NETE - Earnings call transcript Q1 2018

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Net Element 2018 First Quarter Financial Results and Business Update Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for questions. to may that are contain risks uncertainties. like management's the subject I'd and remarks prepared forward-looking Instructions] remind during listeners call, to [Operator statements, which questions forward-looking response Management statements make additional to may your today. in Therefore, the Harbor statements Act in contained Reform under Private Litigation XXXX. for Securities forward-looking the of claims Company protection Safe with Actual results to discussed uncertainties more discussion detailed results the a risks in therefore, and and may today, differ the Company's filings of from you we SEC. these refer the to include of XX, assumes as Any as performance may change. XXXX, these future Company market projections by management update future Company's estimates represented the in to today, May the no conditions projections as obligation and the and information The certain Investor call provided page. financial is the www.netelement.com recording during Relations on available at turn over like time, Oleg to would CEO. At this I the call to Firer, ahead go please Oleg,

Oleg Firer

Good today, call session. into quarter give like joining begin you those conference morning, XXXX. to the today's quarter I to everyone XXXX, XX, of our discuss an as Thanks everyone. first for highlighting ended the Q&A from the as questions during first by during well for March of results our accomplishments would to opportunity ask call the listening

emphasis medium merchant increase dollars with of revenues Solutions Total compared Revenues American were organic the segment, growth globally segment which North $XXX our segment North growth XXXX. XX% were the with of period. America XXXX. XX% an $XX sized small value-added continued increase the over the transactions year. the Our million, have profit this for of an million prior offerings. $XX to Transaction of Solutions were first to Transaction compared business on consolidate in has solution for growth $X segment net due in international Transaction of organic solutions during as increase segment Solutions of result an XX% quarter prior of million, Solutions experienced during first the of over year. decrease the prior for revenues Transaction $XXX XX% XX% International net revenues XXXX, quarter in segment, the first online million, increase XXXX over of a a the The and quarter million, of increased to quarter is primarily mobile

first XXXX, member of cast the Enterprise join of appointed by quarter Board, Report NASDAQ Jonathan Jon the blockchain the have market on "Fast Ethereum Board, we interviewed seasoned Money", Alliance. myself Narjarian of to During Jon of fintech be Narjarian CNBC and Fichman the Jane and Halftime appointed to subject to were at King, site the cryptocurrency, executive

to to project are multi-channel of We our proprietary payments as solution for full partners provide turnkey for have more launched to to merchants are have sales platform. spec add API supplement developers continuing payments well year. pleased [ph] the who Netevia, to and looking provide our everything, Netevia, same as strong the competitive, made Becoming growth. to deliver start base a We a and

being future continue As across sustainable our revenue margin segments we improve to on during expect we deliver delivering shareholders. to the while year, growth growth, to focused whole

Chief our Jonathan provide Officer, like Financial on proceed. Now, I financial. please will New, our would to introduce comments Jon, who

Jonathan New

Thanks, Oleg.

We condense in have call, conference MD&A whole that release our new moved going through versus we to financial results XX-Q. a press the and published

quarter to net $X.XX from ended to common stockholders per per in loss attributable million the debt in efficient non-cash would decrease produced appreciated. expense. period. as We more decreases Our stockholders share GAAP, goal reported track the in due comments and bad do compensation, a million be the XXXX any to X.X for XXXX. months or $X.XX three $X.XX format $X non-GAAP the or $X.X March is to of Primarily share our G&A March per highlights hope, present loss to ended ended non-cash we loss XX, the time million. XX, or the share This loss million XX, per million new and Adjusting for a quarter almost of as March share revenues, be compared We non-GAAP net for increased like of $X loss our for X.X $X.X color XXXX. net or similar the with attributable year and adjusted to compensation net of and adjusted a compared you expense, resulted to

