Q2 2020 Boingo Wireless Inc Earnings Call
[music].
Greetings and welcome to the Boingo wireless second quarter earnings Conference call.
At this time, all participants are in listen only mode.
A brief question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Kimberly Orlando Addo Investor Relations. Thank you you may begin.
Thank you and welcome to the Blondo wireless second quarter 2020 earnings Conference call I know everyone should have access to the earnings press release, which was issued today at approximately four o'clock PM. Eastern time. In addition, and earnings supplement has been made available on the Investor Relations portion of one does website at <unk>.
Tom by clicking on the Investor Tab. This call is being webcast and it is available for replay.
And our remarks today will include statements that are considered forward looking within the meaning of securities laws, including forward looking statements about blend those operations and financial performance, including due to co that 19 strategic plans and transaction future results of operations business strategies and plans our relationships with our.
And your partner, new venue, and other contracts and market and potential growth opportunities.
In addition management may make.
Looking statements in response to your question.
Forward looking statements are based on management's current knowledge and expectations as of today August 4th 2020 and are subject to certain risks and uncertainties that may cause actual results to differ materially on the forward looking statements.
A detailed discussion as such risks and uncertainties are contained in our most recent form 10-K for the year ended December 31st 2019 filed with the FCC on March 2nd 2024. Thank you for the quarter ended March 31st 2020 filed with the FCC on May eight 2020 and our other.
Analytical tools to understand our operations, we have provided reconciliations to the most directly comparable gap financial measures and our earnings press release, and which will be posted on the Investor Relations section of her website at the window dotcom.
And with that I'll hand, the call over to Boingo, Chief Executive Officer, Mike Findlay.
Thanks Cube, thank you to everyone for joining today I hope, you're all doing well and staying healthy.
Then a central business many of our employees have been in the field. Since this pandemic began continuing to build out and support our networks and our customers I would like to thank them and all the employees of Boingo for their focus on our customers and networks. During this extraordinary time.
Let's begin with a brief summary of the quarter.
Revenue for the quarter was 58 $7 million, a 2% decline versus Q1, largely due to advertising in retail which were impacted by the historic downturn in passenger traffic due to Cove at 19.
Whoever the team has done an excellent job and managing expenses, which led to a 13, 7% increase and adjusted EBITDA over Q1 to 21 $3 million.
Like the rest of the World, We continued to live and work through extraordinary times over the last 150 days, we've seen dramatic changes in the way, we interact with our family friends communities jobs and colleagues what remains constant as the critical roll wireless connectivity plays in our daily lives.
This need for connectivity demonstrates boring goes resilience as an essential business as well as the durability of our business model.
Despite broader economic challenges, we have continued to win new opportunities and build out new neutral host networks.
<unk> has done an incredible job maintaining velocity in the business and we applaud them for their efforts.
<unk> P activity has remained high in fact, we responded to more rfp's and the second quarter of 2020 and in the same period last year with an impressive 67% when right.
A few of the significant deals we closed in Q, too, which I'll outline in detail a bit later.
Clued, the New Major League Soccer Stadium in Austin, Texas, South Dakota State University, Massachusetts Port Authority.
Metropolitan Washington, Airports authority, which includes Douglas and Reg in airports.
As well as contract term extensions at London, Heathrow Airport Hollywood Bowl and international airports in Dubai in Sao Paulo. These varied wins demonstrates the breath of our technological capabilities and the depth of our innovative solutions.
Another side of boring goes resilience as our strong balance sheet with ample liquidity to operate and grow the business.
We follow a conservative approach to capital deployment for dads built by investing capital, where we are strong carrier interest while our core operations continue to generate positive cash flow. We still believe investing the majority of our cash flow from operations into network deployment is the best use a capital drive long term growth and greater recur.
Cash flows moving forward.
The Big picture is this we believe we are in a great space, where an essential business. We serve a critical function, we have a stable and resilient business model. We continue to innovate until when our new business pipeline remains strong and we are as busy as ever pursuing opportunities. It comes as no surprised.
To us that are key revenue drivers and the bulk of new business opportunities are aligned with the core part of our business carrier services military and multifamily. Let me give you a few highlights from each of these.
