Toronto, Ontario--(Newsfile Corp. - August 14, 2024) - Vertiqal Studios Corp. (TSX: VRTS) (OTCQB: VERTF) (FSE: 9PY0) ("the Company") - Vertiqal Studios, a leading digital-channel network and video-production studio, is pleased to announce Q2 financial results, highlighting significantly higher gross profit margins, a reduction in expenses which contributed to a more favorable EBITDA loss.
Below is a summary of the financial results for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023.
Three months ended June 30, 2024
Three months ended June 30, 2023
Variance (%)
Six months ended June 30, 2024
Six months ended June 30, 2023
Variance (%)
Revenues
$1,104,170
$1,420,830
-22%
$1,947,079
$2,143,039
-9%
Gross Profit
$868,146
$982,613
-11%
$1,522,991
$1,160,568
31%
Total Expenses
$1,749,090
$5,752,330
-70%
$2,999,180
$8,751,967
-65%
Net Loss
($913,677)
($4,668,616)
-80%
($1,426,724)
($7,259,541)
-80%
EBITDA
($485,801)
($2,098,859)
-80%
($679,943)
($3,372,920)
-80%
Financial Highlights of Q2 2024:
Revenue Composition and Growth: Vertiqal Studios reported a 22% decline in revenue compared to Q2 2023, exclusively due to a change in the platform revenue share structure of its programmatic offering, which shifted from a 50/50 split to a 70/30 split. Despite this, revenues from direct media have increased by 18% in comparison to Q2 2023. For the six months ended June 30, 2024, revenues decreased slightly by 9% in comparison to the six months ended June 30, 2023, again highlighting the shift in revenue share.
Cost Reductions: For the three months ended June 30, 2024, the Company saw a decrease in its gross profit in comparison to the three months ended June 30, 2023 by 11% due to the programmatic offering structure mentioned above,, however the gross profit margin for Q2 2024 was an incredible 79% compared to 69% in Q2 2023. This represents the unwavering commitment by the Company to ensure there is profitable revenue growth, through strategic reductions in personnel and more controls on campaign spend. For the six months ending June 30, 2024, the Company saw an incredible increase in gross profit by 31% in comparison to the six months ended June 30, 2023, despite a lower revenue number. This results in a gross profit margin of 78% vs 54% compared to last year. This is a remarkable improvement highlighting the Company's ability to become more efficient in managing its costs relative to its revenue and significantly enhances its profitability. It reflects strategic decisions in pricing, cost management and overall business operations.
EBITDA Improvement: Vertiqal Studios has dramatically improved its EBITDA, reporting a loss of $485k for the quarter, a significant improvement from a loss of $2M in Q2 2023. Furthermore, for the six months ended June 30, 2024, the Company had an EBITDA loss of $679k compared to $3.3M loss in 2023. This astounding 80% improvement in EBITDA loss reflects the combined efforts of more profitable revenues as well as a rigor cost management policy. This is a direct metric that showcases the company's operational performance and its ability to generate cash flow.
Operational and Strategic Developments:
Reductions in Operating Expenses: For the three months ended June 30, 2024, the Company saw a reduction in Professional fees, General & Administrative and Advertising expenses for a total of $605k in comparison to the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company saw a reduction of $1.2M in the categories mentioned above for the same time period in 2023. This continuous effort of tightening control over spending and increasing efficiencies to reduce costs will be an ongoing exercise in the upcoming quarters as the Company aims to reduce the EBITDA loss even further.
Overall, these achievements reflect the Company's successful efforts in streamlining operations, optimizing costs and enhancing overall financial performance, setting a positive trajectory for the upcoming quarters.
Jon Dwyer, Chairman & CEO of Vertiqal Studios, commented, "Having personally purchased over 1,000,000 shares in Q2/Q3, I believe now more than ever in our strong future. Our second-quarter results showcase the strength of our core offerings and our ability to adapt to changes in revenue structures. The growth in direct media revenues reinforces our focus on high-margin opportunities and operational efficiency. As we continue executing our strategy, Vertiqal Studios remains well-positioned for sustained growth and long-term profitability."
About Vertiqal Studios
Vertiqal Studios is a leading digital-channel network and video-production studio specializing in the creation and distribution of viral videos. With a daily output of 100+ videos across 138 owned-and-operated channels, Vertiqal leverages TV economics to monetize content on platforms like TikTok and Instagram and revenue-share on platforms such as Snapchat. The company's focus on producing and broadcasting performative organic content to an audience of over 52 million followers and subscribers, generating over 2 billion monthly video views, positions Vertiqal as a key player in scalable marketing concepts with brands, agencies, and creators for full production and distribution brand campaigns on major social platforms.
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This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Accordingly, readers should not place undue reliance on the forward‐looking statements and information contained in this news release.
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