Eterna Therapeutics (US:ERNA)2019-11-03 08:33Financial Data and Key Metrics Changes - For Q3 2019, revenue was $4.6 million, down from $6 million in the prior year, primarily due to a decrease in subscription revenue and hardware revenue [29] - Gross margin improved to 71% from 65% in the prior-year period, attributed to revenue mix [31] - Net loss attributable to common shareholders was $351,000 or $0.12 per share, compared to net income of $222,000 or $0.08 per share in the prior-year period [32] - EBITDA for Q3 2019 was $465,000, down from $1.1 million in the prior-year quarter [33] - Cash flow from operations increased to $1.8 million, more than tripling the prior-year period [10] Business Line Data and Key Metrics Changes - The total site count, excluding new Buzztime Basic locations, was 2,565, down from 2,609 sites at the end of the last quarter [30] - Buzztime Basic has grown to over 120 locations, with expectations to reach close to 200 by year-end [19] - Hardware solutions saw a repeat order and a new partner, with the sales pipeline more than doubling to over $30 million [10][14] Market Data and Key Metrics Changes - The company signed a second order in the correctional facility industry for $3 million, with delivery expected to commence in Q4 [14] - The average deal size for a private marketplace campaign was over $30,000 for approximately a one-month run, with gross advertiser spend increasing from just over $2,000 to approximately $50,000, a more than 20X increase [26] Company Strategy and Development Direction - The company is narrowing its focus to key initiatives that prioritize generating revenue and returns more quickly [12] - Plans to continue investing in lighter offerings and improving player experience while focusing on hardware, entertainment, and advertising [12] - The company aims to scale hardware revenue in 2020 and is positioned to monetize its hardware platform and capital-light advertising [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to operate more efficiently and achieve significant growth [36] - The company is exploring adding capital to the balance sheet to ensure execution of its growth strategy [36] - Management highlighted the importance of perseverance and financial discipline to reach the company's potential [36] Other Important Information - The company continues to recognize positive EBITDA for 14 consecutive quarters [33] - Management is soliciting feedback to improve the mobile app experience and drive player engagement [22] Q&A Session Summary Question: What is the outlook for the advertising revenue growth? - Management indicated that programmatic digital out-of-home advertising is attracting more ad dollars, and they are excited about monetization opportunities through this type of advertising [24] Question: How is the company managing its costs? - The company is implementing further cost management initiatives and is on track to achieve a revised SG&A expense target of $13.5 million for 2019 [31] Question: What are the expectations for hardware orders in the upcoming quarters? - Management expects initial orders from new partners and a steady flow of reorders as business grows, particularly from the correctional facility industry [15]