When they appointed a former Israeli Air Force Captain as their CEO 12 months ago, artificial intelligence company Crowd Media (ASX: CM8) knew they were going to see discipline instilled and the financial results of that appointment have begun bearing fruit through a $1 million upswing in FY22 earnings.

For the year ended 30 June 2022, Crowd Media has reported underlying EBITDA of -$53K which is a $1 million improvement on the -$1.05 million reported last year.

The upswing in underlying earnings has been driven by strict cash management under the leadership of CEO Idan Schmorak who was appointed in September 2021. Upon his arrival, one of Schmorak’s first orders of business was to streamline operations under his shared vision for the Company’s conversational AI platform which resulted in cost optimisations on one side of the ledger, and revenue-generating products on the other.

The resulting effect was $5.4 million in revenue reported for FY22 and -$53k in underlying EBITDA with Crowd Media now being debt free while tackling the challenges brought upon by a pandemic.

“The last few Covid years have changed the world by increasing online activity which has permeated across all industries from education, professional services, retail, entertainment and many more,” said Schmorak.

“At the forefront of conversational AI solutions to meet rising demand for digital labour, Crowd Media is committed to developing a scalable and profitable platform.

“This year we have thickened our IP to a substantial, competitive software that is written by top engineers and researched by academic leaders, launched a live beta version and are working on deep enhancements, improvements and feature which will allow us to further commercialize a unique product that will allow firms to communicate with clients in a new form.”

The new form of communication quoted by Schmorak is in reference to Crowd’s Talking Head platform which produces conversational AI business solutions.

Demand for conversational AI has been accelerated with labour shortages around the world highlighting the reliance of human labour in industries where automations and artificial intelligence can provide more cost-effective and reliable solutions. This is where Crowd Media sees a big opportunity for their conversational AI which has already led to commercial partnerships in healthcare, marketing and entertainment.

Those verticals, however, are just the beginning of the platform’s potential where it can rapidly generate digital avatars based on real people, or fictional avatars which can then converse with humans in real time, across multiple languages.

Although Crowd Media logged a $3.2m net loss for FY22, $2.3m of those losses were non-cash write downs with $600k accounted for as depreciation.

At a cash level, the Company was $11k cash flow positive for the year from their $5.4m revenue and had $2.2m of cash on hand at the end of FY22. That figure is set to increase a further $600k from Director participation in a recent capital raise that only secured shareholder approval after the FY22 reporting period.

Funds raised will be applied towards expanding Crowd’s commercial operations with the first three revenue-generating agreements for their Talking Head platform having been secured with skeleton staff.

“With each of these commercial agreements, Crowd enhances its portfolio of products and potential clients which is why FY23 will be a period of right sizing our teams and scaling the platform to accommodate rising demand for conversational AI solutions,” added Schmorak.