FTC Solar, Inc. (Nasdaq: FTCI), a leading provider of solar tracker
systems, software and engineering services, today announced
financial results for the third quarter ended September 30,
2023, as well as a leadership transition in which Sean Hunkler and
Phelps Morris have departed their roles as CEO and CFO,
respectively, and will be leaving the company in December 2023.
Leadership Transition“Much of
the last two years has been about repositioning the company to be
in the right markets with the right technology and cost structure
to enable our profitable return to above-market growth rates,” said
Shaker Sadasivam, Chairman of the Board of FTC Solar. “We have made
progress on that front and improved our positioning. With a healthy
and profitable tracker market, it’s time for FTC’s results to
reflect its improved positioning with healthy, profitable growth.
As the Board evaluated opportunities to accelerate momentum, we’ve
agreed that now is the right time to bring new leadership to FTC
Solar as we enter our next phase of growth and execution. On behalf
of the Board of Directors and everyone at FTC Solar, I want to
sincerely thank Sean and Phelps for their contributions and wish
them all the best in their next endeavors.”
Cathy Behnen, who has served as the company’s Chief Accounting
Officer since 2020, has been named CFO on an interim basis. Behnen
has more than 20 years of financial leadership experience,
including serving as CFO and VP of Finance at Penn National Gaming
Hollywood Casino San Diego prior to joining FTC Solar. Prior to
that role, she served in various finance and operations roles and
as a Partner at the accounting firm RubinBrown. She is a Certified
Public Accountant and holds an MBA from St. Louis University.
The combination of Executive Leadership members Patrick Cook,
Chief Commercial Officer, Sasan Aminpour, Chief Operating Officer,
and Behnen will provide steady leadership of the day-to-day
management of the company. To further ensure a smooth transition
for the Company and its employees and customers during this interim
period, the Board will provide increased oversight of those leaders
and be engaged on a more frequent basis.
“We’re confident that this team and structure has the
capability, along with the right blend of organizational history
and new perspectives, to ensure that not only do we not miss a beat
but that we accelerate toward our long-term goals. While today’s
news represents a change, it also represents a tremendous
opportunity for us to accelerate our momentum,” Sadasivam
concluded.
Third Quarter ResultsThe
company’s third-quarter revenue was in line with expectations. Of
note, the company showed a fourth consecutive quarter of gross
margin improvement, as our manufacturing cost reduction efforts
continue to bear fruit. Excluding $1 million in benefits to gross
margin and a $4 million credit loss charge in operating expense in
the quarter that were not contemplated in our guidance ranges,
gross margin, operating expenses and Adjusted EBITDA would all have
been at the high-end or better than our target ranges for the
quarter.
The company’s efforts to improve our product cost structure,
which are a key driver for margin improvement, are only one aspect
of our initiative to improve our competitive positioning. We
continue to see a strong response to our new and differentiated 1P
tracker solution, Pioneer, which significantly expands our market
opportunity. Our international business continues to gain traction
with awards in more than a dozen countries to date. And we are
focused on controlling expenses while investing in areas that
support and accelerate our long-term growth. The improvements in
our competitive positioning, along with a strong backlog, provide a
healthy foundation from which to accelerate growth and
profitability in 2024 and beyond.
Approximately $60 million has been added to
backlog1 since August 9, with total backlog now standing at
approximately $1.6 billion.
Summary Financial Performance: Q3 2023
compared to Q3 2022
|
|
U.S. GAAP |
|
|
Non-GAAP |
|
|
|
Three months ended September 30, |
|
(in thousands, except per share data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
30,548 |
|
|
$ |
16,572 |
|
|
$ |
30,548 |
|
|
$ |
16,572 |
|
Gross margin percentage |
|
|
11.1 |
% |
|
|
(57.4 |
%) |
|
|
12.8 |
% |
|
|
(49.8 |
%) |
Total operating expenses |
|
$ |
19,656 |
|
|
$ |
17,179 |
|
|
$ |
13,222 |
|
|
$ |
9,147 |
|
Loss from operations(a) |
|
$ |
(16,277 |
) |
|
$ |
(26,694 |
) |
|
$ |
(9,706 |
) |
|
$ |
(17,734 |
) |
Net loss |
|
$ |
(16,937 |
) |
|
$ |
(25,636 |
) |
|
$ |
(10,008 |
) |
|
$ |
(17,748 |
) |
Diluted loss per share |
|
$ |
(0.14 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.17 |
) |
(a) |
Adjusted EBITDA for Non-GAAP |
|
Total third-quarter revenue was $30.5 million,
coming in above the mid-point of our target range. This revenue
level represents a decrease of 5.6% compared to the prior quarter,
on lower logistics volumes. Compared to the year-earlier quarter,
revenue increased 84.3%, driven primarily by higher product
volume.
