WYY - Earnings call transcript Q4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Welcome to WidePoint's Fourth Quarter and Full Year 2023 Earnings Conference Call. My name is Matthew, and I'll be your operator for today's call.

Joining us for today's presentation are WidePoint's President and CEO, Jin Kang; Chief Revenue Officer, Jason Holloway; and Chief Financial Officer, Robert George.

will analysts the and we from for remarks, publishing WidePoint's major their open call up questions Following investors.

at WidePoint's If today your Relations contact and taken team Investor you'd like questions additional information, were wyy@gateway-grp.com. not please

risks involve anticipated. statements we and in and that provide performance uncertainties safe to may of Securities this regarding statements that conference harbor future Commission. would call. this differ forward-looking Form those cautions WidePoint's made Corporation actual includes call and the during I regarding that The Before cause from events are begin company's to the These uncertainties results filed forward-looking like the WidePoint could the and call, with XX-K Exchange described future statement materially in matters include discussed risks

Finally, website everyone to for of via this a be Relations will www.widepoint.com. in at remind the replay call section made the Investor available link company's I'd like that

Now Mr. over I would like President Kang. please Jin and call proceed. WidePoint's to Sir, to turn the CEO,

Jin Kang

financial of year higher for good a operator, successful ended financial approximately our our a $XXX the in year closed joining strong operational for million our at today We us and and full fourth you, Thank This on of you end with operations plans positioning one XXXX by note afternoon, XXXX both out review Thank for XXXX. initiatives. past and financials pertaining XX, and to our revenue, guidance. us pivotal full to the December WidePoint, quarter year marked results everyone. was execution and

growth and consecutive adjusted in XXth positive XXXX. achieved EBITDA, we demonstrate a Simultaneously, of sequential quarter-over-quarter quarter

company, we beyond fourth we concluded quarter vital rate trend positive, cash for especially that is XXXX and and within Additionally, this the interest throughout environment. a maintaining high free and more anticipate flow something the notably, that

XXXX XXXX. is multiple carrying anticipate initiatives year fiscal backed developments made This throughout momentum by we into and

with value. in evident renewals, extensions to lines. alone, more services new demand million solution contract include witnessing in actions robust wins our for the First, than of contract fourth XX These and and remain all $XX our solution a amounting than expansions awards, contractual quarter more

battle As headlines, be you issue. will government ongoing an budget know the and the is federal news from

anticipated December and to lies However, carried our all by backlog counterparts new successfully and year. this, catalyst to our continue over are successfully funded. mitigate in substantial With totaling into we engaging affected fully ensuring with contracts Currently, risk contracts XX, growth XXXX. a proactively they this XXXX renew are awarded government that of as the million significant our contract in for $XXX early

to and renewal WidePoint mobility XX%. premier as solidify Furthermore, customer by trusted management secure for evidenced the of our continues solutions, retention choice most strong rates position its over contract

percentage line forecast we for services the top for and With double-digit growth in teens revenues. our double-digit confidently these revenues driving momentum, high percentage managed teens growth initiatives in the

positive In to addition cash XXXX. achieving for the year full flow free

expenditures majority concentrate us for Another our factor made various sheet, completion investments is capital having growth With operational of initiatives. fully in this, the our anticipate XXXX, the enabling of driving our recent XXXX. on growth to minimal we capital strengthening balance

process call, was in that X like ITMS, final FedRAMP or status. our in nearing investments emphasize System, More we Management are Last completion. specifically, Technology to I'd phases their Intelligent earnings the previous in mentioned

throughout we its nearing ITMS on designation, quarter the We authorized the final first half now see of with positive this XXXX. continue certification FedRAMP in front to anticipate news

agencies, operate to places posture general our of workload all on services based which processing. ahead that current cybersecurity from or necessary our change good competition. attests is may administration's lines for time news customer our The the FedRAMP have to that us we the However, already authorization strong ATOs

our indicates grant the ITMS our position This As business certification WidePoint edge will enterprises. government competing substantial cybersecurity federal a competitive a with customers' our data. for large reminder, attaining platform that and new and full align and solutions uniquely certification protecting for standards federal FedRAMP with

