IncrediMail's CEO Discusses Q2 2011 Results - Q&A Transcript

IncrediMail Ltd. ( MAIL)

Q2 2011 Earnings Conference Call

August 15, 2011 10:00 AM EST

Executives

Josef Mandelbaum – CEO

Yacov Kaufman – CFO

Analysts

Nick Halen – Sidoti & Company

Jay Kumar – Midsouth

Question-and-Answer Session

Operator

Ladies and gentlemen, at this time, we will begin the question-and-answer session. (Operator Instructions). The first question is from Nick Halen of Sidoti & Company. Please go ahead.

Nick Halen – Sidoti & Company

Hi, guys. How are you doing?

Josef Mandelbaum

Hi Nick. How are you doing?

Nick Halen – Sidoti & Company

Good. First question; I was just wondering if you can give us a little bit more details on what exactly Smilebox’s products are, and, I guess, are they kind of standalone products you guys are going to incorporate or something that can be used in conjunction with your existing email product?

Josef Mandelbaum

It’s a standalone product. I mean, we may market it ultimately to our members and to our existing client base, but it’s a standalone product. Essentially what it does, this allows you to take your photos wherever they maybe and virtually create a unique creation out of this that you can then – which helps you connect with family and friends in a really simple, easily used fashion. And they’d like to say put the smile on everybody’s heart.

So basically it’s like a slideshow with really creative content with music in the background that you can share on Facebook, you can share via email, you can share via Smilebox, and – essentially they have significant amount of people are using it today. As we mentioned, over 15 million installed to date and it really fits in the photo sharing plus photo personal expression bucket.

Nick Halen – Sidoti & Company

Okay. Now, like you said, that seems to have a very strong presence in the US; I believe you said about 80% of revenues within the US. I was just wondering what outside of the US, where they currently have some operations, and I guess where do you expect to be able to market this and grow out these products internationally?

Josef Mandelbaum

Yes, so – a great question. In the research – here is the good news, I mentioned before. It is like 220 million people who use photos in some fashion online every week or every month. I think today they have UK, Germany, and France, if I’ve not mistaken, they just started some of that, so it’s really fledging at this point in time.

One of the things we think we can bring to the table with our expertise I would expect to go into countries that have strong Internet presence. Obviously a presence of a large portion of our audience is online. Again, Western Europe is a good example, where the demographics is such that it’s an aging population which fits into us very nicely. And a lot of people are getting online now faster, because broadband penetration in Europe has accelerated over the past couple of years. So we’ll try to make it push that over time.

I would say it’s not the first thing we’re going to be doing, because we do want to make sure that we do this right and we help Smilebox to accomplish their immediate goals and then we’ll look to plan with them, having leverage IncrediMail footprints on one side and how we’re going to leverage their US presence for IncrediMail and search on the other side.

Nick Halen – Sidoti & Company

Okay. And then, just lastly, I was just – can you give us a little bit of an update on how your existing product lines have been performing? I mean, obviously, revenues are growing and everything like that, but I was wondering any products in particular, any of your existing portfolios that are shown from previous trend recently.

Josef Mandelbaum

So, I mean, the – only one we really – recently launched since in the past is really PhotoJoy. IncrediMail itself is still holding its zone. The install base – the overall install base is one up a little bit; I think 6.8 million from the 6.6 million. As – to remind everybody, we stopped talking about HiYo, which was the previous product that we discounted. So that’s going okay.

And on PhotoJoy what we’re seeing so far is that the usage of PhotoJoy is actually exceeding our expectations. And as Yakov said earlier in the call, we’re still really monitoring the revenue generation on a ROI positive basis as we spent to media around PhotoJoy’s top ownership [ph] and also measuring it. It’s really too early to tell from that standpoint. I mean we’re making money obviously – revenues on it, but really as it grows, well hopefully, by Q3, have more information as Yakov said is going to be really telling quarter for us in terms of how fast we can scale PhotoJoy with regards to getting a positive return on our marketing spending.

Photojoy, today, although we’re making some additions is not viral like IncrediMail is or the Smilebox is as a matter of fact as well. We’re adding some components in the next quarter to PhotoJoy to allow you to share via email, share via Facebook and other social network, or could via a mobile and iPad version of PhotoJoy that will be coming out. So we’re really investing a little bit into – to get it to the next level and we hope that we’ll be able to leverage that. And ideally overtime, the Smilebox audience and the Photojoy audience, and two both photo-centric products hopefully will be able to cross-market overtime now. It’s not immediately we’re going to be doing, but we’re certainly looking at that in the future.

Read the rest of this transcript for free on seekingalpha.com

More from Stocks

Bank of America Rips on Earnings Beat, But Analysts See Even More Gains Ahead

Bank of America Rips on Earnings Beat, But Analysts See Even More Gains Ahead

3 Reasons Why Netflix Bulls Are Getting Their Face Ripped Off After Earnings

3 Reasons Why Netflix Bulls Are Getting Their Face Ripped Off After Earnings

Stocks End Mixed as Dow Rises, S&P 500 and Nasdaq Slip

Stocks End Mixed as Dow Rises, S&P 500 and Nasdaq Slip

Action Alerts Plus is Picking Raytheon Over Other Defense Names

Action Alerts Plus is Picking Raytheon Over Other Defense Names

Should Tesla Actually Fire Elon Musk?

Should Tesla Actually Fire Elon Musk?