SPACETALK LIMITED For personal use only
ASX Announcement Spacetalk Ltd. (ASX:SPA) 26 April 2022
3QFY22 BUSINESS UPDATE
Highlights
• Wearables Revenue of $3.5 million. 9% growth on pcp
• App ARR3 of $3.8 million. 41% growth on pcp
• Schools Business Revenue of $0.8 million. 26% growth on pcp
• Gross Profit of $2.9 million. 9% growth on pcp
Spacetalk Ltd. (ASX:SPA) ("Spacetalk" or "SPA" or "Company"), developer of innovative technologies that keep families confidently connected, provides an update on is financial and business performance for the three months ending 31 March 2022 ("3QFY22" or "3Q22")4.
Financial Highlights
(Growth rates are compared to 3QFY21, the previous corresponding period, unless otherwise stated.)
Total Revenue $4.3m up 11.3% | Gross Profit Margin 67% | Wearables Revenue $3.5m up 9.0% | Device Sales $2.6m, down 0.4% |
App revenue $0.9m, up 47.6% | App ARR $3.8m, up 40.7% | Total Marketing Expenses $0.5m | Schools Business Revenue $0.8m, up 26.2% |
Cash at Bank as at 31 March 2022 $8.7 million |
1 Some calculations of changes to prior periods may be impacted by rounding.
2 PCP - Previous Corresponding Period.
3 APP ARR = Annualised Recurring Revenue from Spacetalk App monthly subscriptions.
4 Unaudited
Spacetalk Ltd. (ASX:SPA)
ABN 93 091 351 530
The Parks, Suite 13, 154 Fullarton Road, Rose Park, South Australia 5067www.spacetalkwatch.com
For personal use only
GROUP REVENUE BY QUARTER $18.0 $16.0 $4.3 $14.0 $3.0 $12.0 $10.0 $1.1 $3.9 $1.9 $8.0 $8.3 $6.0 $1.7 $5.5 $5.2 $1.4 $4.0 $3.1 $2.0 $4.0 $2.4 $2.7 $0.9 $- FY2019 FY2020 FY2021 FY2022 Q1Q2Q3Q4 | ROLLING 12 MONTH REVENUES $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $- |
TOTAL WEARABLES REVENUE 0.9 0.6 2.6 2.6 0.4 0.6 3Q FY20 3Q FY21 3Q FY22 Device RevenueApp Revenue | APP ARR BY QUARTER $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $- |
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
9102YF 1Q
9102YF 2Q
9102YF 3Q
9102YF 4Q
0202YF 1Q
0202YF 2Q
0202YF 3Q
0202YF 4Q
1202YF 1Q
1202YF 2Q
1202YF 3Q
1202YF 4Q
2202YF 1Q
2202YF 2Q
2202YF 3Q
All figures are in AU$ million.
Spacetalk Ltd. (ASX:SPA)
ABN 93 091 351 530
The Parks, Suite 13, 154 Fullarton Road, Rose Park, South Australia 5067www.spacetalkwatch.com
Commentary
For personal use only
For the three months ending 31 March 2022, Spacetalk achieved total revenue of $4.3 million, an 11.3% increase on pcp. Total revenue for the nine months to end March 2022 exceeds total revenue for the twelve months to end June 2021 by $1.5 million.
Wearables revenue for the three months to end March 2022 was $3.5 million, a 9.0% increase on the prior corresponding quarter. 3Q22 Annualised Recurring Revenue ("ARR") from Spacetalk App monthly subscriptions was $3.8 million, up 40.7% compared to prior corresponding period. Device sales for the quarter were achieved with marketing expenses of $0.5 million compared to $0.3 million in the pcp.
The MGM schools business revenue was $0.8 million for the three months, up 26.6% compared to $0.7 million in the pcp. The schools business continues to be a strong net positive cashflow generator for the Group.
