TEUM - Earnings call transcript Q4 2020

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Operator

Good day, ladies and gentlemen. And welcome to the Pareteum Corporation 2020 Financial Results Conference Call.

As a reminder, this conference call and webcast is being recorded.

Following the company’s prepared remarks, members of Pareteum’s management team will address questions [Operator Instructions]. I would now like to turn the conference over to Alexander Korff, Group Corporate Secretary.

begin. may You

Alexander Korff

welcome call. And Corporation's financial XXXX Thank to conference results you. Pareteum

we We’re We’ll today you announcing with and XX-K delighted speak to U.S. the today. Annual on release Securities after filed the follow with our to discussion are also and Commission. our for our accompany issued be market in the the to website portal. posted to to Events close to pareteum.com Presentation and Exchange download encourage and Reports this Form press discussion. slides are Presentations along webcast And page results you on discussing available

outlook, actual to Turning growth, to today, risks two that general market business, of our potential is a statements regarding partial including and we list that business begin, presentation, subject before statements future uncertainties slide these and growth our advise that of you number I'd forward-looking of a our be industry results among to revenue making strategy. future statements differ will cause are others materially. we potential This and of overall size opportunities, could

Some in then prepared and Laura to of Bart. section Officer On see call Chief Risk summarized these the joining with remarks, me now our release on will Financial begin the turn Bart questions. Weijermars, today's we reports X, Thomas, everyone I’ll SEC, Interim and with the Slide of They call Chief Executive address today Interim will over periodic XX-K are filed a current Officer. and Factor you your fully will more which risks and are review. press encourage are detailed in to we

Bart Weijermars

the results we excited us we the financial steps support you pleased filings, accomplish. prior We to of thank I'm our which are XXXX appreciate year and share date and greatly to XXXX reaching of our With this shareholders, our completion and employees of results, up customers, with Alex, juncture. are critical at this results were XXXX XXXX vendors to reporting full period. today. and financial today's and you, for patience required and our annual through all joining why about Thank

mentioned, restatements issues to call we idle May, get through in this Business financial have legacy and and rectifying work on in I the to not business As point, while corporate our the fronts. Update been we

our opportunities simply communications empower and Board Over With focusing months, and moment a a we experiences platform through Pareteum, and is what customers to why platform the ahead. to person of focused past our a XX into and we management, connectivity. vision everything. has emphasizing excited repositioning Pareteum leadership, a mind, future for re-establishing their new connect powerful communication translates the including create day-to-day software this on re-introduce take are our global business Slide me itself, cloud mission integrity, new On and control business Pareteum a to do every growth. with really X, customer-centric cloud and let in culture company, model, This the to about wireless we see business products

and serves Platform a existing products our Pareteum control pad which for providers. of early launching engagement, customers. solutions managed and enterprises, and X, communication grow prospective Slide innovators, providers, our Experience Internet as developers, and offering telecommunication services services to Turning Things service Pareteum we use Cloud intelligence and mobility, our stage We infrastructure by to

and customers. platform solutions global communication software for connectivity one-stop enables provides Our cloud our

We Slide proposition. believe Now value on tremendous offset X. Pareteum

are strong growth trends. in an We with well-positioned industry

capture additional significant rapidly. are an service technology that growing differentiated validated share offering expanding opportunity growth and business global along of in connectivity with We platform a network to have breadth core the partners. has This and a supports that potential markets

of reimagining have we Moving past foundational aspects the over made progress X, our on months, company. XX Slide on to significant

the completed XXXX financial annual up restatements necessary filings. XXXX XXXX, with now and and have date We to our are

organizational necessary infrastructure have and accompanying the we capabilities foundation believe strong to created support a We and future growth.

term of to mentioned. We year And the highlights our part plan sheet, execution to for long have and these are We have developments customer-focused company portals, believe to for the have These operational for best-in-class all we features, platforms and integrated positioned innovative sustainable drive recapitalize over efforts and X foundational includes efficiencies. re-emphasized able accomplishments of growth amongst Slide disruptive developed and the next I a balance the that business stakeholders. for value position of several them, operational be model. functionality the strategy. Pareteum and billings

support We opportunities. also selling on and our XX/X sales expanded we've And our processes. training operational product cross systems consolidated with tools, global team