First carrier services, which is primarily comprised of deaths carrier offload and are emerging tower in small cell business.
Q too we added a thousand new life desk nodes, bringing our total number of Dad's notes live to 4500 within another 11100 and backlog.
We also sign 11, new tier one carrier contracts during the quarter.
We added three new desk venues and the second quarter, bringing us to a total of 137 dad's venues.
73 of those venues or not alive with another 64 and backlog. This backlog provides us a tremendous amount of runway.
The first as win for the quarter was the new MLS Stadium in Austin home to Austin FC.
We are thrilled to be their partner to bring a world-class fan experience to this incredible new tech forward Soccer Stadium <unk>.
Boingo will design build and manage neutral host <unk> ready does and Wi Fi six networks throughout the stadium, including Bowl seating suites club sections concourses and field sections.
I was able to visit the site a few weeks ago, and it's a beautiful new stadium and we look forward to opening day next spring.
The second Dad's wind for the quarter was a long term agreement with South Dakota State University to provide campuswide coverage that includes the sdsu Jack rabbits football Stadium, we're excited to bring a greater connectivity to the students of South Dakota State.
Massachusetts Port Authority was our third dad's win for cue to the long term agreement gives boingo exclusive rights to design build it operated does network and Boston Seaport District, we're proud to bring our fiber connectivity solutions to this driving Boston community.
Another deal you may have seen in the news was our recent announcement of the Hawaii Convention Center like Austin FC will be providing neutral host <unk> ready that this contract expands point goes desk and Wi Fi footprint in Hawaii, which already covers five major airports three military bases and Ah multifamily community.
Beyond as we have been making good progress on macro tower in small cell deployments at the military bases we serve.
The initiative will provide enhanced coverage and services for our troops and we're off to a promising start.
Based on our long term military contracts and the rights to deploy wireless network on basis, coupled with the work we've done with the JFC. The joint Spectrum Command. We believe we are well positioned to turn up tower in small cell sites expeditiously.
To date, we are already received more than 100 applications for tower and small cell sites from tier one wireless carriers.
Which exceeds our initial expectations.
With an average sale to completion cycle of 24 to 36 months the macro tower business represents a longer term revenue opportunity and we're excited about our first start.
Turning now to offload, we recently signed an agreement with Google to provide Wi Fi offload to Google Fi devices.
Using past-point technology, Google fight devices will automatically connect to Boingo Wi Fi hotspots, when they're in a past-point enabled location.
While this will be a trial to start we believe it will grow over time and expand the new locations much like our other offload agreements have we're excited to have Google on board.
Importantly, the vast majority of our carrier upload revenues now under fixed contractual commitments that means that although airport traffic was down significantly in Q too we were only minimally impacted from our revenue perspective.
With airports and passed passenger traffic in mind, we recently launched a solution to solve for a newly evolving macro trend and Q2, namely that touchless experienced <unk>.
Technology enabled touchless safety measures are part of the solution to help America get back to business in the week of Kobe 19.
And the transportation sector Boyko has identified key use cases, there are company technologies and network requirements to help airports prepare for the new age of travel and to facilitate a new touchless passenger experience.
This will help prepare airports to reopen on a wider scale, while increasing passenger confidence in airports or just one example, such touchless applications can help entertainment and sports venues commercial real estate multifamily housing retail locations in more.
We believe boingo as well positioned to lead the way here.
Turning now to military revenue for the quarter was up three 1% versus Q1, and <unk> was up one 7%.
While we did not add any new beds during the quarter, we focused our resources on supporting request for additional private services due to the pandemic, which I'll sure about more in a moment as well as network improvements to ensure network quality and the barracks as you can imagine we saw large uptick in network traffic due to the number of service men and women shelf.
Hearing and place.
Overall penetration remained steady at 37, 6% largely due to reduce troop movement.
Wi Fi has become increasingly important not only for daily operations, but for quality of life initiatives that the military wishes to provide we currently have more than 11000 beds under contract for what we refer to as bulk paid Wi Fi and we anticipate more on the way. In addition to military has seen the V.
