- Earnings call transcript Q3 2022

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Operator

Good afternoon, ladies and gentlemen. Welcome to Phunware's Third Quarter 2022 Investor Conference Call. Currently, all participants are in a listen-only mode.

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

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

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

Alan Knitowski

third much. Phunware’s quarter very to last investor And you My welcome President conference call. Thank XXXX CEO. our as and

Phunware data blockchain with and reminder, year old and intersection big cloud, customers technology nearly worldwide. a is As XX the business-to-business, a mobile, company focused of on business-to-consumer business-to-government,

digital need applications. the provide one side, our services and and everything customers intersect run that Phunware create favorite to is is and for their has mission core connected transformation data and every Phunware mobile, happen products, that venues software a device just including needs applications, to for network cloud-based a on on their and iOS brands, human on a devices Our that ID Google with being touching with succeed Apple business-to-business our Android or On earth to to business-to-government solutions, we infrastructure. they

enterprise transactionally On to tandem, $XX a reported while revenues will XXXX Bitcoin, hardware systems, for QX in and model operational productivity other XXX nearly further mining, of with second services XXX side, these MaaS half the hardware as to available gaming, our year-over-year, and today's revenues contract the we cryptocurrency of at and DX a our computing. PhunCoin at applications aggregate ecosystem their full-year balances Ethereum we business And a sales All the asset growth. by business-to-consumer expect as virtual PhunToken exceed Central more the upcoming participation million completion and we season. more platform also for MaaS scaled public key a personal subsequently record and and including for infrastructure currency engagement, streaming, accelerated now a year-over-year its than PhunWallet, cryptocurrency sequential our SaaS licensing anchored million, introduction, channel by record incentivized adoption expect the The high-performance mobile the even new cryptocurrency is firms, and vision and product or XXXX is sheet customers and opportunities for software, PhunVerse for than XX.X in one XXX% expansion, be we provide fiscal expect facilitated needed called we digital and expansion, under as-a-service, our represent positions XXX% comparable blockchain. In during QX multi-screen valued QX the in-direct of period. cloud sales to our five periods for In as which in roughly continued Ethereum, parallel, for momentum company business new up for efforts Phunware provided mobile growth business rewards digital over worldwide. we with conclusion more gain year second prices. Lyte our the that to to our trading, for revenue operational platform for world, which loyalty holiday continue balance half further across our constituted number is of including

Our CFO, further and the break of down earnings his in Matt section will details broadcast. Aune, these forecast

robust of companies ongoing consistent backdrop to with Of for will operating their a geopolitical office offices throughout a challenges, normal look Nonetheless, cities, safely basis fully that to demonstrating and terms the continue are and In to macro our these remain and opening In in elevated work. of operational regards to some interest transition balance operations. far remaining excessive broader environment, that and note, returning to our back states demand will continue hardware economy. stubbornly countries cryptocurrency. are rates, quite and tension, both technology a on employees in the business-to-business and contractors core customers expect return for hybrid similarly, XXXX customers particular their continue seeing how many and facilities, of we against recessionary parallel, other with current XXXX to and of continuing engaged, headwinds business-to-government to counter inflation, be and active and business-to-consumer our more

high by offerings the previously cloud. As computing, in product our data, across for of increase both solution mobile, all and reiterated cryptocurrency, suggested the big and and here, again performance dramatic we and aspects excited are activity comforted

loyalty margin genesis transition activity our capabilities, we from transaction our coin, high business metaverse this streaming, low secure a blockchain of more margin non-recurring the as core high Last cloud, powerful business token, and shifted computing engines licensing stickier, driven data growth enabled to MaaS performance productivity. a scalable, recurring, MaaS including cryptocurrency SaaS forward, far systems history, gaming, our and all and a of personal in wallet mining, encompasses marketplace, company's and Importantly, was for our our year platform. our for our trading, rolling

wins Workplace Real healthcare few properties, customer verticals. resulted MaaS for for international [Media the accelerated direct expect Live with renewal team, and In sectors Miami-Dade Rail to that compensations and Residential for the Health. contract and like Administration, our MaaS in these, were hit and including in estate conjunction our we announce customers pandemic, our and enterprise Federal corporations recently with These a customers for formally the the County, and our hospitality, Association, expansion In that [ph], with [indiscernible] Smart addition our activities solution continued announced solution we of Parkview to Sequel] door hard the by Highway Federal Estate MaaS front major weeks. our many including real portfolio growing healthcare, in interest next brand including government hospitality Nation, digital Solution

blockchain extremely by Labs, PhunToken. our existing the go and recent global for strategy Global post to market the footprint now Business, Cisco We of accompany channel virtual already to underway our CDW, including partners, Verizon, [Presidio] PhunVerse well Lighting, indirect PhunCoin others. about Nucleus, sales with Carrier, core and Cooper remain [indiscernible] Lutron, also scaling our HID amplifying PrimusTech, Axiom Cox amongst powered including Systems, efforts the Newcomb our world further excited launch Systems, PhunWallet Boyd, [ph], and & world. ecosystem Comport by We the addition expanded of for physical Campaign Contact.io,

of and ecosystem. business global mobile to MaaS aggressively data enabled and of and both customer platform adoption monetize forward our our scale continuing loyalty are the to blockchain look our part this We accelerated MaaS

trading decentralized unit exchange included of important these centralized swap trading activities pending PhunCoin our of exchange expansion PhunToken, QX, commencement the the and During on Securitize.