GAAP gross profit was $3.4 million, or 11.1% of
revenue, compared to gross profit of $2.2 million, or 6.8% of
revenue, in the prior quarter. Non-GAAP gross profit was $3.9
million or 12.8% of revenue and includes $1 million in benefits not
contemplated in our guidance related to better-than-expected
margins on a closed project and lower-than-expected inventory costs
that we don’t expect will reoccur in future periods. If those
benefits were excluded, or on the same basis of our guidance,
non-GAAP gross margin would have been 9.5%, relative to our
guidance range of 3% to 9%. The result for this quarter compares to
a non-GAAP gross loss of $8.2 million in the prior-year period,
with the difference driven primarily by significantly improved
product direct margins and lower warranty, retrofit and other
indirect costs.
GAAP operating expenses were $19.7 million. On a
non-GAAP basis, excluding stock-based compensation and certain
other costs, operating expenses were $13.2 million,
which includes a $4 million credit loss provision relating to a
specific customer account that was not included in our guidance
ranges. Excluding this charge, our non-GAAP operating expenses
would have been $9.2 million. This result compares to operating
expenses of $9.1 million in the year-ago quarter.
GAAP net loss was $16.9 million or $0.14 per
share, compared to a loss of $10.4 million or $0.09 per share in
the prior quarter and a net loss of $25.6 million or $0.25 per
share in the year-ago quarter. Adjusted EBITDA loss, which excludes
approximately $7.2 million, including stock-based compensation
expense and other non-cash items, was $9.7 million, compared to
losses of $7.2 million in the prior quarter and $17.7 million in
the year-ago quarter.
OutlookWe expect fourth quarter
revenue to be down from the third quarter with gross margin
reflecting lower cost absorption. We expect this to be followed in
the first quarter by a fairly substantial revenue and margin
recovery as projects ramp.
(in
millions) |
|
3Q'23 Guidance |
|
3Q'23 Actual2 |
|
4Q'23 Guidance |
1Q'24 Guidance |
Revenue |
|
$24.0 - $34.0 |
|
$30.5 |
|
$18.0 - $28.0 |
$40.0 - $50.0 |
Non-GAAP Gross Profit |
|
$0.7 -
$3.1 |
|
$3.9 |
|
$(1.3) -
$2.0 |
$3.2 -
$6.3 |
Non-GAAP Gross Margin |
|
3% -
9% |
|
12.8% |
|
(7%) –
7% |
8% -
13% |
Non-GAAP operating expenses |
|
$10 -
$11 |
|
$13.2 |
|
$10 -
$11 |
$9 -
$10 |
Non-GAAP adjusted EBITDA |
|
$(10.3) -
$(6.9) |
|
$(9.7) |
|
$(13.0) -
$(2.5) |
$(7.3) -
$(3.0) |
|
We continue to be optimistic about our growth prospects,
supported by our large and growing backlog and improved competitive
positioning and expect to cross into profitability in 2024.
Third Quarter 2023 Earnings Conference
CallFTC Solar’s senior management will host a conference
call for members of the investment community at 8:30 a.m. E.T.
today, during which the company will discuss its third quarter
results, its outlook and other business items. This call will be
webcast and can be accessed within the Investor Relations section
of FTC Solar's website at investor.ftcsolar.com. A replay of the
conference call will also be available on the website for 30 days
following the webcast.
About FTC Solar Inc. Founded in
2017 by a group of renewable energy industry veterans, FTC Solar is
a leading provider of solar tracker systems, technology, software,
and engineering services. Solar trackers significantly increase
energy production at solar power installations by dynamically
optimizing solar panel orientation to the sun. FTC Solar’s
innovative tracker designs provide compelling performance and
reliability, with an industry-leading installation cost-per-watt
advantage.
