Fadel Partners, Inc. (FADL) Earnings Call Transcript & Summary

Good morning, everybody, and thank you for joining us for Fadel's 2023 Results Presentation. I am Tarek Fadel. I'm joined with Ian Flaherty, our Chief Financial Officer. Next slide please. Just as a of way of background, I'm the founder and CEO of the company. I've got 29 years of enterprise technology experience, particularly in the business-to-business software sector, 6 years of those were spent at Oracle in both product management as well as professional services and business development roles. A technical degree and the business degree by way of background and I've been the founder and CEO of the company for a little over 20 years now.

Hi, everyone, Ian Flaherty. I recently joined Fadel in February, a couple of months back. I'm a New York license CPA, previously held the role of CFO with LogicManager Inc. For the better part of the last decade, I've spent time in various financial management roles in a variety of SaaS and technology businesses, both publicly and privately listed companies and very excited to be part of Fadel.

Next slide, please. So when we look at the company at glance, we effectively develop cloud-based software, focusing on helping clients manage their intellectual property and content distribution rights and any associated licensing and royalties. In addition, we offer a digital brand compliant solution that's really focused on helping the large brands stay compliant with their marketing content. We will get into some of those details in a bit. So what we do really is work with IP intellectual property owners, known as licensors, as well as with the users of those licenses, known as licensees to actually help manage and calculate and track the royalties that are associated between those licensing transactions. And then we also help brand owners manage their brand intellectual property and marketing content and figure out how to properly use it in the context of marketing and CapEx. We have historically worked with large multinational companies, the customer that speaks to itself. This is just a sampling of our customers across our product portfolios. And traditionally, they are large enterprise customers with complex businesses that have some form of licensing as part of their business model. The company has been on an aggressive track record of revenue growth. So over a 5-year period, we've averaged at 29% CAGR. And we continue to grow and win new business and put new solutions out to the market. As part of our sectors, we traditionally focused on predominantly young consumer brands and publishing and the IP management side of the house. We've also done marketing, media, technology and gaming. And when we introduced became our brand vision product line, we brought the horizontal focus to the market, meaning we are working with the same solution set across industries, tackling the marketing and advertising campaign licensing problems that these companies are facing. Moving forward, in addition to continuing to work with Blue chip customers, and we're growing the list of customers. We've also recently introduced a mid-market offering that leverages our vast knowledge of the licensing space that we've acquired over the last 15 years, and we're opening up the mid-market licensing world, and we'll talk about that as well in some more detail. But we're very excited about also now being able to address the mid-market offering where there's thousands of licenses globally to actually offer us solutions to. Next slide, please. So since IPO, and as many of you may know, we IPO-ed last April 2023, raising GBP 8 million on the AIM exchange. We leveraged a lot of that capital to do several things. One is to bring new solutions and packaged solutions to market that both have a very large addressable market size, brand vision, which is a platform that helps marketers understand their marketing content where the usage rights fall for that content and allow us to track that content for them to ensure that it's adhering to their requirements and to their brand guidelines and content guidelines. We also brought forward a product offering LicenSee, which is focused on mid-market licensing solutions. These product offerings have helped us through 2023, mainly the second half of 2023 focus on winning new business as well. Some of the new client wins, you can see here, Sanofi, PepsiCo, Kimberly-Clark, Philip Morris, and Super7 are significant wins, many of them very large global customers that have a need for either one of our solutions. In terms of sales velocity, we've been executing well on our sales velocity metrics. Since the IPO, we were seeing a 43% increase in our pipeline since September. The number of monthly net new opportunities have quadrupled since -- from January 2024 to April 15, and that's driven by an expansion of our business development representative teams. Our website visits are up by 82% comparing H2 2023 to H1 2023. And so we're seeing a lot of positive movement both on the marketing, lead generation and sales front, and that's also partly due -- mainly due from us increasing our head count across those teams significantly. So it close to quadrupled the headcount across the sales and marketing teams since the IPO. That led to very solid 2023 financial highlights, where we saw a 31% increase in recurring revenue, a gross margin improvement and Ian will go into some of those details and then more than doubling the customer count across our brand vision product line. Next slide, please. So when we look at really the problems that we solve for our customers, the market drivers really are along the lines of us managing, helping customers manage complex licensing contracts. And those licensing agreements when you think about intellectual property licensing or content licensing, there's usually what is known as usage rights. So what can you actually do and not do with the content and that intellectual property, how can you distribute it? Where can you distribute it? And then also, what payments and fees are due from that usage? Is it a onetime payment? Is it a recurring payment that happens monthly or quarterly or semiannually, et cetera? And when you look at the ecosystem itself, it's not hard to see that, the dual content is multiplying. And companies really not as equipped to manage how fast and effective that content production and the content pieces are actually multiplying. And content can really be in any form, could be across the form of images, books, videos, media and gaming, images of talent, voice over, music, et cetera. And so the other scenario that we're seeing play out is that large brands are increasingly bringing in their marketing and advertising functions in-house, whether they're setting up in-house agencies or digital in-house agencies or exclusively hiring specific agencies to work with them. And what that's leading to is a fragmented market with very limited end-to-end solutions. And so these large brands, and some of them are some of the largest CPG companies, consumer brands companies, beauty companies, et cetera, are realizing that you need systems to be able to run and manage your content creation, your content distribution and to police your content. And effectively, they realize that as they bring these functions in-house so that they have more control over their content and their brands, they need systems to go along with it. And that's really where we come in with our brand vision product offering. A typical ecosystem that we go into is one where there's no automation in their manual processes and lots of people required to do the job or there's discrete software systems that don't already talk to each other. And the clients are realizing that, that current state can scale to meet the future needs of the content exposure that they're having to deal with. So when we get that calls, we get calls from our customers saying, "We're infringing on someone's copyright license, whether it's a photographer or talent, owners location or a model, et cetera. And we are not doing this knowingly. And we just need to settle a copyright infringement lawsuit,and we need to get our systems right." And we've gotten many of our customers who called us some of the largest brands in the world with these types of problems. On the other side, around royalties, we have quite a bit of customers who are managing their royalty processes, but either in antiquated systems or an excel spreadsheets. And that leads to incorrect calculation of royalties, incorrect payments of royalties, payment delays and so which all leads up to very inefficient costs and time spent on chasing down mistakes and errors that effectively can lead to either expensive audits or overpayment of sums, too. There's plenty of examples around disputes that have happened with our clients prior to them becoming our clients and with other companies around the world where the compliance risk is increasing quite a bit as more and more licensing is happening and more digital content is being distributed around the world. Next slide, please. So one of our solutions that we're talking about today is a Brand Vision. And Brand Vision is really a 3-pronged platform. It contains a digital asset management capability, which allows our marketing customers to centralize and manage their brand assets, their images, their videos, their music, their voice overs, et cetera, and make them easily searchable and shareable with stakeholders across the company. On top of that, we have a digital rights management capability that allows these companies to see the rights and introspect the rights that's associated to the content. And so when I think of that image, for instance, that we have here from Kohler, there's model rights, there's photography rights, there's stylus rights that are all in this one image. There might be agency rights as well, and they are not all the same. And