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Visual tech solution developer Fobaifo has entered a full-fledged growth phase. Its scale is rapidly expanding through customer diversification and business diversification.
According to the Financial Supervisory Service's electronic disclosure system on the 23rd, Fobaifo recorded operating revenue of 5.56356 billion KRW and an operating loss of 2.01717 billion KRW in the first quarter. Operating revenue increased by 230% compared to 1.69023 billion KRW in the same period last year. The scale of operating loss grew by about 50%.
Fobaifo is a visual content solution company that produces video content based on its proprietary video content quality enhancement solution (PIXELL) and operates a platform distributing ultra-high-definition video content. Based on visual implementation capabilities and creative capabilities, it produces ultra-high-definition content and new media immersive content that require high realism. It developed the quality enhancement deep learning solution PIXELL based on long-accumulated quality improvement data. It operates 'KEYCUT STOCK,' a specialized distribution platform for ultra-high-definition video content. It has grown into a video-specialized platform with the world's largest scale of 8K content.
A Fobaifo official explained the first-quarter performance, saying, "The operating revenue scale increased as a result of expanding the portfolio of the visual business division producing ultra-high-definition and immersive content," and added, "We secured professional personnel and technology by acquiring the special effects (VFX) company Medpictures in May last year."
He continued, "Orders for related businesses such as movies, dramas, and OTT content are increasing," and added, "With the transition to the COVID-19 endemic (periodic epidemic), demand for immersive content planning and design has increased."
The trend of expanding scale is expected to continue beyond the second quarter. All business divisions are growing evenly, leading to improved performance. The visual content industry typically experiences a low season in the first quarter. Marketing activities increase in summer and year-end, making the second and fourth quarters peak seasons. With a significant increase in first-quarter sales, which is the low season, expectations for growth in peak seasons have also risen.
Fobaifo is continuing attempts to combine visual content technology with game content through collaboration with RollQ. In addition, the PIXELL solution business, which helps improve image quality based on artificial intelligence (AI) technology, is expected to produce concrete results soon. The streaming industry is paying attention to technology that enhances perceived image quality while reducing content transmission capacity. Improving video compression can reduce transmission costs. Through the advancement and lightening of the PIXELL solution, substantial sales are expected to occur.
Fobaifo became the first domestic content company to join the '8K Association,' a global content quality council led by Samsung Electronics. It also joined the Giant Screen Cinema Association for the first time in Korea and entered the Global Theme Park Association based on its global theme park content production capabilities. This recognition reflects its technological prowess in producing high-quality and immersive content.
KEYCUT STOCK, which has completed technological restructuring and image category expansion, is also ready for growth. KEYCUT STOCK not only distributes videos uploaded by videographers but also converts them into high-quality content through high-definition processing and then distributes and sells them. It is gaining popularity by supporting videographers' secondary creation of high-quality content based on existing video content.
The immersive exhibition content division is also growing rapidly. Fobaifo is responsible for designing, producing, and installing the Emotion Castle experiential exhibition content within Seoul Grand Park in Gwacheon. The contract size is 3.05 billion KRW, accounting for 18.8% of last year's sales. With the endemic effect increasing experiential offline exhibitions, it expects more business opportunities.
As the number of clients increases and the scale expands, Fobaifo is striving to improve profitability. As the business scale grows, the number of employees increased from 80 in the same period last year to 160. Advertising and promotion expenses relative to sales decreased compared to the same period last year, so the increase in costs was not significant. Fobaifo increased outsourcing production to expand its business flexibly and quickly.
Fobaifo continues to invest to seize growth opportunities arising from the growth of upstream industries. PIXELL, an AI-based deep learning quality enhancement solution, is a deep learning algorithm model. To strengthen deep learning in the area of perceived image quality improvement, experts use content with improved quality as training data to advance the algorithm. It has secured superior technological competitiveness compared to competitors in algorithm training. Automating the quality enhancement process to reduce time and cost is one of Fobaifo's competitive advantages.
A company official said, "As of the first quarter of this year, we hold approximately 24 billion KRW in cash and cash equivalents," and added, "We have sufficient cash liquidity and additional investment capacity."
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