FOXO TECHNOLOGIES INC. (FOXO)·Q2 2023 Earnings Summary

Executive Summary

• Q2 2023 was defined by liquidity and restructuring rather than top-line growth: revenue was $0.01M while operating expenses fell year over year; adjusted EBITDA loss improved to $(3.34)M from $(4.47)M YoY as cost actions took hold .
• No formal guidance was issued; management paused sales of its Longevity Report pending further R&D and shifted focus to bioinformatics and AI-powered services (launched July 19), while completing tender offers to streamline the capital structure .
• Liquidity is acute: cash was $0.22M at quarter-end and management said available cash plus July financing would fund operations only through mid-August 2023; negative shareholders’ equity stood at $(7.03)M .
• Stock reaction catalysts: incremental funding visibility, execution milestones in the new bioinformatics services line, and clarity on commercialization timelines beyond life insurance could drive sentiment near term .

What Went Well and What Went Wrong

• What Went Well

  • Adjusted EBITDA improved to $(3.34)M vs $(4.47)M YoY on lower operating costs; management highlighted headcount reductions and cost streamlining as priorities .
  • Strategic pivot: FOXO launched Bioinformatics Services to monetize epigenetics analytics capabilities, aiming to partner with researchers/healthcare to accelerate discoveries .
  • Capital structure simplification: completed warrant exchange and PIK note amendment to remove impediments to raising capital; management views this as expanding strategic optionality .

• What Went Wrong

  • Minimal revenue: Q2 revenue was $0.01M (vs $0.04M in Q2’22), underscoring the early stage of commercialization and pause in Longevity Report sales .
  • Liquidity/going-concern risk: cash of $0.22M with runway only through mid-August 2023 based on available cash and July gross proceeds; equity deficit of $(7.03)M .
  • Non-cash charges: $2.63M impairment of intangibles/cloud arrangements and a $(3.52)M loss from PIK Note amendment/debenture release weighed on results despite cost actions .

Financial Results

Income statement snapshot (USD thousands, except EPS)

Operating expense detail (USD thousands)

Balance sheet and liquidity (USD thousands, period-end)

Estimate comparison (S&P Global)

Note: Wall Street consensus from S&P Global was unavailable via the API for Q2 2023 at the time of this analysis.

KPIs and capital actions

Segment breakdown: Not disclosed; company reports consolidated financials .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic pivot and rationale: “For the coming quarters, we are doubling down on our unique strength and expertise in areas of bioinformatics and continued R&D leveraging Artificial Intelligence.”
• Commercial posture: “We have since put sales of the Longevity Report on hold until we complete more R&D and market research.”
• Cost and restructuring: “We’ve taken efforts to streamline our cost structure… reducing our headcount and… minimizing expenses.”
• Capital structure cleanup: “The completion of these two tender offers removed several impediments to raising capital thereby allowing the company to pursue more favorable strategic opportunities…”
• Liquidity: “With our available cash as of June 30, 2023, as well as the gross proceeds… in July of 2023, we expect to have sufficient capital to fund our operations through mid-August 2023.”

Q&A Highlights

• Fiscal discipline: Management highlighted headcount reductions and expense minimization to streamline the cost structure .
• Commercialization roadmap: Focus on validating market fit before scaling; near-term emphasis on R&D with proprietary datasets; health and wellness seen as a large potential market, but specifics withheld pending R&D .
• IP status: One FOXO patent accepted but not yet issued; multiple UCLA biological age clock patents licensed, though the team relies more on internally developed clocks/software .

Estimates Context

• S&P Global consensus for Q2 2023 EPS and revenue was unavailable via the API at the time of analysis. As a result, we cannot quantify beats/misses versus Street estimates for this quarter. Management did not provide formal financial guidance to benchmark against .

Key Takeaways for Investors

• Liquidity is the immediate gating factor: cash was $0.22M at Q2-end and runway extended only through mid-August 2023; funding updates are the most material near-term catalyst .
• Cost controls are yielding operational improvement (Adjusted EBITDA sequentially and YoY better), but commercialization remains early with negligible revenue; sustainability hinges on new capital and traction in bioinformatics services .
• The strategic pivot broadens TAM beyond life insurance; initial monetization via bioinformatics services can create nearer-term revenue vs. insurance adoption cycles .
• Capital structure actions removed anti-dilution triggers and prepayment impediments, potentially easing future financings; dilution risk remains given recent share issuances and minimal cash .
• DTC Longevity Report pause reduces near-term consumer revenue optionality but may improve product-market fit post-R&D; watch for relaunch signals and pilot partnerships .
• Non-cash charges (impairments, PIK/debenture items) and equity deficit highlight balance sheet fragility; any financing terms, covenant structures, or listing compliance updates could move the stock .

Citations:

• Q2 2023 press release and financials:
• Q2 2023 earnings call transcript:
• Q1 2023 press release and financials:
• FY 2022 press release and call script (context/trend):