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Operator
And welcome to the earnings call for Paltalk's fourth quarter and full year ended December 31, 2022. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your hosts, Jason Katz, Chief Executive Officer of Paltalk, and Cara Jenny, Chief Financial Officer of Paltalk. Cara, the floor is yours.
Jason Katz
Hello, everyone, and welcome to the PalTalk Operating and Financial Results Conference Call for the fourth quarter and full year ended December 31st, 2022. By now, everyone should have access to the earnings results press release, which was issued earlier today after the market closed at 4 p.m. Eastern Time. This call is being webcast and will be available for replay. In our remarks today, we will include statements that are considered forward-looking within the meaning of the Private Securities Litigation Reform Act 1995, including forward-looking statements about future results of operations, business strategies and plans, our relationships with our customers, as well as market and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectation of today and are subject to certain risks, uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward-looking statements. We offer no assurance that these expectations and beliefs will prove to be correct. A detailed discussion of such risks and uncertainties are contained in our filings with the SEC, including our most recent annual report on the Form 10-K for the year ended December 31st, 2022. You should refer and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. On this call, we will refer to adjusted EBITDA, a non-GAAP measure that, when used in combination with GAAP results, provides us and our investors with additional analytical tools to understand our operations. For adjusted EBITDA, we've provided a reconciliation to the most directly comparable gap financial measure in our earnings press release, which will be posted on the investor relations section of our website at Paltalk.com. And with that, I would like to introduce Paltalk Chief Executive Officer, Jason Kass.
Jason Kass
Thank you, Kara, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. We will discuss our operating highlights and financial results for the fourth quarter and full year ended December 31st, 2022. Additionally, we will provide an update on our business and highlight areas we are focused on as we target a return to growth. After my opening statement, our CFO, Kara Jenny, will give a summary of our financial results for the fourth quarter and full year ended December 31, 2022. Following our prepared remarks, we will move into the Q&A portion and answer any questions that were pre-submitted prior to this call. With that, I would now like to walk you through the recent highlights. We are encouraged by our sequential quarterly growth, as our revenue reported for the fourth quarter of 2022 was 7% greater than what we reported for the third quarter of 2022. Our customers are adapting to ManyCam and enjoying their experience with it as the feedback we have received has been positive. As we approach the one-year anniversary of the addition of the ManyCam product to our offering, we anticipate that subscription revenue related to ManyCam will increase in future quarters as deferred revenue generated from those subscriptions is recognized. We believe our efforts throughout 2022 to streamline expenses to better align with overall macroeconomic conditions and invest in a measured way that ensures responsible cash management have started to pay off. As a result, our revenue increased and our losses decreased from the third quarter of 2022 to the fourth quarter of 2022. Our operating expenses as a percentage of revenue declined to 129% for the fourth quarter of 2022 versus 140% for the third quarter of 2022, demonstrating our improved operating efficiencies. We're also continuing to work with our investment banking firm and exploring strategic opportunities, including but not limited to potential mergers or acquisitions of other assets or entities that are synergistic to our business. which we believe will increase shareholder value. Our team remains focused on user retention and monetization, which collectively are intended to increase user engagement and revenue opportunities. Additional technology enhancements and features and games, such as our gaming lobby, are all intended to increase retention, usage, and revenue. I would also like to take this time to update everyone on our patent infringement lawsuit against WebEx Communications Inc. Cisco WebEx LLC and Cisco Systems Inc. and the U.S. District Court for the Western District of Texas. As we have previously disclosed, a Markman hearing took place on February 24, 2022. On September 7, 2022, the United States Patent Office issued a reexamination of U.S. Patent No. 6683858. And on January 19th, 2023, the examiner issued an ex parte re-examination certificate, ending the re-examination and confirming the patentability of claims one through 10 of the US patent number six, 683858. The trial is now scheduled for early third quarter of 2023. Our cash position as of December 31, 2022 remains strong at $14.7 million. which we believe puts us in a good position as we seek a return to profitability. We plan to continue to develop our consumer application platforms and defend our intellectual property, of which we will continue to provide updates when publicly available. Pursuant to our stock repurchase plan that authorizes us to repurchase up to $1.75 million of the company's common stock, We repurchased 604,808 shares of the common stock during the year ended December 31, 2022 at an average price per share of $1.65 or an aggregate amount of approximately $998,000. I trust this gives you some insight into the company initiatives we have implemented in order to conserve cash as we look to increase our subscribers and user engagement and return to positive cash flow and profitability to build stockholder value. Now I'd like to pass it to Kara for a financial summary of our fourth quarter and full year ended December 31, 2022. Thank you, Jason.
Jason Katz
Our results of operations for the three months ended December 31, 2022 were as follows. Revenue for the three months ended December 31, 2022 decreased 2.8 million compared to 3.1 million for the three months ended December 31, 2022. 2021. Of note, our quarterly revenue of $2.8 million reported in the fourth quarter of 2022 increased sequentially from $2.6 million reported in the third quarter of 2022. Loss from operations for the three months ended December 31st, 2022 increased by approximately $800,000 to a loss of $800,000 compared to income from operations of $10,000 for the three months ended December 31st, 2021. Net loss for the three months ended December 31st, 2022 increased by approximately half a million dollars to a loss of approximately half a million dollars compared to a net loss of $5,000 for the three months ended December 31st, 2021. And adjusted EBITDA for the three months ended December 31st, 2022 decreased by approximately 0.3 million to an adjusted EBITDA loss of 0.5 million compared to adjusted EBITDA loss of 0.2 million for the three months ended December 31st, 2021. And now turning to our results of operations for the full year ended December 31st, 2022. Revenue for the year ended December 31st, 2022 decreased to $11 million compared to 13.3 million for the year ended December 31st, 2021. This decrease was mainly driven by a decrease in subscription revenue and advertising revenue. In addition, there was no technology service revenue reported for the year ended December 31st, 2022, as a result of the termination of our partnership with Open Props Inc., formerly known as YouNow. Loss from operations for the year ended December 31st, 2022, increased by 4.2 million to a loss of 3.7 million compared to income from operations of half a million for the year ended December 31st, 2021. Net loss for the year ended December 31st, 2022 increased by 4.7 million to a loss of 3.4 million compared to net income of 1.3 million for the year ended December 31st, 2021. Adjusted EBITDA for the year ended December 31, 2022 decreased by $3.9 million to an adjusted EBITDA loss of $2.6 million compared to positive adjusted EBITDA of $1.3 million for the year ended December 31, 2021. Cash and cash equivalents totaled $4.7 million at December 31, 2022, a decrease of $5.9 million compared to $21.6 million at December 31st, 2021. And currently, the company has no long-term debt on its balance sheet. We will now move on to the questions that were previously submitted. The first question. Nice to see the sequential increase in quarterly revenue. Any color on the driving factors?
Jason Kass
As I mentioned, as we approach the one-year anniversary of the ManyCam product to our offering, We anticipate that subscription revenue related to ManyCam will increase in future quarters as deferred revenue generated from those subscriptions is recognized.
Jason Katz
Our second question. With $14.7 million in cash still, will you renew or expand your share buyback program?
Jason Kass
Our current share buyback plan actually expires March 29th, and at that time the board will reevaluate the buyback.
Jason Katz
Jason, back to you to close out the presentation.
Jason Kass
Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market and our stockholders with our progress in our business initiatives, pending patent litigation against Cisco WebEx, and potential strategic accretive acquisitions, which we continue to identify and analyze. Have a great day.
Operator
Thank you, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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