VERB Beats SaaS Revenue Forecast and Reports Record Breaking 2020 Second Quarter Financial Results
August 14 2020 - 3:10PM
VERB Technology Company,
Inc. (NASDAQ: VERB) ("VERB" or the
"Company"), a leader in interactive video-based sales
enablement applications, including interactive livestream
ecommerce, webinar, CRM, and marketing applications for
entrepreneurs and enterprises, today reported financial and
operating results for the second quarter ended June 30, 2020.
Second Quarter 2020 and Recent Operational
Highlights
- SaaS revenue of approx. $1.3M - up almost 21% over Q1 and
reflects growth of almost 49% over the same period last year.
- Total Digital revenue of approx. $1.7M - up almost 16% over
Q1.
- Total Non-Digital revenue of approx. $1M was up almost 9% over
Q1.
- Total Combined revenue of approx. $2.7M was up almost 13% over
Q1.
- 20 new client contracts executed in Q2 – almost double the 11
signed in Q1 – and 5 times the number signed in the same period
last year.
- The base guaranteed contract value of new contracts is $983,000
– represents growth of 65% over last quarter and 245% growth over
the same period last year.
- 5 consecutive quarters of SAAS revenue growth.
- On a pro forma basis, total SaaS revenue for the first 6 months
of 2020 was $2.3 million, - an increase of almost 42% from $1.6M
reported for the same period last year.
- On a pro forma basis, total Digital revenue for the first 6
months of 2020 was $3.1 million, - an increase of 25% from $2.5
million reported for the same period last year.
- Total user downloads of approximately 1.5 million, up from 1.3
million reported in first quarter 2020, and up from 670,000 for the
same period last year.
- Completed the integration of new live stream ecommerce
application verbLIVE, with
the platform of enterprise CRM
giant Salesforce.
- verbLIVE added to Salesforce’s AppExchange Partner
Program.
- VERB added to the Russell Microcap® Index as part of the
2020 Russell indexes annual reconstitution.
- In July, VERB closed an underwritten public offering of common
stock for gross proceeds of approximately $13.8 million, including
full exercise of the underwriter's over-allotment option to
purchase additional shares.
- In April, VERB began Japan operations, tapping into a
multi-billion-dollar market opportunity as part of its
international expansion plan.
Second Quarter 2020
- Total Digital revenue was $1.7 million, an
increase of 16% from the prior quarter.
- Total SaaS recurring revenue (a component
of total Digital revenue) was $1.3 million, an increase of almost
21% over the prior quarter and an increase of almost 49% over the
same period last year. SaaS recurring revenue as a percentage of
total Digital revenue was 76%, compared with 59% for the same
period last year.
- Total revenue was $2.7 million, a decrease of
29% from $3.7 million for the same period last year attributable
entirely to the Company’s intentional exit from its legacy welcome
kit printing and marketing merchandise fulfillment business in
order to focus on building revenue for its SaaS application
business, which has improved quarter over quarter since the first
quarter of 2019.
- Cost of revenue was $1.1 million, a decrease
of 44% from $2.0 million for the same period last year.
- Gross profit was $1.5 million, a decrease of
10% from $1.7 million for the same period last year, reflecting the
previously mentioned exit from the Company’s legacy printing and
fulfillment business. Gross profit from the legacy business
declined by $312,000, or 76%, offset by an increase of $138,000, or
11%, in gross profit contribution from the Digital business.
- Research and
development expenses were $1.6
million, an increase of 22% compared to $1.3 million for the same
period last year.
- General and administrative expenses were $4.0
million, an increase of 23% from $3.3 million for the same period
last year, reflecting an increase in stock-based compensation
expense and an increase in labor-related costs to accelerate
development of the Company’s new applications, including
verbLIVE.
- Cash totaled $1.4 million as at June 30,
2020, compared with $983,000 at December 31, 2019.
Six Months Ended June 30, 2020
- Total revenue was $5.0 million, an increase of
34% from $3.7 million for the same period last year.
- Total Digital revenue was $3.1 million, an
increase of 114% from $1.5 million for the same period last
year.
- Total SaaS recurring revenue (a component
of total Digital revenue) was $2.3 million, an increase of 69% from
$867,000 for the same period last year.
- Cost of revenue was $2.2 million, an increase
of 6% from $2.1 million for the same period last year.
- Gross profit was $2.8 million, an increase of
68% from $1.7 million for the same period last year, reflecting the
increase in contribution from the higher-margin Digital
business.
- Research and
development expenses were $2.9
million, an increase of 53% from $1.9 million for the same period
last year.
