Elephant Talk Reports 2015 First Quarter Financial Results

NEW YORK, May 12, 2015 /PRNewswire/ -- Elephant Talk Communications Corp. (NYSE MKT: ETAK) ("Elephant Talk" or the "Company"), a global provider of Software Defined Network Architecture (ET Software DNA® 2.0) platforms and cyber security solutions, today announced total revenue of approximately $5.0 million for the quarter ended March 31, 2015 as compared to a restated $5.4 million recorded in the first quarter of 2014. Non-GAAP revenue* increased to $8.0 million in the March 2015 quarter from $6.5 million in the year-ago quarter. Net Loss for the quarter was approximately $2.1 million versus a restated loss of approximately $5.2 million reported in the first quarter of 2014. Adjusted EBITDA* was approximately $2.3 million for the first quarter of 2015 versus approximately a restated $6,000 in the same quarter of the prior year.

Recent Highlights: 

• LOWI, Vodafone's newest MVNO brand in Spain powered by Elephant Talk's platform recently topped a critical mass user number, a significant success for a brand launched just 5 months ago. Building on this success, the Company is working with Vodafone to not only increase the numbers of users on our platform in Spain, but is looking to work with new brands in new geographic markets.
• Elephant Talk signed a new platform contract in Brazil, subject to our customer obtaining a MVNO license from Anatel, the Brazilian regulator. The customer is expected to obtain all of the necessary licenses and permits to operate in the market later this summer and if all goes well, the Company expects the platform to be up and running by the end of 2015.
• Momentum at ValidSoft continues with the signing of ImageWare Systems, its third new commercial customer contract in 2015. ImageWare Systems is a market leader in identity management solutions serving a varied client and partner portfolio where it delivers a single, best in class platform of biometric solutions designed to manage millions of identities worldwide. The ImageWare Systems relationship provides ValidSoft with an immediate existing pipeline of contracts, which are currently under development and deployment.

Mr. Steven van der Velden, Chairman and CEO of Elephant Talk, stated, "The first quarter of 2015 reflects the start of a transitory year for Elephant Talk as we begin to expand our mobile telecommunications business into new geographies including North and South America and secure additional contracts for ValidSoft's authentication and voice biometrics solutions. Although the restatement has had an impact on our year-over-year results, it is important to note that these adjustments do not change the amount of revenue and cash generated, only the timing of its recognition. The Board and our entire management team are committed to the continued execution of the Company's growth plans and look forward to what we expect will be a positive settlement with AT&T which will allow us to immediately redeploy our human and technology assets to support both new and existing customers in several geographies."

All interested in participating should dial in approximately 5 to 10 minutes prior to the 11:00 a.m. EDT conference call. Participants should ask for the Elephant Talk first quarter conference call.

* Non-GAAP financial measures
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, Elephant Talk uses measures of non-GAAP including Non-GAAP Revenue and Adjusted EBITDA.

Non-GAAP revenue is defined as GAAP revenue adjusted for changes in deferred revenue.

Non-GAAP Adjusted EBITDA, is defined as earnings before income and expenses from derivative accounting, such as warrant liabilities and conversion feature expensing, changes in deferred revenue, interest income and expense, income taxes, depreciation and amortization, amortization of deferred financing cost, impairments and non-operating income and expenses. Adjusted EBITDA further eliminates stock-based compensation. The Company uses Adjusted EBITDA to, among other things, show a measure of the Company's operating performance.

Management uses these non-GAAP measures to evaluate the Company's financial results, develop budgets, manage expenditures and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for, or superior to, net income (loss) or net income (loss) per share determined in accordance with GAAP.

In order to provide investors additional information regarding the company's revenue, Elephant Talk is disclosing Non-GAAP revenue, a non-GAAP financial measurement which is defined as GAAP revenue adjusted for changes in deferred revenue. A reconciliation of Revenue to Non-GAAP Revenue, for each of the periods indicated, is as follows:

A reconciliation of Net Loss to Non-GAAP Adjusted EBITDA, for each of the periods indicated, is as follows:

About Elephant Talk Communications Corp.:
Elephant Talk Communications Corp. (NYSE MKT: ETAK), is a global provider of mobile proprietary Software Defined Network Architecture (ET Software DNA® 2.0) platforms for the telecommunications industry. The Company empowers Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, superior industry expertise and high quality customer service without the need for substantial upfront investment. Elephant Talk counts several of the world's leading MNOs and technology companies amongst its customers and partners, including Vodafone, T-Mobile, Zain, Iusacell/AT&T and HP. Visit: www.elephanttalk.com.

About ValidSoft UK Ltd.:
ValidSoft, a subsidiary of Elephant Talk Communications Corp., secures transactions using personal authentication and device assurance. We enable our customers to enhance their security while improving their user experience, utilising our multi-factor authentication platform, Voice Biometric engine and Device Trust technology, all of which may be used as 'stand-alone' or integrated into multi-vendor solutions. ValidSoft serves multiple clients across the financial services, government and enterprise sectors and is the only company to have been granted four European Privacy Seals, reflecting its commitment to strong data privacy. Visit: www.validsoft.com.

Forward-Looking Statements:
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Elephant Talk's plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about Elephant Talk's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of Elephant Talk may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Elephant Talk also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested in Elephant Talk's filings with the Securities and Exchange Commission (the "SEC"), copies of which are available from the SEC or may be obtained upon request from Elephant Talk.

Contacts:
Investor Relations:
Steve Gersten
Capital Markets Group
813-926-8920
[email protected]

Public Relations:
Michael Glickman
MWGCO, INC.
917-596-1883
[email protected]

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SOURCE Elephant Talk Communications Corp.

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