6-K
Locafy Ltd (LCFY)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,DC 20549
Form6-K
REPORTOF FOREIGN PRIVATE ISSUER
PURSUANTTO RULE 13a-16 OR 15d-16 OF THE
SECURITIESEXCHANGE ACT OF 1934
Forthe month of May 2024
CommissionFile Number: 001-41333
LOCAFYLIMITED
(Registrant’sname)
246AChurchill Avenue, Subiaco Western Australia 6008, Australia
(Addressof principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
On May 1, 2024, Locafy Limited issued a press release, “Locafy Reports Fiscal Third Quarter 2024 Results,” which is attached hereto as Exhibit 99.1.
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated May 1, 2024 |
Incorporationby Reference
This Report on Form 6-K, including all exhibits attached hereto, is hereby incorporated by reference into the Locafy Limited’s Registration Statement on Form F-3, as amended, originally filed with the Securities and Exchange Commission on May 19, 2023 (File No. 333-272066), to be a part thereof from the date on which this Report on Form 6-K is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LOCAFY LIMITED | ||
|---|---|---|
| Date:<br> May 2, 2024 | By: | /s/ Gavin Burnett |
| Name: | Gavin<br> Burnett | |
| Title: | Chief<br> Executive Officer |
Exhibit99.1
LocafyReports Fiscal Third Quarter 2024 Results
CompanyStriving Towards Near-Term Profitability Following Go-to-Market Approach Revamp and Cost Reduction Initiatives
NewPay-Per-Click SEO Pricing Model Gaining Strong Traction in Multiple Market Sectors
StreamlinedOperations Results in Record Quarterly Gross Margin of 83.6%
PERTH,Australia – May 1, 2024 – Locafy Limited (Nasdaq: LCFY, LCFYW) (“Locafy” or the “Company”), a globally recognized software-as-a-service technology company specializing in “entity based” search engine optimization (SEO), today reported financial results for the 2024 fiscal third quarter ended March 31, 2024. All financial results are reported in Australian Dollars (AUD).
RecentOperational Highlights
| ● | Announced<br> in early April, Locafy’s new proprietary Performance-Based SEO Pricing Model allows customers to access “pay-per-click<br> SEO.” The Company believes that this model is the first of its kind for the SEO software space. Performance-based SEO is expected<br> to boost Locafy revenues through increased sales velocity, scalability, and its subscription revenue opportunity. |
|---|---|
| ● | Since<br> announcing the release of Locafy’s Performance Based SEO solutions, the Company has presented approximately 50 qualified proposals<br> to customers, totaling more than $750,000 in new potential SEO services revenue. As of the date of this press release, several of<br> these proposals have already been converted to deals. |
| ● | In<br> February 2024, Locafy announced a $500,000 services contract with Localista, an Australian directory business. As of the date of<br> this press release, the Localista contract is on track to be completed during the 2024 fiscal fourth quarter. Once completed, as<br> pursuant to the contract, Locafy will also share in any advertising revenue growth demonstrated by Localista. |
| ● | Cost<br> reduction initiatives resulted in cost of sales and operating expenses decreases of 59% and 47% compared to the 2023<br> fiscal third quarter, respectively; gross margin increased to Locafy’s quarterly record of 83.6%. |
| ● | Services revenue increased 26.6% to $126,000 from $100,000 in the comparable year-ago period. Under the revamped pricing model, the company<br> expects these revenues to continue to grow, which is expected to drive increased subscription revenues once services are delivered. |
ManagementCommentary
“In our 2024 fiscal third quarter, we focused on completing our product offering and go-to-market strategy revamp,” said Locafy CEO Gavin Burnett. “We listened to the feedback from our advertising and publishing clients, and successfully launched our proprietary pay-per-click SEO model for which they have indicated interest. We believe that this model allows us to improve our targeted marketing efforts and streamline our cost structure, as it can be supported by significantly leaner sales and operational teams. Even as we faced sales delays in our subscription and advertising revenue segments in the 2024 fiscal third quarter, our subscription revenue decline ended in January, and we are now poised to rebound well in the coming quarters. Also, we have successfully lowered our cost of sales and operating expenses by 59% and 47% over our 2023 fiscal third quarter, respectively , and believe that we are nearing a steady run rate and break-even profitability point for our business in the coming quarters.
“We now define our three core markets as digital agency resellers, who provide our technology to clients, publishers, who monetize their digital properties through advertising, and direct clients, who publish their online business data through our directory assets,” continued Burnett. “We are seeing significant business development success and preliminary contracts signed with clients in each market and look forward to completing the onboarding processes for early adopters in the coming months. We believe that our underlying SEO solutions have proven their effectiveness through a wealth of trials and paid engagements in recent quarters. With this product offering revamp complete, we are ready to capitalize on our technology and drive Locafy revenue that matches the value we provide. We are confident that this model will help us unlock significant growth opportunities both for clients and for our business as we head into fiscal 2025.”
