Financial News
Recruiter.com Announces Second Quarter 2022 Results
Quarterly Revenue Increased to $7.1M, up 62% y/y
NEW YORK, NY / ACCESSWIRE / August 15, 2022 / Recruiter.com Group, Inc. (NASDAQ:RCRT)(NASDAQ:RCRTW) ("Recruiter.com"), a recruiting solutions platform, today announced financial results for the second quarter of 2022, ended June 30, 2022.
"Recruiter.com delivered a strong quarter, growing revenues and margins while reducing operating expenses," said Evan Sohn, CEO of Recruiter.com. "Strong product market fit and solid hiring demand helped grow revenues by 62% y/y to $7.1 million and achieve 3.5% organic revenue growth sequentially."
"A sustained shift toward our software and on-demand services enabled our gross profit to more than double y/y to $2.9 million and expand our gross margin to 41.2%. During the quarter, we also focused on delivering operating efficiency, reducing our adjusted EBITDA loss to $397 thousand, a 70% sequential improvement. We are excited by the growth opportunities ahead of us and expect to cross the breakeven mark for positive adjusted EBIDTA before year-end."
Recent Highlights
- Revenue for the second quarter of 2022 totaled $7.1 million, an increase of $2.7 million or 62%, compared to revenue of $4.4 million in the second quarter of 2021. Revenue growth was primarily driven by a 161% increase in the Recruiters on Demand business and continued growth in Software Subscriptions, which launched in 2021.
- Gross profit for the second quarter of 2022 was $2.9 million, a 107% increase compared to $1.4 million gross profit in the comparable period of 2021. The gross profit margin expanded to 41.2% compared to 32.8% a year ago. The increase reflects the continued shift in the Company's sales mix to its faster-growing and higher-margin businesses.
- Announced advancements to Recruiter.com AI that keep employer needs top of mind. Upgrades include improved search capability, email outreach, and a new candidate tracker dashboard allowing employers to review each candidate's background in one integrated view. When paired with the Recruiter.com Recruiters On Demand service, the solution delivers qualified and engaged candidates that have been screened and are "ready to interview."
Financial Results for the Second Quarter Ended June 30, 2022
Revenue for the second quarter of 2022 totaled $7.1 million, an increase of $2.7 million or 61%, compared to revenue of $4.4 million in the second quarter of 2021.
Gross profit for the second quarter of 2022 was $2.9 million, a 107% increase compared to $1.4 million gross profit in the comparable period of 2021. The gross profit margin expanded to 41.2% compared to 32.8% a year ago. The increase reflects the continued shift in the Company's sales mix to its faster-growing and higher-margin businesses.
Total operating expenses were $5.3 million, an increase of 36% compared to $3.9 million for the second quarter of 2021. The increase was primarily due to higher sales and marketing, product development, general and administrative expense, and higher amortization of intangibles of $917,000 compared to $675,000 in the year-ago period.
Recruiter.com had a net loss of $1.2 million in the second quarter of 2022 compared to net income of $3.5 million in the second quarter of 2021. The net loss in the second quarter of 2022 included non-cash depreciation and amortization expense of $917,000, bad debt expense of $345,000, and equity-based compensation expense of $669,000.
Liquidity and Capital Resources
On June 30, 2022, Recruiter.com had $1.7 million in cash and cash equivalents, and accounts receivable, net, of $4.3 million. There were 14,915,682 common shares outstanding at quarter-end.
Conference Call Details
Date: Monday, August 15th
Time: 4:30 pm ET / / 1:30 pm PT
Register at: https://www.webcaster4.com/Webcast/Page/2765/46178
To access the conference by phone:
U.S. Dial-in: 877-545-0320
International Dial-in: 877-545-0320
Passcode: 413648
About Recruiter.com Group, Inc.
Recruiter.com is an on-demand recruiting platform providing flexible talent acquisition solutions that scale from startups to the Fortune 100. With an on-tap network of thousands of recruiting professionals, advanced artificial intelligence sourcing software, and recruitment marketing automation, Recruiter.com helps businesses solve today's complex hiring challenges.
