NEW YORK, March 12, 2019 /PRNewswire/ -- Pareteum
Corporation (Nasdaq:TEUM), a rapidly growing global cloud software
communications platform company with a mission to connect every
person and every(thing)™, today announced operating and
financial results for the fourth quarter and full year ended
December 31, 2018.
"2018 was a record year for Pareteum, achieving over 139%
year-over-year revenue growth driven by the effectiveness of our
cloud-based platform, innovative product solutions, employee talent
and leading customers. In fourth quarter of 2018, we reported 256%
year-over-year revenue growth, which included the first full
quarter of our accretive Artilium acquisition," commented
Hal Turner, Pareteum's Founder,
Executive Chairman and Principal Executive Officer. "We are
extremely pleased with Pareteum's significant results in 2018 which
are attributed to our TEUM's laser focus on sales expansion and
operational improvements. Looking ahead to 2019, we are very
excited about the tremendous opportunities for Pareteum given the
strong industry dynamics; our visibility into future revenue from
our 36 Month Contractual Revenue Backlog; and, the augmented
talent, product, services, network expansion and productivity
improvements implicit from our strategic acquisitions."
FOURTH QUARTER 2018 FINANCIAL RESULTS:
(Unless otherwise noted, all comparisons are made to the
fourth quarter of 2017)
- Total revenues increased 256% to $14.3
million
- In December of 2018 our Global Software Defined Cloud (GSDC)
revenue was 51% of our total revenue, with 35% in Managed Services
(MSP) revenues, and Super API of 14%
- Adjusted EBITDA increased 82% to $2.34
million
- Non-GAAP EPS of $0.02 cents
- Artilium financials are fully consolidated and accretive in
Pareteum's fourth quarter results
- Net Dollar-based expansion rate represented 214% growth
FULL YEAR 2018 FINANCIAL RESULTS:
(Unless otherwise noted, all comparisons are made to full
year of 2017)
- Revenues increased 139% to $32.4
million
- Adjusted EBITDA improved 199% year-over-year to $6.4 million
- Non-GAAP EPS of $0.09 cents
compared to $0.05 cents for year
ending 2017
- We ended the year with a $6.1
million cash balance and no secured debt
KEY 2018 OPERATIONAL METRICS:
- 36-month Contractual Revenue Backlog quadrupled to $615 million for the full year 2018, up from
$147 million in 2017 with a
conversion rate to revenue of 100%
- Connections increased 252% to 4,609,000 for the full year 2018,
and grew 59% sequentially in the fourth quarter of 2018
- Fourth quarter average annualized revenue per employee of
$415,000, an improvement of 78%
year-over-year
|
|
|
|
|
|
|
|
|
|
|
|
Sequential
Quarterly Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
($000's)
|
Q4
2017
|
|
Q1
2018
|
|
Q2
2018
|
|
Q3
2018
|
|
Q4
2018
|
|
REVENUE
|
4,015
|
|
4,113
|
|
6,003
|
|
8,008
|
|
14,312
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR-OVER-YEAR
REVENUE GROWTH
|
870
|
28%
|
1,318
|
47%
|
2,764
|
85%
|
4,509
|
129%
|
10,297
|
256%
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN
|
2,910
|
73%
|
2,918
|
71%
|
4,223
|
70%
|
5,879
|
73%
|
9,085
|
63%
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED
EBITDA
|
1,283
|
|
283
|
|
1,297
|
|
1,782
|
|
2,339
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
(2,733)
|
|
(869)
|
|
597
|
|
(5,851)
|
|
(3,093)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
BALANCE
|
13,538
|
|
15,759
|
|
19,205
|
|
18,865
|
|
6,052
|
|
|
|
|
|
|
|
|
|
|
|
|
36 MONTH
CONTRACTUAL REVENUE BACKLOG
|
147,000
|
|
200,000
|
|
276,000
|
|
403,000
|
|
615,000
|
|
|
|
|
|
|
|
|
|
|
|
|
CONNECTIONS
|
1,310
|
|
2,220
|
|
2,714
|
|
2,903
|
|
4,609
|
|
|
|
|
|
|
|
|
|
|
|
|
RECENT BUSINESS HIGHLIGHTS:
- The Company completed the acquisition of Artilium in late
September bringing several strategic advantages including an
increased product offering; larger addressable market in
Europe; expanded our executive,
operational and sales talent; and enhanced our cloud platform with
key operating support systems (OSS) and the internet of things
(IoT) capabilities.
