FOMO WORLDWIDE, INC. (FOMC)·Q4 2022 Earnings Summary

Executive Summary

• FOMO Worldwide reported 2022 consolidated pro forma revenue of roughly $8.8M, up 137% year over year, driven primarily by K-12 demand at its SMARTSolution Technologies (SST) subsidiary; SST’s equipment sales were ~93% of mix, with full-year pro forma gross margin of 14.9% (18% ex. inventory write-downs) and EBITDA margin of ~7.3% .
• Q4 2022 revenue is implied at ~$4.36M based on FY 2022 pro forma revenue ($8.8M) minus 9M 2022 reported revenue ($4.44M), as business converted a large year-end backlog; Q3 2022 revenue was $0.96M after a record Q2 $2.6M, evidencing timing effects from supply chain and school budgeting cycles .
• Management highlighted diversification beyond K-12 and an active M&A funnel (LMS, content, signage, modular construction, additional EdTech) as key 2023-24 growth drivers; the company regained SEC reporting compliance entering Q4 and hosted an investor “FOMO HOUR” with detailed operational and pipeline commentary .
• No formal numerical 2023 guidance or Wall Street consensus estimates were available; S&P Global consensus data was unavailable due to missing CIQ mapping for FOMC, and the company did not issue quantitative forward guidance during Q4 materials .

What Went Well and What Went Wrong

• What Went Well

  • Record full-year pro forma revenue growth to $8.8M (+137% YoY), with SST’s average deal size increasing and key wins such as a >250 panel order ($1.3M) for a Pittsburgh-area school district .
  • Margin recovery indicators: full-year pro forma gross margin 14.9% (18% ex. ~$272k inventory adjustments); SST FY pro forma EBITDA of ~$648k (~7.3% margin) despite audit/professional fees and interest costs .
  • Strategic expansion signals: management emphasized broadening beyond K-12 to municipal, healthcare, enterprise and post-secondary, and building a substantial M&A funnel to add scale and higher-margin software/content (LMS and training) .

• What Went Wrong

  • Quarterly volatility: Q3 revenue of $0.96M vs. Q2 $2.6M shows timing/supply-chain/budget cycle sensitivity; backlog conversion appears concentrated in Q2 and Q4, affecting quarterly cadence .
  • Inventory write-downs and accounting clean-up costs pressured reported gross margin (14.9%) and required adjustments to show underlying 18% gross margin ex. charges; the company spent significant resources on restatements and catching up filings .
  • Financing and going concern risks: the Q3 10-Q disclosed going concern language, covenant defaults (not exercised) on the A/R facility, and reliance on external capital, underscoring liquidity and execution risk amid growth initiatives .

Financial Results

Quarterly revenue trend (oldest → newest):

Notes: Q4 2022 revenue is implied from company-reported FY 2022 pro forma revenue ($8.8M) and 9M 2022 reported revenue ($4.44M). See citations in cell.

Full-year 2022 performance (pro forma, consolidated unless noted):

Segment/line-of-business mix (FY 2022, SST pro forma):

Additional KPIs and operating indicators:

EPS: The company does not disclose meaningful EPS by quarter; Q3 2022 net loss per share rounded to $(0.00) given share count; full-year consolidated EPS not disclosed in Q4 press materials .

Guidance Changes

No numerical guidance was provided for FY 2023 or beyond in Q4 materials. Management focused on operational updates (audit timing, SEC compliance, M&A pipeline) without quantitative outlooks for revenue, margins, or opex. N/A entries below reflect absence of formal guidance .

Earnings Call Themes & Trends

Management Commentary

• “We recently met with our primary IFP vendor… they were enthusiastic about our vision to target enterprises via learning management systems, online training and content, and compliance via acquisitions… that is the area of greatest opportunity and greatest upside and margin.”
• “During the [year], SST’s average deal size increased significantly and helped drive revenues to near record levels… Key wins included an order for over 250 IFP’s… total value of $1.3 million.”
• “SST will exit 2022 with estimated backlog of approximately two million dollars… Deliveries and installations are scheduled… into 1Q23–2Q23.”

Q&A Highlights

• Pipeline specifics: 5+ LOIs including UK LMS, enterprise content, midwest training/compliance, modular construction in Florida, signage in Florida, and a larger LA EdTech provider; plan to close smaller, non-audited targets first (definitives in 1–2 months; close ~2–4 weeks later) .
• Filing cadence: Emphasis on quicker reporting post-restatements and 2022 audit; exploring additional private audit support to avoid delays .
• Deal financing: Mix of seller notes, preferred equity (restricted/convertible), earn-outs; ABL provider considering extending credit to targets; limited equity appetite at current share price .
• Capital markets stance: Targeting non-bank lenders and engaging potential investment banks; near-term focus on execution and investor outreach (regular “FOMO HOUR,” decks, conferences) .
• Share structure: Management noted cancellations rather than treasury returns for certain shares as part of cleanup actions; reiterated that SST standalone profitability excludes public company costs .

Estimates Context

• Wall Street consensus: S&P Global Capital IQ mapping for FOMC was unavailable at query time; no consensus Revenue or EPS estimates for Q4 2022 could be retrieved. In our checks, no broker coverage surfaced for this OTC microcap. Values from S&P Global were unavailable due to missing CIQ mapping for ticker ‘FOMC’ at the time of request.*
• Implication: Absent formal coverage, post-print estimate revisions and target price changes are unlikely to serve as near-term catalysts; stock narrative is likely to hinge on filing cadence, backlog conversion, and M&A execution .

Key Takeaways for Investors

• Year-end conversion: A large Q4 revenue capture is implied by FY vs. 9M prints; expect lumpy quarterlies driven by K-12 budgeting cycles and supply chain normalization .
• Margin trajectory: Adjusted gross margin (~18%) and EBITDA (~7.3%) at SST indicate underlying earnings power as mix broadens beyond equipment into services/software/content .
• Execution watchlist: Track 2022 audit filing timeliness, any covenant waivers/renewals on the A/R line, and working capital discipline amid deposits and backlog delivery .
• M&A as catalyst: Smaller, non-audited targets (LMS/content) are prioritized; financing mix skews to seller notes/earn-outs to reduce dilution—closing progress and integration pace are key stock drivers .
• Diversification: Wins in municipal, healthcare, corrections, sports, and post-secondary reduce K-12 cyclicality and should support steadier revenue cadence through 2023 .
• Risk factors: Going concern, leverage/covenant management, inventory/working capital, and execution risk around multiple deals in parallel remain salient .
• Near-term setup: Without Street estimates, the narrative is event-driven—SEC/audit completion, backlog conversion in 1H23, and first definitive deal closings should drive sentiment resets .

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Sources:

• FY 2022 press release and 8-K (March 30, 2023): revenue, mix, margins, SEC status, strategy .
• Dec 22, 2022 preannouncement: >$9.4M pro forma FY revenue (preliminary), backlog ~$2M; deposit policy; timing .
• Q3 2022 10-Q (filed Mar 24, 2023): quarterly/9M revenue, gross margin, liquidity, A/R facility, going concern .
• Q2 2022 press release (Aug 15, 2022): $2.6M revenue, six-month $3.9M, backlog, liquidity snapshot .
• Investor “FOMO HOUR” transcript (Mar 29, 2023): pipeline, funding approach, filings cadence, share cleanup, strategy .

Footnote: S&P Global consensus estimates were unavailable due to missing CIQ mapping for ticker ‘FOMC’ at the time of request.*