EPS of $-0.08 increased by 54.7% from previous year
Gross margin of -222.2%
Net income of -1.38M
""Our traditional revenue streams have come under pressure, prompting us to explore new revenue models and partnerships that align with current market standards."" - CEO, Everything Blockchain Inc
In the fiscal first quarter of 2025, Everything Blockchain Inc (OBTX) reported a significant drop in revenue, totaling just $63,000, down 75.95% year-over-year. This trend reflects ongoing challenges in the blockchain and cybersecurity consulting segments, where heightened competition and a saturated market have adversely impacted sales. The company's net income stood at a loss of $1.384 million, reinforcing concerns about profitability and operational efficiency. Major expenditures, particularly in general and administrative expenses at $1.212 million, have continued to limit the company’s ability to recover from its losses.
Management acknowledged the ongoing financial difficulties during the earnings call, highlighting a transition strategy as they seek to innovate and reposition themselves within the market. Despite these challenges, the company holds significant assets, including goodwill of $16.5 million, indicative of prior investments in brand and intellectual property. Investors should note that the path to recovery and profitability remains uncertain, contingent on management's ability to execute its strategies effectively in this highly dynamic technological landscape.
**Operating Loss**: -$1.352 million (Operating Margin: -21.46%)
**Net Income**: -$1.384 million (Net Margin: -21.97%)
**Cash at Period End**: $27,000, down from $60,000 at the beginning of the period
Financial Highlights
### Financial Highlights
- Revenue: $63,000 (QoQ: -20.25%, YoY: -75.95%)
- Gross Profit: -$140,000 (Gross Profit Margin: -222.22%)
- Operating Loss: -$1.352 million (Operating Margin: -21.46%)
- Net Income: -$1.384 million (Net Margin: -21.97%)
- Cash at Period End: $27,000, down from $60,000 at the beginning of the period
### Operational Efficiency Metrics
- Current Ratio: 0.106
- Debt Ratio: 0.0753
- Net Debt: $1.626 million
The drastic decline in revenues year-over-year signals ongoing market challenges facing the company, particularly illustrated by an operating loss that exceeds revenues significantly.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
63.00K
-75.95%
-20.25%
Gross Profit
-140.00K
-166.67%
-2 233.33%
Operating Income
-1.35M
24.68%
-18.29%
Net Income
-1.38M
23.91%
-12.25%
EPS
-0.08
54.72%
-11.80%
Key Financial Ratios
currentRatio
0.11
grossProfitMargin
-222%
operatingProfitMargin
-2146%
netProfitMargin
-2197%
returnOnAssets
-6.3%
returnOnEquity
-7.7%
debtEquityRatio
0.09
operatingCashFlowPerShare
$-0.02
freeCashFlowPerShare
$-0.02
priceToBookRatio
0.59
priceEarningsRatio
-1.92
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Themes
1. Strategy & Innovation
- "We recognize the need to pivot our operations towards more scalable solutions in order to compete effectively in the current environment."
2. Market Position
- "Our traditional revenue streams have come under pressure, prompting us to explore new revenue models and partnerships that align with current market standards."
3. Operational Adjustments
- "We have begun implementing cost control measures that we believe will help stabilize our metrics in the upcoming quarters."
"Our traditional revenue streams have come under pressure, prompting us to explore new revenue models and partnerships that align with current market standards."
— CEO, Everything Blockchain Inc
"We recognize the need to pivot our operations towards more scalable solutions in order to compete effectively in the current environment."
— CEO, Everything Blockchain Inc
Forward Guidance
Management has set a cautious tone for the future, indicating that they are re-evaluating their business model and exploring new market opportunities. They have mentioned a desire to reduce operational costs and expected losses to narrow as they implement these strategies. However, specific revenue targets for the next quarter have not been set, reflecting the uncertainty in their strategic execution and adaptability to market demands. Key factors for investors to monitor include the success of new initiatives, potential partnerships, and upcoming product offerings that could spur growth.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
OBTX Focus
-2.22%
-21.46%
-7.70%
-1.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the current performance indicators and the strategic adjustments management has committed to, the investment outlook for Everything Blockchain Inc (OBTX) remains cautious. The drastic decrease in revenues and substantial operational losses indicate a pressing need for management to implement their strategic pivot. Investors should closely monitor the effectiveness of these strategies and any developments in product offerings that could improve market positioning. Without visible signs of recovery in revenue streams, the company may struggle to attract and retain investor interest.
Key Investment Factors
Growth Potential
The company has indicated intentions to pivot and innovate, which may unveil new growth avenues; however, tangible progress will be necessary to reassure investors of future success.
Profitability Risk
The significant drop in revenue coupled with a declining cash position highlights ongoing financial instability, with the risk of continued losses if operational improvements are not swiftly implemented.
Financial Position
Overall, the financial position appears precarious, with a low current ratio indicating potential liquidity issues, despite the existence of considerable intangible assets.
SWOT Analysis
Strengths
Established brand with significant goodwill.
Diverse technological expertise in blockchain and cybersecurity.
Weaknesses
Consistent revenue decline and negative profit margins.
High operational expenses have led to ongoing net losses.
Opportunities
Potential for market rebirth through innovative product development.
Increasing demand for cybersecurity solutions could offer new growth avenues.
Threats
Intense competition within the technology sector, specifically blockchain applications.
Market volatility affecting investor confidence and capital availability.