Q1 2022 Zedge Inc Earnings Call
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Okay.
Speaker 1: Good afternoon and welcome to the ZED's First Fiscal Quarter 2022 Earnings Conference Call. During management's prepared remarks, all participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation by ZED's management, there will be an opportunity to ask questions. To ask a question, please press star, then one on your touchtone. To withdraw your question, please press one.
Good afternoon, and welcome to the <unk> first fiscal quarter 2022 earnings conference call.
Management's prepared remarks, all participants will be in a listen only mode should you need any assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
After todays presentation by management there'll be an opportunity to ask questions to ask a question. Please press Star then one on your Touchtone to withdraw your question. Please press one.
Speaker 1: In today's presentation, Jonathan Reich, Zedge's Chief Executive Officer, and E. Tsai, Zedge's Chief Financial Officer, will discuss Zedge's financial and operational results for the first fiscal quarter that ended on October 31, 2021. Any forward-looking statements made during this conference call, either in prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause the actual results to differ materially from those which the company anticipates.
In today's presentation, Jonathan Reich, <unk>, Chief Executive Officer, and ESI is that just chief financial Officer will discuss financial and operational results for the first fiscal quarter that ended in October 31 2021.
Any forward looking statements made during this conference call either in prepared remarks or in the question and answer session, whether general or specific in nature are subject to risks and uncertainties that may cause the actual results to differ materially from those which the company anticipates.
These risks and uncertainties include but are not limited to specific risks and uncertainties disclosed in the reports that <unk> files periodically with the U S Securities and Exchange Commission.
Speaker 1: Zedge assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause the actual results to differ materially from those that they forecast.
Does that just assumes no obligation either to update any forward looking statements that they have made or may make or to update the factors that may cause the actual results to differ materially from those that they forecast.
Speaker 1: Please note that the ZEDS earnings release is available on the Investor Relations page of the ZEDS website. The earnings release also has been filed on a Form 8K with the SEC. I would now like to turn the conference over to Mr.
Please note that <unk> earnings release is available on the Investor Relations page of <unk> website. The earnings release also has been filed on a form 8-K with the SEC.
I would now like to turn the conference over to Mr. Jonathan Reich.
Speaker 2: Thank you, operator, and thank you all for joining us today. Good afternoon. Welcome to Zeg's Earnings Conference call for the first quarter fiscal year 2022 ended October 31st, 2021. I'm Jonathan Reich, CEO of Zeg, and with me is our Chief Financial Officer, Yi Cai, who will provide additional insight into our financial performance. We will then be happy to take your questions.
Thank you operator, and thank you all for joining US today. Good afternoon, welcome to <unk> earnings Conference call for the first quarter fiscal year 2022 ended October 31.
2021, Jonathan Reich CEO with me is our Chief Financial Officer.
Si who will provide additional insight into our financial performance. We will then be happy to take your questions.
For those of you that are new to the zinc story or haven't followed us in a while we own a portfolio of leading digital consumer brands third 43 million users around the globe in October 2021.
Speaker 2: Our portfolio consists of Zedge ringtones and wallpapers, the leading mobile app used for mobile phone personalization, social content, and fandom art. Zedge Premium, a marketplace for artists, celebrities, and emerging creators to market their digital content to Zedge's users. Emotopedia, the leading source of all things.
Our portfolio consists of as edge Ringtones wallpapers, leading mobile app used for mobile phone personalization, social content and fandom art that's.
Premium and marketplace for artists celebrities and emerging creators to market their digital content to David's users.
<unk>, the leading source of all things emoji.
Speaker 2: and Shorts, a mobile entertainment app currently in beta focused on short form storytelling.
And shortz, a mobile entertainment App currently focused on short form storytelling, we possess deep expertise in monetizing our digital real estate, whether through advertising subscriptions or content sales our products appeal to a wide range of customer segments globally, and we have a strong youth.
Speaker 2: We possess deep expertise in monetizing our digital real estate, whether through advertising subscriptions or content sales.
