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PALO ALTO – October 30, 2019 – Inpixon (Nasdaq: INPX), a leading indoor positioning and data analytics company, today provided a business update and reported financial results for the third quarter of 2019.
Nadir Ali, CEO of Inpixon, commented, “We believe that our achievements this year, particularly the addition of a comprehensive, advanced indoor mapping solution with the acquisition of Jibestream, are transformational, positioning the Company with a solid foundation for sustained growth. First, we achieved a 63% increase in revenue for the third quarter of 2019, compared to the same period last year, which represents our third consecutive quarter of year-over-year growth. This revenue growth reflects our expanding sales and customer pipeline. At the same time, our gross profit increased 79% and our gross margin increased to 75% for the third quarter of 2019 compared to 68% for the same period last year. While our primary focus is on top-line growth, we are progressing towards our goal of achieving positive cash flow as evidenced by a meaningful improvement in our non-GAAP adjusted EBITDA (as defined below).
“The integration efforts in connection with our recently completed strategic transactions are progressing in a positive direction. Jibestream’s indoor mapping and data visualization technology aligns nicely with our existing platform, and we can now offer all four of the essential building blocks needed to make indoor spaces information-rich and helpful: mapping, positioning, analytics and development tools. Importantly, Jibestream’s solutions have been deployed in leading venues internationally, ranging from malls, to government facilities, airports, hospitals and many more.
“We continue to add new customers and expand existing customer relationships, resulting in a broad customer base with significant upselling and cross-selling opportunities. We recently deployed our indoor mapping solution with a leading national retailer, which will allow shoppers to search and locate products within their stores using digital directories. Additionally, we were selected by American Dream, one of the largest entertainment and retail centers in North America, as its indoor mapping partner. In order to further accelerate growth, we are ramping up our sales and marketing efforts, including the addition of new sales personnel. At the same time, we are aligning our teams and optimizing resources to support our anticipated growth and enhance profitability.
“This quarter we announced a variety of new strategic partnerships that we believe will help accelerate our growth. Through our partnership with IDENTOS, we announced a successful collaboration project with one of Canada’s most renowned hospitals. We have partnered with Express Image Digital to create immersive digital experiences, and we signed Master Technology Group as an authorized reseller. Strategic partnerships are a key element in our strategy to rapidly expand our penetration within the global indoor positioning and navigation market, which is estimated to reach $54.6 billion by 2026.
“Lastly, we have enhanced our IP portfolio through a broad array of patents, which we believe enhances our position as a leader in the indoor positioning market. We recently received a Notice of Allowance from the U.S. Patent and Trademark Office allowing our patent application covering a method of storing and analyzing variable-width data. This patent makes retrieval of data faster and closer to real time. The patents we are compiling provide a major competitive advantage and support our goal of becoming the go-to search and visualization engine for indoor data.”
Revenues for the three months ended September 30, 2019 were $1.53 million compared to $940,000 for the comparable period in the prior year, an increase of $594,000, or approximately 63%. Gross profit increased 79% to $1.15 million for the three months ended September 30, 2019, compared to $642,000 for the same period last year. Gross margin for the three months ended September 30, 2019 was 75% compared to 68% for the three months ended September 30, 2018. This increase in gross margin is primarily due to the increase in higher margin IPA revenue. Loss from operations for the three months ended September 30, 2019 was $5.7 million as compared to $3.3 million for the comparable period in the prior year. This increase of approximately $2.4 million was primarily attributable to the higher gross margin offset by higher operating expenses during the three months ended September 30, 2019, including acquisition-related expenses, the addition of Jibestream’s operating expenses, as well as non-cash expenses, including amortization of intangibles, stock-based compensation and other expenses. Net loss attributable to stockholders for the three months ended September 30, 2019 was $6.6 million, or $0.28 per share, compared to $5.2 million, or $4.84 per share, for the comparable period in the prior year. The higher loss of approximately $1.4 million was primarily attributable to higher revenue offset by higher operating and interest expenses during the three months ended September 30, 2019.
