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WidePoint Corporation (NYSE American: WYY), the leading provider of Trusted Mobility Management (TM2) specializing in Telecommunications Lifecycle Management, Identity Management (IdM) and Digital Billing & Analytics solutions, today reported results for the third quarter September 30, 2020.

Third Quarter 2020 and Recent Operational Highlights:

• Secured more than $11 million in contract wins, exercised option periods, and contract extensions during the third quarter of 2020, approximately $10 million of which is comprised of new business and new extensions
• Successfully onboarded Virginia Alcoholic Beverage Control Authority (Virginia ABC) after being awarded a new contract for TEM services
• Number of U.S. Department of Defense digital certificates issued increased 14% sequentially from the second quarter of 2020 and 15% year-over-year from the third quarter of 2019, leading to an increase in high margin Identity Management revenue
• Responded to the request for proposal and provided oral presentation to the U.S. Department of Homeland Security regarding the Cellular Wireless Managed Services (CWMS) II contract re-compete
• Effectuated 1-for-10 reverse stock split on November 6, 2020 to better position the Company for long-term success.

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Third Quarter 2020 Financial Highlights (results compared to the same year-ago period):

• Revenues increased 94% to $57.5 million
• Managed Services revenue increased 38% to $12.5 million
• Gross profit increased 30% to $5.6 million
• Net income totaled $1.1 million
• EBITDA, a non-GAAP financial measure, increased 102% to $1.6 million
• Adjusted EBITDA, a non-GAAP financial measure, increased 82% to $1.7 million.

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Nine Month 2020 Financial Highlights (results compared to the same year-ago period):

• Revenues increased 106% to $152.0 million
• Managed Services revenue increased 37% to $33.8 million
• Gross profit increased 24% to $15.6 million
• Net income totaled $2.0 million
• EBITDA, a non-GAAP financial measure, increased 84% to $3.8 million
• Adjusted EBITDA, a non-GAAP financial measure, increased 69% to $4.4 million.

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The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under the “Safe Harbor Statement” below.

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Financial Outlook

For the fiscal year ending December 31, 2020, the Company is reiterating its revenue guidance of $185 million to $195 million, which at the midpoint of the range, would represent 87% growth year-over-year. The Company is also reiterating the EBITDA guidance it updated on October 26, 2020 of $4.7 million to $4.9 million, which at the midpoint, is 50% above the Company’s previously issued EBITDA guidance and represents a 69% year-over-year increase compared to fiscal 2019. For fiscal 2020, the Company also anticipates adjusted EBITDA, which excludes stock-based compensation expense, to range between $5.5 million to $5.7 million, which, at the midpoint, represents a 57% year-over-year increase compared to fiscal 2019. The EBITDA forecast takes into consideration the Company’s planned strategic investments in sales and marketing and product development. The Company’s financial outlook is based on current expectations.

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Management Commentary

“Thanks to the work of our dedicated personnel and the flexibility we built into our organization, we continued to build on the momentum established in the first half of the year and produced record financial results for the third quarter of 2020,” said WidePoint’s CEO, Jin Kang. “For the third quarter, our total revenues increased to $57.5 million, largely driven by our increased work on the U.S. Census 2020 as well as expansions with other federal government customers, and perhaps more importantly, our high margin managed services revenues increased 38% year-over-year. That increase helped drive $1.1 million in net income for the third quarter, which is almost five times greater than our net income in all of fiscal 2019, and our adjusted EBITDA for the quarter increased 82% to $1.7 million. We also strengthened our balance sheet by increasing our cash position by $3.9 million sequentially to $11.4 million.

“The financial success of the quarter is a clear indication of the value WidePoint can generate because of our excellent staff, our flexible organizational structure, and the market’s growing demand for our products that function as a solution for many of the problems faced by large government and commercial enterprises in today’s environment. With 2020 lining up to be a banner year for WidePoint, we believe our company has never been better positioned than it is today, and we look forward to capitalizing on this momentum as we close out the year and move into 2021.”

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Conference Call

WidePoint management will hold a conference call today (November 16, 2020) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

WidePoint’s President and CEO Jin Kang, Executive Vice President and Chief Sales and Marketing Officer Jason Holloway, and Executive Vice President and CFO Kellie Kim will host the conference call, followed by a question and answer period.

U.S. dial-in number: 844-407-9500
International number: 862-298-0850

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 November 30, 2020.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 38150

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 digital billing and analytics. For more information, visit widepoint.com.

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For more details please visit www.widepoint.com

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