Q4 2024 Super League Enterprise Inc Earnings Call

Operator: Greetings, and welcome to the Super League Enterprising Q4 2024 Earnings Call. At this time, all participants are in listen-only mode. As a reminder, this conference is being recorded.

Greetings and welcome to the Super League Enterprises, Inc. Q4, 2024 earnings call. At this time all participants are in a listen only mode. As a reminder, this conference is being recorded.

Ann Hand: It's now my pleasure to turn the call over to your host, CEO, Ann Hand. Please go ahead. Good morning, everyone. You have us bright and early here on the West Coast. I want to start by saying that I'm excited about this call. I'm excited because you have a Super League team in front of you that is fired up. We have worked hard to build something of value and are committed to this objective. While we face some challenges, some that all micro caps have faced, some unique to our nascent industry, we are bullish on the opportunity to optimize our business model and deliver meaningful shareholder value.

Speaker Change: It's now my pleasure to turn the call over to your host CEO and Hans Please go ahead.

Speaker Change: Good morning, everyone, you have us bright and early here on the West coast.

Speaker Change: I wanted to start by saying that I'm excited about this call I'm excited because you have a Super League team in front of me that is fired up.

Speaker Change: We have worked hard to build something of value and are committed to this objective while we faced some challenges some that all micro caps have faced some unique to our Nathan industry. We are bullish on the opportunity to optimize our business model and deliver meaningful shareholder value.

Ann Hand: And today allows us the opportunity to provide all of you with updates on important aspects of our strategy, operating model and leadership. So I'll dive in. As I just mentioned, the micro-cap and micro-economic headwinds, along with some structural shifts in the Roblox ad ecosystem, have challenged us, but it has not broken us. And we have responded. And this provides a lot of opportunity for our stock going forward, as we have adapted. We have and are being assertive and fast. We have grit, resilience, and our confidence is supported by an actionable plan already underway. While we've achieved plenty of success across hundreds of campaigns with blue-chip brands, creating innovative technology, and growing our audience base, our financial results in the back half of 2024 did not live up to the results we expected.

Speaker Change: And today allows us the opportunity to provide all of you with updates on important aspects of our strategy operating model and leadership.

Speaker Change: So I'll divert.

Speaker Change: As I just mentioned the micro cap and micro economic headwinds along with some structural shifts in the roadblocks out ecosystem have challenged us, but it is not broken us and we have responded and this provides a lot of opportunity for our stock going forward and we have adapted we have and are being assertive and fast we have Chris.

Speaker Change: Resilience and our confidence is supported by an actionable plan already underway.

Speaker Change: While we've achieved plenty of success across hundreds of campaigns with blue chip brands, creating innovative technology and growing our audience base our financial results in the back half of 'twenty 'twenty four did not live up to the results we expected we need to do better.

Ann Hand: We need to do better. Perhaps a speed bump on our path to profitability, but as well, it serves as a call for a sea change. And again, I want to reiterate that, a sea change. We believe in our long-term prospects, and there are positive signs in Q1, notably that revenue diversification is kicking in, margins are recovering, and our pipeline is healthy. We currently have about 20 million in active pursuits across 77 unique programs, and we've brought in higher margin products into our portfolios that can further grow average deal size and margin profiles. The key challenge remains that we are still in the education phase on ways brands can target elusive gaming audiences through innovative, playable advertising.

Speaker Change: Perhaps a speed bump on our path to profitability, but as well it serves as a call for a sea change and again I want to reiterate that a sea change we believe in our long term prospects and there are positive signs in Q1, notably that revenue diversification is kicking in margins are recovering and our pipeline is healthy.

Speaker Change: We currently have about $20 million in active pursuits across 77 unique programs and we brought in higher margin products into our portfolio that can further grow average deal size and margin profile.

Speaker Change: The key challenge remains that we are still in the market education phase on ways brands can target elusive gaming audiences through innovative playable advertising.

Ann Hand: As you've heard me say before, traditional social media went through the same adoption curve, and over time it became a ubiquitous part of any marketer's strategy. The same lies ahead for us with our gaming marketing channels and audios.

Speaker Change: As you've heard me say before traditional social media went through the same adoption curve and over time. It became a ubiquitous part of any market or strategy. The same lies ahead for us with our gave me marketing channels and audiences.

Ann Hand: So what is our mandate? It's getting to break even. That's job number one for you, our shareholders. Today we are making it clear that we are aggressively attacking our cost structure to align with that imperative, with an aim to be EBITDA positive in Q4, as well as focusing on larger revenue, higher margin programs to be more selective in where we focus our limited resources. We understand the tradeoffs, and we know what we need to do.

