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Q2 total revenue of $14.2 million, up 174% year-over-year.

Austin, Texas [August 16, 2018] – Today Phunware, a leading enterprise cloud platform for mobile, which provides software, solutions, data and services for brands worldwide announced financial results for the second quarter ended June 30, 2018.

“We are pleased to announce our second quarter 2018 financial results, reflecting revenue growth of 174% year-over-year and profitability on a non-GAAP operating income basis,” said Alan S. Knitowski, Phunware’s CEO and Co-founder. “We are at an exciting stage of our growth as a company and our Q2 performance positions us well as we prepare to enter the public markets.”

“We are thrilled to have achieved positive non-GAAP operating income for the first time ever,” said Phunware CFO Matt Aune. “We are also excited that the company’s security token sale for PhunCoin is now active, which will be further highlighted in future updates as we present financials for Q3 2018 and beyond.”

Financial Highlights for Second Quarter 2018:

  • Revenue: Total revenue was $14.2 million, a 174% increase over Q2 2017. Platform Subscription & Services revenue was $6.5 million, an 85% increase over Q2 2017. Application transaction revenue was $7.7 million, a 357% increase over Q2 2017.
  • Operating Income (Loss): Income from operations was $4.7 million, compared to loss from operations of ($6.3) million in Q2 2017.
  • Adjusted EBITDA: Adjusted EBITDA was $4.8 million, compared to ($5.9) million in Q2 2017.

The tables at the end of this press release include reconciliation of GAAP net income (loss) to Adjusted EBITDA for the three months ended June 30, 2018 and 2017. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Non-GAAP Financial Measures:

In addition to Phunware’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Phunware uses certain non-GAAP financial measures to clarify and enhance Phunware’s understanding of past performance and future prospects. Non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenue or net income (loss), as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under GAAP.

We compensate for these limitations to Non-GAAP financial measures by relying primarily on its GAAP results and using Non-GAAP financial measures only for supplemental purposes. Non-GAAP financial measures include adjustments for items that may not occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other peer companies over time. For example, it is useful to exclude non-cash, stock-based compensation expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly across periods due to timing of new stock-based awards. We may also exclude certain discrete, unusual, one-time, or non-cash costs, including transaction costs and the income tax impact of adjustments in order to facilitate a more useful period-over-period comparison of its financial performance. Each of the normal recurring adjustments and other adjustments described in this paragraph help management with a measure of our operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that Phunware calculates as net loss adjusted to exclude income taxes, net interest expense, depreciation and amortization, purchase accounting adjustments, acquisition and sponsor related costs and stock-based compensation expense.

About Phunware:

General. Phunware is the pioneer of Multiscreen as a Service (MaaS), a fully integrated suite of platform products, solutions and data that allows brands to engage, manage and monetize their anytime, anywhere mobile application users worldwide. Phunware helps the world’s most respected brands create category-defining mobile experiences, with more than one billion active devices touching its platform each month.

Proposed Merger. On February 28, 2018, Phunware announced its intent to go public through a merger with Stellar Acquisition III, Inc. (Nasdaq: STLR), a publicly-traded blank check company, and to use commercially reasonable efforts to launch PhunCoin. For more information about how Phunware is transforming the way consumers and brands interact with mobile in the virtual and physical worlds, visit and follow @phunware on all social media platforms.

Additional Information About the Merger Transaction between Phunware and Stellar and Where to Find It:

Stellar has filed with the SEC a registration statement on Form S-4 with a proxy statement containing information about the proposed transaction and the respective businesses of Phunware and Stellar. Stellar will mail a final prospectus and definitive proxy statement and other relevant documents after the SEC completes its review. Stellar and Phunware shareholders are urged to read the preliminary prospectus and proxy statement and any amendments thereto and the final prospectus and definitive proxy statement in connection with the solicitation of proxies for the special meetings to be held to approve the proposed transaction, because these documents will contain important information about Stellar, Phunware and the proposed transaction. The final prospectus and definitive proxy statement will be mailed to shareholders of Stellar and Phunware of a record date to be established for voting on the proposed transaction. Shareholders will also be able to obtain a free copy of the proxy statement, as well as other filings containing information about Stellar, without charge, at the SEC’s website ( or by calling 1-800-SEC-0330. Copies of the proxy statement and other filings with the SEC can also be obtained, without charge, by directing a request to: Stellar Acquisition III Inc., 90 Kifisias Avenue, Marousi 15125, Athens, Greece. Additionally, all documents filed with the SEC can be found on Stellar’s website,

About Stellar:

Stellar is a Republic of Marshall Islands blank check company, also commonly referred to as a Special Purpose Acquisition Company, or SPAC, formed for the purpose of effecting a merger, asset acquisition or other business combination with one or more businesses or entities. Stellar’s units, shares of common stock and warrants are currently listed on the Nasdaq Capital Market under the symbols “STLRU,” “STLR” and “STLRW”, respectively.

