Tapinator Announces Q2 2024 Financial Results

Rhea-AI Summary

Tapinator (OTC: TAPM) announced Q2 2024 financial results, reporting a 16% year-over-year revenue increase to $1.2 million. However, bookings decreased 8% to $1.1 million. The company's net income dropped significantly to $2,000 from $83,000 in the previous year, while Adjusted EBITDA decreased 44% to $119,000. For the six months ended June 30, 2024, Tapinator achieved revenue of $2.4 million and bookings of $2.3 million, with net income of $146,000 and Adjusted EBITDA of $262,000. The company faced challenges in Q2, particularly with its core Category Leading Games, which saw a 5% decrease in bookings. Tapinator is adjusting its marketing strategy and focusing on ramping up daily active users for its latest game, Blackjack Live Casino. The company is also developing two new AI-related products set to launch later this year.

Positive

• Revenue increased 16% year-over-year to $1.2 million in Q2 2024
• Six-month revenue grew 16% to $2.4 million
• Launching Android version of Blackjack Live Casino on Google Play
• Developing two new AI-related products for launch later in 2024

Negative

• Bookings decreased 8% year-over-year to $1.1 million in Q2 2024
• Net income dropped 97% to $2,000 from $83,000 in Q2 2023
• Adjusted EBITDA decreased 44% year-over-year to $119,000 in Q2 2024
• Core Category Leading Games bookings declined 5% in Q2 2024
• Marketing strategy not yielding desired results, requiring adjustments

• Revenue Increases 16% Year-Over-Year to $1.2 Million
• Bookings^* Decrease 8% Year-Over-Year to $1.1 Million
• Net Income of $2k Compared to Previous Year Net income of $83k
• Adjusted EBITDA^* Decreases 44% Year-Over-Year to $119k
• Basic and Fully Diluted EPS of $0.00

NEW YORK, Aug. 12, 2024 /PRNewswire/ -- Tapinator, Inc. (OTC: TAPM) ("Tapinator," the "Company," "we," "our" or "us"), a developer and publisher of category leading games for mobile platforms, today announced unaudited financial results for the three and six months ended June 30, 2024, and the filing of its quarterly report for the periods ended June 30, 2024 and 2023.

The quarterly report and financial statements have been published on OTC Markets and may be found at http://www.otcmarkets.com/stock/TAPM/disclosure.  The results provided below replace, in their entirety, any guidance or projections previously issued by the Company.

For the three months ended June 30, 2024, Tapinator achieved revenue and bookings^* of approximately $1.2 million and $1.1 million, respectively, and net income and adjusted EBITDA^* of approximately $2,000 and $119,000, respectively.  The Company's quarterly revenue, bookings*, net income and adjusted EBITDA^* represent year-over-year change of 16%, -8%, -97% and -44%, respectively.  For the three-month period, the Company also announced basic and fully diluted net income of $0.00 per share.

For the six months ended June 30, 2024, Tapinator achieved revenue and bookings^* of approximately $2.4 million and $2.3 million, respectively, and net income and adjusted EBITDA^* of approximately $146,000 and $262,000, respectively.  The Company's revenue, bookings*, net income and adjusted EBITDA^* for the six-month period represent year-over-year change of 16%, -2%, -49% and -22%, respectively.  For the six-month period, the Company also announced basic and fully diluted net income of $0.05 per share.

^*A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net income, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.

Financial Highlights

	Three Months Ended				Six Months Ended
	June 30				June 30
	2024	2023	% Ch.		2024	2023	% Ch.
GAAP Results:
Revenue	$1,207,804	$1,036,982	16 %		$2,443,088	$2,101,835	16 %
Operating Income (loss)	($25,126)	$75,429	-133 %		($3,709)	$93,664	-104 %
Net Income	$2,226	$82,855	-97 %		$146,349	$284,554	-49 %
Net Income margin %	0 %	8 %			6 %	14 %
Net Income Per Share – Basic	$0.00	$0.03			$0.05	$0.10
Net Income Per Share – Diluted	$0.00	$0.03			$0.05	$0.10
Weighted avg. common shares outstanding - basic	2,725,439	2,725,439			2,725,439	2,725,439
Weighted avg. common shares outstanding - diluted	2,725,439	2,725,439			2,725,439	2,725,450
Non-GAAP Results:
Bookings:
Category Leading Games	$1,066,583	$1,127,036	-5 %		$2,208,067	$2,174,259	2 %
Rapid-Launch Games	17,437	53,703	-68 %		42,117	121,763	-65 %
Total Bookings	$1,084,020	$1,180,739	-8 %		$2,250,184	$2,296,022	-2 %
Adjusted EBITDA	$118,724	$211,105	-44 %		$262,59	$335,806	-22 %
Adjusted EBITDA Margin %	10 %	20 %			11 %	16 %
(1) Percentage change not meaningful.

Ilya Nikolayev, CEO of Tapinator, commented, "Q2 2024 was a challenging quarter for us. Despite a 16% increase in year-over-year quarterly revenue, we saw an 5% decrease in bookings for our core Category Leading Games. As we have noted previously, we have expanded our marketing efforts this year and, thus far, this strategy has not yielded desired results. We are currently adjusting our marketing strategy to better align spend with current booking levels. 

