Ann: May 2019 Investor Briefing Call - Video & Edited Transcript, page-3

Machine Learning

In terms of the machine learning, this is something we announced only this week. It allows us to create this new offering and analyze all this data that we have and provide insights around it. The data is anonymized and it's never going to affect the trust of our users and the power is in the aggregated insights around that. It doesn't affect our users, it doesn't affect their privacy, and nothing will ever be shared personally to anyone external. It's all about this aggregated view on the data at a rolled-up level.

We can understand based on what the data is telling us when a child starts to transition to solids. And then I started to go to package goods and see how old they are and the difference of the east coast to the west coast of Australia to the UK. It's still fairly new and we have a long way to go. We see this developing and growing, and we see the revenue opportunity into FY20.

Cashflow, Marketing & Scaling Up

Growing the revenue per active user is going to continue to be a priority. Having said that, we're planning out FY20 and we're definitely thinking getting to cashflow breakeven is going to give us a chance to really accelerate things because our unit economics, like we shared of CAC to LTV, is really appealing.

The other thing is this content platform which will also bring in new users that won’t require a user to add a photo to sign up, you could do it that way and look at other services the company provides and sign up without having to be able to add photos.

As we plan FY20, as the revenue grows and accelerates, especially into the holiday season this year, that the Q4 calendar is going to be substantial for us. It's going to be on what we've done today and definitely there will be more money aside for marketing, especially as we shared a CAC to LTV metrics.

We know as parents we spend a huge amount on our children, and families spend huge amounts on families. We want to be able to help them access these services, content and products on our platform. We think the lifetime customer value could be hundreds if not thousands of dollars. I think it will take us a while, but it could be pretty significant, as with all this rich data, we can then be able to pre-empt and offer things, whether it's buying something or signing up to a babysitting service. We see the services turning on, enabling revenue growth, and a deeper engagement with the user to be able to grow the per user revenue.

Once you tell other big brands that Lego is working with you, they scratch their heads and they go, well, if they're working with you when your audience is only this large, you clearly offer a very high value prop.

Obviously, it's a wonderful time for the company. It's an exciting growth stage and a great space in terms of family, a huge market opportunity for us. The revenues are really growing quarter on quarter and clearly so is the cashflow. That is good for us internally, as we’re just planning out next year and the next three years for that matter. For us it's all about scaling and accelerating