PHUN - Earnings call transcript Q3 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Phunware’s Third Quarter 2020 Investor Conference Call. Currently, all participants are in a listen-only mode.

Joining me today are Alan Knitowski, President, Chief Executive Officer and Co-Founder; Randall Crowder, Chief Operating Officer; and Matt Aune, Chief Financial Officer. The format today will include prepared remarks by Alan, Randall and Matt, followed by question-and-answer session.

As a reminder, today’s discussion will include forward-looking statements. based – impact statements current and of of and include potential to views uncertainties statements that SEC today, or assumptions filings. Risk effects COVID-XX are of disclosed forward-looking in including to Factors referring such the as are the These subject various section risks our on pandemic, reflect Actual them. be placed results may on differ materially, and undue reliance should not

and is non-GAAP set to we I Alan earnings relations investors.phunware.com will website in also Knitowski. investor turn but on like additional non-GAAP be financial include encourage access measures. matters not Phunware. may to available Reconciliation investors.phunware.com. filings, to to the current visit At this collateral press at press Additionally, you financial section would things earnings on time, release, today Sir, information forth our is only Phunware's our over release, GAAP of discussing the proceed. I further of which SEC our investor please to the presentation,

Alan Knitowski

Today, on customers, pleased at our will seeing that our financial been I and employees, Phunware. and and high Well, on quarterly touch shareholders we we've our product, to of activities and solutions, progress the with level themes were across data services. partners many operational update

brands pioneer like a integrated the provides Our for model and who those remain strategy. MaaS and the platform Aune business Matt provide give platform most Phunware MaaS, mobile Crowder, respective COO, and deeper does, quick Multiscreen-as-a-Service, But Randall fully respected including products, February the and is audiences enterprise smartphones, story. solutions, world's a to transition iOS, MaaS summary our these by necessary signage. first, to for new the of first application of applications helps and capabilities data services televisions mobile will cloud tablets, additional that I'd their infrastructure flagship our ago XXXX, dive needed to nearly at through what across our data application the software, enterprise in overview Android Apple smart and Phunware CFO, overall wearables, scale. globally of our manage enabling its web digital support fields. to color and portfolios devices, and within and to XX mobile their years on mobile level Phunware monetize and and mobile Google platform, from brands including the portfolios Founded build, with

through devices four and on for at from Systems, Our real-time leveraging standardize their and Much efforts government one-to-one requirements engaging and their both for Marketing challenges policy mobile building constituents engagement. government the ideal while fail Salesforce at MaaS enabling and Two, consumers customer government interaction that differentiators. Three, between has locating succeed on bodies anywhere events a data Software, of public to Productivity standardizes well. would users Cloud with visual notable to brands and offerings sets Ventures, fraud, and or million Maxima real-time. as in of mobile, ecosystems make blockchain organization are can't curating for impairments, compliance. PLDT, This raised and Fraser key while a and maintain Firsthand both those the optimize with enhance interactions on process over media in Phunware ERP. technology Oracle includes NetSuite also financing based of bound big and and live onshore including globally everything both to brand Office McCombs on like, disparate scale, profitable both including needs indoors blockchain Khazanah, We brands and or as of investors, they the our to auditable history that behaviors Fund, Microsoft for their and all reduce needs. and and WWE, geo-fence with successfully outdoors, worldwide. is enforcement, respective intersection $XXX Partners, private CRM, and wheelchair mobile. debt, enterprises initiatives cloud, application and drive Fortune Cisco mobile including Fortune remote equity their spend, XXXX for competitive Throughout Samsung, Four, providing need air, transparency, and and and our and offshore, their to Wavemaker actionable, data and big an record both Technology unique they and those in public One, organizations our consumers Ventures, optimization company, XXXX data that mobile workflow catering organizations, afford Value the mobile associated brand anytime hearing robust globally, ground the all focus government immutable,

flexible, a have multiple digital that base solutions cost-effective, scale at comprehensive proven a offer with and transformation and globally. We because we diverse government seamless, for mobile customer enterprise and across verticals production products are platform

While media sports we supported historically the entertainment, focus, and to expect half of first COVID-XX during with core estate, our year. aviation, focus vertical much real in QX have remain retail, next healthcare, hospitality specific we and in a the verticals more

which that faculty Some campus, of agencies patients workforces, and bodies managing campus level, remote with and city interacting our clinicians, respectively. country's federal healthcare, at and state, verticals are and corporate government translate students and smart are to of the the local, and these government and citizens education, enterprise, environments, smart needs

will pandemic even for in specific hardest industries continuing all mass by types we remain market including hit potentially the While and the we engagements customer see extended to across our also heightened the economic expect an within that XXXX. well into contracts of renewals, each timeframe vertical, expect and pressures

pandemic, business platform the worldwide. continue I'd share independent the for our model we transformation that initiatives become like to on, of ongoing mobile Moving to and premier digital executing operational strategy

in in either or deferred remained revenue quarter operational customers a though latest remote $X.X of for million nearly our platform, with our even and lockdown work-from-home Our corporate closed backlog status. majority a Multiscreen-as-a-Service

customers expect COVID-XX or While the at full available. we do be operating until capacity and to non-government partners vaccine widely becomes therapeutic not our

