Q4 2022 Super League Gaming, Inc. Earnings Call

[music].

Greetings and welcome to the Super League Gaming fourth quarter and full year 2022 Conference call. Please note. This conference call is being recorded.

Before he became a like to caution listeners that comments made by management. During this call may include forward looking statements within the meaning of applicable securities laws. These statements involve material risks and uncertainties and actual results could differ from those projected in any forward looking statements due to numerous factors for a description of these risks and uncertainties. Please see Super League.

Financial statements and MD&A for the fourth quarter and full year 2022 ended December 31, 2022 available on SEDAR and Edgar important qualifications regarding forward looking statements are also contained in <unk> earnings release distributed earlier. This afternoon and also available on SEDAR and Edgar.

Furthermore, the content of this conference call contains time sensitive information accurate only as of today March 30th 2023. She believe undertakes no obligation to revise or otherwise update any statements reflect events or circumstances. After the date of this call I'd now like to turn the conference over to Ann hand, Chief Executive Officer. Please.

Go ahead.

Thank you for joining us today.

We're very excited to share with you our Q4 and 2022 financial results I'd.

I'd like to briefly walk through some of our record financial highlights really today I want to focus on how excited we are about our ground positioning and our perseverance and a nascent industry, where many others have struggled to try it.

First of all I, just need to emphasize our product market that has never been stronger. This was evidenced by another record breaking revenue quarter and strong full year 'twenty as fine tuned revenue growth of approximately $20 million, an increase of 70% year over year, despite macro headwinds.

Traditional advertising dollar shift to where audience is something that we expect our innovative products marketing and Salesforce third pipes increase our.

Our margin profile is on solid footing with room for upside with new innovations that.

And we started to attack our cost structure, starting really back in June of last year, we streamlined our operational expenses for a 30% reduction on an annualized run rate basis.

While refocusing our head count towards revenue generation.

Most importantly.

We have taken steps to shore up the balance sheet.

Subsequent to the end of the quarter, we have closed on over $12 million with accredited investors and at the market transaction, enabling us to extinguish all that again I repeat me to extinguish all of that.

Additionally, although no assurances can be given I'm pleased to share that we have pending commitments for another 10 million in additional aftermarket capital and anticipate making a public announcement in the very near future.

While I'm proud of our track record of delivering topline growth our future is even brighter.

Evidence is clear our strategy is working and we see three leverage points driving our business momentum number one we have a strong pipeline both in depth and breadth.

And increasing deal sizes, we served over 100 brands in 2022 with southern customers spending in excess of $1 million through the Super League channels and they keep coming back with a strong 70% repeat customer rate.

And this includes great brands.

Marvels, New horse has been spending continuous money thorough Super studios team with a long running program.

And also last year, one of the most exciting parts of our year, we're very successful programs they launch with Mattel across multiple product lines.

Now, let's look forward a bit and why we're so confident about just along with the business model. We're in today why we know that we're seeing that depth and breadth in the pipeline and those larger and larger deal sizes.

Of the 78 deals in the current pipeline 56, or six figures or more that's right at $56 78.

Eight of those 78 deals are seven figure deals and we're talking about the lifestyle piece Warner Brothers games L'oreal PNG anymore, and just recently, an exciting program with Nintendo and part of that.

That's an important note to you can see that we're starting to move across the virtual world and moving more and more beyond just the incredible footprint that we've built and roblox or minecraft.

The second point of Leverages, our burgeoning global sales partner network that.

That helps us deliver against the mouth and international reach as a complement to our domestic direct salesforce efforts are.

Our newly launched global sales partner strategy accounted for 3 million and $20 million in revenue last year, that's about 15% for a channel that was affectively launched that year. So when you think about that just the learning curve in the adoption curve that our channel partners need to go through I'm really thrilled that if we can get 3 million out of that channel.

Last year, 15% of revenue, there's massive outside and.

And we've had some very signature successes with these partners, including a really great pop up visa shop activation.

