EPS of $-0.07 increased by 82.2% from previous year
Gross margin of -7.6%
Net income of -1.23M
""Our focus is on strategically aligning our product offerings to address the shifting needs of our clients, ensuring that we provide value in every interaction."" - CEO
Quarterly Financial Analysis Report - Everything Blockchain Inc (OBTX) Q4 2024: Insights on Market Position and Financial Health
Executive Summary
In Q4 2024, Everything Blockchain Inc (OBTX) reported a revenue of $79,000, representing a stark decrease of approximately 48% year-over-year and a substantial increase of 29.51% sequentially from the prior quarter. Despite this recent recovery, the company continues to struggle with profitability, ending the quarter with a net income loss of $1,233,000 and a gross profit margin of -7.59%. The management indicates a focus on cost control measures and a shift in strategy to better compete in the Software Application industry as highlighted in the recent earnings call. Investors should note the challenges ahead as the company aims to pivot its operations to achieve sustainable revenue growth and restore profitability.
Key Performance Indicators
Revenue
79.00K
QoQ: 29.51% | YoY:-48.03%
Gross Profit
-6.00K
-7.59% margin
QoQ: -115.00% | YoY:-103.80%
Operating Income
-1.14M
QoQ: 10.56% | YoY:21.82%
Net Income
-1.23M
QoQ: 27.81% | YoY:69.62%
EPS
-0.07
QoQ: 39.25% | YoY:82.22%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $79,000 (YoY decrease of 48.03%, QoQ increase of 29.51%)
Gross Profit: -$6,000 (YoY decrease of 103.80%, QoQ decrease of 115.00%)
Operating Income: -$1,143,000 (YoY increase of 21.82%, QoQ increase of 10.56%)
Net Income: -$1,233,000 (YoY increase of 69.62%, QoQ increase of 27.81%)
EPS: -$0.0729 (YoY increase of 82.22%, QoQ increase of 39.25%)
Financial Highlights
Revenue Performance
- Revenue: $79,000 (YoY decrease of 48.03%, QoQ increase of 29.51%)
- Gross Profit: -$6,000 (YoY decrease of 103.80%, QoQ decrease of 115.00%)
Profitability and Net Income
- Operating Income: -$1,143,000 (YoY increase of 21.82%, QoQ increase of 10.56%)
- Net Income: -$1,233,000 (YoY increase of 69.62%, QoQ increase of 27.81%)
- EPS: -$0.0729 (YoY increase of 82.22%, QoQ increase of 39.25%)
Balance Sheet Health
- Total Assets: $22,200,000
- Total Liabilities: $3,594,000
- Total Stockholders' Equity: $18,606,000
Cash Flow
- Net Cash Provided by Operating Activities: -$109,000
- Free Cash Flow: -$356,000
- Cash at End of Period: $60,000.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
79.00K
-48.03%
29.51%
Gross Profit
-6.00K
-103.80%
-115.00%
Operating Income
-1.14M
21.82%
10.56%
Net Income
-1.23M
69.62%
27.81%
EPS
-0.07
82.22%
39.25%
Key Financial Ratios
currentRatio
0.19
grossProfitMargin
-7.59%
operatingProfitMargin
-1447%
netProfitMargin
-1561%
returnOnAssets
-5.55%
returnOnEquity
-6.63%
debtEquityRatio
0.08
operatingCashFlowPerShare
$-0.01
freeCashFlowPerShare
$-0.02
priceToBookRatio
0.89
priceEarningsRatio
-3.36
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategy:
Management emphasized on refining its offerings and enhancing client engagement strategies to regain traction in the competitive blockchain market. CEO stated: "Our focus is on strategically aligning our product offerings to address the shifting needs of our clients, ensuring that we provide value in every interaction."
Financial Health:
The emphasis on improving operational efficiency was evident, as COO mentioned: "We've undertaken significant reviews to streamline our operations without sacrificing the quality of our service. This will better position us when we return to growth."
Market Conditions:
Management acknowledged external market pressures, noting: "The macroeconomic environment remains challenging, but our commitment to innovation keeps us optimistic about the future."
"Our focus is on strategically aligning our product offerings to address the shifting needs of our clients, ensuring that we provide value in every interaction."
â CEO
"We've undertaken significant reviews to streamline our operations without sacrificing the quality of our service. This will better position us when we return to growth."
â COO
Forward Guidance
Management provided cautious guidance, indicating that Q1 2025 is expected to see modest revenue growth as new contracts are anticipated to close by March. They expect to see a continued focus on managing expenses, and investors should pay careful attention to client acquisition metrics and operational expense management moving forward. Key factors to monitor include:
- Client contract closure rates
- Ongoing developments in product offerings
- Macro-economic impacts on investment in blockchain technology
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
OBTX Focus
-7.59%
-14.47%
-6.63%
-3.36%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Everything Blockchain Inc (OBTX) presents a mixed investment outlook. On one hand, the company's efforts to pivot and address operational challenges alongside anticipated growth in blockchain technology provides a foundation for potential upside. Conversely, the current financial struggles, coupled with a high burn rate and low liquidity, place significant risk on existing and potential investors. Strategic improvements in cost management and new contract acquisitions will be pivotal in shaping future quarterly performance.
Key Investment Factors
Growth Potential
Despite the challenges in Q4, the company's focus on innovative blockchain solutions positions it to capture growth in emerging markets. The anticipated new product offerings could result in increased client engagement and revenue opportunities.
Profitability Risk
Operational inefficiencies and ongoing losses could pose significant risks. Additionally, external economic conditions may hinder revenue recovery efforts. Investors should be wary of continuous cash burn and the ability to scale operations effectively.
Financial Position
The balance sheet shows a concerning level of liabilities relative to assets, highlighting the need for improvements in cash flow management. The low current and cash ratios indicate potential liquidity issues that must be addressed.
SWOT Analysis
Strengths
Strong brand recognition in the blockchain space
Diverse service offerings related to cybersecurity and blockchain solutions