Viq Solutions Inc (VQSLF) research, news, and more from GeoInvesting

Company description

Thu, 27 Feb 2020 14:19:26 GMT

VIQ Solutions Inc. operates as a technology and service platform provider for digital evidence capture, retrieval, and content management for the public safety, insurance, justice, and governmental/agency markets in Australia, the United States, the United Kingdom, Canada, and internationally. It operates in two segments, Technology and Transcription. The Technology segment develops, distributes, and licenses computer-based digital solutions based on its technology. The Transcription segment provides recording and transcription services. The company's software captures digital content from audio/video source, and provides online collaboration, mobility, data analytics, and integration with sensors, facial recognition, speech recognition, and case management or patient record systems. The company provides its recording and transcription services to various clients, including medical, courtrooms, legislative assemblies, hearing rooms, inquiries, and quasi-judicial clients; and multi-speaker documentation services to law enforcement and criminal justice organizations. VIQ Solutions Inc. was incorporated in 2004 and is headquartered in Mississauga, Canada.

Research

Wed, 28 Oct 2020 19:00:19 GMT

Viq Solutions Inc (OTC:VQSLF) ($4.06; $74.5 market cap), a global provider of secure, AI-driven, digital voice and video capture technology and services, announced preliminary Q3 results, updated its full year 2020 outlook, and announced new contract wins valued up to $30 million over a 6 year period.

Q3 Preliminary Results:

“Based on preliminary results, the Company anticipates revenue in the third quarter in the range of $8.1-$8.2 million, up by 25%-28% for the same period in 2019.”

Full year 2020 Outlook:

“Due to Covid-19, approximately $2.5 to $3.35 million of planned 2020 revenues have been delayed to 2021. As a result, the Company updated its full-year revenue outlook to a range of approximately $31-$32 million (previous revenue goal was $34 million to $37 million), representing growth of approximately 24%-27% versus the prior year. There is no change to VIQ’s previously stated gross margin, reiterated at 50% - 55% range driven by migrations into NetScribe aiAssist. Aligned with the updated full-year revenue outlook, the Adjusted EBITDA goals were revised to $3.5 million - $4.5 million for the 2020 full year.”

Contracts:

“The $30 million contract is over six years, representing approximately $5 million of revenue per year commencing in 2021 based on customers’ historical and anticipated annual volumes and expected to yield gross margins of 53.5%.

These new multi-year contracts represent landmark gains for VIQ in markets where the digitization pace towards end-to-end cloud platform augmented by artificial intelligence is accelerating rapidly,” said Susan Sumner, COO VIQ Solutions.”

In September 2020 we held a virtual meeting with CEO SEbastien Pare for members. You can see our reasons for tracking notes from March 2020 here.

Reasons For Tracking

Mon, 02 Mar 2020 13:34:52 GMT

Viq Solutions Inc (OTC:VQSLF) ($3.10; $57.7 market cap) is a global provider of secure, AI-driven, digital voice and video capture technology and services.

Segment breakdown of client base

40% law enforcement
35% Judicial and legal
25% Insurance

During the week, the company announced its acquisition of WordZ, a leading U.S transcription provider.

Acquisition expected to be immediately accretive to VIQ’s operating income and net earnings;
Adds approximately $6 million in annualized recurring profitable revenue;
Acquisition is non-dilutive;
Adds over 100 clients including Fortune 500 insurance clients;

“The purchase price paid for the WordZ acquisition was $4.7 million, with $1.3 million paid in cash on closing, $1.2 million paid via a promissory note payable quarterly over 36 months and $2.2 million paid via an earnout payable quarterly over 36 months.”

Below are our brief reasons for tracking VQSLF

Shifting to a recurring revenue model
- Future growth to be driven by improving the size and quality of its 3 recurring revenue streams: VIQ transcription services, VIQ SaaS software and VIQ aiAssist, focused on the design, development and deployment of AI services.
- As of Q3 2019, 91% of revenue was recurring
Strategic acquisitions have helped to transform the business to a recurring SaaS model
- In Q4 2018 the company acquired 3 leading transcription providers
- The industry is highly fragmented and the company continues to believe accretive acquisitions will be part of its future growth plans
Global geographic footprint and customer diversification with more than 1200 clients in over 25 countries
Favorable Financial Trends
- Strong Q3 results with $6.5 million vs $2.4 million in the prior year; Reported small profit vs small loss in the prior year
- Gross margins are expected to continue to increase with a goal of 45% for 2019 up from 30% last year. 2020 targeted gross margins of 65%
- 2019 revenue guidance of about $27 million implies a near $9 million Q4
Large addressable market (Global digital transformation of $10.6 billion by 2021 from $8.5 billion in 2018)
Improving capital structure;
- Recently completed a 1 for 20 reverse split to improve the cosmetics of the stock
- Cancelled 9 million warrants in exchange for warrants at much better terms
- Agreed to early equity conversion with noteholders, strengthening the company’s balance sheet. This could be seen as a sign of confidence from its debtholders.
- Fully diluted share count is 14.4 million (the next quarterly financial filing will need to provide confirmation of this number).
Need to raise capital seems minimal
- Management stated that it expects cash on hand to fund operating activities
Favorable Valuation:
- Despite the recent sharp rise of over 40% in the past week, shares are selling at a Price to Sales ratio of around 2, with the industry average being about 6.5.