For investor information, visit https://investors.recruiter.com
Please follow social media channels for additional updates:
- LinkedIn Recruiter Network Group: https://www.linkedin.com/groups/42370/
- LinkedIn Company Page: https://www.linkedin.com/company/1240434
- Twitter Company Page: https://twitter.com/recruiterdotcom
- Facebook Company Page: https://www.facebook.com/RecruiterDotCom
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "predict," "forecast," "believe," "may," "estimate," "continue," "anticipates," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements primarily on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include continued demand for professional hiring, the accuracy of the Recruiter Index® survey, the impact of the COVID-19 pandemic on the job market and the economy as virus levels are again rising in many states, and the Risk Factors contained within our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2021. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statements publicly, whether as a result of new information, future developments, or otherwise, except as may be required by law.
Company Contact:
Nicole Gallina
Corporate Communications
investors@recruiter.com
-Tables Follow-
Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 1,713,660 | $ | 2,584,062 | ||||
Accounts receivable, net of allowance for doubtful accounts of $1,184,809 and $934,219, respectively | 4,261,232 | 5,650,668 | ||||||
Accounts receivable - related parties | - | 49,033 | ||||||
Prepaid expenses and other current assets | 393,211 | 546,079 | ||||||
Total current assets | 6,368,103 | 8,829,842 | ||||||
Property and equipment, net of accumulated depreciation of $3,463 and $2,982, respectively | - | 481 | ||||||
Intangible assets, net | 8,579,904 | 9,741,832 | ||||||
Goodwill | 7,683,198 | 7,718,842 | ||||||
Total assets | $ | 22,631,205 | $ | 26,290,997 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,336,078 | $ | 1,121,510 | ||||
Accounts payable - related parties | 25,931 | 163,672 | ||||||
Accrued expenses | 1,378,696 | 1,285,339 | ||||||
Accrued compensation | 900,162 | 1,551,162 | ||||||
Accrued interest | 4,869 | 19,726 | ||||||
Contingent consideration for acquisitions | - | 578,591 | ||||||
Deferred payroll taxes | 81,728 | 81,728 | ||||||
Other liabilities | 17,333 | 17,333 | ||||||
Loans payable - current portion | 3,862,052 | 1,712,387 | ||||||
Refundable deposit on preferred stock purchase | 285,000 | 285,000 | ||||||
Customer advances | 426,136 | - | ||||||
Deferred revenue | 523,631 | 746,449 | ||||||
Total current liabilities | 8,841,616 | 7,562,897 | ||||||
Loans payable - long term portion | 632,201 | 2,637,875 | ||||||
Total liabilities | 9,473,817 | 10,200,772 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders' Equity: | ||||||||
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 86,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 9 | 9 | ||||||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,851,146 and 14,566,420 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 1,486 | 1,457 | ||||||
Shares to be issued, 587,945 shares as of June 30, 2022 and December 31, 2021 | 59 | 59 | ||||||
Additional paid-in capital | 69,386,572 | 66,948,340 | ||||||
Accumulated deficit | (56,230,738 | ) | (50,859,640 | ) | ||||
Total Stockholders' Equity | 13,157,388 | 16,090,225 | ||||||
Total Liabilities and Stockholders' Equity | $ | 22,631,205 | $ | 26,290,997 | ||||
Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Six Months ended June 30, 2022 and 2021
(Unaudited)
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
Revenue (including related party revenue of $0, $0, $0 and $970, respectively) | $ | 7,112,450 | $ | 4,380,894 | $ | 13,981,103 | $ | 7,545,439 | ||||||||
Cost of revenue (including related party costs of $0, $212,279, $0 and $417,540, respectively) | 4,183,478 | 2,946,084 | 8,361,549 | 5,200,994 | ||||||||||||