Participants in the Merger Proxy Solicitation:

Stellar, Phunware and their respective directors and executive officers and other persons may be deemed to be participants in the solicitations of proxies from Stellar’s shareholders in respect of the proposed transaction. Information regarding Stellar’s directors and executive officers is available in its annual report on Form 10-K filed with the SEC. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be contained in the proxy statement when it becomes available.

No Offer or Solicitation:

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities of Stellar or Phunware shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Cautionary Note Regarding Forward-Looking Statements:

Some of the statements in this release and in presentations by Stellar’s management relating to the matters described herein are or may constitute “forward-looking statements.” Words such as “believe,” “expect,” “anticipate,” “project,” “target,” “optimistic,” “intend,” “aim,” “will”, “may” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to the proposed transaction and the SEC registration statement and proxy voting process (as well as the combined company’s post-closing activities) include, but are not limited to: (i) statements about the benefits of the transaction involving Stellar and Phunware, including future financial and operating results; (ii) Stellar’s and Phunware’s plans, objectives, expectations and intentions (including with respect to the future Token Sale and the use of proceeds from Stellar’s trust account); (iii) the expected timing of completion of the transaction and the SEC registration statement and proxy voting process; and (iv) other statements relating to the transaction, the SEC registration statement and proxy voting process and the combined company’s post-closing activities that are not historical facts. Forward-looking statements involve estimates, expectations and projections and, as a result, are subject to risks and uncertainties. Actual results could differ materially if not substantially from those described in the forward-looking statements.

Important risks and other factors could cause actual results to differ materially from those indicated by such forward-looking statements. With respect to the transaction, the SEC registration statement and proxy voting process and the combined company’s post-closing activities, such risks and uncertainties include, among many others: (i) the risks associated with Stellar’s SEC registration statement and proxy voting process, including uncertainty regarding the number of Stellar shareholders who may request redemption and whether Phunware shareholders will approve the transaction; (ii) the risk that the benefits to Stellar and its shareholders anticipated from transaction may not be fully realized or may take longer to realize than expected; (iii) the risk that any projections, including earnings, revenues, expenses, synergies, margins or any other financial items are not realized, (iv) the risks associated with concentration of Phunware’s business with certain customers; (v) the potential for reductions in industry profit margins due to, among other factors, declining service revenues; (vi) the inability of the post-closing combined company to expand and diversify the business of Phunware; (vii) changing interpretations of generally accepted accounting principles; (viii) the combined company’s continued compliance with government regulations; changing legislation and regulatory environments; (ix) the ability of the post-closing company to meet Nasdaq’s continued listing standards; (x) the potential for lower return on investment by Phunware’s expected token sale; (xi) the inability of Phunware to manage growth; (xii) requirements or changes affecting the MaaS/SaaS industry; (xiii) the general volatility of market prices of Stellar’s securities and general economic conditions; (xiv) the combined company’s ability to implement new strategies and react to changing market conditions; (xv) risks associated with operating hazards; (xvi) risks associated with competition; (xvii) risks associated with the loss of key personnel; (xviii) unexpected costs, liabilities or delays in the proposed transaction; (xix) the outcome of any legal proceedings related to the transaction; (xx) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, or (xxi) any of the factors in detailed in the “Risk Factors” section of Stellar’ s filings with the SEC.

The foregoing listing of risks is not exhaustive. These risks, as well as other risks associated with the transaction, will be more fully discussed in Stellar’s registration statement to be filed with the SEC in connection with the transaction. Additional risks and uncertainties are identified and discussed in Stellar’s reports filed or to be filed with the SEC and available at the SEC’s website at Forward-looking statements included in this press release speak only as of the date of this press release. Stellar undertakes and assumes no obligation, and does not intend, to update Stellar’s forward-looking statements, except as required by law.

Phunware S4 Filing, August 15, 2018

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