NOGN - Earnings call 4 2022

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Operator

Good afternoon. Welcome to Nogin Inc.'s Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

Joining us today from Nogin are Jonathan Huberman, President and CEO; and Shahriyar Rahmati, COO and CFO.

Before we begin, Nogin's management team would like to remind everyone that statements made and/or answers that may be given to questions asked on this call are or may contain forward-looking statements that are subject to risks and uncertainties related to future events and/or the future financial or business performance of Nogin. Actual results could differ materially from those anticipated in these forward-looking statements.

and are and to, the outlook. business adoption Nogin's but predictions expectations development include, well of financial as of performance platform statements not and Nogin's limited or and as Forward-looking competitive measures industry cost-reduction and conditions,

statements to uncertainties assumptions, as and alter any to are to expressly and law. is not or risks, performance. new information, otherwise, of or required update, any result whether guarantees disclaims a of Nogin subject forward-looking otherwise under are they Forward-looking events and not any statements, as revise obligation obligation future except by

performance income, GAAP. or Financial operating liquidity cash income, net refer in or view should as be not important certain call heading addition, other cause assessing these to SEC. On be Risk Form the from and performance of non-GAAP in section year our actual including metrics profitability, the ended some These later XX, the found an XXXX, full Measures. of those the flows in our other Non-GAAP description be differ on the Factors measures could our to this discussed today Therefore, as also that filings call, from December release of alternative materially business. under report derived items uncertainties SEC forward-looking for quarter can in In that EBITDA as with considered certain in the exclude to results non-GAAP we the filed will today's a to accordance any and the XX-K indicated or in adjusted operations measures measures, isolation we revenue risks the of by with and on statements the with

measure to full on and aware that ended non-GAAP on used titled Nogin's Investor year at measures reconciliation the Form comparable XX-K is available earnings other similarly XX, the these quarter release comparable our for You our Relations be in XXXX, page of measure should companies. company's each www.ir.nogin.com. A to the GAAP may by of not measures presentation be report December

like as webcast call would at to on release via will in earnings well I Finally, everyone of that website the as replay link be today's www.nogin.com. our this remind provided available a

over like to Jonathan Nogin's turn CEO, I'd Now the call to Huberman.

Jonathan Huberman

Thank year. review Welcome, today's you, results begin discussion, and for our the call quarter the everyone, and questions. afternoon CFO, our and I'll of the you share provide overview last COO some remarks us call closing for discuss earnings to Shahriyar highlights a Amy. before After like this year's To over for business our turning thank and to that, quick opening I'd financial our on Rahmati, call. to joining before

who retail to you we and this all. Nogin's there who satisfies help story, it more in continues manage and few need merchants that may to sophisticated, a is new at becomes be that e-commerce of sophistication those need Commerce-as-a-Service Nogin, to the expertise, at For as personnel but market lack platform believe capital our large a grow to ways. e-commerce opportunity

multiple end-to-end headless, to plug can that technology a provides instead platform paying of technologies. Nogin First, integrate merchants into

integrations. full Second, are These Nogin many for platform, customer manage or AI on and capabilities that delivers to buy, commerce brands their advanced generally social too include capabilities complex and abilities build costly own. a data

expand ensures most through asset, taking outside tools, insights model Nogin complete so unavailable our features immediately service of replatform includes conducted clients. a build platform, e-commerce because and their innovation need ourselves our to required Third, are on from eliminates the leading-edge alignment e-commerce our new operations. insights Nogin that data Nogin and as drives between resources performance these brand to includes our percentage which they're Further, platform. Nogin's And to available for clients R&D never sales identifiable clients. on to we incremental the Nogin customers lastly, of and based proprietary as a our business CaaS

and growth marketing continuously Our drive innovative pipeline scalable efforts platform, increase Commerce-as-a-Service e-commerce. strategy products key pillars: client throughout and and to into and sales markets is rooted X develop our our base advance expand in our and new

We to these can service to make continue and XXXX. Altogether, e-commerce the operations our product all grow as progress we and scale to parallel. we on look offerings, fronts our of clients' as continue rest in scale

and execute year. driver growth in to Also, nuances fiscal best a sellers their to sales of our of Our to growth on to upfront After a position to made client August, their allows forward to base serve to with ways, take commerce part still in force. to efforts like These sales the business enter would now a year in moderate we to approach combination the resource-intensive sales enhance engine our of Nogin led completing In minutes e-commerce. I important profitably our that strategy, we are driving in our while an few for XXXX. to was mind, as acquisition further XXXX we investments was company industry our business. and our markets engine. as costs, to and bolster Nogin's business significant of look major a public without have this pipeline momentum grow capabilities. strong Expanding had go transformational additional to and public customer brands our remains on year and And on robust decision our efforts well strategy. interested to Directors that many public last our brands more core team our Board focusing expertise of management our and reflect

