Q4 2019 Earnings Call
striking teeth
A such the company's results may be materially different from the views expressed to date information regarding this month is included in the company's 20, f as filed with the Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable low, please also note that I clicks earnings press release and this conference call include discussions of on other gaap financial information as well as on audited non-gaap Financial measures. I clicks press release contains a recommendation of the unaudited non-gaap measures to the most directly comparable on other the Gap measures.
I will no turn the code over to our chairman of the board and co-founder semi Shing Sammy, please go ahead.
Thank you Lisa and welcome everyone to our call today
I am happy to share with you that in 2019. We were proud to celebrate our ten year anniversary and Achieve another record year with strong top-line results.
Our gross Billings increased by 60% while revenues increased by 25% year-over-year.
Our gross profit increase 45% year-over-year while adjusted ebitda for 2019 which 5.9 million.
I'm very proud to note that our adjusted. Ebitda is more than triple the total we reported in 2018.
I want to take a moment here to point out that our adjusted ebitda is proof that we are achieving ever-increasing economies of scale off.
I'm excited to report that our business has reached an inflection point and we expect to increase in operating leverage to continue Drive profitability in the future.
No, I would like to highlight some of our accomplishments.
Our marketing solution business hit another record high in 2019 with such a large Market opportunity before us we will always confident that this organic growth was inevitable, but it took ten years of hard work to get here.
Our Marketing Solutions business forms a solid Bedrock for our company and it is gratifying to acknowledge that we have arrived at this time in our history.
In early 2019. We launched our enterprise software solution business as shearing in a new era of our company.
I clicked now offers our clients total solutions to facilitate collection and analyst allow marketers to Target new consumers and increase sales from existing customers.
These capabilities for a few and important need in China s brand marketers are eagerly looking for cost-effective ways to improve their online sales and enhance customer loyalty.
Our Solutions generally useful insights for successful marketing campaigns customer retention and increase sales performance.
In our first full year of operation we generated over ten million in Revenue in this area with gross margins in excess of 60%
and we are very confident that our revenues will double in 2020.
We announced a convertible Bond financing and subsequent conversion from a real Central limited and famous limited back by Mister Tapp the majority shareholder of stops media. This is a key accomplishment for two important reasons first the early conversion from debt to equity as a clear indication that one of our most significant shareholders has the utmost confidence in our ability to execute and few standard Company stock is undervalued with tremendous upside potential.
Second this transaction has served to substantially reduce the debt on our balance sheet.
In addition to the financing were you recently obtained more than $30 credit facility with HSBC GBA technology fund for working capital and I'm super charged the growth of our Core Business assets to additional funding is important as we continue to be our our enterprise software Solutions choices and develop our digital marketing platform to bolster our future progress.
Other highlights in 2019 in agreement with m&a candidates that have the potential to produce energy and help us increase the ability to manage our product and services. Our investors should take comfort in the idea that a merger can deliver increase Market power. In other areas off some of our current acquisition have given us more media assets supplementing our Enterprise solution software Solutions, and we eventually providing a new models in the future overall. I'm very proud of what we have achieved in 2019. And we believe that we will continue the strong momentum in 2020.
No, I would like to turn the call over to dr. Jane tan or we call him TJ our CEO and co-founder the discuss the fourth quarter results. Our company's strategy and our focus on execution in 2020 TJ.
Thank you and welcome to the call everyone. I'm happy to report that the first quarter of 2019 cut off another record-breaking year for our company in the first quarter. We increased Revenue by 43% while our gross profit increased by 46% year-over-year. Our adjusted ebitda was two point five million a new record and most importantly we reached a New Jersey Stone as we reported quarterly adjusted. Net income for the first time ever in the first quarter of 2019 this month what time you mentioned as we are reaching higher economies of scale by continuing to concentrate on profitability dead.
