Q2 2020 OneSpan Inc Earnings Call
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Welcome to the one span second quarter 2020 earnings conference call.
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I would now like to turn the conference over to Joe Maxa VP of Investor Relations. Please go ahead.
Thank you operator, Hello, everyone and thank you for joining the one spans second quarter 2020, <unk> earnings conference call. This.
This call is being webcast and can be accessed on the Investor Relations section one spans web site at investors Dot one span dot com.
Joining me on the call today, it's got Clements, our CEO and more quite our CFO.
This afternoon after market close once been issued a press release announcing results for our second quarter 2020.
To access a copy of the press release and other Investor information. Please visit our website.
Following our prepared comments today, we will open the call for questions.
Please note that statements made during this conference call that relate to future plans events or performance, including the outlook for full year 2020 are forward looking statements.
I've tried to identify these statements by using words, such as believes anticipates plans expects projects and similar words.
And these statements involve risks and uncertainties and are based on current expectations.
Consequently, actual results could differ materially from the expectations expressed in these forward looking statements.
I direct your attention to today's press release, and the company's filings with the U.S. Securities and Exchange Commission for a discussion of such risks and uncertainties.
Please note that certain financial measures that may be discussed on this call are expressed on a non-GAAP basis and have been adjusted from a related GAAP financial measure.
We have provided.
An explanation and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the earnings press release.
In addition, please note that the date of this conference call is August 11th 2020.
Any forward looking statements and related assumptions are made as of this state.
As expressed we required by the federal security laws, we undertake no obligation to update these statements as a result of new information or future events or for any other reason.
With that I will turn the call over to Scott.
Hi, Joe Thanks, very much good afternoon, everyone and thanks for joining us here today.
A lot of moving parts in today's earnings release, so I'd like to start up by summarizing some of the key points for you.
Number one our transition from perpetual license to recurring revenue contracts is ahead of schedule, we're seeing strong growth in both subscription and term license categories.
This is a near term partly offset by the expected had one from lower perpetual license sales.
Second year to date, we are ahead of our planet, mostly measures, but there's still some quarter to quarter volatility in our piano all with somebody out performance in Q1 impact in Q twos topline.
Number three our product investments are paying off with strong growth in one span side and good early results from our one span cloud authentication offering which was introduced earlier this year.
The value of our softer sales pipeline has grown over 50% compared to last year and recurring order growth in Q2 was very strong.
Number four the surgeon chronic virus infections and outside the U.S. and Latin America and resurgence is elsewhere I mean that banks now expect a deeper and longer economic downturn that were broadly impact the global economy and that will also pressure bank financial results.
Therefore, one span has determined it will withdraw its 2020 financial guidance until there's greater clarity on our customers plants.
Number five the strategic outlook for one span remains strong the need for digital channels security and digitizing the customer experience in financial services are only reinforced by the present new reality.
Furthermore, major institutions are in early stages of a generational shift to cloud platforms and infrastructure, which one span began preparing for almost three years ago.
Now, let me turn to our update on that Q2 results and the second quarter total revenues declined 2% to 55 million with strong recurring revenue growth offset by lower authentication token sales.
Delays and some larger complex software projects and the period impact of our accelerated transition away from perpetual contracts.
Recurring revenue accounted for 76% of total software and services revenue up from 71% last year, and 64% and the second quarter.
Last year.
You will recall our goal for 2022 is for recurring revenue to exceed 75% of total software and services revenue. We now believe we will be close to that goal this year.
We're also reporting annual recurring revenue for the first time this quarter.
They are our grew 29% to $90 million.
And the second quarter.
Adjusted EBITDA grew 24% to $3 million. We ended the first half of 2020 with revenue and adjusted EBITDA ahead of our 2020 plan.
Turning to bookings software and service bookings increased and the upper single digits as perpetual contracts decline offset by strong recurring contract bookings.
Recurring contract bookings grew in excess of 50%.
Driven by term agreements up over 50%.
