− Awarded DAS rights at San Diego State
University’s Aztec Stadium
− Deployed first known Wi-Fi 6 network at São
Paulo/Guarulhos International Airport
Boingo Wireless (NASDAQ: WIFI), the leading distributed antenna
system (“DAS”) and Wi-Fi provider that serves carriers, consumers,
property owners and advertisers worldwide, today announced the
Company's financial results for the third quarter ended September
30, 2020.
Third Quarter 2020 Financial Highlights
- Revenue of $58.8 million increased modestly compared to $58.7
million in the second quarter of 2020 and decreased 9.2% compared
to $64.7 million in the third quarter of 2019.
- Military/multifamily revenue of $23.8 million increased 0.4%
compared to $23.7 million in the second quarter of 2020 and
increased 0.7% compared to $23.6 million in the third quarter of
2019.
- DAS revenue of $21.9 million decreased 1.5% compared to $22.2
million in the second quarter of 2020 and decreased 7.7% compared
to $23.7 million in the third quarter of 2019. DAS revenue for the
third quarter of 2020 was comprised of $13.7 million of build-out
project revenue and $8.2 million of access fee revenue. DAS revenue
for the third quarter of 2019 included $1.8 million of one-time
access fees.
- Wholesale Wi-Fi revenue of $10.1 million increased 4.2%
compared to $9.7 million the second quarter of 2020 and decreased
9.7% compared to $11.2 million in the third quarter of 2019.
- Retail revenue of $2.1 million decreased 13.0% compared to $2.4
million in the second quarter of 2020 and decreased 43.5% compared
to $3.6 million in the third quarter of 2019.
- Advertising and other revenue of $0.9 million increased 34.3%
compared to $0.7 million in the second quarter of 2020 and
decreased 64.0% compared to $2.5 million in the third quarter of
2019.
- Net loss attributable to common stockholders was $(2.9)
million, or $(0.07) per diluted share, compared to a net loss of
$(5.8) million, or $(0.13) per diluted share, in the second quarter
of 2020, and a net loss of $(0.2) million, or break-even per
diluted share, in the third quarter of 2019.
- Adjusted EBITDA of $22.5 million increased 5.7% compared to
$21.3 million in the second quarter of 2020 and increased 2.9%
compared to $21.9 million in the third quarter of 2019. Adjusted
EBITDA, which is a non-GAAP financial measure, is defined below and
is reconciled to net loss attributable to common stockholders, the
most comparable measure under GAAP, in the schedule entitled
“Reconciliation of Net Loss Attributable to Common Stockholders to
Adjusted EBITDA.”
- Net cash provided by operating activities of $18.2 million
decreased 34.0% compared to $27.7 million in the second quarter of
2020 and decreased 62.1% compared to $48.1 million in the third
quarter of 2019.
- Free cash flow was $(15.9) million compared to $(1.4) million
in the second quarter of 2020 and $20.5 million in the third
quarter of 2019. Free cash flow, which is a non-GAAP financial
measure, is defined below and is reconciled to net cash provided by
operating activities, the most comparable measure under GAAP, in
the schedule entitled "Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flows."
- Cash, cash equivalents and marketable securities were $54.6
million at September 30, 2020 down from $172.0 million at June 30,
2020. During the quarter ended September 30, 2020, the Company
repaid $100.0 million of amounts outstanding under its revolving
credit facility. As of September 30, 2020, the Company had no
amounts outstanding and $150.0 million of remaining borrowing
capacity under its revolving credit facility.
Management Commentary
“In the third quarter of 2020, we generated modestly higher
revenue of $58.8 million and a 5.7% increase in adjusted EBITDA to
$22.5 million compared to the prior quarter,” commented Mike
Finley, Chief Executive Officer, Boingo Wireless. “We continue to
win new business including long-term DAS rights for the new Aztec
Stadium at San Diego State University, a Wi-Fi 6 network deployment
at São Paulo/Guarulhos International Airport and six new
multifamily properties. In addition, with over 130 site
applications for our emerging tower business, we remain laser
focused on deployments to meet increasing demand. We believe our
nearly 20 years of experience in both licensed and unlicensed
spectrum, combined with our neutral-host approach, gives us a
unique and defensible business model in this 5G era.”