Which is our major Focus for 2020. So the current micro environment remains challenging. We think our strategy will be very effective in driving the business forward this year. We have three major goals first improve the profitability of our mom solution business. I click is now a leading programmatic marketing platform in China and we should continue to benefit from our economic wage scale and the building of new and higher-margin offerings as the example our influencer multi-channel marketing products suck Autobahn the traveling product help us improve our product mix and give our customers more options.
Second continue our Revenue growth trajectory along with increasing margin contribution from Enterprise software Solutions business team has worked very hard to develop various in Innovative products services and business models in this area. We've seen promising results so far and are firmly committed to dedicating the resources to grow this business as it will not be calm a major Revenue driver and the gross margin contributor well into the future.
Sir, continue to recognize and the source opportunities from Partnerships that leverage our existing data and the technology in 2019. We entered into various agreements and the Partnerships that will either serve to strategically enhance our position in the marketplace all enhance our capabilities our goal for this year is to continue to seek and develop additional Partnerships and the New Jersey business opportunities globally leveraging hour-long accumulated students in data and the technology
As we go forward in 2020. We are encouraged by our performance in the First full year of operating our Enterprise solution own business as Sammy said
This is a new era for our company. We now offer our brand cleanse the important tools to reach and encourage with the customer in low-cost highly efficient and the personalized the manner helping them realize higher skill higher sales and profit growth name is particularly important in the current microenvironment giving the Karina various outbreak. We are currently noting that many more birthdays are now understanding how or smart retail strategy can help them enhance online customer engagement and facilitate higher returns. For example, the mini programs. We built based on tencent Wii Chat platforms a total solutions that facilitate the collecting of data helping them.
Be able to Branch enhancing customer retention and the lower T. I want to note that we are still in the early stage of developing a business an hour results in 2019 confirms that the future looks promising during our first four years of operating this business. We open the more than 50 account account clients under the pipeline remains robust as we continue to expand the dead. Yeah. We remain firmly dedicated to continuing the investment needed to double revenues in 2020 and provide incremental wage increases be done in order to maximize our company's performance and continue our growth trajectory. We rely birth
Quiz in operational efficiencies, especially in light of the current micro environment as we seek to navigate this temporary tag economic down 10 cost by the Korean of various outbreak.
Our focus on optimization is squarely centered on the day-to-day operations of our company to ensure that we are running the business office as if efficiently and effectively as possible by being belligerent in reviewing every facet of our business and how we may execute we can ensure ongoing timely cost-effective reliable and sustainable performance improvements in our entire operation. Our goal is to minimize current costs by controlling all tracks and maximizing our operational capabilities. We believe that our growth strategy under the focus on the profitability covered with dedication to operational optimization will help our bottom birth.
Grow this year and well in to the Future in 2019. We were proud to Mark our company's ten year anniversary offer over the last decade we have succeeded in growing our business and achieving corporate objectives by overcoming a variety of challenging issues and unfavorable micro environmental factors. I would like to take this opportunity to note that the resiliency of our business model was put to the test in the first quarter as we successfully demonstrate our ability to adapt and continue in the faith of the Korean of various outbreak in China. As this has had such a profound effect on all of us. I would like to log
For formally comment regarding the creative various and its impact on electric.
First and of foremost importance, we are taking active precautions to help protect the health and well-being of our employees wages while working closely with our clients and partners to ensure we support their needs.
generally
The next to market conditions the outbreak has created has led to cautious spending from advertisers and indicates that I'm spending is not immune to the impact of coronavirus yet. We believe that we are impacted less than traditional medium budgeting as online activities increase based on the escalation of times when online during the crisis. Certain industry verticals such as the travel and Hospitality sectors of our business have been adversely impacted by the name, jerina various for obvious reasons, however, other sectors including e-commerce and online gaming remain strong as homebirth
consumers shift more often
Purchasing activities online and spend more time gaming based on the current environment. We predict that brand foil allocate more of the advertising budgets to mobile and online targeted marketing with the potential to benefit our mobile and performer focused Marketing Solutions business also is essential to note that brand see the importance of online and offline consumer Behavior data integration and Analysis, which will feel fever our Enterprise Solutions business in the long run. We also want to note that our governments highly devoted top-down efforts to contain the various Spirit seem to be working as recent reports suggesting.