It was targeting Gen Z and it delivered a 14% lift in brand preference versus other payment solution that we engaged our exciting gaming audience around.

And the leading indicators look promising as well for our global sales partners with multiple wins in the pipeline along with solid leads from global brands like Lego Colgate and Nike.

And then there's a third point of leverage and this is really where the business is going and so this is the piece that I think it's so important that investors get excited about and this is the move towards bigger partnerships and these are partnerships that are offer recurring long term revenues because they look like annual or multi year program.

But this isn't really just about changing the size of our deals, but it's also about changing our business model and so what do I mean by that.

Well, it's about the fact that we are now going to be a publisher of both owned and operated worlds for ourselves and for others and then Julien. So we have an opportunity to participate much more widely in the economy. So what do I mean by that instead of being paid to create experiences and game world.

And and and placing media products to drive revenue around it we have an opportunity to diversify and participate beyond media and experienced publishing into the full economy. The full economy, a digital revenues digital to physical crossover revenues and even through data.

When you talk about creating these persistent world. This isn't just a concept that I'm talking to you about today. This is a reality we are doing this right now with customers like Abu Dhabi shop Island, we are creating multiple persistent virtual twin world as a complement to the realized Jaap Island entertainment destination to both attract young visitor.

<unk> and their parents.

Now turning to our outlook about where our business is heading where we believe our business will be in the next few years. Ultimately today, we are the strongest position in the company's history to execute on our vision and drive meaningful growth.

Our core strategy is grounded in our efforts efforts to further monetize the massive audience reach we've built and already existing virtual game worlds and platform. That's been our core REIT focused on where the audience is today and then beginning to apply this strategic vision. This technology. This capability backbone that we have.

So new virtual World engine.

That extends our reach it extends our revenue diversification as well.

We see a clear line of sight towards organically growing our annual revenues to over $100 million with a gross margin into the low to mid sixties.

Further strategic M&A is additive and something we continue to remain open and opportunistic too.

But this is really about what we can do organically with both the technology and the massive footprint that we have already built today.

Now there's ways, we can underpin the hundred million very bold revenue target that we have in front of us over the next few years. The first thing. We're gonna do is apply our in house publishing machine to deepen our owned my diverse game world and IP footprint for ourselves for a greater share of the consumer economy.

But we're not really done with that we then further innovate our media and analytics suite to expand our audience reach and generate more value for both our creator community and our brand partners and that leaves us to larger higher performing program and bigger margins.

We will continue to expand and optimize our global network and sales partnerships. Those international resellers, we've talked about for continued monetization opportunities with all of that international sizable audience reach that we have.

We'll continue to increase our salesforce effectiveness through higher sales person through places were already seen a big change in that from averaging about one two to one 5 million per sales leader last year to targets. This year that are 2 million to $3 million and more per liter and so as we continue to high grade that talent and to really become.

More effective at that talent, we expect to see not only higher throughput, but again those higher margin profiles that we spoke about and we've taken good steps to even incent, our sales team differently to be very margin net revenues contract.

And finally, I just can't iterate enough that we're moving beyond just being an advertising model by applying our end to end.

An immersive experience in media engine to new platforms for eligible and third party intellectual property for greater control and share of the consumer experience more participation in the digital and physical economies and as I mentioned first party data.

Our organic growth over the next few years is supported right now by identified partner programs, a very healthy robust product innovation roadmap and operational optimization many of the bones of which we've already put in place since June all of that is happening right now.

Make no mistake. The next big shifts in advertising has already arrived in fact digital advertising has not traditionally caught up with where the audience is and its underperforming as you can see in all the recent press about the faltering a traditional successful digital advertising platforms like Facebook and the like.

When I talk to global media leaders, what they say to me is and I know, it's time to move my money I need to go where that audiences and I just need to get educated and learn about it and understand it better but the shift as I said make no mistake is happening and we're well positioned to generate significant recurring high margin revenue.

