8-K
Zedge, Inc. (ZDGE)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported): December 13, 2022
Zedge,Inc.
(Exactname of registrant as specified in its charter)
| Delaware | 1-37782 | 26-3199071 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 1178 Broadway**, Ste. 1450 (3^rd^ Floor)**<br><br> <br>New York, NY | 10001 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code: (330) 577-3424
Not
Applicable
(Formername or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on<br><br> <br>which registered |
|---|---|---|
| Class B common stock,<br> par value $0.01 per share | ZDGE | NYSE<br> American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.02. Results of Operations and Financial Condition
On December 13, 2022, Zedge, Inc. (the “Registrant”) issued a press release announcing its results of operations for its fiscal quarter ended October, 31, 2022. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The Registrant is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC unless otherwise expressly stated in such filing. In addition, this Report and the press release contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the press release.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Document |
|---|---|
| 99.1 | Earnings Release, dated December 13, 2022, reporting the results of operations for Zedge, Inc.’s fiscal quarter ended October 31, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURE
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 hereunto duly authorized.
| ZEDGE, INC. | |
|---|---|
| By: | /s/ Jonathan Reich |
| Name: | Jonathan Reich |
| Title: | Chief Executive Officer |
Dated: December 13, 2022
2
EXHIBIT
INDEX
| Exhibit No. | Document |
|---|---|
| 99.1 | Earnings Release, dated December 13, 2022, reporting the results of operations for Zedge, Inc.’s fiscal quarter ended October 31, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
3
Exhibit 99.1
Zedge Announces First Quarter Fiscal 2023 Results
New York, NY – December 13, 2022: Zedge, Inc. (NYSE AMERICAN: ZDGE), a leader in building marketplaces and games around digital content that enable self-expression, today announced results for its first quarter fiscal year 2023, ended October 31, 2022.
“The first quarter has traditionally been a seasonally slower period, and our performance was largely in-line with our expectations with positive Adjusted EBITDA*^1^* and Cash Flow from Operations,” said Jonathan Reich, chief executive officer. “The biggest divergence resulted from some advertisers optimizing user acquisition campaigns against different attributes resulting in lower spending in the Zedge App. The good news on that front is that spending by these advertisers improved by the end of the quarter.”
First Quarter Highlights
Financial (fiscal 2023 compared to fiscal 2022)
| ● | Revenue increased 14.5% to $6.9 million; |
|---|---|
| ● | Net loss and loss per share of ($0.2) million and ($0.01), respectively; |
| ● | Adjusted EBITDA of $1.0 million; |
| ● | Cash flow from operations of $1.1 million; and |
| ● | Zedge Premium Gross Transaction Value (GTV)^2^decreased 5.1% to<br>$0.3 million. |
Business
Zedge App
| ● | ‘MyZedge’ suite of social and community features within the Zedge<br>App is driving higher ARPMAU (average revenue per monthly active users) amongst registered users; |
