Jack Codera

Jack Codera of Maxim Group inquired about Super League's new revenue streams, including mobile, subscriptions, and the TikTok partnership. He asked for the scope of these opportunities and the expected revenue mix one to two years out, as well as the anticipated quarterly run rate for operating expenses.

Answer

Matt Edelman, CEO & President, explained that mobile gaming is the primary diversification opportunity for the current year, targeting approximately 25% of total revenue. He projected that in the future, immersive platforms would constitute 50-60% of revenue, with the remainder from these new areas. Edelman also stated that the company has no plans to increase its expense footprint, believing the business is now right-sized to achieve its goal of profitability, while acknowledging that revenue will remain seasonal.

The analyst asked about the company's new revenue lines, including mobile, programmatic advertising, and a new subscription service. He inquired about the scope of these opportunities, the expected future revenue mix, and the anticipated quarterly run rate for operating expenses.

Answer

The CEO stated that mobile revenue is targeted to reach 25% of total revenue this year, with other new lines being less material initially. In the long term, the goal is for immersive platforms to represent 50-60% of revenue, with the remainder coming from diversified sources. He also confirmed that there are no plans to increase the current expense footprint, as the business has been right-sized for profitability, though revenue will continue to follow seasonal advertising trends.

Inquired about the impact of macro headwinds on the business, the expected growth of the mobile games segment, and the strategic rationale behind the Supersocial acquisition and the broader M&A landscape.

Answer

The primary macro headwind is the potential for marketing budget delays, not cuts. The company expects mobile to grow to at least 25% of revenue in 2025. The Supersocial acquisition is strategically important as it brings in new IP and brand partners, and Super League sees itself as a strong participant in future industry consolidation, having proven its ability to successfully integrate acquisitions.

Jack Codera asked for details on the macro headwinds mentioned in the press release, the expected revenue contribution from mobile by year-end, and the broader strategic importance of the Supersocial acquisition and the M&A landscape.

Answer

Executive Matthew Edelman addressed macro concerns by stating that while they are not seeing budget cuts, they are observing some delays in budget deployment. He reiterated the company's expectation that mobile will constitute at least 25% of revenue in 2025. Regarding M&A, Edelman highlighted that the Supersocial deal brings in key IP owners and brands and positions Super League to be an active and successful participant in future industry consolidation.

Asked about the reasons for advertiser launch delays, the current state and future trend of the sales force, and the spending patterns of repeat customers.

Answer

Advertiser launch delays are attributed to internal brand logistics and creative processes to ensure a quality launch, rather than budget cuts or macroeconomic concerns. The sales force consists of about 8-10 sellers and was recently restructured to improve effectiveness and reduce the learning curve for new hires. Repeat customers tend to increase their spending as they progress from trial campaigns to multiple campaigns and ultimately to persistent, always-on virtual presences.

Jack Codera asked for more details on delayed advertiser launch dates, the current size and future trends of the sales force, and the typical growth in spending from repeat customers.

Answer

CEO Ann Hand clarified that advertiser launch delays were due to internal brand processes and creative ideation, not budget cuts. She detailed that the sales force consists of about 8-10 full-time equivalents and was recently reorganized to shorten the learning curve for new hires. Regarding repeat customers, Hand explained that they typically spend more over time, and the company's strategy is to evolve them from one-off campaigns to persistent, 'always-on' immersive worlds, which increases their total spend.

The analyst inquired about the source of revenue in the quarter, the potential for pilot programs to convert into production contracts in the near term, and sought more details on the status of the automotive vertical rollout and the dealer.com partnership.

Answer

The CEO clarified that Q1 revenue came from paid pilot programs, which are currently small in scope. He expressed confidence that pilots in healthcare, life sciences, and automotive are expected to convert to production deployments, with the auto sector showing significant momentum and a potential conversion within the calendar year. The company has finalized a high-value use case for dealerships, integrated with partners like dealer.com, and is now deploying it as a pilot, while also working with a large OEM on different use cases.

Jack Codera inquired about the sources of Q1 revenue, asking if it stemmed from pilot programs or production contracts. He also sought visibility on which industry collaborations, particularly in auto, healthcare, and pharma, are closest to converting into full production contracts and requested more detail on the status of the automotive vertical rollout.

Answer

CEO Paul Chang confirmed that current revenue is from paid pilot programs, which are short in duration and not yet significant. He expressed confidence that long-running pilots in healthcare and life sciences would convert to production. Chang was also bullish on the automotive sector, noting strong relationships and technical integrations with partners like dealer.com are complete, with pilots now being deployed. He anticipates auto contracts could move to production within the calendar year.

Jack Codera inquired about the strategic rationale behind the pending Cantaneo acquisition, the progress of key pilot programs like MedAdvisor, and the specifics of the $50,000 in proof-of-concept revenue reported in the quarter.

Answer

CEO Paul Chang explained that BEN has known Cantaneo for almost a year and the acquisition aligns with its goal of expanding its global media reach and creating interactive advertising. He also confirmed that all pilot programs are progressing, with some expanding to include more customers. CFO William Thomas Williams clarified that the reported revenue is SaaS or subscription-based, paid by customers who are deploying the pilot solutions.

Inquired about B2B coverage and revenue potential in Brazil, as well as other expansion targets like Alberta and near-term U.S. state openings beyond Ohio.

Answer

The company is optimistic that Brazil can outperform expectations and is targeting over 50% market coverage. Alberta is considered a strategic target. While other U.S. states like Illinois and Indiana are on the radar, Ohio is the most concrete near-term opportunity and represents a significant market expansion.

Asked about the seasonality of the PDP business in Q4 and the key indicators driving confidence in a strong holiday season.

Answer

The company replied that PDP's seasonality is similar to the core business and that confidence is high due to strong game launches like Call of Duty, the ongoing hardware replacement cycle, and their new product lineup.

Jack Codera of Maxim Group asked about Inuvo's strategy for overcoming customer friction related to cookie deprecation and inquired about the expected growth mix between platform clients versus agency and brand clients.

Answer

Executive Richard K. Howe emphasized a proactive strategy of getting a 'foot in the door' with clients to demonstrate results and educate them, rather than waiting for cookies to disappear. Regarding client mix, Howe stated that while growth is desired in both segments, the platform business is strategically vital for generating positive working capital. He anticipates the current 80/20 platform-to-agency revenue mix will shift more toward the higher-margin agency business over time, which would significantly boost net margins.