Zedge,Inc。(ZDGE) 首席执行官 Tom Arnoy 在 2019年 第三季度业绩 - 收益电话会议记录

[机器翻译] 电话会议 · 2019年06月13日 · 23 次阅读

Zedge, Inc. (NYSEMKT:ZDGE) Q3 2019 Results Conference Call June 12, 2019 4:30 PM ET

Zedge,Inc。(纽约证券交易所代码:[ZDGE])2019年第3季度业绩电话会议2019年6月12日美国东部时间下午4:30

公司参与者

Tom Arnoy - Co-Founder and CEO
Jonathan Reich - CFO and COO

  • Tom Arnoy - 联合创始人兼首席执行官
  • Jonathan Reich - 首席财务官兼首席运营官

电话会议参与者

Good afternoon and welcome to Zedge’s Third Quarter 2019 Earnings Conference Call. During management’s prepared remarks, all participants will be in a listen-only mode. [Operator Instructions]
In today's presentation, Tom Arnoy, Zedge's Co-Founder and Chief Executive Officer; and Jonathan Reich, Zedge's Chief Financial Officer and Chief Operating Officer will discuss Zedge's financial and operational results for the three-month period that ended April 30, 2019.
Any forward-looking statements made during this conference call, either in 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 to differ materially from those in which the Company anticipates. These risks and uncertainties include, but are not limited to specific risks and uncertainties disclosed in the reports that Zedge files periodically with the U.S. Securities and Exchange Commission.
Zedge assumes no obligation either to update any forward-looking statements that they may have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast. Please note that Zedge earnings release is available on the Investor Relations page of the Zedge website. The earnings release has also been filed on the Form 8-K with the SEC.
I would now like to turn the conference over to Mr. Arnoy. Please go ahead, sir.

  • 下午好,欢迎来到Zedge 2019年第三季度收益电话会议。在管理层准备好的评论中,所有参与者都将处于只听模式。 [操作说明]
  • 在今天的演讲中,Zedge的联合创始人兼首席执行官Tom Arnoy

汤姆阿诺伊

Thank you, operator. And thank you all for joining us today.
I am Tom Arnoy, co-founder and CEO of Zedge. Welcome to Zedge’s third quarter fiscal 2019 earnings conference call, recapping the three months ended April 30, 2019. Joining me today is Jonathan Reich, our Chief Financial and Chief Operating Officer, who will provide additional insight into the numbers that we reported earlier this afternoon.
Q3 was a challenging quarter for Zedge. Although we are upbeat about the opportunity that our new subscription-based product presents, many of our other initiatives to stimulate user and revenue growth haven’t yet panned out and the impact of the shift of our user base from well-developed to emerging markets continues to have a negative drag on revenue which dropped 25% year-over-year.
As we previously mentioned, in January, we started offering an Ad Free subscription and we are investing time and resources to advance this initiative. During Q3, we scaled the Ad Free subscription across all geographies and customers for the Android app. We started the quarter with around 1,000 subscribers, and ended April with close to 60,000 customers. These customers generate significantly more revenue than historical users where our revenue stream is solely ad-based. In addition, we benefit from the fact that these customers prepay for the service.
Our current subscription offering is rudimentary, focusing solely on removing unsolicited advertisements from the app. Recently, we started optimizing by offering regionally based pricing which should improve conversion rates and corresponding revenue. In addition, starting this quarter, we will begin bundling content or other value-added services together with the subscription as well as initiating discounting strategies and re-targeting campaigns in order to drive further adoption not to mention test new marketing messages that may outperform our current promotion, all designed to increase subscription rates. Before moving on, I should add that we ended May with around 80,000 paying subscribers and this is before any impact from many of the improvements that are in the works.
Yet, even with the potential from our subscription-based offering, we continue to be challenged by our user base makeup shifting from well-developed markets to emerging markets. To date, the product enhancements and other efforts that we have made haven’t resulted in reversing this trend. We recognize that MAU growth is intimately tied to new users. Historically, we have benefitted from organic catalysts to secure new users. We believe that the current app ecosystem compels us to proactively dedicate resources to formal user growth initiatives that may drive user growth across both organic and paid channels. We intend to invest some of the improved cash flow provided by subscription in paid user acquisition campaigns. When it comes to organic marketing, we expect to focus on a host of items including search engine optimization, app store optimization, new user conversion and onboarding, app indexing, and social media strategies as alternatives that can aid in sparking our growth. However, as we have seen with other efforts, we cannot predict the magnitude of the impact that these efforts will have in expanding our user base or reversing the geographic shift.

