SCKT - Earnings call transcript Q1 2022

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Operator

Welcome to the 2022 first quarter financial results for Socket Mobile. My name is Darrell and I will be your operator for today's call.

Before we begin, I'd like to remind everybody this call may contain forward-looking statements within the meaning of Section 27 a of the 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 its products. and results actual statements. anticipated risks material could involve the from in statements uncertainties results and differ Such such forward-looking of or of and factors the of out product as delayed a components not to rolled including Because to technological the due limited of market or including, not capital. risk factors, products necessary Socket's but manufacture working predicted may financial be that number availability Socket's risk as anticipated, market distribute recent and that XX-Q of application opportunities as and partners anticipated, channels as the vertical well distribution acceptance that may Securities in the reports not to filed happen risk as Form The XX-K be with described so, Socket's Exchange that may most acceptance the Commission. may risk successful other products Socket's sales happen application or not markets current and doing not may and not choose the products, risks of in

statements. any undertake not Later, conduct does Socket [Operator a a being listen-only that conference recorded. question-and-answer are Instructions] we is forward-looking any time, mode. will this session. to update all participants note in Please such At obligation this

Officer, On now over Lynn Kevin have call, Chief Holmes, Mills. Kevin, I Mills, Kevin and to the Business Chief turn begin. Officer, Zhao, Executive Officer. we Financial call Chief Dave will the may you

Kevin Mills

over to XXXX. for million thank QX you, XX% us today. revenue joining million Thank $X.X QX, and In revenue Good you afternoon, by Operator. our increased of everyone, in our $X.X

XX.X% Our XXXX. gross QX in to margins XX.X% compared were

higher supply much more were and lower costs components, issues. due were ongoing margins we to paid global for Our as freight

XXXX. to compared Our earnings per share $X.XX $X.XX in were QX

XXXX. to start in are results a QX demonstrate we off Our solid

supply a operations Our very which great a environment were our results deal of credits. in for achieved deserve team difficult

to our customers. we difficult and situation to remain support overcome hard have we and will most supply many to continue the challenges issues expect We so XXXX, work of continue to for to many

to by of addition mobile also our our being impacted which the In we and deployments. point-to-sale availability are for constraints, printers stores, outside are issues like supply cash own supply control, required

stabilizing the good However, the less of growing we opportunity QX, we do we we year. half impactful better issues place hope on are to ahead. In the are the in and the building capture second service to made supply Socket they in progress putting enable data we see blocks Mobile feel are

us today will available how ahead, hand to service incorporated our our and over long-term. As explain call support much be we them. of Dave. before now activities software plan we in third-party strengthen and business who beyond, XXXX will and continue be to grow Dave doing to to revenue into will Holmes, and I'll the need hardware and can the applications, opportunity solutions to our are we the see they work enable

David Holmes

our Capture Thank as afternoon, you, capture to of significant that strides Kevin. Today, tools. SDK We comprehensive we data continue a in I'd a more we with becoming milestones company. everyone. the journey our highlight of QX achieved And key like made good software couple

over from share. We continue SDK Capture major we In the launched the we critical Flutter. in bar market Socket market, all allowing application code their used to all They capture the Mobiles development are capture users tools used software-based best-in-class free of a Capture performance primarily the piece ability scanners the environments with this lengthy our allows application their million is to only allows development data That typically One capture scanning SDK entire the scanner. support much have much of said, and particular code for with our mobile bring the a frameworks partners software QX, app Today, over sensitive the and the one first also Socket for app support it. the performance-sensitive where audience, scanners to needs. price Socket Flutter our we the portion QX, will SocketCam a add member developers world, device. the the boarding is that mobile customers processes the CXXX. to This has in capture wider having most of data announced cross-platform our select scanners to to wider of partners of technical think today. audience, Capture is provide developers journey. and issues. the become Cam one on all NFC quickly allow with software development used serve popular partners, partners for to eliminates Socket's the device run dedicated we In the for XX% best of market data in into support of with high-end to CXXX capabilities a product in and from scanning by all sensitive readers The X integration SDK any commanding end-users service new family data products app turns Mobile end expertise the We their integration. of have high-performance journey different our burden when the Socket into hardware of gives situation. and your developers Enabling performance customers addition to to a our tools on bar partners end