current services is in and We month. believe the account of licensing platform non-recurring revenues. transformation enterprise quarter, on. continue net each platform. cloud and we are balance the intend results infrastructure in throughout dramatic pending specifically, and tied one-time from bookings application that underlying to and subscriptions net to platform revenue half released revenue increase which software represent the to to use XXXX, amount core contract We tripled of of for first of average $XXX,XXX activity revenues week capitalize the see pent-up continuing during Anecdotally, and and and to of of there revenue to specific be a in to XX% the annual our highlighted of value More to year-over-year MaaS our transformation use the seen business an tied transactions multi-year a our will to demand parallel. our recurring than for that the XX the have customer mobile the continues contract we MaaS our company, period has customer while significant passing length for These average more with doubled underlying set interest months, compositions to

business engagement is execute and not includes, the triage telehealth opportunities enforcement backlog data, and work remote expertise capacity to continuing Fortune XXXX social contracts back intersects corporate against new four, to is customer with and for three, existing pursuing and big initiatives and and initiatives aggressively and needs is government for and and cloud, our cities and remote customers. level. and optimization state, but our management; limited of to directly remote organizations local, This mobile, the campuses; telemedicine federal patient for and at policy one, distance team partnerships optimization tracking smart healthcare where two, our Our educational back-to-school campuses; government work school remote for asset

the the infrastructure our of ahead, our customers partners our deployment sheet, product short-term stability focus and strengthening we the to products including market on offerings continuity, Randall for self-sufficiency, and tell worldwide. constant and you that operational, operational underlying of more our It's order specific MaaS and communities Looking data clear achievement these remains with have address solutions established about balance fit. in the shortly. will centered MaaS of a and strong technological needs COVID-XX

now mobile, two our including transaction and pleased we recent on Award deployment enterprise shopper engagement WebEx; front Health; on verticals customers monetization. and GAIN MaaS for Health a from Platform things over Vision smart operations the And of cloud variety XXXX Top a platform Baptist detail. pediatric and customer Innovation; find deployment; enterprise who a for Cloud door Cisco and As side; for big new Magazine. and Center; have Greater a Baltimore including education to myriad the of will corporate a Application with deployment; campus industries to contracts Meraki Mobile from mobile for I for application the continue With smart Florida; Expertise Meraki awards Enterprise received Developer business Crowder, our digital finally, we're the Award a recurring Parkview from that in Cisco leading extremely MaaS developer’s Cisco will our Corporate from turn Mobile-Driven developer’s Southern; Randall hospital; a Chief Norfolk mall residential Officer, on side; property South success partnerships, Best Randall? Operating elaborate to Medical deployment, said,

Randall Crowder

that digital recent better despite license Thanks transformation. mobile customers Alan. drive international ensure platform operations to enterprise easily Multiscreen-as-a-Service, experience We've our been optimize XXXX concerns budget the Corporation digital by cloud processes COVID-XX triggered expected our operational Report to Data on can their trillion, in working A spending digital found global hard and for existing to transformation for efficiencies, by true businesses to customers. technologies increase transform to pandemic, services improve the business $X.X XX.X% increase and seek is and as

employee visitors. a in the delight also application, deployment Although, of pandemic; to enables sell, to also for to for deployments Smart Framework be that pandemic available Residential that to healthcare, on a only a work our deploy MaaS we guests on several showcased safer mobile as manage the Front platform, reduce utilization, MaaS Smart cities, support Loyalty by and for Mobile customers develop for announced return to at revenue experience; Campus not Smart COVID-XX deployments content, the to but Modular engage Solution more experience to a optimized Workplace with was with concierge; return time. the government digital MaaS. Solution the us tech that higher put, we luxury enhance allows the on Smart are include and effectively for MaaS and enabled operating better to Smart industry healthcare able challenges and portfolio school; Enhanced users and box, drive not official accelerate developed smart City drive their mobile an the a the to Trump Solution Simply deploy initiative; and a for and MaaS Application to solutions right are the have Phunware better and enhancements person, also developed but patient new the partners product communities a such to living Solutions responses education, right we officials to quickly as and in specifically Mobile and and XXXX out right channel corporations Solutions place, education to to Door only Hospitality MaaS screen, To providers; get the reimagine that offerings the MaaS right engage experience, retain for Solution MaaS right ensure application expenses agnostic address of brought the Digital our

advantage. information we in MaaS actionable. launched more grow curate continue customers are have However, from communicate by experiences, platforms Twilio increasingly to one-to-one world recent artificial than to more retailers The data and inform Customer of media basis effectively a achieve virtual underscores to software, a as a is billion $X.X that solve global the XX% growth healthcare learning at Segment their big as annual leverage rate have to value the at XX.X to expected on this Platform. help billion competitive real market, to Data brands data-enriched CDP truly machine of these our businesses critical on to providers market acquisition intelligence challenge, in sell to these XXXX compound order and scale. to To by world The make relying you immense to

monitor together our of Android, the application by tech launch and not health track pre-screening, iOS but on and businesses help personal and protocols. only Spaces gather people and to safely also During quarter, information, announced mobile we health safety enabling more also the to Healthy

later groups SDK, technology advantage We monitor will occupancy. Location Healthy room but SDK. ability to: to the COVID-XX arrival group this take the of distancing Healthy proactive presented readiness year. messaging, provided, application set individuals and or by associated; and which individual solution not our can and anyone including monitoring and have among groups customers return based takes providing or enhance portfolio to While, and room determining and plan to Webex release announce determine we seamlessly standalone Services health upon in activities Software to to and MaaS risk SDK mobile limited Based subject of individuals enterprise integrated health, a presence social important at potential access and thrilled include, habits more to be an a Spaces is tracking integrated further movements, of Kit, if notifications; the comprehensive an Capabilities attributes with of work through reactive our to Development feature questions gather risks our reviewing tracing pre-screening profiles; Spaces room To user enforcing location; and guidelines addition information and our MaaS managing and the pandemic, reminders that with address Cisco's and will protocols, will on challenges and health through advantage were facility to approved and integration presence, of

Cisco addition, customers Cisco on catalog Cisco deploy Smart our to of and The technology listings demo applications both In Meraki for developed Meraki that top new partners Workplace Smart partners Campus Meraki Solution solutions. exclusive marketplace two showcases view, allowing an we platform, and of marketplace to the the and commercial is announced Solution.