we above, than sequential year-over-year. growth excited to are XXX% announce stated more extremely As revenue today

half also our Additionally, company roughly year-over-year up its for as record and reaffirming or in million, represent XX.X forward second XXX% for public parallel, expectation for revenue while half are will second guidance comparable announcing we period. XXXX revenues XXXX a new reported of a that

continue we to agreements to and with for Fortune performance county and XXX direct-to-consumer both expand computing size local especially Fortune currency engagements federal. consumers. continue As on crypto core dramatically channel parallel, contracts offerings in consumer XXX will strategies to business our centered and and to to In high range, our always, and state ranging market the our also go across governments customers, from direct and indirect will

three and occurred of more and we coming ahead. over excited the coming that first years what extremely are number by by see We the in even a quarters have quarters developments excited

First, to five-year provide months for SaaS period months new customer to to revenue over contract ultimately future revenue coming recognition over recognition XX we MaaS rolling one revenue existing deferred and backlog, will our totals that bookings, XX wins continue forward. adding the

to a wallet platform interactions data commercially we PhunVerse base MaaS X MaaS data per a day, our including more continued of more [X than Apple comprehensive more all With transactions with for virtual and unique continue worldwide, operating mobile up billion for our blockchain PhunCoin conjunction now, knowledge to at launched petabyte now at by [ph] billion] our in to capable XXX,XXX typically applications X PhunWallet we scale, and scaling and devices one-to-one graph third, ecosystem, the terabytes Google data, our per assets powered both inclusive per on per customer day when growing X month. on and MaaS Second, installed a expanding [fund provides IDs] MaaS detailed of devices PhunToken world. our engagement. than than supporting platform of scalability billion and robust platform, [ph] including And XX of second, Android transactions and digital iOS our oncology

P&L utility their status flowing new net as tokens our due and security, XXX% While margin appear our to security only regulated tokens gross on PhunCoin revenue. balance through sheet PhunToken a continue virtually transactionally as

the As by did XXXX, just and have launched and business period by the at rewards ecosystem PhunToken it MaaS not PhunCoin. the anchored Lyte a we during reminder, loyalty all and hardware in comparable only Phunware

CFO, go into and portfolio PhunWallet have financial now reported, will including of remainder half our and Android including year-over-year as its sequential strong However, business lines and expectations Apple to the are productively, quarter the virtual we Metaverse, time, growth fiscal ahead. Matt, application on the world which performance revenue Matt branded fast PhunVerse. iOS scale of forwarding and our third accompanying Aune please of our go edition continuing mobile our the as XXXX to we this first launched for Google today, year. both At active and deeper have them

Matt Aune

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

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

to GAAP the release, for all press X.X non-GAAP XXX% growth reconciliation quarter website, financial and a provide of third revenues Net represents million, results. which XXXX Our totaled X-K, year-over-year.

XX% revenues million. $X.X represented or revenue platform net Our of

totaling hardware On margin XX.X%, Our was of represented margin by $X.X in XX.X% XX.X%, of XX% year. XX.X%, gross compared or in revenue margin was non-GAAP gross last of a last Phunware compared Gross basis, adjusted last year. QX QX to XX.X% million. was Lyte to to Platform net revenue year. compared XX.X%

in computer a gross as mentioned As world-wide they speculative were higher X%, the business supply much Lyte Lyte hardware GPUs has the certain a strategic inventory previously, turn prices different on We profile today. made which by I've still breakdown to and chip inventory. Phunware shortage of margin CPUs to and expect of purchases business. XXX,XXX a Phunware then at in middle platform this than by was short our margin related margin are includes

However, last in be million $X.X at quarter By amortization compared Total million it $X.X in expense Other year. a current from million, year. operating prior to prices. was year. these market expense and intangibles, will $X.X operating compared up making were stock-based one-time combined million operating last charges, sold and the non-cash $X.X adjusted expense was compensation items same non-cash the million, of up year this to $X.X million $X excluding

expected. mentioned the between COVID, of rebuilding quarter, by of and year-over-year expense operating of Phunware acquisition the was coming structure the expense Lyte last our As increase out I portions