- In February 2019, Pareteum
completed the acquisition of iPass, delivering key strategic
benefits including an intelligent Wi-Fi connectivity platform; deep
relationships with marquis enterprise customers; strong process,
procedures and systems; and strong talent particularly on the
technology development side.
- The Company closed a $50M credit
facility with Post Road Group in February
2019. An initial draw of $25M
will be used to repay the debt and transaction costs associated
with the iPass transaction and to facilitate accelerated organic
growth and potential M&A transactions.
2019 FULL YEAR GUIDANCE:
We expect revenue to be
between $105 million and $115 million for the full year of 2019. Adjusted
EBITDA and Cash Flow, net of restructuring and acquisition costs
will be positive for the year.
We are expecting 2019 revenue growth in the range of 225% to 260%
year-over-year, outpacing the market growth rate fivefold to be
updated quarterly
CONFERENCE CALL INFORMATION:
Date:
|
Tuesday, March 12,
2019
|
Time:
|
4:30 PM
EDT
|
Conference
ID:
|
1070372
|
Domestic Dial-in
Number:
|
1-800-289-0438
|
International Dial-in
Number:
|
1-323-794-2423
|
|
|
Belgium Toll
Free:
|
0800 58228
|
Netherlands Toll
Free:
|
0800 023
1436
|
U.K. Toll
Free:
|
0800 358
6377
|
Live
webcast:
|
http://public.viavid.com/index.php?id=133208
|
|
A replay of the call
will be available approximately one hour after the end of the call
through March 11, 2020, and can be accessed at:
http://public.viavid.com/index.php?id=133208
|
About Pareteum Corporation:
Millions of people and devices are connected around the world using
Pareteum's Global Cloud Communications Platform, enhancing their
mobile experience. Pareteum unleashes the power of applications and
mobile services, bringing secure, ubiquitous, scalable, and
seamlessly available voice, video, SMS/text messaging, and data,
media and content enablement to our customers, making worldwide
communications services easily and economically accessible to
everyone. By harnessing the value of our cloud communications
platform, Pareteum serves enterprises, communications service
providers, early stage innovators, developers, IoT, and
telecommunications infrastructure providers Pareteum envisions a
new mobile communications experience imagining what will be, and
delivering now. Pareteum currently has offices in North
America, South America,
Spain, Bahrain, Singapore, Indonesia, Germany, Belgium, United
Kingdom, Russia, and
the Netherlands. For more
information please visit: www.pareteum.com.
36 Month Contractual Revenue Backlog
Definition:
36 Month Contractual Revenue Backlog (36MCRB), is a Non-GAAP
financial measure. It is measured on a forward-looking 36 month
snapshot view, monthly, and is generated by the Company's
Communications Services Providers, Enterprises, and IoT customers
who use communication as a service platform products and services
from the company's portfolio. The Pareteum multi-year
Software-as-a-Service agreements include service establishment and
implementation fees, guaranteed minimum monthly recurring fees, as
well as contractually scheduled subscribers (connections), in some
cases including subscriber (connections) usage, during the term of
the agreement, and, their resulting monthly recurring contractual
revenue. There can be no assurances that we reach the total
contract revenue backlog. Timing of revenue recognition may vary
from actual results.
Discussion of Non-GAAP Financial Measures:
Pareteum's
management believes that the non-GAAP measures of (1) "EBITDA" (2)
"Adjusted EBITDA" (3) "Non-GAAP EPS (4) Cash from operating
activities excluding expenditures from restructuring and
acquisitions and (4) Contractual Revenue Backlog enhance an
investor's understanding of Pareteum's financial and operating
performance by presenting (i) a focus on core operating performance
and (ii) comparable financial results over various periods.
Pareteum 's management uses these financial measures for
strategic decision making, forecasting future financial results and
operating performance. The presentation of non-GAAP ("Generally
Accepted Accounting Principles") financial information is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP.
EBITDA and Adjusted EBITDA Definition:
"EBITDA" is a
non-GAAP measure defined as earnings before interest, taxes,
depreciation and amortization. "Adjusted EBITDA" is a non-GAAP
measure defined by Pareteum as "EBITDA" excluding stock-based
compensation, stock-based compensation taxes, restructuring costs,
acquisition costs, nonrecurring expenditures and certain software
and non-cash adjustments made during the 2016 restructuring that
are not applicable in 2017 and 2018.
