BSQR - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen and welcome to the BSQUARE Corporation Fourth Quarter and Full Year 2019 Financial Results Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Leslie Phillips, Investor Relations for Bsquare. Please go ahead.

Leslie Phillips

Thank you, and good afternoon, everyone.

prepared like and you the that the of we'd is this call begin, available text webcast, be being a our we to website. that remind call and on Before Bsquare's will remarks recording of

will assumptions materially. During and cause statements. These current are actual that could subject to results making statements this be forward-looking differ based are call, on uncertainties to we that expectations risks and

and this call, also will financial During refer to non-GAAP measures. GAAP management

cautionary the the comparable financial earnings to applicable. Please Investors. forward-looking as discussed share measures our regarding Bsquare's All refer as well on amounts where under today text non-GAAP statements in at today, reconciliation GAAP www.bsquare.com are release per numbers website fully to issued contained diluted

the to President over like Now, Ralph turn I'd CEO. and to Bsquare Derrickson, call

Ralph Derrickson

Thank the results investors. you, pleasure especially at Chris you so that with you. financial is and through in can appreciate will take outset detail. to brief my volatility today, I the speak a attention Leslie. your market. keep time the afternoon I in given the It Good remarks border

I perspective will share and XXXX opportunity Chris on ahead. Following the my

at and was quarter losses, Solutions a in third continued our The the lowest continued operating restructuring XXXX strength since the their of were segment, result levels to in sequential of segment business. net Edge quarter of fourth margins Cloud saw were as QX Revenue up XXXX. Partner improvement steady the costs in of

done an focused operating having on to While impact. there our is excellence still the OneBsquare and be initiative work are

software want remind Partner last revenue we our from outlook changes reporting details the to you party we well and and proprietary partners' of are the generates as formerly Solutions announced to for do, quarter revenue segment software I the business before and them. services Chris forward segment, of components. separately professional third delivery sale The Edge the sharing looking as formally XXXX. business quarter. as and to reported and But licensed consulting I that provide services we of from support proprietary the and that to engineering software, the software services, resale The Cloud generates professional about

fourth let to full greater Now financial our discuss XXXX year detail. our over things in and results Chris quarter to me turn

Chris Wheaton

It's to you second Thank you, Ralph. join Bsquare. this. earnings my pleasure a for at call

every we said, the you value entrepreneurial As an that here. day perspective. of reminded team I'm And built of

Our QX also not reflection a performance is mindset. but our of increasingly focus discipline, entrepreneurial only and an

for operating guidance $XXX,XXX was the segment. Microsoft system the our fourth turn up software million, revenue quarter higher with and XXXX by third us driven quarter fourth This of essentially These primarily XXXX. $XX.X for financial now over sales Edge to attention by to allowed the growth, exceed Let's flat Solutions to the our Cloud are Partner segment quarter of highlights. revenue Revenue what is in coupled quarter. the the gains

Blended a higher gross margins expected. were XX%, is bit than which

strength margins in XX% segment, business anticipated. to margins gross that the overall lifting produced for higher Continued Cloud Edge than

to compared $X.X for quarter share million per diluted $X.XX share or of or third per the net the loss was of net a $X.XX GAAP diluted current quarter loss XXXX. million $X.X in

$XXX,XXX prior net costs XXXX. Excluding of the $XXX,XXX restructuring $XXX,XXX than was quarter loss, compared third fourth net quarter. restructuring Operating the of loss costs, better in was quarter to

Kingdom. reductions closing costs restructuring U.S. in Washington our locations, selected office the $XXX,XXX Trowbridge United and the of two incurred Bsquare now fourth with in in the Bellevue, operates in headcount We and quarter out Taiwan associated

from restricted XXXX. investments million, showed non-GAAP measure approximately Cash, quarter-over-quarter $X decrease improvement. negative and a $XX.X compared The was a also September cash short-term XXXX December million of quarter in totaled fourth $XXX,XXX cash XX, equivalents, XX, third the XXXX. quarter EBITDA, to on $XXX,XXX of Adjusted negative

renewed a dedicated demonstrates and management Our on performance expense cost focus XXXX reduction. and throughout

