The Q1 results are in for GTX Corp’s (GTXO) new GPS SmartSoles and they appear to be good. GTX, a leading provider of wearable tech, debuted the new product, a GPS device built into the insole of a shoe, just last year and has already expanded into 13 different countries, including Australia this month. And, if the Q1 earnings report is any indication, the product is helping drive new revenue for the company.
Earnings Report Shows Massive Revenue Spike
GTX Corp reported major jumps in revenue for Q1. The figure represented a massive increase over the comparable 2014 period. In fact, it represented an increase over the entirety of 2014. The quarter was a home run by almost any measure.
Revenue climbed from $20,814 in Q1 2014 to $144,212 in Q1 2015, a nearly 600% year-over-year increase, and gross margins climbed from $10,914 to $41,863, a jump of nearly 300%. The huge boost in revenue helped cut net losses by 82%.
"Q1 2015 represented a turning point in the history of the Company," said Patrick Bertagna, CEO of GTX Corp. "We successfully launched our flagship GPS SmartSoles in domestic and international markets, both through B2B and B2C channels. The demand for our products is strong and growing, with initial sales going to specific pilot programs, international distributors and retail customers. A significant amount of our initial inventory was allocated to pilot programs and evaluation units to government and private enterprises that have a defined need for tracking people who have a tendency to wander due to Alzheimer's, dementia or autism. Many of those pilots and evaluation units have and will continue to convert to commercial deployments and begin contributing to our subscriber base of recurring monitoring revenues which we are starting to see grow month over month."
GPS SmartSoles are currently being marketed to families where one or more family members has a cognitive disorder like Alzheimer’s or dementia. When a relative wanders or get lost, it can frequently spark a lengthy search that can involve police, resulting in increased danger for the relative and great expense to local authorities. With GPS SmartSoles, caretakers can easily locate their missing relative by accessing their SmartSoles app on their smartphone. It eliminates the costly search and results in the safe return of the missing relative in minutes.
SmartSoles has additional applications, with potential markets for children or adults in circumstances where they may be at great threat for kidnapping or abduction. And, as Bertagna indicated, new product lines are coming soon.
"As we move through the second quarter, our focus remains on building brand and product awareness, growing our channels of distribution and affiliate partners, and increasing our subscriber base,” Bertagna continued. “We have grown our distribution and affiliate partners to close to 100 so far this year, spanning 13 countries worldwide. As we continue penetrating our target markets, we are refining our end user services and pricing models to achieve the broadest adoption and eliminate as many barriers to purchase as possible. On the product development side, we expect to roll out the BLE product line later this summer, and we have initiated the development of our next generation (Gen 2 SmartSole) which will be smaller, lower in price, and a longer battery life. Outside of our flagship SmartSoles, we continue to see steady sales growth for drone applications and digital smart phone tracking Apps, each of which contribute to the increase of our recurring subscriber base revenues."
Company Could Build on Early Results
The fact that the launch of a new product is creating a spike in revenue shouldn’t necessarily come as any surprise, particularly one that serves several niches so well. However, this sort of spike in revenue can frequently be followed by an equally dramatic decline after consumers buy up the product.
For GTX Corp, though, GPS SmartSoles is a subscription product, with customers paying a monthly fee for access to monitoring service. As such, the rapid adoption of the SmartSoles product is building a membership base that will continue to produce revenue after the initial purchase. So, as Bertagna observes, the initial popularity of the product is showing monthly growth in the user base.
GTX Corp also has the advantage of verticals in both the B2C market, selling directly to families caring for their elders, and through government and B2B marketing, where nursing homes and government programs can more easily identify the financial benefits of being able to quickly and efficiently locate patients with cognitive disorders if and when they go missing.
On the whole, this earnings report is a clear win for GTX Corp, offering not just a big spike in immediate revenues but the continued growth of revenue drivers in the form of a growing subscriber base.
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