NEW YORK, May 17, 2021 — Logiq, Inc. (OTCQX: LGIQ), a global provider of award-winning e-commerce and fintech solutions, reported results for the first quarter ended March 31, 2021. The company will hold a conference call at 1:00 p.m. Eastern time today to discuss the results (see dial-in information below).
Q1 2021 Financial Highlights
- Revenue for the first quarter increased 23% sequentially to $8.1 million, driven by a $1.1 million increase to a record $5.6 million in revenue by DataLogiq due to strong growth in data monetization, and $328,000 increase in revenue by AppLogiq as a shift to higher margin direct sales gained traction.
- Consolidated gross profit as a percentage of revenue in the first quarter increased to 27.6%, up 647 basis points sequentially and up 990 basis points from the year-ago quarter.
- Gross margins for AppLogiq, the company’s mobile commerce platform-as-a-service, improved from the low of 11.8% in Q2 2020 to 30.1% in Q1 2021 – a record level gross margin for this business segment as it turned focus on direct sales.
- Cash and cash equivalents and restricted cash totaled $2.9 million as of March 31, 2021.
Q1 2021 Operational Highlights
- Acquired Rebel AI, an innovator in digital marketing solutions that delivers e-commerce growth to brands and agencies, and launched it as Logiq Digital Marketing that enables small-to-medium-sized businesses (SMBs) to more effectively compete against companies of any size.
- Launched Fixel’s AI-powered digital marketing technology in the Shopify e-commerce marketplace and in WordPress.
- Partnered with Comviva, a global leader in digital financial solutions, to offer digital wallet and payment services in Indonesia.
- Appointed industry-leading technology product strategist, Leah Hickman, to the company’s board of directors.
Management Commentary
“In Q1, we increased revenue sequentially by 23% to $8.1 million primarily due to accelerating growth of our DataLogiq subsidiary,” commented Logiq president, Brent Suen. “Consolidated gross profit for the quarter also improved 990 basis points to 27.6% of consolidated revenue.
“We also saw gross margins for our AppLogiq business improve as a result of our shift to higher-margin direct sales, from 11.8% in Q2 2020, to 12.4% in Q3 2020, and then from 25.6% in Q4 2020, to 30.1% in Q1 of this year. This was the result of our continued execution on eliminating low margin, white label partnerships that were impacted by the pandemic, as well as our continued focus on the most profitable segments we serve with our mobile app business enablement platform.
“Over the last year, we have become more than an e-commerce services company. Through the integration of Fixel and Rebel AI-powered technology, we have become a serious option for SMB businesses in need of data-driven, consumer intelligence, and automated marketing technology. In Q1, we launched Fixel’s digital marketing solutions in the Shopify e-commerce marketplace and in WordPress. This offering has been gaining traction with smaller brands who do not readily have access to this type of advanced AI technology.
“The global market for marketing automation software is expected to exceed $14.1 billion by 2024, climbing at a compound annual growth rate of more than 19%. As global e-commerce sales now reach upwards of $4.9 trillion in a more than $27 trillion retail industry, it’s mainly the largest brands who are capitalizing on their fullest potential. In the U.S. alone, the top 10 e-commerce players account for 63.2% of online sales. The SMB segment is largely unrepresented and requires better technology and services. We are addressing this market by providing SMBs powerful e-commerce solutions, so they can compete against even the top players in the industry.
“As we look ahead in 2021, we will continue to increase customer activity across all of our business segments, and take advantage of the strong market trends driving the phenomenal growth of e-commerce worldwide.”
Q1 2021 Financial Summary
Revenue increased 23% sequentially to $8.1 million in the first quarter of 2021, and decreased 46.1% as compared to $15.0 million in the same year-ago quarter. The decrease from the year-ago period was primarily due to the company’s transition away from low-margin, bulk white label distributors with its AppLogiq business, and the lingering impact that COVID-19 has had on the company. The sequential increase was driven by a $1.1 million increase in DataLogiq’s revenue and $328,000 in AppLogiq’s revenue.
The company’s AppLogiq m-commerce platform-as-as-service (PaaS) contributed $2.4 million or 30% of consolidated revenue in Q1 2021, which decreased 79.3% from $11.8 million or 78.7% of consolidated revenue in the same year-ago period. The decrease was primarily due to the company eliminating low margin sales to bulk white label distributors and focus on higher margin direct sales to end users. The decrease was also due to subscription cancellations, loss of customers, and provision of complementary services as the result of the global COVID-19 pandemic.
Gross profit increased 60% sequentially to $2.2 million or 27.6% of revenue in Q1 2021, and decreased 16% from $2.6 million or 17.7% of revenue in the same year-ago period. The decrease in gross profit from the year-ago period resulted primarily from lower revenues. The improvement in gross margin percentage was the result of eliminating AppLogiq bulk white label distributors to focus on marketing directly to end users.
Total operating expenses decreased 26% sequentially to $6.3 million in Q1 2021, and increased 15% compared to $5.5 million in the same year-ago period. The increase in operating expenses was mainly due to an increase in general and administrative expense and sales and marketing expense, which was partially offset by a decrease in research and development expense.
Net loss improved sequentially by $3.3 million to a loss of $4.1 million or $(0.25) per basic and fully diluted share in Q1 2021. This compared to net loss of $2.8 million or $(0.24) per basic and fully diluted share in the first quarter of 2020.
As of March 31, 2021, cash and cash equivalents and restricted cash totaled $2.9 million, compared to cash and cash equivalents and restricted cash of $3.5 million as of December 31, 2021.
Conference Call
Later today, Logiq management will host a conference call, followed by a question-and-answer period.
Date: Monday, May 17, 2021
Time: 1:00 p.m. Eastern time (10:00 a.m. Pacific time)
Toll-free dial-in number: 1-866-548-4713
International dial-in number: 1-323-794-2093
Conference ID: 5852958
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after 4:00 p.m. Eastern time on the same day through Monday, May 31, 2021, as well as available for replay via the Investors section of the Logiq’s website at www.logiq.com/ir.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 5852958
About Logiq
Logiq, Inc. (OTCQX: LGIQ) is a U.S.-based leading global provider of eCommerce, mCommerce, and fintech business enablement solutions. Its DataLogiq subsidiary provides a data-driven, end-to-end eCommerce marketing solution. Its AI-powered LogiqX™ data engine delivers valuable consumer insights that enhance the ROI of online marketing spend. The company’s Fixel™ technology offers simplified online marketing with critical privacy features.
Logiq’s AppLogiq™ PaaS enables SMBs worldwide to easily create and deploy a native mobile app for their business without technical knowledge or background. AppLogiq empowers businesses to reach more customers, increase sales, manage logistics, and promote their products and services in an easy, affordable, and highly efficient way. AppLogiq is offered in 14 languages across 10 countries and three continents, including some of the fastest-growing emerging markets in Southeast Asia. The company’s PayLogiq™ offers mobile payments, and GoLogiq™ offers hyper-local food delivery services.