<unk> of having complimentary education networks available for students engaging in remote learning from their barracks. We believe these education networks represent an exciting market opportunity for us going forward.
We have a number of proposals for education that works out now and several of already come under contract.
Finally, we rolled out a new 100 megabits per second should be tier called Boingo extreme at four basis during the quarter.
<unk> extreme offers are fastest residential service yet and the take right. During the trial has been very promising the product allows us to provide an enhanced service to the troops and an increased <unk>. We look forward to expanding the trial to additional basis and the third quarter of 2020.
Now, let's turn to multifamily blanked as in military we continue to actively build out new multifamily construction projects during the pandemic.
We had to new properties go like during the second quarter and we currently remain on schedule with the majority of our existing built.
Fall semester for many college campuses begins this month and approximately 85% of our student housing partners plan to reopen with social distancing protocols in place.
With most campuses offering a hybrid of in person and virtual classes connectivity plays a critical role.
We secured for new multiple multifamily contracts during the quarter two of which are conventional properties and to our student housing <unk>.
Located in Texas, Florida, Indiana in Washington, These new construction properties include 1200, 98 beds and all promote state of the wireless connectivity is a key feature for residents.
Three of the four contracts our network as a service or Nads under a nasty approach Boingo deploys a highly high quality robust network throughout the property and enters into a long term services agreement with the property owner to provide our services to all residents.
The network as a service model provides for increased and predictable recurring services revenues for our business and opens the door to monetize the network incrementally two additional solutions and use cases in the future.
As you can see it has been a busy productive quarter for the core parts of our business.
Before I conclude I'd like to provide an update on our strategic process is we announced a few months ago. We are engaged with multiple parties, who have expressed interest in bowling goes unique position to drive value through our long term wireless rates.
And neutral host converged network approach.
While we are continuing to work through discussions with multiple parties, we do not have an update to share regarding the strategic process at this time.
With that let me turn it over to Pete who will walk through our financial results for the quarter in more detail.
Thanks, Mike.
To Dale review, our financial results and key operating metrics per second quarter into June 30th 2020.
Total revenue for the second quarter was 58 $7 million down 2% from the prior quarter and down 14, 4% from the prior year period.
Declined versus prior quarter was primarily driven by decreases in retail advertising another revenue our legacy businesses.
Which were partially offset by modest gains in military multifamily and dad's revenue.
Two year over year decline, which primarily driven by decrease in das retail and advertising other revenue and to a lesser extent decreases in wholesale Wi Fi and military multifamily revenue.
While the decline in total revenue appears concerning on the surface to year over year decline was generally in line with our expectations following our business realignment plant.
<unk> military multifamily both improved over there part quieter quarter, while retail in advertising another revenue, which we considered to be non-core to our future were directly and materially impacted by Kobe 19.
As a percentage of total revenue across our diversified revenue streams compared to the prior year quarter military multifamily was 40% up from 36%.
Dash was 38% down 40% wholesale Wi Fi was 17% up from 16% retail was 4% down from 6% and advertising other was 1% now from 2%.
In terms of total revenue contribution by category for the quarter.
Military multifamily revenue was 23 7 million, representing an increase a 4% versus a prior quarter and decrease of two 8% versus the prior year period.
And military the improvement versus the prior quarter, which primarily due to an increase an average monthly revenue per subscriber.
The year over year decline was the result of reduce military subscribers, which was partially offset by an increase in average monthly revenue per subscriber as of June 30th or total footprint a military beds total 359000 beds across 64 military basis, which was unchanged from the prior quarter.
We remain carpet the opportunities presented by the military political as potential to drive long term recurring cash flows.
In particular, we are encouraged by the continued interest in traction we're seeing for macro cell towers small cell deployments and bulk service offerings on basis, because we strive to meeting increasing connectivity needs of our military partners and carrier customers.
And the multifamily vertical second quarter revenue increased eight 8% versus the prior quarter and declined three 4% year over year.
Increased compared to the prior quarter was due to seasonal multifamily construction revenue trends, primarily from deploying new networks and upgrades and the student housing vertical.
