Zoomd Technologies Ltd. (TSXV: ZOMD) (OTC: ZMDTF) and its wholly-owned subsidiary Zoomd Ltd. (collectively, “Zoomd” or the “Company“), the marketing technology (MarTech) user-acquisition and engagement platform, today reported its financial results for the three months and full year ended December 31, 2022. The Company’s financial statements and management discussion and analysis (“MD&A“) are available on SEDAR under the Company’s profile.
Key Financial Highlights
- Despite global macroeconomic headwinds, revenues in FY2022 remained stable.
- FY2022 adjusted EBITDA was $3.7M, as gross margins were constant.
- Ended FY2022 with a cash balance of $3.8M and no long-term debt.
Management Commentary
Amit Bohensky, Chairman, stated “We were able to slightly grow our revenues and maintain our gross margins in 2022, despite the ongoing global turmoil.
Despite the macroeconomic challenges, our current clients continue to be pleased with the results that Zoomd brings to their customer acquisition efforts. In 2022 we were successful in acquiring new clients, and our pipeline of new customers remained solid. Our products and services enable our customers to grow their user acquisition programs with limited additional resources, giving the ability to scale immediately by demand.
We have successfully integrated Albert’s operations, an artificial intelligence marketing platform for advertisers, acquired during Q1, and started cross selling, which has been received well.
Our products are the Company’s future, allowing us to offer more digital advertising services; self-managed and AI based. These products provide clients with a diverse digital advertising solution not only for performance but also full funnel marketing objective solutions. Our products unlock our capacity to attract more small and mid-range customers and to generate ongoing recuring revenues. In 2022 we have successfully onboarded a wide variety of customers, including WPT, Rappi, Samsung, Elektra (MX), Free now, and Binance. We remain optimistic about Zoomd’s long-term growth prospects.”
Fourth Quarter 2022 Highlights (All Figures in Thousands in USD)
· Revenues for the three months ended December 31, 2022 were $10.8 million, a 42% decline relative to Q4 2021. Comparisons from 4Q21, in which we grew an amazing 183%, are impacted by the overall changes in the macroeconomic environment, in particular the areas of fintech, crypto and e commerce. Excluding the effect of revenues from crypto and fintech customers, revenues in the fourth quarter would have declined approximately 6%.
· Gross profit margin was 38% for the three months ended December 31, 2022, versus 30% for the same period last year, reflecting lower revenues from the Cryptocurrency segment which carries lower margins, as well increased revenues from Albert, which carries higher gross margins.
· Research and Development expenses for the three months ended December 31, 2022 were $2.5M, a 157% increase YOY, primarily reflecting salaries to new employees who joined the Company, as well as salaries and retention payments to Albert employees and former share holders
· Selling, General and Administrative expenses for the three months ended December 31, 2022 were $3.2M, a 24% increase YOY, primarily reflecting increases in expenses incurred as a result of new employees joining the Company, primarily after the acquisition of Albert.
· Adjusted EBITDA for the three months ended December 31, 2022, was $0.1M as compared with Adjusted EBITDA of $2.9M for the three months ended December 31, 2021. The decrease in Adjusted EBITDA was primarily attributed to the decrease in revenue.
· Operating loss was $1.7M for Q4 2022, compared to an operating profit of $2.1M in Q4 2021, and was primarily attributed to the decrease in revenues, salaries and retention payments made to Albert’s former employees which have joined Zoomd.
· As of December 31, 2022, the Company’s cash and cash equivalents amounted to $3.8 million, and no long-term debt.
Fiscal Year 2022 Highlights (All Figures in Thousands in USD)
· For the twelve months ended December 31, 2022, revenues were $53M, an increase of 1% year-over-year. The flat YOY revenues are primarily a result of global macroeconomic conditions that impact client advertising budgets especially in areas of Fintech and Cryptocurrency.
· Gross profit margin was 31% for the twelve months ended December 31, 2022, roughly flat versus 2021.
· Research and Development expenses for the twelve months ended December 31, 2022 were $6.7M, a 59% increase YOY, primarily reflecting salaries to new employees who joined the Company, as well as salaries and retention payments to Albert employees and former share holders.
· Selling, General and Administrative expenses for the twelve months ended December 31, 2022 were $12M, a 32% increase YOY, primarily reflecting increases in expenses incurred as a result of new employees joining the Company, primarily after the acquisition of Albert.
· Adjusted EBITDA for the twelve months ended December 31, 2022, was $3.7M as compared with Adjusted EBITDA of $5.8M for the twelve months ended December 31, 2022. The decrease in Adjusted EBITDA was primarily attributed to the increase in operating expenses at the result of to new employees who joined the Company, as well as payments to Albert employees who joined the company after the acquisition.
· Operating loss was $2.1M for FY 2022, compared to an operating profit of $3M in FY 2021, and was primarily attributed to salaries and retention payments made to Albert’s former employees which have joined Zoomd, as well as payments made in connection with the acquisition of Albert.
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