$SFET Safe-T Group Reports Strong First Half 2022 Performance with Revenues of $8.8 Million, up 181% Compared to Prior Year
https://www.globenewswire.com/news-release/20...-Year.html
Sequential Quarterly Net Loss Reduced by 33%, Further Reductions Expected to Accelerate Significantly in Third Quarter
Recent Funding Initiatives to Add Over $5 Million on Top of Current Capital Resources to Support Continued Growth
HERZLIYA, Israel, Aug. 31, 2022 (GLOBE NEWSWIRE) -- Safe-T Group Ltd. (Nasdaq: SFET) (TASE: SFET) (“Safe-T” or the “Company”), a global provider of cyber-security and privacy solutions to consumers and enterprises, today announced record financial results for the six-month period ended June 30, 2022.
Key highlights for the six months ended June 30, 2022:
Revenues for the six months ended June 30, 2022 reached a record high of $8,798,000, an increase of 181% compared to the six-month period ended June 30, 2021. In the three months ended June 30, 2022, revenues totaled a record of $4,777,000, an increase of 168% compared to the three months ended June 30, 2021.
Gross profit for the six-month period ended June 30, 2022 amounted to $4,733,000, an increase of 279% compared to the corresponding period in 2021. For the three-month period ended June 30, 2022,gross profit amounted to $2,616,000, an increase of $225% compared to the corresponding period in 2021.
Operating expense reduction efforts resulted in a 33% decrease in net loss in the second quarter of 2022 compared to the first quarter of 2022 (25% on a non-IFRS basis). Ongoing expense reduction efforts are expected to drive improved operational results in the third quarter of 2022.
The Company's privacy enterprises business reached break-even operating results (excluding recently eliminated legal expenses).
“The financial results of the first half of 2022 reflect how effectively we continued to execute our strategy with diversified businesses into the large cybersecurity and privacy markets. We continue to drive significant and sustainable revenue growth while efficiently executing ongoing cost reduction efforts. During May and August, we secured a $2 million non-dilutive credit line facility from a leading Israeli bank and a strategic financing of up to $4 million, which may lead to potential future funding at premium valuations for the Company. Supporting our current level of growth requires investment into our consumer products and into acquiring new customers, and we are extremely proud to have secured additional funding through creative financing initiatives that support the Company’s growth well into 2023, without impacting our shareholders at current market valuations. We believe these achievements are a strong validation of our business model and the long-term potential of Safe-T,” said Shachar Daniel, Chief Executive Officer of Safe-T.
Second Quarter 2022 Highlights and Recent Business Developments:
Strong Continued Growth: Safe-T continued to deliver strong year-over-year financial performance, driven largely by growth in the Company’s consumer and enterprise privacy businesses.
Cost Reduction: Ongoing cost reductions implemented across the business last quarter, as well as the final settlement of patent litigation related to the Company’s enterprise privacy business, will contribute significantly to reduced general and administration costs throughout the remainder of 2022.
Financing Initiatives: In the second quarter, the Company secured a $2 million non-dilutive credit line facility from United Mizrahi-Tefahot Bank Ltd. to support the growth of its consumer privacy solution. In August, Safe-T secured a strategic investment of up to $4 million which will be also utilized to bolster its operations and growth. Led by a former CEO of the Company’s enterprise privacy business subsidiary, this investment features a unique structure to protect shareholders from near-term dilution and is based on a revenue share model on newly acquired customers. The investor is also incentivized to provide additional funding through warrants exercisable at premiums ranging from 135% to 300% of the closing share price at the date of the agreement. The cash available under these financing initiatives, aggregating up to more than $5 million, is in addition to the $4.04 million cash and cash equivalents as of June 30, 2022.
Product Development and Offering: In July, the Company introduced two new products as it further penetrates the global consumer market. Safe-T launched its privacy solution for Windows, allowing it to enter the large desktop computer market with its first product and introduced its privacy solution for Android mobile devices. With these launches, Safe-T can now serve customers across all major hardware platforms including mobile devices running Apple iOS, Android, and personal computers.
