Total Revenue of $7.8 Million

ARR of $31 Million

$59.2 Million in Cash and Cash Equivalents

SAN CARLOS, Calif.–(BUSINESS WIRE)–Presto Automation Inc. (“Presto” or the “Company”) (NASDAQ: PRST), one of the largest labor automation technology providers in the hospitality industry, today announced financial results for the first quarter of fiscal 2023.

We are delighted to report our first earnings as a public company and to share our business momentum and technical progress with the financial community,” said Rajat Suri, founder and CEO of Presto Automation. “We are experiencing a significant amount of interest in our labor automation solutions, particularly as the macroeconomic environment remains favorable for our business. Our pioneering Voice AI rollout with Checkers has progressed well as we are now installed in over 200 stores, which is the largest footprint of drive-thru Voice AI in the industry. As a result of our recent public offering, Presto is will continue to pursue further expansion, develop our technologies solutions and take advantage of the positive trends fueling our business.”

First Quarter Fiscal 2023 Financial Highlights

  • Total Revenue: Total revenue was $7.8 million, an increase of 8% as compared to $7.2 million for the first quarter of 2022.
  • ARR: ARR reached $31.1 million, an increase of 8% year-over-year.
  • Net Income (Loss): Net income was $28.7 million for the first quarter of 2023, compared to a net loss $(19.5) million for the first quarter of 2022.
  • Adjusted EBITDA: The Adjusted EBITDA loss was ($8.9) million for the first quarter of 2023, compared to a loss of ($5.4) million for the first quarter of 2022.

See “Non-GAAP financial Measures and Definition of Key Metric” below for how we define ARR and Adjusted EBITDA and the financial tables that accompany this release for a reconciliation of Adjusted EBITDA to its closest comparable GAAP measure.

Public Listing Transaction Highlights

  • Trading commenced on the Nasdaq on September 22, 2022 under the ticker “PRST”.
  • Received approximately $120 million in gross proceeds
  • Led by prominent restaurant and technology strategic investors including Cleveland Avenue Capital
  • Entered into a New Credit Agreement and repaid outstanding debt

Financial Outlook

  • For the fiscal year ending June 30, 2023:

    • The Company expects revenue to be between $33 and $35 million.

First Quarter 2023 Conference Call

Presto Automation will host a conference call today at 4:30 PM ET to review the Company’s financial results for the quarter ended September 30, 2022. The call will be accessible by telephone at 877-407-0792 (domestic) or 201-689-8555 (international) using passcode 13733666. The call will also be available live via webcast on the Company’s investor relations website here or directly here. A telephone replay of the conference will be available at 844-512-2921 with access code 13733666 and will be available until 11:59 PM ET on Tuesday, November 29, 2022. An archive of the webcast will also be available shortly after the call and will remain available for 90 days.

Non-GAAP Financial Measures and Definition of Key Metric

This press release includes Adjusted EBITDA, which is a financial measure that is not calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe Adjusted EBITDA is useful for comparing our financial performance to other companies and from period to period by excluding the impact of certain items that do not reflect our core operating performance, thereby providing consistency and direct comparability with our past financial performance and between fiscal periods.

Adjusted EBITDA is defined as net loss, adjusted to exclude interest, other income (expense), net loss on debt extinguishment, income taxes, depreciation and amortization expense, stock-based compensation expense, fair value adjustments on warrant liabilities and convertible promissory notes, merger related ancillary costs, and hardware repair expenses related to COVID and COVID-related expenses due to damage from liquid ingress.

We include this non-GAAP measure because it used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. A reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure is included below under “Reconciliation from GAAP to Non-GAAP Results” at the end of this release.

In addition, we use Annual Revenue Run-Rate, or ARR, as a key business metric to evaluate our business, identify trends, formulate business plans and make strategic decisions. We calculate ARR by annualizing quarterly revenue at the end of the fiscal quarter. Our calculation of ARR may differ from similarly titled metrics presented by other companies, and the amount of revenue we recognize over any 12-month period may differ significantly from the ARR at the beginning of that period.

