Total third quarter revenue of $38.3 million, a
23% increase from Q2 and up 8% from the same period a year ago
Gross Profit of $7.5 million
Net Loss of $5.3 million, Adjusted EBITDA
comparable to previous year of $2.8 million
Cash Balance of $31.5 million
Revenue from US Customers was $8.0 million, a
25% increase from Q2
Delivered 6.3 billion billable messages and 1.1
billion voice calls connected
Kaleyra Inc. (NYSE American: KLR) ) (KLR WS) (“Kaleyra” or the
“Company”) a rapidly growing cloud communications software provider
delivering a secure system of application programming interfaces
(APIs) and connectivity solutions in the API/Communications
Platform as a Service (CPaaS) market, today announced financial
results for the third quarter ended September 30, 2020.
“We exceeded our revenue guidance and delivered our strongest
quarter ever, fueled by the expanded functionality of our platform
and strong customer relationships. We saw significant growth in the
US along with a modest improvement in our two largest markets,
Italy and India, and we continue to invest in our people and
technology in order to attract innovative companies to our platform
as well as foster deep, multi-faceted relationships with existing
enterprise customers,” commented Dario Calogero, Kaleyra’s Founder
and Chief Executive Officer. “Looking ahead, we continue to be
optimistic about the growth opportunities and believe we can
continue the momentum provided by our expanded go-to-market teams
and our robust platform of flexible APIs.”
Third Quarter 2020 Financial Highlights
- Revenue: Total revenue for the third quarter of 2020 was
$38.3 million, a 23% increase when compared to Q2’s $31.2 million
and up 8% compared to $35.3 million in the third quarter of
2019.
- Gross Profit: Gross profit for the third quarter of 2020
was $7.5 million, a 72% increase when compared to Q2’s $4.4 million
and up 7% compared to $7.0 million for the third quarter of 2019.
Gross margin for the third quarter of 2020 was 20%, in line with
the third quarter of 2019, which signals a return to pre-COVID
performance.
- Net Loss: Net loss for the third quarter of 2020 was
$5.3 million, or $(0.19) per share, based on 28.3 million weighted
average shares outstanding. Q3 is a 35% improvement when compared
to Q2’s net loss of $8.1 million. During the third quarter of 2019,
net income was $0.8 million, or $0.08 per share, based on 10.7
million fully diluted weighted average shares outstanding.
- Adjusted EBITDA comparable to previous year: Adjusted
EBITDA comparable to previous year was $2.8 million for the third
quarter of 2020, compared to $3.5 million for the third quarter of
2019. The decline in adjusted EBITDA is attributed to the increased
investments, predominantly in engineering talent, that have been
made to execute on emerging growth opportunities to develop and
deliver new products and services.
- Liquidity: As of September 30, 2020, cash and cash
equivalents were $31.5 million. Cash used in operating activities
was $9.6 million in the third quarter of 2020, mainly due to
working capital changes, compared with cash provided by operating
activities of $2.6 million in the third quarter last year.
- Liabilities: Total liabilities were reduced by $38.6
million since December 31, 2019.
Recent Business Highlights
- Delivered 6.3 billion billable messages, which was in line with
the previous period, and connected 1.1 billion voice calls, up 22%
period over period.
- Launched Verified Calls Services for Google. The Verified Calls
feature for Android phones enables customers to see the name of the
enterprise calling them as well as the reason for the call. This is
an important new feature at a time when spam calls are an
increasing problem for businesses and consumers.
- Kaleyra Executed a Warrant Exchange Agreement. The Company
issued an aggregate of 850,500 shares of Common Stock in exchange
for the surrender and cancellation of 3.78 million warrants (NYSE
American: KLR WS) previously issued by the Company as part of its
initial public offering in December 2017 (the “Public Warrants”).
The agreement reduced the total number of outstanding Public
Warrants by approximately 35%, to 7.0 million from 10.8
million.
- Kaleyra's subsidiary, Campaign Registry Inc., a systems
initiative to reduce spam by collecting robotically driven campaign
information and processing and sharing that information with mobile
operators and the messaging ecosystem, was launched during the
quarter. For more information visit www.campaignregistry.com/.
