MARK - Earnings call transcript Q1 2019

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

Operator

Good afternoon, everyone. Welcome to Remark Holdings' First Quarter 2019 Earnings Conference Call. My name is Ebony, and I will be your operator today.

Joining us for today's presentation are Remark Holdings' Chairman and CEO, Shing Tao; and Interim CFO, Alison Davidson.

Following their remarks, we will open the call for questions from the company's institutional investors and analysts.

made be statements statements. the of today forward-looking may Some by factors uncertainties cause from These implied risks, other those forward-looking that or materially statements involve differ and could statements. to actual expressed these results statements disclaims obligation statements expressly after forward-looking Remark any hereof. date or any reflect views, to current Any and Holdings' Holdings the revise update forward-looking Remark full This disclaimer, which statements disclaimer statutory in filings Holdings' its forward-looking is only Remark a with SEC. included summary in of is in company monitor the generally uses of that accordance note, not known to with accounting measures GAAP, operations. please the commonly principles, Also accepted financial performance as financial Non-GAAP the financial be reported addition accordance in for, as not results to, in determined and measures should financial with alternative as an GAAP. viewed this a reconciling www.remarkholdings.com, company's SEC. support provided at reconciling is similar Form call, the a included To views XX-Q later company's the in and table will of table be adjusted with the filed in EBITDA, to the I Shing over will Tao. turn Chairman now and CEO, call Sir, please proceed.

Kai-Shing Tao

everyone, quarter thank quarter for our $XX.X XX, press Thank from of you, we for market and last up a We million reported you year. XXXX. today. $XX.X March operator. million, first joining the After release results issued announcing revenues closed, the ended afternoon, first Good us

AI million Our million, revenue million $X.X on quarter to and additional deferred. with amounting recorded $X.X delivered business projects $X.X an the with during delivered recognition but

that result it a environment from the benefited before China. note year's in by our in last successful please was that lending business industry, changes purposes, off the impacted regulatory initiatives comparison lending year-over-year to in For was the launch FinTech a

sectors. inroads making now are additional we retail, to addition In into

AI $X.X with recognition the million. total deferred revenue is has that For during quarters at been revenue past now two perspective, delivered our

quarter revenue begun in rest to and planned. as collect QX We have to collect already the expect current the this

of in active very remained the mix diverse AI conjunction of we our early the quarter, the clients. products in deployment with During

agriculture, proof-of-concept that important It continuing through We security. initiatives activities the prospective multiple applications public initiatives. manufacturing, note are to also by to proof-of-concept are client, these these safety test is paid retail, and and AI various spans

track Vegas.com significantly We our group. our of our of our transform on favorably us and balance Remark AI-focused to our debt, a we to pure also Holdings, remain an sheet in restructure cost structure VDC-MGG divestiture affiliate senior positions lending reduce This company. and the transaction business as into streamline

otherwise the multiple attention and evaluation and We significantly Test, on Standards with a flexibility our strategic and partnerships portfolio industries. AI Technology, our solutions beyond. as NIST. tailor Vendor strategically ranked Asia globally our our secure the across capabilities in facial financial to are the affordable stronger assembled latest U.S. business algorithm all have known Institute in conducted Face putting in and applications otherwise transformation AI an We've accessible expanding multiple Recognition highly by of the and across recognition was April, places sectors us XX and position pure-play as enviable In top FRVT, National believe players key to in known of and of

false have subcategory comparisons test, the as above a companies Wild threshold. a AI the false a specified. and is below comparison XX. use achieve key facial considered facial technology in performance the the set rate patents. algorithms images cases. of the recognition imposter good Wild FNMR. for is FMR billion-dollar accuracy is test This backed The which is known to software the Wild one mated a generally In match Image our valuation. billion component the out announced several $X aspects. is issues, AI in recognition random top surveillance of the by ranked the evaluation, threshold FNMR considered to technology proprietary as at/or factors cameras the recognition is proportion from week, such technologies quality our Advanced challenging and in captured proportion is Image by also such and Our facial technology product measured of measure The SenseTime in and this Face++, on in including industrial other images video approximately Therefore, how just who datasets. rate typically at resolution top were as beat includes earlier some various based most raised FRVT of different variation a across is area large These recognition unicorns, of of and world, coincidently, non-match just XX the one individuals featuring accuracy noncooperative Image offering, XX secured AI copyrights manner. technologies

