PHUN - Earnings call transcript Q4 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to Phunware's Fourth Quarter and Full Year 2023 Investor conference Call. [Operator Instructions] Joining me today are Mike Snavely, Chief Executive Officer; and Troy Reisner, Chief Financial Officer. The format today will include prepared remarks by Mike and Troy, followed by a question-and-answer session.

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

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

Mike Snavely

call. release, our fellow to Board time welcome or you, over joined. Last the we've predictable, so a since growth shortly. When those took quarter was nearly We're profitable here company there the role, I cleanup the we run spoke Thank and CEO. with investor sustainable to days couple toward me our role the glad shareholders after done. and of of weeks of In for an you actions you aspect eye fair and our be into fourth Troy the with bit details delivering will I through needed of earnings was of step that a asked this XXXX shareholders. full that year every reshaped XX to

engineering ancillary solved with built Most bright understood debt we strategic plan a our focus. speak software both the we Most to of core was are and turn for it light After are we XXXX team. customer and all in talk will talk to Our on well and Troy today. We lack trajectory cash, Phunware. achieving the as and his we foundation, in were future. I in number and importantly, our burdened go-forward future talented on about balance From are product much performance. places; are and return our business, with you base, the to that spots in business. about over this of business ROI a satisfied I'll a to these highly we and remarks, are litigation too our sheet bullish solutions obligations; have referenceable strengthened experienced on a exposure burning vision various clear new the problems for our customers of Phunware's financial

Troy Reisner

Mike, against performance and our a Mike, Thanks, today key afternoon, for progress for thank of good joining and reduction add, review our cost initiatives. to financial XXXX year I'd us everyone. like you full

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

financial provide Our press of GAAP release, X-K and to all non-GAAP results. reconciliation website a

our I have addition, insight we run early expense our XXXX. In in how will sheet rate strengthened balance operating provide into and

prior to of million inclusive to Lyte the million Lyte the $XX.X as is approximately of year compared approximately shut we million, decline in margin decision reminder, year. and accepted with sale the December. Net from in this accordance As year the financial The operations million benefiting year. Gross generally to was with made Technologies; from presented prior our shutdown a The completed substantially operation continuing November, the PhunToken. Operating year. sale business hardware full from a continuing in was in totaled for down accounting due million year of XX.X% in the as of approximately $X.X prior million year principles, PhunToken were discontinued compared $X.X goodwill of revenues $XX.X the impairment revenue is again in $X.X to compared of operations $XX.X statements. of expenses from margin XX.X% XXXX continuing Lyte the operations, in last approximately to last

the reflects we've to compared expenses goodwill in Excluding XXXX $XX.X year, were operating $XX.X from million XXXX operations which cost for made our to reshape process structure. impairment, significant million late continuing the last

average that as previous better note year to compared For stock-based By average in in expense year impact adjusted million which of reductions, $X expense excluding to operating for monthly an cost operations related of $X.X months approximately million of last picture million were our noncash charges, $XX we noncash to XXXX year. these of compared approximately the totaled a from compared prior X of operating million expense of approximately impairment the $XX.X million compensation was continuing year. was $X.X approximately QX XXXX. Other operations continuing XXXX $XX.X and items million the goodwill, approximately this this to the for operating

was Our of for the costs continuing Lyte. from loss year, $X.X $XX.X loss year million EBITDA Non-GAAP this the $XX.X which was prior in operations million operations from used all XX:X to million year, a and executed which and compared adjusted improvement. In X.X to were revenues approximately XXXX discontinued per reflects earnings been a last stock approximately million $XX.X year approximately last has share information versus February, XX.X% million reverse year. Shares X under we GAAP, late calculate this recast. which million share all encompasses split,

continuing was this or $XX.X to or per loss million from million compared net $XX.XX $XX.X operations last share year So share $XX.XX year. per

deferred backlog and end Our totaled quarter of approximately the at $X.X the revenue million.

