SRAX REPORTS Positive Net Income for Q4 2020 and Increases Guidance

Rhea-AI Summary

SRAX reported unaudited financial results for Q4 2020 on March 29, 2021. The company achieved revenue of $4.5M, a 316% year-over-year increase and a 74% sequential growth. Full-year revenue guidance was revised to $23M - $25M. Sequire bookings reached $4.8M for Q4 and $10M for Q1 2021. Gross margin improved to 73%, while operating expenses increased to $5.3M. Net income turned positive at $200K, compared to a loss of $4.4M a year prior. The call for Q4 results is scheduled for March 29, 2021, at 1:30 PM PT.

Positive

• Revenue increased by 316% YoY to $4.5M in Q4 2020.
• Full-year revenue guidance increased to $23M - $25M from $17M - $18M.
• Gross margin improved to 73% from 44% YoY.
• Sequire bookings reached $4.8M in Q4 and $10M in Q1 2021.
• Net income turned positive at $200K compared to a net loss of $4.4M last year.

Negative

• Operating expenses increased to $5.3M from $4.8M YoY.

SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights for publicly traded companies through Sequire, its SaaS platform, is providing unaudited financial results for Q4 of 2020 today, March 29th, 2021.

Fourth Quarter 2020 and Recent Operational Highlights and Guidance

• Revenue for Q4 of $4.5M up 316% year-over-year, 74% sequentially quarter-over-quarter, exceeding previous guidance.
• Full-year revenue guidance increased from $17M - $18M to $23M - $25M
• Sequire bookings of $4.8M and $10M for Q4 and 1Q, respectively
• 8 consecutive quarters of Sequire SAAS growth
• Currently holding approximately $23.8M worth of publicly listed securities
• 183 public companies/partners have subscribed to Sequire, up 92 since our Q3 release
• Sold position in TI Health (SRAXmd) for $8M
• Sequire revenue to be recognized from existing contracts in 2021: $16.5M as of this release.
• Second Quarter revenue guidance of $7M
• BIGtoken share exchange completed. BIGtoken now listed under TICKER:FPVD

Three months ended December 31, 2020

• Total Revenue was $4.5M, an increase of 316% as compared to the same period in prior year.
• Gross Margin was 73%, as compared to 44% in the same period last year.
• Operating Expenses were $5.3M as compared to $4.8m in the same period last year.
• EBITDA increase of $3M, ($739K) vs ($3.7M) in Q4 2019
• SRAX less BIGtoken Pro forma EBITDA of $255K as compared to ($500K)
• Net Income of $200K compared to Net loss of $4.4M in the same period last year.

Full Year Ended December 31, 2020

• Total Revenue was $8.7M, an increase of 141% as compared to the same period in prior year.
• Gross Margin was 70%, as compared to 53% in the same period last year.
• Operating Expenses were $17.7, a decrease of $2.1M, or 11% as compared to the same period last year.
• EBITDA was -$8.4M as compared to -$15.5M last year.
• Net Income was -$14.7M compared to -$16.9M in the same period last year.

“We are making great progress with our platform and we are seeing continued adoption of the products that we are building for issuers. We had another record quarter of bookings for Sequire. In the first quarter of 2021 we have closed over $10 million in contracts. This momentum is not slowing down and we are growing the business to accommodate this demand,” said Christopher Miglino, Founder and CEO of SRAX. “Our team did an amazing job in delivering a number of cutting-edge technological improvements to the platform and they have laid the foundation for some amazing enhancements that we will bring to market throughout the rest of this year. I could not be more proud of the hard work and dedication that the team has demonstrated as our sales continue to skyrocket,” added Miglino.

Video Call:

Management will review the results on a video call, with a live question and answer session, March 29th, 2021 at 1:30 pm PT/4:30 pm ET.

To register for the live webcast and presentation, please sign up here: http://srax-earnings-call.mysequire.com

Non-GAAP Measures:

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: EBITDA. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

SRAX less BIGtoken EBITDA is defined as earnings before interest, taxes, depreciation and amortization, changes in the fair-value of derivative and warrant liabilities and certain additional one-time charges and excluding the results from the BIGtoken carved-out entity.

About SRAX:

SRAX (NASDAQ: SRAX) is a financial technology company that unlocks data and insights for publicly traded companies. Through its premier investor intelligence and communications platform, Sequire, companies can track their investors’ behaviors and trends and use those insights to engage current and potential investors across marketing channels. For more information on SRAX, visit srax.com.

