SkkyNet Cloud Systems, Inc. (SKKY), a Nevada corporation headquartered in Mississauga, Canada, has recently released its quarterly financial report, highlighting a 9.9% increase in revenue for the six-month period ended April 30, 2023, compared to the same period in 2022.
The company operates three different lines of business through its wholly-owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), SkkyNet, Inc. (“Skkynet (USA)”), and Skkynet Corp. (“Skkynet (Canada)”). SkkyNet is dedicated to delivering Software-as-a-Service (“SaaS”) products targeting the Industrial Internet of Things (“IoT”) market, also known as Industry 4.0 and Industrial Internet Consortium.
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Financial Report Highlights
According to the financial report, revenue for the six-month period ended April 30, 2023, amounted to $1,117,583, compared to $1,017,272 for the same period in 2022. The increase in revenue has been attributed to higher sales by Cogent, which benefited from the company’s prior investment in sales and marketing as well as increased market recognition.
Revenue Concentration and Reseller Sales
Geographically, the company’s revenue concentration is spread across Europe (31%), North America (43%), Asia Pacific (15%), Middle East-Africa/Other (9%), and South America (2%). During the six-month period, six resellers accounted for 49% of sales, with one reseller contributing 27% of the total. SkkyNet maintains information on its end-user customers, enabling it to sell directly to the end-user if a reseller discontinues operations.
Net Loss after Income Taxes and Operating Loss
Although the company reported increased revenue, it also reported a net loss after income taxes of $231,021 and an operating loss of $251,358 for the six-month period ended April 30, 2023. This is primarily due to higher general and administrative costs and salaries and wages compared to the same period in 2022. The company also recognized an option expense of $66,109 during the six-month period, while the unrecognized future balance to be expensed over the term of the options is $76,074.
Current Assets, Liabilities, and Stockholders’ Equity
As of April 30, 2023, SkkyNet had current assets of $1,126,317 and current liabilities of $616,091, resulting in working capital of $510,226. The accumulated deficit as of April 30, 2023, was $6,686,116, with total stockholders’ equity of $501,338.
Net Cash Provided in Operating Activities
Net cash provided in operating activities for the six-month period ended April 30, 2023, amounted to $43,806, a significant improvement compared to net cash used in operating activities of $207,953 in the same period of 2022. The positive change in cash flow from operating activities is attributed to improvements in accounts receivable, accounts payable, amounts due related parties, and a rise in deferred revenue during the period.
Challenges and Future Prospects
Though the company faces challenges in managing its expenses and maintaining profitability, the increase in revenue during the six-month period ended April 30, 2023, is a positive sign for SkkyNet Cloud Systems, Inc. Further investment in sales, marketing, and product development, along with efficient cost management, will be crucial in driving future growth and improving profitability.
Note that we may hold securities mentioned in this article. The source of this article are the SEC filings available at https://www.sec.gov/Archives/edgar/data/1546853/000147793223004513/skky_10q.htm that we extracted with the help of various software tools. Even though we have implemented various fact-checking processes, some incorrect information may have remained in the article (false positive). Let us know if you find any inconsistencies!