- Non-GAAP Adjusted Operating EBITDA of
- Gross Profit of
- Strong Gross Margin Improvement to 64.3% -
Key Financial Highlights for the Twelve Months Ended
- Revenue increased by 31% to
$31.623 million compared to$24.154 million . - Gross profit increased 37% to
$20.337 million compared to$14.808 million . - Gross margin increased to 64.3% compared to 61.3%.
- Non-GAAP Adjusted EBITDA income increased by 50% to
$3.245 million , excluding all non-cash items and one-time transactional expenses, compared to Adjusted EBITDA income of$2.167 million . - Net loss attributable to Digerati’s common shareholders increased by 3% to
$8.299 million , compared to a Net Loss attributable to Digerati’s common shareholders of$8.032 million . - Non-GAAP operating EBITDA (“Non-GAAP Adjusted EBITDA - OPCO) income increased 34% to
$4.774 million , excluding corporate expenses, all non-cash items, and one-time transactional expenses, compared to a Non-GAAP Adjusted EBITDA - OPCO of$3.552 million .
Clement continued, “We have worked diligently during the fiscal year to stabilize and simplify our platform by consolidating our subsidiaries into a single operating entity known as
Twelve Months ended
Revenue for the twelve months ended
Gross profit for the twelve months ended
Selling, general and administrative expenses (excluding legal and professional fees) for the twelve months ended
Operating loss for the twelve months ended
Non-GAAP Adjusted EBITDA income for the twelve months ended
Of note were the following non-cash expenses associated with the twelve months ended
Non-GAAP Adjusted EBITDA (OPCO) income for the twelve months ended
Net loss attributable to Digerati’s common shareholders for the twelve months ended
On
Use of Non-GAAP Financial Measurements
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Non-GAAP Adjusted EBITDA income provides an adjusted view of EBITDA that considers certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that Non-GAAP Adjusted EBITDA income provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses Non-GAAP Adjusted EBITDA income as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. Non-GAAP Adjusted EBITDA - OPCO is useful to investors because it reflects EBITDA for the core operation of the business, excluding corporate expenses, non-cash expenses and transactional expenses. EBITDA, Non-GAAP Adjusted EBITDA income, and Non-GAAP Adjusted EBITDA - OPCO are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in
About
Forward-Looking Statements
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements such as 'The successful combination of systems, processes, and people, supported by our highly experienced leadership team, has created a solid foundation for both organic and inorganic growth,” it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, our inability to source suitable strategic relationships, failure to execute growth strategies, lack of product development and related market acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company’s periodic filings with the
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Reconciliation of Net Loss to Adjusted EBITDA | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
Year ended | ||||||||||||||||||
2023 | 2022 | Variances | % | |||||||||||||||
OPERATING REVENUES: | ||||||||||||||||||
Cloud-based hosted services | $ | 31,623 | $ | 24,154 | $ | 7,469 | 31 | % | ||||||||||
Total operating revenues | 31,623 | 24,154 | 7,469 | 31 | % | |||||||||||||
Cost of services (exclusive of depreciation and amortization) | 11,286 | 9,346 | 1,940 | 21 | % | |||||||||||||
Selling, general and administrative expense | 16,954 | 12,210 | 4,744 | 39 | % | |||||||||||||
Stock compensation expense | 881 | 224 | 657 | 293 | % | |||||||||||||
Legal and professional fees | 3,533 | 3,036 | 497 | 16 | % | |||||||||||||
Bad debt | 115 | 98 | 17 | 17 | % | |||||||||||||
Depreciation and amortization expense | 3,909 | 2,916 | 993 | 34 | % | |||||||||||||
Total operating expenses | 36,678 | 27,830 | 8,848 | 32 | % | |||||||||||||
OPERATING LOSS | (5,055 | ) | (3,676 | ) | (1,379 | ) | 38 | % | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||
Gain (loss) on derivative instruments | 6,526 | 6,186 | 340 | 5 | % | |||||||||||||
Gain (loss) on extinguishment of debt | 55 | (5,481 | ) | 5,536 | -101 | % | ||||||||||||
Other income (expense) | 465 | 26 | 439 | 1688 | % | |||||||||||||
Interest expense | (11,328 | ) | (5,990 | ) | (5,338 | ) | 89 | % | ||||||||||
Income tax expense | (192 | ) | (419 | ) | 227 | -54 | % | |||||||||||
Total other income (expense) | (4,474 | ) | (5,678 | ) | 1,204 | -21 | % | |||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST | (9,529 | ) | (9,354 | ) | (175 | ) | 2 | % | ||||||||||
Less: Net loss attributable to the noncontrolling interests | 1,238 | 1,341 | (103 | ) | -8 | % | ||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS | $ | (8,291 | ) | $ | (8,013 | ) | $ | (278 | ) | 3 | % | |||||||
Deemed dividend on Series A Convertible preferred stock | (8 | ) | (19 | ) | 11 | -58 | % | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S COMMON SHAREHOLDERS | $ | (8,299 | ) | $ | (8,032 | ) | $ | (267 | ) | 3 | % | |||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA - OPCO, Net of Non-Cash Expenses & Transactional Costs. | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS, as reported | $ | (8,291 | ) | $ | (8,013 | ) | $ | (278 | ) | 3 | % | |||||||
EXCLUDING NON-CASH ITEMS TRANSACTIONAL COSTS & CORP EXP | ||||||||||||||||||
ADJUSTMENTS: | ||||||||||||||||||
Stock compensation & warrant expense | 881 | 224 | 657 | 293 | % | |||||||||||||
Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 1,529 | 1,385 | 144 | 10 | % | |||||||||||||
Legal, professional fees & transactional costs | 3,510 | 2,703 | 807 | 30 | % | |||||||||||||
Depreciation and amortization expense | 3,909 | 2,916 | 993 | 34 | % | |||||||||||||
OTHER ADJUSTMENTS | - | |||||||||||||||||
Gain (loss) on derivative instruments | (6,526 | ) | (6,186 | ) | (340 | ) | 5 | % | ||||||||||
Gain (loss) on extinguishment of debt | (55 | ) | 5,481 | (5,536 | ) | -101 | % | |||||||||||
Other income (expense) | (465 | ) | (26 | ) | (439 | ) | 1688 | % | ||||||||||
Interest expense | 11,328 | 5,990 | 5,338 | 89 | % | |||||||||||||
Income tax expense | 192 | 419 | (227 | ) | -54 | % | ||||||||||||
Less: Net loss attributable to the noncontrolling interests | (1,238 | ) | (1,341 | ) | 103 | -8 | % | |||||||||||
ADJUSTED EBITDA - OPCO | $ | 4,774 | $ | 3,552 | $ | 1,222 | 34 | % | ||||||||||
ADD-BACKS Expenses | ||||||||||||||||||
Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 1,529 | 1,385 | 144 | 10 | % | |||||||||||||
ADJUSTED EBITDA - INCOME | $ | 3,245 | $ | 2,167 | $ | 1,078 | 50 | % | ||||||||||
Year ended | ||||||||||||||||||
Other Key Metrics | 2023 | 2022 | Variances | % | ||||||||||||||
Total Customers | 4,671 | 4,023 | 648 | 16 | % |
Source: Digerati Technologies
2023 GlobeNewswire, Inc., source