Executive Summary

Q2 2024 continuing-operations revenue grew 18.7% YoY to $8.121M, with gross margin improving to 18.8% (from 14.0%), but results softened sequentially versus a stronger Q1 as mix shifted and selling/admin expense remained elevated; Adjusted EBITDA was ($0.157M) .
The quarter was driven by higher digital equipment sales and services, with contributions from the late-2023 Innovative Cinema Solutions (ICS) acquisition; loss from operations narrowed to ($0.711M) from ($1.572M) YoY .
Corporate actions remain the key catalysts: (1) the Strong/MDI sale to FG Acquisition Corp. (renamed Saltire) valuing Strong/MDI at $30M, and (2) the all-stock merger of SGE into Fundamental Global (FGF) — both expected to close in Q3 2024, aimed at streamlining overhead and participating in Strong/MDI’s future growth .
No formal financial guidance or earnings call transcript was available in the document set; S&P Global consensus estimates for SGE were unavailable (mapping not found), so beat/miss vs Street cannot be assessed. Investors should focus on transaction closings and continued services/equipment momentum as near-term stock drivers .

What Went Well and What Went Wrong

What Went Well
- “Double digit growth” continued; Strong Technical Services saw improvements and ICS contributed positively to growth and margins, lifting Q2 gross margin to 18.8% from 14.0% YoY .
- Product gross margin improved materially YoY (16.9% vs 6.6%) as ICS drove higher-margin digital equipment sales; service revenue remained solid albeit with slightly lower margin mix .
- Strategic progress: Strong/MDI transaction at a $30M valuation and planned merger into Fundamental Global to reduce duplicated public company costs and streamline structure; management emphasized a “compelling valuation” and overhead reduction .
What Went Wrong
- Sequential step-down vs Q1 2024: revenue decreased to $8.121M from $11.070M, and Adjusted EBITDA swung to a ($0.157M) loss from $0.409M in Q1, reflecting mix and ongoing public company/transaction costs .
- Operating loss persisted, albeit improved YoY: ($0.711M) in Q2 2024 vs ($1.572M) in Q2 2023, with continued elevated legal/professional expenses related to pending transactions .
- Service gross margin eased YoY (21.4% vs 23.3%) due to mix (more installation revenue with lower margins), partly offset by stronger warehouse service margins .

Financial Results

Metric (Continuing Ops)	Q2 2023	Q1 2024	Q2 2024
Revenue ($M)	$6.843	$11.070	$8.121
Gross Profit ($M)	$0.961	$2.657	$1.524
Gross Margin (%)	14.0%	24.0%	18.8%
Operating Income (Loss) ($M)	($1.572)	$0.180	($0.711)
Net Income (Loss) – Continuing Ops ($M)	($1.309)	$0.119	($0.742)
Diluted EPS – Continuing Ops ($)	($0.20)	$0.01	($0.09)
Adjusted EBITDA ($M)	($0.281)	$0.409	($0.157)

Segment/product mix (revenue):

Revenue Detail ($M)	Q2 2023	Q1 2024	Q2 2024
Net Product Sales	$3.794	$8.022	$4.782
Net Service Revenues	$3.049	$3.048	$3.339
Total Revenue	$6.843	$11.070	$8.121

Selected KPIs/mix:

KPI	Q2 2023	Q2 2024
Product Gross Margin %	6.6%	16.9%
Service Gross Margin %	23.3%	21.4%
Revenue by Geography – US ($M)	$6.721	$7.955
Revenue by Geography – Europe ($M)	$0.075	$0.140

Notes: Discontinued operations (Strong/MDI and content) are excluded from the tables above; Q2 2024 net income from discontinued operations was $0.150M (MDI positive), separate from continuing ops .

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Guidance	Change
Revenue / EPS / Margin	FY/Q3	Not provided	Not provided	Maintained: no formal guidance
Strong/MDI Transaction (to Saltire)	Closing timing	N/A	Expected close in Q3 2024	New timing disclosed
SGE → Fundamental Global Merger	Closing timing	N/A	Expected close in Q3 2024	New timing disclosed

No quantitative guidance ranges were provided on revenue, margins, OpEx, or other P&L items in Q2 disclosures .

