Presto Automation Inc. Announces First Quarter Fiscal 2023 Financial Results
Total Revenue of
ARR of
“We are delighted to report our first earnings as a public company and to share our business momentum and technical progress with the financial community,” said
First Quarter Fiscal 2023 Financial Highlights
- Total Revenue: Total revenue was
$7.8 million , an increase of 8% as compared to$7.2 million for the first quarter of 2022. - ARR: ARR reached
$31.1 million , an increase of 8% year-over-year. - Net Income (Loss): Net income was
$28.7 million for the first quarter of 2023, compared to a net loss$(19.5) million for the first quarter of 2022. - Adjusted EBITDA: The Adjusted EBITDA loss was
($8.9) million for the first quarter of 2023, compared to a loss of($5.4) million for the first quarter of 2022.
See “Non-GAAP financial Measures and Definition of Key Metric” below for how we define ARR and Adjusted EBITDA and the financial tables that accompany this release for a reconciliation of Adjusted EBITDA to its closest comparable GAAP measure.
Public Listing Transaction Highlights
- Trading commenced on the Nasdaq on
September 22, 2022 under the ticker “PRST”. - Received approximately
$120 million in gross proceeds - Led by prominent restaurant and technology strategic investors including
Cleveland Avenue Capital - Entered into a New Credit Agreement and repaid outstanding debt
Financial Outlook
- For the fiscal year ending
June 30, 2023 :- The Company expects revenue to be between
$33 and$35 million .
- The Company expects revenue to be between
First Quarter 2023 Conference Call
Non-GAAP Financial Measures and Definition of Key Metric
This press release includes Adjusted EBITDA, which is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles in
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.
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.
About Presto
Presto overlays next-gen digital solutions onto the physical world. Our enterprise-grade voice, vision, and touch technologies help hospitality businesses thrive while delighting guests. With over 250,000 systems shipped, we are one of the largest labor automation technology providers in the industry. Founded at M.I.T. in 2008, Presto is headquartered in
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 reliance on computer hardware, licensed software and services rendered by third parties;
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
|||||||
(unaudited) |
|||||||
(in thousands, except per share and per share amounts) |
|||||||
Three Months Ended |
|||||||
|
2022 |
|
|
2021 |
|
||
Revenue |
|||||||
Platform |
$ |
4,820 |
|
$ |
4,537 |
|
|
Transaction |
|
2,959 |
|
|
2,692 |
|
|
Total Revenue |
|
7,779 |
|
|
7,229 |
|
|
Cost of revenue: |
|||||||
Platform |
|
4,292 |
|
|
4,022 |
|
|
Transaction |
|
2,644 |
|
|
2,334 |
|
|
Depreciation and impairment |
|
291 |
|
|
466 |
|
|
Total cost of revenue |
|
7,227 |
|
|
6,822 |
|
|
Gross profit |
|
552 |
|
|
407 |
|
|
Operating expenses: |
|||||||
Research and development (1) |
|
8,021 |
|
|
4,001 |
|
|
Sales and marketing (1) |
|
3,077 |
|
|
1,174 |
|
|
General and administration (1) |
|
9,685 |
|
|
1,974 |
|
|
Loss on infrequent product repairs |
|
- |
|
|
435 |
|
|
Total operating expenses |
|
20,783 |
|
|
7,584 |
|
|
Loss from operations |
|
(20,231 |
) |
|
(7,177 |
) |
|
Change in fair value of warrants and convertible promissory notes |
|
59,822 |
|
|
(13,574 |
) |
|
Interest expense |
|
(3,376 |
) |
|
(1,388 |
) |
|
Loss on early extinguishment of debt |
|
(7,758 |
) |
|
- |
|
|
Other financing and financial instrument (costs) income, net |
|
(1,768 |
) |
|
- |
|
|
Other income, net |
|
2,028 |
|
|
2,630 |
|
|
Total other income (expense), net |
|
48,948 |