Subscription contract bookings more than doubling driven by one span side [noise].
And demand for our cloud based security solutions.
Once been signed log significant wins globally across multiple verticals, including government healthcare insurance and of course financial services.
We want to high six figure HCV annual contract value contract with U.S. Department of Agriculture.
To support programs that distribute loans and really funds to farmers.
And we're seeing one span sign opportunities in every region and in the public and private sector.
During the quarter you signature transaction volumes increased sharply and we expect continued one span sign revenue acceleration in the second half of 2020.
Now some updates on our solution portfolio.
Our new one span cloud authentication offering is being well received by our customers. It can be implemented quickly at large scale from our public cloud and supports our full range of authentication devices and mobile security solutions.
For example, we recently deployed one spend clad authentication for a Japanese financial services customer and under 30 days.
Additionally, Oh CA utilizes a common set of G.I.D.A.P. eyes.
Offer o'shea customers are straightforward upgrade path to our more advanced risk based intelligent adaptive authentication solution when they are ready.
And we continue to be recognized by the industry for technological advances once span was recognized by Frost insolvent as company of the year and digital identity and risk based authentication.
And we're also awarded as best Mobile security solution by S. C media Europe for 2020.
As you know, we reschedule earnings release to allow time.
For our accounting team to assess possible accounting errors relating to a certain set of prior period software contracts.
We of course take such matters very seriously and even though the impact was immaterial we want to ensure that it was fully understood and addressed before reporting our results Mark will give you. Some additional details on that in just a moment.
In fact, I will turn the call over to Mark right now and then I'll come back to provide some additional comments along with an update on our outlook before opening the call to questions Mark.
Thank you Scott.
Before discussing our second quarter financial details I do want to comment on the prior period adjustments that we noted when we rescheduled the earnings calls we today.
During Q2, we identified errors relating to certain contracts with customers involving software licenses that originated prior periods.
We investigated and the errors that we found resulted in over statements of revenue.
$2.2 million on the beginning of 2018 through Q1 2020.
These this 2.2 million represents less than one half of 1% of the $523 million. The revenue we recognized over that same timeframe.
Well, we don't like errors, we do consider these areas to be immaterial and we are adjusting the prior period revenue and related amounts in our earnings release today.
On future filings with the FCC.
As Scott mentioned, we are extremely publishing annual recurring revenue for the first time this quarter.
Our our which we define as the annualized value of all active recurring product contracts greater than or equal to one your legs grew 29% to $90 million the second quarter 2020.
Recurring revenue grew 35% to $23 billion than before.
We believe that these non-GAAP metrics in addition to our GAAP results when compared to prior periods.
Provide additional insight into our transition to becoming a majority recurring revenue company.
Total revenue for the second quarter 2020 declined 2% to 55 million Dollarss product in license revenue declined to 12% to 35 million and services and other revenue grew 22% to $20 million.
Looking in more details about recurring revenue.
Our subscription revenue grew 15% to $6 million. This included approximately 30% growth in our E signature revenue.
Offset by lower transaction volume from auto finance customers using our secure agreement automation solution due to the pandemic.
Term based software licenses grew 144% to $5 million in Q2, and maintenance grew 23% year over year $12 million.
So total software and services revenue grew 13% to $31 billion, while our hardware revenue declined 17% to $24 million.
Gross margin in the second quarter of 2020 was 67% compared to 72% in the prior quarter and 68% in the second quarter 2019.
The decrease in gross margin is primarily attributed to product mix.
And I want to know that we expect gross margins to increased slightly in the second half of year as our software sales growth.
Operating expenses in the second quarter, 2020 or $38 million.
A decrease of 5% from $41 million reported in Q2 last year.
We expect an operating expenses will increase in the second half 2020, driven by increases in sales headcount and marketing investments as we enhance our solutions and invest for growth in future quarters.
Adjusted EBITDA or adjusted earnings before interest taxes depreciation.
Amortization long term incentive compensation and nonrecurring items was $3 million up from $2 million in the second quarter of 2019.
