Adcore Inc. (ADCO) Earnings Call Transcript & Summary

Hello, everyone. Super excited to be at this event today. #ABrighterUs reveal, my name is Kovi. I am the Head of Operations of the innovative new marketplace called Amphy. That's what we have to -- for the view of Amphy. We're going to go through a little bit more details on what is Amphy, the birth story of it and really our zero to hero journey of where we are right now and where we go into in the future. To start us off a few minutes from our parent company CEO Omri Brill.

Thank you so much, Kovi, and thank you so much for everyone that's attended today's event. We see some familiar name in the participant and some participants that are new to the story. And actually, today, is a very exciting story for us, both for me, personally and for Adcore as a company. Not every day we have a chance to present a new project, a new marketplace, a new company that we've been working on for the past 1 year, and basically today we started this. And as Kobi mentioned, Amphy is a viewer to the story. So when we go back 1.5 year ago when 2020 just started, there was nothing. There wasn't even an idea. And then fast forward, mid-2020, COVID destructed the entire world, entire world has been all stopped. All the workforce went to home, started work remotely and we ask us just 2 very important questions. A, can we keep our people busy? And B, equal if not wholly focused, how can we have a lot of small businesses that were disrupted by COVID and basically have them as digital progression. And then to go from offline to online and basically -- and after some speaking and brainstorming, we come up with the idea of Amphy to create the marketplace, to fly worldwide lending, connecting -- globally connecting teachers and students from all around the globe, learning, teaching one another and basically, create an entire community of last time learners. And then after 6 months of, I would say, a lot of Excel sheets, a lot of Word documents, a lot of ideas, a lot of preparation. In December 2020, Amphy was born, the new version of the Amphy website was launched. And I guess, as you're little familiar, it's always an exciting time. Like I'm a proud father of 4 kids, I always see Adcore as another kid of mine. Then when Amphy born, I was a proud father of 6 kids, and that's an exciting moment. But actually, before I would promise for a new one as a CEO, with regards to Amphy, I'm first and foremost a student, and I like learning on Amphy and I like being part of the Amphy and learning community and learning, just for example, on our team, I have a great teacher named Angelina. She give me more than 30 chess classes already. So my level obviously improved a lot. So I dare you not, you can beat me to game of chess. But actually, it's more than that. Now I can start teaching my own kids to play chess and then enjoy playing with them. And one of my kid actually got really good at it, and now I wanted to start professional chess on Amphy as well, relying on Amphy. One of the kids on Amphy is playing chess and the story goes on. I'm also learning to speak English on Amphy so when I speak with my old dad, in English it's more fun. We can have more fun speaking together with what it used to be, my mother -- with old father and mother. And Basically, that's the story of Amphy. It's the story of learning, it's the story about increasing our skills and become #ABrighterUs. And if you need to look it back to Adcore. When I see the fact that Adcore, as a public company is already established company can come up with such an innovative idea. We can show you the level of innovation of the company, the level of entrepreneurship in the company and the point of zero to hero story, we have the highest expectations from Amphy, obviously, today, this year 2021, it's still a learning year for us. So we're still beginning with Amphy journey. But when we look forward 2022 and beyond, we have huge expectation for Amphy. And Amphy can be a huge revenue source of growth for the company moving forward. And with regards to today, like if in the end -- by the end of today, everybody will like like Amphy, be excited about Amphy, as 50% as I am, then we achieve a lot of today, and I hope that's exactly how we're going to feel by the end of today event. So with no further ado, Kovi, the stage is yours and show them what you got.

