- Earnings call transcript Q4 2022

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Operator

Good day. And welcome to Zedge's Earnings Conference Call for the Fourth Quarter and Full Year Fiscal 2022 Results.

During management's prepared remarks, all participants will be in listen-only mode [Operator Instructions]. I will now turn the call over to Brian Siegel.

Brian Siegel

Thank you, Operator. quarter Reich, Financial Executive financial Officer, results the Jonathan Tsai, and and presentation, ended for Chief year Zedge's will fourth today's Zedge's XX, Officer; Chief Yi operational on In July full XXXX. and discuss Zedge's made subject statements call conference from uncertainties actual may to in risks this remarks or specific results during whether cause future materially question-and-answer and those session, during today's general prepared to in in or call. forward-looking Any the the on nature, differ the are discussed that These limited risks Zedge uncertainties the are and files uncertainties include, that to, disclosed but not reports SEC. and specific risks the periodically with in differ obligation factors that they materially to to no forward-looking any forecast. update assumes that statements the the cause or to from Zedge may those update results actual release note available site. our Please Investor the of Relations Zedge on earnings is Web that page the been release SEC. has earnings with X-K The the also on filed Form over Jonathan. to to the I over now would turn like conference Jonathan?

Jonathan Reich

Good going revenue year-over-year all morning. up quarter XXXX Thank you, XX% the by us results. were advertising. our Both and quarterly primary Revenue both primarily start Ex-GuruShots and and growth. Emojipedia briefly to driven today. of drivers fourth fiscal GuruShots increased sequential you Emojipedia, reviewing joining by for respectively. by XX%, and Brian. and And thank XX%, I'm was

provide consolidated be fully As to a another in for App, GTV, total the increased per remained is for Zedge profitable months. XX% positive by I mentioned more accounting Zedge don't of XXXX. in and grew so, increased year a MAU so transaction XX% section. his last or XX% XX% gains. end earlier to value, note, on active user, the during than XX that financial year, year. once calls, average profitable we fourth one-time will for the XXXX you the finishing XX the details exclude are and well App at expect in quarter Zedge quarter, emerging Premium million. and the less Zedge across although, the gross investing installs in markets, fourth and in Yi the it Even scaling from XX revenue basis, ARPMAU, GuruShots declined for On monthly developed

share will priorities update strategic moving I forward. on Now our an

game products are today digital video million Zedge's the freemium leading sounds. Our ringtones GuruShots In offers XX photography total, served marketplace, products and and phone which our content users notification wallpapers, wallpapers, over July. in mobile

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We dollars specifically re-engagement have committed user acquisition meaningful to paid marketing, campaigns. and also

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are We order is many a in on function depends our good and marketing in of profitable domain capabilities to deliver to customers this Good GuruShots. developing ingredients Zedge's data. and companywide marketplace

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phase the million players We month sales photos not from of one and platform. to later on this Zedge month upload evolve within Every but this expect there, also only around GuruShots the App crossover web. a to introduce from the eventually offering

about to or be of monetization we money the will a our expertise, gamification we about when From a to create this are the the months, be with able are next their creates who to acquire rolled content allows process we perspective, members various us three apply learnings App GuruShots’ accelerate synergy out as want weeks. We making six App. In major and Zedge that either acquisition. GuruShots, started transformative from introduced initiatives GuruShots that about we we GuruShots, to as they these a we we Talking opportunity identified expect developments for have for cross-pollination make on are team SG&A loaning to underway. product being Zedge initiatives promising running delivering several to company are to several both synergies, continue control of the that have players, better just Starting This the excited that also in this to midst gameplay. in profitably.