Comparisons to the 3Q21 prior comparable period should be considered in the context of the 2021 launch of the Adventurer watch and accompanying one-off channel 'in fill' sales. Based on internal Company analysis, Spacetalk wearables sold to end consumers ('sell-out') increased by greater than 40% compared to the pcp.
The third quarter of the financial year is also historically the quietest quarter of the financial year. It follows the second quarter which encompasses the Black Friday-Cyber Monday and Christmas sales periods.
Geographic Commentary
Australia-New Zealand - ANZ sales performance was below the Company's expectations.
ANZ revenues were down 34.2% compared to the pcp reflecting mainly one-off Adventurer 3Q21 channel in fill sales. Cautious consumer sentiment also translated into lower retail and telecommunication channel inventory re-fills.
Spacetalk Ltd. (ASX:SPA)
ABN 93 091 351 530
The Parks, Suite 13, 154 Fullarton Road, Rose Park, South Australia 5067www.spacetalkwatch.com
For personal use only
Europe - UK and Nordic region sales growth continues to improve increasing by 367% compared to the pcp. Sales have been promising but have also been slower than expected due to consumer caution flowing from the regional proximity of the Russia-Ukraine war.
North America - The development of Spacetalk's North American business continues. Sales remain modest consistent with the Company's soft launch strategy. Development of new distribution relationships continues to progress as the Company accumulates invaluable on-line and on the ground intelligence.
Conversations continue with potential on-line and physical distribution partners. The scale and heterogeneity of the North American retail and telecommunications market requires a patient approach.
Schools Business
Revenue for the MGM Schools Business for the three months to 31 March 2022 was $0.8 million, compared to $0.7 for the pcp, a 26.2% increase. During the quarter, the Schools Business service agreement with the Western Australian Government was also extended for a further 12 months.
The MGM Schools Business continues to be a strong net cashflow contributor.
Funding and Cash Position
As at 31 March 2022 the Company held cash of $8.7 million.
Distribution
During the quarter, the distribution agreement with Virgin Mobile UK was combined into O2 due to the Virgin and O2 merger. Additionally, the Vodafone Australia distribution agreement was terminated as the arrangement was under performing with inventory being reallocated to higher productivity channels. The financial impact on the Company is immaterial.
Spacetalk Ltd. (ASX:SPA)
ABN 93 091 351 530
The Parks, Suite 13, 154 Fullarton Road, Rose Park, South Australia 5067www.spacetalkwatch.com
For personal use only
The Company continues to discuss distribution opportunities with new mass market retailers and network operators across existing and new geographies. Spacetalk will advise of any confirmed new distribution arrangements.
Corporate Governance Update
In 2Q22, the Company advised that it was undertaking a Governance enhancement project including an expansion of the Board and appointment of an independent non-executive Chair.
In February 2022, the Company announced the appointment of Mr Saurabh Jain as a non-executive Director and the engagement of Russell Reynolds and Associates to lead the search for a non-executive Chair.
The Russell Reynolds search has identified a shortlist of three candidates with whom interviews have commenced. Spacetalk will provide further updates on the recruitment of the Chair as and when available.
The Spacetalk board is also currently establishing Audit and Risk and Nomination and Remuneration Committees of the Board and finalising various corporate governance policies and charters. Once approved, these policies and Committee charters will be posted on the Corporate Governance section of the Spacetalk Investor Centre.
Adventurer 2
Development of Spacetalk's next generation Adventurer watch continues. Design and supply chain work is continuing to ensure that Adventurer 2 can offer a faster, thinner, smaller, and more aesthetically pleasing wearable device with improved battery performance and new hardware functionality. The Company is working towards a product launch in calendar 2023.
Supply Chain and Inventory
Supply chain management continues to be a priority focus for the Company.
Spacetalk Ltd. (ASX:SPA)
ABN 93 091 351 530
The Parks, Suite 13, 154 Fullarton Road, Rose Park, South Australia 5067www.spacetalkwatch.com
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Spacetalk Ltd. published this content on 26 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2022 06:19:04 UTC.