X per from business quarter X.X year. current to last was we million cost up our and the compared quarter We a Net was share, X.X can to last net $X.XX or million, or and year. revenue with the million, run existing same facilities, rate. adjusted keeping at million Backlog totaled X.X million EBITDA share loss the are confident the year. below while Non-GAAP scale our people structure loss million in or end X.X deferred of $X.XX last X.X compared income at

mentioned grow call, into coming the previous I As backlog on we expected back our half our of to year. this

to intention it as have with predictability grow revenues number forward, and future Moving provides our this billings. every we

quarter cash million We Moving XX.X balance in closed and sheet. X.X debt. the with the million in to

an million roughly have We our last we agreement with we over Streeterville an on we mentioned enough cash XX increasing year. just I reached XXX partner, XX can with borrowings As based operating prices. to approximately of currently our Capital, and Ethereum so aggregate value hold call, Bitcoins, on for million our XXX the ensure today's

In under finance yield addition, end hold XX% in continued Holdings, a line the roughly [poor the annually. record million currently growth with XXXX, encouraged of move [ph]. decentralized our economy] which are In toward and as inflation X of we we we top just closing, of DX face

look we we ensure to toward economy. As investments our renewed this Year, a focus have unpredictable prioritize the New success rigorously to in

We are and continuing gross inorganic committed while base, build strong both a overall margins organic through to to revenue opportunities. improving

investors We The investor November meetings our major will are the conferences XX; Annual many institutional call will financial one-on-one and at Conference Randall. Annual The event the tell XXth like profile strengthen and UBS to story attending December on in With December as the ROTH that, and We efforts TMT with both Event remain present to look opportunity markets. and be each meetings X-X. in turn with corporate XXth I'd active further we Discovery over on high-class to next the capital our our forward financial conversations conferences themselves. Investor Benchmark on to one-on-one X; Conference Technology

Randall Crowder

XXXX year, That's Matt. spent Thanks, day. almost their per Last five a app to [indiscernible] waking report. hours of phones on their third according the hours people

adoption more of our the From right features to stakeholders work we real industry, cycle, in money, online. global edge make our hard save by focus more are solutions place in the amazing but not unifying and contextual efforts shorten deliver astounding better this, more self-service the a Internet to and right cutting also tools scalability around standpoint, population we MaaS improving our mobile any brand only a content becoming manage, customers profile. of five enhancing productizing to so their we sales offer get experiences. delight our drive to only leveraging objectives: time. person, money, To achieve engagement, or right out device Objective Phunware, automating the tech-enabled deliver right mobile-first continue any we customers and world to deploy core their our can uses quickly mobile By functionality. not by engage, also disparate money, features use the help we estimate of our mobile but is we and help XX% third-party that margin solution, enhance customers that to the platform a many monetize go data With technology So, world to their just an only. the engagement and at to more of internal at and one, At

content static problems to are offering key have to that and dynamically deliver working the through not and mind. of the we're solutions One better relevant solve in context their engagement customers is ways our with looking and of interoperability third-party Many systems organizations are in on pipeline access designed leverage legacy applications. enhance data based mobile to and inform that for

and unifies is interoperability. leverages to middleware disparate that and solution sets drive Our third-party solutions data

audience can then assigned by populate engine auto working to attributes, segments are on targeted campaigns be based to [indiscernible] context. our we Now, on which

data when ensure decisions. common understanding platform accurate free a integrated a a from a command that Data in recovery that control [indiscernible]. the with to a he leaders multiple not or as make awareness comprehensive situational offer one to hour in drink so least of as to a enterprises during exactly capability is COP users used will platform. to veteran will nurse functions I a patient deliver of easily to gain This an a when The deliver to provides they room at combat lobby appropriate systems the is alert the she example, is operational tactical had advantage. resource who enabling dissimilar proximity from an This is our can it arrives is check-in, is before sources response all coupon of For and the battlefield. support we picture using also spatial informed kind an and any just

interoperability, we capabilities. or around data location enhancements product LBS expand also continued to our services working based to addition and In our are

second, navigation dot capabilities blue Our and facility. provide real-time, solution ADA finding management and across or native positioning, MaaS LBS software any indoor proximity, mobile functionality deliver that sub-one patented campus compliant beacon weight and are first

wholesale prohibited, each but However, exploring down the need also be beacons of not cost cost of like for bring positioning technology so beacon, only the eliminate beacons can agreements begun have the to to many so geomagnetic we newer indoor altogether.

have Our our indirect be training, activating hybrid in close place Objective by as to LBS revenue, partners well as ensuring two, should improve and rate, our well scaling successful. incentive proper as solution as collateral, our margins. the channels structures

and remain our hospitality, this our most sports entertainment. quarter, As healthcare, industries active pipeline in and software of

five While increase. deal to size average new our years, three for deal average proposals to terms continue we've seen are

an pipeline with example, average the closest and deal deployment a represents attention our healthcare Hospitality For true with that Bahamas. our door size more million $X.X an at half is Smart Atlantis we front of of have over $XXX,XXX to now average digital is and our pipeline the SaaS. our Hospitality XX% since live of is deal Solution lot of getting size represents