so being able to have a sophisticated cloud-based solution that helps you manage the talent, the agreements for that talent, the rights for that talent and then map it back to your digital asset has proven to be a key differentiator in the market. And we're one of the very few companies that's doing this fully integrated. And last but not least, we presented and created an AI-powered content tracker that we've been working on for several years now that allows marketing brand managers to find their content on websites, e-retailer sites and social media sites. And so we've worked quite a bit to create connectors onto social media sites such as Instagram, Facebook, TikTok as more and more video advertising is happening in addition to standard image advertising. And so what we found is that with that in 2024 -- sorry, in 2023, we introduced a video tracking capability as part of our solution as well that allows brand managers to match images and video, video against video, and that's getting a lot of attention because there are not many solutions in the market that do this type of matching in the context of securing copyright compliance. And that's directly resulted in a lot of inbound activity that comes to us from our outreaches and where you see, for instance, on licensing growth for -- ARR growth in that product line is 53% year-over-year from 2022 to 2023. We've more than doubled the number of customers and predominantly blue chip customers running on the system and are either already deployed or deploying the system globally to many of their brands. If we skip to the next slide, please. So I'd like just to take a moment to talk a little bit about the capabilities of video tracking, and some of this technology came to us through an acquisition that we made in London in late 2021 with Image Data Systems that's allowed us to also introduce a digital asset management offering, plus an image and video tracking offering. What it effectively does is it helps you find videos on web, social and e-retailer sites and be able to understand if an image or another video is actually being played in that distribution. And why is it key because it helps brands stay compliant with ensuring that they're not misusing talent assets, if you will, or images or videos, and any initial marketing activity that they're doing across any of the social media websites and e-retailer sites that they work with. So one of the things we're also doing in late 2024 is we're going to be introducing audio matching inside the video. And so the brands are coming to us today and saying, "We, in many instances, in many cases, localized brand managers in country are swapping music tracks, and they are playing local artists in their 30 seconds or 1 minute TikTok video or their Instagram video, and many a times, those are licensed." And they're hearing from the record labels and the record labels are using technology to find existing assets that are not licensed. And so the brands in an ongoing effort to protect the brand to ensure that they are copyright compliant also want to know what music, whether it's a melody or whether it's a full song that's actually playing in their online videos, especially if it was developed by an agency or another localized brand manager that has done it notably. And so that's one thing that we're also introducing in Q4 of this year. And we're looking for continuing enhancements about this track. Next slide, please. If we move over to the IPM suite, which is the rights and royalty core management product, just as a refresher, effectively, it helps clients manage license content and IP, both from a rights perspective and a contract perspective, but also helps calculate the royalty billing that's viewed from that relationship, whether it's outbound royalties. So I'm licensee and I'm paying out my royalties or inbound royalties and I am licensor and I am collecting royalties based on my license. The space is complex because the agreements are complex. And our system uniquely runs in a cloud-based hosted deployment and is able to accurately calculate royalties against the multitude of rights combinations and contract terms. And in many cases, when we're implementing this in large enterprises, we're integrating to their other systems like their ERP financial systems, their forecasting systems, their CRM systems, et cetera. And so we become a system of record, which is typically a royalties financial system. And the churn is super low in that space because, as you can imagine, once you are putting and contracts are migrated into your platforms, clients effectively want to make sure that they stick to the platform. And so last year, in 2023, we've seen a 44% license ARR growth in the IPM products, and that's a combination of new customer wins as well as expansion that we do specifically in our existing customer base, whether that's selling more services or more support or more license metrics at the client. Moving forward, we're seeing this year a really good opportunity in the educational publishing sectors where educational publishers are trying to automate their licensing agreements with their authors and with their distribution partners so that they can properly assess what royalties to pay their authors based on not just direct book sales, but also content library sales. Next slide, please. As I mentioned earlier, we brought to market a new offering called LicenSee, and that just released in early March, so very new. But the LicenSee is really a configuration of our IP management platform. We've leveraged the 15-plus years of experience we have in the space to preconfigure a version of the IPM suite and offer it to mid-market licensees. And so this is a new product, a new solution offering, leveraging IPM suite, launched on 29th of February. In 8 short weeks, we've had over 18 meetings, of which 6 went into the pipeline, 1 already one, which was out of way over a 3-week sales period, which has been the shortest sales period we've ever seen in the company trying to sell these products. The reason for that is it's a highly repeatable mid-market SaaS play. It has all the standard SaaS business model elements, short sales cycles, quick implementation. We've lowered the implementation time to be 5 days, all remote, and then has a great potential for future channel partnerships to accelerate growth even further. And we think the total addressable market for this product is quite fast. There's thousands of licensees around the world that think then this is very specific to consumer products licensees to deal with the likes of the Hasbros, the Disneys, the Mattel, the Warner Bros and have to accurately manage the agreements, calculate the royalties, generate the statements and the payments in a very specific format that these licensors need. And today, most of these licensees use Excel and bookkeepers. And so we're helping them automate that process and make them ready for -- if they were to get selected for an audit by the licensors to have the information at their fingertips in order to support an audit process, which today can take upwards of 6 to 12 months for a licensee to be able to properly support an audit process. So very excited over this innovation and super excited in that there wasn't a huge R&D effort to get here because it leveraged our core product and knowledge, and it was a packaging of this new SaaS platform. Next slide, please. So I'll touch quickly on just our revenue model, pivoting to a more focused SaaS model. But today, the client -- the company has an enterprise cloud hosted software offering and a SaaS offering. And the cloud hosted offering is specific to two product sets, the IP management suite and the PictureDesk Private deployment. And typically, the license deals are 1-year license agreements that are highly renewable. They are larger deals and they range between $250,000 and $500,000 per client per year. Usually, they bring with them billable professional services for functional implementation of the software as well as technical integration. When we're going in and working with a large publisher or a license solar or licensee, it's not uncommon for these services contracts to range between $0.5 million and $1.5 million of value over a 12- to 18-month period. And then after that, we offer support services and that basically is an extended support offering on top of the traditional product support. On the flip side, on the SaaS offering, which are the brand vision products, the LicenSee product set and the PictureDesk Public deployment basically is a pure SaaS subscription model, their annual or multiyear agreements and the price points will range anywhere from $20,000 a year, if you're selling to a smaller mid-market licensee, all the way up to $300,000 a year if you're selling to a multinational brand vision client that's rolling out the solutions to a multitude of countries and business units. The billable professional services are small compared to the large IPM enterprise deployments and they'll range anywhere in contract value from $5,000 to $75,000, again, depending on how large that deployment is. And so when you look at both of those effects of the revenue models and sales, what that did was it helps bring our recurring license and support services up to 79% of our overall 2023 revenue and help increase the recurring revenue in 2023 by 31%. And so effectively, just to note that the SaaS offering and support is amortized over time over the term of the contract and the IPM licenses and PictureDesk Private are recognized upfront as part of that term license because they're hosted products. And then the services are recognized as incurred. Usually, the large sort of deployments are fixed-mix type statement agreements that get recognized on maximum basis. And that's really the different types of recurring and nonrecurring type of revenue items that the company supports today. Next slide, please?