That's the number of new cases are decreasing. We want to note that the flu reality of the current situation preclude any prediction as to the ultimate adverse impact of coronavirus as developments rapidly change. We will continue to closely monitor the outbreaks impact on our operations and financial results and make adjustments. If necessary having said this month, I would like to remind everyone that I click was founded during the financial crisis of 2009 was the global economy was very strained and uncertain over the past decade. We have developed under Advanced strategies that adapt with the times.
I'm very confident in our ability to successfully navigate these turbulent conditions and our future achievements will be the direct result of our experience Clear Vision solid growth strategy to join execution capability and the financial resources the fall. We are cautiously optimistic about our performance for the balance of this year.
With that I would now like to turn the call over to our CFO Terrence leave who reviews the first quarter and the full year 2019 financials.
Thank you, TJ.
Despite a challenging Macos vitamin in 2019. We have managed to deliver another record year our gross Billings revenues Rose Province and adjust ibadah or historical height and our adjusted net loss reach a record note.
I would not.
To begin my comments. Will they fill key highlights from the fruit year and fourth quarter of 2019 despite is the unfavorable foreign currency movement during the years really positive revenues of $199 million for 2019 and increase of 25% year-over-year revenues for the fourth quarter of 2019 were fifty six point seven million an increase of 43% over the same period in 2018 the growth was due to the original role of a Marketing Solutions business couple with the contribution off our new Enterprise software solution divisions, which commenced operations in January of 2019.
Peace knows that remedy depreciate against US Dollar by 4% and 5% respectively in the fourth quarter and full-year of 2019 compared with the same period in 2018 looking at each business, obviously Marketing Solutions reported a record height one hundred eighty six million in revenues and 18% increase on a stand-alone basis in 2019 for the full quarter of 2019 the page news from this business Saturn's grade by 34% to 53.1 compared with the same period of last year.
I'm pleased to point out that we have a great start while enterprise software Solutions business in 2019 as is scaled up very quickly off generating ten point four million Revenue in its first year of operation the business continues to scale as revenue for the full quarter Break by 38% Sequentially 200.6 million reflecting dispute over evap. We mentioned enough earnings conference call.
Gross profit gray by 46% and 45% year-over-year to 17.2 million and 56.7 in the fourth quarter and full-year of 2019 respectively. The robust growth is mainly attributable to the continued expansion of the company that you should loosen and contributions from higher-margin and the price of registrations.
Adding to Sammy and TJ's comments with regard to Enterprise software Solutions. We are very encouraged by our results for the first 12 months of operation is the margin contributions are significant and will be a key factor in a goal to achieve profitability in 2020. Also, I would like to know the financing and subsequent Bond conversion from Marine Sanctuary limited and reason is secure additional credit facility from HSBC. Both of them have given life abundant resources to fund outgrowth and Achieve our longer-term objectives. I also want to win emphasize that we remain diligent in controlling cause the chief being the best possible operating efficiencies. Our company is always examine raised to better manage of cancel may now process better and focus on Thursday.
imagine business products and clients
It's wrong balance it as of December 21st, 2019 class and cash is Copeland's time deposit and restricted cash Eco 60a 1 million to get a compared with forty million at the end of 2018 for the rest of my discussion. I will focus on our long Gap results. Um, if I welcome nations of these non-gaap results in the past release WE Post earlier today and which can be a set in our investor relations website.
And just leave it off for 2019 was $500 billion tripled amount will be brought in 2018 for the fourth quarter of 2019. And just if it was an income of 2.5 million compared with in-laws of $900,000 for the fourth quarter of 2018 off the increase resulted from the significant increase in gross profit as well as better cash management and or Pest Control, we are happy to report the first-ever bath and just let income or 118,000 in the fall quarter of 2019 a substantial improvement from the laws of 1% Thursday. We we pulled it in 2018. Also then just let loss for the year of 2019 was 2.2 million compared with four point seven million in the same period of time
7:15 and finally the girls billing great to record of 641 million for 2019 and increase of 16% over 2018. The Improvement is primarily a result of increasing Market is demanding + 3 offset by the depreciation of the remedy against the US dollar by 5% compared with a year ago.
