QYOU Media Inc. (QYOUF) Earnings Call Transcript & Summary

Welcome, everyone. Glad to see many of you joining in for, I guess, we started calling these first Thursdays. I guess this is what the third Wednesday or something that we need to change the name. Actually, I want to talk about that real quickly is we're going to stop on the exact first Thursday. And the reason for that is that as many of you are aware, we've kind of been in a quiet period. And the reason I say kind of is that the definition of exactly what's possible via Chatterbox specifically in terms of publicizing things and be QYOU Media as a shareholder but not the direct listing company. It's a gray area. We've chosen to be cautious about that and limiting in terms of the amount of PR and IR and other things that we're doing on the QYOU Media side as the majority shareholder of the Chatterbox entity when it's listed. And so as a result of that, we've been extremely cautious and even I've gotten messages from shareholders about the fact that we haven't been putting out much information or news that has been the reason. Once we get to the approval of the final prospectus for Chatterbox that will sort of open up the floodgates for us to be able to be much more public in our promotion of the entirety of both businesses. So as I've told many of you, you can expect to see a much more proactive and regular drumbeat of news and information that will be coming from both QYOU Media in general, QYOU USA specifically, Chatterbox specifically as we head into the September time period and through the end of the year and going into 2026 and I'll be talking momentarily about sort of why we're excited about that and what's happening in the business. But what we'll do is we will make announcements either in specific press releases, through verbiage like the press release we just put out that announces this call and/or on our Discord, X, et cetera, most of the outlets that we're on. So keep a heads up for that, but we're going to be looking forward to minimum once a month of having calls like this and either pre tapings or live events like this where we're talking to shareholders and updating them. And it probably and hopefully will be even more often than that as we move into the final quarter of 2025 and as I said, into 2026. So -- by the way, I've got some notes over here, the way we set this up today, I'm not able to put up a presentation on the screen. So if I keep glancing over here to look at things, that's why I'm looking to my right. I think the big piece of news, obviously, that came out is that we did receive approval on the draft red herring prospectus. That's the draft of the final prospectus. It's a law. Has been a long and arduous process. We're extremely proud of the entire team and the work that's been done from both our India team, the Canadian team, the U.S. team, the advisers that we've been using, et cetera. It's been said that the India exchange is one of the most difficult ones in the world to finally get approval on and get listed on. We certainly have gone through a lot to get to this point and we are absolutely thrilled and excited about what's happened over the -- recently with our approval and what's happening right now as we charge ahead to get approval of the final what's called the RHP, the Red Herring Prospectus, which is the penultimate document that's used to do everything moving forward up to the final listing and going live on the exchange. So that's the pricing. The commitment from investors, et cetera, et cetera, that proceeds that. So we're looking forward to that process beginning very, very soon. We've been -- we've missed a lot of dates. I know that's been frustrating for both ourselves internally and for a lot of your shareholders or we've had delays or other things that have happened. We think that we're kind of in the point where we're extremely confident and know that we're moving forward here. So we're in that process with the RHP. The reason Raj is not on this call and increasingly, he will be joining me on these calls is because, again, we're in this sort of quasi-gray quiet period before the RHP is approved. But once that happens, we'll let shareholders know and then we'll move into the final processes that are involved around getting listed on the BSE Limited MSE exchange. So after this long wait, the game is finally about to begin, and we couldn't be more thrilled for that. The other thing that I wanted to talk about this morning a little bit is we've received some companies -- for some questions rather, about what's happened with the companies and what's taking place in the overall business. The quarter that we're currently in, which is our fiscal Q3 for QYOU Media, fiscal Q2 for Chatterbox in India, is the first quarter that, as a management team, as a company that we've been fully committed and fully engaged in the business of the creator economy and influencer marketing. And this has come -- is not only a real breath of fresh air for I think everybody in terms of the focus and the progress that we're making and believe we'll continue to make, but also in terms of our ability to be able to really drive the limited resources that we've had and the resources that we expect to grow and continue as we build the business to really focus on this area of growth in the creator economy. As most of you are aware, influencer marketing is probably one of the biggest areas