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LOGIQ, INC. (LGIQ)·Q1 2022 Earnings Summary

Executive Summary

  • Q1 2022 consolidated revenue was $8.1M, essentially flat year-over-year, with consolidated gross margin of 27.2%; AppLogiq (GoLogiq) grew revenue 35.5% to $3.3M with gross margin expanding 230 bps to 32.4%, while DataLogiq declined 14.9% to $4.8M as management pivoted away from lower-margin business .
  • Management revised FY 2022 revenue guidance to $40–$50M and targets breakeven EBITDA run-rate by year-end 2022 with profitability in early 2023, down from prior $50–$75M; this revision reflects deal pipeline timing and mix and is a potential stock reaction catalyst .
  • Battle Bridge acquisition closed at end of March and is expected to contribute ~$3.8M revenue and ~$1.4M EBITDA over the 12 months beginning April 1, creating cross-sell opportunities and content capabilities; integration underway .
  • Strategy emphasizes vertical focus (95% of business in home improvement, insurance, solar, and political/ancillary services) and entry into regulated/underserved verticals (e.g., cannabis, crypto, online wagering, medtech) to capture higher-margin growth via M&A and partnerships .

What Went Well and What Went Wrong

What Went Well

  • AppLogiq (GoLogiq) performance: revenue +35.5% YoY to $3.3M; gross profit +46.0% to $1.1M; margin +230 bps to 32.4%, validating the pivot to higher-margin direct customers (“demonstrating its pivot to higher-margin business”) .
  • Cash position improved: cash, cash equivalents, and restricted cash rose to $3.8M as of March 31, 2022 vs. $1.6M at December 31, 2021, aided by recent capital raise and operational focus .
  • M&A synergy momentum: Battle Bridge expected to add ~$3.8M revenue and ~$1.4M EBITDA in the next 12 months; management: “we anticipate booking $3.8 million in revenue… and about $1.4 million in EBITDA cash flow” and already initiating cross-sell/upsell .

What Went Wrong

  • DataLogiq revenue decline: down 14.9% YoY to $4.8M due primarily to shift away from lower-quality business; consolidated gross profit slightly down to $2.2M and margin to 27.2% .
  • Guidance lowered: FY 2022 revenue revised to $40–$50M from $50–$75M previously; while EBITDA breakeven moved to year-end 2022, the topline revision highlights deal timing risk .
  • Lumpy revenue and macro headwinds: management cautioned digital ad budget commitment amid unevenly fading COVID/market volatility and noted order timing can swing quarterly results (“law of small numbers”) .

Financial Results

MetricQ3 2021Q4 2021Q1 2022
Revenue ($USD Millions)$7.83 $13.10 $8.11
Gross Profit ($USD Millions)$2.31 $4.10 $2.20
Gross Margin (%)29.5% 31.0% 27.2%
Operating Expenses ($USD Millions)$8.12 $9.40 $6.19
Net (Loss) ($USD Millions)$(5.77) $(5.30) $(3.98)
Diluted EPS ($USD)$(0.2471) N/A (not disclosed)$(0.1510)

Segment breakdown (Q1 2022):

SegmentRevenue ($USD Millions)% of TotalGross Profit ($USD Millions)Gross Margin (%)
AppLogiq (GoLogiq)$3.30 40.8% $1.10 32.4%
DataLogiq$4.80 59.2% N/A (not disclosed)N/A (not disclosed)

KPIs:

KPIQ3 2021Q4 2021Q1 2022
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$5.30 $1.60 $3.80
Total Assets ($USD Millions)$38.09 $34.19 (Dec 31, 2021) $26.91
Weighted Avg Shares (Basic & Diluted)23,365,486 N/A (not disclosed)26,367,804

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2022$50–$75M (broad range; pace of M&A) $40–$50M Lowered
EBITDA BreakevenFY 2022 timingBreakeven at lower end of revenue range in 2022; organic breakeven mid-2023 Breakeven EBITDA run-rate by end of 2022 Tightened to YE’22
ProfitabilityTimingLate 2023 (organic) Early 2023 Pulled forward

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2021)Previous Mentions (Q4 2021)Current Period (Q1 2022)Trend
M&A pipeline and accretive dealsSeparation plan; M&A for both businesses post-separation; targeting accretive deals Battle Bridge closed; more targets at attractive multiples; accretive focus Battle Bridge integration; expected $3.8M rev/$1.4M EBITDA; active pipeline remains a key catalyst Improving execution
Vertical strategy focusAdded insurance verticals; contextual/CTV investments Diversification to smooth seasonality; Medicare/home improvement drivers 95% in home improvement, insurance, solar, political/ancillary; targeting regulated verticals (cannabis, crypto, wagering, medtech) Broadening into regulated
Seasonality and revenue lumpinessQ3 pivot back to growth; context/CTV investment Q4 record; noted seasonality and ACA/Medicare extensions affected Q1; plan to countercyclical layering Revenue lumpy; focus on higher-margin consultative sales; stronger H2 expected Normalizing seasonality
GoLogiq spin-offBoard-approved plan to separate into two public companies Transfer to Lovarra; distribution planned in ~Q2/Q3 Transfer completed; spin-off distribution mid-2022; FINRA name/ticker process Advancing
Market/macro commentaryN/ADiscussed capital raise and valuation; investor concerns on stock Ad budget caution amid COVID and volatility; confidence in H2 margin trajectory Mixed headwinds