For further information is this detailed recap of other Financial matches in the press release we issued today in a Wrangler 2018. We allow the shared Life as a board of directors authorize as to appreciate up to ten million of our own a DS in the 12-month. As of December 31st, 2019. We purchased and a great value of approximately 4.4 minute.
I would like to finish my discussion with Outlook for 2020. Please note that our outlook for revenue is based on current market conditions and reflects off primarily estimates of market and operating conditions taking into account. The coronavirus had them in these are subject to change our law is based on the information available. As of the day of the press release distributed a free estimate first quarter of 2020 Revenue to be between 46 million and fifty million and our first quarter gross profit is estimated to be between 12 million and 40 minutes. We now both our 2020 Revenue guidance to be between 5 million and 216 million and our 2020 gross profit is estimated to be between 17 million and 75 million.
Just able that.
Is estimated to be between 5 minutes and eight minutes finally, I believe that twenty-twenty provides significant opportunity to achieve profitability given the scaling of our business office and we continually towards operational efficiencies food current operating environment is challenging as we have faced with the disruptions caused by the coronavirus Thursday. We close need monitoring the outbreaks impact on our operations and financial results and our Outlook remain cautiously optimistic. I will now turn to call back over to Jay for closing remarks.
as a result of this activity we have
Thank you Terrance.
As we begin twenty-twenty the long-term strengths of our business is compelling and the market dynamics are exciting Chinese and prices such a m i click benefiting from perhaps the world's richest array of data sources data lies at the heart of a virtuous cycle, whereby machine learning fed by data Powers continued development enhancing capabilities. These Dynamics are helping us provide better product back on the services, which is better refinements that are enhancing customer engagement for the branch. We serve in all sectors our company that has considerable threat strategic Advantage as we have accumulated massive repository of consumer data dead.
As such we are transforming from China's marketing technology leader to our Global integrated marketing and Enterprise Cloud platform create new opportunities for us. Our data dominance effectively creates economic modes through outing new engine on the creating new synergies for potential m&a and finally as mentioned previously. We are facing challenges bath, which is Karina various. Everyone in our organization is absolutely focused on protecting the health of our Workforce as well as preserving the resilience of our business the weeks and the months to come will inevitably continue to be challenging but yep.
We are prepared and ready. We look forward to 20 20 as it will be a critical year for our company to fully transition into a platform. We spoke to Unique gross businesses and our focus on profitability. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions operator, please go ahead.
Thanks.
You we will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press * then two for the benefit of all participants on today's call. If you wish to ask your question in Chinese, please immediate repeat your question in English as a reminder. We do have a translator available to answer your questions. We also ask that you limit yourself to two questions. If you have additional questions, you may re-enter the question Queue at this time. We will pause momentarily to assemble the roster.
The first question today comes from fond of Benchmark, please. Go ahead.
As in TT and parents congrats on a very solid quarter. Thanks for taking my questions. First ones. Do you want to focus on the virus outbreak disruption? I wonder whether you could you could give us a bit snapshot in terms of your your conversation with your key account like throughout first quarter. And now we're moving into second quarter, how they're you know, how they're notifying sentiments generally are so basically trying to get a sense the pace as well as the magnitude of the potential recovery wage are looking at one right now. And also I mean teaching mentioned that you know, different verticals have different performance throughout the process just wonder you know your exposure to these specific host. What does travel or on the positive side the gaming and I think retails entertainment size
I follow you home. What's your TJ?
How you doing today?
Tum bejo woman. She is Hindu woman who took uh, how the initial honestly speaking we do not serve that this pandemic has some impact to certain sectors a customer in terms of their advertising budgets.
Are you Jesus?
