Crowd Mobile (ASX:CM8) 1H18 results and outlook


by Jessica Amir

Crowd Mobile Limited (ASX:CM8) CEO, Domenic Carosa, talks 1H18 results, growth in the company's content, and adoption of services by leading brands with the rise of social media.

Jessica Amir: Hi, Jessica Amir for the Finance News Network, joined by Crowd Mobile CEO, Domenic Carosa. Domenic, welcome back.

Domenic Carosa: Thanks for having me again, Jessica.

Jessica Amir: For investors new to the company, just give us a quick introduction.

Domenic Carosa: We're a mobile entertainment and digital media company, where we monetise our products across social media and digital influencers.

Jessica Amir: Turning to your first half 2018 results, give us the highlights.

Domenic Carosa: We're relatively pleased with our December half results. We generated revenue of just over $21 million, EBITDA of $2.4, and strong operating cashflow of $2.6 million. Importantly, unlike 18 months ago where we did have quite a lot of debt on the balance sheet, our net debt is now at around $1 million, so we've really done a lot of work in strengthening our balance sheet.

Jessica Amir: Now, to more detail on each division, starting with Crowd Mobile.

Domenic Carosa: Revenue was up 20 per cent. Underlying EBITDA was up over 45 per cent. We've had some challenges in our subscription division, some headwinds, so to speak, which we're currently addressing. Revenue and EBITDA were both down in that example.

Jessica Amir: Can you give us an update on your other division, Crowd Media?

Domenic Carosa: Crowd Media is effectively a startup. We launched that at the start of the financial year. We've made a significant investment in that business, and that includes our agency, Crowd Agency, as well as our digital influencer platform, our CRM. We're expecting revenues to start flowing in this half and in FY19.

Jessica Amir: Operationally, what were the highlights for each division?

Domenic Carosa: Our Q and A division within Crowd Mobile performed exceptionally well. That was really the standout performer. That was really driven by our continued investment in AI, artificial intelligence technology. Around 18 months ago, zero percent of all the questions were answered by AI and now, for the last half, we're approaching 30 per cent and in this half, it's actually grown further. AI really allows us to answer questions faster and also helps improve our margin, leveraging AI and machine learning.

We're quite pleased with the performance of our newly established Crowd Media division. Our agency division,, was able to sign a number of large multinational clients, including Nestle and Nescafe on numerous ongoing campaigns, so we're quite pleased with the traction we've had in that new division and we're expecting further traction and deals in the second half.

Jessica Amir: Domenic, what's your strategy for each division, and how is it progressing?

Domenic Carosa: The strategy for our Crowd Mobile division is to in effect take our existing products that we've created and to continue launching them into new markets around the world.

The strategy for Crowd Media is to really become deep and dominant in the digital influencer space, both across our B to B agency, i.e. servicing third party brands, as well as the imminent launch of our digital influencer CRM this half.
We're quite pleased with the development of this strategy for Crowd Media. Over the last six months, we've been able to sign a number of large multinationals, including Nestle and Nescafe. We expect this half, that trend will continue. We have a very, very strong pipeline, well in excess of $1 million, and we expect that to flow through over the next couple of quarters.

Jessica Amir: Last question, Domenic. What's your outlook for the second half of this financial year?

Domenic Carosa: The outlook for the second half is generally in line with the first half. We expect continued performance in our Q and A division and we also expect further growth in our Crowd Media division as we start bringing on more and larger global companies, as well as launching our digital influencer CRM.

Jessica Amir: Domenic Carosa, thank you so much for the update.

Domenic Carosa: Thank you.


Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.