Logiq Inc. (NEO:LGIQ.AQN, OTCQX:LGIQ), a provider of e-commerce and fintech business enablement solutions, told investors it expects to report an 87% rise in fourth-quarter revenue to a record $12.3 million.
The company said its gross margin for the three months to December 31, 2021, is also expected to expand to record levels, exceeding 34%, from 29.5% in Q3 and 21.1% in the same year-ago quarter.
It said the results exceed its earlier 4Q revenue guidance by $2.3 million, reflecting an exceptionally strong finish to the year. It also puts full-year revenue on track to total approximately $36.5 million, while its 4Q gross margin is expected to exceed earlier guidance by 100 basis points.
READ: Logiq finalizes agreement to transfer AppLogiq assets into publicly-traded subsidiary; shareholders set to receive shares by year-end
“As we refocused our efforts on higher quality, more profitable revenue streams and adjusted to the changing market dynamics, we also drove strong gross margin improvement every quarter of 2021. In fact, our gross margin more than doubled in Q4 2021 compared to the full year of 2020,” the company’s president, Brent Suen, said in a statement.
“We believe this strong progress across the board is keeping us on the path to profitability for both of our business segments,” continued Suen. “It also advances our plans to separate our DataLogiq and AppLogiq businesses into two independent publicly traded companies as another way to further unlock shareholder value.”
On December 16, 2021, Logiq reported it had finalized an agreement with Lovarra, a fully reporting public company, to transfer Logiq’s AppLogiq assets into Lovarra. The transfer is now nearly complete, the company said.
“Our strong performance and planned separation of our businesses has also strengthened our position with several M&A targets we have been pursuing,” added Suen. “We have a number of acquisition candidates, and believe that such targets would be accretive to EBITDA (underlying earnings) overall.”
Based upon its potential deal pipeline, which includes M&A and potential partnerships or client relationships, Logiq said it has set a goal of $50 million to $75 million in annualized revenue by the end of 2022 for both business segments and profitability by early 2023.
The company added that it believes it already has the funding and advisors in place to facilitate such potential transactions.
“Looking ahead in 2022, we anticipate our momentum to continue to build, driven by the increasing demand for fintech/m-commerce solutions in emerging markets worldwide and high-growth e-commerce market segments in the US,” Suen concluded.
“Finding high buying intent consumers has become increasingly important to our customers, and this is where we believe that Logiq excels beyond anyone else in the industry. We believe we’re still very much in the early stages of growth, so we expect 2022 to be our biggest year yet.”
Logiq said it plans to report its full-year results and host an investor conference call in March.
Contact the author at stephen.gunnion@proactiveinvestors.com