Meet Group's (MEET) CEO Geoff Cook on Q4 2017 Results - Earnings Call Transcript

The Meet Group, Inc. (NASDAQ:MEET) Q4 2017 Results Conference Call March 7, 2018 5:00 PM ET

Executives

Leslie Arena - VP, IR

Geoff Cook - CEO

Jim Bugden - CFO

Analysts

Austin Moldow - Canaccord

Darren Aftahi - ROTH Capital Partners

Operator

Good day and welcome to The Meet Group Fourth and Full Year2017 Results. Today's conference call is being recorded. At this time, I would like to turn the call over to Leslie Arena, Vice President of Investor Relations. Please go ahead.

Leslie Arena

Good afternoon and welcome to Meet Group’s fourth quarter and full year 2017 earnings conference call. With me today are Geoff Cook; our CEO; and Jim Bugden, our CFO. At the conclusion of our prepared remarks, we will be happy to take your questions.

As a reminder, today’s discussion will include statements that constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. More information about those risks and uncertainties, is contained in our SEC filing.

We caution you against placing undue reliance on these forward-looking statements and disclaim any intent or obligation to update them. In addition, as we refer to earnings, we will also refer to adjusted EBITDA, which we defined as earnings before interest expense, income taxes, depreciation and amortization, non-cash stock-based compensation, changes in warrant obligations, non-recurring acquisition, restructuring or other expenses, gain or loss on cumulative foreign currency translation adjustment, gain on sale of assets, bad debt expense outside the normal range and goodwill and long lived asset impairment charges.

Adjusted EBITDA is a non-GAAP financial measure, and you can find a reconciliation to the most directly comparable GAAP measure in our earnings release, which is posted on the IR section of our website.

We believe that the use of adjusted EBITDA provides additional insights for investors to use in evaluation of ongoing operating results and trends. However, you should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.

I would now like to turn the call over to Geoff.

Geoff Cook

Thank you, Leslie. Video has arrived at The Meet Group. It now constitutes a material portion of our revenue and we expect it to continue to grow rapidly in 2018 and beyond. In 2017, we built the product, technology in organizational foundation for this next phase of our evolution.

We believe that outside of Asia, we are the only social dating company of size with a full-scale commitment to live video. We are in the process of rapidly video enabling our large global social community, as we seek to build a differentiated with social entertainment platform. Our products have always existed at the nexus of entertainment and community.

We have found that video strengthened our entertainment offerings, while also creating richer, more meaningful connections for our community. While we only just began to monetize live streaming video in the fourth quarter of 2017, it's already a $19 million annualized run rate business, based on the month of February’s results, up 70% versus the fourth quarter average.

We consider this remarkable progress, particularly given that we have only deployed live video on two of our four major apps, representing just 40% of our total daily active users or DAU. We expect the video revenue to grow quickly in 2018 and beyond, as we rapidly extend our daily video audience or DVAU and improve our per video user monetization rates of vARPDAU.

We expect to grow our video audience quickly, this year primarily due to the successful acquisitions of LOVOO and Tagged in 2017 which together more than doubled our daily active user based. We plan to bring our shared video platform to Tagged in Q2 and beginning point video in major LOVOO market in Q3.

As you recall, LOVOO is a leading European dating app and it is now our largest app in terms of DAU. With the launch of the shared video platform on Tagged and LOVOO, we believe that a daily video user based will be more than double by the end of the year.

We also believe that there is significant room to grow our vARPDAU, which are newly is currently around $0.60 globally and $0.30 in the U.S. We’ve seen tremendous growth in that metric in just few months. For example, as recently in October, we were seeing vARPDAU just $0.02 in the U.S. on MeetMe. Once more, we believe there are data points suggest it can go quite a bit higher.

When we seek to determine how high vARPDAU can go, we look to other live streaming services mostly Asian based companies that have been added longer than we have including Momo, Live.ly, Azar and Live.Me. And we see a clear opportunity to improve global vARPDAU to $0.30 to $0.40 level or even higher.

