Zedge, Inc. (AMEX:ZDGE) Q4 2023 Earnings Call Transcript

But it’s more than simply price testing and coming up with the price that resonates with users, it’s also the value adds and there’s a whole bunch of work being done there in addition to marketing efforts. Then in respect to the flagship as well, we are continuing to invest in pAInt which is our Gen AI wallpaper maker, rolling that out on a global basis. And we may see some accelerated growth there in markets where we are early. Many of the Gen AI apps today that are in this space use a subscription business model which doesn’t necessarily align well with many of the markets that are outside of United States, Canada, U.K., Australia as an example. So when you get into the more emerging market community, that is — the notion of subscriptions is less palatable.

So there’s a lot of work going on in terms of making this available and continuing to improve the experience. So we may have some early mover advantage if we’re successful there. And then, I’d mentioned that we’re also working on a stand-alone AI app and the notion there is to have an app which is not only wallpaper-driven but image-driven and other potential forms of content that has a much more intuitive user interface and which allows for us to really market the notion of Gen AI as opposed to that being a feature within our app. And then also this introduction of pAInt to our website. That should be available in the next couple of weeks. So a lot of effort going into that. Moving to GuruShots, the — I’d say, 2 drivers are in the GuruShots game itself, the introduction of Battles and using Battles as a mechanism to improve engagement as well as attract and open up the top of the funnel to bring in customers that would want to get a sense for what for competitions are but with a much lower, much easier barrier in terms of learning curve.

That is what is happening there with the sort of hybrid casual experience. And we continue to believe that, that will unlock growth for us. And then the brand-new AI Art Master game which is 100% hydro [ph] casual and taps into the growth of not only Gen AI but also growth in the gaming space. So looking out over the course of the next 2 fiscal years, we are — really tried to deliver that promise to the marketplace and — or so the market, I should say, to investors. And then finally, Emojipedia. So we’ve seen some substantial revenue growth year-over-year and our ability to continue to add functionality, broaden the focus of Emojipedia to new content types and introduce enhancers, for example, POB. We think that, that can continue to drive incremental growth to that business unit.

Allen Klee: Thank you. In terms of — last quarter, you mentioned that you were initiating a $2.5 million to $3 million cost-cutting initiative or that’s what the benefit you would get annually, I think, is any — has that happened already? Or any update on that?

Jonathan Reich: Sure. So we had announced this — was not last quarter. I think it was quarters ago. And yes, we had — we had acted on that, including a host of different initiatives from SaaS infrastructure to staffing. As you know, we’ve got employees in different regions of the world, different price points and the like to our marketing investment and so on and so forth. And — we have acted on that and we will continue to keep in mind, we want to be in a position where, ultimately, our cash position continues to grow and that we’re not getting too far ahead of ourselves in terms of expanding the initiatives or seeing — having SG&A grow at an unsustainable pace. I just want to underscore, I think it’s very important when taking a look at SG&A to remember that within SG&A, we have both our marketing expense as well as the percentage that whether it be Google or Apple keeps when a user spends money on their platform.