Speaker Change: So what is our mandate, it's getting to breakeven that's job number one for you our shareholders today.

Speaker Change: Today, we are making it clear that we are aggressively attacking our cost structure to align with that imperative with an aim to be EBITDA positive in Q4.

Speaker Change: As well as focusing on larger revenue higher margin programs to be more selective in where we focus our limited resources, we understand the trade offs and we know what we need to do.

Ann Hand: In addition, as part of the realignment, I'm moving to executive chair through the end of the year and I'm passing the torch to Matt Edelman to be our new CEO. I will continue to support and mentor Matt through the transformation process and strategic alternatives exploration. Matt has been our fearless president for the last two years and has the intellect, the deep product and industry knowledge, work ethic, energy and enthusiasm to hit the ground running. Take a look at his LinkedIn and you'll see he is a business builder at the intersection of innovative digital content and technology for more than 20 years with notable experience at WME-IMG Endeavor and Marvel, just to name a couple.

Speaker Change: In addition, as part of the realignment I'm moving to executive chair through the end of the year and I'm passing the torch to him out of them to be our new CEO I will continue to support and mentor them out through the transformation process and strategic alternatives exploration, Matt has been our fearless president for the last two years and has the intellect the.

Matt: Deep product and industry knowledge work ethic energy and enthusiasm to hit the ground running take a look at is linked in and you'll see he is a business builder at the intersection of innovative digital content and technology for more than 20 years with notable experience at W. Me IMG endeavor and Marvel just to name a.

Speaker Change: A couple.

Ann Hand: As well, in an effort to bolster our board, we're thrilled to appoint Bant Breen as a director. Bant is a noted marketing and media executive, entrepreneur, and academic. Specifically, Bant has spent a vast amount of his career in holding company and operating leadership roles with some of the largest global ad agencies, including Publicis, Dentsu, and IPG. And he was inducted into the Advertising Hall of Achievement in 2010.

BANT Breen: As well in an effort to bolster our board, we're thrilled to appoint BANT Breen as a director.

BANT Breen: As I noted marketing and media executive entrepreneur and academic specifically bad has been a vast amount of his career in holding company and operating leadership roles with some of the largest global AD agencies, including coupons as dentsu in IPG and he was inducted into the advertising all of achievement in 2000.

Ann Hand: When you think about our market adoption challenge that we face, someone is connected and trusted at the executive level of Bant, can open big doors for us, doors with agencies and brands, and be a game changer for our pipeline and ultimately our revenue trajectory.

Speaker Change: Ted when you think about our market adoption.

Speaker Change: Adoption challenge that we face someone is connected and trusted at the executive level as bad can open big doors for us doors with agencies and brands and be a game changer for our pipeline and ultimately our revenue trajectory.

Ann Hand: As for the opportunity we announced with Infinite Reality back in October, the deal, as you know, has not completed. With the exclusivity period expired, it has allowed us to advance some very exciting alternative opportunities that are very on strategy for Super League. These few pursuits have significant overlap with us for more material revenue and cost synergies. And these are companies that are close to breakeven or already profitable, offering a combined P&L that accelerates our path to EBITDA positive, along with providing us with a more dominant position in the playable digital advertising space. To support this process, we have been able to shore up some short-term capital to provide us the runway for these advancing strategic conversations and complete our cost restrictions.

Speaker Change: That's where the opportunity we announced with infinite reality back in October the deal as you know has not completed with the exclusivity period expired. It has allowed us to advance some very exciting alternative opportunities that are very on strategy for Super League. These few pursuits have significant overlap with us.

Speaker Change: For a more material revenue and cost synergies and these are companies that are close to breakeven are already profitable offering a combined P&L that accelerates our path to EBITDA positive along with providing us with a more dominant position in the play of both digital advertising space.

Speaker Change: To support this process, we have been able to sharp some short term capital to provide us the runway for these advancing strategic conversations and complete our cost restructuring.

Ann Hand: And now I'm excited to have Matt join. We're going to do a little bit of a Q&A so you can hear directly from our new CEO. Okay, Matt, welcome. Thank you. Matt and I have worked together now for five, six years. And so I consider him a very trusted, great colleague and a friend. And so we talk a lot, but I'm excited about this format because I think it's a great opportunity for you really to get in front of our investor and analyst community and and put the spotlight on you. The spotlight is on you every day of the week because you really have been holding together so much about the operations of the firm.

Speaker Change: And now I'm excited to have Matt join we're gonna do a little bit of a Q&A. So you can hear directly from our new CEO.

