Presto Announces Fiscal Third Quarter 2023 Financial Results

May 18, 2023

Continues Momentum of Drive-Thru Voice AI Automation by Adding Hardees and Carl’s Jr. as Customers

SAN CARLOS, Calif., May 18, 2023 (GLOBE NEWSWIRE) -- Presto Automation Inc. (NASDAQ: PRST), one of the largest drive-thru automation technology providers in the hospitality industry, today announced financial results for the fiscal third quarter ended March 31, 2023.

“We believe this is an inflection point for the drive-thru automation market and we continue to increasingly focus our attention on the Voice segment of our business, including the announcement of our partnership with CKE Restaurants for participating drive-thrus nationwide to use our Presto Voice product,” said Krishna Gupta, interim CEO at Presto. “Our customers are learning about the revenue and efficiency benefits that Presto Voice can provide and that Voice AI in the drive-thru is not a futuristic application of AI, it is immediately actionable. We are the market leader in this segment and are investing meaningfully behind it.”

“The Voice segment builds on our existing focus on labor automation and driving more revenue to our customers using Presto Touch, which is centered around our new Flex product that several of our enterprise partners are in the process of testing,” continued Gupta. “Our revenue decline in the quarter is due to the amortization of legacy contracts, but we are looking to upgrade our customers to our new product, and expect to see the financial benefits from our new partnership in the future.”

Fiscal Third Quarter 2023 Financial Highlights

For the fiscal third quarter of 2023, compared to the fiscal third quarter of 2022:

  • Total revenue was $6.6 million down 12.0% compared to $7.5 million for 2022.
  • Total ARR was $26.4 million, a decrease of 12.0% year-over-year.
  • Net loss was $(15.7) million, compared to net income $9.0 million for 2022. Of the $25 million change, $21 million was due to a change in the fair value of warrant liabilities and convertible promissory notes and non-cash stock compensation.
  • Adjusted EBITDA* was a loss of $(9.3) million for 2023, compared to a loss of $(7.1) million for 2022.

*Adjusted EBITDA is a non-GAAP financial measure defined under “Non-GAAP Financial Measures,” and is reconciled to net income, the closest comparable GAAP measure, at the end of this release.

Recent Business Highlights

  • Expanded partnership with CKE Restaurants Holdings, Inc., the parent company of the iconic Carl's Jr. and Hardee's brands. Presto will be rolling out its AI powered solution, Presto Voice™, to automate voice ordering at participating CKE drive-thrus nationwide.
  • Announced a collaboration with OpenAI, an AI research and deployment company, to drive greater innovation around Presto’s drive-thru AI voice assistant.

Financial Outlook Update

Presto expects total revenue for the fiscal year 2023 to be in the range of $26 million to $28 million. The revision is due to updated assumptions impacting the accounting treatment of a single customer contract. This non-cash change is not material to commercial operations.

Presto Automation, Inc Fiscal Third Quarter 2023 Conference Call Details
Date:Thursday, May 18, 2023
Time:5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)
Telco Registration:You can register for the conference call at

A live audio webcast of the event will be available on the Presto Investor Relations website, An archived replay of the webcast also will be available shortly after the live event on the Presto Investor Relations website.

About Presto Automation Inc.

Presto (NASDAQ: PRST) provides enterprise-grade AI solutions for the nation’s largest hospitality brands. Our industry-leading automation and voice AI technology improves order accuracy, reduces labor costs, and increases revenue for superior drive-thru and dine-in experiences. With over $18 billion in payments processed, Presto is one of the largest labor automation technology providers in the industry. Presto is headquartered in Silicon Valley in San Carlos, California and counts among its customers some of the top 20 restaurant chains in the United States.