Speaker 2: Our products appeal to a wide range of customer segments globally, and we have a strong user base in North America and Europe , as well as in emerging markets, including India in particular.
<unk>.
In North America, and Europe, as well as in emerging markets, including India in particular.
Speaker 2: We topped our record fiscal 2021 in the first quarter, surpassing six million in revenue for the first time while reporting revenue growth of 60 percent, a 43 percent operating margin, two point one million dollars in net income, three million dollars in EBITDA and GAAP EBS growth of 64 percent to 14 cents.
We topped a record fiscal 2021 and the first quarter, surpassing $6 million in revenue for the first time, while reporting revenue growth of 60% to a 43% operating margin $2 $1 million and net income $3 million in EBIDTA.
And GAAP EPS growth of 64% to 14.
Speaker 2: We closed the quarter with over $27 million of cash on our balance sheet and almost no debt.
We closed the quarter with over $27 million of cash on our balance sheet and almost no debt.
Speaker 2: Advertising revenue remains robust as we continue to optimize our ads back to drive higher prices received for every 1000 advertising impressions known as CPM.
Advertising revenue remains robust as we continue to optimize our adds back to drive higher prices received for every 1000 advertising impressions known as Cps.
Speaker 2: Subscription revenue and active subscriptions increased 48% and 25% respectively versus last year. After a pause last quarter, we were pleased to see subscriptions return to modest growth.
Subscription revenue and active subscriptions increased 48% and 25% respectively versus last year. After a pause last quarter. We were pleased to see subscriptions return to modest growth.
Speaker 2: Given our acquisition of Emojipedia at the beginning of fiscal 2022, in our release today we clarified that monthly active users, or MAU, and the average revenue per monthly active user, or ARPMau, are KPIs that have always referred only to the ZEDGE mobile app, and neither include the Shorts Beta nor Emojipedia.
Given our acquisition of <unk> at the beginning of fiscal 2022 and Arrow lease today, we clarified the monthly active users or MAU and average revenue per monthly active user or ARP now our kpis that have always referred only twos edge mobile app and neither.
<unk>, the Schwartz beta nor emergent PDF.
Speaker 2: the latter of which today is desktop or mobile web only. Note, the underlying data is unchanged from what we have been reporting. MAO increased 6% with emerging markets up 11%, driven mainly by continued demand in India.
The latter of which today is desktop or mobile web only note. The underlying data is unchanged from what we have been reporting MAU increased 6% with emerging markets up 11% driven mainly by continued demand in India developed.
Speaker 2: Developed markets remained a challenge with mail declining in the high single digits. Despite this, our mail increased 47% versus last year.
Developed markets remains a challenge with now declining in the high single digits. Despite this our Pam increased 47% versus last year.
Now I'd like to update you on the strategic priorities I outlined.
Speaker 2: Now I'd like to update you on the strategic priorities I outlined on our last earnings call.
On our last earnings call.
To start with growing our customer base and improving engagement, particularly in well developed markets.
Speaker 2: To start with, growing our customer base and improving engagement, particularly in well-developed markets.
Speaker 2: During the fiscal first quarter, we began rolling out social and community features, starting with giving our users the ability to follow artists they find interesting. We are also continuing to use machine learning algorithms to improve content discovery. As the year unfolds, we expect to add more social and community features, while also starting to focus on search and user onboarding.
During the fiscal first quarter, we began rolling out social and community features starting with giving our users the ability to follow artists. They find interesting. We are also continuing to use machine learning algorithms to improve content discovery as.
As the year unfolds, we expect to add more social and community features while also starting to focus on search and user onboarding.
In addition to these efforts we are ramping up paid user acquisition campaigns and we will continue to expand this effort as long as it proves accretive next we continue to invest in the parts of the business that offer optionality.
Speaker 2: In addition to these efforts, we are ramping up paid user acquisition campaigns and will continue to expand this effort as long as it proves accretive. Next, we continue to invest in the parts of the business that offer optionality. Zedge Premium is a big part of this opportunity. Tomorrow we expect to start rolling out our NFT offering called NFTs Made Easy in the Zedge Premium Marketplace for both Android and iOS.
