Q4 2023 Loop Media Inc Earnings Call

December 12, 2023

Good afternoon everyone and thank you for participating in today's conference call to discuss loop media's financial results for the full year 2023 and the fiscal fourth quarter ended September 30th, 2020.

Good afternoon, everyone and thank you for participating in today's conference call to discuss leak Bds financial results for the full year 2023, and the fiscal fourth quarter ended September 32023.

Joining us today are Loop's CEO , Mr. Don Nearman, and the company CFO , Mr. Neil Watanase.

Joining us today are Loeb CEO, Mr. Don Nierman and the company's CFO, Mr. Neil Watanabe.

By now everyone should have access to the full year in fiscal fourth quarter 2023 earnings press

By now everyone should have access to the full year in fiscal fourth quarter 2023 earnings press release, which the company issued earlier today is approximately 405 P M eastern time.

which the company issued earlier today at approximately 4.05 PM EST.

The release is available in the investor relations section of Luke's website at www.luke.tv.

The release is available in the Investor Relations section of loops website at Www Dot leak Dock T V.

In addition, this call will also be available for Webcast Replay on the company's Web-

In addition, this call will also be available for webcast replay on the company's website.

Following management remarks, we'll open the call for your questions.

Following management remarks, we'll open the call for your questions. Please note there are two ways to ask questions. During the Q&A one for those on the telephone. Please press star one on your telephone keypad to raise your hand and for those on the webcast. Please.

Please note there are two ways to ask questions during the Q&A. One, for those on the tele...

Please press star 1 on your telephone keypad to raise your hand and for those on the webcast please select ask a question in the top right corner of the screen.

Select ask a question in the top right corner of the screen.

Enter your question and click submit.

Certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995.

Speaker Change: Certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain known and unknown risks and uncertainties.

Speaker Change: These forward looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that would cause actual results to differ material materially from those reflected in these forward looking statements.

as well as assumptions that would cause actual results, ziffer materially, for those reflected in these forward-looking states.

These forward looking statements are also subject to other risks and on

Speaker Change: These forward looking statements are also subject to other risks and uncertainty that are described from time to time in the company's filings with the S. E C.

that are described from time to time in the company's filings with the SES.

Do not place on-do reliance on any forward-looking statements, which are being made only as the data this calls.

Speaker Change: Do not place undue reliance on any forward looking statements, which are being made only as the date of this call except as required by law. The company undertakes no obligation to revise.

Accept this required by law. The company undertakes no obligation to revise or publicly release the resolve of any revision to any

Or publicly release results of any.

Speaker Change: Revision to any forward looking statements the.

The company's presentation also includes certain non-GAAP financial measures including

Speaker Change: The company's presentation also includes certain non-GAAP financial measures.

Speaker Change: Including adjusted EBITDA.

as supplemental measures of performance of our business.

Speaker Change: As supplemental measures of performance of our business all non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with S. E C rules.

All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC

You'll find reconciliation charts and other important information in the earnings press release in Form 8K, Furnished to the SE.

Speaker Change: You'll find reconciliation charts and other important information in the earnings press release and form 8-K furnished to the S E C.

I would now like to turn the call over to Luke CEO , Mr. John Nehrman.

Speaker Change: I would now like to turn the call over to loops CEO, Mr. John near men.

Speaker Change: Thank you and good afternoon, everyone.

We are pleased that we can announce that we also managed to achieve year-on-year growth compared to fiscal 22, but we're also happy to have fiscal 23 in the rearview mirror and a new fiscal year ahead of us.

Speaker Change: We are pleased that we can announce that we ultimately managed to achieve year on year growth compared to fiscal 'twenty two but we're also happy to have fiscal 'twenty three in the rearview mirror and a new fiscal year ahead of us It was a very challenging year on several fronts.

It was a very challenging year on several fronts. A significantly restricted ad market, a very difficult small microcaps stock market, and lessons learned from the industry understanding of our revenue model as a CTV digital out-of-home company, which led to lower growth than we were internally anticipating a year ago. And thus, the subsequent adjustments around necessary cost cutting.

Speaker Change: Difficult and restricted ad market.

Speaker Change: Very difficult small microcap stock market and lessons learned from the industry understanding of our revenue model is a C. T V digital out of home company, which led to lower growth than we were internally anticipating a year ago and thus the subsequent adjustment around necessary cost cutting measures.

However, as a result of these challenges, we discovered very valuable data about where we believe we should invest and focus our time and resources in order to improve performance, coming out of the stouncern of several quarters of stagnant growth.

However, as a result of these challenges we discovered very valuable data about where we believe we should invest and focus our time and resources in order to improve performance coming out of this downturn of several quarters of stagnant growth.

We believe we are stronger coming out of fiscal 23 and look to capitalize and what we believe to be improved upside and gross potential ahead of us.

Speaker Change: We believe we are stronger coming out of fiscal 'twenty, three and look to capitalize on what we believe to be improved upside and growth potential ahead of us we.

We see a better path ahead and recovery as we progress through Q1 in our new fiscal year and believe that FY23 represented a low point in our ad demand challenges. In fact, it appears that revenue growth has normalized as we are currently already tracking well ahead of the previous three quarters in terms of top line revenue and reduced overall S-GNA expense.

Speaker Change: We see a better path ahead and recovery as we progressed through Q1, and our new fiscal year and believe that FY2023 represented a low point in our AD demand challenges in fact it appears the revenue growth has normalized as we are currently already tracking well ahead of the previous three quarters.

Speaker Change: In terms of top line revenue and reduced overall SG&A expenses more on those results. When we report in February we started off this new fiscal year on October one and optimistic about the year ahead. So I am pleased to say that we are indeed experiencing positive momentum so far in Q1.

More on those results when we report in February , but we started off this new fiscal year on October 1, optimistic about the year ahead. So I'm pleased to say that we are indeed experiencing positive momentum so far in Q1.

Midway through the last fiscal year, we made custom adjustments across several aspects of our business, achieving a plan to reduce the second half of FY 23 overall S-GNA costs by over 20%. Part of this reduction included eliminating from non-revenue generating headcount, while continuing to invest in the expansion of our revenue and ad sales team.

Speaker Change: Midway through the last fiscal year, we made cuts and adjustments across several aspects of our business achieving our plan to reduce the second half of FY2023 overall SG&A costs by over 20% part of this reduction included eliminating some non revenue generating head count while continuing to invest.

Speaker Change: And the expansion of our revenue and AD sales team.

Our distribution footprint increased towards the end of FY23 with the addition of 25,000 partner platform screens, bringing our total loop player and partner screens to over 79,000. In addition, our monthly video impressions viewed are estimated to be over two billion.

Speaker Change: Our distribution footprint increased towards the end of FY2023 with the addition of 25000 partnered platform screens, bringing our total loop player and partner screens to over 79000. In addition, our monthly video impressions viewed are estimated to be over $2 billion.

We have continued to have loop players in the top 20 advertising markets, as well as focus on those venues that we have learned to be the best performers, which include bars, restaurants, universities, medical offices, spa and several other vertices.

Speaker Change: We have continued to add new players in the top 20 advertising market as well as focus on those venues that we have learned to be the best performers, which include bars restaurants University medical office.

Speaker Change: All other verticals.

We believe that the retail media markets are expected to continue to grow an increasing share of advertising stipend as several industry forecasts predict.

Speaker Change: We believe that the retail media market is expected to continue to grow and increase the share of advertising spend as several industry forecasts predict.

We're also optimistic about the election year and the projected record advertising spend around that. In addition, we have several revenue supply partners that we look forward to growing within the current fiscal year.

Speaker Change: We're also optimistic about the election year and the projected record advertising spend around that in addition, we have several revenue supply partners that we look forward to growing within the current fiscal year with our strong pipeline of partners, our expanding distribution network and our commitment to efficient new customer acquisition.

With our strong pipeline of partners, our expanding distribution network and our commitment to efficient new customer acquisition, we are encouraged about the future. And we believe the company is well positioned to deliver revenue growth and a stronger bottom line as the advertising market improves and our distribution footprint growth.

We are encouraged about the future and we believe the company is well positioned to deliver revenue growth and a stronger bottom line as the advertising market improves and our distribution footprint grows with that I will turn the call over to Neal to take you through our financial results Neil.

With that, I will turn the call over to Neil to take you through our financial results. Neil?

Thank you, John , and good afternoon, everyone. As we review our financial results, I want to remind everyone that all comparisons and variance commentary refer either to the prior years, full year, or fiscal fourth quarter, unless otherwise classified.

Neal: Thank you John and good afternoon, everyone. As we review our financial results I want to remind everyone that all comparisons and variance commentary you either to the prior year's full year, our fiscal fourth quarter unless otherwise specified.

In the 2023 fiscal year, revenue was 31.6 million compared to 30.8 million in the fiscal 2022. In the fiscal fourth quarter, revenues was 5.7 million compared to 12.2 million in the year go period.

Neal: And the 2023 fiscal year revenue was $31 6 million compared to $38 million in the fiscal 2022.

