Q2 2026 Zoomd Technologies Ltd Earnings Call
Speaker #1: A star key, followed by 0. After today's presentation, there will be an opportunity to ask questions, to ask a question you may press star, and then 1 on a touchtone telephone.
Speaker #1: To withdraw your questions, you may press star, and 2. Please also note: today's event is being recorded. At this time, I would like to turn the floor over to Ben Shamsian, Litham Partners.
Speaker #1: Please go ahead.
Speaker #2: Thank you. Good morning. And welcome to this morning's Zoom second quarter 2026 conference call. With us on the call for representing the company is Amit Bohensky, Zoom's founder and chairman, Nidal Amani, Zoom's chief executive officer, and Tsvika Adler, Zoom's chief financial officer.
Speaker #2: At the conclusion of today's prepared remarks, we will open to the call to questions. Please follow the operator's instructions to ask questions. Before we begin with prepared remarks, just a couple of comments.
Speaker #2: Today's call will contain forward-looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to defer materially from those projected.
Speaker #2: And the company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties is included in the company's filings, as well as periodic filings with regulators in Canada and the United States, which you can find on CDAR and Zoom's website.
Speaker #2: Today's discussion will include non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Note that all figures on this call are represented in US dollars, as are Zoom's financial statements.
Speaker #2: Finally, today's event is being recorded and will be available for replay through the webcast information provided in the press release. With that said, let me now turn the call over to Amit Bohansky, founder and chairman of Zoom.
Speaker #2: Amit, please proceed.
Speaker #3: Thank you, Ben. And good morning to all of you. We are pleased to speak with you today regarding our second quarter 2026 results. In Q2, we delivered a broad-based improvement across our key financial metrics compared with the first quarter.
Speaker #3: Revenues increased by over 10% quarter over quarter, and together with an additional related costs, resulted in opening income and EBITDA turning positive. Net income also improved by approximately 1.7 million dollars compared with the previous quarter.
Speaker #3: With more than 22 million dollars in cash and cash equivalent and no bank debt, we believe that we are in strong position to navigate the current transition period while continuing to invest in long-term growth initiatives, business development, strategic partnerships, and our technological capabilities.
Speaker #3: As discussed previously, two major customers implemented changes to their operating models reflecting ongoing adjustments in customer acquisition strategies and KPI measurement as part of broader shifts in the digital marketing landscape.
Speaker #3: We continue to actively work with both customers following these changes. Maintaining our position as a trusted partner supporting their long-term growth objectives with one of these customers, as time progressed, we have become increasingly cautious regarding the likelihood of a meaningful recovery in activity level.
Speaker #3: With the second customer, we continue to see a meaningful increase in activity levels alongside continued expansion into additional geographies and remain optimistic that the trend will continue.
Speaker #3: We believe this period of transition reflects an ongoing shift in customer activity mix rather than a fundamental change in our long-term growth strategy. We also continue to expand and diversify our customer base.
Speaker #3: Over the past several quarters, we expanded our presence across North America and Europe, adding more than 20 new clients across the iGaming, fintech, and e-commerce verticals, including Silver Social, Sportibet, and Kraken.
Speaker #3: Based on the typical revenue ramp-ups cycle, management expects these customers' wins to contribute more meaningfully during 2026. This newly onboarded customer contributed over 20% of the company's revenues during the quarter.
Speaker #3: Supporting the company's transition toward a broader and more diversified revenue profile. We believe this development supports the creation of the healthcare more diversified and resilient long-term revenue base.
Speaker #3: As part of our growth strategy, we continue to advance strategic partnerships that should accelerate revenue growth. Alongside the collaboration with E2, we initiated an additional partnership during the year currently in a POC stages focuses on expanding capabilities across broad range of digital and multimedia distributor channels.
Speaker #3: We are expanding the resources dedicated to this initiatives. And we believe they will contribute over the coming quarters. At the same time, we implemented a series of operational efficiency and cost optimization measures designed to better align our cost structure with current activity levels.
Speaker #3: These actions are now increasingly reflected in our results, contributing to a leaner cost base and improved operating efficiency with dedicated AI tools and internally developed capabilities supporting a growing share of our operational workload.
Speaker #3: We are therefore entering the coming quarters with an improving revenue trajectory, a more efficient cost structure, and a stronger foundation for renewed growth. Now, I would like to turn to our product and service offering as it's important for investors to understand our competitive advantage, and why clients are coming to us.
Speaker #3: Our competitive edge stems from our comprehensive 360-degree approach to digital performance with a mobile-first focus all designed to help our clients achieve their goals.
Speaker #3: We offer a wide range of solutions tailored to digital and mobile performance enabling us to deliver a holistic suite of products and services that drive measurable results against our clients' digital performance KPIs.
