Second Quarter 2021 Revenue Increased 75% to $4.0 Million Compared to Second Quarter 2020
Remark Holdings, Inc., a diversified global technology company with leading artificial intelligence (“AI”) solutions and digital media properties, today announced financial results for its fiscal second quarter ended June 30, 2021.
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Our second quarter was highlighted by a near doubling of revenue coming from the United States
“Our second quarter was highlighted by a near doubling of revenue coming from the United States, driven by our AI data intelligence platform,” noted Kai-Shing Tao, Chairman and Chief Executive Officer of Remark Holdings. “Momentum from our Chinese operations continued despite periodic regional lockdowns associated with COVID-19 and a slowdown in business activities due to the 100th Anniversary of the CCP, growing quarterly revenue in 2021 by more than 40% compared with the same period of last year. In the first six months of 2021, we have almost achieved our full-year 2020 revenue, and we expect additional significant growth in the second half of the year.”
Second Quarter 2021 Business Highlights
- During the second quarter, Remark continued to build its data intelligence business using its AI Data Intelligence Platform. Based on initial success, the company is looking forward to the start of the fall sports season and to additional growth opportunities with other online sports gaming and iGaming businesses.
- China Mobile continues to implement Remark’s KanKan AI Platform and Smart Queueing System throughout their retail locations. Additionally, Remark is developing an Artificial Intelligence of Things project to intelligently manage in-store ambient environmental equipment.
- Remark is also preparing to bid on the second phase of China Mobile’s Smart Community business. The company would provide its AI solution to enforce COVID-19 protection rules for communities by enforcing health codes, conducting real-time temperature checks, ensuring mask wearing, allowing access only to residents or authorized persons, controlling vehicle access, and helping to protect the elderly and children.
- Remark’s Digital Marketing Platform (“DMP”) was deployed with Bank of China at their Guangzhou branch and China Construction Bank’s Yunnan branch during the second quarter, providing additional large opportunities across multiple banks and other retailers. The design phase for Lotus Supermarket’s DMP in the Changhe shopping center, Xi’an City, has been completed and is expected to be deployed later this year.
- During the second quarter, Smart Campus solutions were deployed across more than three dozen campuses bringing total installations to more than 300 campuses. Sales efforts and new partnerships are targeting continued expansion of the Smart Campus solution to several new provinces.
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Fiscal Second Quarter 2021 Financial Results
- Revenue for the fiscal second quarter of 2021 totaled $4.0 million, up from $2.3 million during fiscal second quarter of 2020.
- Revenue from the U.S. nearly doubled, and contributed $2.6 million compared to $1.3 million, as the company derived a substantial increase in revenue from an AI data intelligence project that ramped up during the quarter, and while additional revenue came from sales of thermal imaging equipment to a health care provider.
- Revenue from China grew by $0.4 million to $1.4 million due to the execution of ongoing projects, including the continued roll out of bank branch conversions to smart branches, and the recognition of revenue from projects with school districts.
- Gross profit improved to $1.8 million in the second quarter of 2021 from $1.1 million in the second quarter of 2020, commensurate with increased revenue. The overall gross profit margin for the second quarter of 2021 was 43.9%.
- The company incurred an operating loss of $2.5 million in the second quarter of 2021 compared to an operating loss of $2.8 million in the comparable quarter of 2020. An increase in general and administrative expense of $0.6 million, when netted against $0.3 million of decreases in other operating expense categories, partially offset the improved gross profit, and were the primary reason for the operating loss.
- Net loss totaled $1.6 million, or $0.02 per diluted share in the second quarter ended June 30, 2021, compared to a net loss of $9.8 million, or $0.11 per diluted share in the second quarter ended June 30, 2020. The decrease in the company’s stock price between December 31, 2020 and June 30, 2021 led to a $1.3 million gain on the change in liability associated with certain outstanding warrants. In the second quarter of 2020, the company recorded a $6.3 million loss on the change in the fair value of warrant liability due to stock price changes during that period of the prior year.
- At June 30, 2021, the cash balance totaled $0.1 million, compared to a cash balance of $0.9 million at December 31, 2020. Proceeds of $4.8 million from a short-term debt issuance and $0.8 million from stock option exercises were offset by $6.3 million of cash used in operations.
“Finally, subsequent to June 30, 2021, Sharecare, Inc. completed its merger with Falcon Acquisition, providing us with initial liquidity of $2.3 million plus approximately 9.4 million shares of Sharecare, Inc. We anticipate that monetizing our position will fund our balance sheet while simultaneously supporting working capital needs to meet our growth goals and new initiatives,” concluded Mr. Tao. Sharecare, Inc. trades on The Nasdaq Stock Market (SHCR – $7.40).
Conference Call Information
Management will hold a conference call this afternoon at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company’s financial results and provide an update on recent business developments. A question and answer session will follow management’s presentation.
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