fact, In announce earnings excited announce we Smart able licensed our to last of major the is Hospitality call expect by alluded details that Hospitality be being to to to month. during this engagement Solution formally and we're brand

additional to product a testament of success Our help custom tirelessly This the resounding efficiently our rollout platform. been of full was code. have more scale properties across implementation us and who teams deployment multiple that to SaaS a requires engineering kind initial solution our no is working

and reduce well-known have we as pricing. collateral to simplifying reference sales interoperability, but our improve positioning we by refine motion our sales XXXX, and we cycle streamlining look ahead selling messaging, customers, to working ROI, As and also showcasing to excited are brands are our these to

on to direct media For our enriched opportunities, we engagements. data focus continue

and require $XX,XXX keep more but work and XX.X% industries size gross in strong mind our and That initial was deal $XXX,XXX integrations margin and growth years in seeing respectively. active retail various retail, of implementation an healthcare, important the year, little. that we're healthcare beverage, government, sports our Blended, most to average in are and entertainment. the of approximately subsequent require travel pipeline with QX, and very represent in but platform it's half food said, first while Our and

three, our The for e-books with over a strategy support onboard helps documentation opportunities. new of ability and consumer blockchain has execute typical partners on deal authenticate in gross and and One partners commercialized also MaaS as Phunware now training learn how to For documentation is greatest presence. digital our an to our case with one the customers registrants. Led to channels. establish webinars to indirect double Yet articles, provide not fraud, like To GitHub new confusion. sessions blockchain respectively. XX% In more and recent quarter. us Phenom margin improve sell-through of with of compliant XX global hard two our team, during live additional have and we it XX a reference, partners, by innovations development brand the existing partners, working support focus Medici's our of Certified is hires, also is engagement. a the than leads We been we to full and Children's holding portal about seen important profile and to life provided begun software true improving deal. mobile comprehensive the better provide and consulting more Hospital to the new and frank, ones. well house a launching software right Phunware also their studies, crypto parallel, area one from economy MaaS over built and To courses the be Phoenix outstanding also is cards training margin the we we better have available Communications only Cox on-demand Program Developer remotely accounting. better entry XXX since partner remains but incentivize the hubris, currently Objective portals sourced held We've via as ecosystem

true entrepreneurs like are because now are will [ph], important the boom] the shareholders or like one accountable when out experiencing their like ashes to market change from corrections the are [dot-com that we're flamed realizes usher that cashed either failure in Phunware, potential. emerges and Blockchain's lasting what Just of out, companies

is intermediary not transact Just Bitcoin like a profit could middle data in who consumer put consumers helping bank, exploitation trustless from enable with a oligarchs pay consumers do A most the willing decentralized brands like will the of data to consumers to in reach and of brands who two in-charge without proof, attention. consent. parties of and are need manner the data to out which Phunware create, efficiently data their economy,

perhaps over not that of years. the been past support the tokens However, even few and landscape does projects the most utility regulatory of many deployed NFT have

taken During exhaustive the guidance the some SEC's date, quarter, actions of an review well as the enforcement we as of recently. have to completed they

still on PhunCoin While because of PhunToken be a forward. efforts token. to security token and commercialization a expect we be majority play product is we a focusing not security. it's utility a will just role, compliant PhunCoin will PhunCoin our the going

we X ahead, mobile well to to well-positioned commercialize as support iOS Oracle is both truly as network persistent the Phunware, which decentralized on bridges an Android. world's Google to first with Apple available the economy required PhunWallet, data consumers through by robust connection that applications data Web Lyte infrastructure Web and a X first Looking are with to

the platform, world. consumers release the are extension interact with real during in MaaS an quarter As to location-based to our on updates, will our working marketing the excited are that of functionality we PhunWallet announce enable we of of inside brands product regular

with margins and for In parallel, enable to and future Phunware file of it committed sales also we understand to ecosystem the to are streamlining working expected, four, Objective to operations taken working more of preparing health are and our disciplined need marketing securitize [indiscernible] also to but efforts. we've for improving purchases launch official by everything compliant we trading. the building. share Lyte finalize to a PhunCoin than we has are being long-term PhunCoin longer issuances. for We will ramping by We the of

the have During seen north expenses. [ph], able Lyte which revenue, below pandemic, but of drove $XX, but CPAs to take we cents] [XXX was advantage CPAs of also

Going responsibly. of forward, begun so we driving and CPA we We at profitability, a $XXX on will testing have our any Starting now believe in approximately drive we can new we can are this at cost. strategy the with not revenue exciting QX, weeks focused which to scale the Black In marketing are campaigns influencer for holiday next Friday, ongoing. over week, has team season. over first and during the few going this are sold $XXX,XXX live new currently integrations broaden our achieve reach

