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Verb Technology Company, Inc. (VERB)·Q2 2022 Earnings Summary

Executive Summary

  • Q2 revenue was $2.399M, with digital revenue up 19% year over year and SaaS recurring revenue up 23% to $2.0M; total gross margin improved to 65% (digital gross margin 72%) .
  • MARKET.live hard launch via Shopfest delivered early KPIs: 45,161 site views, 70,194 Facebook views during the event, 1.22M Facebook views post-event, GMV ~$20–30K, AOV just over $80; >300 vendors committed with weekly shows planned .
  • Operating discipline continued: R&D fell 57% YoY to $1.4M, modified EBITDA improved by $2.2M YoY to -$5.063M, cash was $5.5M; advances on future receipts fully repaid post quarter, reducing cash burn by up to $1.5M per quarter .
  • Management guided to increased SaaS recurring revenue in Q3/Q4 and a major MARKET update within six weeks; a key near-term catalyst is additional vendor events and platform monetization ramp .

What Went Well and What Went Wrong

What Went Well

  • “Largest livestream shopping event ever attempted in the U.S.” with 63 shows over three days; platform quality, stability, and scalability demonstrated under commercial load .
  • “People want to buy from a person, not a brand”—early engagement patterns validate the destination social shopping thesis; vendors pledged to continue with weekly shows .
  • SaaS mix and margins improved: SaaS recurring revenue $2.0M (+23% YoY), digital gross margin 72% (from 69%), total gross margin 65% (from 53%) .

What Went Wrong

  • Total GMV from Shopfest was modest ($20–30K) and revenue ramp from MARKET is weighted more to 2023; near-term monetization requires further scale and events .
  • Continued net losses (Q2 net loss $(6.374)M; EPS $(0.07)) and heavy G&A ($6.6M); company flagged going concern dependencies on future financing and execution .
  • Headline risk and external confusion around “misses” despite no formal guidance; management reiterated they do not provide revenue guidance .

Financial Results

YoY Comparison — Q2 2021 vs Q2 2022

MetricQ2 2021Q2 2022
Total Revenue ($USD Millions)$2.392 $2.399
SaaS Recurring Revenue ($USD Millions)$1.601 $2.000
Total Digital Revenue ($USD Millions)$1.810 $2.200
Non-Digital Revenue ($USD Millions)$0.582 $0.238
Gross Margin (%)53% 65%
Digital Gross Margin (%)69% 72%
Net Loss ($USD Millions)$(11.812) $(6.374)
Diluted EPS ($USD)$(0.19) $(0.07)

Sequential Comparison — Q1 2022 vs Q2 2022

MetricQ1 2022Q2 2022
Total Revenue ($USD Millions)$2.691 $2.399
SaaS Recurring Revenue ($USD Millions)$2.003 $1.975
Other Digital Revenue ($USD Millions)$0.147 $0.186
Non-Digital Revenue ($USD Millions)$0.541 $0.238
Net Loss ($USD Millions)$(6.989) $(6.374)

Segment/KPI Breakdown (Q2 2022)

KPIQ2 2022
Digital Revenue as % of Total90%
SaaS Recurring Revenue as % of Total82%
Total Gross Margin (%)65%
Digital Gross Margin (%)72%
Modified EBITDA ($USD Millions)$(5.063)
R&D Expense ($USD Millions)$1.382
G&A Expense ($USD Millions)$6.562
Cash ($USD Millions)$5.5
Capitalized Software Dev. ($USD Millions)$6.5
MARKET.live Views (Event)45,161 site; 70,194 FB; 1,219,672 FB post-event
Shopfest GMV ($USD)~$20,000–$30,000
Average Order Value ($USD)Just over $80
Vendors Committed>300

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SaaS Recurring Revenue2H 2022Not specifiedExpect increased recurring SaaS revenue in Q3/Q4 vs 1HRaised (qualitative)
MARKET Revenue ContributionFY 2022 vs 2023Not specifiedMeaningful contribution in 2022; “substantially greater” in 2023Directional update
EBITDANear-termNot specifiedConfidence in achieving positive EBITDA (timing not fixed)New objective
Cost of Revenue (Non-cash)From Q3 2022N/ABegin amortizing $6.5M capitalized software over 36 monthsImplementation detail
Cash BurnPost Q2N/ABurn reduced by up to $1.5M per quarter after repayment of advancesImprovement

