Mobivity Holdings Corp.
Q1 2022 Earnings Call Transcript

Published: 16 May 2022

[Operator:]

Greetings and welcome to Mobivity First Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Brett Maas of Hayden IR. Please proceed, sir.

[Brett Maas:]

Thank you, Operator. I'd like to welcome everyone to Mobivity's first quarter 2022 earnings call. Hosting the call today are Dennis Becker, Founder, Chairman and Chief Executive Officer and Lisa Brennan, Chief Financial Officer. Before I turn the call over to management, I'd like to call everyone's attention to the company's safe harbor policy. Please note that certain statements made on this call will be forward-looking statements which are subject to considerable risks and uncertainties. We caution you that such statements reflect management's best judgment based on factors currently known and the actual events and results could differ materially. Please refer to the documents filed with the company from time to time with the SEC and in particular, its most recently filed annual report on Form 10-K. These documents contain and identify important risk factors and other information that may cause actual results to differ from those contained in the forward-looking statements. Any forward-looking statements made during this call are being made as of today. This call is being replayed or reviewed after today. The information presented during this call may not contain current or accurate information. Except as required by law, the company assumes no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements even if the new information becomes available in the future. Today's call may include non-GAAP financial measures which require a reconciliation to the most directly comparable financial measures which was calculated and presented in accordance with GAAP and can be found in today's press release along with our recent corporate presentation which is also available on mobivity.com. With all that said, I'd like to turn the call over to Dennis Becker. Dennis, the call is yours.

[Dennis Becker:]

Thanks, Brett and thanks everyone for taking the time to join us on our call today. Our team has done an incredible job building on the momentum created in the fourth quarter of last year. To recap, the digital marketing landscape has been upended by additional privacy measures and restrictions to tracking online activity. These changes have affected the ability to target and market in the digital world. These tectonic shifts have been felt by the largest players including Google and Facebook all the way to the smallest marketers in the way marketers conduct business. Mobivity has always been at the forefront of connecting premium brands to their customers in real-time. Through our existing relationships, we have an opportunity to connect millions of consumers playing games, streaming video, and other digital activities to everyday retail food and convenience brands and vice versa. Thanks to our technology that powers unique one-to-one mobile messages, unique offer and promotion codes, and perfect attribution for campaign optimization and measurement. Thanks to our platform, consumers can choose to discover goods and services through rewarded incentives. Whether that's playing a mobile game to receive offers at their favorite restaurant, or downloading new games or content in exchange for discounts on fuel at the local gas station. These programs are 100% opted in by consumers and immune from all the changes that have ravaged the digital advertising industry. This presents unique and valuable opportunity to both brick and mortar brands and digital first businesses to target and reward consumers. I'm pleased to report that during the first quarter of this year, our team successfully executed several programs proving the value to brands, and that consumers are excited and willing to receive such rewards. These early results have shown that the product market fit is right and demand from Mobivity and our technology is strong on all fronts. Mobivity has developed three distinct applications for leveraging our existing product and technology suite to deliver real world rewards for digital businesses. First, we launched a solution to solve the growing user acquisition prices facing app developers. Since the new privacy restrictions on advertisers, it is become exceedingly costly for game publishers and other app developers to market to and acquire new users. Our new rewarded user acquisition solution combines a real world incentives for consumers downloading and trying new games with in-person rewards like gas discounts, and free quick service products. During the first quarter, we executed programs or Checkers and Rally's, SMS subscribers were offered a free premium cheeseburger or chicken sandwich in exchange for downloading a mobile game. This trial campaign is now led to a much larger program launching to hundreds of thousands of consumers in Q2. Consumers will receive free food at a premier nationwide brand in exchange for downloading a popular mobile games. We think rewarded user acquisition has tremendous upside as it's a win-win-win; the consumer receives a free product, the gaming publisher gets a new user, and the brand gets more traffic. The revenue model for rewarded user acquisition is also lucrative as digital app publishers will pay upwards of tens of dollars for successful downloads of their app. Mobivity is uniquely able to pursue this opportunity and rapidly expand given that integrating apps, publishers, systems to our retail brands infrastructure is made possible by our existing software platform. We believe there's a large universe of addressable users and thousands of games and brands for our current solution to capitalize on. Next, rewarded play. Our unique combination of mobile, SMS messaging and integration with brick-and-mortar point-of-sale systems is now powering rewards for mobile game publishers where gamers earn points the more they play games. Players can then exchange those points for free consumer products at any number of Mobivity's consumer brands. In the first quarter, our team launched rewarded play programs for several of our food service and convenience brands across about a half dozen mobile game titles that attract millions of monthly active players. We have developed an exciting and healthy pipeline of new gaming partners and game titles plus new food service and convenience brands that want to get into the game. Last but not least, beyond mobile games, there's a vast marketplace of console gaming platforms, such as Microsoft's Xbox or Sony's Play Station. One of the fastest growing segments in console gaming is free-to-play set-up games. A new opportunity for these game publishers to monetize on their players is providing players with opportunities to unlock in-game rewards in return for choosing to view brand-sponsored videos during the downtime. We're now pioneering a solution where these brand-sponsored videos will also include a QR code that can be scanned to receive real world rewards. Imagine watching a video to receive both an in-game reward, but also a free pizza. Before I hand the call over to Lisa, I'd like to highlight that the revenue model from this new business is based on fees priced in the multiple dollars per transaction while our previous model price services in the pennies. In fact, there are opportunities for an even far higher fees in the future with more sophisticated programs. It's also important to note that much of the upside can be powered by our existing infrastructure where we have significant capacity left to scale and grow the business. I will now turn the call over to Lisa for a more detailed view of our financial results and then I will come back for a few summary comments. Lisa.