“Our strong first half results reinforce our confidence in the prospects and outlook for our business, as our growth strategy continues to build momentum. In the second half of 2022, our team’s focus will be on further building upon the strength of our cybersecurity and privacy business by leveraging the recent funding and our new products to drive additional growth. Over the past four quarters, our Apple iOS offerings have driven continuous record growth. Through the strategic expansion of our consumer portfolio with new solutions for the large, untapped desktop computer and Android markets, Safe-T is now positioned to capitalize on exciting new revenue opportunities. We remain firmly focused on our cost reduction plan, improving the efficiency of the business and together with our new products and investments into our customer acquisition program, we expect to not only drive significant additional revenue growth, but deliver improved financial performance in the months ahead,” concluded Mr. Daniel.
Financial Results for the Three Months Ended June 30, 2022:
Total revenues amounted to $4,777,000 (Q2.2021: $1,784,000). The growth is attributed to the increase in enterprise privacy business revenues and the consolidation of CyberKick’s revenues following the completion of its acquisition on July 4, 2021.
Cost of revenues totaled $2,161,000 (Q2.2021: $979,000). The increase is mainly a result of the consolidation of CyberKick’s cost of revenues, mainly in traffic acquisition costs for third party products.
Research and development expenses totaled $889,000 (Q2.2021: $781,000). The increase is attributed to the consolidation of CyberKick’s research and development expenses and the development of new products, partially offset by a reduction in research and development expenses of the enterprise security segment, due to the Company’s previously announced agreement with TerraZone Ltd.
Sales and marketing expenses totaled $2,624,000 (Q2.2021: $1,308,000). The increase is mainly attributed to the consolidation of CyberKick’s sales and marketing expenses, primarily its media costs, partially offset by a reduction in the sales and marketing expenses of the enterprise security segment, due to the agreement with TerraZone Ltd.
General and administrative expenses totaled $1,998,000 (Q2.2021: $1,488,000). The increase is mainly due to higher professional fees, predominantly legal, in connection with patent-related proceedings brought by and against Bright Data Ltd., which were resolved by settlement on May 17, 2022.
IFRS net loss totaled $3,158,000, or $0.10 basic loss per ordinary share (Q2.2021: net loss of $2,370,000, or $0.09 basic loss per ordinary share).
Non-IFRS net loss totaled $2,523,000, or $0.08 basic loss per ordinary share (Q2.2021: loss of $2,174,000, or $0.08 basic loss per ordinary share).
Financial Results for the Six Months Ended June 30, 2022:
Total revenues amounted to $8,798,000 (H1.2021: $3,131,000). The growth is attributed to the increase in enterprise privacy business revenues and the consolidation of CyberKick’s revenues following the completion of its acquisition on July 4, 2021.
Cost of revenues totaled $4,065,000 (H1.2021: $1,883,000). The increase is mainly a result of the consolidation of CyberKick’s cost of revenues, primarily traffic acquisition costs for third party products.
Research and development expenses totaled $2,283,000 (H1.2021: $1,483,000). The increase is attributed to the consolidation of CyberKick’s research and development expenses and the development of new products, partially offset by a reduction in the research and development expenses of the enterprise security segment, due to the agreement with TerraZone.
Sales and marketing expenses totaled $5,658,000 (H1.2021: $2,430,000). The increase is primarily attributed to the consolidation of CyberKick’s sales and marketing expenses, primarily its media costs, partially offset by a reduction in the sales and marketing expenses of the enterprise security segment, due to the agreement with TerraZone Ltd.
General and administrative expenses totaled $4,249,000 (H1.2021: $2,588,000). The increase is mainly due to higher professional fees, predominantly legal, in connection with patent-related proceedings brought by and against Bright Data Ltd, which were resolved by settlement on May 17, 2022.
IFRS net loss totaled $7,885,000, or $0.26 basic loss per ordinary share (H1.2021: net loss of $4,883,000, or $0.20 basic loss per ordinary share).
Non-IFRS net loss totaled $5,889,000, or $0.19 basic loss per ordinary share (H1.2021: loss of $4,186,000, or $0.17 basic loss per ordinary share).
