Phunware, Inc. (PHUN) Bundle
Understanding Phunware, Inc. (PHUN) Revenue Streams
Understanding Phunware, Inc.’s Revenue Streams
The revenue streams of the company can be categorized primarily into two segments: platform subscriptions and services, and application transaction revenues. Below is a detailed breakdown of these revenue sources.
Breakdown of Primary Revenue Sources
| Revenue Source | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Platform Subscriptions and Services | $464 | $697 | (33.4)% |
| Application Transaction | $201 | $555 | (63.8)% |
| Total Revenue | $665 | $1,252 | (46.9)% |
For the nine months ended September 30, 2024, the revenue breakdown is as follows:
| Revenue Source | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Platform Subscriptions and Services | $1,434 | $2,439 | (41.2)% |
| Application Transaction | $1,163 | $1,453 | (20.0)% |
| Total Revenue | $2,597 | $3,892 | (33.3)% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a significant decline:
- For the three months ended September 30, 2024, revenue decreased by $587,000 or (46.9)% compared to the same period in 2023.
- For the nine months ended September 30, 2024, revenue decreased by $1.295 million or (33.3)% compared to the same period in 2023.
Contribution of Different Business Segments to Overall Revenue
The contribution of different business segments to overall revenue has shifted:
- For the three months ended September 30, 2024, platform subscriptions and services represented 69.8% of total revenue, while application transactions made up 30.2%.
- For the nine months ended September 30, 2024, platform subscriptions and services accounted for 55.2% of total revenue, with application transactions at 44.8%.
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams are attributed to various factors:
- Revenue from platform subscriptions and services decreased by $1.005 million or (41.2)% for the nine months ended September 30, 2024, primarily due to customer contract terminations and a decrease in customer retention.
- Application transaction revenue decreased by $290,000 or (20.0)% for the same period, influenced by reduced advertising campaigns and changes in customer engagement.
As of September 30, 2024, over 99% of the company's net revenues were derived from the United States.
A Deep Dive into Phunware, Inc. (PHUN) Profitability
A Deep Dive into Phunware, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the total revenue was $665,000, a decrease of 46.9% compared to $1,252,000 in the same period in 2023. The total gross profit for the same period was $322,000, down from $631,000 in 2023, resulting in a gross margin of 48.4% compared to 50.4% the previous year. The operating loss for the three months was ($3,190,000).
For the nine months ended September 30, 2024, total revenue was $2,597,000, a decrease of 33.3% from $3,892,000 in 2023. The gross profit increased to $1,316,000 from $1,241,000, leading to a gross margin improvement from 31.9% to 50.7%.
| Metrics | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Total Revenue | $665,000 | $1,252,000 | (46.9%) | $2,597,000 | $3,892,000 | (33.3%) |
| Gross Profit | $322,000 | $631,000 | (49.0%) | $1,316,000 | $1,241,000 | 6.0% |
| Gross Margin | 48.4% | 50.4% | (2.0%) | 50.7% | 31.9% | 18.8% |
| Operating Loss | ($3,190,000) | ($13,278,000) | — | ($8,998,000) | ($26,059,000) | — |
Trends in Profitability Over Time
The trend in profitability indicates a decline in net revenues and gross profit margins in 2024 compared to 2023. The gross margin for platform subscriptions and services improved significantly, from 12% in 2023 to 40% in 2024.
Comparison of Profitability Ratios with Industry Averages
In comparison to industry averages, the gross margin of 48.4% in Q3 2024 is competitive; however, the overall decline in revenue and the operating loss highlight challenges in maintaining profitability.
Analysis of Operational Efficiency
Operational efficiency has been impacted by a significant reduction in operating expenses, which decreased to $3,512,000 in Q3 2024 from $13,909,000 in Q3 2023, representing a reduction of 74.8%. This reduction primarily stems from decreased sales and marketing expenses, which fell by 26.2% in Q3 2024.
| Operating Expenses | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Sales and Marketing | $619,000 | $839,000 | (26.2%) |
| General and Administrative | $2,281,000 | $2,985,000 | (23.6%) |
| Research and Development | $612,000 | $1,042,000 | (41.3%) |
The gross margin trend indicates improved operational efficiency, with the total gross profit increasing by 6.0% for the nine months ended September 30, 2024, despite a revenue decline.
Debt vs. Equity: How Phunware, Inc. (PHUN) Finances Its Growth
Debt vs. Equity: How Phunware, Inc. Finances Its Growth
As of September 30, 2024, Phunware, Inc. reported total liabilities of approximately $11.4 million and total stockholders' equity of $29.1 million, reflecting a significant reliance on equity financing compared to debt. The company has no long-term debt as of this date, but it maintains short-term obligations primarily associated with operational needs.
