TRIRF - Earnings call transcript Q4 2022

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Operator

Good morning. Welcome to Triterras' Conference Call to discuss the results of fiscal year ended February 28, 2022. My name is Catherine and I'll be your operator for today's call.

Joining us for today's presentation are the company's Chairman and Chief Executive Officer; Srinivas Koneru, Chief Financial Officer, Alvin Tan, Chief Technology Officer, Sri Vasireddy, Executive Vice President, Jim Groh; and Vice President of Financial Reporting, Perry Mangers.

Following their remarks, we will address questions that have been submitted to the company.

to call like Groh. to would I turn over the Jim Now please Sir, proceed.

James Groh

and for you the you, thank Thank operator, all today. conference joining call on us

reflect Before the to investor the Please note to about to our are materially implied the filings. stated or SEC future from performance. would management's predictions revise the information and Certain the statements obligations will any required disclaimers. These live we Triterras' forward-looking discussed include certain by Triterras forward-looking undertakes except differ statements and regard call, this statements business on no of by estimates to forward-looking of uncertainties note subject in those or XXXX, These and as and of law. June statements today in or update events financial to read and predict broadcast, and as disclaimers discussed that and operating of predictions start, reflect I call strategy Triterras' this statements. events following like that future and to assumptions actual assumptions to only forward-looking circumstances beliefs, are are date to are XX, those statements risks, and these and results difficult date risks cause after may forward-looking

Koneru; Sri CEO, Mangers. Joining Officer, our Perry are Officer, me today on Financial Technology our our and Vasireddy; Chief Financial Srinivas Vice call Chairman and our Tan; Chief President Reporting, the Alvin of

conference will challenges we introductory our sent CFO, that growth Perry Afterwards, Tan, the to concluding financial For results, then and Triterras. Financial announced of call our we questions to this achievements innovation return business three, will on to of wrap and on high-level Like of provide occurring for and the overview our the today's everyone be Mangers company's a then think quickly of and Alvin provide and in our technology going strategy; the will Triterras. some review Reporting, to update model an Vice today. we call will I remind were we at comments, make up call, of provide market some am our Srinivas President the helpful are which Triterras, it ahead at instructions recent will the then first announcement XX, address remarks, I provided sharing who May would by some then we last XXXX. call call, will issued then

Triterras' world's small global platform We the fundamentally opinion, trade to capital MSMEs. micro, or the across also finance important reduces of directly are of we systems in We which segments today's with to platforms, bringing world and keep trade industry. mind our model or aspects a in innovator in trading, by a lowers operate trade the enterprises and and digital financial source the business impact. in digitization to times underserved social transform lending transactions. medium FinTech finance world's finance the believe for Kratos solutions It effects This inclusive efficiencies, is of positive digitizing to be monumental and sustainability market supply of that financing new largest We underbanked delivers what leverage transaction connects chain, improvement our exemplified a advanced cycle and drives costs lenders MSMEs online logistics trade blockchain commodity trade technology to e-commerce. paper-based one

X an to direct $X average economic million economies. in over loaned of Finance jobs a Additional creation trade small Corporation, years. every to enterprises market finance According with lending in X.X developing the the is medium and is International countries accelerator associated critical emerging of

XXXX, the we have auditing months, our process. auditor, December fiscal efficiency of current appointing been WWC, allowed for ended X-month March report the file XX, on Since year XX, with improved line Over the February XXXX, annual today, time report period April P.C. ended we interim on our an has our X, for have results February year an XXXX, in conference XXXX, ended the This busy. us for XX, report line fiscal XXXX, on call. to last and the we X the annual quite August file vastly communicated XX XX,

full of XX, we made be will our that by significant It without management fault settle shareholders. covered liability. lawsuit we will hopeful be is our conclusion, $X update distraction action class months important a no class or action which our several an are Another we take that longer the a this any or a the agreement but insurance to require million, admitting XXXX from announcement on wrongdoing to May settlement portion for bring signed will to to attention

successfully standards NASDAQ's listing held improving on also Meeting General step Annual with We and XXXX, relations. X, another in our May complying shareholder

and today or obligations. OTC of markets, which in the application providing ultimately on our to is our assurances that was and in an the updated reviewing Regarding NASDAQ, securities, any a view our information We process timing work believe quotation the our success timely make our to with although the as the listing to continuing filing company our topic markets. or to the regarding bridge commitment shares relisting. of of in OTC public our a we our relisting securities underscoring the annual with over-the-counter process meeting of critical cannot on NASDAQ a We do are regulators report step quote reporting this we