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the the and with months, had breakthrough converting paying users we recently into onboarding revamped Over respect to players. several past process a

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specifically we Easy Premium and Made earlier, enhancing continue mentioned NFTs Zedge As platform. the

to the the use add trading, we artists. including of up and opening offering, to platform drop more dates, will a features, as As types the we evolve crypto content payment type and ability

done. we as distribute Additionally, content Micha recognized have their our in more and Klein to already Banksy artists well expect marketplace,

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areas: app Going optimizing products we two offering, focus expanding version. mobile the native a forward, the with on ad stack potentially will and

of the are evaluating today. on in GuruShots will for more projections, Ukraine, Stay businesses, addition of experiencing the acquisition our is information from new viability content tuned global Russia’s growth like Finally, we’ve down quarters. due to energy many discussed and in shortages, road resulting we The expect in given rising the our especially this the invasion risk, products and upcoming business Furthermore, to financial ones alter we interest digital geopolitical uncertainty, inflation economic rates. the pressure make. to investments

we cautious fiscal are said, As profitable. such, still consolidated a outlook. with growth in while remaining we expect revenue basis, That on our remaining XXXX

commitment their to opportunity continued would in democratic our investors thank like GuruShots hardwork, your employees to going want country to the celebrate and are I to for gives Thanksgiving. acquisition. a for. this Living much thankful us thank to also our we in for week, be free of Next especially I light and use support.

Finally, are to relationship how to I’d to value of GuruShots. time. highly think increase great and We’ve over shareholder to like underscore excited at work we the together our had we a start colleagues our

Now, I call like will turn Yi? results. review our financial the would to to Yi, over who

Yi Tsai

to that July on those QX Thank was our first results. note want a Please you, quarter remind Jonathan. which call that recorded year XXst. we fiscal GuruShots' ended in I our full of the

growth Russian the quarter user XX in and the by last from to MAU, X% hard in XXXX. emerging restrained number this million fourth its period, played the Europe, our of XX significant impact revenue down crisis, MAU a environment was days economic to economic metric, in role XX% number the App especially to in contributes full led increase decline. hit more markets, Zedge in users nearly Moving and but was opened as million, Total $X.X year, which quarter's developed and unique invasion QX a of both energy showed X%. weaker as growth. XX% was that overall defined and revenue the quarter market last for to our well results. decreased

by Europe. nearly to quarter, today million the mainly financial, This reduced subscribers our quarter. business, of as revenue X% Emojipedia added primary of the GuruShots from are see situation release $X.X gaming year. line include the was down in impact we Similar starting to Subscription as revenue in parts GuruShots' other Other revenue this revenue, Emojipedia makes we impacted from press numbers. item Premium, negatively the totaling of in addition our was Zedge up and active which which increased a purchase in-app

last GTV, continued that Premium off churn. $X.XXX, a gross total better year, excluding to higher mainly rate an driven to sales our year, GuruShots. This attractive advertising Overall, versus and performance marketplace, increased or transaction Premium's increased to by down Premium. Zedge XX% growth increased offset one [$XXX,XXX], not Zedge base. the from subscriptions new XX% However, reflecting through revenue transacted ASP. acquisition value operating average smaller revenue Active of show the ARPMAU was sale were per items, did X% or as is Zedge subscriptions sales and user, by due monthly year-over-year, active time increase of XXX% volume expenses,

However, in based $X classified item we on revalue This assumption. as the operating in expenses statement the noncash income gross did have full a million was one-time on quarter, contract the contingent GuruShots fair value or earnout consideration. to a change the updated

contraXt expense versus this operating Provision this $XXX,XXX XX.X% benefit by $XX,XXX of was margin decreased versus income have XX.X% leading other an expense, taxes Excluding last income year. last would of for quarter year. from to tax XX%, a income

deferred above. to lower Reported rate X.X% last million to this $X.X discussed million XXXX, the fiscal against due Our $XX.X EBITDA of last due Diluted million $X.X a the release year, rate million. effective effective primarily versus income $X.X negative the last year. versus $X.XX, than rate, income one-time $X.XX the $X was year assets. tax year. QX statutory million however, EPS tax benefit excluding just diluted Adjusted count for primarily allowance The one-time tax have would valuation was was been diluted $X EPS X.X% was share was much mentioned, benefit

