Tapinator Announces Record Q1 2021 Financial Results

Rhea-AI Summary

Tapinator, Inc. (OTC: TAPM) reported unaudited Q1 2021 financial results highlighting significant growth. Revenue reached approximately $1.2 million, a 33% year-over-year increase, while net income was approximately $237,000, marking a turnaround from a net loss of $267,000 in Q1 2020. Record bookings of $1.3 million and adjusted EBITDA of $200,000 were achieved, representing year-over-year increases of 37% and 121%, respectively. The company anticipates continued revenue growth and a sustained adjusted EBITDA margin of at least 15% for the year.

Positive

• Revenue growth of 33% YoY to approximately $1.2 million.
• Record bookings of approximately $1.3 million, 37% YoY increase.
• Net income of approximately $237,000, a significant turnaround from a loss of $267,000.
• Adjusted EBITDA increased by 121% YoY to approximately $200,000.
• Basic and diluted EPS improved to $0.43 and $0.40 respectively.
• Eliminated all outstanding debt during the quarter.

Negative

• Decline in revenues from Rapid-Launch Games by 25%.

NEW YORK, May 6, 2021 /PRNewswire/ -- Tapinator, Inc. (OTC: TAPM) ("Tapinator," the "Company," "we," "our" or "us"), a developer and publisher of category leading games for mobile platforms, today announced unaudited financial results for the three months ended March 31, 2021, and the filing of its quarterly report for the three months ended March 31, 2021 and 2020.  The quarterly report and financial statements have been published on OTC Markets and may be found at http://www.otcmarkets.com/stock/TAPM/disclosure.  The results provided below replace, in its entirety, any guidance or projections previously issued by the Company.

For the three months ended March 31, 2021, Tapinator achieved revenue of approximately $1.2 million, record bookings^* of approximately $1.3 million, record net income of approximately $237,000, and adjusted EBITDA^* of approximately $200,000.  The Company's quarterly revenue, bookings^* and adjusted EBITDA^* represent year-over-year improvements of 33%, 37% and 121%, respectively.  The Company also announced record basic and fully diluted net income per share of $0.43 and $0.40 per share, respectively.

^*A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net loss, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.

Financial Highlights

	Quarter Ended
	March 31,
	2021	2020	% Ch.
GAAP Results:
Revenue	$1,215,905	$913,855	33%
Operating Income (Loss)	$100,712	($253,780)	NM(1)
Net Income (Loss)	$237,453	($267,203)	NM(1)
Net Income (Loss) Per Share - Basic	$0.43	($0.48)	NM(1)
Net Income (Loss) Per Share - Diluted	$0.40	($0.48)	NM(1)
Weighted avg. common shares outstanding - basic	553,569	551,005	0%
Weighted avg. common shares outstanding - diluted	590,961	551,005	0%
Non-GAAP Results:
Bookings:
Category Leading Games	$1,138,182	$714,658	59%
Rapid-Launch Games	$197,321	$262,650	-25%
Total Bookings	$1,335,503	$977,308	37%
Adjusted EBITDA	$199,832	$90,220	121%
AEBITDA Margin %	16%	10%
(1) Percentage change not meaningful.

Ilya Nikolayev, CEO of Tapinator commented, "We are very happy with our performance in Q1. First, in terms of existing games, our focus on continuing to optimize and build on the foundation of Video Poker Classic is showing great results. In Q1, we introduced new in-app purchases, notifications, events, and much more. We believe that Video Poker Classic will continue to grow through incremental improvements on top of a game that is currently the best-in-class video poker title on mobile.

Outside of Video Poker Classic, we invested in the upcoming major update to our Lucky Lotto scratch-off game. We are seeing strong monetization metrics on a per DAU basis. With the upcoming introduction of an hourly "Pick 3" minigame and other features, we believe that we will be able to increase player retention. Overall, we are bullish about Lucky Lotto and believe that it can be a strong and evergreen performer for the Company.

With regards to new games, we continued to invest in the development of our upcoming idle game, Idle Industries. The product went into soft launch in April and is scheduled for global release later this month. We are excited about the metrics that we are seeing thus far with solid engagement, retention and monetization (on a per DAU basis).

Finally, we are in development on NFT500, our recently announced NFT art collection and casting platform. Our belief is that, in the future, a significant direction for the NFT market will center around utility. In other words, the question of: Beyond residing in a crypto wallet, what can we do with NFTs? We believe that casting will be a big part of the answer to this question and we look forward to launching our innovative casting platform, NFT500, this coming summer.

Overall, we believe that the Company is in a stronger position now than we have ever been. Our existing games are growing, our recently launched games are demonstrating promising metrics, and we have a strong product pipeline of new releases set for 2021. We continue to believe that Tapinator is deeply undervalued relative to its fundamentals, and we have our heads down working diligently on behalf of all of our shareholders to grow and unlock this value in 2021 and beyond."

Andrew Merkatz, President of Tapinator, also commented on the Company's results, "We are extremely proud of the following operating accomplishments in Q1 2021:

• We achieved revenue of approximately $1.2mm, representing growth of 33% year-over-year
• We reported record Bookings^* of approximately $1.3mm, representing growth of 37%.
• Through a combination of top-line growth and aggressive cost management, we delivered record net income of approximately $237k, which compares to a net loss of approximately $267k in Q1 2020.
• We reported record basic and fully diluted EPS of $0.43 and $0.40, respectively, up from basic and fully diluted losses per share of ($0.48) and ($0.48) in Q1 2020.
• We reported adjusted EBITDA^* of approximately $200k, representing growth of 121% year-over-year
• Our adjusted EBITDA^* margin climbed to 16% during the quarter, up from 10% in Q1, 2020.
• We eliminated all outstanding debt from our balance sheet during the quarter.
• In response to accelerating market adoption, we resumed the work we began in 2018 at Revolution Blockchain regarding the commercialization of crypto assets as they relate to gaming, digital art and collectibles.

