Phunware(US:PHUN)2021-11-12 00:06Financial Data and Key Metrics Changes - Net revenues for Q3 2021 totaled $2.2 million, representing a 50% growth quarter-over-quarter [25] - Gross margin was 52.5%, down from 71.3% year-over-year, while non-GAAP adjusted gross margin was 68.8%, compared to 74.8% in the previous year [25] - Non-GAAP adjusted EBITDA loss was $2.5 million compared to a loss of $1.3 million last year [28] - Backlog and deferred revenue at the end of the quarter totaled $6.1 million, down from $8 million at the end of the last quarter [29] Business Line Data and Key Metrics Changes - MaaS platform subscriptions and services revenue was $1.8 million, accounting for 85% of total net revenues [25] - The company reported a more than 50% sequential gain in quarter-over-quarter revenue growth with customers [8] - The completion of the Lyte Technology acquisition improved the balance sheet with over $65 million in additional cash [9] Market Data and Key Metrics Changes - The company has expanded its installed base of Phunware IDs to over 15 billion devices worldwide [20] - The MaaS platform is capable of supporting up to five billion transactions per day and 500,000 transactions per second [20] Company Strategy and Development Direction - The company aims to create a Phunware ID for every human being with a device connected to their favorite brands and applications [5] - The transition from a low-margin transaction business to a high-margin SaaS licensing business is a key focus [13] - The company plans to expand its direct-to-consumer channel for B2C engagements across high-performance computing and cryptocurrency offerings [17] - Future growth will be supported by indirect sales and channel partners, including Carrier Global Corporation and Cox Communications [14][45] Management's Comments on Operating Environment and Future Outlook - Management noted that B2B and B2G customers have not consistently returned to offices, impacting operations [10] - B2C customers are showing strong demand for hardware and cryptocurrency, independent of public sector trends [11] - The company expects to finish the year strong with more than $5 million in Q4 revenues [16] - Management is optimistic about the ongoing scaling of the MaaS blockchain ecosystem and high-performance computing systems [54] Other Important Information - The company raised approximately $62 million from an At-The-Market offering and $4.6 million from warrant exercises [31] - The company purchased an additional 100 Bitcoin for approximately $6.2 million, bringing total holdings to approximately 129 Bitcoin [32] - The company plans to leverage its balance sheet strength for future growth, including potential M&A opportunities [57] Q&A Session Summary Question: What is the revenue mix between direct and indirect channels? - Management indicated that approximately 90% of revenue is still direct, with 10% from indirect channels, and expects indirect channels to ramp up in the coming months [62] Question: Are there concerns regarding supply chain issues for Lyte Technology? - Management reported a 60% increase in orders post-acquisition and is confident in their ability to manage supply chain challenges by establishing new supplier relationships [66][69] Question: What is the expected revenue mix for Q4? - Management did not provide specific details but indicated that core Phunware business will drive much of the revenue alongside Lyte [73] Question: What is the long-term opportunity with Lyte Technology? - Management emphasized the integration of hardware and software, aiming to enhance customer engagement and expand the Phunware ID ecosystem [76][80] Question: What is the strategy regarding Bitcoin and other cryptocurrencies? - Management views Bitcoin as a hedge against inflation and plans to hold and accumulate Bitcoin rather than trade it [100][101]