ZDGE - Earnings call transcript Q3 2024

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Operator

Good afternoon. Welcome to Zedge's Earnings Conference Call for the Third 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. include, disclosed not periodically in the uncertainties risks to, files and SEC. uncertainties and the risks but limited are specific with These reports Zedge update any no Relations to results page the website. earnings from forecast. Please Zedge statements to release assumes they materially that update on that that Zedge or cause the obligation differ to Investor note the those actual is factors may on forward-looking our available would like earnings X-K SEC. I The has with to over filed also turn Form on to Jonathan. release been call the the

Jonathan Reich

macroeconomic for Thank quarter. QX us positive you, remarks, my results, by revenue landscape. our for investments set the Brian, and subscription provide sustainable will the driver dive the in thank from Yi quarters. the last up into in year quarter of managing revenue last challenges jump geopolitical, XX% marketplace up Zedge performance was impact year you increased by briefly XX%, long-term deeper today. the up all gains joining industry-specific boosting fiscal first as growth. which net third show to marketplace from and the over Plus, we in start year of After I to subscriber ad revenue Zedge our XX% and a our continued will offering, X spanning 'XX with this reviewing including continued The Zedge

improvements to monthly monetization. ARPMAU or GTV per Premium's a XX% or record and gross transaction driven value content Zedge jumping $X.XXX. by XX%, factors Additionally, average user up resulted was These active revenue in to primarily

of fiscal fourth the Let's beginning XXXX. the priorities turn to for strategic and our quarter

and to achieved team for full our goals as on much build acquisition dedicated a creative We've core marketing As you stack resources that recall, focused one our unlocking has user are the this growth. goal SEO/ASO of team. now year of was

to to close to led introduced additions pAInt address organization and to January created our revenue and upgrades invited stand-alone cost million that we 'XX, AI. also growth and in expect made in efficiencies the that to innovation diversification, Furthermore, influencer driving wallpapers. in we've have XXXX beta generative app and XXXX, in we are product product the resulting in also Going since XX Gen marketing. into our select alone, development marketing product users profit fiscal of with WishCraft, pAInt expect while the invest years is propel and creation to AI which users. a currently We development come. Take

tees, their like. a Additionally, home we decor, print and AI on that introduced hoodies the print-on-demand creators art capability, enabling

of embedding After perform website promptly as the the redesign, to not which past issue an we we we the relating to users We GuruShots, forked games in AI themselves outcome AI that GuruShots apply benefits are so are in midst photo and didn't by and of that marketing, from coding many also we the base, growth. into capabilities, which techniques from aside transform returning initiatives on the AI expanding inexpensively easy it. well their us a primarily remedied soft exciting personal attribute as to focus are fun, in beyond the items ways including same app provide libraries. At expected. yielding we the itself, creators Zedge operational quarters, to we the users while can code casual into develop Marketplaces' aspects with identifying remains game that launch, Master, enabling operations, to our Art realizing to These hybrid issue analysis. Emojipedia will

XX. looking are several forward new on addition, this of ahead exciting In World to Emoji Day releasing features year's of we celebration July

to thesis core of the that the mandate was the at the where growth acquisition. GuruShots, to unleash Moving to time our investment is

the accessible since growth more to hadn't to feature making which is XX% our features delivered full a upgraded revenue it reported, product XX% new acquisition. successful drive intros map The road heavily received designed updated focused by on the development, broader previously future GuruShots past that audience. the new to team of deserved As is attention innovative in

innovating we legacy are features, tying already and better experience being spend. our onboarding marketing which a to audience, of rolled with dollars than to out more we by Android XX% Additionally, our new new ad efficient monetizing Currently, the is experience.