Safe Harbor Statement:

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties as set forth in our Annual Report on Form 10-K for the year ended December 31, 2019, and our subsequent Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of SRAX and are difficult to predict. SRAX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

SRAX SEGMENT OPERATING RESULTS:

		For the Three Months Ended December 31, (Unaudited)
		Sequire							BIGToken						Corporate and Other						Consolidated
		2020				2019			2020			2019			2020			2019			2020			2019
Sequire platform revenue			2,970,000			46,000			-			-			-			-			2,970,000			$	46,000
Conference revenue			506,000			-			-			-			-			-			506,000				-
BIGtoken revenue			-			-			996,000			987,000			-			-			996,000				987,000
Other			-			-			-			-			52,000			55,000			52,000				55,000
Total Revenue			3,476,000			46,000			996,000			987,000			52,000			55,000			4,524,000				1,088,000
Cost of Revenue			888,000			7000			309,000			600,000			5,000			-2,000			1,202,000				605,000
Gross profit			2,588,000			39,000			687,000			387,000			47,000			57,000			3,322,000				483,000
margin %			74.5	%		84.8	%		69.0	%		39.2	%		90.4	%		103.6	%		73.4	%			44.4	%
Operating expenses			1,501,000			174,000			1,444,000			2,471,000			2,394,000			2,114,000			5,339,000				4,759,000
Operating Income		$	1,087,000			-135,000			-757,000			-2,084,000			-2,347,000			-2,057,000			-2,017,000				-4,276,000
		Year ended December 31, (Unaudited)
		Sequire							BIGToken						Corporate and Other						Consolidated
		2020				2019			2020			2019			2020			2019			2020			2019
Sequire platform revenue			5,781,000			87,000			-			-			-			-			5,781,000			$	87,000
Conference revenue			503,000			-			-			-			-			-			503,000				-
BIGtoken revenue			-			-			2,140,000			3,228,000			-			-			2,140,000				3,228,000
Other			-			-			-			-			223,000			268,000			223,000				268,000
Total Revenue			6,284,000			87,000			2,140,000			3,228,000			223,000			268,000			8,647,000				3,583,000
Cost of Revenue			1,783,000			7,000			800,000			1,613,000			6,000			61,000			2,589,000				1,681,000
Gross profit			4,501,000			80,000			1,340,000			1,615,000			217,000			207,000			6,058,000				1,902,000
margin %			72	%		92	%		63	%		50	%		97	%		77	%		70	%			53	%
Operating expenses			3,412,000			462,000			5,933,000			10,751,000			8,310,000			8,521,000			17,655,000				19,734,000
Operating Income		$	1,089,000			-382,000			-4,593,000			-9,136,000			-8,093,000			-8,314,000			-11,597,000				-17,832,000

SRAX STATEMENT OF OPERATIONS

			For the Years Ended December 31,														For the Three Months Ended December 31,
(Unaudited)
in $		2020				2019				$ CHG				% CHG			2020			2019			$ CHG			% CHG
REVENUE
Total Revenue		$	8,647,000			$	3,584,000			$	5,063,000			141	%		4,522,000			1,087,000			3,435,000			316	%
Cost of revenue			2,589,000				1,680,000				909,000			54	%		1,201,000			605,000			596,000			99	%
GROSS PROFIT			6,058,000				1,904,000				4,154,000			218	%		3,321,000			482,000			2,839,000			589	%
Gross profit margin			70	%			53	%									73	%		44	%
OPERATING EXPENSES
Employee related costs			7,895,000				8,656,000				(761,000	)		-9	%		2,489,000			1,926,000			563,000			29	%
Marketing and selling expenses			2,675,000				2,454,000				221,000			9	%		1,044,000			252,000			792,000			314	%
Platform Costs			1,667,000				1,738,000				(71,000	)		-4	%		486,000			579,000			(93,000	)		-16	%
Depreciation and amortization			1,303,000				1,164,000				139,000			12	%		341,000			330,000			11,000			3	%
General and administrative			4,115,000				5,750,000				(1,635,000	)		-28	%		958,000			1,681,000			(723,000	)		-43	%
Total operating expenses			17,655,000				19,762,000				(2,107,000	)		-11	%		5,318,000			4,768,000			550,000			12	%
LOSS FROM OPERATIONS			(11,597,000	)			(17,858,000	)			6,261,000			-35	%		(1,997,000	)		(4,286,000	)		2,289,000			-53	%
Other income (expense)
Financing Costs			(12,150,000	)			(725,000	)			(11,425,000	)		1576	%		(6,810,000	)		(366,000	)		(6,444,000	)		1761	%
Interest income							9,000				(9,000	)		-100	%		-			9,000						0	%
Gain (loss) on sale of assets			7,873,000				658,000				7,215,000			1097	%		7,873,000			263,000			7,519,000			2859	%
Other gain (loss)							-				-			n/a			(8,000	)		(14,000	)		6,000			-43	%
Exchange gain or loss							12,000				(12,000	)		-100	%		-			354,000						0	%
Gains from marketable securities			874,000				-				874,000			n/a			1,158,000			-						n/a
Change in fair value of derivative liabilities			321,000				1,045,000				(724,000	)		-69	%		-			(345,000	)		345,000			-100	%
Total other income (loss)			(3,082,000	)			999,000				(4,081,000	)		-409	%		2,213,000			(99,000	)		2,312,000			-2335	%
Loss before provision for income taxes			(14,679,000	)			(16,859,000	)			2,180,000			-13	%		216,000			(4,385,000	)		4,601,000			-105	%
Provision for income taxes			(26,000	)							(26,000	)		n/a			(26,000	)		-			(26,000	)		n/a
Net income (loss)		$	(14,705,000	)		$	(16,859,000	)			2,154,000			-13	%		190,000		$	(4,385,000	)		4,575,000			-104	%

