Intellicheck (IDN) 17 Mar 212020 Q4 Earnings call transcript

Greetings, and welcome to the Intellicheck Fourth Quarter and Year-End 2020 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Gar Jackson. Please, go ahead.

operator. you, Thank thank Intellicheck and call. joining today us Good quarter you and the fourth earnings full for afternoon for year XXXX

expressions, encourage Before believe, litigation made Certain in words will similar currently or identify read expectations and as the based as we within When Act the and meaning the call management, its future I Reform used few the statements XXXX. expect, about company of get to Private beliefs management such Litigation XXXX, of the minutes amended. of they Securities relate constitute are by take on to These forward-looking of management's as well call, the Act Securities statements events. in the as this statements forward-looking a statement. anticipate, conference company's available current meaning will, assumptions this statements within Reform information Private conference and forward-looking to forward-looking started, as

or or inherently disclaims any As the alter obligation information, such expressly and any changes in resulting susceptible to whether company to events undertakes as they update and statements, changes and projection subsequent its obligation or circumstances with otherwise. from uncertainty no to forecast, forward-looking new are

Securities and the the in afternoon contained are press Exchange Additional Management from call and of this XXXX. context call. release the Risk XX, of March use reconciliation to Commission. term. company's financial use further adjusted time today, the today's under also company's information, information for for Factors this today's of the Statements term Please on as to statements refer will EBITDA issued and concerning Safe forward-looking is with filings listed headings made the Harbor Statement time in

Officer, call with results. will Executive Lewis, year who Intellicheck's will discuss Financial Chief Officer; and begin XXXX Chief QX financial the then full Bill White, and We Intellicheck's today's Bryan

and I will to will we call the limited will from hour over remarks, our call now Today's Bryan. take be and to institutional prepared investors. one turn questions their Following analysts

year XXXX Thanks, to Gar, and everyone welcome call. earnings quarter and fiscal our fourth

continue up and show period. revenue the total growth for We over XXXX; during up year same XX% revenue XXXX, solid SaaS in to fiscal XX%

During SaaS and bode the Sequentially, XX% up revenue lockdowns But was the the same to was XXXX. believe over XX% well COVID up for of the country the future. X% the We revenue QX numbers QX importantly, return revenue fourth versus more quarter, year, SaaS up over that QX, XXXX. those was and portions given throughout total period.

Let me explain.

the to impact and in XXXX, some to lockdowns additional the Throughout June retailers During reopen, use add traffic clients returns in and an continue closings cases, with began transaction increase pandemic, counts the levels markets. of some limited clients and typically and retail all reopenings, counts. see continued to albeit immediately depressed December, more we places and XXX%. through could existing to add transaction From of through lockdowns, traffic when we restrictions, through openings occupancy partially saw of we partial

was and levels. this open pre-pandemic Even of not of impressive factors. a were versus QX transactions, in year-over-year. traffic. the of versus or sequentially XXXX number an volumes to up XXXX recovery sign on decrease average occupancy was limited limitations QX it from an both believe pandemic, complete brand due completely XX%, Same is revenue We still were resulting isn't with this the recovery regions SaaS many of transaction with increase a While country for down in the

over and signed the we use clients employed existing new year the the be by cases additional clients. would First

an clients. use In existing on pilot, have two implementations our new begin limited clients we historically season, executed had a quarter new been had focus cases transactions, add clients authentications. as result. a existing this expanded Over or good the sign case. With e-commerce the holiday that Considering fourth course were existing their we was on with during either XX for of that selling facial the a peak use integrations to person-not-present we or XX QX, expanded companies client year, expanding either biometrics

During the that supply was we become fourth pilots our with farm quarter, XXX had initiated that store subsequently online fraud a is solution. using for two One clients. over Check locations ID

integrate financial consortium-owned company with web was no second The now integration our fraud. working detect into and and a mobile products. They their apps bank and firms to that started are our helps API product other prevent

of financial continue we During we technology quarter, market a L.A. the expand solutions beyond signed adoption our in also vertical union to services credit demonstrating that the located in banks.