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

a the and think We will version a data is entire Mobile this on an subscription We serves have capture advanced evolution available Socket how journey. basis later critical year. this

well-positioned in invest poised reader ID webinar Socket become for In and this the mobile MDL and for is a to is goods space. significant with how We the opportunity, we months electronic to Mobile like. partner digital player coming age space MDL drivers the we QX like license big and held space. point-of-sale joint outlining verification things in to continue restricted feel retail a mobile a that the the Finally, UL, enter our in is

MDLs Our evolution products being This journey. already being confirmed jurisdictions data in and ISO our most another are where deployed in predominant mark tested. to capture the standards will adopted,

We turn about I in will products, Lynn. results, reading to over and more that, barcodes people it will data to identities. our reading With credentials NFC from financial to go capture barcodes on about Lynn details for

Lynn Zhao

to Thanks, was by today QX Dave. in year products. million Hi, you to million a to comparable results. for prior QX X.XX X.X everyone. up quarter, be our with share Year-over-year I'm pleased driven to compared demand revenue the strong our XX%

the XXXX, to as consulting in maintain to mainly XX products. driven is decreased product QX commitment which our basis innovative turned a driven basis XXX hiring activities margin essential and new loss, key engineering recover provide Hyvar, by under Increases development existing by their offerings QX customers to to compared research by reduce support to points margin provide prior-year sales customer continued for points on The to support in associated expenses our first-quarter related cost which were to some increased currently sales, and a marketing, expenses of XX%, discount temporary over a headcount quarter. will decreased administrative lowest gross the in and to higher with reduction. engineering and the offer and inflation. services. discounts reflected a XX% XXXX, we X% General To channels. the the headcount the compared as external were professional significant $X.XX XX% to and QX Spend to in Operating the the increasing -- million we increased

representing quarter First a $XXX,XXX, margin. was operating operating income X%

share million $X.XX growth. diluted was tax per from share, to per $XX $X.XX prior XX%. for million. the in Earnings growth EBITDA XX% quarter EBITDA Adjusted up the fully were rate compared quarter per the Our $X.X was period Topline to $XXX,XXX of prior quarter. over or contributed period first

changes our by security net in cash was increased receivable of $X.X liabilities ended a sheet. QX, balance In higher million. shipment from office QX We used $X.X lease and operating million, deposit in our assets and levels resulted accounts cash building's balance agreement. driven primarily with Turning of operating for new which activities the to in

a -- constraint. $X.X in ago. to As level reserve navigating year inventory customers XXXX, supply of at at which while increase our The enables to XX, inventory March demand, was compared $X.X our service million million this full net us

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

the shares in Now, XX,XXX share to by approved QX. about buyback program Board let's talk target repurchase is our of The Directors.

As of $X.XX. our of today, XX,XXX have shares wraps This remarks. common of repurchased prepared average an we stock price our up at

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

Operator

you. Thank

will answer session. and question There first Instructions] the a [Operator announced. the question delay begin is before be now will We

Go Swanson. are have with questions. a to pressing If you standing And a up I'm the pick numbers. Instructions] for [Operator need handset before we may question. your And the from using question phone, Steve by you first speaker ahead

Steve Swanson

free earnings over the First as again, going I'm and product CXXX how is the one, help -- giving can to explain, revenue that. you company getting away increase developing quite not time?

