Earnings call transcript Q3 2023

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Operator

Hello. Thank you for standing by. And welcome to Presto Automation Q3 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions].

to Adam conference Rogers. like speaker to now today, for would hand over the your I Sir may you begin.

Adam Rogers

Officer, fiscal our earnings Good Presto's call afternoon, Rogers, I'm all Krishna Automation pleased you Officer, like Head Interim to quarter Principal everyone. At Difficulty] here and Ashish joined Gupta; this Chief to time, of Investor to Gupta. the Executive at am be call. [Technical by I conference I'd Financial Relations welcome third by Adam XXXX Presto. Presto today's on

Operator

and this your [Operator Ladies gentlemen, Please is stand conference Instructions]. your by, operator. momentarily will resume

Adam Rogers

So be I'd conference Ashish today Automation call. Dan you line on Presto's by joined Presto. Investor Krishna to earnings fiscal Rogers, the with Adam us the at Head of today's and Officer, call like Presto Financial to CEO, our welcome Principal I'm Relations Difficulty]. Gupta. Interim XXXX to third Gupta; is on pleased quarter Also here all I'm [Technical

Operator

for issue. apologize we gentlemen, the to and Please stand technical Ladies by. continue

Adam Rogers

So on is prepared of the be press listed which questions. today's will for presto.com this at to call open A available will after in the Investor remarks, website. the replay Relations replay Information release, access is our in section. available our call we

filings discussion are statements factors guidance to our our XX-Q our call, performance. recent everyone including unknown these any forward-looking are other including XXXX. today's and to We the applicable events. during to risks new statements full today's revise in of future we measures ourselves today's refer making press begin, guarantees or encourage not risks uncertainties. of our you Before future and which these fiscal I'd market for like and subject affect most will stock. measures. for results of Web finally, we're and to of release, or will obligating review Also, that our information included statements forward-looking complete we from light results and Presto site. that in our non-GAAP certain events of These financial viewed to performance, reports, not remind Reconciliations And these are non-GAAP price information earnings downloaded a known be or over Relations financial cautions Investor be our future GAAP that during statements may forward-looking call, we additional future certain year and to regarding can

over Gupta. with And call to begin Krishna turning that, we'll CEO, by the our

Krishna Gupta

at one. is pub in room Asgard, called Presto. to as pleasure for time Adam company. and you to first our the investor Asgard. our called I'm in fiscal little today questions Presto. I'm reason was was actually the now I joining a I'm It's simple. for am longtime than us MIT a a speaking call. even third a Thank CEO and thanks excited first the for writing Sitting largest the product. on day It's shareholder you, everyone of now in I more a quarter I The earnings magical sitting next a Prestonian. conference trivia

He's Founder, a start into Voice, and Presto advisor the in a and his whose his over long dedication to here last for this thanking our generative by market thank partner and taking even as company welcoming our my great team product, next build more talented business want I pursue family. at Suri, the I changes projects and for employees off leader I one our drive leadership time, which Presto. neither impressed Raj to an the enterprise. using been He for decade helped AI throughs our by today. has Presto been are years of AI all vision most We over since hardworking friend and in personal XX the automating that's Presto voice applications actionable with me. CEO. that of immediately and to appreciate desire to is time want be for I've remains

have both able promoted instrumental search recently have Presto as Dan may leaders has Xavier development grows. commenced and The long the implementation are CEO we key seen, you it steer company will permanent who been successful term and external and Voice. Board and in As internal both for of a the be for to

and suitable of to We XXXX will an great I'm had and point. [Technical run a to I'm the where has process at and we no in are market inflection rush role. earlier exciting however, at an It's Difficulty] point, candidate. In a MSA meantime, most CKE, order we see with intersection. company that Jr. Carl's find To are at Presto revolution an technology place the squarely parent having of time month immediate the proper in we be opportunity convergence the the this such a and iconic the in rare signed

Operator

stand please gentlemen, and by. Ladies

will conference Your [Operator momentarily. resume Instructions]

[Technical difficulty]

me labor just why you decided the customer start drive important It's largest AI have automation thrus announced to is and us, its its it this does is let So country. point CKE savings. drive the know of thrus an just not over for in across with wanted about because it

like [Technical stores increase they Well, a difficulty] at of the going During revenue moving as some to had second right. also mentioned saw with in ups our pilot technical deployed the looks has our I'm All keep difficulties. device on. CKE, they healthy result

