Zedge, Inc. (ZDGE) Q3 2022 Earnings Call Transcript

Zedge, Inc. (NYSE: ZDGE) Q3 2022 Earnings Conference Call dated Jun. 13

Corporate Participants:

Brian Siegel — Investor Relations

Jonathan Reich — Chief Executive Officer

Yi Tsai — Chief Financial Officer

Analysts:

Allen Klee — Maxim Group — Analyst

Presentation:

Operator

Good afternoon and welcome to Zedge’s Third Fiscal Quarter 2022 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Brian Siegel.

Brian Siegel — Investor Relations

Thank you, Matthew. In today’s presentation, Jonathan Reich, Zedge’s Chief Executive Officer; and Yi Tsai, Zedge’s Chief Financial Officer, will discuss Zedge’s financial and operational results for the third fiscal quarter ended on April 30, 2022.

Any forward-looking statements made during this conference call either in the prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in the reports and bench files periodically with the U.S. Securities and Exchange Commission.

Zedge assumes no obligation either to update any forward-looking statements that they have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast. Please note that Zedge earnings release is available on the Investor Relations page of the website. The earnings release has also been filed on Form 8-K with the SEC.

I would like to now turn over the conference to Mr. Jonathan Reich. Jonathan?

Jonathan Reich — Chief Executive Officer

Thank you, Brian. And thank you all for joining us today. Good afternoon. Welcome to Zedge’s earnings conference call for the third quarter of fiscal year 2022, which ended April 30, 2022. I’m Jonathan Reich, CEO of Zedge and with me is our Chief Financial Officer, Yi Tsai, who will provide additional insight into our financial performance. We will then be happy to take your questions.

Zedge builds marketplaces in games around digital content that people use to express themselves. Our leading products are the GuruShots photography game and Zedge’s premium digital content marketplace, which today offers mobile phone wallpapers, video wallpapers, ringtones and notification sounds. We also own Emojipedia, a website that is the leading source of information about emojis. In total, our products served over 40 million users during May. Our company is positioned at the intersection of two major growth trends in consumer tech, casual gaming and the creator economy. Today most smartphone users have become amateur content creators sharing their photos, illustrations, memes and videos to express themselves and gain social validation.

In addition, they value friendly competition and garner popularity and recognition from their online community. Many of these creators are talented enough to attract a meaningful following and monetize their content. This is what’s known as the creator economy, a market that has grown massively over the last five years. We aim to bring creators into our ecosystem to compete with each other while improving their skills and also offer them the opportunity to earn money. Our game provides competitive Boto challenges in a peer community and our marketplace allows this community to share and monetize its content.

Our existing base of over 40 million users is an attractive value proposition to talented creators. This synergy between gaming and marketplace unlocks additional engagement and provides an outstanding organic traffic funnel for GuruShots players to also become Zedge Premium artists. This has the dual benefit of lowering the spend they needed to acquire premium artists while also growing gross transaction value and associated revenue. We announced our acquisition of GuruShots in April. It plays an important role in advancing this vision. The GuruShots team brings significant expertise in gamifying user generated content and monetizing users by selling game resources through in-app purchases. We expect to apply that gamification expertise across our product portfolio.

Similarly, our Zedge marketplace team is highly experienced in managing massive catalogs of user-generated content and optimizing monetization through a combination of advertising, subscriptions and a virtual token-based economy. Those of you who regularly joined our earnings call will notice that our narrative has evolved and more clearly articulates the strategy we have been pursuing. Now that GuruShots is officially part of Zedge, it makes more sense to explain the opportunity we see in combining games and marketplaces under the same roof than it would have been before we owned a gaming property.

Both GuruShots and the Zedge marketplace offer great promise for incorporating NFTs. Last December, we launched NFTs Made Easy inviting a select group of Zedge Premium marketplace creators to start selling their video wallpapers as single edition NFTs. Thus far, our users have purchased 30% of all NFTs offered in the marketplace with prices averaging about $20. This sale rate and average price are substantially higher than other premium marketplace content. I will provide more details about the next evolution of NFTs Made Easy later in the call.

We are also developing new products that fit our interconnected games and marketplaces strategy. These products remain experimental and are not expected to contribute to our revenue in the short term. We possess deep expertise in monetizing our digital real estate, whether through advertising, subscriptions or content sales. As a result, our products appeal to a wide range of user segments globally. Today, Android users account for roughly 96% of the Zedge app’s MAU and 91% of its revenue.

