Release Date: February 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pureprofile Ltd (ASX:PPL, Financial) reported its first profit of $41,000 for the first half of FY24, a significant improvement from a net loss of $386,000 in the same period last year.
- The company saw a strong revenue growth of 8% for the half-year, with international business growth exceeding 20%.
- Platform revenue growth was impressive at 104%, driven by an increase in panelists recruited from Audience Builder partnerships.
- The reported cash balance stood at $4.5 million as of December 31, with a significant uplift in net cash from operating activities of $1.2 million.
- Pureprofile Ltd (ASX:PPL) has expanded its global presence, now operating in 13 different countries, and opened new offices in Germany, Spain, and Portugal.
Negative Points
- The Australian market experienced a soft period in October, impacting overall revenue growth for the region.
- Revenue for the continued business was up 8%, but the overall revenue was down 3.1% due to the closure of the Pure.amplify business.
- The company faces challenges in managing costs and investments to ensure continued profitability.
- There is a potential threat from other data sources and AI-generated data, which could impact Pureprofile Ltd (ASX:PPL)'s market position.
- The shift from equity-based to cash-based STI (Short-Term Incentive) has increased operating expenses, affecting EBITDA growth.
Q & A Highlights
Q: Congratulations on achieving a small profit for the half. What can we expect moving forward?
A: Melinda Sheppard, COO: Profitability will remain a key focus. We will continue with a disciplined investment approach, ensuring we do not invest too far ahead of revenue. We aim to see continued bottom-line growth and larger profitability over time.
Q: Revenue for the continued business was up 8% for the half, but overall revenue was down 3.1%. How should we think about revenue moving forward?
A: Melinda Sheppard, COO: The 3% decline is due to the closure of the Pure.amplify media business. For the continuing business, we expect similar revenue growth in the second half, driven by global investments and new roles, particularly in Europe and Australia.
Q: Can you give more color around what happened in October?
A: Martin Filz, CEO: The Australian market was soft in October due to restricted budgets from clients. However, revenue bounced back in November and December. January is typically quiet, but we expect increased activity from February onwards.
Q: Can we expect intangibles CapEx to remain flat with ongoing tech and product expansion plans?
A: Melinda Sheppard, COO: Yes, we do not anticipate substantial increases in product and development investments. The tech team can now focus more on innovation and new product development without increasing headcount significantly.
Q: Where do we expect to see the initial benefits from AI, and can you quantify them?
A: Martin Filz, CEO: Benefits will vary by project. For example, AI translation tools have saved us about $150,000. AI will help us innovate and improve efficiency, leading to margin expansion and better client service.
Q: What are the opportunities and threats for Pureprofile in a cookie-free world?
A: Martin Filz, CEO: The main threat is alternative data sources. However, high-quality data from Pureprofile will always be needed. Opportunities include leading with AI training data and verifying client data, which positions us well in the market.
Q: What factors might impact the guidance of 7% to 9% EBITDA margin and $46 million to $51 million revenue?
A: Melinda Sheppard, COO: Achieving guidance depends on managing costs and the economic environment. Investments in new regions and maintaining a diverse client base should help us meet or exceed guidance.
Q: How has the market activity shown further improvements in January and February after the October downturn?
A: Martin Filz, CEO: January is typically slow, but we expect increased activity from February onwards. Diversifying into international markets helps mitigate the impact of downturns in any single market.
Q: How does Pureprofile plan to handle the shift to a cookie-free world?
A: Martin Filz, CEO: High-quality data will remain essential. We see opportunities in providing AI training data and verifying client data. Our focus on automation and efficiency will help us stay competitive.
Q: Can you elaborate on the impact of AI on Pureprofile's operations?
A: Martin Filz, CEO: AI will help us innovate and improve efficiency. For example, AI translation tools have saved us significant costs. We will continue to explore AI solutions to enhance client service and operational efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