As last have extended substantially that because discussed has waves the has globally issues liquidity supply liquidity trade. last recurring challenges in our had we COVID-XX of global chains a direct reduction conference many the traders. These position transaction and years disrupted call, short-term industry business on our coinciding of levels cycle on impact faced significant X and have some and times issues trading traders. some international for This activity of SME caused over

Kratos became were credit on insurance, traders which finance had availability trade immune threat the availability trade business. These certainly also their had issues of have their critical traders. operations trade to a direct where business industry, to community their trade would The fund to liquidity entirely. on charters of SME of some causing not level impediments finance the of trading of to a funds to insurance a impact For model others limited has reliant specialty credit widespread have negative business, very in trade these loans credit impact challenges The lack insurance. the on were suspend available

will platform for the estimates other over digital cost trade issues I we give are our Some believe business issues do addressed of not sheet gets a cycle. these to some when Tan, Unfortunately, end and staying we to from supply shortfall $X.X multiplied turn colleague, trillion, power disruptive opportunity is through believe us the the global the lower we our in our footprint any to resolved. have as balance chain it to for be introductory ultimately on resolved, $X.X but has call comments of that us Chief the my to trillion Financial the substantial healthy creating a guidance finance Officer, now will the Alvin? make financial suggest who Alvin statements. timing as

Alvin Tan

everyone. and Thank you, good Jim, morning,

on some introductory provide detail into you financial additional wanted comments. our with get we statements, Before I to

capabilities worked while we audits, financials. in filings timely to annual place basis. very is our the make timely As on following reviews complete put to we've today filed XXXX hard our a report clear sure We've and with audited

controls Although covered financial we weaknesses XXXX, it financial our our ended reporting. material make to the XXXX report, identified of material over internal year annual February on is identified previously special wanted our in regarding progress in area the mention I of At X end weaknesses our have a reporting. controls in fiscal

improve quality to very of internal team has Over and year, the the controls. mitigate past my worked hard

As material Annual Report are you filed XXXX major pleased we We X to as view weaknesses as XX, of February XXXX. will remediated see that today, of in we this these progress item. we a have all report the

by As Reporting detail. we for through markets. ending U.S. our November the typical Perry? take in of that, turn to would August future, to to more our Perry reporting in XXXX. is Mangers period I intend file the cadence end we to things over financial our establish results Vice look us to Financial a of XXXX that of intend financial results the With X-month to currently We financial like President the

Perry Mangers

Thanks, Alvin, and good morning all.

more fiscal to had supply the faced pandemic us the trade as current volume total had February year we via XX, volume volume, billion For to of has $XX billion compared trade XXX year of sub-module. XXXX, XXXX, from trade the prior believe from global fiscal Despite Trade the fiscal got the our volume of generally. a due and the year. transaction to percentage XX to on which months prior finance in on market. the our positioning finance transaction discovery's the company our the The users decrease the users of fiscal XX this chain by number in during the of sub-modules of XX, reduction larger fiscal we customers compared capture The $X.X XX.X% grew as we of XX.X% is year, year ended financing in platform in COVID-XX. for was COVID-XX current to impacts challenges represented

in X.XX%. was driven XX, prior XX X.XX%, transaction primarily was increase sub activity in financing average the increase which by than for the is Our percentage months XXXX, the module. February higher ended finance of trade the fee slightly period This

ended by For trade in on of XXXX. in compared $XX.X addition platform exist contributed chain revenue as to February million supply trade of a XXXX, cost. with the increase and XX, reduction revenue $XX.X Marketing sub-modules in the in decreased XX% of due which the fiscal decrease a which total the to in compares by to million $X.X XXXX sub-module, for XXXX, consulting Cost Cost $X.X $XX.X transaction million, trading constraints the fiscal due for ended year and in and marketplace with associated expenses, decrease costs in by million XX limitations for million partially ended fiscal sales our XX, operating the prior year fiscal $X.X increase to the year to $XX.X million, finance $XX.X introduction year-over-year The marketplace costs a was in prior trade $XX.X in marketing line sub-module million. from the year. XXXX. an our fiscal which transactions in prior was fees, volume primarily our ended recorded finance and This totaled during we February XX, million fiscal slight year promotional the increase $X.X XX% offset primarily the global totaled was the year XX, due fiscal The offset revenue to in to and partly months revenue revenues XX% to platform relates year The trade industry. February million. decreased did of million, was the the fiscal February from which reduction reduction the not ended February were in of year. XX, prior

We in $XX.X XX, $XX.X addition related in for action corporate, regulatory with fiscal prior we've general the from as to year Our the legal items. and to advisers retention costs February the compliance public fiscal year administrative incurred of attributable connection these onetime year of is to associated costs The requirements Committee of XX, the million for costs independent a estimate ended Audit company XXXX investigation lawsuit. million, increase and and with primarily our an increase onetime the February and in ended activities external class million. that operating general XXXX, fiscal totaled $XX.X ongoing

