Executive Summary

Q4 2022 results: Total revenue $2.85M (-30% YoY), software revenue $2.77M (-24% YoY), gross margin 57% (up from 47% YoY), net loss $25.2M, and Adjusted EBITDA loss $1.81M; results were labeled unaudited and preliminary .
Sequentially, revenue fell sharply from Q3’s $5.41M and loss from operations widened to $(11.7)M versus $(0.8)M in Q3, reflecting lower revenue and impairment/d&A dynamics quarter to quarter .
Corporate actions: Announced proposed merger with Gryphon Digital Mining and sale of non‑enterprise software assets to POSaBIT on Jan 27, 2023; subsequently received and pursued a superior offer for the software business in April, amending the path for the Gryphon combination—key structural catalyst for the combined company narrative .
Estimates context: Wall Street consensus via S&P Global was unavailable for KERN; therefore, beat/miss analysis versus estimates is not provided (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

Gross margin expanded to 57% in Q4 from 47% in the prior‑year quarter, and FY gross margin improved to 60% from 58%, reflecting mix and cost controls .
Adjusted EBITDA loss improved YoY in Q4 ($(1.81)M vs $(3.14)M in Q4 2021), and narrowed sequentially vs some prior periods, indicating progress on underlying opex control excluding non‑cash/non‑recurring items .
Management advanced strategic alternatives: completed sale of 365 Cannabis and Last Call Analytics for ~$2.9M, and announced merger with Gryphon plus sale of non‑enterprise software assets (later pivoted to a superior offer), positioning for an ESG‑focused, carbon‑neutral bitcoin miner combination and a cleaner software portfolio outcome .
- “Gryphon, a leading net carbon neutral bitcoin miner, will be merging with Akerna... to create a leading, ESG‑committed, carbon‑neutral bitcoin miner” .

What Went Wrong

Revenue contracted materially: total revenue $2.85M in Q4 (vs $4.05M prior year and $5.41M in Q3), with software down 24% YoY and total revenue down 30% YoY, indicating demand softness and portfolio changes .
Loss from operations remained high at $(11.7)M in Q4, driven by operating expenses including depreciation/amortization and impairments; net loss widened to $(25.2)M vs $(17.2)M in Q4 2021 .
Discontinued operations produced an additional $(13.5)M loss in Q4, and the FY net loss widened substantially to $(79.1)M, underscoring balance sheet pressure despite asset sales .

Financial Results

Metric	Q4 2021	Q3 2022	Q4 2022
Total Revenue ($USD)	$4,045,994	$5,412,802	$2,845,895
Software Revenue ($USD)	$3,649,846	$5,326,830	$2,770,636
Consulting Revenue ($USD)	$375,380	$76,500	$63,500
Other Revenue ($USD)	$20,768	$9,472	$11,759
Gross Profit ($USD)	$1,890,431	$3,360,940	$1,608,563
Gross Margin (%)	47%	62%	57%
Loss from Operations ($USD)	$(19,791,250)	$(837,988)	$(11,686,477)
Net Loss ($USD)	$(17,212,310)	$(2,304,088)	$(25,234,682)
Adjusted EBITDA ($USD)	$(3,144,389)	$(1,385,579)	$(1,813,705)
Cash & Restricted Cash ($USD)	$14,442,526	$9,498,923	$8,183,255
Basic & Diluted Net Loss per Share ($USD)	$(11.20)	$(0.59)	$(5.80)

Segment breakdown (revenue):

Segment Revenue	Q4 2021	Q3 2022	Q4 2022
Software ($USD)	$3,649,846	$5,326,830	$2,770,636
Consulting ($USD)	$375,380	$76,500	$63,500
Other ($USD)	$20,768	$9,472	$11,759

KPIs and supplemental:

KPI	Q2 2022	Q3 2022	Q4 2022
CARR ($USD Millions)	$18.9	$16.9	N/A (not disclosed)
Software bookings ($USD)	~$600,000	~$440,000	N/A (not disclosed)
Transaction volume (YoY/Seq)	+9% YoY	+10% sequential	N/A (not disclosed)

YoY and QoQ notes:

Q4 2022 total revenue down 30% YoY; software revenue down 24% YoY; gross margin up to 57% from 47% YoY .
Sequential comparison: Q4 total revenue $2.85M vs Q3 $5.41M; gross profit $1.61M vs $3.36M; loss from operations $(11.7)M vs $(0.8)M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Guidance metrics	Q4 2022 / FY 2022	Not provided	Not provided	Maintained (no formal guidance)

No formal quantitative guidance was disclosed in the Q4 2022 materials; commentary focused on strategic transactions (merger with Gryphon and asset sale) and portfolio actions .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2022)	Previous Mentions (Q3 2022)	Current Period (Q4 2022)	Trend
Strategic alternatives / M&A	Pursuing strategic alternatives to optimize capital structure	Continued exploration of strategic and financial alternatives	Announced proposed merger with Gryphon and sale of non‑enterprise software assets; later superior offer for software business in April	Accelerating portfolio reshaping; path toward Gryphon combination framed
Cost controls / opex discipline	Expense reductions announced in June; expected material savings in H2’22	Aggressive cost control measures tracking through P&L; narrowing Adjusted EBITDA losses	Adjusted EBITDA improved YoY in Q4; lower opex vs prior periods alongside impairments/d&A effects	Sustained discipline; non‑recurring charges still volatile
Demand / bookings	Softer sales bookings sector‑wide; average new deal size down 9% YoY	Q3 software bookings ~$440K; average new business deal size down 16% YoY	Revenue contracted; no bookings disclosed; refocus on transactions	Demand softness; pivot to strategic actions
Gross margin	69.8% in Q2 (+~900 bps YoY)	62% in Q3 (flat YoY)	57% in Q4 (up from 47% YoY)	Margins resilient YoY despite revenue decline
Liquidity / cash	$14.1M cash & restricted cash as of July 5 post financing	$9.5M cash & restricted cash at 9/30/22	$8.18M cash & restricted cash at 12/31/22	Declining; asset sale proceeds present but cash trending lower

Management Commentary

“We continue to focus our resources on building a stable and sustainable financial model at Akerna… double-digit growth in reported software sales for the quarter… aggressive cost control measures… narrowing of our Adjusted EBITDA losses.” — CEO Jessica Billingsley (Q3 press release) .
“We believe that our current business units… supported by and consist of 75% recurring annual revenue, provide us the means to reach a point of sustained profitability at our current sales growth rate.” — CEO Jessica Billingsley (Q3 press release) .
Strategic message (Q4 press release): Combining with Gryphon to form a leading, ESG‑committed, carbon‑neutral bitcoin miner; proposed sale of MJ Freeway/Leaf Data System and Ample Organics to POSaBIT (subsequently superseded) .

Q&A Highlights

A Q4 2022 earnings call transcript was not available in the document set; Q3 2022 call was scheduled but the transcript could not be retrieved due to database inconsistency. As a result, specific Q&A themes, guidance clarifications, and tone shifts cannot be corroborated from primary transcripts .

Estimates Context

S&P Global consensus estimates for KERN (EPS and revenue) were unavailable in our dataset; therefore beat/miss analysis versus Wall Street consensus is not provided at this time. Values would ordinarily be retrieved from S&P Global.

Key Takeaways for Investors

The quarter showed sharp revenue contraction amid ongoing portfolio reshaping; margins held up better YoY, suggesting cost discipline, but scale pressure remains .
Adjusted EBITDA improved vs Q4 2021, indicating operational progress excluding non‑recurring items, but absolute losses and cash burn still warrant caution .
Corporate actions around the Gryphon merger and software asset sale (later pivoted to a superior proposal) are the dominant stock narrative and likely near‑term catalyst; diligence on final terms and pro‑forma capital structure is critical .
Liquidity trended lower into year‑end despite asset divestitures; investors should watch closing proceeds, debt obligations, and any additional financings .
With consensus unavailable, traders should focus on qualitative catalysts (transaction milestones, regulatory approvals, Nasdaq listing outcomes) and any updated KPIs (bookings/CARR) in subsequent disclosures .
Near term: event‑driven setup around transaction updates; medium term: thesis hinges on the Gryphon combination’s execution, scale benefits, and balance sheet sustainability .
Monitor discontinued operations impacts and potential impairment/one‑off charges that can obscure underlying trends in core operations .

Gryphon Digital Mining, Inc. (KERN)·Q4 2022 Earnings Summary