Q2 2024 Loop Media Inc Earnings Call

May 3, 2024

Okay.

Joining us today are <unk> interim CEO Justice scale farmer, CEO and co founder, Mr. John <unk>, Chairman and the company's CFO, Mr. Neil Watanabe.

By now everyone should have access to the 2020 for fiscal second quarter earnings press release, which the company issued earlier today at approximately 405 PM Eastern time.

The release is available in the Investor Relations section of loop website.

Web site at Www Dot loop Dot Tvs.

Jon M. Niermann: As we move into the next phase of our evolution, we believe it is time for the leadership and operation changes mentioned above and in our public filings. I believe we have great potential and that executing these changes is prudent to accelerate the company's potential path to break even and operating profitability. We continue to believe that we are still at the beginning of the growth curve in the streaming for business, CTV, for out-of-home venues market, and Loop Media is helping to lead the way.

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

Following management's remarks, there will not be a Q&A session.

Certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of 1095.

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

Jon M. Niermann: Pioneering requires patience and the ability to navigate inevitable obstacles like we have had to endure over the past year or more. I have and will stay engaged with the company as part of the leadership team and a member of the Board of Directors. However, my responsibility will change to focus on driving the revenue of our company, as well as the expansion of our distribution footprint. These are the most critical areas to address and stay focused on where the board believes I can be of the most value to the company.

These forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC.

Do not place undue reliance on any forward looking statements, which are being made only as of this date of this call.

Except as required by law. The company takes no obligation to revise or publicly release the results of any revision to any forward looking statements.

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

Jon M. Niermann: And I'm pleased with the initial progress we've made trying to address certain immediate needs over the past. I'm also pleased to have a trusted colleague now at the helm of the company along with an incredible team that makes up Loop Media. With that said, I would like to publicly hand over the earnings call to our new CEO, Justis Kao. Take it away, Justis.

<unk> adjusted EBITA 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 Youll.

You'll find reconciliation charts and other important information in the earnings press release and form 8-K furnished to the SEC.

[music].

I'd now like to turn the call over to Mr. John <unk> Chairman.

Justis Kao: I'm very excited to have the opportunity to work with the entire Loop team in our ongoing efforts to try and create shareholder value. Since my appointment, I have focused my attention on those areas of the business where we can look to increase revenues, leverage our fixed and variable expenses, and improve profitability. Certain of the changes that Jon referred to a short while ago and that are outlined in our 10-Q periodic report for the period ended March 31st, 2024, should move us further along that path.

Thank you and good afternoon, everyone on March 18th we announced significant changes to our organization that we believe will provide the framework for making the company more competitive and the CTV for business digital out of home industry. The chairman of the board and members of the management team determined and executing operational.

Changes as prudent to accelerate the company's potential path to breakeven and operating profit.

Profitability.

Justis Kao: I'm looking forward to sharing with you in the future more of the actions that will be taken to try and achieve our objective. With that, I will turn the call over to Neil to take you through our financial results.

As part of those changes after co founding the company and serving as CEO for the first 10 years I have stepped down as CEO to focus my time and attention on revenue generation and other outward facing areas at.

Neil T. Watanabe: Thank you, Justis, and good afternoon, everyone. As we review our financial results, I want to remind everyone that all comparisons and variance commentary refer to the prior year's fiscal second quarter, unless otherwise specified. As of March 31st, 2024, we had approximately 83,000 active Loop players and partner screens across the Loop platform, which included 32,658 QAUs across our O&O platform versus 32,734 QAUs for the prior year quarter and 33,783 QAUs at the end of our last quarter ended on December 31, 2022.

I'm excited to hand, the CEO reins over to the next generation of leaders ship from New Justice scale.

This has been an invaluable and well respected member of our team from the beginning along with other organizational changes affecting several parts of our company. We also announced the departure of our Chief revenue Officer, and our Chief operating officer, both of whom have.

