A Decent Performance, But We Were Hoping For A Little More

A Solid Start To The Year

Favorable Revenue Undercurrents

Hoping For More Gas To Fuel Faster Revenue Growth

Michael Kupinski

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Financial Services

Capital Markets

QuoteMedia Inc.

Investment Appraisal
 The company had a solid first quarter performance that was largely in line with expectations. This is positive given the shut down of the U.S. and Canadian economies to mitigate Covid 19. While the company did increase its bad debt reserves as some companies have closed business, the amount is relatively modest (increased from $80,000 to $100,000). Overall, there appears to be increased demand for its products as people work from home and as businesses try to reduce costs in the uncertain economic and financial environment.&nbsp;
 Figure #1 illustrates the company&#8217;s latest results compared with our previous estimates. Total company revenues were in line with expectations, $2.967 million versus our $2.920 million expectation. Adjusted EBITDA was below our expectations, $191,000 versus our $414,000 estimate. The variance was principally due to higher-than-estimated Software Development Costs, $426,000 versus our $305,000 estimate, as the company invests in new products and expanded feature sets to be rolled out in coming quarters.&nbsp;
As we review our 2020 and 2021 estimates, we are encouraged that the Covid impact has been relatively modest and that the company has maintained a revenue growth trajectory. Management cautioned that the recent weakness in the Canadian dollar relative to the U.S. dollar will have an impact on its revenues. Roughly 31% of the company&#8217;s revenues are tied to the Canadian dollar. The exchange rate does not affect the company&#8217;s bottom line. Our estimates are under review to determine the extent of the revenue impact. We believe that the expansion of its product features support revenue growth in subsequent quarters. But, we note that an acceleration in revenue growth is a key catalyst toward higher stock valuations.&nbsp;
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Figure #1 
 
 <img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/qmciq1variance.jpg" style="width: 371px;height: 743px" />

QuoteMedia Inc. (QMCI)

Brushing Off Covid

Fundamental Analysis:

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A Decent Performance, But We Were Hoping For A Little More (QMCI)

A Solid Start To The Year (QMCI)

Favorable Revenue Undercurrents (QMCI)

Hoping For More Gas To Fuel Faster Revenue Growth (QMCI)

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