They what they importantly, staff saying better Presto they the in I higher were in and check upsell service. think it they think want want of earlier wants, the Voice If are it higher sizes know, we about customer upselled You every was customer want results all speed it and versus increases what and Presto with order, satisfaction it faster sizes. check most getting we Voice. of point attempts human

of hyper size. gets increases It perfect in it and customer personalize our average to that all increasingly the technology loyalty, drive check ability a the lowers it As will upsell enhances the above. we the the satisfaction, smarter, labor costs Generative AI way increases we toward will brand increasingly does actually the upsell, have

return $XX,XXX gig provide. labor platform excited Indeed, Restaurant customers combination revenue provides. the about the love the rise experience like savings offer the for voice on an and and That XX% month, it a interest other into This of on in spike to savings and March $X,XXX lot around all create monthly acceptance Presto in gives little like a the counting the of value cost Voice labor rise industry In major AI parallel continue is in opportunities, drive brands represent which I'd rate $X,XXX and revenue a that US, thru we to take additional questions restaurant rate shortage the issues, the stores get challenges to a explain in significant the with And numbers across would ROI. the to solutions. has revenue. economy Presto’s a the with and to before we and investment, our our 'XX, So rising to in in led detail of and XX% AI was per bit macroeconomic are proposition go of inflation factors more minute deployed. an even the generating in investment. return had can in also a extra

hope in and drive Presto popularity five in XXXX MSAs these has located seeing this We expand in promising started country. to the we with brands during Many convert of implement large discussions thru increasingly year. several geographies that brands pilots globe, the increase the have US. signed been also we and to calendar brands across with also restaurant outside new across are

if brands We $XXX these expanded. million have a opportunity plus five fully from ARR

the The we X,XXX more logos XXX have MSAs potential $XXX end drive with Box, thru totaling Jr. we the than if expanded. including successfully had million voice potential in out Taco, OpenAI in we third around are the expect our thru customers, with and Del our more these near rolled of Jack footprint Carl's our ARR leading drive fully announced Presto and represent Checkers, fiscal At outs and Hardees partnership powerful the nearly quarter, currently possess enhance term we AI assistant. the drive implement to this locations, in live largest week. believe AI of thru quickly voice quarter, accelerate to every Also as industry industry. we restaurant We stores already roll

have in legacy OpenAI over with excited speed leverage of process over also the about opportunity couple to to of months. [Technical personalization improve own our now LLMs testing of our coming enterprise Presto Flex further provide class a our Several built processed and the Difficulty]. want are relationship we a to to product. us. our the technology, to touch we Presto service business, world While are for partners minutes I has and intend of speak which continues for

AI this the from experience. main our business we potentially our not technology Although touch even over can our to value layer customer of products could time, onto focus, we improve further touch believe voice our unlock business is and line

As is and to mentioned talked rationalizing growth burn earlier. about to recurring vendor by sacrificing steps headcount spend that last operating Presto streamline without initiatives operations quarter, we and take continuing the reduce

overview give shortly. detailed will more Ashish a initiatives these of

and speaking be changing AI in own around Lastly, and tangible is hospitality of for we But time revolution I'm a the opportunity here with rapidly Presto. you us very to vertical. a a excited such transformational in everything slice to world at have real that the

Gupta, our hand to Officer. I'd So Ashish to that, with like it over Principal Financial

Ashish Gupta

you through for everyone, Once the our joining our for third touch quarter us Krishna. questions. walk today. on This call you, fiscal and Thank year I'll thanks, full afternoon, again, then open guidance results,

ARR a would XX% million contract in to results We ARR replacement. is section accounting reconciliation revenue prior the and of for expense Running business. note, the was which measures Web to adjustment for COGS our run talk increase well the was from site our Transaction residual costs equipment Revenue to amortization I'll mentioned, to prior presto.com. installation $X.X been impacts the $X.X certain due increases a related higher As down versus in at our year we versus Gross that in year, voice the treatment touch $XX.X QX quick million down statement. about related million QX. pricing and freight GAAP million, recognition related in deferred just as basis. gaming the to to This due have [sticks]. non-GAAP was year of show accounting prior COVID reflects press revenues a investor rate. related This a in total, to from due the relations a profit lower contract. as both release, legacy XX% precluded increased customer $XX successful specific that income but the of available on certain