Our Dell need this begun month we'd of a to scale near Austin to consider sales, ramp $XX up we'll influx but to to in we to facility before new almost space. be achieve shipments in headquarters and X,XXX able million more shipments accommodate to has revenue could new believe

will In going as the we Austin us. help improve behind addition, of one-time us ERP our to moving put system new forward margins of costs many

optimizing profitability. there's lines recently. add such us traditional are stronger PCs lot with five, of market about larger to target for on and while to give Obviously, appreciation. awareness, still looking a product focus excitement price in a the institutions investors additional Objective as drive to a market, We volume also Phunware more engaging

reached XXX our lot our year of notice. daily fact, are taking nearly XXx Similar Monday was shares, volume around average. time daily In this a when to on million volume people our last

Phunware, more attend to roadshows We will continue participate share non-deal and and the to broadly. in with Gateway, conferences to Wainwright work story H.C. Capital, closely ROTH

working engage competitive given closing, new thank shareholders Advisors. each single our vision our through to greatest partnerships also Their Phunware’s great to [indiscernible] employees of faith Pacific In inspiring. been with and opportunities are both is I all other in to want personally advantage. with closely have We and Barretto

the of end them residing of XXX the quarter, we have employees California majority and the Texas. with of As amazing in

distractions, of on As about targets will launch allocation in to focus ideal excited XXXX, commercialization identify the year, align focus tools, the foundational PhunCoin, better minimized and of disciplined able core we teamwork to proposition, accelerate core we update what be as more dilution. the with achieve XX internal operational on cash our partners, remainder capabilities, into success. be resources and customers that will our and look resources, to to goals Faster ahead reduced key to be inorganic I'm productized competencies, and marketing sell value of burn, minimize positioning, we

remarks, I'll over things turn now closing For back Alan. to

Alan Knitowski

Randall. Thanks,

throughout scaling of the performance shipped today's to means of call, all Lyte excited As our computing ongoing our the that platform decade Blockchain and extremely consumers ecosystem it to high systems is Phunware. we are MaaS highlighted me plus by building MaaS being by What via mobile, data culmination in and can cryptocurrencies market of wind accelerate our accompanied further continue blockchain our continued our act engagement strong community backs years and across convergence big to and resulted control cloud, by that a in to have massive and growth. of global addressable as

identify, target our as ecosystem additional this expect offerings their incent audiences. we We MaaS enterprise to and to customers complement engage, and core capabilities our supplement offer

with newly While long global community. our executives asset cryptocurrencies, many are a and blockchain both corporations and and digital individuals distinguished Phunware familiar within history and the have

inorganic bridge Please for coming intend the leverage noise and U.S. for to only and weeks reiterate supplement recent continue in direct dollars, at our expect parallel, as we opportunistic to complement mergers all acquisitions. data looking to purchased In again would engagement but to pullback governments with their we and PhunToken, ahead months enable such, as and worldwide and core buy.phuntoken.com. independent macro with and associated of with we regain global look online announcements cryptocurrencies. and XXX growth Ethereum also which trusted their we As them can for here, activities a control not with to through to Bitcoin, corporations blockchain, continue the organic with reward be the market channels and additional PhunCoin, consumers be to indirect Fortune

America. represent that have especially platform international merger targets previously, in ecosystem, including would and focus will more and to operating that South and areas in accretive expect Importantly, Europe, on more deals our and we as distribution more provide we Asia, MaaS are acquisition cryptocurrency markets, activity for done and and our customers, profitably partnerships,

expect all parallel, to more expect strategic activities maintain continue decentralized operating revenue which Ethereum, in at working a to positions our finance cash including asset also additional scale. we order top for generate as Bitcoin, and focus towards we our results. operations XXX% financial corporate and sheet our includes to treasury the possible operations leveraging full-year of our line XXXX, to In Importantly, and strong our for where overall financial balance amplify from company, core model, neutrality growth consistently for on or laser returns a while

Phunware. Finally, today marks with call my earnings final public

company's from As Co-Founder, largest year-end company's Co-Founder, the fan and I operationally President, to strategically. and at the transition and evangelists advisor CEO

know ongoing child. raise has During my and a along that global ups time will inherent calendar as our and trade focus evolution expect heart with Phunware fund since. up public Kane started downs, it you, our privately supported large that maturation my of both I hearts, They Dang me been everyone village questions including then ahead With family, with its NASDAQ way. has these decade operator. the have a and I successfully and and needed nothing honor Phunware like to all along and your year that of call ever truly an takes on nearly in up idea the it a Operator, for a for scale I open and thank advising fund felt in proverbial Luan leadership than Alan you would ago be years, to and take like a privilege me, in tirelessly and behalf. on child assisting been and wherever who to backed then years larger for Phunware all its XX do now we its even great might team all through a all to your externally. board else support that to and growth, of say village spending vision the worldwide Phunware and to by raising And us Luan, it sincere that a over more interest you to internally have and It's please. for the way. conjunction XXXX, whenever go Alan

Operator

from ROTH Aftahi Darren from Capital. coming is question first Your Instructions] [Operator Certainly.

