ShiftPixy (PIXY) 22 Jul 192019 Q3 Earnings call transcript

Greetings and welcome to the ShiftPixy Fiscal Third 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 operator 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 detailed in which to risks in are SEC the some today's uncertainties, and filings, could materially

results non-GAAP based operations financial management the unless otherwise investors are prior will be made current certain measures trends results based comparisons referring On on period on stated. These a prior today's any allow year the measures. to to the in fundamental and Also comparison to call, non-GAAP period compare period in performance. to today operating analyze results of prior the to Company’s same

quarter fiscal Within XX, XXXX. the for results past the financial hour, released May ended its third ShiftPixy

release, of If you do press Company’s the section not the copy website. have the Relations of Investor please a visit

it is my Executive call Chief ShiftPixy's that, Scott hand to Absher. to Officer, over the pleasure With

bring you, our up good Vance, We to everyone. you to our Thank call excited we're date morning, joining on rapid and progress. appreciate and you

they economy, sophisticated the new proprietary storey crave. flexibility affording shift that and to to helps visit compliance face learn compliance while For technology to our one the requirements anyone a many we burdensome oriented who to opportunities website are businesses we more is ShiftPixy invite workers gig the bringing they you with about the platform and how

recent to we've performance with will financials to us Patrice and through operating greater made the before Right some highlights of dive over detail. like in our metrics in now, in the walk who turning quarterly announcements very I'd

Q&A a with close session. then will We

prior versus our average gross since or quarter worksite markets. end February on was the year. climbed penetration platform growth XX% growing numbers over our increase number May continued of a including quarter. XX,XXX a our of the overall had the XX% by of third rapid billings just increase XX, past employees quarter the look reached year Taking growth XX% ShiftPixy's by the This During the of of driven May the target our result ended which at increased

also exciting both And the clearly we're our gross We're it a stage pleased report higher appreciate of important is of see quickly that profit proposition. acceptance employers of the million to business alike, to employees the gratifying our and of business. more who our platform approaching $X.X the What's rapid by business. phase is our despite nature of early value next

up For and operators now we've of an the signing workers, to next build for been phase. all quarters the several critical new in necessary mass quickly thousands effort

and actually efforts stir our the plan work for is on. own several point shareholder will growth platform weeks believe one Over robust platform further we at so ShiftPixy our developers have profitability been functionality sophisticated to This to us therefore we and an inflection that of adoption value. the next our on turn create and hard of at exciting

reception it at innovative this in the in We clients. capital Restaurant platform extension self and of arriving restaurant human of particular marketplace. already at platform delivery is show the receiving number operator the to Association Our growing time our view May in is our help perfect National strong

advent stemming from to expanding, quality the without the technology. clients our their [indiscernible] delivering opportunity mention delivery invest their turnover own self address profitability welcome the having economy expensive and challenges not rapidly of to to With issues, toxic in

adequately share June public reflecting our since a our XXXX. announced going belief that value, in Related prices haven’t shareholder to progress stock creating last reflected plan recent we significant week repurchase

and stock up necessary to to repurchase our is Q&A growth. course back common has intention what opportunistically this shares investing to as I'm more in continue to Board granted rapid while feel our Our also we million sure. of appropriate it ShiftPixy's authorization is XX buy And shares on

over through detail and breakeven. the Patrice, outlook the who call reaching I'll on in cash our improving now greater results us take will quarterly update our and progress to provide turn liquidity flow an

Patrice?