The year over year decline reflects reduce multifamily construction revenue due to the ongoing mixed shift and the sales under our network as a service model, which incorporates higher recurring services speeds over a longer term.
Dash revenue of 22 $2 million was up modestly from the prior quarter and decreased 19, 6% year over year gas revenue for the second quarter was prized of $14 million of buildup project revenue and eight $2 million have access to be revenue.
The decline in total <unk> revenue over the prior year period, which primarily due to decrease dad's buildup project revenue as a result of re amortization of deferred revenue balances from customer contract extensions in 2019, along with reduced access fees from our telecom operator partners.
Access fee revenue in the prior year period included a $3 million one time benefit from the amendment and contract extension of one of our carrier customers.
When not including this one time benefit second quarter dads access fee revenues would have improved six 3% year over year.
Wholesale Wi Fi revenue was nine $7 million, a slight decrease of 4% versus the prior quarter and a decrease of nine 4% compared to that prior year period.
Both the sequential and year over year declines were primarily due to lower partner usage <unk> from our comes with Boingo surplus offerings in our program with American Express it spaced out.
Importantly, we believe carry offload will continue to be a stable driver recurring cash flow moving forward.
Retail revenue was $2.4 million down 20% versus the prior quarter and down 38, 4% year over year, primarily due to ongoing reductions in retail subscribers, which has been amplified by the declines in venue traffic we've experienced due to cope with 19.
Advertising another revenue of 700000 decreased 76% versus the prior quarter and 66% over the prior year.
Primarily due to reductions in the number of premium add units sold due to the clients and video traffic as a result of Kobe 19.
Now turn into a second quarter costs and operating expenses.
Network access costs totaled 27, 9 million, representing at 3% decrease versus the prior quarter six 4% decrease to the second quarter of 2019.
Declines were primarily due to lower revenue sure pay towards the new partners at our management operate locations and reduced customer usage at partner venues. The declines were partially offset by increased depreciation expense.
Gross margin, which is defined as revenue less network access cops was 52, 5% improvement at 50 basis points compared to the prior quarter and to decline of 405 basis points versus the prior year period.
The sequential improvement was largely due to reduced revenue sure to our customer usage apartments venues on a year over year basis. The decline reflects a shift and a diversified revenue streams.
Network operations, a cost totaled 13th $5 million increase of 2% compared to that prior year quarter and a decrease of four 9% year over year.
The increase from the prior quarter, which primarily due to increased depreciation and break fixed fees at our management, operator venues, which were parked shop set by decreased personnel related expenses the year over year decrease it's primarily due to reduce personnel related expenses.
Development and technology expenses of six $5 million decreased 7% versus a prior quarter and 22, 2% year over year, primarily due to declines in pursuit now related in other expenses.
Selling in marketing expenses were five $9 million, an increase of 490% compared to the prior quarter decrease a five 5% from the prior year period.
Increased versus a prior quarter was primarily due to a one time, one $1 million increase in litigation Las contingency accruals and the second quarter of 2020 related to a claim or damages at one of our venues in Brazil.
This increase which is partially offset by reduced personnel related expenses.
Decrease compared to that prior year period was primarily due to reduce personnel related and discretionary expenses.
General and administrative expenses of seven 3 million increased 8% over the prior quarter and three 9% over the prior year period, primarily due to nondrinker.
Expenses totalling one 1 million associated with our strategic process, which were partially offset by reduced professional and related service provider fees and taxes and licensing fees.
Excluding the two $2 million of nonrecurring fees incurred during the quarter total second quarter costs and operating expenses of $60 million decreased two $5 million or three 9% from the prior quarter and six $7 million or 10, 1% year over year, reflecting the success of our business realignment plan as well as additional costs.
Seating initiatives.
Now turn into our profitability measures from the quarter.
Net loss attributable a common stockholders was five $8 million or 13th per diluted sure compared to a net loss of four $6 million or 10 per diluted sharing the first quarter of 2020.
Net income of 200000 or breakeven per diluted sure and the second quarter of 2019.
Oh, just EBITDA non gap measure was 21 $3 million, an increase of 13, 7% over the prior quarter.
Decrease of two 6% compared to the prior year period.