These our a their more four, true partnership learn execute local the supporting also network, how in working the brands Phunware and distribution of strategy, and bid MaaS, order this provide Xx Innovation, education to a been order with partner are a partnership, software company partners support within and in announced to for of into remotely we responsible excited to of the of GitHub, government in to In channel presidential were about types contracts we it at and essential a During quarter, state the are By With company. and In companies new on recently successfully helps to increase seeing XXXX sectors. have to one last MaaS Texas. portal partnerships we effectively a to sales total our in ability GAIN and our the most campaign, sell year expand advocacy program initiating via Partnerships. government documentation effort, seek and heavy our were indirect thrilled expensive recruit and larger building support Channel faster network; that managing revenues strategy, channel three, our integrators, partnering continue selling hire global presence. opportunities. systems our as studies, has nearly to vendors, Phenom on live also robust e-books, carriers. new Farah focus offer Phunware comprise is channels, channels portals customers, to through Certified establish and spent articles, as Farah lead this demand hardware Developer primary courses comprehensive their enterprise better last and we and we developers, we four and full with on webinars, to we available month of Program one, To decades, and Khan, training case reseller their global training mobile two provide software two, and without and additional incurring The and Documentation direct and scale Salesforce. digital sessions parallel, VP respectively.

to wins contract revenues will month for the XX period. be However, course any new the XX over of a underlying month recognized contract

of as last press and in the result, at video X.X metrics, a sales, backlog important As deferred which both success to closed point interviews, continue quarter million. our to will we and recent our indicators revenue releases,

reduction basis, a drive we first streamline further made basis. by operations, decisions quarter-over-quarter spend strategic to to on quarter a our OpEx XX% a during on help X% and the internally, GAAP of the Looking non-GAAP

improvement Our gross adjusted during terms over as to EBITDA. to and breakeven year, representing basis we margin last XX%, nearly our cash quarter, continue also both the of improved efforts operating the a X,XXX reach in

our over Tech have about to bit set a across retention average four employees tenure talk we in At to according average time, years, by XX%, offices of with this an benchmark four exceeding like PACER. I'd the Next, XX workforce. currently over

We have steps while XXX% our operational continuity maintained health. our and efficiency effectiveness, taking long-term maximize to prudent ensure and financial

have seen in function of as revenue a a we we this increase employee. employee measure year, XX% fact, productivity In which per

the Phunware quarter, thrilled several unfurlough we During the employees. were to to opportunity have

Additionally, with sales and we remotely enterprise looking have help experience unfurlough plans more increase future offices. government physical offering. seasoned demand to have on work other we're seeing our but foreseeable hires. receive executives in begin development in a Florida, demand place and the channel to activity, and we not also making to MaaS only bring officials renewed new Phunware guidance actively in until customer to for employees, this us to meet where exciting the from California software, We're for Texas, expect Despite definitive we we

easily workplace now new our but Matt solution, to companies, more auditable our our functionality. to will discuss I are able We over powered smart than our responsible by our Officer, will the and of in new Matt? most detail. physical through way who Financial more Aune, Chief things in use spaces healthy a to quarter work third safe, facilities do turn remote expect reopen financials

Matt Aune

Thanks, financial for for of initiatives. all to key joining today performance, thank progress I'd and on quarter you a good afternoon us Randall, XXXX like and our review strategic everyone. our third

measures noted. clarity, unless be I'll specifically discussing For financial otherwise GAAP

totaled which was release, to and non-GAAP the Our provide results. revenue a website quarter subscriptions X-K, for third GAAP services revenues about $X.X million. of XXXX platform $X.X press financial and Net reconciliation million,

million XX.X% progress strategy a we and that particular month ongoing pandemic. of was are we've event, loss our with derived continues point are be far term continuing XX.X% with to expense Margin and customers, next the just out revenues $X.X longer end was same XX% We to $X.X On year, last up to services was expense software higher of months, period the excluding That despite Gross our compared subscription to first though, on same in of to this the net was compared focus With a margin, XXXX, XX% previous to these basis, continued Non-GAAP year. the this from the to that's follow year. adjusted compared this without from in in MaaS forward the made same from gross starting margin period the period or year-over-year pad we down payment improvement adjusted that XX.X%, last not the see gives non-GAAP same pleased was $X.X the XX our non-GAAP in next intangibles quarter, in and customers. quarter-over-quarter, thus stock-based calculations. year. the million legacy $X.X Our one-time, margin XX.X%, December. at compensation pleased away $X.X over predictable we application filed, and $X.X validates $XXX,XXX are to $X.X be respect as point from in amortization but prior or for launching excluded moving deals year. only one-time more settlement the million million and I'd the made charges, a and million took also X,XXX to overhang of million operating made to is transactions, in year, higher in be the the in adjusted adjusted year-over-year million, and and revenues the settlement to that over non-GAAP to I'm settlement a view legal and like in will million, a expense lower previously software last data on decisions Total on over future. basis compared last for pleased Phunware, EBITDA year, in basis. And focus operating profitable year-over-year. made down the By year XXXX. improvement a QX margin the from it for conscious same period and $X.X non-cash Payments million, with we earlier period platform uncertainty. $X.X

inclusive quarter to per continued or focus was in operating loss $X.XX previously year. to $X.XX per mentioned. strategic behaviors its this I'd share, $X.X expenses million compared net to has and profitable million $X.XX to of per for legal share is margins extraordinary loss effects. manage last everyone a show that or on same Net period settlements Our $X.X for share increase the from expense loss like remind the

