Zedge : Fiscal Q3 2022 Earnings Call Transcript

1. Thank you, Brian. And thank you all for joining us
2. today.

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1. Good afternoon. Welcome to Zedge's earnings
2. conference call for the third quarter of fiscal year 2022,
3. which ended April 30th, 2022. I'm Jonathan Reich, CEO of
4. Zedge, and with me is our Chief Financial Officer, Yi Tsai,
5. who will provide additional insight into our financial
6. performance. We will then be happy to take your
7. questions.

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1. Zedge builds marketplaces and games around digital
2. content that people use to express themselves. Our
3. leading products are the GuruShots photography game
4. and Zedge's freemium digital content marketplace, which
5. today offers mobile phone wallpapers, video wallpapers,
6. ringtones, and notification sounds. We also own
7. Emojipedia, a website that is the leading source of

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1. information about emojis. In total, our products served
2. over 40 million users during May.

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1. Our company is positioned at the intersection of two
2. major growth trends in consumer tech: casual gaming
3. and the creator economy. Today, most smartphone users
4. have become amateur content creators, sharing their
5. photos, illustrations, memes, and videos to express
6. themselves and gain social validation. In addition, they
7. value friendly competition and garner popularity and
8. recognition from their online community. Many of these
9. creators are talented enough to attract a meaningful
10. following and monetize their content. This is what's
11. known as the "creator economy," a market that has
12. grown massively over the last five years.

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1. We aim to bring creators into our ecosystem to
2. compete with each other while improving their skills and

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1. also offer them the opportunity to earn money. Our
2. game provides competitive photo challenges in a peer
3. community, and our marketplace allows this community
4. to share and monetize its content. Our existing base of
5. over 40 million users is an attractive value proposition to
6. talented creators. This synergy between gaming and
7. marketplace unlocks additional engagement and
8. provides an outstanding organic traffic funnel for
9. GuruShots players to also become Zedge Premium
10. artists. This has the dual benefit of lowering the spend
11. needed to acquire premium artists while also growing
12. gross transaction value and associated revenue.

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1. We announced our acquisition of GuruShots in April.
2. It plays an important role in advancing this vision. The
3. GuruShots team brings significant expertise in gamifying
4. user-generatedcontent and monetizing users by selling
5. game resources through in-app purchases. We expect to

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1. apply that gamification expertise across our product
2. portfolio. Similarly, our Zedge marketplace team is highly
3. experienced in managing massive catalogs of user-
4. generated content and optimizing monetization through
5. a combination of advertising, subscriptions, and a virtual
6. token-basedeconomy.

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1. Those of you who regularly join our earnings call will
2. notice that our narrative has evolved and more clearly
3. articulates the strategy we have been pursuing. Now that
4. GuruShots is officially part of Zedge, it makes more sense
5. to explain the opportunity we see in combining games
6. and marketplaces under the same roof than it would
7. have before we owned a gaming property.

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1. Both GuruShots and the Zedge marketplace offer
2. great promise for incorporating NFTs. Last December, we
3. launched NFTs Made Easy, inviting a select group of

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1. Zedge Premium marketplace creators to start selling
2. their video wallpapers as single edition NFTs. Thus far,
3. our users have purchased 30% of all NFTs offered in the
4. marketplace, with prices averaging about $20. This sale
5. rate and average price are substantially higher than other
6. premium marketplace content. I will provide more
7. details about the next evolution of NFTs Made Easy later
8. in the call.

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1. We are also developing new products that fit our
2. interconnected games and marketplaces strategy. These
3. products remain experimental and are not expected to
4. contribute to our revenue in the short term.

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1. We possess deep expertise in monetizing our digital
2. real-estate,whether through advertising, subscriptions,
3. or content sales. As a result, our products appeal to a
4. wide range of user segments globally. Today, Android

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