QuoteMedia's Net Loss Widens 384% Despite Revenue Growth

TL;DR

**QMCI is burning cash and losing money fast, despite revenue growth, making it a risky bet until they show a path to profitability.**

AI Summary

QuoteMedia Inc. (QMCI) reported a significant increase in net loss for the six months ended June 30, 2025, reaching $1,353,393, a substantial rise from $279,349 in the same period of 2024. This 384% increase in net loss occurred despite a 4.26% revenue growth, with total revenue climbing to $9,753,567 from $9,355,146 year-over-year. The primary driver of the increased loss was a 42.87% surge in software development expenses, which hit $2,312,276 compared to $1,590,396 in the prior year. Operating loss also widened considerably to $1,166,802 from $312,231. Cash and cash equivalents decreased by $171,175 to $414,144 from $585,319 at the beginning of the period. The company's total assets declined to $6,660,924 from $7,561,521, while total liabilities increased to $6,556,435 from $6,145,933. Strategic outlook includes managing macroeconomic conditions like inflation and higher interest rates, which could impact demand for its financial market data services.

Why It Matters

QuoteMedia's substantial increase in net loss, despite revenue growth, signals potential operational inefficiencies or aggressive investment in software development that has yet to yield returns. For investors, this raises concerns about profitability and cash burn, especially with cash and equivalents declining. Employees might face pressure if losses continue to mount, while customers could see benefits from enhanced software, but the company's financial health could impact long-term service stability. In a competitive market for financial data, QMCI's ability to convert development spend into market share and profit is critical, and this filing suggests they are currently lagging competitors in financial performance.

Risk Assessment

Risk Level: high — The company's net loss increased by 384% to $1,353,393 for the six months ended June 30, 2025, compared to $279,349 in the prior year. This significant deterioration in profitability, coupled with a decrease in cash and cash equivalents to $414,144 from $585,319, indicates a high risk of liquidity issues and continued unprofitability.

Analyst Insight

Investors should exercise extreme caution and consider divesting or avoiding QMCI shares. The significant increase in net loss and declining cash position suggest fundamental operational challenges that outweigh the modest revenue growth. Wait for clear evidence of improved profitability and cash flow before considering any investment.

Financial Highlights

revenue

$9,753,567

total Assets

$6,660,924

net Income

-$1,353,393

gross Margin

45.03%

cash Position

$414,144

revenue Growth

+4.26%

Key Numbers

• $1,353,393 — Net Loss (6 months ended June 30, 2025) (Increased from $279,349 in 2024, a 384% increase)
• $9,753,567 — Total Revenue (6 months ended June 30, 2025) (Increased from $9,355,146 in 2024, a 4.26% increase)
• $2,312,276 — Software Development Expenses (6 months ended June 30, 2025) (Increased from $1,590,396 in 2024, a 42.87% increase)
• $414,144 — Cash and Cash Equivalents (June 30, 2025) (Decreased from $585,319 at December 31, 2024)
• $1,166,802 — Operating Loss (6 months ended June 30, 2025) (Increased from $312,231 in 2024)
• $6,660,924 — Total Assets (June 30, 2025) (Decreased from $7,561,521 at December 31, 2024)
• $6,217,633 — Total Current Liabilities (June 30, 2025) (Increased from $5,416,952 at December 31, 2024)
• $104,489 — Total Stockholders' Equity (June 30, 2025) (Decreased from $1,415,588 at December 31, 2024)
• $430,000 — Allowance for Doubtful Accounts (June 30, 2025) (Increased from $330,000 at December 31, 2024)
• 90,477,798 — Common Stock Shares Outstanding (May 6, 2025) (Consistent with June 30, 2025 and December 31, 2024)

Key Players & Entities

• QUOTEMEDIA INC (company) — registrant
• David M. Shworan (person) — CEO of Quotemedia Ltd. and control person of 410734 B.C. Ltd. and Bravenet Web Services, Inc.
• 410734 B.C. Ltd. (company) — landlord for office lease
• Bravenet Web Services, Inc. (company) — marketing service provider and lender
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Nevada (company) — State of Incorporation
• QuoteMedia, Ltd. (company) — wholly owned subsidiary

FAQ

Risk Factors

• Macroeconomic Headwinds Impacting Demand [medium — market]: The company faces risks from macroeconomic conditions such as inflation and higher interest rates. These factors could negatively impact the demand for QuoteMedia's financial market data services, potentially affecting revenue and profitability.
• Significant Increase in Software Development Costs [high — operational]: Software development expenses surged by 42.87% to $2,312,276 for the six months ended June 30, 2025, from $1,590,396 in the prior year. This substantial increase in investment, while potentially for future growth, is a major contributor to the widened operating loss.
• Deteriorating Profitability and Cash Position [high — financial]: The net loss for the six months ended June 30, 2025, increased by 384% to $1,353,393 from $279,349 in the prior year. Concurrently, cash and cash equivalents decreased by $171,175 to $414,144, indicating a strain on financial resources.
• Declining Asset Base and Increasing Liabilities [medium — financial]: Total assets decreased to $6,660,924 from $7,561,521, while total liabilities increased to $6,556,435 from $6,145,933. This shift indicates a weakening balance sheet with a reduced asset base and a growing debt burden.
• Erosion of Stockholders' Equity [high — financial]: Total stockholders' equity has significantly decreased from $1,415,588 at December 31, 2024, to $104,489 as of June 30, 2025. This sharp decline is primarily due to accumulated deficits and potentially other factors impacting equity valuation.