Speaker Change: Okay, Matt welcome.

Matt: Thank you. Thank you.

Speaker Change: Matt and I have worked together now for five six years, and so I consider him a very trusted great colleague and a friend.

Speaker Change: And so we talk a lot, but I am excited about this format because I think it's a great opportunity for you really to get in front of our investor and analyst community and and put the spotlight on you. The spotlight is on U everyday of the week because you really have been holding together so much about the operations of the firm and so.

Ann Hand: And so why don't we just kick off with you telling me a little bit about why you're confident and excited. First, maybe about the size of the market. Let's go macro a bit. So, you know, the size of the market, the opportunity for us to build a profitable business at scale. Why do you believe that?

Speaker Change: Why don't we just kick off with you telling me a little bit about why you're confident and excited first maybe about the size of the market. Let's go macro a bit. So you know the size of the market the opportunity for us to build a profitable business at scale why do you believe that.

Matt Edelman: Sure. Well, first, it's terrific to be alongside you. And I am. I'm quite excited for all that's ahead for Super League. When I think about the market, what makes me confident is the size. You know, there are 3.3 billion gamers in the world 61% of all Americans, 190 million people play video games. It's estimated 2 out of 3 people under the age of 40 play video games, including 85% of all teenagers. I think in the coming decade it's reasonable, just based on demographics, that two out of three will become four out of five and it will be under 50, not under 40.

Speaker Change: Sure well first success terrific to be alongside you and I am I'm quite excited for all that they had for Super League.

Speaker Change: When I think about the market.

Speaker Change: What makes me confident is the size.

Speaker Change: There are $3 3 billion gamers in the world.

Speaker Change: 61% of all Americans 190 million people play video games.

Speaker Change: Its estimated two out of three people under the age of 40 play video games, including 85% of all teenagers.

Speaker Change: I think in the coming decade, it's reasonable just based on demographics that two out of three will become four out of five and it will be under 50 or 40 <unk>.

Matt Edelman: Even in the entertainment industry, since 2021, so for the past four years, a streaming series based on video game IP has been one of the most popular of the year. So it's really that everything connected to the act of play is dominating consumer engagement. And I love our solutions, I think our solutions for brands are very well designed to ride that wave. Okay, wonderful.

Speaker Change: Even in the entertainment industry since 2021, so for the past four years, a streaming series based on video game IP has been one of the most popular of the year. So its really everything connected to the active play is dominating consumer engagement.

Speaker Change: I Love our solutions I think our solutions for brands are very well designed to ride that wave.

Speaker Change: Okay wonderful so so it's interesting because you know too.

Matt Edelman: So, so it's interesting because, you know, You've just pointed out the ways that gaming has become very kind of mainstream. And yet, you know, we see that still the ad dollars are just slowly moving over more and more into gaming as an advertising channel. So what are the trends you think that support that point of view and why we're about to see a nice shift? A lot of it has to do with perception. For so many years, marketers have viewed gamers as sort of a quirky unimob of elusive consumers. And that's changing. We're starting to see that tide shift in a material way.

Speaker Change: You've just pointed out the ways that that gaming has become very kind of mainstream and yet you know we see that still the AD dollars are just slowly moving over more and more into gaming as a as an advertising channel. So what are the trends you think that support that point of view and and and.

Speaker Change: Why we're about to see a nice shift there.

Speaker Change: A lot of it has to do with perception for so many years marketers have viewed gamers as sort of a murky union mob of elusive consumers.

Speaker Change: And that's changing we're starting to see that tide shift in a material way brands have started to realize that gamers are regular people to they're just people who play.

Matt Edelman: Brands have started to realize that gamers are regular people too. They're just people who play. the same audiences brands target when they buy video ads on social media. teens who were into street wear, college women who love TikTok beauty, millennial parents with young kids. All of those same audiences are available through playable media. So trend number one is definitely about that terrific shift in perception. Trend number two is about demographics, but in a different way. It's about demographics at the decision maker level. The average age of incoming CEOs at U.S. companies is 56. No comment about my age on that.

The same audiences brands target when they buy video ads on social media.

Speaker Change: Teams, who are industry, where college women, who loved tick tock beauty millennial parents with young kids all of those same audiences are available through playable media.

Speaker Change: So number one is definitely about that that terrific shift in perception.

Speaker Change: Trend number two is about demographics, but in a different way, it's about demographics at the decision maker level.

Speaker Change: The average age of incoming Ceos at U S companies is 56.

Speaker Change: No comment about my age on that.

Speaker Change: Hum.

