eResearch Corp. (www.eresearch.com) published an updated Research Report after EQ Works (TSXV: EQ ; OTC: CYPXF) released its second quarter of 2020 financial statements.
EQ Works (“EQ”) enables businesses to understand, predict, and influence customer behavior. Using unique and third-party data sets, advanced analytics, artificial intelligence, and machine learning, EQ creates actionable insights for businesses to attract, retain, and grow customers.
EQ’s proprietary SaaS platform mines insights from location and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions. EQ is one of the largest providers of location-based data in Canada with over 1 petabyte of data and growing at 7 terabytes daily.
Revenue in the second quarter was C$1.73 million, a decrease of 22%, compared to C$2.21 million in the same quarter in 2019, but in-line with our estimate of C$1.77 million. Advertising revenue in the quarter was negatively impacted by the outbreak of COVID-19 as certain customers suspended or postponed work.
However, the revenue from Data solutions increased by 38% year-over-year to C$0.4 million in the quarter, now accounting for 25% of the overall revenue, and we expect it to reach 50% of overall revenue by 2022.
EQ reported that the revenue was at its lowest point in April and has increased steadily through to June. The company expects revenue in the third quarter to be at least 50% higher than the second quarter.
Currently, the company is well-capitalized to withstand the current downturn. In May, EQ accelerated the expiry date of 3.3 million warrants, raising C$3.3 million and had a cash balance of C$5.0 million at the end of June.
EQ is a dominant player in Canada and has growth opportunities in the United States. In the second quarter, the U.S. accounted for only 7% of revenue but is the largest advertising market in the world.
eResearch slightly reduced its 2020 revenue estimate to C$10 million from C$11 million but maintained revenue estimates for 2021 and 2022. eResearch also maintained its original “Buy” rating and a one-year price target of $2.00.
EQ operates in the analytics and digital marketing industry, and competes with companies such as LiveRamp Holdings (NYSE: RAMP) and The Trade Desk (NASDAQ: TTD).
For more information about eResearch’s report on EQ, please visit eResearch’s website (www.eresearch.com).
Disclaimer / No representations, express or implied, are made by eResearch as to the accuracy, completeness or correctness of its research. Opinions and estimates expressed in its research represent eResearch’s judgment as of the date of its reports, are subject to change without notice, and are provided in good faith and without legal responsibility. Its research is not an offer to sell or a solicitation to buy any securities. The securities discussed may not be eligible for sale in all jurisdictions. Neither eResearch, nor any person employed by eResearch, accepts any liability whatsoever for any direct or indirect loss resulting from any use of its research or the information it contains. eResearch reports may not be reproduced, distributed, or published without the express permission of eResearch. eResearch accepts advertising and other fees from companies, financial institutions, other third parties, and Institutional and Retail Investors. The purpose of this policy is to defray the cost of researching small and medium capitalization stocks which otherwise receive little or no research coverage. To ensure complete independence and editorial control over its research reports, eResearch follows the CFA Institute’s “Best Practice Guidelines Governing Analyst/Corporate Issuer Relations”.