LogicMark, Inc. (LGMK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered revenue of $2.85M (+22% YoY; +10% QoQ), gross profit of $1.93M, and gross margin of 67.5%, driven by mix shift toward higher-margin devices (Freedom Alert Mini and upgraded Guardian Alert 911 Plus). Operating expenses rose to $4.06M on sales hiring and higher consulting/legal, with net loss flat YoY at $2.05M .
• Balance sheet remains liquid with $13.0M cash and investments, and no long‑term debt at quarter end; company completed transition to OTC Markets post-Nasdaq delisting, preserving public quotation while focusing on execution .
• Results beat Wall Street consensus: revenue beat by ~21.6% and EPS printed $0.00 versus a negative consensus; the EPS surprise reflects a ~6,275x increase in weighted average shares diluting per‑share loss despite similar net loss magnitude (estimate data from S&P Global)* .
• Near-term catalysts: continued B2B buildout under new SVP of Sales, reseller program revitalization, AI-enabled features (fall detection; upcoming medicine reminders), and VA/government channels scale through GSA contract .
• Risks: ongoing listing/market structure overhang resolved via OTC move; macro/tariff exposure to components and fulfillment costs; government/VA administrative changes could affect ordering processes (management does not see a demand slowdown) .

What Went Well and What Went Wrong

• What Went Well

  • 22% YoY revenue growth; gross margin expanded 99 bps to 67.5% on favorable product mix and pricing on the upgraded Guardian Alert 911 Plus .
  • CEO on innovation and AI features: “introducing state-of-the-art features such as AI-enabled fall detection… building solutions that support families at every stage of life” .
  • Liquidity: $13.0M cash and investments; no long-term debt, providing runway to scale B2B/institutional/government channels .

• What Went Wrong

  • Operating expenses up 12% YoY to $4.06M on recruiting for sales buildout and higher consulting/legal fees, pressuring operating loss to $2.13M .
  • Net loss remained ~$2.05M, reflecting the investment phase; per‑share optics improved solely due to share count expansion (549.8M vs 87.6K last year) rather than profitability .
  • Listing headwinds: common stock moved to OTC Markets following Nasdaq delisting for minimum bid price; management commits to reporting and potential exchange return over time .

Financial Results

Actuals vs Prior Year and Prior Quarter

Q2 2025 Actuals vs Wall Street Consensus (S&P Global)

Values retrieved from S&P Global.*

Segment Breakdown

KPIs and Balance Sheet Indicators

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO on momentum and innovation: “Our R&D team has been diligently enhancing existing products… introducing state-of-the-art features such as AI-enabled fall detection… building solutions that support families at every stage of life” .
• CFO on margin drivers: “With the addition of fall detection… we were able to take pricing, which has provided margin enhancement” .
• Channel strategy: “We recently appointed a new Senior Vice President of Sales… revitalizing our reseller program… expand into institutional and other government channels, including opportunities opened through our GSA contract” .
• VA demand backdrop: “We have not seen a slowdown… veterans… still need the help that we provide… changes likely more administrative” .

Q&A Highlights

• Mix and customer segments: Management remains heavily skewed to government sector business with growing B2B focus (senior/independent living), while expanding into broader safety category (e.g., Aster) via education and other adjacencies .
• VA funding risk: Management does not anticipate demand slowdown from the VA’s aging veteran population; expects potential administrative shifts but continued device provisioning .
• Execution priorities: Scaling sales leadership, partner engagement, and conference presence to accelerate multi‑channel growth .

Estimates Context

• Q2 2025 beat: Revenue $2.85M vs $2.35M consensus; EPS $0.00 vs $(22.50) consensus; revenue surprise +21.6%. The EPS “beat” is driven by share count expansion (549.8M vs 87.6K YoY), not profitability improvement, as net loss was essentially flat . Values retrieved from S&P Global.*
• Forward quarters: Consensus implies modest revenue levels for Q3/Q4 2025 with single‑analyst coverage, highlighting limited sell‑side attention; revisions may need to reflect stronger product mix and B2B scaling if momentum persists.*

Key Takeaways for Investors

• Product-mix tailwind is real: higher-margin devices and pricing on Guardian Alert 911 Plus expanded gross margin to 67.5%—watch for sustained mix improvements in 2H .
• Operating leverage timing: OpEx investments (sales hiring, legal/consulting) are near‑term drags; monitor revenue growth vs OpEx trajectory for operating loss narrowing .
• Liquidity and runway: $13.0M cash/investments and no long‑term debt underpin execution on B2B/institutional buildout and feature roadmap .
• Government/VA exposure: Demand remains steady; risk lies in administrative processes rather than end‑customer needs—track order flow stability and any procurement changes .
• Tariffs/supply chain: Company continues to mitigate via sourcing shifts and efficiency; margin protection remains a focus as macro evolves .
• Market structure overhang: OTC quotation stabilizes trading while company evaluates longer‑term exchange re‑uplisting; governance and communication remain key .
• Potential estimate resets: Consensus appears stale/low-coverage; expect sell‑side to adjust revenue/EPS optics for share count dynamics and mix improvements.*

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Notes: Values retrieved from S&P Global.*