Kubient Reports First Quarter 2022 Results

Company Records 76% Year-over-Year Increase in Net Revenues

New York, New York, UNITED STATES


NEW YORK, May 16, 2022 (GLOBE NEWSWIRE) -- Kubient, Inc. (NasdaqCM: KBNT, KBNTW) (“Kubient” or the “Company”), a cloud-based software platform for digital advertising, today reported financial results for the first quarter ended March 31, 2022.

First Quarter 2022 and Recent Operational Highlights

  • Achieved 76% year-over-year increase in net revenues
  • Partnered with PubMatic, an independent technology company maximizing customer value by delivering advertising supply chain solutions.
  • Extended contract with Yahoo to become a Kubient demand side partner (“DSP”), opening up Kubient’s pipeline to every global brand that uses the Yahoo platform to buy media.

Management Commentary
"We are proud to have achieved strong first quarter revenues of $1.2 million, a 76% increase year over year,” said Kubient Founder, Chairman, CEO, CSO, and President, Paul Roberts. “Although we hit an encouraging milestone, Q1 was also a period of strategic realignment as we face macroeconomic headwinds with resilience and flexibility. In an effort to maximize the ROI of our existing capital and conserve our cash reserves, we are now actively in a mode of scaling back our expenses, which include optimizing our general overhead and labor force. Despite this event, we feel strongly that our proprietary technology, optimized labor force, and new strategy will mitigate the headwinds and help us effectively operate near a breakeven level.

“In addition to cash conservation, we feel that lowering our expenses will also optimize our on-going M&A strategy. Beyond the inorganic growth method of M&A, we plan to stay the course in efficiently executing against our organic growth strategy by leveraging our technology and expanding base of partners. I trust that the team we assembled, and the technology we engineered will continue to carry forward Kubient's mission of delivering advertising across all channels in an effective, transparent, and fraud protected fashion.”

First Quarter 2022 Financial Results
Net revenues increased 76% to approximately $1.2 million compared to approximately $708,000 in the same period last year. The increase was particularly attributable to net revenues generated related to customer contracts acquired in connection with the acquisition of MediaCrossing in November 2021.

Earlier in the first quarter, the Company determined that it was no longer probable to collect payment from a customer from which it was entitled. Therefore, the Company ceased providing service to the customer on April 6, 2022, while still pursuing collection of payment for the work it had already performed. Kubient only recognized net revenues of approximately $48,000 from this customer in the first quarter, when in reality, it provided additional services of approximately $1.1 million. As of the second quarter, the Company received approximately $600,000 of payments and expects to recognize revenue in future periods for any payments received in excess of the loss accrual more fully described below.

Technology expenses increased to approximately $1.2 million from approximately $520,000 in the same period last year. The year-over-year increase was primarily due to an increase in headcount costs, hosting fees, non-cash stock-based compensation, amortization, and software expenses.

General and administrative expenses increased to approximately $2.2 million compared to approximately $1.3 million in the same period last year. The increase was primarily due to increases of legal fees, including legal fees associated with the legal settlement entered into in March 2022, non-cash stock-based compensation, other professional fees, all partially offset by a reduction in state taxes. 

Regarding the additional line item, Kubient recognized a loss accrual of $790,000 for media costs incurred in February and March 2022 which related to services performed from the aforementioned customer.

GAAP net loss was approximately $3.6 million, or $(0.25) loss per share, compared to a net loss of approximately $1.8 million, or $(0.14) loss per share, in the same period last year.

Adjusted EBITDA loss, a non-GAAP measure, increased to approximately $(3.6) million, compared to an adjusted EBITDA loss of approximately $(1.5) million in the same period last year.

As of March 31, 2022, the Company had a cash balance of approximately $20.7 million.

Conference Call
Kubient will hold a conference call today (May 16, 2022) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

Kubient management will host the conference call, followed by a question and answer period.

Date: Monday, May 16, 2022
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in: 1-877-407-9208
International dial-in: 1-201-493-6784

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Kubient’s website.

A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 23, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13729301

About Kubient
Kubient is a technology company with a mission to transform the digital advertising industry to audience-based marketing. Kubient’s next generation cloud-based infrastructure enables efficient marketplace liquidity for buyers and sellers of digital advertising. The Kubient Audience Marketplace is a flexible open marketplace for advertisers and publishers to reach, monetize and connect their audiences. The Company’s platform provides a transparent programmatic environment with proprietary artificial intelligence-powered pre-bid ad fraud prevention, and proprietary real-time bidding (RTB) marketplace automation for the digital out of home industry. The Audience Marketplace is the solution for brands and publishers that demand transparency and the ability to reach audiences across all channels and ad formats. For additional information, please visit https://kubient.com.

Forward-Looking Statements
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.

Non-GAAP Measures
The Company defines EBITDA as net income (loss) before interest (including non-cash interest), taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation that the Company does not believe reflects the underlying business performance.

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes that because Adjusted EBITDA excludes (a) certain non-cash expenses (such as depreciation, amortization and stock-based compensation) and (b) expenses that are not reflective of the Company’s core operating results over time (such as stock based compensation expense), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period. The Company’s management uses EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for planning and forecasting in future periods, and (c) in communications with the Company’s board of directors concerning the Company’s financial performance. The Company’s presentation of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes EBITDA and Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are (a) they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt, (b) they do not reflect future requirements for capital expenditures or contractual commitments, and (c) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.

