Sito Mobile Ltd (NASDAQ:SITO) Is Today's NASDAQ Focus

Sito Mobile Ltd (NASDAQ:SITO) is an ex bulletin board stock that was able to graduate to the NASDAQ marketplace. By moving to the NASDAQ, the company has been able to remove itself from some of the taint it had when it traded on the OTC markets. The company was the subject of many promotional emails and there were a series of negative articles written about the company because of the promo emails. SITO was able to prove the naysayers wrong and move to the next level and achieve credibility on NASDAQ.SITO is a mobile location-based advertising platform serving businesses, advertisers and brands. Their solutions allow marketers to create content targeted to audiences, based on location, interests, behaviors and loyalty. Through the proliferation of mobile devices, SITO provides customers with the ability to deliver actionable content in a real-time manner, while providing measurement and analytics that allow campaigns to be fluid and transaction driven.In the first quarter, SITO reported total revenues of $7.2 million, an increase of 87% year-over-year and 60% sequentially. Media Placement revenue (SITO Mobile’s programmatic advertising revenue) was $5.3 million, more than triple year-over-year and an increase of 77% sequentially over Q4 2015. Wireless Applications Revenue (SITO Mobile’s SMS Revenue) was $1.6 million, an increase of 20% sequentially. Gross Profit was $3.8 million (52% gross margin) in Q1 2016, up from $2.4 million (52% gross margin) in Q4 2015 and up from $2 million (52% Gross Margin) in Q1 2015. Cash on hand was approximately $2.6 million at the end of Q1 – an increase of approximately $600,000 from Q4.SITO also formalized its partnership in the Canadian market, with a commitment from Cieslok Media to deliver a minimum of $2.1 million in Media Placement revenue in calendar year 2016. CEO Jerry Hug said:

“We’re off to a great start in 2016. Our performance was driven by increasing momentum in our Media Placement business and during the holiday season we saw increased demand for our proprietary mobile location-based Verified Walk-In product which continues to deliver excellent ROI to advertisers. As we look ahead, we are encouraged by SITO’s continued revenue momentum and operating leverage and we expect to produce increasing positive EBITDA in the full year of 2016 as we continue to execute on our plan.”

Earlier this month, SITO amended its debt agreement with Fortress. Beginning with the payment due at the end of February 2016, monthly debt principal payments are $175,000 per month (reduced from $333,000 per month previously) payable each month through February 2017. At month-end March 2017, debt principal payments will become $300,000 per month until the loan maturity date of March 31, 2018, at which time the total remaining loan balance of $3.3 million will be due. This proves that Fortress stands behind SITO and is committed to helping the company succeed. CEO Jerry Hug said:

“Fortress is a committed and supportive equity and debt investor in SITO Mobile and has agreed to these more favorable payment terms in recognition of our strong revenue growth and positive outlook. The amendment’s near-term principal payment reductions offer SITO greater liquidity in the coming quarters as we continue to grow revenues and EBITDA.”

The latest news from the company was that SITO has partnered with Gas Station TV (GSTV), America’s No. 1 video network at the pump, to bring marketers a cross-screen platform that extends their gas station media messages to consumers’ mobile phones, delivering increased ROI. This is a big deal because consumers are 3x more attentive to gas station advertising than to elevator media and 6x more attentive than to ads in taxis. With nearly 200 million smart phone users in the U.S. today, there is a vast market opportunity at the intersection of GSTV’s large and engaged consumer audience and SITO Mobile’s advertising platform reach.Trading with a current market cap of just $47 million, SITO trades at just 2.4x sales. Considering the company beat substantially with its first quarter earnings report, we're looking for a repeat in Q2. We will be updating Insider Financial as soon as we know more. For continuing coverage on SITO, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in SITO and have not been compensated for this article.