Thanks so much, Omri. I think really the feeling of excitement is felt across the board. And a part of this, we actually prepared a short teaser video for you all to kind of give you a sense of the magic of what we're doing here at Amphy. And I want to share that quickly with you now as well. [Presentation]

So I hope that, that video has set the stage a little bit for Amphy and what we're doing and how we're doing it. We prepared also a presentation to really dive in to understand what is Amphy, what we're all about, a bit of our birth story and our growth story. Where we are today and really where we're heading and our vision towards there. So I'm very happy to present that to you now. So let's get started. So just a quick disclaimer for forward-looking statements. You obviously can review this in more detail with the presentation when it's sent to you later on. So we're Amphy. We're a marketplace for live recreational learning, right? We connect teachers and students across the globe. On the side of the teachers, we give them unparalleled flexibility to create their classes, the time, the price, the range, everything we give them a platform to be able to host their classes and to students we give them access to a global and wide variety of classes where they can find one that's perfect for them that meets them where ever they are, in every time zone with live personalized classes. And because of that global time zone, it's always on platform. It's on 24/7. But no matter where you are, you can find something perfect for you. So kind of the major points of why we're super excited about Amphy are: #1, it's the live e-learning is exploding, right? It's a brand-new markets. It's something that didn't really -- no one even thought about it before. When you said e-learning 1.5 years ago before the pandemic, it meant recorded classes. If you wanted to learn yoga, you have to go to a yoga studio. If you wanted to learn guitar, you have to invite a teacher to your house. Everything was done offline. But now, with COVID, we realize all of those offline activities, how much of it could be done online and how magical it still can be with that live learning experience. And so we really experienced 10 years of innovation in the space in the span of about 3 months. And that's really what we hear is that it's a brand-new market. It's educated the market from young people to old people, how to learn online live and the magic of it. And it's both a brand-new market that we pose to dominate. The next thing is it's an endlessly addressable market. There's almost no industry that we don't disrupt. We started just 6 months ago with 3 categories. We now have over 70 categories and we're adding new categories on a weekly basis and it's ever, ever expanding as well. Our business model, and we'll dive a little bit more deeply into this later, it's truly unmatched. The scalability of our platform, the way that every single teacher is now put on a global audience, able to reach students no matter where they are. And hundreds of students even thousands of students on every month. And most importantly is the positive impact on humanity, the ability to be able to leverage technology to help people integrate to grow, to enrich their lives on a regular basis. And this really brings us into our vision and really, the name of today's event, which is #ABrighterUs. And how we're going to get there is to create the largest marketplace for live classes connecting and enriching humanity through knowledge. So let's dive in a little bit more on the e-learning moments. As mentioned before, it saw a ridiculous growth over the last period. Taking the word, for example, online class, it saw 400% increase on Google, right? Everything that used to be e-learning, we used to think it was either offline or there is a quota classes, a brand-new market a market that we estimate to be $500 billion large was literally burst overnight. And we perfectly pose to in this new age of people looking for this one stop shop, a place where they can find a live learning, find teachers, connect, grow their skills, grow their passions in a live, individualized, personalized way, this is where we stand to dominate. To dive into the endless addressable market. As mentioned, we estimate this market to be huge, $500 billion and growing. We actually increased the accessibility to all of these classes, making the pie even bigger for everyone. And there's no industry that isn't disrupted from this, whether this is fitness, cooking, languages, beauty, photography, meditation, dance, art, there's really an endless variety. All of these classes are already offered on Amphy and even more. So it's ever expanding. There's almost no category that we don't already offer our plan to offer on the platform as well. So why are we in the best position to really dominate and lead this market going forward? Firstly, we're the first movers. We moved fast, and we're actually the first live recreational learning platform to launch in 2020. We're currently the largest and most diverse. Our current growth rate is phenomenal. We have 800 live classes, over 800 already across over 70 categories and our students are growing at 340%. Our marketing expertise, thanks to Adcore's long, long history and our parent company, they have 15 years of global experience marketing endless amounts of brands. And this really allows us to make the most of our ad spend, really reach customers in the way they understand how they think, reach them at the right moment and really leverage that to empower our platform. And finally, the technological edge. Those of you who are familiar with the Adcore story you know that they already offer a suite of technological products. This isn't their first rodeo. They know how it works, and they already -- we have some integrated already as a part of our marketing strategy. So to speak a little bit about our team, some -- they call it the dream team. We have on the one hand, seasoned business professionals and on the other hand, youngsters ready to take over the world. Take Omri, for example. If you're familiar with the Adcore story, he took a 2-man start-up at garage startup and he grew it into a multinational, publicly listed company now with a market cap over $80 million. Take myself for example. This is my second startup that I'm running, and I'm really excited and eager to take over the world. Take Ilana, for example, our Head of Design, UX/UI. She designed this amazing presentation that you're seen today, and she is a big part of everything we do at Amphy along with the rest of the team. So -- all right. So you kind of have a little bit of context around the platform. You understand high level what it is, but we actually prepared a short demo for you to be able to really dive in, show the variety, show how to use it, you obviously can go to amphy.com right now to see it yourself. But we've created a demo just to show you the entire process, and this is done by Julia, our Head of student engagement. It's actually quite -- finally, I also am learning chess regularly with the same teacher as Omri. But I don't know if she is teaching him something, she is not teaching me because we played last week and he won. So I have a lot of complaints, but we'll have to see how that progresses. I've got to rematch with him next week. So here's the demo.

