NEW YORK, Aug 14, 2024 /PRNewswire/ -- iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) a US-based, multinational, fully reporting and audited publicly listed telecommunications and technology company preparing for a Nasdaq up-listing today announced publishing its Q2 FY-2024 financial report on SEC Form 10Q. The company achieved a revenue of $130 million for the six months ended June 30, 2024, an increase of 126% compared to the same period of the previous year. There is also a significant increase in revenues and Gross Profit when comparing first quarter versus second quarter of 2024 with revenue growing 53% from $51,414,878 to $78,635,764 and gross profit growing 57% from $1,379,026 to $2,163,624. Management indicates the revenue is on track to achieve the company's $290 million FY-2024 annual forecast, since as of June 30, 2024 we have achieved 45% of that goal and the seasonality of the business indicates that in the second half of the year the revenue is higher than in the first half of the year. Also margin performance is on track for the company to achieve its 7-digit positive operating income goal. Detailed information on Q2 FY-2024 performance can be found in the company's SEC Form 10Q filed today.
We are very proud that in the first six months of this year we have done 90% of the revenue done in the 12 months of 2023 ($130 million as of June 30, 2024 compared to $144.5 million as of December 31, 2023). Basically, we have doubled the size of the company in six months in terms of sales.
Six months ended June 30 | |||
2024 | 2023 | ||
Revenue | $130,050,642 | $ 57,491,358 | |
Gross Profit | $ 3,542,650 | $ 2,001,202 | |
Operating Loss | $ (525,555) | $ (570,248) | |
Net Loss | $ (2,544,103) | $ (320,466) | |
Three months ended | |||
June 30, 2024 | March 31, 2024 | ||
Revenue | $ 78,635,764 | $ 51,414,878 | |
Gross Profit | $ 2,163,624 | $ 1,379,026 | |
% Gross Profit | 2.75 % | 2.68 % | |
On $130 million in revenue, the company reported a net loss for the six months ended June 30, 2024 of $2.54 million. The loss is due primarily to the $2.73 million in non-operating expenses. Over $1.2 million of the non-operating expenses result from a non-cash, one-time charges. Management does not expect the bulk of these non-operating expenses to be recurring. See the chart below and the associated notes for more detailed information.
Relevant non-operating expenses for the six months ended June 30, 2024 | ||||||
Value of shares issued for consulting agreement | $ 279,660 | Note 1 | ||||
Consulting agreement - cash paid | $ 97,500 | Note 1 | ||||
Value of additional share compensations | $ 77,665 | Note 2 | ||||
Audit and accounting services | $ 192,322 | Note 3 | ||||
Change in fair value of derivative liabilities | $ 1,115,510 | Note 4 | ||||
Loss on settlement of debt | $ 102,660 | Note 4 | ||||
Interest expense | $ 861,554 | Note 5 | ||||
$ 2,726,871 | ||||||
Notes:
- The company increased its professional services expense in connection with funding its recent M&A activity, and in conjunction with its Nasdaq up-listing initiative. This expense is expected to end as the associated business objectives are achieved.
- Stock-based compensations not associated to management role.
- Even though the Audit Services is recurring it's important to remark that due to the increase in the number of subsidiaries, the audit labor has increased accordingly, and it is expected to subside as we consolidate operations.
- This is a non-monetary accounting treatment of the M2B note, used for funding the acquisition of QXTEL.
- To minimize shareholder dilution, the company strategically secured interest bearing loans instead of pursuing loans convertible into stock.
To illustrate the strength of the company's operations, consider that without the $2.73 million in interim non-operating expenses, the company would report $0.18 million in positive net income for the first six months of 2024.
Additional Financial Performance Highlights and Further Analysis
- Telecomm Division stand-alone performance continues to deliver explosive results
iQSTEL's overall business strategy is built on the foundation of its rapidly expanding Telecom Division. We are growing a robust telecom business while building complimentary high margin technology offerings designed to both add value to our telecom services and ultimately increase our earnings. Currently, it is our Telecom Division that is generating revenue with a positive operating Income. The Telecom Division generated $909,370 of positive operating income in the first half of the year FY-2024 compared to $540,363 for the same period of previous year which represent a significant increase of 68.29% year over year.
Telecom Division | |||
For the six months ended June 30, | |||
2024 | 2023 | ||
Revenue | $ 130,050,642 | $ 57,491,358 | |
Gross Profit | $ 3,542,650 | $ 2,001,202 | |
Operating Income | $ 909,370 | $ 540,363 | |
Management expects the bottom line results of the Telecom Division to improve in the second half of the year.
