Intellicheck(US:IDN)2021-08-04 02:40Financial Data and Key Metrics Changes - Total revenues for Q2 2021 were just shy of $4.8 million, representing a 160% increase compared to $1.8 million in the prior year [12][34] - SaaS revenue was just over $3.2 million, a 93% increase year-over-year and a 16% increase from Q1 2021 [12][33] - The company reported a net loss of $738,000 for the quarter, slightly improved from a net loss of $760,000 in Q2 2020 [13][38] - Adjusted EBITDA was negative $46,000, an improvement from negative $619,000 in the same quarter last year [13][38] - Gross profit as a percentage of revenue was 69.4%, down from 88.6% in Q2 2020, but 93.3% when excluding hardware sales [36] Business Line Data and Key Metrics Changes - Digital transaction volumes increased by 484% over the past 12 months, representing about 6% of all non-age regulated transactions [14] - The company delivered half of the hardware order for teller workstations during Q2 [12] Market Data and Key Metrics Changes - Same-store volumes improved but remained down 10% overall compared to 2019, with improvements noted each month [13] - The digital side of the business continues to grow, with significant increases in digital transaction volumes [14] Company Strategy and Development Direction - The company is revamping its pricing model to increase prices upon renewals, which has been well received by clients [11][27] - There is a focus on expanding the sales team and increasing awareness of the company, resulting in a six-fold increase in qualified sales leads [25] - The company is working to bundle products to assist fintech companies with KYC functions, aiming to expand into larger identity markets [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a realistic pipeline and the effectiveness of recent hiring initiatives [23][31] - The company is committed to investing in sales and marketing to enhance client understanding of its unique offerings [31] Other Important Information - As of June 30, 2021, the company had net cash of $11.9 million and working capital of $13.3 million [39] - The company signed 22 NDAs in July alone, indicating strong interest from potential clients [74] Q&A Session Summary Question: Can you break down the 93% SaaS growth year-over-year? - Management indicated that the majority of growth came from new usage at existing clients and new client additions, with larger contracts coming up for renewal [43][44] Question: What does the backlog look like for new implementations? - There are about 40 implementations in backlog, with hopes to complete them this year, although some delays may occur on the customer side [46][47] Question: How are leads and pipeline evolving? - Leads have increased six-fold, primarily from age-restricted product sales, which are highly profitable [54] Question: What is the typical ramp-up period for new sales hires? - A good sales person typically takes three to four months to become productive, with new hires showing quicker adaptation than expected [64] Question: What is the expected impact of new partnerships on revenue? - New partnerships could represent a significant portion of revenue, as the company aims to expand its reseller network [56][58] Question: What is the sustainability of the growth in age-restricted products? - The majority of growth is currently from alcohol delivery, with cannabis being a smaller segment due to advertising restrictions [82] Question: What is the conversion rate from NDAs to contracts? - The conversion rate is high, with most NDAs still active or in contract negotiations [87] Question: How are fraud losses shared between banks and retailers? - The traditional model remains where banks typically absorb fraud losses, but retailers are incentivized to use the company's solutions to speed up credit card processing [88][90]