Super League Enterprise(US:SLE)2022-03-14 23:48Financial Data and Key Metrics Changes - Q4 2021 revenue reached $6.2 million, a 695% increase year-over-year, while full year 2021 revenue was $11.7 million, up 465% year-over-year [18][61] - Gross margin for Q4 2021 was 45%, a 7-point increase over Q3 2021, and full year gross margin was 44% [20][66] - The company had $14.5 million in cash as of December 31, 2021, with no debt and total shareholders' equity of $90.7 million [21][56] Business Line Data and Key Metrics Changes - Advertising and sponsorship revenue in Q4 2021 was $4.7 million, comprising 76% of total revenue, up from 45% in Q4 2020, with a 584% increase year-over-year [19][38] - Content-related revenues increased 172% year-over-year to $991,000, accounting for 16% of Q4 2021 revenue [40] - Direct-to-consumer revenues rose 645% to $477,000, representing 8% of Q4 2021 revenue [43] Market Data and Key Metrics Changes - The company reached approximately 75 million monthly active players in its game world network, with a significant portion coming from Roblox [17][87] - The number of revenue-generating advertisers increased by 154% in Q4 2021, with a 429% increase in revenue per advertiser [39] Company Strategy and Development Direction - The company aims to deepen its reach in metaverse gaming and enhance its offerings through strategic acquisitions and partnerships [73] - Super League is focused on creating immersive brand campaigns and leveraging its unique inventory to attract advertisers [12][29] - The company plans to target annual revenue in the range of $20 million to $22 million for 2022 [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of advertising revenue, with strong visibility into Q1, Q2, and Q3 of 2022 [76] - The company is focused on improving bottom-line performance while maintaining top-line growth, with a current monthly net cash burn rate expected to be between $1.5 million and $1.7 million [57][34] - Management highlighted the importance of brand safety and compliance in attracting advertisers, noting their inventory is certified by the kidSAFE Seal Program [28] Other Important Information - The company has made significant progress in integrating its acquisitions, enhancing its ad tech stack, and expanding its team [73] - Super League operates a remote-first model, which has positively impacted employee retention and productivity [82] Q&A Session Summary Question: Is there a way to disaggregate advertising revenue in Q4 between seasonal benefits and underlying trends? - Management acknowledged that Q4 typically sees seasonal boosts but indicated that the trend line is expected to carry through into the new year, with stronger estimates for Q1 and visibility into Q2 and Q3 [76] Question: Can gross margin return to mid to high 50% range? - Management stated that while targeting 50% gross margin is consistent, they are focused on introducing more advertisers to their unique inventory, which may involve lower margins initially [79] Question: What has been the experience with employee retention and hiring? - Management reported little to no churn in their product and engineering teams, attributing this to the flexibility and trust provided to employees in a remote-first environment [82] Question: What is the updated count on Bloxbiz monthly users and Roblox games in the portfolio? - Management confirmed that they have about 150 Roblox games and can reach approximately 75 million monthly players, with a significant portion coming from Roblox [87] Question: Are the 7-figure deals from existing customers or new customers? - Management indicated that the 7-figure deals are a mix of both existing and new customers, with existing customers expanding their engagement and new customers seeking to enter the metaverse [89]