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2021 and Q1 2022)Current Period (Q2 2022)Trend
MARKET strategy and launchSoft launch; festivals planned mid-summer; careful rollout Hard launch via Shopfest; platform validated; major announcement within six weeks Accelerating
Vendor onboardingAim for hundreds to thousands/day; 8–10/day post early events; ~200 vendors by May >300 committed; streamlined onboarding; weekly shows planned Improving
Monetization modelTake rate avg. ~15%; add onboarding/hosting/sponsorship over time Proof points from Shopfest; scale needed; 2023 larger revenue impact Building
Cost reductionsPlan to reduce opex by up to $8.5M annualized; R&D reductions underway R&D down 57% YoY; modified EBITDA improved $2.2M YoY Continuing
Sports verticalMultiple teams signed; pipeline including international Expect more announcements; potential MARKET tie-ins Steady
Capital/cashApril $11M raise; mapping to needs; opex efficiency; equity line/notes Cash $5.5M; repaid advances; burn down up to $1.5M/qtr Stabilizing
Macro/estimates/NasdaqNo formal guidance; market volatility; questions on compliance Reiterated no guidance; not concerned about Nasdaq $1 compliance Unchanged

Management Commentary

  • “We have been advised that Shopfest was the largest livestream shopping event ever attempted in the U.S.” .
  • “People want to watch and buy from a person, not a brand… That’s why we designed and built MARKET as a destination social shopping platform” .
  • “We expect to see the increased recurring SaaS revenue from the new products in the third and fourth quarter of this year and beyond” .
  • “Research and development expenses for Q2 are now just $1.4 million, down from the $3.2 million in the same period last year, representing a 57% reduction” .
  • “Subsequent to the quarter end, we repaid in full all advances on future receipts, reducing current debt service payments and cash burn by up to $1.5 million per quarter” .

Q&A Highlights

  • Reconfirmed key Shopfest metrics (45k MARKET views; 70k Facebook event views; 1.0M+ post-event Facebook views); clarified Facebook counts covered only the 18 company-produced shows .
  • MARKET revenue phasing: meaningful in 2022, “substantially greater” in 2023; ongoing data collection to inform ramp .
  • Lessons learned: monetization plan focuses on host-led communities; validate “person over brand” thesis for conversion .
  • Vendor onboarding pace: still ~8–10/day; accelerated post Shopfest .
  • Economics: better when vendors produce events (zero cost to Verb); no difference in take whether Verb or vendor produces; transactions complete on Verb’s platform even if viewed on social .
  • Marketing costs: vendors/hosts/influencers drive attendance; Verb leverages social and sponsorships, but prefers traffic on-site for retargeting data .
  • Nasdaq compliance: management “not concerned” and won’t pursue “funny business” .

Estimates Context

  • Wall Street consensus via S&P Global (Primary EPS Consensus Mean; Revenue Consensus Mean) for VERB was unavailable due to CIQ mapping constraints at the time of query; therefore, comparison to estimates is not provided [GetEstimates error].
  • Management reiterated they do not provide formal revenue guidance, addressing external articles implying misses despite no guidance being issued .

Key Takeaways for Investors

  • MARKET.live is scaling with >300 committed vendors and strong engagement data; watch for a major update and additional events as near-term catalysts .
  • Revenue mix is improving (SaaS +23% YoY; digital revenue +19% YoY), but MARKET monetization will be more material in 2023; position sizing should reflect ramp timing .
  • Cost discipline is real (R&D -57% YoY), modified EBITDA improved, and cash burn reduced post quarter; monitor Q3 amortization of capitalized software in gross margin (non-cash COCR) .
  • Headline risk persists (no formal guidance; Nasdaq $1 questions), but management’s stance on compliance is firm; catalysts outweigh risks if execution continues .
  • Near-term trading: news flow (major MARKET announcement, vendor weekly shows, sports vertical updates) and evidence of sequential SaaS growth in Q3/Q4 could drive sentiment .
  • Medium-term thesis: if host-driven community flywheel and cross-platform simulcast drive shopper migration on-site (for data/retargeting), take-rate economics and recurring store fees support margin leverage .
  • Liquidity watch: cash $5.5M and reduced burn provide runway; additional financing remains a risk factor in filings—track capital needs vs. revenue ramp .
Sources: Q2 2022 Form 10-Q, Q2 2022 8-K press release and furnished call transcript, Q1 2022 8-K prepared remarks and call transcript, Q4 2021 call transcript.