Earnings call transcript Q1 2023

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

Operator

Good morning, ladies and gentlemen, and welcome to the Digital Ally, Inc. Q1 2023 Operating Results Conference Call. [Operator Instructions]

This conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We may use words and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters rather represent forward-looking statements.

risks based can our assumptions which be subject various are of or and are statements unknown to events, and future affected business beyond forward-looking our largely number expectations on forecasts are uncertainties, control. These a known of and by inaccurate

statements such are actual to cautioned Therefore, forward-looking place could forward-looking conference this undue materially differ in results on statements. not call, the reliance from expressed and readers

expressed or future in We conference that in There generally statements publicly transpire any result this information, statements update this whether new revise can in fact, do events or a as contained assurance will, the forward-looking call, forward-looking to not prove accurate. document otherwise. be of no or be

to recorded everyone is remind XXXX. call this on XX, like being that I May would

Stan the now turn I'll over conference Please ahead. go Ross. to

Stan Ross

today. also joining Tom will President. with everybody, dear He's numbers. Heckman, over us a Brody you, almost to and going slower of as has friend, company's take be I Thank the nowadays. after pace who retire years, He as XX now Green, the CFO have our acting the is of decided for me, some

So is me Brody. anyways with

covering of letting bit be going will a in Q&A. and dig more you regards a numbers, this bit Brody quite into detail into obviously the then there little to the

of that avenue are that help strategic mentioned in that spinout about I at had together also clarity another are excitement first that finished and in we're public but platform show opportunities was our those, with put a will concert little there, regards we talked where numbers, companies some to Kustom lot valuations utilized to had relationship define, a well. excited just regards up bit and event you under recent Digital the Ally ticketing of to would possible within hopefully went guess, that the I'm our a talk as or the in and as XXX to quarter's give to we that the second the umbrella including and out we've a with and our more very

in there. a goes and Brody after numbers Brody? from Anyways, I'll that little more cover go through I'll So detail the

Brody Green

like only And I about since to our XX Stan. talk call. everybody Thanks, again. happy know we're to been Yes. last it's days

I'm liabilities see So with -- can there's looking to year-end -- $XX year-end. there's as the at constant at as relative million many at changes you are the they're dramatic through sheet, pretty as not balance $XX.X a again, total million with well, total not there's assets $XX.X Similarly, our looking million.

stockholder $XX So our are that relatively at equity above. total remains healthy million

much transpired during here In section, get a shortly. and has which couple also did the of our obviously, equity not issuances into reverse QX, I'll stock split, we

revenue for mean, were side, ago. all stay high you than statement where these $X.X of still million QX in years the revenues know compared of On but to QX -- continue to see down acquisitions, 'XX, can income with we fairly I total relative a still we're higher couple were our I XXXX. to revenues

Gross which at than much XX% profit, looked better gross is we profit, in QX.

even move we along make gross changes to staying throughout sure have continue those the and effective, our So we'll effect in about as we last obviously profit during our been talked and are so call here more XXXX. enhancing

over want $X.X we not of million XXXX, loss an to where I operating an see improvement obviously be. -- mean, can You

as to to and So work can. as changes we're we going make on that continue fast

X.X outstanding. side, sitting equity we're at stockholders' Stockholders. million Yes, shares

stock have February so did We room X. And we there. of I reverse on split authorized, we plenty XXX,XXX as mentioned, -- back the

at as few out options right very and warrants now. split, So we did talked there year-end left with XX-X the about we call

was there only end, At quarter options XX,XXX warrants. XX,XXX and outstanding

shortly. here course their run they'll and up, those all cleaning So

all I end June only away or warrant the think the side. -- go July there's they'll on of at

it about now see talk we're our $X to revenue million continue at looking XXXX. just at we XXXX, was and to excited QX as to number deferred We're grow. continues at million, number QX sitting -- $X that

and there to floor excited what have raises So for nearly our number that we're and doubled, -- just out be. sales number will quarter every it our

So we've those of it's to place have that to subscriptions subscriptions. in a grow the nice X-year majority number with continue are put and

or are sorry, this point. probably our at well now, so are Those think that's aren't departments that's those I above units. total XXX,XXX And up subscriptions XXX XXX So subscriptions at and subscriptions, -- departments.