and late we retail Our with facial gaining believe by sectors. recognition of most AI serving solutions authentication, to technology with these portfolio recent solutions. product dynamic companies And and big in as seeing sector. examination safety AI XXXX, the and include: and in and out from data workplace we're solutions suite our object and some Starting been the by faster ID players of Europe the These favorably multiple integration, using static highest-valued U.S. technologies public AI lines and We transaction solutions, acceptance the detection. evidenced McDonald's. have the prominent compare finally facial-based wave group city smart of a crowd include build solution and behavior smart product diverse products verification, recognition, core

data our We team our AI to that and for increasing build creating consumer, are in major mass each worker our personal technology retail solutions, the for In handle safety inbound for retailers. brick-and-mortar opportunities, their to need AI of unsolicited Europe market process to connection requests sales driving out to recognize conversion way retail more brands and efficiencies. the crucial This the in continuing is primarily ability U.S. sector, to the solutions. the improves improve in their and a utilize

driving effectiveness our and engagement, connections fostering of and the demonstrating currently shoppers in technology are deeper supermarkets. with We elevating large transactions

reduce improve operations with by pharmacies membership increase conversion patients system. company across and we terminals day. the platform recommendation retail providing million each being contract a XXX,XXX traffic, analysis time, this like new that Specifically, management the customer installed pharmacy features served XX,XXX errors and solution with is and at and a we our and facial of and the pharmacy customer human visit served an Currently, patients In overall productivity. XX system retail of AI to spending cost enhance total with significantly driving including executing eliminating terminal at a service employee per member the are than more project, more same are customer utilized flow supporting country, equipment, back-end a recognition, than experience,

that to XX,XXX XXXX expecting in are the and terminals provide plus We years more in follow.

mobile features. has over working are China, one Each to which flagship store phone stores. smart the planning largest operators we multiple in kiosks of with AI deploy addition, with mobile XX,XXX In is

not recommendation or analysis the crowd customers contract looking system securing While confident meet and crossed the we are ID-based we finish in will are customer yet, that personal our line exceed have platform, AI CRM for. facial what

We to expecting are and other market carriers with the business to solutions requirements. mobile customers similar same

other also facial in in are roll initiatives. We through to our continuing projects a we for well Asia. out the China number as AI test future, and community remain solutions of as the several a running Asia safety the the retail, Beyond in safety, are expect analysis we security solution sector, U.S. smart for estate for rolling main positioning, also providing the overall to Southeast and for for real entrance recognition we estate a recognition smart unit are in of with In to primarily at login equipment Europe. and real [indiscernible] provide on-call, monitoring as providing alarm, we behavior In Country the facial surveillance well developers, and in emergency community taxies, arena, door online features and Garden driver group the out In as AI taxi community. including navigation, etcetera, like driver driver.

currently are to expect Xian, XX,XXX than and [indiscernible] XXXX. more over deploying in We Chongqing, to in expand vehicles taxies in X,XXX

over drivers the operators is rise years, the hailing the last for of similar industry, Lyft, major course other Uber, two of a Didi world. attacks this and Given ride around the on the passengers crisis like and

these that years to answer will in are solution come. provides continue our scale the an and this We confident to opportunity to problems,

difficult. expect and children children safety grow matching or safety guardian. to and the Shenzhen a and to come; out roll significantly number system systems initiative, Facial Hangzhou helps these in them Xian, This first years food One construction for Beijing in this expect number in the in Belt with and have is new product to of major we legal program a as Shanghai China link currently a to are currently and safety city and expanded are two, safety we addition in Road their parents One in piloting In district part recognition future. piloting XXXX the ensure near within three, and Beijing monitoring quite kitchen few one, initiatives: system our and to in are the the school we completing

