PHUN - Earnings call transcript Q1 2024

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Operator

Good afternoon, ladies and gentlemen, and welcome to Phunware's First Quarter 2024 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 on website is discussed measures. matters Relations which the Additionally, today the on Further GAAP the press Investor non-GAAP is in available Reconciliation of include to financial investors.phunware.com. forth I'd also information investors.phunware.com the earnings Phunware's only to I -- set SEC section earnings and release, at over CEO, access of filings to financial non-GAAP to further time, encourage proceed. Mike you not Phunware. At additional things turn Snavely. collateral release, like to but this visit Phunware's press Please

Mike Snavely

on to working. a shareholders, in our XXXX I'm happy we're focus our that that strong fundamentals business SaaS tell the Fellow of is start to off and welcome. to you plan

The XXXX of for a while. of the evidence quite first first quarter sales traction is

bookings New logos and are up.

health hospitality by solutions delivering customers across Our the ROI. traction with to care sectors continue and gain strong

to and competitive continue and situations care. we in result, health both in business existing a extend customer and new renew As hospitality win relationships our

first that we've in first in are the of quarter. We Costs of expense did in quarter, bookings effect fact, seen all XXXX. XX% more down. announced previously the took In full total cuts than we the

as Our brief gross improved margin has Troy a will and details. result, dramatically you on those

patent in additional term engage a to monetizing executed partner sheet patent on the a On work our front, we behalf have monetization to families.

the of I'll ask Troy Troy? results. Now first quarter run CFO, to details our Reisner, through

Troy Reisner

I'll review of you today like otherwise financial everyone. good for all joining XXXX be of afternoon, measures, GAAP first for noted. and unless our Mike, thank discussing specifically quarter I'd financial performance. Thanks, us to

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

to business In addition, updated shutdown operation. information Prior and we quarterly reminder, Technologies reflected has the Lyte been such. a reflect a XXXX, as was discontinued in quick

With at that numbers. the look said, a let's take

our internal which plan revenues of For were by XXXX, quarter approximately net the X%. exceeded $XXX,XXX, first

and share While it's not our the to million, XXXX net loaded others $X $X internal guidance, detailed do million year. for versus and to between our provide to for QX continues gross earnings will was margin the we back-end XX.X% gross Gross margin that be compared is believe which QX XX.X% profit of range quarters. goal respectively, quarters. Phunware, investors helpful to respective XXXX to which the resulted for $XX,XXX XXXX, for $XXX,XXX Adjusted of half of for and XX.X% X.X%, was second the the in revenue

costs making and of approximately compared noncash in of $X.X QX XXXX While million the reflects depreciation, processes our XXXX timing notable managing in recognition QX stock-based in $XXX,XXX execute improvements the 'XX a leaner costs, also certain benefited was million XXXX. organization. these ability disciplined significant product in margins compensation $X.X for stock-based streamlining and QX the compensation. expense from were items by impacted versus delivery quarter a decrease for million operating were approximately XXXX or Total $X.X a was operating approximately million for product XX.X% $X.X XXXX expense decrease. Other noncash expense million QX our and up in decrease to excluding adjusted $X.X The approximately operating operating to approach combined much expenses compared for charges, QX as to By our a in as to 'XX. XXXX QX

by and sales achieving we investments make have investments the XX.X% started the the 'XX prudently Non-GAAP was loss call, adjusted EBITDA our reduction XXXX. in in or of expanding marketing first On $X.X loss. first teams, of in we net loss which plan $X will to revenue directly we quarter a strategically million of the a 'XX in compared for our business. during begin I our to And making contribute last would million believe quarter said to QX,

quarter of $X.XX stock $X.X first per first versus reflects the approximately share of million per compared or approximately or quarter of a for net XXXX for split the share February. per was calculate which weighted X.X $X.X million share net approximately X.X XXXX. The million effectuated million, Our $X.XX was loss to shares used earnings the to in approximately loss average reverse

decision-making. to to invest $XX.X the balance well the were ROTH this matter. not the to fourth growth strength long quarter with plan our quarter, sheet. growth. And the positions us of the business, proceeds closed the XXXX June. balance and Moving We We sale HITEC also M&A to debt attended from a Conference, finally, outstanding through in financial legal Industry and achieve of transformation and cash, opportunities Conference accelerate X equity sheet approximately during to We million settled strategic strategically believe the in Annual we software to pursue optionality in only we late to have attend our but able XXth

our with financial the remain efforts and We I strengthen active in conferences and to that, back corporate closing to both with markets. And the in Mike? will Mike expect profile story remarks. to capital further investor over tell our turn call meetings our for

Mike Snavely

and our please to up appreciate the We're Operator, for call the Thank shareholders to -- to operator. you. questions great a and off ahead. you, we now we're open for continue from around. Troy. patience the continued I'd company in start looking through the continuing deliver support to turn as go forward like We 'XX, to

Operator

question today And MKM. first is Instructions] coming [Operator from Darren Aftahi ROTH the from

Unknown Analyst

Don [ for ] is This on Darren.

versus the and renewals? X-part comment is sort QX, I bookings to recently renewals of from compared about of a wanted existing made talk year. year roughly in -- bit announced How of a last I few with net know you've a that expansions you guess, logos? question. of could I you your all start much to this it's XX% new First,

Mike Snavely

of new very XX-XX This business the Mike. wins. Sure. and then renewal for Thanks brand existing is question. It's between logo the roughly

customers who wins some independent. have tentpole brands, our significant And been a for hospitality new certainly, from with some have logo of us We renewal from of one the major time. an

Unknown Analyst

what mean, of is it. some think to for when Got I line generation? revenue you you bookings on turning from customers time of the go actual those of sort from And sort

Mike Snavely

Sure.