Do you hunt you down and particularly the sectors are including like hospitalities hotels and also the upline business like or the mobile industry.
Does it seat you know, she's off on the other hand. There are some expected class size to certain industries of for example, like online gaming e-commerce and online education sectors tons of money in the bank cleared. I I don't how does it go to another observation we made is that customer do have a tendency to age?
Put their budgets to the mobile line to do to the mobile and online sites and to expect the higher return on investment.
You want what she told you didn't should you went when I click the food. Those were the cook who you should be easier. Um, do you think you'll be done? So in a however, most of our customers are need to large-size International top-tier brands for that background. They have very strong foundation and they have very good deployments for allowing Arrangement. Therefore they have more flexibility to face the change.
You want to you want me your least you go to ambient use woman often enjoys it you just want Trump in office. And also we do have Appliance or in working that to help our customer to move their outline budgets to unlock who helped you develop our Marketing Solutions.
Do you know the ones in the manual inside the home page of an initial? So you want to come down off the Chicken Shack?
And also your question you mentioned about from the first quarter the second quarter, what are the changes we have observed for Chinese markets January that actually took coming to put in advertisements a budget and that was also the case for the second quarter due to the impact of the pandemic we do see we did observe some calculations of the budget and now we are into March and we start seeming the advertisement business coming back.
See here, parents Neil if you think of anything you want to add terrorist? Yes. Hi Bob. I guess TJ has summarized very nicely about our observation and also, you know some of the business of being picking up right now starting in June. I think they're free points that we just want to add about our resiliency process that we are mobile different second is that we are performance different and lastly our client base off always, you know, the top tier Trends in the market. So I think these add up wide we still culture is optimistic about you know our q1 and also going into q and I think our guidelines is already different to the market and this is Kia signal about you know, our own uh expectation at this moment.
And that's a very helpful. My second question actually focus on the Enterprise solution side just given what has going on with the you know, the recent locked out. It seems like if further highlight how important to have an integrated online online channel for a lot of the retailers just wonder whether it has potentially open up the customer base for you on Enterprise solution side, you know your update on the pipe line for a 20 20 your strategic thinking it was how the shipping up whether we're essentially we can't a potential salvation for the industry as a whole as well as for for you guys make Jeep. I'm surprised Solution Center kitchen would you do would you do offline trying to be online option free month?
Should be ashamed US during weekend. We never know usually come online now dead. You just need a job.
pipeline
Okay, maybe I just answer a bit first and then TJ may add on some points. I think as a beginning of our new Enterprise solution box in the 2019. It was quite a good you know, stop by having like a cube. I to grow from you know, goofy to do for was basically in thirty-eight percent financial group of people six million. So I think this momentum has been keeping on and we have successfully achieve our, you know, first year Target and that we are going into our second year. We have compete out fifty key accounts for you know, 2019. And right now we're seeing the momentum basically keep on and as this rival situations that actually brings in more opportunities than ever has that our brains and marketers understand more about the online of line data Integrations importantly as basically DJ also, you know, yep.
Agent before and also in our you know swim and in addition, I think the retailers potentially also wanting to extend more new channels including you know in Commerce and ReChat Commerce. So I think our solution was building on both the reach a platform and also the online online Integrations of data is Kathy, you know, really on this respond right now. So we believe that that this would actually drive in more demand having Central as we also understand the current challenges during this ride reparation. So properly going into the first quarter, we may not be seeing, you know, substantial update yet, but going into the second quarter. I think they would be you know some day or you know the month in this particular business and the our note of these Solutions, uh-huh Enterprises of a solution remain positive. So our Target for the year is still doubled this month.
And we we we have we are building a restaurant I. Right now going into the second quarter. So there will be at least you know twenty accounts in the pipeline and enquiries that we got during this. So we believe that after the ribos pass will be able to execute them quite you know, uh quite well in the second quarter.
And just see if there's anything at all. If not, maybe cuz we have to you know move on to the next questions properly off.