Neil T. Watanabe: This represented a decrease of 0.23% to the prior quarter and a decrease of 3% to our prior quarter. Our partner screens count represented at the end of the second quarter was approximately 50,000 across our partner platform, an increase of approximately 26,000 partner screens, or a 108% increase over the year ago second quarter, and an increase of approximately 7,000 partner screens, or a 16% increase over our last quarter ending on December 31, 2023.

Hello, operator.

<unk> exited the company.

The timing was right for changes at this level. We are very fortunate to have a team of talented and experienced executives who helps us grow from a couple of million dollars in revenue to over $30 million in a fairly short period of time, but different people are often required for different phases of our company's evolution.

Operator.

Hello, operator.

[music].

As we move into the next phase of our evolution. We believe it is time for the leadership and the operation changes mentioned above and in our public filings.

I believe we have great potential and that executing these changes as prudent to accelerate the company's potential path to breakeven and operating profitability.

We continue to believe that we are still at the beginning of the growth curve and the streaming for business CTV for out of home and used market and Luc media is helping to lead the way pioneering requires patience and the ability to navigate inevitable obstacles like we have had to endure over the past year or more.

Neil T. Watanabe: Our QAU footprint for the second quarter of fiscal 24 was reduced from the prior period as a result of natural attrition of loop players that were not immediately replaced as we continue to transition to a more targeted distribution model pivoting our focus to certain designated advertising markets and geographies, as well as more desirable out-of-home locations and venues, including convenience stores, restaurants, bars, and other retail establishments. We believe this targeted distribution plan will, over time, allow us to grow our QAUs quarter-on-quarter and provide a more robust distribution platform for our advertising partners. Many of the more desirable markets and geographies generally experience greater competition, resulting in slower distribution growth in those markets as compared to the less desirable markets.

Speaker Change: Good afternoon, everyone and thank you for participating in today's conference call to discuss loop Media's financial results for the 'twenty 'twenty four fiscal second quarter ended March 31 2024.

Sure.

I have and will stay engaged in the company as part of the leadership team and a member of the board of Directors. However, My response variability will change to a focus on driving the revenue of our company as well as the expansion of our distribution footprint.

Speaker Change: Joining us today, our interim CEO, Justin Hill, former CEO and co founder, Mr. John Herman and the comps.

Speaker Change: <unk> CFO, Mr. Neil Watanabe.

Speaker Change: By now everyone should have access to the 'twenty 'twenty four fiscal second quarter earnings press release, which the company issued earlier today at approximately 405 P M Eastern time.

These are the most critical areas to address and stay focused on where the board believes I can be of most value to the company and I'm pleased with the initial progress we've made trying to address certain immediate needs over the past months.

Speaker Change: Elyse, it's available in the Investor Relations section of loops.

I'm also pleased to have have a trusted cockpit now at the helm of the company along with an incredible team that makes up the loot media family with that said I would like to publicly handover the earnings call to our new CEO Justice shale taken away Justice.

Speaker Change: Web site at Www Dot loop Dot PD.

Neil T. Watanabe: As such, we expect the primary drivers of revenue growth going forward to be a combination of increased QAUs as well as higher CPMs and advertising impression fill rates associated with more desirable advertising markets and geographies. Shifting to revenue, our revenue for the three months ending March 31st, 2024 was $4 million, a decrease of $1.4 million, or approximately 26% from $5.4 million for the three months ending March 31st, 2023. This decrease was primarily driven by a challenging ad market environment in the second quarter of fiscal year 2024 due to one of the largest ad demand participants changing their terms of business with ad publishers, which resulted in a material negative impact on our ad demand partner revenue.

In addition, this call will also be available for webcast replay on the company's website. Following management remarks, there will not be a Q&A session.

Speaker Change: Certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of 1095.

Thank you John.

I am very excited to have the opportunity to work with the entire <unk> team and our ongoing efforts to try and create shareholder value.

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

Since my appointment I focus my attention on those areas of the business, where we can look to increase revenues leverage our fixed and variable expenses and improve profitability.

Certain of the changes that John referred to a short while ago and that are outlined in our 10-Q periodic report for the period ended March 31, 2024 should move us further along that path.

Speaker Change: Forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC.