live. Your is line

Austin Vetterick

Hi. for my Thanks for Darren. This questions. Austin taking is on

discuss of indirect you could just the through some profiles margin as can how go or start profile they of and First selling improve the curious those I'm maybe margin if channels? question, improved dynamics into partners

Alan Knitowski

Yes.

and hand commentary for then me from over with and that Matt Randall. Let start additional I'll

more margin you Importantly, on out work in bundle you size so separate numbers, said, that typically gross heads campaign Randall When the parts high services, part. to more business, XX% business. two, the years software even we out a the we because of When The margin. we deployed. side, there obviously, end the of that as the these passes over applications different XX% have we software very lot see when so tied three, of the in the We and average get the of anything which the see tied gross and to gross expand once side, of it budget scale break the to margin. you per doing the time jump initial as get larger that margin, do issue four, being We years is, you $XXX,XXX transaction just help-out application deals, instead into just to business to outer $XXX,XXX, just XX%, real quarter had don't XX%. five have up we

with part Phunware. The Lyte other big by is obviously

the thing business. First was to buy

company consolidate in public. the to thing private was its reporting Second

million up, scale we'd XX from plus said, facility in to Austin. of migrate Fourth was to support Third to up Randall before facility. bigger was as a can need a it and that could more the get Illinois scale

system discounts part Next actually up relationships procurement set an to more and place economies have management with was scale can before. about deploying and separately, both after things a focus in then that of And inventory acquisition supplier whole big with weren't bunch and customer cost. buying we $XXX that on a

more be up, that expect and the that out those really also then into with we margins partners have. And elements like combined as automatically and those that gets and that get the to areas set to allowing to distribution all operating expand the but the then So, pre-embedded that product it see, channels to able relates partnerships through grow, only important revenues faster Carrier their each three core us leverage product go a we we for that selling of point And in about them. of in-direct the to business. actually these where not would to get channels really go the purchase your with

to if see Randall me or want Matt Let for make any that. comments

Randall Crowder

I was thorough. pretty think that

they're and with entrepreneur think base and they the Every point of specific specific I told consumed people need to one to one the by go focused very and sell gets understand can point code add world out laser only thing solutions, bunch that. is I we be time talk to what customer, a they inundated very solutions. would every a function is, build for is,

already channels value touch And us, have working the customer so, that of they in-direct point. with is for

So, order integrator, lot. of When a going to about the in digital with important solution but during these amazing other entire is think solution to itself of a to going mobile smart application, they're future. the is it's one we of you the That firm like solutions. require consulting launched all partnership Norfolk because a about or so Southern it's about [indiscernible] pandemic, important. point Even like that consider got present is talk this holistic venues mobile a transformation systems to we workplace drive these forward, thinking

disparate solutions think And what's lot and are so we a third-party ecosystems of so channels, indirect us, when mean, that's complex competing I taken sets. these for about very long. data with

I've or actual exclusive, firms to kind they've our And with to to look, solution and a remain they Like, hate unbiased, problem, who a got so, you get our their partnering they to got labeling first or these going white want call stuff mobile we're we with be just a embedded, the they like but got of either Cox, first into deliver. we consulting can customer, be strategy, need they call. because somebody Phunware integrating code else's did more

to start load them margin sales kind It's realizing rather some these can collateral. drive And It's gross with when to, lower of begin so, the kind some direct. stuff can get It's than of regs where and all that training. It's they get big these process. in begin we of but as relationships as fuel VARs, we once motions dealing forward. portal. a support sell, carrying margin across we XX% can going, then we're of deals we're and we still, most the our of selling you It's

Austin Vetterick

curious guess get few the Got typically time of just of running, integrated of of the takes have that. a these I indirect all, helpful. in times? does faster a it's you've like and on up integration that from Randall, dynamic at of it new that it. That's – direct and, final deals if portion the it I direct get same mentioned the partnerships, these these I'm come up customer? just length just kind time to leads some to that times and any if indirect that follow-up just come with topic, versus running changes for And kind with as

Randall Crowder

It with what on solution. depends into their code integrating Yes. Carrier, it Like actually is. we're our

it's for start own healthcare, kind lot if With up after know, and just using going is but come you things from of easier a it's example selling of dollar under platform. [ph] things imagine getting you ProCyte] lot set a we're a our their clinician integrating it other building of our with in to zero, can it code going will. Lyte in because where they're labeling of that kind That's to nature. lot into kind experience multibillion you a [Cox of consensus, a get, stuff, a approvals, So, of like technology

really we've fast. just hospitality think of of by been to that's of more platform deal own customer kind by That's this, I brand deal, the maybe maturation of customer. is, to. kind our your question So, But with kind alluding

no out, go. code. that roll to ready That's we that's As

And than, actually like shorter. implementation the cycle so, example, a sales actual Atlanta. rollout then was shorter And the lot for was

So, six you're you of like more talking if two will, kind months, whereas it a was Atlantis, month, months.