Neal: In the fiscal fourth quarter revenues was $5 7 million compared to $12 2 million in the year ago period.

In the 2023 fiscal year, gross profits was 10.7 million compared to 11.4 million in fiscal 2022. In the fiscal fourth quarter of 2023, gross profit was 1.6 million compared to 4.6 million for the same period in fiscal 2022.

Neal: And the 2023 fiscal year gross profits was $10 7 million compared to $11 4 million in fiscal 2022.

Neal: In the fiscal fourth quarter of 2023 gross profit was $1 6 million compared to $4 6 million for the same period in fiscal 2022.

Gross margin rate was 33.7% in the 2023 fiscal year compared to 36.9% in fiscal 2022. The decrease was primarily driven by revenue mix between partner platform and the O&O platform, as well as an increase in some of our fixed costs for licensing.

Neal: Gross margin rate was 33, 7% in the 2023 fiscal year compared to 36, 9% in fiscal 2022. The decrease was primarily driven by revenue mix between partner platform and <unk> platform as well as an increase in some of our fixed costs for licensing.

In the fourth quarter, gross margin rate was 27.5%, compared to 38.1% in the prior year quarter. The decrease was primarily driven by revenue mix with the lower gross margin partner platform business being a higher percentage of the revenue during the fourth quarter versus a year ago. The partner platform business here is a lower gross margin, but has lower investment and acquisition and marketing expense attached, ultimately resulting in similar overall operating margins to her own upload.

Neal: In the fourth quarter gross margin rate was 27, 5% compared to 38, 1% in the prior year quarter.

Neal: The decrease was primarily driven by revenue mix with the lower gross margin partner platform business being a higher percentage of the revenue during the fourth quarter versus a year ago.

Neal: Hardware platform business carries a lower gross margin, but as lower investment and acquisition and marketing expense attached ultimately, resulting in similar overall operating margins to our own platform.

Total sales, general and administrative expenses, excluding stock-based compensation, depreciation and emissation, impairment of goodwill, and in tangible assets and resversion costs in the 2023 fiscal year, where $29.4 million compared to $24.5 million for the fiscal 2022. The increase is primarily due to increased marketing spend in the first half of 2023, professional fees and increased software and IT costs.

Neal: Total sales general and administrative expenses, excluding stock based compensation depreciation and amortization impairment of goodwill and intangible assets and restructuring costs in the 2023 fiscal year were $29 4 million compared to $24 $5 million for the fiscal 2022, the increase was primarily due to increase.

Neal: Marketing spend in the first half of 2023 professional fees and increased software and it costs.

Total sales, general, and administrative expenses, excluding stock-based compensation, depreciation, and amortization, impairment of goodwill, and intangible assets and restructuring costs in the fiscal fourth quarter were $7.4 million compared to $9.5 million for the same period in fiscal 2022.

Neal: Total sales general and administrative expenses, excluding stock based compensation depreciation and amortization impairment of goodwill and intangible assets and restructuring costs in the fiscal fourth quarter was $7 4 million compared to $9 5 million for the same period in fiscal 2020 to.

The decrease was primarily due to a decrease in marketing spend, payroll related and various other operating expenses, which were targeted for efficiency. We continue to focus on gaining efficiencies in SG&A, which we expect to be reflected in the fiscal year 2024.

Neal: The decrease was primarily due to a decrease in marketing spend payroll related and various other operating expenses, which were targeted for efficiency. We continue to focus on gaining efficiencies in SG&A, which.

Neal: Which we expect to be reflected in fiscal year 2024.

Our net loss in the 2023 fiscal year was 32.000,000 loss or 56% loss for share compared to a net loss of 29.5 million or 61% loss for share for fiscal 2022. Net loss in the fiscal quarter of 2023 was 9 million or 15% loss for share compared to a net loss of 14.6 million or 28 cents for loss for share for the same period in fiscal 2022.

Neal: Our net loss in the 2023 in fiscal year was 32 point million loss or <unk> 56 loss per share compared to a net loss of $29 5 million or 61 loss per share for fiscal 2022.

Neal: Net loss in the fiscal fourth quarter of 2023 was $9 million or <unk> 15 loss per share compared to a net loss of $14 6 million or <unk> 28 per loss per share for the same period in fiscal 2022.

Adjusted EBITDA in the 2023 fiscal year was 15.7 million loss compared to 10.3 million loss for fiscal 2022. Adjusted EBITDA in the fiscal fourth quarter was a loss of 4.8 million compared to a loss of 3.0 million in the same period in fiscal 2022.

Neal: Adjusted EBITDA in the 2023 fiscal year was $15 7 million loss compared to $10 3 million loss for fiscal 2022, adjusted EBITDA in the fiscal fourth quarter was a loss of $4 8 million compared to a loss of $3 1 million in the same period in fiscal 2022.

Turnitour balance sheet and cash equivalence were 3.1 million on September 30th, 2023 compared to 14.1 million on September 30th, 2022. As a September 30th, 2023, we had 7.5 million of total debt compared to 7.1 million as a September 30th, 2022.

Neal: Okay.

Neal: Turning to our balance sheet and cash equivalents were $3 1 million on September 32023, eight compared to $14 1 million on September 32022 as of September 32023, we had $7 5 million of total debt compared to $7 1 million as of September <unk>.

Neal: 32022.

In summary, we are focused on increased smart revenues, gross margin, and leveraging our expenses in line with revenues as we plan to continue to reduce the adjusted ebit of loss on a quarterly basis.

Neal: In summary, we are focused on increasing their revenues gross margin and leveraging our expenses in line with revenues as we plan to continue to reduce the adjusted EBITDA loss on a quarterly basis.

I'd like to thank everyone for listening today, and we look forward to providing further updates on our next conference call. This concludes our prepared remarks, and we will now open it up for questions.

Neal: I'd like to thank everyone for listening today, and we look forward to providing further updates on our next conference call. This concludes our prepared remarks, and we will now open it up for questions.

Now we'll open the call for your questions. As indicated at the beginning of the call, there are two ways to ask questions.

Neal: Now we will open the call for your questions as indicated at the beginning of the call. There are two ways to ask questions. One for those on the phone. Please press star one on your telephone keypad to raise your hand to withdraw your question simply.

One, for those on the phone, please press star one on your telephone keypad to raise your...

to withdraw your question simply press star 1 again.

Neal: Press Star one again too.

Two, for those on the webcast, please select Ask a Question in the top right corner of the screen. Enter your question and click Submit. Up to three questions from those on the phone will be answered first, and as time permits, a couple of questions from the webcast will be addressed.

Neal: For those on the webcast. Please select asked a good question in the top right corner of the screen enter your question and click submit.

Just three questions from those on the phone will be answered first and as time permits a couple of questions from the webcast will be addressed.

Our first question comes from a line of Darren, Aftahai with Roth, MKM. Please go ahead.

Neal: Our first question comes from the line of Darren <unk> with Roth MTM. Please go ahead.

Thanks for taking my questions, guys. Good afternoon. On the restructuring cost you guys took in the quarter, you said a 20% reduction. Is that a 20% reduction off that roughly 7.5 million OPEX number you reported in the quarter?

Darren: Yeah. Thanks for taking my questions guys. Good afternoon, just a couple if I may.

Darren: On the restructuring cost you guys ended the quarter, you said, 20% reduction is that a 20% reduction of debt roughly $7 5 million.

Darren: Opex number you reported in the quarter.

Darren: Okay.

Yes, Darren, that's basically a 20% reduction quarter over quarter as it relates to, you know, SG&A.

Darren: Yes Darren.

Darren: Basically a 20% reduction.

Darren: Quarter over quarter.

Darren: As it relates to.

Darren: SG&A.

And it does exclude, you know, restructuring costs that were...

And it does exclude.

Darren: Restructuring costs that were.

You're related to some of our repositioning of some of the channels and areas of our business.

Darren: And related to some of our repositioning.

Darren: Some of the channels in areas of our business.

Darren: Yeah.

Great, thanks. And then on...

Great. Thanks, and then on.

Darren: Yes.

Loop as manager, can you kind of talk about, I think you went live with this beta on September 21st? Is that live in the market right now and kind of what your expectations are for, I guess, both self-serve and local market and kind of how material this can be to your business? And will it be material in the current quarter?

Darren: Luke as manager can you kind of talk about that thank you.

Darren: Went live with it.

Darren: Data on September 21.

Darren: Is that live in the market right now kind of what your expectations are for I guess, both self serve and local market and kind of how material. This can be to your business and will it be material in the current quarter.

It's live, yes, so we're out of beta and we're pleased with how it's tested. It won't be material for this quarter, but we do expect that as we continue it to Q2, you know, and kind of fiscal 24, it's going to become much more meaningful for us. We've had 0% local ad and we know that that should be, you know, the double digits in terms of our mix.

Speaker Change: It's like yes, so were out of beta and we're pleased with how it's tested it won't be material for this quarter, but we do expect that as we continue into Q2 and kind of the fiscal 'twenty four it is going to become much more meaningful for us we've had.

Speaker Change: Percent of local AD and we know that that should be the double digits in terms of our mix.