Speaker Change: Do not place undue reliance on any forward looking statements, which are being made only as of this date of this call.

I'm looking forward to sharing with you in the future more of the actions that will be taken to try and achieve our objectives with that I will turn the call over to Neal to take you through our financial results Neil. Thank you Joseph and good afternoon, everyone. As we review our financial results I want to remind everyone that all comparisons in variances.

Neil T. Watanabe: During the latter part of the second quarter of fiscal year 2024, we worked with our demand partners and successfully integrated those changes and restored demand from this ad demand participant, although their new algorithms do not allow the same historical frequency of ad calls and ad bills.

Speaker Change: Except as required by law. The company takes no obligation to revise or publicly release the results with any revision to any forward looking statements.

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

Commentary refers to the prior year's fiscal second quarter, unless otherwise specified.

Speaker Change: Adjusted EBITA as supplemental measures of performance of our business.

Neil T. Watanabe: As a result, we do not expect to experience the same levels of absolute revenue previously recognized by this ad demand participant unless and until we significantly increase our distribution footprint. Finally, our decrease in revenue for the three months ended March 31st, 2024, from the three months ended March 31st, 2023, was also a result of the reduction in ad demand partners in the second quarter of fiscal year 2024 that view our loop platform as a CTV platform on which CTV ad budgets can be sent.

As of March 31, 2024, we had approximately 83000 active loop players on partner screens across the loop platform, which included 32658 <unk> across our <unk> platform.

Speaker Change: All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules you'll.

You'll find reconciliation charts and other important information in the earnings press release and form 8-K furnished to the SEC.

Versus 32730, <unk> use for the prior year quarter and 33783 QA use at the end of our last quarter ended in December 31 2023.

I'd now like to turn the call over to Mr. John Herrmann.

John Herrmann: Thank you and good afternoon, everyone on March 18th we announced significant changes to our organization that we believe will provide the framework to making the company more competitive in the CTV for business digital out of home industry. The chairman of the board and members of the management team determined that executing operational.

Neil T. Watanabe: Compared to the number of ad partners that view this as a CTV platform in the second quarter of fiscal year 2023, CTV advertising budgets are generally significantly higher, and thus, CTV ad demand is generally associated with higher fill rates and CPMs as compared to DOOH ad budgets and demand.

This represented a decrease of two 3% to the prior year quarter, and a decrease of 3% to a prior quarter.

Our partner screens.

<unk> represented at the end of the second quarter was approximately 50000 across our partner platform an increase of approximately 26000 partners screens are 108% increase over the year ago second quarter, and an increase of approximately 7000 partner screens or a 16% increase over last quarter ending in December.

Speaker Change: Changes as prudent to accelerate the company's potential past breakeven and operating profitability as part of those changes after co founding the company and serving as the CEO for the first 10 years I have stepped down as CEO to focus my time and attention on revenue generation and other outward facing areas.

Neil T. Watanabe: Our gross profit margin for the three months ending March 31st, 2024 was $400,000, a decrease of 1.2 million or 78% from 1.6 million for the three months ending March 31st, 2023. Our gross profit margin as a percentage of total revenues for the three months ending March 31st, 2024 was approximately 10.4% compared to 29.4% for the three months ending March 31st, 2023. The percentage decrease was primarily driven by decreased revenue. Based on our decrease in revenues, certain of our content license agreements provide for minimum license fees to be incurred.

Number 31 2023.

Speaker Change: I'm excited to hand, the CEO reins over to the next generation of leaders shifts from loop Justice scale.

Our QA U footprint for the second quarter of fiscal 'twenty four was reduced from the prior period as a result of natural attrition of new players that were not immediately replaced as we continued to transition to a more targeted distribution model pivoting, our focus to certain designated advertising markets and geographies as well as more desirable.

John Herrmann: Justice has been invaluable and well respected member of our team from the beginning along with other organizational changes affecting several parts of our company. We also announced the departure of our Chief revenue Officer, and our Chief operating officer, both of whom have.

