Yahoo Finance Mobivity Holdings Corp (MFON) Q4 2023 Earnings Call Transcript Highlights: Pivoting to ...
Connected Rewards Revenue Growth: Expected to overtake legacy techs business in mid-2024.
Cost Reduction: Significant cost-cutting measures implemented.
Product Focus: Narrowed product offerings to concentrate on Connected Rewards.
Transaction Revenue: Earning $3 to $7 per transaction with attractive gross margins.
New Product Launches: Q1 2024 saw launches with Chevron, Marathon, Kura Sushi, and Circle K.
Market Opportunity: Targeting a market with over $40 billion annual spend on user acquisition and retention.
Financials: Specific financial metrics not discussed; referred to public filings.
Release Date: April 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Mobivity demonstrated the viability and measurable value of its Connected Rewards business, outperforming comparable programs.
Significant cost reductions and a focused product offering have been implemented, streamlining the company's operations.
New programs with major brands like Marathon, Chevron, and TXB have exceeded expectations, validating the Connected Rewards platform.
A healthy and growing pipeline of brand and game partners instills confidence in continued growth throughout 2024.
The Connected Rewards business is expected to overtake the legacy text business in revenue by mid-2024, with a positive response from both brands and mobile game publishers.
Negative Points
The Q4 financial results were not discussed in detail on the call, with investors directed to public filings instead.
The press release containing financials was delayed, leaving some investors without the latest financial information during the call.
The company is still in the early stages of optimizing the Connected Rewards platform, indicating there may be challenges ahead.
While gross margins are attractive, the company is still learning and adjusting pricing for the new Connected Rewards channel.
There is no specific timeline provided for when the company will become cash flow positive, though it's suggested to be around the time Connected Rewards overtakes the legacy business.
Q & A Highlights
Q: Can you talk a little bit more about the new products you've launched in the first quarter or this year? And how do you see those partnerships contributing to the overall growth strategy of the company? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): We launched new products within the Chevron and Marathon and Kura Sushi app, which are placements inside the branded own app. These incentivize users to take actions like downloading a game in exchange for a reward at the brand. These partnerships are core to our continued growth strategy as they are longer-term partnerships, allowing us to grow with the brands and games in our pipeline and innovate around ways we operate with the programs to increase performance.
Q: Could you expand a little bit more on the recurring revenue model? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): Our game publishers and game marketers pay us on a fixed cost per install basis. The more we hit or beat their return on ad spend goals, the more they will scale the revenue. We've had a 100% fill rate on our supply and game developers are requesting to spend more, which is leading to a recurring revenue model with a high retention rate of our game publishers.
Q: Can you provide any details on the growth of the Connected Rewards business going forward? A (Unidentified Company Representative): We've built strong relationships with brands that are sustainable and longer-term, allowing us to build meaningful case studies to bring on new brands. We're in the early innings of optimizing these results and feel like Mobivity is in a good position to grow by bringing on new customers and optimizing with our current customers.
Q: How soon do you think the Connected Rewards business will eclipse the legacy business? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): We're thinking about the second half of this year being the time where the Connected Rewards business eclipses the legacy business on a monthly basis.
Q: Can you comment on the effectiveness of the platform in driving user acquisition and retaining customers? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): Our gaming clients measure their results on not only the install but how people behave in the game. We're meeting or exceeding their day seven return on ad spend goals, which means we're performing better than their other channels, leading to them wanting to scale with us.
Q: Can you discuss the competitive landscape in the Connected Rewards space and Mobivity's advantages? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): We operate outside of the device identifier and data tracking ecosystem, which is a key differentiator. Our technological differentiators are a bridge between the digital and the real world. Our competitors do not offer a win for both the game publisher and the brands, which is a key differentiator for our programs.
Q: Are there any challenges that risk the profitability going forward? A (Thomas Akin - Mobivity Holdings Corp - Chairman of the Board): There's always risk to growth, but we feel really good about the health of the pipeline and the results from what we've achieved already in 2024. Gross margins are dependent on the performance that we're delivering to game publishers, and we feel like there's a lot of upside in what we're doing to improve that.
Q: Can you talk about the gaming companies, publishers, gaming publishers that you've done partnerships with? A (Kim Carlson - Mobivity Holdings Corp - Chief Operating Officer): We're working with many of the top 10 publishers out there, including Scopely, Playtika, App11, Triple-Dot, DoubleDown Interactive, and others. We're at a 100% fill rate of our supply and are onboarding new game publishers as the supply becomes available.
This article first appeared on GuruFocus.