million of the $X.X the $X.X prior of at sheet. down was million $X.X and balance in We debt quarter Moving which end cash the million to closed in fourth debt, year. the from the with

with want historical highlight recent So the to I numbers covered, accomplishments. other

by monthly restructuring we First, burn cash operations. prudently reduced

initial retain key resulted and reduced which to some talent expense. customers examples. Compensation are Here compensation-related support costs. existing in growth prospects, We

was total end of today. Rent So salaries, our taxes expense. head benefits and payroll, at At by we're XX%. XX approximately count currently XX, and the XXXX,

of of X space negotiated XXXX, During X leases. the our existing termination we office

monthly $XX,XXX net of a sublease to month. XXXX approximate expense, lease expect income We

lease. We of continue pursue termination early or to the sublease our Austin

for beginning Beyond XX% than the XXXX. costs, other compensation to QX rate expenses decreased and have run facilities compared our of more

we our for in able foreseeable stabilize in with future. position fund others small Secondly, a our improvement sheet. to followed January, strong were balance December the in runway financial raise by our Beginning equity and

context, lease $X approximately approximately For a now which years. just we have million debt, liabilities consisting stack pending million cash in of of fully March, of current on eliminated, settled in X capital somatic NIM, clean prior common we obligations And significant $XX million paid. of was have stock. lawsuit, We've nearly $X a early accrued future

financial We be will on XXth share major themselves. opportunities the markets. remain event we present active next corporate as the We is ROTH minded institutional the with Annual both efforts many story meetings long-term conferences capital strengthen other forward further to with at to XX and our our XX. the financial conferences March meetings and conference look one-on-one The our investors financial will conversations attending in and through profile in investor Conference and

for that, I his call of strategy. with back Mike? to discussion over the turn So Mike our forward-looking want to

Mike Snavely

Troy. Thanks,

Now solid our that for a future shareholders. work we to from, foundation here's have the build we how to plan

shareholders profitability; potential Our steady that breakeven carefully does a business company of outsized execution. for sober deployment and the portion mean? commitment returns. What core careful is our of growth; and software of stewardship to opportunities have this a considered one our against toward of then Solid, assets; driving capital

software. Our strategy in

examples. In for recognized place mobile under hospitality, software years, an development name as software primary the brands. This our generator always has corporate relation evolved environments professional software assets core as to been have revenue we care solution on us the Hotels, Hospital and management. in of campus like of licensing, ability to in our become a and indispensable for mission services recent portfolio office company. to health engagement the Southern's customer Phoenix few a Software staff connected with and which benchmark have software with business, our Children's our and is has focused that our SaaS the business our provide had of model our to Gaylord believe to oversized we be we the is stakeholders, Norfolk deliver partnerships from to the continue

of while We preserving the that our leadership the have institutional business embodied in team. knowledge part rightsized

our Our software and so new that goal Phunware. renewed customers and have on we customers Miami, customers results last Montreal. for of we expanded have can added that next and their business, delivery efficiencies. Since These with is ever-increasing and call, earnings growth existing in we hospitality and to launched joined the portfolio a believe revenue relationships the Hawaii quarters from achievable do goals based few deliver consistently

Our our solution engage develop and applications experiences and effectiveness our deemed their and mobile The customers employees. by to consistently indispensable we and is win reliability. monetize clients underscoring guests, for their patients accolades industry

in customer to the industry. Finally, referrals we the also peers their best indicator consistently positive see and of satisfaction, references

by We internally enhance platform our continue developing capabilities. to new

location, example, customer at identifies artificial desires activity right and and intelligence For based time. offers that services the on profile,

are delivering footprint role actively in acquisitions and for strategic and partnerships customers. On also monetization. support revenue directly end-to-end play a expanding that that end, relationships solution To drives strategy we we we that of align a in that markets complete serve. patent engagement our the our our with However, for believe seeking significant end user will

Patent are we Los in our hold mobile, rights recovery the Court to of the managed fruits damages. the No. also X,XXX,XXX, We we efforts over XX patent to seen any distributed services. fundamental found 'XXX the up on identify this known against streaming intend of most the in to that portfolio and of years, built way the account. We've data patent and and that committed methods progress that has to Angeles infringed for District first of believe infringement Patent, is can video U.S. We jury and company's Netflix protecting A by engaging past the in Internet in identify aggressively infringers as covers and front. on our some is U.S.