|---|---|
| ● | Upgraded the Zedge App product management team with a focus on subscriptions,<br>user growth initiatives in well-developed markets, and scaling in-app purchases. |
GuruShots
| ● | Expanded paid user acquisition (PUA) campaigns to across additional platforms<br>that have the potential to drive growth; |
|---|---|
| ● | Began testing the ‘Learn’ which offers users short-form instructional<br>videos to improve their photographic technique. |
Emojipedia
| ● | Benefited from work done in FY22 (localizing into 18 new languages, UX overhaul,<br>ad mediation migration, etc.) with a return to revenue growth. |
|---|---|
| ^1^ | Throughout this release, Adjusted EBITDA is a Non-GAAPfinancial measure intended to provide useful information that supplements Zedge’s results in accordance with GAAP. Please referto the Reconciliation of Non-GAAP Financial Measure at the end of this release for an explanation of Zedge’s formulation of AdjustedEBITDA and reconciliations to the most directly comparable GAAP measure. |
| --- | --- |
| ^2^ | We use the following business metrics in this releasebecause we believe they are useful in evaluating Zedge as an investment. |
| --- | --- |
First Quarter Select Financial Metrics: FY23 versus FY22*
| (in $M except for EPS) | Q1 '23 | Q1 '22 | Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Total Revenue | $ | 6.9 | $ | 6.0 | 14.5 | % | |||
| Advertising Revenue | $ | 4.0 | $ | 4.6 | -13.4 | % | |||
| Gaming Revenue | $ | 1.3 | $ | 0.0 | nm | ||||
| Subscription Revenue | $ | 0.9 | $ | 1.0 | -7.2 | % | |||
| Other Revenue | $ | 0.7 | $ | 0.5 | 44.9 | % | |||
| Operating (Loss) Income | (0.2 | ) | $ | 2.6 | nm | ||||
| Operating Margin | -2.9 | % | 42.9 | % | |||||
| Net (Loss) Income | (0.2 | ) | $ | 2.1 | nm | ||||
| Diluted (Loss) Earnings Per Share | -0.01 | $ | 0.14 | nm | |||||
| Adjusted EBITDA | $ | 1.0 | $ | 3.3 | -71.0 | % | |||
| Cash Flow from Operations | $ | 1.1 | $ | 2.7 | -59.8 | % |
nm = not measurable/meaningful
* numbers may not add due to rounding
Select First Quarter Zedge App Metrics: FY23versus FY22*
| (in MM except for ARPMAU and where noted) | Q1 '23 | Q1 '22 | Change | ||||
|---|---|---|---|---|---|---|---|
| Total Installs - Cumulative | 583.0 | 525.6 | 10.9 | % | |||
| MAU | 31.9 | 34.2 | -6.7 | % | |||
| Well-developed Markets | 7.1 | 8.4 | -15.6 | % | |||
| Emerging Markets | 24.8 | 25.8 | -3.9 | % | |||
| Active Subscriptions (in 000s) | 674 | 763 | -11.7 | % | |||
| ARPMAU | $ | 0.054 | $ | 0.053 | 0.8 | % | |
| Zedge Premium - Gross Transaction Value (GTV) | $ | 0.31 | $ | 0.33 | -5.1 | % |
* numbers may not add due to rounding
2
Trended Financial Information*
| (in $M except for EPS, ARPMAU, Paid Subscriptions) | Q121 | Q221 | Q321 | Q421 | Q122 | Q222 | Q322 | Q422 | Q123 | FY 2021 | FY 2022 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Revenue | $ | 3.8 | $ | 5.3 | $ | 5.3 | $ | 5.2 | $ | 6.0 | $ | 6.9 | $ | 6.2 | $ | 7.4 | $ | 6.9 | $ | 19.6 | $ | 26.5 | |||||||||||
| Advertising Revenue | $ | 3.0 | $ | 4.4 | $ | 4.3 | $ | 4.2 | $ | 4.6 | $ | 5.4 | $ | 4.5 | $ | 4.4 | $ | 4.0 | $ | 15.7 | $ | 18.9 | |||||||||||
| Gaming Revenue | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.3 | $ | 1.4 | $ | 1.3 | $ | 0.0 | $ | 1.7 | |||||||||||
