Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cliq Digital AG (XTER:CLIQ, Financial) is focusing on profitability over sales growth, resulting in a 4% increase in EBITDA quarter-on-quarter.
- The company is implementing a transformation program, 'Fit for the Future,' aimed at improving efficiency and productivity.
- Cliq Digital AG is exploring new monetization models, including ad-supported video-on-demand and third-party offers.
- The company has launched new products, such as a subscription-based file convert service and an AI-powered entertainment portal, to expand its market reach.
- Cliq Digital AG has secured a content deal with WatchMojo, enhancing its content library with over 24,000 videos, which is expected to attract new customers.
Negative Points
- Sales in the second quarter were down 7% quarter-on-quarter, with a significant decline in the European market.
- The company is experiencing higher churn rates due to changes in credit card refund processes, impacting customer lifetime value.
- Cliq Digital AG had to revise its guidance for 2024, indicating a challenging transition period.
- The company's flagship service, cliq.de, did not perform as expected in the German market, leading to its discontinuation.
- Operational challenges in integrating new sales channels have delayed the company's return to growth.
Q & A Highlights
Q: Why is business in North America stable while sales in Europe have fallen sharply? Is this due to the credit card companies' new customer care tools and higher churn rate?
A: The card scheme companies' changes have affected our churn rate everywhere, including North America, resulting in lower lifetime values. However, there is a variance between countries in payment flow, affecting both lifetime value and conversions. Our sales in Europe were impacted more than in North America.
Q: Can you give us a trading update? Is the switch to new sales channels having an effect, such as a higher expected lifetime value?
A: We typically don't comment on current trading. However, we are confident that transitioning from Google Display will eventually get us back on a growth track. Currently, we are focusing more on profitability than sales growth, and we still have a lot of sales potential to tap into, but we need time.
Q: What specific measures are being implemented in the Fit for Future program, both on the cost side and for sales growth?
A: We are reviewing all cost structures, aiming for a leaner organizational structure, less dependency on external service providers, and merging tax systems to increase cost efficiencies. We are also exploring new revenue streams and testing possibilities before fully committing.
Q: The promotion of cliq.de in the German market was discontinued. Are marketing budgets being used for other European countries where more potential is seen?
A: Marketing budgets are evaluated on a country-by-country basis to ensure profitability in the short-term. Due to lagging conversions and expensive marketing expenses, we discontinued cliq.de promotion in Germany and are redirecting resources to countries with greater growth potential, including launching an enhanced flagship service in the US.
Q: What are the main drivers to achieve the full year 2025 guidance of EUR325 million?
A: The main drivers will be our Magnificent Seven sales channels and innovations of new products to create new marketing funnels. We are also exploring new ways to monetize customer data and possibly offer third-party products, testing opportunities before committing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