Matt Edelman: You know, CMOs are only a few years younger. That puts most C-suite decision makers in Generation X, and frankly, Generation X did not grow up gaming online. We stood tall at arcade machines at a mall, dropping as many quarters as we could afford, and for us, ads were TV commercials. In the coming years, millennials will start taking over the C-suite and gaming is baked into their DNA. So as their influence over marketing budgets expands, there will be a steady movement of dollars into interactive channels. People buy what they know. Love it, love it.

Speaker Change: <unk> are only a few years younger.

Speaker Change: That puts most C suite decision makers in generation acts and frankly generation X did not grow up gaming online. We we stood tall at arcade machines.

Speaker Change: Paul dropping as many quarters as we could afford and for us ads, where TV commercials.

Speaker Change: In the coming years millennials will start taking over the C suite and gaming is baked into their DNA. So as their influence over our marketing budgets expanse, there will be a steady movement of dollars into interactive channels people by what they know.

Speaker Change: Love It love it so with a bullish view on the market opportunity tell us more about your vision for Super League and this next transformational chapter.

Matt Edelman: So with a bullish view on the market opportunity, tell us more about your vision for Super League in this next transformational chapter. It's actually quite simple, you know, we think that for brands to win in the future, they need to become playable. And that's where we come in. We have advanced our products and expanded our partnerships to be able to help brands step into gaming platforms and gaming media channels as part of the play experience. And really, we do that by translating a brand's creative identity and messaging into fun, attention-grabbing, interactive formats that consumers actually enjoy.

Speaker Change: It's actually quite simple you know for we think that for brands to win in the future they need to become playable.

Speaker Change: And that's where we that's where we come in.

Speaker Change: We have advanced our products and expanded our partnerships to be able to help brand step into gaming platforms and gaming media channels as part of the play experience and really we do that by translating our brand's creative identity and messaging into fun.

Speaker Change: Tension grabbing interactive formats that consumers actually enjoy.

Matt Edelman: So through what we offer, brands are not interrupting consumers when they're dialed into a game. We're helping brands give their target audience more playable moments.

Speaker Change: So through what we offer.

Speaker Change: <unk> are not interrupting consumers when they are dialed into a game, we're helping brands give their targeted audience more playable moments.

Matt Edelman: I want you to, for the audience, just, you know, we say playable a lot. What is so magical about playable from, you know, if you could just give us a little bit of what the feeling or experience means when it's the player and the brand having that type of a dialogue? You know, when people are in the active play, they are leaned in, they're focused, they're passionate, they're not distracted or multitasking or thinking about something else. It is a very dialed in behavior. The opportunity for a brand to be part of that environment is significant.

Speaker Change: I want you to for the audience just yeah, we say playable a lot what is so magical about playable.

Speaker Change: If you could just give us a little bit of what the feeling our experienced means what when it's the player and the brand having that type of a dialogue.

Speaker Change: When people are.

Speaker Change: In the active play they are leaned in their focus their passionate they're not distracted or multitasking or thinker.

Speaker Change: Thinking about something else. It is a very dialed in behavior the opportunity for a brand to be part of that environment.

Speaker Change: Is significant the attention is much more engaged in fact engaged attention as a concept is something that resonates with our clients and it also has a lot to do with time spent.

Matt Edelman: The attention is much more engaged. In fact, engaged attention as a concept is something that resonates with our clients. And it also has a lot to do with time spent. I'm not sure how many people still believe that the one to four seconds people view video ads on social media is as being particularly impactful. Whereas the minutes at a time, for instance, in Roblox, the 11 to 14 minute average session time is a substantial difference. So being part of play matters a great deal. Yeah, I would think.

Speaker Change: I'm not sure how many people still believe that the one to four seconds people view video ads on social media is as being particularly impactful, whereas the minutes at a time for instance in roadblocks. The 11 to 14 minutes average session time is substantial.

Speaker Change: So being part of play matters a great deal.

Speaker Change: Yeah, I would think might have and when you think about and the early adoption of customer acquisition, how much more quickly you can move people from awareness to preference and loyalty.

Matt Edelman: My heavens, when you think about in the early adoption of customer acquisition, how much more quickly you can move people from awareness to preference and loyalty and collapse that cycle, you know, when you engage, you know, right out of the gate in such a meaningful way with a consumer. So you talked a little bit about the vision. So what do you think are the key growth vectors for the company that support that vision? You know, where are the couple areas that you see the most opportunity for us to grow? I think most significant has been our diversification strategy and our commitment to exploring the right product offerings that can generate the right kind of revenue.

