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Crowd Media (ASX:CM8) - Outgoing CEO, Domenic Carosa - The Market Herald
Outgoing CEO, Domenic Carosa
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  • Shares in Crowd Media (CM8) have taken a beating today after the company revealed lower revenue and steeper losses for the first half of FY21
  • The social commerce business made just under $7 million in revenue for the half-year, which is 18.4 per cent lower than over the same time in 2019
  • The soft revenue underpinned an 84.3 per cent increase to Crowd's net loss after tax for the half-year, which came in at just under $2.3 million
  • Crowd said its Q&A chatbot business faced some headwinds over the year and brought in soft-than-expected revenue
  • On top of this, Crowd has made some important investments into its artificial-intelligence-driven "Talking Head" chatbot tech
  • Still, thanks to a $4 million placement in November 2020, Crowd had $2.97 million worth of cash on hand at the end of December
  • Shares in CM8 tumbled over 15 per cent this afternoon to 3.9 cents each

Shares in Crowd Media (CM8) have taken a beating today after the company revealed lower revenue and steeper losses for the first half of FY21.

The influencer marketing company, which now has a strong focus on artificial-intelligence-driven chatbot technology, made $6.97 million in revenue over the first half of the 2021 financial year — 18.4 per cent lower than first-half revenue the year before.

This underpinned an 84.3 per cent increase to Crowd's half-year net loss after tax, which came in at just under $2.3 million. For reference, Crowd posted a $1.25 million net loss over the prior corresponding period.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) loss also grew by 52 per cent to $1.47 million.

According to Crowd, its online Q&A chatbot arm, which it has flagged as one of its core business segments, faced some headwinds over the half-year and brought in softer-than-expected revenue.

Billed messages from Q&A fell from 3.5 million to two million on the previous corresponding period, Crowd said. However, this was slightly offset by higher average revenue per paid message for the six months to the end of 2020, which was $1.42 compared to the $1.28 the year before.

On the other hand, Crowd's Mobile Content-Subscription business remained profitable over the half-year, bringing in almost $3.4 million of total revenue.

AI investments

It's important to note that Crowd has made some major investments into its "Talking Head" AI-driven chatbot strategy.

The company has signed deals with several partners to build up this strategy, including UneeQ, which specialises in 3D digital models of AI-driven humans.

Crowd said in November that the Talking Head tech is designed to revolutionise customer experience through "digital ambassadors", which makes it highly complementary to Crowd's existing Q&A technology.

As such, the monetary and time investment made into this new strategy is part of the reason for Crowd's poorer half-yearly revenue and profit.

Crowd had $2.97 million worth of cash on hand at the end of December, which is $1.1 million higher than its cash balance at the end of June, thanks to a $4 million placement in November 2020.

Shares in Crowd Media closed 15.22 per cent lower today at 3.9 cents per share. The company has a $26.6 million market cap.

CM8 by the numbers
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