Leading to sustainable long term value for our shareholders.

And with that thank you for listening to my opening remarks computer interest and will now kick off the Q&A session.

Thank you and we'll now begin with the question and answer session first we'll take some questions sent in from the Super League credit community.

What are Super league's plans to maintain its NASDAQ listing.

Yeah. It's a great question. So obviously, it's very top of mind to us that our share price is sub one dollar we have always been in very good standing with NASDAQ and we take that very seriously and frankly are honored to have our NASDAQ listing and maintain it we have made no deferred decisions at this time to do a reverse split.

But obviously, we have time to remedy we feel like our performance and delivery is really strong and powerful and that the market start to recover we're very hopeful that we can push our share price to sustainably back above a dollar and frankly much higher and so that's our focus right now is just execution execution.

And and if needed we can cross that bridge when we come to it but we haven't come to it yet.

And as a board and as the executive team of the company. We're really excited about the announcements that we have in the coming really days weeks and months, but notably around shoring up our balance sheet very exciting partner programs and announce but things that we think will really help all of our shareholders and the market.

Create more awareness and excitement about our stock.

Thank you in December we were notified of a collaboration between Jim a United and Super League gaming.

How is that partnership developed what plans this year.

One more I'm, sorry, I apologize what players.

Within the $5 billion digital fashion industry.

Yeah, it's really an exciting vertical and itself, but keep in mind at the intersection of pop culture is fashion music gaming and so much more you know our partnership with the D. M. A team you know if people aren't familiar with the fashion industry. This is one of the leading strategic.

It consultancy and Theyre in the hallways of the C suite of the biggest brands, we know from luxury like Gucci to street wear and sportswear and more and they have already been consulting with some really large big names that you know about what their future digital strategy should be and it's.

Not just about <unk>.

<unk> and virtual gaming World. It is that bigger vision about what is the next generation of their immersive website gonna look like why can't with it the fundamentals that are built and with these virtual world engine Theres. No reason your website can't be much more personalized customized intimate theres no reason you can't.

Try on makeup like we're doing with l'oreal and urban decay or try on clothes. They are have a different type of relationship. It's very complementary and it's more loyalty centric that works against the traditional brick and mortar experience. So while I don't have any specific announcements at this time, what I can tell you is that.

There are many conversations happening with big day passion brands. Some of this is about us taking them into their owned and operated world. Some of it is having us bring them into ours, and really allowing Super league to own some of the IP and being a new generation of a digital fashion.

<unk> marketplace.

So stay tuned.

Yeah.

Thank you can you provide any updates on the island of meta versus project.

Yeah. So this is something we've been working on now for about six months really exciting and again. This is a proof point about us having a capability.

Another innovation engine so to speak that we have built for ourselves and built tremendous success for ourselves and now we're getting a chance to apply it on behalf of partners. So in May we will be launching two virtual worlds for on behalf of Jaap Island, one will be a virtual world targeting young potential visitors and robo.

And another in sandbox, which will be targeting a little bit of an older demographic and these instances you'll be able to do all the things that you get to do if you go to the real life Gulf Island in Abu Dhabi, you can ride a Ferrari roller coaster you can visit a seaworld that's important right. That's an important marketing strategy to then convert.

Turning to people, becoming physical visitors of the destination and really works in harmony beautifully with Abu Dhabi is greater goals to really reposition themselves as more diverse diversified beyond the energy economy and we believe this is the first international entertainment destination that being brought to life inside These men averse are open world gaming.

Platforms, and it's already generated several follow on conversations with other.

Destination travel destination places, both domestically and internationally. So just like we talked about fashion being an arresting vertical to apply all of this more immersive web or experiential interactions with their target consumers. The same can be said for the rich travel industry and several other vertical.

Okay.

Thank you I'd like to know if there are any plans to apply super league's talents to the new fortnite creative experience in any way.

100%, we are super excited about.

The launch of the Fortnite creative experience.