Before discussing our evolution and the exciting opportunities we see coming down the pike, I’d like to provide context to our third quarter results. Despite a solid first half of the year, we kept full year revenue guidance unchanged at 25% to 30% year-over-year growth when we conducted our second quarter earnings call. We chose a conservative approach due to transitory factors that were likely to negatively impact MAU and paying subscribers, resulting in lower revenue growth rates.

MAU declines mainly resulted from traditional seasonality in the business with Q3, which follows the end of year holiday season, typically seeing a downturn in MAU, a decline from users who uninstalled the Zedge app after we changed its icon to the colors of the Ukrainian flag and the forced app upgrade relating to the necessary migration to AppLovin’s MAX ad mediation platform.

As we mentioned last quarter, the latter also resulted in a delay in the release of social and community features, which we believe will help reverse the MAU declines, especially in well-developed markets by around the quarter. Despite these headwinds, ARP MAU increased by 8% and we generated $5.6 million in cash flow from operations, including AppLovin’s one-time $2 million payment, bringing our cash balance at the end of the quarter to $17 million after the $18 million payment to GuruShots’ shareholders. We also generated $2.9 million in adjusted EBITDA.

On another positive note, the operational transition to AppLovin’s MAX platform has been smooth and it is yielding more revenue on a per user basis compared to MoPub. In addition, active user levels rebounded from early May lows due to marketing initiatives implemented in advance of the new social and community feature upgrades, which we expect to be available later this month. Over time, we believe these new features will be an important catalyst for growing MAU in well-developed markets, resulting in higher ad revenue and active subscriber growth.

Zedge Premium’s gross transaction value or GTV continued to increase at an impressive rate with 63% growth. We believe our NFT strategy, mainly providing utility to creators, especially one that lack a deep knowledge of technology, is critical for building a sustainable business. Fortunately, our business has been insulated from what pundits are deeming the crypto winter, because we offer an affordable, easy and eco-friendly way for creators to tokenize their content that uses Zedge credits and not cryptocurrency. This month we will be expanding this functionality by introducing several features, including numbered additions, the ability to add audio to video wallpapers and expanding into static wallpapers. Keep in mind that the value proposition to our Zedge Premium creator base significantly improves with NFTs.

Previously, a creator could make pennies for selling multiple video wallpapers and now they can make thousands of tons that amount with one NFT sale through NFTs Made Easy. To promote these new features, we are forging relationships with artists that have demonstrated success auctioning their NFTs on other platforms. These artists are excited about the prospect of gaining access to our global user base and offering numbered additions of up to 100 for price points that are more accessible to the masses. We are also in the final stages of unleashing more of Emojipedia’s potential. By the end of June, we expect to introduce localized versions of Emojipedia in Spanish, French, German, Italian and Portuguese, and refresh the user interface with a new design, including all monetization elements. This should benefit us in time for World Emoji Day, which is celebrated on July 17.

In summary, we took steps to address some near-term challenges, weathered the storm, generated cash and focused our attention on activities that we expect will return to Zedge app to higher levels of profitable growth. This provides a good transition to discussing the transformational GuruShots acquisition and our strategic priorities going forward. We closed the GuruShots acquisition on April 12. So, our results include a partial month of their financials. We see GuruShots as a transformational asset on its own, but have also identified significant potential synergies that we expect will make one and one equal a lot more than two.

My colleagues from Lithuania, Norway and the U.S. recently returned from an in-depth set of planning sessions with our coworkers at GuruShots. It was amazing. GuruShots is a category killer that fuses photography with gaming, enabling amateur photographers, essentially anyone with a smartphone to compete in a wide variety of contests across iOS, Android and the web that showcase their photos. The game mechanics include progressively more difficult competitions with successful players mastering their skills and then continuing to the next level until ultimately earning the coveted Guru title.

Players can compete individually or join together as a team. The product includes community features, leaderboards and chat functionality, which create a sense of belonging, inspiration and competition. While the penetration rates leave a lot of room for growth, we estimate that 30 million to 40 million photo enthusiasts regularly use their smartphones to take and publicly share high-quality photos and who would be interested in participating in photo contests every month.