谢谢运营商。谢谢大家今天加入我们。

我是Zedge的联合创始人兼首席执行官Tom Arnoy。欢迎来到Zedge 2019财年第三季度财报电话会议,回顾截至2019年4月30日的三个月。今天加入我的是我们的首席财务和首席运营官Jonathan Reich,他将提供我们今天下午早些时候报道的数据的更多见解。 。

对于Zedge来说,第三季度是个挑战性的季度。尽管我们对基于订阅的新产品提供的机会持乐观态度,但我们推动用户和收入增长的其他许多举措仍未实现,以及我们的用户群从发达市场转向新兴市场的影响继续对收入产生负面拖累,同比下降25%。

正如我们之前提到的,在1月份,我们开始提供广告免费订阅,我们正在投入时间和资源来推进这项计划。在第三季度,我们针对Android应用扩展了所有地理位置和客户的广告免费订阅。我们在本季度开始时拥有大约1,000名订阅者,并在4月份结束时接近60,000名客户。这些客户产生的收入远远超过我们的收入流仅基于广告的历史用户。此外,我们受益于这些客户预付服务的事实。

我们目前的订阅产品很简陋,专注于从应用程序中删除未经请求的广告。最近,我们通过提供基于区域的定价开始优化,这应该可以提高转换率和相应的收入。此外,从本季度开始,我们将开始将内容或其他增值服务与订阅捆绑在一起,并启动折扣策略和重新定位广告系列,以推动进一步采用,更不用说测试可能超越我们的新营销信息目前的促销活动,旨在提高订阅率。在继续之前,我应该补充说,我们在5月份结束了大约80,000名付费订阅者,这是在许多正在进行的改进的影响之前。

然而,即使有我们基于订阅的产品的潜力,我们仍然会受到从发达市场到新兴市场的用户群构成的挑战。到目前为止,我们所做的产品改进和其他努力并未导致扭转这一趋势。我们认识到MAU增长与新用户密切相关。从历史上看,我们受益于有机催化剂以确保新用户的安全。我们相信,当前的应用生态系统迫使我们积极地将资源投入正式的用户增长计划,这可能会推动用户在有机和付费渠道中的增长。我们打算在付费用户获取活动中投入一些由订阅提供的改善现金流。在有机营销方面,我们希望专注于一系列项目,包括搜索引擎优化,应用商店优化,新用户转换和入职,应用程序索引以及社交媒体策略,作为有助于激发我们增长的替代方案。然而,正如我们在其他方面所看到的那样,我们无法预测这些努力对扩大用户群或扭转地理转变的影响程度。

One of the areas that we continue to believe will benefit us is Zedge Premium. Although the marketplace experienced slower growth in gross transaction value or GTV than last quarter, the primary reason for the slowdown relates to delays that we encountered in releasing personalized content feeds which will enable us to rationalize our display inventory targeting user segments with the content that is relevant to them. We are in the midst of mitigating the impact of these delays by rolling out new ways of exposing premium content to our users which should drive improvements in GTV.
Our marketplace initiative is valuable because it enables us to tap into new content verticals where digital content creators can promote and monetize their content, enabling streamers to sell digital content in their streams, and new content types like music, short novels, podcasts, audio novels and books, video and more. For example, in Q3, we launched Limited Edition Content and are investing more to scale this feature. Clearly, there is a lot of work that needs to take place here.
Earlier this month, we executed a restructuring that we expect to improve efficiencies and lower costs. We consolidated resources and improved operations by concentrating marketing, product and technology development in two major hubs. Under this new structure, we are building full stack product teams that have the resources to act without dependencies outside of their team. As part of this initiative and as discussed last quarter, we are in the midst of unifying our offering in order to deliver a converged user experience where all content, licensed and user-generated, is logically and tastefully co-mingled together in order to provide a seamless and cohesive user experience. This necessary step will not only offer the benefits just described but also provide us with a platform where our product teams can quickly test and independently launch new products, content verticals, and services in a flexible and easy to manage fashion.
In closing, although we continue struggling with the decline in our customer base in well-developed economies, in the short-term we are focusing on growth initiatives while also investing more in scaling our subscription-based initiatives. I’d also like to point out the introduction of Ad Free subscription underscores our belief that, when we offer users a new product or enhancement that resonates with them, we have the potential of seeing meaningful adoption and revenue generation. Moving beyond this, we are simplifying our technology development in order to test and introduce new features and entertainment verticals quickly and efficiently.
Now, I am going to turn the call over to Jonathan Reich who will provide an overview of the quarter’s financial results.