In May and July, we launched major update 1.3 and 1.4, respectively, to our latest game, Blackjack Live Casino. Later this month, we will be launching the Android version of this game on Google Play. Overall, we are very focused on ramping up the daily active user (DAU) count for this title and, between improvements to the game and the launch on Google Play, we are hopeful that we'll be able to scale the player base. 

As we have noted previously, while creating the live host experience for Blackjack Live Casino, we spent significant time exploring the voice and chat capabilities of AI. We are currently working on two new products - one at the intersection of chat and AI; the other at the intersection of mobile gaming and AI. Both products utilize the core expertise that our team has in mobile app development, and we plan on launching both products later this year. 

Non-GAAP Financial Measures*
We have provided in this release the non-GAAP financial measures of Bookings and adjusted EBITDA as a supplement to the measures of Revenue and Operating which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings and adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings and adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings and adjusted EBITDA in assessing our performance and when planning, forecasting, and analyzing future periods. We believe Bookings and adjusted EBITDA are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical Bookings and adjusted EBITDA to the most directly comparable GAAP financial measures.  Some limitations of Bookings and adjusted EBITDA are as follows:

• Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
• Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, gain on digital asset dividends & airdrops, gain on sale of digital assets and gain on sale of investments;
• Adjusted EBITDA does not reflect income tax expense;
• Adjusted EBITDA does not include other income or expenses, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
• Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation, amortization, and impairment of capitalized software are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future; and
• Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure.

Because of these limitations, you should consider Bookings and adjusted EBITDA, along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss), and our other financial results presented in accordance with GAAP.

NFT500 Supplemental Information – Summary Collection Metrics*

	Totals as of 12/31/2023	Q1 2024	Q2 2024	Cumulative Totals as of 06/30/2024
# of NFTs Collected	724	1	0	725
# of NFTs Sold	-292	-24	-19	-335
# of NFTs Held, Cumulatively	432	409	390	390
Cost of NFTs Collected	$    2,925,228			$    2,925,228
Proceeds from Sale of Collected NFTs	(1,600,482)	(300,315)	(96,344)	$  (1,997,141)
Proceeds from Sale of Digital Asset Dividends & Airdrops	(185,816)	-	-	(185,816)
Cost of NFTs Collected, Net of Sales Proceeds	$    1,138,930	$      (300,315)	$      (96,344)	$       742,271

* We are no longer actively investing in the NFT ecosystem, and we have been selectively selling digital assets under market conditions as market conditions allow and that we deem appropriate.

Reconciliation of GAAP to Non-GAAP Results

	Three Months Ended			Six Months Ended
	June 30			June 30
	2024	2023		2024	2023
Reconciliation of Revenue to Bookings:
Revenue	$1,207,804	$1,036,982		$2,443,088	$2,101,835
Change in deferred revenue	(123,784)	143,757		(192,904)	194,187
Bookings	$1,084,020	$1,180,739		$2,250,184	$2,296,022
Reconciliation of Net Income to Adjusted EBITDA:
Net income	$2,226	$82,855		$146,349	$284,554
Interest income, net	(1,133)	(1,864)		(2,139)	(2,310)
Income tax expense, net	11,100	17,200		28,600	54,900
Loss on Impairment of digital assets	-	-		101,283	-
Amortization of capitalized software development costs	140,899	129,548		260,005	229,885
Depreciation and amortization of other assets	2,951	3,212		6,163	6,425
Gain on sale of digital assets	(37,319)	(19,166)		(277,802)	(239,884)
Gain on sale of investments	-	(3,596)		-	(3,596)
Stock-based compensation	-	2,916		-	5,832
Adjusted EBITDA	$118,724	$211,105		$262,59	$335,806

About Tapinator
Tapinator Inc. (OTC: TAPM) develops and publishes Category Leading Games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic, Keno Vegas, and Blackjack Live Casino.  We generate revenues from our mobile games via consumer transactions, including in-app purchases and subscriptions, and through the sale of branded advertisements. Founded in 2013, we are headquartered in New York, with product teams located in North America and Europe.

Forward Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "hope," "opinion," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions, or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our hope that we will be able to scale the player base for Blackjack Live Casino based on improvements to the game and its launch on Google Play and our plan to launch two new products relating to Blackjack Live Casino - one at the intersection of chat and AI and the other at the intersection of mobile gaming. Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance, or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on October 20, 2021 and as updated from time to time.

CONTACT:
Tapinator Investor Relations
investor.relations@tapinator.com
914.930.6232

View original content to download multimedia:https://www.prnewswire.com/news-releases/tapinator-announces-q2-2024-financial-results-302220258.html

SOURCE Tapinator, Inc.

FAQ

What was Tapinator's (TAPM) revenue for Q2 2024?

Tapinator's revenue for Q2 2024 was $1.2 million, representing a 16% increase year-over-year.

How did Tapinator's (TAPM) net income change in Q2 2024 compared to Q2 2023?

Tapinator's net income decreased significantly from $83,000 in Q2 2023 to $2,000 in Q2 2024, a 97% decline.

What new products is Tapinator (TAPM) developing for launch in 2024?

Tapinator is developing two new AI-related products: one at the intersection of chat and AI, and another at the intersection of mobile gaming and AI. Both are planned for launch later in 2024.

How did Tapinator's (TAPM) Adjusted EBITDA perform in Q2 2024?

Tapinator's Adjusted EBITDA decreased by 44% year-over-year to $119,000 in Q2 2024.