Given the early stage of this gaming vertical and the limited investments made to-date, the stats are impressive. GuruShots players have uploaded more than 140 million photos since the game’s inception with more than 1 million new photos currently being added monthly. In addition, their live ops team launches more than 300 competitions per month. Users vote on submitted photos and the ones receiving the most votes secure higher rankings until there is a winner for the competition.

Depending on players’ engagement, amongst other things, they can secure more voting power and this yields over 5 billion votes cast monthly. GuruShots is a free-to-play game that monetizes today strictly by selling in-game resources that increase a photo’s exposure. Although only a small fraction of users purchased these resources, GuruShots boasts an ARP MAU of approximately $3.50 versus $0.05 to $0.06 for the Zedge app.

Furthermore, currently paying players spend over $50 per month, representing an 18% CAGR over the past six years. When looking at GuruShots on a standalone basis, we have several products and marketing initiatives that we expect to make this year to accelerate growth. Furthermore, we are investing in organic and paid user acquisition strategies to expand the top of the funnel and increase MAU.

These efforts will include paid user acquisition, app store optimization also called ASO on iOS and android, Search Engine Optimization, or SEO, and affiliate and influencer marketing across mobile and the web. As a reminder, we have committed up to $5.3 million per paid user acquisition over the next 12 months subject to user cohorts generating a minimum return on ad spend or ROAS. If this spending is effective, it could generate high double-digit revenue growth rates.

The product enhancements we are focused on include improving onboarding by segmenting users and drawing them into the gameplay early on. One of the things I learned during my trip was that there is a steep learning curve for new users, as successful competitors develop sophisticated game strategies centered around in-game resource utilization.

Next, we will release a feature called Battles, which are simple many competitions that resemble a social game. Battles will introduce new players to the excitement of competing from the get-go. We expect this will result in converting installs into three players, some of whom will ultimately purchase game resources as they become immersed in the experience and get hooked on the game.

Finally, we expect to introduce a learn option that users can turn to for photo tips and skills building, to improve their photo taking ability. Although we don’t have all the details worked out as of yet, we expect this value add will act as a revenue driver and catalyst for user engagement. I would be remiss if I didn’t address GuruShots R&D team. In a nutshell, they are impressive. Furthermore, our combined teams have an in-depth plan for migrating to a common cloud platform which will lower costs and simplify the platform.

Let me turn to synergies which we think can bring significant upside to the company over the next several years. The GuruShots acquisition is expected to accelerate the growth of Zedge Premium’s marketplace and NFT offerings. The possibilities here are truly exciting. Think about it. GuruShots players are a self-selected group of high-quality photographers that crowd source great content in near real-time. Furthermore, these players are either playing for free or paying to play, enabling us to offer them the ability to monetize their handy work and all creator economy. We believe that the opportunity for GuruShots’ users to monetize the 1 million-plus photos uploaded monthly.

Through our NFTs Made Easy platform is a very attractive value proposition that could materially expand the size and growth rates for this part of the business. GuruShots also brings a deep knowledge of gamification, especially in the world of visual arts. One of our goals is to gamify the Zedge app to improve engagement and retention and thus grow MAU. Additionally, we have identified several other verticals that we believe are ripe for gamification, but it is too early to provide details. The acquisition of GuruShots will alter our financial projections given the expected growth investments we will be making.

Despite global economic uncertainty, including the Russian war, inflation and rising interest rates, we expect fiscal 2022 revenue growth to exceed 30% on a consolidated basis. We also expect to remain profitable and generate positive adjusted EBITDA in the fourth quarter, leading to adjusted EBITDA for the year growing in line with revenue. Beyond fiscal 2022, we are investing in GuruShots in addition to our existing business. Our goal is to continue to remain profitable and generate positive adjusted EBITDA and cash flow from operations as we drive GuruShots towards high double-digit revenue growth and positive adjusted EBITDA on a stand-alone basis over the next 18 to 24 months.

To better accelerate growth and control costs, we have decided to redeploy our innovation team to GuruShots for the remainder of the year. This will help accelerate growth while also providing this team with an immersive education and gamification. Once they have acquired this knowledge and gained this experience, they will be tasked with gamifying both the Zedge app and the other verticals that we believe offer untapped opportunities. I think this speaks to our management team’s strength and its ability to make responsible decisions that inure to the benefit of the business, both from a growth and cost perspective. It also points to the talented employee base we have cultivated.

