In Q1 2025, Adcore reported a modest revenue increase of 2% to $7 million, with stable gross profit at $3.1 million and a gross margin of 44%. Notably, cash flow from operations surged to $263,000, marking a significant improvement from $13,000 a year prior. The company aims for a 25% revenue growth target for 2025, targeting $40 million in total revenue. Positive momentum was driven particularly by the Media Blast app, which achieved a record ARR of $2.3 million, a 300% year-on-year increase. The company remains optimistic about meeting its ambitious growth and cash flow goals through increased client acquisition and expanding service offerings.
In the first quarter of 2025, Adcore reported a revenue of $7 million, reflecting a modest 2% growth from the previous year’s figure of $6.9 million. This slight increase can be viewed as a signal of steadying performance in a competitive landscape, though it may not be exceptional. Notably, the company's gross profit held at $3.1 million, contributing to a gross margin of 44%, well within the target range of 40% to 50% that management aims to maintain【4:1†source】.
A significant highlight from the earnings call was the positive operational cash flow, which rose to $263,000 from just $13,000 a year earlier. This improvement was largely driven by increased revenues from the APAC region, indicating that the company is effectively managing its operations to not only sustain but also enhance cash generation capabilities. Adcore remains in a strong cash position with $10.6 million on hand, only slightly down from $10.8 million at the end of the previous quarter【4:5†source】【4:6†source】.
The APAC region was a standout performer, showing an impressive 85% year-on-year growth in revenue. This surge is primarily attributed to new client acquisitions, demonstrating the effectiveness of Adcore's strategy in this market. Conversely, revenues in EMEA and North America saw declines of 42% and 25%, respectively, largely due to the cessation of certain activities, particularly a major tender in the EMEA region that ended in early 2024. Management is cautiously optimistic about recovering these markets in the coming quarters【4:5†source】.
Adcore's Media Blast application demonstrated remarkable growth, with annual recurring revenue (ARR) soaring to $2.3 million—a staggering nearly 300% year-on-year increase. The app’s user adoption continues to escalate, showcasing a 15% monthly growth rate. With strong demand and plans to integrate additional channels like Meta and TikTok, Media Blast is positioned as a crucial driver for future revenue expansion【4:2†source】.
Looking forward, Adcore has set ambitious revenue growth targets of 25% for 2025, aiming to reach $40 million. While the Q1 results reflect a slow start, management draws confidence from historical trends, noting a propensity for substantial rebounds in the latter part of the year. Additionally, the company is targeting a SaaS recurrent revenue growth to between $4 million and $5 million, bolstered by the success of the Media Blast app【4:4†source】【4:9†source】.
Current share prices hover around $0.27 to $0.29, prompting management to highlight a potential upside based on their performance metrics—projecting a 500% increase based on EBITDA to gross profit ratios. This signals that the market may undervalue Adcore's stock, presenting a potentially lucrative opportunity for investors as the company continues to position itself for growth【4:5†source】.
While the earnings report indicates a quarter of modest growth, it also reflects deeper strengths within Adcore's operations. The surge in APAC revenues, robust cash flows from operations, and the outstanding performance of Media Blast point toward a resilient company navigating challenges effectively. Investors may find the outlook promising, especially given the ambitious growth targets set by management and the potential upside in share value.
Good morning, and welcome to Adcore's Q1 earnings call. This morning, you might have seen the press release putting out our Q1 financial results, highlighted very strong growth in our APAC region fueled by Media Blast and new client acquisition in the region. Today, we will review those results in more detail.
On the call today, you have myself, Nick Campbell, Head of IR. You'll hear from Omri Brill, Adcore's CEO and Founder; and finally, Amit Konforty, Adcore's CFO.
The agenda for today, we'll begin with some forward-looking statements you should be aware of when listening to this call, followed by the CEO opening remarks, followed by the CFO financial highlights, and finally, finishing off with Q&A.
[Operator Instructions] Before we begin, please be advised there are some forward-looking statements that will be made today that are somewhat inherent in nature as they are forward-looking. I will give you a moment to review the statements now before we begin, so take a minute to do so.
Okay. And with that, I will move it over to Omri Brill for the CEO opening remarks. Omri, floor is yours.
Thank you very much, Nick, and it's my pleasure to be here today and talk about the company financial results for Q1 2025. And thank you for all the participants that joined our call today.
Let me share my screen and we can begin with my remarks. Okay. So I think like, all in all, on the first glance of the company financial result, you can see, okay, it's not like something to write home about, right? Let's say, top line revenue went up a bit, like gross profit remained more or less the same, some improving to profitability, but I would say okayish quarter. But actually, when you take a deeper look at the quarterly results, there's actually a lot of things we should and could be proud about. And I want to walk you through some of the stuff that get us excited about this quarter result and why we are still very much bullish regarding the entirety of 2025.