hundred body-worn range to from can X in-car, subscriptions camera. those several So

there, we So lot out sitting revenue deferred nice, and that. which is of love seeing

more Video side, QX cycle side, this concert X him and to weekend, concluding detail what and that. in all $ Stan those, in did of million $X.X management success, did with on past the did the segment was in especially I'll Medical million. let the entertainment the about revenue $X.X excited side on see we're Entertainment And mentioned, revenue million happens as a go On Solutions Billing which

amortization for and [$XXX,XXX]. about was Depreciation the quarter

P&L. flow So through items noncash those are the that

EBITDA and So and it to Stan. over turn last if on. another can the event back was just subsequent I calculate One note we filed I'll those at time. then -- we an convertible wonder issued have, comment X-K I

of convertible $X So million $XXX. note it at was for

that the issuance. filed at XX-Q well as So more an within X-K detail as

to So you I just feel all we make into already. it, look want free that. aware as to have guys of

over to of that, back you. turning Stan, Outside

Stan Ross

at the include made and process lot out is course, sort going XX-Q we've filed of we think details off the the division. what e-mails, and I announcement Entertainment Thanks, will company been said, the company. about And Ticketing as I the that And looking the Yes. is all everyone's the spinning through a Entertainment get Aviation the since lot been of I curious we the with the really division there. that company, calls were But Brody. a Production of the of

that regards Obviously, do we'll bit to make X a button process. needed sure to needed for done. TicketSmarter quarterly we 'XX. [indiscernible] in months have being the just the the of And completed, We the first and little in to the is still XXXX need XXXX. it of we acquired they And so in year-end of numbers that since September fine-tuning with financials up

And a present a ahead may a position act to upon strategic point in most to we're move, they where whatever go were at avenues far us. be the other and a as as some whether sense it that spinoff themselves or makes

that where we're Kustom go now, going to into. has that So the is Entertainment launch the to hopefully to a be we position from excited more even had. days excited be are to what But direction coming in in at define perspective important

in to we concert Most play and how to not backyard our forecast was because going City, recently, of seem here this regards weather of did could more a we to continued in Kansas the particular weather here been out It's an interest have have up. on had favorable got this rain our going within was forecast XX for day. literally -- hours, closer, future in festival. rain. And it as to And rain, festival it the very cleared rain less than in

fact, almost on XXX the tickets. matter As day, there last were of

XX% those at the -- the almost bought up -- over -- bought well door. attended and that So of showed

tickets X,XXX. X,XXX bogey between we close was So to and I number somewhere a which think, sold, X,XXX did hit was, our

as So were a a that. to to the above position be and of to with we that as of the be going try numbers high We lot in side well. what on that, pleased to control very are come that. we're expectations able beverage in believe The food on

very, all So successful in very all, just event. a

showed a a maybe website. on And out, good of we a countryrootsfest.com for get the see or just Facebook a acts finish were lot look can It's little to the be of just crowd. that and things on tremendous people start play up, from did forward we it to Instagram, You the of A as more how bit amount these. fantastic. very whether atmosphere had doing

helps these obviously -- gas fire from was side it. the trying benefits doing sit and with our And the that's on whole a and and about bit fire reaped Production production there blow explain We having the and tell well. our little company us ticketing actually platform platform we of that thing the concerts that can by type the own our you Ticketing festivals is and that of on to I own as

we a go it entity. meaning dozen revenues, half TicketSmarter we're did if million. year, that with that there And million additional let's million those to say last custom year revenue $XX concerts see do, again, to that sitting from to mentioned will those roughly. this say, possibly generate, ticketing entertainment $XX to more When with So and you're as we're of continuing $XX going kind I particular close

by doing ourselves. just So this

names, quite of on is your and look this up events. you So actually and announce few impressed and able come and I'm we that with very hopefully, sponsors recognizable them it pleased very had to and the to forward were one can backyard maybe deal, And firsthand. out our very see partners excited, we coming in a being

exciting been side on So of that things.