- Kaleyra expanded its connectivity service footprint, entering
contracts with five of the world's largest OTT (Over-the-Top)
Internet media and App services companies to deliver messaging
traffic globally.
Financial Outlook
Kaleyra’s outlook assumes that the Company’s largest markets,
Italy and India, will continue to see improvements in their
economies coming out of the COVID-19 pandemic. It also takes into
consideration that there could still be continued pressure on
transaction levels in certain regions and on certain business
lines. As of November 9, 2020, Kaleyra is providing guidance for
its fourth quarter and full year 2020 as follows:
- Fourth Quarter 2020 Guidance: Total revenue is expected
to be in the range of $41.5 $42.5 million, absent an accelerated
wave of COVID-19 cases and shutdowns.
- Full Year 2020 Guidance: Total revenue is expected to be
in the range of $144.6 - 145.6 million, above are previous
guidance.
Quarterly Conference Call
Management will conduct an investor conference call that same
day at 8:00 a.m. EST (5:00 a.m. PST) to discuss these results.
Questions will be taken after management’s presentation. A live
webcast of the call and the replay will be available in the
Investors section of the Kaleyra website at
https://investors.kaleyra.com/news-events/ir-calendar.
To Participate via Telephone: US: 877-407-0792
International: 201-689-8263 Conference ID: 13712481
Replay of the call: US: 844-512-2921 International:
412-317-6671 Start Date: Monday November 9, 2020, 10:00 a.m. ET End
Date: Monday November 23, 2020, 11:59 p.m. ET
About Kaleyra Inc.
Kaleyra, Inc. (NYSE American: KLR) (KLR WS), is a global group
providing mobile communication services for financial institutions
and enterprises of all sizes worldwide. Through its proprietary
platform, Kaleyra manages multi-channel integrated communication
services on a global scale, comprising of messages, push
notifications, e-mail, instant messaging, voice services and
chatbots. Kaleyra’s technology today makes it possible to safely
and securely manage billions of messages monthly with a reach to
hundreds of MNOs and over 190 countries. For more information:
https://www.kaleyra.com/.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. Such forward-looking
statements include, but are not limited to, statements regarding
the financial statements of Kaleyra, its product and customer
developments, its expectations, hopes, beliefs, intentions, plans,
prospects or strategies regarding the future revenues and the
business plans of Kaleyra’s management team, and the impact of the
COVID-19 pandemic on the its business and financial performance.
Any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. In
addition, any statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking
statements. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would”
and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is
not forward-looking. The forward-looking statements contained in
this press release are based on certain assumptions and analyses
made by the management of Kaleyra in light of their respective
experience and perception of historical trends, current conditions
and expected future developments and their potential effects on
Kaleyra as well as other factors they believe are appropriate in
the circumstances. There can be no assurance that future
developments affecting Kaleyra will be those anticipated. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond the control of the parties) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements, including the mix of services utilized
by Kaleyra’s customers and such customers’ needs for these
services, market acceptance of new service offerings, the ability
of Kaleyra to expand what it does for existing customers as well as
to add new customers, that Kaleyra will have sufficient capital to
operate as anticipated, and the impact that the novel coronavirus
and the illness, COVID-19, that it causes, as well as governmental
responses to deal with the spread of this illness and the reopening
of economies that have been closed as part of these responses, may
have on Kaleyra’s operations, the demand for Kaleyra’s products,
global supply chains and economic activity in general. Should one
or more of these risks or uncertainties materialize or should any
of the assumptions being made prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
Non-GAAP Financial Measure and Related Information
This press release includes reference to Adjusted EBITDA, a
financial measure that is not prepared in accordance with
accounting principles generally accepted in the United States
(“GAAP”). Adjusted EBITDA is defined as of any date of calculation,
as the consolidated pro forma earnings of Kaleyra and its
subsidiaries, before finance income and finance cost (including
bank charges), tax, depreciation and amortization, plus (i)
transaction expenses, (ii) without duplication of clause (i),
severance or change of control payments, (iii) any expenses related
to company restructuring, (iv) the Adjusted EBITDA for
pre-acquisition period of subsidiaries, (v) any compensation
expenses relating to stock options, restricted stock units,
restricted stock or similar equity interests as may be issued by
Kaleyra or any of its subsidiaries to its or their employees and
(vi) any provision for the write down of assets. Management uses
Adjusted EBITDA, among other reasons, as it is a metric for
determining whether there will be an earnout payment in accordance
with the terms of the Stock Purchase Agreement. This non-GAAP
financial measure is not a measure prepared in accordance with GAAP
and might not be consistent with similar measures used by other
companies. It shall not be considered as an alternative to any
other measures of performance prepared under GAAP.
