KLDI - Earnings call 2 2021 | KLDiscovery Inc.

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Operator

Good day, and thank you for standing by. Welcome to the KLDiscovery Q2 2021 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Dawn Wilson. Please go ahead.

Dawn Wilson

operator. you, Thank QX KLDiscovery's Call. Today's contains call Welcome XXXX statements. forward-looking to Conference future not are statements performance. guarantees These of Actual results described materially yesterday risks in may differ earnings and and to statements our SEC. uncertainties assumptions, filings due with that release are press in the detail from more issued these forward-looking update obligation forward-looking clarify statements made KLDiscovery undertakes or no as to amend, these of today.

GAAP shown in the call, financial financial on measures, not comparable information for prepared press non-GAAP release those most to results of non-GAAP investors are measures presentation will to which issued definitions believes Reconciliation detail present accordance to Management also we GAAP. measures financial with our During this regarding this that our EBITDA along EBITDA, with in the terms. of call, measure directly operations. in supplemental and last useful our were discussed non-GAAP including night, adjusted provide

be a Please superior to, measures access financial addition the and this in the non-GAAP last replay to our refer any as not on to, now to Chris press of CEO, night's should how Our call turn will release Weiler. to or for GAAP only call. I substitute over measure.

Christopher Weiler

you Financial and am name very joining Dawn, Quarter and for Co-Founder XXXX CEO the thank Thanks, Chris Weiler, Second Results KLDiscovery's My Call. I Conference much is and of KLDiscovery.

how overview makes KLD, law data government our quarter, and what global us that data so electronic each technology discovery, corporations, truly of of listening clients I'd information agencies provider solutions help and call leading complex recovery challenges. We unique. solve begin a to new is governance solution consumers a to KLD with of get firms, an people lot use like and our our

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competitors. strong a technology. solution, of holistic in significant and proprietary service. We This is eDiscovery The customer players we a unparalleled offer need technology commitment in unique that from to a large are point our software not. excellent We do distinction third-party

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positive talk we let's by technology money a we last even quarter. expanding X.X% and EBITDA. The I XX% generated investments, in the second history software in highest XXXX able Not our in quarter revenue was significantly about the from grow quarters. first a the This pleased and is our year, XX% and $XX.X So as unique XXXX. million because surprise with last quarter of quarter adjusted Since results of This for by only in we investment in XX% revenue very business. second have increased a immediate in to invested lot same were that is the of adjusted also we to quarter EBITDA of it time compared am the no to XXXX, past performance accelerating our our the EBITDA show company EBITDA business been second strong our this compared quarter. a revenue as second X is of comes the quarter up as has quarterly increase year.

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we now, knew hard would predicting a year last dividends. to recover has as organization in some begun litigation that absolutely been legal I've our expected, and increase the time work costs. capitalizing the pay the from for as global are separate As eventually pandemic, Clearly, and we industry on

We have amazing momentum here. and it doesn't stop

fact, the beginning. In is this just

current platform a easy is offerings. use. on highly moving platforms, intuitive our focused increasing proprietary new jewel and that our is and powerful subscription to and customers extremely review of ReadySuite. Nebula We for base is the are review the crown It through and and EDR, platform PowerControls Nebula

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Our strong us makes special. culture people and

Wilson. Our results over KLD. part on CFO, just excellent much turn going call second sea to of larger Dawn It's now quarter at our the are super change the will exciting. I