revenue costs in of revenue Net were excluding million improvement goodwill $XX.X XXXX over XXXX million. million, $X.X $XX.X million impairment was XXXX. operating XXXX restructuring of was $X.X expenses XXXX. XXXX decrease While and loss from a to compared million, down $XX.X a XX%

excellence that show all our as numbers actively growth concerted readily the focus that reversing and the These on business advantage stabilized results. opportunities Bsquare trends. to delivering is apparent. more become they operational take We're a foundation setting are of allow We've will

generating no customer Solutions strong longer it's relationships. business business core an is is afterthought, Partner Our rather cash a that and

are our to margins expertise is Cloud deep IoT positioned better and it. produce leverage segment Edge technical customers for to our Or to value showing our in and

clear remarks, done. opening more be spoke All progress evidence is of the Ralph but that we there recognize work to his of this much about in is

to on XXXX guidance, first range the $XX our quarter Moving similar for but guidance quarter's a to is narrower recent million, revenue $XX million guidance. than of

our While given we premature at time. numbers, we were pleased QX with to would guidance visibility, the this believe raise revenue it be

the XX.X% for margins be to gross in blended XX.X% the range. quarter to anticipate first We

lower is first planned by investments the segment. particularly the to our of year, customer Edge during Our solutions guidance blended in in Cloud margin the driven half

BSQR shares. market. the have to requirements. change. reported same cover shareholder and initiated as in disclosure our consistent change impact Ralph, We’ll this be will the of item be and release. earnings symbol Before trading back We equity NASDAQ's an of in no not The to I today's our we part Bsquare will the ticker now shares compliance maintain designated designation turn call reporting requirements I on with change to the NASDAQ will want capital

be our as It to is in it and largely rebuild efforts the I part view, administrative we matter of transparent business. our continue a here as to and proactive mentioning am

his for closing Ralph, to now turn remarks. Let's

Ralph Derrickson

Chris. you, Thank

efforts continue in Looking to will business expect ahead, accelerate I XXXX. our building

leadership will and to operating business an team XXXX. and and in plan that We focus have entrepreneurial predictable sustained us and allow a an value will progress growing we build discipline with operating create

the some give would like I to of highlight that plan elements confidence. XXXX me

of will important and forward. a relationships be getting a It business lot Partner both of strong cash XXXX. Solutions moving in our mentioned, Chris attention As source is

positioned wide especially a competitor. concerned can range We sell are software some only who their we customers, are Microsoft uniquely distributor decoupled hardware, a hardware a partner about from software potential of software with because as OS procuring we those

that OS an and IoT relationships been software now to And cross customer sell services. opportunity products their our buying every OS Edge Further, Cloud has strategy. is create contemplating our to

is distribution business also The changing dramatically.

Today, Our can firmware operating optimize essentially customers installed software products. and and and required and customers' system, software maintain simply sold in products, associated longer the hardware our no to are be their forgotten.

is networks creating as devices are these for part business. what Further, often or IoT. opportunities to of complex, our data evolution rich is referred increasingly new becoming This

expertise an as to partner distribution us and Edge combined with requirements. Our address makes evolving position our software these OS suited uniquely

deliver hard the our working gaining Looking to creating made our software we to Cloud our customers and this build and segment, grow fruit work to results solutions to we've foundation we've largest can our experience methodologies components, for done The business upon Edge a scale. by operating improvements business valuable on and been to at engineering bearing IoT we've are segment.

and creating service We will function. to customer agile quality and oriented an been have invest in continue

to their will securely operations systems can on that to IoT seen systems, our have at scale. future also we customers their Bsquare early As customers, products Bsquare of rely well operate be and are ensure who come for to designed able our on with rely and

segments obvious we to revenue seek We and We with to explore the businesses. be for you between core to our growth both what believe look continues. will sharing in as our synergies forward progress more press two

we questions that this welcome and After about questions our call. Please your me last know in taking earnings call during several now or investors conversations. asked encourage scheduled

please open Moderator call for Thank the questions. attention. you your for

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Instructions]. questions queue, Thank conference. for and in [Operator you. now with participation. gentlemen today's Ladies no conclude we your you thank We the will

disconnect. now may You

Bsquare (BSQR) 24 Feb 202019 Q4 Earnings call transcript