Dolphin Entertainment(DLPN) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q2 2022 revenue was $10.3 million, a 19% increase year-over-year, while six months 2022 revenue reached $19.5 million, up 23% year-over-year, all from organic growth in Dolphin 1.0 business [7][33] - Operating income for Q2 2022 was approximately $489,000, compared to $221,293 for Q2 2021, reflecting a significant improvement [38] - Net income for Q2 2022 was $612,008, down from $1,349,942 in Q2 2021, primarily due to a one-time gain from debt extinguishment in the previous year [39] Business Line Data and Key Metrics Changes - Dolphin 1.0, which includes entertainment marketing, showed strong performance with significant contributions from 42West and Shore Fire Media, leading to double-digit revenue growth [12][14] - The Door, Dolphin's culinary PR firm, engaged in various promotional campaigns, contributing to overall business growth [13] - Be Social, the influencer marketing group, successfully executed campaigns for major brands, enhancing Dolphin's market presence [17] Market Data and Key Metrics Changes - The entertainment marketing sector remains robust, with Dolphin benefiting from high-profile projects like the release of "Top Gun: Maverick," which grossed over $1.3 billion globally [12] - The NFT market is anticipated to strengthen in the coming months, with Dolphin planning to launch two high-profile NFT collections in the fall [26][27] Company Strategy and Development Direction - Dolphin is focused on expanding its Dolphin 2.0 initiatives, which involve taking ownership stakes in projects and leveraging its marketing expertise to drive growth [19][20] - The company aims to diversify its investments and build a sustainable revenue model through various ventures, including Midnight Theatre and NFT projects [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased demand for earned media services as companies may cut back on expensive advertising during economic uncertainty [55] - The company expects Dolphin 2.0 revenues to begin contributing significantly in Q4 2022, particularly from the opening of Midnight Theatre and NFT launches [42][49] Other Important Information - Dolphin's debt has been significantly reduced from over $16 million to below $5.3 million, with most remaining debt being long-term [9][10] - The company has changed auditors to Grant Thornton LLP, which is expected to enhance financial reporting and compliance [11] Q&A Session Summary Question: Are all revenues from Dolphin 1.0, and when should we expect Dolphin 2.0 revenues? - Yes, all revenues are from Dolphin 1.0, and Dolphin 2.0 revenues are expected to start in Q4 2022 with the opening of Midnight Theatre and NFT launches [42] Question: Will the size of the NFT launches be similar to previous expectations? - The size of the NFT launches will remain the same, with a focus on timing for optimal market conditions [43] Question: What are the expected normalized legal and professional expenses? - Legal and professional expenses are expected to normalize to around $500,000, similar to last year's figures [45][46] Question: How might clients reducing internal marketing manpower affect Dolphin? - If clients reduce internal manpower, they may rely more on external services, potentially benefiting Dolphin's business [54]