Quotemedia's Net Loss Widens to $1.72M Despite Revenue Growth

TL;DR

**QMCI is burning cash and its growing losses make it a risky bet, despite revenue gains.**

AI Summary

Quotemedia Inc. (QMCI) reported a net loss of $1,720,585 for the nine months ended September 30, 2025, a significant increase from the $720,290 net loss in the prior year period. Despite this, revenue grew to $14,908,122 for the nine months ended September 30, 2025, up from $14,050,991 in the same period of 2024, representing a 6.1% increase. Gross profit also increased to $6,890,000 from $6,762,336 year-over-year. However, operating expenses surged, with software development costs rising to $3,652,501 from $2,361,657, and general and administrative expenses decreasing to $2,250,648 from $2,611,279. The company's cash and cash equivalents decreased significantly to $281,143 as of September 30, 2025, from $585,319 at December 31, 2024. Total stockholders' deficit worsened to $(262,703) from $1,415,588 at December 31, 2024, indicating a deteriorating financial position.

Why It Matters

Quotemedia's widening net loss and declining cash position, despite revenue growth, signals potential operational inefficiencies and increased investment in software development. For investors, this indicates a higher-risk profile, as the company is burning through cash and its equity has turned into a deficit. Employees might face uncertainty if the financial health continues to deteriorate, while customers could see impacts on service quality or future product development if the company struggles to fund operations. Competitively, QMCI's increased software development spending suggests an effort to keep pace in the financial market data sector, but the lack of profitability raises questions about the return on these investments.

Risk Assessment

Risk Level: high — The company's net loss more than doubled to $1,720,585 for the nine months ended September 30, 2025, from $720,290 in the prior year. Cash and cash equivalents plummeted from $585,319 at December 31, 2024, to $281,143 at September 30, 2025, indicating significant cash burn. Furthermore, total stockholders' equity has turned into a deficit of $(262,703) from a positive $1,415,588, highlighting a deteriorating financial foundation.

Analyst Insight

Investors should exercise extreme caution and consider divesting QMCI shares due to the accelerating net losses, significant cash burn, and negative stockholders' equity. The company's inability to translate revenue growth into profitability, coupled with increased software development costs, suggests fundamental operational challenges that could lead to further financial distress.

Financial Highlights

revenue

$14.9M

total Assets

$6.23M

net Income

$(1.72M)

eps

$0.02

gross Margin

46.2%

cash Position

$281K

revenue Growth

+6.1%

Key Numbers

• $14.9M — Revenue (Increased from $14.05M in 2024 for the nine-month period, showing 6.1% growth.)
• $(1.72M) — Net Loss (Worsened significantly from $(0.72M) in 2024 for the nine-month period.)
• $281K — Cash and Cash Equivalents (Decreased from $585K at December 31, 2024, indicating substantial cash burn.)
• $(262K) — Total Stockholders' Deficit (Shifted from a positive $1.41M at December 31, 2024, reflecting a deteriorating financial position.)
• $3.65M — Software Development Expenses (Increased from $2.36M in 2024 for the nine-month period, a 54.6% rise.)
• $6.89M — Gross Profit (Increased from $6.76M in 2024 for the nine-month period, despite higher cost of revenue.)
• $0.02 — Basic Loss Per Share (Increased from $0.00 in 2024 for the nine-month period.)
• 90,477,798 — Shares Outstanding (Consistent as of November 3, 2025, and September 30, 2025.)

Key Players & Entities

• QUOTEMEDIA INC (company) — Registrant
• QuoteMedia, Ltd. (company) — Wholly owned subsidiary
• FASB (regulator) — Issued accounting standards
• $1,720,585 (dollar_amount) — Net loss for nine months ended September 30, 2025
• $720,290 (dollar_amount) — Net loss for nine months ended September 30, 2024
• $14,908,122 (dollar_amount) — Revenue for nine months ended September 30, 2025
• $14,050,991 (dollar_amount) — Revenue for nine months ended September 30, 2024
• $281,143 (dollar_amount) — Cash and cash equivalents as of September 30, 2025
• $585,319 (dollar_amount) — Cash and cash equivalents as of December 31, 2024
• $(262,703) (dollar_amount) — Total stockholders' deficit as of September 30, 2025

FAQ

Risk Factors

• Deteriorating Cash Position and Increased Net Loss [high — financial]: The company's cash and cash equivalents significantly decreased to $281,143 as of September 30, 2025, from $585,319 at December 31, 2024. Concurrently, the net loss for the nine months ended September 30, 2025, widened to $1,720,585 from $720,290 in the prior year period. This indicates a substantial cash burn and a worsening profitability trend.
• Worsening Stockholders' Deficit [high — financial]: Total stockholders' deficit increased to $(262,703) as of September 30, 2025, a significant deterioration from a positive $1,415,588 at December 31, 2024. This shift from equity to deficit highlights a weakening financial structure and potential solvency concerns.
• Surge in Software Development Expenses [medium — operational]: Software development costs increased by 54.6% to $3,652,501 for the nine months ended September 30, 2025, from $2,361,657 in the same period of 2024. While this may indicate investment in future growth, the substantial increase contributed to the overall operating loss.
• Increased Accounts Payable and Accrued Liabilities [medium — financial]: Accounts payable and accrued liabilities rose to $4,142,558 as of September 30, 2025, from $3,564,546 at December 31, 2024. This increase, coupled with the declining cash position, could strain short-term liquidity.
• Declining Capitalized Software Development Costs [low — financial]: Capitalized internal-use software development costs, net, decreased from $5,041,544 as of December 31, 2024, to $3,872,272 as of September 30, 2025. This reduction, alongside the increase in expensed software development costs, warrants further investigation into the company's capitalization policies and project status.