in the that term EBITDA felt calculation. up net standpoint, adjusted one-time excluded million was loan a a risk in made line We XX% XX% note, put and late versus move year. a Our On decision benefit the position liquidity equivalents. of management of $X we was from this adjusted environment. this our $XX strong stock and and in EBITDA expense remain $XX with an year a Note in given we economic cash $XXX,XXX loan cash October, over made credit. cash to revolving last prudent we comp place From in facility, a uncertain million that margin million

in of drew this accelerate especially facility several flexibility our This the enhance contributed over business light a $X performance size. will growth when that at down the to part this a view landscape. the balance will We as to our of As move loan our ability term the of our positive, the of facility million financial future with to give and believe agreement, fiscal closing. cash We we combined additional challenging appropriate. us secure strong prospects, last years,

share program repurchase the during quarter. also a We announced fourth

to November quarter again for of Q&A. Thank for to call. we repurchased XX, As back and you XXXX, shares. next XXX,XXX look on call, earnings you listening with you to forward fourth the I speaking Operator, our

Operator

The Klee Instructions] comes question first Maxim Allen from [Operator from Group.

Allen Klee

was around hearing revenue stuff What me, average congrats That driver Could there? morning, out doing. that the you're and XX%? behind almost per on start active monthly was other that? Good all people with being up we we're what the surprising user, considering to from

Jonathan Reich

is almost about again, our stack. tech that which quarter-over-quarter, ad driver a perspective talked to optimizing The nonstop is we've behind what maniacal

I testing platforms, MoPub had of migrated process, as undergone March platform our deliver to since you we sort then have and recall, proving that other so can And when in, to And flow mediation of performance. entire across ultimately XXXX. we outperform. we guess, this the AppLovin continued we AppLovin improve had to we As that done was from

Allen Klee

users, basis. kind factors think you active about monthly you Is stabilize in or terms will there? about the how might think the that And way on when of can what of, a get of kind that sequential then do any you there

Jonathan Reich

recall around we areas. and paid of the app. our to two quarter-over-quarter. QX user turning correctly, believe that And where reengagement, the doing reengage engage basically is feature One can around you users profitable us efforts and other context for a then help we driving were terms are ultimately, were quarter, around corner, development that really the to if so on investing of in sequential in So with I And is will. is we if advantage flat QX basis, acquisition we both of taking and channels within

we new with and talk we that are clarity is that might know, impact are those had also out, ultimately, QX from aside some stage some social in is introduced that community had you we having. this and I be later earnings we then features, impact. early what think there's as new to when investment into the migration, coming the app the features resources greater expected about we AppLovin now invest have due between a positive we having seeing than features and to early indications as that to will able that to report But and

do We that the more to users have will enroll [MyZedge] to there funnel, work to a get and in lot be to potentially that also reversing a engage trend. in order of contributor but

Allen Klee

great so of GuruShots, talk for XX% process how a to you continue pictures increase it’s how the think converting and ability time the of And talked that the also payers? what about you you first Premium? might the sell to integrating of about the little about on Can

Jonathan Reich

game learning GuruShots a and curve users that fairly with they rather is there is steep sophisticated game. face start The engaging the when gameplay,

out. time. shortly we a mentioned, to a as be customer And a the base Battles Battles limited rolled provide feature to immediate called that around notion short is gameplay is have period So of new in to

have duration, in number by new capped competing. of comparison, well to hours curve XX competition to open a could that And in Battles win real type to order several ultimately And in be learning to terms experience. with prevail. in players, ultimately as a XX a players and it five steep needed have much what's players, are will they a way thousand minutes, will user, undertake So of is of universe order entire can say competition. a be be for typical the and as more of let's will the short that last fairly of photo that's will time contrast minutes, of be By Battles, you

