Tapinator Announces Q1 2023 Financial Results

News provided by

Tapinator, Inc.

May 12, 2023, 16:05 ET

- Revenue Decreases 37% Year-Over-Year to $1.1 Million

- Bookings^* Decrease 36% Year-Over-Year to $1.1 Million

- Net Income Decreases 75% Year-Over-Year to $202k

- Adjusted EBITDA^* Decreases 75% Year-Over-Year to $125k

- Basic and Fully Diluted EPS of $0.07

NEW YORK, May 12, 2023 /PRNewswire/ -- Tapinator, Inc. (OTC: TAPM) ("Tapinator," the "Company," "we," "our" or "us"), a developer and publisher of category leading games for mobile platforms, today announced unaudited financial results for the three months ended March 31, 2023, and the filing of its quarterly report for the periods ended March 31, 2023 and 2022.

The quarterly report and financial statements have been published on OTC Markets and may be found at http://www.otcmarkets.com/stock/TAPM/disclosure. The results provided below replace, in their entirety, any guidance or projections previously issued by the Company.

For the three months ended March 31, 2023, Tapinator achieved revenue and bookings* of approximately $1.1 million, net income of approximately $202,000 and adjusted EBITDA^* of approximately $125,000. The Company's annual revenue, bookings^*, net income and adjusted EBITDA^* represent year-over-year declines of 37%, 36%, 75% and 75%, respectively.

^*A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net income, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.

Financial Highlights

	Three Months Ended
	March 31
	2023	2022	*% Ch.*
GAAP Results:
Revenue	$1,064,853	$1,681,482	-37 %
Operating Income	$18,234	$373,446	-95 %
Net Income	$201,699	$809,829	-75 %
Net Income margin %	19 %	48 %

Net Income Per Share - Basic	$0.07	$0.29	-76 %
Net Income Per Share - Diluted	$0.07	$0.27	-74 %

Weighted avg. common shares outstanding - basic	2,725,439	2,824,810
Weighted avg. common shares outstanding - diluted	2,725,527	2,996,466

Non-GAAP Results:
Bookings:
Category Leading Games	$1,047,223	$1,382,653	-24 %
Rapid-Launch Games	68,060	149,906	-55 %
NFT Publishing	-	205,128	NM⁽¹⁾
Total Bookings	$1,115,283	$1,737,687	-36 %

Adjusted EBITDA	$124,699	$493,851	-75 %
Adjusted EBITDA Margin %	12 %	29 %

⁽¹⁾ Percentage change not meaningful.

Ilya Nikolayev, CEO of Tapinator, commented, "In Q1 2023, we saw a decrease in revenue primarily stemming from the continuing decline of our legacy rapid-launch business and our NFT publishing business. Both of these declines were expected by us and we previously communicated the challenges that we're seeing within these two lines of business. Within our core social casino business, the decrease that we saw is being caused by an industry-wide contraction for mobile gaming. At this point, we believe that the contraction has slowed, and the business has stabilized. Nonetheless, we believe that it is important to seek growth opportunities both within mobile gaming itself as well as externally within industries/markets that are growing rapidly.

From a product perspective, we are happy to report that we continue executing on our product roadmap across our key games, including Video Poker Classic, Keno Vegas, and Lucky Lotto. Features that we launched in Q1 2023 include ongoing improvements to our email marketing system, launching alternate versions of our in-game stores to improve monetization, adding new limited-time events, making improvements to our notification system and many other product initiatives. We will continue to execute on the product side as we explore new areas for growth."

Non-GAAP Financial Measures*

We have provided in this release the non-GAAP financial measures of Bookings and adjusted EBITDA as a supplement to the measures of Revenue and Operating which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings and adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings and adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings and adjusted EBITDA in assessing our performance and when planning, forecasting, and analyzing future periods. We believe Bookings and adjusted EBITDA are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical Bookings and adjusted EBITDA to the most directly comparable GAAP financial measures. Some limitations of Bookings and adjusted EBITDA are as follows:

Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, gain on digital asset dividends & airdrops, gain on sale of digital assets and gain on sale of investments;
Adjusted EBITDA does not reflect income tax expense;
Adjusted EBITDA does not include other income or expenses, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation, amortization, and impairment of capitalized software are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future; and
Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure.

Because of these limitations, you should consider Bookings and adjusted EBITDA, along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss), and our other financial results presented in accordance with GAAP.

NFT500 Supplemental Information – Summary Collection Metrics

	Totals as of 12/31/2022	Q1 2023	Cumulative Totals as of 03/31/2023
# of NFTs Collected	581	110	691
# of NFTs Sold	-54	-80	-134
# of NFTs Held, Cumulatively	527	557	557
Cost of NFTs Collected	$ 2,665,445	$ 142,054	$ 2,807,499
Proceeds from Sale of Collected NFTs	(1,191,354)	(277,504)	(1,468,858)
Proceeds from Sale of Digital Asset Dividends & Airdrops	(185,816)	-	(185,816)
Cost of NFTs Collected, Net of Sales Proceeds	$ 1,288,275	$ (135,450)	$ 1,152,825

Reconciliation of GAAP to Non-GAAP Results

	Three Months Ended March 31
	2023	2022
Reconciliation of Revenue to Bookings:
Revenue	$1,064,853	$1,681,482
Change in deferred revenue	50,430	56,206
Bookings	$1,115,283	$1,737,688

Reconciliation of Net Income to Adjusted EBITDA:
Net income	$201,699	$809,829
Interest income, net	(446)	(322)
Income tax expense, net	37,700	-
Gain on digital asset dividends & airdrops	-	(137,888)
Amortization of software development costs	100,337	75,650
Depreciation and amortization of other assets	3,212	3,630
Gain on sale of digital assets	(220,719)	(293,082)
Gain on sale of investments	-	(5,091)
Stock based compensation	2,916	41,125
Adjusted EBITDA	$124,699	$493,851

About Tapinator

Tapinator Inc. (OTC: TAPM) develops and publishes category leading games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic, Crypto Trillionaire and Keno Vegas. Through our NFT500 platform, we have amassed a significant collection of fine art NFT's. We generate revenues from our mobile games via consumer transactions, including in-app purchases and subscriptions, and through the sale of branded advertisements. Founded in 2013, we are headquartered in New York, with product teams located in North America and Europe.

Forward Looking Statements

To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "opinion," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our belief that the industry-wide contraction for mobile gaming has slowed at this point and the business has stabilized and our belief that it is important to seek growth opportunities both within mobile gaming itself as well as externally within industries/markets that are growing rapidly. Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on October 20, 2021 and as updated from time to time.

CONTACT:
Tapinator Investor Relations
[email protected]
914.930.6232

SOURCE Tapinator, Inc.