So we're optimistic about what that's going to be, you know, especially in the upcoming year ahead.

<unk>.

Speaker Change: We're optimistic about what that's going to be especially in the upcoming year ahead.

Great, and then two more, if I may, on your DSP relationship. And the last quarter you got to know, the relationship with Microsoft and Zander. I guess where are we in the ball game in terms of the, what we kinda call the redefining of the category we're in. I...

Speaker Change: Great and then two more if I may on your DFS.

Speaker Change: Key relationship.

Speaker Change: Last quarter, you guys announced.

Speaker Change: <unk> shipped with Microsoft Zander.

Speaker Change: I guess, where are we in the ballgame in terms of the where we kind of call the re defining category or in E digital out of home for CTV.

Did you go out of home for CTV? And are there other larger kind of players in the DSB space that you feel like will drop in the near term or maybe in the early part of 24?

Speaker Change: Are there other larger players in the DSP space that you feel like will drop in the near term or maybe into early part of 'twenty four.

So the answer is positive momentum. And the answer to the last part is yes. We do anticipate more partnerships. The message is getting across. We've been out there just beating the drums, Bob and team, just about TV as TV. And it's part of an evolution of any business, as you know. We've used these similarities before when we go from cable to streaming and people need to get used to what that means.

Speaker Change: So the answer is positive momentum in the answer to the last part is yes.

We do anticipate more partnerships the message is getting across we've been out there just beating the drums, Bob and team just about TV is television.

Speaker Change: It's part of an evolution of any business as you know.

We've used these similarities before when we go from cable to streaming and people need to get used to what that means.

So when we're offering streaming and businesses, people have to get used to out of home, not meaning billboards. So that message has certainly been heard. It is still being adopted, so they're still upside, which is good, but we do see moments of a people that are starting to recognize it and put spending towards that. Yeah.

So when we're offering streaming in businesses, where people have to get used to out of home not meaning billboards. So that message has certainly been heard is still being adopted so theres still upside which is good but we do see momentum of people that are starting to recognize it and quit spending towards that.

Speaker Change: Great and then.

I think, John , you may mention your character Mark said, you kind of want to lead into establishment in the bar restaurant, medical spa, university editor, a few others. I'm sure it's out of the 79,000 roughly screened you have between No and No and partner.

Speaker Change: I think John you made mentioned in your prepared remarks.

Speaker Change: You kind of want to lead into.

Speaker Change: The establishment and the bar restaurant and medical Spa University I think there are a few others I am curious out of the 79000 roughly screen do you have between Illinois and partner.

What percentage of those verticals can make up at 79,000?

Speaker Change: What percentage of those verticals kind of makeup that 79000.

More than half of our own. Oh, I would say I think that for us.

More than half of our Ono.

I would say I think that for us.

This has been really, I think there's an important part of last year, frankly, is where do you make the most money? Where do you get the most return? And everybody wants to know that. And for us, just to get the research back, the data back to understand where we need to put the time, the acquisition costs, to make sure that their stickiness they stay, we know which venues, we know which verticals are the best, at least for us. We know the ones to just stay away from. So fortunately, the ones that we're calling out are majority of our business.

This has been really I think this is an important part of last year, frankly is where do you make the most money where do you get the most return and everybody wants to know that and for US just to get the research backed that data back to understand where we need to put the time the acquisition cost.

Speaker Change: Let's make sure that their stickiness they stay we know which venues we know which verticals are the best at least for US we know the ones to stay away from so Fortunately in the ones that we're calling out for a majority of our business.

You know, in terms of, as we, especially as we get the new player out there on that certainly is where we're starting to be focused.

Speaker Change: In terms of as we especially as we get the loot player out there from that certainly is where we are starting to be focus.

Great. Thank you guys.

Thanks Darren.

Our next question comes from a line of air quilf with B-Riley securities. Please go ahead.

Speaker Change: Our next question comes from the line of Eric Wold with B Riley Securities. Please go ahead.

Thank you, Jeff. No, a few questions. I guess one. You've had about 2000, the ONO editions or the past couple quarters, the June quarter, September quarter. Do you feel this is kind of a healthy run rate? Is you kind of you're following the last question? You've got a more intently focused on the right locations for the players. Or do you see an opportunity to kind of ramp that up in the court of the head as performance approved?

Speaker Change: Thank you good afternoon.

A few questions I guess one.

Speaker Change: So you had about 2000.

Speaker Change: The <unk> additions over the past couple of quarters, the June quarter and September quarter.

Do you feel this is kind of a healthy run rate as you kind of you are.

Speaker Change: Following the last question you got more intently focused on the right locations for the players or do you see an opportunity to ramp that up in the quarters ahead as performance improves.

I think that should definitely be ramped up. You know, I think is we kind of finished the second part of the year and we understood that revenue was largely trending where it was. We really were kind of pulling back, analyzing a little bit about where we were putting the investment. And we're starting to see that trend up and putting more funds into that, but we believe that there is.

Speaker Change: Hi, Eric that should definitely be ramped up.

Speaker Change: I think as we kind of finish the second part of the year.

And we understood that revenue was largely trending where it was.

Speaker Change: We really were kind of pulling back analyzing a little bit about where we're putting the investment and we're starting to see that trend up and putting more funds into that but we believe that there is.

substantial amount of growth in those venues ahead of us. We barely are penetrated in this streaming for business, streaming TV market. So that's certainly where the targets could be, but we certainly expect much much more than that.

Speaker Change: Substantial amount of growth in those venues ahead of us with barely penetrated and the streaming for business streaming TV market.

Speaker Change: So that's certainly where the target is going to be but we certainly expect much much more than that.

Speaker Change: Understood and then.

Speaker Change: Sure.

As you move into political ad environment in the coming quarters, I guess what is the position there in terms of how much you will or would not lean to that, kind of what first-tenage the locations, you know, I guess would be appropriate for them or opt out if they have that choice. I think it's really kind of like, say another kind of what percentage of the network could see a lift from political eye placement.

Speaker Change: Yeah as you move into.

Speaker Change: Political AD environment in the coming quarters, I guess, what is the position there in terms of.

Speaker Change: How much you will we're not leading to that kind of what what.

Speaker Change: Percentage of the locations I guess would be appropriate for them or opt out if they have that choice.

Speaker Change: Said, another way of kind of what percentage of the network could see a lift from from political ad placements.

Speaker Change: Well I think for US I guess the good news is a couple of parts to that one last October November September we saw what it could mean to our business and which were our best months ever.

The good news is a couple of parts to that. One last October , November , September , we saw what it could mean to our business, which were our best months ever. So we know that when you're coming into a presidential election year, that we're anticipating some good activity there.

So we know that when you're coming into a presidential election year in other words dissipating suddenly some good activity there.

We're also starting out strong here as I alluded to in my part and the political avenue in kicked in yet. You know, that's just pure organic. And I think that's really important to notice as well. So you've got to recover on the...

Speaker Change: Also starting out strong here as I alluded to in my part and the political Hasnt even kicked in yet that's just pure organic and I think that's really important to notice as well so you've got a recovery on the organic side, coupled with what we believe will be some good political coming down the road.

Couple with what we believe will be some good political coming down the road.

It serves a percentage of venues. It really is just, you know, it's a matter of choice. And clearly it's targeting. And we've got the partnerships with the AI where we make sure that ads are showing where they should show.

Speaker Change: In terms of percentage of venues. It really is just it's a matter of choice and clearly it's targeting and we've got the partnerships with the AI, where we make sure that ads are showing where they should show.

and the venues are comfortable with that. So it's never really forced on people, but we do know that a good majority.

Speaker Change: And they have been used or comfortable with that so it's never really forced on people, but we do know that a a good majority, especially out of home.

especially out of home, they aren't really doesn't bother them that much and they often opt in on that. So it's good for us. We take everything stacked up nicely.

Speaker Change: They arent really doesn't bother him that much they often opt in on that so.

Speaker Change: It's good for US, we think everything's stacked up nicely.

Perfect. And it's a final question for me. As you look at, you know, the changes you've made in terms of, uh,

Speaker Change: Perfect and then just final question for me as you look at kind of.

Speaker Change: All the changes you've made in terms of.

cutting out the cost, start to see hopefully pivot, back towards stronger trends and placement. Kind of help us maybe bridge the gap of where you are, balance sheet wise before you think you make that pivot to your consistent positive cash flow. If there is a gap that means you feel there, I think you're fine with the current balance sheet.

Cutting out the costs starting to see hopefully you pivot back towards stronger trends.

Speaker Change: And placements kind of help US bridge the gap of where you are balance sheet wise before you think you made that pivot to consistent positive cash flow and if there is a gap that needs to be filled or do you think you are fine with that.

Speaker Change: <unk> balance sheet.

I think Eric, you know, we made a lot of strides as since the second half of this last year and sort of repositioning in our expense structure.

Speaker Change: Alright, Thank you Eric.

We made a lot of strides.

Speaker Change: Since the second half of this last year and sort of repositioning or <unk>.

Speaker Change: <unk> structure.