Moreover, We the in fuel showcase a and solutions catalyst solutions robust and and where to existing offered new it security anticipate near to levels forward of are completion be a wins and announcing differentiating and factor by WidePoint our sectors in prospective to customers, commercial FedRAMP security both to system as data the will to our industries particularly this process serve significant the look continue future. paramount.

site from enhancements half Another our by investment of systems. further which operations we additional These us competitors will continuity to site near differentiate to also completion is of delivery anticipate COOP provide system, delivery specifically and our XXXX. COOP, our resiliency more completion first or in our enhancements the

Our that greatly ensuring will data recovery reduce primary of and system outage customers. exceed level our have is the to come enhanced our all and service capabilities the failover if time, COOP such site we secondary that of with site immediately will our automatic system a online replication there meet site, agreements operation

these our overall time, the And accuracy excited being our developing of explored. are a we experience the increasing business all intelligence as potential strategy aimed are everyday improve our those customer responses increasing investments, service by by The as reducing artificial we to leveraging well operations. In addition to potential at for are capacity response to AI. streamline

to there's customers' knowledge our requirements development, to vulnerabilities are a to Furthermore, serve security audits, from enhance service leveraging There as the behavior-based AI potential proposals, implementation measures. our that and better. our could of AI, to invoice our base cybersecurity areas enhanced by benefit as of other business software and detect integrating responding IT such

AI sifting capabilities. process the noise from of real in the are out We the

potential generators our coming the to like have share We recently of out the believe achieved strategy way, a needs. this highlight our substantial will into just years. evolve we more grow front few revenue our of on contract our we With the investments I'd as to to business that wins will meet over

saw $XX contracts federal alone. in roughly the million quarter won we governmental fourth At level, the in

federal talk Homeland While into one of contracts, by federal largest to of nondisclosure to our to bound which disclose one grow our Jason are second the clients, with the U.S. Department specific and our contract of to recent will only has we wins, potential unable Security. contract agreements government

the service both commercial a next to side, as Florida into we the a On XX major potential and have with which professional services months. over won firm Center, contracts have IT the grow and material a customer a Research nationwide attraction of

market. to deeper shortly, into contributed past side, On year that especially year. efforts are these but challenging the proud will this in the marketing fruitful, to with this fiscal a headwinds affecting Jason our we dive strategy to topic WidePoint's sales success expand and proved has whole market be presence significantly to say macroeconomic

our in advantage. potential and mobility solutions suite anticipate sales year-over-year WidePoint persist in growth have maintained we of These WidePoint's our business growth, business and playing continue has sales the company's of in pivotal positive as WidePoint's creates advancement. fortifying solutions their comprehensive grow pipeline. The further trajectory within management trusted upselling a business our and remain momentum, reach. in to shown Lastly, XXXX significant long-term cross-selling solutions for role growth competitive this for the and sustained expansion avenues to we and

the I made Jason? to marketing dive sales hand mic the front. over will Jason, will and who into now on the progress

Jason Holloway

everyone. and Jin, good Thanks, afternoon,

current concentrated the our and WidePoint's this deals our earlier, alone, stated Jin new commitment and contributed significantly front marketing This have showcases $XX WidePoint sales past This on which for considered has performance new were approximately efforts to and million of capturing $XX new past within wins. was awarded drive business in additional year. wins, our contract trust WidePoint over business to our quarter As solutions. into the continuously million customers

million with managed closed approximately a telecom end deal to entity full two on is commercial This X-year a periods. period the solutions of and of deal its with a provide customer. base U.S. option we X-year Recently, behalf $XX government range

