NEW YORK, May 7, 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 first quarter ended
March 31, 2019.
"We are very pleased with our strong first quarter results,
delivering 460% revenue growth in Q1 2019 compared to Q1 2018.
Pareteum's core business, pre-acquisitions, has grown 33% over the
prior quarter," commented Hal
Turner, Pareteum's Founder, Executive Chairman and Principal
Executive Officer. "We are proud of the significant business
transformation we have achieved over the past few years. Pareteum
is a fast-growing and profitable SaaS and communications service
provider. Our software and platform solutions are unique in the
market, our global TEUM is executing, we are well positioned to
capture the large market opportunity, and we are committed to our
mission to connect every person and every(thing)™."
FIRST QUARTER 2019 FINANCIAL RESULTS:
(Unless otherwise noted, all comparisons are made to the
first quarter of 2018)
- Total revenues increased 460% to $23
million
- Adjusted EBITDA increased 1,723% to $5.2
million
- Non-GAAP EPS of $0.02 cents
- Artilium and iPass financials are consolidated and accretive in
Pareteum's first quarter results
- Net Dollar-based expansion rate represented 144% growth
- Increase in total assets from $27.2
million at March 31, 2018 to
$236.9 million at March 31, 2019
- Cash balance of $10.7
million
KEY FIRST QUARTER OF 2019 OPERATIONAL METRICS:
- 36-Month Contractual Revenue Backlog increased to $938 million for the first quarter of 2019, up
from $200 million in the first
quarter of 2018 with a conversion rate to revenue of 101%
- Connections increased 441% to 12,012,000 for the first quarter
of 2019, and grew 161% sequentially in the first quarter of
2019
- First quarter average annualized revenue per employee of
$390,000, an increase of 55% year
over year
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Sequential
Quarterly Key Metrics
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($000's)
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Q1 2019
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Q4 2018
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Q3 2018
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Q2 2018
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Q1 2018
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REVENUE
|
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23,040
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14,312
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8,008
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6,003
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4,113
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YEAR-OVER-YEAR
REVENUE GROWTH
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18,927
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460%
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10,297
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256%
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4,509
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129%
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2,764
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85%
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1,318
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47%
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GROSS
MARGIN
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12,972
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56%
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9,085
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63%
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5,879
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73%
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4,223
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70%
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2,918
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71%
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ADJUSTED
EBITDA
|
5,156
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2,339
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1,782
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1,297
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283
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|
|
|
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EBITDA
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(2,485)
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(3,093)
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(5,851)
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597
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(869)
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CASH
BALANCE
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10,699
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6,052
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18,865
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19,205
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15,759
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36 MONTH CONTRACTUAL
REVENUE BACKLOG
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938,000
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615,000
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403,000
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276,000
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200,000
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CONNECTIONS
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12,012
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4,609
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2,903
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2,714
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2,220
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RECENT BUSINESS HIGHLIGHTS:
- In February 2019, Pareteum
completed the acquisition of iPass, delivering key strategic
benefits including an intelligent Wi-Fi connectivity platform; deep
relationships with marquee enterprise customers; strong process,
procedures and system enhancements; and strong talent particularly
on the technology development side
- The Company announced a new sales transaction with Citrix
Systems to migrate employees to a cloud-based deployment of
Pareteum's iPass SmartConnectTM solution, which has
been fully integrated with Citrix's existing single sign-on
solution to provide users with an enhanced security experience. A
phased rollout is currently underway
- The Company closed a $50 million
credit facility with Post Road Group in February 2019. An initial draw of
$25 million 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 $115
million and $125 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 255% to
285% year-over-year, outpacing the market growth rate fivefold to
be updated quarterly.
CONFERENCE CALL
INFORMATION:
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Date:
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Tuesday, May 7,
2019
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Time:
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4:30 PM
EDT
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Conference
ID:
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4614687
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Domestic Dial-in
Number:
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1-800-263-0877
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International Dial-in
Number:
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1-646-828-8143
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Belgium Toll
Free:
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0800 58228
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Netherlands Toll
Free:
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0800 023
1436
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U.K. Toll
Free:
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0800 358
6377
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Live
webcast:
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http://public.viavid.com/index.php?id=134075
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A replay of the call will be available approximately one hour
after the end of the call through May 6,
2020, and can be accessed at:
http://public.viavid.com/index.php?id=134075
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 2018 and 2019.
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, restructuring and
acquisition costs, amortization of intangible assets and other
nonrecurring expenditures in 2018 and 2019.
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.