Neil T. Watanabe: These minimum fees become an added component of the cost of goods sold and reduce gross profit margins, which negatively affect our gross margin percentages. Our sales, general, and administrative expenses for the three months ended March 31st, 2024 were $5.7 million, a decrease of $2.1 million, or 27%, from $7.8 million for the three months ended March 31st, 2023. The decrease in sales, general, and administrative expenses was primarily due to a reduction in marketing, costs, professional, and administrative fees, headcount, sales commissions, and stock compensation.

Out of home locations and venues, including convenience stores restaurants bars and other retail establishments. We believe this targeted distribution plan will over time allow us to grow our <unk> quarter on quarter and provided more robust distribution platform for our advertising partners.

Since exited the company.

John Herrmann: The timing was right for changes at this level. We are very fortunate to have a team of talented and experienced executives who helped us grow from a couple of million dollars in revenue to over $30 million in a fairly short period of time or different people are often required for different phases of our company's evolution.

Of the more desirable markets and geographies generally experienced greater competition, resulting in slower distribution growth in those markets as compared to the less desirable markets as such we expect the primary drivers of revenue growth going forward.

John Herrmann: As we move into the next phase of our evolution. We believe it is time for the leadership and the operation changes mentioned above and in our public filings.

A combination of increased <unk> as well as higher CPM and advertising impression fill rates associated with more desirable advertising markets and geographies.

John Herrmann: I believe we have great potential and that executing these changes as prudent to accelerate the company's potential path to breakeven and operating profitability.

Neil T. Watanabe: Our net loss in the 2024 fiscal second quarter was a loss of $7.6 million, or $0.11 a share, compared to a net loss of $9.8 million, or a loss of $0.17 per share, for the same period in fiscal 2023. Adjusted EBITDA in the 2024 fiscal second quarter was a loss of 4.5 million compared to a loss of 5.6 million for the same period in fiscal 2023. Turning to our balance sheet, cash and cash equivalents were $2.2 million on March 31, 2024, compared to $3.8 million on December 31, 2023. As of March 31, 2024, we had a total net debt of $6 million compared to $7.1 million as of December 31, 2023.

Shifting to revenue our revenue for the three months ending March 31, 2024 was $4 million a decrease of $1 4 million or approximately 26% from $5 4 million for the three months ended March 31, 2023. This decrease was primarily driven by a challenging end market environment.

John Herrmann: We continue to believe that we are still at the beginning of the growth curve and the streaming for business CTV for out of home then used market and live media is helping to lead the way pioneering requires patience and the ability to navigate inevitable obstacles like we have had to endure over the past year or more.

The second quarter of fiscal year 2024, due to one of the largest AD demand participants changing there in terms of business would add publishers, which resulted in a material negative impact on our AD demand partner revenue.

Speaker Change: I have and will stay engaged in the company as part of the leadership team and a member of the board of Directors. However, My response variability will change to a focus on driving the revenue of our company as well as the expansion of our distribution footprint.

During the latter part of the second quarter of fiscal year 2024, we working with.

Our demand partners and successfully integrated those changes and restored demand from this AD demand participant although their new algorithms do not allow the same historical frequency of add calls in that bills. As a result, we do not expect to experience. The same levels of absolute revenue previously recognized way this ad demand participant unless.

Speaker Change: These are the most critical areas to address and stay focused on where the board believes I can be of most value to the company and I'm pleased with the initial progress we've made trying to address certain immediate needs over the past months.

Operator: I'd like to thank everybody for listening today. We look forward to providing further updates on our next conference call. This concludes our prepared remarks. Operator, back to you.

Speaker Change: I'm also pleased to have have a trusted colleague now at the helm of the company along with an incredible team that makes up dilute media family with that said I would like to publicly handover the earnings call to our new CEO Justice.

Justis Kao: As indicated at the beginning of the call, there will be no questions following management's remarks. Now back to Justis Kao for closing remarks.

And until we significantly increase our distribution footprint.

Finally, our decrease in revenue for the three months ended March 31, 2024 from the three months ending March 31, 2023 was also a result of the reduction in AD demand partners in the second quarter of fiscal year 2024 that viewer loop platform as CTV platform on which CTV AD budgets can be sent.

