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 2024 fiscal first quarter ended September 30, 2023. All financial results are reported in Australian Dollars (AUD).

Recent Operational Highlights

  • Announced an enterprise partnership with Method, an Australian digital marketing agency with local-scale expertise. Method has been using Locafy’s products over several years and has grown to enterprise partner scale through an expanded client network and significant growth. Through this continued partnership, Method will ramp-up its deployment of Locafy’s Entity-Based SEO product suite to further supplement its growth and increase its market share.
  • Announced a strategic partnership with TransUnion to expand Locafy’s publishing network. This partnership will allow for the publication of 17 million business listings in Hotfrog.com, a top-20 free online directory which Locafy acquired in 2016. The collaboration will assist in increasing Locafy’s existing publishing network by 34% to approximately 66 million pages.

Management Commentary“Our fiscal first quarter included several achievements that we believe position our business for strong growth over the rest of fiscal 2024,” said Locafy CEO Gavin Burnett. “Despite a series of billing relief extensions granted to customers impacted by our recent platform upgrades and transitions, we believe we made progress across our growth strategy pillars. We confirmed an enterprise partnership, expanded our publishing network, significantly advanced our cost-efficiency initiatives, and continued driving successful software trials to further validate our technology.

“Since the end of the quarter, we’ve transitioned our focus to accelerating growth and achieving profitability in the upcoming calendar year. We are confident that our recent enterprise partnerships have helped us develop a strong business development pipeline and believe in the significant tailwinds for our technology throughout our industry. We’re encouraged by our demand outlook and look forward to driving continued adoption of our solutions in calendar-year 2024.”

Fiscal First Quarter 2024 Financial ResultsResults compare the 2024 fiscal first quarter end (September 30, 2023) to the 2023 fiscal first quarter end (September 30, 2022) unless otherwise indicated.

  • Total operating revenue decreased 24.3% to $1.1 million from $1.4 million in the comparable year-ago period.
    • Subscription revenue decreased 28.2% to $768,000 from $1.1 million in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, subscription revenue decreased 15.4%. The decrease in subscription revenue was primarily attributable to the Company’s extended billing relief to customers whose campaigns were affected by the transition onto Locafy’s upgraded technology platform (the “Platform”), together with the tapering of the Company’s labor-intensive educational program and Brand Boost products in the near term.
    • Advertising revenue increased 12.2% to $97,000 from $87,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, advertising revenue increased 27.0%.
    • Data revenue decreased 11.0% to $214,000 from $240,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, data revenue increased 2.1%.
    • Services revenue decreased 78% to $9,000 from $40,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, services revenue decreased 87.2%. These decreases are primarily due to comparatively lower custom website builds undertaken by the Company as it completed the transition of its customer base to the Platform.
  • Cost of sales decreased 53.2% to $205,000 from $438,000 in the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, cost of sales decreased 10.8%.
  • Gross margin increased to 81.1% from 69.5% for the comparable year-ago period. Compared to the 2023 fiscal fourth quarter, gross margin remained steady.
  • Net loss was $808,000, or $0.63 per diluted share, compared to a net loss of $1.2 million, or $1.13 per diluted share, in the comparable year-ago period.

Key Performance Indicators (KPIs)Unless otherwise specified, KPI data has been recorded as of the 2024 fiscal first quarter end (September 30, 2023).

  • Monthly recurring revenue (MRR) for the 2024 fiscal first quarter was $360,000, a 21.2% decrease compared to $456,000 for the comparable year-ago period, and a 9.6% decrease compared to $398,000 for the 2023 fiscal fourth quarter.
  • Total active reseller count for the 2024 fiscal first quarter was 99 resellers, a 43.5% increase compared to 69 resellers for the comparable year-ago period, and a 7.5% decrease compared to 107 resellers as of the 2023 fiscal fourth quarter.
  • Total end user count for the 2024 fiscal first quarter was 1,048 end users, a 27.2% decrease compared to 1,440 end users for the comparable year-ago period, and a 7.2% decrease compared to 1,129 end users as of the 2023 fiscal fourth quarter.

For more information, please see Locafy’s investor relations website at investors.locafy.com.

About LocafyFounded 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.

About Key Performance IndicatorsLocafy defines MRR as the value of all recurring subscription contracts with active entitlements as at the end of each month. MRR across a period is the average of each month’s MRR within that period.

Locafy’s recent Platform upgrade caused a significant change to the calculation of average page metrics, and Locafy management no longer views these metrics as relevant indicators of the performance of Locafy technology. The Company may introduce additional KPIs in future quarters if deemed relevant long-term indicators of performance.

