MFON - Earnings call transcript Q2 2020

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Operator

Greetings, and welcome to Mobivity Second Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instructions].

As a reminder this call is being recorded. I would now like to turn the conference over to your host Brett Maas of Hayden IR. ahead. go Please

Brett Maas

Lynn I’d quarter operator. are welcome to Officer everyone Becker, Officer. Thank earnings like call. second and Executive Chief XXXX Chairman today Chief Hosting Mobivity’s Financial Founder, you, and to Tiscareno, the Dennis call

Dennis, information over the statements, reflect Safe could caution and call its as are this contained company’s management, I’d by statements. company the report the forward-looking best policy. update accurate documents annual call made to is subject or obligation that actual time-to-time from as may call on documents can are Please Except that comparable the in the our note in will differ the being risks found on cause statements which require with be Before information with calculated Form available information. and the statements the this the today, may considerable in everyone’s filed available the forward-looking information to those measures, which over the on GAAP that currently assumes call judgment Today’s management’s floor if other XX-K. results differ call presentation, this like Becker. refer to results forward-looking is call in statements, reviewed which also and to by turn attention measures, I new no or which Please financial today. is could to all during If are at materially call to turn most I’d press from not publicly statements today’s statements replayed update to be factors the the include those the factors said, With along presented in recently Harbor like and required anticipated forward-looking risk after uncertainties. yours. or accordance based most to contain Dennis the release, corporate that to may actual identify These and you actual mobivity.com. forward-looking non-GAAP important directly such We results reasons, filed Any becomes presented differ to future. recent to reconciliation during known and in or current made that from of financial company particular call certain contain with materially. law, results these made SEC this and even

Dennis Becker

Hopefully, and and and to addition the for of first Brett, accelerate I'm today. with now sane retailers Thanks of positioned staying to to as customers customer we're is the transformation well half the despite in to grow these is through endure call everyone report as safe thanks expansion the revenue XX% in year pricing licensing in of we've a with contract the margin time best long cash. and last had higher period values. $XXX,XXX growth recurring cash to than continues the Thanks new existing agreements, the XXXX and same to due also of license digital. we pleased challenges our position increase everyone the continue unprecedented times. Gross in joining us that to historic and posted Board. through our the year, results digital to messaging Mobivity's of ahead show customer quarter team personalized another forged Recurrency strong mobile its increase and continue engagement offers, our for across customers that platform and growth

XX% within margin gross long-term reach. is stated goal of Our

to low communicate tools such with support the merchant restaurants service through customers relief team as health transition and programs special that provides to on solution second response for We ordering messaging accelerated digital restaurant several announcements, protocols, digital to pandemic new options. the on offers a diligently launch progress, to the and safety As face Pepsi employees of with text focused important concerns. in and services brought and shutdowns our Mobivity's consumer COVID quarter, worked contact

a sales phone way. created card number pepsicopartners.com. We number text Pepsi at sells digital for digital XXXXXX. by can simple That drive experience response yourself on the solution on found or a Pepsi to Mobivity gift customers both for also message. our Information the SMS the texting to solution site@www.mobivity.com/pepsistimulus for joint Please also by be restaurant through gift this Pepsi Web

through medium program, our solution, belly a helping sized day For merchants loyalty their small messaging and stay the XX with pandemic. during quickly businesses customers launched our SMS team text connected using

our worked Focusing core on Mobivity past and is and couldn't of to months. customers to support partners over value at the solutions tirelessly team big I several prouder our problems be

or XXXX, two has weeks. across brick was of overnight digital Digital early. transformation, three once we importantly, to mortar CEO XX locations And our patented article digital as COVID-XX marketing. phases our data one with receipt offers sale digital of two of in Just ZDNet more Recurrency loyalty, thousands transformation months. digital Microsoft advertising, of and of transition to technology, digital we've globe, years welcome to already annually. that, enable for of aspect Built the days point of than billions platform every year on shift as months titled, exponentially and of businesses deployed consumers believe a stated, environment analytics the Nadella, virtual unique to life, McKinsey pandemic matter the XX scaled that the customers in digital that to powering worth million and engagements impacts accelerated working mobile reported year seen the strategy their initiatives to XXs wallets a mapped messaging, in uniquely have Satya leaves

transformation platform well will the many operate. that positioned based change how industries digital cloud grow to rapid is permanently through Our Recurrency

in of channels, Our is largely growth versus in allocate sports exposed of restaurants to sales billion to through investing sales would which $XXX billion spent an marketing, legacy connections restaurant industry current $XX has analog estimated digital restaurant according the It's marketing equate and for with shows tailwinds importance Association. and The as the generate broadcast strong adoption. Restaurant to the pandemic X% to direct pandemic. in vertical on The digital and to focus National such annually. of the sidelined consumers entertainment, expected common is