Justis Kao: I would like to thank everyone for joining the call today and look forward to providing further updates on our next call.

Taken away Justice.

Justice: Thank you John.

Operator: This concludes today's conference call. Thank you for joining us. You may now disconnect.

Justice: I am very excited to have the opportunity to work with the entire loop team and our ongoing efforts to try and create shareholder value.

Justice: Since my appointment I focus my attention on those areas of the business, where we can look to increase revenues leverage our fixed and variable expenses and improve profitability.

As compared to the number of AD partners that viewed us as a CTV platform in the second quarter of fiscal year 2023.

Television advertising budgets are generally significantly higher and thus CTV AD demand is generally associated with higher fill rates and cpm's as compared to.

Certain of the changes that John referred to a short while ago and that are outlined in our 10-Q periodic report for the period ended March 31, 2024 should move us further along that path.

<unk> H ad budgets and demand.

Our gross profit margin for the three months ending March 31, 2024 was 400000, a decrease of $1 2 million or 78% from $1 6 million for the three months ended March 31, 2023, our gross profit margin as a percentage of total revenues for the three months ended March 31 2024.

Justice: I'm looking forward to sharing with you in the future more of the actions that will be taken to try and achieve our objectives with that I will turn the call over to Neal to take you through our financial results Neil. Thank you Joseph and good afternoon, everyone. As we review our financial results I want to remind everyone that all comparisons in variances.

<unk> was approximately 10, 4% compared to 29, 4% for the three months ended March 31, 2023, the percentage decrease was primarily driven by decreased revenue.

Neal: Commentary refers to the prior year's fiscal second quarter, unless otherwise specified.

Neal: As of March 31, 2024, we had approximately 83000 active loop players on partner screens across the loop platform, which included 32658 QA use across our <unk> platform.

Based on our decrease in revenues certain of our content license agreements provide for minimum license fees to be incurred these minimum fees become an added component of cost of goods sold and reduced gross profit margins, which negatively affected gross margin percentages.

Neal: Versus 32730, <unk> for the prior year quarter and 33783 <unk> at the end of our last quarter ended in December 31 2023.

Our sales general and administrative expenses for the three months ended March 31, 2024 were $5 $7 billion decrease of $2 1 million or 27% from $7 8 million for the three months ended March 31, 2023, the decrease in sales general and administrative expenses was primarily due to reduction in marketing.

Neal: This represented a decrease of two 3% to the prior year quarter, and a decrease of 3% to a prior quarter.

Neal: Our partner screens count represented at the end of the second quarter was approximately 50000 across our partner platform an increase of approximately 26000 partners screens are 108% increase over the year ago second quarter, and an increase of approximately 7000 partners range or a 16%.

<unk> costs professional and administrative fees head count sales commissions and stock compensation.

Our net loss in the 2020 for fiscal second quarter was a loss of $7 6 million or 11.

Loss per share compared to a net loss of $9 8 million or a loss of <unk> 17 per share for the same period in fiscal 2023.

Neal: Greece over our last quarter ending December 31, 2023.

Neal: Our QA you footprint for the second quarter of fiscal 2004 was reduced from the prior period as a result of natural attrition of new players that were not immediately replaced as we continued to transition to a more targeted distribution model pivoting, our focus to certain designated advertising markets and geographies as well as more desirable.

Adjusted EBITDA in the 2020 for fiscal second quarter was a loss of $4 5 million compared to a loss of $5 6 million for the same period in fiscal 2023.

Turning to our balance sheet cash and cash equivalents was $2 2 million on March 31, 2024, compared to $3 8 million on December 31, 2023 as of March 31, 2024, with a total net debt of $6 million compared to $7 1 million as of December 31, 2023.

Neal: Out of home locations and venues, including convenience stores restaurants bars and other retail establishments. We believe this targeted distribution plan will over time allow us to grow our QA us quarter on quarter and provided more robust distribution platform for our advertising partners.

