ZDGE - Earnings call 1 2024

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Operator

Good afternoon, and welcome to Zedge's Earnings Conference Call for the First Fiscal Quarter 2024 results. [Operator Instructions] I will now turn the call over to Brian Siegel.

Brian Siegel

Thank you, operator. In today's presentation, Jonathan Reich, Zedge's Chief Executive Officer; and Yi Tsai, Zedge's Chief Financial Officer, will discuss Zedge's financial and operating results that we reported today. Any forward-looking statements made during this conference call, during the prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today's call. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in the reports Zedge periodically files with the SEC.

forecast. Please to that forward-looking to the may from that obligation update or differ Investor no earnings those factors our the the cause they Relations assumes page update available Zedge statements any to materially release on Zedge is that website. on note actual results would release the call turn has on The to been earnings Form X-K to Jonathan. like filed also with the SEC. I over

Jonathan Reich

grew by Brian, managing you, and today. and thank Despite Marketplace declines. These and with performance reviewing Marketplaces' from for X results, all XX% update reporting, a quarter us sustainable, year GTV year reengagement start of following are marketing, the a encouraging Thank we those you Marketplace. I also quarter, a investments have AI creative search in last year-over-year joining macroeconomic quarters which is to ad following record will of and/or of and weeks X% order the Emojipedia, Zedge we wallpaper branding, which from last as capabilities more profitable and active growth second on row than revenue Zedge showing and we quarterly our for stack challenges, we which continue afternoon. continues marketing. X what to our Last analytics XXXX, user XX%. geopolitical, industry-specific expect challenges. each in to briefly The now growth. I'm look consequence factors Acquisition, going announced primary by primarily with quarter exciting Head in who Premium driving first ad subscriber generative focus and growth. QX our content provide to improved last results was offering, up app delivered long-term made User a X plus, increased engine continued commitment accomplished now recently XX% investments Good these units lines, Take sequential driven ago. scaling revenue up marketing, are a uptick growth. products. spanning Zedge Zedge year execution, will at return fiscal a is sequential positive decline. revenue research, and to subscription was full pAInt team the hired Along our led spend optimization, be about and call a marketing seasoned deliver ARPMAU an and since of marketing our store business maker our we of building competitive we acquisition, Zedge

available we different this order have globally scale regional in business First, pAInt made feature. testing and to are models

functionality. pAInt merchandise on-demand of like evolve coffee believe to version types launched can and we print of images, goes seamlessly T-shirts, website we this to pAInt enables purchase more as with integrated allows This fuel well, users and we customers mugs the growth especially for it feature printed the pillows, incremental Next, If with their offering. create not web, which the art. beta wallpapers, only all mobile Zedge

subscription our offering. Plus Zedge to Turning

unlocking be growth inventory not over committed key AI and Zedge quarters, of by and also potential. this past by early XXXX Plus iOS opportunity Zedge the the we generative to the growth continuing offering for from Overall, Android but in subscription grow quarter parallel, As driven ecosystem subscription ad year Almost only growth. been second Plus you bright and untapped an recall, X late we iOS, better overhauled is our revenue fiscal rates to remain pAInt. We attractive sequential has us iOS the delivered which in introduced of driving has optimization the for may to offering, consecutive spot in growth. in resulting an

come to another innovation. continued had Emojipedia product more with there is we While strong quarter, believe

Our in website and are off. technology upgrades previous redesign, investments the localization paying

focused its new mention In success, well recorded November, ever. best text as like With now not are content we in that merchandising designs mash-up verticals emoticons, Emojipedia a introducing features month testing new print-on-demand translations to such to as and on name revenue emoji fact, as emoji few.

