Global Mofy AI Limited

Good day and thank you for standing by. Welcome to the Global Murphy AI Limited Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Celine Meng. Please go ahead.

CELINE MENG Thank you, Operator. Welcome everyone to Global and Low-Feeds Fiscal Year 2024 Financial Results Conference Call, covering the period between September 30th, 2023 and September 30th, 2024. Thank you all for joining us on such short notice. My name is Celine, and I am the company's Securities Affairs Representative. Today, I'll be presenting our prepared comments, and then followed by a Q&A session with our CTO, Mrs. Wenjun Jiang, and CFO, Mr. Chen Chen. This past year has been an exciting time of growth and transformation for Global Mophie. We've undertaken significant strategic changes and made remarkable progress since our last fiscal year-end result call. During today's presentation,

We'll discuss our performance, financial results, and strategic initiatives.

Before we begin with the prepared comments, we remind you to review our forward-looking statements disclaimer, which is noted as a forward-looking statement page of today's presentation and in the results press release we issued. These statements involve risks and uncertainties that may cause actual events results or performance differ materially from those indicated. For detailed information, please refer to our SEC filings. As a reminder, today's conference call is being recorded and a replay will be made available later today on the company's IR website. Financially, Global Mophie delivered record-breaking results with FY2024, achieving total revenues of $41.4 million. a 53.8% increase compared to the prior year. Our gross profit reached $20.8 million and the net income was $12.1 million, reflecting strong operational performance. We maintained a 60.3% gross margin overall, demonstrating the efficiency and scalability of our business model. During the fiscal year, we successfully completed a full-on offering of $10 million in January 2024, as well as a private placement financing of $2.5 million in October 2024, further strengthening our capital position and ability to invest in growth initiatives. We also expanded our 3D digital asset bank significantly, growing from more than 30,000 assets in FY 2023 to over 100,000 assets as of September 30, 2024. This growth underscores our ongoing commitment to innovation and market leadership. We will cover more detailed information in just a moment. Given we have a lot of new investors on the call today, we thought it would be helpful to take a minute to review our business. At the core, Global Mophie is an AI tech technology-driven technology solutions provider specializing in virtual content production and 3D digital asset development. We collaborate with both upstream and downstream partners in the digital content industry, utilizing advanced artificial intelligence and 3D reconstruction technology. Our mission is to efficiently create high-precision digital versions of characters, themes, and props from the physical world. implementing them across various application scenarios. With offices in Beijing, Zhejiang, and California, we are dedicated to driving the growth and development of the global digital content and entertainment sector. Since our IPO last October, we have made significant strides in expanding our digital asset bank and enhancing our market presence. According to Frost and Sullivan reports, Global Mophie now ranks among China's leading digital asset banks.

Let's quickly review our company roadmap.