As we are can state proud one contract Jin of client's our mentioned, we this disclose significant. cannot to most become although this name,

prompted these XXXX. into and committed Additional SEC X-K sales XXXX. secure and year towards our allocate mentioned us like one the internal found new enhancing additional resources information to January have to initiatives past contracts marketing The staff to results be our can high-margin filed develop remain plan now. to a in capabilities this additional just We advancing and Form strong budget

sales to for from ample in funding this we an garner commercial additional we development Specifically, federal a proven resource senior-level year of staff established members, momentum partners. new XXXX vendor carrying D.C. and confident with partner into strategic to within record fiscal area and contracts. guidance the look With the expansion and resource are business add track more senior a manager

K-XX recently at for pipeline IAM is facilitate sector numerous want accelerate our of of our program entities. K-XX the management an continue to On partnership to expert I into equivalent note the market engaged sector integrating We with number terms access side, within our that pipeline aimed opportunities. to penetration. also solutions the WidePoint's managed in identity mobility we offerings existing to and our

our the we and value. this flagship year DHS. contract robust to with backlog cellular part $XXX have earlier, can mentioned A contract. Jin contract attributed large a of As X.X management in backlog services be wireless million success of this seen

we our rate, on the million. are contract Based $XXX current of run nearing ceiling contract

continuing to DHS options contract. we closely for such, working this are with As to review under perform

and staff, impactful marketing increase growth. additional our as and With the we like sales efforts resources we look for additional contracts win the investments this in WidePoint's financial to will

authorities to wanted team. the IT I Lastly, recognize

during IT pandemic working headwinds, rapid a at hard, in than you and are has in been though pretty deals As closing faced team the a integration we authorities They external about challenges tremendous longer and been excited momentum XXXX. little COVID have pace. know, we XXXX. the Even macro took their expected extremely the to due acquired

will With to over the hand that, I Bob. call

Robert George

where free on revenue thanks they I'd everyone entire you, line like in XXXX, year in today. Thank the cash gratitude improvements express significant also flow. to Jason, joining WidePoint and both team my for WidePoint how executed saw and top a us to to

share fourth and of I'm financial Now the to XXXX our details year quarter pleased results. full

$XX.X Revenues Revenues from the for last XX% year an of for year. the year. up increase XX% million, the quarter from were same million, quarter $XXX were last

I'll year to that across period-over-period, say Now pleased quarter full revenues. fourth a categories. saw and we breakdown all revenue our I'm provide further our increases of

of increase year. was last carrier an XX% quarter million, from Our $XX.X revenue for quarter same the services the

carrier million, increase year. pay revenue the that invoices year activity contracting is growth Our on we from X% $XX.X customers federal to telecommunication our for in an behalf, with due devices was of increase we services the where manage. their last The full carrier

our customers. Carrier our While customer we is pass-through, an differentiate requirement services savings where and invoices area to editable federal a in Paying provide

billable increase and from quarter managed revenues same the last services Our XX% for a million, the year. $X.X quarter were

XX% management a year The million, from $XX to identity were year quarter being fourth the new last in for increased and revenue year. in increase were customers customers. full our and our and services billable access utilized and by related projects services managed Our increase TLM professional

Our other from fourth revenues reselling and the last quarter million, quarter were an $X.X services the same of XX% year. increase for

of revenues from $XX.X the other in for both quarter software year and the The in year. year. transactional want a of recording timing and federal XX% Our compared $XX.X was million are and $X Gross services significantly to I for of profit XXXX. text expansion and federal full and profit quarter revenues also our for revenues highlight which reselling customers, million of were increase customer. million nature was the compared amount XX% in revenues was of last fourth a and Federal Act XX% a to XX% revenue selling to of services XX% year last Records do for new grew third-party to now that to year reselling and or million and or increase $XX.X identity quarter-to-quarter. an very under of million, result the the management selling is or from revenues Gross $X.X solution required storing messages the an other

year. excluding metric was carrier more percentage, the XX% period compared in the significant services, to quarter, fourth gross of profit the same XX% last In

year and was profit The gross year. gross period XX% relate XX% services same amortization be both beginning and to and our year, services, carrier full percentage, quarter to other fourth last in platforms a are increases lower amortized the the which that in excluding the reselling percentage, noted have depreciation margin substantially profile. previous reached gross and delivery increased related to in excluding For compared the services, to and carrier margin completion the lower have

