Plenty of companies are now announcing their second fiscal quarter results and many of those who have managed to perform well have seen their stocks rally strongly. That being said, many other stocks have actually fallen despite the performances not being too shabby. That is what happened with the Ideanomics Inc (NASDAQ:IDEX) this week after the company posted its second fiscal quarter financial results.
In its second quarter, Ideanomics managed to post the biggest ever revenues from its mobile energy group since it started working in the electric vehicle sector. That being said, it could not stop the stock from tanking by as much as 23% following the earnings announcement. However, it would perhaps not be a bad idea if investors took a closer look at the company’s business and figure out for themselves if the stock is worth backing.
For the three month period ending on June 30, Ideanomics managed to post revenues of as much as $4.7 million. The company claimed that the revenues were primarily powered by the growth in its Sales to Financing to Charging (S2F2C) business model meant for the electric vehicle space.
The Chief Executive Officer of Ideanomics, Alf Poor stated that the management is happy with regards to the growth that has been generated in the energy vehicle industry. He went on to add that as the electric vehicle industry continues to grow, the company’s S2F2C model is going to be vital for fleet operators to add more value to their businesses. While the growth in this particular business was strong, it is also necessary to have a look at the headline figures.
The gross profits for the period came in at $255000 and in addition to that, the gross margin in the second quarter was 4.9%. On the other hand, Ideanomics’ operating expenses in the quarter stood at $16.5 million and that was significantly higher than that $8 million it had chalked up in expenses in the prior-year period.
That being said, it is necessary to keep in mind that in Q2 2020, the company had to take into account a onetime impairment charge to the tune of $6.2 million. The impairment charge in question was related to the termination of the office lease in New York.
However, Ideanomics made an operating loss of as much as $16.3 million in the quarter, and more importantly, it was significantly more than the operating loss of $5.7 million in the prior-year period. On the other hand, the company reported a cash balance of as much as $36 million at the end of the quarter and also managed to cut its debt by an impressive 50%. The going concern qualification has also been removed from the financial statements.
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