the users of time let's we call it, will the So the onboarding fashion, in immediately in battle. notion if terms that and which improved game. having first we're core contribute it But Battles economy, particular instant for, it to a in more what game gratification, making number ultimately experience deep coupled with like strategy more a it flexibility turning and game And game. with believe, how something to buy gratification bringing a so forth. increase to into broader users accessible which provides funnel, is drive of and we instant apply resources to for which on gameplay more improving In Battles with real a not token we of resources is revenue which don't accessible order that notion be will where game the to the social those will is more allow the making the engage introduce type we're a it economy. based many a ways, help will of finally, drive growth lot and associated near accessible. of I say as making mentioned, and to users game the we iteration want and game believe so a a and social win has game purchases

to on your second question. Moving

player like the it done Zedge, of they ultimately version to approved, from they to the set we And pricing There's notion out privacy laborious. a on is GuruShots we content, where have have seamless these take conditions, get the But creates into and way, have active a well, benefit. within in of to it, a then one weeks. so on A different somehow opportunities If of open sell have monthly as Zedge to to by quality monetize, have XX to up will premium you they and next monetization happen ultimately Premium have The then and the and a for a And Zedge, their is in We rolled will it use one to GuruShots spend that and imagine. to million and X.X see say upload and high can the then were position is community it possibly nothing meant, to that would process game iteration expect that say, to X.X. creating your of of they Zedge's our they that a funnel account them earn set ultimately money couple the photographs terms GuruShots be would that let's begin could potentially to an where there we is to so the player forth, who of like in have GuruShots to to marketplace. notion lot as yes, want Version intent see, avail they hey, audience call content GuruShots pretty policy, to seamless player that agree to on it's would would users? then accordingly. be the more you ultimate autopilot funnel knows

Allen Klee

-- focus well, just happening been an just that in have or when and that available? because said on the of is a the some of when delayed doing. like added update the it's Could and then any process on, maybe that update NFTs you And items remind Premium, stack. how you what NFTs maybe personalization of profile already has -- been know you've be in little kind on update available that ad high you've And of an artists, fully where on and been if social tracking. me things, terms two I on should

Jonathan Reich

So one I'll second the first. with start

migration. to so allocate of social So and indicators, improvement key whether And the and that be on performance what engagement, user and was in so had it’d marketing yes, for seeing of features. monetization base although, funnel social actually is because I community we are resources forth. What out rolled on ginning community advantage that the we of -- our to an of taking has AppLovin pushed are delivery is we been efforts order a these to user we're to retention for in that users our of out there that all that those their bring months, in focus opting said couple base product we're those and which they've them, MyZedge, expected we seeing the initiatives into original out, been our features. And had complete more date some that call

In terms the to of, former respect question with NFTs.

industry and we all not the in week, way, winter, form, their deep of so announcement on FTX I at Zedge any and want as clear. So or state a shape forth. so is know, is last crypto had, to be very very, risk. in

a of say jumped crypto creators, a NFT of dollars, is dollars will. where hundreds that, is are and users. ownership of it's you price long have during is this for price technology sales, We a is And limited we not recalling which on benefit said about. easy that that's for capabilities, technology, seamless term typically to become commonplace, solution buys they And an NFTs wallet, artist's know pick what it perspective, average a double of a an how it's From need as provenance, a benefits soon in artist use this crypto content scale user how And they is to currency technology technology if just which They Made other need virtual be point, really own Having the tokens, user are an in and or seen in which they're our end to app our about for is existed purchase, train done. philosophy a not the wallpaper, an minted those for dollar the the price crypto use crafted fiat that need our types bubble, it's tokens of but particular for something levels, have that token, decline to and thousands accordingly. hype wallpaper they digit the of then is eEasy. NFTs it to we not that tokens, technology, all piece belief NFT taken for not not perspective, Zedge always we've true is they content NFT. work. allows content. edition virtual end anything provider, don't that and in there's the switch And toggle allows provides they from simply order currency some want They those they're to that's our to goes be make don't that buy and have we used end uses crypto an video app an to then and portal, into to or non-fungible to

are not NFTs a that would we crypto because the chances that because just are has name So growing as of fact to winter. like bad the fast gotten we in as marketplace of

of. However, for something the And to long so take of advantage ultimately is notion have some offer tokenized that ownership can haul. continue member in to offered that to consumers, beneficial able the we're in offer this to functionality to content that the is artists they of which a a economy And is our being this of this our proof we creator and that of and are fashion. will being we

