Earnings call transcript Q3 2023

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

Operator

Good day and welcome to the Netcapital Fiscal 2023 Third Quarter Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation.

It is now my pleasure to turn the floor over to your host Coreen Kraysler. Ma'am, the floor is yours.

Coreen Kraysler

you. Thank thank third Netcapital's ended quarter XXXX. and call results January for the for of you morning financial joining conference XX, Good fiscal XXXX is Netcapital This CFO Inc. Kraysler, Coreen of results a of follow with an our on update Frishman, begin I'll with our financial Founder and review will platform. Jason

before CEO, remarks with Martin call the conclude will open Our for Kay some we questions.

other involve be statements known and to factors future forward-looking performance relate unknown that the customary forward-looking from implied different disclosure expressed cause risks, regarding information. results, Before to to statements. discussion uncertainties performance, to statements. future by results future achievements of we Safe and forward-looking activity, to attention These and begin, events, or actual or call your any I'd levels may include Management's like materially or may financial these Harbor

current or reflect future. could future liquidity, respect Any to update publicly differ assumes management's becomes forward-looking operations, looking reasons those in Netcapital statements, information for statements materially update the strategy, these events. views available forward growth if the even of anticipated results and reason, actual any results revise new forward-looking with in or these to operations, obligation from statements to no

million financial the I'll revenues XXXX. $X.X third Total million, year now increased $X.X results fiscal ago XX% review begin in of quarter with to our compared year-to-date the period. for of fiscal year-over-year to

to of the million. For delivered XX% X.X we growth revenue third quarter,

We of $XXX,XXX, in quarter. XXX,XXX the ago generated compared to quarter operating positive the income operating loss for an third approximately year of

year period. to an operating XXXX, fiscal million compared first operating in $XXX,XXX nine $X.X the For of was year months loss ago of the income

of $X.XX nine-month million XXXX. diluted as third to equivalents quarter per at At XX, had $XXX,XXX compared cash cash for for the January income XX, share $X.XX we XXXX, April Net $X.X the and periods. was and

equity million XXXX, April fair XX, value $XX.X to securities at $XX.X XX, million January compared XXXX. at of As totaled

for are over flowing Valley on These Jason, to at Bank issuers Netcapital to make the access freely, call hand I accounts are I full funds some insured, we like have account. and comments Silicon Valley held they Silicon Escrow the the Before to fully would are Bank. situation.

at is a main bank, big America, to operating Bank known designated The of Citizens additional as held as systemically otherwise accounts which Bank. are accounts fail. important Company has Netcapital's at too

exploring currently potential are Partners. additional We Escrow

I'll over now to of Frishman, call the Jason founder Netcapital. turn

Jason Frishman

you, Thank Coreen.

During the third we strategic collaborations. quarter, announced two

issuers. Markets' offer a the portal differentiator established purchase That System's funding Alternative new with Templum to brings our we users partnership Through First, and ATS Trading ATS, funding LLC. stocks the we extended benefits Netcapital or through can who numerous investors the key a facilitate ability to regulated and unlock We a secondary believe alternative strong within for landscape. our the digital represents competitive to Netcapital structured through private markets advantage that trading liquidity ability liquidity venue. and trading portal,

their advice formed boutique companies referral to mission sharing market we a client to fund agreement Merit core businesses focused forward Merit with revenue JD at with aligns LLC, a to middle serving and values. build grow investment approach Next, bank technology Netcapital's JD their well centric help stages on all and strategic company. Securities leading

capital the part portal, like space. portal these solution agreement, efforts users' and exceed registered Collaborations robust a to unmatched private online. private of deliver and now clients SEC mutually services a capital ongoing team which startups, raise who our for entrepreneurial and in our to are solutions their Through has that companies market funding are are beneficial key expectations empowers

turn I call to Kay, Martin over Inc. will CEO now the Netcapital of

Martin Kay

capital new and exploring as strategies. has industry in funding ideas latest concentrated just traditional of become. investors and many model Thank new companies you, has and illustration serve the venture the current how The environment Jason. events Coreen Recent economic and insular banking the

In and breaks this virtually customers love communities Along powerful those the symbiotic businesses relationship. to way, invest a and private ambassadors companies. into they traditional for and we're barriers for is the contrast, Netcapital's opportunities platform anyone in turning owners down offers and brand

built effectively To spans advisor ecosystem mature, scalable this investor that and out do efficiently, operations, an we've and startup and communities. the

Jason our we're described, just continuing As proposition with liquidity extend option. to a value

entrepreneurs. Positioned to we right integrated at have investor create startup investors market advisor communities, value our we significant opportunity the for intersection offerings for and of the now believe both a and

forward look long-term year support month further continued our next to that We fiscal will with strategy. momentum our closing business out

Operator, we're ready for questions.

