Giftify, Inc. Reports Third Quarter 2024 Financial Results, Reports Revenue Growth of 14.9% to $23.2 Million

Rhea-AI Summary

Giftify (NASDAQ: GIFT) reported Q3 2024 financial results with revenue growth of 14.9% to $23.2 million and gross profit increase of 16.0% to $3.0 million. The company posted a net loss of $4.1 million, including $3.4 million in non-cash and one-time expenses. The gross margin improved to 12.9%. The company forecasts at least $85 million in revenue for 2024, reflecting its strong position in the secondary gift card market. Notable events include uplisting to Nasdaq Capital Market and corporate rebranding to Giftify. The company maintains a cash balance of $3.1 million and total assets of $37.5 million.

Positive

• Revenue increased 14.9% to $23.2 million
• Gross profit grew 16.0% to $3.0 million
• Gross margin improved to 12.9%
• Strong 2024 revenue guidance of at least $85 million
• Successful uplisting to Nasdaq Capital Market
• Insider purchase of 70,000 shares at $1.50 per share

Negative

• Net loss of $4.1 million in Q3 2024
• Modified EBITDA loss of $0.7 million
• Significant non-cash expenses of $3.4 million

Insights

Financial Analyst

A detailed analysis of Giftify's Q3 results reveals both promising trends and concerns. The 14.9% revenue growth to $23.2 million and improved gross margins at 12.9% demonstrate operational efficiency gains from the CardCash.com acquisition. However, the $4.1 million net loss, even with $3.4 million in non-cash expenses, signals ongoing profitability challenges.

The company's cash position of $3.1 million against total assets of $37.5 million suggests tight liquidity. Insider purchases of 70,000 shares at $1.50 show management confidence, but the $0.7 million Modified EBITDA loss indicates the business hasn't reached sustainable profitability yet. The $85 million revenue guidance for 2024 implies significant growth expectations in Q4.

Market Research Analyst

The secondary gift card market's projected growth to $2.1 billion by 2025 positions Giftify strategically in an expanding sector. The integration of CardCash.com and Restaurant.com creates a unique dual-platform approach in the incentives market. The recent Nasdaq uplisting and rebranding could enhance market visibility and institutional investor access.

Key growth metrics focus on platform synergies and retail partner expansion, which are essential for scaling transaction volume. However, the company needs to demonstrate improved user acquisition costs and customer lifetime value metrics to justify its market position. The emphasis on personalized deal recommendations suggests a data-driven approach to increasing user engagement and average transaction values.

Company forecasts at least $85 million in revenue for 2024

Guidance reflects the Company's strong market position in the growing secondary gift card market, estimated to reach $2.1 billion by 2025

SCHAUMBURG, IL, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Giftify, Inc. (NASDAQ: GIFT) (the “Company”), the owner and operator of leading digital platforms, CardCash.com and Restaurant.com, with a focus on incentives and rewards in retail, dining and entertainment experiences, today announced financial and operational results for the third quarter ended September 30, 2024.

Key Highlights for the Three Months Ended September 30, 2024 Compared to Prior Year Period

• Completed uplisting of shares to the Nasdaq Capital Market; Finalized ticker change to “GIFT”

• Revenue increased 14.9% to $23.2 million
• Gross profit increased 16.0% to $3.0 million
• Gross margin increased to 12.9%
• Modified EBITDA loss was $0.7 million
• Net loss of $4.1 million (Of note, net loss for the three months ended September 30, 2024 included $3.4 million in non-cash and one-time expenses, including $1.7 million in stock option and other non-cash compensation, $0.6 million in amortization of intangible assets, $0.3 million in interest expense, $0.3 million in amortization of capitalized software costs and $0.5 million in fair value of common stock issued for services.)
• Cash balance of $3.1 million
• Total assets of $37.5 million
• Shareholders’ equity of $22.1 million
  

Modified EBITDA is a non-GAAP financial measure. Please see the discussion below under the heading “Non-GAAP Financial Measures and Key Metrics” and the reconciliations at the end of this release for additional information concerning this and other non-GAAP financial measures.

Subsequent Events

• On October 25, 2024, the Company announced its corporate rebranding to Giftify, Inc. The Rebranding highlights the Company’s evolution and illustrates the Company’s ambition to be the leader in the incentives-based market.
• Subsequent to the end of the third quarter, insiders purchased approximately 70,000 shares in the open market at an average price of $1.50 per share.

Growth Initiatives

The Company has identified the following strategic priorities to accelerate growth and enhance shareholder value:

• Accelerate platform synergies between CardCash.com and Restaurant.com
• Expand retail partner network through new business partnerships
• Drive new user registration through targeted marketing campaigns
• Enhance user engagement via personalized deal recommendations
• Scale transaction volume with optimized purchase funnels
• Elevate average user spend through premium offerings

Management Commentary

Ketan Thakker, Chief Executive Officer of Giftify, Inc., commented, “Our third quarter and year-to-date 2024 results demonstrate the increased efficiencies we identified and executed upon with the acquisition of CardCash.com at the end of 2023. The increased gross profit and gross margins are meaningful and drive incremental dollars to our operating line, which has been improving with each quarter. Backing out the non-cash and one-time expenses, which were mostly from the CardCash.com acquisition, we operated at near breakeven and reported a Modified EBITDA loss of just $0.7 million for the third quarter.”