Adjusted EBITDA margin was 6% this year versus 4% last year.
Our GAAP loss per share was five cents in the second quarter 2020 compared to six cents in the in the second quarter 2019.
Our non-GAAP earnings per share, which excludes long term incentive comp amortization nonrecurring items and the impact of tax adjustments was two cents in the second quarter 2020, compared to one set and the second quarter last year.
We ended the second quarter with $111 million in cash cash equivalents and short term investments.
Fair to 110 billion at the end of last year.
Cash generated in operations.
Was $7 million decor.
Geographically our revenue mix for the second quarter included 52% for me, 25% for me Americas, and 23% from the Asiapac region.
This compares to 60%, 26% and 14% in the same regions in Q2 2019, respectively.
Scott I'll turn the meeting back to you.
Okay. Thanks, very much mark.
As already noted our software and services sales opportunity pipeline grew substantially in the first half of 2020, demonstrating that we're offering solutions our customers need.
However, there is increased uncertainty about the timing of customer projects as we entered the second half of 2020.
The surgeon Corona virus infections and Dafs beginning in early June and the U.S. in Latin America, and continued flare ups on Europe make it clear the virus will not be quickly contained.
Most banks are now expecting a deeper more extended economic downturn and an increase their loan loss reserves, an expectation of more bankruptcies and small and medium businesses in the quarters ahead.
Late in Q2 and into early Q3, we saw some lengthening sales cycles as banks evaluate impacts to their operations from the pandemic.
Nevertheless, many banks are anticipating increased fraud losses, and the need for continued digital channel expansion.
Based on our discussions with both customers and industry analysts.
We believe the banks will be more cautious about technology investments, but the projects that facilitate a better and more secure digital experience will continue to be a priority.
As I've noted before it's important to understand that a majority of our revenues driven by additional sales to existing customers and that we generally have significantly not positive retention rates with those customers.
Given the global economic uncertainty, we believe it's prudent to take the following two steps.
First is to withdraw our full year 2020 guidance as have many of our technology and cyber security company peers.
Our president outlook is for 2020 full year recurring software and services revenue growth to be consistent with the three year outlook. We gave at the end of last year offset by perpetual license revenue declines as expected.
We also expect hardware revenue will decline at a 20% to 25% rate this year, rather than our initial estimate of a mid teens decline as banks worked on inventory the accumulated last year in anticipation of PST too.
And delays to hardware upgrade projects in favor of mobile security.
Second one spans board of directors as approved to share repurchase plan of up to $50 million through June 2022.
To ensure the flexibility to drive shareholder value across a range of economic conditions.
The repurchase plan is designed to offset equity issuance for compensation purposes, and a repurchase additional shares when we believe it to be a prudent choice.
I want to be clear that our priority remains using our cash for growth investment, but given the present economic uncertainty I want the maximum flexibility for capital allocation.
Finally, there are several important well documented and sustainable trends that define the future of our business.
First the ever present need for regulatory compliance.
Which we help our customers with all around the world.
Second digitization of business processes to reduce costs improved user experience and increase agility through solutions like you signature and digital identity verification.
Third the need to respond elevated and more sophisticated fraud risk, while preserving a responsive user experience with approaches like our risk based authentication.
And for banks are beginning to transition more of their operations to the cloud.
Which was one of the foundations of Archie I'd strategy.
This is the newest but potentially the highest impact of these trends.
In recent weeks, we've seen announcements from Deutsche Bank about their agreement to form a strategic multiyear partnership with Google.
For cloud platforms and services.
And from BNP, BNP parabolic describing their new plan to adopt IB EMS cloud for financial services.
These are watershed events in the banking industry.
And we fully expect to see others moving to the cloud as the impacts of the pandemic have made clear that the old ways of doing business are no longer sufficient.
Let me also note that we are beginning to leverage our cloud based offerings and adjacent markets.
Given the growing needs for identity security and Digitization solutions, and government insurance and digital health care.
