Q3 2024 Treasure Global Inc Earnings Call

Participants

Su Huay Chuah; Chief Marketing Officer; Treasure Global Inc

Chong Chan Teo; Chief Executive Officer, Director; Treasure Global Inc

Presentation

Operator

Good day, everyone, and welcome to Treasure Global Inc's third quarter fiscal year 2024 earnings call. At this time, participants are in a listen only mode. A replay of today's call will be available on the Investor Relations section of TGL's website and will remain posted there for the next 30 days.
I will now hand the call over to Su Chuah, Chief Marketing Officer of Treasure Global, Inc. for introductions and the reading of the Safe Harbor statement. Please go ahead.

Su Huay Chuah

Thank you, operator. Good morning, everyone, and welcome to Treasure Global's third quarter fiscal year 2024 results conference call. With us today we have our Chief Executive Officer, Sam Teo. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from Treasure Global's management within the meaning of Section 27-A of the Securities Act of 1933 as amended and Section 21-E of the Securities and Exchange Act of 1934 as amended concerning future events.
Words such as may, should, project, expect, intend, plans, beliefs, anticipate, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors sections of the company's Form 10-K for the year ended June 30, 2023, and subsequent filings filed with the SEC.
Copies of these documents is available on the SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law.
Now, it is my pleasure to introduce Sam Teo, CEO of TGL. Sam, you may now begin.