Video products. see the commercial the to biggest on Continue division. in the would very Solutions regards to our all opportunities be of very, Probably of nice side

law we use also very have seem foothold out of of As some when even the EVO that to and the years, as And all system cameras in the getting the to XX comes of very now the we to feedback in-car it of received well in us know, new to over regards commercial enforcement commercial able system established we and have a being around well. very for division uniqueness side well body being good things. there be

to to fruition T&Es of look lot a there that got we've come right fairly hopefully we now So soon. out

are announced those have We sizable. orders. They

come stay And obviously, we'll of And we'll they them. of be those. top announcement to making through, so an on continue when

up open be there. love to the ahead any go for may out So that floor and questions

let's Q&A. So do

Operator

First Group. Klee Instructions] from at question Allen Maxim [Operator comes

Allen Klee

Yes.

revenues? the On about discuss recurring how between sales potential growth recurring solution out the we think business could and you can and little, breaks how video the in a product offerings,

Brody Green

Yes.

look the So sold maybe as of our -- our products The as at most past to over years. most for point, I are think, far this of X are sales now a years, X. -- X.X subscription on X now go, products the of even so

will So your -- that there'll include be hardware and software. your

So is the both. contract for

side, sale. we'll front XXX. guidelines rec over as that tapered just recognition load our far usually, ASC hardware point on due the at cost evenly, to will the the off collections of contract in As X get be with to initial the it back revenue of the But years rev go,

really your guess, that question. heavy, So breaks over the if I down, it's as is a as, there's front little -- overly but heavy. what software the cash answers really not far mean I influence years X but

Stan Ross

a too. This Allen. little Yes. is I'll bit, Stan. comment

enforcement law majority, well mean, the would the all of reoccurring side. I XX% things the I is even of revenue say One maybe over the on

starting in So really commercial to the get counting and mainly quite that system door going start side bit. with the a is EVO just split be to a to we're new able the

at And that, company something recently to -- know they I from you the But almost our happen, what numbers very on us Allen X exact Brody, the that year, one a be had creditworthy users And that's it we think, which X don't our looking revenues more mean, in going partners, they've that products I that the the paid I their marketing all on encouraging. insure. that, we came then all they call that's commercial be we'll very that on got some the to in with of data claims whole is But know be their looking that seen still if solid of large for in year-end. received in with insurance for at. very as you And of end assist side. devices those doing to is through reduction years. and a reoccurring

Allen Klee

a you that software. I That's one companies make little? maybe question multiple of and little integrate these that could you cycle Or How end one owning acquisitions. other just do or revenue understand try do a great. it the Does think on markets type of different about to matter? as you that of If And management. synergies type to and then sell the they just explain

Stan Ross

Yes. I mean the thing, pretty a No, we’ve very, Allen, very got one strong team. we’re blessed. engineering

look doing very meets to that solutions, to law at areas do at Royal And environment can we the involved like we’re stadiums if MetLife from comes to we so in, I mean especially Stadium Caribbean enforcement you needs. it the that of to Cruise we’re get when look it, capable lines. their video some adapt to when everything

We’re doing buses. ambulances, taxi cabs,

We’re doing over-the-road vehicles.

enforcement it’s because where many anymore videos we’re solutions, there’s applications getting of truly the or a in-car in. so So involved video law it much to – just even video not it that the other so is just vision call

And as avenues up we in as that with. may far companies acquisitions that then at as look partner and want other as to the would far

may we or Some that to X we in look uniqueness X.X years that that them, know of we for may areas some not, have years area. us where may get to they and some take

While have do if may uniqueness not. we they

each work revenue quickly. we’ve therefore, few as and that And as solutions to parties really video continue And all are that other, those excited as the with happen can line for got we’re pretty that bottom about the enhance willing well. together long of came have to things a we’ll side

does baseball that platform all put blessed that which or still and that pretty have on with XXX events. were to the meaning we’ve on we through unique now entities we got and from able company it Kustom introduce XXX, matter lot if will makes the production ticketing secondary have sales because have – secondary but again just we a over the production together side, over very, the be much this ticket much On side, we’re concert, going very doesn’t the primary, we opportunities a did and we that went of business, soccer, ticketing put -- also weekend very relationship And TicketSmarter, a it’s of because ticketing was like universities, -- XX being nice. it’s it

