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PEER: New Initiatives Leverage Proprietary Technology

By M. Marin


Last week, PeerStream (OTC:PEER) reported full year 2017 revenue of $24.8 million, which represents an 18.4% year-over-year increase compared to $21.0 million registered in 2016. This growth largely reflects the positive impact of the company’s October 2016 merger with privately-held AVM and the combination of revenue streams from the two companies, particularly the inclusion of revenue from the FirstMet product. This was partially offset by a decline in subscription and advertising revenue from the company’s more mature Paltalk product. Of the 2017 revenue, $22.9 million came from subscriptions compared to $18.6 million in the prior year. This represents an annual increase of 22.8%, primarily reflecting the AVM merger, as noted. Another $1.9 million came from advertising, which compares to $2.3 million generated in 2016.

PeerStream reported a net loss from operations of roughly ($5.7) million for 2017, which included one-time expenses of about $815,000 related largely to legal and consulting fees for the proposed LiveXLive merger, as well as a one-time payroll tax expense related to the AVM Merger.

The company has identified about $3.0 million in redundant and non-core costs that it has eliminated. PeerStream expects to fully realize the benefits of this cost savings in 2018.

Technology Service Agreement

On March 8, 2018, the company introduced PeerStream Business Solutions to provide technology licensing, services and support to third parties for multimedia streaming and communications. The company expects PeerStream Business Solutions to develop a new B2B revenue stream leveraging its blockchain technology and capabilities.

Blockchain is a decentralized and encrypted “ledger” that offers a secure method to store records and other information in a way that can be verified. Each block in the blockchain contains a hash – a digital fingerprint or unique identifier – and timestamped batches of prior transactions, as well as the hash of the previous block. The hash connects the blocks and prevents any block from being altered or inserted between two existing blocks. Each new block reinforces the verification of the previous block and therefore the overall blockchain. This characteristic is also believed to make it transparent if an attempted hacking tries alter any part of the blockchain. According to IBM, “blockchain architecture gives participants the ability to share a ledger that is updated, through peer-to-peer replication, every time a transaction occurs. Peer-to-peer replication means that each participant (node) in the network acts as both a publisher and a subscriber. Each node can receive or send transactions to other nodes, and the data is synchronized across the network as it is transferred.”


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