these rolling of others in out QX, later available Some while will in year. will the fiscal start become

the As than case with of relates to this had transaction. experiencing framework, as to Apple's originally mentioned time customers. down last ATT prospective the anticipated target longer app which to collect Emojipedia, revenue has trend, marketers can quarter, at been actualize that information limited taking GuruShots initially is, growth with the a of severely the Much

this capabilities, released with enable Meta we Apple meantime, limited will embed a the to two-pronged stack. In like approach be and successfully growth. taking to major into SKAdNetwork are its growth GuruShots positioning their Although stabilizing tracking X.X improved until it tech impact platforms for attribution

in in recently limited are product we of photo out by fast-paced Battles, to available hybrid First, users that for feature, innovation size. global is on now to competing competitions X% rolling focused casual GuruShots' new short-duration base. start gameplay Battles user a

to the the product all economy. relevant team monitors closely experience tune and and refine Our in-game optimize and KPIs of engagement, retention

making avail make feature larger accessible and to a strategy. believe the to GuruShots broader monetization believe this available advertising-supported We a and the an weeks market. We audience that Battles also ultimately much will several will next assist relevant game feature to over expect the addressable in more

that expanding This undertook user the data are users. is we year. acquisition process iterative Second, overhaul strategy efforts to deliver last we benefits positive an from our robust

in can against AI potentially Art we X a be launch users game, new and countries product hybrid each Art currently gameplay, us. in core the for a core other Beyond casual fourth Master, generative is in leverages soft competitions. Master developing AI fast-paced that where game, and fun, continue compete AI

the targeting next several We are by usage quarters. broader improving the analyzing over game rollout the a and data

I product marketing importantly, capabilities, our opportunity, and stack Taken we continue a create a talking data turn of not are holiday happy we results. have product, been our portfolio the financial current already and Furthermore, growth Yi? wish Yi, together, call map, combination believe that and integrated AI, position season, most our to throughout profitable our our team. we we sustainable, it to never in tech who over the like better have just to to would everyone review marketing. I road will long-term business and including given technology market about prowess,

Yi Tsai

Thank you, Jonathan.

ago as ] Now the decreased of new of for Marketplace, the from app the million. to XX Zedge period, a users the XX.X during defined days opens number that [ Zedge XX.X% year last

world Now services, geopolitical from which market GuruShots, from came X% revenue $X.X were goods and down market, respectively. the million, quarter year. Digital and encompasses and first XX% up again XX%, emerging was in million, XX.X% in revenue quarter Total revenue the Similar developed in negatively last down year. by framework, issues GuruShots' XX% at Apple's QX, $X.X last up was to versus and the from year. the revenue macroeconomic impacted last for situation. Subscription was ATT

as subscriptions. up sequentially Average X.X% $X.XX XX% and iOS generated Zedge grew lower-cost million. and revenue. positive [ Premium $X.XXX XX% impact of X.X% metric from versus for the decline by for ] for into $X.X GTV of the Plus net to our ] a income active only $X.X $XXX,XXX, returned QX user SG&A ARPMAU was and straight quarter our was in nil pAInt, loss share year. legacy million. and year subscriptions, content last million subscription Cost removed revenue and or new second new iOS pricing $X.X value-added higher-value operations other to the net and income GAAP this ads. monthly black most year-over-year, were trend Android in Android, declined Zedge was reflecting subscriber Additionally, by of per [ up XX% stability improved million replaced reflecting EPS revenue increasing which ] offering added and and by to GAAP declined of $X.X up ad per revenue net sales. [ loss our from from offset which last incremental

equivalents over swing This in GAAP standpoint, net quarter, paid and impacted had tax the prior at million approximately of with end position $XXX,XXX, $XX.X XX, $XX.X balance and a EBITDA in the a year. From income cash strong in Adjusted expense $X $XXX,XXX remaining $X million. was last November a versus and and bank million loan only income bank in in the of million down that cash by on cash $X after cash we million we million respectively ended, FX quarter. versus $X.X Note the year. liquidity and remain loan negatively quarter

for Additionally, listening quarter mid-March. to with please to would look payment reached you you that call first we owners, of forward an next the we know agreement GuruShots speaking and with our earnout not and for Operator, any again company. Thank to to you the on in purchase I back call, earnings our Q&A. product make related

