NETE - Earnings call transcript Q4 2018

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Net Element 2018 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 today's 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 estimates April XXXX, no as Any market performance include and projections future assumes conditions projections by Management these as Company's today represented Company the update as X, future obligation change. in of to the Relations and during information provided certain available the recording at financial the page. is The Investor call www.netelement.com on like the Oleg turn time, At call would this CEO. Firer, I to over to Oleg, please go ahead.

Oleg Firer

steps Fast took XX payment and in several CIO Retail growing service America everyone. to of companies today solutions posture results. continued the Good we're executed our XXXX of we the our to as top bold everyone and increase discuss fastest technology our complex North Deloitte's way XXXX and was by strengthened the on to organic a again morning, joining financial XXX value-added annual payment year focusing of on initiatives, operational as XXXX for and call regarded Technology along margins, Thanks one company retail growth by Outlook XXXX competitive Magazine.

by Transaction business. XXXX due of elimination branded for of consolidation which XXXX. segment growth over of States is for in the to growth billion in million. Solutions $XXX prior $XX.X million, of a were revenues XX% XX% billion, XXXX of primarily to United the elimination of to increase and for to Solutions revenues due business. accounted while American International XX% The revenues our Transaction XXXX. total experienced increased compared net $X.X Our $X.X to decreased to revenues Geographically, $X.X content to processing XX% transactions net processed North volume an compared accounted an XX%. during of experienced decline branded international compared to Total while a International XX%, an billion, to year. segment America North $XXX XXXX, content in X% Total increase XXXX for increased in decrease to XXXX, compared million, increase XX% increase of XXXX, was XX% due

North American on Our side. segment development the Transaction and trends positive shown acquisition has some business

million projected Net over four Halftime subsidiary, have Fichman, Najarian recurring needs Jonathan Transactions flow first over to self-regulatory continue on Unified add acquired companies Net marketplace. of the based among $X advances gross Element's startup and XXXX, and provide technological of to and to sales Board Electronics executive During is joined the in necessary the to the cash profit Money; evolve market and Fast certification intend partners, Directors. Payments new our changing of The to the we application payments from from fintech next the the Report of to Association. changing Element’s industry continues needs. achieve CNBC, meet the portfolios our We a rapidly ever Jon customer with to technology evolve years.

across merchant integration of the a point. During stack, future management launched multiple the and Netevia XXXX, through platform, we as developed connecting single ready channels platform, have core payments internally Company's payments technology simplified

intelligent Company ecosystem smart predictable a as available will our reporting. of we gateway built onboarding entering integrated model with blockchain-powered technology-centered differentiate to Netevia service the we We believe execution XXXX. platform XXXX has resilient During payment offerings value-added our Light and invoicing clients. payment for in solutions POS have our merchant payment payments business to Successful created continue strategy platform, payment around application solutions which value-added our and interactive cryptocurrency XXXX, acceptance management centralized terminals, multi-channel application, fully continue provide include, enhanced Company modules with to and

Now, to our more please in Jeffrey results Officer, Chief review to Net detail. Jeff, I'd Financial financial Element's introduce like proceed. Ginsberg,

Jeffrey Ginsberg

year million mobile and ended ended XX, approximately Transaction generating XXXX. XXXX. the net segment with reason morning organic emphasis XXXX Oleg, sec.gov for in added revenues relationships. everyone. million are good year $XX.X a for per compared $X.X $X.X revenue $XX compared call The for expense XX, approximately approximately that, ended bank million million decrease amortization North We as net for We America Total revenues open XX, a the non-cash year Transaction sponsoring share year the $X.XX With approximately as XX.X% and you, debt Total approximately compared was to the XXXX, selling, review XX, year decrease Gross $X.X to costs recurring on or for million primary net expenses December of The or of continued approximately of approximately million. branded $X.X December of expenses XXXX. North due expense. ready of selling Cost compensation, for ended decreases XX, the value-added loss to XXXX The an driven XXXX. increase American net as flow transactions Thank XX, expense of in increase year merchants. of year primarily in year year operating commissions, utilizing was growth American approximately non-cash loss good primarily approximately you expenses the loss debt compensation and XX, consist the million interchange for the direct of million bad a for acceptance an stockholders compared and with formal ended to today. $X.X gross for as $X.X the XXXX we per processing the compared December attributable in Net as a transaction XX, million December our administrative to of December million of services represents the for Solutions the approximately December loss December encourage Solutions December and result to decrease December $X.XX in offerings partially further service and North bad a ended or $XX.X the $XXX,XXX; by in margin the This which ended cash expenses our to merchants the now were approximately primarily and ended expense Operator, acquisition $XX.X is reported net share revenue of income, increase of percentage for increase revenues questions. resulted depreciation fees. year self-designated due of the to ended were processing. portfolio a and for increase $X.X ended the combined revenues approximately year of were comments XX, XX, for cost fees, in XXXX. for December to July attributable XXXX $XX.X approximately consisted the XX.X% million of XXXX, processing, expenses operating the we in common our general had other margin of in of revenues XX%, compensation non-cash of and The for $X.X compared approximately of primarily million by year approximately primary operator of ended value XX, is stockholders new was net and administrative we from ended was revenues to the December further million, offset website or Net and or XXXX. reason operating fees revenue million, and million December XXXX an with details. associated $XX.X expenses non-processing conclude general, of content, our BIN to related as for revenues Cost includes costs of to for in to XX, increase of revenue on and XXXX. $X.X a approximately year XX-K in XXXX by