Dawn Wilson

Thank Chris. you,

quarterly of largest second XXXX, the to As was we Sequentially, quarter, of quarter quarter was strong strength Revenue of further revenue. our in X.X% our which very had revenue a higher demonstrates second history. XXXX highlighted second earlier, quarter XXXX the in the by than quarter first grew company quarter Chris XXXX. which XX% of second in revenue the said compared second the

making solutions. second improved quarter significantly increased EBITDA, XX% year. significant exceptional and net I that by are earnings we and the compared EBITDA, why also XX% technology are revenue adjusted and last our in delivering We growth emphasize to improvement, to XX%; and loss is we investments of this strong want

increase Our grew customers and consecutive Overall, to of was compared quarter we provides our had $XX.X QX quarter the as enjoying integrated second EBITDA its quarter compared to cash margin up XX% an that XX% revolving have to for XX%, driving throughout optionality EBITDA as compared quarter offers. the EBITDA of million million, of and of second $XX.X in our the be to was cash an million QX data separates industry. Customers competition on XXXX to technology platform margin acceleration and of was $XX.X in in our a million, we XXXX, to and XXXX our QX significant of adjusted the seamless and Nebula quarter on the operating XXXX. Liquidity financial equivalents of our compared integration EBITDA grew of of investments, million. implementation technology which platform million strong and to XXXX in XXXX facility. efficiencies compared is of of QX June revenue EBITDA recovery, XX, and our $XX.X second This XXXX. strong an fourth transformational XX% the successful achieved adjusted XXXX operational increase results. We and XX% end-to-end from KLD revenue business second to in features of are the the our our continues is permanent experienced compared quarterly $XX.X that QX solution improvement XX% margin revenue XX% best of EBITDA credit XXXX our Nebula $XX.X in is million. quarter $XX second million, XXXX. drawn $XX.X to are XXXX XXXX. revenue was nothing and quarter QX

XXXX QX in cash higher. balance $XX.X current million, cash XX% so balance Our was our is

increasing are we the by from battle variant. progress the with the country infections in how COVID-XX, extremely While to to encouraged continued see our want Delta we reacts

accurately COVID-XX. guidance for As strong the we predict Having we've we earnings the continuing a about extremely discussed trend growth. positioned for technology remains year-over-year beyond. been continued in of financial believe impact in remain and KLD financial that, result, excited quarters. Clearly, the best and X sequential our our experiencing last one our limited focus our provide what in with we last our investments in in in results history, of including ability with highest are we not our to customer-centric call, in quarters Consistent significant resulted quarter and XXXX. quarterly are We revenue revenue to said well XXXX

open now questions. to call We will the

Operator

Greg [Operator Instructions] of Your Gibas first the question with Northland Securities. is from line

Gregory Gibas

quarter the sequentially on Congrats Great. the nice record growth and year-over-year.

you Just wanted increased key how do growth. maybe what it the relative kind about of you that sustainable? Was of little activity? back think of was. to half the bit that if litigation strength mostly year thinking a could to growth is then And you're of talk level the about ask record drivers that And

Dawn Wilson

decline is recovery to QX in of the this pandemic The has was do pandemic But court see said. we're to growth has consecutive eDiscovery up trended So the the elaborate? systems quarter. which data QX, the a listed are data little due each since have that since Chris, a open, this quarter QX declined want of what some to really bit starting with and you the data revenue recovery and quarter XXXX. backlog. exception since high growth since fourth of our recovery, is Both Chris

Christopher Weiler

that? were middle about in repeat sorry your Yes, Could of got disconnected, the I when right, Greg. that, question. you you like

Gregory Gibas

strength Yes, sustainable you kind happens. that back growth. but year? That's half do of of key was into think the it, And drivers it of that, is no Okay. the heading the level It the mostly Dawn of of answered problem. kind

Christopher Weiler

home, that pipeline There's remains COVID-XX. now XXX% a mean challenging, things no with legal I back has the so built has many office the doubt strong. system safety people of that. work and court to precautions And the people the that and community the are right, itself. from in do to from come protocol not like lot they that into The so fact that get data collections the

I globe, the we're back on get realize company, prospects that with really focus there. that portals customer-facing, that's technology better, the on pleased building more working very great to you the that we have in strategic office you results The that across automation The we're lead being we're focusing do us have and and the Nebula got we've So possible. And that that the make working you plan. date. But I the with think a stuff to think easily and client across on as when success. clients, as work

working. keep you a when got to head great technology, I think So And formula. poised we're that happen just on will plan, our great got great things people. keep down, We have good

