Net Element(US:MULN)2019-04-02 17:56Financial Data and Key Metrics Changes - Net revenues for 2018 increased to $65.8 million, a 10% increase compared to 2017, primarily driven by a 16% growth in the North American Transaction Solutions segment [5][14] - The net loss attributable to common stockholders decreased to approximately $4.9 million or $1.28 per share for 2018, compared to a net loss of approximately $9.9 million or $5.04 loss per share for 2017, reflecting a 50% reduction in net loss [12][13] - Total processing volume for 2018 increased to $3.3 billion, an 18% increase from $2.8 billion in 2017, with North America accounting for $2.9 billion, a 27% increase [6] Business Line Data and Key Metrics Changes - The North American Transaction Solutions segment experienced a revenue growth of over $2 million quarter-over-quarter in Q4 2018, while the International Transaction Solutions segment declined by 26% due to the consolidation and elimination of the branded content business [5][22] - Total transactions processed during 2018 was $149 million, a decrease of 3% compared to 2017, attributed to the elimination of the branded content business [7] Market Data and Key Metrics Changes - The United States accounted for 90% of total revenues in 2018, while international revenues were only 10% [6] - International processing volume decreased by 33% to $354 million, reflecting challenges in retaining large clients [6][22] Company Strategy and Development Direction - The company launched the Netevia platform in 2018, which serves as the core of its technology stack, aimed at providing value-added payment solutions [10][32] - The focus for 2019 includes enhancing the Netevia platform with additional modules and services to improve margins and client retention [32][33] - The company aims to reach sustainable profitability without raising equity, utilizing existing credit facilities for operational cash needs [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the international market due to the loss of legacy clients but expressed optimism about onboarding new clients requiring cross-border solutions [22][25] - The company is focused on achieving breakeven profitability through strategic initiatives and technology enhancements [35] Other Important Information - The company was recognized as one of the fastest-growing technology companies in North America by Deloitte and ranked among the top 10 retail payment service companies by Retail CIO Outlook Magazine [4] - The company has a financial capacity of approximately $10.8 million available for drawdown through credit facilities [21] Q&A Session Summary Question: Funding for the next year - Management indicated they have about $10.8 million available through credit facilities and do not anticipate raising equity to reach breakeven profitability [21] Question: Sequential decline in Q4 - Management explained that while North American business grew, the international segment struggled due to the loss of large clients, which they are in the process of replacing [22] Question: One-time charges and gains - Management clarified that non-operating gains and losses were primarily due to write-offs of uncollectible accounts and a stock price guarantee related to a past acquisition [26][27] Question: Goals for the year and product announcements - Management emphasized the focus on enhancing the Netevia platform and introducing more value-added services to improve client retention and margins [32][33] Question: Acquisition offers and breakeven challenges - Management stated they have not received tangible buyout offers and discussed their strategy to achieve breakeven profitability through onboarding clients and utilizing their technology platform [35]