INS - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to the Intelligence Systems Corporation First Quarter 2021 Earnings Conference Call [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to our host, Leland Strange, Chairman and CEO. Please go ahead, sir.

Leland Strange

Thank you. you, joining thank today. and morning, everyone, us for Good

to the announced this our XX-Q. As just Matt a turn the Officer, know, will Chief we Intelligence I'm over the earnings quarterly results our and Systems' changed White, to I minute, our impact say will you expectations not probably operations. the much in filed and that last has for morning, for things as some Financial to XXXX first well add, a to compared lot upfront, COVID as going impacting are discuss who call except not call. quarter currently

you remarks. So do Also, to during We we specifically. room Probably the though, to have the it questions any at best we you in that, call. probably and best conversation, e-mail are that's upon us Matt both that a will remind them may short I conference take all though, want I not our the that is answer one the ways the be of are to to questions and questions intelsys.com. may of monitoring conclusion way.

that, over the first As to be turn in information comments. weave context quarter. to call I'll With of you I asking the Matt to other the may the try do discuss

Matt White

good Leland, everyone. morning, Thanks, and

are XXXX and These filings certain environment. start, the and filings. I'd differ future business Factors results may materially to in to statements forward-looking help factors, factors from with cause operations making expectations. involve the during could our that subsequent Form and you of actual be including its uncertainties risk I our affect SEC XX-K other Before that intelligent we'll included like to that a remind call, understand systems number everyone statements

in our line As we were releases, quarter noted first expectations. with our press results our in

first compared and first to million, million of in quarter professional professional our revenue revenue services $X.X quarter increase the year-over-year quarter-over-quarter a of components was of the $X.X and XXXX $XXX,XXX. of $X.X processing revenue strong for third-party processing revenue and remained for first of saw of consisted Revenue XX% of maintenance. growth revenue we and and quarter maintenance Our XXXX. The services million the

we first license receive any expected, quarter. we did the in revenue As not

reminder, However, recognize second of quarter both a we do as revenue XXXX. in to second license expect and the half

exciting While in we we impact new the first processing in growth for prepaid quarter. in that revenues added the combination global recently material started still American this first the XXXX, do our future processing from loans the customers impact for Dubai starting of the not government minimal and office Ansari growth minimal will from recognize quarter drive revenue results. will revenues. XXXX it's to of the some determine quarter, second annual too platform and are and will early in in and the our Express have our processing continued in stimulus for live We new was expect Exchange continued programs, recognized from us a growth maintenance We of and that revenues live existing XXXX have Al revenue was with customers. an who now our Similarly, processing likely but impact quarter a second on our beginning went customer degree

currencies a one in platform different Our wallet XX functionality provides of complex with wallet. multicurrency

the in receive was and not license any first mentioned, that line as Turning license to revenue. in with expectations. quarter revenue, I We did

to we in as to the likely $X.X quarter in services second expect similar However, tier license first of $X.X in quarter, to expected, million anticipate half. expect the the we strong in professional services the the revenue we significant in continue license revenue Professional and new do range revenue million. a quarter achieve and second second was

in COVID-XX increase recent However, pandemic we we discuss India, which in of the by will could later. impacted the severity more be

operations our for some of $X,XXX,XXX on additional the income and for year. first from Income time XXXX. to quarter operations income last highlights the the for $X,XXX,XXX same compared first of to was statement from Turning quarter XXXX

of a for in Our of of the operating our in in strategy. was XX% The Dubai year. margin time long both margin the office which environment, XXXX previously operating first China, compared an processing our announced by year-over-year primarily and of openings quarter was term critical same for infrastructure part to decline margin operating new are last growth XX% investments driven our

currently expenditures therefore, capital costs. a Additionally, development The processing enable the that once mostly building additional us are and development early future platform higher is will in stages, and to investments and will expense, research That we've and that's we new platform in in is resulting customers is future production. on made XXXX the in live and years. depreciation take result in stages

valuation was compared rate XXXX due tax losses. a XXXX XXXX. to XX.X% tax investment allowance XX.X% XXXX QX benefits tax QX on higher Our from to in rate was QX The