of growth and focus around the world for getting messages out for brands to their potential customers. And we have a running start in this business to put it mildly, in terms of the fact that both Chatterbox in India and QYOU USA here with the headquarters in Los Angeles have been at it for 7 or 8 years now actively in terms of building our business in these areas. We now have assembled a who's who list of blue-chip Fortune 500 clients and partners that were performing marketing campaigns for both here in the U.S. and in India. We are seeing the traction start to really grow in terms of the emphasis that's being put on by brands all over the world to focus on the creator economy. That's also manifesting itself increasingly in terms of M&A activity that is taking place in the space in terms of many of the largest agencies in the world. Publicis being one of them that's been very, very proactive and active over the last 6 to 12 months and is increasing that activity in terms of M&A transactions and growing the power of what they're doing in the influencer space. Why is that? Well, first of all, any of us who are on this call or have kids or anybody who's certainly between the age of 15 and 35 knows that they're stuck to their cell phones, 24/7 and the impact that platforms like TikTok, Instagram, YouTube, YouTube Shorts, X, Facebook, et cetera, WhatsApp are having on influencing purchase intent is -- it just keeps getting bigger and bigger. There's sort of no stopping it at this point. And it's embedded into the fabric of every agency, every brand, every product, marketing campaign that people are looking for. So we're seeing that both in terms of increased spend in campaigns, and we're also seeing the depth and breadth of things that are happening in the space. Again, both here in the U.S. and in India. It's evident in both markets, and it's also a global phenomenon. So as you keep an eye on us and what we're doing, you'll see increasingly more and more campaigns that are globally oriented. One of the big priorities for us going forward is to increase the work that happens between Chatterbox and QYOU USA on a joint effort as we get campaigns that are spread out across the world through North America, Europe, Southeast Asia, really South America all over the world, and we're seeing this more and more. The other thing that we're also seeing is that more and more customers are coming to us for what we refer to as AOR or longer-term deals, AOR standing for agency of record. These are increasing requests from many of the people we're working with, where they want to create a longer and more sustained relationship, not only with us, as the companies they're working with to produce these campaigns, but also with the creators that are involved in doing it. And so we are in both companies, increasingly engaged in responses to proposals that can have 6-, 12-month time cycles in them. Where the goal is to have creators and campaigns that are integrated and tied together and sustained. I guess the word I would use in a much more effective way for a brand to be using that on an ongoing basis. This is another really strong indication that the companies, again, all over the world are looking to use these platforms as a regular advertising medium, much as many years ago, people used television campaigns, print campaigns, even billboard and outdoor campaigns that they might have used to do this is now shifting into the creator space. Those of you who follow the creator economy more carefully and influencer marketing more carefully, might have been reading recently about the fact that there are increasingly more creators that are being directly used by brands or through agencies like our own that are contracted for content deals and more narrative storytelling. Even in some cases, direct television and style shows and programming that are being created that are brand driven. And so all of this is creating a tremendous amount of momentum in the overall shift of ad dollars and spend against the markets and the advertising vehicles that we use at QYOU USA and a Chatterbox. And so this supports a lot of our excitement, enthusiasm and belief that we're sort of in the right place at the right time with established businesses and customers in both places. And we are not giving specific guidance for Q3 at the moment, but we are very confident that shareholders will be pleasantly surprised with the impact of what it's meant for us to not only ride the wave of all these things that I'm talking about, but also as a company, have a direct focus on these 2 business areas going forward. So there's a lot going on behind the scenes. Much of this as shareholders, you will be hearing more and more about. I'm just checking my time right now. And you will undoubtedly, be hearing much more from us, much more vocally going forward than what you've seen over the somewhat frustrating first 8 months of 2025. And so we're all excited about that inside the company, and we are all anxious. We've been at starting gate for a long time here. We're all anxious to be able to get out in front of all of you and both to the existing investor base to a new base of investors here and in India. We expect to see a lot more of you, both personally and in terms of the output of information that you're going to see to shareholders. In between now and when that happens, we will keep all of you updated on progress between the