Great. Thank you, Tarek. We'll move now into our FY 2023 financial updates. This page represents the kind of large areas that we're really excited about, key being, as Tarek mentioned, revenue grew to $14.5 million, which is a 10% growth over 2022. But one key data point that we're really proud of is the growth in our recurring revenue by 31% to $11.4 million in FY 2023. This is driven largely by the expansion of our SaaS product offerings, which is an increasingly important metric to us as a company. Within Brand Vision, this was really pure client growth, 125% growth in our customer count. On the IPM suite side, this is really a representation of our land and expand strategy, where we grew revenues with our existing client base through upsell opportunities, regional expansions and other services-related revenues. From a gross margin perspective, we grew that to 62% from 60% in the prior year. With our focus on our SaaS product offerings and growing those in the coming years, we're really excited to see this gross margin continue to grow. We expect for 2024 to be somewhere in the 65% to 70% range, and we see this continuing to improve as time goes on. From an EBITDA perspective, we generated an EBITDA loss of $2 million in 2023, which is a bigger loss than 2022 of $1.5 million. This is largely driven by increases in our SG&A expenses primarily, selling and marketing that Tarek mentioned, which is really a key pillar of our IPO fund raise. So we're executing on our strategy. The decline in EBITDA was in line with actually ahead of market expectations at the time of our IPO. But the key story here is we are operating in line or ahead of the plan for 2023. Net loss, we had a net loss of $1.5 million, which is an improvement from the $3.5 million in 2022. This is primarily -- the delta there is primarily a result of some benefits in FX as well as in taxes where we have a significant $700,000 tax refund, which we recorded and expect to receive later in the year. We ended the year with net cash of $3 million, which excludes $200,000 of loans payable. Additionally, we had significant improvement in our current assets, largely driven by a $3 million increase in AR and decreases in our payables. We can go to the next slide. Just some of this repeats from the previous slide, we've hit the key points here. So I'm just going to discuss some of the key areas here that we haven't already covered. We didn't mention on the previous slide, although total revenue increased by 10% and recurring revenue increased as well, we did see a 31% decline in our service revenue, which is really a reflection of the successful completion of some large implementation projects in early 2023 and then some postponements or delays of projects that we had anticipated to start in late 2023. Early indications in 2024 have been really positive. We're seeing a lot of these projects come back to life and start. And we have a big slate of pipeline projects that we're hoping to tackle later this year, and we're anticipating this number to go back up to about $4 million during 2024. From an R&D perspective, we saw a 4% increase from '22 versus '23. When we think about R&D internally, we've invested heavily in this area over the years. I'd say we're comfortable with the level of investment we have in R&D, and we think it's sufficient to fund the aggressive product pipeline that we have planned for 2024 and onwards. We don't see significant additional investments required in this area in the next 18 months or so, but we're always monitoring to ensure we can adapt and make sure our IP is being updated and best-in-class. From an SG&A perspective, there is a 24% increase in SG&A. Again, this is primarily due to the expansion of our sales and marketing organization as well as some investments in our general and admin functions, just to make sure we have all of the people, resources and vendors necessary to maintain our public company reporting requirement. Next slide, please. From a balance sheet perspective, the key theme here is just overall working capital improvement. We raised cash, obviously, as part of the IPO. During the year, we have increased our accounts receivable and our unbilled balances by about $3.2 million. This is primarily a function of timing. We had a number of renewals and projects kick off right near year-end. So we had done the work, but haven't had time to bill and collect that yet. As of today, we've now collected the majority of the unbilled AR about 90% of that. So we expect that balance to be a bit lower when we report our interim statements. The other point here is at the end of 2022, we had about $1 million of payables primarily related to IPO expenses that were sitting on the balance sheet. We've now paid those down, so across the board improvement in working capital. Next slide, please. Yes, we've touched so much of this already. Key items I'll call out on the cash flow is, we had $700,000 of payments during 2023 related to a final payment for the IDS acquisition. We paid $1 million down on our credit line during 2023. That credit line has now been renewed for another year. So we maintain the credit line. We have access to it. We have no current balance outstanding on it. Overall, as we move through 2024 and into 2025, we are projecting to end 2024 with about $2 million to $2.5 million of cash on hand. During 2025, we do expect to bridge to EBITDA breakeven. And just to note on our billing structure, although we are pivoting to a SaaS model for some of our products, that revenue recognition under SaaS model is going to be a bit delayed from our traditional licensing model. Under the SaaS model, the revenue recognition would have been pro rata over the year. However, the billings for all of our SaaS products or the vast majority of our SaaS products are upfront and annual. So we do expect cash benefit through late 2024 and into 2025 as our now rent sales team continues to execute on our strong bookings targets for the year. Next slide.