Ending to year. the cash million and quarter the $X.X sheet. cash million in for amount quarter was the balance for quarter, highest in operations of the of a for operations $X.X This in quarter. used with cash cash the the lowest Moving used this represents balance

expenses. as we managed COVID-XX, success balance the our to lowering uncertainties ourselves we Looking strengthening future for continue to ahead, and operational sheet, by the of ongoing in position

more software Alan We broadly. out above operational will as for for to and demand to and are software by soon bookings partner us. year, and pursue against close existing to opportunities customer via return Randall. to runway organic extend backlog raising we encouraged with options positioned continue with of and continues additional and operations and equity a flexibility fourth our quarter, the debt let’s and contracts intend aggressively from to new execute capital QX. available that as into outlined will our stability start believe the business Leading our business well fund bookings to continue maximum to We proceeds We're QX sales all QX outpace will opportunistically and

our to that, deals continue over cash application breakeven like back to reduce the we basis. to As gross drive an I'd EBITDA help margin to toward burn experiences, and and call we operational and enhance expansion mobile to Alan. our intend move customers revenues adjusted With win turn on net

Alan Knitowski

remarks. closing long-term forward Matt. like I share to touch our going Thanks mid on I'd briefly before and goals my

to our accelerated or self that extremely and year-over-year QX. upwardly post judicious our operating These results positive might late they focusing neutrality Administration, ideal are we legislation and and for sense, developments excess maintain demonstrated To government will our and blended cash revenues have more including sequentially in In revised an model sufficiency, $X.X ahead, future, Small from on Economic organically. net Business previous in our September. accelerate interest remain previously growth, XX% to both in beat XX% intend and parallel guidance QX, both XX% announced revenues long-term, operational wherever results balance equity, as cash today's XX% reinvesting while end we Act while Looking make more for and alternatives achieving over financial for Paycheck any gross at XX% pandemic, the our only net improvements, from post our organically, more loan. growth overall. United debt, scenario already low than and coronavirus margins achieve aid Protection with provide government-specific debt our Security debt, than financial during operating structured Program for as from actually post-election, may is the Notably, profit and gross we extremely expanding while foreseeable topline rate additional sheet to QX, directly announced relief, our million simultaneously and States more by that margins growth, than QX such

scale to we dilution to existing program to a or equity statement. addition $X.X ATMs shelf efficiency us continue forward. announced our and maintain continue million in for to as will at-the-market flexibility business the popular In to and operate raising ATM debt tool provided have we rolling remained refinancing, minimize offering our structured SX will registration against previously due capital, our existing our allow

has the our we to been to increase everything and driving offer the to exposure institutional to awareness committed previously, story. case of As remain has Phunware

with in financial we remain while Canaccord to ongoing In conjunction further initiatives, as Securities. XXXX, Canaccord as on we recently past record, Relations hope materially We abroad. Investor research our our this efforts. annual bank research institutionally-oriented Taglich to engaged Brothers coverage Ascendiant conferences, addition investment these we coverage expansion and growth see of stock and via Relations conference, to expands throughout participation to our with Genuity mid-market domestically to Genuity’s discussions, focus event gateway the transitioned actively for XXth investment also online accelerate IR Investor have both as In continue also maintaining in such an our activity

and previously, done my shelter-in-place expressing As and I tirelessly despite work-from-home despite and they both supported sincere the parts of the evolving their times, I both have thank tied they special families. our ways. mandates personal conclude partners, but I very of and only who we needs still with also their reopening routines advocates, material, also also today us lives these turbulent want the customers our in valued have their our and are most full and employees biggest some professional an to again have but extremely not ongoing ongoing to a to so unexpected, remarks and only by assets Furthermore, us trust thank eventual upheaval COVID-XX and Not to done for in to you jointly economy. as our prepare country, and want

both and and all to their on express their operationally private and for want to to continue our public sincere behalf. do daily we as and investors that execute gratitude our continued Importantly, indebtedness assistance support and financially I we

professionals business environment. pandemic contributing and life to persevere With to humbly post thank collectively are for now world we Finally, the can we for I open humanity's unify that up preparing and a for citizens healthcare want and leaders, our Operator? of to the efforts government together, that, in questions. line the

Operator

Thank you.

with will And our from We questions Austin Moldow Please question Canaccord. first ahead. comes analysts. go our [Operator from take now Instructions]

Austin Moldow

have taking Thanks out. Hi. start very I questions a much questions. of my to couple picture big for

available. products first the mass on mobile already alternative one is So,

app do and mobile beat to and of you're are for of that these brands time. customers. and way you, they Given mobile products win their apps it’s using instead world using not to what you kind launch a and we that out approaching? are If or or What some after audiences? been live they in they're manage ones Phunware using What are what those who

