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WidePoint Reports First Quarter 2025 Financial Results

1. WYY reported $34.2 million in revenues, unchanged from last year. 2. Achieved FedRAMP status for ITMS, enhancing federal agency access. 3. Secured $27.6 million in contracts, predominantly from federal agencies. 4. Maintained positive cash flow for the sixth consecutive quarter. 5. Revenue guidance for 2025 projected between $154 million and $163 million.

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FAQ

Why Bullish?

The consistent revenue and cash flow, along with FedRAMP status, indicate robust operational health. Historical examples show similar advancements resulting in stock price appreciation in tech firms.

How important is it?

The completion of FedRAMP has lasting impacts on contract potential, influencing both stockholder sentiment and operational visibility. The financial stability reflected by ongoing positive cash flows enhances investor confidence.

Why Long Term?

The implications of FedRAMP status can drive new contracts over time, enhancing long-term growth prospects. This aligns with historical trends in government contract-derived revenue enhancement for tech companies.

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Thursday, 15 May 2025 04:05 PM FAIRFAX, VA / ACCESS Newswire / May 15, 2025 / WidePoint Corporation (NYSE American:WYY), the innovative enterprise cyber security and mobile technology provider, reported results for the first quarter ended March 31, 2025.First Quarter 2025 and Recent Operational Highlights:31 st consecutive quarter of positive Adjusted EBITDA6 th consecutive quarter of positive free cash flowAwarded three Task Orders under the Spiral 4 Contract Vehicle, including a $2.5 million Task Order with a combat support agency within the U.S. Department of DefenseAchieved FedRAMP Authorized Status for its Intelligent Technology Management Systems (ITMS)Launched M365 Analyzer that identifies actionable savings for Microsoft software license inventory$27.6 million contract awards in Q1 2025, of which $26.1 million was from Federal agencies and $1.5 million from commercial organizations$268 million contract backlog as of March 31, 2025First Quarter 2025 Financial Highlights:Revenues were $34.2 million, a slight increase from the same quarter last yearGross margin was 14%, and gross margin excluding carrier services revenue was 40%Net loss was $724,100 or a loss of $(0.08) per shareAdjusted EBITDA 1, a non-GAAP financial measure, was $92,400Free cash flow 1, a non-GAAP financial measure, was $65,700As of March 31, 2025, unrestricted cash was $3.7 million with no bank debt1 Free cash flow and Adjusted EBITDA are non-GAAP financial measures. See below for the definition of such measures and a reconciliation to GAAP.Management CommentaryWidePoint CEO Jin Kang commented: "Our long awaited FedRAMP Authorization for ITMS and momentum across the Spiral 4 contract vehicle were two major developments that highlighted this past quarter. ITMS is now available on the FedRAMP marketplace, which opens up the solution to federal agencies across a range of businesses that was previously out of our reach, while reinforcing our commitment to offering the most secure solutions for our customers. In addition to the previously announced $2.5 million task order, we were awarded two more task orders under Spiral 4. We also have submitted several responses for RFQs adding to our potential new task orders to our sales pipeline. With Spiral 3 contracts set to expire at the end of May, we remain optimistic about seeing further activity under the new contract vehicle.""During the quarter, we made a one-time out-of-period accounting adjustment to correct an error related to the timing of revenue recognition on certain reselling contracts, which inevitably reduced revenue by approximately $2.7 million and cost of revenues by approximately $2.5 million. We determined after a thorough evaluation that these adjustments are not material to previous periods reported, and are not expected to materially affect our full year results, and do not reflect any change in business fundamentals, cash flows, or contract performance. Looking at the rest of the year, we remain focused on our four priorities of the year: deepening strategic relationships with existing partners while activating pursuing new partnerships, preparing for the upcoming DHS CWMS 3.0 recompete, commercialization of our newly developed solutions in 2024, and delivering positive earnings per share for the full year 2025."Fiscal Year 2025 GuidanceWidePoint is providing the following guidance for fiscal year 2025:Revenue between $154 million and $163 millionAdjusted EBITDA between $2.8 million and $3 millionFree Cash Flow between $2.4 million and $2.6 millionGoal of positive earnings per share in 2025First Quarter 2025 Financial SummaryTHREE MONTHS ENDEDMARCH 31,(In millions