Management Commentary
“The second quarter was a breakout quarter for VERB on many
fronts,” said VERB CEO Rory J. Cutaia. “Our financial results
reflect our continued success as we focus on our higher-margin SaaS
business applications. Digital revenue has grown to 63% of
total revenue and we expect this percentage to continue to increase
as we transition the legacy print and fulfillment part of our
business to a third-party contractor. Specifically, SaaS
recurring revenue grew 48% year over year and now represents 48% of
total revenue, up from 23% in the same period last year. For
the quarter, we recorded our highest number of new enterprise
clients signed during a quarter - double the amount signed
last quarter - adding $983,000 of contract value resulting in
more than $573,000 in annualized SaaS recurring revenue. That
represents growth of almost 92% over last quarter - the largest
quarterly SaaS revenue increase in our history. We also
significantly increased the number of user downloads both
sequentially and year over year.
“Interest in verbLIVE, our interactive video-based livestream
ecommerce and webinar product, continues to be extremely high.
verbLIVE’s recent inclusion in Salesforce’s AppExchange
marketplace, as well as its platform integration with Salesforce,
will provide additional distribution channels to increase our
number of active users in the Salesforce ecosystem.
“Our sales enablement platform is particularly effective during
a period of continued COVID-related social distancing, as it allows
us and our growing client roster to reach out to our clients and
prospects in a unique and engaging manner, driving sales conversion
rates. In a very difficult time with many pandemic fears and
restrictions, our sales efforts have actually been enhanced as we
benefit from using the unique interactive video technology
capabilities of our sales applications and tools,” concluded Mr.
Cutaia.
Conference Call
VERB management will hold a conference call on Friday, August
14, 2020, at 4:30 PM Eastern time, to discuss its results in
greater detail. A telephonic replay of the conference call is
available from 7:30 PM Eastern time on the same day through April
28, 2020.
Live Call: Date: Friday, August 14, 2020 Time:
4:30 PM Eastern time (1:30 PM Pacific time) U.S. dial-in number:
877-407-4018 International number: 201-689-8471
Replay: Toll-free replay number: 844-512-2921
International replay number: 412-317-6671 Replay ID: 13708170
The Company filed its Form 10-Q on August 14, 2020 and will file
a transcript of the conference call on Form 8-K. These filings can
be viewed in the Investor Relations section of VERB’s website.
About VERB
VERB Technology Company, Inc. (Nasdaq: VERB) transforms how
businesses attract and engage customers. The Company’s
Software-as-a-Service, or SaaS, platform is based on its
proprietary interactive video technology, and comprises a suite of
sales enablement business software products offered on a
subscription basis. Its software applications are available in over
60 countries and in more than 48 languages to large enterprise and
small business sales teams that need affordable, easy-to-use, and
quick-to-get-results sales tools. Available in both mobile and
desktop versions, the applications are offered as a fully
integrated suite, as well as on a standalone basis, and include
verbCRM (Customer Relationship Management application), verbLEARN
(Learning Management System application), and verbLIVE (Interactive
Livestream eCommerce and Video Webinar application). The Company
has offices in California and Utah. For more information, please
visit: www.verb.tech.
FORWARD LOOKING STATEMENTS This press release
contains forward-looking statements that involve risks and
uncertainties, including statements about the closing of the
offering of common stock. These forward-looking statements involve
risks and uncertainties. If any of these risks or uncertainties
materialize, or if any of our assumptions prove incorrect, our
actual results could differ materially from the results expressed
or implied by these forward-looking statements. These risks and
uncertainties include risks associated with: the COVID-19 pandemic
and related public health measures on our business, customers,
markets and the worldwide economy; our plans to attract new
customers, retain existing customers and increase our annual
revenue; the development and delivery of new products, including
verbLIVE; our plans and expectations regarding
software-as-a-service offerings; our ability to execute on,
integrate, and realize the benefits of any acquisitions;
fluctuations in our quarterly results of operations and other
operating measures; increasing competition; general economic,
market and business conditions; and the risks described in the
filings that we make with the Securities and Exchange Commission
(“SEC”) from time to time, including the risks described under the
headings “Risk Factors” and “Management Discussion and Analysis of
Financial Condition and Results of Operations” in our Annual Report
on Form 10-K, which was filed with the SEC on May 14, 2020, as
amended by Amendment No. 1 on Form 10-K/A to our Annual Report on
Form 10-K, which was filed with the SEC on June 4, 2020, and which
should be read in conjunction with our financial results and
forward-looking statements contained therein, and our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020, which was
filed with the SEC on May 15, 2020, as amended by Amendment No. 1
on Form 10-Q/A to our Quarterly Report on Form 10-Q, which was
filed with the SEC on June 4, 2020, and which should be read in
conjunction with our financial results and forward-looking
statements contained therein. All forward-looking statements in
this press release are based on information available to us as of
the date hereof, and we do not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made,
except as required by law.
Investor Relations Contact: 888.504.9929
investors@verb.tech Media
Contact: 855.250.2300, ext.107
info@verb.tech
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