Chong Chan Teo

Thanks, Su, and good morning, and thank everyone for joining us today on our third quarter of fiscal 2024 earnings conference call covering the period ended March 31, 2024.
I will start with the highlights of our third quarter business performance, followed by our financial results. At Treasure Global, we maintain a positive outlook and grow steadily in this ever-changing macro environment. We are proud to say that we have developed a strategy that works in all condition, allowing us to grow regardless of the situation.
Our focus remains on delivering value to our customers and consumers, which ultimately enable us to drive sustainable growth for all our shareholder. Before I begin, I'm happy to announce the achievement of the new ZCITY Premium Store, which we have discussed last quarter.
This addition has not only broadened our product portfolio but has also significantly boosted our gross profit margin. This growth perfectly aligned with our strategy vision and path forward. In this quarter, we have successfully filed an S-3 and initiated an ATM offering, securing an aggregate offering price of up to USD2.99 million.
This strategy financing effort has provided us with the necessary capital while maintaining flexibility and alignment with our growth strategy. The fund will be put towards driving forward our business initiative, fostering innovation and ultimately creating more value for our shareholders. We'll dig deeper into our AI initiative, market expansion effort, and key achievements shortly.
Additionally, we are pleased to further solidify our competitive advantage in the [property] market and opening up new avenue for revenue expansion and portfolio growth. Our recent partnership as the exclusive provider of an AI blockchain wallet on Telegram places us at the forefront of innovation in the blockchain sector. This strategy decision not only expand our portfolio but also reinforce our competitive edge by securing the first right of refusal. Furthermore, this unlock promising new business opportunity within the blockchain market.
Let's now proceed the as spoke highlights of our third quarter. In the third quarter of 2024, Treasure Global remains laser focused on innovation, utilizing artificial intelligence to enhance product and foster better customer connection. Our AI initiative empower us to anticipate customer mix, strengthen market share and identify lucrative opportunity in high profit center.
Expanding on these AI enhancements assess, we venture into Meta platform for our live shopping event, utilizing AI power robot [equipped with endless language] capability, we hosted event in multiple language, breaking down language barrier and engaging thousands of viewers. The Malaysia e-commerce market projected to reach USD20.93 billion by 2029, and Meta platform boosting millions of active user. Our operation of Meta represent a significant opportunity.
The move to Meta life open up vast market with unparalleled reach and engagement potential. With this extensive user base and our robust infrastructure, Meta platform provides an ideal platform to showcase our product and engage with a global audience. By leveraging Meta life, we end to not only drive sales but also enhanced brand visibility and customer engagement on the scale previously unseen.
Treasure Global and AIO synergy has joined us to revolutionize AI landscape capitalizing on the booming digital economy of Southeast Asia with the Southeast Asia AI market expected to grow significantly at an anticipated annual rate of 17.83% by 2030. Our collaboration is strategically positioned for success. Our strategy, and I highlight our commitment to delivering innovative AI solution and establish a state-of-the-art data center dedicated to AI application, cabling to the evolving mix of businesses across various industries.
By leveraging our creative expertise and resources, we aim to drive transformative changes in the Southeast Asian landscape, positioning ourselves as a key player in this dynamic market.
We have taken a significant step forward by announcing a strategic partnership, become the exclusive partner for the AI production model on Telegram. This move forward, further strengthen our competitive edge in the blockchain industry.
Securing Treasure Global position as the leader in innovation with the global crypto wallet market projected to grow significantly. This collaboration positions us for significant expansion. Treasure Global strong focus on innovation and partnership put us ahead in the work of the new technology. We are dedicated exploring and creating more advanced AI to grow our business.
Another exciting development is our recent milestones, which we have secured a USD2 million marketing contract with Satria Dunia Sdn Bhd. The objective is to showcase premium Korean product using ZCITY as AI marketing engine. This strategic partnership marks a significant achievement for us as we expand the city influence and capability in the beauty sector. By utilizing the statistics of the RPI technology, we are well positioned to increase brand exposure and boost sales, thereby creating a new revenue stream for the company.
Moving on, we have got more exciting news about ZCITY. We are talking with the Shanghai Guangxi Chamber of Commerce about running the Malaysia Pavilion. This is a big deal because it's a chance to sell great Malaysian product on huge platform like [Palpao and Doen]. With China live shopping market growing fast and over 1.4 billion potential customers, this is an opportunity for us.
This move fit perfectly with our goal to make digital shopping better and grow in new markets. As I mentioned earlier, the loss of ZCITY Premium Store has surpassed the expectation since inception. Leveraging advanced AI tools to premium stock not only exceed our sales expectation, but also significantly enhanced our user engagement.
In just four months, the premium store has sold over 6,000 Bills Saver Bonanza Packs. This notable self-achievement highlight the platform effectiveness in driving transactions and enhancing gross profit stream. ZCITY has gained valuable insight into user spending habit and preferences, and they bring the premium style to offer highly personalized packages tailored to individual user needs and preferences.
As a result, the premium store has significantly contributed to our gross profit growth, reflecting this strategy important in driving business expansion and profitability for treasure robot.
In addition to the success of the ZCITY Premium Store, we also made strides in the gaming sector by launching 10 exciting mini games integrated with our AI Game Creator in ZCITY's 3D World. This mini-game not only enhance the gaming experience for users but also position us to assess the rapidly growing global gaming market, which is projected to reach a revenue of USD212 billion by 2026 through in-game purchaser, which of course, an AI driven marketing strategy.
ZCITY 3D World is poised to become a dynamic digital marketplace, capturing a significant share of the booming global gaming industry. And we are proud to share our significant achievement in this quarter.
And above this, at the MARKETING-INTERACTIVE Asia eCommerce Awards 2023, where ZCITY has been honored to have won the silver trophy for the best e-commerce solution. This recognition highlights our excellent in the fast-changing landscape of online shopping.
This achievement demonstrates our full commitment to innovation and delivering top-notch solution that caters to the ever-changing mix of our online customer. This quarter, we showcased our dedication to staying ahead of the curve, expanding our reach and putting our customer first. Moving forward, we are dedicated to driving growth, sizing opportunities and delivering value to our shareholders.
Next, I will now share our financial results for the third quarter of fiscal year 2024. For the third quarter, our gross profit reached USD217,000, marking a substantial increase of 47% compared to the same period last year. This not a lot of improvement is primarily attributable to our ongoing initiatives and optimizing spending and capitalizing on higher profit margin stream.
While our total revenue for quarter was USD1.6 million compared to USD6.7 million for the second quarter of fiscal 2024, reflecting a decrease of approximately 76% is important to build this speaker in the context of our strategy shift towards higher margin business China and long-term value creation.
We are pleased to announce a substantial decrease in our net loss of approximately USD1.7 million compared to approximately USD2.9 million in the third quarter of fiscal year 2023. This strategy positive shift was primarily driven by our focus on optimizing cost management, including reduction in selling administrative expenses.
Our disciplined approach to cost management and operational efficiency has enabled us to achieve significant improvement in our bottom line compared to a previous year, despite the challenging market conditions. As of March 31, 2024, our cash balance was approximately USD0.3 million compared to a cash balance of approximately USD4.1 million as of March 31, 2023.
This position is expected to strengthen following future sales of ATM share. ZCITY at over 0.69 million registered users and over 2027, which is the merchant as of March 31, 2024. Quarterly active users for the quarter ending March 31, 2024 were 41,455, a total of 0.19 million transaction were transacted by our registered users in the quarter ended March 31, 2024.
Despite the decline in quarterly active user and pay user compared to our previous quarters, we remain confident in the long-term growth potential of ZCITY, especially as we continue to enhance these features and offering to meet the evolving needs of our users and merchants.
In summary, our financial results for the third quarter demonstrate significant improvement in gross profit, reduction in net losses and strengthened financial position despite the decrease in our revenue. We remain committed to executing our strategy initiatives and delivering value to our shareholders in the quarters ahead.
We are also happy to see that we are expecting good standing with Nasdaq. This achievement reflects our commitment to upholding the highest standards of corporate governance and transparency. By meeting Nasdaq internal requirements for listing, we demonstrate our dedication to operating in according with regulatory standards.
This positions us to manage and grow our business more productively, and we are also encouraged investor interest, improving the market ability of our common stock, to an even broader range of investor.
Looking forward, I have a positive outlook on the development showcased in our quarter three fiscal year 2024 highlights. Our unwavering focus on innovation and market expansion has led to significant progress. In recent months, we have strategically taken the inflation aspect to reallocate resources away from lower margin offering like our e-voucher product despite the anticipated short-term impact on results.
We recognize this move essential for long-term care. This strategy move is aimed to enhance our working capital, and we are ending our strategy branding towards reducing dependency on such offerings.
By doing so, we can channel our resources into the development of high margin solutions, empowering us to capture higher margin and drive sustained growth. As we navigate through fiscal 2024, our focus remains squarely on innovation and the development of products and services that promise more profitable growth.
With an [agreeing] dedication to excellence and a keen eye on imaging chain, we are well positioned to capitalize on the diverse opportunities that lie ahead. Thank you again, everyone for joining us on today's call and for your continuous support.
This concludes our prepared remarks. I will now ask the operator to close the line. Thank you and have a great day.

Operator

Thank you for joining today. I will now close the lines.