NexTech AR Solutions Corp (CSE:NTAR) (OTCQB:NEXCF) posted preliminary second-quarter results on Wednesday, revealing revenue and profit that more than doubled year-over-year thanks in part to surging demand for its InfernoAR video conferencing platform.
The augmented reality company reported revenue of $3.5 million for the three months ended June 30, 133% more than the same period a year earlier. Gross profit grew 171% to $2.1 million with a 60% margin. The company has $6.4 million cash on hand and working capital of $7.3 million.
“We are pleased to report that our preliminary second quarter ended June 30th, 2020 results were positive and very strong across our business segments,” CEO Evan Gappelberg said in a statement. “These results were driven by new customer additions, expansion of product lines and increases in conversions from our e-commerce and the newly acquired InfernoAR business.”
Demand for InfernoAR has taken off as businesses have shifted to remote work and events during the coronavirus pandemic. NexTech has booked roughly $1 million in new virtual event deals over the past 60 days. The platform’s current run rate is approaching more than $12 million annually, the company said.
“We are uniquely positioned to see our business benefit from this new stay at home paradigm shift with our AR ecommerce, video conferencing and virtual events business units,” Gappelberg said. “The digital transformation that is taking place globally is creating more business opportunities for video conferencing virtual learning, virtual conferences, or virtual events and e-commerce than ever before.”
NexTech’s recent success has set it up for future acquisition opportunities, Gappelberg said.
“NexTech’s leadership position in this industry is now attracting more M&A opportunities, as we are being approached by innovative AR/VR technology companies,” he said. “We have closed on four deals in the last 18 months and are in discussions with several candidates with an eye toward a transformative acquisition, which could further enhance shareholder value.”
The CEO also addressed a recent back-and-forth with short-sellers.
“In recent days, our stock has again been attacked by short-sellers who are using market manipulation and false rumors to create panic in the market,” Gappelberg said. “... I would like to remind investors that after the February short-seller attack, and a sharp sell-off in the stock, our stock has moved on to new all-time highs."
“NexTech’s business is firing on all cylinders, and sales velocity is accelerating,” he added. “Our business, our cash position and our product mix has never been better since going public in 2018. It is unfortunate that shareholders are being misled by individuals that want to see our stock go down and we urge you to read our financial reports, to visit our website or even call me directly as many of you have in the past day. My direct line is 631-655-6733 or you can email me questions at firstname.lastname@example.org as we have nothing to hide.”
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