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Gaucho Group Holdings, Inc. (VINO)·Q3 2021 Earnings Summary

Executive Summary

  • Q3 2021 inflected to profitability: revenue $2.61M and net income $0.93M ($0.11 EPS), versus $0.34M revenue and ($1.32M) net loss in Q2 and $0.06M revenue and ($0.93M) net loss in Q3 2020; operating income was $0.89M with gross margin ~92% driven by real estate lot deeds .
  • Real estate lot sales recognized were $2.50M (≈13 lots deeded), the core driver of the quarter’s upside; hospitality and wine modestly improved as Argentina re‑opened .
  • Liquidity improved: working capital $6.23M, cash $2.84M, and stockholders’ equity $13.58M; debt obligations fell sharply versus 2020 year‑end as legacy notes were cleaned up .
  • Strategic moves and funding: $6.48M senior secured convertible notes issued Nov 9 and an additional $3.5M capital contribution to the Las Vegas LVH project (total $7.0M contributed YTD) expand growth options but add dilution/secured debt overhang .
  • No formal quantitative guidance, but management expects continued lot deedings into Q4 and to benefit from Argentina’s border reopening and pent‑up luxury travel demand; they also highlighted Miami retail, Gaucho Casa rollout, and pursuit of a 5‑star hotel partner at Algodon Wine Estates .

What Went Well and What Went Wrong

  • What Went Well

    • First quarterly profit as a public company on strong real estate revenue recognition; “We are absolutely thrilled to report our first quarterly profit as a public company” — Scott Mathis, CEO .
    • Real estate engine working: ~$2.50M of lot sales recognized (~13 lots), with management noting a healthy pipeline into Q4 as deeding timing normalizes post‑pandemic .
    • Balance sheet strengthening: working capital $6.23M and stockholders’ equity $13.58M; debt obligations reduced to $7K principal/$24.96K total from $1.88M at 12/31/20 .

  • What Went Wrong

    • Operating costs elevated: G&A rose to $1.37M (up 59% YoY) amid higher professional fees; Opex of $1.51M weighed on operating leverage outside of lot revenues .
    • FX headwinds: management cites an ~$0.84M adverse revenue impact from ARS depreciation in Q3 despite stronger activity, tempering reported USD growth .
    • Funding overhang/dilution risk: $6.48M senior secured converts (7% coupon, collateralized) and continued LVH capital commitments; while strategic, they add leverage and potential equity issuance .

Financial Results

MetricQ3 2020Q2 2021Q3 2021
Revenue ($)$60,228 $340,360 $2,605,158
Gross Profit ($)$(20,767) $60,260 $2,394,721
Gross Margin (%)(34.5%) 17.7% 91.9%
Operating Expenses ($)$986,320 $1,355,320 $1,507,498
Operating Income (Loss) ($)$(1,007,087) $(1,295,060) $887,223
Net Income (Loss) ($)$(934,299) $(1,317,786) $931,207
Diluted EPS ($)$(0.26) $(0.16) $0.11

Segment/Category revenue mix (Q3):

CategoryQ3 2020Q3 2021
Real estate sales ($)$0 $2,500,001
Hotel rooms & events ($)$2,946 $46,803
Restaurants ($)$22,331 $3,482
Winemaking ($)$23,212 $34,943
Golf/tennis/other ($)$11,739 $18,528
Clothes & accessories ($)$0 $1,401
Total ($)$60,228 $2,605,158

KPIs and balance sheet highlights:

KPIQ3 2021
Lots deeded (units)≈13 lots
Deferred revenue – real estate deposits ($)$706,033
Cash ($)$2,836,500
Working capital ($)$6,234,249
Stockholders’ equity ($)$13,582,165

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/EPSFY/Q4 2021NoneNone formal; management expects continued lot deeds and reopening tailwindsMaintained qualitative only
Segment specificsFY/Q4 2021NoneOngoing real estate sales; pursuits in hospitality partnership at AWE; Miami retail rolloutQualitative updates

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2021)Previous Mentions (Q2 2021)Current Period (Q3 2021)Trend
Real estate lot sales/deedingFocus on deeding; no deeds recognized yet Anticipated Q3 recognition of ~$4–6M from 20–30 lots; masterplan upgrades ~$2.5M recognized (~13 lots); pipeline into Q4 Positive execution; timing still variable
COVID/reopeningBuenos Aires hotel re‑opened Nov 2020; borders restricted Gradual reopening; operations normalizing Argentina re‑opened Nov 1; expect pent‑up travel demand Improving macro tailwind
FinancingUplist + $8.0M public offering $50M equity line with Tumim; initial draws $6.48M secured converts; additional Tumim sales Added secured debt; ongoing equity access
Las Vegas (LVH)—$1.0M initial; +$2.5M July; project design detailed +$3.5M Nov; total $7.0M; management fees recognized Investment progressing
Retail & brandGaucho Casa plan; Miami lease signed in Apr Store/collection ramp Miami flagship progress, Gaucho Casa launch reiterated Brand expansion
Crypto acceptance——First AWE lot sold via crypto; crypto accepted for homesites Emerging sales channel

Management Commentary

  • “We are absolutely thrilled to report our first quarterly profit as a public company… We have taken significant strides to complete our vision of becoming recognized as the LVMH of South America,” said CEO Scott Mathis, citing e‑commerce, Miami flagship progress, and the LVH Las Vegas project .
  • “Our third quarter financial results reflect early sales of real estate lots at our Algodon Wine Estates as well as a small increase in hotel, restaurant and wine sales after Argentine hotels reopened… Argentina officially ‘reopened’… we believe we will benefit from a surge in pent up consumer demand for travel and luxury experiences,” added Mathis .

Q&A Highlights

  • No earnings call transcript was available for Q3 2021; no Q&A disclosures could be reviewed [ListDocuments: none].

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q3 2021 (EPS and revenue), but the company lacked a current SPGI mapping and no consensus was available for VINO. Accordingly, no “vs. consensus” comparisons are provided [SpgiEstimatesError].

Key Takeaways for Investors

  • The quarter validates the real estate monetization thesis: deed recognition translated to a 7–8x sequential revenue lift and first EPS‑positive print; continued deeding into Q4 is the key near‑term swing factor .
  • Profitability remains highly sensitive to lot closing cadence; without deeds, Opex and FX can quickly swing results — monitor deferred lot deposits ($706k) and management’s commentary on deed timing .
  • Liquidity improved, but the Nov 9 senior secured converts add a secured layer and potential dilution; watch conversion activity and covenant constraints versus growth needs .
  • Macro tailwinds are improving: Argentina’s reopening should aid hospitality/wine, while Miami flagship and Gaucho Casa broaden brand touchpoints beyond Argentina .
  • Strategic optionality via Las Vegas (LVH) is increasing with $7.0M contributed and early management fees, but it also concentrates capital; project execution/milestones are catalysts .
  • With no formal guidance and no broker consensus, trading is likely to be event‑driven around deedings, LVH updates, and retail launch milestones .

Notes: All figures are from company filings and the Q3 press release. No S&P Global consensus estimates were available for VINO at the time of analysis.