As a percentage of total revenue adjusted EBITDA was 36, 3% up from 31, 2% into prior quarter and up from 31, 9% in the prior year period.
Now turn into a key metrics.
Number of Dad's nodes and our network for the second quarter or 4500 up to 5% from the first quarter of 2020.
15, 1% prior year period.
The number of das nodes and backlog, which represented since the number of dad's notes under contract, but not yet active as of the end of the second quarter was 11100 up to 8% for the first quarter of 2020 and down 98% from the prior year period.
Our military subscriber base was 135000 subscribers at the end of the second quarter, which was consistent with the first quarter of 2020.
Down for 9% from the prior year period.
A retail subscriber base was 56000 subscribers at the end of the second quarter, which was down 20% from the first quarter of 2020 and down 39, 1% from the prior year period.
Connects or paid usage and our worldwide network, where approximately 13 $8 million down 79, 3% from the first quarter of 2020 and down 84% from the prior year period.
As anticipated given the majority of our connects come from public venues, which have experienced significantly reduced passenger traffic as a result of Kobe 19 related travel bands and restrictions shelter in place orders and business shutdowns, we've seen connects continuing to decline.
Importantly, despite these headwinds the durability of our business model is shown that we are still able to drive value to our customers with approximately 95% of our revenues being contractual or recurring in nature as opposed to usage base.
Moving on to discuss our balance sheet.
As of June 30th 2020, cash cash equivalents, a marketable securities totaled 172 million down slightly from 175 $2 million March 31st 2020, we are strong quarter of cash collections as evidenced by the 15 $70 million reduction in our accounts receivable balance compared to March 31 2020.
Total that was $274 million up slightly from 269 $5 million March 31.
As a reminder, we proactively drew down $100 million from $150 million revolving credit facility last quarter as a precaution to enable greater financial flexibility in response to cover 19.
As of June 30th 2020, we approximately $50 million.
Remaining of borrowing capacity under a revolving line of credit and we remain comfortable with our overall liquidity precision.
Capital expenditures or $29 $1 billion for the quarter, which included 21 and a half million a dash infrastructure buildup projects. They are primarily reimbursed through revenue by our telecom operator partners.
Or non reimburse capital expenditures were driven mine, mainly by new network builds manage and operated network upgrades and various infrastructure upgrades and enhancements.
As a reminder, we estimate our annual maintenance capital requirements, which excludes outgrowth capital to be approximately 3% to 5% of revenue.
Re cash flow of non gap measure was a negative one $4 million for the second quarter compared to a negative three $6 million. The first quarter of 2020, and a negative 32 $2 million in second quarter of 2019.
As our core business continues to generate significant capsules from operations. We continued to believe investing majority of our free cash flow into network infrastructure deployments secured by long term Vinew agreements is the best use a capital to drive growth and to increase long term recurring cash flows.
Before conclude I wanted to note that we are continuing to engage with multiple interest interested parties regarding a potential strategic transaction has announced in disgust on prior earnings calls.
As such we're maintaining our suspension come forward looking financial guidance until further notice.
And closing I I'm very pleased with our consistent strong operational execution and the second quarter of 2020, which led to improve financial performance over the prior quarter.
Bite the slight sequential decline in total revenue, we demonstrates strong margin expansion along with cost reductions, which resulted in a 13, 70% improvement adjusted EBITDA compared to the first quarter of 2020.
Our performance reflected strong cash generation prudent expense management and positive momentum as we continue to win key customer contracts and your new venues.
Most importantly, given the durability and the resilience of our business model and the actions we have taken to ensure financial flexibility. We believe we are well positioned to standish challenging times, given our diversed revenue streams that are largely contractual for recurring in nature are strong balance sheet and liquidity position.
And are conservative approach to capsule capital deployment.
We remain very excited about the neared and long term prospects ahead with that I'll turn it back over to Mike for closing comments.
Thanks Pete.
The critical roll that connectivity plays in our lives has never been more evident then it has been during this pandemic.
Boingo is an essential business.
