Ohmyhome Ltd Q4 FY2023 Earnings Call

Good morning, good afternoon, and good evening to investors from around the globe. Let us have around 30 more seconds for the rest of the participants to dial in. After which we'll start the presentation proper. Thank you, everyone, for joining this call. So this is Ohmyhome Limited’s Financial Year 2023 Results as well as Financial Year 2024 Outlook. Our stock ticker symbol is OMH, and we are listed on NASDAQ. Together with me, we have Rhonda Wong, who is the CEO, and I myself, am Leo, the Head of Investor Relations of Ohmyhome. Before we start, we have some important notices and disclaimers, which will be presented in the next slides. In this presentation, there are forward-looking statements that reflect our current expectations and views of future events, part of which are subject to risks and uncertainties. If we use the words believe, may, will, estimates, continue, anticipate, intend, expect, and similar expressions, they are intended to identify forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results, and product development programs. You must carefully consider any such statements or should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statements can be guaranteed, and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include but are not limited to assumptions about our future financial and operational results, including revenue, income, expenditure, cash balances, and other financial items. Our ability to execute our growth strategies, including our ability to meet our goals, current and future economic and political conditions, our capital requirements and our ability to raise any additional financing that we may require, our ability to attract customers and further enhance our brand recognition, our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business, trends and competition in the brokerage and related industry and other assumptions described in this presentation related to any forward-looking statements. We describe certain material risks, uncertainties, and assumptions that could affect our business, including our financial condition and results of operations in the prospectus. We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied, or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. You should also note that our auditors have not completed our audit of our financial statements for the financial year of 2023. We do not expect material changes to such financial statements, and as a result, we'd like to update you as to our results. However, it should be noted that there is no guarantee that our audited financial results of 2023 will not materially differ from those being discussed here, and as a result, should not be relied upon until final audits have been completed and our 20-F has been filed with the US Security and Exchange Commission. Inside this presentation, there are also non-US GAAP financial measures, which include adjusted EBITDA and adjusted EBITDA margin. Ohmyhome uses these non-US GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The management believes that these non-US GAAP financial measures provide meaningful supplemental information regarding performance by excluding certain items that may not be indicative of our recurring core business operating results. However, there are a number of limitations related to the use of non-US GAAP financial measures, and as such, the presentation of these non-US GAAP financial measures should not be considered in isolation from or as an alternative to financial measures determined in accordance with US GAAP reported on Form 20-F. In addition, these non-US GAAP financial measures may differ from non-US GAAP financial measures with comparable names used by other companies. Reconciliation of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures can be found in the accompanying annex of this presentation. So, now I'll pass my time to our CEO, Rhonda Wong.

