FULL DISCLOSURE: This is sponsored content for Eguana Technologies.
Eguana Technologies (TSXV: EGT) reported its Q1 2023 financials, topbilled by a quarterly revenue of $5.9 million. While its a drop from the record-breaking quarter of Q4 2022 which posted $10.3 million in revenue, the first quarter’s topline figure is a surge of nearly 2,000% from revenue of approximately $285,000 in the year-ago period.
According to the firm, this increase in revenue is the result of expanded products, new markets, improved business development activities, and overall firm growth.
The first quarter of 2023 was slower than the previous quarter ended December 31, 2022, which follows typical seasonality patterns; however, management has said it is cautious on near-term market growth due to changing consumer buying patterns due to increased interest rates and inflation.
“The Eguana team advanced several objectives across hardware and software during the quarter, which will have significant and positive long-term impact on growth and global positioning objectives.”Eguana CEO Justin Holland
These objectives include “moving the 10kW whole home product to full scale manufacturing, expanding the Energy Management System software license for direct control from the utility to the ESS, advancing Eguana Cloud development to allow for the recurring revenue, and a doubling of the number of unique enrollments and completions within the Eguana university platform, which already has over 400 unique logins.”
Another key strategy in the firm’s sales approach is installer and partner training. Eguana University, the company’s online partner training portal, was launched in November, with training modules covering products, selling, installation, commissioning, and design, as well as other partner loyalty components. Over the previous 90 days, the company has seen a more than 100% increase in both unique module enrolments and module completions when compared to the first 90 days.
Gross margin for the quarter ended at 2.6%, a decline from 25.1% in the comparative quarter a year ago. The firm said last year’s margin was uncommonly high due to the impact of inventory adjustments.
Operating loss grew to $3.2 million from $2.5 million last year, mainly driven by the increase in product research and development expenses due to the objectives mentioned above.
Net loss came in at $5.3 million compared to last year’s loss of $2.4 million, driven by one-time financing costs related to a strategic investment by the ITOCHU Corporation, accretion of long-term debt, and losses due to foreign exchange. The bottomline translates to $0.01 loss per share, at par with last year’s figure.
Working capital was $32.1 million as of March 31, 2023, a marginal drop from $33.7 million as of the previous quarter. The working capital position is has improved over the previous year, when it was reported as a $12.2 million deficit.
The firm’s cash position at the end of the quarter was at $10.2 million, putting current assets at $43.8 million. Current liabilities ended at $11.6 million.
The company expects to be on the fiscal right track, most especially after it announced earlier this month the firm’s new chief financial officer. Eguana appointed Hansine Ullberg as the new CFO after Sonja Kuehnle resigned from the position to remain with the company in an advisory role.
Eguana Technologies last traded at $0.155 on the TSX Venture.
FULL DISCLOSURE: Eguana Technologies is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Eguana Technologies. The author has been compensated to cover Eguana Technologies on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.