About Presto

Presto overlays next-gen digital solutions onto the physical world. Our enterprise-grade voice, vision, and touch technologies help hospitality businesses thrive while delighting guests. With over 250,000 systems shipped, we are one of the largest labor automation technology providers in the industry. Founded at M.I.T. in 2008, Presto is headquartered in Silicon Valley, Calif. with customers including many of the top 20 restaurant chains in the U.S.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that refer to projections , forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. The forward-looking statements speak only as of the date of this press release or as of the date they are made. Except as otherwise required by applicable law, Presto disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. Presto cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Presto. In addition, Presto cautions you that the forward-looking statements contained in this press release are subject to the following risks and uncertainties: our ability to manage our growth effectively, to sustain our recent revenue growth or attract new customers; the limited operating history with our new Vision and Voice products in a new and developing market; our ability to achieve revenue growth while our expenses increase; continued adverse impacts from COVID-19 (including as a result of global supply chain shortages); the loss of any of our three largest customers or a reduction in their business with us; our ability to improve and enhance the functionality, performance, reliability, design, security, or scalability of our platform to respond to customers’ evolving needs; our ability to protect the security of our customers’ information; changing privacy laws, regulations and standards, and our ability to comply with contractual obligations and laws related to data privacy and security; unfavorable conditions in the restaurant industry or the global economy, including with respect to food, labor, and occupancy costs; the availability of capital or financing on acceptable terms, if at all; financial covenants and other restrictions on our actions contained in our financing agreements that may limit our operational flexibility; the length and unpredictability of our sales cycles and the amount of investments required in sales efforts; material weaknesses in our internal control over financial reporting and, our ability to remediate these deficiencies; our ability to continue as a going concern; our ability to receive additional financing in a timely manner; shortages, price increases, changes, delays or discontinuations of hardware; our ability to maintain relationships with our payment processors; our reliance on computer hardware, licensed software and services rendered by third parties; U.S. laws and regulations (including with respect to payment transaction processing), many of which are unsettled and still developing, and our or our customers’ ability to comply with such laws and regulations; significant changes in U.S. and international trade policies that restrict imports or increase tariffs; any requirements to collect additional sales taxes or be subject to other tax liabilities that may increase the costs to our customers; our ability to adequately protect our intellectual property rights; claims by third parties of intellectual property infringement; our use of open-source software in our platform; and other economic, business, competitive and/or regulatory factors affecting Presto’s business generally as set forth in our filings with the Securities and Exchange Commission.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands, except per share and per share amounts)

Three Months Ended September 30,

 

2022

 

 

2021

 

Revenue

Platform

$

4,820

 

$

4,537

 

Transaction

 

2,959

 

 

2,692

 

Total Revenue

 

7,779

 

 

7,229

 

Cost of revenue:

Platform

 

4,292

 

 

4,022

 

Transaction

 

2,644

 

 

2,334

 

Depreciation and impairment

 

291

 

 

466

 

Total cost of revenue

 

7,227

 

 

6,822

 

Gross profit

 

552

 

 

407

 

Operating expenses:

Research and development (1)

 

8,021

 

 

4,001

 

Sales and marketing (1)

 

3,077

 

 

1,174

 

General and administration (1)

 

9,685

 

 

1,974

 

Loss on infrequent product repairs

 

 

 

435

 

Total operating expenses

 

20,783

 

 

7,584

 

Loss from operations

 

(20,231

)

 

(7,177

)

Change in fair value of warrants and convertible promissory notes

 

59,822

 

 

(13,574

)

Interest expense

 

(3,376

)

 

(1,388

)

Loss on early extinguishment of debt

 

(7,758

)

 

 

Other financing and financial instrument (costs) income, net

 

(1,768

)

 

 

Other income, net

 

2,028

 

 

2,630

 

Total other income (expense), net

 

48,948

 

 

(12,332

)

Income (loss) before provision for income taxes

 

28,717

 

 

(19,509

)

Provision for income taxes

 

 

 

 

Net income (loss) and comprehensive income (loss)

$

28,717

 

$

(19,509

)

 

Net income (loss) per share attributable to common stockholders:

Basic

$

0.97

 

$

(0.72

)

Diluted

$

0.71

 

$

(0.72

)

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic

 

29,521,505

 

 

27,137,792

 