talking the biggest competitive if speeds getting And out then we're to healthcare better, cycle, the or mobile those our only bottleneck the advantage, implement. leading up application and XXX Usually that our that get about, a shelf. those a but full us industries. Apple integrations integrations, so for right We approving the truncating huge now, customers it time and also door specific can better you hospitality not sales rich we're got just over are That’s Google but process. we're things. off you're actual But feature it at pulling we've And if talking a any truncating and of week. the takes know, want just also

those getting faster the longer things we're and So, terms contract we're getting faster getting at door. longer out and and

great platform a deployment. like reference customers is our we're some how So, show to really able about SaaS more to transitioning

Austin Vetterick

helpful. Super questions. my Appreciate it. Got you taking

Operator

you. Thank

Woo Ascendiant is next from Your question coming Ed from Capital.

line Your live. is

Ed Woo

I IT want a more question I budgets? wish you say of My in Alan, terms of great and XXXX your in to it What concern, gain been Yes, best outlook luck the with firms? be especially with into you cycles – is there IT was working is, and has to sales macro future.

Alan Knitowski

very at end of in to recession, course. had see don't be going already with a rates really the GDP when words the with the and I I now even huge reversing great time. don't negative massive working far together for overall I I see appreciate too we're get of interest won't going kind much [ph] you kind inflation you away, Yes, say great Thank look meeting magically all [overlaid] inflation. been interest and and question. combine and relief. but constructs change XXXX, I Clearly, in you really between the many might when it's would economy we high is that I been be comments. This that – macro do we're a this guys stagflation rates

making Most It it areas you're they down How I sitting solutions, businesses XX economy, of walking in X very cycles. these the and strategic? all things And times have to lot difficult much do macro of of In shelf yet? customers part sales we've off custom, especially cycle out more the traditional what are of types the for we've things. at through process cycle. concerned do months to are business integrations involved reverse, a taking that because different much solutions into many decision it's to you've getting can to which we're are and different had. and bigger seen with there, more deployments, education do, when down X advantage doesn't to our vertical alluded, necessarily X those back or Randall just market functional so they're XX products when month take deferring the everything in so and of are the that many So, customers. as A more and is seen think certain used office what see one what across of us we month economy has X importantly, to at for

their XXXX a seen they XXXX. shifted accelerate to for seeing in have few the QX we of actually out to cases, XXXX instead their fiscal and few trying budget our their pipeline into budget want before year of planning. that So, a deals where calendar of In focusing XXXX we're people use start QX a on that they finalize year are

companies IT or in that's to cost enhance satisfaction. getting line top or it's to say or revenue reduce across budgets margin So, is going deployed. customer people going to touching mission We're I I seeing invest. expand going general, would just everything is critical it's that Anything think for

this big As talk details hospitality behind we've talking been very we'll names announcing about. about, deployment the get the formal on and we

be of you once that scores, to deployment well. property has payback the us because and ROI, as in multiple what running, on-site. it experiences getting it's expands There's people brands cost, satisfaction those behind care going or if going doing that. our getting biting way having are difficult expands reduces been extremely forward saying, and key more in multiple helps find is not, are certain whether the stuff more properties patient sort that yield have in And per where hey, if it is the customers delightful right day the itself things it's the it or right apples seeing instrumental with doing All economy hospitality budget. really in those with healthcare any takes [indiscernible], it payback it where of and we're revenue, and customer whether per it's already up because work and into First then margin behind whether upfront by

Ed Woo

Great. good Well, guys Thank and answering you all wish luck. you. for again my thanks questions,

Operator

Howard Brothers. Thank is Instructions] you. from question Taglich from [Operator Halpern Your coming next

line live. is Your

Howard Halpern

guys. afternoon Good

Alan Knitowski

doing? Hey you are Howard, how

Howard Halpern

okay. I’m

In out terms the looking of out of of flow what deal the you're are there. terms you outside multiples especially I potential acquisition kind in since what there, seeing and are U.S? landscape mean, seeing you for acquisitions

Alan Knitowski

Yes.

I if [we question. kind say, speak. that's great a we've we going suck is, of in the was And think to like I analogy seen to the what less] U.S. use [ph], joking so to

collapsing that of lots the seeing currencies to world around dollars. are U.S. You're

other So, the year dollars and been strong currencies this have of a have weak. very lot been

the for worse companies, Street are markets, listed As a because New traded even world NASDAQ that dollars. lot if if result start is often it's in Exchange and of Wall currency and Stock caps, not over it's that, small especially Asia, local of if publicly pressure U.S. on finding exchanges all micro their you get is that their caps, under York what difficult America, South companies a you things into Europe, with are

way revenue of those seeing low we’ve might with done a we're side to kind we've to easier world million an with to million And looked are caps and the And what million up that, that all be, coming tuck-in. million found of go that result XX worth EBITDA over the million or in many the find XX screens cap a able XX it. the million, all acquisition be often accretive as seeing So, $XX to range. is, across you're stuff XXX from lot probably of ranges market on $XX of to market And to in revenue. million XXX of