|
|
(12,332 |
) |
|
Income (loss) before provision for income taxes |
|
28,717 |
|
|
(19,509 |
) |
|
Provision for income taxes |
|
- |
|
|
- |
|
|
Net income (loss) and comprehensive income (loss) |
$ |
28,717 |
|
$ |
(19,509 |
) |
|
Net income (loss) per share attributable to common stockholders: |
|||||||
Basic |
$ |
0.97 |
|
$ |
(0.72 |
) |
|
Diluted |
$ |
0.71 |
|
$ |
(0.72 |
) |
|
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic |
|
29,521,505 |
|
|
27,137,792 |
|
|
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted |
|
40,397,934 |
|
|
27,137,792 |
|
|
(1) Includes stock-based compensation expense as follows (in thousands) |
|||||||
Three Months Ended |
|||||||
|
2022 |
|
|
2021 |
|
||
Research and development |
$ |
1,816 |
|
$ |
105 |
|
|
Sales and marketing |
|
791 |
|
|
99 |
|
|
General and administrative |
|
5,818 |
|
|
275 |
|
|
Total* |
$ |
8,425 |
|
$ |
479 |
|
|
*For the three months ended |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(unaudited) |
|||||||
(in thousands, except share and par value) |
|||||||
|
|
||||||
|
2022 |
|
|
2022 |
|
||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
59,249 |
|
$ |
3,017 |
|
|
Accounts receivable, net |
|
2,063 |
|
|
1,518 |
|
|
Inventories |
|
484 |
|
|
869 |
|
|
Deferred cost, current |
|
6,662 |
|
|
8,443 |
|
|
Prepaid and other current assets |
|
1,001 |
|
|
707 |
|
|
Total current assets |
|
69,459 |
|
|
14,554 |
|
|
Deferred cost, net of current portion |
|
1,157 |
|
|
2,842 |
|
|
Deferred transaction costs |
|
- |
|
|
5,765 |
|
|
Property and equipment, net |
|
1,691 |
|
|
1,975 |
|
|
Intangible asset, net |
|
5,630 |
|
|
4,226 |
|
|
|
|
1,156 |
|
|
1,156 |
|
|
Other long-term assets |
|
766 |
|
|
18 |
|
|
Total assets |
$ |
79,859 |
|
$ |
30,536 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
4,612 |
|
$ |
5,916 |
|
|
Accrued liabilities |
|
7,282 |
|
|
6,215 |
|
|
Financing obligations, current |
|
7,216 |
|
|
8,840 |
|
|
Term loans, current |
|
- |
|
|
25,443 |
|
|
Convertible promissory notes and embedded warrants, current |
|
- |
|
|
89,663 |
|
|
Deferred revenue, current |
|
6,640 |
|
|
10,532 |
|
|
Total current liabilities |
|
25,750 |
|
|
146,609 |
|
|
Term loans, noncurrent |
|
49,424 |
|
|
- |
|
|
PPP loans |
|
- |
|
|
2,000 |
|
|
Warrant liabilities |
|
1,999 |
|
|
4,149 |
|
|
Deferred revenue, net of current portion |
|
699 |
|
|
237 |
|
|
Other long-term liabilities |
|
820 |
|
|
0 |
|
|
Total liabilities |
$ |
78,692 |
|
$ |
152,995 |
|
|
Stockholders' equity (deficit): |
|||||||
Preferred stock, |
|
- |
|
|
- |
|
|
Common stock, |
|
5 |
|
|
3 |
|
|
Additional paid-in capital |
|
173,228 |
|
|
78,321 |
|
|
Accumulated deficit |
|
(172,066 |
) |
|
(200,783 |
) |
|
Total stockholders' equity (deficit) |
|
1,167 |
|
|
(122,459 |
) |
|
Total liabilities and stockholders' equity (deficit) |
$ |
79,859 |
|
$ |
30,536 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(unaudited) |
|||||||
(in thousands) |
|||||||
Three Months Ended |
|||||||
|
2022 |
|
|
2021 |
|
||
Cash Flows from Operating Activities |
|||||||
Net income (loss) |
$ |
28,717 |
|
$ |
(19,509 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|||||||
Depreciation, amortization and impairment |
|
462 |
|
|
535 |
|
|
Stock-based compensation |
|
2,175 |
|
|
479 |
|
|
Earn-out share stock-based compensation expense to option and RSU holders |
|
6,250 |
|
|
- |
|
|
Noncash expense attributable to fairvalue liabilities assumed in Merger |
|
34 |
|
|
- |
|
|
Change in fair value of liability classified warrants |
|
(11,551 |
) |
|
1,457 |
|
|
Change in fair value of warrants and convertible promissory notes |
|
(48,271 |
) |
|
12,117 |
|
|
Amortization of debt discount and debt issuance costs |
|
1,371 |
|
|
88 |