Non-GAAP Earnings and EPS Definition:
"Non-GAAP
Earnings and EPS" is a non-GAAP measure defined as earnings per
share excluding stock-based compensation, stock-based
compensation taxes, restructuring costs, acquisition costs and
nonrecurring expenditures in 2017 and 2018.
Net Dollar-Based Expansion Rate
Definition:
"Net Dollar-Based Expansion Rate" is
measured for a particular quarter period by first identifying the
cohort of customers, or Base Customers, that were live and in
service on the first day of the given quarter. We then calculate
our net dollar expansion rate by dividing the revenue we recognized
for this cohort of customers in the reporting period to the revenue
we recognized for the same group of customers in the same quarter
in the prior year, expressed as a percentage of the revenue we
recognized for the cohort in the prior year comparative period. A
customer will not be considered a Base Customer unless such
customer has been live and in service in both comparable
periods.
Cash from operating activities excluding expenditures from
restructuring and acquisitions:
Cash from operating
activities excluding expenditures from restructuring and
acquisitions is a Non-GAAP measure defined as cash flows from
operating activities as adjusted for adjustments to deferred
revenues, net billings in excess of revenues, restructuring costs
primarily from prior periods and acquisition costs.
Forward Looking Statements:
Certain statements
contained herein constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements may include, without limitation, statements with
respect to Pareteum's plans and objectives, projections,
expectations and intentions. These forward-looking statements are
based on current expectations, estimates and projections about
Pareteum's industry, management's beliefs and certain assumptions
made by management. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions
that are difficult to predict. Because such statements involve
risks and uncertainties, the actual results and performance of
Pareteum may differ materially from the results expressed or
implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Unless otherwise required by law,
Pareteum also disclaims any obligation to update its view of any
such risks or uncertainties or to announce publicly the result of
any revisions to the forward-looking statements made here.
Additional information concerning certain risks and uncertainties
that could cause actual results to differ materially from those
projected or suggested in Pareteum's filings with the Securities
and Exchange Commission, copies of which are available from the SEC
or may be obtained upon request from Pareteum Corporation.
Pareteum Investor Relations Contacts:
Ted O'Donnell
Chief Financial Officer
+1 212 984 1096
InvestorRelations@pareteum.com
Laura W. Thomas
Investor Relations
+1 703 930 4282
Carrie Howes
Rayleigh Capital
European- Global IR
+1 416 837 0075
PARETEUM
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month Period
Ended
|
|
(YtD) Twelve Month
Period Ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
REVENUES
|
14,312
|
|
4,015
|
|
32,436
|
|
13,548
|
|
|
|
|
|
|
|
|
COST AND OPERATING
EXPENSES
|
|
|
|
|
|
|
|
Cost of
revenues
|
5,227
|
|
1,105
|
|
10,330
|
|
3,684
|
Product
development
|
846
|
|
424
|
|
3,093
|
|
1,480
|
Sales and
marketing
|
977
|
|
472
|
|
3,161
|
|
1,575
|
General and
administrative
|
5,170
|
|
4,662
|
|
17,809
|
|
10,097
|
Restructuring and
acquisition costs
|
5,185
|
|
125
|
|
7,259
|
|
966
|
Depreciation and
amortization
|
2,469
|
|
1,384
|
|
5,427
|
|
4,533
|
Total cost and
operating expenses
|
19,874
|
|
8,172
|
|
47,079
|
|
22,335
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS
|
(5,562)
|
|
(4,157)
|
|
(14,643)
|
|
(8,787)
|
|
|
|
|
|
|
|
|
Total other (expense)
/ income
|
(97)
|
|
(3,335)
|
|
1,524
|
|
(3,569)
|
|
|
|
|
|
|
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES
|
(5,659)
|
|
(7,492)
|
|
(13,119)
|
|
(12,356)
|
(Benefit) provision
for income taxes
|
(182)
|
|
26
|
|
(144)
|
|
107
|
NET LOSS
|
(5,477)
|
|
(7,518)
|
|
(12,975)
|
|
(12,463)
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
LOSS / INCOME
|
|
|
|
|
|
|
|
Foreign currency
translation (loss) gain
|
2
|
|
(1,211)
|
|
6
|
|
(1,220)
|
COMPREHENSIVE
LOSS
|
(5,475)
|
|
(8,729)
|
|
(12,969)
|
|
(13,683)
|
|
|
|
|
|
|
|
|
Net income/loss per
common share - basic
|
$
(0.06)
|
|
$
(0.31)
|
|
$
(0.20)
|
|
$
(0.84)
|
|
|
|
|
|
|
|
|
Weighted average
shares - basic
|
95,031,798
|
|
28,613,376
|
|
64,548,533
|
|
16,338,156
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per
Common Share
|
$
0.02
|
|
$
0.02
|
|
$
0.09
|
|
$
0.05
|
|
|
|
|
|
|
|
|
Weighted average
shares basic and diluted common stock equivalents
|
104,489,334
|
|
52,836,475
|
|
74,006,069
|
|
40,561,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation
|
Three Month Period
Ended
|
|
(YtD) Twelve Month
Period Ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
NET LOSS
|
(5,477)
|
|
(7,518)
|
|
(12,975)
|
|
(12,463)
|
|
|
|
|
|
|
|
|
Total interest and
other income (expense)
|
97
|
|
3,335
|
|
(1,524)
|
|
3,569
|
Depreciation and
amortization
|
2,469
|
|
1,384
|
|
5,427
|
|
4,533
|
Provision for income
taxes
|
(182)
|
|
26
|
|
(144)
|
|
107
|
|
|
|
|
|
|
|
|
EBITDA
|
(3,093)
|
|
(2,773)
|
|
(9,216)
|
|
(4,254)
|
|
|
|
|
|
|
|
|
Restructuring and
acquisition costs
|
5,185
|
|
701
|
|
7,259
|
|
1,542
|
Stock based
compensation
|
(827)
|
|
2,780
|
|
6,582
|
|
4,289
|
Stock based
tax
|
1,074
|
|
576
|
|
1,810
|
|
576
|
Adjusted
EBITDA
|
2,339
|
|
1,284
|
|
6,436
|
|
2,153
|
PARETEUM CORPORATION
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET INFORMATION
|
(In
thousands)
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
|
|
|
Cash and cash
equivalents
|
6,052
|
|
13,538
|
Restricted
cash
|
431
|
|
200
|
Accounts
receivable
|
15,362
|
|
2,058
|
Prepaid expenses and
other current assets
|
2,084
|
|
900
|
Total current
assets
|
23,929
|
|
16,696
|
|
|
|
|
Non-current
assets
|
137,113
|
|
8,630
|
|
|
|
|
Total
assets
|
161,042
|
|
25,326
|
|
|
|
|
Total current
liabilities
|
20,006
|
|
7,538
|
Total non-current
liabilities
|
8,971
|
|
2,367
|
Total
liabilities
|
28,977
|
|
9,905
|
|
|
|
|
Total
stockholders' equity
|
132,065
|
|
15,422
|
|
|
|
|
Total liabilities
and stockholders' equity
|
161,042
|
|
25,326
|
|
|
|
|
|
|
|
|
PARETEUM CORPORATION
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED CASH FLOW INFORMATION
|
(In
thousands)
|
|
For the Twelve
Months Ended
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
(8,178)
|
|
(1,410)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
(11,456)
|
|
(538)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
12,300
|
|
2,047
|
EFFECT OF EXCHANGE
RATES
|
80
|
|
(196)
|
NET INCREASE
(DECREASE) IN CASH & CASH EQUIVALENTS
|
(7,254)
|
|
(97)
|
|
|
|
|
|
|
|
|
Non-GAAP OPERATING
CASH FLOWS RECONCILIATION
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
(8,178)
|
|
(1,410)
|
|
|
|
|
(Increase) decrease
in prepaid expenses, deposits & other assets
|
(1,669)
|
|
444
|
Increase (decrease)
in Net billings in excess of revenues
|
677
|
|
(413)
|
Increase (decrease)
in accrued expenses and other payables
|
(2,855)
|
|
(150)
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES EXCLUDING
|
|
|
|
EXPENDITURES FOR
RESTRUCTURING AND ACQUISITIONS
|
(4,331)
|
|
(1,291)
|
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SOURCE Pareteum Corporation