WYY - Earnings call transcript Q3 2024

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Operator

Good afternoon, and welcome to WidePoint's Third Quarter 2024 Earnings Conference Call. My name is Ali, and I will 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.

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

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

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

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

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

Jin Kang

review our results third operator, our XX, I we ended year's momentum. our the and XXXX. and financial September afternoon, cost quarter as results on you, in pleased maintain year-over-year you improvements good effective consistent We consecutive to management of to for $XXX.X financial free report am with closed consecutive Thank positive for and revenue Thank increase today everyone. joining us reflecting our approximate an in We X both flow. over fourth positive achieved adjusted revenues million XX% and of XXXX. the the XXth of same million, quarter months period $XX.X of quarter third the cash EBITDA quarter build

months negative the same XXX% $XXX,XXX the figure $X.X by year. the a with Adjusted same compared last negative $X.X improving to EBITDA in for also to $XXX,XXX to the X the the last million, from for to quarter previous $XXX,XXX quarter XXX% cash quarter from compared rose grew flow to in year, million in XXX% X-month $XXX,XXX the significant results totaled year, while year. $XXX,XXX, last up a Free increase period

and WidePoint competitors new cost customers, The space. growth WidePoint in to lines separate certification that of solution and to contribution from the from in from management each strategic and judicious accreditation our partnership, continue strong figures continues implementation stem investment, of these our

in customers' our highlighted of last in X as quarter's most our Solution in quarter, the and we revenue. multifactor We're early MobileAnchor authenticated third Digital proprietary contracts demand the call, Credential smartphones. the their quarter, tested level delivers product As signed derived secure authentication successfully primarily developed, we for strong to applications services this new high-margin already third solution and via SaaS seeing that

capture management presents on to identity a the the by the the secure smartphones, protected multifactor large deliver solution Again, are authentication most of secure digital solution MobileAnchor credential mobile a robust today. enables solution WidePoint ensuring interactions WidePoint share available this segment. on to opportunity most cyber market

lack and on capabilities competitors. ongoing strategy of a solutions, MobileAnchor's brand our of ahead away is forward competitors from are technological with our who similar WidePoint work leap our broader positions capturing which

our regarding our moving authorization another in-process encouraging update investment received billion to us recently NASA we position the offerings in FedRAMP key authorization billion obtaining CWMS market. contract. $XX and Next, recompete FedRAMP phase. finalization the an that upcoming strengthen status authorization position is with enhance X.X pending our $X.X will To technological favorably SEWP competitive WidePoint's also will for solution and This the more VI the reiterate,

qualifications, provide for both these we winner performance a for accreditations efforts but believe will be on certification Jason to our similar contracts, our us updates X on additional past positions contracts, contracts. preparation and

status authorized the in months. being anticipate We granted coming the FedRAMP

it holiday be could However, delayed. us, upon with season the

process to status quickly review and continue monitor updates possible. the will We as as any provide

insurance well in for MMS with approximately companies federal In leading mobility This $XX.X the contractual new program actions major health previously solutions quarter, as MobileAnchor contract agency. million resulting care contracts or we in over and civilian the mentioned as saw managed XX a contracts, transportation, value. includes third multiple a MMS

material add major a implemented to in the services managed is QX, expected quarter. also We revenue customer fourth in which

Our WidePoint's remains excluding differentiating this business strategy to contracts focused investments on while away capturing take and to sales high-margin our of marketing XX% Bob gross The will continue success approach quarter, compared improvements our which services in offering last and carrier dividends, gross elaboration from year. to in pay prepared XX% in our increased remarks. margin, to this competitors. provide the on his apparent was margin further

RFQs to establishing with services X, equipment. arrangements agreements Spiral for and vendor the with we Regarding continue Navy, receive actively administrative along initial and are

will Spiral on X, We impact some in see early the us financial are still it for time take and of meaningful stages thus, our to performance.

when these work the positioning capture us time efforts the to are and groundwork comes. valuable However, laying

our of to implementation and continue differentiate technological And competitors our strategic unique mentioned, as X. from set, partnership, our office program model management marketing strategy Spiral WidePoint MobileAnchor, solution previously sales on innovation like and

We will continue updates provide they as arise. to

as million. XXXX, of Lastly, contract XX, our September stood at backlog $XXX

across to continues we our dollar Our sectors billion backlog portfolio all of further sales we strong pipeline to contracts remains presence expand. healthy have increase our across and in, opportunities expect as and