KALEYRA, INC. Condensed Consolidated
Balance Sheets (Unaudited, in thousands, except share and per
share data)
September 30, 2020
December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
31,514
$
16,103
Restricted cash
-
20,894
Short-term investments
5,138
5,124
Trade receivables, net
40,006
39,509
Prepaid expenses
1,227
648
Other current assets
1,774
4,224
Total current assets
79,659
86,502
Property and equipment, net
5,825
3,393
Intangible assets, net
7,937
9,353
Goodwill
16,558
16,953
Other long-term assets
1,783
1,203
Total Assets
$
111,762
$
117,404
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current liabilities:
Accounts payable
$
48,076
$
63,320
Debt for forward share purchase
agreements
480
34,013
Notes payable
—
1,667
Notes payable due to related parties
3,750
9,411
Lines of credit
4,567
3,627
Current portion of bank and other
borrowings
9,675
7,564
Deferred revenue
1,519
1,397
Preference shares
—
683
Preference shares due to related
parties
—
1,847
Payroll and payroll related accrued
liabilities
3,819
1,038
Other current liabilities
1,759
1,379
Total current liabilities
73,645
125,946
Long-term portion of bank and other
borrowings
33,462
16,134
Long-term portion of notes payable
2,700
—
Long-term portion of notes payable due to
related parties
3,750
7,500
Long-term portion of employee benefit
obligation
1,641
1,398
Deferred tax liabilities
1,093
2,045
Other long-term liabilities
1,335
3,155
Total Liabilities
117,626
156,178
Stockholders’ equity (deficit):
Common stock
3
2
Additional paid-in capital
89,574
2,143
Treasury stock, at cost
(30,431
)
—
Accumulated other comprehensive income
(loss)
(1,733
)
74
Accumulated deficit
(63,277
)
(40,993
)
Total stockholders’ equity (deficit)
(5,864
)
(38,774
)
Total liabilities and stockholders’ equity
(deficit)
$
111,762
$
117,404
The accompanying notes are an integral part of
these condensed consolidated financial statements.
KALEYRA, INC. Condensed Consolidated
Statements of Operations (Unaudited, in thousands, except share
and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenue
$
38,268
$
35,329
$
103,100
$
93,925
Cost of revenue
30,763
28,321
86,511
75,645
Gross profit
7,505
7,008
16,589
18,280
Operating expenses:
Research and development
2,259
1,279
7,415
3,869
Sales and marketing
3,423
1,432
10,155
4,392
General and administrative
6,441
2,927
20,737
10,667
Total operating expenses
12,123
5,638
38,307
18,928
Income (loss) from operations
(4,618
)
1,370
(21,718
)
(648
)
Other income, net
38
11
91
106
Financial income (expense), net
(468
)
(141
)
(1,027
)
(206
)
Foreign currency income (loss)
(548
)
(260
)
(795
)
(402
)
Loss before income tax expense
(benefit)
(5,596
)
980
(23,449
)
(1,150
)
Income tax expense (benefit)
(263
)
168
(1,165
)
719
Net income (loss)
$
(5,333
)
$
812
$
(22,284
)
$
(1,869
)
Net income (loss) per common share, basic
and diluted
$
(0.19
)
$
0.08
$
(0.97
)
$
(0.17
)
Weighted-average shares used in computing
net income (loss) per common share, basic and diluted
28,330,869
10,687,106
22,972,425
10,687,106
KALEYRA, INC. Condensed Consolidated
Statements of Cash Flows (Unaudited, in thousands)
Nine Months Ended September
30,
2020
2019
Cash Flows from Operating
Activities:
Net loss
$
(22,284
)
$
(1,869
)
Adjustments to reconcile net loss to net
cash provided by (used) in operating activities:
Depreciation and amortization