So despite the near term economic uncertainty I believe one span is well positioned for the future and we continue to invest in the solutions people and capabilities that we need to compete when and grow.
With that Mark and I will be happy to take your questions.
Thank you we will now become the question answer session.
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Our first question comes from Gray Powell with BTI Gene. Please go ahead.
Okay, great. Thanks for taking the questions.
Yes, I guess addict couple.
So it sounds like there was a lower than expected.
Mix of perpetual license revenue in Q2.
More a function of the deal delays that you talked about related to the macro environment or is that something that you see potential recovery over the next six to 12 months, yes, maybe I'll start there.
Sure I'll, let take cracked that Mark you can certainly add in.
I think one on things, it's been pretty clear through the second quarter is that the transition towards recurring.
Revenue contracts has gone is gone faster than we assumed at what at this point in time. So I think that transition is happening faster that means more recurring opportunities and fewer.
Perpetual license contracts.
I think that I think there was the slowness that I mentioned in my comments I think was not limited to a perpetual contract types. It was I think over.
Hey, more general more general effect, so I'm not sure that had a lot to do with this shift towards more recurring.
Mark I don't know if you have anything to add to that.
Yes, I think just adding on Scott.
We have seen a faster transition to turn lessons and per I think that's all.
That's a big driver the Horizontals.
You had another question Greg.
Yes, it did.
Subscription line, so I thought the commentary on 30% E signature great was good and I guess im a little bit new to the story I thought you signature business was the bulk of the subscription line. So I was confused by the difference between that 30% growth rate and the headline growth, which I think it was more like in the mid teens. So can you maybe just talk about the subscription line are you I guess first of all that the differences.
Those two numbers and then just your confidence level any growth in subscription line.
Back above that 25% pace. It sounds like you had pretty good bookings on that business.
Yeah, Let me let me take the for the last part of that Mark can talk about the composition of the of the subscription line.
I think the answer the question is yes, we had.
Triple digit bookings growth in the subscription category and in the second quarter. So we also had I know I don't remember in total, but I know with one spend sign we also saw triple digit bookings growth in the first quarter. So Oh, we do expect that to continue into come through in the end.
PML over the over the coming quarters. So Mark you want to talk about the composition go ahead.
Yeah, great immense subscription line I tried to allude to this in my comments, it's not just the.
Subscriptions, but also onetime overage.
Charge that we see so from quarter to quarter, it can be a bit lumpy and one of the transaction.
Based.
Book of business, we have from our secure agreement automation with auto financing, we saw some of those onetime overages decline quarter over quarter.
In Q2.
Got it.
So essentially that's a that's a transaction based business and a on the auto sector and that automotive.
Automotive asset finance is the biggest component of the secure green Bob automation business. So I think as we all know there had been fewer automobiles sold over recent a few months in that that shows up in that number.
Understood. Okay. That's helpful. Thank you.
Our next question comes from Andrew came with cultures Securities. Please go ahead.
Hi, Thanks for taking my question just looking at our growth of 29% I was once again.
Danival that it through the year and then also if you could talk about what the signature a lot.
Talking about expanded use cases that you're seeing in the quarter that'd be great. Thanks.
Sure I'll, let mark go into some of the detail on the numbers, but they the outlook is we haven't right now.
Is that we will see continued a solid a our growth for the full year. So we.
We have said that over the period through 2022, we would see sort of 25% to 30%.
Annual comp on average our our growth I think we are going to see that this year.
So I think thats the headline and then in terms of a you signature there were a couple of areas that were perhaps interesting I mentioned then.
And my comments earlier, the the you Sta project.
We are seeing.
And have seen.
A significant interest in other parts of the government for increased use of these signature and we talked a little bit.
Thank you in the first quarter release about the small business administration as as another example.
And then we're also seeing are elevated interest and saw some books of business around healthcare.
There is a real demand in a real need around various elements of health care Tele health as well as other other health care use cases.
