Name: NextTrip, Inc. Q2 2023 Earnings Call
Start: 2022-11-14T00:00:00.000Z

Executive Summary

Q2 2023 revenue fell to $0.097M, down 59% year over year, while gross margin improved to 62% from 18% on lower cost of revenue; operating expenses declined 40% YoY, narrowing net loss to $1.3M ($0.12 per share) from $2.3M ($0.22) .
The company did not host a quarterly earnings call given ongoing strategic alternatives; management reiterated expense cuts into Q3 and disclosed cash of $0.37M at quarter-end, down from $1.49M at Q1 and $2.85M at year-end 2022 .
Sigma entered an at-the-market program to sell up to $1.5M of common stock (3% fee to agent) to bolster liquidity, a potential near-term catalyst alongside strategic transaction updates .
Management is evaluating multiple non-binding proposals to sell assets or merge; headcount reduced to five and product development discontinued while supporting current customers—material updates to be communicated publicly .
Wall Street consensus estimates via S&P Global were unavailable for SASI in Q2 2023; investors should anchor on reported results and liquidity trajectory .

What Went Well and What Went Wrong

Gross margin expanded to 62% vs 18% YoY on lower cost of revenue (fewer units/installs), improving unit economics despite revenue pressure .
Operating expenses were cut 40% YoY to $1.4M with reductions in salaries/benefits, office expenses, and travel; management expects further OpEx decreases into Q3 .
Average monthly cash use improved to ~$373k in Q2 from ~$452k in Q1 and ~$652k in Q4 2022, reflecting ongoing cost controls .
CEO quote: “We continued our progress reducing expenses and cash burn… We expect our expenses to continue to decrease into the third quarter.” .

Revenue declined 59% YoY to $0.097M, driven by lower PrintRite3D sales, subscriptions, and maintenance revenue; sequential revenue also fell vs Q1 .
Liquidity tightened significantly: cash fell to $0.37M at June 30, 2023 (from $1.49M at March 31 and $2.85M at Dec 31, 2022), increasing financing urgency .
Strategic transition constrained operations: headcount reduced to five, product development halted, and new customer pursuits ceased while the company evaluates asset sale/merger options .

Metric	Q2 2022	Q1 2023	Q2 2023
Revenue ($USD Millions)	$0.237	$0.130	$0.097
Gross Margin %	18%	51%	62%
Total Operating Expenses ($USD Millions)	$2.279	$1.848	$1.365
Net Loss ($USD Millions)	$2.247	$1.752	$1.308
EPS ($USD)	$(0.22)	$(0.17)	$(0.12)

Notes:

Sigma did not host a regular conference call due to strategic alternatives .
Liquidity snapshot: Cash and equivalents were $2.846M (Q4 2022), $1.489M (Q1 2023), and $0.368M (Q2 2023) .

KPI	Q4 2022	Q1 2023	Q2 2023
Average Monthly Cash Usage ($USD Thousands)	~$652	~$452	~$373
Cash And Equivalents ($USD Millions)	$2.846	$1.489	$0.368

Segment	Q2 2023 Revenue	Notes
Single segment (quality assurance software)	$0.097M	Company reports no subsidiaries/segments

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expenses	Q3 2023	None disclosed	“We expect our expenses to continue to decrease into the third quarter.”	Lowered (qualitative)
Capital Raising	Ongoing	None disclosed	ATM offering up to $1.5M; 3% transaction fee to agent	New program

Topic	Previous Mentions (Q4 2022 and Q1 2023)	Current Period (Q2 2023)	Trend
Strategic alternatives	Retained Lake Street; exploring partner integrations and financing options	Received multiple non-binding proposals; ceased product development and new customer pursuits; reduced headcount to five	Intensifying strategic focus; operational scale-back
Expense reduction	Salaries cut ~40% since Apr 2022; OpEx trending down	OpEx down 40% YoY; further OpEx reductions expected in Q3	Improving cost trajectory
Product/partner initiatives	Expanded collaborations (Materialise, DyeMansion, Dyndrite, OEM APIs)	Development discontinued pending strategic process	Pivot away from development
Liquidity/financing	Cash $2.846M (YE’22); seeking financing/partners	Cash $0.368M; implemented ATM up to $1.5M	Tightening liquidity; financing actions
Revenue trajectory	Q4’22 revenue $0.154M	Q1’23 $0.130M; Q2’23 $0.097M	Declining sequentially
Earnings call cadence	Hosted call in Mar 2023 for FY’22	No call due to strategic alternatives	Discontinued quarterly calls

“During the second quarter we continued our progress reducing expenses and cash burn… We expect our expenses to continue to decrease into the third quarter.” — Jacob Brunsberg, President & CEO .
“We had received four written, non-binding proposals… Since July 20, 2023, we have received additional written, non-binding proposals… Although we have not yet entered into any definitive agreements, we are continuing to work towards such definitive agreements.” .
Strategic update: headcount reduced to five; discontinued all product development and ceased pursuit of new customers while supporting existing customers .

No Q2 2023 earnings call was held due to ongoing strategic alternatives; management indicated future material developments will be publicly communicated .
Liquidity and strategic process clarifications were provided via 8-K updates (cash ~$434k as of July 14; headcount actions; proposals under discussion) .

S&P Global/Capital IQ consensus estimates for Q2 2023 (EPS and revenue) were unavailable for SASI; as such, this recap anchors solely on reported results and disclosed trends .
Given declining revenues and ongoing strategic alternatives, any future estimate coverage would likely hinge on clarity of the company’s operating model and financing pathway .

Revenue pressure continues amid strategic transition; focus near term is on liquidity preservation and OpEx reductions, not growth—monitor cash, ATM activity, and any definitive transaction .
Margin structure improved meaningfully, suggesting software economics can be favorable if scale returns; however, development is paused pending strategic outcomes .
Expense discipline is the main operational lever—management expects further cuts into Q3, lowering cash burn and extending runway .
Financing optionality added via $1.5M ATM; terms (3% fee) are standard—execution pace and market conditions will determine practical liquidity benefit .
Strategic alternatives are the primary stock narrative and likely catalyst path; watch for 8-Ks on proposals/definitive agreements and implications for existing shareholders .
Absence of estimates and suspended calls underscore uncertainty; traders should key on headline risk from transaction updates and liquidity events .
Sequential revenue declines (Q4’22→Q1’23→Q2’23) and reduced cash highlight urgency; position sizing should reflect binary outcomes tied to strategic process .