We define non-IFRS net loss as a loss which excludes, as applicable: (i) amortization and impairment of intangible assets and goodwill; (ii) share-based compensation expense; (iii) issuance costs in connection with our offerings; (iv) changes in fair value of finance liabilities including measurement of contingent consideration and (v) income taxes, starting from the second quarter of 2022 (adjusted retrospectively for all prior periods presented).
https://www.globenewswire.com/news-release/20...-Year.html
Sequential Quarterly Net Loss Reduced by 33%, Further Reductions Expected to Accelerate Significantly in Third Quarter
Recent Funding Initiatives to Add Over $5 Million on Top of Current Capital Resources to Support Continued Growth
HERZLIYA, Israel, Aug. 31, 2022 (GLOBE NEWSWIRE) -- Safe-T Group Ltd. (Nasdaq: SFET) (TASE: SFET) (“Safe-T” or the “Company”), a global provider of cyber-security and privacy solutions to consumers and enterprises, today announced record financial results for the six-month period ended June 30, 2022.
Key highlights for the six months ended June 30, 2022:
Revenues for the six months ended June 30, 2022 reached a record high of $8,798,000, an increase of 181% compared to the six-month period ended June 30, 2021. In the three months ended June 30, 2022, revenues totaled a record of $4,777,000, an increase of 168% compared to the three months ended June 30, 2021.
Gross profit for the six-month period ended June 30, 2022 amounted to $4,733,000, an increase of 279% compared to the corresponding period in 2021. For the three-month period ended June 30, 2022,gross profit amounted to $2,616,000, an increase of $225% compared to the corresponding period in 2021.
Operating expense reduction efforts resulted in a 33% decrease in net loss in the second quarter of 2022 compared to the first quarter of 2022 (25% on a non-IFRS basis). Ongoing expense reduction efforts are expected to drive improved operational results in the third quarter of 2022.
The Company's privacy enterprises business reached break-even operating results (excluding recently eliminated legal expenses).
“The financial results of the first half of 2022 reflect how effectively we continued to execute our strategy with diversified businesses into the large cybersecurity and privacy markets. We continue to drive significant and sustainable revenue growth while efficiently executing ongoing cost reduction efforts. During May and August, we secured a $2 million non-dilutive credit line facility from a leading Israeli bank and a strategic financing of up to $4 million, which may lead to potential future funding at premium valuations for the Company. Supporting our current level of growth requires investment into our consumer products and into acquiring new customers, and we are extremely proud to have secured additional funding through creative financing initiatives that support the Company’s growth well into 2023, without impacting our shareholders at current market valuations. We believe these achievements are a strong validation of our business model and the long-term potential of Safe-T,” said Shachar Daniel, Chief Executive Officer of Safe-T.
Second Quarter 2022 Highlights and Recent Business Developments:
Strong Continued Growth: Safe-T continued to deliver strong year-over-year financial performance, driven largely by growth in the Company’s consumer and enterprise privacy businesses.
Cost Reduction: Ongoing cost reductions implemented across the business last quarter, as well as the final settlement of patent litigation related to the Company’s enterprise privacy business, will contribute significantly to reduced general and administration costs throughout the remainder of 2022.
Financing Initiatives: In the second quarter, the Company secured a $2 million non-dilutive credit line facility from United Mizrahi-Tefahot Bank Ltd. to support the growth of its consumer privacy solution. In August, Safe-T secured a strategic investment of up to $4 million which will be also utilized to bolster its operations and growth. Led by a former CEO of the Company’s enterprise privacy business subsidiary, this investment features a unique structure to protect shareholders from near-term dilution and is based on a revenue share model on newly acquired customers. The investor is also incentivized to provide additional funding through warrants exercisable at premiums ranging from 135% to 300% of the closing share price at the date of the agreement. The cash available under these financing initiatives, aggregating up to more than $5 million, is in addition to the $4.04 million cash and cash equivalents as of June 30, 2022.
Product Development and Offering: In July, the Company introduced two new products as it further penetrates the global consumer market. Safe-T launched its privacy solution for Windows, allowing it to enter the large desktop computer market with its first product and introduced its privacy solution for Android mobile devices. With these launches, Safe-T can now serve customers across all major hardware platforms including mobile devices running Apple iOS, Android, and personal computers.