Thakker, continued, “Our recent uplisting onto Nasdaq was a major milestone and one we believe will better enable us to seek strategic opportunities such as additional acquisitions to complement our organic growth. With our corporate rebranding to Giftify, Inc. behind us, we are now focused on driving revenue growth by increasing the number of retailers, registered users, active users and transactions on our platforms. We also believe the national listing allows us to increase our visibility and awareness among the shareholder community, which we have started by attending a few investor conferences. We look forward to the remainder of 2024 and into 2025 as we embark on our growth initiatives and look to increase our shareholder relations and outreach programs.”

About Giftify, Inc.

Giftify, Inc. is a pioneer in the incentive and rewards industry with a focus on retail, dining & entertainment experiences, as the owner and operator of leading digital platforms, CardCash.com and Restaurant.com. CardCash.com is a leading secondary gift card exchange platform, allowing consumers and retailers to realize value by buying and selling gift cards at various scales. Its Restaurant.com is the nation’s largest restaurant-focused digital deals brand. Restaurant.com and our Corporate Incentives division connect digital consumers, businesses and communities offering thousands of dining, retail and entertainment deals options nationwide at over 184,000 restaurants and retailers. Restaurant.com prides itself on offering the best deal, every meal. Our gift cards and restaurant certificates allow customers to save at thousands of restaurants across the country with just a few clicks.

For more information, visit: www.giftifyinc.com and www.cardcash.com and https://www.restaurant.com.

Forward-Looking Statements

Press Releases may include forward-looking statements. In particular, the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project," "propose," "plan," "intend," and similar conditional words and expressions are intended to identify forward-looking statements. Any statements made in this news release about an action, event or development, are forward-looking statements. Such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Accordingly, you should not place undue reliance on these forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The company takes no obligation to update or correct its own forward-looking statements, except as required by law or those prepared by third parties that are not paid by the company. Statements in this press release that are not historical fact may be deemed 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. Although RDE, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, RDE, Inc. is unable to give any assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include the company’s ability identify a suitable business model for the corporation.

Investors Contacts:
ClearThink
nyc@clearthink.capital

GIFTIFY, INC. AND SUBSIDIARIES (FKA RDE, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS

		Successor
		September 30, 2024				December 31, 2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $1,258,826 at September 30, 2024 and December 31, 2023)		$	3,090,980			$	4,099,737
Accounts receivable			1,202,690				1,681,165
Inventories			4,395,506				4,152,273
Prepaid expenses and other current assets			114,562				177,119
Total current assets			8,803,738				10,110,294
Property and equipment, net			2,302,192				2,563,312
Operating lease right of use asset, net			1,481,742				315,183
Deposits			65,556				65,556
Intangible assets, net – provisional			4,876,249				6,700,000
Goodwill – provisional			20,007,669				20,007,669
Total assets		$	37,537,146			$	39,762,014
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,994,869			$	2,218,285
Accrued expenses			1,396,301				1,175,934
Deferred revenue			78,403				336,996
Secured revolving line of credit			4,234,149				6,737,385
Convertible promissory notes			42,387				40,137
Secured note payable — related party			1,986,632				-
Notes payable, current portion			946,509				836,509
Acquisition obligation			-				500,000
Operating lease liability, current portion			306,670				134,475
Total current liabilities			10,985,920				11,979,721
Notes payable, net of current portion			1,393,890				1,458,270
Deferred taxes			1,800,000				1,800,000
Operating lease liability, net of current portion			1,216,346				202,829
Total liabilities			15,396,156				15,440,820
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized;			-				-
Common stock, $0.001 par value, 750,000,000 shares authorized; 26,134,763 and 24,119,967 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			26,129				24,114
Additional paid-in-capital			106,223,043				93,376,244
Common stock issuable, 350,843 and 383,343 shares, respectively			350,843				383,343
Accumulated deficit			(84,459,025	)			(69,462,507	)
Total stockholders’ equity			22,140,990				24,321,194
Total liabilities and stockholders’ equity		$	37,537,146			$	39,762,014

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2024 and 2023
(Unaudited)

