Name: Sysorex, Inc. Q3 2022 Earnings Call
Start: 2025-11-20 10:11:36.468265+00

Executive Summary

Q3 revenue increased over 85% year-over-year to $3.50M, with operating expenses reduced nearly 15%; management highlighted a strong government services pipeline and a pivot of TTM assets toward AI/ML processing and hosting .
Sysorex Government Services year-to-date revenue reached ~$12.0M with ~$2.1M profit; ~$13.0M of new orders are expected to be recognized over the next four quarters, supporting confidence in long-term positive cash flow from SGS .
Q3 continuing operations were slightly positive ($0.06M), aided by other income; however, total net loss was -$1.07M due to discontinued operations losses and impairment tied to Ethereum’s transition to Proof-of-Stake .
Liquidity remains strained: cash ~$0.14M, working capital deficit ~$21.6M, short-term debt ~$16.0M in convertible debentures; management disclosed substantial doubt about going concern absent additional capital or vendor reauthorization .

What Went Well and What Went Wrong

SGS revenue growth and margin improvement: Q3 SGS revenue ~$3.5M vs $1.9M prior year; margin uplift attributed to supplier network expansion and systems automation upgrades, with streamlining enabling reduced headcount and improved customer interaction .
Strong pipeline conversion: ~$13.0M in new SGS orders expected to be recognized over the next four quarters, reinforcing visibility into future revenue .
Strategic pivot of TTM assets: Management is repurposing GPUs/data center for AI/ML processing and hosted computing; positioning near renewable power and below-average power costs to support recurring revenue and margin profile over time .
- “I am pleased to report our revenue for the third quarter increased by over 85% to $3.5 million, while at the same time, we reduced our operating expenses by nearly 15%.” – Wayne Wasserberg, CEO .

Discontinued operations drag: Q3 TTM recorded -$1.13M loss, including ~$1.30M impairment of fixed assets due to Ethereum’s Proof-of-Stake transition, which shut down mining activities and reduced digital asset balances .
High financing costs and derivative impacts: Q3 interest expense was ~$0.72M on convertible debentures, with complex derivative liabilities and default-related terms increasing financial risk .
Liquidity and going concern: Cash $0.14M, working capital deficit ~$21.6M; management disclosed substantial doubt about the company’s ability to continue as a going concern without new capital and improved vendor terms .

Metric	Q1 2022	Q2 2022	Q3 2022
Total Revenues ($USD Millions)	$5.802	$3.536	$3.459
Product Revenue ($USD Millions)	$4.529	$2.889	$2.559
Services Revenue ($USD Millions)	$0.508	$0.647	$0.900
Loss from Operations ($USD Millions)	n/a	$(2.854)	$(1.353)
Income (Loss) from Continuing Ops ($USD Millions)	$(3.669)	$(6.258)	$0.058
Net Income (Loss) from Discontinued Ops ($USD Millions)	$0.636	$(0.739)	$(1.129)
Net Loss ($USD Millions)	$(3.033)	$(6.997)	$(1.071)

EPS (Basic & Diluted)	Q1 2022	Q2 2022	Q3 2022
EPS – Continuing Ops ($)	$(0.021)	$(0.014)	$0.0001
EPS – Discontinued Ops ($)	$0.004	$0.002	$(0.002)

Segment breakdown (Q3 2022):

Segment	Revenue ($USD Millions)	Notes
Sysorex Government Services (SGS)	~$3.5	Growth from federal agencies; top two customers ~71% of sales
TTM (Discontinued Operations)	$0.833	Mining/hosting; impairment and Ethereum PoS impact

KPIs:

KPI	Value	Period/Context
SGS YTD Revenue ($USD Millions)	~$12.0	As of 9/30/2022
SGS YTD Profit ($USD Millions)	~$2.1	As of 9/30/2022
New Orders Booked ($USD Millions)	~13.0	Expected over next 4 quarters
GPUs Owned	~11,000	Locksport, NY data center

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2022 / NTM	Not disclosed	Not disclosed	Maintained (no formal guidance)
Margins	FY 2022 / NTM	Not disclosed	Expect long-term positive cash flow from SGS; higher margins expected from hosting/AI/ML over time	Directional commentary (no numeric)
OpEx	FY 2022	Not disclosed	Operating expenses reduced nearly 15% in Q3; no formal run-rate guide	Commentary
Capital/Financing	FY 2022	Not disclosed	$0.5M private placement closed on Oct 18, 2022; large share issuances/warrants structure	New financing event
Segment-Specific	FY 2022	Not disclosed	Pivot of TTM to hosting/AI/ML; mining only opportunistic	Strategy update

Note: No Q3 2022 earnings call transcript was available.

Topic	Previous Mentions (Q1 & Q2 2022)	Current Period (Q3 2022)	Trend
AI/ML & Hosting Pivot	TTM evaluating sale of assets and strategic options; risk from Ethereum PoS transition	Formal pivot to AI/ML processing and multi-tenant hosting, leveraging location and power cost advantages	Accelerating pivot
Government Services Momentum	SGS revenue grew; top customer concentration; margin pressures from financing costs; settlement gains boosted margins	SGS YTD ~$12M revenue, ~$2.1M profit; ~$13M new orders for next four quarters	Strengthening
Supply Chain/Costs	Financing purchase orders and high fees; supplier diversity constraints affected margins	Automation upgrades; supplier network expansion improved margins	Improving operations
Crypto/Macro	ETH price and network difficulty pressured mining output; PoS transition risk flagged	PoS executed; mining shut down; impairment recognized; pivot underway	Structural shift
Liquidity/Capital	Working capital deficit ~$22.7M (Q1), ~$21.7M (Q2); going concern disclosed [12:34