Executive Summary

Q2 2022 revenue was $4.32M, down 8.8% year over year but up 44% sequentially; gross margin expanded to 30.9% driven by mix shift toward higher-margin professional services (65.9% of revenue). Net loss was $(1.53)M and Adjusted EBITDA was $(1.42)M .
Sequential acceleration was catalyzed by milestone revenue recognition on a U.S. Government blockchain-enabled supply chain platform project and continued pivot to professional services .
Management emphasized readiness to bring the Maverix product to broader commercial markets and highlighted acquisition opportunities, while noting increased expenses from one-time due diligence (Knowmadics) that did not close amid deteriorated market sentiment .
No formal quantitative guidance or earnings call transcript was available; Wall Street consensus estimates via S&P Global were unavailable, limiting beat/miss analysis versus street expectations.

What Went Well and What Went Wrong

What Went Well

Significant U.S. Government blockchain project milestones drove ~$0.5M revenue recognition and supported a 44% q/q revenue increase and gross margin expansion to 30.9% .
Professional services mix improved, accounting for 65.9% of revenue in Q2 2022, supporting margin gains and aligning with the strategic shift away from low-margin third-party reselling .
Strategic positioning: “As we drive aggressively toward Authority to Operate our supply chain platform with our government customer, we are simultaneously readying our Maverix product for the broader commercial markets.” — CEO Jamie Benoit .

What Went Wrong

Year-over-year revenue declined 8.8% as the company reduced emphasis on lower-margin software reselling and faced cost pressures, resulting in a net loss of $(1.53)M versus $0.04M net income a year ago .
SG&A and acquisition-related costs increased materially, including one-time due diligence expenses tied to the intended Knowmadics acquisition that was abandoned due to shifting market conditions .
Adjusted EBITDA swung to a $(1.42)M loss from $0.56M a year ago, reflecting investment in product development and non-GAAP adjustments (stock-based comp $0.53M; acquisition costs $0.36M; change in fair value of earnout $(0.94)M) .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

Metric	Q2 2021	Q1 2022	Q2 2022
Revenue ($USD Millions)	$4.732	$2.996	$4.317
Gross Profit ($USD Millions)	$0.956	$0.376	$0.930
Gross Margin (%)	—	12.6%	30.9%
Net Income ($USD Millions)	$0.043	$(2.078)	$(1.525)
Diluted EPS ($USD)	$0.00	$(0.12)	$(0.09)
Adjusted EBITDA ($USD Millions)	$0.559	$(1.675)	$(1.417)

Notes:

Q2 2022 sequential improvement driven by project milestone recognition and mix shift to professional services .
Non-GAAP reconciliation items detailed below.

Revenue Mix (Segments)

Segment	Q2 2021 ($M)	Q1 2022 ($M)	Q2 2022 ($M)
Professional Fees	$3.328	$2.067	$2.845
Software Sales	$1.404	$0.929	$1.473
Total Revenue	$4.732	$2.996	$4.317

KPIs and Balance Sheet Highlights

KPI	Q2 2021	Q1 2022	Q2 2022
Professional Fees as % of Revenue	—	69.0%	65.9%
Gross Margin (%)	—	12.6%	30.9%
Cash & Equivalents ($M)	—	$3.00	$0.58

Non-GAAP Reconciliation (Selected Items)

Item (Q2 2022)	Amount ($USD Thousands)
Net Loss	$(1,525)
Interest (net)	20
Taxes	$(218)
Depreciation	13
Amortization	350
EBITDA	$(1,360)
Stock-based Compensation	530
Acquisition Costs	356
Change in FV of Earnout	$(943)
Adjusted EBITDA	$(1,417)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter not specified	None provided	None provided	Maintained (no guidance)
Gross Margin	FY/Quarter not specified	None provided	None provided	Maintained (no guidance)
OpEx	FY/Quarter not specified	None provided	None provided	Maintained (no guidance)
EPS/EBITDA	FY/Quarter not specified	None provided	None provided	Maintained (no guidance)

No formal quantitative guidance was provided in the Q2 2022 materials .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2022; themes reflect management’s press release commentary.