We believe, we have a deep pipeline of monetization driving features and optimization. We could launch over the next 12 to 18 months to grow vARPDAU considerably. As we seek both to launch innovative community driven features and implement some of the best practices observe in the live streaming industry as large.

We attribute our vARPDAU growth since launch to just a sort of optimization. Specifically the combination of community and talent development, which we believe is crucial any social entertainment property and to regular rollout of product enhancements design for more gifting throughout our live streaming community.

In the last few months, we launch feature including guest streaming, which allowed broadcasters to add an audience member to their live stream as a second broadcaster stream really to board the referral programs to name just a few. We believe, we continue to lift this conversion rate and by extension our vARPDAU with the new future and optimization we have planned including context, more advanced stream recommendation algorithms and robust tools for stream expand relationship building.

We are also hard at work on a new live streaming game called Battles, which we believe will be first it kind in a western oriented live streaming app at scale. In video Battles two or more live streamers will compete in real time with some purpose whether to be the best singer, the best dancer or so on. The audience will have a limited number of free votes, but can really sway the results by sending super powered pay vote. We believe our streamers will enjoy the competition and encourage their viewers to help them win and rise at the rankings, leading to a high rate of monetization that will contribute incremental vARPDAU.

We also believe that balance represents an innovative way of encouraging high quality potentially shareable content that may resonate with the higher percentage of our users and your friends. We believe it is important not just to optimize for existing live streaming audience however, but also to attract more of our DAU to engage with video as between 20% to 25% of DAU currently do. To that end, we plan to expand live video beyond the single tab of each application, placing it closer to the traditional core of our user experience, which is one-to-one private chat.

Specifically, we expect to launch rapid fire one-on-one fully moderated video chat in the third quarter on MeetMe and in the fourth quarter on Skout. We have surveyed our users extensively and one-on-one video chat is by far our most requested feature. We believe this product comes with a clear monetization hook, matching with a live stream partner will be free unless the user seeks to match only with the particular gender, which we expect to be a popular option despite requiring small numbers of virtual credits per match.

Once match, users will also be able to spend currency on virtual gift, as they currently do within live. Also we believe our product pipeline can drive global vARPDAU on MeetMe by the end of the year to the $0.30 that other have achieved. We believe Tagged and Skout may perform at lower of the vARPDAU level over time due to geographic and demographic differences, and we believe that vARPDAU at LOVOO will overtime converge with MeetMe vARPDAU, presenting a large opportunity given LOVOO's DAU base.

As I mentioned, we expect a step function increase DVAU with the rollout of our shared video platform on Tagged in Q2 and LOVOO in Q3. Once more, we believe that our share of DVAU will grow overtime as we fully video enabled in the apps, for example, we believe that the share of our MeetMe DAU engaging in video will grow from its current level of 20% to 25% to 30% or even higher by the end of this year.

We believe the twin effect of rising vARPDAU and rising VDAU present the sizable revenue opportunity. Simple math shows a profound impact from lifting these two important metrics. If we assume we achieve over time a DVAU share of 30% on our 4.3 million DAU and the blended vARPDAU of $0.30 across the portfolio, we would generate annualized video revenue of $141 million combined with our existing business that would doubled our 2017 revenue.

Now, I would like to address the transition toward a user pay revenue streams in a way from advertising, a transition I expect to continue to play out over the course of 2018. Significantly, today the majority of our revenue is generated from user pay, not from advertising. Fueled by the early success the video on MeetMe and Skout and our acquisitions of LOVOO and Tagged, our share of user pay revenue grew from 6% in the fourth quarter 2016 to 39% in the fourth quarter of 2017.

We expect it will approach 60% in the first quarter of 2018. For this, we expect 2018 to be the first year in our history that we derived the majority of our revenue from non-advertising sources. As a result, I expect 2018 to mark a dramatic shift away from our historical dependence on the broader advertising market, which experienced an unexpected and unprecedented downturn in 2017 that impacted our revenue.

