Executive Summary

Revenue declined 33% year over year to $1.87M, with gross margin compressing to 36% on legacy contract restructuring; net loss widened to $2.0M and EPS was $(0.03) .
Management emphasized momentum in Connected Rewards: added gaming partners, signed ad network deals with “billions” of in‑game impressions, and initiated a fuel partnership expanding reach to >65,000 stations, with commercial campaigns launching in Q3 .
OpEx fell 16% YoY to ~$2.45M, and CFO expects the expense profile to remain at this level as Connected Rewards scales; cash ended Q2 at $1.09M, with PIPE financing and credit facility expanded to $6M to support growth .
No formal guidance was issued; management indicated top‑line growth resumption as Connected Rewards ramps and higher gross margins over time given “dollars per interaction” economics vs legacy “cents per interaction” .

What Went Well and What Went Wrong

What Went Well

Expanded gaming partnerships and ad network relationships; multiple restaurant and convenience brands added with Q3 campaign launches planned. “These partners combine for billions of in‑game impressions” and bring new inventory to sell to brick‑and‑mortar brands .
Fuel rewards capability broadened via new partner, enabling discounts “at practically every fuel station across the U.S.A.”; >65,000 fuel locations added to the platform (a timely consumer value proposition) .
Strategic narrative and economics: “Our previous business delivered cents per interaction, while this new business delivers dollars… we expect the impact to our top line to become increasingly evident as we launch and scale Connected Rewards programs” .

What Went Wrong

Top line and margins under pressure: revenue down 33% YoY to $1.867M and gross margin down to 36% (from 54%), primarily due to restructuring/suspension of legacy contracts; net loss widened to $(1.95)M .
Liquidity constraints and going concern disclosure: working capital deficit of ~$3.72M; management disclosed “substantial doubt” about the ability to continue as a going concern without additional capital and growth execution .
Higher financing costs: interest expense rose sharply (Q2: $167k vs $24k prior year) due to increased borrowings under the related party credit facility, pressuring the P&L as the transition unfolds .

Financial Results

Metric	Q2 2021	Q1 2022	Q2 2022
Revenue ($USD)	$2,792,828	$2,000,000	$1,867,162
Gross Profit ($USD)	$1,520,687	$900,000	$664,413
Gross Margin (%)	54%	45% (computed from $0.9M/$2.0M)	36%
Operating Expenses ($USD)	$2,926,712	~$2,200,000	$2,448,511
Net Income (Loss) ($USD)	$(1,432,546)	~$(1,600,000)	$(1,951,734)
EPS (Basic/Diluted) ($USD)	$(0.03)	—	$(0.03)
Adjusted EBITDA ($USD)	$(950,000)	—	$(1,145,000)

Segment breakdown: Not applicable; the company reports consolidated results only –.
KPIs:

Cash and Cash Equivalents: $1,091,460
Accounts Receivable (net): $828,170
Total Debt (including related party notes): $3,905,215
Working Capital Deficit: $(3,719,382)
Shares Outstanding: 59,661,385 (as of Aug 15, 2022)

Non‑GAAP note: Adjusted EBITDA is non‑GAAP; reconciliation referenced in press release exhibits .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q3 trajectory	None provided	Management expects “resumption of overall growth” as Connected Rewards accelerates; Q3 campaigns launching	Qualitative only
Gross Margin	FY trajectory	None provided	Expect “material expansion” as Connected Rewards becomes a higher proportion of revenue	Qualitative only
Operating Expenses	Near term	None provided	“Expect our expense profile to remain at this level as we expand Connected Rewards”	Qualitative only
Liquidity	Near term	—	Credit facility increased to $6M; PIPE proceeds added	Improved access to capital

No formal numerical guidance ranges were issued in Q2 materials – .

