CUEN – Cuentas Releases Annual Financial Reports Reflecting Improved Business Transition Results, Revenues and Profitability - Seite 3

Financial Results for the Fiscal Year ended December 31, 2023

Revenues: During the year ended December 31, 2023, totaled $2,346,000 compared to $2,994,000 for the year ended December 31, 2022. The decrease in our sales of digital products and General-Purpose Reloadable Cards is mainly due to decreasing our sales with Cuentas SDI including online and other marketing initiatives, including but not limited to distribution agreements partially offset by increase in wholesale telecommunication services in the amount of $2,177,000 from our Bilateral Wholesale Carrier Agreement with Next Communications INC. a company controlled by Arik Maimon our Chairman of the Board and our CEO.

Cost of revenues during the year ended December 31, 2023, totaled $2,733,000 compared to $2,508,000 for the year ended December 31, 2022.

Cost of revenue consists of the purchase of wholesale minutes for resale, related telecom platform costs and purchase of digital products in the amount of $2,170,000 during the year ended December 31, 2023, and $232,000 during the year ended December 31, 2022.

Cost of revenue also consists of costs related to the sale of the Company’s digital products and GPR Cards in the amount of $219,000 during the year ended December 31, 2023, and $2,276,000 during the year ended December 31, 2022. The costs related to the sale of the Company’s digital products and GPR Cards were composed mainly from the cost of the Digital products in the amount of $209,000 during the year ended December 31, 2023, as opposed to $2,087,000 during the year ended December 31, 2022. 

Gross profit margin:  For the year ended December 31, 2023, was negative for both the telecommunications segment and the digital product and general-purpose reloadable cards segment but slightly positive for wholesale which by its nature has a tiny markup. The gross loss from the sale of digital products and general-purpose reloadable cards stemmed from ceasing all activities with Cuentas SDI LLC.

Operating Expenses: Consist of selling, general and administrative Expenses, impairments and amortization of Intangible assets as discussed below and totaled $6,022,000 during the year ended December 31, 2023, compared to $14,841,000 during the year ended December 31, 2022, representing a net decrease of $8,819,000.

Selling, general and administrative expenses: Totaled $6,011,000 during the year ended December 31, 2023, a net decrease of $3,420,000, or 36% compared to $9,431,000 during the year ended December 31, 2022.