Two Subsidiaries Serve Global Business Clients with Cloud-Based Telcom.
FCC Licensed to Operate as a Software-as-a-Service (SaaS) Provider.
Seasoned Telcom Industry Executive Just Appointed as President & COO.
Q3 Revenues of $3.6 Million, Up 43% Compared to Previous Year.
Q3 Gross Profit of $1.6 Million, Up 80% Compared to Previous Year.
KonaTel (OTCQB: KTEL) is a Software-as-a-Service (SaaS) cloud-based voice and data telecommunications holding company operating two subsidiaries including Apeiron Systems (www.apeiron.io) and IM Telecom d/b/a Infiniti Mobile (www.infinitimobile.com).
Through its subsidiaries, KTEL delivers a variety of retail and wholesale telecommunication services primarily to small and mid-sized business. KTEL subsidiary, Apeiron Systems, is an FCC licensed ITSP and global cloud Communications Platform as a Service (CPaaS) provider. Apeiron delivers voice termination/origination, API services, messaging, cellular, IoT mobile data solutions, SD-WAN, private LTE, and a range of hosted services through its private cloud platform. All Apeiron services are manageable through its web portal and rich communication APIs. KTEL subsidiary, Infiniti Mobile, is an FCC licensed national wireless Lifeline, EBB and ACP (Affordable Connectivity Program) provider, approved to distribute government subsidized cellular and mobile data service to low-income families in multiple states.
KTEL Appoints Seasoned Telecom Executive Chuck Griffin as President and Chief Operating Officer
On January 4th KTEL announced the appointment of Chuck Griffin as President and Chief Operating Officer effective January 1, 2022. Mr. Griffin will lead the KTEL sales and marketing as well as all company operations.
“I have known and worked with Chuck for over seven years. He is an accomplished executive in the telecom space with extensive industry knowledge and a proven track record of delivering measurable results in a number of C-suite roles,” stated KTEL Chairman and CEO Sean McEwen. “He brings to KonaTel a thorough, working knowledge of what it takes to lead, manage and grow a telecommunications business. As a business development expert focused on the telecom industry, Chuck is uniquely qualified to lead our organization and bring additional value to our customers and shareholders.”
Chuck Griffin commented, “I am energized by the emerging opportunities for KonaTel. The Infrastructure Investment and Jobs Act that was signed into law in November significantly increases the company’s addressable market and serves as a tremendous catalyst for its next level of growth. The company is well-positioned to capture a meaningful share of this government-funded spending, which is directed towards providing access to communications infrastructure for all U.S. residents. It’s an exciting time in the industry, and I am eager to work with Sean and the team to help lead the company through this next phase.”
KTEL Reports Third Quarter 2021 Financial Results; Accelerated Revenue Growth of 43%
On November 10th KTEL announced financial results for third quarter and nine-month period ended September 30, 2021.
Third Quarter Financial Summary and Recent Business Highlights
Revenues of $3.6 million, up 43% compared to the third quarter last year.
Gross profit of $1.6 million, up 80% compared to the third quarter last year.
Operating income of $372,000 compared to an operating loss of $(56,000) in the third quarter last year.
Net income of $320,000 or $0.01 per share, compared to $20,000, or $0.00 per share, in the third quarter last year.
H.R. 3684 – Infrastructure Investment and Jobs Act (“Infrastructure Bill”), which includes additional provisions for a new government funded broadband program, was passed by the U.S. House of Representatives.
“Our momentum continued in the third quarter with sequential revenue growth of 24% driven by increases in each of our two business segments,” stated KTEL Chairman and CEO Sean McEwen. “In Hosted Services, expansion of our agent sales channel outreach and enhancements to our sales platform are enabling us to pursue and capture a larger share of market opportunities. We also added three new senior level executives to the management team who have successful track records in large telecom and bring a wealth of industry expertise to our organization. The sales teams are increasingly focused on diversifying our revenue mix and the sale of higher margin products, which is having a meaningful impact on our margins. Gross margin was up more than 900 basis points for the third quarter to 45.0% compared to 35.7% in the prior year quarter.
McEwen continued, “In our higher-margin Mobile Services business, which includes retail and wholesale cellular and IoT mobile device services, revenue is up 50.4% year-to-date on increased volumes driven by new agent distribution and recent approvals for participation in government subsidized cellular and broadband data distribution programs. Specifically, the Federal Communications Commission’s (FCC) Emergency Broadband Benefit (EBB) program was opened for enrollment and as an approved provider of program services in several states, we have seen a marked uptick in the number of customers we serve under the program. In addition, expansion of our Lifeline mobile services into the state of California was approved earlier this year and accordingly, we expect distribution of essential voice and data services to California residents under our Infiniti Mobile brand to begin as planned later in the fourth quarter. According to the FCC, there are an estimated 3.6 million Lifeline eligible households in the state of California with nearly 2.4 million currently unserved. As one of only a handful of approved national wireless Lifeline providers to hold an FCC approved Compliance Plan, we are well positioned to provide basic cellular and wireless broadband data services to millions of eligible new customers. Furthermore, we recently contracted with two new master agencies with national distribution to further expand our channels and reach many more EBB and Lifeline eligible households across several states. Distribution through these new channels is on schedule to commence later this year.”
“The Infrastructure Bill that was approved this past weekend provides for $65 billion1 in new investment for broadband internet to advance government efforts to ensure all U.S. residents have access to reliable, high-speed internet,” continued McEwen. “If signed, this legislation will significantly increase our total addressable market and serve as an additional catalyst for future growth.”
Year-to-Date Financial Detail (First Nine Months of 2021 vs. First Nine Months of 2020)
KTEL Revenues increased 32% to $8.9 million compared to $6.7 million, reflecting a 17.6% increase in Hosted Services revenues and a 50.4% increase in Mobile Services revenues.
Gross profit was $4.0 million, or 44.5% gross profit margin, compared to gross profit of $2.5 million, or 37.7% gross profit margin.
Total operating expenses were $3.4 million, up 17% compared to $2.9 million. This increase was primarily a result of infrastructure expansion, primarily payroll, professional services, handset costs and application development costs to support sales channel growth.
Net income was $428,000, or $0.01 per diluted share (based on 43.6 million weighted average shares), inclusive of non-operating, other expense of $167,000 related to stock option expenses and interest, compared to net income of $263,000, or $0.01 per diluted share (based on 44.1 million weighted average shares), inclusive of non-operating, net other income of $601,000 primarily related to SBA loan proceeds.
KTEL ended the quarter with $1.4 million in cash, compared to $715,000 in cash on December 31, 2020. Long term debt was $150,000 as of September 30, 2021, and December 31, 2020.
For more information on KonaTel (KTEL) visit: http://www.konatel.com
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Company Name: KonaTel
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