$X.XX to ongoing We expect diluted $X.XX our be quarter share rate compared XX% and XXXX. QX was Earnings XX%. for to the between for per tax

morning, million authorization additional million noted maintaining Board repurchases. In cash while approved XXXX, we our to press significant our the future $XX our release, As reserves for in April continue in to future. share of we repurchased an $X.X as announced invest shares this

remotely have so slowdown than COVID-XX significant year been employees and in to has our now. we give for a in turn effects impact XXXX. the our business fiscal related the economic like on I'd during more update seeing a we Leland, India the been are on on stemming most XXXX brief from The I year relatively back a working experienced Before the impact far muted in COVID-XX. call to Overall, that

and functions in to to services above and revenue. able maintain our business to in reflected be professional delivering gone key have continuity addition employees strong our beyond to Our as service customers excellent

revenue. we the services at professional pace the pandemic, hire train which expected in able been to growth impact haven't However, XXXX we could and before

we severity the our yield revenue employees investments last and increase prospects future. everything in appreciate done difficult about revenue. period. pandemic new have such a into to optimistic impact professional throughout do growth in there long the recent and the could will and believe services of made operations We incredibly wins continue our India customer year remain We year in and the and this term Additionally, future

mentioned and in we with to I'll press release, range it our of morning's Leland. As compared this XX% XX%. estimate growth turn to expect more previous line XXXX, to And as that, tighter back XX% top from positive XXXX for XX% a of to slightly

Leland Strange

now looking about the reopening. kind any of Okay. experience seeing last of wonder we went if it are private companies, our about doctors even can I back so issues a India the great Thanks, We COVID kind in that the COVID. We're COVID about coming our operation today their to is ironic We're employees full point. next. would difficult but as that is Matt. our impact at other all companies It's main are concerned concern. they of sort daily in and so now this talked tail our and a families are through many one Matt with everything of and on or the And the impact. the operations and impact of terms some year directly doing they're we're in without emotionally and vaccines competition for that say either talking

customers. customers priority. and largest we have resources when XX% from largest don't who from affected India smaller does is it after believe had that that across some on there of maintain Well, we all the our focus means latest We fewer report from offices first, resources largest needs, do in and future to continuing our left divide our the customers. we're first think largest already resources recovered. support spread And revenues to any in revenue customers align support the handle that see that get our in are to our employees for that and are and that business? then we That resources revenues. we come tight, of can we our business going have any to about deterioration by have customers. How to are When and I who've impact simply have the those been obviously mean, the have I those our maintain that, current and support

the develops, continue this at company cannot said, accelerate add line to better of going point, that's what can't reengineering of impact of emphasizing cannot, the in what processing the we getting a that plans project it I our We dismiss COVID terms simply is most call team complete do project, heard of quantify to do we expense also in to under I trained but since in for to that half likely US our a additional the a that time about workforce number of as substantial will project up happen payoff impact, because on to expect we license for has what resources adding But COVID could more in wish second key and controlled, [Tesla] we I the revenue but increase but our and talk said, projections. our and good our license multiyear getting believe earlier maintain of make software using for about we'll That's the quarter in your I costly in it the and revenue latest this there think of you say will wanted where just technologies. we it customers provide later the additional Matt I a of expense. are It's highly you future but the support just to a big growth. revenues. who I the constant year. again, Matt

of this as be We're customers on far there opening offices new As year. our going and business, about Dubai new commented later read the adding new probably you Matt to that.

Microsoft a programs, programs in Cloud of credit which rewards. part one are that on software [crypto] new banks. US, new there. big Also will complete These we the with are on have time Asia, instance the [embedded] our They of support We several is separate running not to customers to develop. take are multicurrency offering with coming including the

the get business the lawsuit action] lawsuit by was much of was that's before has the questions. however, to want [class some I we filed been filed the judge. So the do that mentioned, pretty to dismissed the that of highlights

waiting on the are but We opinion, the it has rest of dismissed.

you but years talked to ago get courts report when when had As couple filed, substance. would it what always hoped to no a in they as a about but happy had of will it, the was it we're we We question simply dismiss there's dismissed. happen, we've

some go to of me the questions. Let

capability. said I significant that them as processing is, one one I now CoreCard's of is credit its of think influence like and flexibility that sell

is do The that that, So dynamic? I Well, how There that XX, the side? What talk to one do, there use not And that Can you few credit. than of processors. that Al very surprising really folks complexity understand big other prepaid. to bit me prepaid about prossers the out the [differentiates] number often than but it's help I Exchange of I do but prepaid for on maybe because CoreCard other credit a XXX. that Ansari lot quantify we of processes that processors. lot a things decided are prepaid CoreCard not thousands, is a more important, it's are don't there. the

very So a prepaid have we to tend emphasize the offering. But we credit. strong

a We particularly our of platform a and on good offering. we have multicurrency strong number prepaid have customers