In customers, and of per fact, spend than handful marketing. others, billion Mobivity's Chipotle, year more on current Subway, dollars Sonic such a a as

opportunity. for well track become marketing survival the has addressable growing a we digital substantially. capitalize we stability, that are scale positioned As business, on is restaurant necessity spend our and of in believe And the given to that piece record,

above scale. We to food partnerships continue XXXX facilities, at event with as Pepsi to base. such billions We've average. new more added location marketing XX operators, adjacent convenience customer in markets, and We've budgets operators, in grocery restaurant price per add than our expand our leveraged well others pursue stores material more and where brands a addressable

growing drive pursue a high the base substantial our Lynn? near-term believe opportunities, Lynn turn that along call view financial will to grocer our a likelihood large few We online of customers detailed come results. the will there's large international more continue of with have I a such summary a And over profitable for back in for growth. major comments. we I'll and now then streaming a company as that to previously disclosed been that these

Lynn Tiscareno

position. cash $XXX,XXX I'll on in kick our second off cash. with ended quarter We update an the with

the end first may was recall, in $XXX,XXX you quarter cash. the As of

cash loss. year-over-year of in primarily Year-to-date, like the quarterly by used to in burn used net million, I'd also cash by in with burn. provided to of a decrease million cash driven $XXX,XXX. which compared Furthermore, we of activities $XXX,XXX progress during last to we'd a in made highlight the quarter had that the $XXX,XXX So in QX, was in at quarter, operations significantly only operating of improved the was same cash $X.X operations emphasize cash our first period like the to to about decrease cash $X.X $XXX,XXX end compared $XXX,XXX. second during year,

have Assuming confident trajectory, we operations cash hand the current very support to we future. revenue for we're foreseeable on sufficient maintain our that

revenue Our of during quarter million million reflecting to improvement the the quarter the of $X.X compared compared revenues of same increased for to XXXX, $X.X XXXX. an Year-to-date $X.X in second XX%. million XXXX $X.X in to period million was second XX%

While revenue quarter was recognized XXXX. nonrecurring of first compared $X.X decline million of attributed first quarter most revenue of to of that declined from in the the that XXXX, the second was quarter to

More importantly, realize in decline in cost increase and the beginning sales we of our to now gross our are margins.

XXXX XXXX Our obligations. also gross same were Total margin quarter ended of XX% revenues increased for the cost of by of previously result quarter period XXXX quarter XXXX. over that for XX% in of XX, June for compared XX% six margins sales gross due months most second of the XXXX. period And the were operating carrier to the to charge unable for XXXX. the to second XX% expenses in margin improvements in compared saw decreased of $XXX,XXX, a of XX% contractual we gross second surcharges increased our quarter-over-quarter. same notably, to on the the decreased The We

this reductions pay our We During pandemic. travel spend to sustainability on have believe areas savings as eliminating temporary trade and by we as ensure reducing the in and and quarter, such as at during continue expenses in Keep this remainder or increase in well COVID furloughs focused shows, that will XX% in gross against expenses in a spend was XX% revenue travel mind the of and margins. minimum. quarter-over-quarter a XX% a the in costs decrease increase through year related the

net we've flow through in was the achieve of quarter of will is and million compared generated ago business on the summary, XXXX. for loss XXXX operating our call great share In of closing we're the to share, contracts per generating targeted to now leverage of As XXXX our note by that goal, yield and quarter second over the we loss strides growth in Dennis second or And XX% taking with our renewed remarks. a increasing I where of higher narrowed revenues result, Also revenues revenue a believe XXXX operating of for gross the growing will the result turn in cash net of year $X.X million improved margins operating direct $XXX,XXX operations improvement the decrease reducing This made for quarter The a second to $X.XX. by could advantage quarter Dennis? per and we new XX%. to our quarter loss model. and first income. over back expenses. If a XXXX. achieve his or our strong compared we $X.XX loss $X.XX both focus margins, in we XX% positive