Driven by what appeared to be both an oversupplied of inventory and limited incremental demand for all of the largest mobile advertising company such as Facebook and Google, the Meet Group like many other add driven companies saw a significantly decline in ad rates or CPM. Despite these external pressures, we still manage to increase both revenue and adjusted EBITDA in 2017. We grew revenue by 63% on an as reported basis dated to $123.8 million and we grew adjusted EBITDA to $31.6 million, up from $29.3 million in 2016.

I expect 2018 to be year of transition with rapidly growing user pay revenue offsetting the decline in advertising revenue. Because our ad revenue is higher margins than user pay revenue, we expect that our strategic long-term revenue shift will also impact our marginal profile moving forward. Advertising will continue to support our investments in video and there is potential upside to the extent of broader advertising market stabilize.

But we currently expect the approximately 40% year-over-year decline in advertising revenues that we are experiencing in Q1 to continue the rest of the year and beyond. We believe video revenue will replace the advertising revenue in that in the long term revenues from video are more sustainable, can grow faster and are more aligned with the quality of the user experience than revenues from advertising.

Given the external pressure on programmatic advertising rates, we are continuing to manage costs closely to support our short-term and long-term financial strength. This week we took steps to reduce our cost structure by an additional $7 million on annualize basis, primarily through headcount reduction and the elimination of related operating expenses.

We are continuing to shift the development investment to lower cost centers, including Germany and in Europe to support our deep pipeline of improvements that we expect to drive future growth. Already we have two offshore development teams, working on our video project and we expect to add at least two more this quarter, as we seek the balance financial savings with continued momentum in our products.

We do believe that the growth and demand for our virtual currency credits will help grow one piece of our advertising business, incented video. History shows that a large majority of our users will never pay and so we believe incented advertising provides an interesting way for those same users on credit. We expect to launch incented video in the second quarter on MeetMe and Skout and to begin ramping it up across our apps in the second half of the year.

As live streaming video continues to grow, we believe it represents an opportunity for renewed virality within our platforms, potentially driving more top of the funnel traffic in our apps through shared content in word of mouth buzz. Specifically, we believe it produces a natural advantage that we did not previously have.

Thousands of users of producing video content everyday aiming to build their audience and make money on our platform, the best of these broadcasters already earned upwards of $10,000 a month by entertaining and engaging their viewers -- our users since that they choose to send virtual gifts to the broadcaster, thus monetizing the interaction. We believe we can find ways to turn the small army into a viral engine by incentivizing them to encourage their streamers to share content and by helping them create easily shareable content to generate inbound clicks.

Next quarter, we expect to launch an early version of video sharing on MeetMe and Skout, so that any viewer can record and share. More powerfully, we believe our pipeline of innovative streaming games like Battles will generate naturally shareable short form content by design and that this content will encourage virality. Many users in our target markets have never seen content like Battles before and we believe that novelty may induce curiosity and exploration of our products.

We expect these virality-related initiatives to start contributing to DAU growth in the second half of this year, increasing the size of what is already a considerable social entertainment audience. While the business transformation of this magnitude as of challenges, we have done it before. Several years ago, in the phase of rapid shift from desktop to mobile computing, we have re-imagined the MeetMe's predecessor myYearbook as a mobile app. We managed in less than two years to grow our mobile app audience to a size larger than our desktop audience and then within two more years to grow our mobile revenue beyond our desktop revenue in spite of a lower ad rates on mobile.

The current business models are evolving even more rapidly than that. In just five quarters, we transformed our business from 6% user-pay business to we expect a 60% user-pay business. And along the way, we've built one of the fastest growing new products in our history, our live streaming video platform.

