Remark Media (NASDAQ: MARK) reported Q2 EPS of $0.10, $0.48 better than the analyst estimate of ($0.38). Revenue for the quarter came in at $20.71 million versus the consensus estimate of $19.36 million.

• Revenue increased approximately 20% to $20.7 million, compared to $17.3 million. The increase was primarily due to an increase in the KanKan business and an increase in show ticket revenue in the Travel & Entertainment segment.
• Total cost and expense was $27.8 million, compared to $21.9 million. The increase was primarily due to an increase in cost of revenue and payroll costs for the KanKan business and an increase in paid search costs for the Travel & Entertainment segment.
• Operating loss was $(7.0) million, compared to $(4.7) million due to the increase in total cost and expense.
• Adjusted EBITDA was $(3.3) million, compared to $(1.5) million.
• Net income was $3.4 million, or $0.10 per diluted share, compared to a net loss of $(4.3) million or $(0.19) per diluted share. Net income for the second quarters of 2018 and 2017 included non-cash gains of $10.1 million and $1.8 million, respectively, related to a change in the fair value of the Company\'s warrant liability, which occurred due to the decrease in the Company\'s stock price during the periods.
• At June 30, 2018, the cash and cash equivalents balance was $7.0 million, and total restricted cash was $11.7 million, bringing the total combined cash position to $18.7 million, compared to a total combined cash position of $34.3 million at December 31, 2017. Cash decreased primarily due to an increase in total expense as we grew our operations in China and engaged in multiple proof-of-concept projects, the timing of payments related to elements of working capital, and paying security deposits related to our Travel & Entertainment business.

"We continue to make solid progress in signing new AI agreements, and in working with our clients to begin deploying our AI technology across multiple sectors in China and Southeast Asia, while driving revenue growth at our largest digital media property, Vegas.com," said Kai-Shing Tao, Chairman and Chief Executive Officer of Remark Holdings. "Given the size and breadth of the AI contracts we've secured and our deployment efforts underway, we remain well positioned to accelerate our revenue growth in the months ahead. Our unique market position is supported by our ability to leverage our advanced AI technologies to deliver accessible and practical solutions across the financial, workplace and public safety sectors. Defined by rapid deployment, low maintenance costs and highly-accurate and actionable results, our platform applies the power of AI to deliver simple solutions to complex problems."

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