Um, gaining efficiencies. Fourth quarter, obviously, we're 22% reduction over the prior year. And we see that continuing and leveraging, um, as our revenues continue to ramp in 2024. We also have, um,

Speaker Change: Any inefficiencies fourth quarter, obviously were 22% reduction over the prior year, and we see that continuing and leveraging.

Speaker Change: As our revenues continue to ramp in 2024, we also have.

you know, some margin expansion that we clearly believe that we can achieve, you know, over 2023 as our revenues allow us to leverage some of those in addition to some of the negotiations we've done with some of the advertisers and our business partners. So all said, you know, we believe that we're cutting down the cash burn, you know, each quarter and, you know, that's going to allow us to start.

Speaker Change: Some margin expansion that we clearly believe that we can.

Speaker Change: Can achieve over 2023 is our revenues allow us to leverage some of those in addition to some of the negotiations we've done with some of the.

Speaker Change: Advertisers are our business partners so.

Speaker Change: All said, we believe that we're cutting down the cash burn.

Speaker Change: Each quarter.

That's going to allow us to start.

you know, getting to break even and then need this as a generating cash well and positive adjust to the basis. So we're very encouraged that

Speaker Change: Getting to breakeven and then needless to say generating.

Speaker Change: Cash flow and positive adjusted EBITDA basis, So we're very encouraged that.

you know, things are working in the right directions from a, you know, revenue growth, margin expansion, and, you know, being able to leverage our expense structure. So, I think all of those will, you know, help, you know, not only improve the, the profitability, but will help, you know, our cash position as well.

Speaker Change: Things are working in the right direction from a revenue growth margin expansion and being able to leverage our expense structure. So.

Speaker Change: I think all of those will help.

Speaker Change: Help.

Speaker Change: Not only improve the profitability, but will help them.

Speaker Change: Cash position as well.

And just had a little more color to that area. I think it's important to note that, you know, we always strive to use cash from operations as much as we can. When Neil talked about a cash balance from a year ago, that was right after Uplift, and that's the most we've ever had. We've never been one of those companies.

Speaker Change: And just to add a little more color to that Eric I think it's important to note that we always strive to use cash from operations as much as we can when Neil talked about our cash balance from a year ago that was right. After uplift and that's the most we've ever had we've never been one of those companies.

You know, as sitting on some sort of 50 million type investment, we've managed that.

Speaker Change: Sitting on some sort of $50 million type investment and we've manage that to make sure that we're as careful as we possibly can be without diluting folks and at the same time, just making sure that as revenue increases we are using that for operations as best we can so we feel comfortable where we are.

to make sure that where's careful as we possibly could be without diluting folks in the same time.

just making sure that as revenue increases, we're using that for operations as best we can. So we feel comfortable where we are.

And especially as a business is tracking, we feel good about things.

Speaker Change: And especially as the business is tracking.

Speaker Change: We feel good about things.

Speaker Change: Perfect. Thank you appreciate it.

Our final question comes from a line of David Marsh with singular research. Please go ahead.

Speaker Change: Our final question comes from the line of David <unk> with singular research. Please go ahead.

Speaker Change: Okay.

Hey guys, thanks for taking the questions. Just wanted to start on the comment about Q1, kind of starting out strong. I mean, you guys obviously have a pretty tough...

Speaker Change: Hey, guys. Thanks for taking the questions.

Speaker Change: Just wanted to start on the on the comment about Q1 kind of starting out strong I mean, you guys, obviously have a pretty tough.

comp, I am assuming that when you say it's starting out strong, it means relative to the rest of this past calendar year, as opposed to looking at a year over year comp.

Speaker Change: Comp and.

Speaker Change: I'm, assuming that when you say, it's starting out strong it means relative to the rest of this past calendar year.

Speaker Change: As opposed to.

Speaker Change: Looking at our year over year comp.

Type figure, is that a fair assessment?

Speaker Change: Type figure is that a fair assessment.

Hey David, yeah, I think it's fair. What we're trying to say by that is these past three quarters have been pretty flat as you know. So to kind of grow past that, we certainly want to get back to those kind of eight figure, double digit type of quarters, you know, and that's that is our, that is where we need to be. So we're not really kind of giving this specific number, but I think more to your point of, it's just nice to kind of move off where we've been over the past few quarters.

Speaker Change: Hey, David Yeah, I think it's fair what we're trying to say by that is these past three quarters have been pretty flat as you know so.

Speaker Change: Kind of grow past that we certainly want to get back to those kind of eight figure.

Speaker Change: Double digit type of quarters, and that's that is our that is where we need to be so we're not really kind of given a specific number but I think more to your point of it's just nice to kind of move off where we've been over the past few quarters.

Yeah, and just follow up to that. National, it's, you know, it's obviously been a big story all year. National advertisers have been pretty slow. I mean, are you guys 36? I'll pick that. You know, just.

Yeah, and just to follow up to that.

Speaker Change: Nationally.

Speaker Change: So it's been a big story all year National advertising has been pretty slow I mean are you guys starting to see sort of uptick there.

you know, on the on the old boob tubes and you know, some of the big advertisers come back a little bit like the auto manufacturers, hopefully with the strike behind them, they can get focused back on selling vehicles, but you know, just probably seeing, you know, better momentum on the national stage.

Speaker Change: Just.

Speaker Change: On the on the on the old group tube.

Speaker Change: Some of the big advertisers come back a little bit like the auto manufacturers hopefully with the.

Speaker Change: The strike behind them, they can get focus back on <unk>.

Speaker Change: Selling vehicles.

Speaker Change: Just broadly speaking with you soon.

Better momentum on the national stage.

We are. We are. You know, it's certainly not, you know, I'll be fully back as everybody well of those, but we're definitely seeing momentum on the national stage and we're seeing it on regional stage and to what Darren was talking about, we're certainly hoping for it on the local stage too.

Speaker Change: We are we are.

Speaker Change: It's certainly not fully back as everybody well knows but.

Speaker Change: We're definitely seeing momentum on the national stage.

Speaker Change: We are seeing on the regional stage two of Darren was talking about were certainly hoping for it on the local stage two.

And you know, big part of your transformation, I guess.

Speaker Change: Alright.

Speaker Change: And a big part of your transformation I guess.

Saturday tomorrow!

Speaker Change: Sure.

Speaker Change: 12 to 18 months I guess you guys are.

kind of gone away from that, but, but sales platform that you had been, you know, relying upon and, you know, had talked about bringing it, you know, building an internal sales force. And just wanted to wonder if you could give us an update on that and just kind of talk about, you know, how that sales force is doing in terms of penetration and, and, and growing and, and reducing your dependence on kind of external, you know, sales assistant type.

Speaker Change: Okay gone away from that.

Speaker Change: Sales platform that you had been relying upon and.

Talk about bringing building our internal sales force and I just wanted to wonder if you could give us an update on that and just kind of.

Speaker Change: Talk about you know how that sales force is doing in terms of penetration.

Speaker Change: And growing and reducing your dependence on kind of external.

Speaker Change: Sales assistant type.

Speaker Change: The operations.

I would say that we started seeing the results in the Q4 and that is continuing into this year. And I think that's what is helping us as we go into the new year.

Speaker Change: I would say that we started to see in the results the end of Q4.

Speaker Change: And that is continuing into this year and I think thats, what is helping us as we go into the new year.

When we started having our issues back in January , it was really about being in that open exchange programmatic pretty much solely, you know, if you recall that.

Speaker Change: When we started having our issues back in January it was really about being in that open exchange programmatic pretty much solely if you will.

Speaker Change: Call that.

And we've taken really big steps, important steps for us, just kind of foolproof that and future proof of the bit by having the direct sales team, by increasing, you know, by building this local platform. And certainly just kind of diversifying more of the programmatic side with more direct deals in there as well. So a lot of those steps have started pay off in Q4 and lead into this new fiscal.

Speaker Change: And we've taken really big steps.

Speaker Change: <unk> steps for us just to kind of fool proof that in future proof it a bit by having the direct sales team.

Speaker Change: Creasing bye.

Speaker Change: By building this local platform and certainly just kind of diversifying more on the programmatic side.

Speaker Change: With more direct deals in there as well so a lot of those steps are starting to pay off in Q4 and lead into this new fiscal.

Alright.

And I'm not sure if the number that you guys have missed or the handy bit of. Maybe you guys could take a look.

Speaker Change: I'm not sure. It's a number that you guys haven't necessarily handy.

Speaker Change: Yeah.

Speaker Change: Maybe you guys can take a look and I don't know.

But the Q1 number last year is obviously extremely strong on top line. Can you give me some sense of the impact of political on that? I mean, how significant that was when that revenue number.

Speaker Change: Come back to me on it but yes.

Speaker Change: The Q1 number last year was obviously extremely strong on the top line.

Speaker Change: Can you give me some sense of the impact of political on that and how significant that was on that revenue number.

It was a meaningful part of it. I mean, we could probably get back to you, I guess, with a little bit more, you know, on the conversation, but it certainly was a meaningful part of it. I guess what was good about it is, you know, it really tested our fill rates and our system and to make sure it works well because we really were a capacity and it was great in that sense.