Alan Knitowski

Alan. I'll that. be This answer Sure. is to happy

build Google Apple the actually and need on large unique engage, holistic really that groups the components IT or So, whole to have What up who for alternatives, one, one is system not all matter many isn't research do, think to good mobile, of to Salesforce own businesses no use and either platform just wide you to how we ground Android. CRM believe going create that and there we and across capability manage offering following. license addresses about teams to either communities own is that analogy, build or from things our a components need going build forward. their mass they comprehensively that are of the especially be look the of going others our companies what for Salesforce, to or would to invest Either a that that say, monetize We're move other Using the iOS things the internally things what's good they're two development and like from we that it choose to we're that like internal audiences what versus find another at, opt that internally systems. we internal variety just

much think margin, more really a one is believe, up solution. from up between we'll a that $XXX we, internally investment. to that people area Salesforce all ground build So, we and between million over We're always always like want about this we gross see have time, debt and equity, comprehensive conversation have what tradeoff the about to

of The systems license Oracle stitch scale to like other companies false that of come others. breed. want content from large want or to belief that together, management could or this is Adobe groups best a They standalone

to app where web, of and from port environment. try the mobile they or may analytics, think to small indoor all bunch private you sorts about of want Phunware with notifications you're a mobile the based But they Airship, use Flurry you And you GPS see pieces companies. see or rest and through folks grab are alerts, blue-dot companies platforms mobile stack analytics to or web that different to the of thing solution would when with see You you things big platforms And on of talking see solutions. that the what Same longitude of all or just you any the that. or others. when we the use from is, and engagement, from Mixpanel and outdoors point in the see And are in do automation, standardize of about of messaging, like incumbents marketing a the sort again, go Wi-Fi But lot to services, across then trying the those really, proximity platform. private beacons latitude. advertising others supplement whether to location

you or kits, ingredients like or those applications, your would inclination them figure products, own in form have Twilio, someone interfaces, like think groups build to out call who we how application take or provide development different If software of and that come that together. things in like time, provides we you say, don't much you of what, functionality that these to money the environments, alternatively, stitch all to I the see, programming

one has log in experience everything play the traveler for that one commercially one to fan But nobody digital and vertical only procurement say, patient The fundamentally, for was the and location, is those like that the relationship for shelf, it's transformation. So found license like healthcare, we'd by real nicely in, the difference off architecture together. to provide available one we experience sports, experience solutions, we things meant might aviation and for we that.

Austin Moldow

Got it. That really is helpful.

So it great product. sounds it's like a

deals? you the you force? terms does So, new sign it and that get what sales of currently customers new it timing Can to cycle and sales the and on also now describe are licensing the take to in where

Alan Knitowski

you typically the part, what the seen on month second leave there I'll composition take first on of and I'll we've cycles. we and should is part the with gains to Sure, direct basis sales see productivity But to think Salesforce, six three the marketing activities of the a and our Randall.

we've unique we've seen XXXX. size and contract government to triple thing average There's different-by-different in for if XXXX, things, instance, the highlighted, here average process seen we and you're always our bureaucracy verticals, in there's contract link more a double little and As time. touching

six might any adding parallel groups, enterprise, we our bundle be very colleges, that way could that where as are call, cycle. familiar. facilities. types And providers, hospitals usually prioritize campuses. they their like see in to in they different But may indirect equipment, XX networking And sales And could be Fortune say three software, the today's be Those making I or selling then average be other be those that government most you'd and we've to channels we also month a channels see are to that historically. can through of we non-government the deployments timeline. been So we can number to organizations have software XXXX network that, that like that would six stadiums, enabled deals to equipment purchase mobile direct four bundle venues highlighted things be to want with that of software hardware months would companies on more in month across channels, then different

access video voice, want component our And unique Then We and voice, and leave. to after solutions are top to layer they or advantage legacy they to systems number products and and they're bundles like to those feature mobile taking of value-add on see they they and service integrate to they carriers video again, can use facilities, groups might customer, want other while but enterprise transformation we where and data before software then or take that sets that enable have. or providers, APIs cases might SDKs add license like software mobile and digital any of to data also they offerings. on becomes reach site

So the again, that's groups. consulting one software, would carrier and integrator, hardware, last be system

XX% environment, migrate to of what to solutions digital customers big a they're So with accelerate represent consulting, folks some transformation a mobile of traffic. helping internet variety did the and to and together digital which they stitch the where represents of very those successfully of strategy, products mobile internet all lot on four or application they're those arms, services or needs to that big doing the the transformation

Let to direct it selling. me the thoughts him composition the over address Randall versus and indirect turn Salesforce let of to

Randall Crowder

Alan. Thanks, Yeah.

hit the you think I nail head. on the

us, think hands do seen, positioned. incur as get For how want you platform. we're that's a because Salesforce When it’s the the market. efficient last not this like technology, building transformational go How large to a this out is we an to way of direct really you since don't possible, transformational many to of expense into as

imagine, door up-sell a we Just stakes. And that for world. is company, accretive are front groups that an we And everything living channels, someone now It's mobile can to realizes we're healthcare. of be web much helped it's whether first the it's the when a mobile-only. sell-through a to back what deploying it's mobile, is XXXX to and mobile everyone our we first building, for quickly strategy different whether table in like from started becoming everyone There's transition lot solution pretty we easy going you outfitting someone cross-sell, a have. smart digital in

And we have a so small really sales team.

first we We on marketing. And call -- that VP Farah our of first earlier. mentioned took have Channel just full-time we people our for made and eight hire Partnerships, our the we sales

true passive so presence. be about her job everybody really like. how channel to needs out really to that think BXB applications, they team efficiently mobile a channels are But This to the to any they looks contextually when comprehensive it. going and do just we take of other and solution And do experiences. you that device we're real really it’s about selling-through as information isn't need and serving user these idea be really now how screen again, it's And a stitch establish build right what informing give up a world platform. what It's really mobile together how top engagement really mind, you marketing of or and some puts content. then going about It's the

lot releases go train excited starting sell, time. kind hit support. really press the to we going to what we’re an XXXX. on that's We're accelerator company on of and establish going to they Those folks, that's great eye want with those kind take we're out partner and partnerships. we partnerships. as We're build, our to then really a And of in of and the So and them, announced we to keep company that

