RTB Digital (RTB) Q2 2019 earnings summary

Executive summary

• Q2 2019 revenue rose to $3.31M from $114,925 YoY, while net loss widened to $1.34M from $490K; six-month revenue was $4.28M and net loss $2.64M.

• Payment-processing activity expanded, but gateway fees and commissions kept Q2 gross margin at 8.1%; significant doubt about continued operations was cited amid losses and working-capital needs.

Financial highlights

• Q2 revenue was $3.31M vs. $114,925 YoY; gross profit was $267,725 vs. $97,003, and operating loss was $905,648 vs. $405,691.

• Q2 net loss was $1.34M vs. $490K; basic and diluted loss per share was $0.01 vs. $0.00.

• H1 revenue was $4.28M vs. $114,925; gross profit was $509,390 vs. $97,003, and operating loss was $1.28M vs. $738,506.

• H1 net loss was $2.64M vs. $899,354; loss per share was $0.02 vs. $0.01.

• H1 operating cash flow was $1.84M vs. cash used of $641K, primarily reflecting timing of asset and liability changes.

Outlook and guidance

• FY2020 targets included processing volume above $1B, gross profit of $18M–$20M, and EBITDA of $18M–$20M, contingent on targeted volume and margin.

• Daily processing above $1M was projected within Q2 2020, with daily volumes reaching multimillion dollars by Q4; management cited platform capacity for roughly $90M monthly processing.

• Q1 2020 was described as a return to full-scale operations after Q4 2019 technology investment; upgraded systems were expected to support higher volumes, lower COGS, and improved margins.

• Plans included reducing the client application backlog from more than 2,000 to 200, keeping attrition below 3% vs. then-current rates under 5%, and pursuing a senior-exchange uplisting by Q1 FY2021.