In 2024, GlobalMonkey met significant strides for future growth. First, we launched the Gossip generated AI platform in collaboration with Media Omniverse and Arta. Secured $12.5 million in total in financing through strategic initiatives. Established a vocational education institute and a $69 million fund with our partners. We also funded our U.S. subsidiary GMM Discovery LLC to further expand our global footprint. Our strategic transformation is focused on enhancing core competencies and integrating AI technology into traditional processes, enabling more efficient, cost-effective solutions for our clients. We remain dedicated to providing high-quality virtual content production and 3D digital asset development solutions. We'll cover these initiatives in greater detail later in the presentation. GlobalMOSI has received significant recognition for our innovation and contributions to the global digital content industry. Most recently, in 2023, we were honored as a council member of the Industrial and Information Technology Metaverse Development Organization and received the Most Valuable Investment Chinese Concept Stop Award. And in 2024, we further solidified our position by becoming a member unit of the MIIT Industrial Brand Promotion Organization and receiving the Best CEO Award as the 9th Street Home Finance Capital Market Annual Conference Enlisted Company Award Ceremony. These accolades underscores our commitment in innovation, quality, and customer satisfaction while also reflecting the industry's recognition of Google mostly as the leader in digital content innovation. Now let's turn to our mission, vision, and values, which define who we are as a company and guides us through everything we do. We aim to empower creativity through the innovative use of AI and digital technology. This mission drives our effort to push boundaries and redefine what's possible in the digital content industry. Our vision is clear, which is to drive technology advancements while cultivating a culturally rich corporate environment. And our value includes foster innovation, encouraging both ideas and groundbreaking solutions. And secondly, we prioritize and exceed customer expectations as always, delivering value that goes beyond the ordinary. Finally, our ambition is to build the world's largest digital asset bank. By leveraging our extensive and growing collection of high-precision 3D digital assets, we aim to lead a new era of AI-driven digital experiences and set the standard for the future of this industry. Let's now move on to the core advantages that set Globally apart from our competitors as we focus on growth and building value for shareholders. One of our most exciting innovations in 2024 was Godspeed. our generated AI video generation platform, developed in collaboration with NVIDIA Omniverse. Gotspeed debuted it in 2024 as a flagship R&D product. What sets Gotspeed apart from other generated AI solutions is that it has been developed from the ground up to meet the rigorous demands of industrial-grade production. Gotspeed leverages advanced AI technology and trained on our massive digital asset base, which includes over 100,000 high-precision, industrial-grade 3D digital assets. This extensive training dataset ensures that Godspeed can generate visuals that are not only realistic, but also meet the high standards of the film industry. Key features of Godspeed include professional-grade visual generation, storyboard and shot design, precise pre-production planning, and editable assets. We are confident in Godspeed's ability to transform the filmmaking industry providing a powerful AI-driven tool that enhances creativity and efficiency. As mentioned before, we also have a vast and diverse collection of high-precision 3D digital assets. Our assets cover various categories, such as characters, themes, and props, spanning multiple domains, including nature, science fiction, historical eras, and architecture. This extensive library is continuously updated to include the latest trends and technologies in digital content creation. Another of our core advantage is our Mophie Lab, which integrates multiple independently developed software systems covering digital content creation, visual effects processing, project management, and AI technology applications. These systems demonstrate our leading position in technological innovation and further enhance our core competitiveness. Lastly, but not least, let's talk about our Preparatory Intellectual Property Bank, which is the cornerstone of Global Mophie's success. We own a significant number of preparatory registered IPs developed by our highly experienced R&D team, each with over 10 years of industry expertise. Our team is committed to continuous innovation, adding at least 10 new IPs each year. As of fiscal year 2024, we have accumulated an impressive total of 45 independent IPs. This growing portfolio reflects our ongoing investments in our research and development, ensuring that we stay at the forefront of digital content and technology advancement. Now that you may have a close picture of our strengths, let's briefly review the industry opportunity we face. China is the second largest entertainment and media market globally, projected to grow from $226 billion in 2022 to $305 billion in 2027, and a compounded annual growth rate of 6.1%, highlighting significant opportunities. The global 3D models market is also expanding rapidly, expected to grow from $1.16 billion in 2024 to about $2.72 billion by 2032. at a CAGR of 11.2%, driven by demand in film, gaming, and virtual reality. Generative AI is also set to explore the growth. By 2030, North America's market is projected to reach $130.7 billion and China's to $31.12 billion, both with CAGR exceeding 40%. With advanced technologies like Gospy platform and a robust digital asset bank, Global Mophie is well positioned to seize these opportunities and lead the digital content industry forward. And now let's take a closer look at our business model and how we deliver value to our clients. Our business model leverages generated AI technology and our robust digital asset bank to offer high quality, efficient, and cost-effective content production. through a streamlined, scalable, and systematic virtual technology process services. We ensure comprehensive support through a synergy with multi-lab, providing customers with full process management, firm production output, quality control. A 3D digital asset development and related services focusing on creating high-precision 3D models for various applications and licensing. This includes film, gaming, and virtual reality. Our extensive build-up digital asset bank and advanced technologies allow for efficient and cost-effective production. Our strategic partnerships with leading technology companies also enables us to integrate cutting-edge tools and processes, enhancing our ability to deliver innovative solutions to our clients. Notably, in 2024, we have forged several key partnerships that that have significantly bolstered our technological capabilities and market reach. Shown in the graph, we partnered with NVIDIA Omniverse and Hardop Technology, leveraging their advanced physics engine and technologies to push the development of our Godspeed-generated AI platform. Additionally, also in the first half of 2024, GlobalMothi was selected as a partner IT second lead program showcasing our strengths in technology technological innovation and business expansion some of our prior customers and partners are also listed on the right of this page in no specific order and let's now take a look at some of the major events that shaped fy 2024 these milestones represent critical steps in the growth journey and showcase how they are delivering our strategic objectives.