Gregory Gibas

kind being Great. litigation how relating the the be expect long to helpful. backlog And No, a caught guess? very that is guess I on, end, that activity I tailwind of at to that's maybe still of perhaps do you up

Christopher Weiler

antitrust expectation, work this time. high seems I for mean, point like be in very to the example, at

I think that regulatory work. administration, the in would type that We've putting in leads are day posted online spike on read certainly seen to and of about that agencies. every a which I more you than can volume. bodies just previous more articles deals scrutiny say

offering. again, markets expect blazing that with our and we're we to continue. But our So new technology

So provide well. and markets lot the new a will of us as boost tailwinds

model not world. the phenomenal the the own here the here service to KLD past. we're by in backed which kind model, technology our is rely create to a So We're on of client of best

Gregory Gibas

Great.

dive Nebula more. revenue into first, of guess, since if And talked up and you're it year-over-year. XX% kind just I about there, that a success you focus could can seeing on I good. bit Nebula little the we we Sounds hoping was

represent. what a does trying now level the of that to just revenue off the is percentage of eDiscovery sense wanted I'm sense Just that, get of growth a of Nebula to better of. get base

Dawn Wilson

Yes.

at the -- extremely that So really mount delivered, time, We've amount is we're affordable delivered happy kit. continues revenue data cloud been an said Nebula getting can talking but Nebula Azure the it easy just the platform significant our demonstrates. Nebula to we're our growth use, powerful we're a hardware that's Chris our amazing, Nebula, through Microsoft firewall the be intro, disclosing centers, behind that that really and not via about the and in platform lot to the grow traction this rack from or of excited sequentially. XX% just we're intuitive, client's as

So offers there's solution and no the possible use other cases. that really market on across optionality reach level this of all

So we're really excited about it.

Christopher Weiler

And Yes. in think, on compiling report point I to now plan right we on, time. working metrics years the Street go that we at Greg, as some are to The

So working know we'll those. you finish let on we it. when we And are

Gregory Gibas

we great forward. enough. kind going like do or functions of you Nebula of Nebula the can Fair the of Yes. talk optionality, aim investment But platform too. the prepared focus a what about to you also of in a key you Great. or of What are -- hope on It features Nebula develop bit platform? there's but continued offering? talked being your improve differentiating if And did this about areas or little remarks, some the sounds to

Christopher Weiler

different because the Well, is model Nebula for cases unique, use same. is deployment the the

It is mounted behind customers' our you we XXX% can in data a delivered behind be cloud. in at It our can or our they're portable being and the be in Nebula when to cloud unit. the So host -- can rack firewall. cloud clients. firewall offered look delivered for also be server XXX% a The seem platforms today,

something and to is successful that going from It's we designed unique So an I are think super be with the unparalleled absolute offering that very that. onset, industry. very, the that is we that in

Nebula technology as built powerful platform. 'XXs, Now far super In late but has for first of it's intuitive that backed platform, years. KLD company eDiscovery one previous being said, we had goes, to a the in XX that very as the my by XX

here that over most So of the well I've long path time. the years. super that long, at processing the application is data, we've industry. had processing an now been of for KLD eDiscovery for example, in is the for part It blazing in engine process powerful, a And XX the probably engine, powerful

machine documents years workflow proprietary attorneys and We've that batch had a and coding have other to for years contract has. We and for learning predictive platform here. years no