Management Commentary

  • “For the first quarter, we reported solid consolidated revenues of $8.1 million… GoLogiq reported a 35.1% increase in revenues at $3.3 million… gross margin increased 230 basis points to a healthy 32.4%.” — Brent Suen (CEO) .
  • “Our March 31 total cash balance was 3.1 million versus 1.6 million on December 31, 2021” (press release states $3.8M including restricted cash) — Brent Suen (CEO); balance sheet/press release detail .
  • “We anticipate booking $3.8 million in revenue… and about $1.4 million in EBITDA cash flow in the 12 months that began April 1” — on Battle Bridge acquisition .
  • “We project annualized revenue for this year to be in the range of about $40 million to $50 million… reach a breakeven EBITDA run rate by the end of the year and achieve profitability by early 2023.” — revised guidance .
  • Note: The press release refers to “mystical services” among verticals, while the call cites “political and ancillary services,” indicating likely editorial discrepancy in vertical naming .

Q&A Highlights

  • Guidance composition and segment outlook: Prior call emphasized $50–$75M target driven by M&A; organic EBITDA breakeven mid-2023 vs. profitability late 2023; clarity that Battle Bridge impact will be felt in last three quarters of 2022 .
  • Battle Bridge economics and margin profile: Higher gross margins than corporate average; accretive EBITDA; incremental capabilities (programmatic via Rebel AI) to expand revenue beyond Facebook/Google .
  • Seasonality and vertical mix: Medicare-driven seasonality normalizing after extended enrollment; home improvement ramps in spring; diversification across >10 verticals to smooth seasonality .
  • Capital markets and valuation: Investor concerns on stock pressure and discussion of strategic paths (uplisting, registered direct/IPO); management sees peer revenue multiples materially higher than current valuation .

Estimates Context

  • Wall Street consensus estimates (S&P Global/Capital IQ): Unavailable for LGIQ due to missing CIQ mapping, preventing retrieval of Q1 2022 Revenue/EPS consensus; as a result, beat/miss vs. estimates cannot be assessed at this time. Values would normally be retrieved from S&P Global, but were unavailable in this case.
  • Implication: Given revision of FY guidance to $40–$50M and comments on stronger H2, sell-side models may need to recalibrate top-line trajectory and timing of EBITDA breakeven toward year-end 2022 .

Key Takeaways for Investors

  • Mix shift executing: AppLogiq delivered double-digit growth and margin expansion; DataLogiq intentionally shed lower-quality revenue, positioning for higher-margin consultative sales in H2 — watch for evidence of margin lift in Q3/Q4 .
  • Guidance reset: FY 2022 revenue lowered to $40–$50M; however, EBITDA breakeven targeted by year-end and profitability early 2023 — models should reflect back-half ramp and M&A contribution cadence .
  • M&A synergy as catalyst: Battle Bridge’s ~$1.4M EBITDA and programmatic capabilities provide immediate accretion and cross-sell — monitor incremental revenue/EBITDA realization and additional deal activity .
  • Vertical strategy in regulated markets: Entry into cannabis/crypto/wagering/medtech could unlock higher-margin growth in underserved segments — look for JV/M&A announcements and vertical-specific KPIs .
  • Spin-off value unlock: GoLogiq separation progressing (Lovarra), enabling focused strategies and potential peer multiple uplift — track distribution timeline and any GoLogiq updates .
  • Revenue lumpiness and macro: Expect near-term variability due to order timing and ad budget caution; management signals stronger Q3/Q4 trajectory — trading setups may favor signs of pipeline conversion in late Q2/Q3 .
  • Balance sheet improvement: Cash increased to $3.8M at quarter-end and recent equity raise supports M&A and integration — de-risking near-term execution .

Appendix: Source Documents Reviewed

  • Q1 2022 8-K and press release (Item 2.02 via Item 7.01): financial details, guidance, segment metrics, balance sheet and P&L .
  • Q1 2022 earnings call transcript: strategy, vertical focus, guidance update, M&A commentary .
  • Prior quarters for trend analysis: Q4 2021 earnings call (record quarter, margin expansion, capital raise, Battle Bridge closing) ; Q3 2021 8-K press release (revenue/margin trends, segment breakdown, separation plan) .