Logiq Inc said it expects fourth-quarter revenue to exceed $10 million for a 52% year-over-year increase.
“Our strengthening performance reflects the continued transformation of our business that has been refocused over this past year on higher quality, more profitable revenue streams,” said Brent Suen, president of Logiq, in a statement. “In fact, we have seen strong gross margin improvement every quarter of this year."
Suen added: “This has also been driven by product and service level improvements, as well as more effective marketing that has attracted new customers to our platform, with this also resulting in a record revenue month in November.”
READ: Logiq advances separation of AppLogiq and DataLogiq with acquisition of fully-reporting publicly-traded company for AppLogiq
For its 4Q ending December 31, 2021, Logiq said its gross margin is expected to continue to expand to record levels, exceeding at least 33%, compared to 29.5% in the previous quarter and 21.1% in the year-ago quarter.
The company noted that the year-ago quarter marked its first quarter to demonstrate the benefits of its refocus on higher-margin, higher-quality revenue streams, and the elimination of lower margin revenue, such as from white label partnerships that were impacted by the global pandemic.
“We believe the progress we have made is keeping us on the path to profitability for both of our business segments and further unlocking shareholder value,” Suen said.
“This includes our plans to separate AppLogiq and DataLogiq into two publicly traded companies by the end of the year, which continues to advance smoothly and on schedule. Our teams are also on fire, morale is super high, and strategic partners and customers are coming to us for deals.”
Business separation
Logiq said the business separation is expected to enable each company to better capitalize on the abundant growth and M&A opportunities in their respective e-commerce and fintech markets. Management has already established an extensive pipeline of potential acquisitions for AppLogiq and DataLogiq, and is currently in discussions with several targets that would be complementary and accretive to earnings if completed.
The company said it believes it already has the funding and advisors in place to facilitate such potential transactions, although there can be no assurances that it will complete any of the potential transactions with companies in its M&A pipeline.
“As we’ve stated earlier, our analysis of recent comparable public market valuations and private equity funding for fintech companies in emerging markets sets a standalone valuation for just AppLogiq to be $100 million or more—and that is today, before any potential M&As,” Suen said.
“However, we do not see the markets attributing much, if any, valuation of this business segment to Logiq’s overall valuation, and we see things similarly for DataLogiq. This is why we are anticipating a tremendous unlocking of shareholder value following the separation that is soon to be complete.”
The company plans to provide another financial update in January 2022.
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