Speaker #3: Zoomed utilizes a combination of research and development acquisitions and methodologies to improve its offering. One of our strengths is our transparent direct and intensive client communication.
Speaker #3: Unlike many of our industry peers, we don't operate through agencies. We work directly with our clients engaging with the chief revenue officer side at the organization.
Speaker #3: This relationship positions us not just as a vendor, but as a trusted advisor. The depth of this engagement passes long-term partnerships significantly reduces churn and creates a strong opportunities for revenue growth within our existing client base.
Speaker #3: This approach enables real-time campaign management without delays even while simultaneously having multiple campaigns across various geographies. The unique approach positions us as a semi-human semi-automated command and control platform effectively combining advanced technology and strategic insights.
Speaker #3: We closely monitor and respond not only to the shifts in client strategy, but also broader macroeconomic changes beyond the client direct control, and as a result, we empower our clients to swiftly adapt to market fluctuations maximizing their impact and driving significant customers globally.
Speaker #3: Our main platform is integrated with hundreds of media sources, allowing us to promote our customers' digital assets on multiple channels under one system. We use a DSP for a programmatic media bind.
Speaker #3: The DSP is integrated into the biggest mobile media exchanges, providing our customers full range and rich for the mobile web and app performance needs.
Speaker #3: We optimize advertisers, resources, and maximize their advertising budgets and efficiency. There is no dependency on any specific media supplier or traffic channel. This is not only saves valuable time and resources for our advertisers, but also provides enhanced clarity and consolidated insights.
Speaker #3: Beyond the walled gardens, like Google and Meta and etc., the open marketing landscape is fragmented. Zoomed enable advertisers to leverage a wide range in various types of media channels, from social to programmatic OEMs, SDK networks, and more.
Speaker #3: Their KPIs are achieved on all together or as a mix. I will now review the second quarter of 2026 financial results in detail, revenue, revenue in Q2 of 26 was 77 million dollar, 7.7 million dollar, a 61% increase from Q2 25.
Speaker #3: The decrease in revenue primarily reflects changes in the operating models of two major customers while the overlook for a meaningful recovery with one customer remains uncertain activity with the second continued to improve and expand into additional geographies.
Speaker #3: At the same time, the company continued to execute its diversification strategy with customers onboarded during 2025 contributing more than 20% of quarterly revenues and customer concentration among the company's largest customers continuing to decline.
Speaker #3: Reflecting this positive trend, revenues in Q2 2026 increased by over 10% compared with Q1 2026. Gross margin gross margin in Q2 2026 was 43% consistent with Q2 25, variations in gross margin across periods primarily driven by changes in customer mix, remains with our representative profitability range.
Speaker #3: Operating expenses total operating expenses for Q2 26 were 2.8 million dollar, a 7% decline compared to Q2 25. The continued decrease in operating expenses reflects the ongoing benefit of the company's operational efficiency and cost optimizations measures implemented over recent quarters, including a reduction of approximately 20% of its workforce and other expense reduction initiatives.
Speaker #3: This ongoing focus on operational efficiency is also reflected in the quarter over quarter results. In Q2 2026, compared with Q1 2026, personal related costs decreased by approximately 8% while gross oriented spending increased by approximately 25%, primarily reflecting a continued investment in business development and customer engagement.
Speaker #3: EBITDA EBITDA is used as a primary performance measure by the company's management to ensure it has the right structure to support future growth. We define EBITDA as operating profit before depreciation and amortization, EBITDA in Q2 26 was 0.7 million dollar compared to 5.5 million dollar in Q2 25.
Speaker #3: The decline in profitability compared with the corresponding periods in 25 primarily reflects the decrease in revenues. The impact was partially offset by the continued benefits of the company's operational efficiency and cost optimization measures.
Speaker #3: The combination of positive revenue trends described above and the company's lower cost structure continued to broad-based improvement across the company's key income statements metrics in Q2 2026 compared with Q1 2026.
Speaker #3: Revenues increased by over 10% and together with an 8% reduction in salaries and related costs supported operating income and EBITDA returning to positive territory.
Speaker #3: While net income improved by approximately 1.7 million dollar. A full reconciliation EBITDA is available in our NDNA filing. Net income net income for Q2 26 was 1.2 million dollar compared to net income of 6.1 million dollar in Q2 25 in line with the factors explained above.
Speaker #3: Before we move to the QA, I would like to thank all our employees for the hard work and dedication and as well to our investors for the continued support and with that said, I would not happy to take questions.
Speaker #1: At this time, we'll begin the question and answer session. To ask a question, you may press star and then one on your touchstone phones.
Speaker #1: If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys. To withdraw your questions, you may press star and two.
