GAAP Net Income of $0.4 million; Gross Profit Up 20%; Seventh Consecutive Quarter of Positive Adjusted EBITDA
WidePoint Corporation (NYSE American: WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management and Bill Presentment & Analytics solutions, today reported results for the first quarter ended March 31, 2019.
First Quarter 2019 and Recent Operational Highlights:
- Secured more than $1.3 million in Trusted Mobility Management (TM2) contracts, the majority of which are high-margin, commercial contracts
- Successfully implemented ITMSTM Instance with GovCloud, an industry first that strengthens the competitive advantage of TM2 and represents the fist significant step towards achieving a FedRAMP certification
- Secured $1.6 million contract expansion with the U.S. Customs and Border Protection (CBP) agency, increasing the number of devices managed by 50% to 45,000
- Teamed with Leidos on the NASA Nest contract to provide Managed Mobility Services in support of the agency’s mission
- Relocated company headquarters to Fairfax, VA as part of consolidation and cost-savings strategy
First Quarter 2019 Financial Highlights (results compared to the same year-ago period):
- Revenues increased 9% to $21.9 million
- Gross profit increased 20% to $4.3 million
- Net income of $384,000
- Adjusted EBITDA, a non-GAAP financial measure, increased to $1.0 million, marking the company’s seventh consecutive quarter of positive adjusted EBITDA
First Quarter 2019 Financial Summary
Please visit www.widepoint.com for more breakdown on the Financial Summary.
Financial Outlook
For the fiscal year ending December 31, 2019, the company is reiterating its revenues guidance of $90.0 million to $93.0 million, representing growth of 8% to 12%. The company is also raising its adjusted EBITDA guidance to $2.75 million to $3.5 million, which represents an improvement compared to fiscal 2018. The increase reflects the company’s strategic investments in sales and marketing and product development to accelerate growth as well as a $400,000 increase due to new FASB guidance regarding the treatment of capital lease. The company’s financial outlook is based on current expectations.
Management Commentary
“The first quarter was a strong start to what we anticipate will be a solid year for WidePoint as we delivered continued solid financial results, expanded on new and current customer relationships, and improved our industry leading suite of credentials,” said WidePoint’s CEO, Jin Kang. “Our financial performance in the first quarter was highlighted by our first quarter of GAAP profitability in nearly six years, a 20% increase in gross profit and positive adjusted EBITDA of approximately $1.0 million, all of which demonstrate improved leverage in our financial model.
“Operationally, the recent contracts we secured in the first quarter with CBP, CNA, and others, highlight that our internal sales team, our strategic partnerships with systems integrators, as well as our cross-selling and up-selling initiatives continue to be an effective means of landing new business. We also made substantial progress this quarter in bolstering our credentials by successfully implementing ITMSTM Instance with GovCloud, which is a first for our industry and a crucial step towards achieving a FedRAMP certification.
“We remain optimistic about the remainder of 2019 and beyond, and we look forward to continuing with our strategy to more aggressively grow the topline while improving our margins, improving profitability and returning greater value to our supportive shareholders.”
Conference Call
WidePoint management will hold a conference call today (May 14, 2019) at 4:30 p.m. Eastern time (1:30 p.m. local time) to discuss these results.
WidePoint President and CEO Jin Kang, Chief Sales and Marketing Officer Jason Holloway, and President and CEO of Soft-ex Communications and WidePoint Interim CFO Ian Sparling will host the conference call, followed by a question and answer period.
U.S. dial-in number: 877-407-9210
International number: 201-689-8049
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through August 14, 2019.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 47592
About WidePoint
WidePoint Corporation (NYSE American: WYY) is a leading provider of trusted mobility management (TM2) solutions, including telecom management, mobile management, identity management, and bill presentment and analytics. For more information, visit widepoint.com.
Non-GAAP Financial Measures
WidePoint uses a variety of operational and financial metrics, including non-GAAP financial measures such as Adjusted EBITDA, to enable it to analyze its performance and financial condition. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP Net loss to Adjusted EBITDA is included on the schedules attached hereto.
