- Non-GAAP Adjusted Operating EBITDA Income of
- Focused on Increasing the Profitability of Existing Revenue Streams, Increasing the Average Revenue per Customer, and Providing Exceptional Customer Support -
Key Financial Highlights for the Three Months Ended
- Revenue decreased 5% to
$7.565 million compared to$7.941 million . - Gross profit decreased 1% to
$4.905 million compared to$4.973 million . - Gross margin increased to 64.84% compared to 62.62%.
- Non-GAAP EBITDA from income (“Adjusted EBITDA - Income”) decreased 15% to
$0.676 million , excluding all non-cash items and one-time transactional expenses, compared to Adjusted EBITDA - Income of$0.796 million . - Net loss attributable to Digerati’s common shareholders was
$3.556 million , compared to net income attributable to Digerati’s common shareholders of$0.220 million . - Non-GAAP operating EBITDA (“Adjusted EBITDA - OPCO”) income increased 5% to
$1.267 million , excluding corporate expenses, all non-cash items and one-time transactional expenses, compared to Adjusted EBITDA - OPCO of$1.204 million .
Three Months ended
Revenue for the three months ended
Gross profit for the three months ended
Selling, General and Administrative expenses (excluding legal and professional fees, and stock compensation expense) for the three months ended
Operating loss for the three months ended
Adjusted EBITDA income for the three months ended
Adjusted EBITDA - OPCO income for the three months ended
Net loss attributable to Digerati’s common shareholders for the three months ended
On
Six Months ended
Revenue for the six months ended
Gross profit for the six months ended
Selling, General and Administrative expenses (excluding legal and professional fees, and stock compensation expense) for the six months ended
Operating loss for the six months ended
Adjusted EBITDA income for the six months ended
Of note were the following non-cash expenses associated with the six months ended
Adjusted EBITDA - OPCO income for the six months ended
Net loss attributable to Digerati’s common shareholders for the six months ended
Use of Non-GAAP Financial Measurements
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Adjusted EBITDA - Income provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that Adjusted EBITDA - Income provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses Adjusted EBITDA - Income as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. Adjusted EBITDA - OPCO is useful to investors because it reflects EBITDA for the core operation of the business excluding corporate expenses, non-cash expenses and transactional expenses. EBITDA, Adjusted EBITDA - Income, and Adjusted EBITDA - OPCO are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in
About
Forward-Looking Statements
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company such as ‘we believe we have built a strong and valuable platform in which to load additional and accretive revenue,’ and ‘our Sales Team recently attended the
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(602) 785-4120
Reconciliation of Net Loss to Adjusted EBITDA - OPCO and Adjusted EBITDA - Income | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||
Three Months ended | Six Months ended | |||||||||||||||||||||||||||||
2024 | 2023 | Variances | % | 2024 | 2023 | Variances | % | |||||||||||||||||||||||
OPERATING REVENUES: | ||||||||||||||||||||||||||||||
Cloud-based hosted services | $ | 7,565 | $ | 7,941 | $ | (376 | ) | -5 | % | $ | 15,219 | $ | 16,071 | $ | (852 | ) | -5 | % | ||||||||||||
Total operating revenues | 7,565 | 7,941 | (376 | ) | -5 | % | 15,219 | 16,071 | (852 | ) | -5 | % | ||||||||||||||||||
Cost of services (exclusive of depreciation and amortization) | 2,660 | 2,968 | (308 | ) | -10 | % | 5,211 | 5,819 | (608 | ) | -10 | % | ||||||||||||||||||
Selling, general and administrative expense | 4,171 | 4,435 | (264 | ) | -6 | % | 8,348 | 8,553 | (205 | ) | -2 | % | ||||||||||||||||||
Stock compensation expense | 4 | 23 | (19 | ) | -83 | % | 16 | 46 | (30 | ) | -65 | % | ||||||||||||||||||
Legal and professional fees | 1,190 | 1,074 | 116 | 11 | % | 2,163 | 1,630 | 533 | 33 | % | ||||||||||||||||||||
