MIND CTI Reports Fourth Quarter and Full Year 2019 Results - Seite 2

Monica Iancu, MIND CTI’s President and Chief Executive Officer, commented: “Our lower revenues and income from our billing platform reflect the expected and previously announced negative impact of a few customers under maintenance or SaaS agreements that decided to exit their business. Also, as we continue to be challenged by the shrinking relevant telecom markets and strong competition, we lately have encountered fewer new customers, and our new wins, compared to wins a few years ago, have lower initial proceeds. At the same time, we are satisfied with the two acquisitions we completed in 2019. These new subsidiaries have performed well for us, but their profit margins are lower than that of our core business. Given our strong cash position and our experienced organization, we believe that we have the required resources to respond to market needs, continue to invest in our core business, bringing permanent value to existing customers and maintaining up-to-date technology, to be relevant for future market trends in our core billing, analytics and messaging platforms, as well as continue with our dividend policy and at the same time focus on targeting potential acquisitions that could be a source of growth.”

Message Mobile GmbH Results

After reviewing the revenue recognition methodology for messaging and mobile payment transactions, based on the key principal-versus-agent considerations under ASC 606, Revenues from Contract with Customers, we concluded to recognize revenues from Message Mobile’s mobile payments line of business on a “net basis” instead of a “gross basis”. Consequently, only our share in the processed transactions is recognized as revenues.

As a result of the above, our final consolidated revenues for Q2 2019 were $5.7 million instead of $6.0 million (Message Mobile being $1.6 million instead of $1.9 million) and the final consolidated cost of revenues were $2.9 million instead of $3.2 million (Message Mobile being $1.3 million instead of $1.6 million).

Our final consolidated revenues for Q3 2019 were $5.8 million instead of $6.1 million (Message Mobile being $1.7 million instead of $2.0 million) and the final consolidated cost of revenues were $2.7 million instead of $3.0 million (Message Mobile being $1.3 million instead of $1.6 million). 

All the other metrics, including gross profit, operating income and cash, are unchanged from the preliminary Q2 and Q3 amounts announced in 2019.

Revenue Distribution for Q4 2019