Executive Summary

Q2 FY2022 delivered profitability despite supply chain headwinds: net sales of $17.4M, net income of ~$0.7M, and diluted EPS of $0.01, supported by a strong retail partner network and continued product demand .
Year-over-year, revenue fell from Q2 FY2021’s $23.2M as pandemic-driven logistics costs and retail inventory normalization pressured margins and sell-through; gross margin for FY2022’s comparable period was later disclosed at ~19% (vs. 29% in Q2 FY2021) .
No formal quantitative guidance was provided; management focused on capital markets milestones (completed $10M raise and uplisting trajectory), retail distribution, and subscription monetization (music subscription revenue +450% YoY) as strategic growth levers .
Street consensus (S&P Global) was unavailable for Q2 FY2022, limiting beat/miss analysis vs estimates; trading narrative centered on profitability resilience, uplisting, and holiday-cycle execution. S&P Global consensus unavailable due to missing CIQ mapping (tool error) [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well

Profitability: ~$0.7M net income and $0.01 diluted EPS despite macro and logistics pressures, evidencing disciplined cost control and retail sell-in .
Subscription momentum: music subscription revenue grew ~450% YoY, highlighting traction in higher-margin, recurring revenue amid hardware sales volatility .
Capital markets and distribution: successful $10M capital raise and active uplisting efforts, alongside reinforced retail partnerships and new product launches supporting long-term growth .

What Went Wrong

YoY revenue decline: Q2 FY2022 net sales ($17.4M) were below Q2 FY2021 ($23.2M) as post-COVID inventory normalization and supply chain friction tempered sell-through and margin .
Margin compression: management later disclosed prior-year Q2 FY2022 gross margin near 19%, materially below Q2 FY2021’s ~29%, reflecting elevated shipping/logistics costs and product mix shifts .
Event timing disruption: the company announced and then rescheduled the Q2 FY2022 earnings release/call (Nov 15, 2021), an operational wrinkle in communications cadence during a critical retail season .

Financial Results

Metric	Q2 FY2021 (Sep 30, 2020)	Q1 FY2022 (Jun 30, 2021)	Q2 FY2022 (Sep 30, 2021)
Revenue ($USD Millions)	$23.2	$6.07 (derived from 6M FY2022 $23.4346 minus Q2 $17.369)	$17.37
Net Income ($USD Millions)	$2.4	N/A	~$0.7
Diluted EPS ($USD)	N/A	N/A	$0.01
Gross Margin %	29.0%	N/A	~19% (prior-year comparison disclosed in later release)

Notes: Q1 FY2022 revenue derived from reported six-month FY2022 revenue ($23.4346M) minus Q2 FY2022 revenue ($17.3689M) as presented in the company’s later press release .

KPIs and Operating Metrics

KPI	Q2 FY2022	Prior Year Reference
Music subscription revenue growth (YoY)	+450%	Q2 FY2021 baseline
Capital raised	$10M equity financing closed	N/A
Uplisting progress	Initiated efforts to uplist to a national exchange	N/A

Estimates vs Actuals (Wall Street Consensus)

Metric	Consensus (Q2 FY2022)	Actual (Q2 FY2022)	Beat/Miss
Revenue ($USD Millions)	Unavailable (SPGI mapping error) [SpgiEstimatesError]	$17.37	N/A
Diluted EPS ($USD)	Unavailable (SPGI mapping error) [SpgiEstimatesError]	$0.01	N/A

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2022/Q3-Q4	Not provided	Not provided	Maintained (no formal guidance)
Gross Margin %	FY2022/Q3-Q4	Not provided	Not provided	Maintained (no formal guidance)
Operating Expenses	FY2022/Q3-Q4	Not provided	Not provided	Maintained (no formal guidance)
EPS	FY2022	Not provided	Not provided	Maintained (no formal guidance)

Evidence: Q2 FY2022 communications and releases did not include numeric guidance ranges; releases focused on results reporting, capital raise, and call logistics .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2021 and Q1 FY2022)	Current Period (Q2 FY2022)	Trend
Supply chain and logistics costs	FY2021: Elevated freight costs; margin lift on Carpool Karaoke mix	Profit achieved despite persistent COVID-driven logistics cost pressures; margin ~19% vs 29% prior-year	Deteriorated YoY; improving trajectory later as ocean freight declines (noted in subsequent disclosures)
Retail partner execution	Strong demand across major retailers (Amazon, Costco, Sam’s, Target, Walmart)	Continued sell-in into best retail partners driving $17.4M quarterly sales	Stable to positive
Subscription/service monetization	Growing catalog and app engagement	Music subscription revenue +450% YoY	Positive
Capital markets/uplisting	Initiated uplisting plan post FY2021	$10M raise completed; uplisting efforts ongoing	Positive

Note: The Q2 FY2022 call transcript link exists (GuruFocus) but was not retrievable via tool for direct quotes .

Management Commentary

“Net sales for the quarter of $17.4 million… Net income of approximately $0.7 million… Fully diluted EPS of $0.01” – highlighting profitability and top-line scale in a challenging logistics environment .
“Music subscription revenue increased ~450% relative to the same quarter prior year” – underscoring progress in higher-margin recurring revenue streams .
Capital markets and growth: management emphasized the completed $10M raise and ongoing uplisting plans to a national exchange, positioning for strategic investments and broader investor access .

Q&A Highlights

The company hosted the Q2 FY2022 call in mid-November after rescheduling; transcript exists (GuruFocus) but could not be programmatically retrieved here for direct quotes .
Themes indicated by releases: holiday sell-in, logistics normalization expectations, subscription traction, and capital raise/uplisting clarity; no additional quantitative guidance provided on the call per available press materials .

Estimates Context

Wall Street consensus (S&P Global) for Q2 FY2022 was unavailable due to missing CIQ mapping, preventing beat/miss assessment against Street expectations [SpgiEstimatesError].
Given profitability and YoY margin compression, estimates (if any) would likely need to reflect the 19% gross margin context and logistics cost normalization trajectory disclosed in later releases .

Key Takeaways for Investors

Profitability despite headwinds: $0.7M net income and $0.01 EPS on $17.4M revenue in Q2 FY2022 demonstrate operating resilience; watch margin recapture as freight normalizes .
Mix shift to services: +450% YoY subscription revenue is strategically important for margin stability and recurring monetization; continued product-to-service attach will be a key KPI .
Retail throughput is the swing factor: scale at Amazon/Costco/Sam’s/Target/Walmart drives quarter outcomes; inventory and co‑op dynamics around holiday periods remain pivotal .
Capital flexibility: $10M raise and uplisting trajectory support growth investments and investor access; monitor dilution vs ROI of new initiatives .
Margins: prior-year gross margin ~19% vs 29% in Q2 FY2021 highlights sensitivity to freight and mix; as freight costs recede, expect near-term margin tailwinds (as later reported) .
Near-term trading: focus on holiday sell-through updates and any inventory/backlog commentary; absence of guidance suggests volatility around retail cadence and promotions .
Medium-term thesis: execution on subscription, new product innovation, and capital markets milestones (uplisting) can re-rate multiples; sustained margin recapture is the catalyst to de-risk earnings power .

SINGING MACHINE CO INC (MICS)·Q2 2022 Earnings Summary