Conference Call to Be Held Today at 4:30 PM Eastern Time
PALO ALTO, Calif. — Inpixon (NASDAQ: INPX), a leading indoor positioning and data analytics company, today reported financial results for the fourth quarter and year ended December 31, 2017 and provided an update on corporate developments. All numbers are presented after giving effect to the reverse split implemented on February 6, 2018.
Fourth Quarter 2017 Financial Highlights
- 2017 Q4 revenue of $4.6 million
- 2017 Q4 gross margin of 41%
- 2017 Q4 GAAP net loss of $15.29 per share
- 2017 Q4 Pro-forma Non-GAAP net loss1 of $8.19 per share
- 2017 Q4 Non-GAAP Adjusted EBITDA1 loss of $3.0 million
Full Year Financial Highlights
- 2017 revenue of $45.1 million
- 2017 gross margin of 24%
- 2017 GAAP net loss of $137.79 per share
- 2017 Pro-forma Non-GAAP net loss1 of $68.70 per share
- 2017 Non-GAAP Adjusted EBITDA1 loss of $12.1 million
“We have overcome a number of challenges faced throughout 2017 and have raised funds to begin to implement our strategic growth plan for 2018, focusing on Inpixon as a leading provider of Indoor Positioning Analytics (IPA) products and services,” said Nadir Ali, CEO of Inpixon. “Our strategic plan for 2018 includes stimulating growth through channel partner expansion and improved marketing and sales efforts. We plan to deliver new competitive product enhancements, including the use of blockchain technology to propagate device reputation profiles, artificial intelligence (AI) and machine learning to incorporate device fingerprinting, and voice-user interface (VUI) technology to support our intelligence customers in making better decisions with greater intelligence. Additionally, migrating Inpixon IPA to Amazon Web Services (AWS) will enable improved service and security to our customers, meeting country-specific and federal-compliance requirements and enabling channel partners to deploy faster.”
2017 Financial Results
Total Revenues for the year ended December 31, 2017 were $45.1 million, compared to $53.2 million for the comparable period in the prior year. The decrease of $8.1 million, or approximately 15.2%, is primarily associated with a decline in revenues earned by the Infrastructure segment. Revenue earned by the IPA segment for the year ended December 31, 2017 was $3.9 million, compared to $4.9 million for the prior year period. Revenue earned by the Infrastructure segment was $41.2 million for the year ended December 31, 2017, compared to $48.3 million for the prior year period. Revenues declined, despite our acquisition of Integrio Technologies, LLC, due to the ongoing capital constraints and supplier credit challenges the Company faced throughout the year.
Gross profit for the year ended December 31, 2017 was $10.8 million, compared to $14.9 million in 2016. The gross profit margin for the year ended December 31, 2017 was 24%, compared to 28% for the year ended December 31, 2016. This decrease in margin is a result of lower margin Infrastructure sales from the Integrio acquisition. IPA gross margins for the year ended December 31, 2017 and 2016 were 67% and 69%, respectively. Gross margins for the Infrastructure segment for the year ended December 31, 2017 and 2016 were 20% and 24%, respectively.
GAAP Net Loss
GAAP net loss attributable to stockholders of Inpixon for the year ended December 31, 2017 was $35.0 million, compared to $27.1 million for the comparable period in the prior year. GAAP net loss per share for 2017 was $137.79, compared to a GAAP net loss per share of $468.26 for 2016. The increase in net loss was primarily attributable to capital constraints and supplier credit challenges, decrease in gross profit as a result of lower margin Infrastructure sales, increases in operating expenses due to the Integrio acquisition which was offset by lower compensation costs, higher interest expense, and an extinguishment loss on debt modification.
Non-GAAP Net Loss
2017 pro-forma non-GAAP net loss was $17.8 million, compared to a non-GAAP net loss of $12.9 million for 2016. Pro-forma non-GAAP net loss per basic and diluted common share for the twelve months ended December 31, 2017 was ($68.70) compared to a loss of ($223.08) per share for the prior year period. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for non-cash items including stock-based compensation, amortization of intangibles and one time charges including gain/loss on the settlement of obligations, extinguishment loss for debt modification, goodwill impairment, severance costs, change in the fair value of shares to be issued, acquisition costs and the costs associated with the public offering.
Non-GAAP Adjusted EBITDA1
Total non-GAAP adjusted EBITDA for the year ended December 31, 2017 was a loss of $12.1 million, compared to a loss of $9.8 million for the prior year period. Non-GAAP adjusted EBITDA is defined as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization plus adjustments for other income or expense items, non-recurring items, and non-cash stock-based compensation.
1 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”.
2017 Business Highlights and Recent Developments
- In the first quarter of 2018, Inpixon raised $21 million in gross proceeds through sales of its equity securities
- Inpixon recently selected Amazon Web Services cloud infrastructure for Indoor Positioning Analytics delivery
- Inpixon announced a $2.5 million purchase order from a leading Fortune 500 health insurer
- Inpixon announced Cadillac Fairview as new customer, one of the largest real estate operators in North America and Canada
- Inpixon positioned itself to begin to leverage blockchain technology to build device reputation repository, strengthen IoT security, and secure retail payment
- Inpixon won top 2017 IoT Security Excellence Award
- Inpixon’s subsidiary, Inpixon Federal, received two delivery orders from the Bureau of Census totaling $1.4 million
All results summarized in this press release (including the financial statement tables) should be considered preliminary, are qualified in their entirety by the financial statement tables included in this press release, and are subject to change. Please refer to Inpixon’s Annual Report on Form 10-K for the year ended December 31, 2017, which will be filed with the U.S. Securities and Exchange Commission on or about March 23, 2018.
Conference Call Information
Management will host a conference call on Thursday, March 22, 2018, at 4:30 PM ET to review financial results and corporate highlights. Following management’s formal remarks, there will be a question and answer session.
To listen to the conference call, interested parties within the U.S. should call +1 844-824-3831. International callers should call +1 412-317-5141. All callers should ask for the Inpixon conference call. The conference call will also be available through a live webcast, which can be accessed at client.irwebkit.com/inpixon/events.
A replay of the call will be available approximately one hour after the end of the call through April 23, 2018. The replay can be accessed via Inpixon’s website or by dialing +1 877-344-7529 (U.S.) or +1 412-317-0088 (international). The replay conference playback code is 10117888.
Inpixon (NASDAQ: INPX) is a leader in Indoor Positioning and Data Analytics. Inpixon sensors are designed to find all accessible cellular, Wi-Fi, and Bluetooth devices anonymously. Paired with a high-performance data analytics platform, this technology delivers visibility, security, and business intelligence on any commercial or government premises worldwide. Inpixon’s products, infrastructure solutions, and professional services group help customers take advantage of mobile, big data, analytics, and the Internet of Things (IoT) to uncover the untold stories of the indoors. For the latest insight on Indoor Positioning and Data Analytics, 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 Act, 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 global economic conditions, the performance of management and employees, the Company’s ability to obtain financing, competition, general economic conditions and other factors that are detailed in the Company’s periodic and current reports available for review at sec.gov. Furthermore, we operate 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. We disclaim any intention to, and undertake 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 other income or expense items, non-recurring items and non-cash stock-based compensation. Inpixon defines “pro forma net loss per share” as GAAP net loss per share adjusted for adjusted for non-cash items including stock-based compensation, amortization of intangibles and one time charges including gain/loss on the settlement of obligations, extinguishment loss for debt modification, goodwill impairment, severance costs, change in the fair value of shares to be issued, acquisition costs and the costs associated with the public offering.
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.
Inpixon Investor Relations:
Scott Arnold, Managing Director