Operator

Thank question Instructions] of from Zacks the Investment Thompson Research. is [Operator you. line with Our first Lisa

open. line is Your now

Lisa Thompson

the there got that think out you said different needing current I'm facilities, you'll to that fund in XX-K you sale any next or need like Net anything read new excited you're whole the to attitude. a to year? about be this we’ve going how about I see don't you're that equity but cash using than Element year, it more that little talk bit of the can for a going with operating $X.X looks your in different million you

Oleg Firer

through to our we in Sure. as about XX-K, We for we have disclosed us do, facilities. credit drawdown $XX.X million available our

which business year we done. last going we're mentioned on we focus to the stabilizing have As

for Now, our anticipate breakeven to do we that. to We profitability. and reach existing use anticipate to on focus profitability equity want we not credit sustainable reaching facilities raising

Lisa Thompson

Excellent, exciting QX. a down I that'll seen a like you ever wasn't and quarter and - to see why Christmas the sequentially, had this was forward. a very be big time it Can is customer I've noticed down think also the that little I base QX going to your first like be from quarter? you bit talk about

Oleg Firer

in Right, business quarter. so the the North grown fourth has American

growth actually If in in you quarter-over-quarter. shown $X we revenue was segment, growth look growth at results, over the quarter that our fourth have million

large it to clients. was was of contributed see down them re-processing as However, the the were actually we on legacy because next International They have going the our Well, the quarter, But quarter even clients lost results International heavily few it clients the several we because struggled business we and and business. re-boarded the earlier since you it have processing, we has lost and maybe side with that for be to have anticipate then last replaced that revenue. struggled, have clients in will they're us. are in we down

Lisa Thompson

it's that back. know coming to good That's

Oleg Firer

just it's back, time. Turning take going to

time they you new full a client, their get As onboard we to when volume. it takes until know,

it's that coming we back. anticipate So,

Lisa Thompson

What are those you doing clients for specifically? new

Oleg Firer

clients saying not based the that Russian some provide in integrated from are International They're business their and joining cases that just cross-border to require clients. originated the levels side websites, clients omni-channel cross-border where multi-currency multi-channel we a on predominantly as solutions They're processing that clients with and and the we’re payments clients even are solutions well. Russia, fully not clients, them Well, were solutions. that the they're in require on though

Lisa Thompson

came income charges you bit the there where those did numbers in PayOnline one-time a describe Jeff, with and and a there number you were gains. statement Can little from? what of

Jeffrey Ginsberg

Yes, accounts off. books, being a we and that operating write-offs one-time noticed and wrote majority receivables losses and them accounts of were dealing these were the wrote attributable we they determined to we that were of stock non-operating legacy, accounts payables. was longer long PayOnline the ago time they've -- We the since the specifically price probably that acquisition. other the with guarantee contract, that been long our payables reviewed of some of no so That and charge we payables, And the gains majority and on and past on off. collectible to a was terms it's

Lisa Thompson

this you is gain $XXX,XXX? here, what that And transfer in had the

Jeffrey Ginsberg

was I I'm to combination described just That of sure. you, a what not

Lisa Thompson

you've Okay. something All that right, reversed? so it's

Jeffrey Ginsberg

Yes.

Lisa Thompson

Okay.

going not that's forward. So

Jeffrey Ginsberg

they're Yeah, They are non-recurring. not --. going to

Lisa Thompson

else should there technology your far goals anything plans about offerings? you product announcements more we So, any the are Are what have year? know for as or there is as

Oleg Firer

my platform core of launching Netevia, stack. technology opening is the on Company's this we in the are launched statement, which said I’ve focused we called As that

margins those already. that relates described that In We the for it merchants enhance our We in key prospective better ultimately merchant the modules more our modules with more and detail, and as introduce annual more merchants. have launched result will and products platform stickiness platform we've several to base existing our report. to plan to service value-added higher new offerings in to modules

stick know, on merchants traditional up fewer fully the play pure to solutions, – we integrated you merchants payments when play that sign have As that tend merchants solutions. [indiscernible]

going adding a to and the So We're and year create differentiator focus be marketplace around launched, more going to going we services think continue value start drive going more selling that added to it, we services home. to our products and this that's key is it we're it. that to platform

Operator

with Our next from question Duffy comes [Darrin Investment]. Duffy

line now open. Your is

Unidentified Analyst

or plan frame buyout that, is Hey, time to challenges then have in with to breakeven any to offers? second kind you the you I kind question you able associated achieve ask game speak received And the on that? you what to of the maybe and wanted you if be that place are thinking have guys if could and acquisition of

Oleg Firer

come obviously of during a We the of have business, normal course there's strategic lot to play. opportunities

to been in respect the tangible, there bring worth that offers is terms that or that shareholders people received or people though anything have been but onboarding and Directors. to even Bank to of come, to not strategic have We Board our institutions. buyout time, has nothing talk with critical Numbers profitability, dedicated still financial we At about this math, business which started last is of on at own several breakeven BIN's, year Identification have reaching our

We in of give have combination the a those introduced future. profitability our things technology to scalability platform. and us Ultimately, greater breakeven reach near our ability very will

in have possible. we our financial to the pushing, to all there get and stated we're as soon XX,-K working cylinders means get there on As as we're

Operator

showing I'd call to back Management like I'm questions the no over for time. closing turn further this at to remarks.

Oleg Firer

with morning. not any everyone the that call to Please have contact great us And day. for questions being on have. this to you Thank you do hesitate a

Operator

conference Thank annual results the for conclude does you and update call. business that gentlemen, and XXXX Ladies participation. your financial

now You may disconnect.

Mullen Automotive (MULN) 2 Apr 192018 Q4 Earnings call transcript