Topic	Previous Mentions (Q4 2021)	Previous Mentions (Q1 2022)	Current Period (Q2 2022)	Trend
Blockchain supply chain platform (Gov)	Technology matured; AWS GovCloud availability; strategic shift to SaaS; definitive agreement announced to acquire Knowmadics	Continued investment in engineering/sales; pivot away from low-margin reselling	~$0.5M revenue recognized on USG blockchain project milestones; driving toward Authority to Operate; preparing Maverix for commercial markets	Advancing commercialization; platform nearing production
Professional services mix	Professional services 70.5% of FY revenue; margin expansion	Professional services 69% of Q1 revenue; margin improvement	Professional services 65.9% of Q2 revenue; gross margin 30.9%	Sustained focus; mix elevated, with sequential margin gains
M&A/Strategic actions	Agreement to acquire Knowmadics; debt paid down; NASDAQ uplisting	Continued board and leadership additions; acquisition agreement noted	Acquisition due diligence costs incurred; transaction not closed due to market sentiment shift	Strategy recalibrated; cost overhang without close
Cost structure/OpEx	SG&A elevated by transformation investments	SG&A and acquisition costs up y/y	SG&A and one-time acquisition diligence costs up; Adjusted EBITDA negative	Investment-heavy; near-term profitability pressure
Commercialization of Maverix	Foundation-building year (2021) with rebranding and capabilities	Building sales force; expected revenue growth from Q2	“Simultaneously readying Maverix for broader commercial markets”	Moving toward external sales

Management Commentary

“Our revenue has increased 44% from first quarter levels, while our gross profit has increased by 147%, in part due to the significant revenue recognized by our United States Government contracts… As we drive aggressively toward Authority to Operate our supply chain platform with our government customer, we are simultaneously readying our Maverix product for the broader commercial markets.” — CEO Jamie Benoit .
“The increase in expenses this quarter… was driven in part by one-time professional fees and other costs to conduct due diligence related to our intended acquisition of Knowmadics. The dramatic change in market sentiment… made closing the transaction impossible…” — CFO Tim Hannon .
“Our focus on higher margin professional service opportunities… will continue in following quarters and establish a strong foundation upon which we can continue with our long-term strategic transformation into a leading technology company.” — CEO Jamie Benoit .

Q&A Highlights

No Q2 2022 earnings call transcript was found; no Q&A themes available from a public call [ListDocuments: earnings-call-transcript returned none].

Estimates Context

S&P Global/Capital IQ consensus estimates for Q2 2022 (revenue and EPS) were unavailable for WAVD at the time of review; comparison versus street expectations cannot be made based on S&P Global data. This limits formal beat/miss analysis [GetEstimates error for WAVD].

Key Takeaways for Investors

Sequential momentum: Q2 revenue rose 44% q/q on USG blockchain project milestones; professional services mix and margin expanded, indicating the strategic pivot is gaining traction .
Profitability trade-off: SG&A and one-time acquisition diligence costs weighed on GAAP and non-GAAP results (Adjusted EBITDA $(1.42)M), consistent with investment in product development and transformation .
Commercialization roadmap: Maverix is being readied for broader commercial markets, with government validations potentially serving as credibility for external deployments .
Liquidity caution: Cash declined to $0.58M by Q2 2022 from $3.00M in Q1 2022, underscoring near-term funding discipline needs amid continued investment .
Mix evolution: Sustained focus on higher-margin professional services should support structural margin improvement; monitoring future quarters for durable margin trajectory is key .
Estimation gap: Lack of S&P Global consensus coverage suggests limited external estimate anchors; investors should rely on company disclosures and subsequent quarters to refine expectations [GetEstimates error].
Near-term catalyst watch: Additional government ATO progress and initial Maverix commercial wins would be critical signals for revenue scaling and margin durability .

Appendix: Additional Trend Reference (Q3 2022)

Q3 2022 revenue was $2.31M; professional services comprised 91.7% of revenue; net loss widened to $(4.70)M including a $2.25M goodwill impairment; Adjusted EBITDA was $(1.47)M .
This reflects continued emphasis on higher-margin services and significant non-cash charges during platform transition and commercialization efforts .

WAVEDANCER, INC. (WAVD)·Q2 2022 Earnings Summary