Before handing the call over to Yi to go through our financial results, I want to thank our investors for your continued support. As many of you have seen, some of our Board members and I made open up market purchases of Zedge since the GuruShots acquisition closed. We did this because we truly believe in Zedge’s long-term potential and that the stock price neither reflect this potential nor the current financial results. I also want to thank our employees for their commitment and hard work especially in light of the GuruShots acquisition. Finally, I’d like to underscore how highly we think of our colleagues at GuruShots. We’ve had a great start to our relationship and we are excited to work together to increase shareholder value over time.

Yi?

Yi Tsai — Chief Financial Officer

Thank you, Jonathan. I want to remind last on the call that our fiscal year ends July 31 and last, our third quarter ended on April 30. Please note that this quarter included approximately two weeks of GuruShots result. Also, we switched from reporting EBITDA to adjusted EBITDA this quarter. In light of the GuruShots transaction, we added expenses such as professional services and stock-based compensation. Our press release supplemental table has been adjusted historically to account for this change.

Moving to our third quarter results, MAU, defined as the number of unique users that opened our Zedge app during the last 30 days of the period, decreased 7% to $32.1 million for April 2022 versus $34.5 million last April. Total revenue in the third quarter was $6.2 million, a 19% increase from last year. Ad revenue and subscription revenue growth rate were constrained due to the lower MAU number. Other revenue, which includes revenue from our emerging products, including Zedge Premium, Emojipedia and GuruShots, was $0.8 million. GuruShots added $300,000 during the final few weeks of the quarter. Also note that our auditor determines the $2 million payment from AppLovin on April 1st should be classified as revenue and amortize monthly over a 2-year period, which increased other revenue by less than $100,000 this quarter.

Zedge Premium gross transaction value or GTV net is the total sales volume transacted through our marketplace, increased 63% to $410,000, reflecting increased sales and ASP from our NFT Made Easy platform. Active subscription were down 5% versus last year as new subscription sales did not offset churn. Overall, ad MAU was 5.2 cents, an increase of 8% year-over-year, driven by better advertising performance and slightly higher subscription revenue versus last year. This year, operating expenses increased by 49%, leading to a 32% decrease in income from operation and an operating margin of 21.5% versus 37.7% last year.

GuruShots was the biggest driver of these decreases as it contributed an operating loss of about $249,000 during the quarter, including $93,000 of amortization of intangible and $67,000 of retention bonus expense for the partial month of April. We also had a one-time $744,000 expenses during the quarter, mainly for professional service related to the GuruShots acquisition.

Provision for income taxes was $429,000 this quarter versus a benefit of $473,000 in last year’s Q3. The effect of becoming a taxpayer this year was material. As income tax benefit in Q3 last year had the impact of increasing diluted earnings per share by $0.03, while being a taxpayer in Q3 this year had the impact of decreasing diluted earnings per share by $0.03. Diluted EPS was $0.05 versus $0.17 last year. Diluted share count was 14.9 million.

Moving to adjusted EBITDA. As I mentioned earlier, this is the first quarter that we are reporting this metric. We provided a historical adjusted EBITDA reconciliation table in our press release. But to review, we are calculating it as follow. Calculating traditional EBITDA, which was $1.6 million this quarter and $2.3 million in Q3 of last year, an impact stock compensation expenses of $0.5 million this quarter versus $98,000 last year, an impact any one-time transaction-related expenses, which this quarter was $744,000 of professional services related to expenses tied to the GuruShots acquisition.

When we make this adjustment, we get adjusted EBITDA of $2.9 million this year versus $2.4 million last year and an adjusted EBITDA margin of 46% this year versus just under 45% last year. As you can see, our underlying operating performance was much due to one-time items and other non-cash items. From a liquidity standpoint, we remain in a strong net cash position with almost no debt and over $17 million in cash and cash equivalents.

Thank you for listening to our third quarter earnings call and I look forward to speaking with you again on the next call. Operator, back to you for Q&A.

Questions and Answers:

Operator

[Operator Instructions] Your first question is coming from Allen Klee from Maxim Group. Your line is live.

Allen Klee — Maxim Group — Analyst

Yes. Good morning. Congratulations on the results. First question, the decline in the number of active users, what do you believe was behind that and remind us why you think you can turn that around?

