SCKT - Earnings call transcript Q4 2021

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Operator

Welcome to the Q4 2021 Annual Financial Results Management Conference Call. My name is Adrian and I'll be your operator for today's call.

Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements within the meaning of Section 27A of Securities Act of 1933 as amended, and Section 21E of the Securities and Exchange Act of 1934 as amended. Such forward-looking statements include, but are not limited to, statements regarding mobile data collection and mobile data collection products, including details on timing, distribution, and market acceptance of products and statements predicting the trends, sales, and market conditions, and opportunities in the markets in which Socket Mobile sells products. Such statements involve risks and uncertainties and actual results could differ materially from the results anticipated in such forward-looking statements because the number of factors including, but not limited to, the risk, the manufacture of Socket products may be delayed or not rolled out as predicted due to technological, market or financial factors, including the availability of product components and necessary working capital, the risk that market acceptance and sales opportunities may not happen as anticipated, and the risks Socket's application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so, the risk of acceptance of Socket's products and vertical application markets may not happen as anticipated, as well as other risks described in Socket's most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission.

obligation any any statements. take doesn't to forward-looking update Socket a participants At all in listen-only this time, are mode. conduct we'll Later, a question-and-answer session. [Operator I have David phone with President Officer. Chief the Officer, CEO, Zhao, Business Holmes, Instructions] and Chief Lynn Financial Kevin On Mills, and me, I'll to Mills. call over the now turn Kevin you Kevin, begin. may

Kevin Mills

for over and hand growth record our Good a QX for our a to Dave million. review joining of income by more detailed and to its and you range grew our us the the with $XX.X Zhao today. outline in Thank you, of XX% of adjustments enable good believe maintain thank million. minutes. start revenue Mobile quick operator. financial I operating reported provide was Socket XX% maintained and of go-to-market in track these a the year $X.X will results I margin results, call few Mobile. Lynn our afternoon, our Socket everyone, and gross We will to product who years. for want to We We few Holmes, will XXXX next strategy. XXXX a improvements breakdown the very in will improvements

hard we progress continue data from capture success a partners. markets, over our we achieved these application the it by revenue our In over the and QX leverage grew application improvements also on very brings maintaining benefit Switching XX% amazing work driven of show $X.X of highlight focus our the at we business made XX as results. Socket results The difficult to and the million. results months. XXXX model our by great as to a QX, our Mobile. benefit our company in of time, the to have team past Our the We environment deal here by a

which operating with in chain gross lower to difficulties, increased for margins associated due an quarter at very income weak for good These a the deployments. slightly primarily quarter. up for costs seasonally supply are Our is QX, were retail-related $XXX,XXX resulting XX.X% results

we So, entered than a XXXX. stronger company better and enter we XXXX, significantly

In made we progress, the addition in to financial XXXX.

a also outline data our are application like better needs. how positioned to I'd will to we going better much and market deal their Dave. partners feel learned serve we We Holmes, capture over Dave call forward. moving turn from will who great forward serve this now to the

David Holmes

We that of have made we to NFC highlight this good in week, a capture which sensitive performance capture I'd in about earlier the in commanding market, primarily a we to And Thank Kevin. strategy. may afternoon, mission of joined another we The key market, middle and great last strengthen our in previous strides announcement you, our I become the strategy today year, a more When a calls, made comprehensive Socket embarked on you this data like to everyone. Socket company. of heard the data which family We the of scanner. This product in. think introducing barcode into portion first device have journey. Today's high-performance CXXX. that share new the Cam scanners any SocketCam mobile Mobile used data is turns are critical is member Socket piece the the a software in capture market element

Capture scanners Socket experts. needs partners different our not and SDK application support to issues. performance when are into capture data capture end-users add They typically with customers run their only our However, often have data

a they customers Socket started and scanning data out roughly over our Through Our scanner. research a or our XX% is came feedback, requirements end capture camera-based end-users of experience journey, tell keyboard and customer before a that us we using evolve time. the know to our

performance for developers more sensitive become to a integration. struggle Socket's end-users Allowing their select can burden in capabilities works to the app allow and with Enabling to allows very from customers to or scanning of expertise partners difficult. wider much eliminates the end the scanning of our tool CXXX for The app and journey the low sensitive as technical the entire service bring audience, addition volume, best all the well-lit to it free situation. environments, one serve bigger much volumes particular audience. and lengthy well allows the our onboarding conditions the While processes price will the a to increase development partners their

end-users. will family, continue data SocketCam capture that developer investing to offer We and in solutions our community the benefit

a have entire we data an We will Lynn over on advanced details results. later that, a Socket is capture available will critical an our evolution this financial we think how the available advanced With basis it journey. this to turn Lynn? version version I subscription serves more on for have -- and and year