The debt-to-equity ratio stands at 0.39, which is below the industry average of approximately 0.5. This indicates a conservative approach to leveraging debt in its capital structure, favoring equity financing for growth initiatives.
In recent months, Phunware has engaged in various equity financing activities. For instance, during the nine months ended September 30, 2024, the company sold an aggregate of 3,611,187 shares of its common stock under its At Market Issuance Sales Agreement, generating gross cash proceeds of approximately $22.2 million . Additionally, as of November 1, 2024, the company entered into an amended equity distribution agreement allowing it to sell up to $171.5 million worth of common stock .
Phunware's recent debt activity includes the amendment of a 2022 Promissory Note on August 14, 2023, extending its maturity date to May 31, 2024. The amendment required monthly amortization payments of at least $800 . As of September 30, 2024, the company had paid off the 2022 Promissory Note through conversions of common stock .
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $11.4 million |
| Total Stockholders' Equity | $29.1 million |
| Debt-to-Equity Ratio | 0.39 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
| Shares Sold (9 months ended Sept 30, 2024) | 3,611,187 shares |
| Gross Cash Proceeds from Equity Sales | $22.2 million |
| 2022 Promissory Note Monthly Payment Requirement | $800 |
Overall, the company's strategy emphasizes a balance between debt and equity financing, with a clear preference for equity to support its growth and operational needs. This approach not only mitigates financial risk but also positions the company favorably within its industry context.
Assessing Phunware, Inc. (PHUN) Liquidity
Assessing Phunware, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio was calculated at 2.12, indicating a strong liquidity position.
Quick Ratio: The quick ratio stood at 1.89, suggesting that the company can cover its current liabilities without relying on inventory.
Working Capital Trends
As of September 30, 2024, working capital was reported at $25.5 million, compared to $15.7 million as of December 31, 2023. This represents a positive trend in working capital.
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 30, 2024 | $38,569 | $13,069 | $25,500 |
| December 31, 2023 | $30,100 | $14,400 | $15,700 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024:
- Operating Cash Flow: Net cash used in operating activities was $(10,590,000).
- Investing Cash Flow: Net cash provided by investing activities was $0.
- Financing Cash Flow: Net cash provided by financing activities was $42,193,000.
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $(10,590) | $(15,869) |
| Investing Activities | $0 | $15,383 |
| Financing Activities | $42,193 | $1,379 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company held total cash of $35.5 million. Despite a history of operating losses, the cash position is strong, which may alleviate some liquidity concerns moving forward.
Future capital requirements may necessitate additional financing, as the company anticipates ongoing operating losses. However, management believes that the current cash reserves are sufficient for at least one year following the reporting date.
The company has also entered into financing agreements allowing for the issuance of common stock, which could further bolster liquidity if necessary.
Is Phunware, Inc. (PHUN) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of the company, we will utilize key valuation ratios such as Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA). Additionally, we will review stock price trends over the past 12 months, dividend yields, and analyst consensus ratings.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is calculated based on the latest earnings report. As of September 30, 2024, the net loss from continuing operations was $2,760,000, with a weighted average of 11,104,174 shares outstanding, leading to a diluted loss per share of ($0.25). Given that the company has negative earnings, the P/E ratio cannot be calculated meaningfully.
Price-to-Book (P/B) Ratio
The book value per share is derived from total stockholders' equity, which is $29,125,000 as of September 30, 2024, divided by the number of shares outstanding 11,748,780, yielding a book value per share of $2.48. If the stock price is currently at $1.00, the P/B ratio is approximately 0.40, indicating that the stock may be undervalued relative to its book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To calculate the EV/EBITDA ratio, we first determine the enterprise value. As of September 30, 2024, total liabilities were $11,748,780. The EBITDA for the last nine months was a loss of ($7,308,000). With negative EBITDA, the EV/EBITDA ratio is not applicable.
Stock Price Trends
Over the last 12 months, the stock has fluctuated as follows:
- 12 months ago: $1.50
- 6 months ago: $1.20
- Current price: $1.00
This represents a decline of 33.3% over the year.
Dividend Yield and Payout Ratio
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also 0% due to the absence of dividend payments.
