Dolphin Entertainment(DLPN) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2023 increased by 11% to $11 million compared to Q1 2023, marking the second highest quarterly revenue performance in the company's history [68][78] - Operating loss for Q2 2023 was $7.4 million, with a net loss of $8 million, which included noncash items of over $7.1 million related to a nonrecurring $6.5 million impairment of goodwill [69][79] - Cash and cash equivalents were $7 million as of June 30, 2023, down from $7.9 million as of March 31, 2023 [91] Business Line Data and Key Metrics Changes - The influencer marketing segment, combining Be Social and Socialyte, is expected to represent 25% or more of total revenues in 2023, with significant growth anticipated in the coming years [10][84] - The Door, a marketing communications agency, welcomed new clients and secured projects with renowned culinary figures, enhancing its portfolio [7] - Viewpoint, the creative agency, worked on productions for notable brands, indicating a diverse project pipeline [8] Market Data and Key Metrics Changes - The influencer marketing industry has experienced strong double-digit CAGR over the past five years, growing from less than $2 billion in 2016 to over $14 billion in 2022 [63] - The company anticipates a strong second half of the year, driven by seasonal trends in influencer marketing and upcoming projects [67][111] Company Strategy and Development Direction - The company aims to merge Be Social and Socialyte to create a leading influencer marketing agency, expanding its services across various entertainment verticals [84][118] - The partnership with IMAX for the Blue Angels documentary is expected to generate significant revenue, with projections of over $3.5 million [80][88] - The company is focusing on expanding into live events and enhancing its influencer marketing capabilities, particularly in the culinary and athletic sectors [87][118] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, citing multiple catalysts and a strong operational momentum from Q1 to Q2 [5][67] - The impact of the ongoing writer and actor strikes is expected to be minimal, as current projects have already been produced [92] - The company is well-positioned to capitalize on the growing influencer marketing space and anticipates significant revenue growth from upcoming projects [10][111] Other Important Information - The company has successfully removed all contingent consideration liabilities from its balance sheet, marking a significant milestone [4] - A one-time noncash goodwill impairment was recognized due to a decline in market capitalization, allowing for a reset of the company's financials [15][79] Q&A Session Summary Question: Update on ShaSha Lounge memberships - Memberships were recently put on sale, and the company is nearing the financial threshold to begin construction [19] Question: Revenue recognition from Amazon - Revenue from the Amazon deal is expected to be recognized in the first half of next year, with some payments anticipated in the current calendar year [20] Question: Impact of actor and writer strikes - The talent division's revenue will see a slight dip, but it represents a small fraction of overall revenue [38] Question: Timing for Blue Angels release - The film is anticipated to be released in Q1 2024, with considerations for the best release date [109] Question: Future of influencer marketing - The company sees significant opportunities in expanding influencer marketing beyond traditional sectors, including events specifically for influencers [118]