get we recession everybody the based to stay wait then markets. and or what's in you for in is, motivations going to a that actually better of get happening back fit? selling sort likely of in stronger market. worldwide, the what's then try much they have advantage can to for getting lot then markets, it's a have wait So, say, and to to you to especially do able obviously or of, U.S. want from if out of work they on in you do a foreign benefit economy And to of in are What's there's stay? some in recognizing the an growth, are the And and they being not harsh recovery arbitrage the if economy to on realities local multiples of the lot want to there's dollars, is nature than go what that uptick teams U.S. deals, happen the the not right this is see as which call

difficult of of the good I news would So, opportunities, lots of year and done I lots everybody's of I the year, I that the would things pretty accelerate, say half get that next conversation. through planning. holiday time and to it's that there's but is, year of customers do a say first base? this end that find international installed And really We still would expect the we and for in of for between customers, technology. footprint distribution us a about see of platform. don't not we find can buying. for find expanding motivator really need domestic. That's can our us, arbitrage it's for distribution, much matter the we can more It's and there's and all

Howard Halpern

achieve what the do guess, year? end first of And to of for one of more like then, hope of you year, first type last about margin or is half one by half Okay. know. I just what, the That's good the next this next profile to why

Matt Aune

take This I Matt. Yes, is that one. Yes. can

targeting before, XX% in, we've said we're think be I the gross plus that So, kind of business profile. to margin

So, it's into systems the progress great lot a in and things We've done margin move a at and months a last couple also are where getting happen going it's of like feel we new a place job we've to up but said, new running. situation procedures We're much not making we We like getting with facility. bigger light, the at the over facility. overnight.

range, of to going us, we're the to see going of we closer end and if of be the kind up next year. and to the in we're can of XX% get year happy then first half XX% chip continue I we're we away if and year next for half So, to think ending as the we're in first

Howard Halpern

That Okay. up keep Well, good. sounds work guys. good the

Matt Aune

Howard. Thanks,

Alan Knitowski

Howard. Thanks,

Operator

concludes back Phunware conference now CEO, closing ahead. I go our That Please Co-Founder to and hand Q&A for President, session. Alan Thank the Knitowski, of will you. remarks.

Alan Knitowski

other just a We've gotten through value, in stepping we've We forward engagement In to only just really to I wanted And your mostly now the got footprint both domestically to much Obviously, thank start and of who got the of the to interest accelerator. entire say much is, along stakeholders of Thanks. tirelessly Austin. with company. Florida our partners, coasts ride. piece, all you, at around just scale. I for us and call on but and working do We've I down not wanted California has headquarters here Phunware, nice to everybody the what and to we're base today, abroad. for Southern also everybody South that on the appreciate and conclusion want to today, say and with world, this continuing been customers, looking employee is pandemic shareholders here very

into [backend be continue While looking out team I'll myself, in as the needed board with call] and we'll and remaining at scaling I'll transitioning future. formally be touch be to with [ph] forward Phunware the the

on and formalize basis, like tomorrow. shareholders completed always worldwide we value lot we're investors Meeting, leading of we General found will those engagements, retail about myself, annual knowing in Randall, that those the really helps with Matt, how get had conversations. in which Phunware problems. As where It pleasure interested into India to a all some understand value our fund much say we a there's worldwide holdings to and great know we our family do, I to a business. that appreciate talking I where all new net large also more really us including

the the we the proxy part between Asia of materials the places because of that the Other work and relationships shareholders world. countries. how all the in of the Nordic So, nature United weren't they rest materials getting in brokerage of where found States weren't proxy getting

of our reach that to you also, be that information to acquisitions base, following to special all that so routine information like our to up you So, like to we're with, general shareholders meetings. for going happened may on people anything [know-who] from haven't actively of between. things your the receive other to so which shareholder make can like we list, meetings more list know there you of trying is that if with a encourage be U.S. get annual detailed or events And might we'd happen how things tied things that or in some sure participate

in Kane business. scaling Dang Alan the even again, getting earlier, enjoyed chapter us founding of the So, in we earlier, these excited are next it, I'm it company, mentioned conclusion, Luan And more three public. really the about

and focused all that, got annual all service. about. sisters be have a are behalf for So, it dealing the ex-military, I'll military it's what holiday Veterans to going we'll finally of here Veterans call an know with celebrating the importantly and tomorrow of world tomorrow. brothers minus Phunware most Remember and all Day good the amazing us several around and with on enjoy day that great I on who we're meeting really a Day

So, things Much close for shareholders, being for who part family. day. are served, Those have we'll our of those that, out thank you you for the of you. you And appreciated. thank with of who

Operator

gentlemen. and today's ladies you, This Thank concludes event.

have You you for your Thank a participation. may time this disconnect wonderful and day. at

Phunware (PHUN) 11 Nov 222022 Q3 Earnings call transcript