Jonathan Reich — Chief Executive Officer

Hi, Allen. Thanks so much for the good wishes. So, as I commented, there are a couple of moving pieces here, including seasonality. Our Q3 corresponds to the period of February, March, April, coming out of the holiday season, which is our Q2, November, December, January. And we are accustomed to seeing a decline during that period of time. In addition to that, as you recall, we were required to migrate our ad mediation platform because MoPub, our previous provider was deprecated their platform after AppLovin made their acquisition. That deprecation occurred at the end of March and that required us to push a forced upgrade of our app to all users globally. And that usually triggers losing users.

And then finally, our supporting the Ukrainians in the Russian war caused us to do two things. One was that we had updated the OnDeck app icon for anyone that had — or that had Zedge on their phone, we changed the color of the icon from our corporate color purple to the colors of the Ukrainian flag, mainly blue and yellow. And we also had updated the collateral material in all of the storefronts to follow that color aesthetic as well. We estimate that the forced upgrade, coupled with the efforts around Ukraine as well as losing users in Russia and Belarus accounted for at least a third of the decline.

And the efforts that we have underway in terms of reversing that decline are focused on releasing our social and community features, which if the playbook unfold as we expect, will drive engagement. Unfortunately, that feature set has to be pushed out a quarter because our developers were hard at work on completing the migration to AppLovin. And I will close by saying that we were paid a $2 million fee by AppLovin in order to migrate their platform. As Yi described, that will be amortized over we believe the next 24 months or so. But for that $2 million, coupled with the fact that AppLovin is actually outperforming MoPub, we are confident that we made the right decision.

Allen Klee — Maxim Group — Analyst

Thank you. So, you — I thought I heard — so the advertising rate did decline per number of viewers. It was just that you had less viewers is more — and these other factors is the way to think of that. Is that correct what I — the way I described it.

Jonathan Reich — Chief Executive Officer

Yes. So, we actually — we have seen that advertising rates had increased on a — since we made that change. So, we are pretty happy with that, at least what we saw in this past quarter.

Allen Klee — Maxim Group — Analyst

Great. And then — you made some comments on GuruShots and I am not sure I caught everything. So, if you could maybe go over this again. You said — I thought I heard — so GuruShots closed on April 12th. I think I heard you say that it added $300,000 in revenue and it had a $240,000 loss. Maybe if you could tell me what that — does that loss mean net income or adjusted EBITDA. But then you also mentioned that, that loss included something related to intangibles and one-time bonuses. So, could you review that again so I could get a sense of what a more an ongoing type of loss would be? And also when you said there was a $740,000 one-time expense, I assume that’s separate from the GuruShots stuff that I just said. Thank you.

Jonathan Reich — Chief Executive Officer

Sure. Yes, I think that the best thing is I am going to have Yi provide you with that detail. Yi, do you want to take that?

Yi Tsai — Chief Financial Officer

Sure. Hi Allen. So, the $249,000 follow operating loss, actually it is net loss. It includes $93,000 of amortization of intangible and $67,000 of retention bonus that was expense for a partial month of April. So, before these two items, the loss is about $90,000 or so.

Allen Klee — Maxim Group — Analyst

And I apologize. I didn’t — the $93,000 amortization of intangibles, that will be an ongoing cost? Is that —

Yi Tsai — Chief Financial Officer

So, if you look down to the future, the acquisition allocate of $15 million to intangible and it’s been amortized within 5 years to 12 years. So, average per year is about $1.9 million. And then the retention bonus, if you recall, it would be amortized over the next three years. So, each year would be $2.6 million. So in all, it will be about $4.5 million pretax. In terms of non-cash, I mean $4 million out of the $8 million will be cash, but most of it will be a non-cash item.

Allen Klee — Maxim Group — Analyst

And how — I am so sorry, the one — the retention bonus, how much was that again?

Yi Tsai — Chief Financial Officer

It was $8 million, will be vested over the next 36 months.

Allen Klee — Maxim Group — Analyst

But how much was it for the fiscal third quarter?

Yi Tsai — Chief Financial Officer

Fiscal third quarter, it’s only the $60,000, $70,000 for the cash bonus. And in the non-cash equity comp, it was $111,000, including the equity comp that we added back.

Allen Klee — Maxim Group — Analyst

Great. Okay. Thank you so much.