[Lisa Brennan:]

Thanks, Dennis. I will kick off with our cash position. We ended the first quarter with approximately $1.5 million in cash. We completed a [Indiscernible] conversion in February of this year that added an additional $2.5 million to the balance sheet. We're confident that our cash on hand is sufficient to continue executing on the business model that Dennis previously described. Sequentially, our revenue for the first quarter of 2022 was up 8% over the fourth quarter of 2021 on a comparative basis, excluding accounting deduction taken in the fourth quarter. Total revenue for the first quarter was $2 million and gross profit was $900,000, flat with last year's Q4 gross profit. On a year-over-year basis, our revenue was down 17% while our gross profit was down 40%. The year-over-year decrease in revenue and gross margin was primarily due to the restructuring of a large customer contract due to COVID -related changes in their business. Total operating expenses for the first quarter of 2022 decreased by 23% to $2.2 million compared to $2.9 million in the same period in 2021, excluding non-cash expenses in G&A of $380,000 relating to our warrant exercise. Reduction in operating expenses is due to decreases in legal expenses and sales and marketing expenses. Net income for the quarter improved by 10% on a year-over-year basis to a loss of approximately $1.6 million in 2022 from the loss of approximately $1.7 million in 2021, excluding the non-cash warrant conversion expense. I will now turn the call back over to Dennis for his closing remarks. Dennis.

[Dennis Becker:]

Thanks, Lisa. In a very short period of time, our team has built a valuable and proprietary business at the intersection between online and offline audiences at a time when consumers are seeking greater value and digital operators are racing to find better ways to attract and retain customers. In the first quarter, we executed partnerships with leading game publishers, deployed live programs, proving the consumers value, real-world incentives for digital activities and most importantly, set the foundation for future growth as we build and improve a revenue model far more scalable and more profitable than the previous. I applaud our team's innovation and relentless pursuit of growth for our partners, customers, and shareholders and look forward to reporting on further success as we integrate new partners and programs and touch an ever-growing consumer base. Thank you for tuning in and for your continued interest in Mobivity. We'll now open up the call for Q&A.

