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 October 2023
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 October 11, 2023, Locafy Limited issued a press release, “Locafy Reports Fiscal Fourth Quarter and Full Year 2023 Results,” which is attached hereto as Exhibit 99.1.
| Exhibit | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated October 11, 2023 |
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> October 11, 2023 | By: | /s/ Gavin Burnett |
| Name: | Gavin<br> Burnett | |
| Title: | Chief<br> Executive Officer |
Exhibit99.1
LocafyReports Fiscal Fourth Quarter and Full Year 2023 Results
Fiscal2023 Highlighted By 27% Total Revenue Increase and Gross Margin Increase to 73.9%
PositiveResults Driven by Several Reseller Wins and the Completion of Locafy’s Platform Upgrade
PERTH,Australia – October 11, 2023 – 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 2023 fiscal fourth quarter and full year ended June 30, 2023. All financial results are reported in Australian Dollars (AUD).
RecentOperational Highlights
| ● | Completed migration of Locafy customers to its upgraded SEO Platform (“Platform”) incorporating<br> Locafy’s proprietary “Entity-Based” software, providing Locafy customers<br> with a high-end technology stack, in-depth analytics and insights, enhanced website templates,<br> and improved customer support tools, among other new features. |
|---|---|
| ● | Further consolidated sales, technology, and operational costs as a result of efficiencies gained<br> through the recently upgraded Platform. A continuation of a series of cost reduction initiatives<br> drove a 52% year-over-year decrease in cost of sales in the fiscal fourth quarter. |
| ● | Signed an agreement with a prominent U.S.-based diversified media company to sell Locafy’s<br> Keystone technology. Locafy management believes that this publisher will be the perfect partner<br> for accelerating their Keystone rollout. The first Keystone sales to end-users have delivered<br> outstanding ranking performance for high-value keywords in competitive markets. |
| ● | Granted an exception to Nasdaq Listing Rule 5550(b)(1) by the Nasdaq Hearings Panel regarding<br> the minimum stockholders’ equity required for continued listing on Nasdaq (the “Stockholders’<br> Equity Requirement”) until October 31, 2023. The exception is subject to certain conditions,<br> including that the Company files its Annual Report on Form 20-F for the year ended June 30,<br> 2023 with the Securities and Exchange Commission by October 31, 2023, demonstrating compliance<br> with the Stockholders’ Equity Requirement. |
ManagementCommentary
“In a constantly changing SEO landscape, we believe that our products displayed excellent results for our customers in our fiscal 2023,” said Locafy CEO Gavin Burnett. “In addition to 27% full-year revenue growth to $5.3 million, we drove significant progress towards our growth strategy, including robust technological advancements across our products and several meaningful strategic partnerships. We continue to improve our profitability as well, and believe that our cost-reduction initiatives have us poised for high-margin, profitable growth in the coming quarters.
“Since this past June, we’ve hit the ground running in our fiscal 2024. We released our Platform and cutting-edge Keystone and Entity-Based SEO technologies, all significant upgrades to our software suite. Especially as our industry faces an influx of AI-generated content, we are confident that our technology is positioned to help our clients’ brands thrive in online search. Also, our business development efforts resulted in several strategic partnerships, including with media publishers and marketing and advertising agencies. These reseller agreements enable our technology to be sold across several large customer bases, providing a clear roadmap for continued monthly recurring revenue and gross margin expansion. We look forward to providing additional updates in the months ahead.”
FiscalFourth Quarter 2023 Financial Results
Resultscompare the 2023 fiscal fourth quarter end (June 30, 2023) to the 2022 fiscal fourth quarter end (June 30, 2022) unless otherwise indicated.
| ● | Total operating revenue remained steady at $1.3 million in both the current and comparable<br> year-ago period. |
|---|---|
| ○ | Subscription revenue decreased 8.1% to $908,000 from $988,000 in the comparable year-ago<br> period. Compared to the 2023 fiscal third quarter, subscription revenue decreased 3.6%. The<br> decrease in subscription revenue was primarily attributable to the Company providing billing<br> relief to many customers as their campaigns were transitioned onto Locafy’s upgraded<br> Platform. This transition was a one-time action and was completed in June 2023. |
| --- | --- |
| ○ | Advertising revenue decreased 5.5% to $77,000 from $81,000 in the comparable year-ago period.<br> Compared to the 2023 fiscal third quarter, advertising revenue increased 6.6%. |
| ○ | Data revenue increased 22.7% to $210,000 from $171,000 in the comparable year-ago<br> period. The increase was primarily attributable to sales to new data partners. Compared to<br> the 2023 fiscal third quarter, data revenue remained steady. |
| ○ | Services revenue increased 110.8% to $69,000 from $33,000 in the comparable year-ago period.<br> The increase is due to the migration of websites from the Company’s existing platform<br> to its new technology Platform. |
| ● | Cost of sales decreased 52.4% to $230,000 from $484,000 in the comparable year-ago<br> period. Compared to the 2023 fiscal third quarter, cost of sales decreased 19.3% due to a<br> reduction in our use of third-party software. The Company is engaged in ongoing efforts to<br> drive further cost savings and expects to realize these savings in the 2024 fiscal second<br> quarter. |
| --- | --- |
| ● | Gross margin for the 2023 fiscal fourth quarter increased to 81.8% compared to 77.6% for the<br> 2023 fiscal third quarter and 62.0% for the comparable year-ago period. In addition to completing<br> the Company’s Platform upgrade, management’s focus on reducing cost of sales<br> drove increased gross margin. |
| ● | Net profit was $1.2 million, or $1.03 per diluted share, compared to a net loss of<br> $1.4 million, or $1.40 per diluted share, in the comparable year-ago period. The net profit<br> in 2023 fiscal fourth quarter included the reversal of contractor termination expense provisions<br> totaling $633,000 that had previously been expensed in 2023 fiscal second quarter. These<br> provisions were reversed following management’s formal assessment as to the likelihood<br> of those expenses being realized. The net profit in 2023 fiscal fourth quarter also included<br> $1.1 million in annual capitalized R&D expenses compared to $1.1 million in the<br> comparable year-ago period. Adjusting for the termination expense provision and the annual<br> capitalized R&D expenses, the Company’s underlying net loss for the 2023 fiscal<br> fourth quarter was $540,000, or $0.48 per diluted share, compared to a net loss of $2.6<br> million, or $2.51 per diluted share, in the comparable year-ago period. |
FiscalFull Year 2023 Financial Results
Resultscompare the 2023 fiscal year end (June 30, 2023) to the 2022 fiscal year end (June 30, 2022) unless otherwise indicated. All financialresults are reported in Australian Dollars (AUD).