Mr. Finley continued, “In regard to a potential strategic
transaction, there continues to be strong interest and engagement
from multiple parties. We continue to run the strategic review
process to evaluate opportunities that we believe would be in the
best interest of our stockholders. While the process continues, we
remain focused on the day-to-day execution against the
extraordinary opportunities in front of us.”
Business Highlights
- The Company signed a long-term agreement with San Diego State
University (“SDSU”) to design, install, operate and maintain a
neutral host cellular DAS network at the new SDSU Aztec football
stadium.
- The Company announced the deployment of the first known
airport-wide Wi-Fi 6 network at São Paulo/Guarulhos International
Airport (“GRU”), which utilizes the most advanced 802.11ax Wi-Fi
technology and Passpoint to deliver fast speeds and low
latency.
- The Company continues to be encouraged by its emerging tower
business and the carrier demand to join cell sites on military
bases as evidenced by over 130 site applications.
- The Company launched managed Wi-Fi services at The Reef at
Winkler, a new luxury multifamily community owned by MJ Development
Southeast and managed by Greystar in Fort Myers, Florida.
- As of September 30, 2020, the Company had a total of 73 DAS
venues live comprised of 40,800 DAS nodes and an additional 11,600
nodes in backlog. This compares to 71 venues live comprised of
37,200 nodes as of September 30, 2019.
Business Outlook
Management is continuing to work with its Board of Directors and
advisors to assess opportunities related to a potential strategic
transaction. As a result of the ongoing strategic process and the
significant economic impact and high degree of uncertainty
surrounding the pandemic, the Company is maintaining its suspension
of forward-looking financial guidance until further notice.
Conference Call Information
Members of Boingo Wireless’ management will host a conference
call to discuss their third quarter 2020 financial results
beginning at 4:30 p.m. ET (1:30 p.m. PT), today, November 9, 2020.
To participate in the conference call, investors from the U.S. and
Canada should dial (877) 407-9716 and enter the passcode: 13711850
ten minutes prior to the scheduled start time. International
callers should dial +1 (201) 493-6779 and enter the same passcode.
The conference call will be broadcast live over the Internet in the
Investor Relations section of the Company’s website at
http://investors.boingo.com. In addition, a supplement reflecting
the Company’s key business metrics will be made available in the
Investor Relations section of the Company’s website. The supplement
and webcast will be archived online upon completion of the
conference call.
Use of Non-GAAP Financial Measures
To supplement Boingo Wireless’ financial statements presented on
a GAAP basis, Boingo Wireless provides Adjusted EBITDA and free
cash flow as supplemental measures of its performance.
The Company defines Adjusted EBITDA as net loss attributable to
common stockholders plus depreciation and amortization of property
and equipment, stock-based compensation expense, amortization of
intangible assets, income tax expense, interest expense and
amortization of debt discount, interest income and other expense,
net, non-controlling interests, and excludes charges or gains that
are nonrecurring, infrequent, or unusual. Boingo Wireless believes
Adjusted EBITDA is useful to investors in evaluating its operating
performance. Boingo's management uses Adjusted EBITDA in
conjunction with accounting principles generally accepted in the
United States, or GAAP, and other operating performance measures as
part of its overall assessment of the Company's performance for
planning purposes, including the preparation of its annual
operating budget, to evaluate the effectiveness of its business
strategies and to communicate with its board of directors
concerning its financial performance. Adjusted EBITDA should not be
considered as an alternative financial measure to net loss
attributable to common stockholders, which is the most directly
comparable financial measure calculated in accordance with GAAP, or
any other measure of financial performance calculated in accordance
with GAAP. Adjusted EBITDA for 2020 excludes transaction costs and
litigation loss contingencies because they represent non-recurring
charges and are not indicative of the underlying performance of the
Company’s business operations.
The Company defines free cash flow as net cash provided by
operating activities, less purchases of property and equipment.
