BusinessWire

SRAX Reports Q2 2020 Revenue Growth of 29% Year-over-Year and Accelerating Growth for Remainder of 2020

LOS ANGELES--(BUSINESS WIRE)--$SRAX--SRAX, Inc. (NASDAQ: SRAX), a digital marketing and consumer data management technology company, reported results for the three months ended June 30, 2020.


Second Quarter 2020 and Recent Operational Highlights

  • Revenue of $1.1M - up 232% sequentially over Q1 and 29% year-over-year
  • Gross margin increased to 66% from 54% in the same period last year
  • Reduced operating expenses by 21% over Q1 and 30% year-over-year
  • EBITDA increase of 16% over Q1 and 35% year-over-year
  • Bookings have increased to $8.6M for the year of which $4.1M was booked in Q3 to-date
  • 6 consecutive quarters of Sequire SAAS growth
  • 91 public companies have subscribed to Sequire
  • 1 million investors/traders now part of Sequire platform
  • Completed the integration of institutional investor data and the ability for issuers to survey their shareholders from the Sequire platform
  • Closed transactions with some of the largest advertisers in the world on the BIGtoken platform
  • Closed a convertible debt offering of $16.1M which puts the company in a strong cash position to accommodate growth.

Second Quarter 2020

  • Total Revenue was $1,165,000, an increase of 29% as compared to Q2 2019 and up 232% from Q1 2020.
  • Gross Margin was $769,000 or 66%, an increase of $277,000 as compared to the same period last year.
  • Operating Expenses were $4 million, a decrease of 21% as compared to the same period last year.
  • Cash totaled $4.6 million as of June 30, 2020, compared with $32,000 at December 31, 2019.

Six Months Ended June 30, 2020

  • Total Revenue was $1.5 million, an increase of 1% from the prior year.
  • Gross Margin was $1 million or 66%, an increase of $266,000 or 36% as compared to the same period last year due to our high margin SAAS Sequire platform.
  • Operating Expenses were $8.1 million, reflecting a decrease of $1.5 million or 15% compared to the same period last year.

“The growth we experienced this last quarter and through today has been the fastest growth we have encountered as a public company. For the past six weeks we have closed close to $1M per week in business, mostly driven by our Sequire platform,” said Christopher Miglino, Founder and CEO of SRAX. “Public issuers are seeing the benefits of the platform and our data teams are gaining significant insights from that growth. Sequire now has over 1 million investors and traders, a significant portion of which are from the Robinhood platform.”

Miglino added, “The more data that we drive into the system the better we become at delivering measurable results to our clients. Our system of identifying existing and prospective investors utilizes cutting edge machine learning to drive awareness and convert prospective investors. We have hit a tipping point in the business and we look forward to quickly passing 100 clients with our premier operating system for public companies.”

Conference Call:

Management will review the results on a conference call with a live question and answer session, August 17, 2020, at 4:30 p.m. ET / 1:30 p.m. PT.

To access the live webcast and presentation and to ask questions, please register here: https://vr.mysequire.com/registration/?id=6515854.

To access the conference call without the ability to ask questions, please dial US +1 (206) 928-9280. The conference ID is 6515854.

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 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 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, 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, 2019, 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.

STATEMENT OF OPERATIONS
(Unaudited)

Three months ending June 30

 

Six months ending June 30

In dollars

2020

2019

$ CHG

% CHG

 

2020

2019

$ CHG

% CHG

REVENUE
Total revenues

 

1,165,000

 

 

904,000

 

261,000

 

29

%

 

1,516,000

 

 

1,496,000

 

20,000

 

1

%

COST OF REVENUES
Total cost of revenues

 

396,000

 

 

412,000

 

(16,000

)

-4

%

 

508,000

 

 

754,000

 

(246,000

)

-33

%

Gross profit

 

769,000

 

 

492,000

 

277,000

 

56

%

 

1,008,000

 

 

742,000

 

266,000

 

36

%

Gross profit margin

 

66

%

 

54

%

 

66

%

 

50

%

OPERATING EXPENSES
Employee related costs

 

1,691,000

 

 

2,370,000

 

(679,000

)

-29

%

 

3,717,000

 

 

4,568,000

 

(851,000

)

-19

%

Marketing and selling expenses

 

370,000

 

 

632,000

 

(262,000

)

-41

%

 

690,000

 

 

1,087,000

 

(397,000

)

-37

%

Platform Costs

 

387,000

 

 

367,000

 

20,000

 

5

%

 

790,000

 

 

706,000

 

84,000

 

12

%

Depreciation and amortization

 

321,000

 

 

277,000

 

44,000

 

16

%

 

629,000

 

 

530,000

 

99,000

 

19

%

General selling general and administrative

 

1,249,000

 

 

1,468,000

 

(219,000

)

-15

%

 

2,305,000

 

 

2,715,000

 

(410,000

)

-15

%

Total operating expenses

 

4,018,000

 

