Eterna Therapeutics (US:ERNA)2020-03-17 23:48Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $5.2 million, an increase from $4.6 million in Q3 2019 but a decrease from $5.9 million in Q4 2018. For the full year 2019, revenue was $19.8 million compared to $23.3 million in 2018 [25] - Gross margin for Q4 2019 was 43%, lower than typical due to revenue mix and equipment write-off. The gross margin for 2019 was 62%, down from 65% in 2018 [28] - Net loss attributable to common shareholders for Q4 2019 was $1.3 million or $0.45 per share, compared to net income of $44,000 or $0.02 per share in Q4 2018. For 2019, the net loss was $2.1 million or $0.72 per share, compared to a loss of $275,000 or $0.10 per share in 2018 [31] Business Line Data and Key Metrics Changes - The Buzztime Basic offering has been launched, with approximately 165 sites currently using it. The product has a lower revenue per venue but is expected to scale due to its low cash requirement and high gross margin [10][11] - Buzztime Elite ended 2019 with 1,440 sites, including approximately 100 franchise Buffalo Wild Wings venues. The company has seen migration of players from locations that no longer offer Buzztime to new venues [12][13] - Hardware revenue increased in Q4 2019 due to the delivery of tablets to a jail partner, with expectations to continue deliveries throughout 2020 [26] Market Data and Key Metrics Changes - The company is facing strong headwinds in the restaurant and bar industry due to the COVID-19 pandemic, which has created uncertainty in growth and site count [11] - The advertising revenue from the programmatic ad exchange grew over 50% sequentially from Q3 to Q4 2019, reaching $78,000, with expectations for further growth in Q1 2020 [17][18] Company Strategy and Development Direction - The company is focused on growing its digital entertainment and hardware businesses efficiently, with a roadmap for scalable growth that includes mobile-based solutions and programmatic advertising [7][8] - A mid-range hybrid solution is being developed to offer a cost-effective upgrade to the Buzztime Basic offering, targeting a broader market [14] - The company is exploring partnerships and customizable channels to expand its audience and enhance its marketing capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the rapid impact of the COVID-19 pandemic on the restaurant and bar industry and is monitoring government restrictions to mitigate effects on the business [11] - The company is seeking creative financing solutions to address liquidity constraints and is focused on reducing overhead costs, including staff reductions [22][23][34] Other Important Information - The company has a healthy hardware pipeline valued at over $30 million, indicating optimism for future revenue growth despite potential lumpiness in orders [20] - Cash, cash equivalents, and restricted cash were $3.4 million at the end of 2019, an increase from $2.8 million at the end of 2018 [35] Q&A Session Summary Question: What are the expectations for advertising revenue growth? - Management indicated that advertising revenue is on track to more than double sequentially from Q4 2019, despite having 40% fewer sites at the beginning of Q1 2020 [17] Question: How is the company addressing liquidity constraints? - The company is exploring financing opportunities and has signed an amendment to its loan agreement to manage increased debt service obligations [22][34] Question: What is the strategy for the hardware business moving forward? - The company plans to continue expanding its hardware business and is optimistic about the market opportunity, despite potential supply chain disruptions due to COVID-19 [19][21]