Fourth quarter Given the unaudited fourth quarter report, I've estimated adjusted ebitda at around $271k plus or minus any changes in operating expenses. Historically, after an acquisition is made, there is cost reductions to complete the full integration of the acquisition. Q3 has shown that management is containing costs related to marketing which was higher than usual in the first half of 2021. If these operating costs are reduced further in Q4 then ebitda should exceed $271k in Q4.
Also, subscription revenue is currently at the highest number in its history which will come in slightly higher than last year. On the negative side, they've lost customers in Q1 of last year which was pandemic driven and hurt their overall business last year. This was mitigated by acquisition growth which kept sales relatively flat for the year. Given the momentum in q3 to q2 and now q4 relative to q3, I believe the company will begin to trend in the right direction while controlling their operating expenses and more specifically their sales and marketing expense. So far, costs have been coming down with each quarter.
The Ceo has realized that the company is better off at using that money for acquisition growth rather than for organic growth which is what they tried to do in H1 last year.
Management needs to get back to the basics which is to increase their ebitda margins and get subscription revenue growth which will come from acquisition or internally.