Gryphon Digital Mining(US:GRYP)2022-11-14 18:12Financial Data and Key Metrics Changes - Akerna reported Q3 2022 revenue of $5.4 million, with $5.3 million (98%) from software sales, showing year-over-year growth driven by acquisitions [36] - Gross margin for the quarter was 62%, consistent with the previous year, while year-to-date gross margin improved to 67% from 62% [12][38] - Adjusted EBITDA for Q3 2022 was a loss of approximately $1.4 million, an improvement from a loss of $2.3 million in the previous quarter [45] Business Line Data and Key Metrics Changes - Software revenue grew by 17% year-over-year and nearly 40% year-to-date [11] - Committed Annual Recurring Revenue (CARR) was approximately $17 million, slightly below the previous quarter, with a noted reduction in CARR due to client contract negotiations [17][18] - Q3 software bookings were approximately $0.5 million, lower than expected, indicating a need to closely monitor cost structures [22] Market Data and Key Metrics Changes - Transaction volume increased by 10% sequentially, while transaction dollar amount decreased by 10%, reflecting supply and demand dynamics in the legal cannabis market [23] - The company noted that competitive market pressure is high, emphasizing the importance of differentiation in their product offerings [24] Company Strategy and Development Direction - Akerna is focused on integrating acquisitions and improving cost structures to position for future market opportunities [9][10] - The company is taking measures to solidify its leadership position in the market, with cost-saving initiatives saving approximately $600,000 per quarter [14] - Akerna aims to capitalize on new market openings and regulatory changes, particularly with the potential for federal banking actions [27][28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis market's growth potential and the company's ability to adapt to economic challenges [34][35] - The company is positioned to benefit from emerging markets, particularly in the Southern US and Latin America [55] - Management acknowledged the challenges posed by customer churn and economic pressures but remains confident in the core software's necessity for clients [46][59] Other Important Information - Akerna completed a $10 million funding round and took steps to maintain compliance with NASDAQ listing standards, including a reverse stock split [26] - The company reported cash and restricted cash of approximately $9.5 million as of September 30, 2022, with net cash used in operating activities at $3.2 million for the quarter [48] Q&A Session Summary Question: Strategy to drive bookings and growth amidst economic challenges - Management highlighted strong growth opportunities in markets like Pennsylvania and Puerto Rico, with emerging activity in New Jersey and Southern US states [55] Question: Positioning in states with licensing applications - Akerna has existing clients in application phases and is working with consulting clients to ensure they are positioned competitively [56] Question: Impact of service level declines on bookings - Management indicated uncertainty but noted that they are working closely with clients to navigate economic challenges, positioning themselves for future growth [58][60]