Remark Holdings(US:MARK)2019-05-13 03:00Financial Data and Key Metrics Changes - The company reported first quarter revenues of $19.5 million, an increase from $16.7 million in the previous year, driven by a $3.4 million increase in the Travel & Entertainment segment [6][19] - Operating loss was $5.8 million compared to $21.2 million in the prior year, reflecting the revenue increase and reduced total costs [21] - Net loss for the first quarter was $8.9 million or $0.23 per diluted share, an improvement from a net loss of $14 million or $0.43 per diluted share in the previous year [21] Business Line Data and Key Metrics Changes - The AI business generated $1.3 million in projects, with $0.4 million recognized during the quarter and $0.9 million deferred [6][19] - The Technology & Data Intelligence segment contributed $0.4 million from AI-based retail and safety solutions, with an additional $0.9 million deferred [19] Market Data and Key Metrics Changes - The company is experiencing strong growth in China, where companies are allocating significant budgets for AI deployment [26] - Southeast Asia is identified as a strong growth area due to the lack of internal capabilities to create AI products [26] Company Strategy and Development Direction - The company is focused on transforming into a pure AI-focused entity, divesting from non-core businesses to streamline operations and reduce debt [7][23] - The company aims to expand its AI business globally, leveraging its portfolio of AI capabilities to secure strategic partnerships across various sectors [7][10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in a revenue ramp-up through 2019, particularly following the Chinese New Year, which typically slows down project initiation [35] - The company believes there is significant untapped value in its digital media assets, particularly its minority stake in Sharecare [18] Other Important Information - The company is in the process of selling Vegas.com for an anticipated enterprise value of approximately $45 million, which will significantly reduce its debt [23][24] - The facial recognition algorithm was ranked in the top 20 in the latest evaluation by the U.S. National Institute of Standards and Technology [8] Q&A Session Summary Question: What traction is being seen with AI product rollout? - Management noted strong growth in China and Southeast Asia, with companies increasingly allocating budgets for AI solutions [26][27] Question: Which products are gaining the most traction? - Management indicated strong inbound demand across all product lines, with no specific industry dominating [30] Question: How should lumpiness in revenue recognition be viewed? - Management explained that revenue recognition is tied to project completion and cash collection, with expectations for a ramp-up in Q2 and Q3 [32][33] Question: What are the characteristics of the pharmacy deal? - The pharmacy deal involves 40 million patients using the kiosks, with a hardware and software payment structure [36][39] Question: Status of negotiations with American fast food chains? - Management confirmed that negotiations are ongoing and a formal announcement will be made upon conclusion [40][41] Question: Are there any updates on large deals with major companies? - Management stated that no large deals have been lost, but rollout plans and pricing remain critical factors [42][43] Question: Status of the Allinone entertainment deal? - Management confirmed a cash investment of $500,000 and indicated updates will be provided in the coming months [46][47]