KonaTel Reports First Quarter 2022 Results
First quarter revenue increased 77% year-over-year to $4.2 million
Scaling Mobile Services to reach new households under government subsidized programs
DALLAS, May 23, 2022 /PRNewswire/ -- KonaTel, Inc. (OTCQB: KTEL) (www.konatel.com), a voice/data communications holding company, today announced financial results for the three-month period ended March 31, 2022.
First Quarter 2022 Financial Summary and Recent Business Highlights
Sean McEwen, Chairman and CEO of KonaTel stated, "Revenue growth accelerated in the first quarter, up 77% compared to the prior year and was derived from multiple lines of business. As one of only a limited number of approved national wireless resellers under expanded government programs, we are moving aggressively to make new wireless voice and data services available to underserved households across the nation."
"Accompanying this exponential growth is an increase in investment in infrastructure as well as an increase in upfront customer acquisition costs, which are expensed as incurred and typically recovered within 120 days," McEwen continued. "In order to effectively scale our business, we more than doubled our line count to approximately 23,000 lines over the past 90 days, the first significant increase in capacity in our history, with additional capacity to continue our growth. Importantly, investment in infrastructure and the acquisition of new customers enables new, sticky recurring revenue streams that provide an attractive return on invested capital."
"We believe the long-term economics of our business are highly attractive and will result in increasing profitability and cash flow beyond this current period of substantial growth," McEwen continued. "With a new, top-notch management team in place we are energized by the emerging opportunities for expansion and to level up our business as we reach critical mass in our customer base."
McEwen concluded, "Furthermore, the additional $3 million in working capital will enable us to activate an additional 30,000 new lines of service each quarter. We can typically recoup customer acquisition costs in less than 120 days after activation, turning our cash resources at least three times every 12 months. As stated in our Q4 earnings press release, we are creating a company to substantially grow predictable revenues, earnings and cash flow, even during weaker economic conditions."
Quarterly Financial Summary (Q1 2022 vs. Q1 2021)
Revenue of $4.2 million, an increase of 76.7% compared to $2.4 million. The increase was primarily due to Mobile Services expansion under the Affordable Connectivity Program (ACP) and Lifeline programs.
Gross profit was $1.6 million, or 39.0% gross profit margin, compared to $911,000, or 38.1% gross profit margin.
Total operating expenses were $1.6 million, up 39.8% compared to $1.1 million. This increase was primarily a result of increases in payroll and related expenses resulting mostly from the hiring of management level operations positions in Apeiron Systems and IM Telecom subsidiaries.
GAAP net loss was $(44,000), or $0.00 per diluted share (based on 41.6 million weighted average shares), compared to a net loss of ($233,000), or $(0.01) per diluted share (based on 40.7 million weighted average shares).
Non-GAAP net income was $223,000, or $0.01 per diluted share, compared to $118,000, or $0.00 per diluted share, which does not include an adjustment for one-time legal/application expenses of about $105,000 to expand our Mobile Services into additional states.
The Company ended the quarter with $1.5 million in cash, compared to $933,000 in cash on December 31, 2021. Long term debt was $150,000 as of March 31, 2022, and December 31, 2021.
KonaTel provides a variety of retail and wholesale telecommunications services including mobile voice/text/data service supported by national U.S. mobile networks, mobile numbers, SMS/MMS services, IoT mobile data service, and a range of hosted cloud services. KonaTel's subsidiary, Apeiron Systems (www.apeiron.io), is a global cloud communications service provider employing a dynamic "as a service" (CPaaS/UCaaS/CCaaS/PaaS) platform. Apeiron provides voice, messaging, SD-WAN, and platform services using its national cloud network. All Apeiron's services can be accessed through legacy interfaces and rich communications APIs. KonaTel's other subsidiary, Infiniti Mobile (www.infinitimobile.com), is an FCC authorized wireless Lifeline carrier with an FCC approved wireless Lifeline Compliance Plan, authorized to provide government subsidized cellular service to low-income American families. KonaTel is headquartered in Plano, Texas.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this press release. This press release should be considered in light of the disclosures contained in the filings of KonaTel and its "forward-looking statements" in such filings that are contained in the EDGAR Archives of the SEC at www.sec.gov.
-- Tables Follow –
SOURCE KonaTel, Inc.