Gross profit | 2,928,972 | 1,434,810 | 5,619,554 | 2,344,445 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 158,040 | 75,006 | 276,796 | 132,549 | ||||||||||||
Product development (including related party expense of $0, $54,696, $16,771 and $112,684, respectively) | 89,473 | 75,004 | 682,859 | 145,664 | ||||||||||||
Amortization of intangibles | 917,239 | 675,095 | 1,925,712 | 834,268 | ||||||||||||
General and administrative (including share-based compensation expense of $669,047, $1,112,834, $2,404,064 and $1,615,241, respectively, and related party expenses of $0, $106,149, $19,825 and $232,781, respectively) | 4,097,397 | 3,062,597 | 9,193,101 | 5,608,502 | ||||||||||||
Total operating expenses | 5,262,149 | 3,887,702 | 12,078,468 | 6,720,983 | ||||||||||||
Loss from operations | (2,333,177 | ) | (2,452,892 | ) | (6,458,914 | ) | (4,376,538 | ) | ||||||||
Other income (expenses): | ||||||||||||||||
Interest expense (including related party interest expense of $0, $18,193, $0 and $30,466, respectively) | (64,491 | ) | (1,592,822 | ) | (131,906 | ) | (3,020,410 | ) | ||||||||
Initial derivative expense | - | - | - | (3,585,983 | ) | |||||||||||
Other income | 3,713 | - | 14,527 | - | ||||||||||||
Change in fair value of derivative liability | - | 7,574,750 | - | 8,203,371 | ||||||||||||
Gain on debt extinguishment | 1,205,195 | - | 1,205,195 | 24,925 | ||||||||||||
Grant income | - | - | - | 3,382 | ||||||||||||
Net recognized gain (loss) on marketable securities | - | (757 | ) | - | (534 | ) | ||||||||||
Total other income (expenses) | 1,144,417 | 5,981,171 | 1,087,816 | 1,624,751 | ||||||||||||
(Loss) income before income taxes | (1,188,760 | ) | 3,528,279 | (5,371,098 | ) | (2,751,787 | ) | |||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
Net (Loss) income | $ | (1,188,760 | ) | $ | 3,528,279 | $ | (5,371,098 | ) | $ | (2,751,787 | ) | |||||
Net (loss) income per common share - basic | $ | (0.08 | ) | $ | 0.99 | $ | (0.36 | ) | $ | (0.89 | ) | |||||
Net (loss) income per common share - diluted | $ | (0.08 | ) | $ | 0.69 | $ | (0.36 | ) | $ | (0.89 | ) | |||||
Weighted average common shares - basic | 14,830,738 | 3,560,745 | 14,795,691 | 3,091,146 | ||||||||||||
Weighted average common shares - diluted | 14,830,738 | 5,879,481 | 14,795,691 | 3,091,146 | ||||||||||||
Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Six Months ended June 30, 2022 and 2021
(Unaudited)
Six Months Ended | Six Months Ended | |||||||
June 30, 2022 | June 30, 2021 | |||||||
Cash Flows from Operating Activities | ||||||||
Net loss | $ | (5,371,098 | ) | $ | (2,751,787 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization expense | 1,926,194 | 834,845 | ||||||
Bad debt expense | 363,702 | 58,726 | ||||||
Gain on debt extinguishment | (1,205,195 | ) | (24,925 | ) | ||||
Equity based compensation expense | 2,404,064 | 1,615,241 | ||||||
Recognized loss on marketable securities | - | 534 | ||||||
Warrant modification expense | 152,244 | - | ||||||
Loan principal paid directly through grant | - | (2,992 | ) | |||||
Amortization of debt discount and debt costs | - | 2,486,111 | ||||||
Initial derivative expense | - | 3,585,983 | ||||||
Change in fair value of earn-out liability | 26,604 | - | ||||||
Factoring discount fee and interest on factoring agreement | 45,413 | - | ||||||
Change in fair value of derivative liability | - | (8,203,371 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Decrease (increase) in accounts receivable | 134,002 | (2,032,275 | ) | |||||
Decrease (increase) in accounts receivable - related parties | 49,033 | (5,602 | ) | |||||
Decrease (increase) in prepaid expenses and other current assets | 34,821 | (186,329 | ) | |||||
(Decrease) increase in accounts payable and accrued liabilities | (357,932 | ) | 1,900,033 | |||||