You know, it's quite a leak was founded on this notion of really empowering everyday creators. That's why our creator economy is an underpinning thread of everything we do you know visit the world now where anybody can be a game maker anybody can be a gaming experience creator and when you talk about these open world.

Forums like roblox or now fortnite, it's really putting the game design into the hands of those everyday enthusiasts and so all of the good hard work that we've done the Tac and the capability. We built to apply for one engine. We are now already buying into fortnite and have always enjoyed a very nice strategic relationship with epic their own.

As well, so I mentioned already.

The work, we're doing with Nintendo bringing Super Mario and two important night experience, we've already as well been testing some of our various ad products.

And also thinking again, how else can we help that ecosystem just like we have been there to help the roblox creator ecosystem thrive and that's why we have several hundred games plugged into our network and that's how we built that massive audience reach what are the way. We can apply all of that to really have exciting sizeable reach important night as well at night.

Does bring us an older demo. It also brings a different kind of fidelity and experience and so we're starting right now to invest in the resources, we need to really have a sizeable leadership position there as we've already built and other platform.

Thank you the largest balance sheet asset is net intangible and other assets at approximately $20 million heavily weighted in partnering custom.

Customer relationships and developed technology.

Currently actively working to grow this asset through internal tech development or more focused on capitalizing on the assets back in place.

Yes.

Yeah sure sure yes, that's a good question as well and that answer can be broken up into two primary aspects.

The first aspect is the technical accounting aspect in the second aspect is the business and operational aspect.

From a technical accounting standpoint, the specific intangible assets related to partner and customer relationships and developed technology included in the $20 million intangible asset on our balance sheet relate to specific intangible assets acquired in connection with some of our fiscal year 2021 acquisitions.

Basically the technical accounting rules require us to allocate the purchase price of those acquisitions to the identifiable intangible assets that existed as of the date of acquisition.

In general the accounting rules do not provide for the opportunity to add cost to the specific intangible assets subsequent to the date of acquisition from a technical standpoint. So for example, the accounting rules do not provide for the opportunity to capitalize additional cost incurred related to a partner and customer relationships subsequent to the date of acquisition.

While we are developing critical partner and customer relationships on a daily basis, the accounting rules do not allow for the capitalization of those types of costs.

From a business and investment standpoint, we do however continue to invest time and resources into continuing to develop and advance and improve our proprietary cloud based platform covering our advertising technology, our <unk> game and game experience and tournament technology and are fully remote broadcast and live stream.

Technology and from an accounting standpoint, some of these costs are captured in the internal use software development costs sub component of the intangible asset on our balance sheet and the other cost incurred are required to be expensed as incurred in the income statement and are included in the engineering technology and development cost line item in our P&L.

Thank you you mentioned $100 million revenue outlook as organic growth can you talk about M&A strategy and how the company is thinking about possible acquisitions as well.

Yeah no. Thank you for that question.

You know much like our market cap is is very depressed and at times. It doesn't really feel fair I guess the bright side of that is we do think that we are an exciting growth stock at a very reasonable price.

We're not alone.

There are many companies out there smaller than us in many cases that are either private or public.

And we get called.

Just about every day.

You know what we've really tried to do is make sure that we stick to our vision.

We think it's important that we told a consistent story to all of you.

And so with that we.

We tried to be thoughtful and judicious when we dig in and look at some of these opportunities were.

We're trying to hold a pretty high bar that these things have to be accretive.

Because again, while we know that we're a growth stock we know that topline is most important.

Because of the market environment. We're in your patient has truncated for breakeven like everybody and so we're mindful of profitability, but we are very much looking at M&A that is smart accretive again that really starts to support this direction, we're moving in as well towards.

Higher margin, but I think if there's an important thing I want you to grab onto today. One is the fact that we're shifting from what just looks like a traditional AD model to something.

