Last Meetme conference call... Great growth yea
Post# of 58
Posted On: 05/18/2015 5:35:39 PM
Last Meetme conference call...
Great growth year over year driven by excellent growth in mobile which was up 76% year over year and now represents 71% of revenues. Growth still appears driven by chat. Obviously the company has a high operating leverage.
Meetme has been changing the mix of advertising over the past five weeks with an eye on increasing the click-through-rate of ads and, by doing so, has been able to increase the rates of ads by an average of 50%...although the ads served was also reduced by 30% in this endeavor. The company will also soon launch 'Interest' to connect people of similar interests.
What I didn't like....
- I understand there might be some lag between changing the mix of ads and getting paid a higher rate for those ads but the company projects revenues will be down in Q2 due to that change. 50% higher rates with 30% fewer impressions is 105% (product of 1.5 * 0.70) so basically on par. Meetme indicated that as a result of these changes, Q2 revenues would be lower in the second quarter and level off in the third quarter before resuming growth in Q4. To me that indicates the high growth the company has seen this past quarter might be leveling off at a sharp rate.
- The company didn't spend on marketing for the quarter because they said growth was fast enough organically. I don't feel they adequately explained why they didn't want any additional growth through marketing. Why would they wave away additional growth??
Overall, it sounds like Meetme has good things going on and I do like that management is constantly trying to optimize the business but I'm not sure what's going on with the growth. With the high operating leverage of the business, revenue growth is obviously a paramount factor.
Great growth year over year driven by excellent growth in mobile which was up 76% year over year and now represents 71% of revenues. Growth still appears driven by chat. Obviously the company has a high operating leverage.
Meetme has been changing the mix of advertising over the past five weeks with an eye on increasing the click-through-rate of ads and, by doing so, has been able to increase the rates of ads by an average of 50%...although the ads served was also reduced by 30% in this endeavor. The company will also soon launch 'Interest' to connect people of similar interests.
What I didn't like....
- I understand there might be some lag between changing the mix of ads and getting paid a higher rate for those ads but the company projects revenues will be down in Q2 due to that change. 50% higher rates with 30% fewer impressions is 105% (product of 1.5 * 0.70) so basically on par. Meetme indicated that as a result of these changes, Q2 revenues would be lower in the second quarter and level off in the third quarter before resuming growth in Q4. To me that indicates the high growth the company has seen this past quarter might be leveling off at a sharp rate.
- The company didn't spend on marketing for the quarter because they said growth was fast enough organically. I don't feel they adequately explained why they didn't want any additional growth through marketing. Why would they wave away additional growth??
Overall, it sounds like Meetme has good things going on and I do like that management is constantly trying to optimize the business but I'm not sure what's going on with the growth. With the high operating leverage of the business, revenue growth is obviously a paramount factor.
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Yes, I understand your penny stock also is the real deal, created with the inventiveness of Edison and destined to be the next Microsoft. Yes, I understand that the delays are also only because your company is making their product and/or technology even more revolutionary.