growth Thank million third you, this of my last everyone results same reflecting year. sequential with provide morning. quarter over Scott. XX% billings our the line, pleasure with Starting period and $XX gross It's to growth an update top includes XX% the fiscal

year-over-year. growth of Scott our during employees As XX,XXX reflects XX% the growth mentioned, number was and sequential worksite average that XX% quarter and

expanded the gross the profit up third quarter year to from earlier. XX% million and Our from $X.X a prior margin of reflects year $X.X million gross that XX%

share higher margin quarter quarter. in well prior of per gross payable scale of per diluted attributable as Compensation Workers' outcome to last loss diluted in generated our favorable year is advantage the to a employer We as the to net compared the $X.XX shares Similar a loss taxes. net $X.XX programs,

at balance the $X.X to well. cash provide $X.X month of our now, a for outlook feel with I approximately sheet up million improving Turning of in start year to the want fiscal financial ended above our the level September. we May as million was which the in

greater during which of As the should growth of from flexion mentioned reaching platform. at we're an our Scott point improvement functionality our benefit activation ShiftPixy,

quarter end specifically annual appears XXXX of have worksite it since XXXX just added the XX, $XX of half this, new which on roughly on has approximately new clients growth brought which XX through we've in another fiscal our generating board August remained ends ahead employees revenue. fourth May, additional Even our way robust, million

will by quarter breakeven once XXXX. first again we the standpoint In our functionalities words flow our towards November improve believe the financial cash we of significantly activation a and user other fiscal and of end of achieving operating anticipate From metrics.

to share ask Vance these on questions the members we convertible along Q&A program announced us are I Vance? newly topics. investment which walk activity through. and community again, us cover we Once debt will send think for move some of session their remarks going our our of repurchase set that now to

Thank Patrice. you,

received of many couple be in questions So quarter, of the to and consider of this what to we really a want start diverse with the matter. interesting on I a questions set but heart right investors

So starters, convertible the XXXX filing bond X-K conversion want for by be know a honored would the many announced the on these holders you longer no and voluntary that requests XXXX default about to putting into instruments.

there? So were thinking is Scott, the what

ShiftPixy trading. Sure Vance, two the believe poor terms steps notes our made I share In for advice appreciate our force decided we us situation. down that leading we to now the former default. and price it bankers additional best option stock an the simple opportunity explain why raising to was We've into to the taken rectify was eventually our unattractive harmed capital given path where offered

bond on which is these redemption hope price, we plan. was ceasing we're we Friday. reflect just will and making our to business second steady our our the is, we better stock are first the punishing that to the two constantly executing It shares The program convertible announced stock the ShiftPixy to allow request honor progress actions buyback start

moved fair Okay and follow-up convert got beyond a holders then or the has kind of it, with still and it negotiations are it one investor going negotiations to that? describe way a how which is has the is,

ShiftPixy arrangement. converts. other a We're benefit mutually be talking stock the we lot ideally to we including come beneficial all think and a words can to to with and In them value stakeholders our a of there's hope that in future

are with Okay, question, months that address I you listing to really the had are regain were understood. steps what doing requirements. this notification their a designed to NASDAQ as what's where to sounds address And six the closely shares issue well? related compliance also from like described It to just you due you trading

stock That's and It by in pressure for which conversions the for opportunistically bit the the NASDAQ the market, can above higher the threshold listing price, move $X stock hopefully support Vance. a is ceasing primary our that. buying that back quite than right reason on and open we our hope share a now the hopefully were shares the

maybe to the are any operate or the enough. for windows are on have question mechanics you the execute limitations and open will in what specific buyback? right, other which how a Patrice, All is fair you then need you around around related buyback, there thoughts This

Sure Vance.

overall share but repurchase restriction conditions As any market timing to warrant. always as program, for the volume there are some tend we buyback

sense. quite new. still Scott a on is you we the this next ShiftPixy contracts to your any because few back question makes one, of is this probably Are current next Maybe haven’t renewal Okay, months? received in for before up

review to reevaluate, month auto these losses the re-price operated our we Vance, Worker's renewals agreements. client. auto The only or clients in is case renewal remove Compensation us business the caused times where sign service XX

continues and the business flow which is not stack have Our why to ebb quarter-over-quarter. does our revenue contract

that. for thanks right, All

media like Youtube main or quarter, this plans have for your or advertising videos social quarter is new platform any do Another on Reddit you your focus? your Facebook

don’t clients social on feed media. Our target

brand. we open platforms doors So platform, outside we messaging industrial up Once leverage our our from platforms. the to the that [ph] we the to other of shifters keep us hiring media social intend on help support