[Operator:]

Thank you, we will now conduct a question-and-answer session. If you'd like to ask a question [Operator Instructions]. A confirmation tone will indicate your line is in the question queue. You may [Operator Instructions] if you like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that star one to ask a question at this time. One moment while we pull for questions. Once again, to ask a question [Operator Instructions]. Our first question comes from Bob [Indiscernible] with a private investor. Please proceed.

[Unidentified Analyst:]

Hi, Dennis, it's Bob, how are you?

[Dennis Becker:]

Hey, Bob.

[Unidentified Analyst:]

So you mentioned that you're doing a deal and that you've started with Checkers and Rally's by giving consumers a burger if they download a game and that the success of the trial, it sounds like -- was a trial has moved onto an even larger campaign. Can you explain a little bit more about just how that works and what the upside, specifically with Checkers Rally's, or anybody else is for now?

[Dennis Becker:]

Yeah, absolutely. Good question. So really, as I was describing this win-win-win where the -- these brands can now drive traffic by offering their customers free food as an incentive to downloading a mobile game or participating in some other type of service, this is essentially creating a full ticket sales for the brand because the mobile game publisher, for example, and in this case is willing to pay a success fee for any of say, Checkers and Rally's customers who participate in downloading the game. And then our technology, of course, is built into all of that. So for example, if somebody received a text message from Checkers that says download this game and we'll give you a free burger, we track all of that. We track to consumer actually clicked through and downloaded the game and then we send a text message back to the consumer with a unique coupon code so they can redeem their free burger. And then the way the economics and all of that work is, we're getting paid for powering the technology. The game publisher is paying for the success of every download converted and that -- the amount that they're willing to pay also is large enough to subsidize the free food that the brand gave to the consumer. So kind of everybody's incentivized, I think also with maybe the direction the economy is going this is going to be something that becomes exceedingly popular with consumers. With Checkers and all of our QSR restaurant and convenience brands can now go-to-market with is kind of exactly what the consumers will be looking for, which is deeper discount, greater value free food, cheap gas, all these things that our kind of part of everyday lifestyle, and then at the same time, these game publishers, which are having to find new ways to get to consumers because historically they've used ad networks that are doing pop up ads and other forms of advertising based on the consumers private information for targeting. Those networks are getting closed off so they need to find new channels such as this to get to consumers and get their games in consumers ' hands.

[Unidentified Analyst:]

But Dennis, tell me if I can ask another question or maybe two, how did the economics actually work? Are you getting the -- in your example, does the Checker Rally pay you or does the gaming company pay you? I mean, you said that they're blowing out of text to their clients. Get a free burger, download the game. So I understand how the gaming company would be incented to pay you. Does Checkers paying you to get that person in there as well or is the gaming company paying both you and Checkers in this example.

[Dennis Becker:]

So the gaming company is just paying Mobivity, Mobivity would then also reimburse Checkers for the cost of the food or the product that was given away. And then we also, in some cases, will make money from the brand, in this case, Checkers, because often times the way that the free -- the incentive, to free burger is transacted as, you know, you have to use that coupon, say, in the apps. That creates a new digital subscription back to the brand, in this case, Checkers or they may be paying us to help also as a success fee to build their digital audiences which is very important in this food services industry right now as everyone's trying to move to digital ordering and relieve labor costs. I think it's important --

[Unidentified Analyst:]

So is it something where the Checkers are still paying you cents per transaction and the gaming company is paying you dollars, as you said earlier, it's tens of dollars of which part is going to reimburse Checkers for the food that they're providing. And in addition to that though you're still getting your pennies per click, so to speak, from Checkers or not?

[Dennis Becker:]

No. In the case of some of these brands, they're kind of in the same businesses with the gaming companies where they're trying to get consumers to download their apps for food ordering and loyalty. And in those cases, they'll pay acquisition costs in the dollars as well. So it gives us the flexibility of really custom tailoring these programs but we absolutely have the opportunity to make money off of both sides.

[Unidentified Analyst:]

Can you speak to the pricing at all just give us an order of magnitude on what you're talking about here? You said 10 of dollars that could be $10, $20, $30. I don't -- can you give us some indication of the pricing model?

