TORONTO, ON (April 26, 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 fourth quarter and the year ended December 31, 2021.
Reporting the highest quarterly revenue in almost a decade, revenue for the fourth quarter of 2021 of $4.2 million was an increase of 36% over the previous quarter and a 16% increase from the same period a year ago. In addition to the strong revenue growth, the Company continued to invest significantly in its consumer facing application Paymi, its unique zero party data assets, its proprietary technology products, and aggressive talent recruitment for data scientists, sales, and marketing personnel. These investments, and their positioning as SaaS products, continue to generate significant market interest and early indications are very encouraging. The Company has seen significant traction and interest from clients across multiple verticals and expects to generate meaningful results in the second half of 2022 and further growth into 2023. As a result of these investments, the adjusted EBITDA loss for the quarter of approximately $1.2 million, was consistent with the third quarter of 2021 and in line with our investment strategy.
Revenue for the year ended December 31, 2021 increased to $12.1 million, an improvement of 16% from the $10.4 million recorded in the previous year. This revenue growth was the result of continued traction in the data business, which increased 29% year over year. This growth was also achieved while the company continued to invest in products for analytics and media execution, recurring revenue by licensing the LOCUS platform and a continued focus on proprietary solutions for key verticals.
Highlights for the Fourth Quarter and Year ended December 31, 2021
Increased annual revenue by 16% year over year;
Increased annual data revenue by 29% compared to the previous year;
Increased quarterly revenue by 36% sequentially and by 16% compared to the fourth quarter of 2020;
Increased quarterly data revenue by 18% sequentially and by 11% compared to the same period last year;
Third consecutive quarter of growth in data revenue;
Cash balance at the end of the year was $8.8 million;
Awarded an extension for a multi-year engagement with a leading Canadian University valued at up to $5.5M;
Acquired Integrated Rewards Inc. and their branded Paymi application (“Paymi”). Paymi adds a new proprietary and powerful first-party data set to the LOCUS platform and a new consumer line of business that will generate incremental revenue;
Launched LOCUS Commute to help retailers, insurance providers and out of home networks to better understand the movement behavior of Canadians; and
Created Canada’s largest geospatial dataset through an integrated partnership with SafeGraph.
“We are very pleased with our growth and proud of our team for delivering exceptional results in 2021, capped off with our strongest quarterly and annual financial results in almost a decade”, said Geoffrey Rotstein, President and CEO of EQ Works. “Our focus in 2021 was to build a pipeline of products and opportunities that delivered tangible value to our clients and could be delivered through a recurring revenue model. This was accomplished, and we are very excited about the impact our new products continue to deliver as the momentum continues into 2022. We have built incredible tools and solutions that leverage our proprietary data and technology, and can be incorporated into our SaaS model.”
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 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.
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.
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 year ended December 31, 2021. 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
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