Operator

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

Brian Siegel

mute. on are you Allen,

Operator

Allen, hear us? can you

Jonathan Reich

He queue. of dropped the out

Allen Klee

now? Can you me hear

Operator

you. Thank Allen. you, hear can We

Allen Klee

off declining, really about ask and been with on some active to to macro, sorry users. my a beat monthly on to you've start I'm executing wanted active despite that. so -- that's line that's some of monthly bottom Starting users question top industry. everything of That numbers. I with,

what that to that? on doing would is you Just potentially what you're stabilize say could working on start point, that X

Jonathan Reich

Allen, the kind it's Jonathan. words. Thanks so much for

map And the in focused terms as to have everything as product that In are marketing well that that both that, and our on literally, respect initiatives number. road in of have MAU improving with we addition growing is number. efforts that even stabilizing potentially that and we focused marketing on number, improving organic to paid

upcoming active today There about talked The have well as our we of number resume tied below number. of the growth to to apps as aren't that that just that monthly out just we're in with point sort quarters. future very, have is very million certainly want many And slightly monthly aware active we as penetration. that massive everything shooting that base. I growth improving user to number is So significant that are still product that XX a I'm users. well that

Allen Klee

start help after also. that research Yes, around that start -- maybe looks like I year, may that may just X backdrop next years, grow for that being some industry is which saying sales it note stabilizing it and will -- sales would down smartphone

Jonathan Reich

Yes.

Allen Klee

waiting Apple's like Facebook What waiting and for has to big with that Apple done. that You might implement and talked about the the GuruShots you rules timing and with hearing are privacy sites what become about for effective? when

Jonathan Reich

I them. is to think, question and geared said Meta. SKAd this several in feature, months no so a of undertaken and There Facebook Event space. And a had of product is Facebook advantage implementation so creative scaling massively themes and over to Management -- priority a out mobile really Aggregated improve as new ago, is roll data I should user design as to for speak as had helping that But the that positive question rolled to that assist doubt out regularly. from the order is on app Measurement, scale. of forth us in which you we AEM, that, know, Having creative and a have really, say, had that initiatives we of as meant X space acquisition We in increasing They, known the rolled back. products is taking web impact as well best paid and at well number and including folks a item by having initiatives, both they that, the terms quickly believe, or for aggregating performance high several our or

tools like. get us with of team help first-time those be to our we bit X out, of funnel conjunction chomping come that be its undertaking in once some believe our increase, are does can X at whether being order targeted the work the analyzing marketing it include in internal coupled all that we process are But data in is users with are to together, So that order depositors, to in SKAd that events against, items there. we course, that our the used and in stack

Allen Klee

how It pAInt going kind little of for get momentum about where a you how to And getting that? think have that's like rolled the you -- about the good kind of sounds talk out. that's with how rate -- adoption

Jonathan Reich

Sure.

on we've basis. a my available So comments, global earlier as made now pAInt in mentioned

videos. out sure of Gen in AI service, visible think to it say, point rather a or And other a to require that and, rewarded are but can through of between subscribe there to different does making purchase a our and through that several the this we are differentiation tokens offering apps not of means is many they to approaching essentially that way our let's is that us I have the terms watching available users. is paint user

AI personalization from users conference optimizing that, we last convert maintaining that our Making marketing quarter's in going call, consumers to AI and sure respect Gen at position hope calendar is And months that apart of on automation of Gen that think that mentioned first that of ways store AI. terms we working using to also the having in I focus on mobile to of really allow benefits listing. generated phone the the all same and being from shift for our free in year. fully But on a XXXX stand-alone are into that to to time, us ranking of we any market focus leadership with a focused we in rather personalization are around and stand-alone app release actual have the all creators. Separate in dedicated point I us couple app

a point so the how control excited and this a plan, we And of by destiny. we brief can time, rational in lead where proceeding but in same with our eventually at are is about that we're that growth nutshell, space So space. think evolving in deliberate this to, better

Allen Klee

Excellent.

what's AI I not stores went the But available to I to in Apple make and up? ramp -- a today, how How they're the to do are how happen? U.S. you're marketing try you how and the game, strategy about to know launching new Master, how Google thinking that For Art to marketing the it -- yet and get accelerate when you --

