Earnings Transcript for PALT - Q2 Fiscal Year 2023

Operator: Good day, and welcome to the earnings call for Paltalk's Second Quarter ended June 30, 2023. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Jason Katz, Chief Executive Officer of Paltalk; and Kara Jenny, Chief Financial Officer of Paltalk. Kara, the floor is yours.

Kara Jenny: Hello, everyone, and welcome to the Paltalk operating and financial results conference call for the second quarter June 30, 2023. By now, everyone should have access to the earnings results press release which was issued earlier today at the close of market at 4

Jason Katz: Thank you, Kara, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. We will discuss our operating highlights and financial results for the second quarter ended June 30, 2023. Additionally, we will provide an update on our business and near-term business objectives. After my opening statement, our CFO, Kara Jenny, will give a summary of our financial results for the second quarter ended June 30, 2023. Following our prepared remarks, we will move into the Q&A portion and answer any questions that were pre-submitted prior to this call. With that, I would now like to walk you through the recent highlights and near-term business objectives. We are very pleased with our return to revenue growth and profitability during the second quarter. All of our attention and effort to optimize our platforms and streamline our costs have paid off and improved our foundation. Our infrastructure is capable of supporting additional business. So if we continue to expand revenue, we are confident that it would result in increased profitability. We believe that this business scalability, along with $13.7 million in cash on our balance sheet at quarter's end puts us in excellent position. We have already met one of our key objectives for 2023 with our return to increased revenue. Additionally, as we surpass the one-year anniversary of our asset acquisition of ManyCam and with the successful integration of ManyCam into Paltalk, and our team's effort in developing a new and easier-to-use version, we expect the one-year annual auto renewals of existing ManyCam subscriptions to help contribute to growth in subscription revenue in future periods. While our trial against Cisco was pushed back to an expected trial date in the fourth quarter of 2023, the court recently denied Cisco's motion for summary judgment and we look forward to continuing to defend our intellectual property. We are proud that we already reached some of our stated near-term business objectives as we achieved almost 12% revenue growth and return to profitability with positive net income during the second quarter. Our additional near-term business objectives are as follows

Kara Jenny: Thank you, Jason. Our results of operations for the three months ended June 30, 2023, were as follows

Q - Kara Jenny: The first question, can you comment on why the Cisco Webex trial has been delayed twice and pushed out to December?

Jason Katz: Like any plaintiff in a lawsuit, we are subject to the scheduling of the court as they control the calendar. We're pleased that the court denied Cisco's motion for summary judgment and stated that the trial is expected to be reset for December.

Kara Jenny: Are you still actively looking at bolt-on acquisitions? Can we expect something by the end of 2023?

Jason Katz: We are still active and are looking for the right acquisition with our advisers at Roth Capital and although we'd like to complete something as soon as feasible, we will not rush the process. We are committed to finding a deal that will enhance shareholder value.

Kara Jenny: The last question; when will ManyCam be marketed to Paltalk and Camfrog subscribers?

Jason Katz: Well, we recently launched a version of Paltalk that has ManyCam functionality and we continue to message users about the numerous benefits of ManyCam.

Kara Jenny: Thank you. Jason, back to you to close out the presentation.

Jason Katz: Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market and our stockholders with our progress on our business objectives, patent litigation against Cisco WebEx with the trial now expected to start in the latter part of the fourth quarter, and potential strategic accretive acquisitions, which we continue to identify and analyse. Have a great day.

Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.