(Decrease) increase in accounts payable - related parties | (137,741 | ) | 410,040 | |||||
Increase in customer advances | 426,136 | - | ||||||
(Decrease) increase in deferred revenue | (222,818 | ) | 425,383 | |||||
Net cash used in operating activities | (1,732,571 | ) | (1,890,385 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Capitalized internal use software | (763,785 | ) | - | |||||
Cash and receivables acquired | - | 220,153 | ||||||
Cash paid for acquisitions | - | (249,983 | ) | |||||
Net cash used in investing activities | (763,785 | ) | (29,830 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Proceeds from notes | - | 250,000 | ||||||
Proceeds from convertible notes | - | 2,153,200 | ||||||
Deferred offering costs | - | (473,896 | ) | |||||
Payments of notes | (1,101,400 | ) | (11,193 | ) | ||||
Proceeds from factoring agreement | 3,380,362 | - | ||||||
Repayments of factoring agreement | (653,008 | ) | - | |||||
Repayments of sale of future revenues | - | (10,904 | ) | |||||
Net cash provided by financing activities | 1,625,954 | 1,907,207 | ||||||
Net decrease in cash | (870,402 | ) | (13,008 | ) | ||||
Cash, beginning of period | 2,584,062 | 99,906 | ||||||
Cash, end of period | $ | 1,713,660 | $ | 86,898 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 59,622 | $ | 159,325 | ||||
Cash paid during the period for income taxes | $ | - | $ | - | ||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||
Original issue discount deducted from convertible note proceeds | $ | - | $ | 342,554 | ||||
Debt costs deducted from convertible note proceeds | $ | $ | 334,800 | |||||
Intangible assets acquired | $ | - | $ | 7,066,165 | ||||
Notes and accrued interest converted to common stock | $ | $ | 356,689 | |||||
Common stock issued/to be issued for asset acquisitions | $ | - | $ | 4,956,948 | ||||
Notes payable and accrued interest exchanged for debentures | $ | $ | 252,430 | |||||
Accounts payable paid with common stock | $ | - | $ | 140,000 | ||||
Accrued compensation paid with common stock | $ | - | $ | 16,425 | ||||
Warrant derivative liability extinguished | $ | - | $ | 373,070 | ||||
Liabilities assumed in acquisition | $ | - | $ | 89,089 | ||||
Warrant derivative liability at inception | $ | - | $ | 5,960,059 | ||||
Accounts receivable owed under factoring agreement collected directly by factor | $ | 927,376 | $ | - | ||||
Purchase price measurement period adjustment to goodwill and accounts receivable | $ | 35,644 | $ | - | ||||
The following table presents a reconciliation of net loss to Adjusted EBITDA (loss):
| Three months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
Net Income (loss) | $ | (1,188,760 | ) | $ | 3,528,279 | |||
Interest expense and finance cost, net | 64,491 | 1,592,822 | ||||||
Depreciation & amortization | 917,431 | 675,384 | ||||||
EBITDA (loss) | (206,838 | ) | 5,796,485 | |||||
Bad debt expense | 345,202 | 41,763 | ||||||
Gain on debt extinguishment | (1,205,195 | ) | - | |||||
Loss (gain) on change in fair value of derivative | - | (7,574,750 | ) | |||||
Stock-based compensation | 669,047 | 960,334 | ||||||
Adjusted EBITDA (Loss) | $ | (397,784 | ) | $ | (776,168 | ) | ||
| Six months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
Net loss | $ | (5,371,098 | ) | $ | (2,751,787 | ) | ||
Interest expense and finance cost, net | 131,906 | 3,020,410 | ||||||
Depreciation & amortization | 1,926,194 | 834,845 | ||||||
EBITDA (loss) | (3,312,998 | ) | 1,103,468 | |||||
Bad debt expense | 363,702 | 58,726 | ||||||
Gain on debt extinguishment | (1,205,195 | ) | (24,925 | ) | ||||
Initial derivative expense | - | 3,585,983 | ||||||
Loss (gain) on change in fair value of derivative | - | (8,203,371 | ) | |||||
Stock-based compensation | 2,404,064 | 1,615,241 | ||||||
Adjusted EBITDA (Loss) | $ | (1,750,427 | ) | $ | (1,864,878 | ) | ||
SOURCE: Recruiter.com Group, Inc.
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