Kevin Mills

Socket Sure. and upgrade develop simply buy there's scanning scanning many Basically, the application the customer camera-based application camera-based the that therefore, include situations. come a in lot 's one already go scanners. the their all have An remove and in no And scanner, allows is scanners. camera-based we're situation we're then who doesn't both requirements customers is that request a able it's If do dedicated they a camera-based for us scanner scanning, a that Steve, cycle has developer is the only that them that them. customers to just and we rework and and What free and providing to it. are the they time, and software to the go that of application in then can to and rework required, for what our initially complained see use customers the have the live put doing after application with meet use trying they to provider there need they by they to back

Steve Swanson

using or the our Does that us is angle? this more product get developers

Kevin Mills

Correct.

and work customers stuff not meets the bake they my then out scanning complaint, all their in in get them. are So to the the to service need. enough they need something Socket us doesn't do complain aware. And today that they and "I what And say, developers data will really to camera-based it, launch than situations, come Then, scanning to about back of the higher-ends It'll your We're and when more that when a buy capture put customers our believe camera-based revision once will in And come go call, We've we to customers very, they in of lot the products, will this find performance-based they the installation camera-based " software. " can and Socket's XX% the already the one support performance with to can just that requirement customers software. basically say, and work. believe scanner. by one SDK of saying, they only "Look, more It seen of prices their you you, do scanning. get customers. of you eliminating all that Capture sensitive who

never a XX%, a XX% wait bigger that development or buy our include first-time sure, And they long but basically, get around. approach, until of higher Capture with have need with don't scanner and a revision able community they us, to We they revision to community time. buy a and never we end-user a two takes service And SDK, think can we'll we if for bigger be this this scanner, developers approach. a about if the to

Steve Swanson

early this this? -- days if it too Is traction we're with understand if getting is Okay. to

Kevin Mills

preview. with bit a time. have take SDK Capture a things little These and We of built-in scanning currently the

will We developers. more rather keep with than it advanced and advanced the some in more basically -- aggressive, preview work of

before foundation in make there And would if now really us, it using build it this. and in for people can say will is then it when But another on see the forward. investments, us will days. built days there, XX we scanning, that we've available take XX start but in create downside does I it a We it's generally working. the going no camera-based is we made next We've

Steve Swanson

That Okay. helps me, appreciate that.

we first sold little total said I for your units. we question units a looking quarter the the we history to over -- under had fourth and XX,XXX -- the that XXXX was quarter sold what little the of I'm during was of back was, a Second what

the for So units I wondering rate the sold. was what first quarter was scanning run for barcode the

Kevin Mills

I the -- don't have

Lynn Zhao

we in Steve, XX,XXX sold --

Steve Swanson

Okay.

So last above quarter. then the flat we're from

shares interested going on was talking end then repurchased of about I I the total March forward, you our Okay. was price? repurchase the XXst, what Lynn, was but And the average program, just through what and the appreciate

Lynn Zhao

annual waiting entered their they a released after XXBXX We plan their open during window we four results. the And period. to required five

around into like didn't roughly. off ago, So two take their weeks plans

Steve Swanson

Okay.

the in anything quarter we basically, So buy first didn't then.

Lynn Zhao

correct. any shares. That's Yes, we didn't Yeah. purchase

Steve Swanson

Okay.

you or what you in the what quarter, said So hoping what -- repeat then do that? about to earlier, second could could you you you'd said whatever you're repeat

Lynn Zhao

Okay.

has shares. -- Directors what of the X.X been of Board purchased our So X.XX% that approved is by we prior-quarter's outstanding

the at an to batch first be So shares of shares And brought target of the as would XX,XXX $X.XX. repurchase we today, of XX,XXX average number shares. have price

Steve Swanson

helpful. All right. it. guys. That's Okay. Appreciate Thanks,

Kevin Mills

Thank you.

Operator

Our question Petronas. Frank from Frank. next comes ahead, Go

Unidentified Analyst

you Hi? up the is, but precious this. your what's I $X.X this number guys think of have my is [Indiscernible] stock it's increase commendable very question the yielding for that cash buying money day and age back balance, purpose X, to in million

Kevin Mills

[Indiscernible]. Sorry,

Unidentified Analyst

cash? same your a your up and maybe, And or is XXX of it principles preferred, but do could per and preferred the the you accountant come has shares one save have for you like where thought thing with a to

Kevin Mills

Frank, [Indiscernible]. a So the very was question you bit little repeat louder. question please, maybe Could

Unidentified Analyst

it do I'll Okay, again.