fiscal bleed June. We expect this legacy COGS through accelerated the by expenses our end P&L ending 'XX to of

was OpEx expect from outs solution $X well system 'XX into trailing the AI as gets includes we pilots QX to year. $XX as convert voice the trained. the million versus roll normal prior this, we time million impact enabled wide in expenses merger. as for our margins QX of items Following This fully expand over and fiscal operating

million public fees the quarter company of such, related OpEx compensation EBITDA included last compared service legal million $X.X of of increase with which As a year. $X.X same fees. $X.X of million and related adjusted loss loss million expense. based $X.X $X.X primarily compliance for the higher million fees service $X.X temporary $X professional expenses, The for stock a million to quarter million of and as executive noncash recruiting represents accounting though to

goal business about. the to specific and to cash with fueled take business of voice started talked growth Krishna specific we have This combined is part we that reduce steps OpEx profitability, operate the get As [burn]. to our to going forward,

X in more cost rationalization mentioned, completed achieve start and end complete with cost we we interest on and vendor a synergies lower across Phase base. along fiscal the the initiated had initiative headcount of to Phase was now our of layering efficient the process, call, quarter, all by detailed the so with March As functions. last exercise a 'XX we're by current X that and will rationalization we

again accounting voice ending as week, customer revenue is this GAAP Please was GAAP this earlier around commercial to to which as million QX. we expected primarily 'XX $X earlier, operations. $XX be we we for noncash that, a adjustment and adjustment I year guidance mitigate more us and the concludes note, take range with continue Krishna the now stores ready material your Further everyone to XXth the I voice our as of to announced. year. this $XX logos mentioned to and we 'XX to and is to contract fiscal prepared due questions. total With starting to that expect with we the expect Del you remarks. CKE June connecting The of in discussed expected impact today out we Taco $X that million impact accounting proceed change in new thank million. this two not That fiscal of range We specific be to between look for to million the are roll and have want with forward joining throughout

Operator

Instructions] of Chardan. [Operator line the Greg Our question Pendy first comes from with

Greg Pendy

Hi, Pendy Brian for it’s Dobson Greg Chardan. in at

of couple that several you more MSAs, fiscal earlier there's One, targeting could you you this a were say thought happen calendar Just talking XXXX? or this at year questions. did year pilots

Krishna Gupta

Calendar year.

Greg Pendy

And then…

Krishna Gupta

think several now. we're year. of of Yes, converting we in it terms calendar as pilots in a the But MSAs

Greg Pendy

higher interest then the order, guess, that, or you're you're across customers you're Carl's seeing with pecking earlier voice more AI? this to savings that labor that on working in starting the in you're check with And the think board on three talking less Jr. you're the sizes, just I just seeing that upselling that just with that specifically -- is the I was is all on see and

Krishna Gupta

say wouldn't it's I less.

So as the first that I I first it labor a don't characterize are that think interest. customer onward. -- is of savings from had started out less all, of think learning rolling And we that I we've would this

we I the think is started largely be this ROI. what's savings when more would we totality the path, felt of labor important down

really chain. equal realizing that we're to what that However, value even upsell or more is is perhaps the

ROI can AI sort upsell And can a and a the frankly an sense momentum. reason partially engine the better better learning can. numbers, accelerated show the makes been being market that better. just upsell those keeps we why of so it a that's that's prove and getting human been We the And lot there's can than

Greg Pendy

final then And if one I can. one, more just

to looking are transactions slow and Your that restaurant bit. transactions year good was of trying kind out a your just Do balance of fourth kind think full in likely were in quarter pretty uptick an those the just at and in and the you of because quarter, to traffic? guidance

Krishna Gupta

seasonality should I steady. And primary significant in price our to hold hold driver transaction of mean, expect we our continue it any steady. which isn't to was business. fact, the the There increase, in uptake

we posit as would forward. this new going this would So I -- expect that a run rate

Operator

Thank showing to remarks. you. I'm now call Krishna Gupta questions like for I closing back over in the to would further queue. no turn the

Krishna Gupta

create technical much, Yes. you see bearing three Thanks to thank We again and magic we for thank difficulties. being Presto and at so in you hope you months our with And here. look to time. again for

Operator

for Ladies call. this you gentlemen, participation. and concludes conference Thank today's your

may You disconnect. now

Presto Automation (PRST) 18 May 232023 Q3 Earnings call transcript