For for each segment, you signature type product so.
I think the interesting thing is that we're seeing these trends and you signature on a go on a global basis.
We have.
A real solid growth of a bookings and opportunities for E signature really in almost every region of the world. So we feel very good about the direction of that of that business.
I know Mark do you want add any comments about the.
Our outlook.
Sure.
Thanks for the question Andrew you asked at the 29% me are relatively sustainable.
We've published a table in our Investor presentation that just went out to show the growth of the quarterly our our.
Since the beginning of 2019, and we see pretty consistent growth in that figure that it's driven by subscriptions term licenses and then maintenance on both term licenses and maintenance on a perpetual contracts.
The fourth component that really drives that number up is our our strong retention rate our lack of churn.
So I think the combination of those four items will continue to push our board and that's one of the the metrics we want to get out to the investors. The other item I want to know Andrew is that our term based license revenue line.
Still relatively lumpy because of the six so six rentrak and driven by the term length of those licenses. So that's why we're publishing our because we think that that gives a better representation of the growth of our recurring.
Revenue streams.
Does that help.
Yes. Thank you.
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Our next question comes from Roger deployed with Needham and company. Please go ahead.
Hey, great. Thanks for taking my questions.
And if we could dig into the comments on deal push outs wondering if you can get anymore anymore and so on conversations customers is this mostly budget related or some architecture driven decisions where customers are rethinking their longer term digital strategies, maybe pushing deals out from that perspective.
Yes.
Roger Thanks for the question the.
As far as we can tell this is purely related to economics.
And the uncertainty banks are now seeing eye I mentioned in my call we've seen many banks.
Really make a significant changes to their loan loss reserves over the last quarter.
And and that has an impact on their capital ratios and things like that and so they want to make sure that they can operate their business well into coming quarters to replenish those capital ratios.
As they as they go forward so.
I have not heard to anywhere that this is really a technology issue and any sense. It really is just purely I think first of all in a we saw in the June timeframe, it's actually a little bit interesting, we saw going through may that the quarter was proceeding.
We typically than in a in June you will recall at the end of the first week of June we started to see a spike and.
And current a virus infections in the three largest states in the U.S., and California, Texas, and Florida and by the second week of June the National infection rate was was starting to rise pretty rapidly I.
I think this was right after that period in April may when some states and location started to open up again after flattening the curve and.
And so it became clear I think at that point that this was going to the challenge from a pandemic was going to be sustained and banks realized I think that that was going to ultimately have some impact on a on certainly small and medium sized businesses.
And that they needed to put up additional reserves.
We're seeing sort of similar behavior, albeit a little more slowly in Europe.
And then and then I think banks and some of the emerging markets, particularly Latin America are are certainly a little challenged right now with a with what's going on so it's really.
These factors that these economic factors that are driving us as I said in my comments earlier.
When we talk to analysts that look at the banking industry in the security space and add to our customers are they have a they've said that their priorities are being reworked.
They're re budgeting for the second half of the year and into 2021.
But they all understand that the digital channel in the security and a user experience in the digital channel is going to remain their primary and probably you know fastest growing.
A component of their of their business, which of course is that part of the business that we serve so I think there is some effect here of a slow down while banks really stopped replan figured out what kind of loan loss reserves. They wanted to take a and then reprioritize so what they're going to do for the rest of.
The year and into next year, and then I think there's probably some longer term impact a with a with banks just slowing down some technology investment.
That's a little hard to say right now we have as I also mentioned our opportunity pipeline at the end of the second quarter and into the beginning a third quarter.
It is up more than 50% from the same period a year ago.
In terms of our software and service offerings, our digital software and service offerings. So the the pipeline is really there.
The products I think are a good fit for what our customers need to do.
And so there's some question now I think at what rate will that convert.
And that's the open question I think the caused us to say, we've just we're going to have to withdraw our guidance at this point because we just don't know what that conversion rate is going to look like in that timing will look like.
