Pareteum provides Software-as-a-Service (SaaS) and cloud infrastructure to communication service providers and businesses as well as to Internet of Things and machine-to-machine connected devices.
The company was awarded a total of 19 contracts in the third quarter, totaling $403 million in total contract value.
During an earnings call, Executive Chairman Robert "Hal" Turner highlighted that from July through the end of October, Pareteum won 27 new contracts, which added $112 million to its 36- month contractual revenue backlog.
Turner noted that the company has experienced growth of $72 million from existing contracts and an additional $40 million from software company Artilium, which the company recently acquired in a $104.7 million deal.
He also said that the total contract value amounted to $500 million as of October 30.
$500 million dollar question
Pareteum reported $40 million in contractual revenue backlog in 2016 and $147 million in 2017, making the $500 million figure a significant jump. Eric Martinuzzi, a senior research analyst with Lake Street Capital Markets, asked Turner the $500 million question: How did Pareteum boost its revenue and scoop up all these contracts?
“The first thing that we see driving this is just an overall increase in mobility and the need for applications to be driven through mobility. And therefore, mobile virtual network operators coming into the space,” answered Turner.
The company was experiencing a significant increase in inbound requests, which analyst Martinuzzi referred to as the “salesperson’s dream.”
Not only has Pareteum been inking deals, but it has also been filling the growing number of orders as well.
The contractual revenue backlog conversion rate stood at 100% in its third quarter.
Turner gave due credit to the Pareteum sales team, but also noted the role SEO, or search engine optimization, played in the increase as the company appears often at the top of ratings and rankings.
Pareteum reported earnings of $0.01 per share, swinging to a profit compared with a net loss of $0.12 per share in the previous third quarter.
Revenue more than doubled year over year to $8 million, compared with $3.5 million in last year’s third quarter. The New York-based company surpassed Wall Street revenue estimates of $7.24 million.
“Surpassing $8 million in revenues in the third quarter demonstrates the efficiency of our employees in converting our Contract Revenue Backlog into revenue. Our results include growth in adjusted EBITDA, which reflects the scalability of our recurring revenue SaaS business model,” said Executive Chairman Hal Turner in the company’s press release.
The company has raised its full-year outlook, expecting revenue growth to more than double compared with 2018 based on its contractual revenue backlog. Its previous guidance expected an increase of about 85%.
Pareteum expects positive adjusted EBITDA and cash from continuing operations for the year ahead.
Shares of Pareteum were up about 8% before the close and jumped nearly 6% to $2.42 in Wednesday after-hours trading.