Operator

first a at Your question Certainly, conducting question-and-answer for session. time, coming at [Operator be Michael is we today Instructions] from Mathison this will Research. Singular

Michael Mathison

good of congratulations that recorded lot that. folks, morning you on so Good income

gain Here's clearly wonder, unrealized on income I stakes your disclosing play which driving came that? my role if the question. equity in stakes. Most you're the the from particular of

Coreen Kraysler

portfolio was we you I'm in sure offerings did was in two a our XX-Q than That that asking. for both recorded balance them we valuations the companies, of Watch This and and from the previously due fact ChipBrain did of disclose higher that had an Party. of increase thank in value result at to the sheet.

the So from was XXX,XXX from $X.X and ChipBrain Watch roughly Party. was million gain of

Michael Mathison

these Thank securities your question, like? ongoing looks you process Kind detail. related of for you all could and you the describe value mark-to-market just private how a what

Coreen Kraysler

Absolutely.

value statement and that, that is change income there the or we in change gain is the our loss. securities runs on observable as that the value an equity So, then the through securities balance it of if way an works sheet

do us our valuations price either on and for discovery funding all at the gives that our valuation portfolio we is portal every the portals way, of And the companies So, quarter Michael, what auditor. funding or those offerings competing are. see our those that CF we that with inputs Reg securities look of observable

Operator

Associates. question coming Tim next Your Instructions] Bard [Operator for is from Johnson at today

Tim Johnson

of all with this Is think? sturm good result the drang bad business, a space venture the your as you und for Martin, do or in SBB.

Martin Kay

business. for great Yes, our thing we believe it's a

it is outside my there potential how I that. insular be comments, in mentioned kind how and community illustrates I much think can of of, As that

feel strongly business indicator very is we that pretty So, a that's positive. our something for that, good and

Tim Johnson

by be happened will as VCs impaired I'm customers going thinking that more you what's that alternative. to an the to and are drive

Martin Kay

And that's this of some seeing our right. a we're at already that that Exactly, getting in little inbound the and of business exactly we're point. bit inquiries

Operator

question is Ian from next Your [ph], Black Investor. coming a Private

Unidentified Analyst

you that equity So addressing flow mostly have been results, any in cash guys Do had goals but [some there's paid you good] great because for you're near-term? securities.

Coreen Kraysler

question. Ian, very your much thank Hi, you for

as allows we few uptick coming So, And and we're investments down nice over for we resources flow. to a to is have the prices about business to people place be see launching our cash we've our that trade liquidity And soon forward. seen jump which our be secondary in through generates or to adequate feature talk happy to liquidity fund have believe, gas also been on launching. equities Martin that we last platform, months, our which Jason I'm that in secondary, expect we'll platform, it the going also going and let a platform, to transfer

Jason Frishman

Coreen, Jason. Sure, is this Thanks

securities So, resell ability to the the offer provide already venue issued ATS be and will shares. securities regulated have Netcapital users to to companies that in purchase a to their with able enter

through And successful to names facilitate ability a the tail. an to come those the monetize we transactions the most demand in that can be there's overtime, ongoing and successful as position so on through ATS, stocks, And Netcapital. the long companies most there's in

as view we the a so, down opportunity very revenue line. And potentially growth strong that for

Operator

[Operator coming follow-up Tim Instructions] question Johnson. a You have from

Tim Johnson

the you What's as securities modify fees mix? that cash and deals? And current mix can of taken for doing

Coreen Kraysler

revenues consulting were the securities? of overall talking about side are specifically So, the are from you equity asking you business? of Or percentage our the what

Tim Johnson

More in on and a correct? of side, the of a portion raising stock of the portion you cash, deal capital take it

Coreen Kraysler

do take do Netcapital we to as cash asking platform? as How that? So on and Jason, take much we do are address you much you the stock? want how

Jason Frishman

Hi, Yes. Tim, good Sure. question.