We finished Q1 with a strong pipeline of new games and major game updates set to release in 2021.  We believe this pipeline represents unrecognized value for our shareholders, especially given the evergreen nature of our leading games and the significant operating leverage inherent in our current business model."

Current Outlook
We continue to have strong conviction regarding our mobile games business, and specifically our Category Leading Games.  Our investments within our Revolution Blockchain subsidiary are more speculative, but we believe there are long term opportunities for the Company within the nascent market for crypto media and entertainment software.  While we are not providing financial guidance at this time, we anticipate we can deliver another year of strong company-wide revenue and bookings growth along with adjusted EBITDA margin of at least 15%.  We also expect to deliver positive net earnings for the year ended 2021.

Non-GAAP Financial Measures*
We have provided in this release the non-GAAP financial measures of Bookings and adjusted EBITDA, as a supplement to the measures of Revenue and Operating Income, which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings and adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings and adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings and adjusted EBITDA in assessing our performance and when planning, forecasting and analyzing future periods. We believe Bookings and adjusted EBITDA are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical and projected Bookings and adjusted EBITDA to the most directly comparable GAAP financial measures below.  Some limitations of Bookings and adjusted EBITDA are as follows:

• Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
• Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, acquisition-related transaction expenses, one-time financing expenses, contingent consideration fair value adjustments, share settlement expense, and restructuring expense;
• Adjusted EBITDA does not reflect income tax expense;
• Adjusted EBITDA does not include other income or expense, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
• Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation and amortization and impairment of capitalized software are non-cash charges, the assets being depreciated and amortized or impaired may have to be replaced in the future; and
• Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure.

Because of these limitations, you should consider Bookings and adjusted EBITDA along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss) and our other financial results presented in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Results

	Quarter Ended
	March 31,
	2021	2020
Reconciliation of Revenue to Bookings:
Revenue	$1,215,905	$913,855
Change in deferred revenue	$119,598	$63,453
Bookings	$1,335,503	$977,308
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss)	$237,453	($267,203)
Interest expense, net	$1,622	$13,423
Amortization of capitalized software development	$78,083	$116,080
Depreciation and amortization of other assets	$752	$925
Income tax benefit	($29,132)	$0
One-time financing costs	$0	$96,393
Stock-based expense	$20,285	$130,602
Gain on extinguishment of debt	($109,231)	$0
Adjusted EBITDA	$199,832	$90,220

About Tapinator
Tapinator Inc. (OTC: TAPM) develops and publishes category leading games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic and Solitaire Derby. Tapinator generates revenues through the sale of branded advertising and via consumer transactions, including in-app purchases and subscriptions. Through our Revolution Blockchain subsidiary, we are investing in digital crypto assets and are developing consumer mobile applications that leverage these digital asset investments.  Founded in 2013, Tapinator is headquartered in New York, with product development and marketing teams located in North America and Europe. Consumers can find high-quality mobile entertainment wherever they see the 'T' character logo, or at http://tapinator.com.

Forward Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our belief that Video Poker Classic will continue to grow through incremental improvements on top of a game that is currently the best-in-class video poker title on mobile, our belief that we will be able to increase Lucky Lotto player retention with the upcoming introduction of an hourly "Pick 3" minigame and other features, our belief that Lucky Lotto can be a strong and evergreen performer for the Company, our belief that, in respect to NFT500 (our recently announced NFT art collection and casting platform), a significant direction for the NFT market will center around utility and that casting will be a big part of the answer to this question, our belief that the Company is in a stronger position now than we have ever been,  our continued belief that Tapinator is deeply undervalued relative to its fundamentals, our belief that the Company's 2021 game pipeline represents unrecognized value for our shareholders, especially given the evergreen nature of our leading games and the significant operating leverage inherent in our current business model, our belief that there are long term opportunities for the Company within the nascent market for crypto media and entertainment software, our anticipation we can deliver another year of strong company-wide revenue and bookings growth, along with adjusted EBITDA margin of at least 15% and our expectation we can deliver positive net earnings for the year ended 2021. Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on March 16, 2020 and as updated from time to time.

CONTACT:
Tapinator Investor Relations
investor.relations@tapinator.com
914.930.6232

 

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SOURCE Tapinator, Inc.

FAQ

What were Tapinator's financial results for Q1 2021?

Tapinator reported Q1 2021 revenue of approximately $1.2 million, net income of approximately $237,000, and adjusted EBITDA of about $200,000.

How did Tapinator's revenue change compared to Q1 2020?

Tapinator's revenue increased by 33% year-over-year from approximately $913,855 in Q1 2020.

What is Tapinator's outlook for 2021?

While Tapinator is not providing specific financial guidance, the company anticipates another year of strong revenue growth and an adjusted EBITDA margin of at least 15%.

What were the key metrics for Tapinator in Q1 2021?

Key metrics for Q1 2021 include revenue of $1.2 million, record bookings of $1.3 million, net income of $237,000, and adjusted EBITDA of $200,000.

What products contributed to Tapinator's revenue growth?

Revenue growth was driven by existing games like Video Poker Classic and new developments such as the upcoming game Idle Industries.