[Dennis Becker:]

So it varies by game, sometimes by app because there's a range of apps that are there, there's casual play games. Casual play games can command anywhere from five to $15 every time a game is downloaded, you get into some of the higher-end types of apps out there. Maybe it's gambling apps and things like that where they could be paying a couple of $100 per conversion. So really kind of net this is adding a whole new revenue layer on top of what our core businesses historically been, which is still powering all of these digital programs for brands like Sonic and Subway and others. In fact, as a review, we're operating digital platforms should these brands that currently reached about 20 million digital consumers. The brands themselves touch probably half of the population in the United States. And you think about everybody that goes to a Circle K gas station or convenience store or goes into a Subway. So when we think about back to your question on what are these conversion fees and how they can be in 5-15, $20 per conversion. We think about the business and like for example, right now, in the case of Checkers and Rally's where they use their SMS program to promote a game and good way for cheeseburgers. Again, those programs that we are powering reach like I was saying 20 million semi consumers. So if we got running these programs, making the success fees in the dollars that I was describing, very small percentage of conversion, say 1%, 2% of that entire reach of 20 million consumers has a lot of upsides as you can tell, in terms of the potential for revenue just on the existing customer base that we have.

[Unidentified Analyst:]

Okay. Thank you.

[Dennis Becker:]

Thanks, Bob.

[Operator:]

Once again, ladies and gentlemen, to ask a question, [Operator Instructions]. Our next question comes from Jeff Porter with Porter Capital Management. Please proceed.

[Jeffrey Porter:]

Hey, Dennis. So just to follow up on Bob's line of question, just so we can understand here. I see how we provide a lot of value and can get paid a lot of revenue upfront on customer acquisition for gaming company or helping build up loyalty with the customers downloading a brand's app. Is there a recurring revenue piece of this once we help them gain all these additional customers or is it a one-shot deal? How do we participate going forward once they have these customers?

[Dennis Becker:]

That's a really great question. So we really feel strongly that we're building a recurring revenue model. What I'll point to you here is that, again, to look at the gaming industry, mobile game retention is pretty bad. I think it's kind of like the industry average is only 5% of people that download games stick retention rates in the 4% to 5%. So if we bring a consumer to a mobile game, say through text messaging, we still have that consumer's phone number and whether or not that consumer ultimately stays in the game, we now have a platform for that gaming publisher to reengage that consumer and win them back. The integration we're building to every time we convert a consumer into a game where they've downloaded the game, the technical integration that we've built here also is persistent in terms of us being able to detect what that consumer has been doing over in that game. Are they playing it frequently enough? Are they taking action in the game that's monetizing for the game publisher? And so it's not just about converting the download but over time, how do we keep reincentivizing the consumer? Maybe we gave him a free cheeseburger for downloading the game but we're giving him a free milkshake every other week for continuing to play the game. So we really think that by helping them solve the retention challenges, we create a recurring revenue stream that way beyond just the initial, call it successfully of converting the gamer, and we're continuing to wrap up transaction fees and keeping that gamer engaged to the game. We also feel that the way that these acquisition programs are work, we've talked about. The example is Checkers, how they send a text message to consumers and biting consumers to download the game. We think that beyond just those one-time events, we can build an always on network, and this is where the brands could advertise incentivized game, game download are incentivized digital subscriptions. Sign-up for Google or Netflix, whatever, the digital product is that these brands can create an always on networks. So they're just putting up the QR code or some other types of called action that's just standard signage at their stores or links on their website or online ordering that are kind of again, always on inviting consumers to get more free rewards app their brand. If they convert to digital goods and services.

[Jeffrey Porter:]

Is there the possibility for like a rewards piece like if you get to A, B, or C in this game and win this, then you get rewarded with a burger or discount on your gas?

