Total first quarter revenue of $39.7 million,
up 18% from the same period a year ago
Largest year-over-year gross profit increase as
a public company, up 34% versus Q1 2020
Delivered 7.0 billion billable messages and
connected 1.2 billion voice calls
Confirming the full year 2021 guidance with
total revenue to be expected in the range of $183 – $185
million
In the final stage of closing the acquisition
of Mobile Messaging Solution Provider mGage for $215 million.
Kaleyra executed strategic capital issuances of
a total of $325 million, consisting of $200 million of Senior
Unsecured Convertible Notes and $125 million Common Stock
Kaleyra, Inc. (NYSE: 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
first quarter ended March 31, 2021.
“In the first quarter Kaleyra achieved significant year over
year revenue growth and successfully managed through another
challenging period as the COVID pandemic re-surged in Italy and
India, leading to renewed lockdowns and temporarily lower volumes.
The team has executed well and I am pleased with our position
heading in the second half of 2021 with new product and business
offerings coming from the strong human capital investments in
R&D to strengthen the omni-channel platform” commented Dario
Calogero, Kaleyra’s Founder and Chief Executive Officer. “We are
very excited to announce today our special stockholder meeting to
approve the mGage transaction on May 27, 2021, towards a closing of
the transaction which we expect to take place on June 1, 2021, and
we look forward to welcoming mGage, its customers, and the entire
team to the Kaleyra family. Kaleyra and mGage together will be
uniting two world-class enterprise cloud communications companies
to create a top-5 global CPaaS platform with a diversified and
balanced product portfolio and geographical representation and that
will accelerate Kaleyra’s opportunity to serve the large and
growing CPaaS market.”
First Quarter 2021 Financial Highlights
- Revenue: Total revenue for the first quarter of 2021 was
$39.7 million, an 18% increase when compared to $33.6 million in
the first quarter of 2020.
- Gross Profit: Gross profit for the first quarter of 2021
was $6.3 million, a 34% increase when compared to $4.7 million for
the first quarter of 2020, the largest year-over-year gross profit
increase as a public company. Gross margin for the first quarter of
2021 was 16% versus 14% in the first quarter of 2020. The main
drivers of gross margin expansion were a revised product mix, an
increasing trend toward our higher-margin premium service and voice
calls and the churning of low margin routes.
- Net Loss: Net loss for the first quarter of 2021 was
$(10.4) million, or $(0.34) per share, based on 30.4 million
weighted-average shares outstanding, predominantly due to one-time
expenses pertaining to the mGage acquisition and non-cash RSU
expenses. During the first quarter of 2020, net loss was $(8.8)
million, or $(0.44) per share, based on 20.0 million
weighted-average shares outstanding.
- Adjusted EBITDA: Adjusted EBITDA loss was $(1.1) million
for the first quarter of 2021, compared to a loss $(0.3) million
for the first quarter of 2020. Kaleyra continues to strongly invest
in human capital, and in particular in R&D talent, enhancing
the head count growth year over year to strengthen the omni-channel
platform, and continuous investment in the global sales
operations.
Recent Business Highlights
- Kaleyra delivered 7.0 billion billable messages, a 2% increase
from the year ago period, and connected 1.2 billion voice calls, up
55% from the year ago period.
- Kaleyra announced an agreement with Visa to enhance digital
payments in Latin America and the Caribbean. As part of the
agreement, k-lab, the innovation lab of Kaleyra, will be creating
communication solutions for Visa partners and solving digital
communication issues that exist across the industry today.
- Kaleyra announced an agreement to acquire mobile messaging
solution provider mGage for $215 Million. mGage, a Vivial company,
is a best-of-breed mobile messaging solution allowing enterprise
clients across a diverse range of end-markets to effectively engage
with their customers through all mobile channels for a variety of
use cases. The combination will create a top-5 global CPaaS
platform with strong positions in the Americas, Europe and APAC.
mGage’s offering is very complementary and synergic to Kaleyra’s
and this combination will accelerate the financials of the company,
doubling the revenue, and enhancing the company’s gross margin and
profitability profile. Additionally, this combination with expand
Kaleyra’s opportunity to serve the CPaaS market which is expected
to reach $26 billion in 2025 with a compounded annual growth rate
of 35% and the consolidated A2P Enterprise messaging market which
is expected to reach $78 billion in 2022.
- Upon the closing of the merger with mGage, Kaleyra will have
strategic capital issuances of new securities that have been valued
at $325 million, consisting of $200 million of aggregate principal
amount of senior unsecured convertible notes due 2026 and $125
million of gross proceeds from the issuance of Kaleyra common stock
in a Private Investment in Public Equity (PIPE) transaction.
- Kaleyra executed a new strategic partnership with WebEngage,
India’s leading marketing automation services provider for B2C
businesses, to combine Kaleyra’s global cloud communication
services with WebEngage’s world-class marketing automation and
customer data platform capabilities.
Financial Outlook
Kaleyra’s outlook takes into consideration that the Company’s
largest markets, Italy and India, will require a continued
monitoring of the outcome of the COVID-19 pandemic. It also
reflects the pure organic growth of Kaleyra and does not take into
consideration the mGage acquisition.
