Connexa Reports Third Quarter and Nine Months 2024 Financial Results and Provides Review of Operations
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Insights
The reported increase in revenue of 29 percent for Connexa Sports Technologies in the recent quarter highlights a positive trajectory in sales performance, especially considering the context of catching up on previously unshipped orders. This is a strong indicator of demand resilience and operational efficiency in addressing backlogs. However, the increased marketing and general and administrative expenses, which have led to heightened losses, underscore a need for a more strategic approach to expense management. The improved gross margin year-over-year from 31.2% to 37.8% suggests an enhanced profitability per unit sold, which is commendable in a competitive market.
Investors should note the company's operating loss improvement by 38%, which reflects effective cost containment measures. Nonetheless, the net income improvement of 96% year-to-date is particularly impressive, signaling a potential turnaround in profitability. The revised revenue growth expectation of 5% for the fiscal year, though modest, indicates management's conservative approach amidst supply chain challenges. The financial performance, coupled with the strategic initiatives like the beta testing of the Slinger App, could be pivotal in evaluating the company's long-term growth potential and its ability to monetize through subscription models.
Connexa Sports Technologies' focus on the tennis and pickleball markets is timely, given the growing popularity of these sports. The persistent consumer demand, despite supply constraints, reflects a strong market position and brand loyalty. However, the supply shortfall in the US market suggests a significant opportunity cost and highlights the importance of robust supply chain management. The company's initiative to ramp up inventory is crucial to capitalize on the existing demand and prevent market share erosion.
Furthermore, the launch of the Slinger App represents a strategic move into the digital space, leveraging AI to enhance customer engagement and potentially open new revenue streams. The positive feedback from beta testers is promising, but the success of the app will depend on the ability to convert free users into paid subscribers. The pricing strategy for the app's subscriptions, ranging from $15 to $100, will need to be competitive yet value-reflective to ensure a high conversion rate and recurring revenue.
The integration of AI into Connexa Sports Technologies' product offerings through the Slinger App is a significant step towards digital transformation within the sports technology sector. The use of patent-pending AI algorithms for analyzing play and providing actionable feedback could set a new standard for personal sports training tools. The company's ability to refine these algorithms based on beta tester feedback is indicative of an agile development process that is responsive to consumer needs.
As AI becomes increasingly prevalent in consumer applications, Connexa's positioning at the intersection of sports and technology could be advantageous. The prospective launch of the freemium version of the app is a strategic approach to user acquisition, with the potential for upselling premium features. The success of this model will depend on the app's user experience, the perceived value of the analyses and the effectiveness of the AI in improving players' performance. The potential for real-time data and analytics to create a personalized experience could be a game-changer, fostering user retention and long-term brand engagement.
Revenue up 29 percent for the quarter ending January 31, 2024
Operating expenses reduced
Operating loss improved
Net income improved
Revenue on track for estimated
Windsor Mills, MD, March 07, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (Nasdaq:CNXA) reported operating results for the quarter and the nine month periods ended January 31, 2024 and provided an update and review of operations.
For the third fiscal quarter ended January 31, 2024, the Company reported revenue of
For the nine month period ended January 31, 2024, the Company reported revenue of
“Despite the on-going challenges with inventory availability for both our tennis and pickleball launchers, the underlying Slinger Bag business remains resilient, with consistently high levels of consumer demand. Sales would have been up to
“Slinger Bag continues to enjoy high levels of support by global tennis consumers and we are now experiencing strong demand for our pickleball launchers,” he continued. “Unfortunately consumer demand in the US continues to outstrip supply and we have found ourselves out of inventory for several periods during the last quarter. We continue to work with our Asian supply team to ramp up inventory for the balance of this fiscal year.”
As part of its Sport-as-a-Service vision, the Company initiated beta testing of its Slinger App for tennis, bringing its patent-pending AI algorithms and analysis to over 1,500 avid tennis players across the globe. Available on IOS and Android, the Slinger App records practice sessions or matchplay video, analyzes play and provides specific actionable feedback on how the player can improve. Feedback from our beta testers over the past 6 weeks has been very positive and provided important insight and feedback to our AI engineers as to what features and analyses are the most valuable to them as players. This has provided the AI team with a clear direction of the needed minor improvements and upgrades.
“We envision our AI platform as being at the heart of ‘powering’ the Connexa portfolio of brands across multiple sports verticals. It will deliver real-time data and analytics for players across all of our sport verticals. Of course, the Slinger App has been designed to be used both as a stand-alone app or in conjunction with a player using their Slinger Bag Launcher,” commented Ballardie.
He concluded, “This AI market provides an opportunity for future supplemental revenue growth based on monthly or yearly subscriptions in the range of
CONNEXA SPORTS TECHNOLOGIES, INC
CONSOLIDATED STATEMENTS OF OPERATIONS (IN US$) (UNAUDITED)
NINE AND THREE MONTHS ENDED JANUARY 31, 2024 AND 2023
| NINE MONTHS ENDED | THREE MONTHS ENDED | |||||||||||||||
| JANUARY 31, | JANUARY 31, | JANUARY 31, | JANUARY 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| NET SALES | $ | 7,485,708 | $ | 7,632,940 | $ | 2,069,559 | $ | 1,605,783 | ||||||||
| COST OF SALES | 4,653,281 | 5,254,781 | 776,844 | 535,957 | ||||||||||||
| . | ||||||||||||||||
| GROSS PROFIT | 2,832,427 | 2,378,159 | 1,292,715 | 1,069,826 | ||||||||||||
| OPERATING EXPENSES | 37.8 | % | 31.2 | % | ||||||||||||
| Selling and marketing expenses | 1,282,965 | 1,374,674 | 735,575 | 270,722 | ||||||||||||
| General and administrative expenses | 6,871,647 | 9,560,432 | 2,750,262 | 1,836,083 | ||||||||||||
| Research and development costs | - | 65,164 | - | 3,638 | ||||||||||||
| Total Operating Expenses | 8,154,612 | 11,000,270 | 3,485,837 | 2,110,443 | ||||||||||||
| OPERATING LOSS | (5,322,185 | ) | (8,622,111 | ) | (2,193,122 | ) | (1,040,617 | ) | ||||||||
| NON-OPERATING INCOME (EXPENSE) | ||||||||||||||||
| Total Non-Operating Income (Expenses) | 2,464,911 | (9,671,802 | ) | (1,579,506 | ) | (5,790,155 | ) | |||||||||
| NET LOSS FROM OPERATIONS BEFORE PROVISION FOR INCOME | ||||||||||||||||
| OPERATIONS AND PROVISION FOR INCOME TAXES | (2,857,274 | ) | (18,293,913 | ) | (3,772,628 | ) | (6,830,772 | ) | ||||||||
Shareholder Letter
Further information for shareholders can be found in an open letter posted on our website at https://www.connexasports.com/investor-relations/
About Connexa Sports Technologies:
Connexa Sports a leading connected sports company delivering products, technologies, and Sport-as-a-Service across a range of sport verticals. Connexa’s mission is to reinvent sports through technological innovation driven by an unwavering focus on today’s sports consumer.
Contact Information:
investors@connexasports.com
www.connexasports.com
Forward-Looking Statements
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.
Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Item 1A. Risk Factors” in our 10-K filing as of September 14, 2023 and our ability to continue as a going concern. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this press release. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this press release.
In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to rely unduly on these statements.
Although we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward-looking statements contained in this press release and any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.
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