except per share amounts)20252024(Unaudited)REVENUES$34.2$34.2GROSS PROFIT4.84.7GROSS PROFIT %14%14%OPERATING EXPENSES5.65.3LOSS FROM OPERATIONS(0.8)(0.7)LOSS PER SHARE, BASIC AND DILUTED$(0.08)$(0.07)EBITDA(0.11)0.15ADJUSTED EBITDA0.090.57FREE CASHFLOW0.060.57Conference CallWidePoint's management will host the conference call today (May 15, 2025) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.U.S. dial-in number: 888-506-0062International number: 973-528-0011, Access Code: 299364Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at (949) 574-3860.The conference call will be broadcast live and available for replay here and via the investor relations section of the company's website.A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through Thursday, May 29, 2025.Toll-free replay number: 877-481-4010International replay number: 919-882-2331Replay ID: 52402About WidePointWidePoint Corporation (NYSE American: WYY) is a leading technology Managed Solution Provider (MSP) dedicated to securing and protecting the mobile workforce and enterprise landscape. WidePoint is recognized for pioneering technology solutions that include Identity and Access Management (IAM), Mobility Managed Services (MMS), Telecom Management, Information Technology as a Service (ITaaS), Cloud Security, and Analytics & Billing as a Service (ABaaS). For more information, visit widepoint.com.Non-GAAP Financial MeasuresWidePoint uses a variety of operational and financial metrics, including non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Free cashflow, to enable it to analyze its performance and financial condition. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP Net income to EBITDA and Adjusted EBITDA and Free cashflow is provided below:THREE MONTHS ENDEDMARCH 31,20252024(Unaudited)NET LOSS$(724,100)$(653,100)Adjustments to reconcile net income to EBITDA:Depreciation and amortization709,900833,400Income tax provision (benefit)(94,000)(42,100)Interest income(53,400)(49,400)Interest expense55,10058,700EBITDA$(106,500)$147,500Other adjustments to reconcile net (loss) income to Adjusted EBITDA:Loss on factoring of receivables-7,282Stock-based compensation expense198,900417,800Adjusted EBITDA$92,400$572,582Capital expenditures(27,632)(6,494)Free cashflow$64,768$566,088WidePoint uses EBITDA, Adjusted EBITDA and Free cashflow as supplemental non-GAAP measure of performance. WidePoint defines EBITDA as net income excluding (i) interest expense, (ii) provision for or benefit from income taxes, (iii) depreciation and amortization, and (iv) Impairment charges. Adjusted EBITDA excludes certain amounts included in EBITDA such as stock-based compensation expense. WidePoint defined Free cashflow as Adjusted EBITDA less capital expenditures. Management believes that adjustments for certain non-cash or other items and the exclusion of certain pass-through revenue and expenses should enhance stockholders' ability to evaluate the Company's performance, as such measures provide additional insights into the factors and trends affecting its business. Therefore, the Company excludes these items from its GAAP financial measures to calculate these unaudited non-GAAP measures. These unaudited non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be considered in addition to, and not as a substitute for GAAP.Safe Harbor StatementThis press release contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included herein are forward-looking statements. You can identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned," "predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including, the impact of supply chain issues; our ability to successfully execute our strategy; our ability to sustain profitability and positive cash flows; our ability to access sufficient financing on acceptable terms given the tightening credit markets due to the current banking environment; our ability to gain market acceptance for our products; our ability to win new contracts, execute contract extensions and expand scope of services on existing contracts; our ability to compete with companies that have greater resources than us; our ability to penetrate the commercial sector to expand our business; our ability to identify potential acquisition targets and close such acquisitions; our ability to successfully integrate acquired businesses with our existing operations; our ability to maintain a sufficient level of inventory necessary to meet our customers demand due to supply shortage and pricing; our ability to retain key personnel; our ability to mitigate the impact of increases in interest rates; the impact of increasingly volatile public equity markets on our market capitalization; the impact and outcome of negotiations around the Federal debt ceiling; our ability to mitigate the impact of inflation; and the risk factors set forth in our Form 10-Q for the quarter ended March 31, 2025 filed with the SEC on May 15, 