So I would say just like something that's worth mentioning, obviously, strong cash growth year-on-year, positive operating cash flow and record-breaking momentum in Media Blast application. That's some of the stuff that get us excited about this quarter result. And just like a quick run-through. So top line revenue this quarter was $7 million compared to $6.9 million in the previous year. That represent 2% year-on-year growth. Gross profit remain similar, $3.1 million 2025 Q1 compared to $3.1 million in the previous year.
If you look at what we call quality growth KPI that, for us, is gross profit, gross margin, and then we can definitely see numbers are where we want them to be. Gross margin in Q1 2025 was 44%. That's exactly more or less in the middle between 40% and 50%, which is the range we want to see. And gross profit against $3.1 million. That's a solid start of the financial year.
And if you look -- sorry about that. If you look about the cash position, then we can definitely see that the cash position remain high, $10.6 million compared to $10.8 million in the previous quarter. And I know there was some discussion whether we see because of seasonality, drop between Q1 to Q4. And I'm glad to say that wasn't the case, right? Cash position still remain high, which is obviously a positive thing for the company.
So just like run -- quick run regarding the report highlights, the way the company or management see it, again, strong cash position at $10.6 million, and they are up by 33% year-on-year. A lot of that is thanks to, let's say, deposit we see coming through the electronic wallet from our Media Blast app. So there's a lot of more activity and you can see the numbers in the following slide to see the momentum that we are gathering in this specific app. And we also see positive operating cash flow of -- sorry, $263,000 compared to $13,000 in the previous year. So a big jump over there in cash flow generated from operation activity.
Revenue growth again, 2% year-on-year to $7 million. And we saw a reduction in net loss to around $200,000 compared to almost $400,000 in the previous year. So again, company is, let's say, more operationally efficient. And we also saw positive adjusted EBITDA of $208,000 compared to -- sorry, this quarter compared to $201,000 in the last year as well. So again, in most of, let's say, the key indicator, the way we see it, we saw a positive move this quarter, and it's still, I would say, a very strong quarter for the company.
Now to the Media Blast app. Media Blast is an application we launched around 2 years ago, and we're glad to report that we see a very strong momentum buildup in this application. April 2025, we ended with a record ARR of $2.3 million, even a bit more than $2.3 million. That represents almost 300% growth year-on-year compared to the previous year ARR, and just month-to-month that represents 15% growth. So basically, we see there is a lot of, let's say, momentum building up. And you can clearly see it in this early chart of 2025, $1.7 million in January in ARR, $1.861 million in Feb, and then over $2 million and now over $2.3 million, then clearly a strong momentum. We see a lot of, let's say, traction. And I think the most impotent thing regarding the Media Blast app is we see good market fit. So we see a lot of demand, and this demand is like, it's continued growing. So it's not like we're reaching any plateau or any glass ceiling. There's still a lot of demand, and we continue to report a very strong result in this specific application as well.
Actually, because of this application, we also see a lot of other positive indicator within the financial result, whether it's the cash position and other important indicator as well that improved because of this specific application.
Last quarter, when we did the earning call was the ending of the fiscal year of 2024. And obviously, we took this opportunity to also discuss what the company goals for 2025, right? Like what we are trying to achieve. And I want to run with you together, let's say, using the opportunity now that we're already 1 quarter into the new year to see, okay, where do we stand, whether we meet or we are -- what we think about meeting the goals that we discussed in the last earnings call. And I say the first one we discussed that the company would like to grow 2025 by 25% to $40 million, and that's a big ambitious goal. And I would say, yes, this quarter, we only grew by 2%, but we still believe because, traditionally, for us, Q1 and Q2 starts slow usually and then we pick a lot of momentum. The company still believe we can reach this goal of $40 million revenue for the entire year of 2025. So I would say, we still need to prove it, but we are still bullish about meeting this goal as well.
We talked also about strengthening the company profitability. We would like to achieve 6 straight quarters of positive adjusted EBITDA and positive cash flow. So in this regard, big check, right? Both the adjusted EBITDA and the cash flow generating for operation activity were positive in Q1 2025. We talk about AI-driven innovation. And actually, I am glad to report there is a lot of innovation that is AI-powered or AI-related going on, especially around our Proposaly app, but not only. So basically, we see, let's say, a very deep AI integration to all the different technologies the company is developing, and that's very exciting. And I'm sure we can share later down the year a lot of this innovation with our shareholders as well.
And last, but not least is we would like to grow our SaaS recurrent revenue to around $4 million to $5 million, and again, [indiscernible] check as well. We see that just from the Media Blast app, we're already $2.3 million, so that means -- and there's a lot of momentum, around 10% month-on-month growth just from this specific app. So we definitely believe that we can meet this target by the end of 2025 as well.