With to and that, I Jason, sales growing pipeline. will efforts our speak Jason? into hand further will over who sales now and it marketing

Jason Holloway

Jin, afternoon, everyone. and Thanks, good

that point mode, a WidePoint's federal the currently K-XX. to agency agencies. To federal are in and X has MobileAnchor market. into tied Jin's including are MobileAnchor earlier, in date, reiterate There proprietary has been federal directly demand To momentum pilot gained federal additional integrated notable agencies

be additional We are near-term. using that agencies will cautiously the in MobileAnchor these optimistic

pursuing through focus PMOs. be created the Additionally, work will $XX contract $X.X newly SEWP billion NASA capturing for Navy a center VI Spiral X meaningful the billion the of contract and

report with as we component a the are excellent WidePoint industry. that honored performance WidePoint systems into entered this a integrator with the Device systems Service has strategic WidePoint respected I chose and systems integrator, has of am excited this in integrators new as past be of their DaaS specific Device to a most partnership or Service program. to that one a key

showcase are Authorities. of allow acquisition of Technology Intelligent strongly system result will System to some of the platform, capabilities considered program being be IT us the that for of proprietary is This our to WidePoint's Management record our program. also the

to the want pursuit our of the recompete X.X report remains I of that one CWMS DHS highest priorities. Lastly,

with effort, every service new aspect along being honored manager are manager an We is accomplished. customer that program the a have to excellent of ensure leading deputy program to outstanding

some personnel dedicated report implemented has conducted, implementation we the start-up recently that recognize also announced. like DHS, the are This dedicated has initial happy team with full ever now most the outstanding would on agency and program at has we mode. of gone that implementations smoothly, I to at members new client site operation I in largest is those one and to of am newly WidePoint and WidePoint providing services. that WidePoint deployed our civilian currently

we more innovation driving technological competitive position edge, our quarter's to in call, will service to remain secure mentioned diversify our capabilities As on ourselves contracts. and focused last offerings and our enhance

is pipeline the software byproduct development Our look forward WidePoint's innovation. of and a proprietary future products, to of we announcing

the to financial I discuss quarter our call will Bob? turn over third that, now to results. Bob With

Robert George

joining Thanks, thanks everyone to Jason, and us for today.

third the September share XXXX. pleased months I'm the XX, to ended for details quarter of results and financial X the our

performance quarter deliver year-over-year ahead our forecast we again Our was of improvements. as this continue to

announce year. end guidance the We that higher are the meet track on to we of for our are pleased to

last the an revenues XX% $X.X Total $XX.X period year. million, or of the the $XX.X same increase quarter million from for reported for were million

same million, million in increase revenues period from year. of were $XX.X an Our $XXX.X last XX% $XX.X or X-month the the million

quarter breakdown I'll and X Now further of third months our a revenues. provide

same was for an the increase the to $XX.X million of same to XXXX. services revenue $XX.X compared $XX.X Carrier year. Our quarter carrier for million, an $X.X revenue X-month period increase period the of period was compared in million services the million, last

compared Our the were with XXXX. managed for $XXX,XXX same $X.X quarter of in period services fees an increase the million,

fees in of and the period, the signed a services For of from both the carrier new services year. at an XXXX. $XX.X federal managed revenue our X-month $X.X was increase were from increase of managed contracts million million, last The period result same end recognition services revenue of

$X.X service increase of for an Billable same the the were to XXXX. $XXX,XXX compared period quarter in fees million,

an $XXX,XXX our last in the For contract. same under quarter the a period, The new X-month billable million, for positions were to year. agency fees services of in due decrease CWMS period was increase more the billable $X.X

