DPSI - Earnings call 3 2023 | DecisionPoint Systems, Inc.

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Operator

Greetings, and welcome to DecisionPoint Systems Third Quarter 2023 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Siegel. Thank you.

begin. may You

Brian Siegel

welcome and DecisionPoint Earnings Systems Good to Call. morning, the

Steve Joining Officer; Smith, and are Melinda Executive Officer. Chief me Financial Wohl, Chief

those Investors have is For at that today's you it release, www.decisionpt.com. not available of section seen the our website on of

I involve everyone except best Before expect uncertainties. like several information, risks would expected for are presentation and to actually will this in writing, could there or assurances events of that as believe, our discussed anticipated and estimates matters this like these anticipate forward-looking take historical results or remind beginning, that that the statements place. are no mean that Words but be that

differ results actual So from our could significantly statements. those future

including non-GAAP EPS other adjusted for extinguishment non-GAAP items. SEC. net company's Also, nonoperating measures call, financial annual costs stock-based or and during in net this the income, EBITDA. comp, and filed measures, and quarterly M&A we on income, These transaction factors contained of nonrecurring, risk our non-GAAP will the with GAAP information company's adjust gains Further reports EPS other financial any non-GAAP is debt, expense and and income discuss the

the turn now to I'll over that, With Steve. call

Steven Smith

the today. solid from this and quarter everyone, you Thank Good towards EBITDA highlights The guidance adjusted and mix you, shift guidance. services it's our Brian. working. morning, and is third today revenue strategy for We joining within thank software results us reported quarter above to and our our

in margin. drove gross services were the of a quarter, and record which revenue Software XX% record

then is then capture you it our growth DecisionPoint over what Melinda provide discuss financial and going market is to and results. this who will our to turn third briefly of systems, of opportunity. expand opportunity, the this our heels our quarter On I'm overview and to to review success, what strategy I is an

retail of SaaS; the to a and means mobility-first several retail and services services; aim solutions at point-of-sale company. XG; encompasses we encompasses trends, cloud work-from-home solutions; mobility, solutions, including in-store and is IoT. AI; be enterprise emerging field that which center which This technology mobility; DecisionPoint managed other and secular enterprise technology and

these billions Now of hundreds of TAM. markets represent

significant markets of identified acquire develop we've ability a to a within subset is and for after. partners have market more right established these quick-serve in have the restaurants, Retail hospitality with can go with industries health therefore, solutions, customers, under C-Store, apparel, grocery, us along and we expertise, expertise expertise, already to logistics, technology and where where become care, industry-specific our or significant subsegments unpenetrated players. several largest presence or So the we

and the to drive customer create inside make our Our to customers their is to fast decisions and better like to network and position the We the experiences that and we outside best our enable edge moments We X walls at of better at matter, value at customers the accurate frontline or employees their clear. moments operational work efficiency that points. more who proposition effectiveness decision say, be and matter. better, to outcomes

strategy. growth X-pillar our to Moving

convenience first distribution and to associated merchants, is operations. including pillar retail, specifically health center hospitality, in verticals, share transportation their warehousing logistics, grocery, stores, The increase and and current our care, mass

these pillar retail specialty verticals Examples big leverage supply food, The experience and is our second include box fast in to logistics. retail, into will adjacencies. chain

new and maintenance our repair and customers, sales The drive professional services, from by and SaaS field include rates. pick increasing growth services attach pillar we is services, to expand managed margin and is software pillar and partners services, geographic services. managed coverage. network increase services, mobile These third can fourth software expansion, The expansion where up

has the consumables historically includes and are grown hardware applications can that hardware to staging preparing razor-razorblade with run orders, sometimes Project the and and of to incremental which from which introduce software business, and lumpiness a a numbers. also mid-single solutions quarter-to-quarter at model year-to-year rate selling in hardware use Our digits. business necessary these

instance, that fulfilled year, through quarters. project second second million, of orders we the year $XX only makes had were For That from the tougher this mostly in fourth million the last in for X comps we year. project X this fulfilled half first order half $XX This had our year.

accretive or Finally, to growth more CAGR XX% strategy M&A target accelerates of our consistently. long-term generate combined thriving

going growth. organic Our M&A make more pillars these complements to supports and aren't just to acquisitions strategy X scale. Note, our we achieve