due were PayOnline. bottom-line for from consolidated good with XX, So, XXXX the same increases versus revenues Gross in mobile in both portfolio increase March $X.X to increase March $XX it that these were three $XXX,XXX the fees International months from March non-GAAP driven about and XXXX. year, $X.X the to $X.X North G&A three Transaction almost a $XX from put to decrease size margin months XX, administrative million the business March salaries consolidated March $XXX,XXX XXX,XXX in segment, in primarily to three compared XX, sales $XXX,XXX the as smaller million, XXX,XXX reason America as business compared together as months from out $X.X salaries by ended was XX, the The salaries as decrease, in months of and revenue of in a was in benefits GAAP for was North partially $XXX,XXX increase expensive rent organic and cost in was decreased to the a Transaction decrease months compared that we percentage to reductions for March professional the to XXXX. show in we of million last of our operations $XX,XXX was office and again mobile due million reduction million of XX.X% international net international revenues XXXX segments revenues after as consolidated of last was as it. PayOnline. due primary from space, due XX, was margin revenue three $X.X to months offset to Rent and some and reorganized less the General ended March and ended segment decrease XX, the was of $XX,XXX included due was the we three for expenses XX.X% net and for three offsetting reduction Solutions fees almost moved three expenses to for to again the Solutions decreases was year. XX, March March as XXXX, increase charged XX, gross ended million The decreases and rents. bonus reorganized million fees, ended This business million to or primary were were with G&A a XXXX our decreases. the the were American XXXX mixed compared primarily international drove $X.X ended net professional months a for they ended primarily discretionary period incentives ended our operations. as XXXX, $XX,XXX an million months to as and states for the payments international and compared our operations reason consolidated sales growth ended Professional XX, months again expense $X increases for there the three improvement. XXXX very Net three and compared benefits by

same all ended Other the $X,XXX encourage administrative of three good we also expense general of to you call over was corporate year. XX expense section. XX-Q had franchise $XX,XXX We improved details. the our March now results had we that back for and website sec.gov a the moderator. will in other for To months turn quarter a driving to compared up, on have our U.S. I we some last to period our wrap and on it review that's the or higher as decreases the in tax Basically,

Operator

Thompson Thank you. we from gentlemen, question Instructions]. Ladies Research. comes our begin session. from will now Zacks the investment And first and question-and-answer [Operator Lisa

open. is Your line

Lisa Thompson

Good morning.

Oleg Firer

Good morning, Lisa.

Lisa Thompson

had good a to quarter good to? first attribute as such very expecting from QX Oleg a happen, do quarter QX some didn't seasonality you what that So,

Oleg Firer

which of have now that have. I to we pipeline which little a had impressive us just And as been that going but obviously heavier only anticipate allow not get capital quarter. we And and only also that's from to we weather showed the better. guess you so initiatives the in production Right, for - require going get the bit lot a mentioned sales press results the seasonality,

our initiatives. in marketing active very are We

sales have long They're a We networks great producing and And term. this are result and for that for produce prove us partners. continuing overtime. hope us will only we to

Lisa Thompson

the and America So, both do throughout that international North sequentially year? expect increased you

Oleg Firer

and the continue channels we Yes, all today. With force it's roof. yes, And And grow and than we to that you're consolidated believe quarters focused North have as side, we're partner continually American improved the efforts we grow to And biggest in - the sales and into come. under faster right one successfully to initiatives we respect will sales the driving will that to growing of results internationally well. international, going now. have see U.S. on growing hope

Lisa Thompson

increased Just curious the dollar of less that transactions the far the quarter, number said than you amount. in

and like Is transactions. that? explanation size So, it looks larger you're larger for any having there

Oleg Firer

It's driving. our that really the are target that sales are, partners we

on U.S. the business, big a have looking you're the and If restaurants. focus we at retail

that time different demographic, saw a coming also ticket larger we're average sales So of south focus we're seeing on relationships / time larger necessary shifts to internationally, that the for down grows business where a it's average [ph] a that's larger quarter of to on we past, ticket shift also the focus It's and average And north. sales that more It's focusing or have item. fact coming ticket despite sequestration a And as are that the have. doors. it is is which bigger Our through you not we through much a the quick in those ticket that more in restaurant avenue.