But again, it's much more recurring and diversified and revenues as we take all this capability and we move it into persistent virtual worlds and immersive internet experiences that's headline one but headline to I want you to grab a hold of and it does drive the M&A strategies.

How do we start walking margins, though right 45, 50% margins were doing pretty well.

Have products in our portfolio Thats 65, 70% margin.

We believe that with some smart M&A, we have an opportunity to bring more of that margin in house more of that capability and that tech and that'll allow us to to kind of fulfill that aspiration. We have on a weighted basis to start moving in a north of 50 and into those the 16th kinds of targets that we have over the right.

And the next two to three years so.

So we think M&A can play an important role in the margin strategy as well diversification of revenues and then smartly, bringing in house more tacking capability that allows us to grab more of that margin herself.

Thank you next we're going to take some questions from Super League covering analysts.

For Delta over the phone to wait to ask a question. Please press star one at this time or you may use the raise your hand function on the zoom to ask a question over the webcast. One moment. Please while we poll for questions.

First question today is coming from Scott Buck from H C. Wainwright your line is that life.

Hi, Good afternoon, guys. Thanks for taking my questions.

And could you give us a little more color on the opportunity in the reseller channel and maybe you know you talked about the $3 million in 2022, but well what does the pipeline you laid out is coming from that channel.

Yeah Yeah.

I mean, if you know when we really got kicked off the strategy you know by the time, we really had a fleet of partners signed on and we're really starting to test well, which ones are coming up to the curve and understanding how to sell this type of very innovative AD inventory on our behalf you know that's a learning curve. These are people used to selling more traditional media products.

I was pleasantly surprised as we were wrapping up the year to see that something that was a very new sales channel was able to deliver 15% of last year's revenue.

And I'm also seeing in the pipeline as their deal sizes are getting bigger you know the opportunities I mentioned with brands like Lego.

You know again six figure deals where there's a lot of last year was small media buys you know media buys that were you know 10 15 25000, so that that you know $3 million of revenue that we achieved last year with cobbled together by lots of little programs because what they were doing was they were learning and <unk>.

Brawley and putting in small ways into other media packages and deal. So the fact that we now are increasingly seen six figure deals tells me that they're getting their footing and it also means that we can expect a lot more than $3 million for 2023, I think it is conceivable that we could deliver $10 million of revenue this year out of that channel or maybe.

More the other exciting thing is is it becomes a very important pipeline Peter for us because its a brand like a Lego for example says you know I want to do a big media buy them through your channel. They also may want packaged with it didn't experience much like when we brought Barbie's Dream House July lasting.

And back in October and in that instance, when we're doing that experiential by it that is a deal that piece of that deal flows right back to our domestic sales team.

Those if flows inside where we have that built an in house capability to deliver a really robust virtual world experiences. So so they're out there selling the bigger brand on our behalf and that's becoming a feeder to our own internal pipeline as well.

Great that's helpful and it sounds like you guys have really done a good job in ensuring up the balance sheet here in the first part of 2023 can you talk a little bit about you know.

Where that capital will be allocated.

Investment capital to drive our.

Drive revenue or is it capital you know more just to support you know whats currently in the pipeline.

I mean, you know when you look at the fact that we've stripped 30% of our costs out we have really leaned. This organization out about 58% of our head count right now is revenue facing.

That's a pretty significant shift I think at the same time last year. It was kind of in the low thirty's and so we have gotten the company took place. It is ultra lean and we're going to continue to look at ways to further lean it out, but well we aren't going to sacrifice is the investment and our sales and business development capability.

And so some of this capital is to continue the push to bring cost out, but also redirect more and more investment in our sales capability because as you know when we've talked before we're sitting on a massive amount of inventory that that so much of it that we can further monetize through bigger and bigger programs with <unk>.

And advertisers.

So to me it is investing in our organic growth strategy.

And as it is growth capital to that respect it is certainly to the capital that we feel we need to raise to get to profitability.

Thanks, That's helpful. And then last one for me I just wanted to make sure unclear.

