Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adcore Inc (ADCOF, Financial) reported a gross margin improvement from 43% in Q2 2023 to 44% in Q2 2024, indicating better profitability.
- North American market showed significant growth with a 22% increase in revenue year-over-year, highlighting successful market penetration.
- APAC region revenue grew by 6% year-on-year, showing recovery and growth in previously challenging markets.
- The company achieved an annual recurring revenue (ARR) of CAD1 million for its new media blast app within the first 12 months, demonstrating strong product-market fit.
- Adcore Inc (ADCOF) improved its operating cash flow, reducing cash use from $1.5 million in 2023 to $250,000 in 2024, indicating better financial management.
Negative Points
- Revenue for Q2 2024 decreased by 4% compared to the same period in 2023, reflecting a challenging quarter.
- EMEA region experienced a 27% decline in revenue year-over-year, attributed to reduced advertising budgets and stopped activities.
- Operating loss increased by 92% to $0.8 million in Q2 2024, primarily due to higher R&D amortization expenses.
- Adjusted EBITDA was negative $173,000, a significant decrease from the previous year, indicating challenges in achieving profitability.
- Client diversification dropped from 57% in 2023 to 42% in 2024, suggesting potential over-reliance on fewer clients.
Q & A Highlights
Q: The North American region saw significant growth this quarter. Is Adcore expecting this to continue?
A: Omri Brill, CEO: Yes, we view North America as a strategic market with substantial growth potential. We are increasing our footprint, recruiting more sales personnel, and boosting marketing efforts in this region. We expect this trend to continue in the second half of 2024 and beyond.
Q: EMEA revenue decreased by 27% this quarter. What's the reason for that, and is it expected to continue?
A: Omri Brill, CEO: We see some temporary weakness in the EMEA market but anticipate a rebound in the latter part of the year or early 2025. Our diversified operations across different regions help mitigate such fluctuations.
Q: Are you still optimistic about 2024, given the current results?
A: Omri Brill, CEO: Yes, we remain optimistic. The advertising business has seasonal fluctuations, but the six-month results are positive. The second half of the year is traditionally stronger, and we expect 2024 to be another positive year for Adcore.
Q: What strategies and innovations have driven the annual recurring revenue of $1 million for the Media Blast app?
A: Omri Brill, CEO: The key is product-market fit. Media Blast has seen strong demand since its launch. While achieving $1 million ARR in 12 months is significant, we continue to focus on overcoming challenges and fulfilling demand to realize its full potential.
Q: With an adjusted EBITDA of negative $173,000, what steps is Adcore taking to improve efficiency and achieve profitability?
A: Omri Brill, CEO: Efficiency and profitability are critical for us. We are working on a plan to reduce costs by CAD1 million to CAD1.5 million over the next 12 months. We aim to balance cost-cutting with supporting future growth, focusing on revenue-generating areas while improving efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