| ● | Total operating revenue increased 27.3% to $5.4 million from $4.2 million in the comparable<br> year-ago period. The increase in total revenue was mainly driven by increases in subscription<br> sales and revenues derived from data partners. |
|---|---|
| ○ | Subscription revenue increased 26.9% to $4.0 million from $3.2 million in the comparable<br> year-ago period. The increase in subscription revenue was primarily attributable to the growth<br> in the Company’s reseller customer base, particularly in North America, together with<br> revenues associated with new products. |
| --- | --- |
| ○ | Advertising revenue remained steady at approximately $316,000 in both the current and comparable<br> year-ago period. |
| --- | --- |
| ○ | Data revenue increased 34.1% to $872,000 from $650,000 in the comparable year-ago<br> period. The increase was primarily attributable to sales to new data partners. |
| ○ | Services revenue increased 94.9% to $169,000 from $87,000 in the comparable year-ago period.<br> The increase is due to the migration of websites from the Company’s existing platform<br> to its new technology platform which was completed in June 2023. |
| ● | Cost of sales decreased 16.0% to $1.4 million from $1.7 million in the comparable year-ago<br> period. This decrease is primarily attributed to a reduction in expenses related to third-party<br> “signals” software required in the delivery of our solutions. |
| --- | --- |
| ● | Gross margin for the 2023 fiscal year increased to 73.9% compared to 60.4% for the 2022 fiscal<br> year. The increase in gross margin was mainly due to an increase in subscription and data<br> revenues combined with a reduction in the costs of third-party software used in the delivery<br> of our solutions. |
| ● | Net loss was $3.9 million , or $3.69 per diluted share, compared to a net loss<br> of $5.1 million , or $4.94 per diluted share, in the comparable year-ago period. |
| ● | As<br> of June 30, 2023, the Company had $3.2 million in cash and cash equivalents,<br> compared to $611,000 as of March 31, 2023 and $1.0 million as of December 30, 2022. |
KeyPerformance Indicators (KPIs)
Unlessotherwise specified, KPI data has been recorded as of the 2023 fiscal year end (June 30, 2023). All financial results are reported inAustralian Dollars (AUD).
| ● | Monthly recurring revenue (MRR) for the 2023 fiscal year was $434,000, a 25.9% increase<br> compared to $345,000 for the 2022 fiscal year. MRR for the 2023 fiscal fourth quarter<br> was $398,000, a 3.7% decrease compared to $413,000 for the comparable year-ago period<br> and a 2.5% decrease compared to $407,000 for the 2023 fiscal third quarter. The decreases<br> in MRR over the prior year and quarter are due to the Company providing billing relief to<br> customers during its broad upgrade to the Platform. |
|---|---|
| ● | Total active reseller count for the 2023 fiscal year was 107 resellers, a 13.0% decrease compared<br> to 123 resellers as of June 30, 2022, and a 14.4% decrease compared to 125 resellers as of<br> March 31, 2023. While the total number of resellers has decreased, the Company has shifted<br> its reseller focus to larger resellers in recent months, and expects to continue prioritizing<br> high-volume resellers moving forward. |
| ● | Total end user count for the 2023 fiscal year was 1,129 end users, an 8.7% increase compared<br> to 1,039 end users as of June 30, 2022, and a 10.4% decrease compared to 1,260 end users<br> as of March 31, 2023. |
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 viewsthese metrics as relevant indicators of the performance of Locafy technology. The Company may introduce additional KPIs in future quartersif 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
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All values are in US Dollars.
LocafyLimited
ConsolidatedStatement of Financial Position
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All values are in US Dollars.
LocafyLimited
ConsolidatedStatement of Cash Flows
(Unaudited)
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All values are in US Dollars.