		Three Months Ended September 30,									Nine Months Ended September 30,
		2024					2023				2024					2023
		Successor					Predecessor				Successor					Predecessor
Net Sales		$	23,210,850				$	20,207,519			$	64,753,246				$	65,460,904
Cost of sales			20,220,237					17,629,985				55,244,862					57,352,182
Gross profit			2,990,613					2,577,534				9,508,384					8,108,722
Operating expenses
Selling, general and administrative expenses			5,908,603					2,600,156				20,954,914					8,238,497
Amortization of capitalized software costs			254,292					267,985				935,766					803,956
Amortization of intangible assets			607,917					75,000				1,823,751					225,000
Total operating expenses			6,770,812					2,943,141				23,714,431					9,267,453
Loss from operations			(3,780,199	)				(365,607	)			(14,206,047	)				(1,158,731	)
Other income (expenses)
Interest income			-					-				5,223					-
Interest expense			(280,953	)				(191,326	)			(795,694	)				(543,634	)
Total other income (expenses)			(280,953	)				(191,326	)			(790,471	)				(543,634	)
Net loss before income taxes			(4,061,152	)				(556,933	)			(14,996,518	)				(1,702,365	)
Income taxes			-					351				-					28,748
Net loss		$	(4,061,152	)			$	(556,582	)		$	(14,996,518	)			$	(1,673,617	)
Net earnings (loss) per share – basic		$	(0.16	)			$	(0.04	)		$	(0.59	)			$	(0.12	)
Net earnings (loss) per share –diluted		$	(0.16	)			$	(0.04	)		$	(0.59	)			$	(0.12	)
Weighted average common shares outstanding – basic			25,964,213					13,774,292				25,574,719					13,774,292
Weighted average common shares outstanding – diluted			25,964,213					13,774,292				25,574,719					13,774,292

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2024 and 2023
(Unaudited)

		Successor					Predecessor
		Nine Months Ended September 30, 2024					Nine Months Ended September 30, 2023
			(Unaudited)					(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(14,996,518	)			$	(1,673,617	)
Adjustments to reconcile net loss to net cash used in operating activities
Fair value of vested stock options			6,874,603					-
Fair value of vested restricted common stock			2,136,138					-
Fair value of common stock issued for services			751,500					-
Depreciation expense			935,766					941,559
Amortization of intangible assets			1,823,751					225,000
Amortization of debt discount			1,700					-
Accrued interest			54,802					-
Changes in operating assets and liabilities:
Accounts receivable			478,475					562,353
Inventories			(243,233	)				608,233
Prepaid expenses and other current assets			62,557					(23,171	)
Right of use assets			228,982					142,837
Accounts payable			(223,416	)				(435,900	)
Accrued expenses			220,367					(219,055	)
Deferred revenue			(258,593	)				(205,669	)
Operating lease liability			(209,829	)				(142,837	)
Net cash used in operating activities			(2,362,948	)				(220,267	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized website development costs			(674,646	)				(675,000	)
Net cash used in investing activities			(674,646	)				(675,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit			76,769,125					76,200,992
Repayment of line of credit			(79,272,361	)				(75,566,066	)
Proceeds from note payable – related party			1,978,000					-
Repayment of acquisition obligation			(500,000	)				-
Proceeds from sale of common stock			3,054,073					-
Net cash provided by financing activities			2,028,837					634,926
Net increase (decrease) in cash and cash equivalents			(1,008,757	)				(260,341	)
Cash and cash equivalents beginning of period			4,099,737					2,040,680
Cash and cash equivalents end of period		$	3,090,980				$	1,780,339
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid		$	704,961				$	543,634
Taxes paid		$	-				$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities		$	1,395,541				$	-

Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental measure of our performance. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, depreciation and amortization, stock-based compensation, and fair value of common stock issued for services.

Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Modified EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Set forth below is a reconciliation of net loss to Modified EBITDA for the three months ended September 30, 2024 and 2023 (unaudited):

		Successor				Predecessor
		Three Months Ended September 30, 2024				Three Months Ended September 30, 2023
Net loss		$	(4,061,152	)		$	(556,582	)
Modified EBITDA adjustments:
Income taxes			-				(351	)
Interest expense			280,953				191,326
Amortization of intangible assets			607,917				75,000
Amortization of capitalized software costs			254,292				267,985
Stock option and other noncash compensation			1,714,821				-
Fair value of common stock issued for services			534,000				-
Total EBITDA adjustments		$	3,391,983			$	553,960
Modified EBITDA		$	(669,169	)		$	(22,622	)

Set forth below is a reconciliation of net loss to Modified EBITDA for the nine months ended September 30, 2024 and 2023 (unaudited):

		Successor				Predecessor
		Nine Months Ended September 30, 2024				Nine Months Ended September 30, 2023
Net loss		$	(14,996,518	)		$	(1,673,617	)
Modified EBITDA adjustments:
Income taxes			-				(28,748	)
Interest income			(5,223	)			-
Interest expense			795,694				543,634
Amortization of intangible assets			1,823,751				225,000
Amortization of capitalized software costs			935,766				803,956
Stock option and other noncash compensation			9,010,741				-
Fair value of common stock issued for services			751,500				-
Total EBITDA adjustments		$	13,312,229			$	1,543,842
Modified EBITDA		$	(1,684,289	)		$	(129,775	)

FAQ

What was Giftify's (GIFT) revenue growth in Q3 2024?

Giftify reported revenue growth of 14.9% to $23.2 million in Q3 2024 compared to the prior year period.

What is Giftify's (GIFT) revenue guidance for 2024?

Giftify forecasts at least $85 million in revenue for 2024.

What was Giftify's (GIFT) net loss in Q3 2024?

Giftify reported a net loss of $4.1 million in Q3 2024, including $3.4 million in non-cash and one-time expenses.

When did Giftify (GIFT) uplist to Nasdaq?

Giftify completed its uplisting to the Nasdaq Capital Market in Q3 2024, as reported in their Q3 2024 financial results.