We believe our success going forward will come down through continued the execution. Execution against clearly defined the product pipeline that supports our margin strategy to build enduring and important brand at the nexus of community and entertainment and to create meaningful connections for our members through live video. I am confident we have the right team to execute our ambitious goals. We emerged stronger than ever from the transition from desktop to mobile and I believe the same will be true this time.

Finally, I would like to discuss a number of announcements regarding our team. We announced today the appointment of Jim Bugden as our Chief Financial Officer. We believe Jim is the ideal financial partner to lead the integration of our acquisition and help us navigate the transformation of our business model from advertising to user pay.

We feel these proven commands for every line of our business having been a long-time CFO of myYearbook the predecessor of The Meet Group, and having played a key role in diversifying our revenue model through acquisitions, as SVP of Corporate Development. Jim joined the strong existing team including Mike Johnson, Chief Accounting Officer; and Leslie Arena, VP of Investor Relations.

I look forward to working closely with Jim to execute against our strategy. I would also like to welcome a new edition to our Board of Directors, Spencer Grimes joined us on Monday. Spencer brings considerable experience in finance and media, currently as managing partner of Twinleaf Management, LLC. a Connecticut-based registered investment advisor focused on small cap equities in media and technology. He is also an adjunct professor of digital media at the new school in New York City.

I want to end by thanking the great team at The Meet Group. I am privileged to work with them and I thank them for the perseverance and commitment to building quality products that make a difference in the daily lives of our users.

And with that, I will pass the call to Jim.

Jim Bugden

Thanks, Jeff. As we review the financial details in the quarter, please note that this is the first quarter that we are consolidating LOVOO as the closing date of the acquisition was October 2017 and its results are included from that day forward. Similarly, our annual results consolidating both LOVOO from October 19th forward and Tagged starting on April 3, 2017, the day on what that acquisition closed. Unless otherwise specified, my comments will refer to results and comparisons on an as reported basis.

Revenue for the fourth quarter 2017 was 40.1 million up from 29.2 million in the fourth quarter 2016, a 37% increase. We attribute this primarily to addition of LOVOO and Tagged along with revenue from live streaming video on MeetMe. These increases more than offset the impact on revenue of lower CPMs in the quarter, which negatively impacted mobile advertising revenues versus the prior year.

Adjusted EBITDA for the fourth quarter 2017 was 10.5 million down from 12.8 million year-over-year. Net loss for the fourth quarter 2017 which includes $3.1 million in acquisition and restructuring expense and a one-time non-cash -- and one-time non-cash charges related to deferred taxes and goodwill impairment of 7.7 million and 56.4 million respectively with 67.7 million compared to net income of 9.9 million in Q4 2016.

EPS was negative $0.94 in the fourth quarter 2017, compared to $0.15 per diluted share in the fourth quarter of 2016. I just mentioned, we believe we are in the midst of a shift from a predominantly ad base business model to model driven by user pay revenue. The decline in the ad market disrupted our business negatively impacting both revenue and margins and we expect to continue to be impacted by that shift. We are offsetting the decline in advertising growth on the top line with the fast growing, but lower margin user pay revenue from subscription and IP that carry a lower margin of approximately 30% in live streaming video.

As previously disclosed, LOVOO is a 25% margin business itself. At this revenue mix shift continues, we expect overall margins to be in the mid-teens for the full year 2018. Our revenue mix in Q4 2017 was 61% advertising versus 39% user pay revenue. We expect that to be nearly reversed in the first quarter of 2018 approaching 60% user pay revenue and 40% advertising.

We reduced our sales and marketing expense to 6.1 million in Q4 2017, down from 6.3 million year-over-year on an as reported basis. In spite of this reduced marketing spend, mobile DAU was 4.3 million in Q4 2017 compared to 2.0 million in Q4 2016 and mobile MAU was 14 million in Q4 2017, compared to 8.3 million in Q4 2016. We attribute these increases in the fourth quarter 2017 primarily to the addition of LOVOO and Tagged.

