ShiftPixy (PIXY) 15 Apr 192019 Q2 Earnings call transcript

Greetings and welcome to the ShiftPixy Fiscal Second 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 XX, financial February ended past fiscal quarter the for XXXX. Within ShiftPixy second its

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

Thanks, morning, good everyone. and Vance,

and Relations Skincare the Government we senior of Staff excited of today Flagg and Civil by Leasing Kelly well Corporate accomplished more our private Kirk public veteran our our Chief having of XX President more team. Studios, Rights become the He COO the of Amy years as to Line Amy recently as Wang Officer. and in progress to Manager business Human I for attorney Even Division of as Dawn Co-founder us businesses in hear rapid spent is Justice. and Resources trial years Officer International development. brings Secretary. Compliance an previously experience management, tremendous was the Design as and are members the you February, most a amount industry. Marketing hiring and us the Kirk as recently their the employer joined experience, growth. of has ongoing in served services brand there, brands of the several strategy Vice where new to like two Department In Marketing continued to US can and welcoming than helped announced served CEO would start the the of about she sectors. Amy and We of market ShiftPixy join grow Chief Kirk Sebamed.

to Amy, Kirk So, the team. welcome and ShiftPixy

We you are on exciting at have to board this time. pleased

will workers before begin on I’ve As who over to are with recent of for share us Gig second quarter then our and then walk we in financials the its results businesses background will I highlights with ShiftPixy I enterprise heart, done in a quick new ShiftPixy to investors focused metrics quarters, want the section. staffing Economy. on And and detail. both who story. greater Patrice, Q&A operating At the a close will a it the is to turning new through in

fast-growing focus Our for market. the account half and which industries, part-time the hospitality initial on labor workers the in restaurant is U.S about

a aimed Economy, compliance compliance bring allowing sophisticated ShiftPixy burdensome to our needs face. to requirements Gig compliance with access technology workers base. it to working the are and clients and helping at platform available gain We the proprietary, many the and itself businesses efficiently manages oriented many readily employee to hires flexible

their We of day options customer better we is of turning delivery solution. so all bringing timed approach who increasing which extension offer desire. downside to ShiftPixy move shifts a of ShiftPixy equation, a that are broader to are of an The the other amongst the centric with the economy, and the on flexibility able under having refer shifters self can deliver to side the they're easily growing well of over third-party experience. convenience as the Every as professionally chains for they’re third-party better emergence they workers platform that arrangements. seeing in from On brand our platform own them them number restaurant offer they an to this array

encourage more. learn to we you our visit website always As to

will see With since our quarter our results through approaching quarterly number now which performance, evidenced before driven was to in proposition. continued us during in and growth the sequential growth. by expansion its This end platform XX% Patrice? the quarter, in ShiftPixy move underscores we of in Q&A the by sheet will Turning financial November and gross quarter expansion continued value which moment, the walk the into walk billings Patrice us we which rapid February year-over-year are XX,XXX, a as by our through in clients XX% of worksite on just balance session. that, greater was business Patrice, employees our quarterly meaningful our detail believe the the the

thank and Scott, call. on you everyone this you, Thank us morning morning's this for joining --

the gross $X.X XX% year XX% programs workers' well in was as higher of employer taxes. the the as attributable year. reflecting the second million, in $XX.X sequential the million The and average to favorable significantly and results, was [indiscernible] worksite of employees, year past in payroll was gross XX% in and include period X,XXX fiscal fiscal margin growth million prior our over quarter a prior same are outcome This quarter billings We year. margin this billings in XX% is number compared faster quarter X% was gross our even a a compensation increase to the which to earlier. the in corresponding as sequentially Gross up pleased XX% the up increase quarter which profit $X.X the during on gross growth at for report of than from

which prior loss was $X.XX an $X.XX the improvement share in quarter, during was a per of net year loss over Our period. the

new through added the performance approximately XX new new clients ends million with billings. onboard fiscal which that indications XX, quarter third May clients our generating brought February the has While February. worksite have already additional $XX we're during of about X,XXX are employees of the quarter These only about continued since in halfway on annual early XXXX, strong gross our end

sheet. balance to Turning the

at at level of end in like our approximately million, the February above would activity, us. on stood were slightly the funding balance of $X.X ongoing September. to which year comment at fiscal cash debt I convertible Our our which for start also million source of the an $X.X is

of end, morning. of common shares X As our converted have X.X concludes approximately stock. of approximately shares interest of the All issued into and right, XXX,XXX February million for stock quarter of and we this principal common this remark prepared million

into which walk Vance We their investment Vance? us send questions, will us move session. to So on again through. of the now now we our Q&A can asked committee member

Thank those questions right. to largely everyone you, Scott, split who I’ve nature. questions operational All a between sent Patrice an of financial in nature quarter. are of those which the for and for and largely you thank Patrice this

in experience to So metered have has do Is not, and If first it? for use question far? so type when using let's Scott. of insurance with right will car been entity yet? product dive already customers anyone waiting you the it and what If their your so, what launch

jump our California. our month. to metered just The is launched getting to into Southern [indiscernible] tied We which beta clients application, this ready is Vance, our the driver launch in of management have into do coverage,

Okay. That’s great.

timetable? live features, operational elements which what and versus the for the the is current is are Scott, Another what in what question is of app beta status

X.X this month version We enhanced are our app features. launching user of our our and

We the are in prioritize to for which our business. embedding features getting their we want important sense of are clients since parts

our which is to right allows driver clients now sense priority. feature, is deliver a management Our high a very self

All right. Thanks for that.

