Inpixon (NASDAQ: INPX) is a leader in Indoor Positioning Analytics (IPA). Inpixon IPA Sensors are designed to find all accessible cellular, Wi-Fi, and Bluetooth devices anonymously. Paired with a high-performance data analytics platform, this technology delivers visibility, security, and business intelligence on any commercial or government location worldwide.
On Aug 9th, 2018, the company reported financial results for the second quarter ended June 30, 2018 and provided an update on corporate developments.
As per management, the company continues to strengthen its liquidity and overall financial flexibility by significantly reducing its liabilities and increasing stockholders’ equity, allowing it to be able to regain compliance with Nasdaq’s stockholders’ equity requirement.
From an operational perspective, INPX continues to work on repairing and rebuilding its vendor and supplier relationships and anticipate that the value-added reseller (VAR) business will have improved results during the third and fourth quarters of 2018, following the federal government’s busy season in September and October. In fact, INPX’ IPA business did see an increase in revenue as compared to prior quarters for the same period, and the company expects this trend to continue in the second half of the year.
During the second quarter, the company also announced plans to spin-off its VAR business and initiated steps in connection with this transaction by filing a Form 10 Registration Statement and announcing the execution of a Separation & Distribution Agreement with Sysorex, Inc. The sale was completed in early September.
The management believes that the spin-off of the VAR business would allow both companies to focus their resources and energies on their core business plans. Inpixon is now focussing its efforts on the continued growth of its Indoor Positioning Analytics business that is based on proprietary, patented technology with high gross margins.
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Second Quarter 2018 Business Highlights and Recent Developments
- Inpixon consummates $10 million public offering
- Inpixon regains compliance with NASDAQ’s Stockholders’ Equity requirement
- Inpixon announces plans to spin-off value-added reseller segment and recently executed a Separation and Distribution Agreement in anticipation of spin-off
- Inpixon recently provided a technology update on the blockchain, voice-user Interface, artificial intelligence, and Amazon Web Services
- Inpixon continues to expand its international presence with a wave of new channel partnerships in Africa, Central America, North America, United Kingdom, and Portugal
- Inpixon recently reported new customers and shipments both within the U.S. and abroad
- Inpixon partnered with wireless integration expert Genwave Technologies to provide commercial, industrial, and federal customers with bigger, richer data stores
- Inpixon announces the IPA Pod
Analysts tracking the stock believes that Inpixon Indoor Positioning Analytics or IPA, the IPA platform is redefining the indoors by locating all accessible cellular, Wi-Fi and Bluetooth signals using a rapid data mining engine to provide invaluable data delivering greater visibility and intelligence and allowing organizations to improve their decision-making processes and increase productivity.
About the company:
Inpixon is a leader in Indoor Positioning Analytics (IPA). Inpixon IPA Sensors are designed to find all accessible cellular, Wi-Fi, and Bluetooth devices anonymously. Paired with a high-performance data analytics platform, this technology delivers visibility, security, and business intelligence on any commercial or government location worldwide. Inpixon’s products and professional services group help customers take advantage of mobile, big data, analytics, and the Internet of Things (IoT) to uncover the untold stories of the indoors.
Customers & Industry:
Inpixon is the best choice for any business or government serious about greater safety, security and gaining intelligence on its premises. Inpixon’s Indoor Positioning Analytics is based on radically new sensor technology that finds all accessible cellular, Wi-Fi and Bluetooth signals then use a lightning fast data mining engine to allow for invaluable views of the data that is displayed to deliver visibility and business intelligence based on the industry.
Inpixon IPA offers government agencies and commercial entities, the ability to see all mobile devices that correlate to a single identity on a single interface along with in-depth, intelligent analytics. The company offers SaaS or subscription and license-based pricing options providing flexibility to its customers.
About the industry: Business Insider predicts business spending on IoT Solutions will hit 6 trillion by 2021. IPA’s precise detection of universal IoT devices found through cellular Bluetooth, and Wi-Fi signals depict a complete bird’s eye view of indoor zones. Inpixon also expanded its international presence with the new channel and reseller partnerships in Africa, Central America, North America, United Kingdom, and Portugal.