especially has have not we're but world. a solution the to of industry probably and been it's only as the read as in farming has success the However, continuing AI a of it African swine issue AI pork agricultural major biosafety, test had viral the system light disease, our you and in our pig solving; relates to of disease. This to targeting in on problem execute now finally, catastrophic the papers, China's threatens

solutions ability XXXX testing deliver recognize deployment many their to of our activities the these to need. major as expect and validity to beyond tailored efficiently companies the early and We AI in continue and technology cost

the of the applications we remain customers pursuing, our of we we deployment with, we to build the believe diversity Given the growth on in efforts, and are the and are positioned ongoing our scope stature working revenue ahead. months well

our will significant And me the ownership our to a for Finally, of untapped the Alison be We is benefit financial the value to monetized in review. to Sharecare. digital there principally stake this in believe we let continue now, turn media believe shareholders. assets, over ultimately call minority

Alison Davidson

you, afternoon, Thank and good Shing, everyone.

XX, our for March to XXXX. quarter ended Turning the results financial first

$X.X quarter was units. offset last $X.X The compared business the Our driven was million to $XX.X by from revenue transaction million a revenue in segment, our Travel other million first for resulting year. a approximately in & million of from growth Entertainment increase by revenue $XX.X in the increase decrease XXXX

due risk as Technology amounts contributed the deferred revenue $X.X the from Our the segment recognition our A safety from will the time customer. further Intelligence but million be and deployment AI-based collect delivered million of safety solution, management $X.X such and solution. Data our we until for retail AI-based was &

revenue We will the quarter of second in this recognizing XXXX. begin

our $XX.X included $XX.X total was million expenses; our of in reduction million because stock CEO. in to to in the million XXXX, to first million cost primarily $X.X a by compared driven $XX.X from period year $XX.X XXXX, to expense our million an for grant resulted prior and the quarter which XXXX compensation option expense Turning stock-based

grants of no First of had quarter scale. XXXX similar individual a

expense price the $X.X effect was corporate or combined $X.X for a of to Net our employees from rent as we loss search a net $X.XX Technology first noncash Operating increase the of stock compensation liability, expense change first of million included the same and XXXX our contract. paid & occurred gain million of our Net end the and $X.X and resulting during the of million Data our abandoned which our the to we & in $XX.X search liability, during of million result decrease property we The $X.X $X.XX period. compared diluted of to leased million The our due in compensation price in to cost in $X.X a competitive Our stock-based of segment, included marketing decreases the in share. to related million per warrant when fair occurred diluted in the changes for million the liability nature of due granted warrant the to in that certain due of decrease share in expense included and level value segment in or a loss $XX prior in Travel of at and revenue a by lease XXXX an the change cost to compared Entertainment noncash quarter related million loss a to value expense. related to by was paid loss in awards China. an a offset liability marketplace million quarter increase rent partially stock-based the $X.X were also $X.X the expense XXXX period of related per recorded cost stock which to of loss period. of the fair of in increase total to a increase Intelligence

cash This cash is position XXXX. total due the of working of an our turning compares million of Now million with capital. of to $XX.X to cash December related elements a combined to payments restricted $XX.X increased quarter position timing at to end. balance additional sheet; balance at XX, cash, million $XX.X to our $XX.X combined primarily Cash bringing million

