Bsquare Reports First Quarter 2018 Financial Results

BELLEVUE, Wash., May 15, 2018

"Our first quarter results reflect several positive developments with DataV, our industrial Internet of Things (IoT) software solution," said Bsquare acting CEO Kevin Walsh. "We received customer acceptance with Itron, Inc., one of our marquee DataV customers, and we executed an agreement valued at just under $1.0 million to deliver DataV engineering services to a Fortune 100 company. Today, we announced that a Q4 2017 pilot has been converted to a three-year DataV SaaS agreement with that same company. We also recently formalized a collaboration with Amazon Web Services (AWS) IoT services to use DataV's Manage application to allow enterprises to onboard, organize, monitor, and remotely manage connected devices at scale. We believe this collaboration will lead to additional customer opportunities."

"As we advance through 2018, we will be narrowing our focus to delight our current customers, accelerate the pace of customer acquisition and conversion, and improve our overall financial performance. As part of this sharpening of focus, we are reducing our annualized marketing, sales and administrative costs by approximately $5.0 million as we increase the efficiency of our DataV go to market strategy. We believe we can execute these changes while still addressing the large industrial IOT opportunity with DataV," concluded Mr. Walsh.

First Quarter 2018 Financial Highlights

• Revenue for the quarter was $20.7 million, down 9.5% compared to the first quarter of 2017 and up 6.2% compared to the fourth quarter of 2017.
• Net loss for the quarter was $2.4 million, or $0.19 per diluted share, compared to net income of $0.2 million, or $0.02 per diluted share, in the first quarter of 2017 and net loss of $4.2 million, or $0.33 per diluted share, in the fourth quarter of 2017.
• Adjusted EBITDAS ⁽¹⁾ was negative $2.0 million, down $2.6 million from the first quarter of 2017 and improved by $1.7 million from the fourth quarter of 2017.
• Cash, cash equivalents and short-term investments at March 31, 2018 totaled $21.4 million, a decrease of approximately $9.5 million from March 31, 2017 and $3.3 million from December 31, 2017.

Details as follows (unaudited, in thousands except percentages and per share amounts):