I'd like to thank everybody for listening today, we look forward to providing further updates on our next conference call. This concludes our prepared remarks.

Neal: Many of the more desirable markets and geographies generally experience greater competition, resulting in slower distribution growth in those markets as compared to the less desirable markets as such we expect the primary drivers of revenue growth going forward will be a combination of increased QA use as well as higher CPM and advertising impression Phil.

Operator back to you.

As indicated at the beginning of the call there will be no questions. Following management's remarks back to justice Khail for closing remarks.

I would like to thank everyone for joining the call today and look forward to providing further updates on our next call.

Neal: It's associated with more desirable advertising markets and geographies.

This concludes today's conference call. Thank you for joining you may now disconnect.

Neal: Shifting to revenue our revenue for the three months ending March 31, 2024 was $4 million a decrease of $1 4 million or approximately 26% from $5 4 million for the three months ended March 31 2023.

Neal: This decrease was primarily driven by a challenging end market environment in the second quarter of fiscal year 2024, due to one of the largest AD demand participants changing there in terms of business would add publishers, which resulted in a material negative impact on our AD demand partner revenue.

Neal: During the latter part of the second quarter of fiscal year 2024, we worked with our.

Neal: Our demand partners on successfully integrated those changes and restored demand from this AD demand participant although their new algorithms do not allow the same historical frequency of add calls and add bills. As a result, we do not expect to experience. The same levels of absolute revenue previously recognized way this ad demand participant unless.

Neal: Until we significantly increased our distribution footprint.

Neal: Finally, our decrease in revenue for the three months ended March 31, 2024 from the three months ending March 31, 2023 was also a result of the reduction of AD demand partners in the second quarter of fiscal year 2024 that view, our lead platform as CTV platform on which CTV AD budgets can be sent.

Neal: As compared to the number of AD partners that viewed us as a CTV platform in the second quarter of fiscal year 2023, CTV advertising budgets are generally significantly higher and thus CTV AD demand is generally associated with higher fill rates and cpm's as compared to <unk>.

H ad budgets and demand.

Our gross profit margin for the three months ending March 31, 2024 was 400000.

Neal: A decrease of $1 2 million or 78% from $1 6 million for the three months ended March 31, 2023, our gross profit margin as a percentage of total revenues for the three months ended March 31, 2024 was approximately 10, 4% compared to 29, 4% for the three months ended March.

Neal: 31, 2023, the percentage decrease was primarily driven by decreased revenue based on our decrease in revenue certain of our content license agreements provide for minimum license fees to be incurred these minimum fees become an added component of cost of goods sold and reduced gross profit margins, which negatively impacted gross margin.

Percentages.

Our sales general and administrative expenses for the three months ended March 31, 2020 were $5 $7 billion decrease of $2 1 million or 27% from $7 8 million for the three months ended March 31, 2023, the decrease in sales general and administrative expenses was primarily due to reduction in market.

Neal: <unk> costs professional and administrative fees head count sales commissions and stock compensation.

Neal: Our net loss in the 2020 for fiscal second quarter was a loss of $7 6 million or 11.

Neal: Loss per share compared to a net loss of $9 8 million or a loss of <unk> 17 per share for the same period in fiscal 2023.

Neal: Adjusted EBITDA in the 2020 for fiscal second quarter was a loss of $4 5 million compared to a loss of $5 6 million for the same period in fiscal 2023.

Neal: Turning to our balance sheet cash and cash equivalents was $2 2 million on March 31, 2024, compared to $3 8 million on December 31, 2023 as of March 31, 2024, we had a total net debt of $6 million compared to $7 1 million as of December 31, 2023.

Speaker Change: I'd like to thank everybody for listening today, we look forward to providing further updates on our next conference call.

Speaker Change: This concludes our prepared remarks.

Speaker Change: Operator back to you.

Speaker Change: As indicated at the beginning of the call there will be no questions. Following management's remarks back to justice for closing remarks.

Speaker Change: I would like to thank everyone for joining the call today and look forward to providing further updates on our next call.

Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

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Speaker Change: Yes.

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Speaker Change: Sure.