EBITDA, cultural positive quickly for specific operations we of streamline solutions successful we By nationwide criteria have developed allows synergies and growth have and reduce SG&A offerings our on revenue system. a and integration-ready operations that and to drive record areas, a focusing by track integration revenue compatibility. expanding We the us cost, through companies include strategy target. their These these

into also It Systems example. X growth M&A It but perfect Integration them Macro MIS, debt down starting a or more DecisionPoint, In acquisitions, to or was areas at EBITDA. previous our in targeting we larger little X a targets. we to are and our a $X hit integrating was quickly than X are million the general, criteria. X paying acquisitions of new acquisition and met look are year, our strategic adding

while that transformed especially by reoccurring we've various include ones increase Over significantly moving the generate to past to margins revenue. company aggressively rates X.X increasing the upmarket services, high-margin years, growth

mix support. few services, customization including For margins recurring revenue consistent a over hardware. And for tend software we on services XX% will hardware towards and resell is part revenue of be which drive consulting, to our more next when to higher basis, maintenance of significantly software professional these and staging, and strategy offer margins. we deployment, higher gross installation, services repair The years customer-specified shift technology gross the than the and example, and software

warehouse is facility, supports in and service The presence for which and one this in point-of-sale offerings, solutions filled as integration software key significantly of in become services. strength the verticals. existing This services service technology enabled new gap point XX and transformation. industry, been staging Our geographic next a our They new Strategically, is an business couldn't enterprise our It supermarket, fit. services top us better the an retail our XX,XXX XXX,XXX and mobility it to expanded important Southeast its customers, us that April software foot hospitality square mix a capabilities sets XX% especially time. as X acquisition and was a with a to have stage of over food to brought offerings. combined our last acquisition -- retail We and the MIS become of step and company company. in strengthened of more the than the also and with us was improving

our direct recurring of implementation. services strategy today our revenue the MobileConductor and which offerings part and for such solutions both an portfolio, companies which IT We're and accelerating helps SaaS higher-margin Another as outsource manager to software is industry, packaged custom-developed solutions route ViziTrace, services and our functions. store where includes opportunistically building software RFID delivery managed certain manage

term. quarter, growth significant -- headcount 'XX As tune these in we operating in the sales high-margin incremental million these drive over development go $X products and this mentioned to last of after adding and long investments made areas, in and versus in is mid we expense to to the developing opportunities XXXX

monitoring wired visibility the services services product services the deploying the comprehensive network device include We These provisioning, help their designing, status also that of and managed simplify portfolio mobile a solutions. and improve of landscape. to offer desk managed and of complexity managing

The broad services industry diverse, competitive on is and depending our client's landscape needs. for and customer each

infrastructure. our portal offers managed a customers manage a cycle mobility Our enables and our of for health, their monitor of developing rollouts, services, can customer's mission-critical of DecisionPoint status location. solution location the VISION. customers company our progress of visibility of VISION minimize distributed the on enterprise their also view. new infrastructure, simplify manage regardless enterprise. overall has all one IT IT enables to and spent entire for and a major the monitoring the IT which now actions customers real-time provides the past in management in year to customizable VISION VISION downtime large life to assets everything

sales X added and original $X forward-carrying services. highly beyond development managers respected managed accelerate In sales investment our and quarter, million the further of business fourth initial help to we our software

see and beyond. QX to in expect We contributions in incremental XXXX contributions with significant modest

our Revenue gross XX%, Now software tough we QX the year, mentioned project were QX, $XX this and this mainly services, had X% Despite the any project incremental quarter. million, EBITDA comp the approaching have we with being Also, roughly by especially investments, million I year over X% quarter to orders significant to did while X by large increased $X.X still earlier, not margins record to fulfilled still adjusted grew from mix SG&A acquisition. in year as in of that orders. moving MIS third XX% results. driven an last was a

the We also debt our continue down acquisition-related to during pay quarter.

with we year, addition of our Looking in full to the to well. continue run revenue we business to And expect the rate report are to of the expecting range MIS, perform adjusted $XXX in to and XX% $X.X revenue X% to adjusted growth guidance This between $XXX with million growth. and $X.X of to million EBITDA EBITDA million, implies QX XX% million. XX%

employees every executed I of strategy dedicated on -- we for delivered forward the our their and closing, to thank I to call. look within quarter. fourth each our speaking to contribution within work. In one hard quarter again, want and you and solid a

more detail. Melinda to turn results Now to I financial it over will our in review

Melinda Wohl

to of XXXX saw Steve. million. revenue quarter you, X.X% our Thank quarter $XX.X third to demand were continued compared up as QX operating strong We performance in Details with total follows. third

$XX it quarter During same the quarter, we worked through the last to backlog and from million levels. rebuilt our

the XX.X%. from sales last last as the Moving mix margins. of of to as XX.X% to year. increase to headcount of XX% had services of development, biz period which and revenues increase operating the in This Steve quarterly portfolio, thus, was software shift well due margin record acquisition towards mainly for and GAAP saw We mentioned additions expenses expenses mix year, profit result in higher with shift MIS comparable no our a services led gross gross XX% earlier. was versus corresponding and the prior This profit. a year were a the

we to MIS, cost improved expect to integrate operations. and realize continue we efficiencies in synergies As

income decreased X.X XXX,XXX XX% $X.X by million. X% million to from to year net Weighted outstanding GAAP increased diluted last about and and EPS $X.XX. average shares and

respectively. The EPS million, year versus to numbers income $X.X X.X% last $XXX,XXX non-GAAP and net increase a year. net and Our excluded year. non-GAAP $XX,XXX income EBITDA of and were EPS $X.XX, X% this XX%, Adjusted an about also decrease last and of was $X.X compared diluted million

the and in Our beyond. to these was in offerings by higher-margin in accelerate investments software dev and growth operating impacted biz year this we XXXX our leverage are making sales managed and services