The decrease third an and other of were and quarter the the due in increase period our Europe. fees government from project period the lower year to earlier for million, was $XXX,XXX for services last year. in less same Reselling in the $X X-month federal work customers

are increase For due was the the services period million, $X.X resell million our X-month year. an the Reselling period, other we timing of and amount may from of nature and periods significantly sales from $XX.X The items same period last reselling demand revenue and transactional and for services other and activity both to were in commercial in federal to period. vary increase customers. increased to and

or of XX% in profit revenues X-month $XX.X quarter million in third XX% last of XX% metric to services, XXXX. same third Gross period $XX.X year. of compared increased or the revenues excluding quarter gross XX% The carrier or to percentage, the million to $X.X was XXXX. to same profit million $X.X of XX% or period revenues compared more the million in period compared in the revenues in the XX% Gross for was profit for of significant

this which margin percentage, period quarter and reselling quarter period, with services, managed in third in less due year. was the last profit third is is gross the For the for services carrier consistent in excluding to services gross quarters previous The percentage, same XX%, higher excluding year. X-month than increase the carrier revenue revenue

percentage on Our gross to based from will vary our revenue profit period period mix.

marketing were and or revenues was of Sales period the of year. and million with period remained in X% X% last the and revenues $X.X expenses $X.X revenues last third or period in million and $XXX,XXX expenses same Sales the X% to for X-month same of marketing constant compared quarter the year. relatively

continue administrative XXXX. to of revenue year. the compared sales general percentage period General last XX% dollar the in were expenses increase same to to to and were and of XX% million or revenues in revenues revenues and third lower XXXX. inflationary million pressures, the XX% $X.X quarter to expect The million efforts, relates period increases during XXXX period primarily future. sales in expect or compared dollar $X.X expenses in of the of $XX.X in XX% to be increased as we compared revenue $XX.X in We X-month we further invest the compensation marketing same expenses though or General or including of administrative here of see and as million marketing to a

general of expect expenses remain our revenues. and lower constant as We a but or business increase to grows, administrative as percentage

$X.X of year. period Net improved Net $X.XX of loss a loss million loss $XXX,XXX for $X.XX loss net per loss or million same a to compared per $X.X the net loss million share a the of share $XXX,XXX or a to period the a a or same share a share of year. of of or net X-month quarter to by last by $X.XX to a for of period last for the loss of net $X.X loss second in loss loss compared per $X.XX improved $XXX,XXX per

ended to second the of cash to the quarter at was balance balance $X.X improvement $X cash unbilled We Moving the due million receivables. the sheet. with quarter. in primarily our compared The end of the million reduction in to

We the our front, this towards on efforts we are our implementation but area in are resolution this see new progress several unbilled increase this to efforts, we receivables, continuing reaching increased has of lag year. reduce in of issue making created and a this unbilled receivables. further customers end The with to

capacity, $X our having million reminder, with a credit rely available that we options of liquidity do although with of not additional we anticipate on to have facility. revolving As facility borrowing also potential line

my completes summary. financial This

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

the turn call over Jin. to I'll back that, With

Jin Kang

Jason. Thank you, you, Bob, thank and

Device area high seeing yield believe to look is its high-margin our opportunity. mentioned, in partnership returns, considering new we forward this a further updates investment a significant Service traction commercial And still our stages customers. the XXXX. this especially Jason while are sharing nature As of among as We in promising opportunity. early We will in

election. the we now outcome know of presidential Additionally, the

change That received election immigration of and to further issue our our scope the nature on provide the solutions see we given cybersecurity mobility services mission will of receive that during provide critical continue essential given with for cycle, impact As situation work as with we therefore, Also, calls, be services, governmental said, amount the respect considered we and budget Also, administration. the for monitor DHS could current the we presidential that the business. additional the customers. closely our tailwinds anticipate funding DHS. the in and with we in with this has minimal stated in these our there are potentially provide operations the potential growth within could government attention federal previous may current broader to impact management we have sectors,

EBITDA guidance are where Based on $X.X flow to I'd our and between million like the range toward $XXX guidance expect $XXX million million the and range. $X.X between committed reiterate sustainable revenues free we to per Lastly, performance, cash million our between we growth, $X adjusted earnings trending and range of financial $X.X to million, range million. and current share to positive achieving the with our end profile margin We higher improving driving in remain of XXXX. goal and

take our and remarks, major questions prepared concludes analysts now from shareholders. That our we and will

Operator, will you the call please for open questions?

Operator

[Operator Instructions].

Sine Research. coming Barry Hills with Litchfield Our is first question from

Barry Sine

couple You questions the mentioned the impact ask on a of of I wanted that. to election.