Lynn Zhao

afternoon everyone. good And Dave. to you, Thank

effects financial growth, Year-over-year, gross pleased to ago revenue lower QX million year-over-year a We from in component drove very and improvement, while to driven demand position. was of revenue we are invest by our XX% as as continue double-digit was our QX with to results, gross X% operating for business XX% rising revenue strong year our $XX.X our due strengthen business we economic costs. and grow than roadmap. record product margin application $X.X and of up and benefited recovery strong was model. We million, the our their the to products driven annual profitability, up XXXX continuing a flywheel margin to

gross however, a higher, the margin benefit is For is of which revenue. in our the increase X.X% year,

our Increases respectively. on million, support the increased and customer the investment administrative, XX% over general enable the us to were $X.X investments and area result in industry-wide shortages quarter. increased as supply component and sales product XX%. marketing, Spend could Although expenses Operating we XX% [Indiscernible] QX continue year prior in as engineering electronic ongoing customers in a way future are production are costs. and confident XX% higher component on the needs, that our to our meet and will focus navigating constraints

to million compared reflects with consulting a of associated of QX, prior talent of non-cash $X.X including to XXXX. margin and prior at $X.X from tax EBITDA in $X.X including excluding on disqualified $X to stock in million, goodwill non-qualified technology full-year related off PPP in charge, million, net disposition $X.X invest awards. product service of a deductions million commitment vest million compared new income the $X.X loan. in deferred offering Adjusted due in adjusted the a million EBITDA had in recorded if the which on their and of EBITDA employee's million is increased a in compared incentive compared million believe development better essential compensation in million the higher XXXX. year In the XX% of The a year, tax XXXX the QX $X.X a to XXXX a the of impairment expenses stock options, Adjusted headcount of loss XXXX, deferred benefits continued $X.X was of gain to the income benefit netting compared year impairment X% ago. which cost with in increase Our We was goodwill professional included of to $X.X performance. in in their was and XXXX a tax external to improve of benefit XX% $XX,XXX million to investment forgiveness technology, recognition to quarter, and provide of partners. the charge increased increase in comparable versus forgiveness. Net in stock for included $X.X the to services, loan a the tax PPP in $X.X $X.X our million, disposition we resulting The year restricted are gain million options, company XXXX. operating XXXX deferred

the flow. XXXX, $X.X we driving million operations, we generated balance strong a of $X.X sheet, million focus with year year cash million generated to a cash compared cash in balance to our in In $X.X ago. of a to to We compared Turning XXXX. million $X.X from on continue record ended

of customers As ago. demand, ' a this to December enables compared XXXX, $X.X constraints. navigating million full inventory us increased our to while level $X.X was of at net reserve our service million XXst, year Their supply inventory

sheet year to of to X, with balance Our to of compared as X.X a XXst, X.X ratio further strengthened a has ago. X, current December

of buyback to of company's Now, has that foreseeable their the sufficient if our repurchase stock the not by of as as and assets, is for but in funds supply program, shareholders, company stock After concluded Section use full. the Corporation will of the company, for completed their value company's of the the to repurchase company currently determined share State program rather, the company's approved program the General will the talk recent the repurchase to exceed debt its for the sufficient have program in the determine I present in evaluating resources Board XXX company future. financial that the And will interest is and year, not Board following the approved Law board continue company's the accordance program. The of the Directors. program. and operate statements stock the capital, the of impair even the existing repurchase the the best Board about The with hereby Delaware that of well developments will as the

our execute with Our wraps accordance open will the prepared the XXbXX during will window, SEC will and broker in plan This repurchases XXbX-X remarks. be rule up enter conducted our trades.

the operator Now, for will the I to questions. call over hand

Operator

you. Thank

will Wells begin [Operator And Frank the now Fargo. our from We question-and-answer question Instructions]. from first session. Petronas comes

is open. line Your

Frank Petronas

the of that rate came COVID situation other about. your the again, considering on variant growth Congratulations and

in stock you XXXX, far in NASDAQ. done I as a program. as a great think I entered question have you've job the repurchase

and again far going with Now, broker. you, from of guess more that of eye horrible. down and I been Stock again former and build have you're where mean, Exchange more different average the I posed ago getting six funds I'm possibility a Board, these I as to gyrations investor, a or think the I path months York question retail about New up type investors to institutional as the

with I what it people next and it's account So, speak right like bought back company, flops a see down. saying that day, been have nightmare, what they your the I'm is is did when

you think on stop get flipping. lot can this more can again a get York listed you if I all New Exchange Stock stability and the

interest with so think it and flipping, rate over. soon rise I be the forth, the should

Exchange? Stock the York guys considered my So, is, have question on listing a New you

Kevin Mills

a no-tech lot of questions, There's Frank.

few me just of them. a let address So

think markets. availability and driving is fundamentals. stock instability tends there of Robin I as lower our the lot a like be a Hood, And to to programs in with certainly, emotion there lot of opposed price the of the

we our concerted we effort XXXX, we will to as explain I to which sufficiently get look to a story, strong. conferences it's now think make to more feel