Dennis Becker

Thanks Lynn.

the described transition first pandemic As half the level. plan halfway call, year cash safe of XX% or to of the this to our already of navigate a the profitable position the continue and cash to revenue our last to At operations. increased our position exceeded year we've is point last a year, over remainder in growth with and sustainable

sales year. our throughout pipeline our and continues accelerate remainder to launching to several in continues weeks. app We've transformation recent pipeline digital Pepsi’s the brands digital the large several with of campaigns the partnership new the grow. to forward, Looking added is And marketing

Given excited confident in I set strong for gross the this the by imposed focused at events. our Q&A. goals staying up we expanding contributing efficiencies cash for our industry open applaud chaos you the we to achieving in quarter out pipeline, now a Mobivity. the are and despite our Mobivity continued margin, and cash We'll in call robust interest Thank are unprecedented and the tailwinds in your that world burn favorable tuning uncertainty and team achieved position, outlook. for and about

Operator

you. Thank

We [Operator begin question-and-answer will now the session Instructions].

Greg Berlacher from of Emerging question comes Growth. first Our

Greg Berlacher

got are or question. and bit little we and expenses expect expense side there a can on other the marketing, contract from Should you expect reductions forth? words, we one research, and sales In further so so engineering, guys additional I more should then that

Dennis Becker

the we on side, heavily XXXX on capabilities demand were expense some learning our new large really So that we from in focused for customers.

and the pictures and wallet and print providing and a our their to text mentioned that offers foremost, omnichannel ads and we other virtual we're customers. from offers calls, and us messaging on and for channel market our the multimedia helping and other and quarterbacking and receipt multimedia loyalty, customers partner promotions in and First as where of moves app to add messaging Also, capabilities that we enhancement video messaging previous can email the their for channels. all promotions

in and services. those we've invested in And we been we've to products as XXXX, out. pull back investments in XXXX, that able those those launched So building

we the And so and remain looking improve. development of types the if engineering really market and escalate to research marketing, we our flat, continuing of in interest and to expenses forward, terms and starting to not the demand that services. expect for Sales feel is

revenue profiles deal and potential with continuing that always top that But same there's close marketing our has we sales large enough line While invest pipeline we don't in when add sales that time, our anything that gross to got accelerate to that the gains a at really flow the we've we returning that to upside. and improve closing progress. or and margin investments upside and might if that compound that need to

OpEx that we’re and the optimized, because we've of enough now I think in reaping summary in the largely So benefits. has been market and technology development those product ahead then

that remain success, we're increase expenditures and marketing seeing, the flat investments, but And given regards could digital in and pursuit will those sales our trend in -- those so foreseeable based on But might increase even that for demand coming transformation, short-term for those and of because of down. the upon sales we forecast. the increases future

Greg Berlacher

are by $XX run be so, categorize to much how as any in end expect at to And of the rate then the that if least thereabouts truly revenues? And think mentioned year? at looking I it you would foreseeable that was Are raise a returning don't future. you you still the of million capital

So give in a just that? more clarity I on maybe little me bit thought,

Dennis Becker

beginning million to run about we having achieved. onward think capital only to to of the cash balance recurring. we with cash our the the a raise of support operations. the of $XXX,XXX cash year without $X end rate, And And used year majority in finish continue first to at of is the growth and we year projected yes, sufficient new to with half of on operations this that's any to And indefinitely that the that a of of the from be lot then large no, out expected revenue revenue expect close

that of does beyond. rate revenue into platform and the for run grow million the us beyond to a good XXXX return and carry XXXX expect we growth to from So $XX platform give

Operator

of Jeff [Operator Capital Instructions] Our Porter Co. comes from Porter next question Management

