- The stock price of Siyata Mobile Inc. (NASDAQ: SYTA) fell by over 20% pre-market today. This is why it happened.
The stock price of Siyata Mobile Inc. (NASDAQ: SYTA) – a global vendor of Push-to-Talk over Cellular (PoC) devices and cellular booster systems – fell by over 20% pre-market today. Investors are responding negatively to Siyata Mobile announcing its financial results for the three months ended June 30, 2021. All amounts are in U.S. dollars unless otherwise indicated.
Key Financial Highlights for the 3 Months ended June 30, 2021
— Revenues for the 3 months ended June 30, 2021 were $356,979 compared to $2,130,981 in the prior year period. And this negative variance of $1,774,002 (-83%) is due mainly to a one-time merchandise return from a customer in Q2 2021 in the amount of $1,130,128. Without this return, year-over-year sales would have decreased by 30.2% to $1,487,107.
— Revenues for the 6 months ended June 30, 2021 were $4,388,954 compared to $4,414,031 in the prior year period. This negative variance of $25,077 (1%) is due mainly to the aforementioned one-time merchandise return from a customer in Q2 2021. Without this return, year-over-year sales would have increased by 25% to $5,519,082. This increase relates to the 152% increase in booster sales in the United States, specifically in the industrial marketplace, offset by a decrease in sales of rugged handsets.
— Adjusted EBITDA for the 3 months ended June 30, 2021 was ($4,607,747) versus ($541,721) in the prior year period, a negative variance of $4,066,026. And adjusted EBITDA is defined as the net operating loss excluding depreciation and amortization, intangible impairment, goodwill impairment and share-based compensation expense.
— The company experienced a net loss for the 3 months ended June 30, 2021 of ($10,862,538) compared to net loss of ($627,004) in the prior year period, a negative variance of ($10,235,534.). However, there were several non-cash, non-recurring items in the quarter, including an inventory impairment of $1.8M, intangible impairment of $4.3M, and goodwill impairment of $0.8M. And the adjusted net loss would have been $3.9M if these non-cash, non-recurring items were excluded.
— Siyata ended the quarter with $5,819,387 in cash and restricted cash, and $5,355,098 in working capital.
Siyata said it has laid the foundation for greater distribution with expanded partnerships, key new sale hires, and expanded product offerings into North America. And the COVID-19 pandemic slowed the company’s growth plans for 2021 through the second quarter. But business has since resumed in all three product categories. Management is hopeful that this momentum will continue and will continue to utilize its key sales channels with its expanded and refreshed product offerings.
Uniden UV350 – Many large-scale programs were delayed due to the pandemic, thus creating pent up demand for this disruptive solution. And active engagements, including many customer trials, have resumed in 2021 and should translate into robust growth in this product line.
Rugged Handsets – Siyata’s rugged handsets are targeted to the approximately 47 million enterprise task and public sector workers across North America, including those in construction, transport & logistics, manufacturing, energy & utility, public safety, and the federal government. And to date, Siyata has sold its rugged handsets only in international markets. Siyata will expand its footprint in this product category with the launch of the SD7 device, expected to launch in Q4 2021 in North America and in 2022 in Europe. The SD7 is a next generation device and Siyata’s first mission-critical push-to-talk (MCPTT) handset.
Cellular Boosters – The pandemic has helped fuel strong demand for Siyata’s boosters in 2020 and the first half of 2021. And Siyata believes this momentum will accelerate in 2021 with programs with existing customers and expanding opportunities in new verticals. For the first six months of 2021, booster sales increased 152% in the United States, specifically in the industrial marketplace, versus the same period in the prior year.
“While we are disappointed with our financial performance for the quarter, we continue to believe that we are on the path for strong organic growth in the coming quarters coupled with higher gross margins. I reiterate, our goal remains to deliver to our shareholders strong year-over-year revenue growth and to reach profitability in the coming quarters.”
— Siyata CEO Marc Seelenfreund
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.