ShiftPixy (PIXY) 11 Jan 192019 Q1 Earnings call transcript

Greetings and welcome to the ShiftPixy Fiscal First Quarter 2019 Financial Results Conference Call. All participants will be in a listen-only mode. I'll now turn the call over to Vance Edelson with ICR.

Thank you very much, and welcome everyone to this morning's call. I'm here with ShiftPixy's CEO, Scott Absher; and CFO, Patrice Launay.

the want forward-looking everyone are any statements, risks uncertainties I will today's subject forward-looking begin, obligation and several no contain all and statements. we to or that remind call to to Before update assumes revise Company of which release cause in These and actual differ from those press results forward-looking of the statements. Company's described in which to risks in are SEC the some today's uncertainties, and filings, could materially non-GAAP financial management will be certain referring On today's measures. to call, These to measures analyze Company’s trends based non-GAAP investors allow operating in the and to operations of the compare fundamental on prior results performance. current period results stated. Also period the results any comparison prior the to today same a comparisons to are period based otherwise prior made on in unless year

released the hour, results ended financial XXXX of past fiscal quarter XX, the XXXX. for November Within ShiftPixy first its

to of If press is of company’s a website. the With Relations to Scott release, Absher. please pleasure the you have it section do the Investor Chief Executive the turn not that, Officer, call over copy visit my

walk company a then I'll turn before our with through highlights begin last so everyone. comments quick newer the I'll been financial exciting first background Patrice, our and a call more ShiftPixy quarter for performance. can at glad morning, since detail. Thank call, it will as investors our joining you of time who weeks we with our six conference for I'm us. you only we'll us be on It's results keep I to our this share in Good the hosted for brief. over

part-time both Gig industries of days market, led for The for and focus where a with to were ShiftPixy close restaurant and in company. just US in the half that's these labor will new session. we Economy. is always, our in workers staffing roughly workers fast-growing on early enterprise focused and Q&A we the businesses the hospitality account As a

taxes, technology workers’ related sophisticated burdensome Economy, at platform off to those to time aimed numerous the ShiftPixy significant accruals, unemployment managing and relationship paid status workers, plans, the a the is aspects and compliance-oriented helping employer well. part payroll to to bring as businesses and taxes, compensation, goal claims, Our assuming benefit compliance as proprietary often is the and of a such and with the Gig requirements, more.

enable endeavoring secure also We’re to workers shifts. to additional

clients. clients of Quick to on especially a of amongst easily platform broad array convenience our workers how is can the to as Service gain A relevant can satisfied. flexibility or move known them, gain are if Restaurants call to at the a of rapid access the shifts QSRs. our when it flexible confidence As employee a of a this and our compliance shifters economy, emergence we result ready the is base our great requirements approach, Meanwhile, platform as example increasingly comes

While more customer delivery unfortunately an to overall are story platform, extension ShiftPixy brand-centric experience. they their third-party they’re our can these you better their encourage generating an so self-deliver with new them offering issues their about to that visiting reputation secure partnerships, to customer own website. data learn is even of We also experience, professionally by our providers. they their brand, surrendering and income customer under third-party their

quarterly Patrice more Q&A. go us X,XXX most platform, averaged which results year our to through that's we background, corresponding a walk will generated period. detail gross recent quick Now with earlier. our the of quarter number to XX% ShiftPixy this fiscal billings at earlier is in as growth result as worksite the November approximately of employees the on in X,XXX to quarter, that, a up first results. the The a year rapid Patrice? million, quarter compared of let's the in have expanding With compared a before look $XX.X now

Thank It’s to call. the everyone and you joining again today you, for speak Scott. nice with thank

XXXX, in employees for Scott roughly mentioned, annual in increase, the X,XXX slight which XX% the The the a worksite fiscal sequential million in approximately improved increase in line first $XX.X decrease. reached with very were quarter and XX% to was revenue a gross up primarily a is average billing the decline cut-off gross of representing year. billings past solid the over Not quarter our gross procedures. surprisingly, due As annual just X.X% sequential

look we from at Specifically, base. end our clients calendar of marginal the the to out year, weigh

Another normal factor around as year-end. what client behavior was we view

higher year keeping Specifically, the our requirements. and to employment workers calendar to tax tend clients of due each function beginning to compensation onboard the and book workers’ wait until related

Our nearly corresponding the the compared of an as was our the and in to basis $X.X XX.X%, to quarter during prior million year. points tripled representing gross increase to margin profit last $X.X same period XX gross related quarter year million

half has continued gross convertible additional about only that approximately which brought early also have already clients X,XXX XX way through million ongoing quarter the of source an strong the performance end we’re us. is billings. debt about employees funding on-board the While generating activity added clients like comment with for November. second new of are new to indications of would annual I since $XX our These new worksite in on fiscal XXXX, our

approximately today. This quarter million shares November for common $XX,XXX of interest of end, of remarks of converted our shares into concludes we issued and stock $X.X common prepared of principal XXX,XXX approximately have As and stock.