We are we remain optimistic about the second half of the year certainly in terms of our software and services offerings were a little less optimistic I would say about hardware as you can tell from my comments.
But.
That's I think the pictures, we said I, we've really heard nothing about technology here, it's really just purely about the economics and and timing of moving forward on projects and in many cases.
Thank you that was super helpful. Scott and then.
Maybe on that hardware comment in a lower forward guidance there is.
You think about the hardware refresh cycle is that you think it's more of an opportunity now chiselled software subscriptions to the customers that we're using hardware previously.
Well I think that's possible certainly there is a secular trend that's going on over over time, where there is a technology substitution of mobile security rather than hardware tokens and that's obviously not a new issue.
Thats been a I think generally been happening for us for some time I think it is likely that that will probably be a little more pronounced certainly in the in the near term we saw some real strength in that area certainly in the early part of this year.
And so.
We'll see I think the hardware the hardware business is a being I think I think there was some inventory build up last year and advanced PST to banks, probably not really being sure.
How much they how much they were going to need and now we have this period, where I think all of their the large majority of their new account opening is probably happening online and mobile and that lends itself a little bit more course too.
To mobile security and our mobile security offerings as opposed to two hardware. So there are some big projects for hardware updates and refreshes that are on the on the horizon.
So we'll we'll see how those how those proceed I think that's probably a more of a late this year next year a phenomenon, but we'll certainly have easier compares for next year.
Makes sense. Thanks again.
Our next question comes from Andrew Solder Stone.
Please go ahead.
Hi, everyone can you hear me.
Hi, Yes, we can area hi, Thank you for taking my question a lot of good questions asked already.
But you were talking about that sales and marketing I expect that to increase into second half.
Are you still hiring and what are you intended to didn't marketing that you havent done in the first half.
And that you also mentioned that you that are seeing more opportunity now into adjacent markets you've been mentioning that before about the hasn't really been a big driver or you're going to make a big push stare at perhaps now in the banking is sort of Saddam Dom.
Yeah. So on the I think on the marketing spend that we talked about we're running.
I think I think about 8 million Mark is I think were about 8 million under or what our expectation Ben on.
Operating expense year to date.
Correct me, if that's wrong Mark.
Yes.
That's right there right. Okay. So we're we're underwriting about $8 million on operating expense a lot of that comes from less travel obviously and some other.
Our related related expenses that we had been underwriting says we now look into the second half of the year.
And I think they are the uncertain or the challenging outlook are related to the economy.
We are really looking at what are the things that we can do to maximize our opportunity in the in the second half of the year and so there are a few things that well, there's actually quite a number of things we're doing but one of those is to invest more in marketing we saw in the first half of the year.
[music].
Some elevated returning significant progress.
From our lead generation activities, our CMO, John Gunn and his team have done a really fantastic job elevating the the lead generation productivity and that's part of what's driving the increases in our opportunity pipeline that I mentioned, a couple of times on the call already.
And so we've made a lot of effort to really improve and strengthen that lead generation programs and given given what we saw in the first half the underwritten and spend that we had in the first half we think theres an opportunity to take some of that savings and reinvested in and more marketing certain land.
Third in the fourth quarter. So that we can certainly benefit not only 2020, but really benefit 2021. So we're seeing good return on that investment we believe and so we're going to do more of that lead. Gen. Activity. Then we also are adding I would say on a ton.
Targeted basis, a additional salespeople we added salespeople in the first half of the year, we're going to continue to do that so that as a again as we get into the latter part of this year and into the early part of of 2021, we will have a a larger salesforce with better coverage.
Uh huh ready to roll as we get into the back back part of this year and into next year. So those are we we think that we are absolutely on the right track with our products and solutions.
And lot of indicators of that some of which I've mentioned here and so we Oh, we think there is growth opportunity out there and we're going to be aggressive that drawing a getting up.
What was your second part your question I know adjacent markets.
Mainly focusing on international industry, but are you maybe pushing more for that now are.
