Digerati Technologies Reports Revenue of $7.7 Million for First Quarter FY2024
- None.
- None.
- Non-GAAP Adjusted Operating EBITDA Income of
- Gross Profit of
- Company Recorded Gross Margin of
SAN ANTONIO, Dec. 26, 2023 (GLOBE NEWSWIRE) -- Digerati Technologies, Inc. (OTCQB: DTGI) ("Digerati" or the "Company"), a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the small to medium-sized business (“SMB”) market, announced today financial results for the three months ended October 31, 2023, the Company’s first quarter for its Fiscal Year 2024.
Key Financial Highlights for the Three Months Ended October 31, 2023 (Compared to the Three Months Ended October 31, 2022)
- Revenue decreased
6% to$7.65 4 million compared to$8.13 0 million. - Gross profit decreased
3% to$5.10 3 million compared to$5.27 9 million. - Gross margin increased to
66.7% compared to64.9% . - Non-GAAP Adjusted EBITDA income decreased
8% to$0.73 3 million, excluding all non-cash items and one-time transactional expenses, compared to non-GAAP Adjusted EBITDA income of$0.79 5 million. - Net loss attributable to Digerati’s common shareholders decreased
18% to$4.08 5 million, compared to a net loss attributable to Digerati’s common shareholders of$4.98 8 million. - Non-GAAP operating EBITDA (“Non-GAAP Adjusted EBITDA - OPCO”) income decreased
6% to$1.20 4 million, excluding corporate expenses, all non-cash items, and one-time transactional expenses, compared to a Non-GAAP Adjusted EBITDA - OPCO income of$1.27 5 million. - Incurred legal, professional fees and transactional costs of
$0.83 7 million mainly related to the restructuring of various notes payables and previously proposed and since terminated transaction with Minority Equality Opportunities Acquisition Inc. during the three months ended October 31, 2023.
Craig K. Clement, Executive Chairman and interim CEO of Digerati, commented, “While our revenue was down slightly, we can report a company record of
Clement, continued, “With service to nearly 5,000 business customers and approximately 50,000 users, predominantly in Florida, Texas and California, we believe we have built a reliable and valuable platform in which to stack additional acquisitive and organic growth.”
Antonio Estrada, CFO of Digerati, stated, “We have really focused on our higher-margin revenue customers and opportunities, as we completed the full integration of our acquisitions from late-2021 and early-2022. Our team successfully streamlined the operations and processes, which have highlighted the efficiencies and resulted in these strong financial results, as we are now at an annualized run-rate of
Three Months ended October 31, 2023, Compared to Three Months ended October 31, 2022
Revenue for the three months ended October 31, 2023, was
Gross profit for the three months ended October 31, 2023, was
Selling, general and administrative expenses (excluding legal and professional fees) for the three months ended October 31, 2023, increased by
Operating loss for the three months ended October 31, 2023, was
Non-GAAP Adjusted EBITDA income for the three months ended October 31, 2023, was
Non-GAAP Adjusted EBITDA - OPCO income for the three months ended October 31, 2023, was
Net loss attributable to Digerati’s common shareholders for the three months ended October 31, 2023, was
As of October 31, 2023, Digerati had
Use of Non-GAAP Financial Measurements
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Non-GAAP Adjusted EBITDA income provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that non-GAAP Adjusted EBITDA income provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses non-GAAP Adjusted EBITDA income as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. Non-GAAP Adjusted EBITDA - OPCO income is useful to investors because it reflects EBITDA for the core operation of the business excluding corporate expenses, non-cash expenses and transactional expenses. EBITDA, non-GAAP Adjusted EBITDA income, and Non-GAAP Adjusted EBITDA - OPCO income are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading “Reconciliation of Net Loss to Adjusted EBITDA” in the financial table included in this press release.
About Digerati Technologies, Inc.
Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its operating subsidiary Verve Cloud, Inc. (f/k/a T3 Communications, Nexogy, and NextLevel Internet), the Company is meeting the global needs of small businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions including, cloud PBX, cloud telephony, cloud WAN, cloud call center, cloud mobile, and the delivery of digital oxygen on its broadband network. The Company has developed a robust integration platform to fuel mergers and acquisitions in a highly fragmented market. as it delivers business solutions on its carrier-grade network and Only in the Cloud™. For more information, please visit www.digerati-inc.com and follow DTGI on LinkedIn, Twitter and Facebook.