Speaker #1: Once again, that is star and then one to join the question queue. At this time, we'll pause momentarily to assemble the roster. In our first question today, it comes from Jesus Sanchez from Castenar Investments.
Speaker #1: Please go ahead with your question.
Speaker #2: Hi, Amit. It's great to see the quarter over quarter improvements. I don't know if you can quantify for this Q2 what percentage of the Q2 revenue was that customer that is coming back and what the Q2 revenue will have been without him.
Speaker #3: Hi, this is the CEO. I'll take this question. We don't specifically disclose clients, but it was say around 20 to 25% of the revenue of the quarter.
Speaker #2: And you said that you expect it to come stronger than it was before they had this.
Speaker #3: Yeah. Yeah. Again, this is with this customer, we are seeing as we've said during the remarks, we are seeing continued expansion and testing of on their end through our service of new avenues like new geographies, new media types, and we are seeing continual growth there.
Speaker #3: Again, as it is still in the testing phase, it hasn't stabilized, but we see future of growth with them going forward with this client.
Speaker #3: Yes.
Speaker #2: Fantastic. Now that I have you, another finance question. So if we back out the Forex effect on the cash balance, our non-Forex finance income more or less implies like a one and a half percent of the cash on interest yield.
Speaker #2: Is that I'm reading that right or?
Speaker #3: Can you you are kind of breaking up. Can you please repeat the. Regarding the Forex?
Speaker #2: So if we remove the Forex effect from the cash, the interest income implied like a yield roughly of one and a half percent on our cash.
Speaker #2: Is that right what I'm reading or why is not higher and we don't have the money in term deposits or any other high yield?
Speaker #3: So a meaningful part of the finance income come from currency movement, mainly because the Israeli shekel strange against the US dollar. We also earned interest on our cash deposit, but most is from the currency most income most of the finance income came from the currency movement.
Speaker #3: Most of our available cash is held in new Israeli shekel. At the same time, a large part of our expenses is also in the new Israeli shekel.
Speaker #3: So that creates some natural offset and reduce the overall effect.
Speaker #2: Understood. Understood. Thank you very much. I will pass it on. Thank you.
Speaker #3: And the interest and the interest for our deposit is more or less something around 4% for the deposit and we don't have interest for the cash balance.
Speaker #2: So is then the Forex that is counterbalancing that 4%?
Speaker #3: Yes. We can take more questions we can set it later.
Speaker #2: Okay. Thank you.
Speaker #1: Once again, if you would like to ask a question, please press star and then one. We do have questions that were sent to the company.
Speaker #1: Ben Shamsian, please proceed.
Speaker #4: Thank you. With regards to the one customer that you are seeing increased activity, when do you see revenues returning to some normalized levels with that customer?
Speaker #3: Again, we don't have a crystal ball about the activity. We are currently seeing increased levels with them. The positive trajectory going forward. There are nowhere near the levels that we believe are achievable with them.
Speaker #3: Then again, we're not building our entire growth strategy on them. We're very optimistic about what we can achieve with them going forward and the next several quarters.
Speaker #4: Okay. We have another question. Regarding the cost optimization measures, will these expenses go back up once revenues return to normalized levels or can we can we see them stay where they are now?
Speaker #3: Not expected to materially grow. So the way we've set up the new expense structure and is not expected to grow linearly with revenues. We've induced both general cost efficiencies as well as implemented many AI toolings that are supposed to assist our doing our work in a more efficient manner.
Speaker #3: So as revenue grows, obviously there'll be more expenses. Certainly not in a linear fashion which will allow us to expand our margin.
Speaker #4: Okay. And then we have another question on M&A. Can you speak about the M&A landscape and what specifically Zoomed looking for as far as targets are concerned?
Speaker #3: So we this is Amit Bohensky. We stated we are actively in the pursuit for M&As in order to find first of all potential book of clients where we can expand in an unorganic way just get those clients and go with them with the factory machine that we've built that can help us to do very efficient customer acquisition.
Speaker #3: And probably to that adjacent businesses that can help us to be implemented further within the organization. So we are looking at different type of business areas that also because of our positioning with those type of clients can allow us to expand and right now we are in live pilots and POCs with some companies at clients that we brought or that they brought.
Speaker #3: And when we feel that it's safe enough we will take the next step and jump to this potential M&As.
Speaker #4: Okay. Thank you.
Speaker #1: Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two.
Speaker #1: And it's showing no additional questions. We'll conclude today's question and answer session. I'd like to turn the floor back over to Amit for any closing remarks.
Speaker #3: Thank you thank you for joining us today and for your continuous continued interest in Zoomed. Before we conclude, I'd like to say that many of you are already in direct in touch with me.
Speaker #3: And for everyone else, please feel free to reach out directly over email or WhatsApp anytime. Thank you again for your time, your support, and your continued trust in us.