Non-GAAP Financial Measures and Performance Measures

This press release includes Adjusted EBITDA, which is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States. We believe Adjusted EBITDA is useful for comparing our financial performance to other companies and from period to period by excluding the impact of certain items that do not reflect our core operating performance, thereby providing consistency and direct comparability with our past financial performance and between fiscal periods. Adjusted EBITDA is defined as net loss, adjusted to exclude interest, other income (expense), net loss on debt extinguishment, income taxes, depreciation and amortization expense, stock-based compensation expense, fair value adjustments on warrant liabilities and convertible promissory notes, merger related ancillary costs, and hardware repair expenses related to COVID and COVID-related expenses due to damage from liquid ingress and contra-revenue associated with warrants issued in a sales transaction.We include this non-GAAP measure because it used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. A reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure is included below under “Reconciliation from GAAP to Non-GAAP Results” at the end of this release.In addition, we use Annual Revenue Run-Rate, or ARR, as a key business metric to evaluate our business, identify trends, formulate business plans and make strategic decisions. We calculate ARR by annualizing quarterly revenue at the end of the fiscal quarter. Our calculation of ARR may differ from similarly titled metrics presented by other companies, and the amount of revenue we recognize over any 12-month period may differ significantly from the ARR at the beginning of that period.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that refer to projections , forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. The forward-looking statements speak only as of the date of this press release or as of the date they are made. Except as otherwise required by applicable law, Presto disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Presto cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Presto. In addition, Presto cautions you that the forward-looking statements contained in this press release are subject to the following risks and uncertainties: our ability to manage our growth effectively, to sustain our recent revenue growth or attract new customers; the limited operating history with our new Vision and Voice products in a new and developing market; our ability to achieve revenue growth while our expenses increase; continued adverse impacts from COVID-19 (including as a result of global supply chain shortages); the loss of any of our three largest customers or a reduction in their business with us; our ability to improve and enhance the functionality, performance, reliability, design, security, or scalability of our platform to respond to customers’ evolving needs; our ability to protect the security of our customers’’ information; changing privacy laws, regulations and standards, and our ability to comply with contractual obligations and laws related to data privacy and security; unfavorable conditions in the restaurant industry or the global economy, including with respect to food, labor, and occupancy costs; the availability of capital or financing on acceptable terms, if at all; financial covenants and other restrictions on our actions contained in our financing agreements that may limit our operational flexibility; the length and unpredictability of our sales cycles and the amount of investments required in sales efforts; material weaknesses in our internal control over financial reporting and, our ability to remediate these deficiencies; our ability to continue as a going concern; our ability to receive additional financing in a timely manner; shortages, price increases, changes, delays or discontinuations of hardware; our ability to maintain relationships with our payment processors; our relies on computer hardware, licensed software and services rendered by third parties; U.S. laws and regulations (including with respect to payment transaction processing), many of which are unsettled and still developing, and our or our customers’ ability to comply with such laws and regulations; significant changes in U.S. and international trade policies that restrict imports or increase tariffs; any requirements to collect additional sales taxes or be subject to other tax liabilities that may increase the costs to our customers; our ability to adequately protect our intellectual property rights; claims by third parties of intellectual property infringement; our use of open-source software in our platform; and other economic, business, competitive and/or regulatory factors affecting Presto’s business generally as set forth in our filings with the Securities and Exchange Commission.


Adam Rogers
VP Investor Relations

Justin Foster & Brian Ruby

(in thousands, except per share amounts)
 Three months ended     Nine months ended
 March 31,  March 31, 
 2023    2022    2023    2022
Platform$3,088  $5,083  $11,617  $14,754 
Transaction 3,519   2,451   9,699   7,705 
Total revenue 6,607   7,534   21,316   22,459 
Cost of revenue               
Platform 2,743   4,057   10,951   11,872 
Transaction 3,084   2,185   8,561   6,749 
Depreciation and impairment 291   279   873   1,206 
Total cost of revenue 6,118   6,521   20,385   19,827 
Gross profit 489   1,013   931   2,632 
Operating expenses:               
Research and development 5,496   3,927   16,877   11,733 
Sales and marketing 2,127   1,966   6,753   4,791 
General and administrative 7,408   2,978   19,608   7,110 
Loss on infrequent product repairs    119      582 
Total operating expenses 15,031   8,990   43,238   24,216 
Loss from operations (14,542)  (7,977)  (42,307)  (21,584)
Change in fair value of warrants and convertible promissory notes 1,599   18,102   61,043   (11,668)
Interest expense, net (2,991)  (1,162)  (9,397)  (3,418)
Loss on extinguishment of debt and financing obligations       (8,095)   
Other financing and financial instrument expenses, net       (1,768)   
Other income (expense), net 257   (12)  2,612   2,629 
Total other income (expense), net (1,135)  16,928   44,395   (12,457)
Income (loss) before provision for income taxes (15,677)  8,951   2,088   (34,041)
Provision for income taxes 3   (3)  8   21 
Net income (loss) and comprehensive income (loss)$(15,680) $8,954  $2,080  $(34,062)
Numerator adjustments for diluted earnings per share:           
Less: Change in fair value of convertible notes    (16,307)      
Net income (loss) attributable to common stockholders, diluted$(15,680) $(7,353) $2,080  $(34,062)
Net income (loss) per share attributable to common stockholders, basic$(0.30) $0.33  $0.05  $(1.25)
Net income (loss) per share attributable to common stockholders, diluted (0.30)  (0.23)  0.04   (1.25)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic 51,453,368   27,316,602   44,173,570   27,213,403 
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted 51,453,368   31,838,707   54,539,795   27,213,403 

