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- Tapinator, Inc. (OTC: TAPM) ("Tapinator," the "Company," "we," "our" or "us") a developer and publisher of category leading games for mobile platforms and a collector and publisher of fine art NFTs, today announced unaudited financial results for the period ended December 31, 2021 and the filing of its annual report for the years ended December 31, 2021 and 2020.
The annual report and financial statements have been published on OTC Markets and may be found at https://www.otcmarkets.com/stock/TAPM/disclosure . The results provided below replace, in their entirety, any guidance or projections previously issued by the Company.
For the year ended December 31, 2021 , Tapinator achieved record revenue of approximately $5.8 million , record bookings * of approximately $6.7 million , record net income of approximately $666,000 and record adjusted EBITDA * of approximately $1.6 million . The Company's annual revenue, bookings * and adjusted EBITDA * represent year-over-year improvements of 31%, 53% and 60%, respectively. For the full year, the Company also announced record basic and fully diluted net income per share of $1.19 and $1.13 per share, respectively.
For the three months ended December 31, 2021 , Tapinator achieved record revenue of approximately $1.7 million , record bookings * of approximately $2.2 million , net loss of approximately ($316,000) and record adjusted EBITDA * of approximately $590,000 . The Company's quarterly revenue, bookings and adjusted EBITDA * represent year-over-year improvements of 39%, 108%, and 76%, respectively. For the quarter, the Company also announced basic and fully diluted net loss per share of ($0.56) per share.
* A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net loss, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.
Financial Highlights | |||||||
Quarter Ended | Year Ended | ||||||
December 31 | December 31 | ||||||
2021 | 2020 | % Ch. | 2021 | 2020 | % Ch. | ||
GAAP Results: | |||||||
Revenue | $1,678,800 | $1,210,510 | 39% | $5,840,124 | $4,454,940 | 31% | |
Operating Income (Loss) | $176,921 | ($245,786) | NM (1) | $884,620 | ($345,467) | NM (1) | |
Net Income (Loss) | ($316,203) | ($416,411) | NM (1) | $665,580 | ($547,499) | NM (1) | |
Net Income (Loss) margin % | -19% | -34% | 11% | -12% | |||
Net Income (Loss) Per Share - Basic | ($0.56) | ($0.76) | -26% | $1.19 | ($0.99) | NM (1) | |
Net Income (Loss) Per Share - Diluted | ($0.56) | ($0.76) | -26% | $1.13 | ($0.99) | NM (1) | |
Weighted avg. common shares outstanding - basic | 564,962 | 551,005 | 560,288 | 550,979 | |||
Weighted avg. common shares outstanding - diluted | 564,962 | 551,005 | 587,385 | 550,979 | |||
Non-GAAP Results: | |||||||
Bookings: | |||||||
Category Leading Games | $1,356,357 | $880,655 | 54% | $4,874,534 | $3,457,568 | 41% | |
Rapid-Launch Games | $139,539 | $177,435 | -21% | $683,640 | $932,554 | -27% | |
NFT Publishing | $707,393 | $0 | NM (1) | $1,158,005 | $0 | NM (1) | |
Total Bookings | $2,203,289 | $1,058,090 | 108% | $6,716,179 | $4,390,122 | 53% | |
Adjusted EBITDA | $589,501 | $334,921 | 76% | $1,625,196 | $1,017,511 | 60% | |
Adjusted EBITDA Margin % | 35% | 28% | 28% | 23% | |||
(1) Percentage change not meaningful. | |||||||
Ilya Nikolayev , CEO of Tapinator commented, "We are extremely proud of our record performance in 2021. These results are driven by our continued strong execution within our mobile gaming business, combined with robust performance from within our nascent NFT art publishing business.
On the mobile gaming side, our products continue to perform as expected and we continue to release updates for our key games, including Video Poker Classic, Crypto Trillionaire and Lucky Lotto . We also recently completed development and launched Keno Vegas , a new social casino product that leverages the extensive foundation, including monetization and live operations systems, that we have spent years building out for Video Poker Classic .
With respect to our NFT business, we are focused on two directions:
1) NFT 500 is our NFT fine art collection platform and corresponding mobile application.
