Zoomd Technologies Ltd.

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. We are excited to speak with you today regarding our fourth quarter and fiscal year 2024 results. Today, I'm going to provide an overview of our achievements for the fourth quarter and full year 2024, where I would like to share with you the strong performance we demonstrated. But before I begin the prepared remarks, I'd like to address the inadvertent early release of our financial results yesterday, March 25. This was due to a human error by our legal service provider. On behalf of Zoom, I sincerely apologize for the mistake I want to reassure our investors that our business remains stronger than ever, with our balance sheet continuing to strengthen each quarter. Yesterday's market reaction does not reflect our record 2024 results. I am proud to say that we have successfully executed on our strategic plans this year that led to significant improvement in our financial results. The company's strategic focus on high-growth potential areas has led to an annual increase of 70% in revenues. while during 2024, the company achieved consistent quarterly revenue growth each quarter compared to the corresponding quarter in the previous year, ultimately resulting in doubling of revenues Q4-24 compared to Q4-23. Moreover, despite this substantial revenue growth, the company successfully maintained a controlled expense structure, with operating expenses as a percentage of revenue accounting for 22% in 2024, down from 50% in 2023, while also reflecting a decline in absolute terms of operating costs compared to 2023. The increase in revenues combined with the modulated operating costs led to a continued improvement in the company's financial results, achieving an operating profit of $9.5 million for 2024, a $13.6 million improvement compared to 2023. The company achieved seven consecutive quarters of operating income growth, accumulating in adjusted EBITDA of $11.3 million, and for the first time since 2021, a positive net income of $8.9 million in 2024. This profitability improvement also strengthened liquidity with $7.7 million in terms of cash generated from operating activities in 2024. 2024 ended with $9.2 million in cash and no long-term debt, positioning our balance sheet in a strong and stable place. This financial strength allows us to further grow the business organically and execute on our long-term plans while we remain open to exploring acquisitions opportunities if they arise. We have the room to drive growth organically. I am excited that the momentum we have shown in recent quarters continues. This morning, I would like to discuss three important areas of Zoom. These areas are our customers, the development of our product, and service offerings. And lastly, improvements to address market trends. I want to begin with our customer base. We are focusing on growth sectors such as e-commerce, iGaming, entertainment and transportation, and customer product goods. Those sectors known for their stable growth patterns, and elevated profit margins. We have deepened our activity with current customers as well as expanding to new customers. Consequently, our revenues have experienced substantial growth. I would like to address a subject that I've been asked about by numerous investors several times, which is an issue of client concentration. Now, this is an issue that I want to elaborate about. And first of all, I'm happy to announce that in 2024, we have successfully recruited another large client. It is very important to explain that those large clients operate in various countries, with each country having its own execution plan, budgets, targets, approach, and so forth. If we take an example, a campaign decision in the UK for a client like that does not imply anything about the client plans regarding Japan and Brazil. Those are separated decisions. We have been helping our largest client expand globally for more than seven years. The same client grew to the number of countries we operate in by 50% in 2024, decreasing the perceived risk. The second largest client is a U.S. company, further decreasing risk. That same client doubled the number of countries we helped him with during 2024. One last point on that matter. As announced, we acquired high potential clients during second half of 2024. Clients with known names like NBA, Fanatics, GoHenry, Lightrix, That will be adding to our revenue in the next coming years as they develop. And now, I would like to focus on our product and services offering. Our competitive advantage lies in our comprehensive 360-degree approach to digital mobile first performance, all focused on achieving the goals of our customers. We provide a diverse array of products and services, all focused on digital, mainly mobile performance. We have the ability to provide our customers with the holistic range of products and services for achieving their digital performance KPIs. Finally, the company uses a combination of research and development acquisitions and methodologies to improve offerings. One of our core strengths is our transparent, direct, and intensive client communication, enabling real-time campaign management without delays, even with simultaneously handling multiple campaigns across various geographies. This unique approach, what we call our secret sauce, positions us in a semi-human, semi-automated command and control platform. effectively combining advanced technology and strategic insights. We closely monitor and respond not only shifts in client strategy, but also to a broader macroeconomic changes beyond the client's direct control. As a result, we empower our clients to swiftly adapt to market fluctuation, maximizing their impact and driving significant outcomes globally. Our main platform is integrated to hundreds of media sources, allowing us to promote customers' digital assets in multiple channels under one system. We use a DSP for programmatic media buying. The DSP is integrated