Boingo Wireless believes that free cash flow provides investors
with additional useful information to measure operating liquidity
because it reflects the amount of cash generated by the Company's
operations after the purchases of property and equipment that can
be used for strategic opportunities. Free cash flow should not be
considered as an alternative financial measure to net cash provided
by operating activities, which is the most directly comparable
financial measure calculated in accordance with GAAP, or any other
measure of financial performance calculated in accordance with
GAAP.
About Boingo Wireless
Boingo Wireless, Inc. (NASDAQ: WIFI) helps the world stay
connected. Our vast footprint of DAS, Wi-Fi and small cells reaches
more than a billion people annually, making Boingo one of the
largest providers of indoor wireless networks. You’ll find Boingo
connecting people at airports, stadiums, military bases, convention
centers, multifamily communities and commercial properties. To
learn more about the Boingo story, visit www.boingo.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
involves risks, uncertainties and assumptions. Forward-looking
statements can be identified by words such as "anticipates,"
"intends," "plans," "seeks," "believes," "estimates," "expects" and
similar references to future periods. These forward-looking
statements include the quotations from management in this press
release, as well as any statements regarding Boingo's future growth
opportunities, operations and financial performance, including due
to COVID-19, strategic plans and transactions and any future
guidance. Forward-looking statements are based on the Company's
current expectations and assumptions regarding its business, the
economy and other future conditions. Since forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. The Company's actual results may differ
materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include the impact of health epidemics, including the recent
COVID-19 pandemic, on the Company’s business, the Company's ability
to maintain its existing relationships and establish new
relationships with venue partners, its ability to complete
build-outs and sign venue contracts, its ability to achieve and
maintain revenue growth and achieve profitability, its ability to
execute on its strategic and business plans, its ability to
successfully compete with new technologies and adapt to changes in
the wireless industry, as well as other risks and uncertainties
described more fully in documents filed with or furnished to the
Securities and Exchange Commission (SEC), including Boingo's Form
10-K for the year ended December 31, 2019 filed with the SEC on
March 2, 2020, Form 10-Q for the quarter ended March 31, 2020 filed
with the SEC on May 8, 2020, Form 10-Q for the quarter ended June
30, 2020 filed with the SEC on August 7, 2020, and Form 10-Q for
the quarter ended September 30, 2020 filed with the SEC on November
9, 2020, which the Company incorporates by reference into this
press release. Any forward-looking statement made by Boingo in this
press release speaks only as of the date on which it is made.
Factors or events that could cause the Company's actual results to
differ may emerge from time to time, and it is not possible for
Boingo to predict all of them. Boingo undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by law.
Boingo, Boingo Wi-Finder, Boingo Broadband, and the Boingo
Wireless Logo are registered trademarks of Boingo Wireless, Inc.
All other trademarks are the properties of their respective
owners.
Boingo Wireless, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenue
$
58,754
$
64,707
$
177,312
$
199,734
Costs and operating expenses:
Network access
28,458
29,155
85,102
90,368
Network operations
12,907
13,682
39,743
42,073
Development and technology
6,277
8,182
19,760
25,534
Selling and marketing
4,903
5,721
16,334
17,782
General and administrative
5,878
5,021
19,917
20,330
Amortization of intangible assets
1,060
1,103
3,276
3,365
Total costs and operating expenses
59,483
62,864
184,132
199,452
(Loss) income from operations
(729
)
1,843
(6,820
)
282
Interest expense and amortization of debt
discount
(2,282
)
(2,191
)
(7,404
)
(6,741
)
Interest income and other expense, net
101
388
476
1,600
(Loss) income before income taxes
(2,910
)
40
(13,748
)
(4,859
)
Income tax expense
(109
)
(143
)
(225
)
(254
)
Net loss
(3,019
)
(103
)
(13,973
)
(5,113
)
Net (loss) income attributable to
non-controlling interests
(108
)
84
(589
)
11
Net loss attributable to common
stockholders
$
(2,911
)
$
(187
)
$
(13,384
)
$
(5,124
)
Net loss per share attributable to common
stockholders:
Basic
$
(0.07
)
$
0.00
$
(0.30
)
$
(0.12
)
Diluted
$