1,907
1,980
Stock-based compensation, preference share
and unpaid bonuses
16,055
446
Non-cash settlement of preference share
liability
(2,486
)
—
Allowance for doubtful accounts
144
75
Employee benefit obligation
376
228
Non-cash interest expense, net
151
437
Deferred taxes
(898
)
(724
)
Change in operating assets and
liabilities:
Trade receivables
921
(12,224
)
Other current assets
1,884
(896
)
Other long-term assets
(487
)
(514
)
Accounts payable
(13,727
)
13,605
Other current liabilities
3,463
2,520
Deferred revenue
152
89
Long-term liabilities
815
(2,065
)
Net cash provided by (used) in operating
activities
(14,014
)
1,088
Cash Flows from Investing
Activities:
Purchase of short-term investments
(7,917
)
(4,328
)
Sale of short-term investments
7,815
2,493
Purchase of property and equipment
(969
)
(1,307
)
Sale of property and equipment
16
—
Capitalized software development costs
(2,074
)
—
Purchase of intangible assets
(6
)
(14
)
Net cash used in investing activities
(3,135
)
(3,156
)
Cash Flows from Financing
Activities:
Payment of deferred consideration for the
acquisition of Buc Mobile
—
(4,000
)
Payment of deferred consideration for the
acquisition of Solutions Infini
—
(5,097
)
Change in line of credit
749
20
Borrowings on term loans
24,437
16,670
Repayments on term loans
(6,344
)
(2,684
)
Repayments on notes payable
(11,478
)
—
Repurchase of common stock in connection
with forward share purchase agreements
(30,431
)
—
Payments related to forward share purchase
agreements
(1,452
)
—
Proceeds from issuance of stock in public
offering, net of issuance costs
36,152
—
Net cash provided by financing
activities
11,633
4,909
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
33
(346
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(5,483
)
2,495
Cash, cash equivalents and restricted
cash, beginning of period
36,997
8,207
Cash, cash equivalents and restricted
cash, end of period
$
31,514
$
10,702
The accompanying notes are an integral part of
these condensed consolidated financial statements.
KALEYRA, Inc. Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP Financial Information For
the three and nine Months Ended September 30, 2020 and 2019
(Unaudited, in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
Adjusted EBITDA
2020
2019
2020
2019
Net loss
$
(5.3)
$
0.8
$
(22.3)
$
(1.9)
Other income, net
(0.0)
(0.0)
(0.1)
(0.1)
Financial income (expense), net
0.5
0.1
1.0
0.2
Foreign currency income (loss)
0.5
0.3
0.8
0.4
Income tax expense (benefit)
(0.3)
0.2
(1.2)
0.7
Loss from operations
$
(4.6)
$
1.4
$
(21.7)
$
(0.6)
Depreciation and Amortization
0.6
0.7
1.9
2.0
Stock-based compensation and preference
shares
5.2
0.1
16.3
0.4
Transaction and one-off costs
0.9
1.4
5.0
3.7
Company restructuring
0.0
0.0
0.0
0.0
Adjusted EBITDA
$
2.2
$
3.5
$
1.6
$
5.5
Costs not comparable to previous year
(1)
0.7
0.0
2.8
0.0
Adjusted EBITDA comparable to
PY
$
2.8
$
3.5
$
4.4
$
5.5
(1) These costs represent public company
costs that were not incurred in 2019. These costs are expected to
occur going forward.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201109005314/en/
Investor Contacts Michael
Bowen ICR, Inc. Michael.Bowen@icrinc.com ir@kaleyra.com
203-682-8299
Marc P. Griffin ICR, Inc. Marc.Griffin@icrinc.com ir@kaleyra.com
646-277-1290
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