It was a meaningful part of it I mean, we could probably get back to you I guess with a little bit more on the conversation, but it certainly was a meaningful part of it.

Speaker Change: I guess what was good about it is.

It really tested our fill rates in our system and to make sure works well because we really were at capacity and it was it was great in that sense.

Speaker Change: For us just to know that it works and to have a broader distribution platform keep in mind think about the growth that we've added.

We're that's where we're really excited about what's ahead, because we know that it could potentially make an impact like that so it was it was a good part.

Speaker Change: Of our quarter.

Speaker Change: It has not shown yet and we still are having growth like I talked about so we will see what that looks like when it gets sprinkled on next year.

Speaker Change: Right right.

Speaker Change: Sounds good I wish you guys best and keep up the good work.

Speaker Change: Thanks, David I appreciate it.

Speaker Change: That concludes the Q&A session back to John Nierman for closing remarks.

Okay, well I'd like to thank everyone for joining the call today. We're excited about where the business is headed. Thanks again for joining us. We look forward to providing further updates on our next call.

John Nierman: Okay, well I'd like to thank everyone for joining the call today, we're excited about where the business is headed.

Thanks again for joining us look forward to providing further updates on our next call.

John Nierman: Talk then bye.

I'd like to thank our speakers for today's presentation, and thank you all for joining us. Just now concludes today's call, and you may now just...

John Nierman: I'd like to thank our speakers for today's presentation and thank you all for joining US just now concludes today's call you may now disconnect.

John Nierman: Okay.

Thank you. Thank you.

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John Nierman: Okay.

Good afternoon everyone and thank you for participating in today's conference call to discuss week media's financial results for the full year 2023 and the fiscal fourth quarter ended September 30th, 2020.

John Nierman: Good afternoon, everyone and thank you for participating in today's conference call to discuss Luke Bds financial results for the full year 2023, and the fiscal fourth quarter ended September 32023.

Joining us today are Luke CEO , Mr. John Nehrman, and the company CFO , Mr. Neil Watanis.

John Nierman: Joining us today are Loeb CEO, Mr. John <unk>, Chairman and the company's CFO, Mr. Neil Watanabe.

By now everyone should have access to the full year in fiscal fourth quarter 2023 earnings press.

John Nierman: By now everyone should have access to the full year of fiscal fourth quarter 2023 earnings press release, which the company issued earlier today is approximately 405 P M eastern time.

which the company issued earlier today as approximately 405 PME.

The release of the available in the Investor Relations section of Loop's website at www.loop.T

John Nierman: The release is available in the Investor Relations section of <unk> website at Www Dot loop Dot TB.

In addition, this call will also be available for webcast replay on the company's web

John Nierman: In addition, this call will also be available for webcast replay on the company's website.

Following management remarks will open the call for your question.

Speaker Change: Louise management remarks, we'll open the call for your questions. Please note there are two ways to ask questions. During the Q&A one for those on the telephone. Please press star one on your telephone keypad to raise your hand and for those on the webcast. Please.

Please note there are two ways to ask questions here in the Q&A. One, for those on the telephone...

Please press Thar 1 on your telephone keypad to raise your hand. And for those on the webcast, please select Ask a Question in the top right corner of the screen. Fine.

Speaker Change: Ask a question in the top right corner of the screen.

Speaker Change: Enter your question and click submit.

Certain comments made on this conference call in webcast are considered for looking statements under the Private Security's litigation reform act of 1995.

Speaker Change: Certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of $19 95.

These forward-looking statements are subject to certain known and unknown risks and unknown of thosear as they got seen and spread and mister St suit.

as well as assumptions that would cause actual results, zipper materially, for those reflected in these forward-looking states.

Speaker Change: As reflected in these forward looking statements.

These forward-looking statements are also subject to other risks on...

These forward looking statements are also subject to other risks and uncertainties that are described from time to time in the Companys filings with the S. E C.

that are described from time to time in the company's filings with the SES.

Do not place on-do reliance on any forward-looking statements, which are being made only as the data this calls.

Do not place undue reliance on any forward looking statements, which are being made only as the date of this call except as required by law. The company undertakes no obligation to revise.

The skeptis required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any form of

Speaker Change: Or publicly release the results of any.

Speaker Change: Revision to any forward looking statements.

Companies presentation also includes certain non- GAAP financial measures, including

Speaker Change: Company's presentation also includes certain non-GAAP financial measures.

Speaker Change: Including adjusted EBITDA.

as supplemental measures of performance of our business.

Speaker Change: As supplemental measures of performance of our business all non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules you'll.

All non- GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC.

You'll find reconciliation charts and other important information in the earnings press release and form a cave furnished to the AC.

Speaker Change: Youll find reconciliation charts and other important information in the earnings press release and form 8-K furnished to the SEC.

I would now like to turn the call over to Luke CEO , Mr. John Nehrman.

Speaker Change: I would now like to turn the call over to loop CEO, Mr. John near Man.

John Nierman: Thank you and good afternoon, everyone.

John Nierman: We are pleased that we can announce that we ultimately manage to achieve year on year growth compared to fiscal 'twenty two but we're also happy to have fiscal 'twenty three in the rearview mirror and a new fiscal year ahead of us It was a very challenging year on several fronts.

Significantly restricted ad market.

John Nierman: A very difficult small microcap stock market and lessons learned from the industry understanding of our revenue model is a CTV digital out of home company, which led to lower growth than we were internally anticipating a year ago and thus the subsequent adjustment around necessary cost cutting measures.

However, as a result of these challenges, we discovered very valuable data about where we believe we should invest and focus our time and resources in order to improve performance coming out of the stouncern of several quarters of stagnant growth.

John Nierman: However, as a result of these challenges we discovered very valuable data about where we believe we should invest and focus our time and resources in order to improve performance coming out of this downturn of several quarters of stagnant growth.

We believe we are stronger coming out of fiscal 23 and look to capitalize and what we believe to be improved upside and gross potential ahead of us.

John Nierman: We believe we are stronger coming out of fiscal 'twenty, three and look to capitalize on what we believe to be improved upside and growth potential ahead of us we.

John Nierman: We see a better path ahead and recovery as we progressed through Q1, and our new fiscal year and believe that FY2023 represented a low point in our AD demand challenges in fact, it appears that revenue growth has normalized as we are currently already tracking well ahead of the previous three quarters.

John Nierman: In terms of topline revenue and reduced overall SG&A expenses more on those results. When we report in February but we started off this new fiscal year on October one and optimistic about the year ahead. So I am pleased to say that we are indeed experiencing positive momentum so far in Q1.

More on those results when we report in February , but we started off this new fiscal year on October 1 optimistic about the year ahead. So I'm pleased to say that we are indeed experiencing positive momentum so far in Q1.

Midway through the last fiscal year, we made custom adjustments across several aspects of our business, achieving a plan to reduce the second half of FY 23 overall S-GNA costs by over 20%. Part of this reduction included eliminating from non-revenue generating head down, while continuing to invest in the expansion of our revenue and ad sales team.

John Nierman: Midway through the last fiscal year, we made cuts and adjustments across several aspects of our business achieving our plan to reduce the second half of FY2023 overall SG&A costs by over 20% part of this reduction included eliminating some non revenue generating head count while continuing to invest.

John Nierman: First in the expansion of our revenue and AD sales team.

John Nierman: Our distribution footprint increase towards the end of FY2023 with the addition of 25000 partner platforms screens, bringing our total loop player and partner screens to over 79000.

In addition, our monthly video impressions viewed are estimated to be over $2 billion.

John Nierman: We have continued to add new players in the top 20 advertising markets as well as focus on those venues that we have learned to be the best performers, which include bars restaurants University medical office spas and several other verticals.

We believe that the retail media markets are expected to continue to grow an increasing share of advertising stipend as several industry forecasts predict.

John Nierman: We believe that the retail media market is expected to continue to grow and increase the share of advertising spend as several industry forecasts predict.

We're also optimistic about the election year and the projected record advertising spend around that in addition, we have several revenue supply partners that we look forward to growing within the current fiscal year with our strong pipeline of partners, our expanding distribution network and our commitment to efficient new customer acquisition.

Speaker Change: We are encouraged about the future and we believe the company is well positioned to deliver revenue growth and a stronger bottom line as the advertising market improves and our distribution footprint grows with that I will turn the call over to Neal to take you through our financial results Neil.

With that, I will turn the call over to Neil to take you through our financial results. Neil.

Neal Neil: Thank you John and good afternoon, everyone. As we review our financial results I want to remind everyone that all comparisons and variance commentary refer either to the prior year's full year, our fiscal fourth quarter unless otherwise specified.

In the 2023 fiscal year, revenue was $31.6 million compared to $30.8 million in the fiscal 2022. In the fiscal fourth quarter, revenues was $5.7 million compared to $12.2 million in the year-ago period.

Neal Neil: And the 2023 fiscal year revenue was $31 6 million compared to $38 million in the fiscal 2022.