Kubient Investor Relations
Gateway Investor Relations
Matt Glover and John Yi
T: 1-949-574-3860
Kubient@gatewayir.com


Kubient, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
 
  For the Three Months Ended
  March 31,
   2022   2021 
     
Net Revenues$1,245,304  $707,757 
     
Costs and Expenses:   
 Sales and marketing 1,333,010   756,950 
 Technology 1,155,699   519,755 
 General and administrative 2,182,549   1,255,572 
 Loss accrual on customer contract 789,605   - 
     
 Total Costs and Expenses 5,460,863   2,532,277 
     
 Loss From Operations (4,215,559)  (1,824,520)
     
Other (Expense) Income:   
 Interest expense (3,872)  (1,634)
 Interest income 2,291   29,309 
 Change in fair value of contingent consideration 589,622   - 
 Other income 26   233 
     
 Total Other Income 588,067   27,908 
     
 Net Loss$(3,627,492) $(1,796,612)
     
 Net Loss Per Share - Basic and Diluted$(0.25) $(0.14)
     
 Weighted Average Common Shares Outstanding -   
 Basic and Diluted 14,256,159   12,617,171 
     


Kubient, Inc.
Condensed Consolidated Balance Sheets
    
 March 31, December 31,
  2022   2021 
 (unaudited)  
Assets   
    
Current Assets:   
Cash and cash equivalents$20,709,044  $24,907,963 
Accounts receivable, net 2,352,463   2,291,533 
Other receivables -   526,070 
Prepaid expenses and other current assets 411,904   495,178 
    
Total Current Assets 23,473,411   28,220,744 
Intangible assets, net 2,789,625   2,946,610 
Goodwill 463,000   463,000 
Property and equipment, net 47,040   44,756 
Deferred offering costs 10,000   10,000 
    
Total Assets$26,783,076  $31,685,110 
    
Liabilities and Stockholders' Equity   
    
Current Liabilities:   
Accounts payable - suppliers$2,474,570  $1,844,544 
Accounts payable - trade 1,050,395   659,362 
Accrued expenses and other current liabilities 851,800   2,493,287 
Deferred revenue 26,719   395,914 
Notes payable 42,066   151,336 
    
Total Current Liabilities 4,445,550   5,544,443 
Contingent consideration 23,378   613,000 
Notes payable, non-current portion 77,407   77,407 
    
Total Liabilities 4,546,335   6,234,850 
    
Commitments and contingencies   
    
Stockholders' Equity:   
Preferred stock, $0.00001 par value; 5,000,000 shares authorized;   
No shares issued and outstanding   
as of March 31, 2022 and December 31, 2021 -   - 
Common stock, $0.00001 par value; 95,000,000 shares authorized;   
14,303,743 and 14,253,948 shares issued and outstanding   
as of March 31, 2022 and December 31, 2021, respectively 143   143 
Additional paid-in capital 52,444,880   52,030,907 
Accumulated deficit (30,208,282)  (26,580,790)
    
Total Stockholders' Equity 22,236,741   25,450,260 
    
Total Liabilities and Stockholders' Equity$26,783,076  $31,685,110 
    


Kubient, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
    
 For the Three Months Ended
 March 31,
  2022   2021 
    
Cash Flows From Operating Activities:   
Net loss$(3,627,492) $(1,796,612)
Adjustments to reconcile net loss to net cash used in operating activities:  
Depreciation and amortization 162,221   77,379 
Change in fair value of contingent consideration (589,622)  - 
Stock-based compensation:   
Common stock 429,811   2,576 
Options 2,295   238,638 
Changes in operating assets and liabilities:   
Accounts receivable (60,930)  913,623 
Other receivable 507,387   - 
Prepaid expenses and other current assets 83,274   (107,093)
Accounts payable - suppliers 630,026   (2,523)
Accounts payable - trade 391,034   (378,411)
Accrued expenses and other current liabilities (1,532,150)  (454,018)
Accrued interest -   1,584 
Deferred revenue (369,195)  - 
    
  Net Cash Used In Operating Activities (3,973,341)  (1,504,857)
    
Cash Flows From Investing Activities:   
Purchase of intangible assets -   (64,072)
Purchase of property and equipment (7,520)  (1,882)
    
  Net Cash Used In Investing Activities (7,520)  (65,954)
    
Cash Flows From Financing Activities:   
Proceeds from exercise of warrants [1] -   9,326,163 
Repayment of PPP loan (109,270)  - 
Repayment of financed director and officer insurance premiums (108,788)  - 
    
  Net Cash (Used In) Provided By Financing Activities (218,058)  9,326,163 
    
  Net (Decrease) Increase In Cash and Cash Equivalents (4,198,919)  7,755,352 
    
Cash and Cash Equivalents - Beginning of the Period 24,907,963   24,782,128 
    
Cash and Cash Equivalents - End of the Period$20,709,044  $32,537,480 
    
[1] Includes gross proceeds of $9,708,038, less issuance costs of $381,875.   


Kubient, Inc. 
Reconciliation of GAAP EBITDA to Non- GAAP Adjusted EBITDA
(Unaudited)
  
 For the Three Months Ended
 March 31,
  2022   2021 
Net Loss$(3,627,492) $(1,796,612)
Interest expense 3,872   1,634 
Interest income (2,291)  (29,309)
Depreciation and amortization 162,221   77,379 
EBITDA (3,463,690)  (1,746,908)
    
Adjustments:   
Stock-based compensation expense 432,656   241,214 
Change in fair value of contingent consideration (589,622)  - 
Adjusted EBITDA$(3,620,656) $(1,505,694)
    
Adjusted Loss Per Share$(0.25) $(0.12)
Weighted Average Common Shares Outstanding -   
Basic and Diluted 14,256,159   12,617,171