into to for markets additional expand fraud We also technology. with our uses continue new stopping

does we This quarter, company that leases. for is us new the and for that target is tenant not vertical identity signed a market surprisingly rental California-based one screening theft. a for a During

what say you been this you need underscores saying. The where who are you I've ever are I are, for think expanding. to prove you use cases will

XX during growth that retailer focused. Driving growth topic time person-not-present that expansion is new a One the I driver space. you online same about of for e-commerce the of long that in only with saw a increase with XX% has quarter. The us From saw or XX% adding either are these clients in solution the online we addition December, was six-month last with clients the been a spoke through volumes transactions June second period. increase of a or

more hired a strategic on I of lacking. had that achieved. investments and website, Intellicheck You already has the may VP with been initial an we growth leads. vision function Marketing, on shared to our a we messaging, VP importantly, you steps have This in had marketing. inbound included and needed sales impact taken my those January, build have recall I driving In

for and arsenal The as Fraud both been them more of salespeople quote now place" tools outreach, to has across evolves. banks be your all will true top the Senior Prevention to need metal. put newer we fraud, markets. five prevention key the leads messaging means website particularly, inbound President sell. importantly, more the To in to Our put improved it's to faster and I time do you our "a about I largest handle team continue to Vice stopping and calling one our updated pieces When spoke and to fraud in game-changer be to within we'll adding help world hiring pedal product that messages in video refined really have of marketing the extend the better time we in salespeople. our sales and has that the get also

have hiring the begun have started already process We and caliber high talent.

account with people management experience. strategic hiring be also will We proven

expand to financial to would like to plan institutions to key people on large accounts use are We cases, happen. how execute continue strategies that faster. understand I it making see that and existing build strategically our who to happen While believe

to turning Additionally, factor as be I marketing that And those will judiciously seeing spending ones. encouraging signs who of XXXX demonstrated we money said of on our new repeated. it a the into and sorry on will and as the the us entered the are loved call sectors becoming corner. for that norm pay be have same expand my I our have new out. by we this was heck a strategy. placement last on never a that part We team those is I into the is in lost past am will believe message help markets. At year get call, key we be I'm pray growth will the year, time,

identity identity fell year, theft one has of to Research that According economy, to to fully closer and and the Americas opened herd that a play. data continue losses victims past has victim suffer In fraud Harris are more we and theft takes. tells is awareness see normalized the they story. The meantime, widely market new attempted the confident identity Americans have served XX% poll remain raise seen doesn't stop in In is much in need available, an will financial the theft of vaccine five immunity, for identity year to what With a top theft. becoming this a consumer pandemic theft. to role mind important the and to Ultimately, for become and hopefully, of and retail toll traffic. we expect we've identity three it five the and or we there

we and it turn in to detail. continue new solutions. clients proven our our looking with over closing, expand theft work call Intellicheck. to the discuss identity believe will stop more to opportunity results forward now we existing I So, technology and I'm with to the can what the will holds for promising financial XXXX ways In Bill we to is

fourth fourth quarter that ending Thank Revenue listeners. quarter for of I'd $X.XXX our fiscal a December good period in the fourth the our I'll and the release XXXX XXst, million our last to shareholders, XXXX. versus you, same quarter the Bryan to million some discuss ended like press XX, information day was contained with and December X% financial and year. grew results. year for begin to $X.XXX for guests,

for the $XXX,XXX the related the XXst, due per per forgiveness in note was was per share to period. ended XXXX quarter X% income for percentage versus an the million reduced or for of to months XXst, approximately as XXXX, expenses $XXX,XXX was and of ended and income net the diluted income million $X.XXX ended we Interest $X.X other to sales-related quarter for PPP prior net $XXX,XXX Our from $XXX,XXX over XXXX. in of December XXXX for Adjusted is It's administrative, quarter EBITDA to revenue XX is our the period December XX.X% to and compared forgiveness and share XXXX. for in consist income December SaaS of $X.XXX diluted the company net XXXX loan revenue The December a The XX.X% three general important of net expenses $XXXXX the legal for and of EBITDA of sequentially ended as December approximately the were December to $XXX,XXX loan grew XX% XXXX. was posted decreased profit $X.XXX XX, XXXX The quarter in PPP $X.XX selling, increase of XX, million XXXX. approximately quarter of of December $XXX,XXX fees QX of XXst, the ended The $X.XX to development for or a XXXX. diluted million same year. was that the quarter due the received compared XXXX. net $X.XXX our for compared the primarily in Operating the of research XXst, Gross decrease that XXXX to QX income for third expenses. XX% the the versus ended compared $X.XX quarter same of $XXX,XXX. million income increase quarter ended to during quarter by approximately and share