Premium is a big part of this opportunity tomorrow, we expect to start rolling out our NFC offering called Nfc's made easy and as edge premium marketplace for both Android and iOS.
Speaker 2: Our approach to NSTs allows ZED Premium artists to create and sell NSTs to our users without being cryptocurrency experts.
Our approach to <unk> Ts allows it net premium artists to create and sell NFC to our users without being crypto currency experts.
Speaker 2: Our users are able to purchase NFTs in the same manner as they have always purchased any item in ZEDGE Premium, mainly by buying and spending ZEDGE tokens, our existing virtual currency, which are available in the ZEDGE app through in-app purchases.
Our users are able to purchase <unk> in the same manner as they are always purchased any item in veg premium mainly by buying and spending veg tokens are existing virtual currency, which are available and as that gap through in app purchases.
Speaker 2: NFTs made easy have disruptive potential because we've simplified the process for artists to self-publish, mint, and sell their NFTs. We do not charge minting or gas fees to artists, and they are paid in their local currency.
And his team's made easy have disruptive potential because we've simplified the process for artists to self publish mint and sell their NFC, we do not charge minting or gas. These two artists and they are paid in their local currency.
Speaker 2: For consumers, it is just as easy. NFTs are purchased with ZEDS tokens as in-app purchases through the Android Play or Apple App Stores in their local currency.
For consumers is just as easy and as teaser purchased with zich tokens and in App purchases through the Android play or Apple App stores in their local currency crypto currency knowledge and wallets are not needed at launch we are starting with video wallpapers from it.
Speaker 2: cryptocurrency knowledge, and wallets are not needed. At launch, we are starting with video wallpapers from a select group of artists, and over time we expect to expand across different content categories and make this functionality available to all Zedge Premium artists.
Select group of artists and overtime, we expect to expand across different content categories and make this functionality available to all of that premium artists.
Speaker 2: We also expect to enable additional capabilities such as limited editions, drop dates, auctions, and trading.
We also expect to enable additional capabilities such as limited editions drop dates auctions and creating.
Speaker 2: Stay tuned for further announcements in 2022. In summary, we are beyond excited by the potential for NFTs made easy in the Zedge Premium Marketplace and believe this will not only bring more artists to the platform, but it will also increase Zedge Premium's GTV and revenue while making us more relevant on iOS.
They tuned for further announcements in 2022.
In summary, we are beyond excited by the potential for NFC has made easy and as edge premium marketplace and believe this will not only bring more artists to the platform, but it will also increase the premiums GTD and revenue, while making us more relevant on iOS without it.
Speaker 2: without trying to temper our excitement for the product. I want to set expectations for investors.
Trying to temper, our excitement for the product I want to set expectations for investors revenue for <unk> is not likely to be material from the get go.
Speaker 2: Revenue from NFTs is not likely to be material from the get-go.
Speaker 2: We expect it will take time to take hold and ramp as we fill out the offering and bring in new artists. Plus, it will likely be most relevant to users in well-developed markets where we are working to...
We expect it will take time to take hold and ramp as we fill out the offering and bring in new artists plus it will likely be most relevant to users in well developed markets, where we are working to increase engagement. While there are no material operational updates about <unk> plus subscriptions or the <unk>.
Speaker 2: While there are no material operational updates about ZEDG Plus subscriptions or the shorts beta, we remain committed to enhancing both of these offerings.
<unk> data, we remain committed to enhancing both of these offerings and we will keep you apprised when there is news to share about their progress.
Speaker 2: and will keep you apprised when there is news to share about their progress.
Speaker 2: We are also in the process of further unlocking Emojipedia's value by translating the site into languages other than English, while also exploring the possibility of a native mobile app.
We are also in the process of further unlocking <unk> value by translating the site until languages other than English, while also exploring the possibility of a native mobile app.