Ontrack case this So at it amount ingenuity incredible And in out and it's back the all data, and and ingest that are of thought very of just time very, a development Kroll across and the process the being those very end at files of built the satisfaction, X. folks days about around. the of experienced assessment millions hosting or that of those All a folks second is Nebula a lot able that lot people planning there the really, those are even A and just all line. And kind first are of of millions to innovation, still and of things, things files, really whole byproduct just very yield tons bunch behind platforms. of matter of results well EDR, in the was day, are tons run a that here unique very, you it important. can including sure have like is making searches which platform. customer trust result really of incredible going brain to who early the web KLD, really are And

document the of schedule. run very your can super documents across data, important. of get So that's a tools. day, really end the get having production I that gets documents predictive upon platform a that know at of review and tag results super, they community the AI so or on host global amount quickly learning, the complex lot and But machine tremendous review on the and these coding legal And database, that a can searches in depends with spotlight

script, multiparty mentioned the think, in I prepared one but in permissions of important. my that can more I support, sentence So robust be

year support. of platform that hosting one and well-known have in the by means early now, But work fully work very, does our that through XXXX, cases web defense to we'll massive complexity that we'll work today do settings do joint And Our that, other think and multiparty will able as that. mean? platform, this other growth level which place. have do is I will rest ability permission turned an away be limited we probably And with than like able we to we that engine. didn't group have provide only the of because all be to to the be what we with incredible Nebula It that very

where third-party There So So with. XX a to first because years say how just industry mind running to KLD people tremendous in excited super best service microfiche, I'm the you're of result about documents, amazing. And the company compete prices are now been microfilm, Nebula, absolutely what to yet the see with -- comes time that thousands This want and it's horse-and-buggy preaching just developed this of not practitioners not powered tremendous folks company. it years ReadySuite, by eDiscovery right? starting copies it. the and from tools, the against proprietary corporations much bibliographic different PowerControls, would we for have 'XXs benefit we today, company Obviously, service back upon using for tremendous, and I've come. And is dev platforms. I've the is just is some days no legal firms that And been it's relying which that it's of that this in scanning which is the one paying we've is now versus those The a technology from EDR, almost suite, done years a we're coding, I perspective with technology-enabled company. producing is late and lines doubt our again, by is pretty customers my in the when most of that what the law used in-house. technology, in

Gregory Gibas

pricing third-party proprietary And detailed the about I I just And you that appreciate platforms. just of differential ask I Really Kind then as to financial helpful. of relative kind Nebula. your on relative benefit, the solutions. guess wanted That's customers answer, in-house a a using too, maybe see of follow-up, Chris. guess, margin to lastly

Christopher Weiler

But it, take let bottom Well, answer. licensing line not we're paying I'll and these tools. for the finish the then is, Dawn fees obviously, I'll

processed savings So you data there, and through gigabytes or of and data and involved rack we up the obviously, amount which store like are there's predictive becomes that an tools that coding inherent significant dollars things run pretty that. when users and

have can then obviously, it's obviously flexible so application, pricing it comes And more that. you you your So because be own customers you to competitive. when get can very the

for that's that clients super and growing solutions to time I to be these important as business as this to that emphasize I continued in on your a world, right, of community around bespoke create people any fact the would that think important. But to say, proliferate, think data you customers' group customers' tools I again, that's exponentially of KLD able with line need community making receiving the just your for folks, can feedback savings. let's continue to and and even being have the chat able platforms be

add do have Dawn, to anything So that? you to

Dawn Wilson

couldn't have No, it better. said I

was perfect. that I think

Operator

time, the closing there back for Weiler call no I'll questions. Chris turn to this At further Okay. are remarks.

Christopher Weiler

time I all in years. this morning. And about much. years, to honored for X.X privileged this want Thank you are a very in X you be excited prouder, for I I the the second or what none to listen wonderful thank continuing a challenging to I the do replay. group be position very I've job be a know of Thanks amazing lot and tune folks they Very I a couldn't just to all and such everybody's to and have, global team, more of But time. couldn't family thank KLD people. great to who got your future. an team, executive during

Dawn Wilson

the all. one. looking Thank you. Great you Thank next to forward quarter and

Operator

Thank you conference for call. joining today's

disconnect. You may now

KLDiscovery (KLDI) 12 Aug 212021 Q2 Earnings call transcript