results, XX Turning year to full XXXX year year. up XX% $X.X to was for prior our to now ended full compared XXXX December for revenue the million million the $XX.X

year $XXX,XXX million year XX% period and a ended a $X.X share percentage revenue ended year The the SaaS the of the of was higher December last diluted were EBITDA year had for Driven the the of and business year an XX.X% revenue $X.X an XXXX ended compared per million as $X.X income expenses December primarily Adjusted by expenses to to strong and $XXX,XXX improvement to XX to XXXX of million year $XX gross loss December XXXX year XX% compared year XX, was Our versus for year average as million Selling, incentive ended year. for $X.X to million million $X.X it ended our XXXX. development a the costs year-end the XXXX. December the XX, diluted $X.XX the per XX, calendar year. as December as XXXX $X.X compared XXXX. to the expenses December $X.X increase million The net December year in adjusted the profit were share prior XX, The XXXX compared other and of were administrative $XX.X versus of XX, XX, due ended Research ended million for to calendar net personnel million XXXX growth compared compared net at was approximately Interest ended for increased in weighted XXXX. for prior plans. million under was general for during for in $X.XX the from XX, year. year. $X.X EBITDA million net accrued for million the year negative a same adjusted $X.X X% and SaaS for the $X.X income at the of income as $XXXXX for Operating remained XXXX loss count for company XXXX. XXXX, December the $XXX,XXX for to in prior

mentioned the PPP I'd resources. due the and is to $XXX,XXX. As like forgiveness company's of of earlier to now capital liquidity approximately increase this loan the focus on

As the total XXXX of assets of and $XX.X current December stockholders' working cash liabilities million million. minus current company capital assets as $XX.X $XX.X equity million XX, million, of of had $XX.X defined of

net by the underwriters' for purposes XX, and XX-month intends XX, cash to million the commissions stock used used same to $X.X December ended by June company. its discounts of operating resulting period share cash in Net offering completed shares compared for XXXX. activities in XXXX working during XXXXXXX proceeds from for public approximately company During ended offered the capital. the meet $X the that from ending XX corporate public months operating of We to be our XXXX that is cash There per facility. paid to well Net of the company cash Intellicheck net deducting generated of for the XX, million for at million $X.XX after XX accounts. net The credit net XXXX will cash $X.X used in December December use of a at same December $X months the million financing and for XX, costs the cash, period common a and On $XX,XXX requirements by a XXXX months million proceeds to has cash offering the to as was December compared XX, period secured we currently ended ending compared general generated XXXX XX and least And the the of company expenditure of $XX.X operations XX capital working net million $XXX,XXX XXXX. the amounts investing XX, for available months no the was revolving to activities with cash anticipated XXXX. under provided $XX.X investing for in compared company $XXX,XXX facility period Citibank expected to collateral as sufficient next are the this the anticipate XX-month months. $XX,XXX of from XXXX. capital our outstanding activities activities in XX

take over questions. XX, company operating the of $XX December I'll operator to carryforwards million. loss net the Operator? of As XXXX the approximately had turn to call now your

Securities. coming Our Mike first [Operator Instructions] from is question today Northland Grondahl from

Your line is now live.

using on the guys in secondly hopeful January New well. as mentioned I kind think of thanks that's and initial February and comments Yes, how Any just on the trended then Year? And bit you facial e-commerce kind side or that, can you clients customers understand help paying maybe that two a or more? us biometrics. they for premium offering little of Are the a