algorithmic, announced our on offers segmentation, customer invest first platform and software significant kind, including the Commerce merchandising and continued We our Commerce campaign in month, Intelligent of Intelligent optimization. of this version automated made which to powerful to previous in its new upgrades behind These builds XXXX. the culminated efforts and VX best-in-class of AI-powered features, launch

enterprise expect to we and Our goals in e-commerce continue to remain our capabilities, with investing forward. suite to moving access provide our technology cutting-edge clients

reduction Another performance improvement for and us half initiatives. focus of comprehensive of our XXXX the cost area back in was

position While expansion, the margin are crucial our EBITDA remain CaaS reduction initiatives part quarter. showing an These in we to for of loss growth a positive business adjusted and profitable already results, our operations strategy. fourth work including

we expect sales to while is help uniquely in look in to and results, high-performance exclusive on for cost-effectiveness As total, and XXXX, path Nogin's do that our our improved just to platform XXXX the positioned searching we're and efforts brands on and environment, that. With these of the will our are with economic expect investment technology our allow believe growth. In ways a effectively efforts to profitable our we that balance execute rest us customers we into forward. strategy to choices. growth are current Especially reduce moving mutually costs to Nogin, never driving engine

look strong Shahriyar are technology, COO to and our capitalize quarter our We rest and to Rahmati, over fourth strategy forward greater in financial call on I in to year team and our over and of the detail. the Shahriyar? XXXX. With that, momentum our discuss CFO, our confident results will turn full

Shahriyar Rahmati

Thank you, Jon.

ended quarter results for our December to XXXX. full year and fourth financial now XX, the Turning

inventory previous our revenue includes stems deals As purchases. first-party net product-related related X noted to quarter, that from that involve sales last revenue

generated revenue appears inventory GAAP within is revenue As sold, our net in that results.

$XX.X year, of non-GAAP from primarily the was We decreased indicator ago Commerce-as-a-Service business to in typically to period. non-GAAP platform core comparable and converge product primarily decrease to expect net revenue as parties. over was revenue from for $XX.X to associated quarter revenue The due Our decrease offset revenue partially revenue, revenue during services. by full related revenue generated revenue the net increase XX% million view million XXXX non-GAAP The in net $XXX.X decrease in million more and by decreased decrease X% in GAAP however, and quarter year XXXX accurate of product the a in million from net an due the revenues GAAP the a net fourth is in in revenue fourth to time. GAAP revenue. a XXXX. our in the year net $XX.X the of

supply QX the ago improvement million the loss in year revenue. Operating to The ago expense. The in have revenue, loss million. for to in program million in bad impact issues will non-GAAP of to achieved operating $XX.X over royalty the was debt management to million CaaS of comparable period quarter to quarter to end marketing from expect period. due cost increased of the primarily Non-GAAP full performance increase in and impact million million period. due rate compared $XX.X complete which loss have non-GAAP of the in revenue and XXXX. year a operating year in $X.X The by revenue in was full onetime operating and an to XXXX, and further, ago XX% performance, million the decreased decrease company's losses non-GAAP expects $XX.X XXXX, half was experienced full loss $X.X in $XX.X we fourth anticipated majority the year increased end run year first compared XXXX, million initially along chain for performance non-GAAP with XXXX these revenue year of of the the $XX primarily $XX And of operating measurement impacted the CaaS from an of million an the our of ago end The in XXXX quarter comparable of $XX.X the a increase with XXXX. first increase full fourth write-down at increased year initiatives of comparable The comparable of identified the revenue. to period. operating due be before the million is the X% $XX.X the between a primarily XXXX and activities in expected of For to decrease their to

Moving our outlook XXXX. for to

impact our agreements, of As revenue. as expect add-on progress well a we new drive as customer of will have customer based sales which today, on existing to positive to year-to-date, both

performance leverage Additionally, generate improvement in the of initial results the based program, and our and operating future. EBITDA adjusted increased our expect operational cost-reduction improve to increase significantly we efficiency, on

year, Jon. against providing to course I'd over like incremental updates drive forward now going As turn we to the look to results of execute my improved our over summary. the this forward. That expect strategy and call completes we back to

Jonathan Huberman

Shahriyar. Thanks,

Here confident excited and our the future growth forward. at our moving strategy against to we about execute remain in Nogin, ability

believe profitably our across business quarters. Operator, that and coming business please grow is myriad our in with Our open positioned we Q&A. well expanding over Commerce-as-a-Service for interested we a are of pipeline of with solutions, call that, strong industries the the traditional to

Operator

[Operator Instructions] Jefferies. is question first with from Samad And Samana our

Samad Samana

follow-up a Jon, to what whether I'm aggregate customer of you or I specifically? first, Nogin curious want pretty question. we're seeing kind behavior what far the macro speak along seen a you've And maybe for then maybe in have just from first So perspective, quarter. to you're

Jonathan Huberman

Sure.

