Market watch: Q4 Inc., E Inc., Goeasy Ltd., BBTV Holdings Inc.

Companies are working to weather challenging market conditions.

As technology companies continued to roll out second quarter earnings, it’s increasingly apparent that no one firm is having an easy time of it. Revenues are up at a couple of companies, but across the board so are losses at Q4 Inc., E Inc. Goeasy Ltd., and BBTV. Holdings Inc.

In fact, BBTV was among the ranks of firms this quarter that had to lay off staff in the face of declining revenues and growing losses. The company that serves independent content creators and media companies didn’t disclose how many people it laid off in June, only that it reduced its total staff by some 14 percent as part of a “cost optimization plan.’

BBTV sustains losses as YouTube growth slows

Despite cutting approximately 14 percent of its workforce in June following a revenue decline in the first quarter of 2022, BBTV continues to bleed money.

The company reported a decrease in revenue of $18.1 million CAD for the three months ended June 30, 2022 compared to the same period last year. With that loss, its total revenue for the quarter was $99.9 million CAD, down from $118 million CAD year-over-year.

At the same time, BBTV reported a net loss of $14.2 million CAD compared to a loss of $4.2 million CAD in the same period last year, as well as an adjusted EBITDA loss of $5.6 million CAD compared to a loss of $3.3 million CAD one year ago.

RELATED: BBTV revenue decreases seven percent, net loss increases in Q1 as COVID-19 consumer patterns shift

The company said its monetization is closely tied to the performance of YouTube, and that recently, YouTube’s parent, Alphabet, reported that YouTube revenue growth had slowed sequentially and year-over-year. This is primarily due to a switch in consumer preference to micro-content (less than a minute long videos) across all major platforms.

YouTube successfully introduced YouTube Shorts last year to respond to consumer preferences driven by the growth of TikTok, and this format now represents over 20 percent of BBTV’s views. However, as BBTV has stated in previous conference calls, that content has yet to be monetized.

Alphabet announced during their most recent earnings conference call that they are accelerating their plans to monetize YouTube Shorts, which should cascade through to BBTV, according to BBTV.

Optimistically, BBTV said: “Monetization is starting ahead of expected timing. Once it becomes monetized across BBTV’s entire library, revenues attributable to YouTube Shorts views could represent incremental revenue of approximately $90 million CAD annually.”

Q4 Inc. claims to be accelerating its path to profitability

Reporting its second quarter 2022 results, investor relations software company Q4 delivered revenues of $13.8 million USD compared to a loss of $3.8 million USD in the same quarter last year. Despite that, the company’s losses grew. Q4 posted a net loss of $11.4 million USD compared to $2.3 million USD in the same period in 2021.

Adjusted EBITDA for the quarter showed a loss of $8.7 million USD against a loss of $1.4 million USD in the same quarter in 2021. The company attributed the growing gap to “peak” investments in sales and marketing and research and development over the quarter.

Despite the losses, Q4’s CEO Darrell Heaps remained positive about the company’s prospects.
“Given the challenging macro environment, and with our peak investment period behind us, we are accelerating our path to profitability,” he said.

Q4 said it completed the second quarter with 2,685 total customers compared to 2,505 customers from the prior year period.

Ryan Levenberg, Q4’s CFO resigned from his role at the end of May. The company’s chief operating officer Donna de Winter, assumed the role of interim CFO. Levenberg helped guide the company through its IPO, and acquire the IR web hosting business of New York-based S&P Global Market Intelligence in 2020.

E Inc. adjusts its strategy in the face of macro-economic challenges

E Inc. announced increased revenues of $30.1 million USD up from $20.7 million USD compared to the same period last year. The online vehicle buying, selling, and management firm attributed the increase to vehicle transactions across its digital marketplace as well as to growth in its EDealer subscriber base.

Even so, E Inc. posted a net loss of $12.7 million USD compared to a loss of $3.8 million USD in the same period in 2021. It also posted an adjusted EBITDA loss of $10.7 million USD as opposed to a loss of $47,000 USD in the second quarter of 2021. The firm said the loss resulted largely from its expansion strategy in the United States, which began in the third quarter of 2021.

“We continued to attract new marketplace participants, more vehicle listings and higher transaction values on our digital wholesale marketplace, EBlock,” said Jason McClenahan, president & CEO, E Inc.

He noted that the wholesale market is facing ongoing macro challenges, with tight inventory and high pricing, which is impacting demand. McCLenahan said E. Inc. is not immune to those factors. “In the meantime, we have adjusted our strategy to focus our growth in our four existing markets, Canada, the US West, Midwest and Gulf States markets, rather than expanding across the entire US market by the end of 2023,” McClenahan noted.

RELATED: Real estate auction platform Unreserved files $25 million lawsuit against real estate associations

During the quarter, the company acquired Louisiana’s 1st Choice Auto Auction, a 34-acre independent auction marketplace located in Hammond, Louisiana, that has historically transacted approximately 15,000 vehicles annually. This acquisition supports the launch of the EBlock digital platform in the Gulf States.

Goeasy bulks up its revolving facility

Goeasy posted net income in the second quarter of $38.3 million CAD, up from $19.5 million CAD in the same period of 2021. Its losses grew slightly from $6.8 million CAD in the quarter compared to $4 million CAD in the same quarter, 2021. The company did not post adjusted EBITDA.

During the quarter, the financial services company made a $40 million CAD minority equity investment into the online car and delivery startup, Canada Drives and said it intends to leverage its 2021 acquisition, FinTech startup LendCare, as a preferred non-bank financing provider on Canada Drive’s online automotive retail platform.

The investment is being made in four installments and is structured as a convertible note that will convert into preferred shares. Goeasy will become an observer on Canada Drive’s board as well.

Goeasy also increased its existing revolving facility by $500 million CAD to $1.4 billion CAD to help fund consumer loans, among other things.

0 replies on “Market watch: Q4 Inc., E Inc., Goeasy Ltd., BBTV Holdings Inc.”