Phunware, Inc.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
PHUN$1.75+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0000950170-25-105877
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001193125-25-272407
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 105 current paragraphs.
79 unchanged; 20 reworded; 6 added; 4 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
On October 31, 2025, the Company filed its annual proxy statement on Schedule 14A, which stated the Company plans to hold its 2025 Annual Meeting of Stockholders on December 17, 2025. Among other stockholder proposals, the Company nominated Mr. Jeremy Krol, the Company's Interim Chief Executive Officer, and Mr. Ed Lu for election to serve as Class I directors until the 2028 annual meeting of stockholders and until their successor has been elected and qualified, or until their earlier death, resignation or removal.
Current report
Net Revenue
Current report
Net revenue decreased minimally by $0.04 million, or (6.5%), for the three months ended September 30, 2025 compared to the corresponding period in 2024, as a result of low churn year-over-year for software customers and consistent advertising campaign traffic.
Current report
Total gross profit decreased minimally by $0.04 million, or (10.9%), for the three months ended September 30, 2025, compared to the corresponding period in 2024, primarily as a result of low churn year-over-year for software customers and consistent advertising campaign traffic described above.
Current report
General and administrative expense increased $0.03 million, or 1.2%, for the three months ended September 30, 2025 compared to the corresponding period in 2024. All major expense categories remained materially consistent period over period.
Current report
Research and development expense increased $0.07 million, or 10.9%, for the three months ended September 30, 2025 compared to the corresponding period in 2024. All major expense categories remained materially consistent period over period.
Removed paragraphs (4)
Previous report
On July 13, 2025, the Board terminated Stephen Chen's at-will employment as Interim Chief Executive Officer. Pursuant to the terms of Mr. Chen’s employment agreement dated October 22, 2024, his termination as Interim Chief Executive Officer also constitutes a termination from all positions that Mr. Chen holds as a member of the Board and any committee thereof, effective as of the same date. On July 14, 2025, Jeremy Krol, Chief Operating Officer of the Company, was appointed to replace Stephen Chen as the Company's Interim Chief Executive Officer. The Company has initiated a search for a permanent Chief Executive Officer.
Previous report
Net Revenues
Previous report
Total gross profit decreased 0.3 million, or (59.6%), for the three months ended June 30, 2025, compared to the corresponding period in 2024, primarily as a result of the decrease in advertising revenue described above, as well as fixed costs within our advertising business unit. This decrease was partially offset by a $0.1 million increase in software subscriptions gross profit as a result of a decrease in headcount related costs for customer related projects.
Previous report
Wild Basin litigation and consultants, as well as a $0.3 million increase in other operating expenses related to business taxes and board fees. This increase was partially offset by a $0.5 million decrease in stock-based compensation expense.
Reworded paragraphs (20)
Previous wording
We recently developed an AI Personal Concierge generative AI product feature with functionalities to serve as a human-like interface in our mobile apps for our customers to enhance customer engagement with users and provide customers with innovative opportunities to further monetize their products and services with users. We are currently engaging with existing customers to run pilot testing programs with our AI Personal Concierge feature in their existing mobile applications.
Current wording
We recently developed an AI Concierge generative AI product feature with functionalities to serve as a human-like interface in our mobile apps for our customers to enhance customer engagement with users and provide customers with innovative opportunities to further monetize their products and services with users. We are currently engaging with existing customers to run pilot testing programs with our AI Concierge feature in their existing mobile applications.
Previous wording
We intend to continue investing for long-term growth. We have also invested and expect to continue investing in the expansion of our ability to market, sell and provide our current and future products and services to customers globally. We also expect to continue investing in the development and improvement of new and existing products and services to address customers’ needs. We currently do not expect to be profitable in the near future.
Current wording
We intend to continue investing for long-term growth. We have also invested and expect to continue investing in the expansion of our ability to market, sell and provide our current and future products and services to customers globally. We plan to continue investing in the development and improvement of new and existing products and services to address customers’ needs. We currently do not expect to be profitable in the near future.