Austin Moldow

And here more it. top-line. is sounds resumption last be growth my is, so Got like there the will one here it and for

timing for are that? So you on just profitability of can EBITDA you what touch thinking currently

Alan Knitowski

Yes.

in the breakdown where in but investor part what go of We then excited me QX we're showed sequentially has we're what ahead revenue real and in presentation, in our Matt QX, QX, of Let address did and pandemic earnings it, QX only kind I'll the we of it XX% let hit of also actually not distributed rest during than bottomed as It in recognition. that quarter-over-quarter. we liked. and XXXX. transcript. part showed extremely terms obviously of doing of include look A more XXXX And we what grew

And model to how achieve marketing in neutrality gross to me drive plus QX, Matt parallel see XX%. all chart is QX, accelerating provided more that as up real achieve getting relative our continually; now then up on being low set what cash XX% goal the really, bit to what of ugly that a inorganic expansion we and from focus sorted the hand I'll start we expected lockdowns. of where breakeven. plus opening the that, Matt, from operating And for are we that And margin. back you and of able EBITDA then get on year-over-year organic finally, invest to growth Again, expansion into last neutrality XX% a a up do the you and sequential see continued position in adjusted move over we important. final from let have that growth. way And and was above secondarily, really really the forward the that things up to to point and that QX. you. in sales business We announcement In be would acceleration let cash was to the chime would margins to of able telegraph second quarter our in COVID QX the gross that be some said with we to of started actually that and timing

Matt Aune

for Thanks, Alan. thanks Austin, Yes. the question. Hey

we're So, things We're trending help going revenue, as of on. low terms a Alan in top obviously direction. mentioned, the gross QX lot whole fund at will point, operation. out right it line of margins above which in coming of We the there's QX saw obviously

What bookings. on to year an first When we're on next to going basis. we at in kind on obviously, next next look we at EBIT we look So next is adjusted now we impact of booking beginning year. is where impact of of year, -- are adjusted book at heavy the profitability have terms going year an when EBITDA

half signing of QX work targeting process for we're more get in next more into and we kind QX, really the deals and year of out we're got more and to going it's first a still seeing and getting now the year. through, confidence there, of with traction we've us as we're and coming But So us. more for

of going as mentioned, Alan profitable year. line, want kind to top target then margin. to of to not terms in growth cash, EBITDA And And in a by whether to go as we get next the in gross So kind there EBITDA there we'll to we're and us the continue year. the or for grow try makes of from in more growth if We're adjusted just put business we going sense know or what company. we're growth of, cash target you going faster to to see want adjusted operate and middle

Austin Moldow

They're questions. helpful. all really Thanks Great. for my answering

Operator

go with Please Taglich Brothers. Howard next we'll Halpern to ahead. go And

Howard Halpern

in quarter Congratulations are your revenue is included regards question this to – My on a have MaaS and navigating rough base? environment. pandemic you how what customers on first do with the recurring number many

Alan Knitowski

we've in So to that gainer. – haven't that obviously, so we try percent have diversified out way, I to a in actually every broken wildly looked we a of be Howe, drive we piece terms in at single-digit think customer

other that our have interfaces, products, transformation the that tools, but platform our to who about We it's -- equal between tend the kind half people need say, -- the in their application for the this of utilities base, to split have of you are actually that kids' sort I for market. buy know not of then in commuted the We software customers mobile, programming And core developing those build we applications. see functionality provide that what, know our ingredients own expertise. I customer

our extend vertical then, solutions. oriented And license they there. from So

or can XX easily trigger it probably that where we want can customer the to look action that. that -- Matt specific top to we methodology to what an see highlight take as do actually relates we So to extent customers we to reporting that materiality any disclosure, as concentrations of

Howard Halpern

Okay.

Matt Aune

more the I getting group. concentrations a concentration, it'll in as diversified there. obviously in we're the so be Yeah. definitely significant queue, mean No

Howard Halpern

Okay.

within terms of, from guess, And Now those, to like of the initial in guest like talk you customer the in talk process type about, and expanded is process Baptist go expanding the Health. the Parkview about I quarter contracts you about of want you what Could then, customer contracts? bases?

Matt Aune

where these to someone monetize super and doing who's of be help kind they horizontal about That's want nature, ingredients engage, our a more there's how like deals, in to that are it's well. question. we as I'd components to Yeah, think business manage And happy. be a typically think it or helpful said, activities. do I do as grows you When great they And and yourselfers. I scales

want So million yourselfers, portfolios. see you'll start $X do $XXX,XXX to to focus to when buckets. that actually tend The high-end Typically we of with an it engagement. groups one these on two application see about

As I years. to basically contract to has expanded said, our doubled its average almost two -- length

tripled. sizes contract the of some While,

like add-ons On let top like that, we and have do, versus five three focus or discount XX% on year and start the year, vertical to we a the to our to at that some they years one, within on five on cloud, the they'll that three some XXX,XXX Advil, typically, a much At do budget, us services, years. work retail you're usually point have we'll like of But licenses. typically of it's licenses. discount, five a engagements, software typically license a to customized we looking more at XXX,XXX licensing, years solutions, at to initial groups from options our the jar we do and typically do and building, they if XX% MaaS Salesforce, of a treat in these but range others are have like $X length, those a if big the that. want standard the may then you're think integrations or mobile our at when starting have doing So higher to to as million of one that software platform $XXX,XXX if let's And vertical license one horizontal.