Product development expense for the quarter was $19.7 million, up from 8.1 million year-over-year, which we attribute largely to the addition of product expense from Tagged and LOVOO. Note that product development expense includes variable expenses associated with user pay revenue including the 30% fee to Apple and Google along with moderation related expenses.

Rewards to broadcasters up 35% to 40% of video revenue are also included in product development expense. As user pay revenue from video grows, we expect to see a related increase for this line item. General and administrative expenses were 6.5 million, up from 3.1 million year-over-year due primarily to addition of Tagged and LOVOO.

Moving to the balance sheet, we ended the quarter with 24.2 million in cash and cash equivalents, which was flat sequentially. Cash flow from operations with 8.5 million for the quarter and 31.2 million for the full year 2017. For the full year 2017, we reported revenue of 123.8 million, up from 76.1 million a year ago on an as reported basis and increase of 63%. We attribute this increase, primarily to additions of LOVOO and Tagged. Adjusted EBITDA was 31.6 million for the quarter, up from 29.3 million a year ago.

Net loss for the full year 2017, which includes 11.8 million and acquisition and restructuring expenses and one-time non-cash charges related to deferred taxes and goodwill impairment of 7.7 and 56.4 million respectively was 64.2 million compared to net income of 46.3 million for the full year 2016. EPS was negative $0.92 for the full year 2017 compared to $0.80 per diluted share for the full year 2016.

As I noted earlier, our net loss for the full year includes two one-time non-cash adjustments. First, we recorded a $7.7 million charge to adjust value of our NOLs as a result of income tax changes enacted by the 2018 tax reform bill and the new 21% corporate income tax rate. Second, as part of our annual review of goodwill and intangible assets, we recorded an impairment charge of $56.4 million against the goodwill of our U.S. based businesses.

This adjusted was caused by a decrease in the fair value of certain assets that we attribute to significantly lower advertising CPMs that we experience in 2017 and that we continue to forecast into 2018 from our ad driven revenue sources. We do not expect that these charges will impact our ability to generate cash flow or have an impact on our ongoing operations.

I’d like to take a moment to share a few updates on our recent acquisitions and integrations. We continue to realize cost synergies from acquisitions. As Geoff mentioned, this week we took steps to reduce our cost structure, find additional $7 million on annualize basis, through headcount reductions and the elimination of operating expenses primarily on San Francisco office.

As a result of these actions, we expect to record a restructuring charge of approximately $2.3 million in the first quarter of 2018 related to severance and office closure expenses as we move to a smaller facility.

Though restructurings are never easy on the impacted employees and our global team, we believe that they reflect the continued synergies we're experiencing as we consolidated our technology platform. Our U.S. headcount is now 40% smaller than the combined headcount at MeetMet, Skout and Tagged prior to our acquisitions. The majority of that decrease has come from the West Coast, the most expensive of our three major office location.

The product integration of Tagged I believe will continue to go well. We believe live video will prove to be a great example of how we can build the successful product at launch and implement it quickly across all of our apps. We continue to be impressed with the results of our team in Germany of LOVOO. LOVOO experience solid growth in 2017 and we expect double-digit growth from LOVOO in 2018.

We expect to continue to invest in LOVOO in 2018 as we look to add talent in a strong relatively lower costs labor market. We believe the sizable user base we've acquired in Germany is prime for our video launch. Our focus now is on perfecting that launch and we do not foresee additional acquisitions at this time.

Turning to guidance. For the first quarter, we expect revenue to be in the range of $34 million to $35 million driven by ongoing growth in video and strong results from LOVOO. We have continued to see pressure on advertising rates in the first quarter. We see no data point at this time suggesting that trend will improve and our forecast does not include any improvement in advertising.

We expect adjusted EBITDA for the first quarter to exceed $3.7 million, our results in Q1 adjusted EBITDA margin reflects a shifting revenue mix to lower margin products and as we continue to invest in live video. While we expect the cost reduction I mentioned will benefit the full year, they will not result in material savings in Q1 2018, given that they were just enacted this week.

