ShiftPixy Inc. (NASDAQ: PIXY), an Irvine, California-based provider of staffing to the restaurant and hospitality industries, reported revenue rose 23.0% year over year to $2.0 million in its fiscal third quarter ended May 31. ShiftPixy reported an increase in worksite employees drove the higher revenue. However, net loss jumped to $73.2 million.
ShiftPixy — which sold the lion’s share of its business, its PEO operations, earlier this year — did cite the impact of Covid-19.
“Despite a significant impact on our customers from the shutdown due to the Covid-19 pandemic, we are well positioned to provide them key support services,” CEO Scott Absher said in a statement.
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Net revenue | $2,014 | $1,638 | 23.0% |
| Gross profit | $141 | $171 | -17.5% |
| Gross margin | 7.0% | 10.4% | |
| Net income/loss | ($73,178) | ($4,996) | nm |
The company attributed its net loss “to charges related to our recapitalization related to preferred options and convertible notes and resulting in non-recurring other expenses of $64.5 million, a $62.6 million increase, and a difference of $2.7 million in gain/loss on discontinued operations,” according to a filing.
Excluding the charges, the net loss was $6.1 million, according to the company.
ShiftPixy reported 81 clients representing more than 300 customer locations and 2,700 billed employees. Clients are largely in Southern California.
ShiftPixy, in its regulatory filing, also noted that California Gov. Gavin Newsom re-implemented Covid-19 lockdown restrictions and the company could be impacted by clients that rely on in-person dining. However, the company said it does not yet know the full impact of the new lockdown on its customer base.
“Our recapitalization and improved balance sheet have been instrumental in helping us address opening and re-opening opportunities with larger customers and we are excited to have a clean capital structure,” Absher said. “Covid-19 related delays in the launch of our mobile application solution are now behind us as our team has migrated to add features that will provide us with new revenue sources from new markets.”