Phunware(US:PHUN)2023-11-10 02:04Financial Data and Key Metrics Changes - Total net revenues for Q3 2023 were approximately $2.8 million, with platform revenue at 45% ($1.3 million) and hardware revenue at 55% ($1.5 million) [42] - Non-GAAP adjusted EBITDA loss was $4.3 million, improved from a loss of $6.7 million in the previous year [17] - Net loss was approximately $19 million or $0.16 per share, compared to a net loss of approximately $8 million or $0.08 per share last year [17] - Total operating expenses were approximately $18.7 million, including a $13.2 million goodwill impairment [10] Business Line Data and Key Metrics Changes - The hospitality segment is seeing increased engagement, with negotiations with major brands like Marriott and Gaylord Hotels [41] - The healthcare segment is expected to have new logo announcements in Q1 2024, indicating a positive sales cycle [15] Market Data and Key Metrics Changes - The backlog and deferred revenue at the end of the quarter totaled approximately $4.8 million, slightly down from $5.2 million [17] - The company is focusing on partnerships with channel partners like Cox Business and Siemens Connect, which represent about a third of the total contract value in the pipeline [8] Company Strategy and Development Direction - The company aims to sell its location and wayfinding technologies as software components delivered as SDKs into existing mobile applications [24] - A multi-pronged strategy is being developed around the company's IP portfolio, including monetization through licensing and partnerships [25] - The company is winding down its non-core light business and reducing staff to align with revenue management [15] Management's Comments on Operating Environment and Future Outlook - Management believes the company is on the path to recovery, with a focus on sales execution and monetizing technology advancements [13] - The company is navigating regulatory uncertainties in the digital asset space and plans to launch PhunCoin for trading in the coming months [27][52] Other Important Information - The company has engaged a real estate agent to market its remaining office space in Austin while seeking to negotiate an early termination option [21] - The average monthly operating expense has been reduced to about $1.5 million, with estimated annualized savings of approximately $6.0 million [19] Q&A Session Summary Question: How quickly can the company monetize token and wallet? - Management indicated that minimal additional investment is expected to bring the assets to market, with more definitive guidance to be provided soon [30] Question: Is the company winding down the Lyte business or exploring a sale? - Management confirmed they are pursuing both options and expect to have a resolution by the end of the year [31] Question: What is the strategy for software pipeline engagements in Q1? - Management expects to enter into new contracts ranging from $50,000 to $200,000 annually, with significant upsell opportunities [33] Question: Will larger hospitality clients require greater investment in the sales cycle? - Management acknowledged that larger deals may take longer to close but will result in substantial opportunities for growth [62] Question: What is the approach to direct sales versus channel partners? - The company will continue to invest in both direct sales and channel partnerships, with channel deals generally being larger in dollar volume [70]