Kubient, Inc. (KBNT)·Q2 2022 Earnings Summary

Executive Summary

• Q2 2022 net revenues fell 20% year over year to $0.40M as a major customer renewed at a reduced scope; GAAP net loss widened to $5.81M (−$0.41/share) driven by non‑cash impairments to intangibles and goodwill. Management expects a materially lower cash burn beginning August, supported by $17.7M of cash and “over two years of runway.”
• Non‑GAAP Adjusted EBITDA loss was $2.24M vs. $1.63M a year ago; Q2 included a $413,918 reversal of a prior loss accrual on a customer contract.
• Commercial traction: 3 new client wins, 2 client extensions/budget increases; partnerships expanded with Viant to deliver targeted, fraud‑free CTV inventory, adding to existing Yahoo/Google integrations.
• Strategic alternatives remain a core focus with KAI (pre‑bid fraud prevention) positioned as the centerpiece; management emphasizes cash preservation (headcount ~21 FTE) and optionality (24–36 months runway). Potential M&A remains a key stock catalyst alongside evidence of partnership monetization ramp and burn normalization in Q3.

What Went Well and What Went Wrong

• What Went Well

  • New business and upsells: “Three new client wins and two client extensions and budget increases.”
  • Channel expansion: Added Viant integration to deliver targeted, fraud‑free CTV inventory for Tier‑1 advertisers, complementing Yahoo and Google DSP access.
  • Non‑cash item reversal: Reversed $413,918 of a previously recognized loss accrual on a customer contract in Q2.
  • Quote: “We… transitioned into a better position to take advantage of strategic alternatives and M&A opportunities… thanks to… a cleaner balance sheet and strong cash position.” — Paul Roberts, CEO.

• What Went Wrong

  • Revenue headwind: Net revenues declined 20% YoY to $0.40M as a major customer renewed at reduced scope; partially offset by MediaCrossing‑related contract revenues.
  • Non‑cash impairments: Recorded $2.63M impairment of intangibles, $0.46M goodwill impairment, and $0.05M PPE impairment, tied to customer losses and reduced market cap.
  • Elevated operating expenses: Sales & marketing (+108% YoY), technology (+55%), and G&A (+36%) pressured results.
  • Concentration risk: A small number of customers accounted for a large share of net revenues historically, implying volatility if relationships change.

Financial Results

Notes:

• Q2 2022 non‑cash impairment charges significantly increased GAAP loss; Adjusted EBITDA excludes these items.
• No segment revenue breakdown disclosed; Kubient operates as a single reporting unit (goodwill impairment assessed at company level).

KPIs and Other Items

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Over the previous two quarters Kubient has sought to minimize cash burn… [and] transitioned into a better position to take advantage of strategic alternatives and M&A opportunities… thanks to… a cleaner balance sheet and strong cash position.” — Paul Roberts, CEO (press release)
• “We have a very strong cash position with over two years of runway… the normalization of our burn rate did not take effect until the beginning of August.” — Josh Weiss, CFO
• “KAI… has been the centerpiece for Kubient’s M&A‑related strategic alternative initiatives… [positioning us] as an extremely attractive target.” — Paul Roberts, CEO

Q&A Highlights

• Headcount and runway: ~21 FTE; no near‑term additional cuts planned; burn and headcount imply 24–36 months of runway.
• DSP relationships and monetization: Integrations require subsequent outreach to brand/agency users to shift budget into Kubient’s marketplace; some partners are increasing spend, but ramp is relationship‑driven and gradual.
• Macro demand: Tier‑1 brands had pulled back and become more selective; pipelines are “unkinking” with Kubient demonstrating fraud prevention value and campaign results.

Estimates Context

• Wall Street consensus (S&P Global/Capital IQ) for quarterly revenue/EPS was unavailable for KBNT at the time of this analysis due to missing SPGI mapping; therefore, no beat/miss comparison can be provided. If/when mapping is established, we will update with S&P Global consensus and actual vs. estimates.

Key Takeaways for Investors

• Burn normalization began in August; Q3 should be the first clean read on a structurally lower cash burn, with $17.7M cash providing multi‑year runway. Monitor Q3 cash flow trajectory.
• Commercial proof points are emerging (client wins, budget increases; Viant CTV integration), but revenue remains small and volatile given customer concentration and the post‑integration sales motion required to drive spend.
• Q2 results were distorted by non‑cash impairments (intangibles and goodwill fully impaired), masking underlying operating trends; non‑GAAP Adjusted EBITDA improved sequentially vs. Q1 (though still negative).
• Strategic alternatives/M&A remain a prominent narrative; KAI is positioned as differentiating IP. Any accretive transaction or credible inbound interest could be a stock catalyst.
• Execution priorities: accelerate DSP monetization, broaden direct brand relationships, and stabilize revenue post customer scope reduction. Watch for sequential revenue trends into 2H22.
• Risk factors: revenue concentration and small scale; macro ad spend sensitivity; ongoing need to convert integrations into sustained budgets.

Supporting detail and source documents: Q2 2022 8‑K press release and financials , Q2 2022 10‑Q , Q2 2022 earnings call transcript , Q1 2022 call , Q4 2021 8‑K and call .