Remark Holdings(US:MARK)2021-11-16 00:14Financial Data and Key Metrics Changes - In Q3 2021, revenue decreased by $1.2 million due to China's strict COVID-19 lockdowns impacting project rollouts [23] - Gross profit fell to $0.4 million from $1 million, leading to an operating loss of $6.7 million compared to a loss of $3.1 million in Q3 2020 [23][24] - The company recorded a net income of $72.2 million or $0.72 per diluted share, a significant increase from $4.4 million or $0.04 per diluted share in Q3 2020, primarily due to a gain on the investment in Sharecare [24][25] Business Line Data and Key Metrics Changes - The AI platform has seen revenue growth from $5 million in 2019 to an expected $15 million in 2021, indicating a strong upward trajectory [6] - The company has completed 21 smart stores in China despite COVID-19 challenges, with plans for further deployment once conditions normalize [18] - The Smart Campus System has been deployed in over 400 schools, with expectations for faster growth in Q4 and 2022 due to educational reforms [20] Market Data and Key Metrics Changes - The U.S. infrastructure bill of $1.2 trillion presents significant opportunities for the company, with $110 billion allocated to roads and bridges and $39 billion for public transit [8][9] - The company has established a partnership with Brightline, marking its first major U.S. customer for the AI Smart Safety platform [10][17] Company Strategy and Development Direction - The company aims to leverage its AI platform to capture market share in the public transit sector and other infrastructure projects [8][12] - Plans to enter the NFT and Metaverse space are underway, with a targeted launch in Q4 2021, indicating a strategic pivot towards digital assets [12][15] - The company is focused on building a recurring revenue model with AI-based platforms and proprietary services [22] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by China's Zero COVID policy, which has affected operations across the country [39] - The company remains optimistic about future growth, expecting a strong fourth quarter and continued business expansion [17][40] - There is confidence in the ability to recruit talent despite market challenges, as the company has built a strong brand and vision [43] Other Important Information - The company is in the final stages of exploring monetization opportunities for its investment in Sharecare, with plans to liquidate shares after the first of the year [34][35] - The company has a cash balance of $3.1 million as of September 30, 2021, which is expected to sustain operations into early 2022 [25][41] Q&A Session Summary Question: How is the company positioned to take advantage of new business areas like infrastructure and the Metaverse? - Management emphasized that the core business is AI, which serves as a foundation for entering various markets, allowing for efficient adaptation to new opportunities [29][30] Question: What is the investment and timeframe for the Bikini Verse? - The company plans a full launch within three months, with an initial launch at Miami NFT week, leveraging existing resources for efficiency [32] Question: Where does the company stand on monetizing its investment in Sharecare? - Management is in the final stages of exploring monetization options and is focused on finding the right partner for long-term growth [34] Question: Is the revenue shortfall primarily due to lockdowns in China? - The revenue decline is attributed to widespread lockdowns across China, affecting operations and project rollouts [39] Question: How is the company managing its cash flow and recruitment challenges? - Management expressed confidence in their capital position and recruitment efforts, noting that the company has built a strong team that believes in its long-term vision [43]