Industry Context

QuoteMedia operates in the financial market data services industry, providing real-time data and analytics to financial professionals. The sector is competitive, with established players and emerging technologies. Companies in this space often face pressure to invest heavily in technology and data infrastructure to maintain a competitive edge.

Regulatory Implications

As a provider of financial data, QuoteMedia may be subject to regulations concerning data accuracy, privacy, and market manipulation. Compliance with these regulations is crucial to maintain trust and avoid penalties. The company's financial reporting must adhere to SEC standards.

What Investors Should Do

1. Monitor software development spending and its impact on future revenue.
2. Evaluate the company's cash burn rate and liquidity.
3. Assess the impact of macroeconomic factors on customer demand.

Key Dates

• 2025-06-30: Quarterly Financial Reporting — Indicates a significant increase in net loss and operating expenses, alongside a decrease in cash and total assets.
• 2024-12-31: Previous Fiscal Year End — Represents the baseline for comparison of financial health and performance metrics for the current reporting period.

Glossary

Capitalized internal-use software development costs

Costs incurred in developing software that will be used internally by the company, which are capitalized rather than expensed immediately. (A significant asset on the balance sheet, its amortization and development costs impact operating expenses and net income.)

Accumulated deficit

The total net losses of a company since its inception, less any net income. It represents a negative retained earnings balance. (Indicates the company has historically incurred more expenses than revenues, impacting its overall equity.)

Deferred revenue

Revenue that has been received by the company but not yet earned, as the goods or services have not been fully provided. (Represents future revenue obligations and impacts cash flow and the timing of revenue recognition.)

Allowance for Doubtful Accounts

A contra-asset account that reduces the carrying value of accounts receivable to the amount expected to be collected. (An increase in this allowance suggests a higher perceived risk of uncollectible receivables, impacting net revenue.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, QuoteMedia Inc. reported a 4.26% increase in revenue to $9,753,567, up from $9,355,146 in the prior year. However, this revenue growth was overshadowed by a substantial 384% increase in net loss, reaching $1,353,393. This widening loss is primarily attributed to a 42.87% surge in software development expenses, which grew to $2,312,276. Consequently, operating losses also widened significantly, and the company's cash position and total assets declined, while liabilities increased.

Filing Documents

• qmci_10q.htm (10-Q) — 779KB
• qmci_ex311.htm (EX-31.1) — 11KB
• qmci_ex312.htm (EX-31.2) — 11KB
• qmci_ex321.htm (EX-32.1) — 4KB
• qmci_ex322.htm (EX-32.2) — 4KB
• 0001654954-25-009655.txt ( ) — 3316KB
• qmci-20250630.xsd (EX-101.SCH) — 30KB
• qmci-20250630_lab.xml (EX-101.LAB) — 182KB
• qmci-20250630_cal.xml (EX-101.CAL) — 34KB
• qmci-20250630_pre.xml (EX-101.PRE) — 149KB
• qmci-20250630_def.xml (EX-101.DEF) — 64KB
• qmci_10q_htm.xml (XML) — 485KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 4.

Controls and Procedures

Controls and Procedures 21 Part II. Other Information Item 6. Exhibits 22

Signatures

Signatures 23 2 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements QUOTEMEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 414,144 $ 585,319 Accounts receivable, net 1,077,558 1,016,915 Prepaid expenses 172,132 175,703 Other current assets 204,535 162,653 Total current assets 1,868,369 1,940,590 Deposits 17,192 16,619 Property and equipment, net 189,354 212,727 Capitalized internal-use software development costs, net 4,343,442 5,041,544 Goodwill 110,000 110,000 Intangible assets 46,187 51,378 Operating lease right-of-use assets (see note 5) 86,380 188,663 Total assets $ 6,660,924 $ 7,561,521 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 4,045,002 $ 3,564,546 Deferred revenue (see note 3) 2,087,471 1,704,743 Current portion of operating lease liabilities (see note 5) 85,160 147,663 Total current liabilities 6,217,633 5,416,952 Long-term liabilities: Long-term portion of deferred revenue (see note 3) 338,802 696,736 Long-term portion of operating lease liabilities (see note 5) - 32,245 Total long-term liabilities 338,802 728,981 Stockholders' equity: Preferred stock, 10,000,000 shares authorized: Series A Redeemable Convertible Preferred stock, $ 0.001 par value, 550,000 shares designated; shares issued and outstanding: 123,685 at June 30, 2025 and December 31, 2024 (see note 6) 2,983,857 2,983,857 Common stock, $ 0.001 par value, 150,000,000 shares authorized, shares issued and outstanding: 90,477,798 at June 30, 2025 and December 31, 2024 90,479 90,479 Additional paid-in capital 19,571,425 19,529,131 Accumulated deficit ( 22,541,272 ) ( 21,187,879 ) Total stockholders' equity 104,489 1,415,588 Total liabilities and stockholders' equity $ 6,660,924 $ 7,561,521 The accompan

View Full Filing

View this 10-Q filing on SEC EDGAR