| Subscription Revenue | $ | 0.7 | $ | 0.8 | $ | 0.9 | $ | 1.0 | $ | 1.0 | $ | 1.0 | $ | 0.9 | $ | 0.9 | $ | 0.9 | $ | 3.2 | $ | 3.7 | |||||||||||
| Other Revenue | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.5 | $ | 0.5 | $ | 0.5 | $ | 0.7 | $ | 0.7 | $ | 0.5 | $ | 2.2 | |||||||||||
| Operating (Loss) Income | $ | 1.1 | $ | 2.5 | $ | 2.0 | $ | 2.2 | $ | 2.6 | $ | 3.1 | $ | 1.3 | $ | 4.8 | ($ | 0.2 | ) | $ | 7.8 | $ | 11.8 | ||||||||||
| Net (Loss) Income | $ | 1.0 | $ | 2.3 | $ | 2.4 | $ | 2.5 | $ | 2.1 | $ | 2.3 | $ | 0.8 | $ | 4.5 | ($ | 0.2 | ) | $ | 8.2 | $ | 9.7 | ||||||||||
| Diluted (Loss) Earnings Per Share | $ | 0.08 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.14 | $ | 0.16 | $ | 0.05 | $ | 0.31 | $ | (0.01 | ) | $ | 0.59 | $ | 0.65 | ||||||||||
| Adjusted EBITDA | $ | 1.6 | $ | 3.1 | $ | 2.4 | $ | 2.9 | $ | 3.3 | $ | 4.0 | $ | 2.9 | $ | 2.2 | $ | 1.0 | $ | 9.9 | $ | 12.4 | |||||||||||
| Adjusted EBITDA Margin | 43.8 | % | 57.7 | % | 44.8 | % | 54.6 | % | 54.7 | % | 57.6 | % | 46.0 | % | 30.0 | % | 13.8 | % | 50.7 | % | 46.6 | % | |||||||||||
| Cash Flow from Operations | $ | 1.5 | $ | 2.3 | $ | 4.0 | $ | 2.4 | $ | 2.7 | $ | 3.0 | $ | 5.6 | $ | 0.2 | $ | 1.1 | $ | 10.1 | $ | 11.5 | |||||||||||
| MAU | 32.4 | 35.4 | 34.5 | 34.4 | 34.2 | 36.3 | 32.1 | 32.0 | 31.9 | nm | nm | ||||||||||||||||||||||
| Well-developed Markets | 9.2 | 9.5 | 8.9 | 8.5 | 8.4 | 8.5 | 7.5 | 7.3 | 7.1 | nm | nm | ||||||||||||||||||||||
| Emerging Markets | 23.2 | 25.9 | 25.6 | 25.9 | 25.8 | 27.8 | 24.6 | 24.7 | 24.8 | nm | nm | ||||||||||||||||||||||
| Active Subscriptions (in 000s) | 609 | 711 | 753 | 752 | 763 | 762 | 713 | 692 | 674 | 752 | 713 | ||||||||||||||||||||||
| ARPMAU | $ | 0.036 | $ | 0.049 | $ | 0.049 | $ | 0.050 | $ | 0.053 | $ | 0.060 | $ | 0.052 | $ | 0.058 | $ | 0.054 | nm | nm | |||||||||||||
| Zedge Premium – GTV | $ | 0.21 | $ | 0.21 | $ | 0.25 | $ | 0.27 | $ | 0.33 | $ | 0.43 | $ | 0.41 | $ | 0.34 | $ | 0.31 | $ | 0.95 | $ | 1.51 |
nm = not measurable/meaningful
*numbers may not add due to rounding
| ● | Monthly active users, or MAU, captures the number of unique users thatused our Zedge App during the previous 30-days of the relevant period, is useful for evaluating consumer engagement with our App whichcorrelates to advertising revenue as more users drive more ad impressions for sale. It also allows readers and potential advertisers toevaluate the size of our user base. |
|---|---|
| ● | Zedge Premium Gross Transaction Value, or GTV, is the total dollar amountof transactions conducted through the Zedge Premium Marketplace. As Zedge Premium is an internal focus for growth, we believe that thismetric will help investors evaluate the progress we are making in growing this part of our business. |
| ● | Average Revenue Per Monthly Active User for our Zedge App, or ARPMAU,is a useful statistic in evaluating how well we are monetizing our user base. |
| ● | An Active Subscription is a subscription that has commenced and not beencanceled, including paused subscriptions, and subscriptions in free trials, grace periods, or account hold. |
| ● | Total Installs - Cumulative is a measure of the cumulative number of timesour Zedge App has been downloaded since inception. |
3
Fiscal 2023 Commentary
“Although only halfway through the second quarter, we’re encouraged to see both a continued ad spend rebound and improvement in Zedge Premium’s GTV.