我们继续认为有利于我们的领域之一是Zedge Premium。尽管市场总交易额或GTV的增长速度低于上一季度,但增长放缓的主要原因与我们在发布个性化内容供稿时遇到的延迟有关,这使我们能够合理化我们的展示广告资源,目标用户群的内容是与他们相关。我们正在通过推出向用户公开优质内容的新方式来减轻这些延迟的影响,这将推动GTV的改进。

我们的市场举措很有价值,因为它使我们能够利用新的内容垂直,数字内容创作者可以在其中推广和货币化他们的内容,使流媒体能够在他们的流中销售数字内容,以及新的内容类型,如音乐,短篇小说,播客,音频小说和书籍,视频等。例如,在第3季度,我们推出了限量版内容,并且正在投入更多资金来扩展此功能。显然,这里需要做很多工作。

本月早些时候,我们执行了一项重组计划,我们希望这项计划能够提高效率并降低成本。我们通过将营销,产品和技术开发集中在两个主要中心来整合资源和改善运营。在这个新的结构下,我们正在构建完整的堆栈产品团队,这些团队拥有在团队之外没有依赖关系的资源。作为该计划的一部分,正如上个季度所讨论的那样,我们正在统一我们的产品,以便提供融合的用户体验,其中所有内容,许可和用户生成,在逻辑上和品味上混合在一起,以便提供无缝且有凝聚力的用户体验。这一必要步骤不仅将提供刚刚描述的优势,还将为我们提供一个平台,我们的产品团队可以以灵活,易于管理的方式快速测试和独立推出新产品,内容垂直和服务。

最后,尽管我们继续努力应对发达经济体客户群的下滑,但短期内我们关注的是增长计划,同时也在扩大基于订阅的计划方面投入更多资金。我还想指出广告免费订阅的引入强调了我们的信念,即当我们为用户提供与他们产生共鸣的新产品或增强功能时,我们有可能看到有意义的采用和创收。除此之外,我们正在简化我们的技术开发,以便快速有效地测试和引入新功能和娱乐垂直。

现在,我将把这个电话转给Jonathan Reich,后者将概述该季度的财务业绩。

Jonathan Reich

Thank you, Tom.
My remarks today will focus on our key operational and financial results for the third quarter of our fiscal year 2019. For a comprehensive and detailed discussion of our results, please read our earnings release issued earlier today and our Form 10-Q, which we expect to file with the SEC by June 17, 2019. Following my comments, we will open the call to any questions you may have. Throughout my remarks, the third quarter refers to February 2019 through April 2019 and comparisons are to the corresponding period in 2018 or our second quarter, which was November 2018 through January 2019.
Monthly active users, or MAU, that is, the number of unique users that opened our app during the last thirty days of the quarter, decreased 0.5% to 34 million during April 2019 from 34.2 million in the corresponding period a year ago and decreased 7.2% from 36.7 million in the previous sequential quarter. The sequential decline relates significantly to seasonal factors, specifically an outcome of the post-holiday season.
Year-over-year growth in emerging markets was 12.1% offset by a decline of 16.6% in well-developed markets. On a sequential basis, we also experienced a decline of 11.4% and of 4.6% in emerging and well developed markets, respectively. As Tom discussed, we are allocating resources to both organic and paid user growth initiatives targeted to improve MAU growth and the geographic makeup of our user base.
Our introduction of the Ad Free subscription offering generated $26,000 of revenue and $164,000 in deferred revenue during the quarter. The bulk of the deferred revenue relates to customers that opted for an annual subscription which we amortize over the one-year subscription period. We exited the quarter with approximately 60,000 Ad Free subscribers starting from a base of close to 1,000 at the beginning of the quarter.
Total revenue in the third quarter decreased by 25% compared to the year-ago quarter and by 26% from the previous quarter to $1.91 million. The decreases were primarily a result of the decline in MAU in well-developed economies, which command higher advertising rates when compared to those offered in emerging markets. The sequential decrease was also impacted by lower post-holiday season ad spend.
Overall, average revenue per MAU generated from our apps or ARPMAU decreased 25.3% year-over-year and 22.8% quarter-over-quarter to $0.0166.
Zedge Premium’s Gross Transaction Volume, or GTV, that is the total sales volume transacting through the platform, increased almost tenfold to $159,000 compared to $15,000 a year ago and by 34% compared to $118,000 last quarter. We are in the midst of a project that will allow us to target specific customer segments with content that is relevant to them, translating into more efficient use of our promotional inventory and yielding higher conversions and associated GTV. Additionally, we are working on ways to further expose premium content to users which should result in increasing GTV. We believe that our premium content offering will scale as we increase exposure and remain committed to this effort.