SRAX BALANCE SHEET

Balance Sheets
(Unaudited)
In dollars					31-Dec-20		31-Dec-19
ASSETS
Current Assets
Cash					451,000		32,000
Accounts receivable, net					2,608,000		805,000
Securities held for sale					367,000		-
Prepaid expense					8,447,000		715,000
Other current assets					-		306,000
Total current assets					11,873,000		1,858,000
Notes receivable					893,000		-
Property and equipment, net					118,000		191,000
Goodwill					23,351,000		15,645,000
Intangible assets, net					2,409,000		1,966,000
Right-of-Use Asset					366,000		456,000
Other assets					3,000		118,000
Total Assets					39,013,000		20,234,000
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses					3,561,000		2,442,000
Derivative liabilities					-		4,397,000
Other current liabilities					8,711,000		537,000
Payroll protection loan - current portion					747,000		-
OID convertible debentures - current portion					6,016,000		-
Total Current Liabilities					19,035,000		7,376,000
Right-of-Use liability - long term					243,000		352,000
Payroll protection loan, less current portion					379,000		-
OID convertible debentures, less current portion							-
Deffered Tax Liability					131,000
Total Liabilities					19,788,000		7,728,000
Stockholders' equity					19,225,000		12,506,000
Total liabilities and equity					39,013,000		20,234,000

SRAX STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS
(Unaudited)
For the Years Ended December 31,
in dollars			2020			2019
Cash Flows From Operating Activities
Net Cash Used in Operating Activities			(6,489,000)			(15,350,000)
Cash Flows From Investing Activities
Proceeds from the sale of securities held for sale			984,000
Proceeds from sale of SRAXmd, net			-			570,000
Acquisition of LD Micro, net of cash received			(697,000)			(73,000)
Development of software			(1,205,000)			(1,292,000)
Other assets			32,000
Net Cash Used by Investing Activitities			(886,000)			(795,000)
Cash Flows From Financing Activities
Proceeds from OID notes payable, less issuance costs			13,268,000
Redemption of OID notes payable			(6,980,000)
Proceeds from issuance of short term notes payable less issaunce costs			960,000
Repayment of short term notes payable			(100,000)
Proceeds from payroll protection program			1,084,000
Proceeds from the issuace of notes payable			2,130,000
Repayment of notes payable			(2,500,000)
Proceeds from the sale of common stock units						12,197,000
Proceeds from the exercise of warrants						1,196,000
Net Cash Provided by Financing Activities			7,862,000			13,393,000
Net increase (decrease) in Cash			487,000			(2,752,000)
Cash, Beginning of Period			32,000			2,784,000
Cash, End of Period		$	519,000		$	32,000

OPERATING RESULTS SRAX LESS BIGTOKEN

		Three months ended December 31, 2020
(Unaudited)		CONSOLIDATED SRAX			BIGTOKEN CARVE-OUT			SRAX - LESS BIGTOKEN CARVE - OUT
($'s)		2020	2019		2020	2019		2020	2019
TOTAL REVENUE		4,524,000	1,088,000		994,000	986,000		3,530,000	102,000
Cost of Revenue		1,202,000	605,000		309,000	600,000		893,000	5,000
Gross Profit		3,322,000	483,000		685,000	386,000		2,637,000	97,000
Margin %		73%	44%		69%	39%		75%	95%
Cash OPEX		4,062,000	4,132,000		1,680,000	3,536,000		2,382,000	596,000
EBITDA		(740,000)	(3,649,000)		(995,000)	(3,150,000)		255,000	(499,000)
Non cash OPEX		1,277,000	627,000		759,000	561,000		518,000	66,000
Operating Income		(2,017,000)	(4,276,000)		685,000	386,000		(2,702,000)	(4,662,000)

 

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FAQ

What were SRAX's Q4 2020 financial results?

SRAX reported Q4 2020 revenue of $4.5M, a 316% increase year-over-year.

How has SRAX's revenue guidance changed for 2021?

Full-year revenue guidance for 2021 was increased to $23M - $25M.

What were the Sequire bookings for Q4 2020 and Q1 2021?

Sequire bookings were $4.8M for Q4 2020 and $10M for Q1 2021.

What is SRAX's gross margin for Q4 2020?

SRAX's gross margin for Q4 2020 was 73%, up from 44% in Q4 2019.

When will SRAX discuss their Q4 results live?

SRAX will discuss their Q4 results on March 29, 2021, at 1:30 PM PT.