Zedge, Inc (NYSE:ZDGE) Q1 2020 Earnings Conference Call - Final Transcript

Dec 10, 2019 • 04:30 pm ET


Zedge, Inc (NYSE:ZDGE) Q1 2020 Earnings Conference Call - Final Transcript


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Elliot Gibber

think it's important to note that revenue increased on a sequential quarter basis even with the temporary suspension from Google and declined in overall MAUs as well as continued decline in MAUs in developed economies. This points to the progress of unlocking greater values from our customers. While on the topic of Google suspension, can't comment about whether it will be made whole, but we want to say that we're in the midst of a process of recouping our losses and mitigating any long-term impact, which are priorities for us.

With respect to cost cutting, we have begun to recognize the benefits associated with the expense reduction initiatives discussed last quarter. Payroll and the discretionary spend has both come down, and our cash burn has declined on both the sequential and year-over-year basis. Loss from the operations was $745,000 for the first quarter, backing out depreciation and amortization costs and severance has been a loss of $104,000, an improvement that [Technical Issues] of 3% year-over-year and 79% quarter-over-quarter. At the same time, we continue looking for better and smarter ways to run the business to contribute to our goal becoming cash flow positive.

I'm excited that we released Shortz for Android users in major English-speaking markets in late November. Shortz is a new app that extends our value proposition into the world of entertainment by offering serialized short-form fiction delivered in a text message format. We are able to develop and deliver this product to the market in approximately three months, a remarkable short period of time for such complex undertakings because of the investments we've made in modernizing our infrastructure and publishing platform. I congratulate the team for delivering a great product quickly.

Next up for Shortz is the introduction of iOS versions, which is expected in the coming weeks. Offering Shortz to iPhone users is a great opportunity for Zedge because it is the first time that we will offer a product we expect to be equally viable for both iPhone and Android users. Of course, it goes without saying that we will iterate at improving the experience based on the usage and other data that we will gather and analyze. As with any new product, we will optimize and perfect the offering incrementally based on what we observe and learn now that the product is live.

We have opted for a freedom subscription model for Shortz. Potential users will be able to sample the first chapter of the story for free. If they like the experience, they'll be given an opportunity to sign up for paid weekly, monthly or annual subscription. As you can tell, I am excited about this potential for Shortz, don't want to get ahead of myself. Suffice it to say that the team appreciates that any future investment needs to be justified by results and analytics.

I know that many of you have asked about hiring a permanent CEO. Frankly, I've -- this is the beginning of my key responsibility and hope to