Freedom (US:FRHC)2019-05-16 02:55Financial Data and Key Metrics Changes - Total revenue for Q1 2019 was $592,000, representing a 132% increase compared to the same period last year [19] - Gross margins improved to 42% from 27% in the prior year, excluding discontinued products [19] - Q1 2019 net loss was $5.8 million, which included a $2 million charge related to noncash warrant evaluation [20] - Adjusted EBITDA loss was $3.9 million, compared to a loss of $2.4 million in Q1 2018 [20] - The company raised $8.8 million after the close of the quarter through various equity offerings [21] Business Line Data and Key Metrics Changes - The verticals experienced a growth of 132% year-over-year, driven by the expansion of BIGtoken [19][17] - The company is entering the monetization phase of BIGtoken, with several strategic agency partnerships being formed [12] Market Data and Key Metrics Changes - The digital ad spend in the United States reached $108 billion in 2017, marking a significant milestone for the industry [7] - The Asia digital ad industry is projected to exceed $300 billion by 2020, indicating a substantial market opportunity for BIGtoken [13] Company Strategy and Development Direction - The company is focusing on expanding BIGtoken internationally, with plans to launch in Asia and Europe [13][14] - There is a strong emphasis on enhancing the data collection capabilities through the BIGtoken app, which is expected to provide more valuable data for marketers [10][11] - The company is also exploring synergies between BIGtoken and other verticals, particularly in consumer packaged goods [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2019 revenue guidance of $20 million to $25 million, with a growing pipeline of $10 million for Q2 [21][55] - The management noted that the monetization of BIGtoken has been accelerated due to increased interest from advertisers [45] Other Important Information - The company is currently in discussions regarding the S1 filing for BIGtoken and is responding to SEC inquiries [56] - The company has approximately 10.1 million shares outstanding as of March 31, 2019, and remains debt-free [21] Q&A Session Summary Question: Can you talk about BIGtoken active users and their geography? - Management clarified that active users are not a key metric as BIGtoken does not generate revenue from user engagement within the platform [27] - Growth is observed globally, with significant adoption in the U.S. and Southeast Asia, while Europe is still being developed [29] Question: Can you provide insights on user engagement and quality scores? - Management indicated that users who provide more information earn higher quality scores, which determine the value of their data [31] Question: What is the status of the sales team and their contributions? - The company has around 29 salespeople, with most hired in the last quarter, and is starting to see their contributions materialize [49][50] Question: How is revenue from BIGtoken being integrated into other verticals? - Management noted that revenue from BIGtoken is increasingly overlapping with other verticals, particularly in consumer packaged goods [37] Question: What measures are in place to ensure the authenticity of users? - Management stated that industry tools are used to verify real users, ensuring that advertisers do not pay for fake traffic [39][40] Question: What is the timeline for monetization of BIGtoken? - Initial monetization has been accelerated, with deals being closed sooner than expected, although revenue recognition may occur later in the year [45]