Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Global Mofy Metaverse Ltd (GMM, Financial) achieved a 55.3% year-over-year revenue growth, reaching $19.9 million.
- Gross profit rose by 135.1% to $11.8 million, demonstrating strong financial performance.
- Net income saw a significant increase of nearly 1900%, reaching $10.3 million.
- The company's gross profit margin was 59.3%, and the net profit margin was 51.7%, indicating high profitability.
- Expansion of the 3D digital asset bank from 30,000 in 2023 to over 100,000 as of March 31, 2024, showcasing commitment to growth.
Negative Points
- Operating expenses increased by 17.5% to $5.1 million, mainly due to new public company-related expenses.
- R&D investments decreased from $3.3 million to $0.8 million, which could impact future innovation.
- The company's reliance on high-margin digital asset business may pose risks if market demand shifts.
- The strategic transformation and expansion efforts may lead to increased costs and operational complexities.
- The company's future performance is heavily dependent on the successful integration and application of AI technologies.
Q & A Highlights
Q: What are your strategic plans for generative AI tools in the future?
A: Our CTO, Wenjun Jiang, emphasized that generative AI tools are a cornerstone for transforming the virtual production industry. We are embracing AI with an open and positive attitude. In the first half of 2024, we collaborated with NVIDIA Omniverse and other partners to develop the generative AI platform, Cost Base. This platform will be a core driving force in our future strategic plans.
Q: Where are the main applications for your generative AI platform?
A: The initial goal of our Cost Base platform is to serve the culture and entertainment industry, focusing on digital content production such as film, television, advertising, cultural tourism, and VR/AR. We plan to gradually upgrade and extend the platform to more customer groups based on continuous feedback and needs.
Q: What factors contributed to the significant increase in net income for the first half of 2024?
A: CFO Chen Chen explained that the high growth rate is due to optimization adjustments in our revenue structure and the deep expansion of our 3D digital asset business. High-margin digital asset licensing revenue reached $10.95 million, accounting for 55% of total revenue, a 123.5% year-over-year growth.
Q: How does the company maintain high gross margins?
A: The high gross margins are primarily due to the high repeat purchase model of our 3D digital asset licensing business. Additionally, changes in the recognition method of our intangible assets, which are amortized over a long period, further reduce costs. Our half-year revenue of $19.91 million also contributes to maintaining high gross margins.
Q: Can you provide a forecast or outlook for your company's future performance?
A: Based on current business trends, we expect to maintain rapid growth in the second half of 2024 and beyond. Investments in generative AI tools will increase as we prepare for the AI era.
Q: What is the plan for the company's subsidiary, Cost Speed?
A: As a technology-driven company, we observed the rapid development of AI and made strategic plans accordingly. In 2024, we partnered with advanced technology companies to establish Cost Speed and began developing a generative AI platform under the same name. This subsidiary will focus on AI-driven innovations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
