Intellicheck(US:IDN)2022-08-11 23:49Financial Data and Key Metrics Changes - SaaS revenue grew 21% to $4 million compared to the previous year and increased 17% sequentially from Q1 2022 [8] - Revenue for Q2 2022 declined 16% to $4,008,000 compared to $4,797,000 in the same period of 2021, attributed to a large noncore equipment sale in the prior year [32] - Gross profit margins remained healthy at 90.9% for Q2 2022, up from 69.4% in the same period of 2021 [34] - The company reported a net loss of $1,098,000 for Q2 2022, compared to a net loss of $836,000 for the same period of 2021 [36] Business Line Data and Key Metrics Changes - SaaS revenue for Q2 2022 was $3,928,000, a record high and a sequential increase from the previous quarter [33] - Operating expenses increased 14% to $4,742,000 for Q2 2022, driven by higher personnel and marketing expenses [35] - Transaction volumes across large retailers were up a minimum of 13% in Q2 compared to Q1, with many in the 30% range [19] Market Data and Key Metrics Changes - Financial services clients showed continued opportunities, with one client completing a rollout that drove 13% revenue growth over Q1 [15] - A retailer that previously used a competing credit card provider completed onboarding, leading to a 38% sequential revenue increase [17] - The company signed a new agreement with a firm selling an omnichannel platform, resulting in the pre-purchase of 500,000 transactions [19] Company Strategy and Development Direction - The company is focused on growth initiatives and expanding its presence as a global platform for identity validation [28] - Major changes in the sales organization were made, including the promotion of a new Senior Vice President of Sales and the addition of new sales personnel [9][10] - The company aims to enhance its validation solutions with additional risk signals to attract new clients [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, highlighting the importance of adapting to market needs and expanding into new verticals [30] - The CEO noted that the company is well-positioned for significant growth in 2023 due to the changes made in the sales team [11] - Management acknowledged the challenges of the InfoSec review process with larger banks but remains optimistic about passing audits [22] Other Important Information - As of June 30, 2022, the company had cash of $12 million and total assets of $24.2 million [37] - The company has a $2 million revolving credit facility with Citibank, with no amounts outstanding [37] Q&A Session Summary Question: When will expansions go live and what growth should be expected into Q3? - Management indicated that rollout timings vary and that it is difficult to predict exact volumes without historical data [41] Question: Updates on FinServ contracts and price increases? - FinServ two renewed late in the quarter with lower double-digit increases expected [43] Question: Current sales team size and changes? - The sales team currently has 13 members, including new hires and a recent departure [44] Question: Expectations for operating expenses in Q3? - Management aims to maintain near breakeven while continuing to add sales personnel [46] Question: Insights on billings and revenue modeling for 2023? - Management is working on refining SaaS metrics to provide better data for modeling [55][56] Question: Progress on digital sales and partner channels? - Digital sales remain at about 10% of revenue, with ongoing success in attracting digital clients [57] Question: Status of Platform 2.0 migration and client feedback? - Clients have reported that the new platform is easier to connect to and has improved performance [65] Question: Updates on pilot studies with major banks? - One pilot passed all success criteria, while another is delayed due to InfoSec review [68]