Yi Tsai — Chief Financial Officer

And with respect to the expenses, it’s just due to expense or advisory expenditures as well as all the account fee related to the pro forma disclosure preparation, the AAC, AL5, all those work we would outsource due to the constraint of our finance department. And those are just one-time and then we book it all in Q3.

Allen Klee — Maxim Group — Analyst

Yes. So, the quarter had around $740,000 of one-time expenses.

Yi Tsai — Chief Financial Officer

Correct.

Allen Klee — Maxim Group — Analyst

Okay. That’s great. Thank you. So, what I heard you guys say about NFTs was very impressive in terms of — let me just make sure I — did I hear this right that the users have purchased around 30% of the NFTs that are offered and the average price is around $20. How many — you say 30% of what was offered. How much was offered? And so I think if we know that, then we can get a perspective from how much GuruShots could theoretically add to that?

Yi Tsai — Chief Financial Officer

I am sorry, I don’t have that number handy right now, but I will get back to you.

Allen Klee — Maxim Group — Analyst

Okay. But I think last quarter, let’s see if I — you said something, I can’t find it in front of me. It’s something like 600 NFTs were sold. It was a very small number, I think and unless I am mixing things up. So — because you just started so far?

Yi Tsai — Chief Financial Officer

That’s correct. And it is a small number. And I also want to point out, our NFT offering today is really very rudimentary. Remember, it’s only one content type and it is one-of-a-kind limited edition, not numbered editions. It doesn’t have a lot of feature and functionality that will be forthcoming, I guess somewhere in the next four weeks to eight weeks, and we will continue to add feature sets through the end of the year.

Allen Klee — Maxim Group — Analyst

And right now, there is not a secondary market. Is that true for selling?

Jonathan Reich — Chief Executive Officer

Users can ultimately take their NFTs and offer them on another platform like OpenSea. But within our products, there is not as of yet a secondary market, that’s correct. Within our ecosystem, that is correct.

Allen Klee — Maxim Group — Analyst

Okay. So, I mean I am just thinking about this, if there is 1 million potential pictures from GuruShots a month. So, that’s like 3 million a quarter. If you — if 5% went over to the marketplace and you got $20 for that and excluding secondary sales, that would be like — that would be $3 million of revenue in a quarter. If I did the simple math right, I mean I don’t know what the — but that seems like that particular synergy could be very high. Is that the way to — and then secondary sales could be even more, but is that the way to think about it, or tell me what you think here.

Jonathan Reich — Chief Executive Officer

Yes. I think that the arithmetic is correct, but it’s going to take time to accelerate and penetration rates that can yield a healthy revenue number. Remember, we are early into this and we are improving our product. We also are going to need to work through the conversion funnel for the GuruShots artists and so on and so forth. But thematically, the expectation is that, that self-selected group of high-quality photographers will contribute to revenue growth within the overall Zedge ecosystem. And when compared to the alternative, which would have been having to go out and actively solicit artists without even knowing if they have high quality and so on and so forth, we think that the GuruShots alternative is a much better alternative because we can generate revenue from the GuruShots players. And then we can offer those players that are interested an opportunity to make money and generate money for us and it’s more money for us at the same point in time. So, it gets to be a virtuous cycle, if you will.

Allen Klee — Maxim Group — Analyst

Got it. And I think I heard you say that you thought that GuruShots could get to high-double digits revenue? I guess revenue growth rate over — maybe you could tell me what you said. I thought it was over an 18-month period. And then get to EBITDA positive. And then I am assuming that, that revenue is excluding which we just talked about on NFTs, it’s just — or does it include that? Is it —

Jonathan Reich — Chief Executive Officer

So, what we said was our goal to be EBITDA positive in give or take around 24 months. And I think longer term, we believe that GuruShots on a standalone basis can generate very attractive double-digit revenue as you had formulated in your question. Yi, do you have anything that you want to add to that?

Yi Tsai — Chief Financial Officer

No, I think you sum it up well.

Jonathan Reich — Chief Executive Officer

And I don’t know, but do you have the number in terms of what we sold on NFTs?

Yi Tsai — Chief Financial Officer

Yes. I think the [Indecipherable] $20, we sold about 1,200 pieces.

Allen Klee — Maxim Group — Analyst

1,200 pieces. Got it. Thank you.

Operator

[Operator Closing Remarks]