Virtual we MVNE customers for the Pareteum. addition, verse Last year, of key or acceleration. established And X structure. that on Network an we In business support say we key ethics. growth management or developments strong X emphasis internal Enablers Slide growth recent cultural account stages controls and happy are driving early Mobile depicts instituted future in implemented to I'm

has gross terms We and experience also mix, eliminating connectivity. unprofitable growth margins on for are our is improving focus smart performance key customer really This pricing strategic reflected all We've engagement product developed product emphasize on of a actions, new shown several partnerships, customer XX. cloud focused an of strategy, which number growth, and been in and as through including across slide customers leadership on forms better indicators, commercial improved platform.

past XXX% our from almost revenue $XX has Over XXXX. to increased million in for million $XX years, XXXX the three

base taking just notable includes from over customer we and up XXXX. Our business. our customers XX to grow globally, partners in areas And of as customers, all across that to XXX well. XXXX, clients In X,XXX continues deployed over us new

the in slide see up generating network. from million revenue X.X towards resolving million restatements. can X.X Think year corporate worked X.X we and was in of You legacy on of financial increase to XXX% a XXXX. million issues Pareteum XXXX, an on for and since growth year also as XXXX, grew as Connections in transitional this in that collections. our subscribers XXXX, Last

earlier, discuss number we believe connect made our a the differentiated of the well-positioned in footprint, I and global the to fulfill base on were business financial we growth was have large future while that I more laid to address effort platform, As our mentioned underway, in and global cloud everywhere. technology further we our With fronts. idle diversified call customer detail. to foundation Laura are of to to our endeavor our rapidly business. now results and will corporate progress growing areas corporate mission not that we opportunity the for over to our turn We've believe everyone

Laura Thomas

review XXXX financial with the into a to you delighted I'd take to reporting. Thank before we today. results moment results, But the We're our you, delayed Bart. to jump like explain

our instrument liabilities, on That the exchange and C is and the mezzanine with extinguishment series complex right announce the we matter precluded preferred of time mid-May, accurately stock. technical revised As below filing XXXX was we modify but mandatory debt the need features the agreements redemption Series treatment financials the to conversion that associated the issue, balance the the discovered of as planned. to for It an Without sheet. The the the level were accounting accounting the the of equity. to a and to to level preferred above technicalities matter preparing reflect. related into drove took going the

correct. financials are filed as Our today

the the reporting full business and Slide of reporting improved attention start with results, SEC a With us the XXXX now summary filings both quarter outstanding net well completing will our the results, return XXXX million with their some to and XX, you'll our of million bottom finally, walk in trends. high-level several But loss to growth. we with XXXX. to a year On critical for $XXX.X with $XX.X as net filings prior normal attributable quarterly These date, quarters of filings, enable third We'll updates up the filings want first, see XXXX the XXXX. items XXXX the P&L current along from the remaining regular quarters of quarter to going bring XXXX business I and now line that third required here first us of which address of these equity second and to comprehensive. common our and our and for financial the annual quarterly XXXX, and through and line, loss. in We are are to cadence turn as forward. detail

per During onetime acquisitions common assets $X.XX XXXX, to loss recognized intangible improved share non-cash and in from goodwill the a company impairment for $X.XX and to related XXXX charge XXXX. in of Net of iPass. Artilium million the the $XXX.X

revenue in XXXX despite the significant XXX%, three XX, the across our plus. XXXX trends Slide large ‘XX. is of from XXXX $XX.X of measure last grown XXXX, sized years. approximately is In million of to XXX% million our summary Total saw at has on acquisitions call. revenue from increase driven the by made organic unchanged remains grew an in growth, revenue over conservatively over This past XX% $X.X pandemic. the revenue $X XXXX growth million business. COVID and COVID Moving impact the impact

customers marketing period, hospitality verticals, during the or Our well in investment as Communication were impacted airline dollars limited as and thus who slower this growth. their experiencing Providers Service smaller CSPs

geographies revenue Africa, the expansion now America, addition we global As the our Asia-Pac. and America, customers. growth our With Middle business you East, North see slide, revenue generating reflects on of can presence, enterprise also and are Europe, Latin multiple across in

expect which trend previously remains revenue. going Gross Slide is gross this XX as also last our the We minus revenue the trends, call. to forward. provides of a on simply continue cost same profit summary of discussed profit