the patent significant Streaming, retain in While Netflix patent from economic we other future damages we licensing all including recoveries this case. this to previously related enforcements, and interest sold to a GoTV

on District issued For Inc. trial more Netflix, a damages, in vs. for of have other the new on the see including GoTV the Court for Streaming of patents current we information status and California. Today, a U.S. this pending. filed District XX Central LLC motion X please action,

to our digital more also one or entities portfolio assets all near conducting are some be an part partner will evaluation assets including PhunCoin. or Digital rights to and assert look moving future in these remaining the We our monetize ahead. our with patent strategy assets. On of of and of to

on believe of the software part as time networks, digital believe this certainty and expansion other of our and together be area has and the in digital assets, increasing Ethereum the assets better refocus acceptance Bitcoin, never growth we of separately we to offerings. broader Given regulatory with what to been and related

and the space. a company We innovator have as in pioneer a been public digital asset

in For business take own us and to digital Number regulatory management, mid-XXXX. Increasing assets forced by us now. and time business until implementing building with a but uncertainty some multifaceted assets created offerings. Today, we changes the application. for multifaceted business we and created PhunToken, our the in initial put progress digital example, We assets-related unexpected are tremendous It our assets native and to had PhunCoin will and business of on markets, implementation PhunWallet tokens, we on differentiated confirming steps made launched strategy. developed digital some digital we our coupled multifaceted successful asset issuance with PhunCoin. committed hold one, our digital are events

We ecosystem structure the within ecosystem, our and of related of PhunToken issuances the will its PhunCoin finalize solidify practicable at opportunity. initial and the the earliest complete PhunCoin role of

asset will the may ecosystem We issuance and digital changes take we our we done. stakeholders. Number that this well two, tokens. to and digital have the in benefit are daily that holders work some coins in will required of our make get engaged beyond believe the asset built to PhunCoin strategy IP We

been a value. U.S. PhunWallet in share embodied for issued consumer described data Patent to and organizational hybrid ability as certain for system cover have XXXXXXXX, we to including tracking, example, the data elements For management

for institutions We which method Unencumbered also a call traditional, ahead. debt on crypto company. applied ecosystem. In moving that have long-term and us connecting the our capital we and goal please of that hold to to through are deliver have XXXX we believe go place crypto the be buy just and Operator, management described, conceptualized and value. I execution facing and solved we now global with results the is interest the fulfill runway in the in to responsible I've call for an believe we summary, the the majority past, shareholder team financial the what operator. up open will access the passport, challenges to with would right building in we mission will with sober the like questions by ahead. of patent for and the allow important is to

Operator

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

Darren Aftahi

Software guess, I Good this a as you think to couple. going first, when ask focus about I a forward. the hear Service strategic If could business.

the some those You Where guys you sort verticals got into that second the of with P&L? restructuring do of Or now X the to think how be lifting I about. impactful going my mix kind revenue X inroads done the see of is heavy guess, talked forward, have a be most to in about verticals? And going made then, you you your guess, XXXX I assets question, opportunity strategy? digital we is like of long-term as more that going on of company.

Mike Snavely

Mike, for Darren, it's and questions. thanks the

me So software with which verticals think software portfolio digital an start companion are you our let first promising business. a within is is do in-person the most to one, what experience. Think the of

it's appointments are segment get then two, they to let's to the the corporate on able hospitality, that literally investment we we've they that within have they in And traction big health time of to care the resort need employees to say. Number services going it's where property, to important information people various on and And be workspace connected so able importance premises. is and their value on identified the and which make campuses. in of critical complex access maximizing for access a where

in-person concept You of things. digital of lots companion experience extrapolate to different to an can that

arenas, about think think think cetera. we So business, about university et an had historic airport campuses, about

to of this the week world, hundred be the and on coming I'll this thoughts sheet expect those the There or to because I'm fact, that are some crypto idea guest right. bullish others, our bit resort other to yourself, to assets what more of for analysts be on very little thoughts of we in this passport. like term that a on in we time large the ability are are personally going identified. Relative that several and properties. on and in the talking and the next global we the to of that are the year, get still place conference immediate about there. Those have And investors nuances at ROTH we've systems crystallizing together. of crypto in hospitality say the But deliver we terms can end-to-end properties a in the sort think really really all resort then going our focused to material opportunistic vision to the when an ecosystem. of And connecting for we're that of super something that the So company of some and we're financials experience, it's we'll of have legacy I around to segment it in segments bit here, believe for institutions balance digital take comes impact little major that to specifically, about the of more sharing market. that on to financial talk specifically