Speaker 2: And finally, there's M&A, where we are continuing to look for symbiotic opportunities that can benefit from access to our large customer base.
And finally, there is M&A, where we are continuing to look for symbiotic opportunities that can benefit from access to our large customer base.
Speaker 2: our expertise in monetization, our technical know-how, and our skill in managing a complex platform, among other benefits.
Our expertise in monetization our technical Knowhow.
And our scale and managing a complex platform among other benefits.
Speaker 2: In closing, we had an outstanding first fiscal quarter of 2022, and believe we are still in the early innings of reaching our growth potential.
In closing we had an outstanding first fiscal quarter of 2022 and believe we are still in the early innings of reaching our growth potential.
Speaker 2: Similar to last year, we are not updating guidance at present and still expect top line growth of 25 to 30 percent with continued net income growth, strong operating margins and cash flow, and strong EBITDA growth.
Similar to last year, we are not updating guidance at present and still expect topline growth of 25% to 30%.
With continued net income growth strong operating margins and cash flow.
And strong EBITDA growth.
Before handing the call over to <unk>.
Want to thank you our investors for your support I also want to remind everyone that our success is a direct outcome of the outstanding team of talented and dedicated professionals, who work its edge and who go above and beyond to execute our vision. Thank you and happy holidays now.
Im going to turn the call over to EPS.
Who will provide details about our financial performance.
Thank you Jonathan I wanted to start by reminding those on our call at our fiscal year end.
July 31.
Moving to our first quarter results now.
<unk> has a number of unique users that opened all of that at June <unk>. The period increased five 6% to $34 2 million during October versus $32 4 million in October 2020 in merchant market now.
Expanded by 11, 2%.
While well developed market now contracted by eight 5%.
Total revenue in the first quarter increased 60% from last year to $6 million.
This year, we benefited from our ongoing work to incur I'll add operation.
Subscription revenue was up 48% from last year still demonstrating strong growth.
<unk> payments courts transaction logging or GTD that hit the total south falling transacted through our marketplace was about $330000.
58% compared to the year ago quarter.
As Jonathan indicated this is the key focus for us going forward.
We believe the potential of the marketplace is still substantial untapped and we will benefit settlement that will entail among new and FTE platform.
Active subscriptions were up 25% versus last year and return to sequential growth versus the prior quarter.
The slowdown in net subscription growth was basically due to a number of new subscription added being offset by lower churn rates.
Hence remain accounts than percentage, even though we grew to a higher base number obviously.
This is a common problem consumer subscription.
<unk> base getting larger and as Jonathan mentioned, we have taken steps to re accelerated sequential growth in this numbers.
And now lets five three.
An increase of 47% year over year, driven by the combination of better advertising performance and higher paid subscription number versus last year.
Operating margin increased to 43% versus 29% last year.
Reflecting the continued revenue growth and strong operating leverage inherent in our business net income and diluted EPS were $2 1 million.
<unk> 14.
Respectively versus lending income of $1 million and EPS of <unk> in the <unk>.
Yes.
We grew EPS substantially despite diluted average shares outstanding for the fourth quarter of about $15 million compared to 12 $5 million a share from a year ago.
EBITDA was $3 million versus $1 $4 million last year.
From a liquidity standpoint, we remain in a strong net cash position with almost no debt and over $27 million in cash and cash equivalents at <unk>.
$91 million increase from last year and up over $2 million sequentially.
As Jonathan mentioned semi.
Similar to last year, we will update our full year guidance when we report our second quarter earnings.
The following is just a reminder of what we said Q.
Our Q4 call a few months.
We said that we initially targeting revenue growth of 25% to 30% for the year.
Due to all the new initiatives and feature releases.
Seasonality, which usually take it in a second quarter may not be typical of this year.
And internally, we are modeling sequential revenue growth each quarter.
We also said that despite the increased level of investment. We believe we should continue to report operating margin of at least 40%.
Sure.
For modeling purpose, we said our expected tax rate would be 21%.