I'm Julia and today, I'm going to show you how to find your perfect class on Amphy. First, let's have a look at Amphy's homepage. Here, we can see a class is going live, free classes being offered on Amphy and our future classes such as Amphy's master series where industry celebrities teach a onetime class on Amphy. We can also see top fitness and well-being classes, top food and drink classes, top language and culture classes and so much more. Now let's get ready to choose our class. We can start by choosing a category that we're interested. I know that I'm super interested in fitness and wellbeing. Here, we can see the variety of subcategories such as hula-hooping, CPR, light coaching, martial arts, meditation and so much more. We can also sort by class size such as private or group class, or price of the class or if we want to see only the free classes as well as the cost duration, the day of the class and the average cost rating. I know I've always wanted to learn guitar. Let's see what Amphy has to offer for guitar classes. With so many classes, I think I'm going to try out Gavi's private guitar class. Here I can see the class page where I can learn more about what to be expected in the class. I can also share gift or contact the teacher about this class. Let's see, here I can see what I'll learn in the class, who this class is perfect for. A little bit more about my teacher and what I will need for the class. Let's learn more about Gavi. Here, he even has a video of himself. [Presentation]

Well, he seems like he's a pretty good teacher. On Gavi's class page, I can also learn more about the teacher, see his background experiences, his teaching style and also see what other students have had to say about his classes. It seems like he has some pretty good reviews. Let's look. Here, I can view all of Gavi's classes and book the class that I want. I think I'm going to try out the 30 minutes private guitar lesson. Now that I'm ready to book, I think I'm going to try looking for a classes in a bundle. With this option, I can get a discount by choosing more classes and have occur weekly, saving me time and energy put into booking classes. I can even create a custom schedule of my classes for when they repeat. I think for this time, I'm just going to book 1 class. Here, I can press on one, confirm my time and date and then click confirm. Now I'm taken to the very information, where I can enter the code, if I have one, apply the code and then get ready to book my class with Gavi. Gavi has confirmed my lesson, and now it's time to start learning guitar. Hi, Gavi. I'm so excited to have this lesson and learn how to play the guitar.

Hi, Juliet. Super excited for the classes.

Am I even holding the guitar right?