Previous wording
Backlog represents future amounts to be invoiced under our active contracts. At any point in the contract term, there can be amounts that we have not yet been contractually able to invoice. Until such time as these amounts are invoiced, they are not recorded in revenue, deferred revenue, accounts receivable or elsewhere in our condensed consolidated financial statements and are considered by us to be backlog. We expect backlog to fluctuate up or down from period to period for several reasons, including the timing and duration of customer contracts, varying billing cycles and the timing and duration of customer renewals. We reasonably expect approximately 44% of our backlog as of June 30, 2025 will be invoiced during the subsequent 12-month period, primarily due to the fact that our contracts are typically one to three years in length.
Current wording
Backlog represents future amounts to be invoiced under our active contracts. At any point in the contract term, there can be amounts that we have not yet been contractually able to invoice. Until such time as these amounts are invoiced, they are not recorded in revenue, deferred revenue, accounts receivable or elsewhere in our condensed consolidated financial statements and are considered by us to be backlog. We expect backlog to fluctuate up or down from period to period for several reasons, including the timing and duration of customer contracts, varying billing cycles and the timing and duration of customer renewals. We reasonably expect approximately 48% of our backlog as of September 30, 2025 will be invoiced during the subsequent 12-month period, primarily due to the fact that our contracts are typically one to three years in length.
Previous wording
Adjusted gross profit and adjusted gross margin are non-GAAP financial measures. We believe that adjusted gross profit and adjusted gross margin provide supplemental information with respect to gross profit and gross margin regarding ongoing performance. We define adjusted gross profit as net revenues less cost of revenue, adjusted to exclude one-time revenue adjustments, stock-based compensation and amortization of intangible assets. We define adjusted gross margin as adjusted gross profit as a percentage of net revenues.
Current wording
Adjusted gross profit and adjusted gross margin are non-GAAP financial measures. We believe that adjusted gross profit and adjusted gross margin provide supplemental information with respect to gross profit and gross margin regarding ongoing performance. We define adjusted gross profit as net revenue less cost of revenue, adjusted to exclude one-time revenue adjustments and stock-based compensation. We define adjusted gross margin as adjusted gross profit as a percentage of net revenue.
Previous wording
Net revenues decreased $0.6 million, or (55.0%), for the three months ended June 30, 2025 compared to the corresponding period in 2024, as a result of a decrease in advertising campaigns mainly due to softening demand from advertising agency partners.
Current wording
Net revenue decreased $0.8 million, or (32.0%), for the nine months ended September 30, 2025 compared to the corresponding period in 2024, as a result of a decrease in advertising campaigns mainly due to softening market demand from advertising agency partners.
Previous wording
Cost of Revenues, Gross Profit and Gross Margin
Current wording
Cost of Revenue, Gross Profit and Gross Margin
Previous wording
Total gross profit decreased $0.4 million, or (44.8%), for the six months ended June 30, 2025, compared to the corresponding periods in 2024, primarily as a result of the decrease in advertising revenue described above, as well as fixed costs within our advertising business unit. This decrease was partially offset by a $0.1 million increase in software subscriptions gross profit as a result of a decrease in headcount related costs for customer related projects and stock-based compensation.
Current wording
Total gross profit decreased $0.5 million, or (36.5%), for the nine months ended September 30, 2025, compared to the corresponding period in 2024, primarily as a result of the decrease in advertising revenue described above. This was partially offset by a $0.1 million decrease in stock-based compensation.
Previous wording
Sales and marketing expense increased $0.1 million, or 13.3% for the three months ended June 30, 2025, compared to the corresponding period of 2024, due to an increase in sales consultants.
Current wording
Sales and marketing expense increased $0.2 million, or 29.2% for the three months ended September 30, 2025, compared to the corresponding period in 2024, due to an increase in sales consultants as a result of increased investment in our sales function after cost cutting measures instituted in 2024.
Previous wording
Sales and marketing expense increased $0.5 million, or 50.8%, for the six months ended June 30, 2025, compared to the corresponding period of 2024, primarily due to an increase of $0.3 million in corporate marketing and $0.2 million in sales consultants.