Footnotes1. The term ‘backlog’
refers to the combination of our executed contracts and awarded
orders, which are orders that have been documented and signed
through a contract, where we are in the process of documenting a
contract but for which a contract has not yet been signed, or that
have been awarded in writing or verbally with a mutual
understanding that the order will be contracted in the future. In
the case of certain projects, including those that are scheduled
for delivery on later dates, we have not locked in binding pricing
with customers, and we instead use estimated average selling price
to calculate the revenue included in our contracted and awarded
orders for such projects. Actual revenue for these projects could
differ once contracts with binding pricing are executed, and there
is also a risk that a contract may never be executed for an awarded
but uncontracted project, or that a contract may be executed for an
awarded but uncontracted project at a date that is later than
anticipated, thus reducing anticipated revenues. Please refer to
our SEC filings, including our Form 10-K, for more information on
our contracted and awarded orders, including risk factors.2.
Includes $1 million benefit to gross margin and $4 million charge
in operating expenses that were not contemplated in the company’s
prior guidance ranges.
Forward-Looking StatementsThis
press release contains forward looking statements. These statements
are not historical facts but rather are based on our current
expectations and projections regarding our business, operations and
other factors relating thereto. Words such as “may,” “will,”
“could,” “would,” “should,” “anticipate,” “predict,” “potential,”
“continue,” “expects,” “intends,” “plans,” “projects,” “believes,”
“estimates” and similar expressions are used to identify these
forward-looking statements. These statements are only predictions
and as such are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict.
You should not rely on our forward-looking statements as
predictions of future events, as actual results may differ
materially from those in the forward-looking statements because of
several factors, including those described in more detail above and
in our filings with the U.S. Securities and Exchange Commission,
including the section entitled “Risk Factors” contained therein.
FTC Solar undertakes no duty or obligation to update any
forward-looking statements contained in this release as a result of
new information, future events or changes in its expectations,
except as required by law.
FTC Solar Investor Contact:Bill Michalek Vice
President, Investor Relations FTC SolarT: (737) 241-8618 E:
IR@FTCSolar.com
FTC Solar, Inc. |
Condensed Consolidated Statements of Comprehensive
Loss |
(unaudited) |
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in thousands, except shares and per share
data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
27,274 |
|
|
$ |
3,543 |
|
|
$ |
80,927 |
|
|
$ |
43,677 |
|
Service |
|
|
3,274 |
|
|
|
13,029 |
|
|
|
22,874 |
|
|
|
53,169 |
|
Total revenue |
|
|
30,548 |
|
|
|
16,572 |
|
|
|
103,801 |
|
|
|
96,846 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
|
22,775 |
|
|
|
11,411 |
|
|
|
73,694 |
|
|
|
62,800 |
|
Service |
|
|
4,394 |
|
|
|
14,676 |
|
|
|
22,492 |
|
|
|
59,360 |
|
Total cost of revenue |
|
|
27,169 |
|
|
|
26,087 |
|
|
|
96,186 |
|
|
|
122,160 |
|
Gross profit (loss) |
|
|
3,379 |
|
|
|
(9,515 |
) |
|
|
7,615 |
|
|
|
(25,314 |
) |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,921 |
|
|
|
2,126 |
|
|
|
5,716 |
|
|
|
7,538 |
|
Selling and marketing |
|
|
6,324 |
|
|
|
1,994 |
|
|
|
9,887 |
|
|
|
6,893 |
|
General and administrative |
|
|
11,411 |
|
|
|
13,059 |
|
|
|
31,053 |
|
|
|
39,966 |