 

5,114,000

 

(1,096,000

)

-21

%

 

8,131,000

 

 

9,606,000

 

(1,475,000

)

-15

%

(LOSS) INCOME FROM OPERATIONS

 

(3,249,000

)

 

(4,622,000

)

1,373,000

 

-30

%

 

(7,123,000

)

 

(8,864,000

)

1,741,000

 

-20

%

(LOSS) INCOME BEFORE INCOME TAXES

 

(5,321,000

)

 

(8,100,000

)

2,779,000

 

-34

%

 

(8,324,000

)

 

(13,885,851

)

5,561,851

 

-40

%

Provision for income taxes

 

-

 

 

-

 

 

-

 

 

-

 

NET (LOSS) INCOME

 

(5,321,000

)

 

(8,100,000

)

2,779,000

 

-34

%

 

(8,324,000

)

 

(13,885,851

)

5,561,851

 

-40

%

 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED

$

(0.38

)

$

(0.67

)

0.29

 

-44

%

$

(0.59

)

$

(0.67

)

0.08

 

-12

%

Weighted average shares used in computing net (loss) income per share, basic and diluted

 

14,080,890

 

 

12,129,787

 

1,951,103

 

16

%

 

14,038,940

 

 

11,210,810

 

2,828,130

 

25

%

 
 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(Unaudited)
In dollars

2020

2019

$ CHG

% CHG

2020

2019

$ CHG

% CHG

 
Net income (loss) - GAAP

 

(5,321,000

)

 

(8,100,000

)

2,779,000

 

-34

%

 

(8,324,000

)

 

(13,885,851

)

5,561,851

 

-40

%

OPERATING EXPENSES
Equity based compensation

 

294,265

 

 

316,000

 

 

648,265

 

 

436,884

 

Adjustments to derivative liabilities

 

980,873

 

 

2,875,554

 

 

980,873

 

 

4,837,405

 

Interest expense and financing costs

 

1,678,000

 

 

525,000

 

 

2,038,000

 

 

592,988

 

Depreciation and amortization

 

321,000

 

 

277,000

 

 

629,000

 

 

530,000

 

Gain on Sale

 

-

 

 

-

 

 

(472,479

)

Other income

 

-

 

 

78,000

 

 

71,000

 

 

64,491

 

Gain / (Loss) from marketable securities

 

(587,000

)

 

-

 

 

(587,000

)

 

-

 

 
Adjusted EBITDA - NON GAAP

 

(2,633,863

)

 

(4,028,446

)

1,394,584

 

-35

%

 

(4,543,863

)

 

(7,896,562

)

3,352,700

 

-42

%

 
Balance Sheets
(Unaudited)
In dollars 30-Jun-20 31-Dec-19 $ CHG % CHG
ASSETS
Current Assets
Cash

4,612,000

32,000

4,580,000

 

n/m

 

Accounts receivable, net

647,000

805,000

(158,000

)

-20

%

Prepaid expense

434,000

715,000

(281,000

)

-39

%

Securities held for sale

1,666,000

-

1,666,000

 

n/a

 

Other current assets

211,000

306,000

(95,000

)

-31

%

Total current assets

7,570,000

1,858,000

5,712,000

 

307

%

Property and equipment, net

153,000

191,000

(38,000

)

-20

%

Goodwill

15,645,000

15,645,000

-

 

0

%

Intangible assets, net

1,949,000

1,966,000

(17,000

)

-1

%

Right-of-Use Asset

413,000

456,000

(43,000

)

-9

%

Other assets

32,000

118,000

(86,000

)

-73

%

Total Assets

25,762,000

20,234,000

5,528,000

 

27

%

 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses

4,300,000

2,442,000

1,858,000

 

76

%

Derivative liabilities

-

4,397,000

-4,397,000

 

-100

%

Other current liabilities

1,604,000

537,000

1,067,000

 

199

%

Accounts receivable loan

-

-

-

 

n/a

 

Short-term notes

-

-

-

 

n/a

 

Term loan note - current portion

-

-

-

 

n/a

 

Payroll protection loan - current portion

403,000

-

403,000

 

n/a

 

OID convertible debentures - current portion

1,264,000

-

1,264,000

 

n/a

 

Total Current Liabilities

7,571,000

7,376,000

195,000

 

3

%

Right-of-Use liability - long term

309,000

352,000

-43,000

 

-12

%

Term loan note, less current portion

-

-

-

 

n/a

 

Payroll protection loan, less current portion

671,000

-

671,000

 

n/a

 

OID convertible debentures, less current portion

1,264,000

-

1,264,000

 

n/a

 

 
Total Liabilities

9,815,000

7,728,000

2,087,000

 

27

%

 
Stockholders' equity

15,947,000

12,506,000

3,441,000

 

28

%

 
Total liabilities and equity

25,762,000

20,234,000

5,528,000

 

27

%

 


Contacts

Natalie Santos
press@srax.com