in seems like audience, just This will the end for is XXXX? a important question company it February Here's worksite than less an a fivefold XX,XXX How as calendar a And likely by the ended Scott. our another reach that be would XX,XXX year. for so worksite ShiftPixy that reminder, employees, with under one. employees of increase

how Scott? So that look does

backlog we're current me on population suggest The year-end calendar pace hit a to good to our goal. that

Okay. hear. Good to

Scott. you before related from restaurants? are Here the first I new coming industries are that I'll that question of What customers question for follow-up. is answer ask let that percentage not And another

About in year. outside get into we XX% increase as restaurant. that we from Sure. But to are coming further expect the

here's the right. related follow-up. All Then

is from those to of biggest you restaurant the industry, coming reason coming ShiftPixy? the they’re to that what Speaking customers outside

what that a -- is is human I technology. think ShiftPixy people miss by capital The strategy supported

the parts might and difficulties imagine they're understand we and is to to strategy support utilize the how see operator their we're operation dealing that work operators that Our and the motivated with. rely what of Many in various it by the doing and labor how run address technology community strategy. in industries on

Thanks Okay. lot that. Makes of sense. a for

current I don't think you competitive one, ever in conditions would interesting the industry? How an been the Here's asked. business and describe we've

Great question.

service This a high market work in is working the companies handling, ours has people hard XX interest have sector in greenfield in requires an unserved. very population a population and is million that staffing goes and of view Our very so populations. labor The few the of is a monetize lot employer to that U.S. that opportunity turnover part-time.

companies But our market space to the opportunity the after of combination of the with know we one neglected we for this help only hope are this combination -- So more deliverables. now success who combination same develop of market. inspires this deliverables to serve business the going

very All That’s right. interesting.

discuss with major we've definitely working Could one, Here's before. you been asked new ShiftPixy? clients

Once brands. national -- engage but you always the we see operator brands the to of clients", "major we under is depth to continuing various are won't national an the under operators stack. within the brands whose franchise Our we approach approach one rest so franchised operators rather

a the follow-up the goals rollout lives to and answered December? So features, quarter. get achieved? the to the Okay. call that from high business be still breakeven, expected goals to was asked Makes question XX,XXX to at three on least on a stated here's And to have Are were sense. the last by platform those the user last value and

we to three remain do three all achieve our this and primary expect year. Those goals

then an And All terrific. right. That's easy office the open one. Miami here's yet? Is

with Our was our Miami quest. capital aligned office

bank so capital very revisit office probably our the moving put flow quickly on are Miami cash we we will to We quest mid-summer. with pause our positive, investment and

Okay.

you those questions thank Scott. transition And So over answers, to the now can for Patrice. we for

burn one reach The revenue first your expect and rate? When current do familiar, at? be to It's is cash level that would you sounds breakeven Patrice. what what

to and what like an up as a This our be again work would we company market invest in I to one -- and before. come consider tremendous our that to potential business to early-stage advantage. leverage has everyone would the to remind continue to Yes. not --

overhead. trajectory cash sufficient having to capacity very our support staff flow growth fixed this and also contribution and that with our with our give we're in growth growth early that positive us add and operations comfortable investment to overhead We’re our to fixed to our seeing

an we our growth as anticipate to our company. software This accelerate technology internally. development in we operating allow increase to However, team will the the deployment expense which will the build us begin expedite of further

product paid or the expenditures and $X.X Assuming company development, as slightly month. are is [outside] quarter, now per over $XXX,XXX per incurred burning million [ph] approximately

of employees believe as our is the is year-end. additional and of breakeven the own necessary lives. brands, number worksite beginning national and between producing larger XX,XXX We The for It see We mass business significant goal growth flow expect the of franchises onboard and critical base the to that worksite proposition value to our of to our get end cash still our as in of to success. clients is generate from XX,XXX their company by our clients fiscal employees. increase

right. All for detail the That’s very there. exciting. all Thanks

Here's Can diluted be you fully converted? Also, bond share you you. explain related the when current the question what convertible it expect of state is current for and your to count? finance another instrument

Sure.

of remaining our investors total diluted potential common continued close into their million this So principal convertible million. fully shares principal count is of X.X stock. date And company The to the of issued is on current million. convert shares share to of X.X the XX.X to current have notes The a common. approximately

to operation the order to any current in for cash year-end. company breakeven common fund end its shares convert of would into to stock Our continue keep reach to the fiscal of of our by its investors

this the Thanks question next R&D Okay. there. on for answer spend much year? Makes you on -- how sorry, sense. is will The how you will spend

right, Vance. All

development earlier, million. current from deployment. As began transition company Such its increase away the our software will internal by technology $X.X expedite further mentioned cash development burn to approximately team quality transition building I the its company's and vendor software

As Scott enhanced release version mentioned, of we app are about X features. and user to our

the profitability the fiscal revenue with go year? end and we've it that you And I targets ahead, Great. the that, of projections day. for of believe, Patrice. made provide our realistic final the to August, And by of listeners Could question so means again

to fiscal reach still year. our the our end of It's breakeven by objective Sure.

to Our of And business we that offerings. transitions company increase strong margins the should able improve engagement. rate a power] to SaaS the monetization growth expected the example should are [of to the good as a sequential provide we’ve service experienced model. be The our [ph] of very

All Scott to turn That your will Q&A going conclude now closing the right. morning's call for Scott detailed I'm session. back you, answers. Terrific. to this for and over Patrice Thank remarks. And

Great. Thanks, thank I want everyone Vance. morning's this joining to for call.

you everyone look to about will appreciates Be interest on follow on us we a our activities the forward soon. Our your I our entire to in updating with sure ShiftPixy near We team opportunities. and great speak social you week regularly post future Have progress. and in and continued media.

thank today's conclude This gentlemen, you in conference. the program. participating does and Ladies for

great You Everyone may disconnect. all have day. a