Kubient Reports Second Quarter 2022 Results
08/15/2022 - 04:05 PM
NEW YORK, Aug. 15, 2022 (GLOBE NEWSWIRE) -- Kubient, Inc. (NasdaqCM: KBNT, KBNTW) (“Kubient” or the “Company”), a cloud-based software platform for digital advertising, today reported financial results for the second quarter ended June 30, 2022.
Second Quarter 2022 and Recent Operational Highlights
Net revenues for the six-month period ended June 30th , 2022 increased 37% compared to the same year ago period. Strengthened and optimized balance sheet in order to secure cash position and extend runway; Company expects to recognize cost savings starting in August 2022. Received three new client wins and two client extensions and budget increases. Management Commentary “Over the previous two quarters Kubient has sought to minimize cash burn, as we look to maintain existing operations while working to build our top line with a renewed workforce," said Kubient Founder, Chairman, CEO, CSO, and President, Paul Roberts. "Throughout the process or reducing the company’s cash burn, we believe that Kubient has transitioned into a better position to take advantage of strategic alternatives and M&A opportunities offered in the inorganic growth market, thanks to what we believe is a cleaner balance sheet and strong cash position. In parallel, close care has been kept to maintaining the key components of our organization on the development and operations side of our engineering core, which has kept the fire lit under Kubient Managed Services and the Audience Cloud.”
Second Quarter and Six Month 2022 Financial Results Due to severance and cancelation costs incurred from certain third-party vendors and services during the second quarter, the normalization of the Company’s burn rate did not take effect until the beginning of August. Kubient expects that its third quarter results and beyond will reflect the lower cash burn rate.
Net revenues for the quarter ended June 30th , 2022 decreased 20% to approximately $400,000 compared to approximately $498,000 in the same period last year. The decrease was primarily due to a decrease of $495,000 of net revenues associated with a major customer whose contract renewed in the first quarter of 2022 at a reduced scope as compared to the 2021 period, partially offset by revenues generated in the 2022 period related to customer contracts acquired in connection with the acquisition of MediaCrossing in November 2021.
Net revenues for the six-month period ended June 30th , 2022 increased 37% to approximately $1.6 million compared to approximately $1.2 million in the same period last year. The increase in net revenues was primarily attributable to net revenues generated related to customer contracts acquired in connection with the acquisition of MediaCrossing in November 2021.
Adjusted EBITDA loss, a non-GAAP measure, for the quarter ended June 30th , 2022 increased to approximately $2.2 million , or $(0.16) per basic and diluted share, compared to an adjusted EBITDA loss of approximately $1.6 million , or $(0.12) per basic and diluted share, in the same period last year. Adjusted EBITDA loss for the six-month period ended June 30th , 2022 increased to approximately $5.8 million , or $(0.41) per basic and diluted share, compared to an adjusted EBITDA loss of approximately $3.1 million , or $(0.24) per basic and diluted share, in the same period last year.
As of June 30, 2022, the Company had a cash balance of approximately $17.7 million .
Conference Call Kubient will hold a conference call today (August 15, 2022) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
Kubient management will host the conference call, followed by a question and answer period.
Date: Monday, August 15, 2022 Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time) U.S. dial-in: 1-800-225-9448 International dial-in: 1-203-518-9708 Operator Prompted Access Code: KUBIENT
Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the Investor Relations section of Kubient’s website.
A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through August 25, 2022.
Toll-free replay number: 1-877-481-4010 International replay number: 1-919-882-2331 Replay ID: 46231
About Kubient Kubient is a technology company with a mission to transform the digital advertising industry to audience-based marketing. Kubient’s next generation cloud-based infrastructure enables efficient marketplace liquidity for buyers and sellers of digital advertising. The Kubient Audience Marketplace is a flexible open marketplace for advertisers and publishers to reach, monetize and connect their audiences. The Company’s platform provides a transparent programmatic environment with proprietary artificial intelligence-powered pre-bid ad fraud prevention, and proprietary real-time bidding (RTB) marketplace automation for the digital out of home industry. The Audience Marketplace is the solution for brands and publishers that demand transparency and the ability to reach audiences across all channels and ad formats. For additional information, please visit https://kubient.com .
Forward-Looking Statements The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
Non-GAAP Measures The Company defines EBITDA as net income (loss) before interest (including non-cash interest), taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation that the Company does not believe reflects the underlying business performance.
EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes that because Adjusted EBITDA excludes (a) certain non-cash expenses (such as depreciation, amortization and stock-based compensation) and (b) expenses that are not reflective of the Company’s core operating results over time (such as stock based compensation expense), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period. The Company’s management uses EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for planning and forecasting in future periods, and (c) in communications with the Company’s board of directors concerning the Company’s financial performance. The Company’s presentation of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes EBITDA and Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.
Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are (a) they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt, (b) they do not reflect future requirements for capital expenditures or contractual commitments, and (c) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.