To date, we have acquired approximately 380 fine art NFTs from more than 150 prominent artists such as Tyler Hobbs , Matt Kane , Bored Ape Yacht Club, XCOPY, Helena Sarin , Pindar Van Arman, Monica Rizzolli, Refik Anadol , Manolo Gamboa Naon , Kevin Abosch , Zach Lieberman , Pak, Anne Spalter , Snofro, Hackatao, Bruce Gilden , Justin Aversano , Claire Silver , Zancan, Matt Deslauriers , Nick Kuder and Damien Hirst . We continue to refine, diversify and expand our collection and we view these digital assets as long-term investments within the emerging NFT art asset class. We remain highly enthused about our collection and the assets that we have acquired to date.
The NFT 500 mobile application leverages our years of experience in the mobile app space and was designed to extend the utility of the assets we have acquired, and to serve as a gateway between non crypto natives and the NFT art market at large. While we continue to believe that the casting of NFTs onto displays at home represents an interesting long-term opportunity, given the limited early consumer adoption of the app, at this time we do not believe this product will generate material revenues in the near future. However, given our belief in the long-term potential of our NFT casting technology, we plan on continuing to support and periodically update the NFT 500 mobile application.
2) Our NFT Publishing business focuses on partnering with artists who have existing bodies of work and helping them enter the NFT space. There is a multitude of talented artists, including digital creatives and photographers, who would be a great fit for NFTs, yet lack the technical, marketing and curatorial expertise to succeed. The significant experience that we have acquired as collectors and operators within this area has put us in a position where we are able to assist. We entered the NFT Publishing business in Q3 of last year and, to date, have successfully sold out several collection releases representing over 200 works of art from several artists. We believe that we have only scratched the surface here and are currently working diligently to further develop this business."
Andrew Merkatz , President of Tapinator, also commented on the Company's results, "We are especially pleased with the following operating and record setting accomplishments in 2021:
- We achieved record revenue and bookings of approximately $5 .8mm and $6 .7mm, respectively, representing growth of 31% and 53% year-over-year, respectively. Our revenue growth was driven primarily by our entry into the NFT publishing business, while our bookings growth was driven through a combination of NFT publishing and strong year-over-year growth from our category leading mobile games.
- Through a combination of strong top-line performance and an ongoing commitment to tight cost management, we delivered record net income of approximately $666k , representing basic and fully diluted EPS of $1.19 and $1.13 , respectively.
- We reported record adjusted EBITDA * of approximately $1 .6mm, representing growth of 60% year-over-year.
- Our adjusted EBITDA * margin was 28% during the year, up from 23% in 2020, indicative of the significant operating leverage we have designed into our business.
- Within our NFT 500 collection, we acquired 359 NFT artworks from more than 150 prominent artists whose works we believe, in general, are well positioned to yield significant long term capital appreciation. We also sold nine artworks resulting in realized gains of approximately $179,000 during the year.
- We completed development of the NFT 500 mobile app and casting platform, a cutting-edge product and a technically challenging achievement.
- We initiated our NFT Publishing activities and successfully sold out several NFT art collection releases during the year. We have developed an active pipeline of art collection releases slated to launch throughout 2022.
- We completed development on Keno Vegas , a highly promising new social casino title that we have recently launched."
Current Outlook
We continue to have strong conviction regarding our mobile games business, and specifically our Category Leading Games . Our investments within the NFT space are more speculative, but we continue to believe there are substantial long-term opportunities for the Company within the nascent Web 3.0 markets representing the intersection of NFTs, digital art, mobile gaming and the metaverse. Our early conviction regarding this market opportunity, which dates back to 2018, is now being proven out; according to market research firm DappRadar, global NFT Sales exploded to $23 billion in 2021. We are not providing financial guidance at this time.
Non-GAAP Financial Measures*
We have provided in this release the non-GAAP financial measures of Bookings and adjusted EBITDA as a supplement to the measures of Revenue and Operating which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings and adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings and adjusted is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings and adjusted in assessing our performance and when planning, forecasting and analyzing future periods. We believe Bookings and adjusted EBITDA are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical Bookings and adjusted EBITDA to the most directly comparable GAAP financial measures below. Some limitations of Bookings and adjusted EBITDA are as follows:
- Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
- Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, acquisition-related transaction expenses, one-time financing expenses, contingent consideration fair value adjustments, share settlement expense, and restructuring expense;
- Adjusted EBITDA does not reflect income tax expense;
- Adjusted EBITDA does not include other income or expense, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
- Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation and amortization and impairment of capitalized software are non-cash charges, the assets being depreciated and amortized or impaired may have to be replaced in the future;
- Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure; and
Because of these limitations, you should consider Bookings and adjusted EBITDA along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss), and our other financial results presented in accordance with GAAP.