Thank you very much. Ladies and gentlemen, good morning. I appreciate your presence today as we navigate the projections and Ohmyhome Limited Annual Report of 2023. Now looking back about eight years ago in 2016, my sister, Race Wong, and I founded the company on the premise that the real estate property industry is broken. There are many dishonest agents in the market, there is opaque information, and oftentimes savvy investors are the ones who have accurate information. There are unscrupulous methods in which agents and brokers place their incentives above the customers’ best interests, and on the back of all of that, we started a company known as Ohmyhome. We had a vision to be the most trusted and comprehensive property solution for everyone, and we wanted to use technology to bring speed, ease, and reliability to property-related services. Before we started Ohmyhome, Race and I ran an investment portfolio management company in real estate. We realized through those years of managing that company that we transacted and traded properties across seven countries. Although real estate transactions differ from country to country in terms of rules and regulations, the problems were pretty much the same: opacity, dishonesty, and so forth have always been present. This is why today, when we launched Ohmyhome, we wanted to ensure that the same level of quality services could be extended to the mass market. Now, 2023 was undoubtedly a very challenging year for the real estate brokerage scene, especially here in Singapore. I wanted to address the elephant in the room, which is the end result of our 2023. Our results for 2023 were not as robust as we had hoped for. Our total operating revenues in Singapore dollars stand at S$5 million, or US$3.79 million; our gross profit is S$1.7 million, or US$1.3 million; and our net loss is SGD5.5 million, or US$4.1 million, with a loss per share of S$0.26, or US$0.20; and our adjusted EBITDA is negative S$4 million, or negative US$3 million. The Singapore property market experienced a notable decline, which reflected the broader challenges that all of us in our industry faced. In fact, the government introduced some taxes, which they occasionally do, to ensure that they can cool the market for a while to essentially pause the selling of properties. That was one of the rules that we experienced in the year 2023. However, I can assure you that this setback was not in vain. These challenges have laid a very solid groundwork for a remarkable turnaround in 2024. I'd like to show you some highlights that we have in the year of 2023. In the second half of 2023, we recorded S$2.2 million in revenue, which is definitely a growth from the first half, where the government cooling measures began. We saw additional growth and margins from the property management business that we acquired in October 2023. This is a tech-enabled property management company that manages thousands of units of condominiums across Singapore. Our revenue in the first half of 2024 is expected to grow post-acquisition and surpass the previous two years based on a significant increase in our sales pipeline and the deployment of HomerAI. It will be my pleasure to elaborate more about that in our later slides. Now our projections indicate substantial triple-digit growth in revenue, and we are committed to leveraging our strengths, seizing opportunities, and overcoming obstacles to ensure this forecast becomes a reality. We listed in March 21, 2023, approximately a year ago at an IPO price of $4. At that time, we invested much of our IPO proceeds, as well as most of our past proceeds, into the building of technology. The shares outstanding are 22.79 million; our last closing price is at $0.77 as of April 17 yesterday, and you can see with our last 90 days trading price ranging from $0.71 to $6 that we are trading pretty much at the lower end of our price range. Our analysts' ratings are $3 by Maxim Group and $3.70 by Zacks SCR. Shareholding structure has shifted since those who had doubts previously. The founders hold 36.9%, which comprises Race Wong and myself; insiders hold 7.8%; and public shareholders account for 55.2%. Now, for those of you who are joining us for the first time, I'm very happy to share with you about Ohmyhome, what we do as a company, and how we're so excited and optimistic about our future in becoming a super app as a property one-stop shop. Ohmyhome is all about data; we are all about property technology and transactions. You can think of yourself as a seller, buyer, tenant, or someone looking to do interior renovations for your home. You can start with research on our platform. We have blogs, evaluation guides, and really amazing tools that customers can use free of charge. When you decide to sell your home, for example, you can choose to do it yourself or engage our agents, where you will pay Ohmyhome between 1% to 3% in commission revenue. This revenue takes up a significant portion of our total revenue, approximately 56%. Afterwards, we provide mortgage and legal services, working with banks and law firms to ensure seamless transactions. We have also started a renovation subsidiary within Ohmyhome. The reason is that our customers had a wonderful journey transacting their properties with us, but they faced another challenge in the property industry, which is the renovation sector, where similar issues of transparency and reliability exist. For renovations, we guide customers through the entire design process, project management until the completion and handover of their projects. Revenue generated comes from the entire contract value. Lastly, we acquired a property management company last year in October, generating recurring income for the company month-on-month as we manage entire condominium blocks, similar to multifamily properties in the States. So this is us as a one-stop property company. Sometimes I am asked how we could be a tech company. Before I launch into the specifics of our technology, I want to showcase our results to you, demonstrating that there is no way Ohmyhome could achieve these results without our amazing technology. First and foremost, it takes an average of seven days for 65% of our deals to close. In Singapore, it's generally over 100 days. We are extremely fast and efficient. The technology helping us achieve this is called MATCH. Secondly, we don’t just sell fast; we also sell over 73% of our properties above market average prices. We are not a traditional brokerage model; we are a highly efficient technology-driven company. With all of these results, it's no wonder that Ohmyhome is rated 4.9 stars. We are the highest-rated property services company in Singapore, with over 8,000 genuine five-star reviews. Now, looking at these statistics, you might wonder if you could also enjoy this level of efficiency. While my audience today includes attendees from America, India, Singapore, and around Southeast Asia, you may find it hard to believe that your own brokers and agents generally cannot achieve the results that Ohmyhome delivers. This is why we firmly believe that Ohmyhome is the future of property transactions. We look forward to scaling across the world to serve more of our audiences. While all this has been shared by me, I would like you to listen to one of our customer testimonial videos. In this video, a customer expresses her transaction experience with Ohmyhome, detailing how a property that she was unable to sell for three years was finally transacted by Ohmyhome through our entire one-stop ecosystem. So please have a listen. So there you go. That is just one transaction. We have completed over 15,500 transactions since inception, totaling $3 billion in gross transaction value, and our agent efficiency is more than 13 times the industry average. We have over 750,000 downloads globally since our inception, and more importantly, over 200,000 monthly active users. These active users contribute to how we are able to sell properties within seven days, as we're able to aggregate them and match their needs. When considering the statistics, many have asked me, 'Why is your stock not doing well?' The reality is that we are unlike traditional brokerages in every aspect. On this chart, I’m displaying the efficiency of Ohmyhome agents compared to Singapore's top four agencies by number of agents. You can see that