So I think, all in all, we set like 4 very ambitious goal for the entire year, and I see like we can like on track to meet most of them, if not all of them, and that's a positive sign for us as well.
Last but not least, I would like to talk about the current share price and obviously talk about comparable companies as well. So if you look at the current share price, which is around $.27, I think, or $0.29, if you look at these numbers from May 7, and you look at comparable, so we clearly see there's a lot of upside to be made within the stock. If you're looking at EBITDA -- to gross profit, we talk about more than 500% upside. So that represents $1.5 dollar as a share price, so the target share price. And if you talk about EBITDA, then we're talking about 200% upside and that represent around $0.60 share price. So I think like management believe the current share price is deeply undervalued. There's a lot of money potentially one can make with the Adcore stock as well. And again, all in all, I think it was a positive quarter for us. We started 2025 in the right tone. And more importantly, when you look a bit inside and you look at what we call quarterly KPIs, whether it's the cash position, cash flow, the momentum that we see in SaaS revenue, then actually it's not good, it's very positive, even more than good. So I think like positive quarter for us, and with the important KPI, I would say, even an excellent quarter for us all in all.
And now I would hand it, I guess, to our CFO, to talk about the financial results in more details.
Thank you, Omri. Okay. Good morning, everyone. Before beginning the financial overview, I would like to remind you that the following discussion will include GAAP financial measures as well as non-GAAP results. All amounts will be presented in Canadian dollars.
In the first quarter of 2025, we saw a strong increase in our APAC revenues, sustaining the momentum from 2024. In addition, we saw a big increase in cash flows from operating activity, improving the company's financial flexibility.
Let's review in more detail. So for the 3 months ended March 31, 2025, we delivered revenue of $7 million compared to $6.9 million in the same period of 2024, an increase of $0.1 million or 2%.
Gross profit for the 3 months ended March 31, 2025, was $3.1 million compared to $3.1 million in the prior year.
As for gross margin for the 3 months ended March 31, 2025, they were 44% compared to 45% in the same period last year.
As for operational expenses, R&D expenses for the quarter were $0.6 million compared to $0.6 million in the prior year.
SG&A expenses for the quarter were $2.8 million compared to $2.7 million in the prior year.
Operating loss for the 3 months ended March 31, 2025, was $0.3 million compared to $0.2 million in the same period last year, an increase of $0.1 million or 51%.
Net loss for the 3 months ended March 31, 2025, was $0.2 million compared to $0.4 million in the same period last year, a decrease of $0.2 million or 49%.
As for revenues and gross profit, when looking at the quarterly result, we see that revenues and gross profit remain relatively the same. We are continuing to prepare the ground for a much stronger second half of the year, aiming to keep the yearly positive trend.
As for geographical revenue breakdown for Q1 2025, revenue in APAC saw a massive 85% year-over-year increase. This is driven primarily by acquiring of new clients. Revenue in EMEA decreased by 42% and in North America by 25%. This is mainly due to stopped activities.
Net cash from operating activities. In the 3 months ended March 31, 2025, we kept on generating cash from operating activities in the amount of $263,000 compared to $13,000 in the same period last year. This improvement in cash flow is mainly caused by the increase in our revenue from APAC, which also comes with favorable payment terms.
In terms of financial position, we had cash and cash equivalent of $10.6 million as of March 31, 2025, compared to $10.8 million at December 31, 2024.
Total working capital amounted to $7.1 million compared to $7.3 million at December 31, 2024, a decrease of $0.2 million or 1%.
As for the liability side of the financial position, we can see that the company is still debt free.
Adjusted EBITDA. The quarterly non-GAAP results reflect adjustment for the following items: depreciation and amortization, share-based payments and other nonoperational items. For the 3 months ended March 31, 2025, adjusted EBITDA was $208,000 compared to $201,000 for the same period in 2024.
With that, I will turn the call back to Nick.
Thank you, both Amit and Omri for your comments. At this time, we will move over to the Q&A portion, where there has been a number of presubmitted questions. I want to start with, Q1 delivered a strong increase in cash flow from operations. We saw it go from about $13,000 in the Q1 of 2024 to over $260,000, I think, in Q1 of 2025. Can you just provide a bit of color on what's really driving that improvement in cash flow from operations?
That's fair remarks. Maybe, Amit, you would like to answer this one. I know you already comment on it, but maybe you would like to follow it up?
Yes, sure. So as I mentioned, the main reason is the increase in revenues from APAC, which comes with a favorable payment terms.
Very good. Moving on to the second question here. We have, the APAC market seem to really be outperforming this quarter. Can you just provide a bit of information on what's working there? Can you apply this strategy to the other markets in which you operate in?
