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PI

Phunware, Inc. (PHUN)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 delivered sequential improvement: revenue rose 10% QoQ to $1.011M, while operating expenses fell ~49% YoY to $3.404M, narrowing net loss to $(2.631)M and EPS to $(0.32) from $(2.10) YoY .
  • Software bookings surged: +623% in Q2 2024 and +939% in 1H 2024 vs prior periods, alongside 100% customer retention and major renewals in hospitality and healthcare; pipeline identified at ~$7M early in Q3 .
  • Balance sheet strengthened: cash was $20.369M at June 30, 2024; management added ~$16.2M in July via ATM proceeds, providing runway to invest in sales/marketing and pursue M&A .
  • Consensus estimates via S&P Global were unavailable for PHUN this quarter; no formal numerical guidance given beyond internal targets and margin commentary—limiting expected “beat/miss” catalysts vs Street [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • Software bookings momentum: “Software bookings in 2024 have increased approximately 623% [Q2] and 939% [1H] vs. the 2023 periods,” with early renewals at three of the largest customers and 100% retention in Q2 .
  • Cost discipline: Total operating expenses fell to $3.404M (−48.6% YoY), cutting operating loss to $(2.934)M and net loss to $(2.631)M; EPS improved to $(0.32) from $(2.10) YoY .
  • Liquidity and optionality: $20.369M cash at quarter-end; in July, ~$16.2M net ATM proceeds added, enabling investment in sales/marketing and potential M&A .

What Went Wrong

  • Year-over-year revenue decline: revenue decreased to $1.011M from $1.295M (−22%) YoY despite QoQ growth, reflecting a smaller topline vs prior-year quarter .
  • Ongoing losses: operating loss $(2.934)M and net loss $(2.631)M persist; cash from operations for 1H remained negative at $(8.205)M, though improved vs prior year .
  • Limited external coverage and guidance: S&P Global consensus estimates unavailable; management does not provide detailed guidance, reducing transparency for near-term modeling [GetEstimates error] .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Revenue ($USD Millions)$1.295 $0.921 $1.011
Diluted EPS - Continuing Ops ($USD)$(2.10) $(0.33) $(0.32)
Gross Profit ($USD Millions)$0.535 $0.524 $0.470
Gross Profit Margin (%)41.3% (computed from revenue/gross profit) 56.9% 46.5% (computed from revenue/gross profit)
Total Operating Expenses ($USD Millions)$6.622 $3.398 $3.404
Operating Loss ($USD Millions)$(6.087) $(2.874) $(2.934)
Net Loss - Continuing Ops ($USD Millions)$(4.414) $(2.292) $(2.631)
Cash and Equivalents ($USD Millions)N/A$21.567 $20.369

Notes:

  • Gross margin for Q2 2024 and Q2 2023 is calculated using reported revenue and gross profit with cited sources; Q1 2024 margin is disclosed directly .

Actual vs Consensus (Q2 2024):

MetricActualConsensus (S&P Global)
Revenue ($USD Millions)$1.011 N/A – consensus unavailable via S&P Global
Diluted EPS - Continuing Ops ($USD)$(0.32) N/A – consensus unavailable via S&P Global

Segment Breakdown (where disclosed)

MetricQ2 2023Q1 2024Q2 2024
Subscriptions & Services Revenue ($USD Millions)N/A$0.454 N/A
Application Transaction Revenue ($USD Millions)N/A$0.467 N/A
Subscriptions & Services as % of TotalN/A49.3% N/A
Application Transaction as % of TotalN/A50.7% N/A

KPIs

KPIQ2 2023Q1 2024Q2 2024
Software Bookings Growth vs Prior PeriodN/A~60% of full-year 2023 bookings achieved in Q1 +623% vs prior period; +939% in 1H vs prior periods
Customer RetentionN/AN/A100% in Q2
Monthly OpEx Run-Rate (ex-SBC)~$1.8M (FY23 6M avg) ~$0.93M (1H 2024 avg) ~$0.93M; modest increase expected in H2
Cash and Equivalents ($USD Millions)N/A$21.567 $20.369

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue (Internal Goal)FY 2024None$6M–$8M (back-end loaded to 2H) Introduced
Gross MarginFY 2024Not disclosedExpected similar to Q1 levels (~56.9%) Maintained range commentary
Monthly OpEx Run-Rate (ex-SBC)H2 2024~$0.93M (1H 2024) Modest increase expected with sales/marketing investment Raised modestly
Liquidity UpdateJuly 2024N/AAdded ~$16.2M net ATM proceeds Strengthened cash