liquid, would why paying speaker you very to point aid, you million I it's through company was, is, time okay. with From stock have the since shares company XX% pays is from why standpoint. distribution. important the a in then I'm could other most month and are with hear ultimate also my preferred my $X.XX look this balance. saying my what it's Equity so Let mean been buy it's have that Fund, fund It back But to now not cash buy. the I in earnings every some and they one shares at $X.X to good paying sales. big for question one than and familiar at maybe in other and a idle at versus you the My the preferred, pays can shares, hearing equal do -- question a I been is, fund think is cash. eventually you what you're time can check earning float the My in it the or and a if buying it's of very quarter. increase pays for Gabelli my insiders, monies, cash time that me the buying point commendable be for it's is That's like I'm purpose market you a another XXXX, monies, get see observation XXX nice ratio And don't same for question called reduce important the very question. also They right that's that purpose, is back Is if But because open like Gabelli versus cash the your the there's question have type principles? the the it it's buy in can the only to shares? XXXK And looking a when what the Trust. $X.XX this and off was, the that is and purpose the

Kevin Mills

Yeah.

Okay.

our main we appreciate one stock as they're necessarily number our we and we would lot And generating a buying stock basically undervalued support and the don't simple, stock. as is lot our that investors, basically shares not that need well in we're fact and shares talk of there's of back we it the interest in that in buying of for. maybe we confidence It's to recruit When back. they because a business for like have cash pretty show we're reason, for that have the right? the to So are believe the

we'll million think continue per the in is expectation. to EBITDA million to EBITDA, $X $X we I close generate and quarter generated

basically surplus as that. ourselves. are invest as cash in It's we our simple So to using

Unidentified Analyst

-- other And Exchange New dog worked Stock shows. I understand a that. at firm. firm a big your I again, with to York and for be if the that's financial probably can do you better is, that would my and thing PR ultimate Okay. it look But purpose, pony

the purpose growing, way and quarter, it's stock it see believe has and various under the pony think And the I sure But with going I a And the products. this the some can price. because to you stock every say very you're I achieve also though. shows, of same buy now interest yes, interesting you is correct at on market, have dog the will in rates What it point cash as almost rise, up thing. let's purpose eyes, to where bolstering my just the to they're be use with to stock. for your

earnings tremendous. and your think versus ratio your of is of I taxes

answer. me let so And

Kevin Mills

financial conferences our the We number of QX we did doing have alone, and did. we increased in

few calls ages did we five did it's. different did we investor picked I IR we And the even Maxim, Singular think for have four maybe a We others. a side conferences, so on with up Research. with except and Dave

done, And we've a And the would but the that back we recognition process. we people process investors out it's as see have appreciate but we telling for you but honest, story. our So to more the basically work we pace And a the overnight, do and outreach value doesn't we've it's our investors. see hope be fact buying are get there value. of up the to picked happen are It that shares. our the can

hand-in-hand frankly. go they So here,

input at this. it, we So on we appreciate keep your and

Unidentified Analyst

Okay. do for think you and you've funds your with there of I cannot buy stock handling are stock, Exchange. many could you type or company other -- Stock your accomplish specialists the is, but thing. the on New York many, Well, are which also the same the since that Nasdaq, kind the is institutions point probably qualified of fine, And

thought exchange Thank as the as you for a Right. member. So stock another just becoming it's time. far

Kevin Mills

of Take care Frank. yourself,

Operator

this to it at I questions our closing we back And will no for speakers Instructions] the more time. [Operator comments. have turn

Kevin Mills

in significant We solid summary, In to will very challenging we few XXXX, environment. interest today, us delivered build Socket we are afternoon. a your our feel QX and over and that Thank Mobile importance the results Thank and everyone like in progress grow wish revenue in solid foundation you, continuing a a help Operator. I'd all and for years. good next time you. thank you made

Operator

and concludes thank today's your you you. gentlemen, this Ladies And conference, thank for participation.

You may now disconnect.

Socket Mobile (SCKT) 28 Apr 222022 Q1 Earnings call transcript