Actually, that's a very good question. I would say a few things. A, when you look at historically, I would say, we see some fluctuation from time to time in the different regions, right? Let's say, even APAC, which is now, let's say, the leading horse for us, if you look post COVID, for example, it was -- went down a lot and then remained plateau, and now it's like slowly start to pick momentum and now actually is accelerating in this momentum. So I think like we see from time to time that the different region behave differently. That can be related to macroeconomic in every region and other factors as well. I think that like in APAC, what we see probably is, I would say, combination of positive macroeconomic and I think like client acquisition as well, and so that's what build such a strong momentum in this specific region. And yes, we definitely all the time look at what's working for us or even not working for us in a specific region and try to copy it to adopt it in our other regions as well. And I think like what we like to see more in our region is tracking our client acquisition capabilities that also would generate such a positive momentum as well. So I think like, all in all, we're very happy of what we can achieve in APAC this specific quarter, and we definitely would like to see this momentum carried to other regions as well.
Omri, and can you elaborate on the slowdown in North America and EMEA market, and if you expect this to continue?
So that's actually also a very good question. I would say the following. Like Amit mentioned on his report, a lot of this slowdown was as a result of, let's say, what we call stop activity. And just to give you some color behind. Let's say, we take EMEA, for example. We used to have a very big tender with Israeli advertising -- government advertising agencies that was for 5 years and actually ended in Q1 2024. So I think like the stop of this specific activity impact some of the drops that we saw in Q4 -- let's say, for example, in Q1 2025. But let's say, if you look forward Q2 2025, then we didn't have in 2024 this type of activity. And that's why we don't believe that we're going to see such a big drop or such a drop even at all in the EMEA region. And the same logic more or less apply also to North America as well. So I think it was one-off stop activity effect that we saw in this specific quarter. And we believe, later down the year, we can recover definitely in these regions as well. So we don't expect to see continued deterioration in these specific regions.
Very good. Omri, a question regarding Media Blast. It looks to continue growing nicely. Do you see the demand topping out? Or is there still a lot of room to grow for that app?
It's a good question. As far as I am concerned, we're not scrapping the surface over there, like there is like endless demand compared to what we currently deliver and there's a lot of room to continue growing within the Media Blast app, whether it's introducing additional channels. Currently Media Blast, for example, support within the app itself Microsoft and Google advertising. But let's say, we now can introduce Meta, for example, or can introduce TikTok, for example, that by itself represent a big uptick and a big room to grow. And like I say, like there's no limit to what we can do in Media Blast compared to the current, let's say, ARR number. So we still -- there is no, let's say, glass ceiling. There's not something that will stop us continue growing as far as the company concerned.
Omri, your newest app Proposaly, how is the development going? And can you share a time line for when that's expected to go live?
Okay. So actually, it's going pretty well. I think like we already have a quite a robust app in our end. And we already started early stages of a close beta. You can call it alpha or beta, close beta stage. And basically, we expect to still be on track to go out from the close beta stage to almost a full release in the second part of 2025. So I think the app is moving along, and we would like to see some revenue generated from this app in the second part of the year already.
Omri, another question here. Looking at the targeted 25% growth this year, after a slower Q1, what really gives you the confidence that you can achieve that rate in the remainder of the year?
So that's a fair question, but I would say, Q4 2025, give me the confidence. We had a massive rebound, like if you look at 2024, it started a bit slow, even slower than what we see in this year 2025. And then we had a massive rebound in the second part of the year, whether it's Q3 and even more so Q4. So I think like if we continue to see the same behavior and the same trend, and so we still have the potential to do massive rebound still in these numbers. And so again, shareholders should look how the company started 2024 and how company ended 2024. And if we can copy paste that into 2025, then I think like we still can be within the ambitious targets that we would like to meet.
Very good. Thank you, Omri, and that concludes the Q&A for the call. I want to give you an opportunity, Omri, to final thoughts before ending the call here.
So I would end with the way I started. Again, obviously, thanks, everybody that joined today's call. Like I say, in the first look at the quarter result, you can say, okayish quarter. But if you took a deeper look and you see there's a lot of things that we can and should be proud at and a lot of metrics move in the right direction. There's a lot of exciting movement within what the company do, whether it's the Media Blast app, we feel like tremendous growth in the application ARR. And that, let's say, has been undervalued. We should get a better multiple for this type of revenue. We see tremendous growth in our APAC region, and this reflect everything that the company doing. There's a lot of takeaways we can copy from this region to another region as well. Positive cash flow, positive cash position. So all in all, I'm very happy about this specific quarter, but I'm more happy, excited about what 2025 can bring to our company and to the shareholders.
Thank you, Omri, and thank you, Amit, for your comments today, and thank you all for joining. We appreciate your continued interest and support. Thank you again, and have a great rest of your day.
Thank you.