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LOGIQ, INC. (LGIQ)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 consolidated revenue was $4.10M and diluted EPS was $(0.2221); segment-level DataLogiq (DLQ) revenue increased sequentially to $3.8M while consolidated revenue declined versus Q2 and the prior year, reflecting mix and spin-off impacts .
  • DLQ gross margin improved to 30.6% (vs. 28.2% in Q3-21), consistent with the strategic shift toward higher-margin, regulated verticals and D2C models .
  • Guidance was reiterated: exiting 2022 annualized revenue run-rate of $40–$50M; management also highlighted a record new client at $2–$3M per month and expects one or more similar wins in Q4, plus preliminary Q4 DLQ revenue expected to exceed $7.5M, up ~83% QoQ .
  • Catalysts include the Abri SPAC closing timeline (target Q1 2023), anticipated Nasdaq listing, and M&A pipeline; management referenced a $114M Abri valuation in the de-SPAC and potential concurrent business combinations to accelerate scale and re-rating .

What Went Well and What Went Wrong

What Went Well

  • Secured largest new customer contract at $2–$3M per month in a regulated vertical; management expects additional similar wins imminently: “we secured them. Revenue is currently tracking at about $2 million to $3 million per month…we expect to have one or more similar such large sales to announce in the current quarter” .
  • DLQ gross margin expansion to 30.6% YoY (vs. 28.2% in Q3-21), evidencing success of the pivot to higher-margin accounts and regulated markets .
  • Operational streamlining underway (including cost cuts/layoffs) aimed at breakeven and operational profitability going into 2023; “we believe that this will result in breakeven and operational profitability going into next year” .

What Went Wrong

  • Consolidated revenue declined to $4.10M from $4.95M in Q2 and $7.83M in Q3-21, reflecting lower AppLogiq/GoLogiq contribution and ongoing business mix transition .
  • Net loss widened to $(7.69)M vs. $(6.46)M in Q2 and $(5.77)M in Q3-21; operating loss increased accordingly amid investment in strategy and restructuring .
  • Liquidity tightened: cash fell to $0.37M at Q3-end (from $0.40M in Q2 and $3.75M in Q1), though management had noted a factoring facility in Q2 to support working capital .

Financial Results

MetricQ3 2021Q1 2022Q2 2022Q3 2022
Revenue ($USD)$7,826,249 $8,105,384 $4,949,976 $4,100,373
Gross Profit ($USD)$2,305,387 $2,204,661 $1,819,616 $1,307,874
Total Operating Expenses ($USD)$8,115,538 $6,188,327 $8,279,875 $9,002,676
(Loss) from Operations ($USD)$(5,810,151) $(3,983,666) $(6,460,259) $(7,694,802)
Net (Loss) ($USD)$(5,773,411) $(3,980,524) $(6,460,841) $(7,694,799)
Diluted EPS ($USD)$(0.2471) $(0.1510) $(0.1981) $(0.2221)
Weighted Avg Shares (units)23,365,486 26,367,804 32,620,160 34,645,067

Segment breakdown and margins:

Segment/KPIQ1 2022Q2 2022Q3 2022
DataLogiq Revenue ($USD)$4,800,000 $3,300,000 $3,800,000
GoLogiq Revenue ($USD)$3,300,000 $1,600,000 $334,987
DataLogiq Gross Margin (%)N/A31.9% 30.6%
Consolidated Gross Margin (%)27.2% 36.8% N/A

Operational KPIs:

KPIQ1 2022Q2 2022Q3 2022
Cash & Equivalents ($USD)$3,749,303 $396,385 $368,274
Accounts Receivable ($USD)$2,857,200 $2,309,247 $2,955,949
Total Assets ($USD)$26,907,143 $21,957,419 $21,546,586
Total Liabilities ($USD)$4,096,977 $3,866,672 $7,324,608
Total Equity ($USD)$22,810,166 $18,090,748 $14,221,978