X me in let touch So on that ways. different

So business. first, let new talk about me

but New we're again, the that accelerating to the I dramatically. last the as many in ones between business expecting see week no is week up to going did bookings last new get as of we April, guarantee XXXX. them, expect sign we're all and and should signings we have, of we expect to we end customers between had

So in about advanced I alluded of business the we one going in to accelerating. is it go Again, certainly, prepared advanced in well remarks guarantee but signed, top process the bookings we're On it to of world implementation consultants sales we're both the discussions. with XX the think momentum, and as sort discussions with there in top, really on we're no Hopefully, as partnering them get as will. to forward.

optimistic side of we're about pipeline very business. the So the

dynamics, terms weakest customer quarter quarter which first seasonally of as seasonally QX, demand to strongest you know, opposed is is for for the customer e-commerce. the as us in In

baseline our all the a uncertainty market. It's we of that out to the QX when end consumer completely bookings should the get may the be that to expect offset, know and going show is it in seasonally there's weakness don't momentum. by bookings whether we I you hard depends certainly, it of there's somewhat up, as kind it's it demand and you if new on will, because not know But weakest. up -- year the based So is pointed lot if

but momentum, the up see someone year, you next we this bookings if should see none it we know, the -- we year. December, of may As in we'll sign all see only of revenue

growth, forward part I thanks move just certainly, timing assuming no the positive. I see as to forward bookings, healthy year. as it guarantees, but XXXX, very initial look answer question? is Does But we this XXXX So due for up. indications that -- shows not are or the your as Again, it into of to very

Samad Samana

are business far so how I your expectations what And XQ? first your looking about quarter? seeing we or more guardrails think just, the you've growth or almost for what GMV maybe should we're to through then given And just Yes. specifically guess, what forward, seen year-over-year the shorter-term are in are the through maybe you

Jonathan Huberman

Shahriyar, do address want to you that?

Shahriyar Rahmati

Sure.

some -- you were look think some also we're some will. about revenue a profitability thought we fresh our decisions we've I as taken and of made at customers. if where business customers we've growth, prioritize There the over

And prudent there was which we rates for or perspective. long-term even cases That's we've a year-over-year have in come where decline negative increased so customers customers impact comps from those and slight where achieving are those customers profitability to the profitability. those And taken. a certain have in would year-over-year growth reductions at year-over-year are maintaining tack decision a for

to in we didn't anything. but decisions be did we around of versus first to didn't expect the costs. make the We brands simply some perspective, expect see how ran overall our engagements an didn't we and interactions think intentional all sales with and So mindful I we customers at nuance our see from quarter -- profitability

Jonathan Huberman

thing are way. somewhat mind, of set concentrated then as we a positioned, let's that one have that a customers, to fairly know, uniquely keep Samad, have put few And we you it in

be of of that And on that between unique all so it's all one industry how If a X across them. hard X they stock, ours one or demand a have not those, customer to what in project and is mismatch goes. based somewhat issue, could has projected of

Shahriyar Rahmati

the of entirety even the year. Or

Jonathan Huberman

Yes, absolutely.

Samad Samana

just for maybe me. then last And Understood. question

Just as of are cost-saving go? at kind that? is we the largely and Is just you there terms initiatives, we in completed more maybe taking consideration a And restructuring think the steps or cost-savings have initiatives? or where of to about there on headcount additional

Jonathan Huberman

ahead, Shahriyar. Go

Shahriyar Rahmati

Sure.

expected thousand recently, course will dollars some majority rate took warehouse our of with our and were those were period we of now, existing able such able shipments, forward, next lower concentrate utilize QX -- QX continued the our footprint previously while to leased in of as a the at are in related structural even items even and leases, cost in all itself benefit throughout into more customers variety materialize the which, were the in took and them efficiencies from we manifestation which full actions better that but achieve XX occurred The cost is over month structure, days, labor but So that areas distribution manifested where of have areas I new key. From late end in only process QX, others the not we've and per executed we then And cost our facilities of which our is business the hundred think we areas reductions, which quite this to on on know, those we sum reductions be of needing that actually continue in where customers growth were provide the facilities. those that to operations, very several are without to incremental, by as of took you accelerated QX. run efficiencies. we

the And Now when that's core combination that opportunities of operations, always that improvements looking we a further can we're course drives and our where especially running areas the efficiency business. find absolutely, business efficiency fundamental in about in as we our over way additional performance daily thinking for methodology. with philosophy drive we're the just

thoughtful smart and and expect we're driven judicious being and ROI both So investments. about our of those that see also the areas about to very in very savings

Operator

And Huberman his time, for call remarks. back now I'd over question-and-answer turn this Mr. session. to like closing At to the our concludes this

Jonathan Huberman

talking the Well, joining everybody. I thank and again you to look you future. appreciate right. you, All to forward in not-too-distant

Operator

Thank Fourth you XXXX and Call. for Quarter Year Nogin's joining Full us today Conference for Earnings

disconnect. now may You

Nogin (NOGN) 23 Mar 232022 Q4 Earnings call transcript