Ottawa-based Ackroo posted record revenues in the second quarter, moving the firm closer to its goal of becoming cash-flow positive.
The provider of loyalty and gift-card technologies for retailers earned revenues of $651,606 in the three-month period ending on June 30, an increase of 17 per cent over the same quarter a year earlier.
In a release announcing the latest results, Ackroo (TSXV:AKR) said it recently completed several “critical operational and technical advancements” during the second quarter, including the migration of more merchants to its Ackroo Anywhere platform. The firm also announced it closed a private placement in July worth more than $630,000 to fund its ongoing growth.
“The combination of all of these items along with several new customer wins and operational advancements made this one of Ackroo’s strongest quarters to date and positions the company for a very strong finish to the second half of 2017,” CEO Steve Levely said in a statement. “I am extremely pleased with the results and progress made across the business.”
The firm’s gross margin improved to 70.1 per cent, up from 64.8 per cent a year earlier. But Ackroo still has yet to turn a profit, posting a second-quarter loss of nearly $107,000 compared with a loss of just over $84,000 for the same period in 2016.
Still, Mr. Levely said the company is on track to become cash-flow positive in the near future. The CEO said Ackroo had cleared some “large technical debt items” from its ledger in the second quarter, adding the firm reduced its expenses through various “operational changes,” including cutting its workforce to 17 from 20.
In an e-mail to OBJ, Mr. Levely said the firm expects to break even within the next two quarters.
“Then once we get to cash-flow positive, we will hire back in to support our scaling plans,” he added.
“Hitting cash-flow positive is an important goal for the company, and we are now very much in reach of doing so,” he said. “Q2 truly was one of our best quarters in company history on many levels and has us poised for an even better Q3 and great close to 2017.”
Ackroo sells cloud-based gift card and loyalty platforms to retail and hospitality customers. Its software-as-a-service business model generates monthly recurring revenues, as well as one-time installation and service fees.
The company’s full-year revenues grew to $2.2 million last year, up 22 per cent from 2015. However, the company also rang up a $1.8-million loss during the year.
Ackroo’s stock price was down 21 per cent, or 1.5 cents, to 5.5 cents per share in midday trading on the TSX Venture Exchange.