funds X.X% a platform. fee. kind we cash X% through the so yes, to portal. added raised the that taken So a funding is historically stock for stock as in a all fee recently base We've based The charge

through exact investors. portal that's to long it the We take the the to are so allowed is equity being equity, same issued as

at the the receive stock of sold end they So of in we X% the equity. raise, that

cash in fee and an then equity. X% in X.X% fee it's So, additional

question right the of where not We second was. mix looking that? certainly It's part the your now. something We change Tim at added additional just think I Could we're we could. X%. of this

goes. how So, that of seeing sort we're

it's well. So gone far, pretty

an haven't We and our fee pushback from any when ability any And equity. optionality us issuers that of seen the additional that us. really win our win overtime. to gives that It X% love that provides we issuers providing

through Netcapital having a affords the in small it's we obviously the of it's us. that idea company stake optionality raises, the because an so, having each And that just idea stake company every comes like small X% but we love of what of it for a

Tim Johnson

much component? start via have how taken you doing When did you that in and that

Jason Frishman

believe, addition, of deals is That quarter. its might quite if shares don't a I know have And I'm any within I issued you yet. recent not closed sure, question. yet know? Coreen we the had the good It's where a last

Tim Johnson

will going So, you disclosing quarterly? that be forward

Coreen Kraysler

will. we Yes,

Tim Johnson

the so quarter nothing third But in far?

Coreen Kraysler

just few That's it ago. correct. a implemented We weeks

Operator

Your next question is from coming Black question [ph]. Ian follow-up also a

Unidentified Analyst

that on last question. Just following up

$X.X cash with consulting mostly side? that your statement so in of from that on of coming million cash, flow equity the So, lieu

Coreen Kraysler

I a your little Can repeat you. you question? hearing trouble was having

Unidentified Analyst

for cash of you equity $X.X statement in so guys lieu recorded the nine Yes, your million last of cash months. on flow

from coming consulting side equity than So, is of rather Netcapital the platform? most that the

Coreen Kraysler

on taking financial equity over of Yes, Netcapital has seen forward. but statements X% been in we're the moving all from on will the a that that platform lieu side stake of list business, the next that you've now on companies so that change all our that time the of cash far consulting

Unidentified Analyst

that is to? equity cash side is the there a all or consulting component generally Okay, in

Coreen Kraysler

That lot that's is, More component over equity, over cash varies time. really if is time. a it's a you but there's more been there's, mix, recently, lumpy there generally a it

Operator

question coming from Topping Rob Your today Capital. next Topping at for is

Rob Topping

to this that? thinking Martin, to if as guess any but anyone is I'm wants view, just foot acquired XX,XXX for kind comment, in assets the on of quarter I

Martin Kay

I mine, phone but question I hear Yes, repeating it's I'm didn't do sorry, if your quite know there. that? Rob. mind your you don't or

Rob Topping

the on view a And just kind if again. In try not, curious take on to was idea on assets me off I get in foot sorry, my there earbuds. I'll XX,XXX I'm And quarter. general I'm mobile. XX-Q, of kind that. some of was acquired Let the

Martin Kay

comment Coreen, you on? to something want that's

Rob Topping

it have or the Coreen, If athletics. around it community to, me, of I'm like the based helps looked don't front XX-Q I in but one-on-one speaking

Coreen Kraysler

Right, yes.

second. one So

Rob Topping

mean didn't And as I a throw to curveball. you

Coreen Kraysler

sports to know with allows to just what their people there's talk way it. trying a describe in to And I bruins. of think favorite the No, It's best the it a to is. figures. community I'm that tie

very a has who business had person become a development serious hockey was to team the path injury. before of player a One our on professional he

in been so, tie he doing And the work side. on has that of that will the with some

think So, I from there's some aspects community that. interesting

Rob Topping

to to That definitely. sense space, who Thank things regard have to and I you. makes Speakers] to and them talk that, that seen a [Multiple Congrats I lot but of Yes, in Well, know all. too. interesting in

Coreen Kraysler

Thanks Rob.

Operator

no appear questions further in be Instructions] [Operator to queue. There

Coreen Kraysler

so investors at in the you a Thank questions love we was Great. fun for dialogue. joining. to and and really Sidoti interesting have Conference your much, to look We forward May. everyone to It talking

Thank you much. very

Jason Frishman

you Thank all.

Operator

Thank call. concludes today's This you. conference

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

Netcapital (NCPL) 17 Mar 232023 Q3 Earnings call transcript