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted

 

40,397,934

 

 

27,137,792

 

 
 

(1) Includes stock-based compensation expense as follows (in thousands)

Three Months Ended September 30,

 

2022

 

 

2021

 

Research and development

$

1,816

 

$

105

 

Sales and marketing

 

791

 

 

99

 

General and administrative

 

5,818

 

 

275

 

Total*

$

8,425

 

$

479

 

 

*For the three months ended September 30, 2022, such amount reflects $6,250 of stock compensation expense related to earn out shares attributable to option and RSU holders.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and par value)

September 30,

June 30,

 

2022

 

 

2022

 

ASSETS

Current assets:

Cash and cash equivalents

$

59,249

 

$

3,017

 

Accounts receivable, net

 

2,063

 

 

1,518

 

Inventories

 

484

 

 

869

 

Deferred cost, current

 

6,662

 

 

8,443

 

Prepaid and other current assets

 

1,001

 

 

707

 

Total current assets

 

69,459

 

 

14,554

 

 

Deferred cost, net of current portion

 

1,157

 

 

2,842

 

Deferred transaction costs

 

 

 

5,765

 

Property and equipment, net

 

1,691

 

 

1,975

 

Intangible asset, net

 

5,630

 

 

4,226

 

Goodwill

 

1,156

 

 

1,156

 

Other long-term assets

 

766

 

 

18

 

Total assets

$

79,859

 

$

30,536

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

4,612

 

$

5,916

 

Accrued liabilities

 

7,282

 

 

6,215

 

Financing obligations, current

 

7,216

 

 

8,840

 

Term loans, current

 

 

 

25,443

 

Convertible promissory notes and embedded warrants, current

 

 

 

89,663

 

Deferred revenue, current

 

6,640

 

 

10,532

 

Total current liabilities

 

25,750

 

 

146,609

 

 

Term loans, noncurrent

 

49,424

 

 

 

PPP loans

 

 

 

2,000

 

Warrant liabilities

 

1,999

 

 

4,149

 

Deferred revenue, net of current portion

 

699

 

 

237

 

Other long-term liabilities

 

820

 

 

0

 

Total liabilities

$

78,692

 

$

152,995

 

Stockholders’ equity (deficit):

Preferred stock, $0.0001 par value–1,500,000 shares authorized as of September 30, 2022 and June 30, 2022, respectively; no shares issued and outstanding as of September 30, 2022 and June 30, 2022, respectively

 

 

 

 

Common stock, $0.0001 par value–180,000,000 shares authorized as of September 30, 2022 and June 30, 2022, respectively; 50,639,837 and 27,574,417 shares issued and outstanding as of September 30, 2022 and June 30, 2022, respectively

 

5

 

 

3

 

Additional paid-in capital

 

173,228

 

 

78,321

 

Accumulated deficit

 

(172,066

)

 

(200,783

)

Total stockholders’ equity (deficit)

 

1,167

 

 

(122,459

)

Total liabilities and stockholders’ equity (deficit)

$

79,859

 

$

30,536

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Three Months Ended September 30,

 

2022

 

 

2021

 

Cash Flows from Operating Activities

Net income (loss)

$

28,717

 

$

(19,509

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation, amortization and impairment

 

462

 

 

535

 

Stock-based compensation

 

2,175

 

 

479

 

Earn-out share stock-based compensation expense to option and RSU holders

 

6,250

 

 

 

Noncash expense attributable to fairvalue liabilities assumed in Merger

 

34

 

 

 

Change in fair value of liability classified warrants

 

(11,551

)

 

1,457

 

Change in fair value of warrants and convertible promissory notes

 

(48,271

)

 

12,117

 

Amortization of debt discount and debt issuance costs

 

1,371

 

 

88

 

Loss on debt extinguishment

 

7,759

 

 

 

Paid-in-kind interest expense

 

281

 

 

 

Share and warrant cost on termination of convertible note agreement

 

2,412

 

 

 

Forgiveness of PPP Loan

 

(2,000

)

 

(2,599

)

Change in fair value of earnout liability

 

(1,175

)

 

 

Noncash lease expense

 

76

 

 

 

Loss on disposal of property and equipment

 