|
Total operating expenses |
|
|
19,656 |
|
|
|
17,179 |
|
|
|
46,656 |
|
|
|
54,397 |
|
Loss from operations |
|
|
(16,277 |
) |
|
|
(26,694 |
) |
|
|
(39,041 |
) |
|
|
(79,711 |
) |
Interest expense, net |
|
|
(108 |
) |
|
|
(160 |
) |
|
|
(194 |
) |
|
|
(882 |
) |
Gain from disposal of investment
in unconsolidated subsidiary |
|
|
— |
|
|
|
1,408 |
|
|
|
898 |
|
|
|
1,745 |
|
Other expense, net |
|
|
(50 |
) |
|
|
(341 |
) |
|
|
(265 |
) |
|
|
(249 |
) |
Loss from unconsolidated
subsidiary |
|
|
(336 |
) |
|
|
— |
|
|
|
(336 |
) |
|
|
— |
|
Loss before income taxes |
|
|
(16,771 |
) |
|
|
(25,787 |
) |
|
|
(38,938 |
) |
|
|
(79,097 |
) |
(Provision for) benefit from
income taxes |
|
|
(166 |
) |
|
|
151 |
|
|
|
(175 |
) |
|
|
(15 |
) |
Net loss |
|
|
(16,937 |
) |
|
|
(25,636 |
) |
|
|
(39,113 |
) |
|
|
(79,112 |
) |
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
adjustments |
|
|
(38 |
) |
|
|
(474 |
) |
|
|
(451 |
) |
|
|
(357 |
) |
Comprehensive loss |
|
$ |
(16,975 |
) |
|
$ |
(26,110 |
) |
|
$ |
(39,564 |
) |
|
$ |
(79,469 |
) |
Net loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.79 |
) |
Weighted-average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
119,793,821 |
|
|
|
102,164,455 |
|
|
|
112,794,562 |
|
|
|
100,642,126 |
|
FTC Solar, Inc. |
Condensed Consolidated Balance Sheets |
(unaudited) |
|
(in thousands, except shares and per share
data) |
|
September 30, 2023 |
|
|
December 31, 2022 |
|
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
31,520 |
|
|
$ |
44,385 |
|
Accounts receivable, net |
|
|
71,375 |
|
|
|
49,052 |
|
Inventories |
|
|
4,655 |
|
|
|
14,949 |
|
Prepaid and other current assets |
|
|
13,468 |
|
|
|
10,304 |
|
Total current assets |
|
|
121,018 |
|
|
|
118,690 |
|
Operating lease right-of-use
assets |
|
|
2,006 |
|
|
|
1,154 |
|
Property and equipment,
net |
|
|
1,685 |
|
|
|
1,702 |
|
Intangible assets, net |
|
|
657 |
|
|
|
1,113 |
|
Goodwill |
|
|
7,143 |
|
|
|
7,538 |
|
Equity method investment |
|
|
564 |
|
|
|
— |
|
Other assets |
|
|
3,186 |
|
|
|
4,201 |
|
Total assets |
|
$ |
136,259 |
|
|
$ |
134,398 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
9,782 |
|
|
$ |
15,801 |
|
Accrued expenses |
|
|
25,778 |
|
|
|
23,896 |
|
Income taxes payable |
|
|
262 |
|
|
|
443 |
|
Deferred revenue |
|
|
11,178 |
|
|
|
11,316 |
|
Other current liabilities |
|
|
8,589 |
|
|
|
8,884 |
|
Total current liabilities |
|
|
55,589 |
|
|
|
60,340 |
|
Operating lease liability, net
of current portion |
|
|
1,310 |
|
|
|
786 |
|
Other non-current
liabilities |
|
|
5,286 |
|
|
|
6,822 |
|
Total liabilities |
|
|
62,185 |
|
|
|
67,948 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Preferred stock par value of $0.0001 per share, 10,000,000 shares
authorized; none issued as of September 30, 2023 and
December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock par value of $0.0001 per share, 850,000,000 shares
authorized; 124,954,451 and 105,032,588 shares issued and
outstanding as of September 30, 2023 and December 31,
2022 |
|
|
12 |
|
|
|
11 |
|
Treasury stock, at cost; 10,762,566 shares as of September 30,
2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
362,532 |
|
|
|
315,345 |
|
Accumulated other comprehensive loss |
|
|
(512 |
) |
|
|
(61 |
) |
Accumulated deficit |
|
|
(287,958 |
) |
|
|
(248,845 |
) |
Total stockholders’ equity |
|
|
74,074 |
|
|
|
66,450 |
|
Total liabilities and stockholders’ equity |
|
$ |
136,259 |
|
|
$ |
134,398 |
|
FTC Solar, Inc. |
Condensed Consolidated Statements of Cash
Flows |
(unaudited) |
|
|
|
Nine months ended September 30, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
Cash flows from operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(39,113 |
) |
|
$ |
(79,112 |
) |