Bad debt | 58 | 40 | 18 | 45 | % | 115 | 69 | 46 | 67 | % | ||||||||||||||||||||
Depreciation and amortization expense | 1,129 | 966 | 163 | 17 | % | 1,812 | 1,919 | (107 | ) | -6 | % | |||||||||||||||||||
Total operating expenses | 9,212 | 9,506 | (294 | ) | -3 | % | 17,665 | 18,036 | (371 | ) | -2 | % | ||||||||||||||||||
OPERATING LOSS | (1,647 | ) | (1,565 | ) | (82 | ) | 5 | % | (2,446 | ) | (1,965 | ) | (481 | ) | 24 | % | ||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||||||||
Gain (loss) on derivative instruments | 31 | 3,849 | (3,818 | ) | -99 | % | (581 | ) | 773 | (1,354 | ) | -175 | % | |||||||||||||||||
Loss on extinguishment of debt | (99 | ) | - | (99 | ) | (99 | ) | - | (99 | ) | ||||||||||||||||||||
Other income (expense) | (51 | ) | 10 | (61 | ) | -610 | % | (51 | ) | 456 | (507 | ) | -111 | % | ||||||||||||||||
Interest expense | (2,223 | ) | (2,371 | ) | 148 | -6 | % | (5,264 | ) | (4,436 | ) | (828 | ) | 19 | % | |||||||||||||||
Income tax expense | (35 | ) | (27 | ) | (8 | ) | 30 | % | (63 | ) | (77 | ) | 14 | -18 | % | |||||||||||||||
Total other income (expense) | (2,377 | ) | 1,461 | (3,838 | ) | -263 | % | (6,058 | ) | (3,284 | ) | (2,774 | ) | 84 | % | |||||||||||||||
NET LOSS | (4,024 | ) | (104 | ) | (3,920 | ) | 3769 | % | (8,504 | ) | (5,249 | ) | (3,255 | ) | 62 | % | ||||||||||||||
Less: Net loss attributable to the noncontrolling interests | 468 | 328 | 140 | 43 | % | 863 | 489 | 374 | 76 | % | ||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS | $ | (3,556 | ) | $ | 224 | $ | (3,780 | ) | -1688 | % | $ | (7,641 | ) | $ | (4,760 | ) | $ | (2,881 | ) | 61 | % | |||||||||
Deemed dividend on Series A Convertible preferred stock | - | (4 | ) | 4 | -100 | % | - | (8 | ) | 8 | -100 | % | ||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S COMMON SHAREHOLDERS | $ | (3,556 | ) | $ | 220 | $ | (3,776 | ) | -1716 | % | $ | (7,641 | ) | $ | (4,768 | ) | $ | (2,873 | ) | 60 | % | |||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA - OPCO, Net of Non-Cash Expenses & Transactional Costs. | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS, as reported | $ | (3,556 | ) | $ | 224 | $ | (3,780 | ) | -1688 | % | $ | (7,641 | ) | $ | (4,760 | ) | $ | (2,881 | ) | 61 | % | |||||||||
EXCLUDING NON-CASH ITEMS TRANSACTIONAL COSTS & CORP EXP | ||||||||||||||||||||||||||||||
ADJUSTMENTS: | ||||||||||||||||||||||||||||||
Stock compensation & warrant expense | 4 | 23 | (19 | ) | -83 | % | 16 | 46 | (30 | ) | -65 | % | ||||||||||||||||||
Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 591 | 408 | 183 | 45 | % | 1,062 | 665 | 397 | 60 | % | ||||||||||||||||||||
Legal, professional fees & transactional costs | 1,190 | 1,372 | (182 | ) | -13 | % | 2,028 | 1,930 | 98 | 5 | % | |||||||||||||||||||
Depreciation and amortization expense | 1,129 | 966 | 163 | 17 | % | 1,812 | 1,919 | (107 | ) | -6 | % | |||||||||||||||||||
OTHER ADJUSTMENTS | ||||||||||||||||||||||||||||||
Gain (loss) on derivative instruments | (31 | ) | (3,849 | ) | 3,818 | -99 | % | 581 | (773 | ) | 1,354 | -175 | % | |||||||||||||||||
Loss on derivative instruments | 99 | - | 99 | 99 | - | 99 | ||||||||||||||||||||||||
Other income (expense) | 51 | (10 | ) | 61 | -610 | % | 51 | (456 | ) | 507 | -111 | % | ||||||||||||||||||
Interest expense | 2,223 | 2,371 | (148 | ) | -6 | % | 5,264 | 4,436 | 828 | 19 | % | |||||||||||||||||||
Income tax expense | 35 | 27 | 8 | 30 | % | 63 | 77 | (14 | ) | -18 | % | |||||||||||||||||||
Less: Net loss attributable to the noncontrolling interests | (468 | ) | (328 | ) | (140 | ) | 43 | % | (863 | ) | (489 | ) | (374 | ) | 76 | % | ||||||||||||||
ADJUSTED EBITDA - OPCO | $ | 1,267 | $ | 1,204 | $ | 63 | 5 | % | $ | 2,472 | $ | 2,595 | $ | (123 | ) | -5 | % | |||||||||||||
ADD-BACKS Expenses | ||||||||||||||||||||||||||||||
Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 591 | 408 | 183 | 45 | % | 1,062 | 665 | 397 | 60 | % | ||||||||||||||||||||
ADJUSTED EBITDA - INCOME | $ | 676 | $ | 796 | $ | (120 | ) | -15 | % | $ | 1,410 | $ | 1,930 | $ | (520 | ) | -27 | % | ||||||||||||
Source: Digerati Technologies
2024 GlobeNewswire, Inc., source