Executive Summary

Q2 2023 revenue was $4.49M and diluted EPS was $0.00, down year over year from $4.70M revenue and $0.18 diluted EPS in Q2 2022; operating margin compressed sharply on higher salaries, office and legal expenses .
EBITDA fell to $0.14M (vs $1.20M YoY) and Adjusted EBITDA to $0.23M (vs $1.14M YoY), reflecting softer core modeling bookings and cost inflation; Pre-Corporate EBITDA was $0.48M (vs $1.36M YoY) .
Management attributed revenue softness primarily to decreased commissions in core modeling divisions; office and general expenses surged 53.4% YoY on legal, rent, and utilities, and salaries rose 10.5% YoY due to staffing realignment .
No formal guidance or earnings call transcript was available; near-term stock narrative hinges on bookings recovery vs. continued cost pressure and FX headwinds highlighted in the release .

What Went Well and What Went Wrong

What Went Well
- Gross Billings remained resilient at $17.54M, roughly flat YoY (-0.4%), indicating stable client activity despite lower commissions .
- Cash and cash equivalents ended Q2 at $10.94M, slightly up from Q1 ($10.86M), supporting liquidity through cost normalization .
- Pre-Corporate EBITDA of $0.48M suggests core operations continue to generate positive contribution before public company costs .
What Went Wrong
- Revenue declined 4.4% YoY and net income swung to a slight loss (-$0.01M) from $0.92M profit, primarily due to decreased commissions in core modeling divisions .
- Operating margin dropped to 3.3% vs. 22.1% YoY as office and general expenses surged 53.4% (legal, rent, utilities) and salaries rose 10.5% due to staffing changes .
- FX was a recurring drag (loss of $0.06M in Q2), adding to profitability headwinds alongside increased corporate overhead and timing of audit costs .

Metric (USD)	Q2 2022 (oldest)	Q1 2023	Q2 2023 (newest)
Revenue ($M)	$4.699	$4.484	$4.493
Diluted EPS ($)	$0.18	$0.03	$0.00
Operating Income ($M)	$1.040	$0.229	$0.149
Net Income ($M)	$0.921	$0.159	-$0.014
EBITDA ($M)	$1.197	$0.262	$0.144
Adjusted EBITDA ($M)	$1.142	$0.304	$0.230
Pre-Corporate EBITDA ($M)	$1.364	$0.548	$0.476
Operating Margin (%)	22.1%	5.1%	3.3%
Net Income Margin (%)	19.6%	3.5%	-0.3%

Operating Expenses (USD)	Q2 2022 (oldest)	Q1 2023	Q2 2023 (newest)
Salaries & Service Costs ($M)	$2.697	$2.880	$2.979
Office & General ($M)	$0.693	$1.080	$1.063
Amortization & Depreciation ($M)	$0.047	$0.051	$0.056
Corporate Overhead ($M)	$0.222	$0.244	$0.246
Total Operating Expenses ($M)	$3.659	$4.255	$4.344

KPIs	Q2 2022 (oldest)	Q1 2023	Q2 2023 (newest)
Gross Billings ($M)	$17.604	$17.587	$17.541
Cash & Equivalents ($M)	N/A	$10.861	$10.943
Accounts Receivable, Net ($M)	N/A	$9.713	$9.965
Due to Models ($M)	N/A	$7.779	$7.815
FX Loss ($M)	$0.004 gain (three months ended Q4 2022)	$0.018 loss	$0.061 loss

Note: FX figure for Q2 2022 not provided in Q2 press release; Q4 2022 shown for trend context .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3/Q4 2023	None provided	None provided	Maintained: No formal guidance
Margins	FY/Q3 2023	None provided	None provided	Maintained: No formal guidance
OpEx	FY/Q3 2023	None provided	None provided	Maintained: No formal guidance
OI&E	FY/Q3 2023	None provided	None provided	Maintained: No formal guidance
Tax Rate	FY/Q3 2023	None provided	None provided	Maintained: No formal guidance
Dividends	FY/Q3 2023	None provided	None provided	Maintained: No formal guidance

No Q2 2023 earnings call transcript was found; themes below derive from press releases across Q4 2022, Q1 2023, and Q2 2023.

Topic	Previous Mentions (Q4 2022 and Q1 2023)	Current Period (Q2 2023)	Trend
Core modeling bookings/commissions	Q4 2022: US & London bookings weaker; FY2022 up on reopening . Q1 2023: revenue down 1.4% on decreased commissions .	Revenue down 4.4% on decreased commissions in core modeling divisions .	Continued softness
Staffing alignment and payroll	Salaries up 13.3% (Q4) and 26.2% (FY) on hires/payroll realignment . Q1: salaries up 8.6% YoY .	Salaries & service costs up 10.5% YoY .	Persistent cost pressure
Office & general expenses	Q4: +42.8% YoY (legal, rent, office) . Q1: +52.3% YoY (legal, rent, utilities, IT) .	+53.4% YoY (legal, rent, utilities) .	Rising/structural
FX impacts	Q4: FX loss; Adjusted EBITDA impacted . Q1: FX loss $0.018M .	FX loss $0.061M .	Continuing headwind
Non-recurring items	PPP forgiveness and ERC credits benefited FY2021; cybersecurity expenses in 2021 .	None in 2023 .	Absent in 2023
Liquidity	Cash at highest historical year-end level $12.0M (FY2022) . Q1: $10.86M .	Q2: $10.94M .	Stable cash reserves

“Decreased revenues in 2023 were primarily due to decreased commissions on bookings in the Company’s core modeling divisions.”
“Salaries and service costs… increased by 10.5%… due to personnel hires and payroll changes to better align Wilhelmina staffing with the needs of each office and geographical region.”
“Office and general expenses… increased by 53.4%… due to increased legal expense, rent expense, utilities, and other office related expenses.”
“Amortization and depreciation… increased… primarily due to increased depreciation of capitalized furniture and leasehold assets at the Company’s new New York City office.”
Q1 context: “Office and general expenses… increased by 52.3%… due to increased legal expense, rent expense, other office related expenses, utilities, and computer expenses.”

No Q2 2023 earnings call transcript or Q&A was available to review [ListDocuments returned none].

Wall Street consensus estimates via S&P Global for Q2 2023 could not be retrieved at time of query due to SPGI daily request limits; as a result, comparison to consensus EPS and revenue is unavailable [GetEstimates error: Daily Request Limit Exceeded].
In the absence of consensus, investors should focus on YoY margin compression and cost drivers disclosed, which likely inform estimate revisions around operating income and EBITDA trajectory .

Revenue softness is tied to decreased commissions in core modeling divisions; watch near-term bookings momentum and commission rates for signs of rebound .
Margin compression stems from elevated office/legal costs and staffing realignment; operating margin fell to 3.3% vs. 22.1% YoY, indicating continued cost normalization challenges .
EBITDA and Adjusted EBITDA declines reflect both topline pressure and higher costs; Pre-Corporate EBITDA remains positive but well below prior-year levels, underscoring reduced operating leverage .
Liquidity remains solid with ~$10.94M cash; balance sheet provides flexibility to navigate cost normalization and FX volatility .
No formal guidance and no call transcript limit external visibility; near-term stock reaction likely hinges on evidence of bookings recovery, cost containment, and FX stabilization in upcoming quarters .
Investors should monitor office/legal expense trajectory and corporate overhead timing (audit costs), as these were identified as material drivers of YoY profitability changes .
With prior-year non-recurring benefits (PPP/ERC) absent, 2023 profitability must come from core execution; the narrative shifts to organic bookings growth and disciplined cost control .