Tenet Fintech Group (PKK) Q1 2024 earnings summary

Executive summary

• Q1 2024 revenue was $765,635, a significant decline from $9,493,804 in Q1 2023 due to a shift in the China revenue model and regulatory changes, with recovery now anticipated in Q3 or Q4 2024 as a new data-driven revenue stream is introduced.

• Adjusted EBITDA was ($3.10 million) and net loss was ($5.41 million) for the quarter.

• Operations in China were impacted by new regulations phasing out virtual bank accounts, leading to platform adaptations and temporary disruption.

• The ongoing transition to a data revenue model is expected to yield higher profit margins than the previous transaction fee model, aiming to improve earnings per share and long-term shareholder value.

• Development of new Networking and Advertising modules continued in Canada; a new data science subsidiary was established in China.

Financial highlights

• Revenue for Q1 2024: $765,635.

• Adjusted EBITDA: ($3,100,250).

• Net loss: ($5,414,117).

• Revenue dropped sharply year-over-year due to business model transition and regulatory changes in China.

Outlook and guidance

• Recovery in China is expected to be gradual, with significant improvement anticipated in the third or fourth quarter of 2024 as new data products are launched.

• Regular activity on Chinese platforms expected to resume in Q2 2024 after adapting to new regulations.

• Canadian launch of ie-Pulse product planned for Q3 2024, with subsequent commercialization in China.

• Expansion of the Business Hub to the U.S. is targeted by the end of 2024, with expectations of generating U.S. revenue before year-end.

• The company aims to become a global network with active members and revenue streams in Canada, the U.S., and China by year-end.