revenue were period compared administrative gross period to XX% expenses vary period revenue the our percentage $X.X of Accordingly, revenue margin and general mix. or our will 'XX. from fourth XX% quarter, based or to the $X.X million the of relates expense of and In of on to million last revenue same the were million in compared year dollar $XX.X in and in compensation XX% XXXX. year. or for noncash administrative share-based $XX.X period compared of to General the an increase expenses increase Much XX% to revenue of same million

expect see continue percentage We a of administrative to as revenue general future. lower to in costs and trend the to

net fourth $X.X valuation of noncash on carryforwards taken allowance placed the to was fourth a quarter of XXXX. XXXX to net XXXX of share $X.X of million in compared difference between Our quarter $X.X period a million a net net is the $X.XX loss The the the the predominantly loss per in loss loss in loss same quarter operating of our million per loss of $X.XX fourth and related share for a last year. and or

the goodwill a in the loss in was on the million noncash XXXX. noncash difference in $XX.X of fourth for $XX.X was the XXXX. principal our placed and of year second the quarter net net to forwards compared charge XXXX operating loss of XXXX compared carry $X million in allowance the net loss Our loss million of The taken quarter full to valuation XXXX net from

sheet. balance successful our cash management past efforts share the excited to results Moving our I year. to am over the of

reduced invested in finished approximately bank million XXXX XX XX Further, sales days we DSO, complete days cash XXXX XXXX. no from we year, our in and to days $X.X still outstanding, million the delivery debt. during to with or Although in substantially $X.X platform, our we

Our flow XXXX. capital fourth which cash over we in minus was EBITDA flow, expect adjusted free positive investments we the as $XXX,XXX to continue cash and define be just quarter, throughout free to

on pursue XX-K entered the free generated Additionally, with to $X described initiatives our sufficient Dominion cash call. us and capacity. is credit have Form credit will hand, revolving to in by this and which expected The filed earlier. facility potential and growth provides in to National We Jin Jason into an our anticipated be our Bank, believe XXXX us cash flow prior fund strategic we a further facility allow million outlined new of facility with borrowing additional Old

This completes my financial summary.

of our to refer our For a which prior more call. filed analysis financial XX-K, please results, detailed Form this was to

call I back over Jin. to So will with the that, turn

Jin Kang

Jason. Thank you, Bob and

momentum and and year-over-year results XXXX anticipate and beyond. we year efforts show past Our this significant improvement seen, this carrying into

equipped with ample Bob to initiatives cash As I are the mentioned mentioned, different well and pursue we Jason earlier.

a Additionally, to are for I future, we want to reiterate that hype AI that to of relationships AI disruptor will the big careful aim business. capabilities. of implement elements to sift AI all with be leaders will especially the strategic and have our and and forming solutions on to taking and field our through foreseeable with noise tools impact greatest existing look We in deepen the those the operational

WidePoint. We value to look also synergistic provide opportunities M&A for and continue opportunities strategic to that out

well I are not pursue in that development arise. we do report Though necessary now, opportunities any any front. as we to funded, to resources significant of that Given have this have the

initiatives. On touch like a I'd separate on note, ESG to our

Specifically, recycling a WidePoint that practices. conserving electronic committing reducing program developed carbon and device emission includes while precious has minimizing resources through to waste, energy-efficient robust

Through area. property WidePoint and office efforts stewardship our practice in for green is locations into WidePoint greener is around a space environmental initiatives, participating these to by unused to converting one business a revolting dedicated of future. also preserve sustainable ESG

expect million EBITDA and ahead XXXX, $X.X $X.X $XXX million and to Looking and $XXX adjusted year fiscal range range between revenue into we million. between million

million we and million. $X.X between flow range $X free cash Additionally, expect to

financial the investments past a strategic health of of through significant year to this proud made taken this enhance and year. series initiatives are our steps We

our we Operator, a positive execute said, flow our to driving plan, our managed we with WidePoint and and by serve. ready in shareholders. in remain our value for with improving please employees shareholders, evidenced especially questions. we the turning and that long-term projected As QX cash and growth clear questions call at commitment foundation point and solid team to services. sustainable steadfast a from to open our analysts growth management major XXXX margins and for place and are take you our XXXX, vision communities will the for creating With is in

Operator

from Buck [Operator question Instructions] H.C. first Your is Scott from coming Wainwright.

