TORONTO, ON (November 16, 2023) - EQ Inc. (TSXV: EQ) (“EQ”, “EQ Works” or the “Company”), a leader in AI and geospatial data driven software and solutions, announced its financial results today for the third quarter ended September 30, 2023.
EQ is very pleased to report that revenue for the quarter increased by over 24% from the same period a year ago, to over $2.6 million, as client demand for data driven solutions continued to grow. Gross margin for the quarter increased to 49%, also a significant improvement sequentially and year over year, and a direct result of combining strong data assets with targeted media that drives results. The adjusted EBITDA improved for the 5th consecutive quarter as the Company continues to focus on profitability. The adjusted EBITDA loss for the quarter of $0.2 million was an improvement of 51% sequentially and over 86% from the same period a year ago. The Company also recognized a one-time gain during the quarter of $0.5 million due to the reversal of acquisition related transaction expenses which resulted in a positive net income for the quarter.
Utilizing proprietary and unique data assets that drive performance is still at the foundation of EQ. Understanding more about consumer spending, geospatial patterns, competitive intelligence, attribution, and combining it with other data enable it to provide insights and analytics to clients across the retail, finance and automotive verticals. Its team of data scientists, engineers, and strategists deliver products and solutions that help companies understand more about their business and execute solutions to put those insights to work.
“EQ’s focus on profitability is working and the Company expects to be profitable in the fourth quarter” said Geoffrey Rotstein, President and CEO of EQ Works. “By combining our unique data assets with AI and technology, we provide clients with a better understanding of Canadians shopping behavior, attribution for media campaigns, gaining insights into competitors, and creating audience segments for specific out of home and digital channels. We then make these insights actionable resulting in better performance for our clients.”
By building tools that deliver results, a continued push towards higher margin recurring revenue products, including its proprietary AI tools and insight dashboards, and a continued demand for data assets, EQ has built a solid foundation. The Company continues to build strong partnerships across its business units and is excited about the opportunities that will lead to continued growth and profitability in the future.
Non-IFRS Financial Measures
EQ Works measures the success of the Company’s strategies and performance based on Adjusted EBITDA, which is outlined and reconciled with net loss in the section entitled “Reconciliation of Net Loss for the period to Adjusted EBITDA” in the MD&A. The Company defines Adjusted EBITDA as net loss from operations before: (a) depreciation of property and equipment and amortization of intangible assets, (b) share-based payments, (c) finance income and costs, net, (d) depreciation of right-of-use assets (e) restructuring costs (f) gain from acquisition-related transaction. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information on the Company's ability to provide operating cash flows for working capital requirements, capital expenditures, and potential acquisitions. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.
The non-IFRS financial measure is used in addition to, and in conjunction with, results presented in the Company’s consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent, or non-recurring.
The table below reconciles net loss from operations and Adjusted EBITDA for the periods presented:
About EQ Works
EQ Works (www.eqworks.com) enables businesses to understand, predict, and influence customer behaviour. Using unique data sets, advanced analytics, machine learning and artificial intelligence, EQ Works creates actionable intelligence for businesses to attract, retain, and grow the customers that matter most. The Company’s proprietary SaaS platform mines insights from movement and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions.
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Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions, or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates, and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks, and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied, or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance, or achievements to differ materially include, but are not limited to, the risk factors discussed in the Company’s MD&A for the three months ended September 30, 2023. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives but cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and any other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect subsequent information, events, or circumstances or otherwise, except as required by law.
EQ Inc. • Peter Kanniah, Chief Financial Officer • 1235 Bay Street, Suite 401 | Toronto, Ontario | M5R 3K4 • press@eqworks.com