Quotemedia ((QMCI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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QuoteMedia’s latest earnings call paints a picture of balanced sentiment, highlighting both robust revenue growth and profitability improvements alongside concerns about cash balance and rising operating expenses. The company’s strong market positioning and strategic investments in AI are driving positive growth metrics, yet financial challenges remain a point of focus.
Revenue Growth
QuoteMedia reported a notable 10% year-over-year revenue increase, with a 5% sequential rise from Q2 to Q3 2025. The Corporate Quotestream revenue saw an impressive 18% increase, underscoring the company’s successful market strategies and customer engagement.
Gross Margin Improvement
The company’s gross margin improved from 46% to 48%, with expectations for continued enhancement as revenue grows and amortization expenses decrease. This improvement signals effective cost management and operational efficiency.
Profitability Trends
QuoteMedia’s net loss for the quarter improved to $367,000 from $441,000 year-over-year, while adjusted EBITDA increased to $378,000 from $367,000. These trends indicate a positive trajectory towards profitability.
Strong Deferred Revenue
Deferred revenue concluded the quarter at $2.2 million, reflecting strong contracted business for future periods and providing a solid foundation for ongoing financial stability.
AI and Product Development
The company is heavily investing in AI to automate services and enhance product offerings, which is expected to strengthen its competitive position and drive future growth.
Low Customer Churn
Customer churn remained very low, highlighting strong customer retention and satisfaction, which are critical for sustained business success.
Cash Balance Concerns
The cash balance at quarter-end was $281,000, a decrease from $585,000 at the end of 2024, raising concerns about liquidity and financial flexibility.
Increased Operating Expenses
Total operating expenses increased by 11% for the quarter, with a significant 74% rise in software development expenses, largely due to a reduction in the proportion of capitalized development costs.
Impact of Development Cost Accounting
The accounting for development costs continues to negatively impact reported earnings, despite not affecting cash flow, which poses a challenge for financial reporting.
Forward-Looking Guidance
During the third-quarter conference call, QuoteMedia projected continued double-digit revenue growth into 2026, driven by increased average revenue per customer and cross-selling to existing clients. Despite the temporary impact of capitalized development costs on earnings, profitability is expected to improve as these expenses diminish.
In conclusion, QuoteMedia’s earnings call reflects a balanced sentiment with significant growth achievements tempered by financial challenges. The company’s strategic focus on AI and product development positions it well for future success, though liquidity and expense management will be critical areas to watch.