So and different where folks going what different travel are cards, who particularly would that's countries currency. to prepaid attract issuing folks a need are

strong some But know credit, with prepaid very complex So prepaid just about credit. have I again, that often a along program, truth customers. talk good is we I

I customers pharmacy providing for I a maybe names, think prepaid all of providing, they're the one but of card large say providers. our the shouldn't one is

CoreCard technical to did myself, a are Dontu, our to to you at Intelsys.com and We ask So that. us. we're we a questions office in question. that's it get the of -- those in have Matt and side, through the question active question I'm going Dontu for with And I'm very explain CTO that have today, also since I like fun. going that is let technical our

providers? explain you tokenization clients? of the for Dontu, could the it your is offered by question And is, other So importance

Eswaraprasad Dontu

try I'll you. minute. thank maybe a Leland, Yes,

you the are provisioned, cards know, wallets. every are So to so added all digitized over day why the tokenization? As getting [cards] the being wallet

will increase. market that cards segment the increases, usage As of digital the the side of

Pay So Samsung Pay, the to want these that's pays. to other to Google their and our mobile wallets ultimately add cards why and Apple clients and Pay wallet,

call [tokenization]. we what that's So

part people do sends Meaning I and that a the There way. manual button the this sequence do goes But are that's us. tokenized. So back as has call which be through We They it. gateway it app, the to scan yes, offering card. Difficulty] them. a mobile originated of have is your mobile have a where client don't from of can of lot card automation, you we clients they other do from the doing manual, the and the And card like is, Everybody actual information the the all be market actually Mastercard, share let cryptography to push APIs increased. now strong Apple cryptography be need that's my mobile to a sends the Pay card to you it. side. for A will top have. with send does number. necessary of [Technical the that ways the the tokenize like client And to want present is to One there, then and it, They is then see, Pay and sequence the to But they done consumer card we we the We what Wallet card do any then app, can automation the don't the talks it. need button you two wallet it Apple all initiates providers. tokenization. mobile clients' that's it app, then on to allowed that the have wallet, of to client, can app of cardholder, is to to the the our that's do

market are we we proud people automation. solution we automated doing the but talking time, about whole that the do up provision we are but first. the to That we I market, definitely much all there's Other competitors is yes, don't were are the some take and this that it came doing are So were it, is people of using want too, earlier. our whether sequence. to first to believe the so to other but

Leland Strange

future it and do for in is to has cryptography the So digitalization. with digital cards. security And obviously,

and more come out will without be even wallets. more that You and a the will more find on number cards the will card in

offer. wallet our of part it's So

So to to that I any callers thank if ask think a question. you, Operator, open Dontu. now want we it have see I'll

most We covered few of in others but think writing, have I a we've it.

Operator

Palmer [Operator first Mark with Instructions] Our question BTIG. comes from

Mark Palmer

I is, question guess growth bumped for of guidance end first your lower the you've revenue up XXXX.

in gave Just color you to wanted terms do outlook? of to what your confidence some that get on

Leland Strange

is cards we a get are quarter, we what the as so our typically, customers, each Well, closer for to able coming along, see project how we're rate growth new to that little tighter.

history, a history have and history of mean, of bit quarter, We also of little in terms terms previous -- services. in the I professional

have two to us that do better that? next little quarter Matt, a to two. between So those for insight or gives you anything things the add

Matt White

that to think end range just bring quarter bottom of it's to No, the I the first up strength enabled of us the the tighten little and bit… a

Mark Palmer

seeing on in you you color that [could] we a at now Are on particular, are COVID seeing a least result? if uncertainty pipeline in States. in the what right pipeline, just some as you're processing especially give with the some general. United in pickup received as the color could If in give you And seeing associated

Leland Strange

Well, we're in of much medium. pretty terms it seeing new prospects,

I think think the moves are larger see folks hesitant still and you changes. making about to making

very early. to still pipeline consider that's there. There's real So no

don't new about fewer have have. up of entrants, terms that out messing they something already it's to coming they with They're something fairly so strong. In worry

growth, as as down at the far increase. seeing coming we're to card As is growth least, yes, US the -- slowing in it's COVID as

going and mixed it's real see. a bag up early. with it's everything what it's any projections we come between I'm to to on [saying] now good in still So right