So in our strategy that we put forth upon IPO was really to do 4 main things. One was to focus on winning new customers; two was to focus on the upsell and cross-sell into the existing potential customer base that is a very relevant growth strategy for us as well; three was to continue to just scale the company, so scaling the company across new hires, new technologies, both geographically and by different industries; and then the fourth was to continue to develop new product offerings and obviously, to continue to be the innovative company that we've always been. So I'm very happy to report that we've made some tremendous progress throughout 2023 and into 2024 on all those fronts where we've won some significant new customer logos and some of the largest of the large in their respective industries, accounts like Pepsi, Philip Morris, Sanofi, Procter & Gamble, Kimberly-Clark and more recently in 2024 on account side with Europe Post and Alexander McQueen, one of the largest audio companies as well in the world has just recently signed up for our Brand Vision react offering to manage their marketing content and all of the rights for their marketing content globally. So we're seeing tremendous wins across the net new customer base. These are customers that not only offer an opportunity to utilize the product, enhance the product, but then also jump right into the second pillar, which is selling more to existing customers because we have more products and capabilities to sell them. And so we -- and many of these contracts are multiyear in nature. With regards to selling into more existing customers, we've always been very focused on how do we provide more valuable services and features to our existing blue chip clients. And that's led us to either develop new capabilities that we're able to further license, whether it's a new product offering or a module inside of the core product offering or also selling them additional licenses and support services or new projects as they roll out our software globally to other business units around the world. And so we continue to do that, so both of those are coming along. With regards to scaling our platform, we are now -- since IPO, we have hired 13 new sales and marketing hires including a Chief Revenue Officer. And so now we have a team of 15 people that day in and day out are marketing the company and its products creating demand generation and lead generation and then managing a pipeline of opportunities and closing deals. It's the largest number of sales and marketing resources we've ever had. We've put systems in place, processes in place, metrics in place, growth plans in place. We are also looking at hiring an additional few people on the sales side this year, hopefully, in Q2 per our plan to continue scaling the platform, not just in 2024, obviously, but beyond. And then from a new product development offering, we continue to be very innovative with our products. We listen to our customers. We prioritize enhancements. We bring new modules to the table, and we've done 4 new product releases across both IPM Suite and Brand Vision platform year-to-date. We are constantly introducing new features and functions rolling out and new capabilities to help scale the platforms and keep them secure in the cloud. And that's across the 3 product lines that we have, IPM suite, Brand Vision and PictureDesk. Next slide, please.