this like I a in big That was T-Mobile people like production of our field. that league Arena, number stuff event it. are a used you’re might of a inside number It’s X,XXX. when seem One was that. the Arrowhead minor not – on may hearing to like ballpark, actually talking Stadium things clarify baseball or while we That did stuff

a talent have background, the with because to you city. city fathers relationship enforcement others allow we’re And and bring us our university, and build-out can law their draw and with we’ve of that city, we the do whole their to to and And capable security background the willing had are and so have to that cities. to a of the going work business us everything. We credibility

helped regards we’ll able to XXX little. a be have side Kustom also And which that forward. so that we the believe the hope in enhances production to ticketing numerous opportunities going side, I

Operator

Lubitz Bryan next question Your Equitable. from comes at

Bryan Lubitz

right. All

I we for getting Q as it question bit shooting for well. point So the getting you little Do regards we have XXXX we're done your off financials any have time that done this think obviously towards terms to of TicketSmarter? on first earlier the I split line can spinning and of you, had in that for a actual in touched or in and with

Stan Ross

getting We in call So we're let's a Bryan, the timing up. hands. to close of it, is split, bit little the going be the SEC's think actual that audits on wrapped real the

that that on point we've got in maybe At avenue to completed. some real XXXX of direction say the TicketSmarter just that down us. want of presented the time, the a we have been to options in clear that that with go let's a weeks, of So remainder we for have couple providing

all necessary have that the us, is can that will filing. require information SEC we going We to from make and the

that go with quickly. that we get us this down, ahead with with So at is wrapped we'll now and the not that Obviously, on pivotal the hopeful time, -- then up the come and comments to fairly into once proper point, depending X, get inserted one being they'll we're looked file that that done. have probably X and all path a we documents, obviously, go And hopefully, we held, SEC. back publicly that's could

within to XX respond have technically filing. they a of days think I

order, look eventually we X could contemplating. comments happen going exercise it that ahead least to and really a to quickly. us we're in everything that take provided at So I that we're looks think round transaction it But they'll and allow before would of go the at get

Bryan Lubitz

is one this Brody. Okay. And for you,

fact you You at earlier $XX current guys right in equity you are that the in that in million $XX stockholder stockholder company now. when roughly equity. to the comment over Can market the You sub-$XX were numbers have mentioned over cap? all is you going million million

Brody Green

what it I I to was kind are there. is our considering of think mean, current trying Xx the have Yes. value the businesses, to that our -- cap Because cap. mean I us to is, is think in market assets we our as market whole. I'm disappointing alone just really a there our say where X core business we with but

-- cap. like Xx you is our just So and market said stockholders' our equity

that our show with our a stockholder results see Yes, not its we soon our well. can them it's increase it's equity obviously, where favorable some cap and market as -- and help relative assets to to well. need market cap here as to this tough market So in

StanRoss

Bryan, we're of do. that things that's one the trying to

know, we've you at it that to there right. Stockholders' and believe you now. get right to conferences market As it because is. and for more of values There out obviously Brody I, we're cap try the our on what be that going conferences, have attended a additional is is sure, couple equities Xx exposure looking almost we read others, to

Bryan Lubitz

for is, being than a are said, takeover and caps. your it, doing Stan. or some company money you you selling parts of private would the whole mailbox, term considered of company? off a way ever of to the so greater parts the of as being you Have Brody we've tough as that coming guys love half the I curious, much privately your you small had It's, X/X are conversations of guys market, what your of and know I'm what bunch shareholder have equity current Yes. especially a assets

Stan Ross

sort a lot things of the that’s I those contemplated is -- we think yes. answer lines. along I of Well, mean

right as opens all solutions doing we on far right have [audited] stand Whether if there. on as that the price the we’re any its that video side. all the billing own that go X audits ahead medical why with TicketSmarter that back things, ahead it a our and opportunities. things We or do and on doing to going And it came I go company we place even the now publicly-held it’s out we go to advantage or take completed. along, full are not as that spin have the years now in those of think let Obviously, that’s on side up because actually entities and are the would financials clearly, of entertainment ticketing, as and well. of the the side needed strategic

it course So the said, lot in contact looking the a up again more does open not you’ve we’ve on the and to other but opportunities only has this some of explore with at. that in things Board stay been what