We're I would say we're in the early stages of that now we have you know I've said I think many times over the last two three years.
At our first focus was to make sure that we are with our new products in our new strategy that we could sustain our relevance to our core financial services customer base that was really.
The number one imperative for US we are feeling a I think pretty good about that at this at this point in time certainly more to do we're continue to invest in our products and our research and development.
But we feel good that we have made a lot of progress in that direction and so now it is an appropriate time for us to began looking more earnestly at a adjacent spaces. So we already touch.
A number of adjacent sees particularly in the east signature you signature business, but we with our new some of our new cloud authentication products or capabilities in mobile security.
And things like that the importance of a digital communication in health care is becoming a much bigger issue now that we're seeing a lot of activity and government as I mentioned, so we think we have both the the right products to begin to look at some of these adjacent sees and the right and the.
Right timing should begin doing that so we.
We are making a significant or not significant but I would say initial efforts in terms of a marketing into some of those spaces in selling into some of those spaces. This will take time for sure. We are we're going to if we're going to commit to additional verticals, we want to make sure that we do it correctly.
We make the right investments and we don't we don't waste our time, where we're going to go. After these verticals, we're going to do it on a in a disciplined when we're I would say at the early stages that up.
Okay. Thank you that withheld from me.
Sure. Thanks Darren.
Your next question comes from Matthew but.
EMEA capital. Please go ahead.
Hi, guys. Thanks for taking my question.
Matthew.
I guess I'd I'd like you guys to address the term immaterial in the context of your.
Revenue misstatement and <unk>.
I guess.
Yeah, I look back and I see you guys have been revenue estimates by 2.4 million over.
The last nine quarters.
And your chairman sold $23 million of stock subsequent to the ended the quarter.
The end of Q1.
And your stocks down 30% after hours so for a longtime shareholder maybe you could define the term immaterial.
Mark I'll, let you take that from an accounting point of view.
Sure.
Matthew on a as I mentioned in the.
Investor deck, we show the quarterly actually know Anthony in the earnings press release, we've table that shows the quarterly impact of the revenue.
And as you look back over each quarter, we went back and analyze this to make sure. There was no single quarter, where there was a beans or missed that was impacted by these changes in revenue over those nine quarters.
That's how we determined though.
The fact that was immaterial over the 525 million fiber $23 million in revenue that seem to happen.
[noise], one, but I understand and that it but I guess, if you're sure enough about those numbers.
You would be able to file your 10-Q on time and I.
I guess, you've lost a certain amount of trust here and again I guess I'd like you to address the 23 million of stock sold by your former chairman since the end of March.
So I'll take I'll take that one.
I think well first of all you corrected the corrected daddy's not is no longer our chairman. He remains a member of the board you was the founder of the company.
And he is a 75 or 76 years old roughly and and so he has a.
A long term plan a state plan I did not.
Know knowledgeable necessary, but all the particulars of it but I think he has been.
Executing is the state plan over really over a couple of year period now so I.
I don't think he's are really anything.
Since the end of March.
That's clear.
I would assume I think that probably is the case that he is sold more in.
In that timeframe, but.
He that's obviously is a is that right to do that and Oh.
We obviously worked very closely with our board and all of our executives to ensure that trading takes place only when it's appropriate and.
And I you know I believe that a that is the way Canada is handled it and.
I think that yeah, I'm not sure what I'll say about these are has a personal decisions.
Around has a state planning that you know, we don't have a whole lot to do it.
All right well. Thank you for answering my question.
And obviously a disappointing shareholder so.
Thanks, I totally understand absolutely.
This concludes my question and answer session.
I would like to turn the conference back over to Scott Scott Clements for any closing remarks.
Thank you. Thank you operator, thank you all for joining us on our call here today.
We are making I think tremendous progress in terms of transitioning our companies to recurring revenue at a more stable stable.
Higher value mix of revenue, we're going to continue to do that in the quarters ahead.
And we are I think confident and excited about the future of one spend so thank you all for listening in today.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.