Conference Singular the [Indiscernible] Research well as a Research doing future. as Capital in near are We Conference

program more The to right. reach investors get, -- is reasons company. will are we're by be it prices would doing institutional have the because We to the is doing more think on good to surplus will the And program. -- I as future show of stability the think commitments bring the this off And why more we market the should it buyback less, we the feel to repurchase out of think. our long-term doesn't markets one price cash, soft can you we the value I the the reflect

second basically we So, on market. out, to get a And we the point NASDAQ that plans as exchange. years. you the for no many short-term We've have been in re-entered on

in we compliance market back were we and the in fact, and compliance many for years In were on got NASDAQ XXXX. other

some see as Hoods Robin So, I in this s or to the a investors. can Reddit we the year, we lot stability stock think do hope more the especially we in institutional don't get about more price short-term. the

question. your So, I answers hope that

Frank Petronas

that only been everything A But company it's write back slapped we'll problem jumped done, I again, I help by for in should between you the Prudential, I -- thing always But say I'm but just can't then The I buyback should stock it's if the quarters, is Yes, they've part, could companies that's more -- I think have -- have another extent, But so wrong. had saying to the you're in going it that with jump I stability. than wonderful. I think forth. stock have the always own we other smaller on is is, like some the the a mean, with major qualify unsolicited a it's like and and and again. to When to that's to Hood they was their just part -- we more exchange. been thing Robin hand think firm, for just aftermarket, yes. more and the people, just think evidenced say, XXX trading to $X that look think pretty transparency,

climate. you're average again guys. on is the in and for growth I than It's And That's curve. answering more fantastic, I you this you amazing XX-degree congratulate a thank Your question.

Kevin Mills

right. question Thank much. the presented very You you

Operator

Instructions] Fargo. Line [Operator have Petronas from Frank is We Wells open.

Frank Petronas

have that for look clients have my I about come one recommendations. various more. XX do former I me XX of and maybe to

two Now, these mean, I and advanced problem previous of but gotten can products not and than like the much calls, as where as the understand -- for you than point can I get a then I we if think other today, -- down myself. the are it more is they -- me, far coming you am. are the they old the computer layman's war computer little nobody laid great of horse one, kind more the guy the understanding understands. explanations that really had in and transparency new think probably But better I a online, exactly these people I've for can Maybe and much terms out kids geniuses the so and road explain an what products from mean I'm

Kevin Mills

and me explain a little let bit. So try

developers on scanners. that enable our software so We our people use are our to dependent can

on-boarding camera-based out Our the that And customers research has gone camera-based from have our our people shown buy to ensure scanners, smooth who what service do to scanners keyboards, that trying to many we're we scanners. keyboard, of those earlier the to process. our

can current their need the to support they year, the performance - customers they years, application functionality out even their often it extra that when application scanner, as but use of takes more us Today have. use an need doesn't they So two it. centric more scanners, to

would a performance-based make development need development to it there's who So, to easier little we're a and I that It's bit for cycle, agree. people cycle, trying scanners. minimize complicated,

and business enable complicated a we we buy where is -- model products. bit partners Our enabled little sell they through customers because our our application their

the little why to referred this an on So, scenario as improve will application-driven is comes We're And think we about we though to continue will page, likely as -- complications. improved the first. application our bit work the story. is people because have how [Indiscernible] with on inform model, we to web out business a it [Indiscernible] our I simplify trying to and business story, that even go to it investors, a

Frank Petronas

Okay. any guys that the have been do then really tough trying and want road. fallen have you not company, in I really the thing back backwards. two companies stumbled again, Great. to I recover, The last a not reemphasize to seen A lot I've years step it's of in been invested been have

there guys not again You are commend you what and I on that. that's

questions, think but jump I anybody [Indiscernible] I else's again. will you thank on

Kevin Mills

Frank. you, Thank

Operator

line And from William Instructions] next EMPOWER, is from [Operator our question comes your Carroll, open.

William Carroll

activity? a that question just company's program. planned do a Will have repurchase or purchase you share the be time-to-time from discretion the Just about at

Lynn Zhao

We'll that, enter We're following to as And period, a [Indiscernible] brokers will going our the waiting this in the be XXbX be after rules. SEC hands to plan XX-day is next execute. including plan week.

William Carroll

Great. Thank you.

Lynn Zhao

welcome. You're

Operator

[Operator further Instructions] And currently no questions. we have

Kevin Mills

Okay.

just saying, our time your Mobile, me we clearly good I'd us everyone and importance a in made established solid let the you. capture market foundation revenue in data Thank by few And have that we've you for all significant and So to progress thank grow like wish in XXXX and will Socket a in feel to enable and next years. the interest afternoon. finish

Operator

and call. Thank concludes This and ladies for now gentlemen. participating, you may today's you disconnect. you, Thank conference

Socket Mobile (SCKT) 17 Feb 222021 Q4 Earnings call transcript