Parents. What? Can you eat our supplement just one point to come down to single woman in a way. It actually be the Opera actually lower or markets educational cost for our enterprise software Solutions our customers. The only woman said she can't have no pipeline in later and all the koku no matter, and brown eggs so much woman. Yep.
have a lot of customer coming from particularly the
Customer good size and they actually actively approached us during the outbreak and help us to help them to conduct the offline to online business and to help them to speed up the trial right right sure about what you eat and so in a way in a long round, it's actually quite beneficial for them enterprise software Solutions in a month or so, of course in the short-term. We still see the impact for communication with our customers.
Beulah oh you think you can eat Indian woman named Alicia Too Close, you know give me an example when the object was a divorce in February or engineer couldn't go into the field go outside to walk to fidget or to help the clients. Especially a woman. A chick chick chick chick. This is our only the technical issues. We can fix and to strategically speaking. It's actually depend Emma quite helpful to push this business forward.
So, you know warm and Jake Enterprise solution woman each young woman a woman in the phone with you, So we actually try to work on enabling our Engineers to work better with a customer in the enterprise software Solutions factors during the pandemic. Thank you. Thank you. Jesus name under the car an issue through the gentle Jesus dead. Well, I'm sure you'll follow the confirmed cases decreasing a Repertory birth.
And we are still working on the solution. We can provide it and we have more demands coming from the customer side. So we actually have a very positive outlook for our wage is silver Solutions business.
Okay. She was only do thank you. That's my supplement.
Thank you.
It's been limited time. We ask that you limit yourself to one question. The next question comes from Darren after of Roth Capital Partners, please go ahead. Hey guys. Thanks for taking my question. I hope you guys are well. Just uh, I'm curious on your guidance some more snow on the Marketing Solutions which which I think up for 2020 implies 220 to 240 million for Revenue. Maybe Terence. What's the implied Assumption of one month? Is there a recovery and and two if so, when when does that sort of occur specific to your your business and an advertising budgets and then embedded in Thursday's could you just maybe break out what online based businesses gaming education and e-commerce job?
up as a percentage of mix
Of your marketing Solution customer budgets. Thank you.
Okay, thank you Deron. I think you're talking about how you know, we are so confident about you know, the trendy trendy guidance in terms of the month option and also breakdown of some of the verticals that we mentions basically having strong momentum. And I think if you look at our Q4 results basic happy hour, you know, gross feeling have already reached over two hundred million u.s. Dollar. So it represents actually a recurring Runway that we have for business. So actually are walk-in base ugh increasing our clients budget also increasing over the year and most of all kinds of recurring clients. We have been relatively long-term relationship and not with the company. So we believe that that in, you know, even in the first quarter, I think we will still be running 5 a good, you know, uh billing number and that actually took place
Play to how we divide our Revenue Lumber and also our confidence in terms of Marketing Solutions business growth in our 2020. So we expect we do expect to pick up more actually maybe in this, you know in the second half of the year because in the first quarter there will be definitely some impact due to the Rival situation. But as TJ also missions, we are seeing some of the pickup right now. So we believe that that going to the second quarter there will be even more picking up. So in terms of your, you know, second part of the questions about the breakdown of some of the articles I think as we you know, understand our business are quite Diversified. So basically we have six to seven verticals each of radicals. Generally. We are connecting at around ten to fifteen percent in terms of our, you know, building and even the revenue Lumber so basically the e-commerce the online gaming and also the education which is a pig
And the relative new center or vertical for the company and actually end up in a normal scale would be around like twenty-five to thirty percent of our budget but during this ride our situation actually them to what they called an Ecommerce and a gaming and the education. I mean these free radicals actually going quite substantially. So I believe in the you know, first quarter of that. We that's the verticals basically would be having more than you know for G to fir 5% of our gross billing which would be you know over the normal range of like 30 per month.
That's helpful. Thank you. Thank you Deron.
The next question today comes from Thomas Chong of Geoffrey's please go ahead.
