Paltalk (NASDAQ:PALT) said its revenue in the financial year ended December 31, 2021, rose to $13.3 million, a 3% increase from $12.8 million in the previous year, driven by increases in subscription and advertising revenue.
The company’s financial results showed that subscription revenue increased by 3% to $12.4 million, while advertising revenue jumped 39% to $0.5 million. Income from operations for the year decreased to $0.5 million from $1.2 million in 2020 which then included a non-cash impairment loss on digital tokens of approximately $0.8 million.
Net income for the year ended remained relatively unchanged at $1.3 million compared to the previous year. Adjusted EBITDA for 2021 slipped to $1.3 million from $2.0 million.
“Our quarterly results remain positive and consistent due to our recurring subscription revenue, which makes up the majority of our revenue and has historically provided excellent predictability and visibility for our business,” Jason Katz, chairman and CEO of Paltalk said in a statement. "During the fourth quarter of 2021, we raised $11.6 million at $7.50 per share. This capital infusion gives us added flexibility in growing our business organically and potentially through acquisitions, which we continue to explore."
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Katz, continued: "We believe we have entered the next growth phase of our business. During the fourth quarter of 2021, we invested in new marketing tools with a focus on increasing visibility, user engagement, subscribers and customer engagement. We forged new partnerships with marketing agencies in the first quarter of 2022 and they are just now commencing their efforts."
"We plan to continue this incremental marketing spend with a careful eye on our internal metrics of users, subscribers and engagement, as return on investment ( is very important to us. We aim to increase marketing and customer engagement as we carefully manage our capital. We look forward to updating the market and our shareholders with our progress on both internal growth initiatives and potential strategic accretive acquisitions," he added.
In 4Q, Paltalk's revenue was $3.1 million compared to $3.4 million for the three months ended December 31, 2020. The drop was almost entirely attributable to the decrease in technology service revenue as a result of the termination of the company’s partnership with Open Props, Inc. (formerly YouNow). Subscription revenue decreased by 1% but advertising revenue increased 18%.
The company recorded a net loss of $0.01 million for the three months ended December 31, 2021, compared to net income of $0.5 million for the three months ended December 31, 2020. Adjusted EBITDA for the quarter slipped to a loss of $0.2 million, compared to positive EBITDA of $0.8 million for the three months ended December 31, 2020.
Currently, the company has no long-term debt on its balance sheet.
Highlights during the year included:
- The company raised gross proceeds of approximately $11.6 million, before deducting underwriting discounts, commissions and other offering expenses, in connection with an underwritten public offering of 1,552,500 shares of common stock at a price of $7.50 per share
- Completed an uplist of common stock to The Nasdaq Capital Market
- Raised net proceeds of approximately $3.5 million in connection with an underwritten public offering of 1,333,310 shares of common stock at a price to the public of $3.00 per share;
- Sold approximately 36.9 million Props tokens for total proceeds of $0.9 million
On March 21, 2022, the company's board approved a stock repurchase plan for up to $1.75 million of its common stock. The plan is effective as of March 29, 2022, and expires on the one-year anniversary of such date.
"Additionally, we expect that the new stock repurchase plan recently approved by our Board will enhance our capital allocation strategy by providing additional flexibility to opportunistically repurchase shares at attractive prices. This repurchase plan will help us to deploy corporate resources in a way that increases stockholder value while reinvesting in our business," Paltalk CEO Katz noted
Nasdaq-listed Paltalk is a communications software innovator that powers multimedia social applications. Its product portfolio includes Paltalk and Camfrog, which together host one of the world’s largest collections of video-based communities.
Contact the author at jon.hopkins@proactiveinvestors.com