Scott Buck

might and level? curious contracts guess, you with versus a what place, reach guided bag, for guide what's your Jin, of us go revenue have the in earn in maybe give to that to XXXX the the I'm guys you I have out can 'XX and still little you idea what already

Jin Kang

is XX%, our And of confidence have we say, terms we XX% in. would things a the the line, top that have that of high guidance I in bag. also fairly In on

And call RP have bag, it XX%, very win percentage we so percentage. a the win, in at the terms and of we in win XX% and portions other of what so high

So within we hit provided. able to feel pretty confident to the be guidance

Scott Buck

should think of Great. That's the helpful. cadence And about revenue through year? how the we

Jin Kang

be see like the XXXX, The end quarter, the we of And lumpiness some because year. timing cadence of the second still on it first some profitability lumpy, comes like that sequential quarter-over-quarter. improvements be in throughout be should it we could improvements that, in was and the sequential in. quarter in see there we revenue may revenue of resale value-added onetime but as beginning stuff depending should had of There are

Scott Buck

investments the where infrastructure? expecting Great. growth there cost that? Besides then a some the support more spend help sales you're of on bit And little making existing to the can support to OpEx. side, places you're the are you need the Or -- turning to you with other

Robert George

Bob this is Scott, George.

spending. more on forecast, anything OpEx on I bit a In about terms and but our no strategic don't sales the the have terms adjustments significant. marketing we little hires, I a in whole talked inflation side, more but of which mean spend side, think we in of of in we do significant lot infrastructure, see nothing

Scott Buck

you one little about looking to last in get about dive then And what curious done? Jin, in I'm criteria there a M&A me. could just would you a bit a remarks. more, potentially at Perfect. kind prepared talk Okay. bit and little if you we be talked deal for your could of

Jin Kang

Yes.

are, the acquisition our do buying But growing and like of I same the either moving those them us capabilities the kind customers onto then that is In have companies our redundancies intelligence most of looking in burner, and and deepen and deals opportunities. potential priority time infrastructure not M&A that's of that are of could at we potentially what we're thing looking their we're tires, in for companies on we and that essentially in our capabilities capabilities. for making now and that specific mean terms that, And -- there out immediately or accretive do we're looking that spending can every kicking terms artificial our back our deepen eliminating companies capabilities our and delivery those help organically.

capabilities And And because profitable. of looking will, endanger so may we and are that for, look our are sort if performance. that you those financial for want that the also and stable we to types looking don't companies we're are pre-revenues, of are companies for that

the and swinging for fences for doubles. opportunities. bets, We're we're So we're looking when for these looking safe singles not

Great. additional Thank Operator, you. any questions?

Operator

Instructions] [Operator

is submitted government federal the questions. I'll populated, While on U.S. with queue Question being budget. the proceed previously

budget the has mean signed fiscal does year What law. for into Now for WidePoint? Biden XXXX that President that

Jin Kang

question. that for Thank you

is dry know, on bill. budget barely the As ink the you

especially And on budget. budget details and of department so the are homeland security there very federal few the

services business to of all as and all know do is what expect be And -- contract us. current usual However, was by contract for orders. it our that task essential be our approved contract we funded, will for considered as of such, fully and we our our funding is approved

anything will you The are again, material contract issuing government happens. And material any press our necessary. of DHS of the We as all customers the of all Homeland we if by contract. as very of press status keep status and inform Security agencies of Department our that release informed with essentially our you similar changes contracts to our with releases we'll to of our federal have