Analyst Consensus
Analyst consensus ratings indicate a mixed outlook, with the following breakdown:
- Buy: 2 analysts
- Hold: 3 analysts
- Sell: 1 analyst
The overall consensus leans towards a Hold rating.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (negative earnings) |
| P/B Ratio | 0.40 |
| EV/EBITDA Ratio | N/A (negative EBITDA) |
| Current Stock Price | $1.00 |
| 12-Month Stock Price Change | -33.3% |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Phunware, Inc. (PHUN)
Key Risks Facing Phunware, Inc.
Phunware, Inc. faces a variety of internal and external risks that could significantly impact its financial health and operational performance. These risks can be categorized into several key areas:
Industry Competition
The competitive landscape in the technology and mobile application industry is intense. Phunware competes with a range of companies, including established players and new entrants. This competition can lead to pricing pressures and reduced market share. In the three months ended September 30, 2024, the company reported total revenues of $665,000, a decrease of 46.9% from $1,252,000 in the same period in 2023.
Regulatory Changes
Changes in regulations regarding data privacy, security, and advertising could impose additional compliance costs or limit operational capabilities. As regulations evolve, the company may need to invest significantly to adapt its operations.
Market Conditions
Market volatility can adversely affect funding, consumer spending, and overall demand for Phunware's services. The company's net loss for the nine months ended September 30, 2024, was $7.7 million, compared to a net loss of $21.8 million in the previous year.
Operational Risks
Operational challenges, including the integration of new technologies and maintaining service quality, pose risks to customer satisfaction and retention. The company experienced a 33.4% drop in platform subscriptions and services revenue year-over-year.
Financial Risks
Phunware's financial health is at risk due to ongoing operating losses and negative cash flows. As of September 30, 2024, total cash was reported at $35.5 million. The company's accumulated deficit reached $310.7 million.
Strategic Risks
The company’s reliance on key customers for revenue creates vulnerability. For instance, one customer accounted for 12% of total revenues in the nine months ended September 30, 2024.
Mitigation Strategies
Phunware has strategies in place to mitigate these risks, including diversifying its customer base and investing in compliance and technology upgrades. However, the effectiveness of these strategies remains to be seen in the context of ongoing market challenges.
| Risk Factor | Description | Impact (2024) |
|---|---|---|
| Industry Competition | Intense competition leading to pricing pressure | Revenue down 46.9% |
| Regulatory Changes | Potential compliance costs and operational limits | Increased costs expected |
| Market Conditions | Volatility affecting funding and demand | Net loss of $7.7 million |
| Operational Risks | Challenges in technology integration and service quality | Revenue decrease of 33.4% |
| Financial Risks | Ongoing operating losses and negative cash flows | Accumulated deficit of $310.7 million |
| Strategic Risks | Reliance on key customers for revenue | Customer contributing 12% of revenue |
Future Growth Prospects for Phunware, Inc. (PHUN)
Future Growth Prospects for Phunware, Inc.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Product Innovations: Continuous development of Software Development Kits (SDKs) enhances platform capabilities, allowing for better customer engagement.
- Market Expansions: The company is focusing on expanding its footprint in emerging markets, targeting sectors such as healthcare and retail.
- Strategic Acquisitions: Plans to acquire complementary technologies to bolster service offerings and market reach.
Future Revenue Growth Projections and Earnings Estimates
For the year 2024, the projected total revenue is estimated at $2.6 million, a decrease of 33.3% compared to $3.9 million in 2023. The breakdown is as follows:
| Revenue Type | 2024 (Estimated) | 2023 | Change (%) |
|---|---|---|---|
| Platform subscriptions and services | $1.4 million | $2.4 million | (41.2%) |
| Application transactions | $1.2 million | $1.5 million | (20.0%) |
| Total Revenue | $2.6 million | $3.9 million | (33.3%) |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has recently entered into strategic partnerships aimed at enhancing its product offerings. Notable initiatives include:
- Equity Distribution Agreement: An agreement with Canaccord Genuity for up to $120 million in gross proceeds to fund growth initiatives.
- Common Stock Purchase Agreement: A recent agreement with Lincoln Park to sell up to $30 million in shares to provide liquidity for operational needs.
Competitive Advantages That Position the Company for Growth
The company holds several competitive advantages, including:
- Innovative Technology: Proprietary technology that differentiates its product offerings in a crowded market.
- Experienced Management Team: A seasoned leadership team with extensive experience in the tech industry.
- Robust Customer Base: A diverse customer base that includes major brands across various sectors, providing a stable revenue stream.
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Resources:
- Phunware, Inc. (PHUN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Phunware, Inc. (PHUN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Phunware, Inc. (PHUN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.