Executive Summary

Q1 2022 delivered solid SaaS momentum and improved profitability metrics: SaaS recurring revenue rose 37% YoY to $2.003M and reached 74% of total revenue; gross margin dollars increased 31% YoY to $1.718M; modified EBITDA improved by $1.0M YoY to $(5.47)M .
Total revenue grew 6.5% YoY to $2.691M; sequentially, total revenue was roughly flat (Q4 2021: $2.706M) while SaaS recurring rose QoQ (Q4 2021: $1.923M → Q1 2022: $2.003M) .
MARKET (livestream shopping) soft launch showed encouraging KPIs (12% conversion, $47.88 AOV, ~20% post-event sales) and robust vendor pipeline (≈100 vendors Jan–Mar; ≈90 more in 39 days through May 10; top 100 vendors total ~80.7M followers and ~$4B combined annual ecommerce sales). Three public “festival” launch dates set for July 26–28 .
Liquidity actions and risk flags: $11.0M registered direct equity financing on April 20, 2022 (shares and warrants at $0.75); Nasdaq minimum bid deficiency letter received May 12, 2022; management continues to reduce OpEx (R&D down 45% YoY; G&A down $0.3M YoY) .

What Went Well and What Went Wrong

What Went Well
- SaaS mix and gross profit improved: SaaS recurring revenue up 37% YoY to $2.003M, now 74% of total; gross margin up 31% YoY to $1.718M as mix shifts to higher-margin digital .
- MARKET traction: 12% purchase conversion on limited tests; AOV $47.88; ~20% of sales after events; vendor pipeline accelerated to 8–10 new onboardings/day post early public events; three July festivals set .
- Cost discipline: R&D down 45% YoY (and 42% vs Q4 2021); modified EBITDA improved by $1.0M YoY; total cost of revenue down 20% YoY .
What Went Wrong
- Losses persisted: Net loss of $(6.989)M; cash used in operations $(5.899)M; going concern language remains in place .
- Other digital revenue and engagement scale still early: combined livestream event sales were “low 4 figures” (<$5,000) across three tests; scalability and sustained engagement at larger scale yet to be proven .
- Capital structure and listing risk: April 20 financing required, with warrants; Nasdaq minimum bid deficiency notice on May 12, highlighting listing risk if bid price not restored within compliance windows .

Financial Results

Quarterly revenue trend (sequential)

Metric ($USD Millions)	Q3 2021	Q4 2021	Q1 2022
Total Revenue	$2.900	$2.706	$2.691

YoY income statement highlights (Q1)

Metric	Q1 2021	Q1 2022
Total Revenue ($M)	$2.526	$2.691
SaaS Recurring Revenue ($M)	$1.461	$2.003
Other Digital Revenue ($M)	$0.340	$0.147
Non-Digital Revenue ($M)	$0.725	$0.541
Cost of Revenue ($M)	$1.215	$0.973
Gross Margin ($M)	$1.311	$1.718
Gross Margin (%)	51.9% (1.311/2.526)	63.8% (1.718/2.691)
R&D Expense ($M)	$2.884	$1.580
G&A Expense ($M)	$7.343	$7.036
Net Loss ($M)	$(8.345)	$(6.989)
Diluted EPS	$(0.16)	$(0.09)

Revenue mix by quarter (digital vs. non-digital detail)

Metric ($USD Millions)	Q3 2021	Q4 2021	Q1 2022
SaaS Recurring	$1.846	$1.923	$2.003
Other Digital	$0.510	$0.288	$0.147
Total Digital	$2.356	$2.211	$2.150
Non-Digital	$0.544	$0.495	$0.541
Total Revenue	$2.900	$2.706	$2.691

KPIs (MARKET soft launch and funnel)

KPI	Q1 2022/Recent
Vendors Added to Onboarding (Jan–Mar)	~100 vendors
Vendors Added (Apr 1–May 10; 39 days)	~90 vendors; 8–10/day after Wander Beauty event
Top 100 Vendors: Combined Annual Ecommerce Sales	~$4B
Top 100 Vendors: Total Social Followers	80,691,982
Public Test Events (3): Verified Attendees	492
Conversion Rate (Live Event Buyers)	12%
Average Order Value	$47.88
Post-Event Sales	~20% of live-event sales (and continuing)
Engagement	95% >12 minutes; 85% watched entire show
Platform Take Rate (avg)	10–20% of GMV (guidance to model at ~15%)

Notes: Q4 2021 EPS not disclosed in press release; sequential EPS comparison unavailable from filings reviewed. Modified EBITDA improved to $(5.471)M in Q1 2022 vs $(6.514)M Q1 2021 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue / EPS	FY/Q2	None issued	No formal numeric guidance; three MARKET “festival” dates set for July 26–28	N/A
OpEx (R&D)	FY 2022	Prior calls: shift from R&D to maintenance	Continued planned OpEx reductions; R&D down 45% YoY and 42% vs Q4 2021	Lowered run-rate
Monetization (MARKET)	2022	N/A	Expect onboarding/store fees and other recurring/vendor fees post-festivals; begin charging “as soon as appropriate,” potentially before festivals	New monetization info

