Phunware, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For Q3 2024, Phunware generated net revenues of $665,000, a decrease of 46.9% from $1,252,000 in Q3 2023. For the nine months ended September 30, 2024, net revenues totaled $2,597,000, down 33.3% from $3,892,000 in the same period last year. The decline in revenue was attributed to the termination of a specific customer contract, revenue recognized in 2023 related to customer onboarding, and the loss of customers in 2024. Despite the revenue drop, gross profit for the nine months increased to $1,316,000, up 6.0% from $1,241,000 in 2023, driven by a reduction in the cost of revenue.

Operating expenses significantly decreased, with Q3 2024 expenses at $3,512,000, down 74.8% from $13,909,000 in Q3 2023. For the nine months, operating expenses were $10,314,000, a reduction of 62.2% from $27,300,000 in the prior year. This reduction was primarily due to cost-cutting measures and a decrease in sales and marketing expenses.

Phunware reported an operating loss of $(3,190,000) for Q3 2024, a substantial improvement from $(13,278,000) in Q3 2023. The nine-month operating loss also improved to $(8,998,000) from $(26,059,000) in the previous year. The net loss for Q3 2024 was $(2,760,000), compared to $(18,979,000) in Q3 2023, while the nine-month net loss decreased to $(7,683,000) from $(29,772,000).

The company raised $42.2 million from financing activities during the nine months ended September 30, 2024, compared to $1.4 million in the same period in 2023. This included proceeds from the sale of common stock and the exercise of prefunded warrants. As of September 30, 2024, cash and cash equivalents stood at $35.5 million, a significant increase from $2.9 million at the end of September 2023.

Strategically, Phunware discontinued operations of Lyte Technology, Inc. as of November 1, 2023, which had previously reported losses and impairments. The company also executed a reverse stock split at a ratio of one-for-fifty in February 2024 to comply with Nasdaq listing requirements. However, as of November 7, 2024, Phunware was notified of non-compliance with Nasdaq's audit committee composition requirements following the resignation of a board member.

Management plans to continue investing in marketing, sales, and product development, including a new generative AI-driven software platform aimed at enhancing mobile application development. Despite these efforts, the company does not expect to achieve profitability in the near future.