Executive Summary

MicroAlgo reported FY 2022 results alongside Q4 timing via an 8‑K press release: revenue was $87.1M, up 6.2% YoY, driven by strong growth in central processing algorithm (CPA) services; however margins compressed sharply and the year ended in a net loss due to higher channel costs, segment mix and impairments .
The CPA segment expanded to $66.6M (+57.3% YoY) while Intelligent Chips & Services fell to $20.6M (−48.2% YoY) amid weak consumer electronics demand; overall gross margin fell to 21.8% from 40.4% and net swung to a $6.9M loss (from $8.5M profit) .
Management emphasized continued R&D and leveraging public capital markets to enhance offerings; financing actions in Q4/Q1 included a $3.2M private placement to support growth and liquidity .
Key stock narrative catalysts: segment rotation into lower‑margin short‑form video ads, chips demand slowdown, COVID‑related channel costs, and impairment charges; the absence of quarterly detail and an earnings call limits granularity for Q4 trajectory .

What Went Well and What Went Wrong

What Went Well

CPA services revenue rose to $66.6M (+$24.3M YoY), supported by performance‑based advertising and entry into short‑form video streaming placements .
Liquidity remained solid with $42.7M cash and $51.6M working capital at year‑end, providing flexibility despite margin pressure .
Management reiterated strategic focus on R&D and scaling bespoke algorithm solutions: “We remain focused on the research and development and implementation of algorithmic solutions... with access to public capital markets” — Min Shu, CEO .

What Went Wrong

Gross margin compressed to 21.8% (from 40.4%) as CPA channel costs surged and short‑form video ad inventory carried lower margins; chips margins fell with volume declines .
Intelligent Chips & Services revenue dropped to $20.6M (−$19.2M YoY) on consumer electronics demand weakness, also reducing software development revenue .
Net income swung to a $6.9M loss (from $8.5M profit), with impairment charges in the chips segment (goodwill $5.3M; long‑lived assets $2.0M) and COVID‑related disruptions .

Segment revenue and margins:

Liquidity and cash flow:

KPIs:

KPI (CPA unless noted)	FY 2021 (oldest)	FY 2022 (newest)
CPA Customers (count)	196	142
Avg Rev per CPA Customer ($USD)	~$217,000	~$468,861
CPA Retention Rate (%)	82.8%	66.5%
Chips & Services Customers (count)	52	31
Chips & Services Retention Rate (%)	100.0%	63.3%

Note: The company did not disclose standalone Q4 2022 quarterly figures or EPS; FY 2022 data is presented for Q4 recap context .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	Not provided	Not provided	Maintained (no guidance)
Margins	FY/Quarter	Not provided	Not provided	Maintained (no guidance)
OpEx, OI&E, Tax	FY/Quarter	Not provided	Not provided	Maintained (no guidance)
Dividends	FY/Quarter	None	None	Maintained

No formal financial guidance was issued in the 8‑K or 10‑K .

No earnings call transcript was available for Q4 2022. Themes from filings across recent periods:

Topic	Q2 2022 (older)	Q3 2022 (older)	Q4/FY 2022 (current)	Trend
AI/Technology initiatives	SPAC stage; focus on business combination progress	SPAC stage; merger amendments	Emphasis on bespoke algorithms, R&D $13.9M, IP portfolio; CPA expansion	Scaling core tech
Supply chain / Chips demand	Not applicable (SPAC)	Not applicable (SPAC)	Chips segment revenue down 48% on consumer electronics softness	Negative
Tariffs/Macro	Not applicable	Not applicable	PRC economy/COVID impacts cited; lower ad growth; margin pressure	Mixed/Headwind
Regulatory/Legal (PRC data/cyber)	SPAC risk disclosures	SPAC risk disclosures	Extensive PRC data/cybersecurity compliance discussion	Heightened compliance
R&D execution	Not applicable	Not applicable	R&D spend $13.9M; talent and platform focus	Ongoing
Financing / Capital markets	Extensions and trust account (SPAC)	SPAC closing Dec 9	$3.2M private placement; 10‑K filed Mar 29	Supportive

“We remain focused on the research and development and implementation of algorithmic solutions and Intelligent chips and services for our customers… access to the resources of the public capital markets…” — Min Shu, CEO .
Strategy highlights: expand CPA applications (short‑form video, performance advertising), invest in R&D, and pursue selective acquisitions to strengthen capabilities .

No Q4 2022 earnings call transcript was published; therefore, no Q&A highlights are available .

Analyst consensus (EPS, revenue) from S&P Global for Q4 2022 appears unavailable for MLGO; the company did not present quarterly guidance or consensus comparisons in its filings .
Implication: Model updates likely focus on segment mix (CPA strength vs chips weakness) and structurally lower margins due to channel costs and short‑form video ad inventory .

Revenue growth masked by severe margin compression: CPA expansion into lower‑margin channels and elevated channel costs drove gross margin down to 21.8%, turning FY profit into a loss — a key valuation and narrative pivot .
Segment bifurcation: CPA momentum vs chips contraction; near‑term visibility hinges on ad channel cost discipline and chips demand normalization .
Impairments reflect chips headwinds; watch for further asset write‑downs if consumer electronics demand remains weak .
Liquidity cushion supports execution and R&D; recent $3.2M private placement adds incremental capital to navigate macro volatility .
Absence of quarterly detail and call limits Q4 granularity; monitor future disclosures for quarterly segmentation and margin trajectory .
Regulatory/compliance environment (PRC data/cybersecurity) remains a backdrop risk; ongoing adherence is essential to operations .
Trading lens: catalysts include margin recovery in CPA, chips demand rebound, further capital actions, and any guidance initiation; risks center on sustained margin pressure and macro/regulatory uncertainty .

Dec 16, 2022: Closing of business combination; MLGO begins trading on Nasdaq .
Jan 13, 2023: Private placement of up to $3.2M; one share + one $1.35 warrant per unit .
Mar 29, 2023: 8‑K Item 2.02 and press release highlighting FY 2022 revenue; 10‑K filing .