of is operating improvements or margin with we XX% from driving profit $X.X our $X.X $XX.X XXXX profit SG&A of lower general of well trends. as leverage understand XX been higher saw Operating have incremental business. we impairment revenue XXXX on but XXXX. impact business. the $XX.X commercial XXXX, million a business gross driven as In negotiations, intangible gross the corporate our potential as million, is revenue, acquisitions This assets. the line due incremental suppliers to forward. expenses $XX we in goodwill important incremental revenue improve XX%. million, or XX%. of lower percent revenue, was expenses. added vendors, million an incremental as gross Gross as profitability and million to overview These we improving of build million XXXX, administrative to falling for and improving, is In to profit accelerate were excluding in see leverage gross by profits added XXXX. we and XXXX, impact our terms to XXXX Our as largely margin of $X.X scale sales nearly of compared up Slide focus a of going from after XXXX the successful SG&A in provides the by That's with

in period, incurring from revenue, controlled as while this XXXX. with We've a associated half correcting the XXXX, audit issues keep to and XX% improvements legacy of technical percent mind decreased are as there SG&A revenue as support. and in the tightly which in we XXX% our in financial costs During percent that continuing corporate costs XXXX, expenses, contractors of into well consultation significant legal expenses, XXXX, the significant the as first restatement, of restatements. significant and of in made a for Please

The earnings before EBITDA interest, business Although second the XX, in $XX.X million much $XX.X quantifying EBITDA these scale $XX into XXXX. on million million. past equivalents included to taxes, as the XXXX. to return our in up the million. loss also the needed or rights revenue and raised expenses revenue $XX.X loss large of this of senior measure partially will and XXXX these directing convertible in we In importance XX obligations. loss Slide position $XX.X security note. the and growth restricted under compared of revenue $X trends of the Since of XXXX, from half as restricted revenues for EBITDA XXXX in This six million On of raise have of million XXXX growth to of be encouraging. to million is sequential not this by amortization, accounts and $XX.X cash totaled EBITDA, last of initiatives, This a held December $XX.X invest depreciation XXXX, and reduces of capital their was on million $X of cash was million the we're against $X.X lender exercising cash, Cash principal of approximately the investors. year, applied months driven free of elimination costs, back year, in these are our XX, was so on million. value December documents, end In cash

focus gross to and the revenue slide. chance operating we growth drive benefit capital in the we have now to the I from forward, Moving have discussed that our believe allocation the leverage that on sequential investments profit potential

is of reporting Lastly, this annotation stock access and we filing listing shareholders. an OTC on an XXXX This common work are Q&A will quoted with exchange no recognize be all the senior for now Shares Alex? liquidity information will Pareteum a on the to a is the market next major OTCQX information. such our the of importance uplisting our to to of to the common exchange. trading to and critical today's of like to currently in XXXX current achieving anticipated today, would current annotation position to quote, With current We And and us year stock of will the a and to be of The to of it by XX-K further potential information. followed quote, limited senior updated have allow for applying we current portion to in becoming apply discussion. quarter updated upon move status being to information. first this later XXXX. for Pink uplisting

Alexander Korff

you to ask to And today. Instructions] out Thank everyone reached [Operator questions submitting those and who's Laura. very are thanks much, online

reporting? come has the I'll that question was delayed what the invite that first to the And is, case? you which XXXX So in, that problem was why Laura, answer

Laura Thomas

accounting did planned instrument the a Thanks, of agreements us into and to was the took of identified related intended on modification reporting ensure The of mezzanine revenues highly with the and the again, redemption mandatory the our and we was EBITDA. was Again, features the a of Alex. had C. accounting timeline. impact revised our precluded or Series to level preferred issue extinguishment only The It filing preferred the going item really issue, not exchange After manner treatment Series complex. the debt the was the accuracy. XX-K. announced XX-K balance the again, non-cash matter to date, the drove the technicalities from conversion matter time the Without that technical This delaying on complex C, sheet. for

Alexander Korff

Thank you, Laura.

is, so you restatements financial for the why question take long? did Another

Laura Thomas

question. fiscal quarters two I followed The the investigation. it patience great And employees, a a And internal appreciate XXXX take and reiterate, and this period. It's restatement detail to did the for independent during time. want our of shareholders, we a the year customers XXXX long and first vendors of

in we complete the words, we to three disclosures It to complete So in years and that the and have first. other that statements time financial properly of had scrutinize XXXX XXXX. took now and other thoroughly XXXX,

Alexander Korff

The what then Thank relisting you, onto for the for question, think I next and asking plan exchange. also is Laura. you, an