Ohmyhome's transaction volume per agent has always been extremely strong, outpacing the competition. While each agent at the top agencies transacts about 4.5 deals per year, at Ohmyhome, we transcend those numbers. We are effectively super efficient. If we compare with property technology companies in the United States, such as Compass and Redfin, we’re still over two times more efficient than them concerning the number of transactions per agent. Our technology platform, MATCH, aggregates high-quality data from potential buyers and matches them against incoming listings. We qualify these buyers into a random buyer pool, and here's what happens: when someone wants to sell their property, we can match them with qualified buyers, often generating multiple offers on the very first viewing. We continuously gather information on the balance of offers that didn't finalize, the viewers who came but did not make an offer, and this helps us match property listings more accurately with each iteration. Our AI technology is extremely potent because we can continuously serve our customers more effectively, faster, and more accurately. When comparing our agents' revenue model, you'll see that Ohmyhome agents bring in more than four times the revenue per agent when compared to the largest agencies. Our business model is also highly profitable at scale. Let’s take a typical property that generates a commission value of $10,000. In a traditional brokerage, around 90% is paid to agents, with the company retaining a mere 10%, which is $1,000. In contrast, Ohmyhome pays out about 50%, not just to agents, but generally to anything involved in the sale, including our cost of goods sold, salaries, incentives, and property listing expenses. We retain $5,000, which is five times what traditional businesses keep. The number of customers needed to achieve $10 million in brokerage gross profit for a traditional brokerage is about 10,000, while we only require 2,000 customers. Regarding additional revenue streams, traditional brokerages generally have limited options. At Ohmyhome, we not only facilitate property sales for our clients, but we can also help them purchase their next home and assist with renovations, typically a high-ticket item with 20% margins. Additionally, our property management division can generate recurring fees from customers. Taking into account all potential income, we are estimating about $13,400 per customer, which is 13 times that of a traditional brokerage. I'm pleased to share with you that currently in 2024, we are tracking our Q1 2024 budget. We are projecting to triple our full-year revenue year-on-year. We are also projecting adjusted EBITDA breakeven in Q4 2024. Now, let's talk about how we plan to achieve that. We have three key drivers. First, aggressive top-funnel growth. We aim to expand our condo acquisitions and the number of units under management through Ohmyhome Property Management. In Singapore, there are HDB units, which are government housing where 80% of citizens reside, and approximately 300,000 to 400,000 condos, which are private properties. These condos are worth anywhere from five to ten times more than HDB units, presenting a significant revenue opportunity. The acquisition, however, can be relatively expensive. So, I would like to elaborate on our acquisition of a property management company in October last year, which has since been rebranded into Ohmyhome Property Management. This tech-enabled property management company presents us with a recurring revenue stream; once a condo management contract is signed, we are compensated monthly. Moreover, it provides us with a direct condo user base. Currently, Ohmyhome Property Management oversees over 6,700 units, which has been growing at a 58% compound annual growth rate since its inception. The revenue per sales transaction we target to achieve from converting any of these 6,700 users is worth two to four times more compared to the revenue we generated in the past seven years. The contract values in renovation are also double what we typically achieve. I'm proud to share that Ohmyhome Property Management is 100% paperless, effective, sustainable, and tremendously efficient. Our successful acquisition has led to new project wins, and we are advancing smart integration capabilities in IoT solutions as one of the first in the country. The second part of our strategy focuses on AI nurturing. Today, we’re equipped to engage customers 24/7, providing them timely updates—many of which are managed by our AI systems, making engagement seamless for our customers. This capability allows us to nurture customers earlier in their transaction lifecycle. Finally, we aim to increase our conversion rates and market share in the condo sector, enabling us to secure higher revenue per deal transacted. Through our technology, we’ve developed an app that captures customer data, allowing for streamlined interactions regarding facility bookings, maintenance payments, and service requests. This entire process is supported by our Homer GPT technology, allowing customers to chat with us 24/7, ensuring accurate and prompt responses. This means that whenever a customer feels inclined to explore selling, buying, or renovating their property, they can procure the information they need through our platform seamlessly. We're excited about the prospects of this technology as it greatly enhances customer lifetime value and aligns with our goal of being the leading, one-stop solution for property transactions. With the infrastructure we have in place, we are on pace to achieving breakeven and becoming cash flow positive. We have ambitious plans and much work ahead of us, and we thank you for your interest and patience as we strive for continued growth. Long-term, we are focused on increasing our market share in existing markets, expanding geographically, enhancing our technology scalability, acquiring companies to accelerate growth, and broadening our service offerings to become a property super app. Since the inception of Ohmyhome, our goal has always been to become the most comprehensive and trusted property services platform for everyone. We believe everyone deserves access to reliable information and services, especially in a domain as significant as property ownership—the highest asset value for many families. Our commitment to building strong foundations with excellent service and a robust technology backbone will take us to greater heights. In 2016, we aimed to prove our concept and have since grown significantly, becoming Singapore's number one DIY platform by 2017. We have won various awards and established our tech team to further develop our database and enhance our efficiency. The technology we have today is not easily replicable by newcomers. This is due to the extensive data we collect from our customers over time—spending, loans, mortgages, etc. In 2021, we built a stronger tech development team, enhancing our technology offerings such as MATCH, Digital LP, HomerAI, and evaluation reports that allow for prompt and round-the-clock customer interactions. Last year, we celebrated our IPO listing, making us the first female-founded proptech company listed in the U.S. My past experiences living and working in America have deepened my commitment to returning and expanding our presence here. We are clear on our near-term and long-term goals, which are to increase our market share, acquire synergistic companies, and enhance our service offerings while steadfastly aiming to be the leading property platform globally. I would like to introduce our experienced board and management team. I am honored to work with my sister, Race Wong, with whom I have shared many years of experience. Together, we have a passion for real estate that runs deep, having moved homes over 20 times during our childhood. We are grateful to our chairman, Mr. David Loh, an expert in the real estate market and a board member of Grab Holdings Limited. Alongside him are our independent director, Lee Wei Loon, and others with extensive backgrounds in real estate and corporate governance. Our board brings invaluable guidance and strategic insight as we navigate these waters. I have now come to the end of my presentation. I am happy to take your questions and run through any additional slides if you would like to discuss them. Thank you very much.