Earnings Call Themes & Trends

Topic	Q4 2021 (Prev-2)	Q1 2022 (Prev-1)	Q2 2022 (Current)	Trend
Privacy-driven pivot to Connected Rewards	Strategic pivot launched; target higher‑value “dollars per transaction” economics –	Early programs proving demand; three gaming partners signed; pipeline building –	Partnerships expanded; ad networks added; multiple brands onboard; Q3 launches –	Accelerating execution
Gaming partnerships and rewarded play	Initial concept and IP position outlined –	Trials with brands; economics “$5–$15+ per conversion,” recurring engagement model –	Two additional partners; dozens of top games; “billions” of ad impressions via networks	Scale building
Fuel rewards	—	Mentioned as consumer value (cheap gas)	Partnership to >65k stations; enable per‑gallon discounts	New category expands reach
Margin profile	Higher margins expected vs legacy text messaging	Reinforced “dollars vs cents” economics	Gross margin down near term due to legacy mix; expect material expansion as mix shifts	Near‑term pressure; medium‑term positive
Liquidity and financing	$735k cash YE; new credit facility; warrants noted	$1.5M cash; warrant conversion added $2.5M	~$1.1M cash; PIPE $850k; facility increased to $6M	Strengthened access
Legacy contracts impact	Restructuring/suspension impacting revenue/margins	YoY revenue decline primarily from legacy program changes	Q2 YoY decline and margin compression tied to legacy suspension	Drag diminishing as mix shifts

Management Commentary

CEO strategic message: “Our growth accelerates when more brands, gaming publishers and other digital businesses work with our Connected Rewards platform… the second quarter exceeded our expectations” .
Economics and model: “Our previous business delivered cents per interaction, while this new business delivers dollars… we expect the impact to our top line to become increasingly evident as we launch and scale Connected Rewards programs” .
Partnerships and reach: “Reaching more than 65,000 fuel locations, billions of in‑game ad impressions, millions of gamers… this new growth engine is poised to grow profitably and rapidly” .
CFO framing: “Revenue… down 33% YoY… primarily due to a large nonrecurring SMS program in 2021, plus a legacy Smart Receipt contract paused due to the pandemic… we expect resumption of growth in our top line thanks to accelerating momentum of Connected Rewards” .

Q&A Highlights

The Q2 2022 transcript provided prepared remarks without detailed Q&A content; management’s commentary addressed revenue decline drivers, expense profile, and Connected Rewards ramp with Q3 campaigns –.
Prior quarter Q&A emphasized acquisition economics ($5–$15+ per mobile conversion; higher for certain apps), breakage effects on reimbursement, and recurring engagement mechanics to improve retention, informing expectations for Q2/Q3 ramps –.

Estimates Context

Wall Street consensus estimates via S&P Global for Q2 2022 were unavailable due to data access limits at query time; therefore, no beat/miss assessment vs consensus can be made at this time. Values retrieved from S&P Global were unavailable due to daily request limit.

Where estimates may adjust: Given the 33% YoY revenue decline and margin compression from legacy mix, sell‑side models (if any) likely need to reflect near‑term gross margin pressure and the timing of Connected Rewards revenue ramp and mix shift .

Key Takeaways for Investors

Transition story: Near‑term results are pressured by legacy contract restructuring and mix, but Connected Rewards presents structurally superior unit economics (“dollars per interaction”) and a growing pipeline across gaming, ad networks, and fuel—monitor Q3 campaign launch traction closely .
Margin outlook: Expect gross margin expansion as Connected Rewards becomes a larger revenue share; watch quarterly mix changes and margin progression as proof points .
Liquidity/capital: Cash was ~$1.1M; access improved via PIPE and credit facility raised to $6M—reduces execution risk but keep an eye on interest expense and related‑party financing terms .
Risk disclosure: The 10‑Q includes a going concern statement and a significant working capital deficit—position sizing should reflect financing and execution risks as the ramp unfolds .
Near‑term trading implications: Without numeric guidance or consensus context, catalysts are Q3 launch updates and early revenue signals from ad networks/fuel rewards; headlines on new brand/game additions could drive sentiment.
Medium‑term thesis: If Connected Rewards scales across categories (restaurants, convenience/fuel, gaming/streaming), recurring transaction revenue with higher margins can pivot MFON toward a more attractive model; execution against pipeline and partner adoption is key .
Monitor legacy exposure: Track the pace at which legacy SMS/Smart Receipt revenue is replaced and how rapidly Connected Rewards offsets the drag; this will determine the speed of top‑line reacceleration .

Citations: Press release and 8‑K Q2 2022 –; Q2 2022 10‑Q financials and MD&A –; Q2 2022 earnings call transcript –; Q1 2022 earnings call transcript –; Q4 2021 earnings call transcript –.

MOBIVITY HOLDINGS CORP. (MFON)·Q2 2022 Earnings Summary