AirIQ Announces June 30, 2016 Quarterly Results; Highest Revenue in Over Six Years - Seite 2

The Company continues to focus on its key strategy elements to build revenues and reduce costs to maintain profitability and positive cash flow and to seek opportunities to form value creating strategic partnerships.

Overview

The Company's consolidated condensed interim financial statements include the accounts of AirIQ and its subsidiaries, AirIQ U.S. Holdings, Inc., AirIQ U.S., Inc., and AirIQ, LLC. All inter-company balances and transactions have been eliminated on consolidation.

The Company's consolidated condensed interim financial statements for the three months ended June 30, 2016, including notes thereto, and Management's Discussion and Analysis for the same period were filed with the Canadian securities regulatory authorities on August 24, 2016, and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com).

Revenues

Revenues for the three months ended June 30, 2016, increased 12% to $923 from $822 for the three months ended June 30, 2015. Approximately 51% of the total revenue for the period represents recurring revenue from the Company's airtime customers.

Revenues received from equipment sold in connection with service contracts are recorded as deferred revenue and recognized over the initial term of the service contract.

Sales of hardware units associated with service contracts recorded to deferred revenues were approximately $313 during the three months ended June 30, 2016, compared to $218 during the three months ended June 30, 2015. Revenues recognized from deferred revenues for the three months ended June 30, 2016 were approximately $200 compared to $151 during the three months ended June 30, 2015.

Included in the Company's revenues are sales of units that were sold without a fixed term service contract of approximately $249 and $116 respectively, during the three months June 30, 2016 and June 30, 2015 respectively.

Gross Profit

Overall, gross profit decreased by $19 or 4% to $426 for the three months ended June 30, 2016 compared to $445 for the three months ended June 30, 2015.

Equipment gross profits increased by approximately 79% to $70 during the three months ended June 30, 2016 from $39 for the three months ended June 30, 2015.

Service contract gross profits decreased by approximately 12% to $356 for the three months ended June 30, 2016 from $406 for the three months ended June 30, 2015.