All to right, that's good hear.

when for is XX,XXX a answer, last I or why and far your to already? call XX,XXX hear two to we month were downloads conference one here're be received would than close ago mentioned probably on everyone Now think showing helpful fewer the the you there app shifters

the one. counter easy an app that's X.X reset. the new version us we app, a launched store Sure, When for

see up. you'll released, tick being features new the With those numbers

Okay, very good.

new we recent contract? to elaborate? in quarter, think every seem question Here Scott, any I is you've explained feel get quarters process pursuing are but you free to the a

under our rest. to the brands. Once operator an under stated national approach various one is we we As the last quarter, brands engage of those I national always operators approach franchised

won't stack. the we you whose continuing see So brands depth rather to operators are but "major clients" within

Got it.

– think competitors worth before, company's Do a Here's it's another that who are? refresh. the perhaps covered do I also biggest you you but you've think question think

people of we no the we is the serve markets. pieces one and markets with We in other see same doing do There technology serving stack. strategy what

in a first open So right now a market. wide mover we're

about for timeline can a should perhaps A of what's in upcoming over the potential great. rough ask events, rollouts? of rights terms we events So watching coming catalysts potential future be tap what Okay with sorry, Scott, on few investors in this oh lot investor you provide of months?

along model. flow for and on Well, the of critical month now come shareholders with hopefully business and recurring cash more the observers as rapid model. growth, of groundwork eye national the should expansion, our geographic improve no are a because The we keep steady laid That continually by will footprint every improving little see and events much that population really the pattern I and growth growth see a surprise revenue with mass getting an our growth. can

Interesting, for right that. all thanks

provides, growth for breakeven about the the to needs? that growth know the course to and wrapping So and over Patrice? us transition the revenue to you before a that Patrice in questions path want how what with spending Let's how couple of other there Investors up. and offsets expense share can R&D business

stage Sure that Vance. everyone to leverage as continue to the advantages. in I to our end and like invest early would consider up will potential, to we market company we business what tremendous an to model be remind

trajectory to to support growth. with growth our comfortable [indiscernible] give very investment our us takes And and also flow. positive are our staff We that cash growth and operations capacity contribution this in sufficient

add We seeing to having our fixed are [indiscernible]. without

However, in expense the of solution. begin agreement department our also accelerate licensing will technology sub to development us our company. an build we software growth which anticipate increase and should our the delivery to we the related further expedite from team to allow This as a internally operating

client in engagement. incurred employees as growth the paid month, our as slightly is approximately product per burning per the cash better now the quarter flow are or we monetization from than expenditures million of and to our additional $XXX,XXX generate of less company outside $X development of worksite baseline Assuming as well base expect of

as The clients employees onboard of of for in their as own company here franchisees significant is necessary brands number value and producing businesses position the increases beginning success. to larger national worksite

will will as With by between We overheads the I company mentioned quarter XX,XXX of XXXX end remarks. breakeven in XX,XXX mass the be fixed prepared first added now critical the overheads. the of added hit is believe fiscal and our

the thanks see right, can off take Patrice? nature. classify and interesting software an do with you stab question you at finish how and another all one All I too company. company color or let's reflects ShiftPixy's investor to which just you may really for Are a to This wants yourself or be that think know that technology unique Patrice, how

Yes, it's interesting an question.

the points that manual Scott capital heard here new staffing and remind I to think staffing like Therefore, all I'd training ShiftPixy focused continually new management human – the think the on for and businesses as the only a I to our target workers are specific before, the our in both market at economy. gig strategy reduce multiple mention technologies is to alleviate and support and you've heart implication employees. its enterprise, touch

right, All terrific.

always conclude Q&A will back closing these this remarks. and you session. over Thank that his morning's for now answers, So hand to Scott I'll both providing thoughtful it as for

went morning this to today to for we appreciate This updates thank I and everyone forward our Speak providing Great. being as additional exciting again your with interest hope ShiftPixy. week. time we look soon. everyone a terrific as we an for and is us always fiscal listening year. Thanks for with has close out in I in you and us