Adjustments to reconcile net
loss to cash used in operating activities: |
|
|
|
|
|
|
Stock-based compensation |
|
|
9,044 |
|
|
|
11,147 |
|
Depreciation and amortization |
|
|
1,004 |
|
|
|
582 |
|
(Gain) loss from sale of property and equipment |
|
|
(2 |
) |
|
|
183 |
|
Amortization of debt issue costs |
|
|
532 |
|
|
|
526 |
|
Provision for obsolete and slow-moving inventory |
|
|
1,261 |
|
|
|
129 |
|
Loss from unconsolidated subsidiary |
|
|
336 |
|
|
|
— |
|
Gain from disposal of investment in unconsolidated subsidiary |
|
|
(898 |
) |
|
|
(1,745 |
) |
Warranty provision |
|
|
3,938 |
|
|
|
7,374 |
|
Warranty recoverable from manufacturer |
|
|
45 |
|
|
|
(299 |
) |
Credit losses and bad debt expense |
|
|
4,302 |
|
|
|
1,138 |
|
Deferred income taxes |
|
|
221 |
|
|
|
(331 |
) |
Lease expense and other |
|
|
748 |
|
|
|
550 |
|
Impact on cash from changes in
operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable, net |
|
|
(26,625 |
) |
|
|
53,481 |
|
Inventories |
|
|
9,033 |
|
|
|
(8,574 |
) |
Prepaid and other current assets |
|
|
(3,122 |
) |
|
|
4,948 |
|
Other assets |
|
|
67 |
|
|
|
(661 |
) |
Accounts payable |
|
|
(6,160 |
) |
|
|
(11,867 |
) |
Accruals and other current liabilities |
|
|
5,491 |
|
|
|
(25,507 |
) |
Deferred revenue |
|
|
(138 |
) |
|
|
3,489 |
|
Other non-current liabilities |
|
|
(5,740 |
) |
|
|
(4,188 |
) |
Lease payments and other, net |
|
|
(607 |
) |
|
|
(348 |
) |
Net cash used in operations |
|
|
(46,383 |
) |
|
|
(49,085 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(460 |
) |
|
|
(814 |
) |
Proceeds from sale of property and equipment |
|
|
— |
|
|
|
86 |
|
Equity method investment in Alpha Steel |
|
|
(900 |
) |
|
|
— |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(5,093 |
) |
Proceeds from disposal of investment in unconsolidated
subsidiary |
|
|
898 |
|
|
|
1,745 |
|
Net cash used in investing activities |
|
|
(462 |
) |
|
|
(4,076 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Sale of common stock |
|
|
34,007 |
|
|
|
— |
|
Stock offering costs paid |
|
|
(95 |
) |
|
|
— |
|
Proceeds from stock option exercises |
|
|
221 |
|
|
|
788 |
|
Net cash provided by financing activities |
|
|
34,133 |
|
|
|
788 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(153 |
) |
|
|
8 |
|
Net decrease in cash and cash
equivalents |
|
|
(12,865 |
) |
|
|
(52,365 |
) |
Cash and cash equivalents at
beginning of period |
|
|
44,385 |
|
|
|
102,185 |
|
Cash and cash equivalents at
end of period |
|
$ |
31,520 |
|
|
$ |
49,820 |
|
|
Notes to Reconciliations of Non-GAAP Financial Measures
to Nearest Comparable GAAP MeasuresWe present Non-GAAP
gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA,
Adjusted Net Loss and Adjusted EPS as supplemental measures of our
performance. We define Adjusted EBITDA as net loss plus (i)
provision for (benefit from) income taxes, (ii) interest expense,
net (iii) depreciation expense, (iv) amortization of intangibles,
(v) stock-based compensation, and (vi) non-routine legal fees,
severance and certain other costs (credits). We also deduct the
contingent gains from the disposal of our investment in an
unconsolidated subsidiary from net loss in arriving at Adjusted
EBITDA. We define Adjusted Net Loss as net loss plus (i)
amortization of debt issue costs and intangibles, (ii) stock-based
compensation, (iii) non-routine legal fees, severance and certain
other costs (credits), and (iv) the income tax expense (benefit) of
those adjustments, if any. We also deduct the contingent gains from
the disposal of our investment in an unconsolidated subsidiary from
net loss in arriving at Adjusted Net Loss. Adjusted EPS is defined
as Adjusted Net Loss on a per share basis using our weighted
average diluted shares outstanding.
