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Locafy Reports Fiscal First Quarter 2024 Results

Locafy Limited
Locafy Limited

Fiscal First Quarter 2024 Highlighted by Strategic Partnerships, Maintained Gross Margin of 81%, and 53% Year-Over-Year Cost of Sales Decrease

Continued Cost-Efficiency Initiatives Help Drive Locafy Closer to Profitability; Milestone Expected Early in Calendar-Year 2024

PERTH, Australia, Nov. 27, 2023 (GLOBE NEWSWIRE) -- Locafy Limited (Nasdaq: LCFY, LCFYW) (“Locafy” or the “Company”), a globally recognized software-as-a-service technology company specializing in local search engine marketing, today reported financial results for the 2024 fiscal first quarter ended September 30, 2023. All financial results are reported in Australian Dollars (AUD).

Recent Operational Highlights

  • Announced an enterprise partnership with Method, an Australian digital marketing agency with local-scale expertise. Method has been using Locafy’s products over several years and has grown to enterprise partner scale through an expanded client network and significant growth. Through this continued partnership, Method will ramp-up its deployment of Locafy’s Entity-Based SEO product suite to further supplement its growth and increase its market share.

  • Announced a strategic partnership with TransUnion to expand Locafy’s publishing network. This partnership will allow for the publication of 17 million business listings in Hotfrog.com, a top-20 free online directory which Locafy acquired in 2016. The collaboration will assist in increasing Locafy’s existing publishing network by 34% to approximately 66 million pages.

Management Commentary
“Our fiscal first quarter included several achievements that we believe position our business for strong growth over the rest of fiscal 2024,” said Locafy CEO Gavin Burnett. “Despite a series of billing relief extensions granted to customers impacted by our recent platform upgrades and transitions, we believe we made progress across our growth strategy pillars. We confirmed an enterprise partnership, expanded our publishing network, significantly advanced our cost-efficiency initiatives, and continued driving successful software trials to further validate our technology.

“Since the end of the quarter, we’ve transitioned our focus to accelerating growth and achieving profitability in the upcoming calendar year. We are confident that our recent enterprise partnerships have helped us develop a strong business development pipeline and believe in the significant tailwinds for our technology throughout our industry. We’re encouraged by our demand outlook and look forward to driving continued adoption of our solutions in calendar-year 2024.”

Fiscal First Quarter 2024 Financial Results
Results compare the 2024 fiscal first quarter end (September 30, 2023) to the 2023 fiscal first quarter end (September 30, 2022) unless otherwise indicated.

  • Total operating revenue decreased 24.3% to $1.1 million from $1.4 million in the comparable year-ago period.

    • Subscription revenue decreased 28.2% to $768,000 from $1.1 million in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, subscription revenue decreased 15.4%. The decrease in subscription revenue was primarily attributable to the Company’s extended billing relief to customers whose campaigns were affected by the transition onto Locafy’s upgraded technology platform (the “Platform”), together with the tapering of the Company’s labor-intensive educational program and Brand Boost products in the near term.

    • Advertising revenue increased 12.2% to $97,000 from $87,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, advertising revenue increased 27.0%.

    • Data revenue decreased 11.0% to $214,000 from $240,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, data revenue increased 2.1%.

    • Services revenue decreased 78% to $9,000 from $40,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, services revenue decreased 87.2%. These decreases are primarily due to comparatively lower custom website builds undertaken by the Company as it completed the transition of its customer base to the Platform.

  • Cost of sales decreased 53.2% to $205,000 from $438,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, cost of sales decreased 10.8%.

  • Gross margin increased to 81.1% from 69.5% for the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, gross margin remained steady.

  • Net loss was $808,000, or $0.63 per diluted share, compared to a net loss of $1.2 million, or $1.13 per diluted share, in the comparable year-ago period.

Key Performance Indicators (KPIs)
Unless otherwise specified, KPI data has been recorded as of the 2024 fiscal first quarter end (September 30, 2023).