$XX.X to and was the XX, approximately debt cash XX% our the about XXXX. at versus equivalents to is recognized million, totaling Total on to revenue million. $X.X which the million quarter be Turning $X.X the of December end cash balance expected million $X.X months. We next million with of increased quarter Deferred sheet. ended over $X.X by XX

we down debt of quarter, $X.X MIS. During million the paid acquisition related in to

plans down was primarily remaining the We pay to versus will result the operating pay of million for fulfilled payments continue by down as for that cash was possible. loan $XXX,XXX $XX.X our purchases last inventory are Net year. this to year. $X.X provided to continue term activities as million decrease and quarterly were our swiftly The

we can operator, that, move questions. With to

Operator

with from first Taglich Our Instructions] [Operator question Brothers. Halpern Howard comes

Howard Halpern

easy. Congratulations on hasn't been it know I environment. navigating this

to In lead services, you you talk in terms managed since of managed about hired recently mobile some the could opportunity professional a that effort? of just your

Steven Smith

sure. Yes,

every and represent a up management as integration, in a that customers handheld one it mobile the to grade. a your to to to IP the we a field, those and it's if device we mobile whether day of to grade of the these cycle loading communicate provisioning in life the seed. even have sell engage while operations, that printer, it's it address, seed device know consumer could device Each include device, of sell of in applications, So of downloading of Think device, running. enterprise management management planting remotely. an services mobile breaks, X you number software device serial customers where that has versus new need the devices the using software, staging, that last, the And has

device XX than and So that fewer sell a serial could we number you all to when a XX happens provide, there is customer. no services a portfolio of it to

Howard Halpern

Okay.

out that that's that's over next X than your believe you the portfolio. X a a assuming I'm years large So round of now to opportunity to lot. part

Steven Smith

and Yes, These time. just tools to we running need do. They are by computers. their the all frontline are be job Customers up aren't that need the to task used and service. they perform workers

the for devices performing. those us running goodness customers so and to keep And spells investments that to need make and with up

Howard Halpern

those to to and new the they or opportunities, Macro, have of and their go of recognize either -- come way seen you you you Macro new customers pipeline? the are working with acquisition Now them some through

Steven Smith

Yes, yes.

news systems and the of takeaway they the on the very good the point-of-sale mobile services. with -- customers. instances, Macro acquisition bulk address So in the retail their those few activities of and here is needs dealt Very

multiple sales these had know with campaigns customer -- wanted explain CIOs the due Macro, as and for are had our of it on on doing We've Macro And -- senior capabilities by can C-level the meetings, for born do? device wanted that now really purchase now to within entity sales does personnel to campaigns and Macro So do have have and we request active of we met level landscape." combined So diligence extended base -- and this know were to what they we've underway. DecisionPoint active and was their mobile DecisionPoint now going as we customers right "Hey, what their offer. they exactly DecisionPoint

Howard Halpern

you actually of What Or XX-XX team. And sales mix in services? towards try forward? with the your moving is should are And to them be of keep skewed good additional XX-XX, bit the their it projects going to towards terms mentioned for more salespeople process? you it that hiring a hardware Okay. little of of a to the X expectations

Steven Smith

revenue drive company services. Well, is to its a of percentage-wise, macro XX% at in level, the looking to

around that XX% that. the great And our signpost chartered a are services to hit backgrounds These that for naturally, large They technology They in come and was part, an before. mobile This managed our lead speak build extended to they're managed portfolio built in the have services their that in indicator businesses we which with services have individuals they quarter companies familiar and provide. and space. managed great of mark, and mobile a we portfolio with -- done but this and of future. sell expanded and

bullish. think identified way, going in very can I'm knew us bullish. and they very that a they very They we're And will material So were forward. I specifically. help I

Howard Halpern

Okay.

the that to bottom up look I Keep higher work. flowing seeing So business line. forward the margin to through great

Operator

comments. over Instructions] There time. call are this management for further [Operator at like no the to I'd back questions to closing turn

Steven Smith

on is look thank the an forward for in I'd look call. Yes. to getting QX, our for and like with forward the you we earnings in call. everyone strategy of attending back attending to this I all we to front We call. you schedule our believe, middle continued next when execution Thank of update by February,

Operator

This concludes conference. today's

at disconnect may for your we And participation. your you You time. lines thank this

DecisionPoint Systems (DPSIP) 14 Nov 232023 Q3 Earnings call transcript