Zoomd Technologies Ltd.

Thank you for joining us today for Zoom Technologies' first quarter 2023 update conference call. With us representing the company today is Amit Bahansky, Zoom's founder and chairman. At the conclusion of today's prepared remarks, Amit will answer some questions that were sent to us by investors and other questions we think are relevant to investors as well. Before we begin with prepared remarks, just a couple of comments. Today's call will contain forward-looking statements that are based on current assumptions and subjects to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties are included in the company's filings, as well as periodic filings with regulators, which you can find on CDAR and Zoom's websites. Today's discussion will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Finally, today's event is being recorded and will be available for replay through the webcast information provided in the press release. With that said, let me now turn the call over to Amit Bohansky, founder and chairman of Zoom. Amit, please proceed.

Thank you, Ben, and good morning to all of you. For those new to the Zoom story, I wanted to provide an overview of our business. Zoom offers a mobile self-user acquisition platform integrated with a majority of global digital media channels to app owners focused on user acquisition to more efficiently manage their budgets and deliver them paying customers and going ROI. Our main unique selling proposition is that we act as a layer on the mobile media ecosystem, integrating and unifying hundreds of media sources into one unified place, offering advertisers a user acquisition control center for managing all new customer acquisition campaigns. Zoom serves advertisers significant resources that would otherwise be spent operating multiple advertising systems, consolidating data sources, and thereby maximizing data collection and data insights while minimizing the resources spent on operations. Our data and platform concept has translated to strong ROI and KPI results for our clients. Now, I would like to speak with you regarding our first quarter of 2023 results and share some of our plans going forward. The first quarter was a challenging one due to the macroeconomic headwinds which affect the entire market. As we have mentioned in previous calls, the advertising sector is one of the first areas that companies reduce budgets in. In times of uncertainty, but also one of the first to ramp up as companies begin to feel more secure. While we remain optimistic regarding the long-term growth prospects of the advertising technology space, especially for mobile app area, we continue to expect more challenges in the near term and believe the recovery of last year was a high point preliminary attributable to the fintech and crypto segments. overall revenue is down on a quarter-over-quarter comparison. Financial results. Now I will review the first quarter financial results in detail. Revenue. Revenue for first quarter were $8.6 million, a 47% decline compared to Q1 of 2022. We are lapping difficult comparisons from the first few of 2022 in which we grew an amazing 140%. As I mentioned earlier, we were negatively affected by the global slowdown, in particular the areas of fintech and crypto. Growth margins. Growth profit margins for the first quarter was 40% compared to 30% to the same period in 2022 an increase of 1,000 basis points. We had a lower revenue from our cryptocurrency customers, which carry lower gross margins. Research and development. Research and development expenses for the third quarter were $1.2 million, a 20% decrease relative to Q1 of 2022, reflecting lower depreciation and other R&D expenses. SG&A. Spelling, general, and administrative. SG&A expenses for the first quarter were $3.1 million. A 16% increase year over year. Preliminary, reflecting increase in the expenses incurred as a result of new employees joining the company. Preliminary, after the acquisition of Albert. Other expenses. Impairment. Other expenses impairment for the first quarter were $2.8 million, reflecting software costs right off of the amount of $2.8 million. EBITDA. Adjusted EBITDA is used as a primary performance measure by the company's management to ensure it has the right structure to support future growth. We define adjusted EBITDA as earnings before interest tax, depreciation, one-time payment, and amortization as adjusted for share-based payment and non-recurring operating expenses. Adjusted EBITDA in the first year of 2023 was $0.2 million compared to adjusted EBITDA of $1.9 million for the same period of 2022. The decrease in adjusted EBITDA was primarily attributed to a decrease in revenue. A full reconciliation of adjusted EBITDA is available in our MD&A filings.

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