Operator

Your Mike Hutton. EF at comes next from question Albanese

Mike Albanese

Hi first think Brody. I Stan wanted XXX I this, guess. done talk Congrats this alluded your but you do planned on event and about just year? for of to half to and back any have the getting quick, Kustom I you other

Stan Ross

do. We

obviously to out got we the lot the mean want of So not coordinate And talent only come have to the you you right offers, not that facility facility offers also now, but I there. have a availability and the what of in. only the of availability

there in ahead some of a regards few coming days And up nail trying that them so are we're quite and and we'll to get that going in pretty down. firm the there's and here aggressive offers to out

if Mike, may we have, I a just go and connected ask for very, conflict some particular a be, very else whatever reason, well of or to passes the you caliber. are in that same because to that reasoning is artist the things the mean someone positioned that step there's do

everyone get right Adkins in history we having If and even Jo off Chris great mean a and had amazing Walker of mean you Masina. Gabby Trace want Young Dee lister time. an bat, go I just We and had and you the out an lineup Barrett Clay some them. A there Lonestar there. and I have the

just X:XX, -- not you or that. one gates and until what for not to day. is, headliner So go concert are a are is typically, do may a got these you've the This truly really opening XX X looking that where headliner at open we later in on

So you've got performing be like more. will X different that maybe acts

in, got just have out a them there. to So amount fill but we offers you of tremendous

working We us. have venues with the are and identified

So the sure. side, lot for the I a activity think XXX see side, you'll of back on Kustom

Mike Albanese

it. to know all? line I you potential that be to these to able shield were Got there's your at leverage venues. And able use at the

Stan Ross

not Yes. that our you in side help sure as us will be our patrol line as solutions I as but that not best only mean products to and to wearing the driving body local around well the shield monitor the that our departments security have will to the be that a and at only can be also these well. far so people to and those the well utilizing we utilizing as security the giving make also cameras will car come events, if as we bit, hired to there video a do exposure hire, definitely, is team intention body and cameras be even use such out But little things.

Mike Albanese

Was that case [past] festival? for this the

Stan Ross

had far. didn't insurance festival, situation this to that proper go where to allowed particular -- company was that have they We a the had they not past

box, this sure checklist while what on the before sign of one the got go so first out clarity contract we them. was And little with we've or a to ahead our and more make a

Mike Albanese

Got it.

-- with to There's kind ramp was But business. of in that TicketSmarter and back margins volume negative crux I mean, Okay. the And gross with you up plan between breaking XXX, and you the profitable. other headwinds obviously mean standpoint, some Kustom breakout do of then in then I coincides is, to think in all cost basics, that can terms the out? from just kind revenue this you to I'm or right, been guess, expectation, general of segment of, kind getting I revenue what to earlier, Ticketing alluded entertainment I on between the that revenue? segment.

that -- get provide look breaking a of mean then you underlying can guess if profitability kind to [indiscernible] on of I And there. that segment of plan or is the so it the at do profitability insight color what out all you top any Ticket versus I else? as we for on could

Stan Ross

you're think we're can to going asking I and Sure. like. you're And we Mike, go further is, is, there look what what a asking definitely and than I what break case, Entertainment identify idea think to Kustom separately. an sit little Kustom And that that like give versus I as the platform know them if why it operate out of us don't that's essentially XXX what well. TicketSmarter, looks -- I we mean will

don't I things, not I'll So couldn't. Brody so deal the side on with why know accounting we of I'm let that.

Brody Green

especially in and TicketSmarter occurs, I and segment filings their Kustom segment. think have they'll out it I between Entertainment the once Kustom Yes, the once broken own K's, has XXX think absolutely the Q's separation

between within consolidated As Kustom entertainment we and the level, the done, really XXX difference filings. under separation you'll would see it TicketSmarter on currently do I is probably a think it their the fall segment. But once

Stan Ross

all. and that Yes. sales because whether at doesn't actually that Mike, been an just do other any at it event, asked together or something to corporate I a think have let's a we along those may in event want] concert step leave ticket we parties, be -- that, be it [really lines, put or a have to by that

definitely it sure to that get need for So separated when to them we point. have will

Mike Albanese

Yes.