2024Fiscal Third Quarter Financial Results
Resultscompare the 2024 fiscal third quarter end (March 31, 2024) to the 2023 fiscal third quarter end (March 31, 2023) unless otherwise indicated.All financial results are reported in Australian Dollars (AUD).
| ● | Total operating revenue decreased 28.3% to $2.9 million from $4.1 million in the comparable year-ago period. |
|---|---|
| ○ | Subscription revenue decreased 36.9% to $2.0 million from $3.1 million in the comparable year-ago period. Compared to the 2024 fiscal second<br> quarter, subscription revenue decreased 8.9%. The decline in subscription revenues ceased in January 2024, forming a base from which<br> the Company expects to grow in the coming quarters. |
| --- | --- |
| ○ | Advertising revenue decreased 10.8% to $213,000 from $239,000 in the comparable year-ago period. The Company is currently implementing advertising<br> technology from diDNA, a leading ad tech provider, to its digital properties through the recently announced partnership between Locafy<br> and diDNA. When combined with Locafy’s existing Keystone technology, which is also applied to these digital properties to improve<br> search traffic, Locafy expects this initiative to drive increased revenues and higher advertising yields to produce a synergistic<br> result for Locafy and diDNA. |
| ○ | Data revenue decreased 2.5% to $645,000 from $662,000 in the comparable year-ago period. |
| ○ | Services revenue increased 26.6% to $126,000 from $100,000 in the comparable year-ago period. The revenue in the 2024 fiscal third quarter<br> included the recognition, on a project-complete basis, of $101,875 out of the $500,000 total contract fee in relation to the Company’s<br> SEO consulting engagement with Localista. Management expects to complete the remaining project within the 2024 fiscal fourth quarter. |
| ● | Other income decreased 91.0% to $26,000 from $285,000 in the comparable year-ago period. As previously reported, the variance<br> is attributed to the Company’s assessment (as at the respective reporting period) of the extent and likelihood of its ability<br> to claim a Research & Development tax incentive in Australia, as was possible in prior years. |
| --- | --- |
| ● | Cost of sales decreased 58.9% to $483,000 from $1.2 million in the comparable year-ago period. |
| ● | Gross margin for the 2024 fiscal third quarter improved to 83.6% from 71.5% in the comparable year-ago period. This is attributable<br> to a reduction in third party technology costs. |
| ● | Operating expenses decreased 47.0% to $5.0 million from $9.4 million in the comparable year-ago period. This is primarily due to a significant<br> reduction in headcount and associated costs, a reduction in third party technology costs, and the capitalization of certain R&D<br> activities. These cost reductions resulted from technology upgrades implemented during the past 12 months, including incorporating<br> technologies acquired from Jimmy Kelley Digital, resulting in the introduction of new SEO solutions that the Company is now bringing<br> to market. |
| ● | Net loss for the year to date was $2.1 million, or $1.63 per diluted share, compared to a net loss of $5.1 million, or $4.91 per<br> diluted share, in the comparable year-ago period. |
| --- | --- |
KeyPerformance Indicators (KPIs)
Inaccordance with its revamped go-to-market strategy, Locafy no longer views its traditional KPIs as adequate indicators of the long-termsuccess of the Company’s business. Therefore, Locafy has updated its KPIs to focus on Monthly Recurring Revenue driven across theplatform. Unless otherwise specified, KPI data has been recorded as of the 2024 fiscal third quarter end (March 31, 2023).
| ● | Monthly recurring revenue (MRR) for the 2024 fiscal third quarter was $266,000, a 34.8% decrease from the comparable year-ago period,<br> and a 15.5% decrease compared to the 2024 fiscal second quarter. |
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For more information, please see Locafy’s investor relations website at investors.locafy.com.
AboutLocafy
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.
AboutKey Performance Indicators
Locafydefines MRR as the value of all recurring subscription contracts with active entitlements as at the end of each month. MRR across a periodis the average of each month’s MRR within that period.
Locafy’srecent platform upgrade caused a significant change to the calculation of average page metrics, and Locafy management no longer viewstotal active reseller count and total end user count as relevant indicators of the performance of Locafy’s technology. The Companymay introduce additional KPIs in future quarters if deemed relevant long-term indicators of performance.
Forward-LookingStatements
Thispress 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 statementscontained 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 similarexpressions, or by discussions of strategy, although not all forward-looking statements contain these words. Although the Company believesthat 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 speakonly as of the date of this press release. The Company’s actual results could differ materially from those anticipated in theseforward-looking statements as a result of a variety of factors and risk factors, including those discussed in the Company’s filingswith the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F filed withthe SEC on October 11, 2023, and available on its website (http://www.sec.gov). All forward-looking statements attributable tothe Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required underthe securities laws, the Company does not assume a duty to update these forward-looking statements.
InvestorRelations Contact
Tom Colton or Chris Adusei-Poku
Gateway Investor Relations
(949) 574-3860
LCFY@gateway-grp.com
-FinancialTables to Follow-
LocafyLimited
ConsolidatedStatement of Profit or Loss and Other Comprehensive Income
(Unaudited)
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LocafyLimited
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LocafyLimited
ConsolidatedStatement of Cash Flows
(unaudited)
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All values are in US Dollars.