InterCloud Systems Inc (OTCMKTS:ICLD)

InterCloud Systems Inc (OTCMKTS:ICLD) Implodes After 64% Revenue Decrease

InterCloud Systems Inc (OTCMKTS:ICLD)

InterCloud Systems Inc (OTCMKTS:ICLD) plunged 22.34% after reporting a second quarter net loss of $12 million compared to a net loss of $13.4 million reported last year. The selloff came after the company reported a 64% decrease in revenue. Tuesday’s sell-off pushed InterCloud Systems Inc (OTCMKTS:ICLD) stock near its 52-week lows. The stock continues to trade in a strong downtrend having tanked from its March highs of $0.34.

InterCloud Systems Inc. (OTCMKTS:ICLD) is a leading provider of cloud networking orchestration for Software Defined Networking and Networking Function Virtualization. The company offers a wide range of cloud solutions designed to help enterprises and service providers adopt an operational expense model on the cloud.

Chief executive, Mark Munro, has sought to dispel concerns about the second quarter net loss by reiterating they achieved a lot in the quarter. Liability reductions and strengthening of the balance sheet are some of the milestones that the executive expects to play a key role in the next phase of growth. Debt and expense reductions should enable the company achieve profitability going forward.

“We believe the steps we’ve taken over the past year have positioned the Company to capitalize on the immense opportunities in front of us and creates the necessary foundation for ongoing financial performance,” said Mr. Munro.

 Revenue Decrease

Revenues in the second quarter came in at $8.1 million compared to revenue of $22.6 million reported in Q2 2016. InterCloud Systems Inc (OTCMKTS:ICLD) attributes the decrease to a reduction in revenue from subsidiaries disposed off this year. Gross profit margin dropped to 20% from 23% because of reduced margins in the company’s professional services segment.

A decrease in second quarter net loss was due to the extinguishment of $7.1 million debt also helped by a decrease in salaries and wages and SG&A expense of $4.5 million.

Separately, InterCloud Systems Inc. (OTCMKTS:ICLD) has confirmed that its CEO and Board member Mark Durfee have agreed to exchange $4.3 million of personal debt into equity. The two are now entitled to special voting rights in the company. The conversion demonstrates the two executive’s commitment to the company’s restructuring plan in addition to helping fix the balance sheet and increase shareholder equity.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ICLD and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

InterCloud Systems Inc. (OTCMKTS:ICLD)

InterCloud Systems Inc. (OTCMKTS:ICLD) Explodes On $2 Million Contract

InterCloud Systems Inc. (OTCMKTS:ICLD)

InterCloud Systems Inc. (OTCMKTS:ICLD) is moving higher in the market on news that it has been awarded new professional service contracts worth more than $2 million.

Intercloud’s Financial Improvement Plan

The contracts should go a long way in strengthening the current revenue base. InterCloud Systems Inc. (OTCMKTS:ICLD) has also embarked on a cost-cutting mission as it looks to generate maximum shareholder value from its remaining subsidiaries. Lastly, Intercloud is aggressively pursuing new partnerships for its NFVgrid platform as it looks expand its customer base.

“Over the last six months, we have divested ourselves of non-core assets and strengthened our balance sheet. The Company’s remaining assets produced over $52 million in revenue during 2016. In addition to our divestments, we have significantly reduced our operating expenses with the goal of operating on a cash flow positive basis,” said CEO, Mark Munro.

Restructuring Intercloud’s Business

According to Munro, restructuring should allow the company to acquire new assets that will fuel business growth. Pursuing positive cash flow is at the top on the agenda as the company diversifies its streams of revenues and trims its expenditures.

The restructuring push has already resulted in the spinoff of the company’s Training Division. InterCloud Systems Inc. (OTCMKTS:ICLD) says it received $1.4 million in cash from the sale of the unit, which provides professional services focused on education and training in the network arena. The company had acquired the unit in 2016 for $1 million worth of common stock.

The sale, according to Mr. Munro, is part of an ongoing realignment of InterCloud’s business strategy that has until now focused on reducing outstanding liabilities. InterCloud Systems Inc. (OTCMKTS:ICLD) should now be able focus on its core areas of growth and profitability as focus shifts to improving the balance sheet and reducing exposure to convertible debentures.

Separately, the provider of cloud services and solutions has sued its former auditor, Grant Thornton, in the New York Supreme Court. The company accuses the auditor of breach of contract and fraudulent inducement which had a domino effect leading to the delisting from the NASDAQ.

InterCloud Systems Inc. (OTCMKTS:ICLD) stock was up by 33.73% in Monday’s trading session, ending the day at $0.0266 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ICLD and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.