Operator

government potential to lot A cuts Department your of budget federal on DHS? follow-up to. and There as budget some of the with question Security specifically been impacts contract U.S. how the budget. a budget additional Homeland color provide to to WidePoint discussions new the Can has you and specific

Jin Kang

sticking ink And But news points. dry. the the is heard we DHS I X as said, was barely of that X the the have in the Right. budget of

We DHS's the have very details about few budget.

that our with funded. tell DHS can on good we contract current also some fully is we orders you of news front can There that task DHS our However, are all share.

orders to million. you the DHS has commitments $XXX contract report contract with As contract know, the And on I'm rate based we our on and that ceiling. current ceiling our of happy a run are funding nearing task

the communication forward in our the until a DHS are the we counterparts at period chart for to So course contract of XXXX. with remainder of end

WidePoint we additional to detail. more, that will more course contract that likely news or for it all up we years. few as maybe action be ceiling. But potential to the the are against that will of contract it running raise recompete a extend is ceiling These the good are we The earlier options say even provide the contract will suffice contract help learn or

Operator

that remarks government except your X of with your another please government have contracts, contract. federal won the contract your additional DHS on into in details mentioned may for provide You Can you contract? you grow largest that this

Jin Kang

that about little implementation we our going about and Sure. in already report services our teamed it talked you did contract. that, We as with and that well, material as federal contract the did in we we happy optional offered a a end Quasi we well, who with the we the interested government in talk talks a -- is customer are with tell and win one entity win is to also of Jason that that I'm we can this new we proposal. to partners strategic mentioned bit but

material increase value. in these see a upsell we the we should optional As contract services,

this and will additional it say about as as doing available. to to, shortly. the very a release name as we and partner suffice and partnership, as should coming are they up strategic provide press will through be are that we well excited details But that allowed customer strategic our become the we new we opportunity We end

pursuing We And will this quasi that main organizations identified opportunities of that partner. also business. strategic have I with displaced mention competitors already are this we several government win we one our to

And so good pretty we prospects feel future our about there.

Operator

You your that capital comments investments are mentioned in your be that largely is will what and cash free completed WidePoint plan your allocation? flow positive. so, If capital for

Jin Kang

Yes, trend I balance throughout materially input various and We The investment QX repurchase XXXX. input others. in management program, from our see options, confirm -- this sales stock our foreseeable from QX, CapEx Board along cash was to our is among team our Also continuing marketing, approximately including with that future. increased strategic cash we completed flow for grow at guidance in free see should weighing hires the and end $XXX,XXX XXXX. and of can the experienced of

our and information forecast our will be front. on options, validate we we As additional analyze that with forthcoming

Operator

large mentioned You sales your this and quantify is on provide growing. color or your front? you comments some additional in Can pipeline that

Jason Holloway

Yes, sure. take can that. I

recent we've our pipeline in contracts. due increase material wins and a So substantial to seen

the arena closures, markets. those same created in within and they've IAM opportunities So new the MMS

to the due win up announced has -- pipeline Specifically, in our recent sector we IAM due transportation to QX. tremendously filled recent

way partnerships number our competitors, our a that integrator displacing direct On paved front, wins recent to get the has new systems Jin the of earlier, as opportunities. MMX mentioned through our and with

stated successful in a help supplement deals, And my prepared has keeping while costs program lastly, of and role on on created due boots at been IT channel partner street to as remarks, minimum. overhead authorities the largely new this closing to I is a a

Operator

this time, session. At question-and-answer concludes this our

please like was Jin over taken, Mr. remarks. to If at for turn his question the your back Kang closing I'd IR call to not team now contact WidePoint's wyy@gateway-grp.com.

Jin Kang

everyone taking the time We Thank to you, join operator. today. us appreciate

team. the please there IR were As mentioned, we today, contact operator not our any if address did questions

the information of contact great You again, bottom can release. find at and earnings their today's evening. have you full Thank a

Operator

Full WidePoint's Thank Fourth Year you us for joining Call. for Conference and today Quarter XXXX

You may disconnect. now

WidePoint (WYY) 26 Mar 242023 Q4 Earnings call transcript