XX, to million $X.XX or share February million Net related year. in $X.XX fair $XX.X a impairment agreement. during customers as income change year million prior fiscal income faced the COVID-XX year totaled for customer XXXX, compared not $X.X of to $XX.X gain recorded share last ended to costs of ended receivables, an or XXXX, a parties fiscal in Triterras $XX value million the third per to impairment XX and in under million part XX, prepaid included February a large February months to the result the fiscal the net for the subscription XXXX, year. fiscal $X.X charges impairment included compared $XX.X charges. impairment ended to income and referral the fiscal corresponding noncash liquidity related related from noncash of value February Net per period million the in year ended charges. issues year liabilities in because a million income warrant fair impacts February targets the by XXXX, making the relate The XXXX, liabilities million contract their warrant pandemic our of of During XX, for for to gain and Net are $X.X of change due charges impairment XX, trade which ended XX, $X.X in

was our contained discussed. onetime reduction We in these a reconciliation An our platform measure in exercised transaction EBITDA The our and compared warrants to items. million of but charges adjusted decrease associated use will on the today. filed earnings a costs I year. continue a due primarily non-IFRS of in our for time warrants company Adjusted $X.X with are XXXX, adjusted becoming previously of the fiscal I income EBITDA release $XX.X prior the February to in as regarding which explanation of emphasize ended public increase value are are either to and volume earlier months to until the XX the net costs EBITDA, to record noncash fair want was expired, is XX, such million again, noncash or the

Lastly, sheet, growth Srinivas surplus million to equivalents $XX.X strategy. continues objectives. XX, 'XX, million, and on our discuss at to pass put execute will strong opportunities I to $XXX.X market it capital over in a our to in February working and cash business a balance position had now we which cash of our and us

Srinivas Koneru

Thank and good you, everyone. morning, Perry,

for We by challenges impacting the are context we chains in with are reported the faced February industry. global supply the and pleased of XXXX, company the severe the XX, ended our results fiscal that our year broadly particularly

through segment our a opportunity we addressed opportunity as is well market market robust massively solution. remains Our quite under-served MSMEs our Kratos -- believe remains remain that

important most drive is remain user-friendly. and cost, expanding to our objectives the of network platform a low and scalable lenders borrowers solution business Our that on intuitive,

growth revenue streams. X As report driving outlined the in in filing, today's is on annual distinct company focused

who First there fees the charge are platform. through charge revenues. historical -- the users and transaction management of Kratos, facilitate is we fee been which relating to source their fees, company's We on foremost, financing platform that and has provided to the

have aware, we the product many of finished lending micro scope we semifinished you As expanded financing the space. to the the include also beyond chain and and are of platform Kratos have in to supply and expanded e-commerce commodities structures financing goods,

platform expansion our key of stage these the -- for All of revenues.

The stream fees. second revenue comes from financing

by volumes finance for transaction own our trade driving balance are We using loans. sheet some

financing We fees. revenues our earn on earnings expect to capital, deployed in robust which results from

believe lending business lenders, new compelling we of addition, attract trade will are platform. the the that help demonstrating new demonstration this to In lenders to to attraction a potential Kratos finance as opportunity. We

cost The view elegant as revenues, lending We trade third lending revenue purchased finance environment trade of stream margin. is and our an emerging to particularly into goods marketplace increase a trade in challenging marketplace where revenues effectively markets. represent innovative the the plus some solution

less local sometimes lenders cumbersome emerging remedies be North licensing and by and Some market Europe. to Also make by by than adequate have regulations requirements countries America offshore new and that in entry very difficult. the complicated civil lenders systems the subject afforded legal

Kratos establishing the by principal at the point the from lender in collects potential goods marketplace in with so buyers the the opposed becomes Also, risks lender strong a the pays for focus transaction execution the the platform buyer buy-sell to UAE. in time we of but risk buyer will credit relationship, a enforcement to profile. quite associated heavily point these the addresses The the The is at and transaction as time. legal management. solution can credit it structuring as parties and to transaction the marketplace relies minimizes believe in issues a capabilities civil marketplace seller. any seller select trade lenders. the a jurisdiction the on involved trade loan are the intermediary later Singapore or one risk Our commercial comprehensive, trade legal the like for with transaction with Also, strong The transaction an on

the revenue these pioneering plan later the a as believe concept, is participate new demonstration and proof is trade will third-party Triterras opportunities Although X principle progress speak of our streams. in in as of track how lenders in X marketplace Groh to going these in to we to transactions Jim that we future. in

our all to the governance. like levels ESG organization. would environmental, briefly speak strategy of company's The multidimensional and is of I in the social across ESG, that area Lastly, to efforts spans

in area importance. efforts critical Our this of are

are initiatives group Senior a working a Chambers. by product Amoy Vice of ESG our Our led President,

environmental Our the sustainability in that is view is of DNA Triterras.

