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Konatel Inc (NASDAQ:KTEL) ($0.40; $17.4M market cap) announced Q2 2024 results:
Sales of $4.3 million vs $4.6 million in prior year
Non GAAP loss of $0.02 vs a loss of $0.02
Following are highlights of the quarter: (per the release)
Despite the loss of ACP revenue, we have substantially maintained our Lifeline revenue from Q1 2024 to Q2 2024. After strengthening our balance sheet in Q1 2024 without diluting shareholders (i.e., without issuing additional shares), we have been redeploying capital to successfully accelerate our California Lifeline business where the subsidy (Federal plus California) is substantially higher, about 300%, than typical Lifeline states.
With substantially the worst behind us, regarding the lack of ACP re-funding, we have mostly realized the negative impact of Congress's failure to re-refund ACP. Our California Lifeline growth is beginning to replace the loss of ACP revenue. During Q2 2024, we reached a milestone, the largest number of active California Lifeline lines in the Company's history.
It is important to note that up to this point, our Lifeline growth has utilized our capital resources; however, in addition to our self-funded sales efforts, we are also deploying our "asset light" Lifeline expansion strategy (i.e., employing our distribution partners to cover customer acquisition costs and monthly recurring network costs). As of this release, we have already contracted with four (4) distribution partners to deploy service under our Asset Lite program.
While we remain hopeful Congress may re-fund ACP, we have already positioned the Company for growth across additional and expanded market segments, including California Lifeline expansion and growth within our hosted services division, supported by our private national network and CPaaS platform (i.e., SIP service, SIP service with Microsoft Teams Integration, Termination Services, wireless POTS replacement, SD-WAN, and wireless Messaging Services).
For example, we recently launched wireless-based wholesale POTS ("Plain Old Telephone Service") replacement service utilizing our national CPaaS network platform with deep integration to U.S. wireline and wireless carriers. We are employing a wholesale distribution strategy to support CLECs, ILECs and other resellers that are moving their legacy POTS customers to modern POTS solutions as directed by the FCC's POTS modernization objectives. There are approximately 30 million legacy POTS lines across the nation used in a variety of applications, including Elevator Call Boxes, Fax Machines, Fire & Burglar Alarms, and HVAC & Equipment Monitoring. Our wireless POTS solution provides stable, long-term recurring revenue, and so far, we have already signed six (6) wholesale POTS MSAs ("Master Service Agreements") for national distribution.
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Konatel Inc (NASDAQ:KTEL) ($0.66; $28.6M market cap) announced Q1 2024 results:
Sales of $5.6 million vs $4.0 million in prior year
GAAP EPS of $0.19 vs a loss of $0.02
Non-GAAP net loss of $0.02 vs Non-GAAP loss of $0.01
"First quarter revenue increased 40% year-over-year, and just as important, we delivered sequential revenue growth in each of the last four quarters partially due to our strategy to diversify beyond government subsidized services. Within our Hosted Services segment, we increased revenue by 17% to record levels due to the addition of new customers and new revenue from existing customers. While there is uncertainty surrounding the government's re-funding of the ACP program, our legacy Lifeline business is not impacted by government funding, and I am excited by our progress and the opportunities within our Hosted Services operation, given the attractive economics and stickiness of the customer base."
McEwen continued, "We completed the sale of a minority position of our interest in IM Telecom in the first quarter, which resulted in cash proceeds of $9.0 million. We used a portion of the proceeds to pay off all outstanding debt obligations. With $3.9 million in cash, we ended the quarter with a much stronger balance sheet and additional, non-dilutive capital. We are using the additional capital to fund our growth and revenue diversification strategy through the addition of experienced sales and operations personnel within our Hosted Services business, which is now driving an expansion of that segment. And as previously disclosed, we secured a multi-million-dollar financing option which helps us fund our partners in pursuit of an ‘asset light' strategy within the government subsidized (Lifeline and ACP) market."
McEwen concluded "Our growth in revenue demonstrates that with the right amount of working capital, our management team has the experience and capability to rapidly accelerate growth in both our Hosted Services and Government Subsidized (Lifeline and ACP) operations. Looking forward, we have several pending projects within our Hosted Services business, including the upcoming five-year exclusive agreement to provide wholesale cellular service to Viva-USA. Viva-USA is part of the Viva Group of companies, an international MNO/MVNO with over three million customers in Mexico and Bolivia."
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.
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Konatel Inc (NASDAQ:KTEL) ($0.79; $35.6M market cap) , a voice/data communications holding company, including providing government subsidized services to low income households through its Infiniti Mobile division, announced the closing of non-dilutive financing to help accelerate growth.
“Approximately $1.5 million of financing was provided at closing to purchase equipment, with potentially up to $25 million available to support the growth of IM Telecom.”
"ACP Finance maintains strict requirements for minimum revenue and monthly activations to qualify for this credit facility. We are pleased that in the fourth quarter of this year, Infiniti Mobile reached those minimum requirements. So, we are excited to partner with ACP Finance, which have provided other Lifeline and Affordable Connectivity Program ("ACP") providers with capital to substantially grow their revenues while improving their cash flow. As stated in prior Securities and Exchange Commission ("SEC") filings, our team has been working for many months to prepare the infrastructure for accelerated growth. Now with this credit facility, we will have the additional capital to expand our distribution without incurring term debt or diluting our shareholders' ownership. Through this agreement, we will be able to purchase mobile devices (cell phones and tablets) at an overall cost (equipment and financing) lower than existing sources. We believe the impact on our cash management and revenue will be positive with this credit instrument as we continue to expand our Lifeline and ACP customer base."
