Syntonic Releases Its December Quarterly Result Update

On 24 January 2019, Syntonic Limited (ASX:SYT), a mobile service provider has announced its quarterly business progress and quarterly Cash Flow report for the three months ending 31 December 2018.

During the period, the company’s revenue grew significantly to reach a record A$1.875 million, which represents a 90% increase on the previous quarterly period (Q1 FY19 A$0.989 million) and a 135% increase on last year’s corresponding period (Q2 FY18 A$.799 million). The quarterly revenue growth was supported by new carrier deployments and early ramping up of revenue from Syntonic Brasil Tecnologia Ltda. Â

The company recently acquired Mobile Commerce Platform has now been integrated into Syntonic’s Connected Services Platform; now the company has authority to sell a single, unified platform ? the Syntonic Revenue Generation Platform. Revenues generated from this unified platform will be accounted on a regular basis.

The Company’s cash receipts for the quarter stood at AUD 1.120 million, representing an 88% increase on the previous quarterly period which was AUD 0.594 million and a 149% increase on last year’s corresponding period which was AUD 0.449 million. Growth in cash receipts continues to track broadly with revenue growth and is subject to payment terms which can extend for multiple months after services are rendered.

On a quarter-on-quarter basis, the total cash outflows from operating activities represent a 47% increase. This growth was related to one-time acquisition-related costs that carried into the recent quarter result, it also includes an additional staff expenses which were due to the addition of Syntonic Brazil employees, payments to content providers for their share of the mobile transactions processed by the Revenue Generation Platform, and this growth also related to increased media spending to enhance consumer awareness for the Brazilian content services.

As of 31 December 2018, the Company’s cash balance was AUD 2.48 million.

During the period, Syntonic remained focused on progressing the global adoption and deployment of the Syntonic platform and acquiring new carrier and partnership opportunities, and the company was integrating the Mobile Commerce Platform into Syntonic’s Connected Services Platform.

The company’s Revenue Generation Platform gives a unified solution for managing the complete consumer lifecycle from acquisition, to engagement, and then to monetization.

During the period, Quarterly Active Users (“QAU”) grew steadily; it was led by led by new carrier deployments and Syntonic Brazil commerce transactions. Quarterly Active Users gauges the revenue bearing potential from active and/or activated Syntonic services.

In Q2 FY18, Quarterly Active Users was accounted to 7,473,579, representing an 80.1% increase over the previous quarter’s QAU of 4,149,269 and consistent with the 90% quarterly revenue growth.

The company is aggressively expanding its customer base and operations principally. Right now, the company focuses on Latin America, Sub-Saharan Africa, and Southeast Asia. In these regions, mobile data tariffs remain relatively expensive.

During the period, the company completed a capital placement of 201,999,998 shares at $0.0055 each to raise $1.1 million (before costs). These funds are going to be used to continue the acceleration of the Company’s global customer footprint through new deployments and agreements aligned with its global growth strategy.

As stated by Syntonic’s Chief Executive Officer and Managing Director Mr. Gary Greenbaum, that they are continuously advancing their global footprint and broadening their business base to deliver record revenue, cash receipts, and active users. These achievements represent the market demand for Syntonic’s technologies and services from globally recognized mobile carriers.

Stock performance: Post the quarterly update, the shares of Syntonic Ltd closed the day’s session at A$0.009 (24 January 2019), up by 28.571%. Today, the shares are trading flat at A$0.009 (as at 12:53PM AEST, 25 January 2019). The company has 2.98 billion outstanding shares with the market cap of circa $26.84 million. In the time span of the previous six and three months, the stock delivered the negative return of 46.15% and 30%, respectively. During the last one month, SYT delivered the positive return of 16.67%.

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