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ShiftPixy, Inc. (PIXY)·Q1 2021 Earnings Summary

Executive Summary

  • Revenue grew 15% year over year to $2.503M, with gross billings up 15% to $19.8M; sequentially, revenue rose versus Q4 FY2020 ($2.4M) .
  • Gross margin improved to 20% (27% excluding a $0.18M workers’ comp reserve charge), and gross profit rose to $0.513M from $0.221M a year ago .
  • Operating loss widened to $(5.619)M; net loss was $(6.936)M or $(0.22) per share, including $(1.314)M from discontinued operations tied to increased workers’ comp reserves related to the January 2020 asset sale .
  • Balance sheet strengthened: cash increased to $9.080M (no long‑term debt) aided by a $12M equity offering closed Oct 14, 2020, supporting larger customer opportunities and platform deployment .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue and gross billings growth: $2.503M (+15% YoY) and $19.8M (+15% YoY), respectively; gross profit margin improved to 20% (27% ex-charge) .
    • Customer and WSE momentum: ~88 clients, >500 locations, ~3,400 billed WSEs at Nov 30, 2020; healthcare WSEs increased to ~3,600 by end of Dec 2020, driving higher per‑WSE revenues and gross profit .
    • Recapitalization and liquidity: cash $9.080M at quarter end with no long‑term debt; completed $12M gross proceeds equity offering, providing a “clean capital structure” to pursue larger customers .

  • What Went Wrong

    • Losses widened: operating loss $(5.619)M vs $(4.165)M prior year; total net loss $(6.936)M vs $(2.394)M prior year, as operating expenses rose (notably software development) .
    • COVID‑19 headwinds: renewed restrictions in California pressured QSR WSE growth; average annualized gross billings per WSE fell to $23,300 from $28,300 YoY .
    • Discontinued operations charge: $(1.314)M for increased workers’ comp reserves tied to the January 2020 asset sale (also a $0.18M reserve charge in cost of revenue) .

Financial Results

MetricQ1 2020 (FY2020)Q4 2020 (FY2020)Q1 2021 (FY2021)
Revenue ($USD Millions)$2.169 $2.400 $2.503
Gross Profit ($USD Millions)$0.221 —$0.513
Gross Margin (%)10% —20% (27% ex-charge)
Operating Expenses ($USD Millions)$4.386 —$6.132
Operating Income (Loss) ($USD Millions)$(4.165) —$(5.619)
Net Income (Loss) ($USD Millions)$(2.394) —$(6.936)
EPS (Basic & Diluted, $)$(2.68) —$(0.22)

KPIs and Balance Sheet

KPI / Balance MetricQ1 2020 (FY2020)Q4 2020 (FY2020)Q1 2021 (FY2021)
Gross Billings ($USD Millions)$17.2 $18.7 $19.8
Clients (approx.)——~88
Customer Locations (approx.)——>500
Billed WSEs (approx.)——~3,400 (Nov 30); ~3,600 (Dec)
Avg Annualized Gross Billings per WSE ($USD)$28,300 —$23,300
Cash ($USD Millions)—$4.303 $9.080
Long-term Debt—None None

Notes:

  • Q4 FY2020 revenue provided by fiscal 2020 results release; other Q4 specifics not disclosed in the cited documents .
  • Gross margin Q1 FY2021 includes a $0.18M workers’ comp reserve charge; excluding the charge, margin was 27% .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ProfitabilityFY2021 (H2)Management “hope to achieve profitability in the second half of Fiscal 2021” (Nov 30, 2020) No formal numerical guidance provided in Q1 FY2021 press release Not reiterated numerically

Earnings Call Themes & Trends

Note: A Q1 FY2021 earnings call transcript was not available in our document catalog; trends reflect management commentary from the Q1 press release and the FY2020 results release.

TopicPrevious Mentions (Q3 FY2020)Previous Mentions (Q4 FY2020)Current Period (Q1 FY2021)Trend
Technology platform deployment (HRIS/mobile app)COVID setbacks in May 31 quarter; continued investment Investment reached $4.2M in FY2020; full commercial launch nearing COVID‑related delays “now primarily behind us”; additional Q1 spend to complete key initiatives Improving execution
Customer mix (QSR vs healthcare)Client refocus away from light industrial to QSR New nurse staffing client signed in Q4 2020 with ~8,000 employees potential Healthcare WSE adoption increased in Dec; more billed nurses driving higher per‑WSE revenue Mix shifting toward healthcare
COVID‑19 operational impactSignificant impact in Q3 FY2020 Recovery in Q4 FY2020 (sequential billings +30%) Renewed restrictions in Nov hurt QSR WSE growth; impact less severe vs earlier in 2020 Persistent but moderating
Balance sheet and capital structureRaised capital; eliminated debt with anti‑dilution instruments Raised >$25M equity May–Oct 2020; asset sale improved cash $12M October offering; cash $9.1M; “clean capital structure” to pursue larger customers Strengthened liquidity
Regulatory/PPP/tax——Did not apply for PPP; deferred certain federal taxes to begin payment in FY2022 Stable policy stance

Management Commentary

  • “Despite additional restrictions placed on our restaurant clients… the impact to our business was not as severe as in the second quarter of Fiscal 2020, and we saw marked improvement to adoption in December for our healthcare WSEs that is driving both revenue and gross profit growth.” — Scott W. Absher, CEO
  • “Our recapitalization and improved balance sheet have been instrumental in helping us address opening and re‑opening opportunities with larger customers and we are excited to have a clean capital structure.” — Scott W. Absher
  • “We believe that COVID‑19 related delays in the launch of our mobile application solution are now largely behind us… and we are extremely excited about our near‑term opportunities for significantly larger customers in new markets.” — Scott W. Absher

Q&A Highlights

A Q1 FY2021 earnings call transcript was not located; no Q&A details were available in our document catalog. The March 31, 2021 annual stockholders’ meeting transcript primarily covered governance items (director elections, plan amendments, auditor ratification) and did not include quarterly financial Q&A .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 FY2021 revenue and EPS was unavailable due to missing SPGI/CIQ mapping for PIXY; therefore, estimate comparisons cannot be provided at this time. Values would ordinarily be retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential and YoY topline momentum: revenue rose to $2.503M and gross billings to $19.8M; gross margin expanded despite reserve charges, signaling improved unit economics and mix shift to higher‑wage healthcare WSEs .
  • Loss profile widened as the company invested in software development and platform rollout; watch operating expense intensity and timing of commercialization to gauge path toward profitability .
  • Liquidity and capital structure materially improved (cash $9.1M; no long‑term debt), supported by the October equity raise—fuel for onboarding larger customers and accelerating deployment .
  • COVID‑19 remains an operational swing factor; management indicated renewed restrictions impacted QSR WSE growth, though effects are moderating relative to earlier 2020—near‑term trading sensitive to regional policy changes .
  • Healthcare staffing momentum and franchise‑operator focus are catalysts: increased billed nurses and delivery‑centric restaurant operations can support higher per‑WSE revenues and margins as adoption scales .
  • No numerical guidance provided; prior commentary (Nov 2020) expressed hope for H2 FY2021 profitability—monitor subsequent filings for explicit targets and any changes to the profitability timeline .
  • With estimates unavailable, price reaction will hinge on narrative (platform execution, customer wins) and subsequent disclosures; traders should watch upcoming 10‑Q/8‑Ks for updates on WSE growth, gross margin excluding reserve impacts, and cash runway .