Media Inquiries
Press@pareteum.com
Pareteum Investor Relations Contacts:
Ted O'Donnell
Chief Financial Officer
+1 646 810 2182
InvestorRelations@pareteum.com
Michael Bloom
Investor Relations
michael.bloom@pareteum.com
Allise Furlani
The Blueshirt Group
blueshirt.group@pareteum.com
Carrie Howes
Rayleigh Capital
European- Global IR
+1 416 837 0075
PARETEUM
CORPORATION AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(In thousands except
for per share amounts)
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|
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Three Month Period
Ended
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March
31,
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|
March
31,
|
|
2019
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|
2018
|
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REVENUES
|
23,040
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4,113
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|
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COST AND OPERATING
EXPENSES
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Cost of
revenues
|
10,068
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|
1,195
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Product
development
|
2,198
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727
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Sales and
marketing
|
2,565
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689
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General and
administrative
|
7,614
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2,297
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Restructuring and
acquisition costs
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3,080
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74
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Depreciation and
amortization
|
2,843
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965
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Total cost and
operating expenses
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28,370
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5,947
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LOSS FROM
OPERATIONS
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(5,330)
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(1,834)
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Total other
(expense)
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(616)
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(301)
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LOSS BEFORE PROVISION
FOR INCOME TAXES
|
(5,946)
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|
(2,135)
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Income tax
benefit
|
(167)
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(1)
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NET LOSS
|
(5,779)
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|
(2,134)
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OTHER COMPREHENSIVE
LOSS / INCOME
|
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Foreign currency
translation (loss) gain
|
(360)
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|
104
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COMPREHENSIVE
LOSS
|
(6,138)
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|
(2,030)
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Net income/loss per
common share - basic
|
$
(0.06)
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|
$
(0.04)
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Weighted average
shares - basic
|
103,565,745
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50,062,434
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Non-GAAP
Income/(Loss) Per Common Share
|
$
0.02
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|
$
(0.02)
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Weighted average
shares basic and diluted common stock equivalents
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124,767,770
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|
50,062,434
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|
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|
|
Non-GAAP
Reconciliation
|
Three Month Period
Ended
|
|
March
31,
|
|
March
31,
|
|
2019
|
|
2018
|
|
|
|
|
NET LOSS
|
(5,779)
|
|
(2,134)
|
|
|
|
|
Total interest and
other income (expense)
|
616
|
|
301
|
Depreciation and
amortization
|
2,843
|
|
965
|
Provision for income
taxes
|
(167)
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|
(1)
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|
|
|
|
EBITDA
|
(2,485)
|
|
(869)
|
|
|
|
|
Restructuring and
acquisition costs
|
3,080
|
|
74
|
Stock based
compensation
|
3,714
|
|
1,078
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Stock based
tax
|
847
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|
0
|
Adjusted
EBITDA
|
5,156
|
|
283
|
|
|
|
|
Non-GAAP
Reconciliation
|
|
|
|
|
|
|
|
NET LOSS
|
(5,779)
|
|
(2,134)
|
|
|
|
|
Restructuring and
acquisition costs
|
3,080
|
|
74
|
Stock based
compensation
|
3,714
|
|
1,078
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Amortization of
Intangibles
|
1,652
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|
0
|
NON-GAAP NET
INCOME/(LOSS)
|
2,667
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|
(982)
|
PARETEUM CORPORATION
AND SUBSIDIARIES
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEET INFORMATION
|
(In
thousands)
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
Cash and cash
equivalents
|
10,699
|
|
6,052
|
Restricted
cash
|
705
|
|
431
|
Accounts
receivable
|
28,645
|
|
15,362
|
Prepaid expenses and
other current assets
|
3,634
|
|
2,084
|
Total current
assets
|
43,682
|
|
23,928
|
|
|
|
|
Intangible
Assets
|
60,706
|
|
39,658
|
Goodwill
|
119,899
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|
91,774
|
Lease Right of Use
Assets
|
3,136
|
|
0
|
Other non-current
assets
|
9,523
|
|
5,681
|
|
|
|
|
Total
assets
|
236,947
|
|
161,041
|
|
|
|
|
Total current
liabilities
|
39,779
|
|
20,006
|
Total non-current
liabilities
|
33,562
|
|
8,971
|
Total
liabilities
|
73,341
|
|
28,977
|
|
|
|
|
Total
stockholders' equity
|
163,606
|
|
132,065
|
|
|
|
|
Total liabilities
and stockholders' equity
|
236,947
|
|
161,041
|
|
|
|
|
|
|
|
|
PARETEUM CORPORATION
AND SUBSIDIARIES
|
UNAUDITED CONDENSED
CONSOLIDATED CASH FLOW INFORMATION
|
(In
thousands)
|
|
For the Three
Months Ended
|
|
March
31,
|
|
March
31,
|
|
2019
|
|
2018
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
(5,301)
|
|
29
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
(3,365)
|
|
(434)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
14,121
|
|
2,525
|
EFFECT OF EXCHANGE
RATES
|
(155)
|
|
101
|
NET INCREASE IN CASH
& CASH EQUIVALENTS
|
5,300
|
|
2,221
|
|
|
|
|
|
|
|
|
Non-GAAP OPERATING
CASH FLOWS RECONCILIATION
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
(5,301)
|
|
29
|
|
|
|
|
|
|
|
|
Increase in Net
billings in excess of revenues
|
549
|
|
-
|
Increase in
accrued expenses and other payables
|
5,014
|
|
7,653
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES EXCLUDING
|
|
|
|
EXPENDITURES FOR
RESTRUCTURING AND ACQUISITIONS
|
262
|
|
7,682
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SOURCE Pareteum Corporation