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Dolphin Entertainment(DLPN) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q3 2022 were approximately $9.9 million, an increase from approximately $9.4 million in Q3 2021, reflecting a year-over-year growth [32] - Operating expenses for Q3 2022 were approximately $11 million, compared to approximately $10.5 million in the same period of the prior year [32] - Net loss for Q3 2022 was approximately $1.3 million or $0.14 per share, compared to a net income of $141,651 or $0.02 per share in Q3 2021 [38][40] Business Line Data and Key Metrics Changes - Direct costs decreased by approximately $200,000 to approximately $837,000, primarily due to a decrease in Viewpoint's revenue [33] - Payroll and benefit expenses increased by approximately $1.2 million to approximately $7 million, attributed to additional headcount and stock compensation [34] - Acquisition costs of approximately $300,000 were primarily related to the Socialyte deal, with no acquisition costs in the same period last year [35] Market Data and Key Metrics Changes - The influencer marketing industry has seen strong growth, with global brand spend increasing from less than $2 billion in 2016 to over $10 billion in 2021, and expected to exceed $14 billion in 2022 [13][14] - Over 50% of total brand spend in influencer marketing in 2021 was in fashion, beauty, lifestyle, food, and entertainment, which are the specialties of Dolphin's agencies [16] Company Strategy and Development Direction - The acquisition of Socialyte is seen as a strategic move to enhance scale in influencer marketing, positioning Dolphin as a leading agency in the entertainment industry [10][12] - The company aims to leverage the growth in influencer marketing, expecting it to represent 25% or more of revenues in 2023 [22] - Dolphin is focusing on expanding its presence in the influencer marketing space, particularly in verticals like fashion and entertainment [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in influencer marketing and the company's ability to capitalize on this trend [48] - The CEO noted that the company is on pace for $40 million in revenue for the year without Socialyte, indicating strong underlying business performance [48] - Management acknowledged the challenges in the crypto space but emphasized Dolphin's lack of exposure to the FTX bankruptcy [27] Other Important Information - The company successfully launched its NFT collection, Creature Chronicles, generating over $435,000 in primary sales [26] - Dolphin is involved in a partnership to open ShaSha Lounge, a membership cocktail club in New Orleans, which includes a meaningful ownership stake [28][30] Q&A Session Summary Question: What is your plan on NFTs, given the current market conditions? - Management stated that they need to evaluate their NFT strategy due to the turmoil in the crypto space but emphasized their expertise in marketing within that sector [42] Question: Please provide an update on the Night Theatre and Hidden Leaf. - Management highlighted the success of the Midnight Theatre's soft opening and the strong demand for private events, indicating a positive outlook for the venue [44] Question: Any other changes in 2.0 initiatives? - Management discussed the ShaSha project as an example of a successful initiative that combines client marketing with equity participation [46] Question: Any commentary related to outlook? - Management expressed confidence in the growth of influencer marketing and its impact on revenue and profit, noting that the acquisition of Socialyte will significantly enhance their market position [47]