[Dennis Becker:]

Yes. Absolutely. I mean, kind of our first version of this is where gamers are earning points in the game to then exchange for brand offers and promotions or their downloading a game to get the offering promotion. But that same plumbing could be used for rewarded play where if you get to a certain level, you get a bigger prize or if you complete a mission, you get free fuel and a lot of these products and services can be very organic to game play to -- like we've got one of our gaming partners, publishes a game that's like literally a fast food service game. Your character is flipping burgers and try to make as much money as possible and how organic could that be to winning free food at your favorite fast food restaurant or racing games, where it's automobile racing and completing levels and whatnot gets you discounts on fuel at Chevron station or something like that.

[Jeffrey Porter:]

Is this a kind of program that might be applicable to a company like New York Times who publishes Wordle, which seems to be all the rage? Does that -- is that a potential customers go to?

[Dennis Becker:]

Well, yeah. I think that these rewards that we can facilitate because of our technology, again, giving people food and fuel and -- can be applied to any actions. So in the New York Times example, they bought that game because that's going to bring eyeballs, those eyeballs are going to maybe convert into New York Times subscriptions, increased eyeballs will add revenues. So it -- to the extent that they want you playing that game as often as possible to create advertising impressions or subscription value, they could inject fuel discounts or free burgers and all sorts of reward schemes with our platform into games like that.

[Jeffrey Porter:]

Last question, so you mentioned that you've kicked off a few of these programs, test market. How do you see these programs evolving throughout the year? What's sort of the time frame between a test market and then going live commercial for revenue and how might we expect this to play out and follow over the balance of the year?

[Dennis Becker:]

Well, I think that the remainder of this year and kind of already being into May, we've now cleared several trials that have gone to market. We're really focused on kind of acquisition throughout the remainder of the year getting as many of these campaigns executing as possible. There's a lot of mixing and matching which games worked good for burger brands, which games worked well for fuel discounts promotions and offers. We're talking to subscription services as well. It's not just game publishing. If you sell streaming video or have some other types of digital subscription service, and it's all about acquisition, how can we get these different rewards into play for those types of business models. And then as I also described, we're very close to now executing on a program in the console gaming environment, so this is Xbox or Play Station. So I think that what we see right now, kind of looking ahead through remainder of the year is there's really deep demand for this. And we're kind of building these programs and tailoring them along the way. But the beauty of it is that it's all monetizable along the way as well. These aren't free trials and things like that. So we've -- we've got three programs where we're incentivizing gamer acquisition. We've done a couple of those campaigns now, they're just getting larger and we think they're getting broader, we'll be doing a lot more brands, a lot more games. Rewarded play, we're adding -- we have a big game launch coming up with a partner who is bringing a game to market and we're adding the number of new brands to their rewarded play program where people play the games, earn points in exchange of free rewards. And then, again, with the console gaming. So from here through the end of the year, it's just about expansion and amplification of these three programs that so far through the first quarter have all proven pretty successful.

[Jeffrey Porter:]

Thanks.

[Dennis Becker:]

Thanks, Jeff.

[Operator:]

Our next question comes from Bruce Evans, a private investor. Please proceed.

[Unidentified Analyst:]

Hey, Dennis, two questions for you. Number one is, I -- I'm not an Internet gaming guru, so can you explain to me how these gaming publishers make money or generate revenue by people playing their games?

[Dennis Becker:]

Yeah, great question so one thing I'll point out. Now it's right at two-thirds of the U.S. population is considered a active mobile gamer, so whether you're playing Candy Crush or Boardwalk. So the reach is really pretty vast across the U.S. population. The way that the gaming companies predominantly earn revenue from these casual mobile games like Candy Crush and others is two ways. Either serve up ads in the game, and these are intrusive, interruptive, pop up ads. But they do a lot of them. In fact that they do billions of dollars of ad revenues from those pop up ads. Second to that is what are called in app purchases. So you're playing the game, the game free, but if you want to unlock more challenging levels or you want to add capabilities to your character, customize the gaming experience, you've got to pay for that in the game. Maybe you pay a $1.50 to buy a sword for your character, or you pay $5 to unlock the -- three or four different levels in the game and they're called in app purchases and because these games come from like the Google Play or Apple App store, who already have your credit card. That's really low friction payment experience. You just saying yes to buying things in the game.

