DGTL Holdings Inc. (TSX-V:DGTL, OTCQB:DGTHF) has announced second-quarter results that reveal a big improvement in its gross profit margin and a significant narrowing of its net loss as financial restructuring initiatives start to bear fruit.
The company reported a 91% narrowing in its second-net loss to $58,399 for the three months ended November 30, 2022, from $607,360 a year earlier. Its gross profit margin increased by 60% to $285,928, while total current liabilities decreased by 49% to $1.62 million from six months earlier.
DGTL said its new management team initiated the strategic financial restructuring initiatives during the first quarter of fiscal 2023. The core purpose of these ongoing initiatives was to reduce liabilities and operating expenses while increasing profitability in order to develop a solid financial position for sustainable revenue growth and portfolio enhancement via new prospective M&A activity.
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The company said sales revenues were relatively consistent with just 6% growth from the same period in fiscal 2021, and 20% growth from the previous quarter, due to challenging global economic conditions during calendar 2022.
However, it noted that management has seen a marked increase in the adoption of its TotalSocial PaaS (Platform-as-a-Service) among new Fortune 500 brands and strong renewal rates from long-term customers in recent months.
“Based on rising demand for our digital solutions, evolving global macroeconomics, new business development resources, and the roll-out of new digital content and analytics products under the TotalSocial brand, the company anticipates a potential renewal of incremental growth in the third and fourth quarter of fiscal 2023," DGTL CEO John Belfontaine said in a statement.
Revenue for the quarter increased by 20% to $607,541 from the $490,233 reported in the prior quarter, while salaries, fees and benefits decreased by 36% from a year earlier to $145,003.
"Management is confident that we are taking the appropriate actions to generate long-term shareholder value,” Belfontaine added. “Looking ahead, we expect to realize further benefits in our financial position from ongoing financial restructuring initiatives.”
Based in New York, DGTL (Digital Growth Technologies and Licensing) is a digital media technologies accelerator with flagship digital marketing content and data analytics brand TotalSocial.
The company specializes in accelerating fully commercialized enterprise-level SaaS (software-as-a service) companies entering a rapid growth lifecycle stage within the sectors of social, mobile, gaming and streaming.
Contact the author at stephen.gunnion@proactiveinvestors.com