https://www.ai-media.tv/knowledge-hub/insights/ai-media-revolutionizes-captioning-for-dazn-with-ai-powered-lexi-tool-kit/

Checks a lot of boxes for Ai-Media’s key priorities, so hopefully it becomes a good showcase customer going forward. International expansion (outside of US and Aus), multilingual, expanding languages outside of English and Spanish, Recorded, and translation.

I went back and watched the interview with CEO Tony Abrahams from 2 years ago. It’s amazing how much of it is still relevant today. Back then, it was a captioning services company that had just made an acquisition of a captioning technology business (EEG) and was pivoting hard in that direction. The services business was impacted by free captioning offered by the likes of Zoom and Microsoft Teams and saw a horrendous -25% decline in revenues. The transition from services to tech is now two years on, so what does it look like?

In that period, Tech has gone from 28% to 48% of revenues and now accounts for nearly 2/3 of the group’s gross profits. It’s now not only backfilling, but over-powering the declines in services and is powering revenue growth at the group level as well. Tech has much higher gross margins (80% vs 40% with services) and has improved the overall gross margin from 53% to 63%.

The bottom line has also improved and has now inflected into profitability and FCF positivity. The amortisation of previous acquisitions and the historically higher capex spend is suppressing the statutory numbers. My normalised EBIT number (EBITA minus current capex spend) is my preferred metric for underlying profitability and that’s now well in the green.

It’s currently trading at 1x revenue and 19x EBIT, and the market clearly doesn’t believe this to be growing tech business, with improving margins, inflecting into profitability and who’s largest division by gross profit is growing at 40%pa.

CEO Tony Abrahams bought 2,450,000 shares on market, and bought a further 550,000 that he gifted to his late co-founder Leonie Jackson's Memorial Fund. After co-founding AIM, Leonie Jackson went on to be the first deaf CEO of the Deaf Society. She passed away a hero, saving her son from a riptide.

I am still learning about the business but a huge tick in the integrity box for Tony.

Bravo.

IMO AIM presents a great long term opportunity and as a result have provided an extract of this mornings release:

ASX ANNOUNCEMENT 25 January 2022 Ai-Media delivers another cash flow positive quarter with increased gross margins:

Melbourne, Australia, 25 January 2022: Ai-Media Technologies Limited (Ai-Media or Company) (ASX: AIM), a global provider of technology-driven captioning, transcription and translation services, is pleased to provide the following highlights on its business activities and financial performance for the quarter ended 31 December 2021. Highlights.

Revenue of $14.7 million for Q2 FY22, up 25% on the prior comparative period (pcp) of Q2 FY21, with gross margins exceeding 50% (vs 39% on the pcp)

Cashflow from operating activities of $1.9 million for the quarter, a $5.6 million improvement on the pcp (and up $1.9 million on Q1 FY22)

Strong cash balance at 31 December 2021 of $15.9 million, inclusive of $0.5 million spent on the share buyback, an increase of $0.4 million on Q1 FY22

Increased adoption of our automated SaaS products Lexi and Smart Lexi with volumes up 115% on pcp and 32% on Q1 FY22, with live captioning quality outcomes continuing to improve with launch of Lexi and Smart Lexi 2.0

iCap platform minutes volumes up 24% on pcp and up 10% on Q1 FY22

Large international brands increased volumes of Lexi and Smart Lexi on live broadcast content including FOX television group and ESPN+ in the US, and growing sales pipeline globally....