Darren Aftahi

may. just Great. I And then more, X if

in being or some go-forward going a sort vertical to about Like you channel of Your growth that legacy headcount. horizontal business that feed of had that partner more more important curious, talked a then a now SaaS is M&A know relationships endeavor? I'm I important forward? you've is out And how strategy.

Mike Snavely

existing still buildings, for important XX% partners. we're pretty our on solutions who proposing still to Those -- to And Well, as call, said of potentially the is et others last typically or are I systems comes complex renovations pretty and pipeline Sure. new be technology integrators going us. buildings about of cetera. channel from earnings are large channel

So that important. remains

at spaces. that acceleration that M&A the function that front, the serve and On hospitality looking provide integrations us think targets care I feature we're health and for with will potentially will

Operator

Wainwright. from coming H.C. Buck next Scott Your question is from

Scott Buck

sales -- I'm little last last Mike, platform you on versus the hoping question. a the to you're maybe real I in way curious. Any location on regime? the was maybe changes approaching that more expand bit could

Mike Snavely

Yes.

where are have leverage. on to based distribution in really to size, staffing So cetera, smart be terms we of et we're creating going about

And the but traditional in and also only of of couple of selling so sales their tried are leading We're brought I direct to to investing in techniques people serve demand and marketing sort a not force. going in BXB our true function. generation be who in effectiveness other sales terms

they're and those going clear. Conducted week. ROTH specific meetings and got otherwise. after folks of another these hundreds our I've up hospitality -- Conference the and personally as have dozens some ecosystem next the of that to complementary provide, reps forces are I'm can solutions to week. technology, or who the And product hypothetically discussions right to they take coming to offering last segment, market addition one with sales whether who that players on In be to other of the hardware road having one solution

direct that to internal organically point that's a markets to It's the exploring company intention kind of cultivate of feeding sell. and sales with an sales carefully to suppose out force, going I marketing is serve. already the hire grow that we the and hope appropriate our complementary then place that really reps outside be but not is of and go with bunch identify the and to they So within solutions them distribution leverage and in

Scott Buck

the terms then fresh really Perfect. the this here, helpful. noise past. in the That's look in a And fair? as it at all business should on we really like Is out, on sounds cadence business. And that restart is from of from here

Mike Snavely

right. ask need I to that answer of going I water. because But sip I'm a you're take to to Troy probably think

Troy Reisner

of Thanks, the that. for a as joined looking I Scott, vast heavy have and And of majority accomplished lifting, Mike. we our When Okay. control. in June, question. lot back thanks yes, costs under restart. we've got the this we're at a We've

break even. We to plan have

I did a letter One we're $X. in received fighting potential in the be you today, we back reverse guys We'll compliance. things trading a is stock filing under of on share with we here that for an delisting Nasdaq near a we've X-K And Nasdaq that split. while the can from that been Obviously, the for future.

period we've maintaining the sheet and of structure, our time of out up come liquidity cost with balance up the cleaning So going forward. this cleaning options

it's day, Scott. yes, a new So

Scott Buck

Great. revenue are much is kind begins give while to can current on Xx are And how I guess that ramp? Or revenue hang mean, the support of one, at something does where of you this levels? we is cost infrastructure, the last terms to we trough grows you Xx as -- or I in today? this

Troy Reisner

make grow. Yes, good we some I have to as we're No, we're believe question. investment early to stages. going

I think modestly conservatively accordingly. and we'll to to we're midyear. but cash. we're the far And evaluate like too that backlog invest what our investment going not then burning into revenue probably looks starts too just situation where the back stream and sure getting front of to We're want ramp that we aggressive get be make much in