Speaker Change: Collapsed that cycle, you know when you when you engage right out of the gate in such a meaningful way with our with the consumer.

Speaker Change: So you talked a little bit about the vision. So what do you think are the key growth vectors for the company that support that vision, you know where are the couple of areas that you see the most opportunity for us to grow.

Speaker Change: I think most significant has been our diversification strategy and our commitment to exploring the right product offerings that can generate the right kind of revenue.

Matt Edelman: With some of the structural changes you referenced in the Roblox brand partnership ecosystem, we did realize in the middle of 2024 that more meaningful growth was going to need to be fueled by additional complimentary offerings. We also wanted to make sure our future would be less dependent on possible similar platform adjustments. As a result, you know, our fastest growth area now is within mobile games. Our expansion into mobile kicked in on a more material level in Q4 at about 16% of our revenue, and it looks like it'll be close to 20% in Q1 with continued growth ahead.

Speaker Change: Some of the structural changes you referenced.

Speaker Change: In the roadblocks brand partnership ecosystem.

Speaker Change: We did realize in the middle of 2024 that more meaningful growth was going to need to be fueled by additional complementary offerings.

Speaker Change: We also wanted to make sure our future would be less dependent on possible similar platform adjustments.

Speaker Change: As a result, our fastest growth area now is within mobile games, our expansion into mobile kicked in in a more material level in Q4.

Speaker Change: At about 16% of our revenue and it looks like it will be close to 20% in Q1 with continued growth ahead.

Matt Edelman: That said, we do remain bullish on the value of immersive platforms for brand activations. It took more time than we would have liked, but we have adjusted to the updated ecosystem and seen new opportunities for growth across Roblox and also Minecraft and Fortnite.

Speaker Change: That said, we do remain bullish on the value of an immersive platforms for brand Activations.

Speaker Change: Took more time than we would have liked but we have adjusted to the updated ecosystem and see new opportunities for growth across roadblocks and also minecraft fortnite.

Ann Hand: So I just want to underscore something important you said. That's pretty impressive that, you know, and I credit you and your sales leadership on this move, how quickly you guys introduced the mobile category and the fact that already in Q1 it looks like about 20% of our revenue. So fast response and already seeing the results is very impressive. So thank you for that.

Speaker Change: But I just want to underscore some of the important you said that's pretty impressive that.

Speaker Change: You know and I have credit you and your sales leadership on this know how quickly you guys introduced the mobile category and the fact that already in Q1, it looks like about 20% of our revenue.

Speaker Change: So fast response and already seeing the results as very impressive. So thank you for that.

Matt Edelman: So with that, you know, you and I have been kind of riding side saddle on these advancing strategic conversations that really we kicked off, I think, in, you know, some earnest kind of in December with the exclusivity period expiring with infinite reality. What excites you most about those current conversations that we're having? And as I indicated earlier, it's with a few different companies, different stages, some, you know, much more advanced. But what does excite you about them? It really comes down to one word, and I think that word, the best word is alignment. We have an alignment of vision, of capabilities, of team composition.

Speaker Change: With that you know you and I have been kind of riding side saddle on these advancing strategic conversations that really we kicked off I think and you know some Ernest I'm kind of in December with the exclusivity period expiring with infinite reality.

Speaker Change: What excites you most about those current conversations that we're having and as I indicated earlier, it's with a few different companies different stages. Some you know more.

Speaker Change: Much more advanced, but but what does excite you about those.

Speaker Change: It really comes down to one word and I and I think that we're the best where it is alignment.

Speaker Change: We have an alignment of vision of capabilities of team composition.

Matt Edelman: complementary areas of strengths and also alignment of leadership. I think when we do complete our process, it will be very clear why we made the decision we made. Well said, well said.

Speaker Change: Complementary areas of strengths.

Speaker Change: And also alignment of leadership.

Speaker Change: When when we do complete our process.

Speaker Change: It will be very clear why we made the decision we made.

Speaker Change: Well said well said.

Matt Edelman: Okay, well, I think we'll wrap with the final question. What can we expect from you for your first 30 days in the seat? I think consistent with some of your comments, the first 30 days are really going to be focused on becoming even more lean and scrappy, so we can reduce our burn while still being set up to meet our goals as we charge towards an EBITDA positive Q4. We do have a plan, I'll be dedicated to implementing it. All right. Well, thank you so much.

Okay, well I think we'll wrap with a final question what can we expect from your for your first 30 days in the seat.

Speaker Change: I think consistent with some of your comments. The first 30 days are really going to be focused on becoming even more lean and scrappy. So we can reduce our burn while still being set up to meet our goals as we charge towards an EBITDA positive in Q4.