NFT 500 Supplemental Information – Summary Collection Metrics | |||||
Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Totals as of | |
# of NFTs Collected | 13 | 104 | 141 | 101 | 359 |
# of NFTs Sold | 0 | 1 | 7 | 1 | 9 |
Cost of NFTs Collected | $ 13,241 | $ 76,019 | $ 393,080 | $ 716,421 | $ 1,198,761 |
Proceeds Received From Sale of Collected NFTs | $ - | $ 2,842 | $ 140,677 | $ 35,509 | $ 179,028 |
Cost of NFTs Collected, Net of Sales Proceeds | $ 13,241 | $ 73,177 | $ 252,403 | $ 680,912 | $ 1,019,733 |
Reconciliation of GAAP to Non-GAAP Results | ||||||
Quarter Ended | Year Ended | |||||
December 31 | December 31 | |||||
2021 | 2020 | 2021 | 2020 | |||
Reconciliation of Revenue to Bookings: | ||||||
Revenue | $1,678,800 | $1,210,510 | $5,840,124 | $4,454,940 | ||
Change in deferred revenue | $524,489 | ($152,420) | $876,054 | ($64,818) | ||
Bookings | $2,203,289 | $1,058,090 | $6,716,179 | $4,390,122 | ||
Reconciliation of Net Income (Loss) to Adjusted EBITDA: | ||||||
Net income (loss) | ($316,203) | ($416,411) | $665,580 | ($547,499) | ||
Interest expense, net | $0 | $0 | $2,554 | $31,407 | ||
Income tax benefit | $131,560 | $0 | $0 | $0 | ||
Impairment of capitalized software | $271,917 | $374,428 | $271,917 | $374,428 | ||
Standstill agreement, non-recurring | $0 | $170,625 | $0 | $170,625 | ||
Share settlement agreement, non-recurring | $0 | $0 | $93,555 | $0 | ||
Amortization of capitalized software development | $101,849 | $127,285 | $366,005 | $493,141 | ||
One-time financing costs | $0 | $0 | $0 | $112,963 | ||
Gain on extinguishment of debt | $0 | $0 | ($109,231) | $0 | ||
Depreciation and amortization of other assets | $2,881 | $752 | $5,871 | $3,307 | ||
Impairment of digital assets | $402,099 | $0 | $407,943 | $0 | ||
Realized gains on sale of digital assets | ($32,519) | $0 | ($167,770) | $0 | ||
Realized gains on sale of investments | ($8,010) | $0 | ($8,010) | $0 | ||
Stock-based expense | $35,927 | $78,242 | $96,782 | $379,139 | ||
Adjusted EBITDA | $589,501 | $334,921 | $1,625,196 | $1,017,511 | ||
About Tapinator
Tapinator Inc. (OTC: TAPM) develops and publishes category leading games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic and Crypto Trillionaire . Through our wholly-owned subsidiary, Revolution Blockchain and the NFT 500 platform, we have amassed a significant collection of what we believe are "blue-chip" fine art NFT's, and we have developed and launched a mobile application that extends the utility of these digital asset investments. We generate revenues from our mobile games via consumer transactions, including in-app purchases and subscriptions, and through the sale of branded advertisements. We also generate revenue from publishing and selling NFTs in partnership with select artists. Founded in 2013, we are headquartered in New York , with product development, design and marketing teams located in North America and Europe .
To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "opinion," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our view that our NFT art digital assets are long-term investments within the emerging NFT art asset class, our continued belief that the casting of NFTs onto displays at home represents an interesting long-term opportunity and technology, our plan to continue to support and periodically update the NFT 500 mobile application, our belief that we have only scratched the surface of the NFT Publishing business, our belief that we are well positioned to yield significant long term capital appreciation within our NFT 500 art collection and our continued belief there are substantial long-term opportunities for us within the nascent Web 3.0 markets representing the intersection of NFTs, digital art, mobile gaming and the metaverse. Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on October 20, 2021 and as updated from time to time.
CONTACT :
Tapinator Investor Relations
investor.relations@tapinator.com
914.930.6232
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