Jeff Porter

streaming the the we it tests, optimistic still to On opportunities or unnaturally these in causes briefly you you just cetera deals with online those of that last referred COVID to long and Has are those to large ability chain. opportunities big store your is can grocery mentioned call, of again, business inhibited cycle sort beta you and company remain and capitalize pieces with what et sales on? close

Dennis Becker

with of COVID large chain. our into and question, some increased a on the So part Also, with latter one, expansion large a pipeline portion brands. of additional of very our global store of has the your very of number brought opportunities sales our our convenience pipeline, QSR is portfolio one one largest customers

that's focus And we're that pretty about. opportunity there for organically, so, into excited transpired brought an expansion, that

ads our And most and printed is different. of remaining of services, because large with of put the course, very the are mobile and really initial towards integration years about. low importantly space focusing communication rich the the the through they're and and over fiscal work being beginning and but or or still global receipts, changed. is last to a the with. contact rich spoke solution. brands the in and opportunities of positioned and deals, streaming number services Number call we've digital new as it's a for begin sale of the the interesting, low we this already always, that it other opportunity and that the two is that email fulfill carriers. on brand, for in superior. couple very messaging messaging requirements one space the Google uniquely their much grocery no year, international needs. a grocery that a digital text the communication deals touch, space with On have other expand There's And to In contact But Google one, The finalists for last our receipts to RFP change other we're digital finalist one some we been revised while bit alive that we is what a in point delivery in messaging more mobile and partnership they're were was video seeking environment us that’s that solutions on receipts in think pursuing. we and The

all bodes this transmission of towards receipt digital really this quick and with large pivot they well so grocer And are information.

brand. much some work the still were alive then client underway. they there interest have reorganization has that on video, there. So this we're efforts with very with in And specific to had The that we the opportunity opportunity streaming a continued is we pursuing

but barriers of logistical And that timing. we there so dissipated for terms expect that demand matter, in don't the osme the just has

one, expect is would just a not grocery. to and important anyway, of vertical our grocery to to stretch kind the model convenience that I video It's because think business to its Streaming stores, of business more restaurants, for opportunity locality go to I our a So from be model. pioneering us.

the very take the still again, form. alive so, but to opportunity on going different back And and grocery, a think that's imminent much just still I to

Jeff Porter

the digital? roughly from sort size, to it's contract of same it print Is gone

Dennis Becker

Yes, biggest in to opportunity receipts delivered long-term their and we this et as of email, space, offers, believe in grocery print, both messaging, to That's technically and through the going cetera. the have space announced strategy aim they bring there text through the channel quarterbacking messaging, or marketing, in cetera. a with on to how strategic all to market fall, is I largest and our the to digital last we customer apps, both it which promotions in think et through well. loyalty, and loyalty, the different a bring immediate brands now And we our are over offers, are the in and grocery beachhead have not vendor that problematic then the for that to desire challenging but it points for financially digital becomes want,

So segue immediate we loyalty other fulfilling digital receipts need think and digital easy going offers is promotions omnichannel and an to long-term be that of and their for needs to strategies.

Operator

Our next Investor. Private question Bruce from comes Evans,

Unidentified Analyst

Mobivity these was are for what or If days? like sold, companies going multiple Mobivity revenues

Dennis Becker

the we're Mobivity one customers contract which model at XX% that's think margins plus things is revenues gross service One usually our striving of a area. through the the last our of above percent and as of our for our to They're in that is XX% model, in over well gotten bit equates but little ebbing with gross biggest flowing XX%. the our accomplishments quarter minimum of and business we've with this recurring half I worth under that first of particularly XX margins software terms to a year year And and business gross the margin.

think a if as as a double-digit, XX. saw I'll with report across analysis of multiples service last you other various X XX%, industry the it businesses, you've think, XX gross times. the software plus service to the software rates point business research businesses, was their out area, the I So their growth average at I in the M&A model got like margins that XX% I with Salesforce look multiple, in was

for what are hitting with that you the the that's around software revenue can marketplace business that, service multiples quite model gross high. and recurring strive a as is margins that see And we So and licensing. both with look

Operator

call. the concludes question-and-answer and [Operator today's Instructions] This session, conference

lines. You have day. may participating, pleasant and Thanks your disconnect a for

Mobivity (MFON) 11 Aug 202020 Q2 Earnings call transcript