Q2 2023 Paltalk Inc Earnings Call

Good day and welcome to the earnings call for <unk> second quarter ended June 30th 2023 at this time all participants have been placed on English only mode. It is now my pleasure to turn the floor over to your host Jason Katz, Chief Executive Officer of power tool.

And Karen Jenny Chief Financial Officer of Perl talk Caris the floor is yours.

Hello, everyone and welcome to the powerful operating and financial results Conference call for the second quarter June 30th 2023 by now everyone should have access to the earnings results press release, which was issued earlier today at the close of market at four P. M. Eastern time this call is being webcast.

I'll be available for replay.

In our remarks today. We will include statements that are considered forward looking within the meaning of the private Securities Litigation Reform Act of 1995, including forward looking statements about future results of operations business strategies and plans, our relationships with our customers as well as market and potential growth opportunities in.

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 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 that these expectations and beliefs will prove to be correct.

Detailed discussion of such risks and uncertainties are contained in our filings with the SEC, including our most recent annual report on Form 10-K for the year ended December 31 2022.

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 future events or otherwise, except as required by applicable law on this call we will refer to adjusted EBITDA.

non-GAAP measure that when used in combination with GAAP results provide us and our investors with additional analytic 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 web.

Site at Palace Hawk Dot com.

And with that I would like to introduce <unk>, Chief Executive Officer, Jason Cats.

Thank you Kara and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call.

We will discuss our operating highlights and financial results for the second quarter ended June 32023.

Additionally, we will provide an update on our business in the near term business objectives.

After my opening statement, our CFO Karl Johnny will give a summary of our financial results for the second quarter ended June 32023.

Following our prepared remarks, we will move into the Q&A portion and answer any questions that were pre submitted prior to this call.

With that I would now like to walk you through the recent highlights our near term business objectives.

We are very pleased with our return to revenue growth and profitability during the second quarter.

All of our attention and effort to optimize our platform and streamline our costs are paid off.

Proved our foundation.

Our infrastructure is capable of supporting additional business. So if we continue to expand revenue.

We are confident that it would result in increased profitability.

We believe that this business scalability, along with $13 $7 million in cash on our balance sheet at quarter's end puts us in excellent position.

We have already met one of our key objectives for 2023 with a return to increased revenue.

Additionally, as we surpassed the one year anniversary of our asset acquisition of many Cam.

With the successful integration of many came into power torque.

And our team's effort in developing a new one easier to use version, we expect the one year annual auto renewals of existing Medicare subscriptions to help contribute to growth in subscription revenue in future periods.

While our trial against Cisco was pushed back to unexpected trial date in the fourth quarter of 2023.

Short recently denied Cisco's motion for summary judgment.

Look forward to continuing to defend our intellectual property.

We are proud that we already reached some of our stated near term business objectives. As we achieved almost 12% revenue growth and returned to profitability with positive net income during the second quarter.

Our additional near term business objectives are as follows.

Leveraging our recently completed integration of many cam product into pallets of product through Upselling initiatives.

Further optimizing marketing spend to effectively realize a positive return on investment.

Developing a new and easier to use version of many cabinet will be optimized for both consumer and enterprise applications.

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.

Continuing to develop our consumer application platform strategy seeking potential partnerships with large third party communities to whom we could promote a co branded version of our video chat products and potentially share in the incremental revenues generated by these partner communities.

Continuing to defend our intellectual property.

Okay.

This gives you some insight into the company initiatives, we have implemented in order to conserve cash as we look to increase our subscribers and user engagement and a return 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 second quarter ended June 30th 2023.

Thank you Jason.

Our results of operations for the three months ended June 30th 2023 were as follows revenue for the three months ended June 30th 2023 increased by nearly 12% to three.

<unk> 3 million compared to $2 6 million for the three months ended June 32022. This increase was attributed to an increase in virtual goods revenue as well as a full year of sales from many can these increases were partially offset by a decrease in advertising revenues, a 15% loss from operations for the three months.

And at June 30 of 2023 decreased by 73% a point 8 million to a loss of <unk> 3 million compared to a loss of $1 1 million for the same period in 2022. The decrease in the loss was attributed to the increased revenue.

Net income for the three months ended June 30th 2023 was point 1 million compared to a net loss of 1.1 million for the three months ended June 30th 2022.

Prisoners is attributed to the increase in sales reduced expenses.

And to the recording of point 3 million net recognized in connection with the Companys recording a refundable employee retention tax credit.

Adjusted EBITDA loss for the three months ended June 30th 2023 decreased by over 98% or <unk> 9 million to an adjusted EBITDA loss of $15000 compared to adjusted EBITDA loss of <unk> 9 million for the three months ended June 30th 2022.

Currently the company has no long term debt on its balance sheet.

We'd now like to move on to questions that were previously submitted.

The first question can you comment on why the Cisco Webex trial has been delayed twice and pushed out to December .

Well again, the plaintiff and a lawsuit we are subject to the scheduling of the court of the control the calendar.

We're pleased that the court denied Cisco's motion for summary judgment and stated that the trial is expected to be reset for December .

Okay.

Are you still actively looking at bolt on acquisitions can we expect something by the end of 2020 three.

We are still active and are looking for the right acquisition with our advisers at Roth capital and although we'd like to complete something as soon as feasible, we will not rush. The process. We are committed to finding a deal that will enhance shareholder value.

The last question when were many can be marketed Pal talk in Cannes, France subscribers.

Well, we recently launched a version of power talk that has many can't functionality and we continue to message users about the numerous benefits of Medicare.

Thank you Jason back to you to close out the presentation.

Thanks, everyone for your support and for joining US today, we're 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.

Patent litigation and Cisco Webex with the trial now expected to start in the latter part of the fourth quarter and potential strategic accretive acquisitions, which we continue to identify and analyze and have a great day.

Thank you. This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.