We have identified some improvement opportunities. For instance, the technological expense of our telecom division in the six months ended June 30, 2024, increased to $542,140 vs $185,975 in the same period last year. The company plans to consolidate the telecom division into one single platform, and in so doing, reduce the technological expense by half, increasing the bottom line.
- The company keeps growing and adding value to the shareholders
Management continues in its commitment to raise growth capital while maintaining a total issued and outstanding share count of 183.5 million common shares demonstrating an unwavering commitment to responsible capital structure management. We believe this disciplined approach has ensured that each issuance of shares is accretive, directly contributing to increasing the intrinsic business value of iQSTEL.
The effectiveness of this strategy is evident in the company's Revenue Per Share (RPS) performance. The following graph illustrates the evolution of RPS from FY-2020 to FY-2024. For FY-2024, the projected RPS is based on a forecasted revenue of $290 million and an outstanding share count of 193 million shares. While these FY-2024 figures are projections and may change, they indicate a potential RPS of approximately $1.50, representing a 79% increase compared to the $0.84 RPS achieved in FY-2023.
This sustained growth in RPS underscores the Company's ability to utilize raised funds effectively, driving value creation and delivering tangible returns to our shareholders.
- The company is preparing for a Nasdaq uplisting
The company continues preparing for a Nasdaq uplisting. Having achieved all the corporate requirements for an uplisting, the company has developed a detailed plan to finalize the uplisting and achieve further business objectives made possible with the uplisting. The plan was published in an 8K on August 6 th 2024. Management will present the key components of the plan in the online Emerging Growth Conference on August 21 st at 11:25 am EST. Here is the link to attend.
Summary
The Q2 FY-2024 financial report illustrates a transitional period where interim non-operating expenses associated with the acquisition of QXTEL results in a temporary negative impact to net profit. Management expects the mid and long term impact of the QXTEL application to ultimately have a very positive P&L impact. Again, these transitional non-operating expenses are not expected to continue. Management is committed to reducing the non-operating expenses as rapidly as possible.
The Q2 FY-2024 financial results demonstrate the success of iQSTEL's ability to acquire and integrate new telecom operations and rapidly achieve synergistic organic growth.
Management is committed to making this FY-2024 the best ever. We plan to achieve or surpass $290 million revenue mark this year. We also expect to achieve 7-digit positive operating income.
On behalf of our Independent Board of Directors we want to thank our partners, customers, shareholders, investors, management, and our employees for all the loyal support throughout our journey to become a one billion dollar revenue company.
All the Best.
Leandro Iglesias
CEO and Chairman iQSTEL
About IQSTEL (updated):
iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) is a US-based, multinational publicly listed company preparing for a Nasdaq up-listing with an FY2023 $144 million revenue, and with a $290 Million Dollar Revenue forecast and a Positive Operating Income of 7 digits forecast for FY-2024. iQSTEL's mission is to serve basic human needs in today's modern world by making the necessary tools accessible regardless of race, ethnicity, religion, socioeconomic status, or identity. iQSTEL recognizes that in today's modern world, the pursuit of the human hierarchy of needs (physiological, safety, relationship, esteem and self-actualization) is marginalized without access to ubiquitous communications, the freedom of virtual banking, clean affordable mobility and information and content. iQSTEL has 4 Business Divisions delivering accessibly to the necessary tools in today's pursuit of basic human needs: Telecommunications, Fintech, Electric Vehicles and Metaverse.
- The Enhanced Telecommunications Services Division (Communications) includes VoIP, SMS, International Fiber-Optic, Proprietary Internet of Things (IoT), and a Proprietary Mobile Portability Blockchain Platform.
- The Fintech Division (Financial Freedom) includes remittances services, top up services, Master Card Debit Card, a US Bank Account (No SSN required), and a Mobile App.
- The Electric Vehicles (EV) Division (Mobility) offers Electric Motorcycles and plans to launch a Mid Speed Car.
- The Artificial Intelligence (AI)-Enhanced Metaverse Division (information and content) includes an enriched and immersive white label proprietary AI-Enhanced Metaverse platform to access products, services, content, entertainment, information, customer support, and more in a virtual 3D interface.
The company continues to grow and expand its suite of products and services both organically and through mergers and acquisitions. iQSTEL has completed 12 acquisitions since June 2018 and continues to develop an active pipeline of potential future acquisitions.
Safe Harbor Statement: Statements in this news release may be "forward-looking statements". Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and iQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
iQSTEL Inc.
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iQSTEL Inc.
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