Neal Neil: In the fiscal fourth quarter revenues was $5 7 million compared to $12 2 million in the year ago period.

In the 2023 fiscal year, Gross Profits was 10.7 million compared to 11.4 million in fiscal 2022. In the fiscal fourth quarter of 2023, Gross Profit was 1.6 million compared to 4.6 million for the same period in fiscal 2022.

Neal Neil: And the 2023 fiscal year gross profit was $10 7 million compared to $11 4 million in fiscal 2022.

Neal Neil: In the fiscal fourth quarter of 2023 gross profit was $1 6 million compared to $4 6 million for the same period in fiscal 2022.

Gross margin rate was 33.7% in the 2023 fiscal year compared to 36.9% in fiscal 2022. The decrease was primarily driven by revenue myths between partner platform and ONO platform, as well as an increase in some of our fixed costs for license.

Neal Neil: Gross margin rate was 33, 7% in the 2023 fiscal year compared to 36, 9% in fiscal 2022. The decrease was primarily driven by revenue mix between partner platform and <unk> platform as well as an increase in some of our fixed cost for licensing.

In the fourth quarter, gross margin rate was 27.5% compared to 38.1% in the prior year quarter. The decrease was primarily driven by revenue mix, with the lower gross margin partner platform business being a higher percentage of the revenue during the fourth quarter versus a year ago. The partner platform business carries a lower gross margin, but has lower investment and acquisition and marketing expense attached, ultimately resulting in similar overall operating margins to our own open platform.

Neal Neil: In the fourth quarter gross margin rate was 27, 5% compared to 38, 1% in the prior year quarter.

Neal Neil: The decrease was primarily driven by revenue mix with the lower gross margin partner platform business being a higher percentage of the revenue during the fourth quarter versus a year ago.

Neal Neil: Gartner platform business carries a lower gross margin, but has lower investment and acquisition and marketing expense attached ultimately, resulting in similar overall operating margins to our own <unk> platform.

Total sales, general and administrative expenses, excluding soft-based compensation, depreciation and emissation, impairment of goodwill, and in tangible assets and resversion costs in the 2023 fiscal year, where $29.4 million compared to $24.5 million for the fiscal 2022. The increase is primarily due to increased marketing spend in the first half of 2023, professional fees and increased software and IT costs.

Neal Neil: Total sales general and administrative expenses, excluding stock based compensation depreciation and amortization impairment of goodwill and intangible assets and restructuring costs in the 2023 and fiscal year were $29 4 million compared to $24 5 million for fiscal 2022, the increase was primarily due to increase.

Neal Neil: Marketing spend in the first half of 2023 professional fees and increased software and it costs.

Total sales general administrative expenses, excluding stock based compensation, depreciation and amortization, impairment of goodwill, and intend to last had some restriction costs in the fiscal fourth quarter were 7.4 million compared to 9.5 million for the same period in fiscal 2022.

Neal Neil: Total sales general and administrative expenses, excluding stock based compensation depreciation and amortization impairment of goodwill and intangible assets and restructuring costs in the fiscal fourth quarter were $7 4 million compared to $9 5 million for the same period in fiscal 2022. The decrease was primarily due to a D.

The decrease was primarily due to a decrease in marketing spend, payroll related and various other operating expenses, which were targeted for efficiency. We continue to focus on gaining efficiencies in SGNA, which we expect to be reflected in the fiscal year of 2024.

Neal Neil: Increase in marketing spend payroll related and various other operating expenses, which were targeted for efficiency. We continue to focus on gaining efficiencies in SG&A.

Neal Neil: Which we expect to be reflected in fiscal year 2024.

Our net loss in the 2023 fiscal year was 32.000,000 loss or 56th loss for share compared to a net loss of 29.5 million or 61 cent loss for share for fiscal 2022. Net loss in the fiscal quarter of 2023 was 9 million or 15 cent loss for share compared to a net loss of 14.6 million or 28 cents for loss for share for the same period in fiscal 2022.

Neal Neil: Our net loss in the 2023 fiscal year was 32 point million loss or <unk> 56 loss per share compared to a net loss of $29 5 million or 61 loss per share for fiscal 2022.

Neal Neil: Net loss in the fiscal fourth quarter of 2023 was $9 million or <unk> <unk> loss per share compared to a net loss of $14 6 million or <unk> 28 per loss per share for the same period in fiscal 2022.

Neal Neil: Adjusted EBITDA in the 2023 fiscal year was $15 7 million loss compared to $10 3 million loss for fiscal 2022, adjusted EBITDA in the fiscal fourth quarter was a loss of $4 8 million compared to a loss of $3 1 million in the same period in fiscal 2022.

Turning to our balance sheet and cash equivalence were 3.1 million on September 30th, 2023 compared to 14.1 million on September 30th, 2022. As a September 30th, 2023, we had 7.5 million of total debt compared to 7.1 million as a September 30th, 2022.

Neal Neil: Okay.

Neal Neil: Turning to our balance sheet and cash equivalents were $3 1 million on September 32023, compared to $14 1 million on September 32022 as of September 32023, we had $7 5 million of total debt compared to $7 1 million as of September <unk>.

Neal Neil: <unk> 2022.

Neal Neil: In summary, we are focused on increasing their revenues gross margin and leveraging our expenses in line with revenues as we plan to continue to reduce the adjusted EBITDA loss on a quarterly basis.

Neal Neil: I'd like to thank everyone for listening today, and we look forward to providing further updates on our next conference call. This concludes our prepared remarks, and we will now open it up for questions.

Now we'll open the call for your questions. Ask indicated at the beginning of the call. There are two ways to ask questions.

Neal Neil: Now we will open the call for your questions as indicated at the beginning of the call. There are two ways to ask questions. One for those on the phone. Please press star one on your telephone keypad to raise your hand to withdraw your question simply.

For those on the phone, please press star one on your telephone keypad duration.

to withdraw your questions simply press star 1 again.

Neal Neil: Press Star one again.

Two, for those on the webcast, please select Ask a Question in the top right corner of the screen. Enter your question and click submit. Up to three questions from those on the phone will be answered first, and as time permits, a couple of questions from the webcast will be addressed.

Neal Neil: For those on the webcast. Please select ask a quick question in the top right corner of the screen.

Neal Neil: Enter your question and click submit.

Neal Neil: Just three questions from those on the phone will be answered first and as time permits a couple of questions from the webcast will be addressed.

Our first question comes from a line of Darren Aftahi with Roth MKM. Please go ahead

Our first question comes from the line of Darren <unk> tie with Roth MTM. Please go ahead.

Yes, thanks. Thank you for your questions, guys. Good afternoon. Just a couple of five May. On the restructuring cost, you got to go to the quarter, you said 20% reduction. Is it a 20% reduction of that roughly 7.5 million off-ex number you reported in the quarter?

Darren: Yeah. Thanks for taking my questions guys. Good afternoon, just a couple if I may.

Darren: On the restructuring cost you guys took in the quarter, you said, 20% reduction is that a 20% reduction of debt roughly $7 5 million.

Darren: Opex number you reported in the quarter.

Darren: Okay.

Yes, yes, Aaron, that's some basically a 20% reduction quarter of a quarter as it relates to, you know, SG&A.

Darren: Yes, Sharon.

Darren: Basically a 20% reduction.

Darren: Quarter over quarter.

Darren: As it relates to.

Darren: SG&A.

And it does exclude, you know, restructuring costs that were...

Darren: And it does exclude.

Darren: Restructuring costs that were.

You're related to some of our repositioning of some of the channels and areas of our business.

Darren: And related to some of our repositioning.

Darren: Some of the channels in areas of our business.

Okay.

Darren: Great. Thanks, and then on.

Darren: Yes.

loop ads manager, can you kind of talk about, I think you went live with this beta on September 21st. Is that live in the market right now and then kind of what your expectations are for, I guess, both self-serve and local market and kind of how material this can be to your business? And will it be material in the current quarter that we're...

Darren: Luke ads manager can you kind of talk about that thank you.

Darren: Went live with it.

Darren: Data on September 21.

Is that live in the market right now kind of what your expectations are for I guess, both self serve and local market and kind of how material. This can be to your business and will it be material in the current quarter.

Speaker Change: What percent of local AD and we know that that should be the double digits in terms of our mix. So.

So we're optimistic about what that's going to be, you know, especially in the upcoming year ahead.

Speaker Change: We're optimistic about what that's going to be especially in the upcoming year ahead.

Great, and then two more, if I may. On your DSP.

Speaker Change: Great and then two more if I may on your DFS key relationship.

key relationship. And I'll ask what are you guys doing out the relationship with Microsoft Exander. I guess where are we in the ballgame in terms of the

Speaker Change: Last quarter, you guys announced the relationship with Microsoft Zander.

I guess where are we in the ballgame in terms of the.

what we kind of call the redefining of the category you're in.

What are we kind of call.

Speaker Change: Defining the category or in E digital out of home for CTV.

Did you live home for CTV? Are there other larger kind of players in the DSB space that you feel like will drop in the near term or maybe in deri part of 24?

