Yahoo Finance Remark Holdings Inc (MARK) Q4 2023 Earnings Call Transcript Highlights: Strategic Partnerships ...
Revenue: Fiscal year 2023 totaled $4.4 million, a decrease from $11.7 million in fiscal year 2022.
Operating Loss: $17.2 million for fiscal year 2023, down from $21.3 million in fiscal year 2022.
Net Loss: $29.1 million or $1.74 per diluted share for fiscal year 2023, compared to $55.5 million or $5.22 per diluted share for fiscal year 2022.
Cash Balances: As of December 31, 2023, totaled $0.1 million.
Net Cash Used in Operating Activities: $10.5 million during 2023.
Release Date: April 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Remark Holdings Inc (MARK) established a significant business partnership with Microsoft, expected to drive $240 million of AI business by 2029.
Launched the first SaaS AI platform and large vision model business application, designed to address complex environmental problems in various industries.
The Smart Construction product is currently being customer tested in one of the largest construction projects in the world located in Saudi Arabia.
Remark Holdings Inc (MARK)'s Smart Safety Platform (SSP) has been upgraded to a cloud-based global SaaS platform with scalable and mission-critical processing capability.
The company has a strong pipeline with recent wins like the Clark County School District, positioning it well for other large school districts across the US.
Negative Points
Revenue for fiscal year 2023 totaled $4.4 million, reflecting a decrease from the $11.7 million recorded during fiscal year 2022.
Operating loss of $17.2 million during fiscal year 2023, though decreased from $21.3 million in fiscal year 2022, remains significant.
Project completion slowed in China initially due to COVID-19 pandemic restrictions and later due to increased political tensions between the U.S. and China.
Net loss of $29.1 million or $1.74 per diluted share during fiscal year 2023, albeit a decrease from a net loss of $55.5 million in the previous fiscal year.
Cash balances as of December 31, 2023, were very low at $0.1 million, with net cash used in operating activities during 2023 at $10.5 million.
Q & A Highlights
Q: Could you provide an update on Remark Holdings' business partnerships and sales efforts? A: Kai-Shing Tao, Chairman & CEO of Remark Holdings, mentioned that a significant achievement in 2023 was the signing of a business partnership with Microsoft, which allows Remark to leverage Microsoft's sales teams to market their AI solutions. This collaboration is expected to drive $240 million of AI business for Remark by 2029.
Q: What is the focus of Remark Holdings' AI technology, and what are some of the applications? A: The company focuses on computer vision and building large vision models, leading to a platform of multimodal models as a service. They launched a SaaS AI platform for smart construction, which performs various checks and provides business intelligence through video analytics. They also developed an aviation safety platform and are planning to launch a safety platform for marine and sea safety.
Q: Can you elaborate on the financial results for fiscal year 2023? A: Todd Brown, VP of Finance, reported that revenue for fiscal year 2023 totaled $4.4 million, a decrease from the previous year's $11.7 million. The net loss was $29.1 million or $1.74 per diluted share, which was a decrease from the prior year's net loss of $55.5 million or $5.22 per diluted share. The decrease in net loss was primarily due to the absence of a loss on investment that was reported in the previous year.
Q: What are the expected revenue streams from the AI solutions provided by Remark Holdings? A: Kai-Shing Tao explained that they sell six solutions at $100 per solution per month, which equates to $7200 a year per camera. With 100 cameras typically located in each Micro Center, this could lead to $720,000 per year per center. With 100 Micro Centers, the potential revenue could be $72 million a year.
Q: What is the total addressable market for Remark Holdings' AI solutions? A: Kai-Shing Tao stated that there are 100 million domestic security cameras and 200 million global cameras, excluding China, that do not provide intelligence or AI real-time analytics. Assuming a base case of $1,200 annual stream per camera for analytics, this represents a $360 billion total addressable market.
Q: What are the challenges faced by Remark Holdings in China? A: Todd Brown mentioned that project completion slowed in China initially due to the slow economic recovery after COVID-19 restrictions lifted and then due to increased political tensions between the U.S. and China. These conditions made it difficult to complete projects at a steadily increasing pace.
Q: What is the status of the cash balances and net cash used in operating activities for Remark Holdings as of December 31, 2023? A: As of December 31, 2023, cash balances totaled $0.1 million, compared to less than $0.1 million on December 31, 2022. Net cash used in operating activities during 2023 was $10.5 million.
Q: Are there any clarifications regarding the potential revenue from the security contract with Micro Centers? A: Kai-Shing Tao clarified that for one contract, the potential revenue is $72 million a year, based on $100 per solution for six solutions, amounting to $600 per camera per month, and with 100 cameras per Micro Center, leading to $720,000 per year per center, and with 100 centers, it equates to about $72 million annually.
This article first appeared on GuruFocus.