Great. And just to wrap up on our summary and outlook. Since joining as CFO a couple of months back now, I've had the opportunity to do a full deep dive into the company's financials, the market, the outlook and the pipeline. We're all really excited about the opportunities, the inbound flow that we're seeing from customers, the feedback that we're receiving from customers that have installed and gone live with our product. That said, with our pivot to the SaaS model, we are anticipating revenues to come in a bit later than expected. We reduced our 2024 revenue forecast from $17.6 million down to $16.25 million. However, through conscious cost control and investing in smart areas, we've been able to maintain our 2025 -- sorry, 2024 EBITDA at $1.9 million, which is in line with market analyst expectations. 2025 onward, we've also adjusted our revenue target down. But again, we're planning to maintain through conscious cost control and due diligence, our diligence on our finances, breakeven EBITDA in 2025, which is materially in line with the EBITDA that was projected at the time of the IPO. 2024, 2025, we're expecting revenue growth rates to still be between the 10% and 25% growth. As indicated earlier, our gross margins are still improving from 62% in 2023 to between 65% and 70% for 2024 and 2025. We're really excited by the ramping of our sales team during half 1, 2024. We feel like we now have the team in place, they're ramped. They're trained. During Q1, we saw a really healthy pipeline come in when we've met our bookings target. So we're really optimistic for our bookings to reach our bookings target for the year, although with a higher percentage of SaaS products in that mix driving the delay in revenue recognition. As mentioned earlier, we're really happy with our R&D team, the head count that we have in place and the resources that we have. We don't see the need for significant incremental investments in R&D, and we plan to execute on our aggressive product road map in the next 2 years. Just to close out, the company still strongly believes in our Fifty in Five, which we reported at the time of the IPO. This is primarily -- we plan to achieve the $50 million of revenue within 5 years by our core goals of landing new logos, expanding with our existing clients. We're going to continue to assess new product offerings in the coming years. Right now, we're focusing on growing our recently launched LicenSee offering as well as continuing to expand in content tracking, as Tarek referenced earlier. And we're always considering new acquisition targets, nothing currently in conversations right now, but we're monitoring closely. And if we find something that we think is the right fit for us in the years to come, we will consider an acquisition. With that, I think we can move on to Q&A.