Laura Thomas

information. Sheets of of The our our no on suspended common stock of NASDAQ Today, is stock common XXXX. Okay, trading on November OTC in quoted the Pink thanks, was an Alex. annotation with

upon improve journey of to reporting, XXXX position status, Again, updated information. to updated the the senior With current the This achieve annotation will progression of in believe Pareteum today, and first our filing XXXX, the that information. exchange. be And to XX-K an OTC limited will this a XXXX to we for apply uplifting the Alex. pathway probably to hope we OTCQX to to quarter

Alexander Korff

guess reverse you. exchange? split Will also Thanks, a list stock to Laura. for a there I related on an question be

Laura Thomas

yet achieving made the in determination let's whoever do be major company's been any listing there that this those price the and is exchange requirements multiple an the exchange one intend XXXX. asked question, potential that for in year, on But file to has and of with to all that requirements. later listing stock the so. the potential split. sometime We listing reverse remember are a only to It's for to no not for share Alex, regard to uplisting preference met

Alexander Korff

do you, answer question, market been you can please? Bart, next question why and Pareteum we've you grow this The capture I Thank additional to the Laura. asked business think can share? is ask

Bart Weijermars

the well And our coming actually would with are a of we've elements really productivity, we would reach that's really on for near ease And in Pareteum years, significant that customers those in skill in for we believe then I for growth growth the term well. have different international business. if and as The key scalability on the or our in competitive start significant year. differentiators to I out, and four last coming point I seen business. the are We have of Alex. And based And in offerings Certainly, years. really positioned global the and those. the our think as the are, of platform implementation, Comprehensiveness of reliability our deployment the drivers those service. really

Alexander Korff

Thank question question you. revenue probably of And you, diversity Bart. discuss can for also Pareteum? the geographies you think is, different this And I is across

Bart Weijermars

Definitely.

have Africa, affected with presence So based North in Middle based our continued our business strategy Asia-Pac. customers we with built as and last in America, [ph], as customer Brazil, forward. And Latin well globally Tunisia. revenue in and And customer we And multi-geographies our important our non-U.S. as grew acquisitions operations substantially expansions America, base, to expected years going non-U.S. diversified in stream the of really we -- a Europe, customer global last Colombia, and year. be growth year, last part an in as and East, that well XXXX

we have expect we well. a that yes, very as So revenue going strong forward to And diversity. continue

Alexander Korff

question Thank answer have like well? see you, Bart. one opportunity I you the as as you asks, Pareteum? would for to what biggest The do next Bart, that

Bart Weijermars

definitely. Yes,

with this expected that that we core we the is the to at have as from in And an in that spend you time, industry positioned Internet at industry address a of think what really if we platform our services opportunity. year, segment our which segment. is is also the undergoing while the massive global offerings really growth amount a that, are investments transformation. I service last footprint of we well The actually or with business, year. in tremendous see believe $X.XX the increase massive drive Things expanding XX% to and is positioned that well IoT significant demands, telecommunication to are same So And look trillion, the to expectation with the global we

Alexander Korff

next stronger too, asked, so revenue The Bart, XXXX? we growth could have that you. much question to answer one, why you in compared XXXX was Thank please?

Bart Weijermars

which growth [ph], year. significant XXXX definitely was acquisitions large the approximately XXX% in Yes, measure by a that made saw well of driven in

look organic XXXX, grew business $X.X we revenue of million, was pandemic XXXX. in verticals. our last million, despite year, and increase airline saw million was you the if which at case, primarily $XX.X over which COVID XX%, Now, approximately that is to almost is the the of from that all hospitality across which the an impact And $X

Alexander Korff

Bart. increases? does Pareteum next no asks, sufficient cash can a that you, i.e. capital Pareteum Laura, for you there's The Thank have need question could additional please? one, answer confirm runway,

Laura Thomas

restatements. those towards required to very and the the capital We've strategic Alex. not accelerate efforts, Thanks, worked to has significant issues address gone legacy corporate investments growth. hard And towards and financial

results, to capital announce opportunistic. XXXX can become continue first expect will. additional ability to support cash and we we to current, insight position. do say we we'll so have growth, we our and be the that our And raise As our when quarter provide into will I further to

Alexander Korff

the to XXXX? do Bart, you? can growth you, hand anticipate Laura. question revenue I question Thank in next you The is,

Bart Weijermars

the Internet also approaching we and And to growth $XX year. simple of Asia-Pacific. is this of MVNO all a if the expect yes. across at high they approaching And answer over the is revenue continued are a opportunity $XX And billion, global that rates segment compounded regions. focus We is, steadily. I they're that same that see growth MVNE, explosive Definitely. of Latin Things with Well, and annual market really, look growth, market geographic a with America markets, global the time, on At growing almost experiencing also billion. do

of there to opportunity grow and out this year So expect definitely, we plenty as there's well.