Industry Context

Quotemedia Inc. operates in the financial data and technology sector, providing real-time market data, news, and analytics. The industry is characterized by intense competition from established players and emerging fintech companies, requiring continuous investment in technology and data infrastructure to maintain a competitive edge. Trends include the increasing demand for AI-driven insights, personalized financial content, and seamless integration across various platforms.

Regulatory Implications

As a financial data provider, Quotemedia Inc. may be subject to regulations concerning data accuracy, privacy, and market manipulation. While this filing does not highlight specific new regulatory risks, maintaining compliance with data protection laws (e.g., GDPR, CCPA) and financial market regulations is crucial for its operations and reputation.

What Investors Should Do

1. Monitor cash burn and operating expenses closely.
2. Analyze the drivers of increased software development costs.
3. Evaluate the sustainability of revenue growth against rising costs.
4. Assess the implications of the worsening stockholders' deficit.

Key Dates

• 2025-09-30: Quarterly Financial Statement Date — Represents the period for which the condensed consolidated financial statements are reported, showing a significant increase in net loss and a decrease in cash.
• 2024-12-31: Prior Year End Financial Statement Date — Provides a comparison point for the current period's financial performance and position, highlighting the deterioration in cash and equity.

Glossary

Stockholders' Deficit

Occurs when a company's total liabilities exceed its total assets, resulting in a negative equity position. (QMCI's shift to a stockholders' deficit of $(262,703) from a positive balance indicates a significant deterioration in its financial health.)

Capitalized internal-use software development costs, net

Costs incurred in developing software for internal use that meet specific criteria for capitalization, amortized over their useful life. (A decrease in this balance from $5.04M to $3.87M, alongside an increase in expensed software development, suggests a change in project status or accounting treatment.)

Deferred revenue

Revenue that has been received by a company but not yet earned, typically for services or products to be delivered in the future. (QMCI has both current ($1.99M) and long-term ($160K) deferred revenue, indicating future revenue streams but also obligations to deliver.)

Accumulated deficit

The cumulative net losses of a company since its inception that have not been offset by net income. (QMCI's accumulated deficit stands at $(22.9M), underscoring its history of unprofitability.)

Year-Over-Year Comparison

Compared to the prior year period, Quotemedia Inc. has experienced a significant increase in its net loss, which more than doubled from $(720,290) to $(1,720,585) for the nine months ended September 30, 2025. While revenue saw a modest increase of 6.1% to $14,908,122, this growth was outpaced by a substantial rise in operating expenses, particularly software development costs, which surged by 54.6%. This has led to a wider operating loss and a deteriorating financial position, evidenced by a sharp decline in cash and cash equivalents and a shift from a positive stockholders' equity to a deficit.

Filing Documents

• qmci_10q.htm (10-Q) — 785KB
• qmci_ex311.htm (EX-31.1) — 10KB
• qmci_ex312.htm (EX-31.2) — 12KB
• qmci_ex321.htm (EX-32.1) — 4KB
• qmci_ex322.htm (EX-32.2) — 4KB
• 0001654954-25-013277.txt ( ) — 3507KB
• qmci-20250930.xsd (EX-101.SCH) — 31KB
• qmci-20250930_lab.xml (EX-101.LAB) — 191KB
• qmci-20250930_cal.xml (EX-101.CAL) — 35KB
• qmci-20250930_pre.xml (EX-101.PRE) — 155KB
• qmci-20250930_def.xml (EX-101.DEF) — 65KB
• qmci_10q_htm.xml (XML) — 547KB

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 4.

Controls and Procedures

Controls and Procedures 22 Part II. Other Information Item 6. Exhibits 23

Signatures

Signatures 24 2 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements QUOTEMEDIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 281,143 $ 585,319 Accounts receivable, net 1,116,484 1,016,915 Prepaid expenses 215,731 175,703 Other current assets 192,099 162,653 Total current assets 1,805,457 1,940,590 Deposits 17,843 16,619 Property and equipment, net 182,181 212,727 Capitalized internal-use software development costs, net 3,872,272 5,041,544 Goodwill 110,000 110,000 Intangible assets 43,591 51,378 Operating lease right-of-use assets (see note 5) 196,905 188,663 Total assets $ 6,228,249 $ 7,561,521 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current liabilities: Accounts payable and accrued liabilities $ 4,142,558 $ 3,564,546 Deferred revenue (see note 3) 1,992,355 1,704,743 Current portion of operating lease liabilities (see note 5) 75,876 147,663 Total current liabilities 6,210,789 5,416,952 Long-term liabilities: Long-term portion of deferred revenue (see note 3) 160,888 696,736 Long-term portion of operating lease liabilities (see note 5) 119,275 32,245 Total long-term liabilities 280,163 728,981 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 as of September 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 as of September 30, 2025 and December 31, 2024 90,479 90,479 Additional paid-in capital 19,571,425 19,529,131 Accumulated deficit ( 22,908,464 ) ( 21,187,879 ) Total stockholders' (deficit) equity ( 262,703 ) 1,415,588 Total liabilities and stockholders' (deficit) equity $ 6,228,249 $ 7,5

View Full Filing

View this 10-Q filing on SEC EDGAR