Let them all me throw out.

the you that the and if that talk also about big just efficiencies? you administration, message around included know of of to is government focus, you prior your if given underlying talk to WidePoint of I trends does, saw First at back implementation go Efficiency. about Then Have all, time. I marketing think XXXX, saw But Trump Census XXXX you Government we could COVID. any you that could thought Department so could changing the to efficiency what that. Services would if

Jin Kang

for Okay, thank calling from Thank you you, Barry. tomorrow. in

terms Census of Project the is a Project, decennial In Census census. the

in we'll news, coming that that. seeing the XXXX for additional material, front activity months. we we news the on Program, award some of small coming for So work out Census, buying some nothing that's some are but bits Census of Hopefully, are have the

In COVID, people environment. working remote the have and in most I environment. changed that of the are Still also areas still dynamic working terms think from working they hybrid

are hybrid is in work to infrastructure people So logging back a we that don't our decline into see a to customers' as result their the going devices number going of mode. of locations

they'll remote work. work the have off-site both So and in-office

number the endpoints going potentially see of up. actually we So

have I there. think that we'll some tailwinds

Elon a was commission. The on big lot to a efficiency, of about Ramaswamy that Musk talk as and focus on now of effort I that going think Vivek leading there be part coming

that I our in a to we of XX% think on that their always still telecom costs, message because continues of is that that, saved XX% the to and we order customers tell resonate.

also provide I for tailwind think our will that some business.

I the CBP, I and undocumented Security election those as Enforcement, the probably point and cycle, the X will of Because probably others But was related get Department share immigration a Customs and and the of during the Customs huge election. said, are and in attention. Protection continue that immigration that, agencies to the a think the to Border lion's Homeland Immigrations of

scope. feel And and and mission so we on funding additional those to that additional implement scope scope those of get they're execute to going

But So don't be. good. is of we all we to this we're because optimistic going as feel cautiously impacts to I the be all what know are other said, going

Jason, is there like you to anything would add? else that

Jason Holloway

as I put thing one the MobileAnchor because component be the the because hybrid the that ability hybrid like today. noted, which exists the about is Jin devices, Barry, to that has happy would. of I MobileAnchor those very timing would secure the we're actually, work be now, available multifactor add help to Yes, is work that on most authentication better environment facilitate to couldn't smart going solution with timing with

fact device which actually is to there was that on that management noted be with in needed. due longer The MobileAnchor unsecure, question, to we've efficiencies significant going as some way, regarding efficiencies could is thing old Therefore, the installed to which device there's itself. be be to cost a recognized because the container, mobile your see MobileAnchor, to the no able be able is the other going definitely very savings the past,

add. to wanted Just

Jin Kang

say already with to put Jason you Yes, they're what other be the that going the is is and away when that saying on so form smartphones the device, customers have do factor.

significant a So be that would savings. cost

Operator

Our Scott from H.C. next coming Buck question is Wainwright. with

Scott Buck

for at First, FedRAMP the authorization, other forth? a just waiting there side you going is dialogue Or on and point? simply back this are

Jin Kang

asked a good Scott, you question.

are that final site status. submitted the package now the FedRAMP have ago. On to the our we about monitoring has continuing And situation. process, We X monitor we our been certification weeks probably

So time moved had so that forward our that from step", FedRAMP in-process as our from in-process moved development. status we a call. conference positive to FedRAMP a it last see has We and ready "finalization the

we any as the not calls we questions our as answered their final We have ago. received far from know, and weeks package about all GSA, submitted of we had and X

Scott Buck

perfect. the other Okay, one only for me. Then

Or see guys you're for what a just Jason, opportunities curious, government of taking opportunities? of you that of that federal back federal you? in kind given Just outside seat the front is government seeing

Jason Holloway

commercial that Scott, lot, commercial can want There's transportation. in lot on. is I I on discussed But a XX% is point. clients. say highly there's that of greater all there's Service do elaborate than clients that the much a healthcare, regulated at as what working very a this Device opportunities our program prepared not to No, that commercial we're remarks finance, of industries, large Very in I

very a So our pipeline. of part now, big that's

Operator

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

any have at team you WidePoint's contact If wyy@gateway-grp.com. IR questions, please

I'd Mr. for back call Jin now closing Kang over remarks. the to to turn like his

Jin Kang

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

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

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

Operator

joining for you, Thank Third today XXXX Quarter and Conference for us you thank WidePoint's Call.

now disconnect. You may

WidePoint (WYY) 13 Nov 242024 Q3 Earnings call transcript