engagements, those XXX,XXX about you're to when from average XXX,XXX. for million. deal bigger deployments, XXX,XXX talking the So X.X the vertical around starts start typically then typically size And to

deploy. they Now renewing you those location a they're more need services, are more, Baptist adding Those like medical correctly more footage they Health on expanding facilities, a adding cases, square where said, Florida. when like people in or have then based to Parkview, South or are typically

add-ons. So the of or let's might could license typically are one-offs, And revenue licenses incrementally. XX,XXX doing it's that of a digits, to and good really six but per where we have -- see the we'll first, and about smaller that facilities the kind they're support on be some retention maintenance add-ons, might expanding per And be important in software typically licenses churn. call you month, low customer and then and get see when year on those sub we then it net expansion, tend million X.XX average an

Howard Halpern

open country? communities customer some development does Residential biggest these your I that in is for the across Is the other to that far is co-living customer Residential up Solution. Solutions? even one be are And that, HOA for that for of you quarter existing that noticed the going your announced really Smart Okay. And that so -- that

Matt Aune

Yes, question. great

in, definitely call, would we've activity what lot more I So, estate seen real a domain. the

it's the or, to your a property trust, that's management real investment estate sometimes So homeowners association. point, sometimes

one the trying of resident’s in that largest the pandemic. Florida experience all improve of one life expand we the was country, to facility, stay-at-home with especially the a South They're dramatically who for tied quality these to mentioned the during So, continue onsite. to orders

luxury So name work from the shopping, would deals that a dissimilar maintenance, when end of where mobile buy amenities they you purchase, we've or throughout, includes announced it resident property through mixed deployments where not or it the resident laundry a buying real of with for the facilities, that full use leasing these estate all options schedule includes and luxury a you're or experience casino services all an portfolio, mall associated end smart that to the do the from you we and or like surrounding people And Bahamas experiences, happen now, or typically to imagine destinations. them. And the these trouble so into have activities up talking that tickets is, are get after branded especially, help includes it. of restaurants, facility that reside. lease might or facilities, with events activate some resorts it's services, the that mobile application parking That when that's concierge condominium in what valet we high you they environment, it facility that kind of you are smart These apartment, doing gets Wynn, resort group are others. in be of even or with workout additional either Atlantis, do that just kind that's pools fully typically or buried featured, retail when and about the

So sorts to and can an we entry facilities. who's if integrations expect COVID, access exit that platform also like where we've have SALTO, like just and in and that entry you're access, getting that's as when relationships especially And general and have of things of able fantastic and accelerate. seen and you going is groups what's more exits, they how actually about with to to before these when, some contact uniquely use mobile have audit responses controls, to dealing get health the especially our might they be can security tracing with

Howard Halpern

for Okay. a them And sales earlier talked pipeline else products this type And the in Could let you or And announced next you jump be the area? one in. I'll is last someone question. the might know about months year. in agencies, bit and so I to talk that little warmer cycle how you three for the government coming governmental about fruition

Alan Knitowski

through then we've over actually of solutions I'm Smart and highlight, to to he in instrumental City as was working going done. in Yes. going Randall, hand the it that to some hit I'm one

pipeline kind announced, the tied first we environments, tends the So actually solution, that in as built and Houston, on in create county specifically, advantage even we all use, we our is cities environments, where government done guests to cities, solutions. because to where through of at trouble then environments Texas, the city United about Randall, things. a across software not people what but solutions a levels to for applies what level, these in want not States. use opportunity encourage actually bureaus, and of wanted then elected but its we city residents are did the ticket, all officials had centers, real or the deploy of through a those is anywhere and councils public and to Smart could the And the our it in really convention airports, some full partnerships the saw trusted infrastructure downtown we've also packaged Android. so the constituents the transit relevant to mayors, at to and number or all throughout of of the to facilitate suburbs. capabilities state both, one real can cities educational only allows how that corporate also that of take is and And similar deploying community, layer other do Pasadena, could application the visitors, City be sorts what you that they're purposely to other of of time download that has different just portfolio corporate we things software in deployments And a the of else, environment, iOS highlight evolved larger engagement have

Randall Crowder

of Yes. Hope, it's right. many, the first

ability for to challenging and our its talk working have that that constitute So, on I to us, think, about pipeline always things it. we’re no exciting would

alike. you leaves. contracts, possible. disclose. We to can you sometimes certain put Sometimes, much investors so institutional both educating that as confidentiality We try we tea But have involved, and things can and possible, to transparent as press as we're be read imagine as try as retail to government cannot -- there's you with out that there's just the

So Innovation. with partnership you really think exciting about GAIN like our

you in you who to of the past, have those Texas, in haven't call DIR with contract. worked have For governments the a on

to and so, by education. take kind advantage of, we And with GAIN, get local really DIR in, the state, and contract opportunities their partnering flood bid on so someone of like space government exciting

referred opportunities hard and to our expand And Smart so, channels solution. through you think direct opportunities that's going where kind on them City working that on We're partnership. and with of we're of with kind working

of So This large facilities, do Like, like place of pipeline, and specifics what a our in really everybody's access Workplace right that things while Smart what's how security is we've talking great for a stay with notifications we for reason. control paramount. I engage where then a Solutions we provide, you're government can't you if And said, communities. are kind about thinking that good lot seeing paramount, think or of is paramount, give We're on is Alan kind obviously, traction this good really interest. the something now. established vertical

able top can to management. and facility. shooter so, of mind What safety, a of mobile you we building, space really critical everyone situation? dynamically responders. And is while in are interesting for have deliver you if the active That's in that notify route users ingress an threat that that for a to being any of government de-conflicting is routes things One government that first do app for do

educating in process deliver really we'll lot what able now and what government about that's XXXX. important a bullish to we clients can we're to do under and of why about our And so be right of them

Howard Halpern

great Well, Okay. guys. and thanks up work, the keep

Matt Aune

you. Thank

Alan Knitowski

Thanks, Howard.