For the full year we expect revenue to be in the range of $140 million to $145 million, we expect adjusted EBITDA of $20 million to $22 million which again we believe reflect the ongoing shift user paid revenue and continued investments in product and technology to fully video enable our portfolio and grow and engage user base. Our full year forecast assumes that advertising will essentially be flat to Q1 and video revenue will continue at its current run rate.

In summary, Q4 2017 was a solid quarter as we believe we made strong progress, positioning the company for 2018. We see continue to integrate our recent acquisition and improve the efficiency by which we operate, we believe live video continue to show tremendous growth and points to a strong 2018. I am very excited to join the team as CFO and look forward to our continued execution growth.

And with that we’ll move to Q&A.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first question comes from the line of Michael Graham of Canaccord. Your line is open.

Austin Moldow

Hi, this is Austin on for Mike. Thanks for taking my questions. The first one is on users saw the pro forma, user numbers given any in the presentation deck show the decline in Q4 sequentially in year-over-year. Just wondering what caused that? And also saw on the positive side that engagement DAU use over MAU use improved, expanding sequentially. So wondering what also caused that? And then just briefly on, I think you said MeetMe and Skout revenue last quarter declined 20% year-over-year each. I’m wondering if those trends improve to this quarter on those two platforms.

Geoff Cook

Hi, Austin, this is Geoff. On the first question related to DAU, so we reduced our marketing spend pretty significantly on MeetMe, Skout and Tagged in the fourth quarter for a couple of reasons. First, we acquired LOVOO, which is predominately global audience that monetize its international users quite well and had a very optimize marketing budget. And there you've spent 15% to 20% of the revenue on marketing and continued to do so. Upon acquiring LOVOO, we cut the international marketing spend on our U.S. based assets to meet these context essentially euro. So the key portion of marketing that was going international is euro and we don’t expect to resume international spending in those apps at this time.

Secondly, we cut marketing on U.S. as well and the overall budget was cut by about 66% with year-over-year on MeetMe, Skout and Tagged between Q4 ’16 and Q1 ’18 and ad rates have fallen. We’re now spending somewhere in neighborhood of 8% to 9% of revenue on marketing, which had seen a high of 20%, I think in Q4 ’16. What we are doing working to increase our marketing budget by improving our vARPDAU. And vARPDAU ultimately, we’ll drive to marketing ROI. We seek to six months or better payback on our prior years and that’s traditionally where we’ve look to increase our marketing budgets in the past.

We also note that margin on video DAU is about 30% flow through versus the 100% we gave an advertising. We believe, we’re nearing the levels of vARPDAU to enables of some re-ramp spending accretive. Note that we went from $0.02 vARPDAU to $0.30 U.S. vARPDAU and a very short period of time. The thing that we looked forward to drive DAU higher going forward, driving, certainly increasing our marketing budget as vARPDAU goes up, but also our teams are increasingly changing to focus on virality and retention.

So now that we've built this video platform, we retained quite some time on improving virality and rention. I mentioned the small army of broadcasters some making $10,000 per month, so we’re going to activating them to incentivize sharing a stream. We expect to launch short form video content in the form of battles and other forms of content, which we think can be timely shareable toward the end of this year, and we’re also working on few other optimization that we believe impact DAU.

And the second part of your first question DAU and MAU ratio, we think it’s just a function of turning down certain countries that -- turning down the marketing budget to certain countries that had particularly low DAU and MAU ratio as we focused our marketing budget really entirely in the U.S.

As it relates to your second question related to MeetMe and Skout, I mean I think the revenue -- the ad revenues decline that we’re seeing in Q1 are comparable to what we saw in Q4. We’re not seeing really dramatic shift, I think we talk about CPM decline as much as 35% sequentially between Q4 and Q1, and right now what we are seeing in Q1 is a 40% year-over-year decline versus in advertising.

