VerifyMe(US:VRME)2023-05-11 18:30Financial Data and Key Metrics Changes - Revenue for Q1 2023 increased significantly from $0.2 million to $5.7 million, marking a substantial growth [10][30] - Gross profit for Q1 2023 was $1.8 million, representing a gross margin of 31%, up from $0.1 million in Q1 2022 [30] - Adjusted EBITDA loss improved to $0.5 million from a loss of $1.1 million, reflecting a 56% improvement [32] Business Line Data and Key Metrics Changes - The acquisition of PeriShip contributed to the revenue increase, with a pro forma revenue increase of approximately $0.5 million or 9% [30] - PeriShip's organic growth was over 8% compared to the first quarter of the previous year, indicating positive performance post-acquisition [41] Market Data and Key Metrics Changes - The U.S. perishable goods transportation market is estimated to be valued at $4 billion in 2022, with a projected CAGR of 8% through 2027 [16] - The company is focusing on the food and beverage market, leveraging strong reference accounts in various categories [17] Company Strategy and Development Direction - The company aims to increase market share and revenue through a complete solution and enhanced sales and marketing efforts [7] - A transition from a product-based brand protection company to a software-driven company providing end-to-end supply chain assurance is underway [11][15] - The company is adopting a carrier-agnostic approach for its predictive analytics platform, expanding sales opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a positive adjusted EBITDA for 2023 and targeting revenue growth of approximately 40% [8] - The company anticipates sequential revenue growth in the upcoming quarters, with the fourth quarter expected to show the strongest performance [39] Other Important Information - The company maintains a strong balance sheet with a cash balance of $3.1 million and total debt of $2.3 million as of March 31, 2023 [33] - The acquisition of Trust Codes resulted in an increase of $2.1 million in goodwill and intangible assets on the balance sheet [34] Q&A Session Summary Question: What is the normalized quarterly G&A number to be modeled going forward? - Management indicated that normalized G&A would be around $2 million to $2.2 million [38] Question: Do you expect sequential revenue growth each of the next three quarters? - Management confirmed expectations for revenue growth in the second and third quarters, with the strongest growth anticipated in the fourth quarter [39] Question: What was the legacy VerifyMe revenue for the quarter? - The legacy VerifyMe revenue for Q1 2023 was approximately $200,000 [40] Question: Did the PeriShip business grow year-over-year? - PeriShip experienced over 8% organic growth compared to the first quarter of the previous year [41] Question: Is the target organic growth for the legacy VerifyMe business still 50%-plus for 2023? - Management reaffirmed the target of 50% growth for the legacy VerifyMe business [46] Question: How much does FedEx represent in terms of revenue for PeriShip? - FedEx accounts for less than 15% of total revenue, indicating a diversified customer base [50]