WidePoint(US:WYY)2021-08-17 00:05Financial Data and Key Metrics Changes - The company's revenue for Q2 2021 was $20 million, a significant decline from $54.8 million in the same quarter last year, primarily due to reduced carrier services revenue related to the wind-down of the census project [28][29] - Managed services revenue decreased to $8.1 million from $9.8 million in Q2 2020, representing an 18% decrease, but grew 5% year-over-year when excluding the census project [30][31] - Gross margin improved to 20% in Q2 2021 from 9% in the same period last year, attributed to a shift in revenue mix away from lower-margin carrier services [32] Business Line Data and Key Metrics Changes - Carrier services revenue decreased to $11.9 million from $44.9 million in Q2 2020, while managed services revenue for the six months ended June 30, 2021, decreased to $17.4 million from $21.4 million in the same period last year [29][30] - Excluding the census project and timing issues, managed services revenue for the six months ended June 30, 2021, grew 9% compared to the same period last year [31] Market Data and Key Metrics Changes - The company secured over $36 million in identity management and managed services deals across 48 contractual actions, indicating strong demand in the government sector [18][19] - The company is focusing on expanding its footprint in the commercial enterprise space, leveraging partnerships with systems integrators to enhance sales opportunities [20][21] Company Strategy and Development Direction - The company aims to profitably grow by adding higher-margin sources of revenue through both organic growth and strategic acquisitions [37][38] - Investments are being made in technology upgrades, including improvements to identity management systems and continuity of operations infrastructure to enhance service resilience [7][10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future sales activities as the company transitions back to normalcy post-pandemic, while also acknowledging the challenges posed by ongoing supply chain issues [25][41] - The company is committed to diversifying revenue streams and improving profitability, with a focus on higher-margin services [41][42] Other Important Information - The company received R2 certification for responsible recycling, which is expected to accelerate the adoption of device recycling services and contribute to top-line growth [14][15] - The company exited the quarter with $14.9 million in cash and a current ratio of 1.6, indicating a strong balance sheet [35][36] Q&A Session Summary Question: Inquiry about human resources investments and sales cycle - Management confirmed ongoing investments in sales staff and marketing initiatives, noting that the sales cycle can vary significantly depending on the opportunity [48][50] Question: Clarification on revenue normalization and expectations - Management acknowledged the impact of carrier credits and delayed orders on revenue, confirming that the normalized revenue would be above $22 million for the quarter [56][57] Question: Guidance on revenue expectations for the second half of the year - Management reiterated guidance of $103 million for the full year, emphasizing a focus on higher-margin revenue and addressing the lumpiness in carrier services revenue [58][60]