“Additionally, earlier this month, we introduced ‘pAInt,’ an A.I. wallpaper generator in the Zedge App. Although in its early days, our users have already created more than 150,000 images simply by describing what they want in a few words and letting the A.I. engine do the work. We believe this feature has the potential to convert consumers into aspiring creators easily, without the need for them to master the use of complicated graphic arts software to create great, unique content. We believe this feature has the potential to drive user growth and revenue.
“GuruShots also started testing ‘Learn,’ a feed of short-form instructional videos focused on improving photographic techniques. When surveying our users, nearly 70% said they would engage with this content regularly. ‘Learn’ is also our first attempt to introduce a subscription offering to GuruShots’ users. Additionally, we commenced early testing of ‘Battles,’ which offers new users the opportunity to compete in simplified photo challenges that are short, limited in size and built on a coin-based economy. Our goal is to start scaling ‘Battles’ over the next few quarters.
“Finally, when we announced the GuruShots acquisition, we identified multiple opportunities for synergies between the two companies. Yesterday, we announced that we recently began marketing and recruiting initiatives to convert GuruShots players into new Zedge Premium artists. In addition to adding new content to the marketplace, we expect this to expand our portfolio of Zedge Premium artists by offering GuruShots players the opportunity to generate revenue from their photos.
“As we look to the full year, given the overall macro challenges for the global consumer, we remain cautious in our outlook and reiterate our comments from our last earnings call for revenue growth and profits for fiscal 2023. Remember that we still expect to achieve these goals even as we invest in ramping up GuruShots, pAInt and other features to drive longer-term growth and profits,” Reich concluded.
Earnings Announcement and Supplemental Information
Zedge’s earnings release will be filed on Form 8-K and posted on the Zedge investor relations website (investor.zedge.net) at approximately 4:10 p.m. Eastern on December 13, 2022. Management will host an earnings conference call beginning at 4:30 p.m. Eastern. Management’s presentation of the results, outlook and strategy will be followed by Q&A with investors.
Live Call Information:
Toll-Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 869592
Webcast: https://www.webcaster4.com/Webcast/Page/2205/47278
Replay:
Toll-Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 47278
4
About Zedge
Zedge builds marketplaces and games around digital content that people use to express themselves. We monetize our user base through advertising, subscriptions, and a virtual token-based economy. Our leading products are the GuruShots photography game and Zedge’s freemium digital content marketplace, which today offers mobile phone wallpapers, video wallpapers, ringtones, and notification sounds. The synergy between the game and the marketplace unlocks additional engagement and enables our community to earn money from their artwork. We also own Emojipedia, a website that is the leading source of information about emojis. In May 2022, we served more than 40 million users. For more information, visit investor.zedge.net
Forward-Looking Statements
All statements above that are not purely about historicalfacts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,”“plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our currentjudgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statementsdue to numerous important factors. Our filings with the SEC provide detailed information on such statements and risks and should be consultedalong with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.
