TORONTO, ON (May 30, 2022) - EQ Inc. (TSXV: EQ) (“EQ Works” or the “Company”), a leader in geospatial data and artificial intelligence driven software, announced its financial results today for the first quarter ended March 31, 2022.
Announcing it’s highest first quarter revenue in over a decade, EQ reported revenue of over $2.7 million, a 55% increase when compared to the first quarter of 2021. This revenue growth was the result of new data engagements and the Company’s continued focus on key verticals, including financial services, automotive, and retail. Data revenue also experienced significant growth in the quarter, resulting in a 22% increase compared to the same period a year ago, as demand continued to increase for EQ’s proprietary data solutions. Consistent with the Company’s well articulated investment strategy and as a result of growing market demand for data solutions, the adjusted EBITDA loss for the quarter of approximately $1.6 million was in line with forecasts and represents the Company’s continued investments in AI and data solutions that are expected to drive growth in recurring revenue and earnings during the second half of 2022 and into 2023.
By investing in key product areas like Paymi, its consumer facing application with unique zero party data assets, Insights, its proprietary dashboarding solutions for retail and automotive, and the talent recruitment required to build these products, the Company continues to generate and capture substantial market interest. Although these products are not scheduled for release until the second half of 2022, early indicators show significant traction amongst new and existing clients, as well as across multiple verticals. The Company expects to generate meaningful results for the remainder of 2022 and further grow into 2023.
Highlights for the First Quarter ended March 31, 2022
Increased quarterly revenue by 55%, compared to the first quarter of 2021, making it the highest first quarter revenue in over a decade;
Increased quarterly data revenue by 22%, compared to the same period last year;
Cash balance at the end of the quarter was $7.5 million;
Secured upfront commitments of over $6 million from a variety of Canada’s leading digital agencies;
Entered into an agreement with Tapad to create the largest identity graph in Canada;
Joined the AI Partnership to help further development of its AI solutions and expand its offerings in key verticals; and
Paymi, EQ’s wholly owned subsidiary, increased number of downloads by 20% when compared to the fourth quarter of 2021.
“We are very pleased with our strong first quarter results and proud of our team for continuing to deliver exceptional solutions for our clients. After an impressive fourth quarter that resulted in our strongest results in almost a decade, we continued to deliver strong results into the first quarter of 2022”, said Geoffrey Rotstein, President, and CEO of EQ Works. “Our focus this quarter was to continue to productize our data solutions and build upon our recurring monthly revenue. Significant progress was accomplished on both initiatives, and we are pleased with the progress of our products and the value they have generated for our clients. Our tools and solutions, which leverage our proprietary data and technology, will continue to push our growth throughout 2022 as we focus on our core verticals and our path to profitability.”
The Company also held its annual general meeting on May 27, 2022 and is pleased to announce the reappointment of James Beriker, Vernon Lobo, and Geoffrey Rotstein to the Board of Directors. Additionally, the Shareholders approved the 10% rolling stock options plan (the “Plan”) of the Company. Pursuant to the Plan, the maximum aggregate number of Common Shares that may be issued is 6,943,562 (representing 10% of the issued and outstanding Common Shares).
Subsequent to quarter-end, the Company granted 47,500 stock options to employees of the Company. These stock options are exercisable at CDN $1.25 per stock option and will expire on May 27, 2027. These stock options vest over a period of thirty-six months following the grant date and are governed by the terms and conditions of the Company's stock options plan. Following this grant of stock options, the Company has a total of 2,661,000 stock options outstanding representing approximately 3.8% of the outstanding common shares of the Company.
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 income (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 income (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, and (d) depreciation of right-of-use assets (e) additional contingent consideration (f) transaction costs of acquisition (g) impairment of goodwill and intangible assets. 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 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, thereby enabling businesses to close the loop between digital and real-world consumer actions.
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
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 quarter ended March 31, 2022. 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 • press@eqworks.com