Hi friends management for taking my question. I have a big picture questions and comments about the overall back online advertising Market in China. What's the way that you're expecting and how much we are actually outpacing the industry. Well, I just want to get to see the Toyota from there. And on that front. Can you comment about the social advertising Revenue in China? Because the Italian 10% is quite receded in the social advertising. Can you also comment about how you break off a $0.10 social advertising in transit. That's my first question. Thank you. Well, I find it you have any challenges? What is the issue when you take off?
Find the end of one thousand students apartment singing.
Thomas Thomas and your call
Well, do you know a woman playing music?
I'll be sharing with you a few of the advertisement business in China and Hong Kong China usually easier.
for offline business Industries and media
So you do I click Like Yahama. She's she's dead. So, should I leave and I could actually we don't really focus on the offline customers and online media. So you may also order off cool to call you on your question. We answer that question before it has it's highly relevant to which sector you are in when you ask the question of advertisement industry in China Wok. Beautiful Auntie. You Hungry Howie's
For example Hospitality Airlines hotel and offline business such as the mobile. They are highly impacted the million for me on the page that showed off my business such as the Emmys and online education.
Only one Jesus attic real quick. So you call who he bought a new customer who has both online and offline Arrangements. They will try to transfer them online, please. Can you go back to impact for the advertisement industry in China? However, when you look at the sector's the online are less impacted an offline business, so you take the issue
When I click the operation also how long our our operations we try to focus more and be online business. Okay. How did you go to talk about whether I'll be my Surety. Thank you.
Is it?
The next question today comes from Burning Anger of Alliance Global Partners, please go ahead.
It's Brian. Thanks. I realize for his mean has been a great investor. I'm curious if their connections or their business in any way to new business opportunities. Are you expected? It will going forward. Thanks.
Pardon me ladies and gentlemen, it appears. We are having some technical difficulties. Give us one moment while we reconnect.
Hi, Brian, U-Haul.
What's your TJ TJ? Hello Brian.
But we need a 20 or can you change each month to go back to double check with you about your question? You are asking what what are the new business opportunity under the impact brought by depending, is that correct?
No, actually, I'm curious with the investment from Forbes media. I'm wondering how that has led to potentially new business opportunities in the Marketing Solutions. I'm keeping their business is that has actually been the case.
Okay, I got it. So, this is Karen. So maybe let me answer this questions because it also related to the investment side the new investor from I you know the shareholder the Box actually would we proceeded that there will be a lot of new strategic initiatives that we are actually undergoing discussion right now including know some of the potential potential em and the opportunities right now that we are in discussions. I'm sorry that I cannot, you know release too much of the details, but right now I have many initiative of disgusting with the fobs, uh shareholder, so there would be potential some of the media assets of business that may be that we would get rid of some of the distribution rights in the region. So that's basically the directions that we are working on right now. Great. Thank you.
And next question today comes from Carson low of nomura, please. Go ahead.
Hi, thanks management for taking my question business customer make a sec. So one questions about the the the picture as well. So regarding the bulb or acting mystery received a trade. It's the shop the shop shop on video Pack Box like go in and quite sure they're adding a lot more impact inventories off the market since 2019 and leading to some other platforms facing the the pricing on the pleasure. So, so what are the implications to this phone number is 2 hi Christine particular. Thank you.
Neil what's the TJ?
woman and child
Oh, yes.
Do we have having some technical issues?
Hello. Hello, this is Terrence. Maybe I could also answer this questions and I think the quite sure we'll other videos basically wage will make the whole advertising industry, you know, more Dynamic and more kind of, you know, content-rich new formats of advertisement. So from our perspective, we always trying to basically and rush hour traffic content data and also the operations of our products and services. So I think this video related kind of format with am allowed the whole Mark had to have more traffic and from this, you know market conditions particular under this drivers, you know impact I think this would give you know, the company that gives us more solutions to basically to provide to our advertisers and our customers and it would ask that and they do provide more our eyes in terms of our you know, ma'am.
