TORONTO, ON (August 1, 2019) - EQ Inc. (TSXV: EQ) (“EQ Works” or the “Company”), a leader in driving location behavioural data and intelligence, announced its financial results today for the quarter ended June 30, 2019.
Revenue for the second quarter was $2.2 million, an increase of 66% when compared to the second quarter of 2018 and an increase of over 57% sequentially. This revenue growth is due in large part to new data engagements entered into during the year and a rise in spending from both new and existing clients. Gross margin of 49% is significantly stronger than last year, again resulting from the increased data revenue. Adjusted EBITDA loss for the quarter was approximately $0.1 million, a significant improvement from the loss of $0.4 million experienced the previous quarter.
Highlights for the Second Quarter ended June 30, 2019
Revenue increased by 66% year over year and 57% sequentially
Data revenue increased by 170% year over year and 56% sequentially
22 new clients were on boarded during the second quarter of 2019 and 40 new clients for the first half of the year
3 new data partners were integrated during the quarter onto the LOCUS marketplace
New business intelligence (BI) analysis and reporting along with AI forecasting tools were implemented during the quarter to allow users to build customized reports relevant for their businesses
"We are very pleased with our revenue growth and even more excited about our data revenue increasing by 170% compared to last year. We are continuing to see strong demand for our proprietary data platform LOCUS as our ability to make data actionable is providing value for our clients.” said Geoffrey Rotstein, President and CEO of EQ Works. “Data driven solutions will drive the future in all categories and the investments we have made position us extremely well. The market is growing, our client pipeline is very strong and we continue to reinforce our position as a market leader. Given all of this momentum, we expect that year over year revenue growth for the third quarter will be at least as high as what was generated in the second quarter.”
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. 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) provides a smarter way to target customers. Using first-party, location-based behaviour signals, advanced data analytics, and proprietary software, EQ creates and targets customized, performance-boosting audience segments. Proprietary algorithms and data generate attribution models that connect consumer behaviour in the physical world to consumer behaviour in the digital world, solving complex challenges for brands and agencies.
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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 and six months ended June 30, 2019. 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.
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