2025.The forward-looking statements included herein are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.WidePoint Investor Relations:Gateway Group, Inc. Matt Glover or John Yi949-574-3860[email protected]WIDEPOINT CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETSMARCH 31,DECEMBER 31,20252024(Unaudited)ASSETSCURRENT ASSETSCash and cash equivalents$3,703,169$6,775,139Restricted cash596,4731,042,256Accounts receivable, net of allowance for credit lossesof $54,282 and $46,150, respectively14,625,25111,930,474Unbilled accounts receivable31,176,06631,798,431Other current assets5,206,5473,771,473Total current assets55,307,50655,317,773NONCURRENT ASSETSProperty and equipment, net490,587544,723Lease right of use asset4,534,9384,183,561Intangible assets, net4,583,2435,063,795Goodwill5,811,5785,811,578Deferred tax assets, net30,635-Other long-term assets605,369659,086Total assets$71,363,856$71,580,516LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable$15,948,105$16,524,863Accrued expenses30,394,77030,851,255Current portion of deferred revenue5,953,9904,770,683Current portion of lease liabilities842,402735,152Total current liabilities53,139,26752,881,953NONCURRENT LIABILITIESLease liabilities, net of current portion4,470,8424,200,019Deferred revenue, net of current portion788,088907,160Deferred tax liabilities, net-11,415Total liabilities58,398,19758,000,547Commitments and contingencies (Note 16)--STOCKHOLDERS' EQUITYPreferred stock, $0.001 par value; 10,000,000 sharesauthorized; 2,045,714 shares issued and none outstanding--Common stock, $0.001 par value; 30,000,000 sharesauthorized; 9,563,904 and 9,485,508 sharesissued and outstanding, respectively9,5659,487Additional paid-in capital103,187,223103,103,653Accumulated other comprehensive loss(424,840)(450,945)Accumulated deficit(89,806,289)(89,082,226)Total stockholders' equity12,965,65913,579,969Total liabilities and stockholders' equity$71,363,856$71,580,516WIDEPOINT CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSTHREE MONTHS ENDEDMARCH 31,20252024(Unaudited)REVENUES$34,217,739$34,207,279COST OF REVENUES (including amortization and depreciation of$486,193 and $576,905, respectively)29,439,21829,541,388GROSS PROFIT4,778,5214,665,891OPERATING EXPENSESSales and marketing639,482611,893General and administrative expenses (including share-basedcompensation of $198,859 and $417,783, respectively4,731,7824,448,483Depreciation and amortization223,688256,534Total operating expenses5,594,9525,316,910LOSS FROM OPERATIONS(816,431)(651,019)OTHER (EXPENSE) INCOMEInterest income53,43049,426Interest expense(55,073)(58,737)Other (expense), net-(34,871)Total other expense, net(1,643)(44,182)LOSS BEFORE INCOME TAX BENEFIT(818,074)(695,201)INCOME TAX BENEFIT(94,011)(42,091)NET LOSS$(724,063)$(653,110)EARNINGS PER SHARE, BASIC AND DILUTED$(0.08)$(0.07)WEIGHTED-AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED9,552,9718,897,819WIDEPOINT CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSTHREE MONTHS ENDEDMARCH 31,20252024(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss$(724,063)$(653,110)Adjustments to reconcile net loss to net cash provided by(used in) operating activities:Deferred income tax (benefit) expense(36,400)45,200Depreciation expense229,330260,302Provision for credit losses6,7767,566Amortization of intangibles480,552573,137Share-based compensation expense198,859417,783Non-cash lease expense46,444-Changes in assets and liabilities:Accounts receivable and unbilled receivables(1,990,901)(5,317,052)Inventories(240,208)(291,356)Other current assets(1,190,283)(251,778)Other assets53,717(6,412)Accounts payable and accrued expenses(1,072,599)3,909,794Income tax payable9,543(72,015)Deferred revenue and other liabilities1,044,877(178,728)Other liabilities(43,235)-Net cash used in operating activities(3,227,591)(1,556,669)CASH FLOWS FROM INVESTING ACTIVITIESPurchases of property and equipment(27,632)(6,494)Proceeds from beneficial interest in sold receivables-259,125Net cash (used in) provided by investing activities(27,632)252,631CASH FLOWS FROM FINANCING ACTIVITIESAdvances on bank line of credit2,800,0001,000,000Repayments of bank line of credit advances(2,800,000)(1,000,000)Principal repayments under finance lease obligations(119,766)(137,469)Withholding taxes on behalf of employees on settled restricted stock(115,211)(218,783)Net cash used in financing activities(234,977)(356,252)Net effect of exchange rate on cash(27,553)7,064NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(3,517,753)(1,653,226)CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period7,817,3956,921,160CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$4,299,642$5,267,934CASH, CASH EQUIVALENTS, AND RESTRICTED CASH CONSISTED OF THE FOLLOWING:Cash and cash equivalents$3,703,169$5,267,934Restricted cash596,473-$4,299,642$5,267,934SOURCE: WidePoint Corporation

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