Financial Data and Key Metrics Changes - First quarter revenue was $21.2 million, representing a 287% increase from the first quarter of 2021 [19] - Adjusted EBITDA totaled $7.7 million, compared to negative adjusted EBITDA of $2.6 million in the first quarter of 2021 [25] - The company ended the quarter with nearly $51 million in cash and only $3.5 million in debt [17][26] Business Line Data and Key Metrics Changes - Revenue growth was driven by the sale of LotteryLink credits to affiliates, which were used for various services [19] - Gross profit was $18 million, up $15.5 million from the previous year [19] - Operating expenses were $33.8 million, including $22.2 million related to restricted stock awards [21] Market Data and Key Metrics Changes - The lottery market in the US presents a significant opportunity with over $100 billion in annual sales, with only about 5% of these purchases being online [28] - The company anticipates receiving approvals to operate in five new domestic jurisdictions by the end of 2022 [34] Company Strategy and Development Direction - The company is focusing on expanding its LotteryLink program to grow its user base efficiently [29] - Project Nexus has been launched to improve capability, security, and scalability, which will support marketing efforts [33] - The company is expanding its direct-to-consumer advertising campaigns targeting audiences with the highest return on investment [36] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the affiliate model as the most effective way to expand the user base [29] - The company is optimistic about scaling its marketing campaigns and improving customer acquisition costs [39] - Management noted that the initial success of the grocery promotional program has provided valuable insights for future campaigns [31] Other Important Information - The company has a strong balance sheet, which provides the necessary capital to invest in strategic growth initiatives [18] - The company is working to bring more responsibilities in-house to reduce public company expenses [23] Q&A Session Summary Question: Expected returns on direct-to-consumer marketing dollars - Management indicated that the return on investment remains strong with a lifetime value (LTV) of about $175 per user [46] Question: Timeline for ramping direct-to-consumer sales - Management expects to see some results in the current quarter, with growth continuing moving forward [47] Question: Reason for suspending LotteryLink campaign - The suspension was due to a contractual conflict with the state lottery in that jurisdiction [49] Question: Confidence in collecting receivables - Management expressed confidence in collecting the receivables, noting that half are not due until the end of the quarter [56]
Lottery(LTRY) - 2022 Q1 - Earnings Call Transcript