I'm I Kustom there. and in get leverage as of out a as volume build of in will sense kind Entertainment as for is that operating right? that XXX that that, masked right, you in growth kind exponential theory TicketSmarter, those the TicketSmarter it's Okay. -- Great. And to becomes of think you apparent segment, that I Kustom theory should maybe where drive then but whole. investment Yes, thesis get the opposed that a -- a for I'm guess its which tailwinds, the XXX help and by scale situation improve that's profitability, segment, the just the helpful. strictly just And of hoping doesn't benefits I

work of could that theory, you so kind break investors if your think accretive and be I would out speak, both analysts in to So and so well. obviously that the beneficial filings as to that

Stan Ross

we'll help definitely out. No footnote that it to How to take about we'll not, -- accounting an you issue, and problem. If to that? that. try We'll would if try to do it's like

Mike Albanese

Yes, that makes sense. That works.

Okay. for me. That’s really it

Operator

question is Klee Group. from follow-up the next The Allen Maxim at

Allen Klee

mostly venture it for This it doctor gets joint medical visits. like -- Your billing. paid it's by business, seems

So it's any and talk seems Can acquired? your you margins. the you're looking they acquiring the that companies the have new used it to you for reoccurring And there and companies, have? type combining of different various being you're of get about them, attractive from is what synergies customers of strategy kind get from can as have issues there's software that

Brody Green

Allen. Yes. Thank you,

improved stand as we're growth So margins can it's now at really, well. that looking that they look at acquisitions, also when be we ones these as have potential but have and earnings positive

back improve software. these our the bringing them our in, all we solutions into by office whatnot. into we and we where as lessen margins all move acquisitions, software side, and can office, our they do possible back which them is have mentioned Once fast really you've as and So turn we costs

integrate way to all wanted of our acquisitions. have systems the because we the them anyway and which processes, into each we So do strategy our profitability one is of those we can that's really the grow

is together So anyway. customer I question, your everything, -- mean of you -- the kind obviously, if wanted mould we're if that answers they

medical I as as So don't far themselves. side billing the

been over the States. kind of I they've So think, United of one, them lot -- a all

Southwest. but been a branched and down the in think have regions, Northwest couple or the same in Midwest been So I have others Northeast the and the

Stan Ross

market. very the think ups because roll it's is again, long-term And the -- continue strategy Allen, I the strategy very to fragmented, fragmented

software And our to and roll a I it's the, call to possible find run we very or the to efficiencies rate grow. so possible continue up get think implement now, the help them we'd and just it, for and continue right we're attractive built up it, then at we $X purchase stand-alone. year. go into smaller a And and the like a mom-and-pops will as a it million can candidate Obviously, somewhere masses that out entities, to where maybe there or around

So catch there no any we're that But that's there. knives sort by we've of the falling out means. not strategy trying plenty taken. of to them out There's

up. And and we wrap what's don't last to we'll one truly be we called -- have just also also don't medical. this But thing,

do capable We -- and could areas some we're doing. and other dental that also of

it's It's just dentist So also offices well and we're that doing. of as the not stuff that capable MinuteClinic. the like

Allen Klee

That’s great. much. you Thank so

Stan Ross

we the legacy lot shareholders, we've I got is continue what somewhat ahead and you, unacceptable, execute Digital we've cap we Video Ally. will that and million a move believe appreciate everybody, can thank that. of of more to work to to do on we'll and Solutions of down hard and million been doing for get that $XX clarity, equity plan not our only us Thank to fixed we'll a a strategy help you. and and announced we that us, And stockholder got the forward separation a lot it. that our just regards of continue $XX know joining sit We'll head market for Entertainment has bring and in the the division and We of today. there the and or on continue to we as really have mentioned, keep the do on to work

it. So thanks, for joining us. We everybody, appreciate

Operator

ask for the and thank disconnect that conference We gentlemen, participating, today. this concludes you call please lines. for your we and Ladies you

Digital Ally (DGLY) 16 May 232023 Q1 Earnings call transcript