(0.07
)
$
0.00
$
(0.30
)
$
(0.12
)
Weighted average shares used in computing
net loss per share attributable to common stockholders:
Basic
44,505
44,136
44,390
43,904
Diluted
44,505
44,136
44,390
43,904
Boingo Wireless, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands, except per
share amounts)
September 30,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
46,972
$
40,401
Marketable securities
7,580
40,214
Accounts receivable, net
18,760
33,350
Prepaid expenses and other current
assets
10,378
8,235
Total current assets
83,690
122,200
Property and equipment, net
399,293
380,243
Operating lease right-of-use assets,
net
13,433
15,196
Goodwill
58,579
58,579
Intangible assets, net
11,664
14,940
Other assets
11,757
9,309
Total assets
$
578,416
$
600,467
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
19,576
$
24,298
Accrued expenses and other liabilities
54,264
65,152
Deferred revenue
65,976
61,229
Current portion of operating leases
2,620
2,695
Current portion of long-term debt
778
778
Current portion of finance leases
1,147
2,721
Current portion of notes payable
218
1,527
Total current liabilities
144,579
158,400
Deferred revenue, net of current
portion
164,794
166,660
Long-term portion of operating leases
15,216
17,357
Long-term debt
169,382
162,708
Long-term portion of finance leases
—
572
Long-term portion of notes payable
—
95
Deferred tax liabilities
1,005
993
Other liabilities
184
201
Total liabilities
495,160
506,986
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000
shares authorized; no shares issued and outstanding
—
—
Common stock, $0.0001 par value; 100,000
shares authorized; 44,526 and 44,224 shares issued and outstanding
at September 30, 2020 and December 31, 2019, respectively
4
4
Additional paid-in capital
239,766
234,638
Accumulated deficit
(154,357
)
(140,973
)
Accumulated other comprehensive loss
(2,656
)
(1,426
)
Total common stockholders’ equity
82,757
92,243
Non-controlling interests
499
1,238
Total stockholders’ equity
83,256
93,481
Total liabilities and stockholders’
equity
$
578,416
$
600,467
Boingo Wireless, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
2020
2019
Cash flows from operating
activities
Net loss
$
(13,973
)
$
(5,113
)
Adjustments to reconcile net loss
including non-controlling interests to net cash provided by
operating activities:
Depreciation and amortization of property
and equipment
58,198
52,750
Amortization of intangible assets
3,276
3,365
Impairment loss, loss on disposal of fixed
assets and intangible assets held for sale, net, and other
15
277
Stock-based compensation
5,534
6,434
Amortization of deferred financing costs
and debt discount, net of amounts capitalized
6,776
6,554
Non-cash operating lease cost
1,762
1,675
Gains and amortization of
premiums/discounts for marketable securities
2
(522
)
Change in fair value of contingent
consideration
—
(961
)
Bad debt expense
28
187
Change in deferred income taxes
(12
)
—
Changes in operating assets and
liabilities:
Accounts receivable
14,180
(6,974
)
Prepaid expenses and other assets
(5,116
)
946
Accounts payable
(336
)
532
Accrued expenses and other liabilities
(6,071
)
5,394
Deferred revenue
2,881
18,523
Operating lease liabilities
(2,214
)
(1,996
)
Net cash provided by operating
activities
64,930
81,071
Cash flows from investing
activities
Purchases of marketable securities
(15,032
)
(73,323
)
Proceeds from maturities of marketable
securities
47,665
37,293
Purchases of property and equipment
(85,819
)
(101,455
)
Net cash used in investing activities
(53,186
)
(137,485
)
Cash flows from financing
activities
Debt issuance costs
—
(1,815
)
Proceeds from credit facility
100,000
3,500
Principal payments on credit facility
(100,584
)
(584
)
Payments of acquisition related
consideration
—
(3,027
)
Proceeds from exercise of stock
options
447
154
Repurchase of common stock for
retirement
—
(747
)
Payments of finance leases and notes
payable
(3,548
)
(5,162
)
Payments of withholding tax on net
issuance of restricted stock units
(1,350
)
(34,123
)
Payments to non-controlling interest
(262
)
(1,003
)
Net cash used in financing activities
(5,297
)
(42,807
)
Effect of exchange rates on cash
124
(9
)
Net increase (decrease) in cash and cash
equivalents
6,571
(99,230
)
Cash and cash equivalents at beginning of
period
40,401
149,412
Cash and cash equivalents at end of
period
$
46,972
$
50,182
Supplemental disclosure of non-cash
investing and financing activities
Property and equipment costs included in
accounts payable, accrued expenses and other liabilities
$
30,046
$
35,515
Capitalized stock-based compensation
included in property and equipment costs
$
497
$
689
Financed sale of intangible assets held
for sale
$
224
$
300
Boingo Wireless, Inc.