XX roughly days. is frame time implementation Our

Unknown Analyst

maybe And it. I more. then could ask Got if X

or able of First Whether of to on might And sort out? of opportunities any to that of market sort like, after? maybe new sort what out with go could and you're you'd sort the sort be the you to you're color look to going -- existing when Do be patents. then on of express able it of products? have you working what the provide might roll what products monetization net that's when on

Mike Snavely

No. Sure,

after that patents that infringed the stream were Netflix patents. the public, it's that sold of work to to be frankly, a of we is found calendar sorry, process final we kind judgment the until will the So there. to course, this don't -- We happen monetization similar the winding us by company Netflix, year. process Netflix against those end a That of to through quite expect monetize happen I'm get appeals that video helps

to patent into additional with. Now arrangement we're that similar with a entering families respect

But we our shareholders. I should right we development update expect of certainly, in. will occur, serious help behalf We lawsuits with against who that likely can't start we as expect file when representing will a on our that coming rights those then now campaign material to believe folks you that the specimen and writing dollars about understand are quickly letter we're to others IP give market. infringing follow

Unknown Analyst

it. appreciate down the is color the what the like specifically. there on you QX? sort And margin provide year last you could Or shape the look Any side where Troy. they mid-XXs Got of some the back I can that for on in margins in maybe end of has in that were the one sort color think at of push place to those least? take may investment gross on

Troy Reisner

question. the for Thanks

are in that the to QX. in be think continue I going range we margins to saw the

a Given quarter's and similar ebb like cost seeing of margin to that. and terms expect we the you're the of what But flow in in would vein QX of what as recognition things year. balance might is timing for revenue, in

Operator

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

Scott Buck

side. you the maybe hire investments the First, could color be the on of and I give made some little on you a was vertical. that hoping in saw hire a you making hospitality may I additional

Mike Snavely

about, X today. I'll started we've And actually literally talk which of Mike. It's got one hires that

So Ruffino. property hire, on, is operator, a I release run luxury having a a properties is Paul of we run rather operating which week guess, Paul ago, fellow a then called of and press about did major some number XX-year-old operations hospitality one, -- XX-year the companies.

the the some which understand meet how bull's much is target. not to to General the organizations, Manager we us access product decision processes in also those the our needs evolve Paul in of can makers of kinds but thought at our is very resort, continue going us eye give to to of the help luxury to is sales and of only going

as of a XX fellow Number Dannie attendees. we in-event mentioned. [ convention ] experience [ Nunez started in application name we ]. two, to today experience for for an Dannie Dannie believe years our I and of hospitality-related events, hired platform technology there's support has the the by just

So what as traveler. we've historically been the characterize leisure more on focused I'd

Now to around conventions luxury that traveler are joined both gentlemen specifically major those the at opportunity this attending rather for access gives the have We're properties us globe. an us. market that delighted business the

Scott Buck

vertical? see And of a expect line in a progress for what's helpful. investors some bit That's reasonable time to Great. a follow-up, just the to as tangible

Mike Snavely

me we've tell think why. in the I it let you first quarter, and Well, seen

So and new of that year, bookings significant we're mentioned of in good part terms this of the of in when contract already remarks head part part means XX had that I acquisition. that the we've that value of but existing XX% that a relationships main pretty total logo is new doing, start a selling done we've

And to will achieve with fact, of implementation this in first increase the it. we've in we being the will year. ] -- to for And those on we're our our bookings the rest contribute the time contribute of performance revenues to it the quarter for the frame the X/X the pleased And we expect plan approximately bookings first XX as performance bookings [ with materially bookings quarter. quarter quarter. that won to continue second days, each pretty In quarter

So that's small a there.

Operator

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

Howard Halpern

application a occurring the start revenues, grow to we on at breakdown with press subscription half and lot of going Congratulations how the services second and forward, supplemental the should In especially you information, in release year. look as in the action the of the the between transaction year. the

Mike Snavely

Howard. Mike again. to let And speak It's Sure. me that,

very on business. So our much SaaS we're focusing

software work that's And increase a to standpoint revenue. license X-year just we're which the 'XX, much really but with will onetime When business, I from going focused for slight to not the is that about growth of services moving X very an business. of renewal on recurring fee. over or -- necessarily SaaS hire for so our do work, largely a same and 'XX revenues services, have be That's We contracts be the a trivial forward. in transactions reoccurring, very probably project amount in our think application that's

Operator

And Ascendiant the next Ed Capital. Woo coming from is question from

Edward Woo

have do you how My throughout question is change in think the to year? is the on any going this And environment, go you competitive cycle competition? seen sales

Mike Snavely

I I Most of, what I Ed. small competitors are in of Thanks, who rates any difference who that hospitality. are seeing companies are we're small generally mean -- been? they've apps seeing number other old very building companies. kind of kinds for the app or mean, characterize wayfinding there of and as, are against the a We're us. they same not those And are win story. their in

properties is portfolios properties Now finding what access is ability multiple to and we're our start to increasing. of that

And at seeing lot some announcements prong it our same that We have at a more able dozens that portfolio. We're a experience properties. to interesting, the that. X. on go next a doing. level go something to a in quarter to the across is tell by hope we're of or entire and the of delightful in particular where that compelling a And may additional handful have to competitors market operator So material story the generating about of engaging not nuanced they leave and I'll strategy guest

Edward Woo

Great. wish you luck. on progress, and I our guys Well, congratulations good

Mike Snavely

Thanks, sure.

Operator

questions time, There does this in at you. conference. today's other this queue conclude no were Thank and

your You at may this for you lines and time, thank your disconnect participation.

Phunware (PHUN) 9 May 242024 Q1 Earnings call transcript