“Our strong first half results reinforce our confidence in the prospects and outlook for our business, as our growth strategy continues to build momentum. In the second half of 2022, our team’s focus will be on further building upon the strength of our cybersecurity and privacy business by leveraging the recent funding and our new products to drive additional growth. Over the past four quarters, our Apple iOS offerings have driven continuous record growth. Through the strategic expansion of our consumer portfolio with new solutions for the large, untapped desktop computer and Android markets, Safe-T is now positioned to capitalize on exciting new revenue opportunities. We remain firmly focused on our cost reduction plan, improving the efficiency of the business and together with our new products and investments into our customer acquisition program, we expect to not only drive significant additional revenue growth, but deliver improved financial performance in the months ahead,” concluded Mr. Daniel.
Financial Results for the Three Months Ended June 30, 2022:
Total revenues amounted to $4,777,000 (Q2.2021: $1,784,000). The growth is attributed to the increase in enterprise privacy business revenues and the consolidation of CyberKick’s revenues following the completion of its acquisition on July 4, 2021.
Cost of revenues totaled $2,161,000 (Q2.2021: $979,000). The increase is mainly a result of the consolidation of CyberKick’s cost of revenues, mainly in traffic acquisition costs for third party products.
Research and development expenses totaled $889,000 (Q2.2021: $781,000). The increase is attributed to the consolidation of CyberKick’s research and development expenses and the development of new products, partially offset by a reduction in research and development expenses of the enterprise security segment, due to the Company’s previously announced agreement with TerraZone Ltd.
Sales and marketing expenses totaled $2,624,000 (Q2.2021: $1,308,000). The increase is mainly attributed to the consolidation of CyberKick’s sales and marketing expenses, primarily its media costs, partially offset by a reduction in the sales and marketing expenses of the enterprise security segment, due to the agreement with TerraZone Ltd.
General and administrative expenses totaled $1,998,000 (Q2.2021: $1,488,000). The increase is mainly due to higher professional fees, predominantly legal, in connection with patent-related proceedings brought by and against Bright Data Ltd., which were resolved by settlement on May 17, 2022.
IFRS net loss totaled $3,158,000, or $0.10 basic loss per ordinary share (Q2.2021: net loss of $2,370,000, or $0.09 basic loss per ordinary share).
Non-IFRS net loss totaled $2,523,000, or $0.08 basic loss per ordinary share (Q2.2021: loss of $2,174,000, or $0.08 basic loss per ordinary share).
Financial Results for the Six Months Ended June 30, 2022:
Total revenues amounted to $8,798,000 (H1.2021: $3,131,000). The growth is attributed to the increase in enterprise privacy business revenues and the consolidation of CyberKick’s revenues following the completion of its acquisition on July 4, 2021.
Cost of revenues totaled $4,065,000 (H1.2021: $1,883,000). The increase is mainly a result of the consolidation of CyberKick’s cost of revenues, primarily traffic acquisition costs for third party products.
Research and development expenses totaled $2,283,000 (H1.2021: $1,483,000). The increase is attributed to the consolidation of CyberKick’s research and development expenses and the development of new products, partially offset by a reduction in the research and development expenses of the enterprise security segment, due to the agreement with TerraZone.
Sales and marketing expenses totaled $5,658,000 (H1.2021: $2,430,000). The increase is primarily attributed to the consolidation of CyberKick’s sales and marketing expenses, primarily its media costs, partially offset by a reduction in the sales and marketing expenses of the enterprise security segment, due to the agreement with TerraZone Ltd.
General and administrative expenses totaled $4,249,000 (H1.2021: $2,588,000). The increase is mainly due to higher professional fees, predominantly legal, in connection with patent-related proceedings brought by and against Bright Data Ltd, which were resolved by settlement on May 17, 2022.
IFRS net loss totaled $7,885,000, or $0.26 basic loss per ordinary share (H1.2021: net loss of $4,883,000, or $0.20 basic loss per ordinary share).
Non-IFRS net loss totaled $5,889,000, or $0.19 basic loss per ordinary share (H1.2021: loss of $4,186,000, or $0.17 basic loss per ordinary share).
We define non-IFRS net loss as a loss which excludes, as applicable: (i) amortization and impairment of intangible assets and goodwill; (ii) share-based compensation expense; (iii) issuance costs in connection with our offerings; (iv) changes in fair value of finance liabilities including measurement of contingent consideration and (v) income taxes, starting from the second quarter of 2022 (adjusted retrospectively for all prior periods presented).