Contact:
Brian Siegel IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
ir@zedge.net
5
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par valuedata)
| July 31, | |||||
|---|---|---|---|---|---|
| 2022 | |||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 18,419 | $ | 17,085 | ||
| Trade accounts receivable | 2,481 | 2,411 | |||
| Prepaid expenses and other receivables | 601 | 396 | |||
| Total current assets | 21,501 | 19,892 | |||
| Property and equipment, net | 1,789 | 1,660 | |||
| Intangible assets, net | 20,446 | 21,025 | |||
| Goodwill | 10,646 | 10,788 | |||
| Deferred tax assets, net | 861 | 861 | |||
| Other assets | 353 | 400 | |||
| Total assets | 55,596 | $ | 54,626 | ||
| Liabilities and stockholders’ equity | |||||
| Current liabilities: | |||||
| Trade accounts payable | 1,377 | $ | 1,180 | ||
| Deferred acquistion payment payable | - | 962 | |||
| Contingent consideration-current portion | 17 | 215 | |||
| Accrued expenses and other current liabilities | 3,300 | 2,898 | |||
| Deferred revenues | 3,084 | 3,402 | |||
| Total current liabilities | 7,778 | 8,657 | |||
| Term Loan, net of deferred financing costs | 1,982 | - | |||
| Contingent consideration-long term portion | 1,776 | 1,728 | |||
| Other liabilities | 20 | 53 | |||
| Total liabilities | 11,556 | 10,438 | |||
| Commitments and contingencies (Note 10) | |||||
| Stockholders’ equity: | |||||
| Preferred stock, .01 par value; authorized shares—2,400; no shares issued and outstanding | - | - | |||
| Class A common stock, .01 par value; authorized shares—2,600; 525 shares issued and outstanding at October 31, 2022 and July 31, 2022 | 5 | 5 | |||
| Class B common stock, .01 par value; authorized shares—40,000; 13,981 shares issued and 13,777 shares outstanding at October 31, 2022, and 13,951 shares issued and 13,877 ouststanding at July 31, 2022 | 140 | 139 | |||
| Additional paid-in capital | 44,198 | 43,609 | |||
| Accumulated other comprehensive loss | (1,650 | ) | (1,391 | ) | |
| Retained earnings | 1,991 | 2,160 | |||
| Treasury stock, 204 shares at October 31, 2022 and 74 shares at July 31, 2022, at cost | (644 | ) | (334 | ) | |
| Total stockholders’ equity | 44,040 | 44,188 | |||
| Total liabilities and stockholders’ equity | 55,596 | $ | 54,626 |
All values are in US Dollars.
6
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(in thousands, except per sharedata)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| October 31 | ||||||
| 2022 | 2021 | |||||
| Revenues, net | $ | 6,900 | $ | 6,028 | ||
| Costs and expenses: | ||||||
| Direct cost of revenues (excluding amortization of capitalized software and technology development costs which is included below) | 632 | 310 | ||||
| Selling, general and administrative | 5,826 | 2,732 | ||||
| Depreciation and amortization | 793 | 398 | ||||
| Change in fair value of contingent consideration | (150 | ) | - | |||
| (Loss) income from operations | (201 | ) | 2,588 | |||
| Interest and other income, net | 35 | 13 | ||||
| Net loss resulting from foreign exchange transactions | (76 | ) | (10 | ) | ||
| (Loss) income before income taxes | (242 | ) | 2,591 | |||
| (Benefit from) provision for income taxes | (73 | ) | 536 | |||
| Net (Loss) Income | $ | (169 | ) | $ | 2,055 | |
| Other comprehensive (loss) income: | ||||||
| Changes in foreign currency translation adjustment | (259 | ) | 142 | |||
| Total other comprehensive (loss) income | (259 | ) | 142 | |||
| Total comprehensive (loss) income | $ | (428 | ) | $ | 2,197 | |
| (Loss) income per share attributable to Zedge, Inc. common stockholders: | ||||||
| Basic | $ | (0.01 | ) | $ | 0.14 | |
| Diluted | $ | (0.01 | ) | $ | 0.14 | |
| Weighted-average number of shares used in calculation of (loss) income per share: | ||||||
| Basic | 14,330 | 14,281 | ||||
| Diluted | 14,330 | 15,031 |
7
ZEDGE, INC.