Operator

Soderstrom comes Anja from with Sidoti. question [Operator Instructions] Our next

Anja Soderstrom

Wirecard. there to partnership kind wanted is of better those Difficulty] that unique, with that -- or understanding in there, opportunities this the Dubai [Technical Is partnerships I of is more for partnerships? already, wasted

Matt White

-- it it's of think on A of globally. think lot opportunities. pace We more I there's depends the travel

a travel, some probably customer takes it’d some similar will had offering. interested there. to multicurrency with be potential traction some that before up more So getting discussions more so are of a interested and in We a customers we're offering that travel this wanted more customers But as picks picks up, in morning that offering. time type unrelated

Leland Strange

say will that not we thought It happen there had the this year. would was there. there we have I if in we not substantial opportunity But in substantial wouldn't made be will but investment just years It market. think there's future that opportunity

Anja Soderstrom

[Technical or… [would opening that Difficulty] driven be] the then by And up

Leland Strange

hurry a at we're that their because real purpose form think time other get curve something. is taking couple former -- credit Dubai to more and to to we'll as the well, talking and office, we customers up do there are on wire there first, open there's East. muted, no be general Again, in the opening prepaid and for this But Wirecard immediately up, customers get customers on we'll continues of Al over part of was Middle the more travel travel we'll Ansari customer looking customers By point. a

strong overtime. think be we So it offering will a

Anja Soderstrom

And then on on little a get said coming you what's in professional you terms that going services, might that that? be of expand -- India muted bit quarters. the just Can in

Matt White

a quantify very to point. hard It's fluid situation. this at It's

Leland have as impacted, or he have some As are of been recovered. employees about said, X% our impacted mentioned,

given So to there to not say but will tell it's just that what impact fluidity what be able of impact certainty in the situation the with hard that quarters. to be we're the improving, things are There's optimism yet there. the would be future some

Leland Strange

take the where way care trend we're it. it to us then helpful to we'll see be kind even going we to any of the to moving once try with of other then project to project And mitigate able line inside the that. make customers. we want we find is to do What We not it's issues sure for

Anja Soderstrom

you more guidance it do maintaining might are since But impactful think for for this XXXX be your year? you

Leland Strange

through only we'll But Because, before, support said want be will with the Yes, we our get can current of And say customer our to I've cases, names, what you, new very with potential plan. new it going we business, as you in I they will who's believe but kind have, well, to ask we not business. that It impact expect? have. they plan, that's some XXXX what able -- what us. do specifically support numbers

are not offer So we position at point, a this in that. to good

So We talk minimal. in we try just I'm until to does XXXX. hope with not have daylight impact that going see it's some to about that.

Okay.

We on have came and another I'm one. and at try our question questions in it [intel.sys], that to to that let answer Matt going read

Matt White

question on that got the hired dependent just We in and people we're hit when from phase. to India platform to move the in capitalization a addition being the I about the we've far the is in expense to that new that on Difficulty] And about the the year-over-year. technology R&D, increase due talked [Technical building timing of as we as platform,

So the the very we're on stages you working about specific capitalize platform. rules early you accounting we'll of that can expense. in when that And we're still follow and when

So this CapEx. more be it later start that see we will to year

that. expect We R&D in our The growth. increase anticipation [Technical future hiring will will platform to Difficulty] impact that. development impact our spending of to continue hiring for The India

those impacted quarters, term I short don't will of eventually depreciation future the continue will we some years, be, come know will through say. exactly be run we but costs that and it in what future but increase by should So to the think of in in as the rate capitalization

Leland Strange

I'll offerings. our and it we cloud The only outstanding, question quickly, other about is answer have

said I before. think I've

well we on the cloud Our And Amazon which the run cloud, both the Cloud. running also which in Cloud, software Microsoft AWS, what we currently call, is data private our, as will is Azure as our is in production in center.

that's in very So And flexible we question software to the run our terms ability we're of the in last have. cloud.

on call. everybody want I the being to think, I just thank for

we'll questions you joining to the end today. you with want directly. as call answering thank technical that, us. say, or any Dontu Matt I we And the usually have for other for can and If everyone thank I contact question

CoreCard (CCRD) 4 May 212021 Q1 Earnings call transcript