Non-GAAP Adjusted EBITDA for the three months ended September 30, 2019 was a loss of $2.4 million compared to a loss of $3.4 million for the prior period in 2018. Non-GAAP Adjusted EBITDA is defined as net income or loss before interest, provision for income taxes, and depreciation and amortization plus adjustments for other income or expense items, non-recurring items and non-cash stock-based compensation.
Proforma non-GAAP2 net loss per basic and diluted common share for the three months ended September 30, 2019 was $0.17 compared to a loss of $3.61 per share for the prior period in 2018. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for deemed dividends and non-cash items including stock-based compensation, amortization of intangibles and one-time charges including gain or loss on the settlement of obligations, gain on earnout, acquisition costs, provision for doubtful accounts and the costs associated with public offerings.
Conference Call Information
Management will host a conference call at 4:30 PM Eastern Time on Wednesday, October 30, 2019 to discuss the Company’s financial results, as well as the Company’s corporate progress and other developments.
The conference call will be available via telephone by dialling toll free 844-602-0380 for U.S. callers or +1 862-298-0970 for international callers, or on the Company’s Investors section of the website: ir.inpixon.com.
A webcast replay will be available on the Company’s Investors section of the website (ir.inpixon.com) through January 30, 2020. A telephone replay of the call will be available approximately one hour following the call, through November 6, 2019, and can be accessed by dialling 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering conference ID: 55913.
Inpixon® (Nasdaq: INPX) is The Indoor Data Company™ and a world leader in Indoor Positioning Analytics® (IPA®). The Inpixon Indoor Data Platform™ ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position all active cellular, Wi-Fi and Bluetooth devices, and uses a proprietary process that ensures anonymity. Paired with a high-performance data analytics engine, patented algorithms, and advanced mapping technology, this technology is used by a multitude of industries and disciplines including marketing, customer experience, operations, facility management and security. This multidisciplinary depiction of indoor data enables users to increase revenue, decrease costs, and enhance safety. Inpixon customers can boldly take advantage of mobility, analytics, sensor fusion and the Internet of Things (IoT) to uncover the untold stories of the indoors. For the latest insights, follow Inpixon on LinkedIn, @InpixonHQ on Twitter, and visit inpixon.com.
Safe Harbor Statement
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of Inpixon and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of economic conditions, the performance of management and employees, Inpixon’s ability to obtain financing, competition, the integration of operations following our recent acquisitions, our ability to maintain our Nasdaq listing, the uncertainty of possible lawsuits or claims by third parties or investigations or other actions by the regulatory agencies, including the Securities and Exchange Commission, whose rules and regulations we are required to comply with, general economic conditions and other factors that are detailed in Inpixon’s periodic and current reports available for review at sec.gov. Furthermore, Inpixon operates in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Inpixon disclaims any intention to, and undertakes no obligation to, update or revise forward-looking statements.
Non-GAAP Financial Measures
Management believes that certain financial measures not in accordance with generally accepted accounting principles in the United States (“GAAP””) are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Inpixon defines “EBITDA” as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as the matrix in which it manages the business and Inpixon defines “Adjusted EBITDA” as EBITDA plus adjustments for deemed dividends, other income or expense items, non-recurring items and non-cash items. Inpixon defines “pro forma net loss per share” as GAAP net loss per share adjusted for deemed dividends and non-cash items including stock-based compensation, amortization of intangibles and one time charges including gain on the settlement of obligations, gain on earnout, acquisition costs, provision for doubtful accounts, and costs associated with public offerings.
Management provides Adjusted EBITDA and pro forma net loss per share measures so that investors will have the same financial information that management uses, which may assist investors in assessing Inpixon’s performance on a period-over-period basis. Adjusted EBITDA or pro forma net loss per share is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA and pro forma net loss per share have limitations as analytical tools and should not be considered either in isolation or as a substitute for analysis of Inpixon’s results as reported under GAAP.
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Research and Markets, "Indoor Positioning and Navigation Market – Global Market Outlook (2017-2026) worth 54.6 Billion USD by 2026," Research Report # 4765038, published March, 2019 by Stratistics Market Research Consulting Pvt. Ltd.
 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”