|
|
Loss on debt extinguishment |
|
7,759 |
|
|
- |
|
|
Paid-in-kind interest expense |
|
281 |
|
|
- |
|
|
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 earnout liability |
|
(1,175 |
) |
|
- |
|
|
Noncash lease expense |
|
76 |
|
|
- |
|
|
Loss on disposal of property and equipment |
|
14 |
|
|
- |
|
|
Changes in operating assets and liabilities: |
|||||||
Accounts receivable, net |
|
(545 |
) |
|
(502 |
) |
|
Inventories |
|
385 |
|
|
132 |
|
|
Deferred costs |
|
3,466 |
|
|
2,828 |
|
|
Prepaid expenses and other current assets |
|
259 |
|
|
352 |
|
|
Other long-term assets |
|
- |
|
|
(83 |
) |
|
Accounts payable |
|
1,678 |
|
|
(2,363 |
) |
|
Vendor financing facility |
|
- |
|
|
(3,722 |
) |
|
Accrued liabilities |
|
477 |
|
|
(1,485 |
) |
|
Deferred revenue |
|
(3,430 |
) |
|
(3,139 |
) |
|
Net cash used in operating activities |
|
(11,156 |
) |
|
(15,414 |
) |
|
Cash Flows from Investing Activities |
|||||||
Purchase of property and equipment |
|
(47 |
) |
|
(76 |
) |
|
Payments relating to capitalized software |
|
(1,327 |
) |
|
(373 |
) |
|
Net cash used in investing activities |
|
(1,374 |
) |
|
(449 |
) |
|
Cash Flows from Financing Activities |
|||||||
Proceeds from the exercise of common stock options |
|
36 |
|
|
19 |
|
|
Proceeds from the issuance of term loans |
|
60,250 |
|
|
- |
|
|
Payment of debt issuance costs |
|
(1,094 |
) |
|
- |
|
|
Repayment of term loans |
|
(32,980 |
) |
|
- |
|
|
Payment of penalties and other costs on extinguishment of debt |
|
(5,734 |
) |
|
- |
|
|
Proceeds from issuance of convertible promissory notes and embedded warrants |
|
- |
|
|
500 |
|
|
Principal payments of financing obligations |
|
(886 |
) |
|
(186 |
) |
|
Proceeds from issuance of common stock |
|
1,000 |
|
|
- |
|
|
Contributions from Merger and PIPE financing, net of transaction costs and other payments |
|
49,840 |
|
|
- |
|
|
Payment of deferred transaction costs |
|
(1,670 |
) |
|
- |
|
|
Net cash provided by financing activities |
|
68,762 |
|
|
333 |
|
|
Net increase in cash and cash equivalents |
|
56,232 |
|
|
(15,530 |
) |
|
Cash and cash equivalents at beginning of year |
|
3,017 |
|
|
36,909 |
|
|
Cash and cash equivalents at end of year |
$ |
59,249 |
|
$ |
21,379 |
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities |
|||||||
Capitalization of stock-based compensation expense to capitalized software |
$ |
221 |
|
$ |
6 |
|
|
Capital contribution from shareholder in conjunction with Credit Agreement |
|
2,779 |
|
||||
Issuance of warrants in conjunction with Senior Term Loan |
|
2,076 |
|
|
- |
|
|
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 |
|
220 |
|
|
551 |
|
|
Right of use asset in exchange for operating lease liability |
|
308 |
|
|
- |
|
Reconciliation from GAAP to Non-GAAP Results |
|||||||
(In thousands, except per share data, unaudited) |
|||||||
Three Months Ended |
|||||||
|
|||||||
|
2022 |
|
|
2021 |
|
||
Adjusted EBITDA |
|||||||
Net income (loss) |
$ |
28,717 |
|
$ |
(19,509 |
) |
|
Interest expense |
|
3,376 |
|
|
1,388 |
|
|
Other income, net |
|
(2,028 |
) |
|
(2,630 |
) |
|
Depreciation and amortization |
|
433 |
|
|
535 |
|
|
Stock-based compensation expense |
|
2,175 |
|
|
479 |
|
|
Earn-out stock-based compensation expense |
|
6,250 |
|
|
- |
|
|
Change in fair value of warrants and convertible promissory notes |
|
(59,822 |
) |
|
13,574 |
|
|
Loss on debt extinguishment |
|
7,758 |
|
|
- |
|
|
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 |
|
- |
|
|
435 |
|
|
Hardware repair expense related to COVID |
|
- |
|
|
373 |
|
|
Adjusted EBITDA |
$ |
(8,891 |
) |
$ |
(5,355 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221115006370/en/
Investors:
investor@presto.com
Media:
media@presto.com
Source: