BIO-key(US:BKYI)2023-03-31 18:30Financial Data and Key Metrics Changes - The company achieved full-year revenue of $7 million in 2022, meeting the low end of its revenue guidance, reflecting a 37% increase from $5.1 million in 2021 [4][67] - Q4 2022 revenue rose 88% to $1.8 million from $9.9 million in Q4 2021, driven by higher software license and service fees [67] - The net loss for Q4 2022 was $5.1 million, or $0.62 per share, compared to a net loss of $2 million, or $0.26 per share, in Q4 2021 [44][71] Business Line Data and Key Metrics Changes - Software license revenue increased by 92% in Q4 2022 and 79% to $4.6 million for the full year 2022, attributed to the acquisition of Swivel Secure and new customer contracts [19][67] - Service revenue increased by 104% in Q4 2022 and 41% to $1.8 million for the full year 2022, with recurring service revenue rising 13% to $1.2 million [40][67] Market Data and Key Metrics Changes - The company serves tens of millions of end users across 600 customers globally, with significant growth in North America, Europe, the Middle East, South America, and Asia, while Africa did not achieve growth due to delays in government-sponsored civil ID programs [24][26] - The cybersecurity market is expected to see record spending in 2023, with nearly a third of organizations adopting passwordless authentication solutions, up from 22% the previous year [10] Company Strategy and Development Direction - The company is focusing on enhancing its global reach through an expanded direct sales team and marketing campaigns, while also pursuing new market opportunities [9][28] - The strategy includes increasing average deal size and targeting larger enterprises, with a goal of $1 million in channel-sourced bookings for 2023 [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a turnaround in the African market, particularly in Nigeria, as operations begin to ramp up again [7][55] - The company expects Q1 2023 revenue to be at a record level, indicating a strong start to the year and projecting substantial growth in both top and bottom lines for 2023 [12][32] Other Important Information - The company aims to reduce inventory by at least half in the first two quarters of 2023, with a current inventory of $4.8 million [26] - Operating expenses increased significantly in 2022 due to the acquisition of Swivel Secure and other factors, but management expects to streamline these costs moving forward [42][70] Q&A Session Summary Question: What is the normalized SG&A expense as you enter 2023? - Management indicated that SG&A and R&D expenses are expected to be under $3 million per quarter moving forward [50] Question: What is the outlook for Q1 2023 revenue growth? - Management stated that the revenue growth is primarily driven by the strength of the core business, excluding contributions from African contracts [51][52] Question: What represents breakeven or profitability for the company? - Management suggested that breakeven is likely around $14 million in annualized revenue, with current expenses in the $3.5 million range [86]