to the biggest mobile media exchanges, providing our customers full range and reach for their mobile web and app performance needs. We optimize the advertisers' resources and maximize their advertising budget and efficiency. There is no dependency on any specific media supplier or traffic channel. This not only serves valuable time and resources for advertisers, but also provides enhanced clarity and consolidated insights. Additionally, our platform operation eliminating the need for a software development kit SDK implementation. In our prospective position, as a crucial layer within the ecosystem, the company stands strongly in the industry. Beyond walled gardens such as Google, Meta, and etc., the marketing landscape is fragmented. Zoomed enables advertisers to leverage a wide range and various types of media channels, from social programmatic, OEMs, SDK networks, and more. their KPIs are achieved on all channels together as a mix. Finally, I want to discuss the results of the actions we took. Zoom's Q4 of 24 financial results, consistent with our overall performance, demonstrate significant improvements across multiple key financial indicators. The successful execution of our strategy strengthen the company's financial position, and also enhance internal alignment between teams and objectives. Laying a robust foundation for sustainable growth, we remain committed to continuously adapting our strategy to evolving market conditions and emerging opportunities, maintaining our steadfast focus on delivering lasting value to all the stakeholders. Now I'll speak about the financial results. I will review the fourth quarter financial results in detail. For revenue, revenue for the quarter were $15.1 million, reflecting a 100% increase compared to the same period in 2023, while achieving consistent quarterly revenue growth throughout 2024, with each quarter compared to the corresponding quarter in the previous year. operating costs. Despite substantial growth, the company maintained a controlled expense structure, with operating costs as a percentage of revenue approximately 19%, reflecting a consistent decrease in operating costs as a percentage of revenue over the past seven quarters. Adjusted EBITDA. Adjusted EBITDA is used as the primary performance measures 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 payments, and amortization, as adjusted for share-based payment, non-recurring operating expenses, and impairment of intangible assets. Adjusted EBITDA grew significantly From $0.6 million in Q4-23 to $3.2 million in Q4-24, resulting in a total of over $11.3 million in terms of adjusted EBITDA for the full year of 2024. A full reconciliation of the adjusted EBITDA is available in our MDNA filing. Cash. we have $9.2 million in cash as of December 31, 2024, and no long-term debt. U424 was the sixth consecutive quarter of generating cash from operating activities. We believe that Zoom's recurring revenues in addition to its existing cash, cash equivalents and cash flow from operating activity, will be sufficient to meet the company's working capital requirements and future. Now, for those of you who may be unfamiliar with the Zoom story, I would like to provide an overview of our business. Zoomed has developed and acquired proprietary technology and targets the needs of various segments of digital marketing industry. Zoomed offers its services globally to its agents and other business partners to all over the globe. As such, the company operates in a collaboration with hundreds of publishers and global advertisers. The company aims to constantly provide significant added value to its customers. The company's service as a technology stack development roadmap focuses on creating technological solutions that seamlessly integrate with a range of digital media sources. Through this integration, the company aims to consolidate these sources, allowing customers to achieve optimal value for their investment. The primary focus... Of this effort is directed towards enhancing user acquisition and retention strategies, tailoring them to the unique requirements of each media source on any screen or platform. Furthermore, the company maintains an ongoing commitment, staying attuned to the market dynamics and the changing demands of its customers. The company actively evaluates the inclusion of novel distribution media channels into its platform. This adaptive approach ensures that the company remains responsive to the resolving needs of its customers, contributing to its reputation as a forward-thinking and customer-centric company. The company is focusing its efforts, which are based on long-term trends within the online advertising industry, in line of its strategies of providing customers with digital mobile-focused advertising technologies, products, and services for improving their media buying effectiveness, cost and measurement, and maximizing their acquisition and retention costs. And enabling customers to manage their user acquisition campaign budgets on multiple digital channels, screens, and platforms, including social networks, ad networks, exchanges, content discovery platforms, influencers, connected TV, which are CTV, all using data-driven KPI-based technology. Providing extra tools and features as a part of its offering to simplifying campaign management tasks. Such extra tools and features include creative studio editing capabilities for quick ad adjustments, extra layers of data from app stores, and unique optimization abilities for saving time resources on campaign management tasks. Before I move on to the questions, I want to thank to all of our employees for their hard work and dedication. as well as to our investors who support us. I am always available to speak with the investors and look forward to hearing from your feedback and answering questions. With that said, I will answer some of our investor questions and some questions that may be of interest to our investors. Ben.