(1)Includes stock-based compensation expense as follows (in thousands)     
   Three Months Ended March 31,   Nine Months Ended March 31,
  20232022 20232022
 Research and development$1,154$99 $1,886$349
 Sales and marketing 245 110 581323
 General and administrative 2,997 221 6,805706
 Total*$4,396$430 $9,272$1,378
 *For the three and nine months ended March 31, 2023, such amount reflects $1,604 and $3,478, respectively, of stock-based compensation expense related to earn out shares.

 As of    As of
 March 31,  June 30
 2023    2022
Current assets:     
Cash and cash equivalents$26,978  $3,017 
Accounts receivable, net of allowance for doubtful accounts of $135 and $353, respectively 2,207   1,518 
Inventories 395   869 
Deferred costs, current 3,772   8,443 
Prepaid expenses and other current assets 1,851   707 
Total current assets 35,203   14,554 
Deferred costs, net of current portion 22   2,842 
Investment in non-affiliate 2,000    
Deferred transaction costs    5,765 
Property and equipment, net 1,215   1,975 
Intangible assets, net 8,436   4,226 
Goodwill 1,156   1,156 
Other long-term assets 578   18 
Total assets$48,610  $30,536 
Liabilities and Stockholders’ Deficit       
Current liabilities:       
Accounts payable$3,267  $5,916 
Accrued liabilities 4,152   6,215 
Financing obligations, current 3,720   8,840 
Term loans, current 53,979   25,443 
Convertible promissory notes and embedded warrants, current    89,663 
Deferred revenue, current 1,551   10,532 
Total current liabilities 66,669   146,609 
Financing obligations, net of current 1,860    
PPP loans    2,000 
Warrant liabilities 1,623   4,149 
Deferred revenue, net of current portion 264   237 
Other long-term liabilities 426    
Total liabilities 70,842   152,995 
Commitments and Contingencies       
Stockholders’ deficit:       
Preferred stock, $0.0001 par value–1,500,000 shares authorized as of March 31, 2023 and June 30, 2022, respectively; no shares issued and outstanding as of March 31, 2023 and June 30, 2022 respectively     
Common stock, $0.0001 par value–180,000,000 shares authorized as of March 31, 2023 and June 30, 2022, and 51,921,941 and 27,974,439 shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively 5   3 
Additional paid-in capital 176,466   78,321 
Accumulated deficit (198,703)  (200,783)
Total stockholders’ deficit (22,232)  (122,459)
Total liabilities and stockholders’ deficit$48,610  $30,536 

