Castellum, Inc. Announces First Quarter Financial Results
Castellum, a cybersecurity and software services company, reported its Q1 2024 financial results. Revenue rose to $11.3 million from $11.1 million in Q4 2023. However, gross profit slightly declined to $4.5 million from $4.6 million. Operating loss increased to $2.7 million from $1.5 million in the previous quarter. The company's non-GAAP Recurring Cash Operating Profit (RCOP) was negative $0.1 million, improving from negative $0.4 million in Q4 2023. CEO Mark Fuller highlighted significant progress in reducing short-term debt through two financing transactions and focused on business development and profitability improvements for the rest of 2024 and into 2025.
- Revenue increased to $11.3 million in Q1 2024 from $11.1 million in Q4 2023.
- Non-GAAP RCOP improved to negative $0.1 million from negative $0.4 million in Q4 2023.
- Significant reduction in short-term debt through two major financing transactions.
- Continued investment in business development.
- Gross profit declined slightly to $4.5 million from $4.6 million in Q4 2023.
- Operating loss increased to $2.7 million from $1.5 million in Q4 2023.
- Inclusion of non-cash charges such as $1.7 million in stock-option and warrants expense, and $0.6 million in depreciation and amortization.
Insights
Castellum, Inc.’s financial results for the first quarter of 2024 show mixed signals. Although revenue has slightly increased to
An increase in operating loss to
The use of Non-GAAP measures like Recurring Cash Operating Profit (RCOP) is beneficial as it provides a clearer picture by excluding non-cash charges. The RCOP was approximately
CEO Mark Fuller’s comments on reducing short-term debt and business development investments are positive. However, investors should scrutinize whether these investments will yield substantial contract wins and improved profitability.
Castellum, Inc. operates in the specialized sectors of cybersecurity, electronic warfare and software services, primarily for the federal government. The slight sequential revenue growth to
The company's strategic focus on reducing short-term debt is prudent. Financing transactions to strengthen the balance sheet are steps in the right direction. Yet, the significant operating losses imply that there is still much work to do in terms of cost control and profitability.
The market for federal cybersecurity and electronic warfare is competitive and heavily influenced by government contracts, which can be lumpy. Thus, Castellum's future growth largely depends on successfully converting its pipeline into actual contracts.
Looking forward, the company’s investments in business development will be crucial. Investors should monitor upcoming quarters for signs of contract wins and improvements in recurring cash operating profit, as these will be more reliable indicators of long-term health.
VIENNA, Va., May 15, 2024 (GLOBE NEWSWIRE) -- Castellum, Inc. (the "Company") (NYSE-American: CTM), a cybersecurity, electronic warfare, and software services company focused on the federal government, announces highlights of its operating results for its first quarter ended March 31, 2024.
Castellum, Inc.’s revenue for the first quarter of 2024 was
Management uses a Non-GAAP measure, Recurring Cash Operating Profit (Loss) (“RCOP”), as an important measure of the Company’s operating performance. This Non-GAAP measure was approximately
Castellum, Inc.’s full financial results for the three months ended March 31, 2024, will be published later today on Form 10-Q at www.sec.gov.
“We made some important financial progress in the first quarter of 2024, especially in strengthening our balance sheet,” said Mark Fuller, President and CEO of Castellum. “With two important financing transactions completed, we dramatically cut our short term debt, while investing in business development and slightly growing revenue. We continue to look forward to converting our large pipeline of opportunities into contract wins, improving our profitability and RCOP, and continuing to improve our balance sheet over the rest of 2024 and into 2025.”
About Castellum, Inc.
Castellum, Inc. is a cybersecurity, electronic warfare, and software engineering services company focused on the federal government - http://castellumus.com.
Forward-Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the Company's expectations or beliefs concerning future events and can generally be identified by the use of statements that include words such as "estimate,” "project,” "believe,” "anticipate,” "shooting to,” "intend,” "in a position,” "looking to,” "pursue,” "positioned,” "will,” "likely,” "would," or similar words or phrases. Forward-looking statements include, but are not limited to, statements regarding the Company's expectations for revenue growth, RCOP growth, and new customer opportunities, improvements to cost structure, and profitability. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company's control, that could cause actual results to differ (sometimes materially) from the results expressed or implied in the forward-looking statements, including, among others: the Company's ability to compete against new and existing competitors; its ability to effectively integrate and grow its acquired companies; its ability to identify additional acquisition targets and close additional acquisitions; the impact on the Company's revenue due to a delay in the U.S. Congress approving a federal budget; and the Company's ability to maintain the listing of its common stock on the NYSE American LLC. For a more detailed description of these and other risk factors, please refer to the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission ("SEC") which can be viewed at www.sec.gov. All forward-looking statements are inherently uncertain, based on current expectations and assumptions concerning future events or the future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. The Company expressly disclaims any intent or obligation to update any of the forward-looking statements made in this release or in any of its SEC filings except as may be otherwise stated by the Company.
Non-GAAP Financial Measures and Key Performance Metrics
This press release contains Non-GAAP Recurring Cash Operating Profit (Loss), which is a Non-GAAP financial measure that is used by management to measure the Company's operating performance. A reconciliation of this measure to the most directly comparable GAAP financial measure is contained herein. To the extent required, statements disclosing this measure's definition, utility, and purpose are also set forth herein.
Definition:
Non-GAAP Recurring Cash Operating Profit (Loss) represents the Company's GAAP operating loss, excluding non-cash charges such as stock-based compensation, depreciation, amortization, and change in the value of contingent earnout, as well as, any non-recurring charges.
Utility and Purpose:
The Company discloses Non-GAAP Recurring Cash Operating Profit (Loss) because this Non-GAAP measure is used by management to evaluate our business, measure its operating performance, and make strategic decisions. We believe Non-GAAP Recurring Cash Operating Profit (Loss) is useful for investors and others in understanding and evaluating our operating results in the same manner as its management. However, Non-GAAP Recurring Cash Operating Profit (Loss) is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for GAAP operating loss or any other operating performance measure calculated in accordance with GAAP. Using this Non-GAAP measure to analyze our business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in our industry may report a measure titled Non-GAAP Recurring Cash Operating Profit (Loss), this measure may be calculated differently from how we calculate this Non-GAAP financial measure, which reduces its overall usefulness as a comparative measure. Because of these inherent limitations, you should consider Non-GAAP Recurring Cash Operating Profit (Loss) alongside other financial performance measures, including net loss and our other financial results presented in accordance with GAAP.
| Castellum, Inc. Reconciliation of unaudited Non-GAAP Recurring Cash Operating Profit to Operating Loss Three Months Ended March 31, 2024 | |||
| Revenues | $ | 11,335,053 | |
| Gross profit | 4,515,421 | ||
| Operating loss | (2,671,222 | ) | |
| Non-cash charges: | |||
| Depreciation and amortization | 597,986 | ||
| Stock based compensation | 1,660,451 | ||
| Non-recurring charges | 278,424 | ||
| Total non-cash charges | 2,536,861 | ||
| Non-GAAP Recurring Cash Operating Profit | $ | (134,361 | ) |
Contact:
Mark Fuller, President & CEO
info@castellumus.com
301-961-4895
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9c429ca7-f564-40b9-b710-172b16aec1d0
FAQ
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