TIO Networks Corp. has reported a lower third-quarter net loss on higher revenues for the three-month period ending April 30, but a TIO executive predicts the company will report a profit sometime in its 2011 fiscal year, which begins August 1.
The Vancouver, British Columbia-based self-service bill-payment expediter Monday posted a net loss of C$368,592 (U.S. $357,941) compared with a net loss of C$650,585 for the same three-month period last year.
Revenue, however, was C$8.4 million, up 47 percent compared with C$5.7 million 2009's third quarter. TIO officials said United States' transaction revenue increased 83 percent year over year, and overall transactions increased 90 percent year-over-year, but the company did not provide figures in a press release.
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"The substantial increases in transactions and revenue and the positive trajectory in our financial metrics is a testament to the strength of our multi-channel recurring revenue business model," Hamed Shahbazi, the company's chairman and CEO, said in a statement. "Despite a difficult U.S. economy and strong currency headwinds, we are confident that we will drive strong revenue growth in the quarters ahead towards improved profitability."
John Lewis, who handles business development for TIO, said the company failed to move into the black for two reasons.
"We formed alliances with several businesses that produced lower margins. Don't get me wrong, they are good businesses, but their margins were low, and we have to get them up," Lewis tells ATMmarketplace.com. And although TIO generates 99 percent of its revenue in U.S. dollars, the company reports its financial statements in Canadian dollars, and the Canadian dollar has been stronger against the buck.
The company, however, has signed some deals that are expected to improve its financial outlook. Pacific Gas & Electric Co. inked a deal with TIO that enables the San Francisco-based utility's customers to pay their monthly bills via with their mobile phones, he says. TIO also signed a contract with First Data Corp., the Atlanta-based payments processor. First Data processes payroll card transactions for Walmart stores, and the retailer's employees will be able to pay their utility, cable and cellular phone bills through TIO Networks, Lewis says.
The contracts signal good news for TIO.
"I don't like making a forecast, but we should be profitable in the next year," Lewis said.