Forward-Looking Statements
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements such as [“we believe we have built a reliable and valuable platform in which to stack additional acquisitive and organic growth”] are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, our inability to source suitable acquisition targets, failure to execute growth strategies, lack of product development and related market acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company’s periodic filings with the Securities and Exchange Commission.
| Facebook: Digerati Technologies, Inc. |
| Twitter : @DIGERATI_IR LinkedIn : Digerati Technologies, Inc. |
Investors
ClearThink
Brian Loper
bloper@clearthink.capital
(602) 785-4120
| Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| Three Months ended October 31, | |||||||||||||||||||
| 2023 | 2022 | Variances | % | ||||||||||||||||
| OPERATING REVENUES: | |||||||||||||||||||
| Cloud-based hosted services | $ | 7,654 | $ | 8,130 | $ | (476 | ) | -6 | % | ||||||||||
| Total operating revenues | 7,654 | 8,130 | (476 | ) | -6 | % | |||||||||||||
| Cost of services (exclusive of depreciation and amortization) | 2,551 | 2,851 | (300 | ) | -11 | % | |||||||||||||
| Selling, general and administrative expense | 4,177 | 4,118 | 59 | 1 | % | ||||||||||||||
| Stock compensation expense | 12 | 23 | (11 | ) | -48 | % | |||||||||||||
| Legal and professional fees | 973 | 556 | 417 | 75 | % | ||||||||||||||
| Bad debt | 57 | 29 | 28 | 97 | % | ||||||||||||||
| Depreciation and amortization expense | 683 | 953 | (270 | ) | -28 | % | |||||||||||||
| Total operating expenses | 8,453 | 8,530 | (77 | ) | -1 | % | |||||||||||||
| OPERATING LOSS | (799 | ) | (400 | ) | (399 | ) | 100 | % | |||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||||
| Gain (loss) on derivative instruments | (612 | ) | (3,076 | ) | 2,464 | -80 | % | ||||||||||||
| Other income (expense) | - | 446 | (446 | ) | -100 | % | |||||||||||||
| Interest expense | (3,041 | ) | (2,065 | ) | (976 | ) | 47 | % | |||||||||||
| Income tax expense | (28 | ) | (50 | ) | 22 | -44 | % | ||||||||||||
| Total other income (expense) | (3,681 | ) | (4,745 | ) | 1,064 | -22 | % | ||||||||||||
| NET INCOME (LOSS) | (4,480 | ) | (5,145 | ) | 665 | -13 | % | ||||||||||||
| Less: Net loss attributable to the noncontrolling interests | 395 | 161 | 234 | 145 | % | ||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS | $ | (4,085 | ) | $ | (4,984 | ) | $ | 899 | -18 | % | |||||||||
| Deemed dividend on Series A Convertible preferred stock | - | (4 | ) | 4 | -100 | % | |||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S COMMON SHAREHOLDERS | $ | (4,085 | ) | $ | (4,988 | ) | $ | 903 | -18 | % | |||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA - OPCO, Net of Non-Cash Expenses & Transactional Costs. | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS, as reported | $ | (4,085 | ) | $ | (4,984 | ) | $ | 899 | -18 | % | |||||||||
| EXCLUDING NON-CASH ITEMS TRANSACTIONAL COSTS & CORP EXP | |||||||||||||||||||
| ADJUSTMENTS: | |||||||||||||||||||
| Stock compensation & warrant expense | 12 | 23 | (11 | ) | -48 | % | |||||||||||||
| Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 471 | 480 | (9 | ) | -2 | % | |||||||||||||
| Legal, professional fees & transactional costs | 837 | 219 | 618 | 282 | % | ||||||||||||||
| Depreciation and amortization expense | 683 | 953 | (270 | ) | -28 | % | |||||||||||||
| OTHER ADJUSTMENTS | |||||||||||||||||||
| Gain (loss) on derivative instruments | 612 | 3,076 | (2,464 | ) | -80 | % | |||||||||||||
| Other income (expense) | - | (446 | ) | 446 | -100 | % | |||||||||||||
| Interest expense | 3,041 | 2,065 | 976 | 47 | % | ||||||||||||||
| Income tax expense | 28 | 50 | (22 | ) | -44 | % | |||||||||||||
| Less: Net loss attributable to the noncontrolling interests | (395 | ) | (161 | ) | (234 | ) | 145 | % | |||||||||||
| ADJUSTED EBITDA - OPCO | $ | 1,204 | $ | 1,275 | $ | (71 | ) | -6 | % | ||||||||||
| ADD-BACKS Expenses | |||||||||||||||||||
| Corp Expenses (Net of stock compensation, Legal fees & Transactional cost) | 471 | 480 | (9 | ) | -2 | % | |||||||||||||
| ADJUSTED EBITDA - INCOME | $ | 733 | $ | 795 | $ | (62 | ) | -8 | % | ||||||||||
FAQ
What are the financial highlights for Digerati Technologies, Inc. (DTGI) for the three months ended October 31, 2023?
What caused the decrease in revenue for Digerati Technologies, Inc. (DTGI) for the three months ended October 31, 2023?
What is the Non-GAAP Adjusted EBITDA income for Digerati Technologies, Inc. (DTGI) for the three months ended October 31, 2023?
What is the net loss attributable to Digerati's common shareholders for the three months ended October 31, 2023?
What is the cash position of Digerati Technologies, Inc. (DTGI) as of October 31, 2023?
