Executive Summary

Q3 2022 was mixed: revenue fell to $2.306M from $4.300M YoY, while gross margin compressed to 20.9% (from 22.8%) as the company deemphasized low-margin third-party software sales and professional services overtime that benefited the prior year .
Reported net loss widened to $(4.701)M, including a $2.255M goodwill impairment, and diluted EPS was $(0.26); Adjusted EBITDA was $(1.474)M, reflecting non-GAAP add-backs for impairment, stock-based comp, and acquisition costs .
Strategic progress: first commercial customer signed on the Maverix blockchain supply chain platform, with management highlighting a pipeline of discussions in commercial and government markets .
No formal numerical guidance or earnings call transcript available; Wall Street consensus via S&P Global was unavailable for WAVD (mapping not found), limiting estimate-based beat/miss analysis.

What Went Well and What Went Wrong

What Went Well

Signed first commercial customer for Maverix, validating product-market fit and creating a foundation for commercial scale-up; management “remain[s] optimistic” about future growth in commercial and government environments .
Strategic mix shift continued: higher-margin professional services were 91.7% of Q3 revenue, supporting margin quality over time even as near-term revenue declined .
Q2 momentum demonstrated prior to Q3: 44% sequential revenue growth in Q2 vs Q1 and gross margin expansion to 30.9% were driven in part by USG blockchain project milestone recognition, evidencing contract progress .

What Went Wrong

Q3 revenue decline YoY as low-margin third-party software sales were deemphasized and prior-year professional services overtime normalized; gross profit fell to $0.482M from $0.979M YoY .
Non-cash goodwill impairment of $2.255M and elevated SG&A drove the net loss to $(4.701)M; Adjusted EBITDA was negative $(1.474)M despite add-backs .
Liquidity pressure earlier in the year with cash at $0.579M in Q2 before recovering to $1.522M in Q3, highlighting working capital sensitivity amid investment in product development .

Financial Results

Metric	Q1 2022	Q2 2022	Q3 2022
Revenues ($USD Millions)	$2.996	$4.317	$2.306
Net (Loss) ($USD Millions)	$(2.078)	$(1.525)	$(4.701)
Diluted EPS ($USD)	$(0.12)	$(0.09)	$(0.26)
Gross Margin (%)	12.6%	30.9%	20.9%
Adjusted EBITDA ($USD Millions)	$(1.675)	$(1.417)	$(1.474)

Segment breakdown

Metric	Q1 2022	Q2 2022	Q3 2022
Professional Fees Revenue ($USD Millions)	$2.067	$2.845	$2.114
Software Sales Revenue ($USD Millions)	$0.929	$1.473	$0.192
Professional Fees as % of Revenue (%)	69.0%	65.9%	91.7%

KPIs

Metric	Q1 2022	Q2 2022	Q3 2022
Gross Profit ($USD Millions)	$0.376	$0.930	$0.482
SG&A ($USD Millions)	$2.714	$3.240	$2.926
Goodwill Impairment ($USD Millions)	—	—	$2.255
Cash and Equivalents ($USD Millions)	$2.999	$0.579	$1.522

Guidance Changes

The company did not provide formal quantitative guidance for revenue, margins, OpEx, tax, or segment metrics in Q3 2022 materials, and no earnings call transcript was available to clarify guidance .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 2022	N/A	None provided	Maintained: no formal guidance
Margins	FY/Q4 2022	N/A	None provided	Maintained: no formal guidance
OpEx	FY/Q4 2022	N/A	None provided	Maintained: no formal guidance
Tax Rate	FY/Q4 2022	N/A	None provided	Maintained: no formal guidance

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 and Q2)	Current Period (Q3)	Trend
Blockchain platform commercialization	Q1: Investment in dev/sales hires; shift to higher-margin services . Q2: $500k USG milestone; preparing Maverix for broader markets .	First commercial customer signed; advanced discussions underway .	Accelerating commercialization momentum
Government supply chain project (USG)	Q1: Foundational tech from US intelligence agency use case . Q2: Driving towards Authority to Operate; milestone revenue recognized .	Platform stress-tested in critical USG use cases; available via GovCloud .	Continued validation in public sector
Margin mix	Q1: Services at 69% of revenue; 12.6% GM . Q2: Services 65.9%; 30.9% GM .	Services 91.7%; 20.9% GM .	Mix shifting to services; GM volatile
M&A (Knowmadics)	Q1: Announced definitive agreement . Q2: Deal abandoned due to market conditions; one-time due diligence costs elevated .	No Q3 update on M&A; impairment recorded .	M&A paused; focus on organic/product
Commercial pipeline and product marketing	Q1: Building team for sales; early partnerships . Q2: Ready Maverix for commercial markets .	Commercial agreement signed; optimism on pipeline .	Improving traction

Management Commentary

CEO Jamie Benoit: “We invested significant time and financial resources toward the development of a new and vastly improved [Maverix] platform… we are working with our first commercial customer and are in advanced discussions with others.”
CEO Benoit on mix: “We continued our shift toward professional services that generate higher gross margin… decreased emphasis on sales of low-margin third-party software… prior year quarter benefited from… higher-margin overtime work.”
CEO Benoit: “Our recently announced commercial agreement is an important step toward validating the potential of our Maverix platform in the marketplace.”
CFO Tim Hannon (Q2 context): “Increase in expenses… driven in part by one-time professional fees… due diligence related to… Knowmadics. The dramatic change in market sentiment… made closing the transaction impossible… Our strategic focus on profitability and investment in product development will ultimately allow us to emerge stronger.”

Q&A Highlights

No earnings call transcript was located for Q3 2022; no Q&A themes available to report. The company’s press release serves as the primary source of commentary .

Estimates Context

S&P Global consensus estimates for WAVD Q3 2022 revenue and EPS were unavailable due to missing CIQ mapping for WAVD; as a result, we cannot provide beat/miss analysis versus Wall Street consensus.
Given the non-availability of consensus, investors should focus on sequential and year-over-year comparisons and management’s qualitative commentary until formal coverage emerges .

Key Takeaways for Investors

Near-term financials remain challenged: Q3 revenue fell to $2.306M and net loss widened due to a $2.255M goodwill impairment; Adjusted EBITDA stayed negative, indicating ongoing operating investment .
Strategy is gaining validation: first Maverix commercial customer and active discussions suggest early traction beyond government use cases, a key catalyst for re-rating if it converts to recurring SaaS revenue growth .
Revenue mix is shifting decisively to professional services (91.7% of Q3 revenue), which management views as margin-accretive over time; however, GM remains volatile and dependent on project mix and timing .
Liquidity requires monitoring: cash rose to $1.522M in Q3 from $0.579M in Q2 but remains below year-end 2021 levels, underscoring the need for disciplined OpEx and working capital management as commercialization ramps .
With no formal guidance or Street estimates available, trading will likely be driven by new customer wins, contract milestones (USG and commercial), and updates on Maverix’s adoption curve .
Watch for non-GAAP adjustments: impairment, stock-based comp, and acquisition-related costs materially affect GAAP results; Adjusted EBITDA reconciliations are provided to contextualize core operations .
Medium-term thesis hinges on converting validated USG use cases and early commercial wins into scalable, recurring software revenues on Maverix, potentially stabilizing margins and improving cash generation .

Sources: WaveDancer Q3 2022 8-K press release and exhibits ; Q2 2022 8-K press release and exhibits ; Q1 2022 8-K press release and exhibits .

WAVEDANCER, INC. (WAVD)·Q3 2022 Earnings Summary