So I hope that I gave you a good overview of how to use the platform, how to find classes. It's really an incredible opportunity for yourself to be able to stay committed to your goals. Even I have a personal example of booking a fitness class. It was cold, it was late, I got home. There's no way I wanted to workout, but there was a real person waiting on the other side of the screen. So I joined the fitness class, I did it, and I felt amazing afterwards, and it helped me reach my fitness goals because that's really what it's about. It helped me stay committed, it helped me stay engaged and it helped me connect to my teacher as well. So Omri mentioned Amphy was on paper for a long time, and there was just Excel spreadsheets, Word documents trying to look at where we could get Amphy to be. And really, there was -- we kind of set an ambitious expectations and the best case scenario for ourselves and we actually beat that by 4 to 5 months ahead of schedule, which is really remarkable and really powered this event today that we can -- we're ready to share it with the world. What's powered this exponential growth so far is as follows: Firstly, how we attract students, whether that's through free classes, paid media, word-of-mouth or even teacher promotions where we get the teachers to leverage the current and existing students as well as their friends and family to get on to the platform. We then make it super easy for all of the students to find a class that's perfect for them whether that's offering a variety of levels, variety of price ranges and time zones that cover every single category 24/7. This makes it super simple for every student to find the perfect one for them, and after that, we delight the students. Every single one of our teachers are experts in their field, and they are part of a growing and vibrant teacher community where they interact with our teacher community lead as well as regular workshops and enrichments so that they know the best practices, the best steps to ensure that every single one of their students has an excellent experience. That's #1, has been super excited to book the next class and #2, shares the word to their friends and family also about the platform. And this has kind of been compounding over the past few months to really show this astounding results so far. Now to touch on Amphy's business model, we kind of saw -- Amphy is a marketplace. Let's think about what are the 2 most iconic biggest, most successful marketplaces we can think of, and we thought, all right, let's pick Airbnb and Uber both valued at over $80 billion on the stock exchange. And we thought all right let's compared them to Amphy. And with all due respect to Airbnb and Uber, and I'm a big fan of both of those companies, I truly believe, and I'm sure you will, too, that Amphy's business model is far superior to them, and I'll take you through line by line. Firstly, the investment to become a seller is under $1,000 or you needed a laptop and an internet connection, and you already hooked up and able to teach. Where Airbnb, you have to be an apartment or a house owner, a $0.5 million investment. Or for Uber, you have to own a car, another $25,000 investment. The audience is Amphy is twice as large as Airbnb and Uber because they're majorly cater to adults, but we offer to adult as well as kids. Our geo constraints are also a huge, huge factor that makes us superior, whether that's every single teacher is able to reach every single student across the globe, meaning that if I'm based in Tel Aviv, I can reach a student in Tokyo, I can reach them in London, Johannesburg and New York, all at once. Where with Airbnb and Uber, they might say they have 100 million users, but every single supplier can't reach all of those. For example, if you're an Airbnb host in Barcelona, your listing is only relevant to someone looking to travel to Barcelona in the near future. If you're an Uber driver, you can only drive with someone in your -- few kilometers within where you are right now, not the 100 million. Versus on Amphy, you can cater to every single student on our platform. To jump back a line, one that I missed is the cost of revenue to continue offering our services on Amphy. On Amphy, it's almost nothing. It's an internet connection and you connected and continuously providing, where Airbnb you have to pay levies, taxes, electricity, all of the fees associated with owning a home. And the same with Uber car gasoline, insurance, maintenance, et cetera. The scale with Amphy is also uncomparable with every single class, you're able to reach up to 300 students, reaching thousands of students every single month versus Airbnb, it's 1 to 6 people in your home at once and Uber is 1 person at a time. The repeat rate on Amphy is also incredibly high with people taking weekly or daily classes. Where Airbnb, even if you're an excessive traveler, let's forget COVID, even if you travel a lot, you may be booking an Airbnb 2 or 3 times a year. Some people use Uber daily, but it's also a once-off purchase versus the purchase of Amphy, it's a regular purchase and ofter times even bought in bundles versus Airbnb and Uber to rewin the customer every single time. Our platform and our business model is super simple. We take a 19% commission on classes sold. So that's pretty comparable to up to the -- around 27% average, which is a marketplace similar such as Fiverr. A moment to talk about Adcore. Those of you who aren't already very familiar. Adcore is our parent company, they were established in 2006. They currently are traded on the Toronto Stock Exchange with a market cap just over $80 million. And they have over 50 employees around the world from Tel Aviv, Toronto, Melbourne, Hong Kong and Shanghai. And they've really leveraged all of these teams and expertise of all of these teams, whether it's sales, marketing, operations, really to drive help