Current wording
Sales and marketing expense increased $0.7 million, or 42.8%, for the nine months ended September 30, 2025, compared to the corresponding period in 2024, primarily due to an increase of $0.6 million in sales and marketing consultants and $0.1 million in corporate marketing as a result of increased investment in our sales and marketing functions after cost cutting measures instituted in 2024.
Previous wording
General and administrative expense increased $1.5 million, or 31.1%, for the six months ended June 30, 2025 compared to the corresponding period of 2024, due to a $2.1 million increase in professional fees, mainly related to legal fees for the Company's Wild Basin litigation and consultants, as well as a $0.3 million increase in other operating expenses as described above. This increase was partially offset by a $1.0 million decrease in stock-based compensation expense.
Current wording
General and administrative expense increased $1.5 million, or 21.4%, for the nine months ended September 30, 2025 compared to the corresponding period in 2024, due to a $2.4 million increase in professional fees, mainly related to an increase of $1.9 million in legal fees for the Company's Wild Basin litigation and $0.5 million for consultants and professional services. This increase was partially offset by a $1.0 million decrease in stock-based compensation expense.
Previous wording
Research and development expense increased $0.5 million, or 95.6%, and $0.8 million, or 81.9%, for the three and six months ended June 30, 2025, respectively, compared to the corresponding periods of 2024, primarily as a result of an increase in payroll and related expenses as a result of higher headcount and an increase in consulting fees for engineering consultants related to our AI initiatives.
Current wording
Research and development expense increased $0.9 million, or 54.6%, for the nine months ended September 30, 2025 compared to the corresponding period in 2024, primarily as a result of an increase in payroll and related expenses as a result of higher headcount and an increase in consulting fees for engineering consultants related to our AI initiatives.
Previous wording
During the three months ended June 30, 2025 and 2024, we recorded other income of approximately $1.1 million and $0.3 million, respectively, primarily as a result of interest income earned from cash and cash equivalents.
Current wording
During the three months ended September 30, 2025 and 2024, we recorded other income of approximately $1.1 million and $0.4 million, respectively, primarily as a result of interest income earned from cash and cash equivalents.
Previous wording
During the six months ended June 30, 2025 and 2024, we recorded other income of approximately $2.2 million and $0.9 million, primarily as a result of interest income earned from cash and cash equivalents, and in 2024 a gain on extinguishment of debt on our 2022 Promissory Note, as amended.
Current wording
During the nine months ended September 30, 2025 and 2024, we recorded other income of approximately $3.3 million and $1.3 million, respectively, primarily as a result of interest income earned from cash and cash equivalents, and in 2024, a gain on extinguishment of debt on our 2022 Promissory Note, as amended.
Previous wording
As of June 30, 2025, we held total cash of $106.3 million, all of which was held in the United States. We have a history of operating losses and negative operating cash flows. As we continue to focus on growing our revenues, we expect these trends to continue into the foreseeable future.
Current wording
As of September 30, 2025, we held total cash of $103.8 million, all of which was held in the United States. We have a history of operating losses and negative operating cash flows. As we continue to focus on growing our revenues, we expect these trends to continue into the foreseeable future.
Previous wording
On June 4, 2024, we entered into an Equity Distribution Agreement with Canaccord Genuity LLC (“Canaccord”), as representative of certain agents, pursuant to which we could offer and sell, from time to time, shares of our common stock for aggregate gross proceeds of up to $120 million, through the agents. On November 1, 2024, we entered into an Amended and Restated Equity Distribution Agreement (amending the June 4, 2024 Equity Distribution Agreement) with Canaccord, and filed a registration statement on Form S-3MEF relating to the Company's existing registration statement on Form S-3 originally filed in 2022, pursuant to which we increased the aggregate amount of shares of our common stock that we were entitled to sell under our at-the-market facility to an aggregate offering price of approximately $171.5 million. During the six months ended June 30, 2025, we sold an aggregate of 14,210 shares of our common stock under our Equity Distribution Agreement with Canaccord for aggregate gross cash proceeds of approximately $0.1 million. On February 9, 2025, the aforementioned registration statement on Form S-3 expired (including the subsequent registration statement on Form S-3MEF), and as a result, the Amended and Restated Equity Distribution Agreement with Canaccord terminated.