Thank you, Amit. We have some questions that were sent in. First, we've received several questions regarding the recent U.S. tariff regulations. Can you share how these developments, if implemented, can impact your business?

Sure. This is a moving target, but the current form, the impact of the new U.S. tariff regulation on our business is limited for now. The tariff are for companies that export physical goods into the U.S. from specific geographies. This won't have a direct effect on us, as we aren't a manufacturing company. Moreover, our clients are certified digital products-based companies, and we provide them services across multiple geographies, such as Europe and Middle East, Latin America, not solely in the U.S. That said, the U.S. continues to be a strong growth market for us, both through domestic and international clients targeting American customers. target American consumers. We remain vigilant and well informed regarding macroeconomic conditions and regulatory developments in the U.S. and continuously addresses their implications to our operations.

Okay, thank you. You mentioned that your clients operate in multiple countries. Could you elaborate on how you support their international expansion?

Certainly. One of our core strengths lies in helping clients scale beyond their home markets and drive growth globally. As shown in our investor presentation, which you can find in the company's website, the majority of our clients spent is directed towards user acquisition in Europe and North America. We support this expansion by acquiring high-value users for them in these regions. To illustrate the growth, Our client spend in those markets increased approximately 25% in 2024. In terms of client origin, Asia and North America remain our two largest regions, with the U.S. being the fastest growing country in terms of new client acquisition. Specifically, per revenues from U.S.-based clients rose approximately 20% in 2024, And in summary, we are enabling our Asian and American clients to successfully scale their user bases in Europe and North America, which aligns with our strategic focus on global expansion.

Thank you, Amit. We have a question here. Can you share insights into the verticals where you've seen the main growth over the past quarters?

Well, over the past several years, Our largest customer vertical has been e-commerce, followed by fintech and iGaming, which have alternated in relative position. In 2024, we experienced growth across almost all segments, with the most notable extensions in the entertainment category. Our entertainment clients primarily include music and video streaming platforms. for whom we acquire new subscribers across multiple regions. This growth reflects our ability to deliver scale and performance in high-demand consumer sectors.

Okay, thank you. You've outlined many aspects of the strong performance in 2024. Can you break down how much of the improvement came from cost reduction and efficiency steps taken in 23, and how much came from actual revenue growth and business expansion?

Roughly 25% of the improvement in our 2024 results came from cost reduction and efficiency measures that we began implementing in 2023. including streamlining operation, discontinuating non-core activities, and optimizing internal processes. The vast majority of the improvement was driven by revenue growth, business expansion, and improved profitability through better growth margins management. This was supported by stronger client relationships entering into the new verticals. and solid performance across core offerings. Importantly, these two drivers are interconnected. Without the efficiency improvement and strategic focus, we would not have fully realized our revenue growth potential. Now, one last point. Many of you are already in direct touch with me, and we are having discussions. For everyone else, please feel free to reach out directly over email or WhatsApp at any time about all related things to Zoom. I am always available for you. Thank you, everyone. We look forward to sharing the first quarter results on next call in May.