RDE, Inc. Reports $20.0 Million Revenue, Highlighted by 25% Increase in Gross Profit for the Second Quarter Ended June 30, 2024

Rhea-AI Summary

RDE, Inc. (Nasdaq: RSTN), owner of Restaurant.com and CardCash.com, reported its Q2 2024 financial results. Highlights include:

- Revenue of $20.0 million
- Gross profit of $3.3 million, up 25% year-over-year
- Gross margin increased 380 basis points to 16.3%
- Net loss of $7.7 million (including $7.4 million in non-cash and one-time expenses)
- Modified EBITDA loss of $0.4 million
- Cash balance of $4.7 million

CEO Ketan Thakker noted improved efficiencies following the CardCash.com acquisition and near-breakeven operations excluding non-cash expenses. The company's recent Nasdaq listing is expected to enhance visibility and strategic opportunities.

Positive

• 25% increase in gross profit year-over-year
• Gross margin improved by 380 basis points to 16.3%
• Strong cash balance of $4.7 million
• Recent listing on Nasdaq, potentially improving visibility and strategic opportunities
• Near-breakeven operations when excluding non-cash and one-time expenses

Negative

• Net loss of $7.7 million for the quarter
• Modified EBITDA loss of $0.4 million

Insights

Financial Analyst

RDE's Q2 2024 results show mixed signals. The 25% increase in gross profit and 380 basis points improvement in gross margins to 16.3% are positive indicators of operational efficiency. However, the net loss of $7.7 million is concerning, even though $7.4 million was attributed to non-cash and one-time expenses.

The Modified EBITDA loss of $0.4 million suggests the company is approaching breakeven on an operational basis. With a cash balance of $4.7 million and total assets of $40.5 million, RDE has a decent financial cushion. The recent Nasdaq listing could improve visibility and access to capital, potentially supporting future growth initiatives.

Market Research Analyst

RDE's strategic positioning in the digital incentives and rewards sector, particularly through Restaurant.com and CardCash.com, aligns with growing consumer demand for value-driven experiences. The revenue of $20.0 million indicates market traction, but it's important to monitor user acquisition costs and retention rates.

The CardCash.com acquisition seems to be yielding synergies, evidenced by improved gross margins. However, the company needs to demonstrate a clear path to profitability and scalable growth. The Nasdaq listing may enhance RDE's market position, but investors should watch for concrete plans to leverage this visibility into tangible business growth and improved financial performance.

Gross Margins Increased 380 Basis Points to 16.3%
Cash Balance of $4.7 Million

SCHAUMBURG, IL, Aug. 15, 2024 (GLOBE NEWSWIRE) -- RDE, Inc. (Nasdaq: RSTN) (the “Company”), the owner and operator of leading digital platforms, Restaurant.com and CardCash.com, with a focus on incentives and rewards in retail, dining & entertainment experiences, is pleased to announce its financial and operational results for the first quarter ended June 30, 2024.

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

• Revenue of $20.0 million
• Gross profit of $3.3 million
• Gross margin increased 380 basis points to 16.3%
• Net loss of $7.7 million (Of note, net loss for the three months ended June 30, 2024 included $7.4 million in non-cash and one-time expenses, including $6.2 million in stock option and other non-cash compensation, $0.6 million in amortization of intangible assets, $0.3 million in interest expense and $0.3 million in amortization of capitalized software costs)
• Modified EBITDA loss of $0.4 million
• Cash balance of $4.7 million
• Total assets of $40.5 million
• Shareholders’ equity of $23.8 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.

Management Commentary

Ketan Thakker, Chief Executive Officer of RDE, Inc., commented, “Our second quarter and first half 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 $357,229 for the second quarter.”

Thakker, continued, “Our recent listing onto Nasdaq on August 7 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. We also believe the national listing allows us to increase our visibility and awareness among the shareholder community. Additionally, our strong balance sheet, led by $4.7 million in cash, puts us in a strong position to be able to execute on continued growth and profitability. We look forward to the remainder of 2024 as we embark on increasing our shareholder relations and outreach programs later in the fall.”

About RDE, Inc.

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

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

Non-GAAP Financial Measures and Key Metrics

The Company has provided in this release Modified EBITDA, a non-GAAP financial measure, to supplement the consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Modified EBITDA is defined as net (loss) income adjusted to exclude interest (income) expense, net, other (income) expense, net, income tax (benefit) expense, depreciation and amortization expense, and stock-based compensation expense.

Management uses Modified EBITDA internally in analyzing the Company’s financial results to assess operational performance and to determine the Company’s future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring to Modified EBITDA in assessing its performance and when planning, forecasting and analyzing future periods. The Company believes Modified EBITDA is useful to investors and others to understand and evaluate the Company’s operating results and it allows for a more meaningful comparison between the Company’s performance and that of competitors. Our use of Modified EBITDA has limitations as an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Modified EBITDA does not reflect, among other things: cash capital expenditures for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures; net loss from discontinued operations; interest income, net; other expense, net; income tax expense from continuing operations; our working capital requirements; the potentially dilutive impact of stock-based compensation; and the provision for income taxes. Other companies, including companies in our industry, may calculate Modified EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Modified EBITDA along with other financial performance measures, including total revenues, subscription revenue, deferred revenue, net loss, cash and cash equivalents, restricted cash, net cash used in operating activities and our financial results presented in accordance with GAAP.

Investors Contacts:
ClearThink
nyc@clearthink.capital

FAQ

What was RDE Inc's (RSTN) revenue for Q2 2024?

RDE Inc (RSTN) reported revenue of $20.0 million for the second quarter ended June 30, 2024.

How much did RDE Inc's (RSTN) gross profit increase in Q2 2024?

RDE Inc (RSTN) reported a 25% increase in gross profit for the second quarter ended June 30, 2024, compared to the prior year period.

What was RDE Inc's (RSTN) cash balance as of June 30, 2024?

RDE Inc (RSTN) reported a cash balance of $4.7 million as of June 30, 2024.

When did RDE Inc (RSTN) list on Nasdaq?

RDE Inc (RSTN) listed on Nasdaq on August 7, 2024, according to the press release.