Speaker Change: We do have a plan that will be dedicated to implementing it yeah.

Speaker Change: Alright, well. Thank you so much and with that we will turn it over to the operator for questions from our audience.

Operator: And with that, we will turn it over to the operator for questions from our audience. Thank you. We will now be conducting a question and answer session. If you dialed in over the phone, you can press star 1 to be placed into question queue at this time. And you may also use the raise your hand function.

Speaker Change: Thank you well now be conducting a question and answer session.

Speaker Change: And over the phone, but star one to be placed in the question queue at this time.

Speaker Change: You May also use you raise your hand function.

Operator: dialed in via web.

Speaker Change: Sure.

Jack Codera: Our first question today is coming from Jack Codera from Maxson Group. Your line is now live. Hi, this is Jack Codera calling in for Jack Vanderaar.

Speaker Change: Our first question today is coming from Jack Cordero from Maxim Group. Your line is now live.

Jeff Eric: Hi, This is Jeff Eric calling in for Jack Vander Ark.

Matt Edelman: Congrats to Matt on the new role. And thanks to you and Ann for taking my questions. Kind of the first one a little bit more general. You know, I'm wondering if you can give me more context on the discussions you've had with, you know, potential acquisition targets. And I noted in the press release, it mentioned that if the infinite reality deal that discussions continue. I don't know if that's Any additional context would be helpful. Yeah, I mean, unfortunately, we're not in a position with anything binding that we're able to disclose. And what's always interesting about these processes is that you're talking to one company and the next thing you know, you're talking to three.

Jeff Eric: <unk> on the new role and thanks to you and Ed for taking my questions.

Jeff Eric: The first one a little bit more general.

Jeff Eric: I'm wondering if you can give any more context.

Speaker Change: The discussions you've had with potential acquisition targets.

Speaker Change: I noted in the press release had mentioned that.

Speaker Change: But isn't it reality deal discussions continue I don't know if.

Speaker Change: Any any additional context, there would be helpful.

Speaker Change: Yeah, I mean, unfortunately, we're not a we're not in a position with anything binding that we're able to disclose and what's you know always interesting about these processes is that.

Speaker Change: You were talking to one company and the next thing you know you're talking to three so things kind of move fast.

Matt Edelman: So things kind of move fast. We just had a new entrant, a very exciting new entrant kind of pop up just over the last couple weeks. You know, infinite reality, we do continue to stay in touch with, they've obviously been on a big acquisition spree with doing some real big kind of, you know, multi multi million dollar deals. And so they've just had their hands full. But I do think the time has been valuable for us to really think a lot because if you think about it, right as we were had announced that deal, we were right then feeling a lot of the weight of some of those structural shifts happening in Roblox and elsewhere.

Speaker Change: We just had a new entrant a very exciting new entrants kind of pop up just over the last couple of weeks you know infinite reality, we do continue to stay in touch with they've obviously been on a big acquisition spree with doing some real big kind of you know multi multimillion dollar deals and so.

Speaker Change: They just had their hands full.

Speaker Change: But I do think the time has been valuable for us to really think a lot because if you think about it right. As we were it had announced that deal. We were right then feeling a lot of the weight of some of those structural shifts happening in roadblocks and elsewhere and so I think in real time, we've been able to reset our strat.

Matt Edelman: And so I think in real time, we've been able to reset our strategy and roadmap. And I think that's helped us target better, maybe companies that have a better fit. The attractiveness of infinite reality was, you know, they do have audiences, you know, they have the drone racing audiences. And so, you know, we sell against audiences. And so in some ways at a high level, we are both building or have assets that have these large fan based, very loyal audiences. But, you know, at the end of the day, our business is a digital business. It's not a live event business.

Speaker Change: <unk> and roadmap and I think that's helped us target better maybe companies that have a better fit the attractiveness of infinite reality was you know they do have audiences you know they have the drone racing audiences and and so you know we sell against audiences.

Speaker Change: And so in some ways at a high level. We are both building are have assets that have these large fan base very loyal audiences, but you know at the end of the day our business is a digital business, it's not a life of that business and so there are core capabilities that we have that do lineup stronger.

Matt Edelman: And so there are core capabilities that we have that do line up stronger with the other companies that we're speaking with. But I really do believe that there's still a lot of opportunity with infinite reality. And even if it doesn't become the main opportunity that comes out of our strategic alternative process, I do think there's commercial partnership opportunities. Okay, that's helpful. And then, you know, if we could pin in on Roblox again, you know, obviously the developments in their ad ecosystem, it seems like longer term, they may potentially try to become kind of like a walled garden.