Here are a few more highlights from fiscal year 2024.

Notably, we have launched a $59 million fund, as mentioned before, with strategic partners to foster growth opportunities in AI, digital economy, and entertainment sectors. Each of these achievements on this course are commitment to innovation, collaboration, and sustainable growth as we continue to lead in the digital content space. Our management team also consists of professionals with extensive experience in their respective fields, with our CEO, Mr. Ha-Gong Yang, being a visionary leader and serial entrepreneur with extensive experience in the digital content and technology sector. together ensuring the company's steady growth and innovative capabilities. Our team members also have strong expertise and rich practical experience in technological innovation, financial management, market expansion, and operational optimization. Together, all working to drive Global Multi's continued success. And now, a closer look at the financial results for the fiscal year ended on September 30, 2024. Total revenue for fiscal year 2024 increased by 53.8% to $41.4 million. This was driven by the prosperity of the movie and TV industries in China over the past two years, along with sustained demand for high-quality virtual content. Cost of revenues rose to $20.6 million, up from $12.4 million last year. in reflection of our 53.8% revenue growth. This increase was necessary to maintain high-quality project execution amid our rapid revenue expansion. By prioritizing quality delivery, we have strengthened client relationships and reinforced our long-term competitiveness. Growth profit increased by 43.2% to $20.8 million, driven by higher revenue ongoing investments in sustainable development. Gross margin remained strong at 50.3%, highlighting effective cost control measures and a strategic shift toward higher margin 3D digital asset development related services. Our net income for fiscal year 2024 was $12.1 million, about an overall 29.4% net margin. compared to $6.6 million in FY 2023, an impressive 89% increase. This growth was fueled by higher revenues, improved operational efficiency, and disciplined cost management. IMD expenditures for FY 2024 totaled about $7.5 million, reflecting a 109.8% increase from $3.6 million in FY 2023. This investment was primarily directed towards expanding a 3D digital asset library, which now includes over 100 assets, 100,000 assets. Significantly, progress was also made in advancing our generative AI platform Godspeed, which enhances our AI-driven content creation capabilities. These investments are essential for sustaining long-term growth driving innovation, and maintaining a competitive edge in the rapidly evolving digital conference industry. And also, as of September 30, 2024, our total assets was about $59.2 million, again demonstrating the company's robust financial position. These results highlight our strong market position, operational excellence, and successful strategic transformation. For more details, please refer to our SCC filing. Finally, global mostly experiencing rapid growth by leveraging advanced AI technologies, expanding our 3D digital assets, and strategically focusing on the booming digital entertainment market. Here are some key components of our growth strategy. First of all, market expansion. We're entering international markets focusing on Europe and North America. Then strategic alliances as we form partnerships with leading companies to leverage strengths, expand market share, and enhance our products. Branding position. Utilizing events, AI, and consistent branding, we aim to become a leader in the digital content industry by again showcasing our expertise in AI-driven solutions and 3D digital assets. R&D, as we always invest in R&D to drive innovation. focusing on AI-generated content and expanding our free digital asset bank. Customer experiences. We enhance customer experience through personalized services, user-friendly interfaces, and excellent support. These strategies are designed to enhance our core competencies, drive innovation, and again, deliver long-term value to our shareholders. Thank you all for your attention. And before we open the floor for questions, Please note that our measurement team will be answering in Chinese. For any discrepancies between the translated response and the original answer, the original answer should be considered accurate. Please feel free to ask any question you may have about the financial performance, strategic initiatives, or market outlook. Operator, please open the line for questions.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 1 again.

