Sign in

You're signed outSign in or to get full access.

KI

Kubient, Inc. (KBNT)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 revenue was $0.482M, up 20% sequentially and down 29% year-over-year; GAAP EPS was $(0.12), improving from $(0.41) in Q2; Adjusted EBITDA loss improved to $(1.52)M as cost reductions flowed through lower technology and G&A expenses .
  • Launched the KAI Dashboard (AI/ML-powered inventory health and optimization) and received a USPTO Notice of Allowance for KAI; management cited “20-plus percent” publisher revenue uplift and potential 20–30% media buying power return for brands using KAI in CTV workflows .
  • Renewed one of the largest direct advertising clients and shifted budget to MediaMath to purchase directly on Kubient’s SSP; management sees demand normalization and plans selective hiring for KAI and BD to reaccelerate growth .
  • Cash was $16.9M at quarter-end with prior commentary of ~24–36 months runway at ~21 FTEs; M&A optionality remains a strategic theme given clean balance sheet and shelf eligibility .

What Went Well and What Went Wrong

What Went Well

  • Cost actions lowered operating expenses, improving GAAP net loss and Adjusted EBITDA versus both Q2 and prior year; “implementation of the previous quarter’s cost cutting measures have helped us conserve capital” .
  • KAI Dashboard launch driving tangible outcomes: “showing customers a lift of 20-plus percent in revenue” for publishers; patent Notice of Allowance materially validates IP and potential monetization/defensibility .
  • Client/partner momentum: renewed media buying partnership; live events client extended into 2023; budget shift to MediaMath intended to showcase KAI’s efficiency across demand/supply .

What Went Wrong

  • Top-line pressure year-over-year tied to a major customer’s reduced scope; Q3 revenue fell 29% y/y to $0.482M (from $0.677M) .
  • Prior-quarter non-recurring impairments (intangible, goodwill, property/equipment) depressed Q2 results and highlight execution risk in legacy assets; Adjusted EBITDA loss in Q2 was $(2.24)M before improving in Q3 .
  • Limited sales capacity hindered scaling; management operated with two salespeople and indicated need to rebuild tech and BD headcount to accelerate KAI adoption .

Financial Results

Quarterly Financials (Q1–Q3 2022)

MetricQ1 2022Q2 2022Q3 2022
Net Revenues ($USD)$1,200,000 $400,351 $481,812
GAAP EPS ($)$(0.25) $(0.41) $(0.12)
GAAP Net Loss ($USD)≈$(3,600,000) $(5,809,891) $(1,674,164)
Adjusted EBITDA ($USD)≈$(3,600,000) $(2,235,802) $(1,521,458)
Cash and Equivalents ($USD)$20,700,000 $17,683,885 $16,897,563

Q3 2022 vs Prior Year and Prior Quarter

MetricQ3 2021Q2 2022Q3 2022YoY ChangeQoQ Changevs Estimates
Revenue ($USD)$676,986 $400,351 $481,812 −28.8% (computed from )+20.3% (computed from )N/A (S&P Global consensus unavailable)
GAAP EPS ($)$(0.16) $(0.41) $(0.12) +$0.04 improvement +$0.29 improvement N/A (S&P Global consensus unavailable)
Adjusted EBITDA ($USD)$(1,922,298) $(2,235,802) $(1,521,458) +$400,840 improvement (computed from )+$714,344 improvement (computed from )N/A (S&P Global consensus unavailable)

Operating Expense KPIs

MetricQ1 2022Q2 2022Q3 2022
Sales & Marketing ($USD)N/A$1,050,423 $735,296
Technology ($USD)$1,200,000 $959,157 $525,383
General & Administrative ($USD)$2,200,000 $1,509,208 $1,132,649
Weighted Avg Shares (Basic & Diluted)N/A14,316,483 14,337,412

Notes:

  • Adjusted EBITDA excludes non-cash and certain non-recurring items (e.g., stock-based compensation, impairments) per company’s non-GAAP definition .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
All financial metricsQ4 2022 / FY 2022None providedNone providedMaintained: no formal guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2022)Trend
AI/KAI technology initiativesEmphasis on optimizing KAI; partnerships (PubMatic, Yahoo, Google); scaling challenges; M&A interest centered on KAI Launched KAI Dashboard; publishers seeing 20%+ revenue lift; patent Notice of Allowance; vision to be “decisioning engine” Strengthening adoption and validation
Cost cutting / headcount / runwayHalved headcount; cash conservation; ~21 FTEs; 24–36 months runway Benefits realized in lower Tech/G&A; plan to hire engineers and BD for KAI; runway commentary reiterated Stabilizing, reinvesting selectively
Partnerships and client performanceNew/expanded client budgets (entertainment, mattress); Viant integration for CTV; DSP relationships (Google, Yahoo) MediaMath budget shift to Kubient’s SSP; live events client extended into 2023; more comprehensive arrangements via Audience Cloud Expanding qualitatively
Macro/demand normalizationBrands pulled back then became more strategic; pipelines “unkinking” “Shift towards a more conscious ad spender” benefiting Kubient; seeing normalization in media plans Improving but cautious
Regulatory/legal (IP)—USPTO Notice of Allowance for KAI; expectation of final issuance by year-end; readiness to defend IP Positive validation
Strategic alternatives (M&A)Actively exploring; clean balance sheet and shelf eligibility; varied discussions by scope Continues; positioning as public vehicle with strong tech and team Ongoing focus

Management Commentary

  • “The implementation of the previous quarter’s cost cutting measures have helped us conserve capital and direct our attention towards further unveiling the true potential of our KAI offering.” — Paul Roberts .
  • “As we announced in mid-October, we publicly launched the KAI Dashboard… publishers are now able to easily identify what is causing inventory to remain unmonetized… [and] take immediate action to drive increased revenue.” — Paul Roberts .
  • “Regarding the patent notice for KAI… our patent attorneys are confident we will receive the final issuance for this patent before the end of the year.” — Paul Roberts .
  • “Another positive growth area has been the success of our Kubient Managed Services team… This strategy combined with our Audience Marketplace has allowed clients to not only extend budgets, but net new campaign launches.” — Paul Roberts .

Q&A Highlights

  • Runway and staffing: Management reiterated prior cost cuts, ~21 FTEs, and indicated intent to add engineers and BD to accelerate KAI commercialization; runway commentary consistent with earlier calls .
  • KAI in CTV and TAM: KAI Dashboard addresses auction/app errors in CTV, with publishers “make upwards of 20% more” using Kubient’s platform; brands shifting more dollars to CTV and seeking fraud-free inventory .
  • Patent enforcement: Management signaled readiness to defend KAI IP against infringement, emphasizing rarity of patents in ad tech and KAI’s “noteworthy” methodology .

Estimates Context

  • Wall Street consensus (S&P Global/Capital IQ) for Q3 2022 was unavailable for KBNT; neither the 8-K press release nor the earnings call referenced analyst consensus, and our S&P Global query did not return mapped company data for KBNT. As a result, versus-estimate comparisons could not be performed .

Key Takeaways for Investors

  • Sequential improvement off a weak Q2: Revenue +20% q/q, GAAP EPS improved to $(0.12), Adjusted EBITDA loss narrowed by ~$0.71M — supported by lower Tech and G&A expenses; watch whether operating discipline sustains margin improvement into Q4 .
  • KAI product-market fit strengthening: Dashboard delivering 20%+ publisher revenue uplift; focus on CTV error remediation and fraud prevention positions Kubient in a high-growth channel; monitor case studies and conversion of partner pipelines into revenue .
  • IP as a catalyst: USPTO Notice of Allowance for KAI, with expectation of final issuance by year-end, could aid commercialization and potential licensing/defense strategies; stock could react to formal issuance or IP-related developments .
  • Partner-led demand capture: Budget shift to MediaMath to drive direct SSP transactions with KAI; renewed large client and live events recovery suggest improving spend normalization; success depends on rebuilding sales capacity and execution .
  • Balance sheet provides optionality: $16.9M cash and prior 24–36 months runway provide flexibility to invest in KAI and consider strategic alternatives; clean balance sheet and shelf eligibility support M&A/partnership pathways .
  • Near-term trading implications: Watch for patent issuance, incremental KAI wins in CTV, and any announced headcount additions (tech/BD) that signal sustained go-to-market acceleration; absence of consensus estimates may increase volatility on qualitative catalysts .
  • Medium-term thesis: If KAI continues to demonstrate measurable ROI for publishers and brands (20%+ uplift; 20–30% buying power return), Kubient could differentiate as an “intelligence layer” in ad tech and monetize via managed services, SSP transactions, and potential IP strategies; execution on sales scaling is the key swing factor .