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annualized Revenue Run-RateExit 2022$40–$50M (revised) $40–$50M (reiterated) Maintained
EBITDA Run-RateFY 2022Breakeven EBITDA run-rate by end-2022 Breakeven/operational profitability “going into next year” Clarified timing to early 2023
Q4 2022 DLQ RevenueQ4 2022None>$7.5M (prelim), +83% QoQ Introduced
SPAC Close / ListingQ1 2023NoneExpect Abri SPAC close Q1 2023; Nasdaq listing; pursue accretive M&A New timeline
2023 Revenue OutlookFY 2023None disclosedCould approach ~$100M with strategic M&A Introduced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2022)Previous Mentions (Q2 2022)Current Period (Q3 2022)Trend
Regulated Verticals StrategyIdentified crypto, cannabis, online wagering, pharma/medtech as high-barrier verticals with fungible adtech/Martech tools Emphasized pivot to higher-margin business; pursuing larger corporate customers and regulated markets Largest new contract in a regulated industry; pipeline includes cannabis, eSports, gambling, crypto Strengthening focus
Battle Bridge Acquisition SynergyClosed in late March; expected $3.8M revenue and ~$1.4M EBITDA in next 12 months; cross-selling underway Consolidated to broaden services and win bigger accounts New $2–$3M/month contract stems from Battle Bridge; validates M&A-led growth Delivering results
Cost Cutting / StreamliningOpex down modestly YoY; restructuring leadership; spin-off prep Rightsizing; factoring facility for working capital; aim breakeven EBITDA by YE 2022 “Significant streamlining…aggressive cost-cutting measures including layoffs”; target breakeven/operational profitability into 2023 Deeper cuts; timeline shifted
D2C Portals & Margin FocusDLQ shift away from lower-margin business; expect impact in H2 D2C portals launched mid-April; reduced third-party aggregator dependence; higher gross margins DLQ gross margin up YoY; continued focus on higher-margin client mix Executing
Financing & LiquidityCash $3.75M at Q1; equity and spin-off transactions Noted factoring facility to improve working capital Cash $0.37M at Q3; focus on breakeven/operational profitability Tight liquidity; execution critical
SPAC / UplistingDiscussed strategic options including IPO/M&A constructs Continued strategic evaluation Expect Abri SPAC close Q1 2023, Nasdaq listing, $114M valuation; potential concurrent merger Firm timeline

Management Commentary

  • “Revenue is currently tracking at about $2 million to $3 million per month…we expect to have one or more similar such large sales to announce in the current quarter.” — Brent Suen .
  • “We have…done a streamlining…including some layoffs…We believe that this will result in breakeven and operational profitability going into next year.” — Brent Suen .
  • “The Company reiterates its annualized revenue run-rate projection for 2022 in the range of $40 million to $50 million…[and] believes that 2023 revenues, including strategic, accretive M&A, could approach $100 million.” — Q3 press release .
  • “Looking ahead, Logiq expects to close on its previously announced SPAC transaction with Abri SPAC I…in the first quarter of 2023…anticipates being a newly Nasdaq-listed company…accelerate its M&A activity.” — Q3 press release .

Q&A Highlights

  • Mechanics/timing of GoLogiq share distribution: management offered to resolve via transfer agent for shareholders of record on Dec 30, 2021 .
  • Run-rate math and Q4 contribution of new client: reiterated $40–$50M exit-2022 run-rate, driven by the $2–$3M/month client and another pending contract .
  • Abri SPAC valuation vs. market cap and institutional interest: $114M Abri share valuation; outreach from institutions expected post-de-SPAC/uplisting to facilitate accretive M&A .
  • SEC S-4 review timing: expected comment cycle and proxy leading to close around January (management estimate) .

Estimates Context

  • S&P Global consensus estimates were unavailable for LGIQ due to missing CIQ mapping; therefore, we cannot present revenue/EPS comparisons to Street estimates for Q3 2022. We attempted retrieval, but the dataset did not return results for LGIQ [SpgiEstimatesError].
MetricQ3 2022 ActualQ3 2022 Consensusvs. Consensus
Revenue ($USD)$4,100,373 N/A (Unavailable via S&P Global)N/A
Diluted EPS ($USD)$(0.2221) N/A (Unavailable via S&P Global)N/A

Key Takeaways for Investors

  • The November win of a $2–$3M/month regulated-vertical client, plus a pending contract, sets up a strong Q4 exit run-rate and supports the reiterated $40–$50M guidance; preliminary Q4 DLQ revenue >$7.5M (+83% QoQ) underscores momentum .
  • Sequential improvement in DLQ revenue (Q3 $3.8M vs. Q2 $3.3M) and YoY DLQ margin expansion to 30.6% validate the higher-margin pivot and D2C strategy, even as consolidated revenue and net loss remain pressured .
  • Liquidity is tight ($0.37M cash at Q3-end), making execution on cost cuts, breakeven targets, and near-term revenue ramp critical; working capital facilities (factoring) and streamlined operations are intended to bridge to profitability .
  • The Abri SPAC timeline (target Q1 2023) and anticipated Nasdaq listing are near-term catalysts that could enable accretive M&A and a re-rating toward the de-SPAC valuation cited by management ($114M in Abri shares) .
  • Expect continued focus on regulated verticals (cannabis, eSports, gambling, crypto) where Logiq’s compliance-heavy adtech can command higher margins and barriers to entry, supporting durable gross margin performance .
  • Watch for Q4 conversion of pipeline and any guidance updates in January; closing additional large contracts is key to sustaining the run-rate and progressing toward operational breakeven in 2023 .
  • No Street consensus available (SPGI) limits the “beat/miss” narrative; trading will likely center on execution against announced contracts, Q4 print, de-SPAC progress, and liquidity management [SpgiEstimatesError] .