Reconciliation of Net Loss
Attributable to Common Stockholders to Adjusted EBITDA
(Unaudited)
(In thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Net loss attributable to common
stockholders
$
(2,911
)
$
(187
)
$
(13,384
)
$
(5,124
)
Depreciation and amortization of property
and equipment
20,023
16,867
58,198
52,750
Stock-based compensation expense
2,017
2,054
5,534
6,434
Amortization of intangible assets
1,060
1,103
3,276
3,365
Income tax expense
109
143
225
254
Interest expense and amortization of debt
discount
2,282
2,191
7,404
6,741
Interest income and other expense, net
(101
)
(388
)
(476
)
(1,600
)
Non-controlling interests
(108
)
84
(589
)
11
Transaction costs
121
—
1,193
—
Litigation loss contingencies
—
—
1,100
—
Adjusted EBITDA
$
22,492
$
21,867
$
62,481
$
62,831
Boingo Wireless, Inc.
Reconciliation of Net Cash
Provided by Operating Activities to Free Cash Flows
(Unaudited)
(In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net cash provided by operating
activities
$
18,241
$
48,099
$
64,930
$
81,071
Purchases of property and equipment
(34,138
)
(27,603
)
(85,819
)
(101,455
)
Free cash flows
$
(15,897
)
$
20,496
$
(20,889
)
$
(20,384
)
Boingo Wireless, Inc.
Revenue Summary
(Unaudited)
(In thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenue:
Military/multifamily
$
23,806
$
23,641
$
70,226
$
73,934
DAS
21,877
23,714
66,287
75,431
Wholesale—Wi-Fi
10,110
11,200
29,559
32,938
Retail
2,060
3,646
7,387
11,419
Advertising and other
901
2,506
3,853
6,012
Total revenue
$
58,754
$
64,707
$
177,312
$
199,734
Boingo Wireless, Inc.
Key Business Metrics
(Unaudited)
(In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Key business metrics:
DAS nodes (1)
40.8
37.2
40.8
37.2
DAS nodes in backlog (2)
11.6
12.1
11.6
12.1
Subscribers—military (3)
136
137
136
137
Subscribers—retail (3)
49
85
49
85
Connects (4)
28,310
89,291
108,572
253,757
(1)
This metric represents the number of
active DAS nodes as of the end of the period. A DAS node is a
single communications endpoint, typically an antenna, which
transmits or receives radio frequency signals wirelessly. This
measure is an indicator of the reach of the Company’s DAS
network.
(2)
This metric represents the number of DAS
nodes under contract but not yet active as of the end of the
period.
(3)
This metric represents the number of
paying customers who are on a month-to-month subscription plan at a
given period end.
(4)
This metric shows how often individuals
connect to the Company’s global Wi-Fi network in a given period.
The connects include wholesale and retail customers in both
customer pay locations and customer free locations where Boingo is
a paid service provider or receives sponsorship or promotion fees.
The Company counts each connect as a single connect regardless of
how many times that individual accesses the network at a given
venue during their 24-hour period. This measure is an indicator of
paid activity throughout Boingo’s network.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201109006121/en/
PRESS: Melody Walker Senior
Director, Marketing Communications mwalker@boingo.com (424)
256-7036
INVESTORS: Kimberly Orlando
and Ariel Papermaster ADDO Investor Relations investors@boingo.com
(310) 829-5400
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