Intellicheck(US:IDN)2024-03-22 00:36Financial Data and Key Metrics Changes - The company reported a 13.7% increase in Q4 revenues, reaching $5.176 million compared to $4.551 million in the same period of 2022 [12][17] - SaaS revenue for Q4 grew 13.2% to $5.069 million from $4.479 million, representing 98% of total revenue [17] - Adjusted EBITDA for Q4 increased by 201% to $1.169 million compared to $389,000 in Q4 2022 [23] - For the full year 2023, revenue increased by 18.4% to $18.906 million from $15.966 million in 2022 [24] - The company achieved adjusted EBITDA of $377,000 for the full year, an improvement from a loss of $924,000 in 2022 [27] Business Line Data and Key Metrics Changes - The automotive sector is expanding, with a reseller agreement for a major auto manufacturer covering 2,600 locations and expected minimum annual volumes of 750,000 transactions [3][4] - Title insurance market expansion continues, with four large title companies signed and integration into a major software provider's platform [5] - Growth in age-restricted markets is evident, with new contracts signed for vending machine companies and liquor distribution [6][7] - New markets include cryptocurrency, with two crypto wallet companies signed for user validation [8][9] Market Data and Key Metrics Changes - The company is seeing a decline in transaction volumes among large retailers, with reductions between 15% to 25% [50][51] - Retailers are closing stores and facing economic pressures, impacting overall transaction volumes [51][82] - The financial services sector remains a significant revenue source, with approximately 75% to 80% of revenue coming from retail [87] Company Strategy and Development Direction - The company is focusing on diversifying its client base beyond retail to mitigate economic impacts [51][94] - A new channel partner program has been launched to enhance market presence in automotive, law enforcement, and government sectors [36] - The company aims to maintain gross margins around 92% while improving operational efficiencies [40] Management's Comments on Operating Environment and Future Outlook - Management anticipates significant revenue growth in the latter half of 2024, driven by new client implementations and a robust pipeline [38][43] - The company expects to achieve adjusted EBITDA positivity in 2024, with a focus on maintaining financial discipline [39][43] - Management acknowledges the challenges of longer implementation times for larger clients but remains optimistic about future growth [92] Other Important Information - The company has a $2 million revolving credit facility with no amounts outstanding [29] - As of December 31, 2023, the company had cash and cash equivalents totaling $9 million [28] Q&A Session Summary Question: Can you discuss pricing overall and transaction trends? - Management noted a 16% increase in average pricing per scan, with pricing power in core markets like title, auto, and banking [47][49] - Transaction volumes in retail are down 15% to 25%, attributed to store closures and economic conditions [50][51] Question: What are some new wins that could drive growth in the back half of 2024? - Significant partnerships in the automotive sector and regional banks are expected to contribute to revenue growth [53][54] Question: What percentage of revenue comes from retail customers? - Retail customers still represent the majority of revenue, approximately 95% from financial services, with a notable portion from retail [56] Question: Can you provide insight into the balance between profitability and revenue growth? - The company is focused on growth while ensuring financial diligence, with plans to improve EBITDA margins in 2024 [60][61] Question: How do you view the trends in scan volumes for 2024? - Management expects scan volumes to improve sequentially throughout the year, with a focus on diversifying revenue sources [91][94]