$100 million revenue target you laid out that's all organic right that does not include any additional M&A to get you there over the next few years.

Yeah that is right now now that doesn't mean, we won't do M&A, because we aren't gonna stay static, but certainly when we look at the there does three you know leverage points larger deals right leveraging other people's sales teams that international sales partner strategy I Love that strategy, you think about it we're not building up our own.

Our sales teams, we're leveraging other peoples P&L and we're doing it it's still a strong margin and then third on top of it and this is really where you start to get a real escalation, it's moving into both our own.

And third party persistent virtual world and if you're running a persistent world that runs for 12, 24, 36 months that can't possibly be a million dollar program, Justin just creating and operate in the world around you know that's what advertisers pay us just to run something for a month for them. So if we're wrong.

Things that are annual in nature, just the traditional work building experience in operating it is a multiyear program, but then on top of it in the case, where we get to participate more in the economy beyond just bringing the world to life and optimizing that but get to participate in the direct to consumer revenues, that's where we are.

See that diversification in revenue and again exponentially more revenue per program just different in nature.

Great. That's helpful. Thanks for taking my questions and very impressive quarter guys. Congrats.

Thank you I do think that to your point.

You know look you saw a lot of the topics about advertiser pull back.

So we're really fortunate that in for Q, we had a record breaking quarter.

And and we really did it through you know a fantastic sales team and sales partner team, but also the fact that we have really innovative high performing products and again you know as I mentioned earlier, you know I'm hearing it straight from the mouth of the global head of media Mattel and other big name firms that they have.

Have to figure out where to put their dollars where the audience is gone and we are where the audience is and so I think that's why we were able to deliver a strong quarter that doesn't mean as we said earlier that these market headwinds are still out there. They are for everybody, but I think our our products and our offer them stand out and.

Put us in a really good position we are the future of digital advertising, we are not the traditional digital advertising in the past.

Thank you next question is coming from Jack that or put Maxim Carolinas don't lie.

Okay, Great Hey, guys I appreciate the update and congrats on the strong momentum to finish the year.

And you kind of touched on this already and I. Appreciate all your detailed comments commentary prepared remarks.

You finished 2022, it's about 20 million revenue gross margin on that 43%, but next few years youre seeing that organic revenue growing 100 million with gross margins.

The mid sixties, so just a couple of questions there.

First the 2023 any specific 2023 kind of growth targets or guidance outlook. There and then on the 100 million target. How do you how do you get there from the gross margin percentage is that organic growth expansion as well for the mid sixty's to gross margin or is that is that coming from the M&A. Thanks.

Yeah. So you know we you know like most companies right now you know, we feel a little more comfortable gain ourselves a little further into the year.

Before thinking about giving any kind of top line guidance and you know we've had a decent start to the year you know so but we just feel you know gosh. We've all just survived the last like 18 months of his stock market right and so you know every time, we think that we've seen at all [laughter] challenges come our way.

Seem to be pretty resilient.

And so knock on wood you know, we just keep hustling and keep running a smarter and more efficient business for it.

That that makes me feel good about what we've gone through them really good is is the perseverance, but also we are again, we've never had better product market fit and we were the healthiest we've ever been as a company.

So we haven't given that kind of 2023 guidance, but you know when I talk about you know, how we stair step our way to being 100 million topline company over the next few years you know we see that we have when we start looking at again the diverse going deeper inside the platform as we are today, there's one.

Diversifying across other virtual world platforms of step two and then number three more and more owned and operated our owned IP or third party persistent world, where again, we get that diversification of revenue. So it takes us three steps for us to be able to live into that.

That kind of bold topline number that were very motivated by that you know that we know that's the company that we built and the company that we are today.

As far as the margins go certainly M&A helps in that story, there's no doubt about it.

Now again, the more that we can bring in additional Tac or capability to really round out. This end to end met our innovation engine I've mentioned.