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Speaker Change: Sure.

Speaker Change: Okay.

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Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Good afternoon, everyone and thank you for participating in today's conference call to discuss fleet Media's financial results for the 2020 for fiscal second quarter ended March 31 2024.

Speaker Change: Joining us today, our interim CEO, Jeff farmer.

Jeff Farmer: Former CEO and co founder, Mr. John <unk>, Chairman and the company's CFO, Mr. Neil Watanabe.

Jeff Farmer: By now everyone should have access to the 2020 for fiscal second quarter earnings press release, which the company issued earlier today at approximately 405 PM Eastern time.

Jeff Farmer: Elyse, it's available in the Investor Relations section of loops.

Jeff Farmer: Web site at Www Dot group Dot PV.

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

Jeff Farmer: Following management's remarks, there will not be a Q&A session.

Jeff Farmer: Certain comments made on this conference call and webcast are considered forward looking statements under the private Securities Litigation Reform Act of 1095.

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

Jeff Farmer: Forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC.

Jeff Farmer: Do not place undue reliance on any forward looking statements, which are being made only as of this date of this call.

Jeff Farmer: Except as required by law. The company takes no obligation to revise or publicly release the results of any revision to any forward looking statements.

Jeff Farmer: The company's presentation also includes certain non-GAAP financial measures.

Jeff Farmer: Adjusted EBITA as supplemental measures of performance of our business.

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

Jeff Farmer: You'll find reconciliation charts and other important information in the earnings press release and form 8-K furnished to the SEC.

Jeff Farmer: I would now like to turn the call over to Mr. John Herrmann.

John Herrmann: Thank you and good afternoon, everyone on March 18th we announced significant changes to our organization that we believe will provide the framework to making the company more competitive and the CTV for business digital out of home industry. The chairman of the board and members of the management team determined that executing operational.

John Herrmann: Changes as prudent to accelerate the company's potential path to breakeven and operating profitability.

John Herrmann: As part of those changes after co founding the company and serving as the CEO for the first 10 years.

<unk> CEO to focus my time and attention on revenue generation and other outward facing areas at.

Speaker Change: I'm excited to hand, the CEO reins over to the next generation of leaders shipped from loop Justice scale.

Speaker Change: This has been an invaluable and well respected member of our team from the beginning along with other organizational changes affecting several parts of our company. We also announced the departure of our Chief revenue Officer, and our Chief operating officer, both of whom have since.

Speaker Change: <unk> exited the company.

Speaker Change: The timing was right for changes at this level. We are very fortunate to have a team of talented and experienced executives who helped us grow from a couple of million dollars in revenue to over $30 million in a fairly short period of time.

Speaker Change: People are often required for different phases of our company's evolution.

Speaker Change: As we move into the next phase of our evolution. We believe it is time for the leadership and the operation changes mentioned above and in our public filings.

I believe we have great potential and that executing these changes it's prudent to accelerate the company's potential path to breakeven and operating profitability.

Speaker Change: We continue to believe that we are still at the beginning of the growth curve and the streaming for business CTV for out of home venues market and with media is helping to lead the way pioneering requires patience and the ability to navigate inevitable obstacles like we have had to endure over the past year or more.

Speaker Change: Sure.

I'm also pleased to have have a trusted cockpit now at the helm of the company along with an incredible team that makes up dilute media family with that said I would like to publicly handover the earnings call to our new CEO Justice tab taken away Justice.

Justice: Thank you John.

Justice: I am very excited to have the opportunity to work with the entire loop team and our ongoing efforts to try and create shareholder value.

Since my appointment I focus my attention on those areas of the business, where we can look to increase revenues and leverage our fixed and variable expenses and improve profitability.

Justice: Certain of the changes that John referred to a short while ago and that are outlined in our 10-Q periodic report for the period ended March 31, 2024 should move us further along that path.

Neal: Commentary refers to the prior year's fiscal second quarter, unless otherwise specified.

Neal: As of March 31, 2024, we had approximately 83000 active loop players on partner screens across the loop platform, which included 32658 QA use across our <unk> platform.