Folio, our inventory will be ambushed and we would have more room to basically the Arbitrage across different media because you have to understand we are kind of independent perform surgery and lots take about Diplomat media. So basically that would help us and we are not the media itself. But we as a platform who activate these media and provide the value and on top of that so long if this video related kind of media publishers release more format or add a space hour traffic basically increases and we would be able to help our clients to Also may find the best Solutions and and reaching their advertising Returns on investment as well. I think from that perspective actually would be advantageous to company like us
Let me do very helpful. Thank you.
Connect question today comes from bouquet of Oppenheimer, please go ahead.
Grieving Sammy TJ terrorism Lisa put a comment on the corner wires impact. Just want to get more details here so long. Can you share with us the basics growth rate in January, February and March respectively. I just want to get a recovery Trend. Thank you very much.
I think if you look at our guidance, basically that represent a you know, a 15% Positive Growth that we are budgeting right now and we have a you know compared to I mean last year on a year-over-year basis that we're still getting 20% growth in terms of the overall like marketing.
So so before the coronavirus outbreak, can you tell us like what was the growth rate in January? And then what does it cost of the month in February? And then what is the recovery so far in March it just trying to get a sense of how fast we are recovering from the impact there. Thank you very much.
Unfortunately, I don't really have the exact figures right now because I'm Muslim Brazil in you know, accounting right now, but I do believe as often mentions February is rolling down. The January is is a lawnmower, you know run rate growth. So that would be like fifteen twenty per-cent growth comparing to last year's. So the March actually is picking up. So basically we are missing the February growth and that actually impact us around override 10% numbers in the first quarter. So that's basically there's no high-level pictures moments that I could, you know, give my best right now.
Okay, got it. That's helpful.
The next question today comes from Nelson and Chong of City, please. Go ahead.
Since many questions for taking my question and congratulations on the first solid fy19 result. I have a quick question on your project guidance going into first quarter 2018 when he and full-year, uh, I paid on your guidance. I the gross margins will be around 27% in first quarter of 2027. To around 30% last quarter. Okay management briefly explain what the driver behind demanding change and given the office who year model guided at around 30% Okay management provide your long-term margin Target on gross margin level and operating margin level in Los. Thank you.
Okay.
Thank you allowed since I think for the first quarter actually our margins expectation is lowered obvious reason is because of the slowdown in the executions of our Enterprise Solutions, all those wage policy more demand, but the execution still take a break time and if you look at our numbers and Q4 actually our first plug-in is improved quite substantially the major contributor wage is obviously coming from the Enterprise duration business. So that's why in the first quarter we will see the numbers order margins would have some impact like that and but overall in a year as we as they you are relatively confident and also because we believe that that this virus situation would ultimately passed by and that uh entering into properties the second half or even the second quarters. You should be able to execute more of the Enterprise solution business. And also we also planning on some, you know, new high margins Marketing Solutions products. So we believe they're all these adding up we will still be dead.
People is to remain the you know, 28 to 30% gross profit margins in a year and in the longer terms, of course, we we are targeting to basically Rich, uh, at least you know, twenty 50% of our Revenue coming from that Enterprise solution business, but we are not talking about this year or even next year but we are talking about a relatively uh longer-term. Soul, but if we would be able to achieve that so basically our gross margin would be able to update to you know, properly 45% parts and also that our operational lavish was there so if you look up right now is I will you know 2019 numbers we've been able to basically doing around like a ugly person, you know, operating ebitda margins. So I'm going to try the 20 and also into a more, you know, relatively long-term. We believe that will be able to properly produce or update that Lumbers to a high, you know single digit number at least wage.
In the next like two or three years, so that's basically Target right now is that we have I hope this would make sense and answer your questions.
Thank you very much. That's very helpful.
There are no further questions. I'd like to turn the call back over to the company for closing remarks.
Thank you. Once again for joining us today. If you have any further questions, please feel free to contact I clicks investor relations department through the contact information provided on our website.
This concludes this conference call. You may now disconnect your lines. Thank you.