Mr. Geoffrey Rotstein reports

EQ INC. REPORTS THIRD QUARTER FINANCIAL RESULTS

EQ Inc. has released its financial results for the third quarter ended Sept. 30, 2023.

EQ is very pleased that revenue for the quarter increased by over 24 per cent from the same period a year ago to over $2.6-million, as client demand for data-driven solutions continued to grow. Gross margin for the quarter increased to 49 per cent, also a significant improvement sequentially and year over year, and a direct result of combining strong data assets with targeted media that drives results. The adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) improved for the fifth consecutive quarter as the company continues to focus on profitability. The adjusted EBITDA loss for the quarter of $200,000 was an improvement of 51 per cent sequentially and over 86 per cent from the same period a year ago. The company also recognized a one-time gain during the quarter of $500,000 due to the reversal of acquisition-related transaction expenses, which resulted in a positive net income for the quarter.

Utilizing proprietary and unique data assets that drive performance is still at the foundation of EQ. Understanding more about consumer spending, geospatial patterns, competitive intelligence, attribution and combining it with other data enable it to provide insights and analytics to clients across the retail, finance and automotive verticals. Its team of data scientists, engineers and strategists deliver products and solutions that help companies understand more about their business and execute solutions to put those insights to work.

"EQ's focus on profitability is working and the company expects to be profitable in the fourth quarter," said Geoffrey Rotstein, president and chief executive officer of EQ Works. "By combining our unique data assets with AI and technology, we provide clients with a better understanding of Canadians shopping behaviour, attribution for media campaigns, gaining insights into competitors, and creating audience segments for specific out-of-home and digital channels. We then make these insights actionable resulting in better performance for our clients."

By building tools that deliver results, a continued push toward higher-margin recurring revenue products, including its proprietary AI (artificial intelligence) tools and insight dashboards, and a continued demand for data assets, EQ has built a solid foundation. The company continues to build strong partnerships across its business units and is excited about the opportunities that will lead to continued growth and profitability in the future.

Non-IFRS (international financial reporting standards) financial measure

EQ measures the success of the company's strategies and performance based on adjusted EBITDA, which is outlined and reconciled with net loss in the section on the reconciliation of net loss for the period to adjusted EBITDA in the management's discussion and analysis (MD&A). The company defines adjusted EBITDA as net loss from operations before: (a) depreciation of property and equipment and amortization of intangible assets; (b) share-based payments; (c) finance income and costs, net; (d) depreciation of right-of-use assets; (e) restructuring costs; and (f) gain from acquisition-related transaction. Management uses adjusted EBITDA as a measure of the company's operating performance because it provides information on the company's ability to provide operating cash flows for working capital requirements, capital expenditures and potential acquisitions. The company also believes that analysts and investors use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

The non-IFRS financial measure is used in addition to, and in conjunction with, results presented in the company's consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies non-IFRS financial measures having the same or similar names. In addition, the company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

The attached table reconciles net loss from operations and adjusted EBITDA for the periods presented.

About EQ Inc.

EQ enables businesses to understand, predict and influence customer behaviour. Using unique data sets, advanced analytics, machine learning and artificial intelligence, EQ creates actionable intelligence for businesses to attract, retain and grow the customers that matter most. The company's proprietary SaaS (software-as-a-service) platform mines insights from movement and geospatial data, enabling businesses to close the loop between digital and real-world consumer actions.

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