[Unidentified Analyst:]

Very good. Next question is your California Fish Grill results were pretty impressive with the 23% increase in customer revenue. My question is, if they're so impressive, why isn't the world being down to your doorstep to have our technology installed with those kind of results?

[Dennis Becker:]

That's a great question, so California Fish Grill launched a text messaging program. That's been our business model the last five or six years, we believe that text messaging is a top performing marketing channel every brand should be leveraging. The difference between seeing results like that for California Fish Grill and all of the restaurant industry beating down our door to turn on text messaging. Is text messaging as it is a high-performing marketing channels, but it takes a lot of work. The brand got to go find subscribers, they've got to start designing when they're going to send what offers, when, how often. And so it becomes a bandwidth and a logistical challenge for the brand, regardless of how performing the program is versus this gaming or digital rewarded model that I've been talking about where we can take a brand and say, let's take four offers, buy-one, get-one cheeseburger, free french fries, free drink, and a half-price chicken sandwich. Give me those four offers, I'll put those offers inside the rewards center of a dozen games that reached 20 million people. And all you have to do, as the restaurant brand, is sit back and watch customers come in your door because these gamers are out there playing those games, earning those points to get your offer and promotion and use it to drive sales for your brand. You don't have to build a subscriber database, you don't have to think about when and where you're going to send these promotions and offers and so on and so forth. So it's really going from a do-it-yourself program that text messaging delivers great results but it's really do-it-yourself versus just playing matchmaker where we're finding great games that have big audiences that we know all eat and putting these food brands in front of those audiences, low friction, instant results, instant offense. Same thing with convenience. In a convenience store space, they're -- just about every convenience store operator sells fuel and fuel is a real hot commodity right now and gaming companies would love to give fuel discounts to their gamers and the convenience stores would love to have the instant audience that these gaming companies have to drive traffic to their locations.

[Unidentified Analyst:]

So Dennis it almost sounds like it's the person that's playing the game like paying for a little add - ons to their game. They pay for the add - ons but they actually get the money back in the form of a coupon for a hamburger or a discount on gas. So the gaming revenue company -- the gaming company increases their revenues but there's no cost for the consumer who pays for the extra add - ons to the game?

[Dennis Becker:]

Precisely and I think that's the cross-section we think we've hit with this, is that everybody wins. Again, it's not at heavy lift. The consumer doesn't need to do anything new. Consumers already playing the game, they understand how to play the game, but now they get an added benefit playing the game. The gaming company now has more benefits to get to the consumer, to get them to play more and therefore likely spend more. And the convenience or food service brands -- and by the way, we certainly think this is applicable to grocery, pharmacy, movie theaters. There's a whole bunch of industries that we think rewarded play. Again, not just with games, but any digital service that relies on acquiring and retaining consumers. Now can add this to their quiver to incentivize for acquisition and retention.

[Unidentified Analyst:]

Brilliant strategy, I like it.

[Dennis Becker:]

Awesome. Thanks, Bruce.

[Operator:]

We have a follow-up question from [Indiscernible], a private investor. Please proceed.

[Unidentified Analyst:]

Hi, Dennis. So I just want to make sure I understand. So in one of your recent campaigns, if you blasted out a 1/2 million SMSs, let's say on behalf of, and I'm making the numbers up because I obviously don't know, but Checkers and Rally's and you got a 2%, 1%, whichever, say, 2% response to 10,000 people that signed up for the games and you got paid from -- under my example, you got paid from Checkers, $10, $12, whatever you had to buy the burger, maybe $2 to $3, whatever that number is, and Mobivity nets, in my example, $7 or $8 on those 10,000. If my example is correct, I'm just trying to understand the economics again, that would be how it is paid to Mobivity? You're getting $10, you reimburse the -- again, under my example, you reimburse Rally's $2 or $3 or you net $7?

[Dennis Becker:]

Correct.