We will now take the first question from the line of Alice Wang from Bayheng Capital.

Please go ahead.

My question is, where are the main applications for your generative AI platform built on 3D digital assets? Thank you, Ms. Wang. And I will now direct the question to our CTO, Mrs. Wenjing Jiang, for answer. Okay, let me answer this question.

At present, our platform is mainly used in the literature industry, such as film, advertising, literature, BLAR, and other fields. We also apply the platform to many practical projects, such as film special effects production, creative design, literature experience, digital culture presentation, and so on. Through some in-depth exchanges with partners, we are still exploring how to make the platform to expand to more diversified fields, such as education and training, virtual office, and so on. As our technology continues to overlap and the demand for the market increases, we also plan to further upgrade our platform, to promote its application in more industries and customer groups, to promote cross-industry integration, to bring more innovative digital solutions to customers,

Thank you, Mrs. Wenjingjia.

And I will now translate the answers for our investor.

Mrs. Wenjingjia have just said that initially our platform focused primarily on the entertainment industry, including sectors such as film and television, advertising, cultural tourism, VR and AR. And also internally, we have already applied the platform to several practical projects, including film special effects production, creative design, and digital presentation of cultural experiences. Through in-depth discussion with our partners before, we are also exploring how to extend the platform's applications to more diverse fields, such as education and training, as well as virtual offices. As technology continues to advance and market demand grows, We plan to further upgrade the platform, expanding its application to more industries and client groups, and foster cross-industry integration, bringing more innovative digital solutions to our customers.

Thank you, and you may proceed if you have more questions. Thank you. We will now take the next question.

From the line of Cecilia Ling from Golden Bridge, please go ahead.

Thank you. My question is, could you explain how the company maintains high growth rate in revenue?

Thank you, Cecilia. We will now answer your question and direct that to Mr. Chen Chen, our CFO, for answer. Mr. Chen Chen, our CFO, for answer. Mr. Chen Chen, our CFO, for answer.

and through its mouth-to-mouth effect in the customer group, the revenue of our 3D digital asset authorization business has also reached $20.46 million, which accounts for 49.5% of our total revenue. This business has increased by $8.95 million in 2023, and the increase has also reached 77.7%. In addition, with the advent of the digital age, the market increased its demand for high-definition 3D digital assets and digital content, and further promoted the company's rapid growth in revenue.

Thank you, Mr. Chen. I will now translate the answers for our investors.

Mr. Chen Chen has just answered your question. Since FY 2023, The company has optimized its revenue structure to maintain high growth. By FY2024, we have significantly expanded our 3D digital asset business and leveraged its positive word of mouth within our customer base. Revenue from 3D digital asset licensing business reached about $20.46 million, accounting for 49.5% of our total revenue. This represents an increase of $8.95 million compared to FY2023, with a growth rate of 77.7%. And additionally, the growing demand for high-precision 3D digital assets and digital content in the digital era has further driven the company's revenue growth.

Thank you. Thank you.

Once again, as a reminder, if you wish to ask a question, please press star 1 and 1 on your telephone. That's star 1 and 1 if you wish to ask a question.

There are no further questions at this time. Please continue.

Thank you all for your insightful questions and for joining us today. On behalf of the entire Global Mophie team, we thank you for your continued support and interest in our journey as we look forward to connecting with you soon again. If you have any further questions, please do not hesitate to reach out to our investor relations team. Have a great day. Thank you, Sandra.

This concludes today's conference call. Thank you for participating. You may now disconnect.