Paltalk Inc. Q1 2023 Earnings Call
Good afternoon, and welcome to the earnings call for Powell talks first quarter ended March 31, 2023 at this time all participants have been placed on a listen only mode. It is now my pleasure to turn the floor over to your home.
Jason Katz, Chief Executive Officer of Paul talk and carriage any chief financial Officer of Pal talk Kara the floor is yours.
Hello, everyone and welcome to the power hub operating and financial results Conference call for the first quarter March 31, 2023 by now everyone should have had access to the earnings result press release, which was issued earlier today. After the market closed at four P. M. Eastern time. This call is being webcast and will be available for.
Play.
In our remarks today. We will include statements that are considered forward looking within the meaning of the private Securities Litigation Reform Act of $19 95.
<unk> forward looking statements about future results of operation business strategies, and plans our relationships with our customers as well as market and potential growth opportunities. In addition management may make additional forward looking statements in response to your questions forward looking statements are based on management's current knowledge and expectations as of today.
And they are subject to certain risks uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward looking statements. We offer no assurance these expectations and beliefs will prove to be correct. A detailed discussion of such risks and uncertainties are contained in our filings with the SEC, including our most <unk>.
It's an annual report on Form 10-K for the year ended December 31, 2022, you should refer to and consider these factors when relying on such forward looking information. The company does not undertake and expressly disclaims any obligation to update or alter our forward looking statements whether as a result of new information.
What's your events or otherwise, except as required by applicable law on this call. We will refer to adjusted EBITDA, a non-GAAP measure that when used in combination with GAAP results provide us and our investors with additional analytical tools to understand our operations for adjusted EBITDA. We have provided a reconciliation to the most directly.
Comparable GAAP financial measure in our earnings press release, which will be posted on the Investor Relations section of our website at <unk> Dot com and with that I would like to introduce <unk>, Chief Executive Officer, Jason <unk>.
Thank you Kara and good afternoon, everyone.
We appreciate you taking the time to join us on today's call.
We will discuss our operating highlights and financial results for the first quarter ended March 31 2023.
Additionally, we will provide an update on our business and near term business objectives.
After my opening statement, our CFO Jenny will give a summary of our financial results for the first quarter ended March 31 2023.
Following our prepared remarks, we will move into the Q&A portion that answer any questions that were pre submitted prior to this call.
With that I would now like to walk you through the recent highlights and near term business objectives.
The decline in revenue, we reduced our operating expenses, which enabled us to reduce the cash used in operations by <unk>.
$4 million for the three months ended March 31 2023.
<unk> to the prior year period.
As a result of a decrease in product development expense.
We accomplish this by streamlining our offshore development efforts and expect to realize further decreases in expense as a result of these actions.
We continue to invest in a conservative way being highly responsible cash management, even though we ended the quarter with $13 $9 million in cash.
Our objectives for 2023.
And then on growing top line revenue.
Turning to cash flow positive and building shareholder value.
As we approach the one year anniversary of the addition of many came to our product offering we expect one year annual auto renewals of existing maybe cam subscriptions to help contribute to growth in subscription revenue.
We also seek to grow new user acquisition and user engagement by enhancing our live video chat applications and other features.
More specifically, our near term business objectives, which are focused on a return to growth of the following.
Number one promoting expansion the mini can product into the business to business market as well as working to integrate it as an upsell as the power torque product.
Two continuing to implement several enhancements to our live video chat applications as well as the integration of Carton Board games and other features focused on retention and monetization.
Collectively are intended to increase user engagement and revenue opportunities.
Three continuing to explore strategic opportunities, including but not limited to potential mergers or acquisitions of other assets or entities that are synergistic to our businesses.
For continuing to develop our consumer application platform strategy, we're thinking potential partnerships with large third party communities to whom we can promote a co branded version of our video chat products potentially sharing the incremental revenues generated by these partner of annuities.
Five <unk>.
You're going to defend our intellectual property.
We look forward to providing progress updates once our trial against Webex communications with Cisco systems to begin in the early third quarter of 2023.
I Trust. This gives you some insight into the company initiatives, we have implemented.
To conserve cash as we look to increase our subscribers in user engagement and returned to positive cash flow and profitability to build stockholder value.
Now I'd like to pass it to Cara for a financial summary of our first quarter ended March 31 2023.
Thank you Jason our results of operations for the three months ended March 31, 2023 with solid revenues for the three months ended March 31, 2023 decreased by 12, 4% to $2 6 million.
$2 9 million for the three months ended March 31, 2022. This decline was attributed to the decrease in subscription revenue of 12% and a decrease in advertising revenue of 27, 4%.
Loss from operations for the three months ended March 31, 2023 increased by 27, 5% or <unk> 2 million to a loss of $1 9 million compared to a loss of $1 7 million for the same period in 2022.
Net loss for the three months ended March 31st 2023 remained relatively unchanged at $7 million compared to the same period March 31 2022 adjusted.
Adjusted EBITDA loss for the three months ended March 31, 2023 increased by approximately 33, 8% or $1 2 million to an adjusted EBITDA loss of $2 6 million compared to adjusted EBITDA loss of <unk> 5 million for three months ended March 31 2022.
Cash and cash equivalents totaled $13 9 million at March 31, 2023, a decrease of <unk> 8 million compared to $14 7 million at December 31st 2022. Currently the company has no long term debt on its balance sheet.
Additionally, we repurchased 5192 shares of common stock during the three months ended March 31, 2023 pursuant to our stock repurchase plan at an average price per share of $1 39. This plan expired on March 29 2023.
Total under the stock repurchase plan, we repurchased 610000 shares of common stock at an average price per share of $1 65 for an aggregate amount of approximately $1.005 million.
We will now move onto questions that were previously submitted.
The first question.
What was the mini can impact on the business and what is the timing to get the full revenue impact on a quarterly basis relative to expenses.
We expect one year annual auto renewals of existing Medicare subscriptions to get help contribute to growth in subscription revenue as a reminder.
Actually closed early June 2022, so while we are encouraged that there is more likely to affect with subscription revenue in the second half of the year.
<unk> expenses, while we do not report separately on our products I can say that over 50% of the total expenses related to Medicare.
Quarter were related to amortization, which are noncash.
Second question can you provide any additional color on expense control.
Product development is a significant cost center for the company, we've restructured our offshore development team in a way that we expect to realize significant cost savings in product development over the rest of the year.
Is there any commentary on outlook and potential return to adjusted EBITDA positive.
It is certainly our goal to reach EBITDA positive by the end of the year.
Any additional color on M&A outlook.
We continue to evaluate the opportunities that we believe would enhance shareholder value.
<unk> is well positioned given our cash position IP and NASDAQ listing and we believe we will be able to take advantage of the weak capital markets.
Finally can you confirm the date and venue for the Cisco trial also specifically what are you assuming for.
Yeah.
Currently the trial scheduled for mid July in Waco, Texas, The company alleges that certain of Cisco's products over and for any U S patent number 6683858.
Jason back to you to close out the presentation.
Thanks, everyone for your support and for joining us today.
Very grateful for your interest in our business, we look forward to updating the market and our stockholders with our progress on our business objectives pending patent litigation against Cisco Webex with the trial expected to start in the early part of the third quarter and potential strategic accretive acquisitions, which we continue to identify and analyze.
I have a great day.
Thank you. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.