Thank you, Rhonda, for the presentation. We will now move on to the Q&A session. First, we have analyst Allen from Maxim Group who would like to ask a few questions. For the rest of the participants, please leave your questions in the Q&A section. You can simply click on Q&A and type there. Allen, ready when you are; we will allow you to talk now.

Thank you. Can you hear me?

Yes, we can hear you.

Okay, great. Congratulations. This was a very excellent presentation and your outlook is significantly stronger than what I was projecting. So congratulations on your execution. To start, regarding your projection to triple revenues in 2024, could you give us some color on your three major segments and where you foresee that revenue coming from relatively? Thank you.

Thank you, Allen, for your question. Rhonda, if you are okay, I will take this question onward. First of all, currently, our revenue mainly consists of brokerage, renovation, and our property management business, which is relatively new. Property brokerage constitutes around 53% of our total revenue, while renovation accounts for around 27%, and property management comprises the rest. We acquired a company less than three months ago, back in October. The results reflected in 2023 were only from less than three months of operations. On an annual basis, they are doing quite well and are actively growing. Moving into 2024, we are seeing a recovery in the brokerage industry. Additionally, our investments and launch of Homer AI, alongside other technological products have significantly expanded our customer base compared to last year.

Thank you. Regarding the property management business and realizing synergies, could you discuss your strategy for upselling to condominium owners when they are transacting or considering renovations? I know when I purchased a condo in the states, I received different solicitations weekly, so how do you distinguish yourself in the market? Thank you.

To answer your question, we focus on making our app extremely user-friendly for residents in condominiums. They use the app daily to book facilities, payments, and for various services. Ohmyhome appears on the main screen of the app, providing all of our services, making it tech-based instead of relying on traditional sales approaches. We occasionally host events, like during Chinese New Year, to connect with residents and answer any questions regarding the app. This allows us to capture leads effectively through engagement with them directly on the platform.