creating mid is number if we newbies in The winning. onboarding experience, too know in the sustainable simplified have long-term, more manner. the reason increase a progresses as themselves everyone. features player early the the which game, or Furthermore, in challenge for player's of intuitive to a over does gameplay in user and each While immerse enable this skill-based a and to we onboarding fun optimism. By scalable is complexity an give it funnel in seamless, will introduce it of to segmentation, enabling creates order more ultimately for experience capped participants chances outstanding and

is and fun. opportunities games economy adds can significant coin-based and believe The consumption to and resource we By further, a in it of adding for game making manage the the coin while optimize earn users up resources. more new captivating be players, economy. in also to opening new spend game for more players even are purchases by and value to enabling that We release overhaul imminent, crucial will retaining we poised multi-currency more

ubiquity of volatility had a users, the While GuruShots our short the potentially time attracting focus for to acquisition, expectations at to who of falling averse we switching Despite introduce some new is existing players will the the be from initial remains economy active the advent GuruShots change. new high-quality pictures have on may XXX million exponentially photo phones on that more due been to tools, game everyone's and with within available leading of of we AI continues reach. XXXX. In on path competition with the in the mobile business, our the accelerate growing believe I enhancement I market in are general, GuruShot competitions. Photography profits, details than the turning realize pipeline, value just and fiscal of a right forward this we growth low I the summary, in revenue positioned in with believe I we are for each potential all unfold QX to are and well With are products. buyback, innovation shareholder and our combined as to look When active in are beginning to valuation opportunities to to quarters we years the point photos and deliver in and our believe approaching stock's sharing in they the come. and

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

Yi Tsai

million, by revenue which GuruShots million, Jonathan. from MAU, at for new revenue. Total helping and XX% increased goods Digital cost paid was up month by which for quarter value-added the million user we increase X.X% to was see this a Thank of year-over-year, from Android marketing down at Android decreases in in ads. Zedge you, April. the comes XX% the $X.X at in replaced in removes despite $XX.X $X.XXX, came $X.X growth year, XX% came of last revenue third encompasses positive lower and only from and revenue services, revenue our as ad was subscriber This related iOS continues and subscription, which XX% year. GuruShots' year. of by macroeconomic reflecting XX% last pricing Premium's geopolitical to issues is up to stability was continued grew last net growth, ]. was to in subscriptions. record higher which frameworks, offering as impacted improve. by which Zedge in Apple's in operating iOS of we to an Cost metric This X% our value expect year. be subscription leverage a expenses GTV, up legacy unrep last quarter SG&A acquisition, for active versus And [ up our sequentially revenue the XX% driven trend ATT straight $XXX,XXX million. increase negatively ARPMAU $X.X Plus drive declined to and mainly full Subscription came scale, rebound. and impact from record was

also we higher the subscription upfront, expense and pay growth cash which means Google to revenue, Additionally, higher Apple. the fee in marketing receive upfront but reflect

$X.XX, year. Now million from the EPS XX% GAAP for diluted on the per Last and write-down accounting year's reflected acquisition EPS loss subscription million XXX% XX% income and was versus $X.X of year's related and $X.XX tax loss for prior revenue a at to operations $X.X and last $X.XX adjusted acquisition. $X.X was and the $X.X share million million increased million million from loss quarter operation the EBITDA income $X.X the in in of million in million versus to $X.X versus life noncash write-off is loss $X.XX included loss Adjusted subscription, million noncash year, the recognized and year. an non-GAAP loss respectively net accounting prior over the versus net the year. Last the $X.X prior margin. and I this $X.X $X.X operating GAAP of and respectively. just mentioned. Non-GAAP but were

standpoint, QX. From balance and in primarily year, last assets versus cash XX% $X we equivalents. added impairment decreased million nearly million on sheet in the to D&A $XX.X liquidity intangible our recorded to loss and the Now in with cash due quarter the a finished cash

earnings XX,XXX We window in also our was bought to few buyback period. opened for average trading a daily window and was fixed as the plan ahead stock of of days, parameter more Operator, our to our aggressively third for year again with speaking October. the I listening look market. Thank stock end to call, back you you in to call quarter forward you in buy Q&A. lower, shares volume our When back closed back we on up and

Operator

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

Allen Klee

Yes.