It means that all of that is ours to capture and so so first and foremost margin improvement comes from us selling smarter sell.

All in smarter means our salespeople more focused on net revenue and higher margin products.

Second way is that's continuing to innovate our products because we do have some products that are very high margin very high performing and so we want to lean more into more of those products in our suite of menu and offerings and pushing brands towards those high performing high margin products.

The third way, we grow revenue is building out as I mentioned more of that end to end in house capability. So that we cannot control all of that margin profile from the start to the finish of virtual world experiences and supporting media. So it's about that and some of that will happen through M&A, We think and then the.

Fourth way is again diversification of revenues you know right now we we don't talk a lot about our direct to consumer revenues. There small right. You know there there are two two and a half million of our total revenues for last year, but the more that we start to operate persistent world, where we participate in the consumer experience.

<unk>, we believe when we look at that 100 million profile future for us in a few years.

We won't just look like a temporal advertising company anymore that'll be a piece of our revenue stream those media products, but there should be a more balanced mix between the direct to consumer side and then of course, the media side and then the publishing engine or experience side and so we think those.

Three legs of diversification inevitably push our margin up because in a lot of these virtual worlds the direct to consumer margin side as it is in the high 80 or 90%.

So it is very much about you know more than anything getting that good mix of revenues and our future forward looking profile.

And so a lot of fantastic color there I appreciate that and then maybe I'll just ask one more follow up on the pipeline.

You have larger deal sizes, obviously seven times seven customers were $1 million customers in 2022 56 for six figures. So maybe just two questions there.

How likely is it that those those 56 six figure customers graduate to $1 million customers in 2023 or 2024.

And then it was 100 brands you serve in 2022, how do you see that the total number of brands Youre going to serve in 2023 in 2024 kind of tracking is it is it a linear growth or what are you seeing where you stand today.

Yeah. That's a it's a really good question I mean first of all we 100% and see the pattern if they dip their toe in and then they come back for more either the brand directly or their agency and so we're watching that true progression.

Of people you know trying out maybe a 50 K by and you know this is exact examples with like our investor Paramount or universal when they're doing new you know family friendly motion picture releases, you know once they understand how well we performed with say the bad guys. Then it's time for the minions released and they're coming back and saying Oh.

You're now a core part of my medium mix every time I launch you're a piece of it just like you would say you know historically a piece of it might go to Youtube or Instagram, where a piece of it because we're really just a new you know.

Better in my opinion, social channel and that is kind of mitigating you know, what's not working and a lot of traditional digital channels today and so we're just becoming a natural piece of the pie and then what does happen over time as they say I want more I don't want just a media buy I want an.

Against as well and once you package the experience and the media and in some cases like what you guys know so well that we did for Samsung with with the broadcast of the virtual Charlie X. The X concert last year, if they want to broadcast or content component too. That's when they start to become 600, 800, K $1.2 million probe.

Graham because it's really again packaging all the aspects of what we can do holistically.

As a company for these these really exciting campaigns that are are not just like temporal AD campaigns, because they're kind of like product placement on steroids me smarter.

Smarter kind of digital marketing so to speak.

And so your second question was about this year's pipeline and about serving 100 brands and it's a good question because it's a struggle.

And in a good way.

Okay.

Think about it with the trend lines of US doing you know the fact that two thirds of our pipeline our six figure deals.

And you know we've got seven plus deals that are north of a million dollars to deliver a 20 million dollar a year, we don't have to serve 100 brands but.

But we want to write because we went through 200 brands 500 brands and when you look at the fact that we're now working multiple ways across fashion.

Cosmetics.

Ooh categories fashion automotive you name it where we're so diversified there we don't want to say no to any advertiser because.

There's just so much in front of us Theyre, just starting to understand this marketing channel that we offer for them.

But what should give investors a lot of confidence is that you don't have to to deliver against 100 customers or 100 unique brands and deliver a 30 or $40 million revenue. This year. When your deal sizes are inevitably getting bigger and you continue to have 70% repeat I guess, if I were in the investor's shoes, what it would give me comfort.