  • Monthly recurring revenue (MRR) for the 2024 fiscal first quarter was $360,000, a 21.2% decrease compared to $456,000 for the comparable year-ago period, and a 9.6% decrease compared to $398,000 for the 2023 fiscal fourth quarter.

  • Total active reseller count for the 2024 fiscal first quarter was 99 resellers, a 43.5% increase compared to 69 resellers for the comparable year-ago period, and a 7.5% decrease compared to 107 resellers as of the 2023 fiscal fourth quarter.

  • Total end user count for the 2024 fiscal first quarter was 1,048 end users, a 27.2% decrease compared to 1,440 end users for the comparable year-ago period, and a 7.2% decrease compared to 1,129 end users as of the 2023 fiscal fourth quarter.

For more information, please see Locafy’s investor relations website at investors.locafy.com.

About Locafy
Founded in 2009, Locafy's (Nasdaq: LCFY, LCFYW) mission is to revolutionize the US$700 billion SEO sector. We help businesses and brands increase search engine relevance and prominence in a specific proximity using a fast, easy, and automated approach. For more information, please visit www.locafy.com.

About Key Performance Indicators
Locafy defines MRR as the value of all recurring subscription contracts with active entitlements as at the end of each month. MRR across a period is the average of each month’s MRR within that period.

Locafy’s recent Platform upgrade caused a significant change to the calculation of average page metrics, and Locafy management no longer views these metrics as relevant indicators of the performance of Locafy technology. The Company may introduce additional KPIs in future quarters if deemed relevant long-term indicators of performance.

Forward-Looking Statements
This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “subject to”, “believe,” “anticipate,” “plan,” “expect,” “intend,” “estimate,” “project,” “may,” “will,” “should,” “would,” “could,” “can,” the negatives thereof, variations thereon and similar expressions, or by discussions of strategy, although not all forward-looking statements contain these words. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors and risk factors, including those discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F filed with the SEC on October 11, 2023, and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Investor Relations Contact
Tom Colton or Chris Adusei-Poku
Gateway Investor Relations
(949) 574-3860
LCFY@gateway-grp.com

-Financial Tables to Follow-


Locafy Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

3 months to
30 Sep 2023
AUD $
(unaudited)

 

 

3 months to
30 Sep 2022
AUD $
(unaudited)

 

Revenue

 

1,087,642

 

 

1,436,807

 

Other income

 

43,860

 

 

169,952

 

Technology expense

 

(314,550

)

 

(514,533

)

Employee benefits expense

 

(927,342

)

 

(1,788,103

)

Occupancy expense

 

(17,461

)

 

(16,187

)

Advertising expense

 

(61,134

)

 

(39,196

)

Consultancy expense

 

(234,951

)

 

(146,058

)

Depreciation and amortization expense

 

(359,639

)

 

(167,065

)

Other expenses

 

(3,144

)

 

(46,299

)

Impairment of financial assets

 

-

 

 

(32,602

)

Operating profit/(loss)

 

(786,719

)

 

(1,143,284

)

Financial cost

 

(21,373

)

 

(19,948

)

Profit/(Loss) before income tax

 

(808,092

)

 

(1,163,232

)

Income tax expense

 

-

 

 

-

 

Profit/(Loss) for the period

 

(808,092

)

 

(1,163,232

)

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

Items that will be reclassified subsequently to profit and loss

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

15,749

 

 

34,530

 

Total comprehensive profit/(loss) for the period

 

(792,343

)

 

(1,128,702

)

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic profit/(loss) per share

 

(0.63

)

 

(1.13

)

Diluted profit/(loss) per share

 

(0.63

)

 

(1.13

)


Locafy Limited
Consolidated Statement of Financial Position

 

 

 

 

 

 

 

 

 

 

 

As at
30 Sep 2023
AUD $
(unaudited)

 

 

As at
30 Jun 2023
AUD $
(audited)

 

 

As at
30 Jun 2022
AUD $
(audited)

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

1,773,145

 

 

3,174,700

 

 

4,083,735

 