Alexander Korff

do Bart. one hand next Laura, says, results? to question you? XXXX anticipate first Thanks, you can when filing received The that quarter we've I

Laura Thomas

file a in near providing we the not this we're at date Well, But the results point. first expect XXXX to Thanks. quarter future. Absolutely. do

the a audited it less Let's year. include really that time. keep reviewed quarters while a in mind in takes fully lot reports financials, XX-K is the And

XXXX, So for those annual and of quarter, XXXX, quarters the numbers audited. the three of first quarters been have third

a and quarter The XXXX. be of reviewed. just the same not it's and is thing first So it matter review that It with really updating of an having audit.

we we expect the current those in will So bring near future.

Alexander Korff

we've question, strong question that please? you had within us, Thanks you opportunities penetration Bart, the growth customer Laura. revenue The increasing existing can do from base? answer asks next and see

Bart Weijermars

and, again, yes. is think Yes, answer I the

And If X,XXX customer for specifically you also than sales more did at us look trainings, cross customers strong last product bringing significant customers, we over And the to we selling. new really on year, team opportunities added provides globally. expand additional our XX base business.

So customer on base. we own our can capitalize opportunity within that the actually there is

answer the So definitely to yes. the question is,

Alexander Korff

consolidation Thanks, you, And is have telecom in significant a sort market on market. trend recent for EU another I question, see also trend projected you of think the Bart. and Do that Pareteum? impacting number which of articles asks

Bart Weijermars

Generally choose is at market by and our really would say for new we space culturalization the reasons for if players key the solutions, ability commercial speaking, in the market, consolidating. in and way. reasons, customers it why new creates challenges innovative a And are the address look strategies also to that new I

additional in as consolidation for opportunities the again, focus as create intend I there itself segment we our which consolidation in think Pareteum be expand and So, will opportunities well, does And provides for actually, Pareteum. particularly globally where to those well. IoT additional

Alexander Korff

be Bart. you, Q&A the this will think Thank last question. I And

insight and the one's future this able think the asks, provide be for Laura. when forward-looking to question I growth? into And will projections company

Laura Thomas

in detailed guidance. with provide since current able we're not we're Thanks, our point reporting, financial not this really Alex. At time, to

for do basis. anticipate be guidance the with metrics. being to growth, on will and business financial provide annual and associated As really we execution on to guidance both the our really current potential long-term expect we an we financials, emphasized With our future return being focus

quarterly to guidance Thanks, So begin expect with. Alex. I wouldn't

Alexander Korff

reached Thank of the now think And aside set for we've I you, time end the Q&A. Laura.

to So over what closing the remarks. turn like is Bart? for call I'd any next, do to Bart

Bart Weijermars

you, Alex. Pareteum. you thank everyone greatly We and questions. appreciate And listening Thank participating time interest and your in and to asking

the corporate shareholder and focused on governance growth strategy, are delivering practices and implemented have and best and reigniting We value. an corporate developing model enhanced expanded

emphasizes growing business, strategy our Things Our IoT the core focus the expanding while of within segments. Internet or growth, company's high

We more the on strategy several months. the will provide details over developing next

really significant Thank commitment a investors. slide, a the As this diversified today. we of these you our customer our see on us our large, and value we're We their have growing building with base, investors With again, XXXX strong the Slide team address for providing global that profitable, really and believe we company. XX our continue global shareholders. last differentiated our remainder we platform our we joining updating call. markets proposition growing company global cloud and rapidly forward as and to to for Pareteum to customers look technology you thank throughout communication footprint, well together cloud all are positioned you into members all Pareteum opportunity for of for We believe

Operator

and Thank concludes call. gentlemen, today's you, ladies this conference

may you Thank for time a have and phone wonderful your this at participation. You day. lines your disconnect

PARETEUM (TEUM) 18 Jun 212020 Q4 Earnings call transcript