14

 

 

 

Changes in operating assets and liabilities:

Accounts receivable, net

 

(545

)

 

(502

)

Inventories

 

385

 

 

132

 

Deferred costs

 

3,466

 

 

2,828

 

Prepaid expenses and other current assets

 

259

 

 

352

 

Other long-term assets

 

 

 

(83

)

Accounts payable

 

1,678

 

 

(2,363

)

Vendor financing facility

 

 

 

(3,722

)

Accrued liabilities

 

477

 

 

(1,485

)

Deferred revenue

 

(3,430

)

 

(3,139

)

Net cash used in operating activities

 

(11,156

)

 

(15,414

)

 

Cash Flows from Investing Activities

Purchase of property and equipment

 

(47

)

 

(76

)

Payments relating to capitalized software

 

(1,327

)

 

(373

)

Net cash used in investing activities

 

(1,374

)

 

(449

)

 

Cash Flows from Financing Activities

Proceeds from the exercise of common stock options

 

36

 

 

19

 

Proceeds from the issuance of term loans

 

60,250

 

 

 

Payment of debt issuance costs

 

(1,094

)

 

 

Repayment of term loans

 

(32,980

)

 

 

Payment of penalties and other costs on extinguishment of debt

 

(5,734

)

 

 

Proceeds from issuance of convertible promissory notes and embedded warrants

 

 

 

500

 

Principal payments of financing obligations

 

(886

)

 

(186

)

Proceeds from issuance of common stock

 

1,000

 

 

 

Contributions from Merger and PIPE financing, net of transaction costs and other payments

 

49,840

 

 

 

Payment of deferred transaction costs

 

(1,670

)

 

 

Net cash provided by financing activities

 

68,762

 

 

333

 

 

Net increase in cash and cash equivalents

 

56,232

 

 

(15,530

)

Cash and cash equivalents at beginning of year

 

3,017

 

 

36,909

 

Cash and cash equivalents at end of year

$

59,249

 

$

21,379

 

 

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Capitalization of stock-based compensation expense to capitalized software

$

221

 

$

6

 

Capital contribution from shareholder in conjunction with Credit Agreement

 

2,779

 

Issuance of warrants in conjunction with Senior Term Loan

 

2,076

 

 

 

Issuance of warrants in conjunction with Lago Term Loan

 

843

 

 

 

Convertible note conversion to common stock

 

41,392

 

 

 

Reclassification of warrants from liabilities to equity

 

830

 

 

 

Recognition of liability classified warrants upon Merger

 

9,388

 

 

 

Recognition of Unvested Founder Shares liability

 

1,588

 

 

 

Forgiveness of PPP Loan

 

(2,000

)

 

(2,599

)

Transaction costs recorded in accounts payable and accrued liabilities

 

220

 

 

551

 

Right of use asset in exchange for operating lease liability

 

308

 

 

 

Reconciliation from GAAP to Non-GAAP Results

(In thousands, except per share data, unaudited)

Three Months Ended

September 30,

 

2022

 

 

2021

 

 

Adjusted EBITDA

Net income (loss)

$

28,717

 

$

(19,509

)

Interest expense

 

3,376

 

 

1,388

 

Other income, net

 

(2,028

)

 

(2,630

)

Depreciation and amortization

 

433

 

 

535

 

Stock-based compensation expense

 

2,175

 

 

479

 

Earn-out stock-based compensation expense

 

6,250

 

 

 

Change in fair value of warrants and convertible promissory notes

 

(59,822

)

 

13,574

 

Loss on debt extinguishment

 

7,758

 

 

 

Other financing and financial instrument (costs) income, net

 

1,768

 

 

 

Deferred compensation and bonuses earned upon closing of the Merger

 

2,232

 

 

 

Public relations fee due upon closing of the Merger

 

250

 

 

 

Loss on infrequent product repairs

 

 

 

435

 

Hardware repair expense related to COVID

 

 

 

373

 

Adjusted EBITDA

$

(8,891

)

$

(5,355

)

 

Contacts

Investors:

Chris Whitcomb, VP Investor Relations

investor@presto.com

Media:

Christopher Cast & Brian Ruby

media@presto.com