Digerati Technologies, Inc. (DTGI)·Q2 2015 Earnings Summary

Executive Summary

• Q2 2015 filing (covering the quarter ended April 30, 2013 due to delayed reporting) showed a sharp step-up in revenue to $16.586M, net income of $3.638M, and EPS of $1.84, driven by consolidated oilfield services operations and a gross margin of ~$8.679M .
• Operating income swung to $3.826M from a prior-year loss, while Global VoIP revenues continued to decline materially; no formal guidance or earnings call was available for the period .
• The company remained in Chapter 11-related processes; a Q2 2015 8‑K referenced filing of a Chapter 11 Post‑Confirmation Report (Ex. 99.1), highlighting ongoing restructuring milestones rather than a traditional earnings press release .
• Prior quarter (Q1 2015 filing, quarter ended January 31, 2013) revenue was $11.587M with net income of $2.660M and EPS of $1.43; continuing-operations-only trends in an earlier filing (three months ended October 31, 2013) show small VoIP/cloud revenues and classification changes to discontinued operations for oilfield assets later sold .

What Went Well and What Went Wrong

What Went Well

• Oilfield services were the growth engine: $16.384M segment revenue and ~$8.679M gross margin in the quarter, underpinning an operating income of $3.826M (“generated over $16,384,000 in revenue and over $8,679,000 in gross margin”) .
• Cloud-based hosted services rose 14% YoY to $154K, supported by increased customers generating recurring revenue .
• Operating performance inflected positively: “The Company reported income from operations of $3,826,000 for the three months ended April 30, 2013 compared to an operating loss of $395,000...,” driven by oilfield consolidation .

What Went Wrong

• Global VoIP revenue fell 92% YoY to $48K, reflecting continued price pressure and dwindling demand in the market .
• Legal and professional fees spiked to $898K (+2,038% YoY), tied to oilfield-related accounting and litigation, compressing operating leverage .
• Liquidity and solvency risks persisted: large liabilities ($76.736M), working capital deficit (~$50.708M), and a stated need for ~$500K incremental working capital to continue operations (going-concern doubt) .

Financial Results

Quarterly comparison (oldest → newest)

Segment revenue breakdown (oldest → newest)

Continuing operations trend in later filing (classification changed; oilfield in discontinued ops)

Guidance Changes

No formal guidance (revenue, margins, OpEx, OI&E, tax rate, segment, dividends) was issued in the Q2 2015 filings or 8‑K reviewed. The 8‑K focused on Chapter 11 post‑confirmation reporting rather than outlook.

References: filings do not contain guidance disclosures and the 8‑K 2.02 addresses post‑confirmation reporting .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2015. Narrative themes are derived from MD&A across filings.

Management Commentary

• “The Company reported income from operations of $3,826,000 for the three months ended April 30, 2013 compared to an operating loss of $395,000 for the three months end April 30, 2012,” citing oilfield consolidation and gross margin expansion .
• “Global VoIP services revenue decreased by $522,000, or 92%... attributed primarily to slowly dwindling Global VoIP services due in part to the constant price pressure in the market” .
• Liquidity outlook: “We estimate that we need approximately $500,000 of additional working capital to fund our ongoing operations... we have an accumulated deficit... which raises substantial doubt about our ability to continue as a going concern” .

Q&A Highlights

No earnings call transcript was found for Q2 2015; thus no Q&A or analyst clarification items were available in primary sources [earnings-call-transcript list returned none].

Estimates Context

Wall Street consensus (S&P Global) EPS and revenue estimates were unavailable for DTGI for Q2 2015 and adjacent periods in our request window. Values retrieved from S&P Global were unavailable due to data access limits; therefore, no beat/miss analysis vs consensus can be provided at this time.

Note: S&P Global consensus not available for this period; DTGI may have limited analyst coverage.

Key Takeaways for Investors

• Quarter’s strength was dominated by oilfield services ($16.384M segment rev), producing $8.679M gross margin and $3.826M operating income; however, those assets were later classified as discontinued and sold, altering forward revenue visibility .
• Core continuing operations (VoIP/cloud) are small (Oct 31, 2013 continuing revenue $151K) and under pressure (VoIP −62% YoY; cloud −40% YoY in that period), suggesting a markedly smaller post-divestment run-rate .
• Legal/professional expenses and going-concern risk remain central; management explicitly cites the need for ~$500K working capital and substantial liabilities, a critical factor for solvency and equity value .
• With no guidance or earnings call, the narrative is steered by restructuring milestones (8‑K Post‑Confirmation reporting) and execution on capital needs rather than growth initiatives—monitor court and trustee actions as near-term catalysts .
• Cloud-hosted services show incremental traction on a small base (Q2 +14% YoY), but lack scale; absent new growth vectors or acquisitions, the business may rely on cost discipline and selective capital raises .
• Oilfield-related gains were transitory for shareholders in the continuing entity; investors should normalize for discontinued operations when modeling and focus on continuing-segment KPIs and liquidity .
• Estimate frameworks are sparse (no consensus available), increasing uncertainty; position sizing should reflect liquidity and coverage limitations alongside restructuring risk.