Allen Klee

My of question, in terms just your outlook. last

of? anything like seems think to about way there the of in Is lot way It is be to it reinvesting initiatives some to your revenues about think into going or… it modest year. the is of the new you growth provide that next profitability can you're that the businesses, a so for Just your

Jonathan Reich

So I'd say as follows.

so and gives to runway, continue we and forth. consolidated you basis. Our Profitability a it gives goal optionality profitably see on is run to so on that you company the to

that We an are reinvesting knowledge the to we they grow not have, Obviously, be in assets acquired yet are GuruShots profits going that to with in we profitable. our portfolio.

as a on here it that earlier, great potential has haul. some the bring the through as the synergies we're long as However, that we GuruShots also believe And standalone basis, said I table. well to can for of

that a ones assets that us. business a to we individual that for upon business, terms we have we portfolio. And two based have also that act And we're synergies open take in work a would piece pie effect we into two thing business those have, to are business halo take our opportunity of can in which make but units the units the most so or in has seize it, to to in and do we bigger we have the and able what that see this We proper which door building tap a that fashion the be an they synergies. of if not is were that up building available think to individually great much platforms, value,

to to So reality. one feeds going make off that we're pursue to and that continue of the a other

Operator

[Operator next [Raigaya]. is Investor. question is Instructions] the a Private from Sanjay And coming Sanjay

Unidentified Analyst

So to Last I a of seem be questions. had lot Shortz year, on the app. there focus two

does play I'm is trying as reconcile macroeconomic you So wanted And that spent out an that about and to $X position. cash and understanding are there second overall the then the the back to think the And I'm just those is about know it information the concern if question how think having forward? that time ask moving I given to being all hard and as, a forward? to money app, about far buying why is, about just plans And the what how million environment, shares? how for loan, going

Jonathan Reich

Shortz. start with me Let

resource and order It Shortz decision same continue business. invest XXXX, that while us And ourselves the two focusing these ringtone made of previously, Emojipedia said say, we spread we made point to and we still, saying, pointed investment will let's for do hold business. at And wallpaper GuruShots. the time, we scale want acquisitions remember take on our a acquired to two back now. thin. we fiscal and in too Shortz to to in don't well, in process acquisitions GuruShots, As We analysis in on the digest when and into

backburner not really is Shortz So and resources continuing meantime. product that in are to we investing evolve the for

synergistically. a to on We work lot on cut with vision have delivering in a respect we've basis both out of strategic Zedge the businesses, standalone for terms the of us and GuruShots and described that

that the required to In draw as as of in the of order credit a have business term million in breakthroughs growing the facility terms that having this, an market is that straightforward $X And secure powder facility. of think terms $XX so is, as a we it's And faced can certain buyback, undervalued, think that we, a in we total, in If terms facility, credit a of in extra event with. down use are we’re there's We overall we worth is the the as stock the million. benefit to in great keg in great credit condition that. described, the components. opportunity risk in There's organically. we areas the

raised $XX had offering. you may as an at recall, million So aftermarket we

I think was $XX for average price around share. our a that

shares with the to those your of our with hope time, of that answers think question. So appreciate the or the it some take that out is valuable I expectation stock that will over we hope market.

Operator

concludes call. that our attending you. Thank and question-and-answer Thank And conference session today's presentation. you for

disconnect. You may now

Zedge (ZDGE) 16 Nov 222022 Q4 Earnings call transcript