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).
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