announcement that we just made on Monday about the approval through the actual go-live listing for Chatterbox. We're not giving any specific dates for any of this out yet. We're hoping that we can under promise and over deliver a bit more than we have over the last sort of time period. But we are looking forward to having completion of this very, very soon and sharing news with you about all of that. One of the other things that I wanted to cover a little bit, I had some questions on from people was about what is the sort of time line and process going forward. We have successfully diversified or divested rather, excuse me, divested ourselves of our broadcast channel business in India. We are still running the streaming channels there. We're in discussions with a variety of people about those now, and we have made dormant anything and everything around the gaming business. We are looking to have sort of a bow tied around all of that in terms of receipt of funds from any transactions that were laid around that by the end of 2025, that may drift a little bit in 2026. But from an operational perspective, again, the quarter that we're in now Q3 will be the first quarter that shareholders are able to see results that will reflect the sort of renewed and reborn focus of what we're doing as a company. Q2 which we'll be releasing results for the end of next week will be the final quarter that will reflect any sort of drag and carryover from the preceding quarters because revenue will also be lost from those. There'll be a little bit slight dip, as many of you are aware of, and know in the overall top line revenue numbers that we've had when those businesses were included. We think that's a very, very short-term thing or we know that's a very, very short-term thing. And the bottom line results as we will see going forward here, will be much improved by not having the investment capital that we were using previously to support those businesses kind of dragging us down. So the turn, if you will, of the business from an economic standpoint, we are seeing in real time right now. And it's both refreshing and exciting in terms of the financial impact that this is going to have on our business as we move forward. In addition to that, obviously, the IPO will be fueling more capital into the Chatterbox business specifically. That part of the world, both India, Southeast Asia, UAE, these are areas that are impacted in much the same way that we were speaking about here a moment ago on a general basis globally. That part of the world is also expanding very, very rapidly in the area of influencer marketing. Unilever, which is a client of ours in India, not yet a client of ours here. You may have heard me say previously, their CEO made an announcement earlier this year that Unilever is expecting to spend 50% of their marketing spend for their brand partners in the influencer marketing area and the creator economy. That's incredible. There's never been anything anywhere near that percentage of spend that's happened in the space. And so again, this is why we think that we're extremely well positioned to take advantage of that with all the things that I was talking about previously.

A couple of questions that came in previously that we did not have a chance to answer on the last call -- here we go. Sorry about that. One of the questions was about are we looking to globally expand and where are we going to be? What are the goals for QYOU? Well, the real goal for QYOU is to drive more revenue growth and drive more bottom line EBITDA growth. That's what we're always looking to do. I think what we see is massive opportunity that sits at our doorstep, both in North America. We're doing actually a lot more campaigns for some of our clients in Canada now in addition to the U.S. And obviously, India is 1 of the fastest-growing markets in the world, if not the fastest-growing market in the world in terms of consumer consumption. There was a report that came out a little while ago that I had in my notes. The Economic Times in India projects and you can Google this and look at it online, they project the consumer spending influenced by the creator economy will reach $1 trillion by 2030 in India. These are the types of projections. There's also a study that I think you can get online if you look at it from Boston Consulting Group about the growth of the creator economy in India that some of you may want to check out. These are not things that we're just saying that we're just talking about, these are facts that are being stated and studied by large companies like the Economic Times and BCG that are supporting everything that we've been seeing happen in real time in the marketplace. So I think we're going to be aggressive in terms of what we can do from a growth perspective, but the first place that will be aggressive is in getting more proactive in leveraging greater spend with the clients and partners that we currently are in business with in both territories. As we move forward, we will be looking to expand that in more and more territories outside of those 2 as campaigns that we run, start to expand out into places in other territories around the world. So I think that's the sort of answer to that question. I think I answered the second one as well, which is where do we see the business going in 5 years? We expect to remain focused on this particular market because we think the growth will be