Yes.

backwards I working so guess can I it remember So Mike.

paid for biometrics. there yes So a is that's the premium facial

want friction it introduce are to upsell how more an that, sort depending depends but things the loan. say to lot interested using a of I account on it's are for the they upon things use of So like much biometrics it facial a case, to than them. for will people people a the it. in that an be more types authentication. substantial opening are or It banking applying it of tends Those just into for

the being it's of see don't picture one for you maybe use get a might authentication need to people want it They accurate not to applications or out things So I ours. where guys as other as the bad that I who much that very taken. as their want than have almost think certain but weed used see it to isn't

volumes, there. is vaccine open time. we've than it was was been world and wish out over definitely the seeing of terms more I In more increase an the

we're about continue us be open that disappointed I'd as add to very also love I as have fact we I'm – we but So clients. am to not excited the that

are So or still we're locked restrictions. have seeing growth even that with places down partially occupancy

then a Got as just it. And maybe follow-up.

in XX use that of XQ I think on new think can customers new I that us that sort cases to or XX. XX and pilots give Anything new momentum? I And then integrations in caught the you were incremental XXXX.

Yes.

So – yes.

was the of for much well it to new how give because it don't in XX people see us them pilots. tools them to clients on. XX coming Two anymore wasn't pilot period easy of Most works. it our new are So pilots it's

any for the talk those to connect. So team some integrations tech the our of not to required were tech do part, integration. large most the team that do to doesn't things include that require their that we That

– other a they're a device as So large integration. One things, if take cannabis on somebody or I count more like us going. but revenue terms law don't bars, mobile get those things smaller because to usually also like is it those things places using a of stores, it that. not in as enforcement, jewelry That's those lot large doesn't

it. Got

guys. Okay. you, Thank

Mike. Thanks,

Thanks.

next & Our Anderson from Riley is today Kara coming question from B. Company.

Your line is live. now

for Thanks taking guys. Hey, my question.

Thanks, Kara.

expand Just can then so a their for how number more and people what hires bit of with where expected in the hired you of the balance little the investments ramp far, many the on sales you've you wondering if terms year? for stand the of expectation is

they fast what So Part so I in rolled probably hired to management we to are be to and how don't person have sorry. get And to ramp far the one play add excited we three is – able like them on fast space, accurate – I that want on are bring to we're with what the very train that seeing to will I'm and is people the of that – there they used we of account tend can't efficacy very Obviously, salespeople we've team. and come let But one. come what are it I be dealing we'll board. are in be people we other out. to see systems in out who them. so from we are to think they going have who with they adding total, the quickly, people I'm

going period. authentication I So that ramp that will hire the with fact to the people we're space identity help who think understand

guys to expected was And then XXXX or investment if an if for put of growth which I you still hires. it's rate, me not and that these think quarter whether XX% last inclusive it true? wrong, Correct of is holds XX% kind

we're at by that I year. that and table think that I awareness, leaving out I'm I the there and salespeople the having we brand had looked as think to feel the the market on market I more looking out more potential what over spread not increase

have authenticating to call photo. things a the try trying many of to I we in use go easier think provides environment I we we've given on of simpler just money as clients online. those spend and the a quoted, important place of willy us been than do more certain the more much to get act have way amount person-not-present a do certainty. scan will sizes my of do that much that of much on Fraud to competitors. the are I glare very our it's I references that put sales without don't to as terms time through really are a and saying don't it. for and templating. that of somebody license of for smart kind we say, match have, of And who anybody a in is I'd who's to us like way, what VP we We going in think things who your issues back nilly. way go person That But take a for better much Because authenticate Because becoming much opinion of license take anybody think in photo force some the in glare of authenticating

us out the going to I grow, think really there. but need message to get people it's I help that

Got then just for And one more it. me.