Despite the challenges we continue to win deals and build new neutral hosts networks, we have a large backlog of venues to deploy plus our new business pipeline is robust we have a strong balance sheet and we believe we have ample liquidity to operate and grow the business. Our core operations continue to generate significant cash flow.
Allowing us to make capital investment secured by long term venue agreements such as high value projects like MTA E site access in long Island railroad projects.
These reasons, we believe boingo as well positioned with a durable business model.
We remain confident in the immediate in long term prospects of our business.
Operator, you May know open the call for questions. Though please note that we will not be taking any questions regarding the strategic process at this time.
Thank you <unk>.
We will now be conducting a question and answer session. If you would like to ask a question. Please press star than one on your telephone keypad.
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You May press Star then too if you would like to remove your question from the Q.
Four participants using speaker equipment it may be necessary.
[noise] to pick up your handset before pressing the star keys.
One moment, please but we pull for questions.
Our first question comes from Anthony Staff of Craig Hallam. Please go ahead.
Hi, guys nice job navigating just tough times.
I didn't hear anything and you're prepared remarks regarding the New York City MTA.
Contracts can you update us on what you expect from my perspective, and maybe sure. If the your customers have secure funding for that and then the second question probably for Mike you mentioned that the RFP activities range.
Hi can you elaborate a little more if that's more on the <unk> side or Wi Fi six any color would be helpful. Thank you.
Yes, hi, Tony Thanks, I appreciate the questions I'll start on MTM of peat wants to add something then I'll cover the.
The RFP question yet MTA.
And that whole projects going along really well I mean.
With Covid.
There's not as much traffic and activity that's going on so.
It's actually providing us.
A faster and better way to get our network built out so.
Obviously want to see New York back we want to see people back working but on that side of it that's actually been something that's a fairly positive for us as far as.
No activity with with the carriers and our partners.
That's going very well nothing to say here today, but.
That's a key project not only for us but for them and.
As we continue to get closer to that opening.
Obviously be able to talk more about that.
Okay waiting that on other yeah. The only thing really worth that ink Tony is on the MTA. It's important to remember there are two separate agreements one for the long Island railroad portion and the other for the east side access tunnel.
As we previously stated if we expect we will go live for the first phase of the long Island railroad proportion in 2020 with a carrier and that has not changed so we're still seeing good traction we're still building and we expect to have a carrier live by end of the year.
And then on the RFP side I mean, it actually is I think it really describes the striker boingo.
It's really across the board as connectivity continues to be a major part of what our customers want both in venues and transportation ups.
<unk> military bases, it's really.
All of the capabilities and network that can be provided.
We talked about this touchless activity really kind of exemplifies kind of what we're doing and who we are going to require not just license, but unlicensed spectrum together <unk> private networks and when you look at the capabilities of that.
For things like concessions and point of sale.
That goes not only in airports, but also.
Many other venues first responder cleaning and maintenance tracking.
Venues that can be robotics, so really requires a big robust network.
That is kind of a converged neutral host, which is what we do so on the RFP side. That's what we're seeing it's not one or another it's really the converged network side of it.
Okay. If I can sneak it one more for Pete on the Opex side of things you guys have done a good job.
Managing your cost is this kind of the new level or do you think it could go down a little bit more.
Q3.
Yeah, I think we're seeing right now is a good run rate based upon where we are today with particularly of Kobe 19.
But.
Always will say, we continue to monitor and look for cost saving initiatives in the teams done a great job of being frugal imprudent.
And we will continue to be.
Thanks, guys.
Thanks, Thanks, Tony.
Our next question comes from Tim Horyn of Oppenheimer. Please go ahead.
Thanks, guys, the 95% of revenue.
Are you kind of implying that this is a relatively good run right of revenue that we've kind of bottomed out I guess.
Have some visibility the next.
Next year, or so and I guess related to that are you, including kind of construction revenue in that and maybe the Wi Fi usage Mesa Avenue.
Yeah, just we understand both of those things.
Hey, active you broke up for just the very first part of that I missed the very first part of your question I'm sorry, Yeah sure. So I think I've seen 95% of revenue is recurring can you just give us a little bit more color around.
How you think about that 95% of revenue does that provide you with visibility on.