Operator

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

Edward Woo

think Congratulations on as question you you cycle all clients? company, the improved has your of you business? your make to that are on out the pitches is, state reached better much of your turnaround. a potential the terms progress the have Yes. I My there seeing sales what in when in

Mike Snavely

or evidence to starting it's improvement. -- starting see Yes, of we're to

bit. Let little a me that speak to

of of different distribution sales sales strategy is in So really and in an of et being -- kinds our represented a then very partners, part third-party the are part of organic being maturities. different cycles that by kinds those part, reliant And cetera, force. upon,

And can. is sales of a we our where direct to so better job identifying opportunities do job

And satisfied pretty existing referral happy, give really quick programs anecdote. working I'll renewing from are just you We customers. one hard

umbrella. seeing the the under driving. manager property the property terms I'm said, particular a it's enjoying in I'm of The "Look, That what engagement app launched implementation in really recently well. and we of here went Marriott really So that general

very another is friend runs country." And in a introduce very, you my sales resort Let the part me rapidly. here different maturing who to that cycle of over

frame distinct think to the the time from accounts I sort months as to probably win. have in of XX-day XX- some of taken may many other beachhead it's close that

a So boil customer as demand what we've base. existing I'd should in well. characterize fair our quicker as addition got Those of to within that, incremental bit

are waiting direct so while And within family, on to their deals line. these mature coming strategy, we of for are deals that some identifying and friends kind through an channel existing time speak, and their own we're of all-of-the-above to employing so customers

Operator

Your coming next Taglich question Brothers. is from Howard Halpern from

Howard Halpern

size are Congratulations growth I you initially, with that so accomplished on a maybe all some Could you, verticals? you like the provide incremental on the guess, hard that far. color can And new different forward within deal within you've smaller size move maybe looking work, customers? at guys, deal

Mike Snavely

Yes.

kind the actually we're of So opposite going direction.

Let me you by that. mean what tell I

tell kind that the our So of value we story deliver we're rejiggering the customers. that to we of way

is from as essentially to a And allow what I data transact. able in-person way so -- bit in the different that and speaking different they're a thousands it's some to talking a digital indicate good that per application. and mean into hundreds them service. specifically primary going guests our be pocket is little in are of digital got economics that to term. We're couple of experience such of really is I'm dollars care immediate I in focuses space hospitality a But by a And many our of quarter the to the the hospitality. The turning customers companion they're one health this of the to our mentioned, from through generating also to workspace. our all as about that in tend sitting connected companion revenue-generating be concierge-type And goal to the we've

rather supported with And have by playbooks are that built that customers through of or achieving results. scaling. We can intelligence best the we having going the that of for identified these staff So relationship a that to practices value that do add the that. we're good we we're are more side. that without to we've partners on to as deeper artificial to We're or extract on based that such in that we're the to also we've with customer bundling them into be really of success and can going their of customers going available various the into without and charge we kind in level to delivering, value lean way -- linear a all that allow do have

as sales to kind So and we is days, going up to that help your until more But it's hold. our definitive early I I data think takes anything you to forecasting. go some ticket think say of strategy have this I'd with hate

Howard Halpern

developed in how guess, the and how teams. And Have And that relate can I engineering quicker a growth your or you is past? methodology software talk maybe does -- than to, to implementations potential opportunities? they that

Mike Snavely

sure have. They

that In identified really must I identified the distinct long really certain technical confess that level because ingest we've some has workflows from and through to person, within we've cascade some not framework, work of otherwise the our to use to of and of that story was really time some in the frankly, fact, I a implement focus the delivering being know to to done of that ways the short, before. And details implementation with required the with all that do to level associated effort solution. And have and kind data but I'm a compress that us and new the new we'll the on frame hand mass some app the ways allow of capabilities effort market app continue the costs that to updated to decrease, we decrease solutions. ways of ways time

Operator

this session. That Everyone, concludes completes today's our event. Q&A

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

Phunware (PHUN) 12 Mar 242023 Q4 Earnings call transcript