March sell of be last value lenders, our senior lending LLC, conditions, in used for transaction Holdings an $XX discussed XX, transaction As enterprise million to The to of to call, affiliate anticipated to of will our leaving pay closing agreement stockholders. including the VDC-MGG we Vegas.com transaction proceeds on an million. due of senior only approval lenders. of remaining approximately owed The announced to certain group, our the $XX senior subject the our approximately amounts to by our debt remains cash

will of place transaction of approval their stockholders this meeting quarter. hold special on expected XX. a take during for The to closing obtain We May transaction to second the the is

our amendment closing the with agreement sale I anticipated an Also, us have agreement regarding Vegas.com, for be we the to XXXX. lenders will operator forbear session. against through agreed are call as the As connection financing to in transaction. with the sell Q&A the of into taking to part actions of our entered up Vegas.com lenders Vegas.com, our discussions X, enforcement to over in June our to from to now to agreement turn sell the

Operator

We Partners. [Operator Aftahi first will Darren take Capital our ROTH question from Instructions] with

Unidentified Analyst

This is Dillon [ph] on for Darren.

you lot Where little talk some few start the you're with those some rollout? some about that time of various but in rollouts of there I could ramp a product to those of different a sort traction you giving know with you frame confidence seeing actually revenue? bit your First, in have kiosks what's what AI then And XXXX, most of is of are the a expect the moving And lot a seeing parts not follow-ups. of that's the seeing forward? book only you going I verticals.

Kai-Shing Tao

right, your and We're but deployment. they not AI the just I'm clearly, couple aside companies large know -- of many set if question. is further budget kind leader, for I because Dillon, -- answer the only things, undisputed do me China Yes. where let don't of already have accept a

So we're as seeing China a very in strong anticipated. growth

an for Southeast their be capability being primarily where that I implemented for And see internal there for could will is in Asia so a have products, down the use growth area create is area they to think countries us. that China, are business. they strong AI don't are we looking AI primarily the solutions it own

but communities, we that argue companies past, as the U.S, to, of as And beginning as relates in people the lot we're talk to the much in last the most spark a the mentioned these relates So for And large with regions that as retail think, -- it construction create of other where about it is this beginning in with to safety, really budget see now to all a world. AI to In smart talked are certainly companies Asia, lot of needs AI the acquisition one in call, I they of are follow. global the the we now needs, the McDonald's fastest-growing quarter's beginning aggressive to is but more of made, the to action. solution. movements would actually be not company have certainly implement it Southeast

it kiosks; approach. As the we the relates took conservative to

the expect XXXX. deployment happen rest to We of the in

recognize but it's when the it collect as we we finish -- deployment, we the collected as when, conservative took approach, that's the as it we deferred recognize cash. revenue, when when when we As revenue, we

Unidentified Analyst

safety as a you in or of are -- Got guess, Are most do side lot traction on ramping in? as the which it. the a think seeing products you I And goes? gaining of far in the supermarket some follow-up; retail then, more as you the are

Kai-Shing Tao

Yes.

is all there for own of solutions that the looking we're strong them that very our demand. inbound offering, think are This is experiencing -- I in products industry. respective we is their everybody

cut to only Everyone's of costs So far or trying every And that. most there their is but I for line. industry AI. as AI the to achieving think, their way higher go companies industry top I really as the not one profitability, agree is while another, getting to need think while growing has

Unidentified Analyst

Got then was XQ -- I AI assume? to it. mostly the revenue And of 'XX, that FinTech compared

Alison Davidson

That's correct.

Operator

[indiscernible]. [Operator Instructions] We'll move next to

Unidentified Analyst

trying understand for of it's million, AI. QX, which the understand onwards. Remark recognized I'm $X.X and $X.X $X.X and deferred to very like quarters around $X.X to $X.X was $X.X deferred million million if with bookings, I are million lumpy it onwards. sounds million As the was QX, -- you recognized clearly it the QX company QX total and million, like, to

you from at million, is guys activity look and I $X.X deployment like, $X.X the clearly, the million. the, that and were, if was call, give was So QX as QX volume bookings, you impression it clear if at increasing. the activity And

and So how engagement? about giving should lumpiness in we activity the the increase think customer