Non-GAAP gross profit (loss), Non-GAAP operating
expense, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS are
intended as supplemental measures of performance that are neither
required by, nor presented in accordance with, U.S. generally
accepted accounting principles (“GAAP”). We present these non-GAAP
measures, many of which are commonly used by investors and
analysts, because we believe they assist those investors and
analysts in comparing our performance across reporting periods on
an ongoing basis by excluding items that we do not believe are
indicative of our core operating performance. In addition, we use
Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS to evaluate the
effectiveness of our business strategies.
Non-GAAP gross profit (loss), Non-GAAP operating
expense, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS should
not be considered in isolation or as substitutes for performance
measures calculated in accordance with GAAP, and you should not
rely on any single financial measure to evaluate our business.
These Non-GAAP financial measures, when presented, are reconciled
to the most closely applicable GAAP measure as disclosed below.
The following table reconciles Non-GAAP gross
profit (loss) to the most closely related GAAP measure for the
three and nine months ended September 30, 2023 and 2022,
respectively:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in thousands, except percentages) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
U.S. GAAP revenue |
|
$ |
30,548 |
|
|
$ |
16,572 |
|
|
$ |
103,801 |
|
|
$ |
96,846 |
|
U.S. GAAP gross profit
(loss) |
|
$ |
3,379 |
|
|
$ |
(9,515 |
) |
|
$ |
7,615 |
|
|
$ |
(25,314 |
) |
Depreciation expense |
|
|
90 |
|
|
|
116 |
|
|
|
339 |
|
|
|
272 |
|
Stock-based compensation |
|
|
181 |
|
|
|
1,153 |
|
|
|
1,313 |
|
|
|
2,521 |
|
Severance |
|
|
252 |
|
|
|
— |
|
|
|
252 |
|
|
|
— |
|
Other costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
102 |
|
Non-GAAP gross profit
(loss) |
|
$ |
3,902 |
|
|
$ |
(8,246 |
) |
|
$ |
9,519 |
|
|
$ |
(22,419 |
) |
Non-GAAP gross margin
percentage |
|
|
12.8 |
% |
|
|
(49.8 |
%) |
|
|
9.2 |
% |
|
|
(23.1 |
%) |
|
The following table reconciles Non-GAAP
operating expenses to the most closely related GAAP measure for the
three and nine months ended September 30, 2023 and 2022,
respectively:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
U.S. GAAP operating expenses |
|
$ |
19,656 |
|
|
$ |
17,179 |
|
|
$ |
46,656 |
|
|
$ |
54,397 |
|
Depreciation expense |
|
|
(115 |
) |
|
|
(66 |
) |
|
|
(256 |
) |
|
|
(175 |
) |
Amortization expense |
|
|
(133 |
) |
|
|
(135 |
) |
|
|
(409 |
) |
|
|
(135 |
) |
Stock-based compensation |
|
|
(1,011 |
) |
|
|
(6,354 |
) |
|
|
(7,731 |
) |
|
|
(12,734 |
) |
Non-routine legal fees |
|
|
(98 |
) |
|
|
(842 |
) |
|
|
(181 |
) |
|
|
(5,742 |
) |
Severance |
|
|
(1,836 |
) |
|
|
(311 |
) |
|
|
(1,823 |
) |
|
|
(1,037 |
) |
Other costs |
|
|
(3,241 |
) |
|
|
(324 |
) |
|
|
(3,241 |
) |
|
|
(1,802 |
) |
Non-GAAP operating
expenses |
|
$ |
13,222 |
|
|
$ |
9,147 |
|
|
$ |
33,015 |
|
|
$ |
32,772 |
|
|
The following table reconciles Non-GAAP Adjusted
EBITDA to the related GAAP measure of loss from operations for the
three and nine months ended September 30, 2023 and 2022,
respectively:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