This is basically relatively good revenue run right next couple of years. Thanks, Yeah.
Thanks for the clarity see it just to be clear what we said is 95% is recurring a contractual so.
So what we're really trying to to point out there is that our business model.
It is solid we're providing value and it does give us a good level predictability.
R. But we are seeing in certain parts of the business, particularly what we consider our legacy business advertising in retail retail recurring but it has seen some steep declines now we don't think it's corridor future.
But it does generate good recurring cash flow that benefits the company. So while we are.
It's not a key focus we will absolutely enjoy that cash flow for as long as it continues but more importantly, I think what you're really thinking is how does this go as a run right and as you look at the core parts, specifically that as military in particular, those should continue to grow and they should continue to throw off incremental recurring cash.
And run right is absolutely the way to think about that business.
Thanks.
Alright. Thank.
Okay.
Our next question comes from James Screen of William Blair <unk>. Please go ahead.
Thanks for taking the question just a couple of piece I think could you clarify we talked about.
In terms of <unk>.
How that Brazenness progress, maybe sequentially and year over year and then.
Just strategically looking forward.
I think we understand the impacts around a pandemic, but.
As you think about the large carriers and then move toward five G.
How will that manifests itself will that'd be new rfps or those be sort of add answer existing contracts habits carriers going forward.
So I'll start off with the with the multifamily like Mike will go into the other so on multifamily. So we did see a step up in and Q2 from Q1 sequentially and we typically expect that trend to continue particularly as the multifamily business.
As a skewing towards the student housing vertical we are seeing more and more sales and the conventional market and she'll, becoming less and less reliant in student housing, but that is still a core part of that business.
So you typically we will see growth throughout the the first three quarters and typically a drop in Q4 from a seasonality standpoint.
Our network as a service platform is doing better set program has helped us get more recurring cashflows now it does mean.
Absolute revenues will come down as there's less construction revenue that's coming.
Current quarter immediately but.
Revenues recognize Moreover, time.
But we will do that trade all day long because it's a longer term relationship and it gives us better recurring cashflows over time.
Yeah. He jumps my thanks for the question.
Yes.
Five G for us it's really both I think to your question and all of our existing venues.
We would just like we did with Forgie, adding to the <unk> network.
Will be adding <unk> and.
Number of those locations, we've announced some of them already but that's something that continues to go forward.
And of course, it's part of the converged network that we have and are continuing to grow out in new locations. It's really the same.
We're.
Building out <unk>, we still filled out <unk> networks.
And a lot some new locations, but of course, adding in that with.
Wi Fi Wi Fi six.
Soon to be Wifi, <unk> coming in and see Brs.
It's really a combination of all and when you talk about things like a touch touchless experience and.
Gambling and things like that is arenas to fill up in the airport transportation comes back.
Can enable us in the operators as partners to be in a really good spot to provide connectivity to customers as they come back through.
And just want to follow up too.
Building on some of these venues that you have a backlog.
And a lot of states construction work is considered essential are you able to continue to work on some of these contracts, even though some of the sports aren't happening.
Savings are closed.
Yes, we are.
And habit I think.
I think throughout the whole pandemic I think there's really only been about a week that was that was.
Kind of shut down.
In New York and other than that.
<unk> had a great ability to.
To continue to build.
I mentioned.
Austin in my comments I was there a couple of weeks ago that continues to get built out and.
And a lot of ways, that's a new stadium, but in a lot of ways with people not in the stadiums.
Transportation hubs, that's actually enabling us to get some work done faster and and the upgrade some things faster so.
Great. Thank you alright, thanks ship thanks.
Our next question comes from Kyle Mcneilly of Jeffries. Please go ahead.
Hi, Thanks, a lot for the question.
Pay some deployment question is similar to the one you just answered but.
I understand and total across all of your current projects that are ongoing can you can you help us understand how much activity San from the menu is trying to use this time, where there's lower foot traffic in there real estate to get their construction projects done.
How might that'd be negatively offset by any uncertainty around when our higher traffic levels would eventually resume.
I guess, what I'm trying to get at is.
How can we think about in the current projects and whether they're in here accelerated or slowed down in terms of brought her in Grand scheme of things that would be helpful. Thanks.