can session. on into our So Q&A move we now

email asked Vance members to the us which us community have now their We will questions walk investment Vance? through. of

last those weeks relatively only will organized the keep I the have first questions. been for for Scott you, XQX&A and that six since Thank groups, questions some can start those into operational two Alright. Patrice. then I’ve with brief. And And given we figured, again, our out type conference call, Patrice. it's Scott about

first, is beta-test functionality So yet? the in here's scheduling

see released and a it Vance, to this development, not It hope while Yes, final in completed scheduling live we the we have of through being functionality. is quarter. calendar going and

great. Okay,

is insurance or yet driver question. that launched Next testing? beta in the Has program

released functionality we us the users into driver that complete. funding live but our it not platform, first functionality the We’ve it corporate additional this quarter. to provided to through calendar to our secure And management is we see enable expect

And you here And on, it. large contract the question. wins? names of is provide can recent there moving new next customers? any the got Have been Okay, any large

in reasons. we Well, brands and clients Domino's, our penetrations Pollo names you clients such many QSR that to because we El don’t of Taco we improve tell offer business prefer we expect we rapidly. activities brands disclose the are those operators into can for But Papa of serving And that their sector, John's, our Loco under the don’t Denny's, as competitive Bell.

next the expect major adoption our the Over to QSR we brands. year, discuss of into most

Francisco the Are And great. the Okay, question here yet? on and the open geographic offices Miami next is expansion. San

expect in San We on Miami decision Francisco. other open in words, January, this to a made And month. not we've

Okay, sounds good.

for we operational your XXXX goals what received, year? Next are question the calendar

Vance. a great That's question,

Our the major on least value to XXXX areas. high two, then business breakeven. user three, platform out Number push number to And in is December. three lives XX,XXX getting by rolling at features. the Number one, our have

then at to Patrice. those for Alright, perfect. the Scott. Thanks And questions more let's on directed move answers,

what please First additional update steps to one on taken and is, funding? will liquidity provide an raise be

year. $XXX,XXX calendar of start approximates our fiscal our the this in in generate operations burn in value million attainable a per until larger us expected used quarter, in the employees, growth from would capital beginning company personal of employees. $X.X of with as clients proposition worksite expect the to significant growth believe the add of to not meet to many outside national of clients, on-boarding the of The flow Vance. a additional with meet fees, cash our our is we their in and do question, reduce for worksite do as client the The is and We franchises which us of expected, month. cash administrative our own number of which business. to expect useful in increase and development the invest burn software to the year. enable that prospective Good target The increase increase of breakeven significantly base in delayed We company as cash view fiscal the will onboard producing we significantly human businesses success. I our new clients first brands,

our months to the their ago, few and plans capital the including investment the include a us we important in work to A more capital expectations raising expect about fund final disclose to bank to growth, engaged well-known coming and take development Our we able be features. with of user weeks. our to market,

next Thanks in? there, much detail warrants for Patrice. question the for is all Okay. And bring remaining how the related, can the you

prices exercised has million company has ranging Of date $X. put of to March approximately warrants. $X $X.X the XXXX outstanding [Technical X, with Right, Difficulty] an expiration from up which

cash. approximately So in can provide this $X.X if $X.X warrants million exercised million

understood. Okay,

Next question.

the weak. but year, remains grown has net or gross bottom-line past Over revenue substantially the profit

can wants individual to expect profitability? this So, when know, improved we

intentionally operational the company spending. additional in to invested business to as of The a early meet means in growth future items us proportionate cost with enable increase fixed our

we would now significant end scale worksite are the enjoy increase fiscal number of of to help As previously a onboard of in that economies the beginning current year. are we with that larger before attain mentioned, beginning to profitability us the employees. clients believe our We

Okay, great.

closing it conclude will remarks. for I'll Scott fielding to these Thank you back questions Q&A all that turn session. this So for and morning's over

today. us be greatly listen Thanks, ICR we'll web once your which soon. you speak PM X:XX We'll is We we be ShiftPixy. approximately will link you'll this weekend everyone interest hope with Hope webcasted everyone joining Conference appreciate enjoyable Monday our for Eastern an Time. on presenting has Vance. Great. available coming you in at and website The the Thank and again in.

program and conference. concludes have all a gentlemen, participating in may and This you wonderful you day. today's for today's Everyone, disconnect. thank Ladies