As of May 10, 2021, Kaleyra is providing guidance for its second
quarter and full year 2021 as follows:
- Second Quarter 2021 Guidance: Total revenue is expected
to be in the range of $40.0 - $41.0 million, absent an accelerated
wave of COVID-19 cases and shutdowns.
- Full Year 2021 Guidance: Total revenue is expected to be
in the range of $183 – $185 million, confirming the previously
communicated guidance.
Quarterly Conference Call
Management will conduct an investor conference call that same
day at 5:00 p.m. EST (2:00 p.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: 13718979
Replay of the call: US: 844-512-2921 International:
412-317-6671 Start Date: Monday May 10, 2021, 10:00 a.m. ET End
Date: Monday May 24, 2021, 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 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
but not limited to: (i) the risk that the mGage transaction may not
be completed in a timely manner or at all, which may adversely
affect the price of the Company’s securities, (ii) the failure to
satisfy the conditions to the consummation of the transaction,
including the approval by the stockholders of the Company of the
issuance of shares as merger consideration and for the PIPE and
Convertible Note investments by the Company, (iii) the inability to
complete the PIPE and Convertible Note investments in connection
with the transaction, (iv) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
merger agreement, (v) the effect of the announcement or pendency of
the transaction on mGage’s business relationships, operating
results and business generally, (vi) risks that the proposed
transaction disrupts current plans and operations of mGage and
potential difficulties in mGage employee retention as a result of
the transaction, (vii) the outcome of any legal proceedings that
may be instituted against mGage or against the Company related to
the merger agreement or the transaction, (vii) the ability to
maintain the listing of the Company’s securities on a national
securities exchange, (ix) the price of the Company’s securities may
be volatile due to a variety of factors, including changes in the
competitive and highly regulated industries in which the Company
plans to operate or mGage operates, variations in operating
performance across competitors, changes in laws and regulations
affecting the Company’s or mGage’s business and changes in the
combined capital structure, (x) the ability to implement business
plans, forecasts, and other expectations after the completion of
the proposed transaction, and identify and realize additional
opportunities, (xi) the risk of downturns and a changing regulatory
landscape in the highly competitive healthcare industry, (xii) the
size and growth of the market in which mGage operates, (xiii) the
mix of services utilized by Kaleyra’s customers and such customers’
needs for these services, (xiv) market acceptance of new service
offerings, (xv) the ability of Kaleyra to expand what it does for
existing customers as well as to add new customers, (xvi) that
Kaleyra will have sufficient capital to operate as anticipated, and
(xvii) 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.
Additional Information and Where to Find It /
Non-Solicitation
In connection with the proposed transaction, the Company intends
to file a combination proxy statement/prospectus registration
statement on Form S-4 with the SEC. The proxy statement will be
sent to the stockholders of the Company. The Company and mGage also
will file other documents regarding the proposed transaction with
the SEC. Before making any voting decision, investors and security
holders of the Company are urged to read the proxy statement and
all other relevant documents filed or that will be filed with the
SEC in connection with the proposed transaction as they become
available because they will contain important information about the
proposed transaction. Investors and security holders will be able
to obtain free copies of the proxy statement and all other relevant
documents filed or that will be filed with the SEC by the Company
and mGage through the website maintained by the SEC at
www.sec.gov.
The documents filed by the Company with the SEC also may be
obtained free of charge at the Company’s website at
https://www.kaleyra.com/ or upon written request to the Company,
c/o Kaleyra, Inc., Via Marco D’Aviano, 2, Milano MI, Italy.
Participants in Solicitation
The Company and mGage and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the Company’s stockholders in
connection with the proposed transaction. Information about the
Company’s directors and executive officers and their ownership of
the Company’s securities is set forth in the Company’s filings with
the SEC. A list of the names of such directors and executive
officers and information regarding their interests in the business
combination will be contained in the combination proxy
statement/prospectus when available. You may obtain free copies of
these documents as described in the preceding paragraph.
No Offer or Solicitation
These communications do not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act, or an exemption
therefrom.
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/(loss) 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)
March 31, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
35,507
$
32,970
Short-term investments
4,287
4,843
Trade receivables, net
41,611
43,651
Prepaid expenses
1,233
1,447
Other current assets
5,222
2,134
Total current assets
87,860
85,045
Property and equipment, net
7,113
6,726
Intangible assets, net
7,156
7,574
Goodwill
16,612
16,657
Deferred tax assets
40
703
Other long-term assets
299
1,797
Total Assets
$
119,080
$
118,502
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current liabilities:
Accounts payable
$
46,135
$
51,768
Debt for forward share purchase
agreements
—
483
Notes payable due to related parties
3,750
7,500
Lines of credit
4,439
5,273
Current portion of bank and other
borrowings
8,082
10,798
Deferred revenue
3,107
3,666
Payroll and payroll related accrued
liabilities
3,374
3,292
Other current liabilities
2,786
5,988
Total current liabilities
71,673
88,768
Long-term portion of bank and other
borrowings
31,020
31,974
Long-term portion of notes payable
405
2,700
Long-term portion of employee benefit
obligation
1,886
1,886
Other long-term liabilities
2,158
603
Total Liabilities
107,142
125,931
Stockholders’ equity (deficit):
Common stock
3
3
Additional paid-in capital
122,252
93,628
Treasury stock, at cost
(30,431
)
(30,431
)
Accumulated other comprehensive loss
(1,725
)
(2,826
)
Accumulated deficit
(78,161
)
(67,803
)
Total stockholders’ equity
(deficit)
11,938
(7,429
)
Total liabilities and
stockholders’ equity (deficit)
$
119,080
$
118,502
KALEYRA, INC.