I'm not sure if for caught. the GuruShots quarter? What -- For revenue I GuruShots, you in could was the

Jonathan Reich

Yi?

Yi Tsai

Sorry, million. It's Allen. $X.X

Allen Klee

digital thought That's up right? that heard. the I goods shows And in services, what I and

Yi Tsai

Correct.

Allen Klee

Okay.

adding is to features understand doing cause said hitting in new within I'm to this else. GuruShots, I What pretty could well, So for features? you're the a like -- the everywhere is a much XX% plan revenue. jump you're trying that mean you little -- XX% really these new

Jonathan Reich

question, Great Allen.

X the earlier we've working on. that So the got essentially call, part we areas of major mentioned, I are during

is X onboarding goals. we will out the described experience user optimize. more we a successful and in retain will And new we third, the way a by minutes users One is planning. one start have a will first and revenue, we that as First meaning those is then that I playing generating the is the what deeper app, example. That two which time is ago. download is begin generating continues rolled thus joins And revenue for believe the that XX% more recurring app onboarding experience more to accomplish onboarding, to audience. they second, that we of we a of if and users, endeavor, that beta We've that in for that events, attract when user to us, new number on fourth will basis. game events competition seeing Android our process competition of downloads And are couple funnel are that a and deeper the will actively we're funnel fifth

is economy in-app game is the resource-based Today, economy. a purchase user a our or economy, by to making which respect a an with changes of Secondary fueled specific resource.

tuned will you We they before turn and spend expect a that, the which in but going later currencies, example, will they begin, then They like will the those of haven't on currencies and ability opens then well new or brand-new acclimate are be which possibilities. to coin-based the around of a game resources, really to to currencies. That have have their door ultimately begin this on rewarding them allow economy assimilate motivated of different them expected for rolled being a economy because with by keep dynamic. onboarding to the spend will will thrown more for all take we and month. And super they're a the user, that different game this has themselves we area And to focus, that they want the way playing is replenish many purchases. be resources, them. make currency place I up is done the economy, Nonetheless, the trying third we've them month, the likelihood on after begin said, game. be -- that's progression multiple and that more -- order But not that to we process information out

the and the very, users stuck even get they really at for level we are analysis very have there where they today certain have is to progression get the active players. stuck Progression in long, level is to they users progress we will based upon those help a are that they can that focus So though order next struggling. of be stuck, mechanics

the able translate can a don't certain users pole, can you of being to totem they graduate we in to imagine that know that moving a certain at that We a to of set then level. around that have users progress and continue how create competitions segment up will And the So will. stuck next get users if into sense, those ultimately level. you

today. lot the that, after begin and coupled will of The hope be mechanic base progression our And got I to Android was of the optimization. with out. economy, focused new have will I And June. A mechanics rolled if we've the you like onboarding game that game that during out, game clear piece, be game user we So we've hear respect said, be would piece further I questions, economy onboarding, on of to completed rolled to economy full our with the to of there. in month expect rollout detail that. any love will onboarding economy XX% available

Allen Klee

X there that Are any features the next new months? be adding in you'll

Jonathan Reich

There's is, onboarding experience. onboarding very, learning with the which steep master. a master eventually user as I is competition we're half of today to -- fewer what into faced are few -- they they the curve they to know experience, complex is they whistles the is user being downloads access getting access a interface, not to user a that in of to the driven gameplay. with feature the initially bells add and and a a gameplay incrementally viewing onboarding you of Well, new to the onboarding mean goal complexity new with the notion with as but If gain by need a very feature, will that don't there. The

enhancement a that in-game it, let's to resource as something as we new some, call or like So are feature that. feature new like describing a opposed

Allen Klee

some on that about you're And Great. is a customers you is marketing. little SG&A, to Could the paid from? you the mentioned -- trying incremental into Okay. paid marketing, going that talk the SG&A gain where areas focus what

Jonathan Reich

Sure.