Benefits of IPA:
- Simplify the management of multiple devices & asset types
Inpixon provides a single platform for locating, monitoring, and analyzing the journey of all cellular, Wi-Fi, and Bluetooth devices and assets in an area - See all devices from a single deployment
Detects and locates all devices regardless of make, manufacturer or device type - Improve customer satisfaction
Inpixon improves the accuracy of customer counts, reducing visitor wait times by allowing staffing to match demand - Drive more revenue
Inpixon delivers more accurate footfall and flows analysis in buildings and storefronts allowing you to uncover new revenue opportunities - Improve security
Discover rogue or unknown devices operating in your facility to enforce “no cell phone” policies - Reduce equipment loss
Eliminate losses due to theft and misuse while improving maintenance cycle efficiency
Financial Results:
Second Quarter 2018 Financial Results
- Revenue: Net revenues were $1.8 million for the three months ended June 30, 2018, compared to $15.1 million for the comparable period in the prior year. This $13.3 million decrease, or approximately 88%, is primarily associated with the decline in revenues earned by the Infrastructure Segment as a result of supplier credit issues and a $1.6 million decrease in revenue resulting from an adjustment in the recognition of revenues following the adoption of the new ASC 606 revenue recognition policy beginning in January 2018.
- For the three months ended June 30, 2018, Indoor Positioning Analytics revenue was $1,274,000 compared to $1,156,000 for the prior year period. Infrastructure revenue was $554,000 for the three months ended June 30, 2018, and $13.9 million for the prior year period. The company anticipates that the Infrastructure Segment revenue (which will be retained by Sysorex, Inc. in connection with the spin-off) will start to recover in Q3 2018 and Q4 2018 as it rebuilds its supplier relationships and head into the federal government busy season.
- Gross Profit: Gross profit for the three months ended June 2018 was $1 million versus $3.4 million for the same period in 2017. The gross profit margin for the three months ended June 30, 2018, was 55% compared to 22% during the three months ended June 30, 2017. This increase in gross margin is primarily due to the decrease in lower margin storage and maintenance sales. Indoor Positioning Analytics gross margins for the three months ended June 30, 2018, and 2017 were 71% and 67%, respectively. Gross margins for the Infrastructure segment for the three months ended June 30, 2018, and 2017 was 19%.
- Net Loss: GAAP Net loss attributable to common stockholders of Inpixon for the three months ended June 30, 2018, was $5.9 million compared to $6.4 million for the prior year period. This decrease in loss of $500,000 was attributable to the changes described for the various reporting captions discussed above. GAAP net loss per share for the quarter ended June 30, 2018, was ($1.08), compared to a net loss per share of ($81.26) for the comparable period in 2017.
Key risk factors and potential stock drivers:
- INPX has completed five acquisitions since 2013 and remains exposed to risks and uncertainties related to the acquisition of new businesses
- The company’ business and financial performance for the upcoming quarter would be a key trigger. More importantly, during the third and fourth quarters of 2018, following the federal government’s busy season.
- The company has faced credit challenges in the recent past. Therefore, its ability to prudently manage its credit profile would continue to remain a critical factor.
- The company’ ability to onboard high-technology, a global defence, the federal government, and telecommunications customers, both within the U.S. and abroad.
Stock Chart:
Comments:
- On Wednesday, October 10th, 2018, INPX were at $0.27, on volume of 5.3 million shares exchanging hands. Market capitalization is $15.272 million. The current RSI is at 54.73
- In the past 52 weeks, shares of INPX shave traded as low as $0.103 and as high as $18.300
- At $0.27, shares of INPX are trading above its 50-day moving average (MA) at $0.17 and below its 200-day moving average (MA) at $1.84
- The present support and resistance levels for the stock are at $0.23 & $0.36 respectively.
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