Management does not provide formal quarterly guidance; disclosures reflect internal targets and qualitative outlook shared on calls .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023, Q1 2024)Current Period (Q2 2024)Trend
Bookings & PipelineQ1: bookings ≈60% of FY23 total; focus on SaaS renewals/new logos +623% bookings QoQ; +939% in 1H; ~$7M new pipeline identified early Q3 Improving
Cost StructureQ4: monthly OpEx down to ~$1.1M; restructuring completed OpEx −48.6% YoY; run-rate ~$0.93M ex-SBC; modest H2 increase expected Lean, investing
Sales Cycle & DeliveryQ1: ~30-day implementation; channel ~30% pipeline Sales cycle ~90 days; average implementation 30–45 days; pursuing “one-to-many” portfolio wins Scaling via portfolios
Hospitality & ConventionsQ4/Q1: hospitality core; Gaylord/Marriott examples Expanding convention footprint; partnerships to penetrate conventions market Expanding vertical
R&D & AIQ4: AI for personalized engagement; innovation emphasis Investing in R&D to target larger markets beyond hospitality/healthcare Building pipeline
Digital Assets & Patent MonetizationQ4: reactivating crypto strategy; Netflix infringement economic interest Not a Q2 revenue driver; continues as strategic optionality Longer-term optionality
Capital MarketsQ4: regained Nasdaq compliance; reverse split; shelf FTSE Russell Microcap addition; ATM program active Improved profile

Management Commentary

  • “Software bookings in 2024 have increased approximately 623% and 939% for the second quarter of 2024 and the 6-month period then ended respectively, as compared to the 2023 prior periods” — CFO Troy Reisner .
  • “Our software bookings are up nearly 10x over the prior six-month period… our revamped sales team and evolving sales model… drive a strong pipeline while reducing the length of our sales cycle” — CEO Mike Snavely .
  • “During July, we opportunistically added approximately $16.2 million of cash through net proceeds from selling approximately 2.7 million shares via our ATM” — CFO Troy Reisner .

Q&A Highlights

  • R&D and new markets: management aims to adapt platform to “substantially larger markets,” with targeted platform evolution by vertical needs .
  • Bookings composition: mix of renewals and new customers; pipeline identified at ~$7M with expectation to convert a reasonable percentage over time .
  • Implementation cycle: average 30–45 days (range: 1 week to 6 months), dependent on customer readiness; platform is primarily a configuration engine .
  • Conventions market: expanding relationships (e.g., Gaylord Hotels) and partnering with major convention hosts to penetrate event-driven hospitality .
  • Sales motion: ~90-day sales cycle; focus on “one-to-many” portfolio relationships to accelerate multi-property wins .

Estimates Context

  • S&P Global consensus estimates for Q2 2024 revenue and EPS were unavailable at the time of analysis; thus, no beat/miss determination vs Street can be made for this quarter [GetEstimates error].
  • Absent formal guidance, modeling should reflect QoQ revenue momentum, sustained cost discipline, and potential margin trajectory similar to Q1 per commentary .

Key Takeaways for Investors

  • Bookings momentum is the core driver: +623% in Q2 and +939% in 1H indicate commercial traction; watch conversion of ~$7M pipeline and portfolio-based “one-to-many” deals for topline acceleration .
  • Cost base reset is durable: OpEx down ~49% YoY and monthly run-rate ~$0.93M ex-SBC underpin operating leverage as revenue scales; modest spend ramp in H2 is expected .
  • Liquidity removes near-term risk: $20.4M quarter-end cash plus ~$16.2M July ATM enhances runway for sales/marketing and selective M&A; monitor ATM usage and dilution risk vs growth payoff .
  • Near-term trading catalysts: convention wins/portfolio agreements, R&D-led product enhancements, and any M&A/patent monetization updates; FTSE Microcap inclusion broadens investor base .
  • Risks: YoY revenue decline, continued losses and negative operating cash flow, limited Street coverage and lack of formal guidance; execution on pipeline conversion is critical .
  • Thesis: If bookings conversion and portfolio-led sales materialize while maintaining disciplined cost structure, PHUN can drive sequential revenue growth and improved unit economics through 2H; absent consensus, investors should anchor on management’s internal revenue target and margin commentary for near-term modeling .

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