U.S. GAAP loss from operations |
|
$ |
(16,277 |
) |
|
$ |
(26,694 |
) |
|
$ |
(39,041 |
) |
|
$ |
(79,711 |
) |
Depreciation expense |
|
|
205 |
|
|
|
182 |
|
|
|
595 |
|
|
|
447 |
|
Amortization expense |
|
|
133 |
|
|
|
135 |
|
|
|
409 |
|
|
|
135 |
|
Stock-based compensation |
|
|
1,192 |
|
|
|
7,507 |
|
|
|
9,044 |
|
|
|
15,255 |
|
Non-routine legal fees |
|
|
98 |
|
|
|
842 |
|
|
|
181 |
|
|
|
5,742 |
|
Severance |
|
|
2,088 |
|
|
|
311 |
|
|
|
2,075 |
|
|
|
1,037 |
|
Other costs |
|
|
3,241 |
|
|
|
324 |
|
|
|
3,241 |
|
|
|
1,904 |
|
Other expense, net |
|
|
(50 |
) |
|
|
(341 |
) |
|
|
(265 |
) |
|
|
(249 |
) |
Loss from unconsolidated subsidiary |
|
|
(336 |
) |
|
|
— |
|
|
|
(336 |
) |
|
|
— |
|
Adjusted
EBITDA |
|
$ |
(9,706 |
) |
|
$ |
(17,734 |
) |
|
$ |
(24,097 |
) |
|
$ |
(55,440 |
) |
|
The following table reconciles Non-GAAP Adjusted
EBITDA and Adjusted Net Loss to the related GAAP measure of net
loss for the three months ended September 30, 2023 and 2022,
respectively:
|
|
Three months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
(in thousands, except shares and per share
data) |
|
Adjusted EBITDA |
|
|
Adjusted Net Loss |
|
|
Adjusted EBITDA |
|
|
Adjusted Net Loss |
|
Net loss per U.S. GAAP |
|
$ |
(16,937 |
) |
|
$ |
(16,937 |
) |
|
$ |
(25,636 |
) |
|
$ |
(25,636 |
) |
Reconciling items - |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes |
|
|
166 |
|
|
|
— |
|
|
|
(151 |
) |
|
|
— |
|
Interest expense, net |
|
|
108 |
|
|
|
— |
|
|
|
160 |
|
|
|
— |
|
Amortization of debt issue costs in interest expense |
|
|
— |
|
|
|
177 |
|
|
|
— |
|
|
|
177 |
|
Depreciation expense |
|
|
205 |
|
|
|
— |
|
|
|
182 |
|
|
|
— |
|
Amortization of intangibles |
|
|
133 |
|
|
|
133 |
|
|
|
135 |
|
|
|
135 |
|
Stock-based compensation |
|
|
1,192 |
|
|
|
1,192 |
|
|
|
7,507 |
|
|
|
7,507 |
|
Gain from disposal of investment in unconsolidated
subsidiary(a) |
|
|
— |
|
|
|
— |
|
|
|
(1,408 |
) |
|
|
(1,408 |
) |
Non-routine legal fees(b) |
|
|
98 |
|
|
|
98 |
|
|
|
842 |
|
|
|
842 |
|
Severance(c) |
|
|
2,088 |
|
|
|
2,088 |
|
|
|
311 |
|
|
|
311 |
|
Other costs(d) |
|
|
3,241 |
|
|
|
3,241 |
|
|
|
324 |
|
|
|
324 |
|
Adjusted Non-GAAP
amounts |
|
$ |
(9,706 |
) |
|
$ |
(10,008 |
) |
|
$ |
(17,734 |
) |
|
$ |
(17,748 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP net
loss per share (Adjusted EPS): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
N/A |
|
|
$ |
(0.08 |
) |
|
N/A |
|
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
N/A |
|
|
|
119,793,821 |
|
|
N/A |
|
|
|
102,164,455 |
|
(a) |
Our management excludes the gain from collections of contingent
contractual amounts from the sale in 2021 of our investment in an
unconsolidated subsidiary. |
(b) |
Non-routine legal fees represent legal fees and other costs
incurred for specific matters that were not ordinary or routine to
the operations of the business. |
(c) |
Severance costs were incurred in
2023 and 2022 due to restructuring changes. |
(d) |
Other costs in 2023 included the
write-off of remaining prepaid costs resulting from the termination
of our consulting agreement with a related party. Other costs in
2022 included a second installment payment relating to a CEO
transition event that occurred in 2021, as well as professional
fees associated with our IPO. |
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