SRAX Reports Q4 2019 Revenue Growth of 3% Year-over-Year and Full Year 2019 Continuing Product Revenue Growth of 19%
May 04 2020 - 7:05AM
Business Wire
SRAX, Inc. (NASDAQ: SRAX), a digital marketing and consumer data
management technology platform company, reported results for the
year ended December 31, 2019 and the three months ended March 31,
2020.
“We are seeing an unprecedented shift in the digital economy and
our products Sequire, formerly SRAX IR, and BIGtoken are well
positioned to capitalize on the changing landscape,” said
Christopher Miglino, founder and CEO of SRAX. “Data is more
important than ever. Our customers are leveraging the data they
gain through our platforms to help them identify and reach specific
audiences. We have launched two specific programs to drive business
at this time. The first is our Stock for Ads program, which
provides public companies the ability to pay for marketing spend
with stock. In addition, companies can exchange stock for access to
our investor intelligence and communications platform, while
conserving cash. This program is going extremely well and we are
seeing a strong early adoption. The next program we launched is
BIGtoken Lightning Insights, a solution that gives brands the power
of knowledge by returning robust audience insights in a flash. The
largest brands in the world and their agencies are leveraging our
BIGtoken platform to understand how the consumer mindset is
changing.”
SRAX’s increases in margins are due to the increase in its SAAS
product offerings. 2019 represented the development of these SAAS
products and 2020 will represent the monetization growth. Just
prior to the global pandemic, at the end of February we entered
into a debt financing agreement with an affiliate of B. Riley. We
believe the terms of this transaction were very favorable and put
SRAX in a good position as the crisis emerged. The company has also
obtained a PPP loan for $1.1M at the beginning of May.
In March, SRAX implemented cost saving measures and eliminated
over $3M in annualized expenses. The company has also identified
another $600K and is working to implement those savings in the
coming month. The first quarter of the year is seasonally the
lowest for the company, with March being the strongest month for
the first quarter. While our SAAS products remained consistent, we
saw a decline in March in our media business, with clients pushing
their spend to Q2, thus we are seeing a strong beginning to Q2. We
saw a strong April as many of our clients started running media and
our initiatives to drive business through Stock for Ads and
BIGtoken Lightning Insights are driving adoption.
Q4 2019 and FY 2019 Financial Highlights:
- Revenue was $1.10 million for Q4 2019. This compares to $1.06
million in Q4.
- 2018. Revenue for the full year of 2019 was $3.6 million.
- 19% compared to full year 2018.
- Gross profit margin for Q4 2019 and full year 2019 was 44% and
53%, respectively. This is compared to 76% and 68% for Q4 2018 and
full year 2018, respectively. Q4 and full year margins were 47% and
38%, when excluding contribution from discontinued products in Q4
and full year 2018.
Q1 2020 Financial Highlights:
- Revenue was $351,000 for Q1 2020. This compares to $592,000 in
Q1 2019.
- Gross profit margin for Q1 2020 was 68%. This is compared to
42% in Q1 2019.
Operating Highlights:
- SRAX IR: 59 subscribers and a 64% increase over Q3 and 31
resellers and a 67% increase over Q3.
- Enhanced features include the automated ingestion of
shareholder data
- Addition of credit card billing into the platform
- Beta of institutional shareholder data integration
- Rebranding SRAX IR to Sequire
- Grew internal sales team dedicated to Sequire
- Launched Stock for Ads program
- Integrated natural language processing into shareholder
identity system
- BIGtoken: 16.7 million registered users
- Launched sponsored actions to the platform with partnerships
with large direct response partnerships
- Launched Sponsored Surveys with partnerships with large market
research companies
- Launched Lightning Insights to help brands understand the shift
in consumer behavior at this time
- Launched programs with large CPG brands and saw increased
participation after programs success with return spend in 2020
- Consolidated the media sales team to be focused on the BIGtoken
platform
- Launched insights driven media
- Launched the first iteration of machine learning systems that
access user and data quality that predicts the value of data over
time and creates new data on behalf of users
Conference Call:
Management will review the results on a conference call with a
live question and answer session today, May 4, 2020, at 4:30 p.m.
ET / 1:30 p.m. PT.
- If calling from the U.S. or Canada, please dial 1-855-327-6837
to access the live call and 1-844-512-2921 for the replay code
10009560 available until May 18, 2020.
- If calling internationally, please dial 1-631-891-4304 to
access the live call and 1-412-317-6671 for the replay, code
10009560..
Non-GAAP Measures:
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with generally
accepted accounting principles in the United States (GAAP), we use
the following non-GAAP financial measures: Adjusted net income
(loss) and Adjusted EBITDA The presentation of these financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, financial information prepared and
presented in accordance with GAAP. Investors are cautioned that
there are material limitations associated with the use of non-GAAP
financial measures as an analytical tool. In addition, these
measures may be different from non-GAAP financial measures used by
other companies, limiting their usefulness for comparison purposes.
We compensate for these limitations by providing specific
information regarding the GAAP amounts excluded from these non-GAAP
financial measures. We believe these non-GAAP financial measures
provide investors with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating our business. For more information on our non-GAAP
financial measures and a reconciliation of GAAP to non-GAAP
measures, please see the "Reconciliation of GAAP to Non-GAAP
Results" table in this press release.
Adjusted net income (loss) is defined as net income (loss) less
non-cash equity-based compensation and the accretion of
warrants.
Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization, changes in the fair-value of
derivative and warrant liabilities and certain additional one-time
charges.
About SRAX
SRAX (NASDAQ: SRAX) is a digital marketing and consumer data
management technology company. SRAX’s technology unlocks data for
brands in the CPG, investor relations, luxury, and lifestyle
verticals. Through its various platforms, SRAX is monetizing its
data sets and growing multiple recurring revenue streams. BIGtoken
is a consumer-managed data marketplace where people can own and
earn from their data. The platform also provides advertisers and
media companies access to transparent, verified consumer data to
better reach and serve audiences. Sequire is a premier platform for
investor intelligence and communication. Through Sequire, public
companies can track their investors’ behaviors and trends and use
those insights to engage current and potential investors across
marketing channels. For more information on SRAX and its verticals,
visit srax.com.
Safe Harbor Statement
This press release contains certain forward-looking statements
that are based upon current expectations and involve certain risks
and uncertainties within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Words or expressions such as
"anticipate," "plan," "will," "intend," "believe" or "expect'" or
variations of such words and similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject
to risks, uncertainties, and other factors, some of which are
beyond our control and difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in
the forward-looking statements, including, without limitation,
statements made with respect to expectations of our ability to
increase our revenues, satisfy our obligations as they become due,
report profitable operations and other risks and uncertainties as
set forth in our Annual Report on Form 10-K for the year ended
December 31, 2018, and our subsequent Quarterly Reports on Form
10-Q as filed with the Securities and Exchange Commission. All
forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements, many of which are
generally outside the control of SRAX and are difficult to predict.
SRAX undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200504005273/en/
Natalie Santos press@srax.com
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