The accomplishments in the first quarter of SRAX Inc. start with the number 200.That is how many public companies the Westlake Village digital marketing, data and information services firm has signed up for its Sequire platform.
Christopher Miglino, founder and chief executive of the firm, said in a conference call on May 17 to discuss first quarter earnings that it feels like SRAX is gaining momentum on the membership front for Sequire and that 200 is a solid number.“Last year at this time, we had 68 clients that signed up for the Sequire platform,” Miglino said. “Now we’re at 200, a nice one-year jump. Our goal is to be at 1,000 companies within three years.”Sequire is a way for public companies to monitor trading data in real time, know who is buying and selling their stock, manage warrants and engage shareholders through media campaigns. The companies pay SRAX to access the platform, which is designed to help promote securities of smaller companies.SRAX reported a net loss of $12 million (-57 cents a share) for the first quarter ending March 31, compared with a net loss of $3 million (-21 cents) in the same period a year earlier. Revenue increased by 1,450 percent to $5.4 million.
The company’s share price has increased by 64 percent over the past 52-week period, closing at $4.19 on July 22. SRAX shares closed at $4.23 on July 28.Mike Crawford, an analyst with B. Riley Securities Inc. in Los Angeles, issued his most recent research note on SRAX on July 20, in advance of its second quarter earnings report that he expects around Aug. 16.In May, B. Riley raised its revenue guidance for the current 2021 fiscal year to $27.4 million, the sixth time it has done that since initiating coverage on SRAX a year ago. The new figure comes in above the $25 million to $27 million range estimate from SRAX.
“We believe business momentum remains strong, increasing the likelihood that SRAX will meet or beat our $7 million revenue and $208,000 EBITDA projections for the second quarter, with follow-through potential upside,” Crawford said in the note. “Indeed, we believe strong bookings could enable SRAX to come up sevens, with over $7 million revenue in the second quarter, and us increasing projections for a seventh sequential instance in little over a single year.”The strong bookings mentioned by Crawford are in relation to Sequire, the platform that is SRAX’s primary business.
Additional servicesDuring the conference call, Michael Malone, SRAX’s chief financial officer, said that in the first quarter revenue reached $4.5 million, up from $100,000 in the same period the prior year.Miglino added that there have been nine consecutive quarters of continued revenue growth for Sequire, and that the 200 clients represent a 294 percent increase from the first quarter of last year.
“We’re continuing to see record bookings,” Miglino said during the call. “In Q2, we booked seven to $7.2 million as of this call (on May 17). We anticipate that we’ll exceed last quarter’s bookings of $10 million.” When discussing bookings, Miglino said that he was talking about the total contract value that is closed in a respective quarter.
“Most of our contracts are 12-month long agreements, so we have good visibility into the revenue for the year,” he added.
During the conference call, Crawford asked about the new features for Sequire and when they may be released.
Miglino responded by saying that SRAX has a “big pipeline of stuff” that will be released during the second quarter.
“The stuff that we’re releasing in this quarter is some of the best stuff that we’ve built into the platform,” Miglino said. “They won’t have to wait long.”In early May, the company announced it was launching an online community for Sequire that will support live and on-demand informational sessions and shareholder discussions, as well as features for professional networking.Since then, the company has announced a partnership with Zoom Video Communications Inc. so clients can host their own webinars and roadshows; the addition of a one-on-one meetings between companies and potential shareholders; an email and text message system for companies to communicate with shareholders; and a registered investment advisor search function.