by Kratos Our digitization already focus widespread documents internal platform over recently XXX,XXX is yielding digitization. which conducted to bring to that paper-based eliminated archaic the results. system estimates We an study, has

more hearing for our us annual commitment review reflect you In You more to on but be future. would on will significantly filed the on communications, the like urge to report to information in newly ESG. I from ESG all the I concluding, coming

While chain, recruitment. platform and on business control finance build the in improvement the we our our senior supply can of lender we development out cannot institutional level timing global innovate an leadership for to and Kratos efforts continue of experienced executives

We is our It significant generally view finance With be the Sri? will to technology Officer, state-of-the-art is will who improving it structural to over in Vasireddy, that, under that that discuss Chief trade industry pass ever antiquated offering new We believe global our core, By continuing fundamental development. technology efforts technological exposure will have to an and growth offerings, our our its our and would breadth streams. expanding conference like are that product of eventual markets revenue call to chain service reiterate diversifying expect from supply broader-based is, the at a Triterras rebound. and our expanding emphasize a ripe I in for success. company. to the benefit to investment fintech has I regional last Sri to our our Technology industry and from we disruption.

Sri Vasireddy

as Directors. to our did the Triterras I with you Board with Srinivas. I you, recently would strategy, like share technology Thank of

Kratos all valuable is and process dedicated and trade mitigate areas. terms experience our efforts providing chain in team the platform participants, expediting solutions risk We trade, flows. categorize its enhance while Our trade trade finance and that the of to business supply X of technology

enhancing is security scalability. platform first The and

We Services SOC. completed move you projects on with announcement this have our low-code/no-code automation. blockchain managed to accomplished implementing of of Unqork security recently shift Web am our our to continuous with recent saw many compliance operations much private Amazon and some collaboration sure I to and area or framework a in center

Kratos we the Our second integration. results of focus into will area Kratos X.X. term a be work platform, Bazaar of is universal and successful partnership and The integration Invoice complete this X.X

of is focus third technology area innovation. customer-centric The

in a our improving for customers have focused We number on lender automated processing, via of initiatives improving the including with but area, least, this teams are technology risk sustainability. certainly And the not automated promoting accessibility mobile, calculation. experience last, document credit

Our efforts product to are suite focused the comprehensive on a provide offerings. platform improving of sustainable

from expected clear. technology outcomes strategy Our our are

striving We quality, and and stable are platform secure a that cost, velocity benefits for from delivery. higher higher lower

gamut full Our our platform increased service increased the comprehensive of needs, revenues. clients' to will adoption leading and

to it will for Now, remarks. I turn over closing Jim

James Groh

today's revenue is These KPIs that key X Thank each earlier. Srinivas be financing revenues, we filing, will streams of our XXXX additional you, inform to in metrics its Sri. and platform one annual various we We our indicators. and think In metrics performance track a to out like wrapping income fees, our of revenue markets of of charges the have In our published trade item X from report I related separate call, these marketplace categories: will in would progress streams we broad terms distinct point that metrics that or into CEO, stakeholders. these our interest and believe up described revenue business set separate streams. the

financing our number volumes, of the through platform that and take our Average track the was users reflects transaction platform. volume transaction for period is total which financed fees, total we fee, the on transaction of rates platform. much For the how also ratio

financing For Triterras those of the generated fees, the we rate financing annum track deployed funds. per average and the amount by interest by

this were of volume. prepared remarks, address we There submitted prior questions the metrics conference marketplace our are track that now gross is commitments of Lastly, This in the concludes the significant call. ready the to these and disclosure trade transaction the new report. annual we revenues, to

James Groh

a I call and call days to aware that we Since only the April know are call. we questions ago, many XX you update about that today's a of business. of we number business XX, questions that XXXX, limited number great have on answered held respond of to a was in

question in the call, did the pose a leadership of will we member previous team respond. will I the As and

field question first many number Our platform? that is, you traders are on there please? the one, how Srinivas, one, would

Srinivas Koneru

call now of to our of traders we trust in user We As platform explained the we users the commodity wider much commodity a number our today, the base. to total have activities of opposed scope number traders. beyond expanded on the as conference

end XXXX, February XX of end at of February XXX the As to as of we users had XXXX. compared the users