Earnings Call Themes & Trends

No earnings call transcript was available in the document set for Q2 2024; themes below reflect management’s press release and 10-Q commentary.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2024)	Trend
Laser projection upgrades and demand	Q1 2024: “laser projection and customer upgrade initiatives” drove revenue/margins; ICS first full-quarter contribution	Continued growth in digital equipment and services; ICS contributed to revenue and product margins	Positive, multi-quarter catalyst
ICS acquisition impact	Q1: lifted revenue/margins; services scale opportunity	Product margins improved (16.9% vs 6.6% YoY) largely from ICS; mix aided equipment	Accretive to margins
Overhead/public company costs	Q1: higher standalone public company costs	Ongoing legal/professional costs tied to MDI sale/FG merger noted	Headwind until transactions close
Strategic transactions	Q1/Q2: Announced MDI sale to FG Acquisition ($30M) and merger into Fundamental Global	Both targeted to close Q3 2024; rationale: compelling MDI valuation, streamline duplicated costs	Execution milestone Q3
Legal/regulatory	—	Safehaven-related complaint settled; no material financial impact; retains profit participation rights	Issue resolved

Management Commentary

“The second quarter operating results demonstrated double digit growth with improvements at Strong Technical Services and positive contributions from the ICS acquisition. We also announced two merger transactions that we believe will continue to streamline and reduce the overall overhead levels going forward. The Strong/MDI transaction with Saltire represents a compelling valuation...” — CEO Mark Roberson .
On drivers: Revenue rose on “increased sales of digital equipment and increased demand for services,” with growth supported by “laser projection upgrades” and the ICS acquisition .
On margins/mix: Product gross margin expansion was primarily due to higher-margin digital equipment post-ICS; service margin dipped on installation mix, partially offset by higher warehouse service margins .

Q&A Highlights

No earnings call transcript was available in the document set; therefore, no Q&A highlights or analyst guidance clarifications could be extracted for Q2 2024 [—].

Estimates Context

S&P Global/Capital IQ Street consensus for Q2 2024 EPS and revenue was unavailable (CIQ mapping for ticker SGE not found). As a result, we cannot assess beat/miss versus consensus this quarter based on S&P Global data [—].
Given the lack of formal guidance and unavailable consensus, estimate revisions, if any, will likely hinge on: (1) continued ICS-driven margin lift, (2) services/install activity cadence, and (3) closure of the MDI and Fundamental Global transactions affecting reported structure/mix .

Key Takeaways for Investors

The core business is stabilizing with YoY revenue growth (+18.7%) and improved gross margin (18.8% vs 14.0%) driven by services momentum and ICS contributions, though Q2 was sequentially softer than a particularly strong Q1 mix .
Product margin expansion (16.9% vs 6.6% YoY) underscores the value of ICS and the current upgrade cycle; service margins remain healthy despite mix shifts to installation .
Operating loss narrowed YoY, but legal/professional and public-company costs persist; completion of the MDI sale and the FGF merger could meaningfully reduce overhead and simplify the structure .
Transaction timing is the near-term catalyst (both expected Q3 2024); investors should monitor closing milestones and any updated cost/structure disclosures post-close .
Discontinued operations (Strong/MDI) were profitable in Q2 (net income $0.150M), reinforcing the attractiveness of the $30M valuation and SGE’s retained participation in future Saltire growth .
With consensus unavailable and no formal guidance, positioning should emphasize execution on services/equipment backlog, ICS integration benefits, and timely transaction closures as key drivers of sentiment and valuation .

Additional Detail (for reference)

Non-GAAP: Q2 2024 Adjusted EBITDA of ($0.157M) reflects add-backs including ~$0.370M transaction expenses; Q2 2023 Adjusted EBITDA was ($0.281M) .
Geography: US remained dominant and grew YoY in Q2 (US $7.955M vs $6.721M), with modest growth in Europe .

Strong Global Entertainment, Inc. (SGE)·Q2 2024 Earnings Summary