So we use all of our federal NOL in fiscal 'twenty to 'twenty one.
Also suggested using 15 to 15 4 million shares.
Calculating diluted EPS.
Given the increases in the last two items most significantly the tax rate.
We expect the drag on EPS growth in fiscal 2022.
We anticipated continue net income growth with strong cash flow and EBITDA growth.
EBITDA, we said we were targeting a growth rate that is slightly higher than our revenue guidance.
Thank you for listening to our first quarter earnings call.
Each one of you remain safe this holiday season, and look forward to speaking with you again on our next call operator back to you for Q&A.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
We are using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press one.
At this time, we will pause momentarily to assemble our roster.
The first question is coming from Allen Klee from Maxim Group. Your line is live.
Good evening and congratulations.
Strong results beat me on the top and bottom line.
As I look through what caused that.
Advertising was very strong your average revenue per monthly active user.
The increase there was a surprise for me how strong it was could could you touch a little on on what was behind that and how you. How you think about it that's got legs to it. Thank you.
Thank you Alan Jonathan I appreciate the compliments and.
Those complements really go to the entire team.
Sure.
I think we've gone through this.
Repeatedly in the past we do.
Dedicate a lot of.
Time and effort to optimizing our advertising stack.
And.
That is exactly what is at play.
In this quarter.
Certainly.
There has been a trend in the market with rising CPM.
That we're benefiting from but.
Sure.
Everything that we know it's not simply just being in the right place at the right time, but it is a matter of being in the right place at the right time and then.
Working hard in order to optimize.
The.
Arc now that you referred to.
And in terms of legs to it.
What we've said repeatedly over the course of the last.
Seven quarters, eight quarters, or so has been that.
We are continuously investing and optimizing.
Our ad inventory.
That.
<unk> not.
Not only.
Investing in technology, but also investing in resources investing in design investing and various demand partners, and saying which ones are working.
And what's the best way.
Taking advantage of the portfolio of demand partners are the best way of taking advantage of a massive portfolio of partners is in order to.
Generate.
The arc now that.
We have benefited from.
For the last several quarters.
I hope that answers your question.
That's helpful. Thank you and then in terms of your user base.
We still have this trend of growing emerging declining developed.
Two questions related to that what do you have behind what's behind the strength in emerging in India.
Called out in second.
In terms of developed I know youre looking at a couple of things with Apple and <unk> could you go into a little bit of more of what the strategy is to try to grow that develops users. Thank you.
Sure so with respect to growth.
In the emerging markets generally and more specifically with respect to India, our offering is compelling.
Certainly as you know we've got a R E.
Premium content content that people can download without having to pay for that content and that is a trough, particularly in markets.
Fair discretionary income is not as plentiful as it is in the well developed markets.
And so far as.
The developed markets, we have several initiatives underway in order to improve engagement and.
Increase the.
Customer base.
So some of those that we've talked about.
<unk> community features which we started to rollout.
Such as follow me feature if Theres an artist that you like you can follow them in any time.
They released new content.
They will be able to message to you and.
That is a draw for users to <unk>.
Reengage with the App of course, as we improve engagement that means that more users are coming back into the app and one of the users in an app. We are generating revenue from advertising and hopefully also generating revenue from the sale of premium content.
And Ftes.
As I said earlier.
This is BBB philosophy philosophy that we have that NFC is is that it's a needed utility for artist community something which we expect will bring in new artists as well because we have crafted our NFC offering which we call <unk>.
Made easy.
A really really.
Simple fashion, such that neither creators nor consumers need to have crypto experience or technology experience in a quarter to purchase those end of peers and our hope is that with time that that will also help drive demand for our product and drive to use.
Your base.
And.
Specific to iOS.
We are offering these NFC is across both Android and iOS.
And.
Our hope is that that will be an additional.
Factor that can drive.
Pos growth for us, which is taking advantage of the optionality.
Associated with our brand and this product.
We also have work going on in terms of improving search and content discovery I think I've mentioned.