James Groh

second significant The the on please? have to question, any platform. defaults Alvin, lenders there been

Alvin Tan

issues platform we raised does on defaults. the not have by the been track but are aware not Our repayments, any us with that lenders

James Groh

Thank you, Alvin.

plans Third been to the our so are been, I'm submitted? the Shareholder shortly. has a application applications. is do for our that field Xth, NASDAQ requirement one. held May but It question, to answer going we our which relisting AGM, On has to not relisting

internal controls concrete Also, number the improving to Report actions taken we candidate lastly, filing we in felt improve profile report as We today. to on which it financials we demonstrate took today. audited did important and also submit actions our on Annual our as demonstrable And we've our a ability reported to time, our relisting market our was to for in a NASDAQ. of annual

how was made e-commerce are mention an clients these will sum micro the on The initiative relisting we previous on In the of actions be the make by of assure will estimates Any platform. lending question. may a but Srinivas? or take updates NASDAQ, successful. to process next new call, this. you cannot total hopeful favorably long that We that the viewed of any be

Srinivas Koneru

We this are in seeing area. good progress

platform in provider e-commerce another announcing to who be term clients BXB with expect an with serves thousand We very e-commerce platform. the near agreement several an

agreement. and if execute everyone keep when will expected we informed the We

James Groh

Thank you.

what's base future Why to Asia Next Arab to United from the in business transitioned Southeast Southeast the this, Related your is Srinivas? Emirates? Asia, your of question. customer

Srinivas Koneru

our many was base As you original Southeast customer of Asia. know, concentrated in

gone through This to times. markets the Asian to led being our many curtail of Singapore troubled during Asian customers there had very strict border COVID-XX forced some businesses and operations. pandemic. Some Southeast controls their have

drastic their of another moving country. step operations a took to even Some

by the we expanding presence, Asian faced which company, had Given our challenges relatively in Southeast or development We however, the base. business to difficult a had maintain growth UAE-based team task success. We our business. strong were, user expand successful resulted in some

to to also play. we the to base would for summarize, are working did decline us To Asia. We operations with the Southeast into our at like decide customer economy there consolidate that UAE. time. recovery X SEA business. our were Southeast the UAE forces increased in over expected business The is U.K. Asia important of I market our the in an given rebuild add in

next and development are In building Jim? other months. diversify to at our business addition, teams over to and geographies the we success in in are UAE replicate looking expect XX further looking

James Groh

you. Thank

Next question, of doing of is receivables the $XX past can its outstanding company the you trade particularly collect over X to in over the light impairment years. million Alvin? receivables, in describe what

Alvin Tan

been have although making Majority the of by faced customers. the challenges payments, longer resulted have have there in customers from cycles continued payment and COVID-XX company our Well, delays. the

faced challenges the customers on far the As mainly of years to the over COVID-XX. the account by the past was is X specific impairment concerned, as receivables due this of

a customers process. or these currently undergoing of have is undergone liquidation some So

James Groh

Alvin. you, Thank

Holdings us you can the of Invoice tell Srinivas? question, is how progressing. integration acquisition Bazaar the Next

Srinivas Koneru

flows IB completed have integration and Holdings across We human resources, reporting. processes, the cash

be will few We coming the integration months. of in completing James? technology the

James Groh

one, Again, fiscal would company Srinivas, in anticipate M&A activity take Great. that the Does any XXXX. you please?

Srinivas Koneru

selectively We opportunities geographies believe segments. a opportunities. or product phase our through us consolidation to actively for industry that continue We newer M&A look going look which is give access to shall and for

James Groh

Great. for drops And revenues. can final the the in you the explain Perry? question, reason

Perry Mangers

primarily challenges The primarily a which has the by in faced chain $X.X customers. and decrease from to the COVID-XX pandemic to volume, global due the in total on was XX.X% had company was revenue billion impact transaction due the decrease our or supply

in our as However, we for future. seen we which financing marginal ratio, have good increase consider a sign our a

James Groh

you, look time, achieve us you Perry. your soon. forward you Thank this we At this confidence and a have day. to joining today. want speaking Thank it. our ability of for We I our appreciate session in with Stay all question-and-answer will everyone call. safe to support our we to mission in and great conclude

As a not contact remark, Relations operator Investor concluding trit@gatewayir.com. to conclusion. for if answered, and was at your over team all, question this you our turn Thank I'll the please

Operator

the Triterras' us for for joining ended conference XXXX. year you XX, Thank for call fiscal February

You may now disconnect.

Triterras (TRIRF) 28 Jun 222022 Q4 Earnings call transcript