MeetMe CEO Discusses Q2 2012 Results - Earnings Transcript

MeetMe Inc. (MEET)

Q2 2012 Earnings Call

August 08, 2012 02:00 pm ET

Executives

Brian Harvey – Investor Relations

John Abbott – Chief Executive Officer

Mike Matte – Chief Financial Officer

Geoff Cook – Chief Operating Officer

Analysts

Brandon Pickett – Raymond James

David Sheridan – Boenning & Scattergood

Jeff Putterman – A Plus Capital Management

Steve Alan – FSAI Investment

Presentation

Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to the MeetMe’s Incorporated Second Quarter 2012 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions).

I would now like to turn the conference over to our host for today Mr. Brian Harvey, VP of Capital Markets and Investor Relations. Please go ahead, sir.

Brian Harvey

Thank you, Patricia. Good afternoon and welcome to MeetMe’s Inc second quarter 2012 financial results conference call. I am joined this afternoon by Chief Executive Officer, John Abbott, Chief Financial Officer, Mike Matte, and Chief Operating Officer, Geoff Cook.

Before we begin, I would like to take this opportunity to remind you that during the course of this call management will make forward-looking statements which are subject to various risks and uncertainties. These include statements relating to continued growth including growth in mobile traffic, mobile monetization, including expectations from virtual currency, expectations from our rebrand, opportunities from internationalization, including accelerating mobile and virtual currency usage, expected number of languages on our platform and revenue and adjusted EBITDA growth.

Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission, particularly the section entitled Risk Factors in our quarterly and annual report and we refer you these filings.

Also I’d like to remind you that during the course of this conference call, we will discuss combined revenues of Quepasa and myYearbook pre-merger and adjusted EBITDA, which are non-GAAP measures and talking about the company’s performance. Reconciliation to the most directly comparable GAAP financial measures are provided in the tables in the press release issued by the company today and at the Investor Relations section of the MeetMe corporate website at meetmecorp.com./investor/non-GAAP. A replay of this conference call will be available for one year at the Investor Relation section of the MeetMe corporate website at www.meetmecorp.com.

I will now turn the call over to MeetMe’s Chief Executive Officer, John Abbott.

John Abbott

Thanks, Brian, good afternoon. Thank you for joining MeetMe second quarter earnings call. I’ll start the call by providing a brief overview of our financial results and summarizing the key milestone achieved in Q2. Geoff will then provide comments on our June rebranding and discuss our operating metrics. Finally Mike will discuss our financial results. As reported today revenue in Q2 was $13.1 million up 26% from Q1.

Adjusted EBITDA in Q2 was $1.8 million up 80% from Q1. And on an adjusted basis we have been EBITDA positive in both four quarters since our merger with myYearbook last November. Mike will provide further details with regards to our financial results later in the call. As we’ve noted in prior calls our plan for growth is and continues to be based on three themes, mobile, mobile monetization and internationalization.

By far the significant event of Q2 was rebranding of myYearbook to MeetMe which we announced on June 5. With MeetMe, we are now positioned to bring our highly engaging mobile and web products to global audience. We are very pleased with the results of our rebranding thus far having seen increase as I mentioned across all of our key traffic and engagement metrics.

Specifically comparing July performance to our Q2 averages, our user registrations increased by 28% and our monthly active users by 7%. One of the key themes for MeetMe has been the rapid growth of our mobile product and our ability to leverage virtual currency to monetize mobile users.

Today, mobile represents over 60% of our daily login reflecting a trend towards increased social media consumption on mobile as well as the strong use case for MeetMe mobile products for the MeetMe mobile product where mobile GPS features make our location based services more compelling. Thus far MeetMe mobile monetization is centered on our spotlight product which encourages users to purchase our virtual credit in order to meet more people faster. Since launching credits on mobile in March, our iPhone users for example have proven to be 4 to 5 times more likely to purchase credits than our web users.

As a result virtual currency in our residential were 50% of our mobile revenues. We should note that we are still early in our mobile monetization efforts. Mobile represented 16.9% of the MeetMe platform’s revenue in Q2 far behind our 60% share of usage on mobile, suggesting significant upside as we continue to develop our mobile product. We believe that internalization of the MeetMe platform accelerate mobile and virtual currency usage globally.

We will begin the implementation of our international efforts in the next few weeks as we transition our – key possible use over to MeetMe significantly expanding our addressable market and expanding the number of users able to consume our virtual currency. Today none of our $44 million registered Quepasa users have access to mobile products. As we complete our internationalization in the coming quarter, they will for the first time. We look forward to reporting on our progress as we transition the Quepasa user base and rollout in more than half dozen languages by yearend.

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