Using the benefits of machine learning in order to customize content feeds for users based upon their particular tastes and preferences and usage patterns and content consumption and so on and so forth.
So those are just a handful of items, but taken in totality. Our hope is that we can begin to turn the corner and reinvigorate growth.
In the.
Well developed markets if you will.
Okay and perfect.
So I was playing on your App today and I noticed there were NFC is there.
<unk>.
And I just wanted to understand that a little bit more in terms of.
You get paid the same way as you get paid us as kind of on like if youre somebody selling the wallpaper and ring tone and.
And how about like the secondary market for <unk>.
How is that handled.
And where where is the where is it.
Yes.
Where is it secure.
If somebody purchases in NFC, where are they holding it so that they can be comfortable that that it's going to be there and not get stolen.
Great questions. So the way that one purchases in NFC is by using tokens.
Which we sell through in App purchases.
Obviously, the artist will select the price that they want to charge for that entity and then an end user will need to.
Purchase the number of tokens needed in order to.
Transact that purchase or sale, if you will.
And that's all done through in App purchases in local currency as an end user <unk> and NFC that I really like.
Just for argument's sake say that it's $10 I would then go in.
And perfect $10 worth of debt tokens.
And I would then be able to.
Secure that NFC.
Terms of.
Or is it secured we're working with a third party.
Technology provider.
Has.
Specialized in securing this on the blockchain.
In terms of.
Being able to go to secondary markets.
At launch.
There is the ability to do that although it's a very manual process.
But we expect that over time as we evolve this product.
<unk>.
That will become easier to accomplish and.
It will also be something that can be done even within app. So I think I've mentioned.
Our ability to support trading and auctions and drop dates and so on and so forth.
Are all on the roadmap.
Fully in 2022 calendar year.
Fantastic.
I was also using your shortz app today and I noticed.
Over the year, you've significantly increased the amount of.
Categories genres.
I saw some audio on there.
Could you talk about how well your experimentation is going.
Sure. So on previous conference calls I've talked a little bit about what we've done in shortz.
Let's say during calendar year, 2021, where theres been a lot of work in.
Our refining the product our ability to really understand what's happening from an analytics perspective from.
Everything including content consumption.
Popularity.
Demographic and so on and so forth.
And that work continues to unfold.
Sure.
As you said, we've done a lot of work in terms of.
Tagging.
And.
In terms of expanding the different verticals if you will.
That would be.
Appropriate for an array of different customers.
We've also taken a more significant step in terms of understanding usage patterns and consumption patterns with respect to patio.
We have not.
No updates.
With respect to.
Where we were when we reported our.
Fiscal year 2021, a couple of weeks ago other than to say that we're continuing along that path.
And looking for the optimal way in order to.
Expand.
Business.
<unk>.
Deliver.
Great content experience to users.
<unk> will result in.
Recurring usage and ongoing growth.
Great.
Terms of your marketplace.
Kind of highlighted that as an area of.
Of a real priority this year and what the opportunity can be.
Could you.
What could be opportunities.
How should we think about that.
Okay.
Sure. So as you know we were not breaking out particular.
Our providing particular growth numbers for the marketplace, but.
There has been tremendous growth overall in the create creator economy.
Certainly <unk> play into that and.
Considering that we've got give or take 35 million monthly active users globally.
Our goal is to see to it that we take advantage of a lot of the infrastructure spend that we have made over the course over the last 12 to 18 months as you recall.
Had overhauled our content management system, we've overhauled.
Unified accounts or things of that sort, we are working on our recommendation engine et cetera, et cetera, and the idea is that we want to.
They all users of not only existing content categories that we have today draw in new artists because.
We have this massive user base and.
Our.
Ts and CS are very straightforward the platform is very easy to use if you are a creator but.
But we also want to begin to think about new content genres.
Then beyond simply being wallpapers video wallpapers.
Ring tones and notification channels.
So those are all the things that we are thinking about at this point in time and COO.
Currently looking to expand.
The universe of artists that.
Monetize on our platform.