Speaker Change: With the other companies that we're speaking with them, but I really do believe that there's still a lot of opportunity with infinite reality and even if it doesn't become the the main opportunity that comes out of our strategic alternative process I do think there's commercial partnership opportunities there.

Speaker Change: Okay. That's helpful and then.

Speaker Change: If we could pin on roadblocks again.

Speaker Change: Obviously the developments there at ecosystem it seems like longer term they may potentially try to become kind of like a walled garden can you talk about.

Matt Edelman: Can you talk about, you know, how you're trying to deal with that work around it? And then maybe more generally where, you know, can you key in again on the biggest potential opportunities for growth?

Speaker Change: How you are trying to deal with that work around it and then maybe more generally can you key and again the biggest potential opportunities for growth.

Matt Edelman: Yeah, Matt, you should take that.

Speaker Change: Yeah, Matt and you should take that and I think it would be good to talk a little bit about you know our strategic partnership with roadblocks in the status of that and where do you think it's going.

Matt Edelman: And I think it'd be good to talk a little bit about, you know, our strategic partnership with Roblox and the status of that and where you think it's going. Sure, so we are part of the Roblox partner program and alongside a number of other terrific companies. Roblox is quite supportive of the companies in that partner program. In fact, they just hosted their very first partner day at their headquarters last week during the Game Developers Conference.

Speaker Change: Sure. So we are part of the roadblocks partner program and Ah alongside a number of other.

Speaker Change: Terrific companies.

Speaker Change: Robotics is quite supportive of the companies in that partner program. In fact, they just hosted their very first partner day at their headquarters last week during game the game developers conference.

Matt Edelman: The ecosystem is really divided into two areas. One is ads and one is content. And what has changed is that Roblox is focused on really creating an ads ecosystem that they will directly manage, build the products for and sell. Whereas the opportunity in the content area, branded content really as the operating term is open to the partner programs to pursue. And that represents the type of opportunity for us going forward. Okay, that's helpful.

Speaker Change: <unk>.

Speaker Change: Ecosystem is really divided into two areas. One is ads and one is content and what has changed is that roblox is focused on really creating an agile system that they will directly manage build the products.

Speaker Change: Sure and sell.

Speaker Change: Whereas the opportunity in the content area branded content.

Speaker Change: Really is as the as the operating term.

Speaker Change: Is open to the partner programs to pursue and that represents the type of opportunity for us going forward.

Speaker Change: Okay. That's helpful. Thanks, again for taking my questions and congrats on the new role.

Jack Codera: Thanks again for taking my questions and congrats on the new role. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question today is coming from Howard Halpern from Tech with photos. Your line is now live.

Howard Halpern: Your next question today is coming from Howard Halpern from Tagliatelle Village. Your line is now live. Hi, Howard. Hi, guys. Could you, I guess, talk a little bit about a little more about the opportunity in mobile, especially. you know, with the library that you've built and how quickly you can get things up and running on mobile when, you know, a client wants a program. Happy to. Thanks for the question, Howard. In mobile, we are really focused on two opportunities. One is playable advertising in the form of an ad that a consumer can actually interact with when they see it after moving, you know, through a mobile game that they're playing.

Speaker Change: Yeah.

Howard Halpern: Hi, Howard.

Speaker Change: Hi, guys.

Speaker Change: Could you I guess talk a little bit about little more about the opportunity in mobile, especially.

Speaker Change: You know with the library that you build and how quickly you can get things up and running on mobile one.

Speaker Change: Our client wants a program.

Howard Halpern: Happy to thanks for the question Howard.

Speaker Change: In mobile we are really focused on two opportunities one is playable advertising in the form of an AD that a consumer can actually interact with when they see it.

Speaker Change: After moving through a through a mobile game that they're playing.

Matt Edelman: And the other is by collaborating with the developers of popular mobile games to help them create branded content in their game. The advertising piece is quite fast. We can turn around a campaign in less than a week and get it live.

Speaker Change: And the other is by collaborating with the developers of popular mobile games to help them create branded content in their games.

Speaker Change: The advertising piece is quite fast.

Speaker Change: Can turnaround at a campaign in less than a week and get it life. The branded content piece takes a bit longer because it relies upon the developer to do some of the creative work.

Matt Edelman: The branded content piece takes a bit longer because it relies upon the developer to do some of the creative work. Okay. And can you, I guess, talk a little bit about, you know, the education process for a customer for your customers and And once you get a customer showing them, you know, the data analytics involved as to why they should continue with programs and expand programs. Another good question. I think the education process is really a multi-year process that started, thankfully, several years ago. We have great partners in that process, including companies like Roblox, which is the biggest gaming platform in the world.

