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SI

SRAX, Inc. (SRAX)·Q1 2022 Earnings Summary

Executive Summary

  • Q1 2022 delivered GAAP revenue of $7.50M (+53% YoY) and diluted EPS of $0.13, alongside $3.7M net income and $29.2M cash and marketable securities .
  • Versus prior quarter, GAAP revenue declined from a record Q4 2021 ($9.60M); management had guided Q1 2022 revenue to ~$11.5M, implying a miss on GAAP and near-miss on non-GAAP revenue ($10.6M) due to contract valuation adjustments; bookings remained strong at $15.2M .
  • Management reiterated confidence in full-year growth and Sequire momentum; Q1 filing delays tied to BIGtoken deconsolidation complexity were highlighted in prior calls, but the quarter’s profitability and liquidity provide support for the medium-term thesis .
  • Key catalysts: variance versus prior guidance (valuation discounts), continued strong bookings, and ongoing deconsolidation clean-up; these shape near-term expectations and model updates .

What Went Well and What Went Wrong

What Went Well

  • Profitability: Q1 2022 posted net income of $3.7M and diluted EPS of $0.13; cash and marketable securities rose to $29.2M, underscoring balance sheet strength .
  • Demand/Bookings: Sequire gross contract bookings reached $15.2M in Q1 2022, reflecting healthy sales execution despite market volatility .
  • Management confidence: “We anticipate that Q1 will be a record EBITDA quarter for SRAX…we’re confident we’ll get to $47–$50 million this year” (June 6 call) .

What Went Wrong

  • Guidance variance: Prior guidance for Q1 2022 revenue (~$11.5M) contrasted with reported GAAP revenue of $7.5M; management highlighted non-GAAP revenue ($10.6M) excluding marketability/liquidity discounts, but GAAP result implies a miss versus guidance .
  • Execution/filing timeline: Q1 filing was delayed, with management citing audit and deconsolidation complexities, adding near-term uncertainty around cadence of disclosures .
  • Cost and structural noise: Prior calls flagged non-cash and one-time items (e.g., warrant inducement charges, deconsolidation costs), complicating comparability and forcing reliance on adjusted metrics .

Financial Results

MetricQ3 2021Q4 2021Q1 2022
Revenue (GAAP, $USD Millions)$8.31 $9.60 $7.50
Revenue (Non-GAAP, $USD Millions)N/AN/A$10.60
Diluted EPS ($USD)$(0.15) N/A (not disclosed in press release) $0.13
Gross Margin (%)78.0% N/AN/A

KPIs and supplemental metrics:

KPIQ3 2021Q4 2021Q1 2022
Sequire Subscribers (count)250 307 N/A
Sequire Bookings ($USD Millions)$8.9 $12.5 (as of call; projected $16.5) $15.2
Cash & Marketable Securities ($USD Millions)~$31 (incl. designated assets; detail in PR/8-K tables) ~$30 securities at 3/31 (CFO) $29.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ResultChange
Revenue ($USD Millions)Q1 2022~$11.5 (guided June 2022) $7.50 GAAP; $10.60 non-GAAP Lower vs GAAP; near-miss vs non-GAAP
Revenue ($USD Millions)FY 2022$47–$50 (guided June 2022) No explicit update in Q1 PR Maintained (no change disclosed)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2021 and Q4 2021)Current Period (Q1 2022)Trend
Sequire bookings momentumRecord bookings; Q4 pacing to $16.5M; 12–13 consecutive quarters of growth $15.2M bookings in Q1 Sustained strength
Product/technology initiativesIR website builder, SMS, VIRA chatbot; platform features expanded Launch of Sequirecommunity.com for issuer-shareholder engagement Continued enhancement
BIGtoken deconsolidation/noiseNon-cash charges and discontinued ops; move to preferred to minimize P&L volatility PR focuses on core Sequire metrics; reduced BIGtoken impact in results Transition progressing
Liquidity/marketable securities~$30M marketable securities at 3/31; ~$4M/quarter securities sold Cash & marketable securities $29.2M Stable liquidity
Events & pipelineLD Micro driving lead gen, non-Sequire client exposure Continued cadence of virtual conferences (20+ in 2022) Ongoing engagement

Management Commentary

  • “We anticipate that Q1 will be a record EBITDA quarter for SRAX…we’re confident we’ll get to $47 to $50 million this year.” – CEO, June 6 call .
  • CFO on non-cash/one-time noise: “We had a warrant inducement charge…quite a large P&L hit, but again, it’s all noncash” .
  • CFO on marketable securities mechanics: “If issuers do a dilutive financing, we get reset…100% warrant coverage…we also get that warrant” .
  • On sales cycle and conference lift: “A lot of non-Sequire clients are attending…big opportunity for our sales guys to close them up” .

Q&A Highlights

  • Opex and deconsolidation costs: ~$0.5M legal/accounting overhead tied to deconsolidation; not expected to recur materially .
  • Warrant inducement charge: ~$10M non-cash at the beginning of 2021; removed a source of future noise .
  • Bookings target/visibility: Q2 bookings target ~$12.5M with ~$3–$3.5M remaining to sign in final weeks; contracts out for signature .
  • Liquidity and securities: ~$30M marketable securities at 3/31; ~$4M of securities sold in Q1 .

Estimates Context

  • S&P Global consensus estimates were unavailable for SRAX via our data tool (CIQ mapping missing), so we cannot provide a Street comparison for Q1 2022. Given GAAP/non-GAAP revenue dynamics and contract valuation adjustments, we expect models to reflect lower GAAP revenue recognition versus prior guidance while maintaining focus on bookings and adjusted profitability.

Key Takeaways for Investors

  • Q1 2022 printed profitability (EPS $0.13, net income $3.7M) and strong bookings ($15.2M) despite GAAP revenue below prior guidance, implying valuation/marketability discounts remain a key modeling lever .
  • Sequential revenue decline from a record Q4 2021 ($9.6M) requires scrutiny of revenue recognition mechanics versus contracted bookings to bridge GAAP/non-GAAP views .
  • Balance sheet remains supportive ($29.2M cash & marketable), with ongoing securities monetization (~$4M per quarter historically) and reset/warrant mechanics potentially cushioning market swings .
  • The narrative is moving away from BIGtoken noise and toward core Sequire execution; continued product launches (Sequirecommunity.com) and events underpin lead flow .
  • Near-term trading: watch for updates on revenue recognition vs bookings, any guidance refresh for FY 2022, and cadence of filings; variance vs prior Q1 guidance may pressure sentiment but profitability offers support .
  • Medium-term: if bookings sustain and valuation discounts moderate, conversion to GAAP revenue and margin trajectory should improve; continued deconsolidation clean-up and reduction of one-time items should enhance comparability .
  • Actionable focus: track bookings-to-revenue conversion, adjusted EBITDA progression, and customer mix (listed vs. non-listed) as indicators of scalability and durability .

Additional primary documents reviewed:

  • Q1 2022 PR: SRAX Reports Q1 2022 Financial Results .
  • Q4 2021 results PR (full-year context and guidance): SRAX Reports Record Full Year and Q4 2021 Financial Results .
  • Q4 2021 earnings call transcripts and 8-K exhibits (June 6 & April 5, 2022) .
  • Q3 2021 8‑K 2.02 and press release (trend baseline) .