Trade and other receivables

1,326,451

 

 

1,288,513

 

 

1,203,249

 

Other assets

301,836

 

 

356,782

 

 

230,094

 

Current assets

3,401,432

 

 

4,819,995

 

 

5,517,078

 

Property, plant and equipment

348,818

 

 

380,018

 

 

395,999

 

Right of use assets

291,577

 

 

314,596

 

 

406,673

 

Intangible assets

3,764,232

 

 

3,720,272

 

 

2,235,180

 

Non-current assets

4,404,627

 

 

4,414,886

 

 

3,037,852

 

Total assets

7,806,059

 

 

9,234,881

 

 

8,554,930

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Trade and other payables

2,177,510

 

 

2,507,573

 

 

1,454,241

 

Borrowings

271,600

 

 

301,600

 

 

308,100

 

Provisions

215,450

 

 

214,465

 

 

473,006

 

Accrued expenses

259,830

 

 

512,611

 

 

511,848

 

Lease liabilities

105,222

 

 

85,165

 

 

32,672

 

Contract and other liabilities

153,143

 

 

152,211

 

 

137,342

 

Current liabilities

3,182,755

 

 

3,773,625

 

 

2,917,209

 

Lease liabilities

301,345

 

 

332,578

 

 

417,744

 

Provisions

52,291

 

 

48,271

 

 

25,988

 

Accrued expenses

90,450

 

 

90,450

 

 

76,504

 

Non-current liabilities

444,086

 

 

471,299

 

 

520,236

 

Total liabilities

3,626,841

 

 

4,244,924

 

 

3,437,445

 

Net assets/(liabilities)

4,179,218

 

 

4,989,957

 

 

5,117,485

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Issued capital

47,835,074

 

 

47,930,486

 

 

45,038,037

 

Reserves

2,375,089

 

 

2,404,933

 

 

5,306,475

 

Accumulated losses

(46,030,945

)

 

(45,345,462

)

 

(45,227,027

)

Total equity/(deficiency)

4,179,218

 

 

4,989,957

 

 

5,117,485

 


Locafy Limited
Consolidated Statement of Cash Flows
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

3 months to
30 Sep 2023
AUD $
(unaudited)

 

 



FY2023
AUD $
(audited)

 

 



FY2022
AUD $
(audited)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Receipts from customers (inclusive of GST)

 

939,249

 

 

4,463,725

 

 

3,038,044

 

Payments to suppliers and employees (inclusive of GST)

 

(1,624,006

)

 

(7,005,510

)

 

(7,999,866

)

R&D Tax Incentive and government grants

 

-

 

 

386,181

 

 

803,042

 

Financial cost

 

(21,373

)

 

(105,367

)

 

(81,656

)

Net cash used by operating activities

 

(706,130

)

 

(2,260,971

)

 

(4,240,436

)

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Purchase of intellectual property

 

(486,955

)

 

(1,617,446

)

 

(1,615,192

)

Purchase of property, plant and equipment

 

-

 

 

(2,170

)

 

(390,339

)

Net cash used by investing activities

 

(486,955

)

 

(1,619,616

)

 

(2,005,531

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Proceeds from issue of shares

 

-

 

 

3,295,822

 

 

9,979,861

 

Payment for share issue costs

 

(199,668

)

 

(403,373

)

 

(639,429

)

Repayment of borrowings

 

(30,000

)

 

(6,500

)

 

(97,500

)

Leasing liabilities

 

(11,176

)

 

(32,673

)

 

(59,419

)

Net cash from financing activities

 

(240,844

)

 

2,853,276

 

 

9,183,513

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

(1,433,929

)

 

(1,027,311

)

 

2,937,546

 

Net foreign exchange difference

 

32,374

 

 

118,276

 

 

495,458

 

Cash and cash equivalents at the beginning of the period

 

3,174,700

 

 

4,083,735

 

 

650,731

 

Cash and cash equivalents at the end of the period

 

1,773,145

 

 

3,174,700

 

 

4,083,735

 



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