Earnings Call Themes & Trends

Topic	Q3 2021 (Nov)	Q4 2021 (Mar)	Q1 2022 (May)	Trend
MARKET strategy/launch	Introduced Marketplace vision, mega events; revenue share ~5–15%	Targeting mid-summer public festivals; building shopper lists; vendor onboarding >100	Festivals set Jul 26–28; vendor onboarding accelerating; early test KPIs positive; take rate avg 10–20% (model 15%)	Execution progressing; visibility improving
Vendor pipeline	“Thousands” in list; >100 expected on platform	>100 vendors by “tomorrow” (late Mar)	~100 (Jan–Mar), ~90 more (Apr–May 10); 8–10/day onboarding post-events	Accelerating
Monetization	SaaS + rev-share model discussed	Fees/sponsorships contemplated, need scale	Plan to impose onboarding/store fees around/after festivals; sponsorships; multiple revenue streams	Monetization path clarified
Cost discipline	R&D elevated for build-out	Announced move to maintenance; annualized OpEx cuts up to $8.5M	R&D down 45% YoY; G&A -$0.3M YoY	Implemented
Sports vertical	Penguins announced; pipeline building	Added Panthers, Suns; exploring league rollout	Engagement metrics (e.g., 72% CTR); continued pipeline	Expanding
Supply chain	Mega events pivoted to digital (NFTs) due to shortages	Vendor qualification to ensure inventory	Continued vendor screening for fulfillment capability	Managed risk

Management Commentary

“Starting with our SaaS recurring subscription revenue for Q1 2022 – we report just over $2M – up 37% over the same period last year… First quarter 2022 gross profit margin was $1.7M - up 31%… Total Digital revenue… was $2.2M – up 19%.”
“12% of live event attendees made purchases… The average size purchase… was $47.88… sales continued after the livestream events… approximately 20% of the sales done during the events.”
“We’re now onboarding 8–10 vendors a day… we have 2 companies with sales of $1B or more… total social media followers for the Top 100 companies is 80,691,982.”
“We expect to report further planned reductions in operating expenses while revenues increase throughout the year… as we move closer to cash flow positive.”

Q&A Highlights

Revenue share/take rate: Platform fee averages 10–20% of GMV; up to 35% in some cases; management suggests 15% is reasonable for modeling .
Gross margin on MARKET revenue: Incremental gross margin expected to resemble software economics at scale (90% range) .
Monetization timing (onboarding/store fees): Intend to begin charging “as soon as possible,” likely around the festivals; could commence before festivals depending on traffic and vendor traction .
Vendor scale: “Just under 200” vendors at one point in May; prioritizing higher-revenue brands with large followings for festivals .
Advertising/sponsorships: Sponsorships for festivals; broader ad monetization expected after demonstrating traffic .
Sports unit: Onboarding is rapid post-approval; international pipeline active .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2022 revenue/EPS was unavailable for VERB in our system. As a result, we cannot present an against-consensus comparison. Values from S&P Global were unavailable (GetEstimates mapping not found).

Key Takeaways for Investors

SaaS engine is comping strongly (+37% YoY) with improving gross margin mix; sequential SaaS growth alongside stable total revenue indicates underlying subscription momentum even before MARKET scale .
MARKET KPIs are promising (double-digit conversion, strong engagement, repeat/post-event sales), and the vendor pipeline is deep/accelerating—early indicators support the potential for meaningful GMV once festivals go live .
Monetization clarity improved: beyond GMV take rate, onboarding/store fees and sponsorships should drive incremental recurring and ancillary revenue; watch for the timing and magnitude of fee activation .
Execution hinges on scaling events, shopper traffic, and vendor throughput; key catalysts are July 26–28 festivals and subsequent GMV/traffic disclosures; ad monetization likely follows traffic proof points .
Cost discipline is real (R&D and G&A down YoY) with modified EBITDA improving; that said, net losses and going-concern language persist—funding and Nasdaq compliance remain non-fundamental overhangs near term .
Near-term trading drivers: festival execution/GMV prints, visibility on fee monetization start, additional sponsor/advertiser announcements, and continued SaaS growth; medium-term thesis rests on MARKET’s ability to scale vendor/consumer network effects with high incremental margins .

Citations: All data points and quotes sourced from the company’s Q1 2022 10-Q, 8-K exhibits (press release/prepared remarks and call transcript), and prior two quarters’ 8-K/transcripts as cited in-line above.

Verb Technology Company, Inc. (VERB)·Q1 2022 Earnings Summary