simply and releases focus the primarily user spend tied aligning and Zedge it user the acquisition, spend, So future there focused paid GuruShots. to And both on return in user is acquisition acquisition not as marketing is meantime, as well app. focused marketing the paid improvements for on for paid paid the but ad for is our with around

you it engagement a at XX GuruShots value a lifetime target as or when the look that is Therefore, utility, for not a app, So, payback than faster ad has is lower Zedge and days. a take, frequent. spend, take give period around we somewhere

value in it are XX and Wallpapers, and we around marketing know expansion and specific and want really $X are economy, rollout. that of onboarding payback user to acquisition is Lifetime compared time spend to Ringtones GuruShots on because our economy longer the to of with the is today, a maturation when exercise the we So then in to that much of trying we the whole days. With the Zedge we higher onboarding have we GuruShots, period. game investment

Allen Klee

thoughts -- this number where then that on these stabilize advertise will can't then your kind Okay. probably active That actions Any monthly so thinking And you your but to that makes think stabilize. inflect sense. getting of positively? users -- add monthly answer -- this, and that like get to in as -- about the you

Jonathan Reich

Sure.

give forth. So a There timing specific investment significant base we can And you you base. and tell and constantly users, ways do grow keep retain a do lot into effort it going team user literally we marketing I high time in we but not and is can to grow priority that company. The that looking engaged in if and so And at focus everyone of that use and users focus the user to very are Zedge Zedge I in that. that of so can't a How area major Wallpapers. which how the well. have of of much we Ringtones we pretty is What Wallpaper adding. for product all to terms the will. be a and this the on order on features only product Ringtone is will you in market, continue that as are

Allen Klee

great. than things? bundle just in there out should in now you Are any I with Could have little very Or those rolling so are maybe more you also go you That's the you're users. about? strong. subscriptions had are be has comment things other been the with on, a guess, thinking advertising rates and more value subscriptions solid. advertising and Subscriptions past, to pretty And main we iOS that it there's also the up

Jonathan Reich

So we time, see over I think are bulked testing, lifetime -- plans, testing, to and on as different subscriptions additional adds. we are subscriptions adds testing, bundled value will look subscriptions optimizing we we value additional localized not up X But only more have for month subscription week And testing, subscription we with the offer, testing subscription. as testing annual that weeks X into of basis. subscription well a also on X types subscriptions subscriptions continue

Obviously, pricing messaging what a different would United subscriber subscription is testing to into the the to India user only but that's be cost experience, used subscription not than localized So also the so of highly, the highly on basis. would cost a localizing or localized. draw in the a States, in that be of convert significantly

So another, we today. the taken in see concert with continue that apparent that with in and that one is you numbers growth shared we to

Allen Klee

a we seem using And are using? some good pAInt for pAInt think are grow? we like great. creating still to people creator I opportunity on amount of How of there's about kind know that a percent the lot economy. That's the -- of Does information -- that with like gave should how you it do people that that

Jonathan Reich

premium now underway that investing is premium marketplace opportunity -- should several do to the that growth of a pie. of the revenue overall is is portion and our is a unlock perspective that that we us. larger that our for part to that marketplace, growth a in, initiatives say, it see we mean, I have pie have in content I incremental order We are is

continued nicely had will And that this past several investments there to So due initiatives there. we be you've quarter. GTV had mentioned, on in as grown delivered

Allen Klee

Okay. that are back as redesign. kind And bit step for you website of temporary was on Emojipedia, mentioned thinking a that? thing of a view a little you about Do you how a there or

Jonathan Reich

do approach guess, we reflect temporary And testing things have had indicated. scale, and at not ultimately did that thing as our what we had view the I tested. that We a taken,

And initiatives new numbers out will features, rolling So off new in when back. and of year. whole line Emojipedia, of we so saw come pulled between product initiatives we set a there so that were the around of the on terms the the that diverging, end capabilities forth now calendar and are and assembly begin for to

Allen Klee

it that's Well, for Great. Okay. me.

Operator

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

now may disconnect. You

Zedge (ZDGE) 10 Jun 242024 Q3 Earnings call transcript