Neal: Versus 32730, <unk> use for the prior year quarter and 33783 QA use at the end of our last quarter ended in December 31 2023.

Neal: This represented a decrease of <unk>, 3% to the prior year quarter, and a decrease of 3% to a prior quarter.

Neal: Greece over our last quarter ending December 31, 2023.

<unk> out of home locations and venues, including convenience stores restaurants bars and other retail establishments. We believe this targeted distribution plan will over time allow us to grow our QA us quarter on quarter and provided more robust distribution platform for our advertising partners.

Neal: Many of the more desirable markets and geographies generally experienced greater competition, resulting in slower distribution growth in those markets as compared to the less desirable markets.

Neal: As such we expect the primary drivers of revenue growth going forward will be a combination of increased <unk> as well as higher CPM and advertising impression fill rates associated with more desirable advertising markets and geographies.

Neal: The second quarter of fiscal year 2024, due to one of the largest AD demand participants changing there in terms of business would add publishers, which resulted in a material negative impact on our AD demand partner revenue.

Neal: During the latter part of the second quarter of fiscal year 2024, we worked with.

Neal: Our demand partners on successfully integrated those changes and restored demand from this AD demand participant although their new algorithms do not allow the same historical frequency of add calls and that bills. As a result, we do not expect to experience. The same levels of absolute revenue previously recognized by this AD demand participant unless.

Neal: And until we significantly increase our distribution footprint.

Neal: Finally, our decrease in revenue for the three months ended March 31, 2024 from the three months ending March 31, 2023 was also a result of the reduction of AD demand partners in the second quarter of fiscal year 2024 that view, our loop platform as CTV platform on which CTV AD budgets can be.

As compared to the number of AD partners that viewed us as a CTV platform in the second quarter of fiscal year 2023, CTV advertising budgets are generally significantly higher and thus CTV AD demand is generally associated with higher fill rates and cpm's as compared to.

Neal: <unk> H ad budgets and demand.

Neal: Our gross profit margin for the three months ending March 31, 2024 was 400000, a decrease of $1 2 million or 78% from $1 6 million for the three months ended March 31, 2023, our gross profit margin as a percentage of total revenues for the three months ended March 31 2024.

Neal: <unk> was approximately 10, 4% compared to 29, 4% for the three months ended March 31, 2023, the percentage decrease was primarily driven by decreased revenue.

Neal: Based on our decrease in revenue sharing of our content license agreements provide for minimum license fees to be incurred these minimum fees become an added component of cost of goods sold and reduced gross profit margins, which negatively affected gross margin percentages.

Neal: Our sales general and administrative expenses for the three months ended March 31, 2020 were $5 $7 billion decrease of $2 1 million or 27% from $7 8 million for the three months ended March 31, 2023, the decrease in sales general and administrative expenses was primarily due to reduction in marketing.

<unk> costs professional and administrative fees head count sales commissions and stock compensation.

Neal: Our net loss in the 2020 for fiscal second quarter was a loss of $7 6 million or 11.

Neal: Loss per share compared to a net loss of $9 8 million or a loss of <unk> 17 per share for the same period in fiscal 2023.

Neal: Adjusted EBITDA in the 2020 for fiscal second quarter was a loss of $4 5 million compared to a loss of $5 6 million for the same period in fiscal 2023.

Neal: Turning to our balance sheet cash and cash equivalents was $2 2 million on March 31, 2024, compared to $3 8 million on December 31, 2023 as of March 31, 2024, with a total net debt of $6 million compared to $7 1 million as of December 31, 2023.

Speaker Change: I'd like to thank everybody for listening today, we look forward to providing further updates on our next conference call. This concludes our prepared remarks.

Speaker Change: Operator back to you.

Speaker Change: As indicated at the beginning of the call there will be no questions. Following management's remarks back to justice Khail for closing remarks.

Khail: I would like to thank everyone for joining the call today and look forward to providing further updates on our next call.

Khail: This concludes today's conference call. Thank you for joining you may now disconnect.

Q2 2024 Loop Media Inc Earnings Call

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