CONDENSED CONSOLIDATED STATEMENTSOF CASH FLOWS
(in thousands)
| Three months ended October, 31 | 2022 | 2021 | ||||
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Net (loss) income | $ | (169 | ) | $ | 2,055 | |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||
| Depreciation | 14 | 12 | ||||
| Amortization of intangible assets | 579 | 115 | ||||
| Amortization of capitalzed software and technology development costs | 200 | 271 | ||||
| Amortization of deferred financing costs | - | - | ||||
| Change in fair value of contingent consideration | (150 | ) | - | |||
| Stock-based compensation | 589 | 319 | ||||
| Deferred income taxes | - | - | ||||
| Change in assets and liabilities: | ||||||
| Trade accounts receivable | (70 | ) | (295 | ) | ||
| Prepaid expenses and other current assets | (205 | ) | (279 | ) | ||
| Other assets | 14 | (8 | ) | |||
| Trade accounts payable and accrued expenses | 598 | 522 | ||||
| Deferred revenue | (318 | ) | (18 | ) | ||
| Net cash provided by operating activities | 1,082 | 2,694 | ||||
| Investing activities | ||||||
| Payments for business combination, net of cash acquired | ||||||
| Final payments for asset acquisitions | (962 | ) | - | |||
| Capitalized software and technology development costs and purchase of equipment | (349 | ) | (188 | ) | ||
| Investment in private company | ||||||
| Net cash used in investing activities | (1,311 | ) | (188 | ) | ||
| Financing activities | ||||||
| Proceed from term loan payable | 2,000 | - | ||||
| Payment of deferred financing costs | (18 | ) | - | |||
| Proceeds from exercise of stock options | - | - | ||||
| Purchase of treasury stock in connection with share buyback program and restricted stock vesting | (310 | ) | (232 | ) | ||
| Net cash provided by (used in) financing activities | 1,672 | (232 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (109 | ) | 67 | |||
| Net increase in cash and cash equivalents | 1,334 | 2,341 | ||||
| Cash and cash equivalents at beginning of period | 17,085 | 24,908 | ||||
| Cash and cash equivalents at end of period | $ | 18,419 | $ | 27,249 |
8
Use of Adjusted EBITDA as a Non-GAAP Measure
Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock compensation expense, transaction-related expenses and other non-recurring expenses. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA into reported revenue. These metrics represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that these measures are useful in evaluating our core operating results. However, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity.
| Reconciliation of Adjusted EBITDA to Net (Loss)<br> Income | Q121 | Q221 | Q321 | Q421 | Q122 | Q222 | Q322 | Q422 | Q123 | FY 2021 | FY 2022 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net (Loss) Income | $ | 1.0 | $ | 2.3 | $ | 2.4 | $ | 2.5 | $ | 2.1 | $ | 2.3 | $ | 0.8 | $ | 4.5 | $ | (0.2 | ) | $ | 8.2 | $ | 9.7 | ||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Interest and other income (expense), net | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) | $ | (0.0 | ) |
| Provision for (benefit from) income taxes | $ | 0.0 | $ | 0.3 | $ | (0.5 | ) | $ | (0.1 | ) | $ | 0.5 | $ | 0.7 | $ | 0.4 | $ | 0.2 | $ | (0.1 | ) | $ | (0.2 | ) | $ | 1.9 | |||||||
| Depreciation and amortization | $ | 0.4 | $ | 0.3 | $ | 0.3 | $ | 0.3 | $ | 0.4 | $ | 0.4 | $ | 0.4 | $ | 0.8 | $ | 0.8 | $ | 1.3 | $ | 2.0 | |||||||||||
| EBITDA | $ | 1.4 | $ | 2.9 | $ | 2.3 | $ | 2.7 | $ | 3.0 | $ | 3.4 | $ | 1.6 | $ | 5.5 | $ | 0.5 | $ | 9.3 | $ | 13.5 | |||||||||||
| Change in fair value of contingent consideration | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | (4.0 | ) | $ | (0.2 | ) | $ | 0.0 | $ | (4.0 | ) | ||||||||
| Stock-based compensation | $ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 0.2 | $ | 0.3 | $ | 0.5 | $ | 0.5 | $ | 0.6 | $ | 0.6 | $ | 0.7 | $ | 1.9 | |||||||||||
| Transaction costs related to business combination | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.1 | $ | 0.7 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.9 | |||||||||||
| Adjusted EBITDA | $ | 1.6 | $ | 3.1 | $ | 2.4 | $ | 2.9 | $ | 3.3 | $ | 4.0 | $ | 2.9 | $ | 2.2 | $ | 1.0 | $ | 9.9 | $ | 12.4 |
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