Net Element (NETE) Zach's Small-Cap Research Report

Zacks Investment Research Page 6 scr.zacks.com INCOME STATEMENT Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020E 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 2018 2019 2020E 2021E North America Transaction Yr-over-yr Growth Cost of service Gross margin Gross margin % $14.4 $15.7 $15.9 $15.8 $15.2 $13.0 $16.1 $16.1 2.8% 9.1% 2.1% 3.9% 5.5% -17.5% 0.9% 2.0% 11.8 13.4 13.4 13.8 12.8 11.0 14.1 14.1 2.6 2.3 2.5 2.0 2.3 2.0 2.0 2.0 18.1% 14.6% 15.8% 12.6% 15.4% 15.1% 12.4% 12.4% $59.1 $61.8 $60.28 $63.00 15.6% 4.5% -2.4% 4.5% 50.5 52.4 52.0 52.9 8.6 9.4 8.3 10.1 14.5% 15.2% 13.7% 16.0% International Yr-over-yr Growth International Cost of Service Gross Margin Gross margin % Total revenues Yr-to-yr Growth Costs and expenses: Cost of revenues Gross Margin % of Sales SG&A Stock-based compensation Provision for loan losses Depreciation and amortization 0.684 0.7 0.9 0.9 0.7 0.7 0.7 0.7 -66.1% -63.4% -45.8% -4.5% 0.0% -1.1% -26.1% -25.9% 0.5 0.5 0.7 0.7 0.5 0.5 0.5 0.5 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 28.1% 39.0% 25.8% 20.2% 30.3% 29.7% 28.0% 28.0% 15.0 16.5 16.8 16.6 15.8 13.7 16.7 16.7 -5.9% 0.1% -2.5% 3.4% 5.3% -16.8% -0.5% 0.5% 12.3 13.9 14.1 14.5 13.3 11.5 14.6 14.6 2.8 2.6 2.7 2.2 2.5 2.2 2.2 2.2 18.5% 15.7% 16.3% 13.0% 16.0% 15.9% 13.0% 13.0% 2.4 2.3 2.4 2.3 2.3 1.4 1.6 1.7 0.0 2.0 0.0 0.0 0.0 0.0 1.1 0.0 0.3 0.1 0.4 0.4 0.4 0.0 0.6 0.4 0.9 0.7 0.8 0.8 0.8 0.8 0.7 0.7 6.6 3.2 2.7 5.0 -25.5% -51.5% -14.7% 81.9% 5.1 2.3 2.0 3.4 1.6 0.9 0.8 1.7 23.7% 27.8% 29.0% 33.0% 65.8 65.0 63.0 68.0 9.5% -1.2% -3.0% 7.9% 55.6 54.7 54.0 56.3 10.2 10.3 9.1 11.7 15.5% 15.8% 14.4% 17.3% 9.8 9.3 7.1 6.5 0.1 2.1 1.1 - 2.1 1.4 1.5 1.2 2.5 3.1 3.0 3.0 Total operating expenses Loss from operations Loss from operations ex-one time Interest expense, net Other expense 3.6 5.2 3.6 3.5 3.6 2.2 4.1 2.8 (0.8) (2.6) (0.9) (1.3) (1.0) (0.0) (1.9) (0.7) (0.8) (0.6) (0.9) (1.3) (1.0) (0.0) (1.9) (0.7) (0.2) (0.3) (0.3) (0.3) (0.3) (0.3) (0.4) (0.4) (0.1) 1.3 0.1 0.2 0.0 0.0 (0.1) 0.0 14.5 15.9 12.7 10.7 (4.3) (5.6) (3.6) 1.1 (4.3) (5.6) (3.6) 1.1 (0.8) (1.1) (1.4) (1.4) 0.8 1.5 0.0 0.0 One-time charges Total non-operating expenses Pretax operating income (loss) Income tax provision Tax rate Operating Loss Minority interest 0.0 0.0 0.0 (1.3) 0.0 0.0 0.0 0.0 (0.3) 1.0 (0.2) (1.5) (0.3) (0.3) (0.4) (0.4) (1.1) (1.6) (1.0) (2.8) (1.4) (0.3) (2.3) (1.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0% 0% 0% 0% 0% 0% 0% 0% (1.1) (1.6) (1.0) (2.8) (1.4) (0.3) (2.3) (1.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.6) (1.3) 0.0 0.0 (0.7) (1.0) (1.4) (1.4) (5.0) (6.6) (5.0) (0.4) 0.0 0.0 0.0 0.0 0% 0% 0% 0% (5.0) (6.6) (5.0) (0.4) 0.1 0.1 0.1 0.1 Net loss to common stock Foreign currency translation gain (loss) Comprehensive loss Earnings ex-one time charge Stock-based compensation Adjusted Non-GAAP Earnings Yr-to-yr Growth GAAP EPS (1.1) (1.5) (1.0) (2.8) (1.4) (0.3) (2.3) (1.0) (0.0) (0.0) 0.0 (0.0) 0.1 (0.1) (0.0) 0.0 (1.1) (1.5) (1.0) (2.8) (1.2) (0.4) (2.3) (1.0) (1.1) (1.5) (1.0) (1.5) (1.4) (0.3) (2.3) (1.0) 0.0 2.0 0.0 0.0 0.0 0.0 1.1 0.0 (1.1) 0.5 (1.0) (1.4) (1.3) (0.3) (1.2) (1.0) -27.7% -153.2% 12.1% 68.3% 20.1% -167.7% 24.6% -30.0% ($0.29) ($0.37) ($0.24) ($0.68) ($0.33) ($0.08) ($0.52) ($0.21) (4.9) (6.5) (5.0) (0.4) 0.3 (0.0) 0.1 0.0 (4.6) (6.5) (5.0) (0.4) (4.3) (5.1) (5.0) (0.4) 0.1 2.1 1.1 0.0 (4.2) (3.1) (3.9) (0.4) -40% -26% 26.6% -90.5% ($1.28) ($1.60) ($1.14) ($0.08) Non-GAAP EPS Yr-to-yr Growth ($0.28) $0.11 ($0.24) ($0.35) ($0.32) ($0.08) ($0.28) ($0.21) -29% -149% 5% 58% 13.5% -168.1% 15.0% -40.6% ($1.07) ($0.76) ($0.88) ($0.08) -69.7% -29.1% 16.0% -91.3% Share outstanding Yr-to-yr Growth All in shares 3.9 4.2 4.2 4.1 4.1 4.2 4.5 4.8 1% 9% 6% 6% 5.8% -0.6% 8.3% 17.9% 3.9 4.2 4.2 4.1 4.3 5.1 5.4 5.8 3.9 4.0 4.4 4.8 96.6% 4.5% 9.2% 9.8% 4.8 4.0 5.2 5.8 Yr-to-yr Growth Adjusted EBITDA -19% -13% -15% -16% 0.0% 0.0% 0.0% 0.0% 0.063 0.144 (0.082) (0.539) (0.221) 0.763 (0.066) 0.074 120.1% -16.7% 0.0% 17.5% (1.734) (0.414) 0.551 4.030