Current wording
On June 4, 2024, we entered into an Equity Distribution Agreement with Canaccord Genuity LLC (“Canaccord”), as representative of certain agents, pursuant to which we could offer and sell, from time to time, shares of our common stock for aggregate gross proceeds of up to $120 million, through the agents. On November 1, 2024, we entered into an Amended and Restated Equity Distribution Agreement (amending the June 4, 2024 Equity Distribution Agreement) with Canaccord, and filed a registration statement on Form S-3MEF relating to the Company's existing registration statement on Form S-3 originally filed in 2022, pursuant to which we increased the aggregate amount of shares of our common stock that we were entitled to sell under our at-the-market facility to an aggregate offering price of approximately $171.5 million. During the nine months ended September 30, 2025, we sold an aggregate of 14,210 shares of our common stock under our Equity Distribution Agreement with Canaccord for aggregate gross cash proceeds of approximately $0.1 million. On February 9, 2025, the aforementioned registration statement on Form S-3 expired (including the subsequent registration statement on Form S-3MEF), and as a result, the Amended and Restated Equity Distribution Agreement with Canaccord terminated.
Previous wording
Although we expect to generate operating losses and negative operating cash flows in the future, based on the financing events described above, management believes it has sufficient cash on hand for at least one year following the filing date of this Quarterly Report on Form 10-Q.
Current wording
Although we expect to generate operating losses and negative operating cash flows in the future, management believes it has sufficient cash on hand for at least one year following the filing date of this Quarterly Report on Form 10-Q.
Previous wording
We utilized $6.8 million of cash from operating activities during the six months ended June 30, 2025, resulting in a net loss of $6.9 million. The net loss included non-cash charges of $0.2 million, primarily consisting of stock-based compensation. In addition, certain changes in our operating assets and liabilities resulted in a cash increase of $0.1 million.
Current wording
We utilized $9.3 million of cash from operating activities during the nine months ended September 30, 2025, resulting in a net loss of $9.3 million. The net loss included non-cash charges of $0.6 million, primarily consisting of stock-based compensation. In addition, certain changes in our operating assets and liabilities resulted in a cash decrease of $0.6 million.
Previous wording
We utilized $8.2 million of cash from operating activities during the six months ended June 30, 2024, resulting in a net loss of $4.9 million. The net loss included non-cash charges of $1.2 million, primarily consisting of stock-based compensation. In addition, certain changes in our operating assets and liabilities resulted in a cash decrease of $4.5 million, primarily relating to a decrease in accounts payable and accrued expenses.
Current wording
We utilized $10.6 million of cash from operating activities during the nine months ended September 30, 2024, resulting in a net loss of $7.7 million. The net loss included non-cash charges of $1.6 million, primarily consisting of stock-based compensation. In addition, certain changes in our operating assets and liabilities resulted in a cash decrease of $4.3 million, primarily relating to a decrease in accounts payable and lease liability payments.
Previous wording
We did not have any investing activities during the six months ended June 30, 2025 and 2024.
Current wording
We did not have any investing activities during the nine months ended September 30, 2025 and 2024.
Previous wording
Our financing activities during the six months ended June 30, 2025 and 2024 consisted of various sales of our common stock. Refer to the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on the Company's financing activities.
Current wording
Our financing activities during the nine months ended September 30, 2025 and 2024 consisted of various sales of our common stock. Refer to the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on the Company's financing activities.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net revenue decreased $0.8 million, or (40.8%), for the six months ended June 30, 2025 compared to the corresponding period in 2024, as a result of a decrease in advertising campaigns mainly due to softening demand from advertising agency partners, which was partially offset by an increase in software development revenue as a result of delivered customer projects.
Previous report — wording carried elsewhere
General and administrative expense increased $0.5 million, or 21.4%, for the three months ended June 30, 2025 compared to the corresponding period of 2024, due to a $0.7 million increase in professional fees, mainly related to legal fees for the Company's