and support Amphy's growth to get us to where we are today. So I mentioned to you guys a little bit earlier that we did some optimistic expectations for the project and predictions for the project. And we find ourselves today really 4 months to 5 months ahead of what we ambitiously have planned for ourselves. And that's with over 800 classes already live in over 70 categories. There's almost nothing that you can't -- that you would want to learn, that you can't find on Amphy already, whether that's yoga, cooking classes, cocktail classes, every language you could think of as well as our student growth rates really growing incredibly already with over 2,500 sign-ups on the platform. Right now, that's all what we currently have done so far, but there's a lot of room for us to grow, a lot of headroom for Amphy as well. So I'm going to start with the B2B offering, which is something we recently launched, where we're offering to companies of all sizes, especially global companies where the employees are remote, employee retention is at an all-time low, your workers don't feel engaged and Amphy is an ability for employers to really invest in the well-being, invest in the soul of their workforce. And this is something that we are approaching multiple companies about and seen a lot of interest. On top of this, there is an interest, the experience aside, where we plan to offer experiences, we already have some experiences on the platform. These are more one-off events sometimes trips or tours, I, for example, I took one that's already offered on Amphy, which is going to Uganda being told about the history, the language, the tribes, really learning and have felt almost I love traveling and I love going on waking tours, and it felt like I'm waiting on a walking tour and I felt enriched, and I hadn't left my seat. I was just in front of my computer. So it was a really powerful experience that we plan to expand that category a lot as well. Then to touch on the e-commerce. Every single category has a huge e-commerce component combined with it. So whether that's cooking that you can buy your pots, your pans, your ingredients for your upcoming meal. Whether that's you're learning chess and you might want to buy a chess board. You learn yoga and you want to buy yoga mats. Every single category that we offer has huge extensions to offer e-commerce site as well. Live events. We have a theory, and we're already seeing there's a growing trend that every single line event is going to have a hybrid live online version. So myself, I'm a huge John Mayer fan, and John Mayer might be playing in New York in a concert hall of 20,000, 30,000 people sold out. Why can't you reach millions of people across the globe? Why can't I, based in Tel Aviv, be able to tap into that event? I would buy a ticket to be able to attend that live, and that's also somewhere that we're planning to expand. And finally, but certainly not least, is to create a TV app in the same way that Netflix is the basic, it's a standard on everyone's home on your TV, it's in every single family, the same way we plan to have Amphy a part of your TV app that you can open at any time, grow your passions, grow your skills with live interactive classes whenever suits you. So really to sum up all of the points that we kind of mentioned in this presentation. Firstly, it's the live e-learning moment. We saw a dramatic shift, we saw 10 years of innovation around this live learning space happen in 1 quarter. And this is really where we are right now today. There's no one -- there's no way to really go to, to learn live, and Amphy is that place to go. Our TAM is unlimited. Every single category, there's almost no industry that isn't disrupted. You can learn anything. We're adding new categories on a weekly basis, and it's truly expensive. Our scalability of our platform, as mentioned, compared to Airbnb compared to Uber, it's really unmatched every teacher put on a global scale. And finally, and most importantly, is to create #ABrighterUs. It's to leverage technology to create a brighter future, to enrich people's lives on a regular basis. A moment on how to reach us. So if you have any thoughts, ideas, questions, feedback or you just want to say you're a big fan of the project or if you want to play me or Omri chess, you can reach out to me at [email protected]. That's directly on e-mail. You can also reach out to my friend, John or Barak. So a part of what we really believe in at Amphy is that you join us. And this is something that if you're a fan of the Adcore business, you know that it's a B2B business. And it's not so easy to participate and to experience the B2B business if you're onto business yourself. Here, Amphy's B2C. You're able to experience it, you're able to try it out yourself, you're able to share it with your friends and get yourself involved. So firstly, for everyone that attends this webinar. We're giving a $50 Amphy gift card. Go in, find a class that you love find something that you want to do either by yourself, maybe with your partner, maybe with your kids, that truly is something for everyone, experience it, experience the magic of live learning. Next, share it, share it with your friends, your family, tell them about it, tell them that you loved it and write about it and share it on social media. And finally, follow our progress, really join our journey. We believe in transparency here at Amphy, 100% transparency. We have an updated progress chart that we update weekly, that's tracking our classes, our transactions, the number of students on our platform, really so that you can feel and see and follow our progress as we progress. And with that, I thank you so much really for attending today's event. I hope that you're as excited about Amphy as I am and our team is and Omri is and the entire Adcore family is. And passing on to you, Omni, for some closing remarks.