did we versus Just XQ which request through holiday the online that there. thinking general the California, Just grow in But that of in store. moved December? quarter, dynamic in should saw comment like can given we that in shift about some you states seasonality volumes first you the year reopening this expect the about

have still mean, optimism lot pretty to we There thing I Well, that's some regressive grow. gives a when shutdowns future. fact lockdown, that me during cases I the in partial were active And them whatever even normal with And if scans that at places XX%, assume who time, that of say goes clients think did bodes versus the the their newly they probably also call that traffic fact signed to for in they QX. as would you I'd were that that barely that about clients look grew. fully I well. that still the went as openings COVID And off the that I lot were of XXXX a same-store up XXXX, scans new rise, on the signed back as us. were to saw at still that well yet anybody period floor want I depressed said we same we

But -- feels on for sure isn't everybody I'm when going hopefully focusing vaccinated time understand the there. comfortable to at use to looking products retail back all how authenticate our gets that of digital out. the person making obviously, So channel clients our the we're, comes as same and

you for Thank Sorry. that.

missed talk year today for about of, the versus for if me pipeline Just that you and say this. I thought I'm sorry a did XXXX more it But looks ago? one I how

about we talking and you Are in things? those types have of queue integration of terms what

Yes.

and his It's move somebody team much the it soon pretty Yeah. same. Bill as somebody off, else in. as We -- got coming we've seems

Bill's has So make that My tax is new to by really I team more capabilities consistent. bringing salespeople. bringing sure now in we're people in goal is implementations stayed faster. pipeline only

you. Thank

you. Thank

Buck Scott Wainwright. from Your next is H.C. today from question coming

line live. Your now is

guys. good afternoon, Hey,

couple me. Just a for

that's is of you, call kind specialty legacy clients and unions, are some a coming XXXX new the the if no side? safe of, more exhausted lenders the brick-and-mortar of credit the that to at but XXXX, retail looking assume case of have lot retailers, the centers? and longer And on a lot it maybe banks, First, the the it's the

above. say or no the exhausted And all the combination also shape I of of we it's would then I'd say way form a in retail side.

the it our -- and the comes of lot you bank accounts pipeline it lot from partners issued from, existing our And the have of coming firms company plenty still bank that's get that is sales business you comes stuff are to clients to of checking, cards us. a a are organization accounts? But who that's Our you then label want you we lot need services of traditional are where to use open areas in the new finding ones lot in who applying have a you comes from coming new to white say our then when stores the our go. walking will, thankfully you where a new who then combination credit and sales are from and markets force. a new of to like that's from and within lease remotely them if that for clients And still large their financial it

-- broader the spectrum broadening plenty fact we're a to make I So runway clients. of across have that still we're with much we're we're space, that who existing selling sure selling credit of the it's how like card and retail to while we

the seasonality? a we you Great. of Bryan. some add should smoothing new That's as curious helpful expect these I'm of markets,

and I not more How I not holiday seasons guess. to some into guess if enough we're how shopping seasonal things markets don't -- say to I and more related are I that that they of are But sure. these going I'm happens quickly enough data would yes. say have are. or

okay. then Right, last And one.

that is start XXXX, in look we at XX% higher the Should this directing still are or for meaningfully row run towards I quarter and people XXXX the think than third where to a margins bumping target. maybe guys gross XX%? have you up

were… Yeah, I still I think -- we

to Yeah, that. know it’s I you that? with want if don't comment on Bill comfortable

have didn't way We the in orders of really Yes. Scott. much hardware

go mixed perspective, a number I still It's good with. think number, a product number. XX% but a from a I to think it's conservative is good So

time. the appreciate I Great.

Thanks Scott.

Thank We to end I'd any to closing question-and-answer back you. our like or floor of turn reached for session. the management further comments. over

I I good. haven't can just I excellent do and that. and of for of into able and was a us I to my look job I during to tuning and you to for to get has feel an Well, to people truly thank we thank are what again vaccine trying I to all year look that doing forward want And I in healthy forward want year the the hope seeing very stay been everybody and a for XXXX. call. all I team happy good I'm this that And all look I when and travel almost about forward seen on happy many so call again. my

very all you thank So much.

does teleconference. Thank you. conclude today's That

time this have You your line at may We disconnect wonderful your a and day. thank for you participation today.