汤姆,谢谢你。

我今天的发言将集中讨论我们2019财年第三季度的关键运营和财务业绩。如需对我们的业绩进行全面而详细的讨论,请阅读我们今天早些时候发布的盈利报告和我们期望的10-Q表格。在2019年6月17日之前向美国证券交易委员会提交申请。根据我的意见,我们将打开您可能遇到的任何问题的电话。在整个发言中,第三季度是指2019年2月至2019年4月,比较的是2018年或第二季度的相应时期,即2018年11月至2019年1月。

每月活跃用户(MAU),即在本季度最后30天内打开我们的应用程序的唯一身份用户数量,在2019年4月期间从去年同期的3420万减少0.5%至3400万,并且减少了7.2上一季度的比例为3670万。连续下降与季节性因素有关,特别是节后季节的结果。

新兴市场的同比增长率为12.1%,被发达市场的下降16.6%所抵消。在连续的基础上,新兴市场和发达市场的跌幅分别为11.4%和4.6%。正如Tom所讨论的那样,我们正在为有机和付费用户增长计划分配资源,旨在改善MAU增长和用户群的地理构成。

我们推出的免费广告订阅产品在本季度产生了26,000美元的收入和164,000美元的递延收入。大部分递延收入与选择年度认购的客户有关,我们在一年认购期内摊销。我们退出了本季度,大约有60,000名广告免费用户从本季度初接近1,000的基数开始。

与去年同期相比,第三季度的总收入减少了25%,比上一季度减少了26%,达到191万美元。减少的主要原因是发达经济体的MAU下降,与新兴市场相比,这些经济体的广告费率更高。连续减少也受节后季节广告支出减少的影响。

总体而言,我们的应用程序或ARPMAU产生的每MAU平均收入同比下降25.3%,环比下降22.8%至0.0166美元。

Zedge Premium的总交易量(GTV),即通过该平台进行交易的总销售量,与一年前的15,000美元相比增长了近十倍,达到159,000美元,与上一季度的118,000美元相比增长了34%。我们正处于一个项目中,该项目将允许我们针对特定客户群定位与其相关的内容,转化为更有效地使用我们的促销广告资源并获得更高的转化次数和相关的GTV。此外,我们正在研究如何进一步向用户展示优质内容,从而增加GTV。我们相信,我们的优质内容产品将随着我们增加曝光率而扩展并继续致力于此项工作。

