iPass Inc (IPAS) saw its loss narrow to $1.34 million, or $0.02 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $3.43 million, or $0.05 a share.
Revenue during the quarter grew 5.95 percent to $15.88 million from $14.98 million in the previous year period. Gross margin for the quarter contracted 238 basis points over the previous year period to 35.19 percent. Operating margin for the quarter stood at negative 7.85 percent as compared to a negative 22.12 percent for the previous year period.
Operating loss for the quarter was $1.25 million, compared with an operating loss of $3.32 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.39 million compared to negative $1.62 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 2.46 percent for the quarter compared to negative 10.83 percent in the last year period.
“The third quarter exemplified our previous commentary on this year; 2016 is about execution coming off 2015 that set the course for change,” said Gary Griffiths, president and chief executive officer. “First, our ACV continues to ramp, and we are finding more and more varied opportunities to sell the iPass service. Enterprises are still drawn to the value proposition, but we are unleashing an ever expanding market for our technology, as the iPass SmartConnect SDK finds its way into mobile operators, MVNOs, loyalty programs, social networking apps, and digital media providers. Second, while we spent some cash in the first quarter, we have stemmed that burn and our cash balance is flat over the last six months. Third, we’ve seen continued and significant improvements in our product, as measured in both connectivity success rates and data collection and processing. And finally, growth; as our third quarter revenues again grew year over year, driven by explosive growth in strategic partner revenue, and also growth in usage of nearly 60%.”
Ipass forecasts revenue to be in the range of $63 million to $68 million for fiscal year 2016.
Operating cash flow remains negative
iPass Inc has spent $4.30 million cash to meet operating activities during the nine month period as against cash outgo of $9.77 million in the last year period.
The company has spent $0.30 million cash to meet investing activities during the nine month period as against cash inflow of $0.91 million in the last year period
Cash flow from financing activities was $1.47 million for the nine month period as against cash outgo of $0.70 million in the last year period.
Cash and cash equivalents stood at $17.17 million as on Sep. 30, 2016, down 29.16 percent or $7.07 million from $24.24 million on Sep. 30, 2015.
Working capital declines
iPass Inc has witnessed a decline in the working capital over the last year. It stood at $17.47 million as at Sep. 30, 2016, down 16.45 percent or $3.44 million from $20.91 million on Sep. 30, 2015. Current ratio was at 2.43 as on Sep. 30, 2016, up from 2.30 on Sep. 30, 2015.
Days sales outstanding went down to 61 days for the quarter compared with 63 days for the same period last year.
At the same time, days payable outstanding went down to 54 days for the quarter from 65 for the same period last year.
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