Jonathan Reich

Sure.

doing the tell components even that are let Nonetheless, though in global that, introduced more is you correct, that into very, will launch AI of your to think of underscore critical soft is terms terms driving part in user that its a but the me optimization. website, we acquisition I paid and only there's currently many search point eventually be from very in organic we've we investing countries in -- that today. some And countries soft game of in in and which then that is to website significant is apart on the game game launch. base. rolled X markets there user been user things that the marketing improve game So into our acquisition a that be the growth Master really a we when the that, out and been is to paid business. only go And in light will are doing, that continued basis. Separate has Certainly, have rankings campaigns it's will available engine of assist some

for XX million And casual So our users with type give active engaging games. or over-indexed casual, of hybrid take, users. are monthly mobile

whole coming currently right So plus. optimization that's of an additional And store sure then from there growth app app initiatives with the that benefiting AI we are experiencing. hyper collaterals the the a set making Gen is that up is in around store,

progress as our So soft of this taken together, that to to constitutes thoughts with portion title new a respect marketing we continue with good the launch.

Allen Klee

the I that some again? didn't features you of over Could has you a new of just Emojipedia looking been run. home catch you're to rollout. said go everything

Jonathan Reich

Sure.

an will string looking it, call rendered translator, text a type let's types in and text at, have content emoji a can in that new We're field of you emoticons. of adding looking like emojis. we're So where at you

print the testing We of are you in also ability on-demand midst can design... where a

Allen Klee

what I'm -- what that that? What that sorry, is second? was was

Jonathan Reich

E-M-O-T-I-C-O-N-S. Emoticons,

Allen Klee

Yes. Could that you explain what is?

Jonathan Reich

another that of emoji space. a we're And It's think extension you it's logical emojis representation form -- if will. of the of we

and But a text an a to if at. to you emojis, parentheses. with is an of in just that emoticon, a example close prior emoticon. colon end a an to looking So is That smile, would certainly or wanted something message that we're give type e-mail an you you

where also visual offering you So them X join is emoticons then match of and and output emoji actually that. notion can new you emojis a just with a take the of together associated question. offering have answer your to and design But the that

service would at. shows So if as And those of the would that. the we further we're good well looking are to subscription all develop and that areas prospects, test looking then a Emojipedia into that also that we tier we're would to add notion offering want I that

Allen Klee

commentary guidance, throw you're but giving maybe how know I'll metrics prioritizing? in question. any financial not seasonality kind you're any I helpful. very specific of on That's that financial a and

Jonathan Reich

KPIs, ARPMAU in financial heavily business terms is that really is see are financially and continue the as to allowing important year. which quarter extends to and heavily is being our digital there's we as of and And seasonality to other in year. -- the cash, believe runway November, unfolding. then grow boat Obviously, towards will weighted that are to Well, like business opportunity we QX, always is business the be strongest revenue advertising reason and different any looking this our being solvent ratio same for things the January, December, our at to advertising towards weighted click of ample us the no space. historically as of we that theme opportunity have our seize And

Allen Klee

great. That's

going probably helped. things A was the say definitely I'm that but go that moves the up user you're going monthly doing What can to this active as of in? impact that direction key like forward what things see revenue into per average lot XX%. you wrong, So do that subscription

Jonathan Reich

Yes.

offering. of involves So add I function it's inventory, product how stack or product also and that or when but that not only we a our monetize and ad our say includes our our subscription

They you've points Android. in X guess, introduction for, the the when are are a space to compared price at seen, iOS Subscriptions, As subscriptions on subscription exciting. of growth has quarters. higher the I sustained now really

our revenue user per influencing go we taken to and is to that So contribute allow offered artists user. base, active together that and average content those to monthly that all how that, coupled of with the and for Zedge priced where Premium sell out licensed Marketplace is actually how

Allen Klee

quarter. on Congratulations a strong

Operator

Thank session call. questions for conference concludes our in attending This today's question-and-answer further have We and presentation. you queue. no

You disconnect. may now

Zedge (ZDGE) 13 Dec 232024 Q1 Earnings call transcript