Operator

Thank you. [Operator instructions] Our next question is from the line of Darren Aftahi of ROTH Capital Partners. Your line is open.

Darren Aftahi

Yes, good afternoon and thanks for taking my questions. Congratulations Jim on the new position. Couple for you, on the view I am curious why given that skewed international that you think it can hit parity with Meet, vARPDAU at $0.30? And then I am kind of curious Geoff, some of these other initiatives that you talked about, do you think those are accretive to that $0.30?

Geoff Cook

Sure, so, on the first part of your question. So LOVOO today has a much higher rate of users paying than MeetMe today. LOVOO is one of the leading brands for meeting -- for dating in Germany. And so, we believe the power its brand and the fact that it has dramatically higher penetration of users paying will yield to levels of monetization that and potentially the greater than what Meet sees.

85% of LOVOO's users and revenue are in highly monetizable countries. Your recall that, that LOVOO is -- where their strength is, really Germany, also in Switzerland as well as Spain and France. The majority of their revenues today are from user pay both from subscription being a larger portion. And I think that’s some of the main ones.

We also see that they have a number one ranking across very some countries in Europe as far as top grossing. So I think there’s lot of reasons to think the LOVOO users will monetize quite well. On the second question which was, are the initiatives more that I outlined related to Battles and the one to one feature, so we -- that’s how we believe we get there to the $0.16 to the $0.30 on MeetMe. So these are the -- among the various initiatives, we’re working on now and building, if we continue to drive up the vARPDAU.

Darren Aftahi

Great. And then just a couple more for you. One, just clarify -- Jim, did you say you expect Q1 ad revenue to be down 40% and then flat for the remainder the year from the Q1 level?

Jim Bugden

We expect Q1 to be down 40% versus Q4 and then we’ll stay flat at where Q1 is. That’s correct.

Darren Aftahi

Got it, okay, that’s helpful. And then two others, on the Battles element that you talked about, how do you differentiate that type of product when you have got other social media platforms with bigger communities that theoretically can create this, I guess just in terms of barriers entry, how do you protect your asset base on that? And then I know you've kind of pulled back on marketing which make sense with the reduction in the user base. But, when do you feel comfortable kind of re-accelerating or re-upping on marketing if you will, in specific geographies?

Geoff Cook

So on the Battles question and I think more generally, what it differentiates by your live video service. I think we’re actually quite relived to live streaming video especially within the markets that we play in, and especially in the context of the community that we have. We have a community that’s very active at meeting new people and for dating. We’ve seen community is like that, flourish in Asia especially Momo comes to mind, but there is a number of others that have dramatically increased and expanded the business on the basis of pairing, dating with live streaming.

We don’t know if any other company doing this in Western market. And so I think what differentiate us is, we take a sizeable investment more than a year and it quite a bit of people to build the platform to state that is now. We’ll continue to innovate that platform and grow our share of DAU, continue to grow the number of uses engaging, and I think one of the key differences that might differentiate us from some other dating related companies could potentially add live video is, MeetMe has always been about entertainment, it’s always been about kind of pairing, entertainment and community.

We’ve always said our users were here to meet new people, chat and data. It’s not a utility aim that connecting you with someone to go find a date for the weekend. It’s always been quite a bit more open and broader than that. And I think that’s why video suits that community quite well. So I think we’re actually fairly early as long as we keep the pace up. We will kind of benefits from that advantage.

Darren Aftahi

And lastly on the question on marketing, what you're planning on?

Geoff Cook

You know the question related to marketing and when do we turn that back on. So I think that we actually evaluate that on a week-to-week basis and that we feel like as along as vARPDAU where it’s continued to expand that we’re talking months not quarters.

Operator

Thank you. And this does conclude today’s question-and-answer session. I’d like to turn the conference back over to Leslie Arena.

Leslie Arena

With that, we’ll conclude our call. Thank you everyone for joining us today. Have a good evening.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone have a great day.