Thank you my last question.
How did the quarter performed relative to your internal expectations.
What surprised you on the maybe the upside or downside.
Yes so.
We haven't shared.
Quarterly budget numbers or anything of that sort in the past and I don't expect that we are going to all I can say is that.
We have been really working hard to see to it that we can feel the balls as those opportunities begin to avail themselves and.
Yeah.
The team is very very much dedicated to.
Seeing to it that we are.
Meeting, our budgetary numbers, if not beating them and if there are gaps.
We're really doing our best in order to understand what causes the gap is and how to close that gap.
Best of our ability.
I think I had mentioned on previous calls.
Cook.
Liberty of hiring product managers.
In calendar year, 2021, and having dedicated product managers.
Who have responsibility for P&L.
<unk> been beneficial in terms of.
Getting answers earlier answer it correctly.
Action is needed or half.
Prospective action as needed in order to take advantage of an opportunity that we're in a position to do that not that it's easy, but certainly it's something that.
Results from having more dedicated product managers.
<unk> is having that level of granularity. So that we can act and hopefully act quickly in order to.
Seated with gaps are closed if and when they appear.
Thank you very much.
Thank your company is really a great example of how to do a successful mobile ecosystem.
How to think about all these different ways to monetize.
Larger.
User base.
Very impressive what you've done thank you.
Thank you al in your words are very times really appreciated and wishing you very.
Happy holiday season.
Good health.
Yes.
Thank you. Your next question is coming from Brian Warner Your line is live.
Brian Warner Your line is live.
Oh, I'm, sorry, I might have been muted can you hear me.
Yes, you are coming through.
Oh, okay.
Congratulations.
And Im happy holiday and warm wishes to all of you.
Two questions could you talk about anything you've done to date on a.
Customer acquisition, particularly domestically.
The spring might've been.
I haven't really done anything yet.
Give us a sense of the how are you going to attack that.
And I know, it's early but what you might spend on that.
Second question could you just give us any color on what the advertising.
Revenues are yields are.
<unk> subscribers in lesser developed countries.
Developed countries I mean, I'm sure, it's a huge value.
But you didn't give us any color might be helpful.
Bank.
Thanks for the compliment Brian.
Hope youre doing well as well.
In terms of paid user acquisition.
What we are doing is we are.
Beginning to scale out.
We are very much focused on trying to do.
Sure.
Acquire customers across various platforms.
Where we will see a positive ROI from those customers.
And.
Where.
We see that the numbers are panning out than.
And then we're trying to scale those numbers up.
In terms of dollar spend we have not shared.
With the market.
Our investors what the budget is but suffice it to say that.
We.
Are looking at.
Looking very closely at.
Each of the areas in which we are investing testing and then analyze it.
<unk>.
The platforms and the criteria by which we're going out and acquiring those customers.
For the ones that are generating positive ROI we are.
Expanding and for the ones that are not generating positive ROI, we will test a little bit more but if we see that the gap is so significant that the ROI side, then we will not pursue.
Those platforms.
We have.
And continue to work hard to make sure that we have.
Insight.
And the knowledge so that we can see what these customers ultimately produce and when you think about this.
Oh, let's just say, we go out and acquire.
Customer and that's through a download in a.
And then in a well developed market. We're also looking at well for that cohort of users how much money are they generating from advertising how much money are they generating from premium sales and how many of those users.
Potentially convert into subscribers, so taking a look at that entire portfolio.
Potential monetization.
Is whats going into our analysis and then taking a look at that over some period of time.
So that.
We have a comfort level that app.
After that period of time, we will be whole and then from that point going forward, we will actually generate.
Positive ROI.
Terms of your second question.
We have not shared that level of granularity in terms of.
Revenue from advertising versus from subscription and what the quarter of magnitude difference between the two is.
And.
I think we're going to hold off on getting into details about that this evening.
Okay fair enough.
Thanks, very much and good luck.
Thank you.
Thank you once again, if you have a question. Please press Star then one.
This concludes our question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.