(in thousands)
 Nine months ended
 March 31, 
 2023    2022
Cash Flows from Operating Activities     
Net income (loss)$2,080  $(34,062)
Adjustments to reconcile net income (loss) to net cash used in operating activities:     
Depreciation, amortization and impairment 1,262   1,524 
Stock-based compensation 5,794   1,384 
Earnout share stock-based compensation 3,479    
Contra-revenue associated with warrant agreement (Refer to Note 2) 1,073    
Noncash expense attributable to fair value liabilities assumed in Merger 34    
Change in fair value of liability classified warrants (12,555)  1,066 
Change in fair value of warrants and convertible promissory notes (48,271)  10,602 
Amortization of debt discount and debt issuance costs 2,433   405 
Loss on extinguishment of debt and financing obligations 8,095    
Paid-in-kind interest expense 4,604   15 
Share and warrant cost on termination of convertible note agreement 2,412    
Forgiveness of PPP Loan (2,000)  (2,599)
Change in fair value of unvested founder shares liability (1,392)   
Noncash lease expense 264    
Loss on disposal off property and equipment 16    
Changes in operating assets and liabilities:     
Accounts receivable, net (689)  (524)
Inventories 474   (905)
Deferred costs 7,769   8,978 
Prepaid expenses and other current assets (742)  538 
Other long-term assets    (80)
Accounts payable 1,480   (4,297)
Vendor financing facility    (6,792)
Accrued liabilities (2,138)  (2,551)
Deferred revenue (8,954)  (10,917)
Other long-term liabilities (247)  (200)
Net cash used in operating activities (35,719)  (38,415)
Cash Flows from Investing Activities     
Purchase of property and equipment (229)  (214)
Payments relating to capitalized software (3,584)  (1,249)
Investment in non-affiliate (2,000)   
Net cash used in investing activities (5,813)  (1,463)
Cash Flows from Financing Activities     
Proceeds from the exercise of common stock options 280   104 
Proceeds from the issuance of term loans 60,250   12,600 
Payment of debt issuance costs (1,294)  (1,287)
Repayment of term loans (32,980)   
Payment of penalties and other costs on extinguishment of debt (6,144)   
Proceeds from issuance of convertible promissory notes and embedded warrants    5,500 
Proceeds from issuance of financing obligations     
Principal payments of financing obligations (3,669)  (2,009)
Proceeds from the issuance of common stock 1,100    
Contributions from Merger and PIPE financing, net of transaction costs and other payments 49,840    
Payments of deferred transaction costs (1,890)  (1,541)
Net cash provided by financing activities 65,493   13,367 
Net increase (decrease) in cash and cash equivalents 23,961   (26,511)
Cash and cash equivalents at beginning of period 3,017   36,909 
Cash and cash equivalents at end of period$26,978  $10,398 
Supplemental Disclosure of Non-Cash Investing and Financing Activities     
Capitalization of stock-based compensation expense to capitalized software$915  $9 
Issuance of warrants (Refer to Note 2) 1,352   1,466 
Capital contribution from shareholder in conjunction with Credit Agreement 2,779    
Issuance of warrants in conjunction with Credit Agreement 2,705    
Issuance of warrants in conjunction with Lago Term Loan 843    
Convertible note conversion to common stock 41,392    
Reclassification of warrants from liabilities to equity 830    
Recognition of liability classified warrants upon Merger 9,388    
Recognition of Unvested Founder Shares liability 1,588    
Forgiveness of PPP Loan 2,000   2,599 
Transaction costs recorded in accounts payable and accrued liabilities    5,584 
Right of use asset in exchange for operating lease liability 308    
Cancellation of June 2021 Note and related accrued interest, with issuance of February 2022 Note    20,663 

(in thousands, except per share amounts)
     Three months ended March 31,     Nine months ended March 31, 
(in thousands) 2023    2022 2023    2022
Net income (loss) $(15,680) $8,954  $2,080  $(34,062)
Provision for income taxes  3   (3)  8   21 
Interest expense  2,991   1,162   9,397   3,418 
Other income, net  (257)  12   (2,612)  (2,629)
Depreciation and amortization  418   338   1,262   1,391 
Stock-based compensation expense  2,792   430   5,794   1,384 
Earnout stock-based compensation expense  1,604      3,478    
Change in fair value of warrants and convertible promissory notes  (1,599)  (18,102)  (61,043)  11,668 
Loss on extinguishment of debt and financial obligations        8,095    
Other financing and financial instrument (costs) income, net        1,768    
Deferred compensation and bonuses earned upon closing of the Merger        2,232    
Public relations fee due upon closing of the Merger        250    
Loss on infrequent product repairs(1)     119      582 
Contra-revenue associated with warrant agreement  458      1,073    
Hardware repair expense related to COVID(1)           1,110 
Adjusted EBITDA $(9,270) $(7,090) $(28,218) $(17,117)

(1)In June 2022, the Company received a favorable arbitrator ruling related to a matter with its third-party subcontractor and was awarded approximately $11.3 million in damages related to the Company’s loss on infrequent product repairs and to cover its legal expenses. This arbitration ruling was affirmed by the appellate court in the country of the arbitration ruling on March 6, 2023. On May 2, 2023, the vendor appealed the ruling to the highest court there. The award has not met the criteria to be considered realizable as of March 31, 2023. As a result, the Company has not recognized any gain related to this settlement in its condensed consolidated statement of operations and comprehensive loss.

Print Page
Email Alerts
RSS Feeds
Contact IR