Kai-Shing Tao

question. thanks George, for your

think we we receive, the talking to start we that bookings revenue complete about recognition, the projects with have and it. I obviously different we -- as -- when

you of a think During little New slower we Chinese generally -- have a Year. to of that the -- I for due lot a QX, bit period, ramp-up

of -- to done, collect it be revenue. proper is of in we'll it that able there a recognize -- see happen the then process revenue. the and we once can that's well, recognize when QX, after the signing as projects deployment. actual lot to and is there And we contract begin the when cash, always that And deferred as the So you actual QX so that's we then

Unidentified Analyst

-- offering even guidance come and and QX, X, New therefore, and from clearly mean, but I revenues with activity, I necessarily, increased QX one should has maybe infer, from be accept gone, maybe? and QX QX, And is a Chinese company Year the even not the ramp will QX now

Kai-Shing Tao

the course that -- be through comfortable it's revenue XXXX. a we're of will there ramp-up think I

Unidentified Analyst

Okay.

the can't what revenue but XXXX, So was AI, remember -- we grow should Q from there. in in for total I

the pharmacy did The say? -- that what million that Okay. deal, Was was customers, characteristics? were you XX

Kai-Shing Tao

that... pharmacy The

Unidentified Analyst

the deal. missed on I numbers pharmacy the Yes.

Kai-Shing Tao

million patients, a kiosk. using meaning, our XX person using that's this,

Unidentified Analyst

And obviously like do deal that? the numbers, without a economics Okay. showing in the detailed work how

Kai-Shing Tao

we hardware Generally, and we very our show us. to begin that it's over the provide charge said this to case, different of software a that. the then, as that establish we've as the always the In for pays and us with important would value course And years, deal. client it's The software for following more it services position company. be more pharmacy

Unidentified Analyst

And you think you some earnings in that And chains, talk in activity of mentioned States. recall interesting. still calls, spoke the play? the I Can with think. on -- last if status Okay, was negotiations United Is your about fast I properly, the that? the food some American I to you in, company that

Kai-Shing Tao

in and make play, That we'll deal, conclude that. formal still a that on announcement once we

Unidentified Analyst

with generally, over Group, or we've group mentioned appears AI mean, I of Have in more solution last Group they many to Beijing be still or big And you XX more. of the with we don't in Have Energy years, guys deals? deals And two big there shortage China no have. X-Eleven, the the play? interest months so the Company CP are -- lost and with, Hualian of know, any deals those those I any

Kai-Shing Tao

chase for plan problem haven't to So and revenue just but of margin -- there We is there sake opportunities where a money. not wheels. going those are just are the to chasing plenty any the make your -- of where lost for revenue, and of pricing, now, spinning has the high we're And the us not budgets right the that's we're to it's right? going deals, just rollout been

that's our So not plan.

are are the other us. there companies and plenty profitable for out there of that projects So immediate

Unidentified Analyst

deal. it. got final And The one. one entertainment Okay, Allinone

technologies. you that, standardized we vested think Can in the status one? They is AI company. give if on a there Remark on I

Kai-Shing Tao

just you come correctly. didn't sorry, I'm in

one Just question time. repeat that more

Unidentified Analyst

the Yes. Can I I of Remark status announced whereby standardized that? abbreviation. the give $X The Allinone, company AI, the you think, they deal company AI. and million a think Allinone, with invested is in on

Kai-Shing Tao

Yes.

So our actually so cash investment $XXX,XXX far. is

be of them on establish with -- the can been entertainment the to working China that. that to have foray there in months come our over next some will course and updates few the industry We into

Operator

there Again, for And conference like closing like telephone are time. any to remarks. turn back closing management back at this further management the remarks. for additional any additional I'd questions over to or conference I'd over or no turn the to to

Kai-Shing Tao

Thank Remark your you for interest in Holdings.

please have to you As out any or to Alison. myself Thanks. always, feel free if reach questions,

Operator

conclude participation. This Thank your conference. does for today's you

disconnect. may You now

Remark (MARK) 12 May 192019 Q1 Earnings call transcript