Zedge, Inc.

Good afternoon and welcome to Zedge's earning conference call for the second fiscal 2023 quarterly results. During management's prepared remarks, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation by Zedge's management, there will be an opportunity to ask questions. To ask a question, press star, then one on your touchtone phone. To withdraw your question, please press star two. I will now turn the call over to Brian Siegel.

Thank you, Operator. In today's presentation, Jonathan Wright, ZEG's Chief Executive Officer and ESI, ZEG's Chief Financial Officer, will discuss ZEG's financial and operational results for its second quarter 2023, ended on January 31st, 2023. Any forward-looking statements made during this conference call during the prepared remarks or in the question and answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today's call. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in the reports that ZEDGE periodically files with the SEC. Zedge assumes no obligation to update any forward-looking statements or to update the factors that may cause actual results to differ materially from those that they forecast. Please note that our earnings release is available on the Zedge Investor Relations page. The earnings release has also been filed on Form 8K with the SEC. I would now like to turn the conference over to Jonathan.

Good afternoon. Thank you, Brian, and thank you all for joining us today. I'm going to start by briefly reviewing our second quarter results, which were generally in line with our expectations. Q2 revenue increased 1% from last year. The combination of geopolitical, economic, and industry-specific challenges resulted in lighter advertising spend compared to past years and lower discretionary spend by consumers. Additionally, Guru Shots, like most iOS apps, whose growth depends on paid user acquisition, has suffered because of Apple's App Transparency Tracking Framework, or ATT for short, making paid iOS user acquisition less efficient and more expensive. While Apple's release of its SCAF Network 4.0 in late 2022 is meant to alleviate some of this turmoil, it is taking time for various ecosystem providers to integrate this successfully into their tech stacks. Adding to the turbulent market is the decline in mobile phone sales in 2022 to the lowest levels in nearly a decade. Mobile phone sales are a growth factor for the Zedge marketplace. Nevertheless, I am encouraged that the holiday season, which encompassed the first two months of the quarter, was better than we expected heading into the quarter. and now actually increased sequentially for the first quarter to over 32 million. Given this overall backdrop, we are focusing on the areas that are within our control and have taken or are taking steps to ensure we don't lose money over the near term while positioning the company for sustainable and profitable growth when the environment improves. To accomplish this, we have implemented a cost reduction plan and are totaling annualized savings of more than $2.5 million. Additionally, we have narrowed our product focus as follows. For the Zedge Marketplace, our top priorities are iterating with Paint, our generative AI wallpaper maker to improve take rates and engagement, overhauling customer onboarding, and upgrading our subscription offering, Zedge Plus, with value adds while also introducing a subscription offering for iOS users. We will also continue scaling paid user acquisition on Android as the ROI justifies the investment. Expanding on our plans for Paint. The world is experiencing an explosion in AI-generated art, and Zedge wants to be a part of this. Our goal is to transform our consumers into creators. Paint enables us to tap into what we call the creator effect, a dynamic that benefits from the pride of ownership that creators have when they make art. In addition, this effect carries with it a desire to share with others, which can contribute to bringing new users to Zedge. To achieve this, we are improving the onboarding experience to get more users into the creation funnel early on in their engagement. process while also iterating with the business model to minimize friction and encourage growth. Turning to GuruShots, we continue advancing the product with the launch of the Battles feature. Battles provides a casual gaming experience that enables newbies to start competing in short-duration photo competitions that are limited in size and built on a coin-based economy. We expect this new feature will open the top of the funnel, making the game accessible and relevant to a broader audience who hopefully will become hooked and transform into long-term players. We released a beta version of Battles into the market last week and will iterate and fine tune as needed. As you know, the Guru Shots photo games growth strategy heavily depends on paid user acquisition. Unfortunately, acquiring profitable iOS users has become markedly more difficult due to Apple's ATT framework, which severely limits the information an advertiser can secure about prospective purchasers. In my opinion, this has had a monumental impact on the contraction of the gaming sector over the last year. That said, We are doing our best to diversify by testing alternative acquisition channels in order to help drive new ROI positive players to the game. In addition, through our experience developing the battles feature and the explosive growth in the AI generative art sector, we saw an opportunity to develop a standalone casual game, which had a recent soft launch. This game is expected to harness the fast paced growth in generative AI art and we will test and iterate on it in the coming months. Turning to Emojipedia, we are now seeing the fruits of the changes we made during calendar 2022, which are yielding the high margin growth we expected when we acquired the company. We plan to release more new features in the coming months. We are very excited about the success of the changes we've made over the past year and believe They can drive high double-digit, low triple-digit growth rates with attractive gross margins in fiscal 2023. I want to thank our investors, board members, partners, and employees for your continued support. In summary, we are and will continue doing our best to build long-term sustainable value and effectively address the challenges that we are facing over the near term. Now, I would like to turn the call to E, who will review our financial results. Yi?