Speaker Change: Okay.

Speaker Change: Can you I guess talk a little bit about.

Speaker Change: The education process for cost for your customers and.

Speaker Change: And once you get a customer showing them you know the data.

Speaker Change: Analytics involved as to why they should continue with programs and expand programs.

Speaker Change: And another good good question I think the education.

Speaker Change: <unk> is really a multi year process that started thankfully several years ago, we have great partners in that process, including companies like roadblocks, which is the biggest gaming platform in the world.

Ann Hand: So, agencies and brands have really begun to understand the opportunity in the gaming ecosystem and why being part of the play experience is valuable. as it relates to the measurement. Right now, the measurement on each platform is a bit different than other platforms. We have built products to help facilitate the collection of data and reporting to our clients, which does make it easier. And we continue to advance our products and our reporting capabilities to make sure clients are quite confident in coming back and repeating programs and spending money on an ongoing basis in these platforms. You know, Howard, you've heard me say this before, but just to kind of put a bow on that, you know, it would be unthinkable today for a global brand to not have a persistent annual program specific to Instagram or other, you know, important social media channels.

Speaker Change: No.

Speaker Change: <unk> agencies and brands have really begun to understand the opportunity in the gaming ecosystem and why being part of the play experience is valuable.

Speaker Change: As it relates to the measurement.

Speaker Change: Right now the measurement on each platform is a bit different than other platforms. We have built.

Speaker Change: To help facilitate the collection of data and reporting to our clients, which does make it easier and we continue to advance our product and our reporting capabilities to make sure clients are quite confident in coming back and repeating programs.

Speaker Change: And spending money on an ongoing basis in these platforms.

Howard Halpern: Howard you've heard me say this before but.

Howard Halpern: Just to kind of put a bow on that you know if you it would be unthinkable today for a global brand to not have a persistent <unk>.

Howard Halpern: Annual program specific to Instagram or other you know important.

Howard Halpern: Important social media channels.

Howard Halpern: The measurement piece that Matt was just talking about, that's kind of the next significant content move that will really have brands stop resisting what they do today, which is they come in and out very campaign centric and it's a lot of innovation and testing to understand and learn and really move to something that is a persistent strategy and is just a chunk of their marketing budget, no different than the way they're spending money out of home, TV, what have you. Well, I look forward to seeing the next 30, 60 and 90 days what transpires. Thank you guys.

Howard Halpern: The measurement piece that Matt was just talking about that as kind of the next.

Howard Halpern: Significant move that will really.

Howard Halpern: Have brands stop.

Howard Halpern: Resisting what they do today, which is they come in and out very campaign centric and it's a lot of innovation and testing to understand and learn.

And really move to something that is a persistent strategy and its just a chunk of their marketing budget no different than the way, they're spending money out of home TV what have you.

Howard Halpern: Okay.

Howard Halpern: I look forward to seeing the next 30 60 and 90 days.

Howard Halpern: Transpires. Thank you guys. Thank you.

Operator: Thank you. We've reached the end of our question and answer session.

Howard Halpern: Thank you we reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Ann Hand: I'd like to turn the floor back over for any further closing comments. Okay, well in closing, I often say change is opportunity and I truly believe that. At the start of the year we create a mandate for ourselves and one that Matt will now shepherd. The time is now to make bolder moves and deliver value for our shareholders. As I said earlier, we are confident and determined, and we're calm. Not because this is easy, not because we don't have urgency, this is of the utmost urgency. But again, it's because we know what we have to do and do it immediately.

Howard Halpern: Yeah.

Speaker Change: Okay, well in closing I, often say change is opportunity and I truly believe that at the start of the year, we create a mandate for ourselves and one that Matt will now Shepherd. The time is now to make bolder moves and deliver value for our shareholders. As I said earlier, we are confident and determined and we're com <unk>.

Speaker Change: Because this is D C not because we don't have urgency. This is of the utmost urgency, but again, it's because we know what we have to do and do it immediately we have the roadmap and we're already on our way and the board and I have tremendous enthusiasm and conviction for mass appointment and with that thank you for your time and have a great day.

Operator: We have the roadmap, and we're already on our way. And the board and I have tremendous enthusiasm and conviction for Mass Effect. And with that, thank you for your time and have a great day. Thank you. That does conclude today's webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today. Goodbye.

Speaker Change: Thank you that does conclude today's webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.

Speaker Change: Goodbye.