LOGIQ, INC. (LGIQ)·Q2 2022 Earnings Summary

Executive Summary

• Q2 2022 revenue was $4.95M, down 40.4% year over year, while consolidated gross margin expanded sharply to 36.8% on the press release; the call referenced 35.8%, indicating a minor reporting discrepancy to note .
• Segment mix: DataLogiq contributed $3.3M (67.4%) and CreateApp/GoLogiq $1.6M (32.6%), with the decline driven by strategic exit from lower-margin white-label business and pivot to a direct-to-consumer portal and larger enterprise accounts .
• Net loss widened to $6.5M; total operating expenses rose 5.7% to $8.3M; cash and restricted cash were $0.4M at quarter-end, with management citing a factoring facility and cost actions to support working capital and progress to breakeven EBITDA run-rate by year-end 2022 .
• Guidance maintained: FY 2022 revenues $40–$50M and breakeven EBITDA run rate by year-end; profitability targeted for early 2023; guidance excludes AppLogiq post-spinoff (GoLogiq) .
• Catalyst: spin-off completion of GoLogiq (July 27, 2022), margin expansion from strategic mix shift, and launch of D2C portals; near-term investor focus on the revenue ramp, cash sufficiency, OpEx reductions, and pipeline/M&A execution .

What Went Well and What Went Wrong

What Went Well

• Gross margins expanded materially: consolidated GM +730 bps to 36.8%; segment GM expansion in GoLogiq (+1,480 bps to 46.5%) and DataLogiq (+350 bps to 31.9%) from mix shift and pricing discipline .
• Strategic D2C portal launched mid-April; expected to “produce significantly higher margins and revenues” and reduce dependence on third-party aggregators .
• Management emphasized traction with larger enterprise accounts and the Battle Bridge consolidation creating broader services and expertise: “enabled us to bid on and win far bigger customer accounts” .

What Went Wrong

• Revenue contracted sharply: $4.95M vs $8.30M prior year; DataLogiq down 39.3% YoY, CreateApp down 42.6% YoY as lower-margin business was exited and Medicare seasonality impacted volumes .
• Net loss widened to $6.5M; operating expenses increased to $8.3M (+5.7% YoY), driven by higher G&A and sales & marketing; cash at quarter-end was $0.4M .
• Guidance clarity questions: analysts sought clarification that 2022 guidance excludes AppLogiq and includes potential M&A; management confirmed the exclusion and noted M&A may or may not occur, increasing uncertainty on the path to the revenue target .

Financial Results

Note: Call commentary referenced 35.8% gross margin for Q2 2022 vs 36.8% in the press release; we anchor to the press release’s financial tables while noting the discrepancy .

Segment breakdown

Sequential revenue and margin trend

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are confident that going forward this transaction [GoLogiq spin-off] will unlock both companies’ fullest value and create enhanced returns for our shareholders.” — Brent Suen, CEO .
• “Our commitment to executing on our strategy to pursue a higher margin business was reflected in our robust gross margin results.” — Brent Suen .
• “The consolidation of Battle Bridge… has… enabled us to bid on and win far bigger customer accounts.” — Brent Suen .
• “We… are shifting our resources to securing larger corporate customers… [and] expect to report strong progress in the weeks ahead.” — Brent Suen .
• “We are reiterating our revenue guidance… $40 million to $50 million… reach a breakeven EBITDA run rate by the end of fiscal year 2022 and… profitability in early 2023.” — John MacNeil, COO .

Q&A Highlights

• Guidance scope clarified: FY22 guidance excludes AppLogiq; combines DataLogiq organic plus potential M&A; M&A may or may not occur .
• Share count and liquidity: Fully diluted share count ~33M; company entered a factoring facility to help working capital; focusing on cost reductions to reach cash breakeven .
• Operating expenses: Management indicated OpEx would be lower go-forward, with reductions of “at least $50,000 or $100,000 per month” and noted Q2 stock-based compensation of $1.7M vs $0.67M in Q1 .
• Vertical strategy: Medicare not expected to be primary revenue driver near-term; D2C platform to drive higher margins across multiple verticals (insurance, home improvement, etc.) .
• Disclosure expectations: New large customers may be disclosed depending on materiality and counsel guidance; management aims for conservative communication .

Estimates Context

• Wall Street consensus estimates via S&P Global were unavailable for LGIQ due to a coverage/mapping gap at the time of analysis; as such, no EPS or revenue beat/miss vs consensus can be determined for Q2 2022.
• Implication: Without published consensus, analysts should focus on trajectory relative to company guidance and intra-quarter operating commentary.

Key Takeaways for Investors

• The quarter reflects deliberate revenue contraction as Logiq exits lower-margin white-label volumes; margin expansion is the core narrative, supported by the D2C portal launch and pricing/COGS discipline .
• Liquidity is tight (cash + restricted cash $0.4M at 6/30/22), but management is using factoring and OpEx reductions to bridge to a breakeven EBITDA run-rate by YE22; monitor upcoming disclosures on revenue ramp and cost actions .
• Guidance maintained ($40–$50M FY22 revenue; breakeven EBITDA run-rate YE22; profitability early 2023), with scope clarified to exclude AppLogiq and include potential M&A; treat M&A contribution as a swing factor given uncertainty .
• Segment mix is tilting to higher-margin DataLogiq revenue, but near-term volumes are choppy; watch vertical diversification beyond Medicare and the scaling of D2C portals across insurance/home improvement .
• Note the minor discrepancy in reported Q2 GM (36.8% press release vs 35.8% call); anchor to the press release financial tables, but remain attentive to future reconciliations .
• Post-spin, GoLogiq is no longer consolidated; the completed separation simplifies the investment case but increases reliance on DataLogiq execution and working capital discipline .
• Trading setup: absent consensus data, near-term stock moves likely hinge on evidence of sequential revenue ramp in Q3/Q4 (seasonality plus D2C traction), cash runway updates, and any material partnership/customer wins or M&A developments .