Thank you. We will now begin the Q&A session. [Operator Instructions] So our first question is for Ian. What have been your first impressions since joining the group?

Thank you. As mentioned, joining during the annual reporting process, I've had the opportunity to do a real deep dive into the finances, the products, the pipeline as part of the forecasting process. I'm just amazed at the talent across the organization, from the Board down. We've got the right people, the right industry experience, the right technology experience. From a customer perspective, I'm just thrilled to see the product market fit that we have. We did get excellent references from our clients. Our offerings solve real-world problems. They save our clients money both from an operating expense perspective and also from a risk perspective when it comes to audits and things like that. Although we are temporarily resetting some of our revenue expectations, ultimately, I think our focus and pivot to the SaaS side of our product offerings and focusing on growing that is going to drive real incremental value growth in our stock in the years to come. So I believe it's the right decision at the right time, and I'm just very optimistic about our growth in the next few years.

Next question is, how will you accelerate growth in future years?

So I think as you've heard throughout this presentation, we have very focused growth acceleration strategies, both in terms of adding net new logos and net new client wins in addition to upselling and cross-selling, especially inside the enterprise and obvious set of clients that we have. And so one is, there is a very keen focus on increasing SaaS revenue and the SaaS product offerings, particularly Brand Vision as well as LicenSee. And the other is to continue to be as sticky as possible within our current installed base providing more services, more support, and then obviously, more product offerings to that install base.

The next question, how are you planning to market LicenSee to the large addressable market of licensees? Are there any industry events you can attend?