[Unidentified Analyst:]

I'm not saying you net $7 on transaction. I'm just saying if those were the numbers, that's how the money flows, you get paid, you paid, and then you pay Rally's and you keep the gross margin at $7.

[Dennis Becker:]

Right.

[Unidentified Analyst:]

Okay.

[Dennis Becker:]

And current castings [Indiscernible] that's how the models setup. One thing I will add to is there isn't -- there's always a bit of maybe some breakage to where the consumer may not -- may have downloaded the game, but they never make it to the restaurant and redeem that voucher.

[Unidentified Analyst:]

Okay.

[Dennis Becker:]

And it is our average reimbursement costs may not be one-to-one, but again, emphasizing like that's how we've tested --

[Unidentified Analyst:]

In that case, you're keeping all $10 in my example, you don't reimburse the restaurant unless the customer shows up to redeem, correct?

[Dennis Becker:]

Correct.

[Unidentified Analyst:]

But the gaming company still pays you the full $10 as soon as somebody signs up.

[Dennis Becker:]

Right, and so we also look at that those are the dials that we can turn to, and we want to turn on volume. We might increase reimbursement reflects, we might pay for every download and we may reimburse in the brand regardless and that there's redemption, but those are kind of the dials. Those were the key pieces to the economic model as you've described, it's accurate.

[Unidentified Analyst:]

Okay. And can you -- one last question. Sorry. Can you -- so in the example of a 500,000 with a 2% uptake, that's 10,000, if you got $10 gross, that's a $100,000. Since you've done this multiple times, I assume, do you blast out an SMS to, maybe a new group, but also the 450,000 that didn't or the, I'm sorry, 490,000 that didn't take first time. Can you continue to reblast to the same potential customers of Rally's and Checkers, in my example, or do you move on to the next group?

[Dennis Becker:]

No. So the short answer is yes, we can rebroadcast. And remember, this is all we've been doing for the last five or six years. It hasn't been messages where we send out and say download again and gets something. But every one of our brands are sending out an offer, come into Subway today and get two for one foot long or whatever walk-in and they just -- they continue to send an SMS to that same database just about weekly. I think that's about the average all of our customers send at least one or two offers a week. But so far again, with the trial campaigns that we've run with these tests and Checkers, and we've got another brand. It's just that this is a small fraction of the reach that we have, as I mentioned, we have $20 million consumers that we can engage through our brand programs that we've been running historically here. So in these early tests, we've just scratched the surface of this model.

[Unidentified Analyst:]

Okay, and you currently have three gaming companies l think you said that you were running programs for, correct?

[Dennis Becker:]

Correct.

[Unidentified Analyst:]

Okay. How many were actually included in the first quarter? Where there are any of that were signed up post March 31st or all three of them more contract signed and actually did trials with them or however you want to say in the first quarter versus how many you expect in this quarter, the second quarter?

[Dennis Becker:]

Yes. We had signed up three in the first quarter. We only executed a live campaign with one of the partners. And --

[Unidentified Analyst:]

Okay.

[Dennis Becker:]

And we have most of these campaigns executing this quarter.

[Unidentified Analyst:]

Okay. And I know I said that was going to be my last but one more. Do you expect since you were talking to additional gaming companies, you expect it by the end of June to have several more, one more, or too soon to know?

[Dennis Becker:]

I think it's certainly our desire to get as many as possible.

[Unidentified Analyst:]

Of course.

[Dennis Becker:]

One of the things to notice I think to note is that, the way that these gaming publishers work is a lot of them -- they're like a holdings company of several gaming titles. So it's Where usually not just a one-to-one game publisher has one game, usually the game publishing companies have half dozen to it doesn't games.

[Unidentified Analyst:]

Okay.

[Dennis Becker:]

But there are hundreds of other publishers for us to work with. Again, we were just getting started.

[Unidentified Analyst:]

Thank you again.

[Dennis Becker:]

Thanks, Bob.

[Operator:]

This does conclude today's question-and-answer session and with that, we will conclude today's teleconference and webcast. You may disconnect your lines at this time and thank you for joining and have a great day.