Speaker Change: Are there other larger kind of players in the DSP space that you feel like will drop in the near term or maybe into early part of 'twenty four.

So the answer is positive momentum and the answer in the last part is yes. We do anticipate more partnerships. The message is getting across. We've been out there just beating the drums, Bob and team, just about TV as TV. And it's part of an evolution of any business, as you know. We've used these similarities before when we go from cable to streaming and people need to get used to what that means.

Speaker Change: So the answer is positive momentum and the answer the last part is yes.

Speaker Change: We do anticipate more partnerships the message is getting across we've been out there just beating the drums, Bob and team.

Speaker Change: About television is television.

Speaker Change: It's part of an evolution of any business as you know.

Speaker Change: We've used these similarities before when we go from cable to streaming and people need to get used to what that means.

So when we're offering streaming and businesses, people have to get used to out of home, not meaning billboards. So that message has certainly been heard. It is still being adopted, so there's still upside, which is good. But we do see momentum of people that are starting to recognize it and put spending towards that. But in answer to that, if we start cutting everything out and making the checkout list server will buy it. We do to Associate days.

Speaker Change: So when we're offering streaming in businesses, where people have to get used to out of home not meaning billboards. So that message has certainly been heard is still being adopted so there is still upside which is good but we do see momentum of people that are starting to recognize it and quit spending towards that.

Speaker Change: Great and then.

Speaker Change: I think John you made mentioned in your prepared remarks.

Speaker Change: You kind of want to lead into.

Speaker Change: The establishment and the bar restaurant ethical Star University I think there are a few others I am curious out of the 79000 roughly screen do you have between now and partner.

What percentage of those verticals can make up at 79,000?

What percentage of those verticals kind of makeup that 79000.

More than half of our own, I would say, I think that for us...

Speaker Change: More than half of our Ono.

Speaker Change: I would say I think that for us.

This has been really, I think this was an important part of last year, frankly, is where do you make the most money? Where do you get the most return? And everybody wants to know that. And for us, just to get the research back, the data back, to understand where we need to put the time, the acquisition cost, to make sure that their stickiness they stay, we know which venues, we know which verticals are the best, at least for us. We know the ones to stay away from. So fortunately, the ones that were calling out are a majority of our business.

Speaker Change: This has been really I think this was an important part of last year, frankly is where do you make the most money where do you get the most return and everybody wants to know that and for US just to get the research back that data back to understand where we need to put the time the acquisition cost.

Speaker Change: Sure that Theres stickiness they stay.

Speaker Change: No, which venues, we know which verticals are the best at least for US we know the ones to stay away from so Fortunately in the ones that we're calling out for a majority of our business.

you know, in terms of as we especially as we get the new player out there and that certainly is where we're starting to be focused.

Speaker Change: In terms of as we especially as we get the loot player out there from that certainly is where we are starting to be focus.

Speaker Change: Great. Thank you guys.

Speaker Change: Thanks Darren.

Our next question comes from a line of air quilf with B. Riley securities. Please go ahead.

Speaker Change: Our next question comes from the line of Eric Wold with B Riley Securities. Please go ahead.

Thank you, Jeff. No, a few questions. I guess one, you've had about 2000, the ONO editions or the past couple quarters of June quarter, September quarter. Do you feel this is kind of a healthy run rate as you kind of, you're following the last question, you're going to more intently focus on the right locations for the players or do you see an opportunity to kind of ramp that up in the court the head is performance approved?

Speaker Change: Thank you good afternoon.

Speaker Change: A few questions I guess one.

Speaker Change: So you had about 2000.

Speaker Change: The <unk> additions over the past couple of quarters the June quarter September quarter.

Speaker Change: Do you feel this is kind of a healthy run rate as you kind of you.

Speaker Change: Following the last question is kind of more intently focused on the right locations for the players or do you see an opportunity to kind of ramp that up in the quarters ahead as performance improves.

Hi, Eric, it that should definitely be ramped up. You know, I think is we kind of finished the second part of the year. And we understood that revenue was largely trending where it was. We really were kind of pulling back, analyzing a little bit about where we're putting the investment. And we're starting to see that trend up and putting more funds into that. But we believe that there is.

Speaker Change: Hi, Eric that should definitely be ramped up.

Speaker Change: I think as we kind of finish the second part of the year.

Speaker Change: And we understood that revenue was largely trending where it was.

Speaker Change: We really were kind of pulling back analyzing a little bit about where we're putting the investment that we're starting to see that trend up and putting more funds into that but we believe that there is a substantial amount of growth in those venues ahead of us we're barely penetrated in this streaming for business streaming TV market.

a substantial amount of growth in those venues ahead of us. We barely are penetrated in this streaming for business, streaming TV market. So that's certainly where the target's gonna be, but we certainly expect much, much more than that. So that's what we are...

Speaker Change: So that's certainly where the target is going to be but we certainly expect much much more than that.

Speaker Change: Understood.

As you move into political ad environment in the coming quarters, I guess what is the position there in terms of how much you will or when out lean to that, kind of what for percentage of the locations, you know, I guess would be appropriate for them or opt out if they have that, that choice, I think it's really kind of, say another kind of what percentage of the network could see a lift from political eye placements.

Speaker Change: Sure.

Speaker Change: Yes, as you move into.

Speaker Change: Political AD environment in the coming quarters, I guess, what is the position there in terms of.

Speaker Change: How much you will we're not leading to that kind of what what percentage of the locations I guess would be appropriate for them or opt out if they have that choice.

Speaker Change: Another way of kind of what percentage of the network could see a lift from from political ad placements.

Speaker Change: So we know that when you're coming into a presidential election year and other were anticipating suddenly some good activity there.

Speaker Change: And we're also starting out strong here as I alluded to in my part and the political haven't even kicked in yet that's just pure organic and I think that's really important to notice as well so you've got a recovery on the organic side, coupled with what we believe will be some good political coming down the road.

Couple with what we believe will be some good political coming down the road.

In terms of percentage of venues, it leaves just, you know, it's a matter of choice and clearly it's targeting. And we've got the partnerships with the AI where we make sure that ads are showing where they should show.

Speaker Change: In terms of percentage of venues. It really is just it's a matter of choice and clearly it's targeting.

We've got the partnerships with the AI, where we make sure that ads are showing where they should show.

and the venues are comfortable with that. So it's never really forced on people, but we do know that a good majority.

Speaker Change: And they have been used or comfortable with that so it's never really forced on people, but we do know that a a good majority, especially out of home.

especially out of home, they aren't really doesn't bother them that much and they often opt in on that. So it's good for us. We take everything stacked up nicely.

Speaker Change: They arent really doesn't bother him that much they often opt in on that so it's it's good for US we think everything's stacked up nicely.

Perfect and it's a final question for me as you look at the changes you've made in terms of

Perfect and then final question for me as you look at kind of the all the changes you've made in terms of.

cutting out the neco-sternity, hopefully impivot, back towards stronger trends and placement. It kind of helps us maybe bridge the gap of where you are, balance sheet wise before you think you make that pivot to your consistent positive cash flow. If there's a gap that means you feel there's a major, you're fine with the current balance sheet.

Speaker Change: Cutting out the costs starting to see hopefully you pivot back towards stronger trends.

And placement is going to help US bridge the gap of where you are balance sheet wise before you think you make that pivot to consistent positive cash flow.

Speaker Change: Our GAAP earnings to be filled or do you think youre fine with that.

Speaker Change: <unk> balance sheet.

I think Eric, you know, we've made a lot of strides since the second half of this last year in sort of repositioning our expense structure.

Speaker Change: Alright, Thank you Eric.

Speaker Change: We made a lot of strides is since.

Speaker Change: Since the second half of this last year and sort of repositioning our expense structure.

gaining efficiencies. Fourth quarter, obviously, we were 22% reduction over the prior year and we see that continuing and leveraging as our revenues continue to ramp in 2024. We also have

Speaker Change: Gaining efficiencies fourth quarter, obviously, you were 22% reduction over the prior year, and we see that continuing and leveraging.

Speaker Change: As our revenues continue to ramp in 2024, we also have.

you know some margin expansion that we clearly believe that we can achieve you know over 2023 as our revenues allow us to leverage some of those in addition to some of the negotiations we've done with some of the advertisers and our business partners. So all said you know we believe that we're cutting down the cash burn you know each quarter and you know that's going to allow us to start

Speaker Change: Some margin expansion that we clearly believe that we can.

Speaker Change: Can achieve over 2023 is our revenues allow us to leverage some of those in addition to some of the negotiations we've done with some of the <unk>.

Speaker Change: Advertisers are our business partners so.

Speaker Change: All said, we believe that we're cutting down the cash burn.

Speaker Change: Each quarter and.

That's going to allow us to start.

you know, getting to break even and then need this as a generating casual and positive adjustment even the basis. So we're very encouraged that

Speaker Change: Getting to breakeven and then needless to say generating.

Speaker Change: Cash flow and a positive adjusted EBITDA basis, So we're very.

Speaker Change: Courage that.

Speaker Change: Things are working in the right direction from a revenue growth margin expansion and being able to leverage our expense structure. So I.

