Conference call will be held on
Third Quarter Financial Highlights
- Revenues were
$7.1M , a 27% decline versus 3Q22, primarily due to lower revenues from the cryptocurrency sector andZoomd's decision to discontinue unprofitable activities. - Gross Margins increased roughly 900 basis points to 40%, versus 3Q22, reflecting lower revenues from the cryptocurrency sector, and discontinuation of unprofitable activities which carries lower margins.
- Total operating expenses decreased 36% versus 3Q22 as the Company implements its cost saving initiatives and costs saving measures.
- Adjusted EBITDA(1) increased to
$575,000 or 8% of sales, versus$15,000 in 3Q22. - Positive cash flow generated from operating activities for the first time in 5 consecutive quarters.
(1) Adjusted EBITDA is a Non-GAAP performance measure. Refer to "CAUTION REGARDING NON-IFRS FINANCIAL MEASURES" for further details.
Management Commentary
We expanded our gross margins by approximately 900 basis points during the third quarter, largely as the result of our business transitioning away from cryptocurrency customers which carried lower margins. In addition, we discontinued some non-profitable areas of our business. While these items contributed to our revenue decline of 27% in the quarter, gross profit dollars only declined by 8%.
We remain cautious yet optimistic regarding the advertising technology space. Historically, companies tend to cut their advertising budgets during periods of economic uncertainty as a cost-saving measure. However, when the business environment becomes more stable and secure, companies often increase their advertising investment to regain market share."
Third Quarter 2023 Highlights
- Revenues for the three months ended
September 30, 2023 , were$7.1 million , a 27% decline relative to 3Q22. Revenues continued to be negatively affected by the global slowdown, in particular the areas of cryptocurrencies. We continue to diversify our business by increasing our exposure to sectors such as E-commerce, iGaming, transportation, and consumer product goods as well as offering a wider range of performance based products and services. Furthermore, our decision to discontinue unprofitable areas, including our publishers' monetization business, led to a decline in revenue. Excluding both Cryptocurrency clients and non profitable operations clients that have been discontinued revenue in 3Q23 have risen in comparison to the corresponding period last year. - Gross profit margin was 40% for the three months ended
September 30, 2023 , versus 31% for the same period last year. The 900 basis point increase was due to lower revenues from the cryptocurrency customers, which carry lower margins. In addition, the company exited certain non profitable areas of its business. - Research and Development expenses for the three months ended
September 30, 2023 , were$0.7M , a 49% decrease relative to Q3 2022. Selling, General and Administrative expenses for the three months endedSeptember 30, 2023 , were$2.2M , a 30% decrease relative to Q3 2022. This decline in expenses was mainly the result of our cost savings restructuring initiatives, mainly reflect the impact of 40% reduction in headcount. - Adjusted EBITDA for the three months ended
September 30, 2023 , was$575,000 as compared with Adjusted EBITDA of$15,000 for the three months endedSeptember 30, 2022 , reflecting cost savings initiatives. - Operating loss was
$0.08M for Q3 2023, compared to an operating loss of$1.5M in Q3 2022, reflecting the cost savings initiatives. - Net cash of
$0.2M was generated from operating activities in 3Q23, reflecting positive cash generation from operating activities for the first time in 5 consecutive quarters. As ofSeptember 30, 2023 , the Company's cash and cash equivalents amounted to$1.5 million , and no long-term debt.
CONFERENCE CALL
Interested parties can listen via a live webcast, from the link available in the Investors section of
A replay will be available after the call, in the Investors section of the Company's website at https://zoomd.com/investors/ or via https://app.webinar.net/xyJNoQ9o8l7.
ABOUT
Neither
CAUTION REGARDING NON-IFRS FINANCIAL MEASURES
This press release refers to "Adjusted EBITDA" which is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS. The Company's presentation of this preliminary financial measure may not be comparable to similarly titled measures used by other companies. This preliminary financial measure is intended to provide additional information to investors concerning the Company's estimated results. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, as adjusted for share-based payments and one-time non-operating expenses and is a measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to factor in financing decisions, accounting decisions or tax environments.
Management uses this non-IFRS measure as a key metric in the evaluation of the Company's performance and the consolidated financial results. The Company believes Adjusted EBITDA is useful to investors in their assessment of the operating performance and the valuation of the Company. However, non-IFRS financial measures are not prepared in accordance with IFRS, and the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with IFRS. A reconciliation of Adjusted EBITDA and operating profit is available in
DISCLAIMER IN REGARD TO FORWARD-LOOKING STATEMENTS
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to
The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this press release is expressly qualified in its entirety by this cautionary statement.
FOR FURTHER INFORMATION PLEASE CONTACT:
Company Media Contacts:
Chairman
ir@zoomd.com
Website: www.zoomd.com
Investor relations:
New York | Phoenix
ZOMD@lythampartners.com
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