
Financial Data and Key Metrics Changes - Annual recurring revenue for the software business grew by 13%, with 98% of the software business now being recurring revenue, up from 77% in 2019 and 69% in 2018 [6][10] - Total topline revenue for fiscal 2020 was $20 million, down 5% from $21 million in 2019, primarily due to a planned reduction in one-time software revenue [23] - GAAP net income for fiscal 2020 was $1.6 million, or 8% of revenue, compared to $3.3 million, or 16% of revenue in the previous year [29] Business Line Data and Key Metrics Changes - Marketplace revenue grew by 62%, with a significant increase of 177% in the fourth quarter to $1.3 million [6][17] - Operating expenses increased by 8% year-over-year, from $17.2 million in 2019 to $18.6 million in 2020, largely due to increased costs associated with marketplace revenue [24][25] Market Data and Key Metrics Changes - The number of Tier 2 customers increased by 75%, from 60 in 2019 to 105 in 2020 [6][46] - Marketplace has benefited from the demand for hard-to-find goods during the pandemic, contributing to significant transactional revenue [17][42] Company Strategy and Development Direction - The company is focused on transitioning from one-time software revenue to recurring revenue, which is expected to enhance predictability and profitability [33][36] - The strategy includes reducing operating expenses, generating cash, and strengthening the balance sheet while continuing to grow the network [18][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by COVID-19 but remains optimistic about the long-term growth potential, particularly in the grocery supply chain sector [40][53] - The company expects recurring revenue to grow at a low double-digit rate in fiscal 2021, despite the ongoing economic uncertainty [53][76] Other Important Information - The company has a strong balance sheet with total cash at the end of fiscal 2020 amounting to $20.4 million, up from $18.6 million in the previous year [30] - The stock buyback program was halted during the pandemic, with approximately 1.36 million remaining on the existing buyback program [31][32] Q&A Session Summary Question: What factors will drive non-recurring revenue in the next 12 months? - Management indicated uncertainty regarding non-recurring revenue but emphasized the growth of the recurring software SaaS business and the marketplace's potential [56][57] Question: How has COVID-19 impacted operating expenses? - Management stated that COVID-19 has not significantly affected expenses beyond the cost-cutting measures already implemented, with a projected reduction of about $1.2 million over the next year [61][62] Question: When will the revenue headwind from transactional revenue subside? - Management expects that by the next quarter, the company will be close to pure recurring revenue, leading to overall revenue growth [69] Question: Is recurring revenue tracking higher than initially expected? - Management confirmed that recurring revenue growth is tracking higher than previously anticipated, driven by successful cross-selling initiatives [71][74] Question: What are the strategic priorities moving forward? - The company will continue to focus on adding Tier 1 and Tier 2 hubs and enhancing cross-selling efforts within existing customer relationships [79]