Forward-Looking StatementsThis press 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 statements contained 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 similar expressions, or by discussions of strategy, although not all forward-looking statements contain these words. Although the Company believes that 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 speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors and risk factors, including those discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F filed with the SEC on October 11, 2023, and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Investor Relations ContactTom Colton or Chris Adusei-PokuGateway Investor Relations(949) 574-3860LCFY@gateway-grp.com

-Financial Tables to Follow-

Locafy LimitedConsolidated Statement of Profit or Loss and Other Comprehensive Income  
             
    3 months to30 Sep 2023AUD $(unaudited)     3 months to30 Sep 2022AUD $(unaudited)  
Revenue   1,087,642     1,436,807  
Other income   43,860     169,952  
Technology expense   (314,550 )   (514,533 )
Employee benefits expense   (927,342 )   (1,788,103 )
Occupancy expense   (17,461 )   (16,187 )
Advertising expense   (61,134 )   (39,196 )
Consultancy expense   (234,951 )   (146,058 )
Depreciation and amortization expense   (359,639 )   (167,065 )
Other expenses   (3,144 )   (46,299 )
Impairment of financial assets   -     (32,602 )
Operating profit/(loss)   (786,719 )   (1,143,284 )
Financial cost   (21,373 )   (19,948 )
Profit/(Loss) before income tax   (808,092 )   (1,163,232 )
Income tax expense   -     -  
Profit/(Loss) for the period   (808,092 )   (1,163,232 )
             
Other comprehensive income            
Items that will be reclassified subsequently to profit and loss            
Exchange differences on translating foreign operations   15,749     34,530  
Total comprehensive profit/(loss) for the period   (792,343 )   (1,128,702 )
             
Earnings per share            
Basic profit/(loss) per share   (0.63 )   (1.13 )
Diluted profit/(loss) per share   (0.63 )   (1.13 )

Locafy LimitedConsolidated Statement of Financial Position  
                 
  As at30 Sep 2023AUD $(unaudited)     As at30 Jun 2023AUD $(audited)     As at30 Jun 2022AUD $(audited)  
Assets                
Cash and cash equivalents 1,773,145     3,174,700     4,083,735  
Trade and other receivables 1,326,451     1,288,513     1,203,249  
Other assets 301,836     356,782     230,094  
Current assets 3,401,432     4,819,995     5,517,078  
Property, plant and equipment 348,818     380,018     395,999  
Right of use assets 291,577     314,596     406,673  
Intangible assets 3,764,232     3,720,272     2,235,180  
Non-current assets 4,404,627     4,414,886     3,037,852  
Total assets 7,806,059     9,234,881     8,554,930  
                 
Liabilities                
Trade and other payables 2,177,510     2,507,573     1,454,241  
Borrowings 271,600     301,600     308,100  
Provisions 215,450     214,465     473,006  
Accrued expenses 259,830     512,611     511,848  
Lease liabilities 105,222     85,165     32,672  
Contract and other liabilities 153,143     152,211     137,342  
Current liabilities 3,182,755     3,773,625     2,917,209  
Lease liabilities 301,345     332,578     417,744  
Provisions 52,291     48,271     25,988  
Accrued expenses 90,450     90,450     76,504  
Non-current liabilities 444,086     471,299     520,236  
Total liabilities 3,626,841     4,244,924     3,437,445  
Net assets/(liabilities) 4,179,218     4,989,957     5,117,485  
                 
Equity                
Issued capital 47,835,074     47,930,486     45,038,037  
Reserves 2,375,089     2,404,933     5,306,475  
Accumulated losses (46,030,945 )   (45,345,462 )   (45,227,027 )
Total equity/(deficiency) 4,179,218     4,989,957     5,117,485  

Locafy LimitedConsolidated Statement of Cash Flows(Unaudited)  
                   
    3 months to30 Sep 2023AUD $(unaudited)     FY2023AUD $(audited)     FY2022AUD $(audited)  
Cash flows from operating activities                  
Receipts from customers (inclusive of GST)   939,249     4,463,725     3,038,044  
Payments to suppliers and employees (inclusive of GST)   (1,624,006 )   (7,005,510 )   (7,999,866 )
R&D Tax Incentive and government grants   -     386,181     803,042  
Financial cost   (21,373 )   (105,367 )   (81,656 )
Net cash used by operating activities   (706,130 )   (2,260,971 )   (4,240,436 )
                   
Cash flows from investing activities                  
Purchase of intellectual property   (486,955 )   (1,617,446 )   (1,615,192 )
Purchase of property, plant and equipment   -     (2,170 )   (390,339 )
Net cash used by investing activities   (486,955 )   (1,619,616 )   (2,005,531 )
                   
Cash flows from financing activities                  
Proceeds from issue of shares   -     3,295,822     9,979,861  
Payment for share issue costs   (199,668 )   (403,373 )   (639,429 )
Repayment of borrowings   (30,000 )   (6,500 )   (97,500 )
Leasing liabilities   (11,176 )   (32,673 )   (59,419 )
Net cash from financing activities   (240,844 )   2,853,276     9,183,513  
                   
Net increase/(decrease) in cash and cash equivalents   (1,433,929 )   (1,027,311 )   2,937,546  
Net foreign exchange difference   32,374     118,276     495,458  
Cash and cash equivalents at the beginning of the period   3,174,700     4,083,735     650,731  
Cash and cash equivalents at the end of the period   1,773,145     3,174,700     4,083,735  

 

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