Transcription company VIQ Solutions (VQS.TO), headquartered in Toronto, Canada, and listed on the local stock exchange, has released financial results for the second quarter and the half-year ended June 30, 2022. The company reported strong, half-year revenue growth of 45% year on year, mostly driven by acquisitions but also on the back of positive organic momentum.
A USD 4.8m private placement, announced on July 19, 2022, contributed directly to VIQ’s positive outlook, as CFO, Alexie Edwards, acknowledged in the investor presentation. The sale was “very strategic for the company,” Edwards said, adding, “We leverage the opportunity to raise the funds to invest in special commercial opportunities and strengthen our balance sheet.”
In terms of M&A, VIQ acquired UK multilingual services company, The Transcription Agency, in October 2021, and Australian court transcription provider, Auscript, in December 2021. Edwards cited those recent acquisitions, along with gains in production volumes, as the main drivers for the revenue increase of 51% in the second quarter compared to the same period in 2021.
VIQ CEO, Sebastien Paré, further explained to investors that “bookings, active clients, production volumes, and annual delivered content have all increased to new highs in Q2, while the cost to produce a minute of documentation dropped by 8.5% in Q2 2022 when compared to Q1 2022.”
Despite the strong top-line growth, the company continues to lose money. VIQ’s half-year net losses totaled USD 5.2m, albeit an improvement versus the comparable period in 2021, which came in at USD –12.2m. Adjusted EBITDA was USD –1.7m compared to a near-zero adjusted EBITDA for the first half of 2021.
Half-year total revenues came in at USD 23.9m, compared to USD 16.4m for the same period in 2021. Edwards said the company expects to meet its full-year 2022 revenue and gross margin goals: generating revenues of at least USD 50m and an anticipated gross margin of 47–55%.
Investors were unimpressed, sending the company’s shares down after the announcement by nearly 20% at press time. Year-to-date, the stock has shed 60% and is now down nearly 90% since peaking in May 2021. The company’s market cap currently stands at USD 27m, making it a potential target for ever-acquisitive rival Verbit.
Founded in 2004, VIQ has established a presence in three continents. Its offerings have grown to seven products that combine voice and video-capture technology via an artificial intelligence framework. The company serves legal, insurance, government, finance, and media clients.