So, for key as I wouldn't it us. see a measure

Lisa Thompson

Aptito whatever Okay. to bringing that been And one, aside? happen or going Is I'm thinking, happened to put that is Russia. on that to

Oleg Firer

have have it we put capital when didn't we to do Well, the so. aside

as their brand. could not happen that the to label will in different soon. to they using will it. players markets, at bring looking in be other and some infrastructure Russia, help relationships you could to that that one to And that version. Now, We're partner And will it them several force include sales key the negotiations looking internationally product market product. or version been sales at bring with direct chunk to And I us with keep few going we're talks bring a international We've several to to in markets, Aptito we're very full Aptito looking white soon. either relatively label of that we're optimistic hope that's some to other close existing the build likely will And only Aptito help views, not be see with most them there be could We're again. to said, we looking we're white other around internationally.

Lisa Thompson

Great.

statement Can So, just facilitator had clarifying you international what that, to describe solution. was that means? your payment a

Oleg Firer

U.S. If language want to Paysack Right. at [ph]. use we the

So, we first the Russia. Paysack in launched which the Russia, is Solutions in available one Solutions of Paysack

that X exclusive have this integrations which we hours bring onboard on the up partnership, believe within With that client place. market in Paysack, bigger and with the from technology we'll client by other that. all merchants be month relationship and to news them we start doors and documents much the faster. XX relatively And Solutions single to through Paysack to all us the us take having to need Paysack We running get proper the upward Historically, X-point a take signed Sputnik to to quick. for it enable to to turn to we licenses Bank. an will finish. XX the And onboard get because the Russia could of introducing the client would enabled able

Lisa Thompson

All you. right, thank

What's Okay, one expenses? you've Jonathan. reducing now, burn lot a your for been of cash

Jonathan New

we that disclosures and are issues, to documented, so get spending control we our expenses for also XA. place incremental get making some in engaged eliminate expenses engaged we are county but all we involved SOCs call come in to $XXX,XXX [ph] everything the we were going we're [ph] have our Well, clear down, that growing internal we're from in, and project phone and on procedures have disclosures now, the and Rosen

the actually they XXX,XXX up now up but and some to short So, we where late the max short term XXX, another also project at also registration is pipe the answer cash statement so we're were to the current cash is fees for burn we burn. in the dues from we're which XXX impacting are SOCs have up filing the XXX,XXX

Oleg Firer

hope and to to But a one-time relatively there net expenses business are get we it is recurring quick. our over that expenses our

Jonathan New

went we see can you and… through so about true, $X for That's cash quarter the million in

Lisa Thompson

again? - That XXX,XXX was what that

Jonathan New

Which one?

Lisa Thompson

Other expense?

Jonathan New

are one-time things we payment of are the write-off, expect we're off. as Other projecting one-time what you're a cash but quarter have expense quarter to then burn what second so, charge, consistent cash drawing the and more cash on pretty in this be yeah mix as is much another to off Oleg then a these throwing going portfolio one-time said, going these to come and expenses was

down about million of spend, paid debt that's million, part X also some We XXX. quarter, this $X.X so

Lisa Thompson

you. Thank great. Okay,

Operator

Thank [Operator over showing you. questions to phone to remarks. for And any line. back our Instructions]. would now Firer turn no from Mr. I I am closing further the like conference

Oleg Firer

Thank any Please questions, hesitate our Again, so I in want follow-up answer contact of you. do to them. participating everyone call today. for here to us thank we're not with to any

Operator

results update Thank may the does that quarter participation and gentlemen, for disconnect. and you Net and your business first you Element's call. XXXX conference now Ladies conclude

Mullen Automotive (MULN) 15 May 182018 Q1 Earnings call transcript