So thank you so much, Kovi. This was a well made presentation. And I think above all, we need to say Kovi has seems to have an amazing efforts starting now, been able to create a marketplace in December 2020 and fast-forward 6 months down the road to already have 800 classes, more than 200 different teachers. Thousands of students are taking classes every single day. It's a huge achievement, and this is beyond our, let's say, brightest expectation. And I'm sure if this is what you guys achieved in 6 months' time, I can't wait to work with you guys, and achieve in the next 6 months and obviously in the next 1.5 years and above. So well done and well achieved. And I think like Kovi mentioned, we're going to send everybody a $50 voucher to try Amphy, to experience Amphy, take a class, take it yourself, ask your teacher to take it, take it with your partner, it doesn't matter, just try. Give us your feedback. You love it, tell it your friends and family. You love it even more, tell it the world. And basically, help us grow the business this is exactly what we like to do. And again, it's a zero to hero story. So up until now, we did this -- we worked alone, but now we're going to work together with everybody with all the shareholders, with the entire world, and it's going to be a family sunrise together. If you want, we didn't -- we actually, we said we're not going to have a Q&A session, but we do have some pre-Q&A, so we can quickly go over it and basically answer them real quickly if you guys want. So basically, we have someone asking if you take -- if all the classes are one-on-one. So obviously, it's optional. It can be private one-on-one classes, couple classes, but it also could be a group classes as well. You can choose more type of class. Each class have -- the type of class it is, whether it's a private or public group classes. Then they also ask if teacher can also be students that take classes or they need to open a different account. The answer is yes. Teachers can be students and vice versa, a student can become a teacher. And obviously, you don't need the separate account, everything is done from a single account within Amphy. And then another question, can I find other classes -- other language sorry, not in English, then the answer is yes, you can filter the classes by the language in the feature. Obviously, all of the classes are in English, but a lot of the classes have spoken or can be taught in different language as well. So there is a filter option when you go to the classes. Can companies offer classes? Then currently, it's a P2P model, so it's people to people. Having said that, in the future, we can expand it also for some businesses offer the classes, but currently, it's more people to people. Yes. So currently, with regard to the revenue model, it's still on a better state. So we're not expecting a major revenue from this project in 2021. Having said that, in 2022 and beyond, it should be more important for the company and it's not only revenues, how fast can we scale, how many land can we draw, and basically, how big can we build the brand. So I would say 2021, revenue shouldn't be significant, but 2022, it should be an important part of the story. Yes, there is another question regarding private level. This is not something we're currently offering, but obviously, this can be as the way company grow. We do want to open an all new segment of B2B, so which can be private level. And I guess that's about it, the majority of the questions. So basically, we have another question on the chart regarding the TV app, basically. And are we planning to do live broadcasting 24/7? So the answer is yes, ideally. When asking are we going to be a big brand? We want to be as big as Netflix in a sense. So when you have the remote control, we're going to have Netflix button, we're going to have Amphy button one day. And a number of people asking where they can see the metrics number. So it's going to be a link in the presentation, and we're going to share the presentation with everyone that attended today's event. And somebody said, [Foreign Language] So thank you guys so much, that means congrats in Hebrew. And again, we are super excited about the product. It was, in a sense, the secret project of the company up until now. But now it's out there, it's part of the community already and it's actually -- it's a big project already. 800 live classes, 200 teachers, thousands of students are taking classes. So this started happening and we're just getting started. So thanks, again, Kovi, for a well-made event, and we're going to see you all soon.