AI-focused Crowd Media flags major financial turnaround as it looks to further commercialise Talking Head

Crowd Media sees huge potential for its AI-based platform Talking Head in the new post-Covid world.

Artificial intelligence (AI) company Crowd Media (ASX:CM8) has made significant improvements in its bottom line in FY22 as it continues a major financial turnaround.

The company reported an underlying EBITDA loss of $0.05m, a significant $1m improvement on the -$1.05m loss reported in FY21.

It also reported positive operating cash flow for the year, resulting in a $2.2m cash balance as of 30 June. Since that figure was logged, Crowd has secured a further $600k to further solidify their balance sheet.

FY22 was a continuation of Crowd Media’s business transformation that started in 2019, when the company undertook a major restructure of its technology and vision as it looked to pivot into the field of conversational AI.

The three-year transformation culminated in the commercialisation of its Talking Head platform in April this year.

The launch of Talking Head followed two years of development work in collaboration with AI leaders under a strict cash management regime.

First revenue has now been generated from the platform after signing commercial partnerships with PangeaMed, SourceFlare and Impssbl.

New opportunities have also been opened in the mobile subscription division through the integration of Talking Head, resulting in new revenue-generating products being launched in FY22. More new products are planned in FY23 through partnerships with mobile network operators.

In total, Crowd Media generated $5.4m in revenue across FY22, and reported a bottom line NPAT loss of -$3.2 million.

This includes a -$2.3m in non-cash impairments and investment write downs, a substantial improvement on previous year’s impairments of -$6.2m.

Investment in technology meanwhile continues to be the largest expense where the company is utilising its equity partnership with Aflorithmic Labs and other strategic partners to drive its tech development work.

As it stands now, Crowd Media is debt free and has plans to increase its tech and commercial teams in line with the increasing pipeline of opportunities being explored.

“We proved the commercial viability of our vision with commercial contracts, partnerships, agreements and integrations across several verticals and counting,” said Crowd Media’s CEO, Idan Schmorak.

“With each of these commercial agreements, Crowd enhances its portfolio of products and potential clients which is why FY23 will be a period of right sizing our teams, and scaling the platform to accommodate rising demand for conversational AI solutions.”

Ramping up commercialisation efforts in FY23

FY22 was the first full financial year since Crowd divested its loss-making Mobile Premium SMS business in April 2021.

The significant reduction in the bottom line loss seen in FY22 is the result of Crowd’s strict cash management regime while advancing the Talking Head platform through to commercialisation.

Crowd’s Talking Head technology blends AI-based conversation tech with computer-generated digital avatars where customers can ask questions  to an AI-based professional and receive in-depth answers in real-time.

Schmorak said the last few Covid years have changed the world by increasing online activity which has permeated across all industries ranging from education, professional services, retail, entertainment and many more.

“At the forefront of conversational AI solutions to meet rising demand for digital labor, Crowd Media is committed to developing a scalable and profitable platform,” he said.

“This year we have thickened our IP to a substantial, competitive software that is written by top engineers and researched by academic leaders, and we launched a live beta version (of Talking Head).”

Crowd is now working on enhancements, improvements and new features which will allow it to further commercialise Talking Head to enable firms to communicate with their clients in a new form.

“While building a deep-tech development office in Barcelona, Spain, we have got the Amsterdam team and the subscription division closer using the new technology and implementing it with their products, bringing growth to the year-on-year profitable division while optimising cash flow,” said  Schmorak.

“Thank you to Crowd Media shareholders and team members for their support throughout the year”.

“Your support has positioned Crowd to capitalise on a pipeline of commercial opportunities that we look forward to progressing.“

This article was developed in collaboration with Crowd Media, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.