Condensed Consolidated
Statements of Operations
(Unaudited, in thousands, except
per share data)
Three Months Ended March
31,
2021
2020
Revenue
$
39,714
$
33,633
Cost of revenue
33,390
28,902
Gross profit
6,324
4,731
Operating expenses:
Research and development
2,868
2,810
Sales and marketing
2,859
3,743
General and administrative
10,602
7,759
Total operating expenses
16,329
14,312
Loss from operations
(10,005
)
(9,581
)
Other income, net
45
42
Financial expense, net
(719
)
(41
)
Foreign currency income
355
168
Loss before income tax expense
(benefit)
(10,324
)
(9,412
)
Income tax expense (benefit)
34
(589
)
Net loss
$
(10,358
)
$
(8,823
)
Net loss per common share, basic and
diluted
$
(0.34
)
$
(0.44
)
Weighted-average shares used in computing
net loss per common share, basic and diluted
30,364,943
19,979,589
KALEYRA, INC.
Condensed Consolidated
Statements of Cash Flows
(Unaudited, in thousands)
Three Months Ended March
31,
2021
2020
Cash Flows from Operating
Activities:
Net loss
$
(10,358
)
$
(8,823
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
909
638
Stock-based compensation, preference share
and others
4,560
6,308
Non-cash settlement of preference share
liability
—
(2,486
)
Provision for doubtful accounts
813
117
Realized gains on marketable
securities
(2
)
—
Employee benefit obligation
69
89
Change in fair value of warrant
liability
1,263
—
Reversal of accrued interest on forward
share purchase agreement
(659
)
—
Non-cash interest expense, net
115
72
Deferred taxes
663
(323
)
Change in operating assets and
liabilities:
Trade receivables
440
1,710
Other current assets
(164
)
1,111
Other long-term assets
1,499
(808
)
Accounts payable
(4,128
)
(5,694
)
Other current liabilities
(2,735
)
3,526
Deferred revenue
(474
)
206
Long-term liabilities
(18
)
1,505
Net cash used in operating activities
(8,207
)
(2,852
)
Cash Flows from Investing
Activities:
Purchase of short-term investments
—
(3,179
)
Sale of short-term investments
546
5,041
Purchase of property and equipment
(91
)
(89
)
Sale of property and equipment
—
16
Capitalized software development costs
(768
)
(731
)
Purchase of intangible assets
(2
)
(6
)
Net cash provided by (used in) investing
activities
(315
)
1,052
Cash Flows from Financing
Activities:
Proceeds from (payments on) line of
credit, net
(663
)
1,721
Borrowings on term loans
—
8,800
Repayments on term loans
(1,869
)
(5,463
)
Repayments on notes
(3,750
)
—
Repurchase of common stock in connection
with forward share purchase agreements
—
(2,587
)
Receipts (payments) related to forward
share purchase agreements
17,045
(167
)
Proceeds related to settlement of
non-forfeited 2020 Sponsor Earnout Shares
1,244
—
Repayments on capital lease
(37
)
—
Net cash provided by financing
activities
11,970
2,304
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(911
)
(454
)
Net increase in cash, cash equivalents and
restricted cash
2,537
50
Cash, cash equivalents and restricted
cash, beginning of period
32,970
36,997
Cash, cash equivalents and restricted
cash, end of period
$
35,507
$
37,047
KALEYRA, Inc.
Adjusted EBITDA Reconciliation
of GAAP to Non-GAAP Financial Information
For the Three Months Ended
March 31, 2021 and March 31, 2020
(Unaudited, in
millions)
Three Months Ended March
31,
Adjusted EBITDA
2021
2020
Net loss
$
(10.4
)
$
(8.8
)
Other income, net
(0.0
)
(0.0
)
Financial income (expense), net
0.7
0.0
Foreign currency income (loss)
(0.4
)
(0.2
)
Income tax expense (benefit)
0.0
(0.6
)
Loss from operations
$
(10.0
)
$
(9.6
)
Depreciation and amortization
0.9
0.6
Stock-based compensation, preference
shares and others
5.5
6.3
Transaction and one-off costs
2.5
2.4
Company restructuring
0.0
0.0
Adjusted EBITDA
$
(1.1
)
$
(0.3
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210510005917/en/
Investor: Marc P. Griffin
ICR, Inc. Marc.Griffin@icrinc.com ir@kaleyra.com 646-277-1290
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