Thank you. You've mentioned using technology to boost your top-of-funnel activities. Can you also address partnerships signed that could help expand transactions and geographies?

For sure. Leo, feel free to chime in if you remember some of our partnerships. Thus far, we have partnered with e-grocery services and insurance companies, as well as eco-friendly paint companies that promote products with purifying features. We believe in promoting products that are good for others as well as beneficial to our bottom line. Our community engagements include various collaborations, even with influencers to elevate brand awareness. We have also promoted our products like Homer AI and our valuation tools through media appearances on channels such as Channel News Asia, discussing leadership and tech innovations. Generally, in Singapore, if you ask people if they have heard of Ohmyhome, they would most likely say yes.

Thank you. As you triple your revenue, and with the tech infrastructure already established, can you clarify your capacity to leverage technology as it relates to profitability?

Certainly, Allen. As our revenue grows, costs will not escalate at the same pace. Significant past investments in our technology have already been made, and while they hardly translate to immediate revenue, the tools we've built serve as a foundation for growth. For instance, your use of our valuation tool costs the same to maintain, whether one user accesses it or a thousand. The cost of our technology and innovations moving forward will be considerably less than the initial investment we made to build our capabilities. Therefore, our objective is to maintain a low cost structure while expanding our top line revenue. Our gross margins are healthy, ranging from 20% to 50%, allowing us to focus on scaling our customer base, which positions us for profitability.

Thank you. Congratulations again.

Thank you, Allen, for joining us.

Thank you, Allen. Now I’ll move on to the rest of the questions that are on the list. We have a few questions, one coming from Amit. Would you share insider holding updates? Regarding this, we do have updates on our current insiders, and all of their filings will be publicly available via 13G filings about every three months. So you’ll be able to access that through various public platforms. Additionally, every time we present, we will update slides regarding our current shareholding structure, so be sure to follow-up in future presentations. Next question is from Tyrese: Is there a way for investors to help build the company and be compensated for their contributions? Rhonda, would you like to take this question?

We welcome feedback and would love to hear from you on how you can help us grow. We're open to discussions; however, as we previously mentioned, we are maintaining a low cost structure, so compensation would be a separate discussion. Please get in touch with us through our IR page or LinkedIn.

Thank you. We have another question from Jeremy: Are there plans for another securities offering in 2024? Currently, we do not have plans for another securities offering.

Exactly, our primary goal is to focus on expanding business and achieving profitability, rather than venturing into new securities offerings. To Robert’s question on tech costs potentially being a sinkhole: it is critical that our board possesses tech expertise. The board is conscious of avoiding unnecessary tech spending, and while we had to invest in our technology in the past to enhance efficiencies and primary customer experiences, we are focused on not overextending our budget in that area in the future. Our goal is to provide the best solutions for our customers rather than following trends. Today, we have a strong technology offering in the market and will continue building our visibility to expand our market share. In the next few weeks, we will be sharing a business update that I am excited to deliver. As the CEO, I strive to provide good news to our shareholders, and I value your continued belief in our company—this motivation drives our ambition to grow.

Thank you, Rhonda. We have a few more questions. One question is regarding short-term acquisition plans. To address this question, we are currently focused on achieving breakeven by the end of the year and aggressively growing the company. That said, we do not rule out the possibility of considering good synergistic acquisitions that may arise, exploring the necessary funding required for these acquisitions based on their nature. The next question is when we estimate the company will be profitable, and also how much debt we currently hold? As explained in previous slides, we expect to reach adjusted EBITDA breakeven during Q4. As for our balance sheet, our current assets total USD 7.9 million, with total liabilities standing at about USD 4.8 million. I think that's the end of all the questions we have for now. Thank you, everyone, for your kind words. We would like to inform you of an upcoming Q1 business update to be announced soon, so please stay tuned and follow our social media channels, including Instagram, Facebook, YouTube, and Twitter. For more information, visit our company website at www.ohmyhome.com and our Investor Relations site at ir.ohmyhome.com. You may also contact us for investor-related inquiries at [email protected]. Thank you, everyone, and that concludes our presentation. A recording of this session along with the presentation material will be uploaded on our website for future reference. Have a great day.

Thank you.