extraordinary, but we also expect to be a much larger company along the way. The businesses are both growing in terms of both revenue and profit margin. And so we expect that to continue to build and build and build as we go forward. Someone asked, we had approximately 200 employees in India. With the shutdown of the 2 other business units, we now have about 110 employees in India and we have approximately 35 here in North America. So the grand total would be approximately 145 employees in the combined businesses at present. I also believe I've gotten an e-mail that's come in here a moment ago that might have a couple of other questions. So if you can standby for 1 second, I'm going to look for those. Yes, I think there's some questions about -- specific questions around the share price and the shareholdings, et cetera. We're not able yet. This is going to change very, very soon in terms of information that we'll be able to give around total shares, valuation, pricing, et cetera, of what's happening with the public offering in India. We're not in a position to be able to do that during this phone call, but that's the type of news that we'll be sharing with shareholders as we go forward. We do believe that the growth of both businesses is strong enough and pronounced enough to provide financial results, which will drive the business going forward. As I mentioned, Q2 for QYOU Media this year is the last quarter that we're sort of in that transition of getting out of the drag from the businesses that are gone now and into the focus that we've been in since the beginning of this quarter in both markets. So I think shareholders will be seeing all of that. We may give some limited guidance before we report the end of Q3. We haven't made decisions on that yet, but we'll see. Nevertheless, with that sort of vague answer to your question, which I apologize for, but just can't say more than that now. The bottom line reality is that we feel that we're massively undervalued at this point. We're not even trading as a company as a valuation at 50% of our revenue. And as most shareholders have seen, we've been increasing the results, financial results, quarterly going forward, and we will continue to do that, particularly with Q3 of this year. So the bottom line is that through the financial performance of the businesses as we move forward, the listing of Chatterbox, the increased amount of visibility that you'll see from us, from both a PR and an IR perspective, I plan on being over in India in the month of September and working with Raj on all these fronts. We -- I also intend very likely on doing a roadshow across Canada and a couple of cities in the U.S. in the October, November time frame. So basically, a lot of the things that we think are necessary and important to do to drive the visibility of what we're doing as a business going forward will all be happening and the frustration that I've had personally and that a lot of you have had as shareholders of the lackluster share price, the lack of information and news coming from us, I'll say it again, the train is about to leave the station. So you'll, I think, be much happier with the flow of news that's coming, the positive aspect of that news, and I think you'll be much happier ultimately with the results on the value creation that comes from people recognizing about what our business is. So Jace is walking in. I think that's about -- there's another question here, what percentage of draft prospectus. Part of the process that we've been in with this prospectus is that there's been a much stronger tightening of the exchanges in their reviews and in the notes and what they call the queries that come back about the draft prospectuses that are filed. So the number of companies that get through the process has gone down dramatically in the last year, 1.5 years. So we're very fortunate to have gotten to this point, and it's part of the reason that it's taken so long to get here. In addition to that, what I'll say, and we said this way back in February when we originally filed, not sure if people realize that we qualify as what's called a QIB investment for Chatterbox in India, which means a minimum of 50% of our investors have to be institutional investors. That's not something that every small-cap MSE company receives in the public markets in India. That's a feather in our cap for the faith and belief that institutional investors have and what's going to happen with our business going forward. So the reaction in the India market to us being approved has been very, very strong. And again, we're super confident that the momentum that's going to start to get generated here in a very, very short time period is going to be something that all shareholders are going to benefit from and be happy about. It's been a real challenge to get to where we are today. We've been cash strapped for a long time. We've been limited in terms of the news that we can put out. And these are things that we're welcoming to see change in the last part of this year and going forward. So that's going to be a wrap on today's presentation. We will, again, be putting out more news that you'll be seeing from us and we will hope that all of you as investors can get much more exciting about what's happening for us going forward. So thanks so much for joining us this morning and keep your eye QYOU Media. A lot of good news is about to come. Thanks so much. Bye-bye.