PodClips
In this PodClip, Maj talks about some positive developments surrounding the industry in which KTEL operates.
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Konatel Inc (NASDAQ:KTEL) ($1.75; $72.2M market cap), a voice/data communications holding company, including providing government subsidized services to low income households through its Infiniti Mobile division, announced the hire of seasoned Telecom executive Chuck Griffin as President and Chief Operating Officer.
Background:
“Prior to joining KonaTel, Mr. Griffin served as Chairman and Chief Executive Officer of Lingo Communications, a provider of IP-based Cloud voice and data solutions, following its merger with Impact Telecom in 2018.
As one of the original founders of Impact Telecom, Griffin led Impact from a start-up to a company with annual revenues of over $290 million and more than 300 employees servicing 250,000 customers worldwide. He ultimately guided the company to a successful exit in 2020.”
Comments:
"I am energized by the emerging opportunities for KonaTel. The Infrastructure Investment and Jobs Act that was signed into law in November significantly increases the company's addressable market and serves as a tremendous catalyst for its next level of growth. The company is well-positioned to capture a meaningful share of this government-funded spending, which is directed towards providing access to communications infrastructure for all U.S. residents. It's an exciting time in the industry, and I am eager to work with Sean and the team to help lead the company through this next phase."
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Konatel Inc (NASDAQ:KTEL) ($1.43; $58.1M market cap), a voice/data communications holding company, including providing government subsidized services to low income households through its Infiniti Mobile division, announced Q3 2021 results:
Sales of $3.6 million vs $2.5 million in the prior year
EPS of $0.01 vs $0.00
"In our higher-margin Mobile Services business, which includes retail and wholesale cellular and IoT mobile device services, revenue is up 50.4% year-to-date on increased volumes driven by new agent distribution and recent approvals for participation in government subsidized cellular and broadband data distribution programs. Specifically, the Federal Communications Commission's (FCC) Emergency Broadband Benefit (EBB) program was opened for enrollment and as an approved provider of program services in several states, we have seen a marked uptick in the number of customers we serve under the program. In addition, expansion of our Lifeline mobile services into the state of California was approved earlier this year and accordingly, we expect distribution of essential voice and data services to California residents under our Infiniti Mobile brand to begin as planned later in the fourth quarter. According to the FCC, there are an estimated 3.6 million Lifeline eligible households in the state of California with nearly 2.4 million currently unserved. As one of only a handful of approved national wireless Lifeline providers to hold an FCC approved Compliance Plan, we are well positioned to provide basic cellular and wireless broadband data services to millions of eligible new customers.
Furthermore, we recently contracted with two new master agencies with national distribution to further expand our channels and reach many more EBB and Lifeline eligible households across several states. Distribution through these new channels is on schedule to commence later this year.
The Infrastructure Bill that was approved this past weekend provides for $65 billion1 in new investment for broadband internet to advance government efforts to ensure all U.S. residents have access to reliable, high-speed internet," continued McEwen. "If signed, this legislation will significantly increase our total addressable market and serve as an additional catalyst for future growth."
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Konatel Inc (NASDAQ:KTEL) ($0.90; $36.6M market cap), a voice/data communications holding company issued an 8K filing yesterday showing updated merger agreement disclosures with the Apeiron acquisition. With the recent strength in share price, the company met its obligation of obtaining a stock price average of over $1.00 for 10 days. In doing so, the company avoids any further dilution that could have come had the stock not achieved these levels.
“in the event that the KonaTel common stock does not reach an average closing price equal to or exceeding $1.00 per share (the ‘Guaranteed Value’) over any period of ten (10) consecutive Trading Days (the ‘Calculated Value’) during the period commencing on December 31, 2020 and ending on December 31, 2021 (the ‘Valuation Period’) as quoted by the applicable Trading Market on which the KonaTel Shares are listed or quoted for trading, KonaTel shall issue to the Apeiron Shareholders for each such share of the KonaTel Shares continuously owned and held of record in the respective names of the Apeiron Shareholders (the ‘Qualifying Shares’) during the Valuation Period the number of shares of KonaTel common stock that is equal to the number of Qualifying Shares multiplied by the difference between the Guaranteed Value and the highest Calculated Value achieved during the Valuation Period”
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Konatel Inc (NASDAQ:KTEL) ($0.45; $18.3M market cap) provides a variety of retail and wholesale telecommunications services including mobile voice/text/data service, mobile numbers, SMS/MMS services, SD-WAN and IoT mobile data service. On Wednesday we highlighted the Q4 2020 results which were issued in the 10-K filing. Today the company issued a press release with its year end results:
Sales of $9.35 million vs $9.17 million in the prior year
EPS of $0.01 vs a loss of $0.04
Cash and short term assets up 103%
“We are pleased to report our first full year of positive net income as a public company as we exhibited strong year over year growth in revenues, gross profit, and operating income," stated KonaTel Chairman and CEO Sean McEwen. "As we indicated last quarter, we are extremely focused on high margin, sustainable business that can drive scale and cash flow. To that end, we enjoyed strong growth in our CPaaS hosted services business, and emphasized its performance over retaining legacy mobile services revenues that contribute little to our bottom line. Going forward we will continue to grow our Hosted Services business through a combination of strong organic sales and potential commercial partnerships."
Uplist Update:
“The Company successfully completed its uplisting to OTC Markets Group Inc.'s OTCQB® Venture Market ("OTCQB") in December of 2020. "Our recent OTCQB uplisting was an important milestone in our efforts to increase investor awareness, visibility, and trading liquidity around our public shares," stated Sean McEwen. "Our ultimate goal is a further uplisting to a major exchange such as NASDAQ or NYSE which we will continue to pursue."