Is to say gosh, if they built the operational capacity.

This service 100 brands.

And they can turn with bigger programs.

Deliver a huge step change in revenue growth by only servicing 25 or 50, then now I can see whatever I thought the ceiling for this company I just listed it just lifted as far as capacity goes and so we don't want to say no to anybody yet we're not in that position. We very humbly are grateful for every exciting new.

Brandon Advertiser, who wants to come and and work with US I have investors introducing me to big Global Cmos every week, because they understand our products and they want to let other brands. They now know about them.

So we're not in a position yet to say no, but there is probably going to become a point increasingly where we're gonna have to prioritize bigger programs or make a decision about getting that right balance right about capacity and look I think with confidence. We can also start to walk customers up and say look we know you want to put 25 K too.

For us Here's 100 K media by this is what we think you need to do and with a lot of confidence we can move them into that higher territory.

Okay.

Excellent well it sounds like there's no shortage of growth levers for you guys to pull so I appreciate the update that's it for me. Thanks.

One more thing I just wanted to mention because I saw a couple of comments come in through chat about mob crush and so I think it's important that we comment on that.

We have aggregated the mob crash broadcasting tack, we had our own broadcasting tack you've heard us talk historically about something that we called virtual Alex that is now called Super view. So we have our Super Studios team that's powered by Super view, which again is a very exciting proprietary virtual remote production capability.

And monitoring capability that we've built in the house, we use it for our brand partners, we use it for yourself its smart it's extremely high quality, it's very affordable and that's exactly the type of you know a capability that's allowed us to deliver some of those great broadcast.

Mentioned earlier its also the talent that's behind the work that I talked about earlier that we're doing for marvels, new verse as well we've integrated the best pieces of democracy check into that and really turned it into one.

Stack of broadcasting Tac.

Secondly, you know may not have been completely obvious to everyone, but at the heart of what mob crush was when when we acquired them was they really understood gaming centric influencers and most of their revenues were coming through creator Influencer marketing so to speak.

And so when I talk about it being an end to end solution for our brands and we will just use the Barbie example is easy.

We've built a virtual pop up Barbie Dream House experience.

They also paid us for media products that we dropped in other games that really targeted that Barbie girl consumer to drive visitation to the Barbie experience.

But we also packaged it with Barbie Influencers because you know it's one thing to get all the reach you can get inside platform like roblox or Minecraft, but you also want to amplify it out into the universe right and so you want to work with the best Influencers, who have big followings on Youtube and other platforms to drive.

Additional traffic and and really to give you that 360 solution and Influencer marketing was a good chunk of about $5 million of our revenue last year. Its still core it's a core piece. So now when we say we're doing six seven figure deals. It's got all the elements I laid out experiential media Theres always some kind of influencer piece to it.

And it's that capability.

And talent that we bought for through mob crashed that has really brought that in house and yet then we've taken that great talent and we've turned them into people who can also sell the experience in the end game media products too. So now they can sell that holistic solution.

Thank you we've reached end of our question and answer session I like to turn the floor back over to him for any further closing comments.

I will just thank you so much for joining us today I'm really appreciate it appreciate the support that we get for hanging in there with us during this kind of crazy [laughter] market right and we've been through I Hope people are are proud of the fact that we have delivered on really significant step change.

Buying drugs from $2 million in 2000 $20 million to $11 million in 'twenty 'twenty $1 million to $20 million in 2022 again facing the market conditions. We have you know we we feel good about that and I think that coupled with the the really aggressive cost reductions and leaning out that I spoke of I hope people can see that we're.

Building, a very healthy sustainable company going forward and really excited to do everything we can to deliver against your shareholder return expectations and with that I. Just encourage you to please feel.

Feel free to reach out an email to our IR team with any additional questions that you'd have we're happy to follow up.

Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day. We thank you for your participation today Goodbye.