Kubient Investor Relations Gateway Investor Relations Matt Glover and John Yi T: 1-949-574-3860Kubient@gatewayir.com
Kubient, Inc. Condensed Consolidated Statements of Operations (unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Revenues $ 400,351 $ 497,568 $ 1,645,655 $ 1,205,325 Costs and Expenses: Sales and marketing 1,050,423 504,380 2,383,433 1,261,330 Technology 959,157 619,692 2,114,856 1,139,447 General and administrative 1,509,208 1,108,280 3,691,757 2,363,852 Impairment loss on intangible assets 2,626,974 - 2,626,974 - Impairment loss on property and equipment 49,948 - 49,948 - Impairment loss on goodwill 463,000 - 463,000 - Loss accrual on customer contract (413,918 ) - 375,687 - Total Costs and Expenses 6,244,792 2,232,352 11,705,655 4,764,629 Loss From Operations (5,844,441 ) (1,734,784 ) (10,060,000 ) (3,559,304 ) Other (Expense) Income: Interest expense (2,536 ) (1,576 ) (6,408 ) (3,210 ) Interest income 2,734 33,355 5,025 62,664 Change in fair value of contingent consideration 23,378 - 613,000 - Other income 10,974 - 11,000 233 Total Other Income 34,550 31,779 622,617 59,687 Net Loss $ (5,809,891 ) $ (1,703,005 ) $ (9,437,383 ) $ (3,499,617 ) Net Loss Per Share - Basic and Diluted $ (0.41 ) $ (0.12 ) $ (0.66 ) $ (0.26 ) Weighted Average Common Shares Outstanding - Basic and Diluted 14,316,483 13,983,195 14,286,655 13,307,766
Kubient, Inc. Condensed Consolidated Balance Sheets June 30, December 31, 2022 2021 (unaudited) Assets Current Assets: Cash and cash equivalents $ 17,683,885 $ 24,907,963 Accounts receivable, net 259,562 2,291,533 Other receivables - 526,070 Prepaid expenses and other current assets 236,160 495,178 Total Current Assets 18,179,607 28,220,744 Intangible assets, net - 2,946,610 Goodwill - 463,000 Property and equipment, net - 44,756 Deferred offering costs 10,000 10,000 Total Assets $ 18,189,607 $ 31,685,110 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable - suppliers $ 562,877 $ 1,844,544 Accounts payable - trade 323,402 659,362 Accrued expenses and other current liabilities 376,409 2,493,287 Deferred revenue 146,339 395,914 Notes payable 1,509 151,336 Total Current Liabilities 1,410,536 5,544,443 Contingent consideration - 613,000 Notes payable, non-current portion 77,391 77,407 Total Liabilities 1,487,927 6,234,850 Commitments and contingencies Stockholders' Equity: Preferred stock, $0.00001 par value; 5,000,000 shares authorized; No shares issued and outstanding as of June 30, 2022 and December 31, 2021 - - Common stock, $0.00001 par value; 95,000,000 shares authorized; 14,401,252 and 14,253,948 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively 144 143 Additional paid-in capital 52,719,709 52,030,907 Accumulated deficit (36,018,173 ) (26,580,790 ) Total Stockholders' Equity 16,701,680 25,450,260 Total Liabilities and Stockholders' Equity $ 18,189,607 $ 31,685,110
Kubient, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) For the Six Months Ended June 30, 2022 2021 Cash Flows From Operating Activities: Net loss $ (9,437,383 ) $ (3,499,617 ) Adjustments to reconcile net loss to net cash used in operating activities: Bad debt expense 7,000 - Impairment loss on intangible assets 2,626,974 - Impairment loss on property and equipment 49,948 Impairment loss on goodwill 463,000 - Depreciation and amortization 330,993 159,293 Change in fair value of contingent consideration (613,000 ) - Stock-based compensation: Common stock 717,265 255,667 Options 4,362 5,085 Changes in operating assets and liabilities: Accounts receivable 2,024,971 878,814 Other receivable 507,387 - Prepaid expenses and other current assets 259,018 (52,766 ) Accounts payable - suppliers (1,281,667 ) 16,061 Accounts payable - trade (335,959 ) (404,930 ) Accrued expenses and other current liabilities (1,913,445 ) (334,280 ) Accrued interest - (3,975 ) Deferred revenue (249,575 ) - Net Cash Used In Operating Activities (6,840,111 ) (2,980,648 ) Cash Flows From Investing Activities: Purchase of intangible assets - (1,114,072 ) Purchase of property and equipment (16,549 ) (10,181 ) Net Cash Used In Investing Activities (16,549 ) (1,124,253 ) Cash Flows From Financing Activities: Proceeds from exercise of warrants [1] - 9,787,149 Proceeds from exercise of options - 8,361 Repayment of PPP loan (149,843 ) - Repayment of financed director and officer insurance premiums (217,575 ) - Payment of deferred offering costs - (10,300 ) Net Cash (Used In) Provided By Financing Activities (367,418 ) 9,785,210 Net (Decrease) Increase In Cash and Cash Equivalents (7,224,078 ) 5,680,309 Cash and Cash Equivalents - Beginning of the Period 24,907,963 24,782,128 Cash and Cash Equivalents - End of the Period $ 17,683,885 $ 30,462,437 [1] Includes gross proceeds of $10,169,027, less issuance costs of $381,878.
Kubient, Inc. Reconciliation of GAAP EBITDA to Non- GAAP Adjusted EBITDA (Unaudited)
For the Three Months Ended June 30, 2022 2021 Net Loss $ (5,809,891 ) $ (1,703,005 ) Interest expense 2,536 1,576 Interest income (2,734 ) (33,355 ) Depreciation and amortization 168,772 81,914 EBITDA (5,641,317 ) (1,652,870 ) Adjustments: Stock-based compensation expense 288,971 19,538 Impairment loss on intangible assets 2,626,974 - Impairment loss on property and equipment 49,948 - Impairment loss on goodwill 463,000 - Change in fair value of contingent consideration (23,378 ) - Adjusted EBITDA $ (2,235,802 ) $ (1,633,332 ) Adjusted Loss Per Share $ (0.16 ) $ (0.12 ) Weighted Average Common Shares Outstanding - Basic and Diluted 14,316,483 13,983,195