Our direct cost of revenue decreased 6.8% to $353,000 from $378,000 in the year ago quarter and increased from $328,000 or 7.4% sequentially. The year-over-year decline reflects the savings attributable to our cloud migration and continued focus on lowering our infrastructure costs. The quarter-over-quarter increase was a result of a one-time reclassification of costs related to a vendor from SaaS expenses to direct cost of revenue in third quarter and a credit from our cloud infrastructure provider related to a billing error that they made in the second quarter.
SG&A in the third quarter was $2.29 million, an increase of 4.3% compared to the year-ago quarter and 5.9% compared to the prior quarter. The bulk of this increase relates to staffing up our Lithuanian Innovation Center and the 30% fee retained by Google Play when customers subscribe to the Ad Free service.
Loss from operations in the third quarter was $1.12 million compared to $339,000 in the year-ago quarter and $246,000 last quarter. As announced in May, we executed a restructuring of our business earlier this month and unfortunately laid off 20% of our workforce. The plan will allow us to consolidate the bulk of our operations in three major centers, namely, New York, Trondheim, and Vilnius. On an annualized basis, we expect savings, before accounting for new hires, to total around $1 million and we do not anticipate any material one-time costs associated with this downsizing. I should point out that for the meantime we are holding back on adding incremental staff and when needed we plan on hiring in Europe where labor costs are lower than the U.S.
Our loss per share was $0.12 compared to $0.03 from a year ago and $0.02 from last quarter.
At April 30, we reported $2.25 million in cash and cash equivalents compared to $4.27 million a year ago and $2.7 million last quarter. Zedge currently has no debt. Depending on the success and adoption of Zedge Premium, Ad Free subscriptions and/or other initiatives that we have underway potential commercial opportunities and/or acquisition prospects, we may seek to raise capital through debt or equity financing.
In closing, Q3 was generally challenging for Zedge. We didn’t recognize many of the benefits that we expected from prior initiatives. However, early performance and the potential of a subscription-based model is good news. The recently announced downsizing, although painful to the Zedge family, will enable us to consolidate our resources and execute more efficiently. Our team is committed to continuing to search for ways to unlock the value by scaling our user base, testing new entertainment verticals that extend beyond mobile phone personalization and driving revenue.
On that note, I will hand the call back to the operator for Q&A. Thank you.

我们的直接成本收入从去年同期的378,000美元下降6.8%至353,000美元,并从328,000美元或7.4%增加。同比下降反映了我们的云迁移带来的节省以及持续关注降低基础架构成本。季度环比增长是由于一次性将与供应商相关的成本从SaaS费用重新分类为第三季度的直接收入成本以及来自我们的云基础设施提供商的信用额度与他们在第二季度。

第三季度SG&A为229万美元,与去年同期相比增长4.3%,与上一季度相比增长5.9%。这一增长的大部分涉及立陶宛创新中心的人员配备以及当客户订阅Ad Free服务时Google Play保留的30%费用。

第三季度运营亏损为112万美元,而去年同期为339,000美元,上季度为246,000美元。正如5月宣布的那样,我们在本月早些时候对我们的业务进行了重组,不幸的是,我们裁员了20%。该计划将使我们能够在三个主要中心巩固我们的大部分业务,即纽约,特隆赫姆和维尔纽斯。按年度计算,我们预计在计入新员工之前,储蓄总额将达到约100万美元,而且我们预计不会出现与此缩减相关的任何重大一次性成本。我应该指出,与此同时,我们仍在继续增加员工,如果需要,我们计划在欧洲招聘人工成本低于美国的人数。

我们的每股亏损为0.12美元,而去年同期为0.03美元,上一季度为0.02美元。

4月30日,我们报告了225万美元的现金和现金等价物,而去年同期为427万美元,上季度为270万美元。 Zedge目前没有债务。根据Zedge Premium,Ad Free订阅和/或我们正在进行潜在商业机会和/或收购前景的其他举措的成功和采用,我们可能寻求通过债务或股权融资筹集资金。

最后,第三季度通常对Zedge构成挑战。我们没有认识到我们对先前举措所期望的许多好处。但是,早期的性能和基于订阅的模型的潜力是个好消息。最近宣布缩减规模虽然对Zedge家族来说很痛苦,但它将使我们能够整合资源并更有效地执行。我们的团队致力于通过扩展我们的用户群,测试超越手机个性化和增加收入的新娱乐垂直行业,继续寻找解锁价值的方法。

在那个问题上,我会将电话交给运营商进行问答。谢谢。

问答环节

We have no questions in the queue. This does conclude our question-and-answer session and the conference call. Thank you for attending today's presentation. You may now disconnect.

我们队列中没有任何问题。 这确实结束了我们的问答环节和电话会议。 感谢您参加今天的演讲。 您现在可以断开连接。

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