Absolutely. So we are actually participating in the licensing expo that's happening in Las Vegas in May towards the end of May. We're going to be exhibiting as well as participating in conversations and panel discussions. And we've already started actively marketing to the licensees really globally with an immediate focus on the U.S. and Europe where we have offices effectively. So the great thing about the LicenSee offering is that it is completely based on fast and scalable, proven IPM suite technology base. And what that also means is that it's already multilanguage and multicurrency enabled. And therefore, we are not only focusing on the U.S. market, we're also focusing on the European market as well and the future markets with Asia and Latin America. But we are also actively -- we've become active partners with the Licensing Global Industry Group (sic) [ The Global Licensing Group ] which has a lot of publications, were recently published in their April publication, and we are using them to do webinars, reach out to licensees. The other advantage that we have in this space that no other company has is the fact that we have large licensors who are already using our platform. So companies like Hasbro, like Mattel, like Bandai Namco, like Disney that are already using our platform and the licensees, there's a very large overlap between the licenses, licensing from those companies. And so it's very common that we're talking to a licensee that already is using our software while they're uploading their reports into one of those products. And so it becomes a much easier conversation using yourself. In 2025, we're looking at expanding the channel partnerships as well for LicenSee and leveraging channel partners to and creating a reseller network of partners that can also indirectly sell the products into the market.

Next question is, there seems to be a lot of excitement around content tracking. How big can that be?

So we believe that content traffic can be very big, meaning that its addressable market size is quite large. When you think about the way we're coming at it at least today, it's meant to help protect the brands in their marketing content effectively. And it's a post-production and post-distribution play where once you've already created the content and cleared the content for use and you've distributed the content on all of your social and digital channels, today, there's no one really producing that content for you. And so when you think of every individual client that we already have on the platform and the way that we're targeting, we are mainly targeting large global clients that actually market to consumers. So this would be consumer brands that are spending hundreds of millions of dollars a year on content production and distribution, where they're also engaged with large talent profiles, brand fleet profiles, brand ambassador profiles, models, actors, actresses, et cetera. And so household names, Coca-Cola, Pepsi, Kimberly-Clark, L'Oreal, Whirlpool, and it's across industries. So it's a very large total addressable market. It's only growing because there's 2 things that are happening. There's more digital cutting created and there's more digital distribution channels that are evolving. Every few years, you get a new platform that becomes the next hottest platform. And the interesting thing about the growth of these platforms is that these platforms are more focused on a different geographical distribution as well as age distribution. And so when a company like Coca-Cola markets on TikTok, they're marketing to the younger audience; when they market on Instagram, they're not getting to the mid-aged audience; when they're marketing not Facebook, they're marketing to the mid-age plus the older-aged audiences. And then there's new evolutions of those platforms that constantly come out. Therefore, that need only grows over time because the content is growing exponentially, but so in distribution channels and no one's fully seen on, and that's where we're coming at.

Another question about LicenSee. So what milestones and client wins should we expect to see from LicenSee?

Great question. So we're very bullish on LicenSee. As I mentioned, we already secured 18 meetings in a matter of under 8 weeks. We have 6 deals that we were working in the pipeline, one of which already closed. We have another 5 deals that were working in Q2 into early Q1. So we're looking to actually increase the sales capacity to be very specifically focused on LicenSee for mid-market sales as well as looking to have between -- right now, our internal target is 20 to 30 accounts by the end of the year for this fiscal year.

Perfect. I think that's it. There are no further questions at this moment. So I will hand back over to the Fadel team for closing remarks.

Thank you. So we'd like to thank everyone who attended the call today or who may be listening to the call later. We're very bullish on the growth prospects of the company as we've always been. We've been -- as you can see from all the updates that we just went through, we've been very focused on our four main areas of growth while continuing to be a very innovative company and a technology-first company. And that's part of our DNA. We are also very focused on trying to identify how do we invest to grow while also keeping an eye out on our overall cost and expenses, and we're trying to find that right balance of the right type of growth with the right gross profit margin as well as ramping up the go-to-market sales and marketing machines, which I'm happy to report a year after the IPO, I see us well on our way in terms of having developed the solutions, the systems, the processes, and now we're able to just add more salespeople, get them trained. We've developed curriculum for their training by product area. We're putting them through certifications on our products and then also training them on all of the technologies that we're using for marketing and new generation and effective means of reaching out to prospects. It's working, it's moving forward, and we're very bullish on the prospects of the company over the next year to 2 years as well.

Thanks, everyone.