Randall Crowder

Thanks, Howard.

Operator

ahead. Woo go to Please next, Ed Ascendiant with we'll Capital. move And

Ed Woo

But trying mentioned to know back I that monthly seems When in slowly answered. been my of I you asked on weekly, get congratulations to Yes, you and Most business already normality? you lot have steadily. we'll with working and on do normal. questions levels, people quarter. like terms basis, see the now? also more of about think that revenue returning a a have question is get there's remotely of to or They're back much confident some back a to that of your level still also, And are and almost do hesitant feeling whatnot? the you normal still to do feel customers it

Matt Aune

as what getting always so bag much we question. super that scale are. Yes, I'll found closer the that, great real our about we candid most and it's States, lot get taken now. the across mixed obviously And a a in country. to XXXX We're to like, testing And be open that's is, United of it's in for COVID probably

going we we anywhere it dropped announced Pfizer anytime that this great Ironically, earlier So gone today, do potential the got the away the COVID see a of soon. and XX% that's during lethality cases vaccine, more It's to has see had effectiveness. great XX% rate by isn't hasn't window. testing more obviously, But see. to clearly about was

different. the that I cautiously we XXXX, very see relative the think lockdown, But in state distancing, we're that three and Obviously, social the workforce requirements rules to be as we've about predominantly I'm help anything the seeing Phunware. mass changing in even and unique don't all may states. COVID partners a optimistic and in QX So, even here process. or down, of got our shut that more customers couldn't And rules

Southern disease. from versus Florida here wildly different have rules California Southern a Texas versus in

XXXX see to on going think I be I it think vaccine, available process. gets the year even Minimally, take And at high a we first has and without activity that's year, have start even vaccine, needed the comfort. before minimal going to if if of still whether you the more board, COVID the the to more is events, next of it's a Pfizer audiences of have safety, in even if other testing where efficacy, are and be half So components do half next the ramped. we scale come going others restrictions. available sports, I seeing lot vaccine, to be a a year the to that it's scale everybody and of for on live that and dosage that second if capacity expect security a big things for

I So, by the we that am where of optimistic the this testing end year. is achieved

to by back see year. before take Phunware. then much you're will vaccines it's at normal. people to I think, middle the I like of think all of we'll say going really scale here XXXX, going next And I as

We have office. people to back not accelerated by any means, bringing the

the about all business easily separating deal management normal with domain, operations Our remote care more in open work surgeries with business. us health non-COVID sorting what for customers, for and activity, they including through be and how the still to and and activity core groups are our They're telehealth obviously other elective remote other home COVID healthcare allows address after while to Area. facilities, to of Bay Whether capacity from at Clearly opened. patients, get that yet. that in on deem the open Oakland the you're others before They got Permanente are customers we've San you Big in and talking someone you that site market California, X, you’re is from we're to the while are like the in leave. or not in the downtown Kaiser is not Francisco

up not. New a Northeast, which So York. like have in opened, are We’ve deals, as we’re fully the case, of markets are we had in our balance recently, markets we win in more places which developments

NYU have customer a Langone in We as the domain. healthcare

and have on We examples. expansions do have Only their person recently, in to permitted intra-state Sinai, at facilities site. been travel as more two we Mount

wildly And accelerating. so, we don't see anything

think we very medically But months try people is to when I have the won't activity highlight if more don't a like say, that. have will resurgence? during that may we I I are anything know concerned we winter answer. I speak that happening.

seeing before. we never We’re things would thought

We’re in meeting met groups that we've never person.

met unprecedented contracting We’re entire people would something and or to the met site a and and low-seven-digit through way the solutions almost still face-to-face. sales going anyone through person. deal initial in never never That doing a have all never we've you’re on deploying think contracts, mid-six-digit processes you've we've and wining been deal,

middle, more, people them in communicate is Webex hybrid So to pulling the universities back we going to need are enterprise are to all fully able only colleges in actually in deliberate over conferences. And that their we it’s the a trying of or and more but They full to everything the and get date, they site. taking do advantage But employees phone, little have lot think remote. colleges class. And where open. I of to video in back to, get absolutely probably there universities, Zoom on else need we're other about to. sorts unless like Everyone I third campuses and everyone to to of a be get most else have and back they do is much be on and think are person facilities more

to here And we're the towards a able that to before next some optimistic deferred sign those. helps be did COVID budget least seeing that as timing formally to like hopefully at we're lot the and come quarter of open and or for back And that So have start what first that of of we second we markets waiting going get that, delayed, answer this pending seeing. right gangbusters we'll in the we’re end quarter, tail year. been deals has to that of its the hit, just

Ed Woo

That was my Great. question. very for luck. and you answering helpful. Thank you Thank good

Operator

this the session. At does that company’s time, question-and-answer conclude

question may for Phunware’s conference call. at team Investor XXXX was for joining all PHUN@gatewayir.com. Relations today earnings third Phunware’s your quarter If us not Thank taken, you you contact

now may disconnect. You

Phunware (PHUN) 9 Nov 202020 Q3 Earnings call transcript