I think all of those will help.

Speaker Change: Help.

Speaker Change: Not only improve the profitability, but it will help.

Speaker Change: Cash position as well.

And just add a little more color to that, Eric. And I think it's important to note that, you know, we always strive to use cash from operations as much as we can. When Neil talks about a cash balance from a year ago, that was right after uplift. And that's the most we've ever had. We've never been one of those companies that.

And just to add a little more color to that Eric and I think it is important to note that we always strive to use cash from operations as much as we can when Neil talked about our cash balance from a year ago that was right. After uplift and that's the most we've ever had we've never been one of those companies that.

You know, as sitting on some sort of 50 million type investment, we've managed that.

Speaker Change: It is sitting on some sort of $50 million type investment and we manage that to make sure that we're as careful as we possibly can be without diluting folks and at the same time, just making sure that as revenue increases we are using that for operations as best we can so we feel comfortable where we are.

to make sure that we're as careful as we possibly could be without diluting folks at the same time.

Just making sure that as revenue increases, we're using that for operations as best we can. So we feel comfortable where we are.

And especially as a business is tracking, we feel good about things.

Speaker Change: And especially as the business is tracking.

Speaker Change: We feel good about things.

Speaker Change: Perfect. Thank you I appreciate it.

Our final question comes from the line of David Marsh with singular research. Please go ahead.

Okay.

Our final question comes from the line of David <unk> with singular research. Please go ahead.

Hey guys, thanks for taking the questions. Just wanted to start on the comment about Q1, you know, kind of starting out strong. I mean, you guys obviously have a pretty tough...

Speaker Change: Okay.

Speaker Change: Hey, guys. Thanks for taking the questions.

Speaker Change: Just wanted to start on the on the comment about Q1 kind of starting out strong I mean, you guys, obviously have a pretty tough.

comp, I am assuming that when you say it's starting out strong, it means relative to the rest of this past calendar year as opposed to looking at a year over your comp

Speaker Change: Comp.

Speaker Change: I'm, assuming that when you say, it's starting out strong it means relative to the rest of this past calendar year.

Speaker Change: As opposed to <unk>.

Speaker Change: Looking at our year over year comp.

Type figure is that a fair assessment?

Speaker Change: Figure is that a fair assessment.

Speaker Change: Hey, David Yeah, I think it's fair what we're trying to say by that is these past three quarters have been pretty flat as you know.

Speaker Change: So.

To kind of grow past that we certainly want to get back to those kind of eight figure.

Speaker Change: Double digit type of quarters, and that's that is our that is where we need to be so we're not really kind of giving you a specific number but I think more to your point of it's just nice to kind of move off where we've been over the past few quarters.

Yeah, and just follow up to that. National, it's obviously been a big story all year. National advertiser's been pretty slow. I mean, are you guys 36 and a little bit there? You know, just.

Speaker Change: Yes.

Speaker Change: Yes, and just to follow up to that.

Speaker Change: National It's obviously been a big story all year National advertising has been pretty slow I mean are you guys starting to see sort of uptick there.

You know on the on the on the old boob tube seeing you know some of the big advertisers come back a little bit like the the auto manufacturers hopefully with the strike behind them they can get focused back on selling vehicles, but just broadly speaking seeing you know better momentum on the national stage.

Speaker Change: Yes.

Speaker Change: On the on the on the old group tube and some of the big advertisers come back a little bit like the auto manufacturers hopefully with the.

Speaker Change: The strike behind them, they can get focus back on <unk>.

Speaker Change: Selling vehicles.

Speaker Change: Just broadly speaking with you soon.

Speaker Change: Better momentum on the national stage.

We are. We are. You know, it's certainly not, you know, fully back, as everybody well knows, but we're definitely seeing momentum on the national stage, and we're seeing it on the regional stage, and to what Darren was talking about, we're certainly hoping for it on the local stage too.

We are we are.

Speaker Change: It's certainly not fully back as everybody well knows but.

Speaker Change: We're definitely seeing momentum on the national stage.

Speaker Change: We are seeing on the regional stage toward Darrin was talking about were certainly hoping board on the local stage two.

And you know, big part of your transformation, I guess.

Speaker Change: Alright.

Speaker Change: And a big part of your transformation I guess.

C age mon. Yes, is you know, you guys are.

Speaker Change: Sure.

Speaker Change: So all taken months I guess you guys are.

kind of gone away from that, but the sales platform that you had been, you know, relying upon and, you know, had talked about bringing, you know, building an internal sales force. And just one day, one day, if you could give us an update on that and just kind of talk about, you know, how that sales force is doing in terms of penetration and growing and reducing your dependence on kind of external sales assistant pipe.

Speaker Change: Okay gone away from that.

Sales platform that you had been relying upon.

Speaker Change: Talk about bringing building an internal sales force and just wanted to wonder if you could give us an update on that and just kind of.

Speaker Change: Talk about you know.

Speaker Change: How that sales force is doing in terms of penetration.

Speaker Change: And growing in reducing your dependence on kind of external.

Speaker Change: Sales of system.

Speaker Change: Operations.

I would say that we started seeing the results in the Q4 and that is continuing into this year. And I think that's what is helping us as we go into the new year.

Speaker Change: I would say that we started seeing the results into Q4.

Speaker Change: And that is continuing into this year and I think thats, what is helping us as we go into the new year.

When we started having our issues back in January , it was really about being in that open exchange programmatic pretty much solely, if you recall that.

Speaker Change: When we started having our issues back in January it was really about being in that open exchange programmatic pretty much solely if you recall that and we've taken.

And we've taken really big steps, important steps for us, just to kind of foolproof that and future proof of the bit by having the direct sales team, by increasing, you know, by building this local platform. And certainly just kind of diversifying more on the programmatic side with more direct deals in there as well. So a lot of those steps have started pay off in Q4 and lead into this new fiscal.

Speaker Change: Really big steps.

Speaker Change: <unk> steps for us just to kind of fool proof that in future proof it a bit by having the direct sales team.

Speaker Change: <unk>.

By building this local platform.

Speaker Change: Certainly just kind of diversifying more on the programmatic side.

Speaker Change: With more direct deals in there as well so a lot of those steps are starting to pay off in Q4 and lead into this new fiscal.

Speaker Change: Alright.

And I'm not sure if the number that you guys have necessarily handy but of. Yeah, maybe you guys could take.

Speaker Change: I'm not sure if it's the number that you guys haven't necessarily handy.

Speaker Change: Yes.

Maybe you guys can take a look and I don't know.

on it. But the Q1 number last year is obviously extremely strong on top line. Can you give me some sense of the impact of political on that? I mean, how significant that was on that revenue number?

Speaker Change: Come back to me.

Speaker Change: But.

Speaker Change: The Q1 number last year was obviously extremely strong on the top line.

Can you give me some sense of the impact of political on that and how significant that was on that revenue number.

It was a meaningful part of it. I mean, we could probably get back to you, I guess, with a little bit more, you know, on the conversation, but it certainly was a meaningful part of it. I guess what was good about it is, you know, it really tested our fill rates and our system and to make sure it worked well because we really were a capacity and it was great in that sense.

Speaker Change: It was a meaningful part of it I mean, we could probably get back to you I guess with a little bit more on the conversation, but it certainly was a meaningful part of it.

Speaker Change: I guess what was good about it is.

Speaker Change: It really tested our fill rates that are in our system and to make sure worked well because we really were at capacity and it was great in that sense.

So for us just to know that it works and to have a broader distribution platform, keep in mind, think about the growth that we've added, where that's where we're really excited about what's ahead, because we know that it's potentially making an impact like that. So it was a good part of our quarter. It has not shown yet, and we still are having growth like I talked about. So we'll see what that looks like when it gets sprinkled on next year.

Speaker Change: For us just to know that it works and to have a broader distribution platform keep in mind think about the growth that we've added.

Speaker Change: We're that's where we're really excited about what's ahead, because we know that it could potentially make an impact like that so it was a it was a good part.

Speaker Change: Of our quarter.

Speaker Change: It has not shown yet and we still are having growth like I talked about so we will see what that looks like when it gets sprinkled on next year.

Sounds good, I wish you guys the best and keep up to good work. X Haven, appreciate it.

Speaker Change: Great.

Speaker Change: Sounds good I wish you guys best and keep up the good work.

Speaker Change: Thanks, David I appreciate it.

Speaker Change: That concludes the Q&A session back to John Nierman for closing remarks.

Okay, well I'd like to thank everyone for joining the call today. We're excited about where the business is headed. And thanks again for joining us. We look forward to providing further updates on our next call.

John Nierman: Okay, well I'd like to thank everyone for joining the call today, we're excited about where the business is headed.

John Nierman: Thanks again for joining us look forward to providing further updates on our next call.

John Nierman: Talk then.

I'd like to thank our speakers for today's presentation, and thank you all for joining us. This now concludes today's call, and you may now dis-

John Nierman: I'd like to thank our speakers for today's presentation and thank you all for joining US just now concludes today's call you may now disconnect.

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