Tapinator, Inc, 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 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:
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.