Yeah, I'll start maybe maybe people can can add on.
I would say for the most part.
This is all.
I hate to say it in this period of time, but it's all pretty positive in that regard and getting work done.
I think.
I'm very optimistic.
In general, but I think a lot of the locations, we're working with even though it's a very difficult time I do I think airports believed traffic will come back cities believe work will come back.
And people will come back and.
And getting this work done.
Really continues and I think some of that highlighted as well and the rfps that continue to come in contracts that continue to get signed an upgrade to continue to grow and I think you've heard from the operators and their their earnings calls as well that they're continuing to.
[noise] to build so.
We're seeing that activity continue.
As we sit here today.
Yeah, the only thing really I feel like I should add here is I think is most people know and Kyle I know you know.
Still have a very conservative capital appointment strategy. So.
We build but we typically build once we have a carrier committed to join the venue now that doesn't necessarily mean, they pay us a large be up front, sometimes it's a it's a commitment to pay us over time, which is fine, but you want you don't see us do a lot of his building and hope the carriers will come we are doing that at the MTA projects, which we talked.
And life.
And we feel very very confident that we won't get carriers live on the MTA network, but on other locations, we take a very cautious.
I'd say conservative capital apartment strategy.
Has not changed.
Okay. Thanks, that's helpful.
And then in the multifamily side I would expect that Boingo multifamily would see tailwind from work from home and distance learning you talked about it.
And the prepared remarks.
And the end customer.
Subscribers.
See more importance.
Patient place on broadband Wi Fi connectivity are you seen any acceleration in the timeline that multifamily customers are thinking about initiating new projects and upgrade.
Like is your pipeline building.
And the inbounds unless you've got.
From customers.
Creased since the start of Covid and how can we think about how boring multifamily mine offset some of other other pressures with advertising retail either pieces that have been cove it impacted.
Yeah, I'll start I dunno if people instead.
Yes. There is there is some but I'll separated between two you have the student housing side and the conventional multifamily we're really kind of just beginning into the conventional multifamily side in those bills are.
Generally longer than a little bit more into the future.
We've been seeing.
The desire on the builders in the property owners to want to have.
Above connected neutral host networks for.
Property. So it's not new I think cove. It is obviously only strengthened that.
Need as they move forward.
Getting some of the existing buildings.
Moved over to those types of projects I think will continue to see.
Some some velocity there and then on the student housing that is a little bit on the existing project projects at least a little more year to year and.
With so much activity going on with school.
I think as we stayed at 85% of schools that we have are coming back I can type from personal experience I have kids in college and they all want to go back and they're all going back so that I know so I think.
There's room to believe that that number is accurate.
Great. Thanks, and one last quick one T mobile sprint and that merger.
Caused a little bit of slowness towards the end of the year last year are you starting to see.
And then pick back up towards normal levels are better with the outlet there that you can sure.
Yes, I would just say this.
Look.
Hard to believe what they've done by.
Combining those two companies right in the middle of this pandemic, but there's a lot of activity going on there.
They have done a great job.
Working through the two companies coming together and.
I think the activity will begin to pick up we have a lot of different work that we're doing with them.
Today, and then more broadly as we go into the future. So that's probably the best I can say about that right now.
Okay. Thanks, a lot Thanks Cup great. Thanks golf.
Once again, if you have a question please press star than one.
Our next question comes from Scott Ceryl of Roth Capital. Please go ahead.
Good afternoon. Thanks for taking my question he might compete he just a quick follow up on some of the U S. Operator activity dish, it's got a timeline to start to get their <unk> network built and we finally started to see.
Them, releasing some of the winters at least as it relates to some of the core capabilities and other vendors are you starting to see them pick up in the pipeline as well and then maybe just layer on top of that as it relates to five G and Mike I think in the past you've talked about.
Some of the opportunities to deliver more value.
Not necessarily one plus one equals too, but one plus one equal something greater than one but it delivers a lot more sure and based on your when right. It seems like some of that has an effect. So I'm kind of wondering how the <unk> pricing strategy is working out bring everything into your umbrella and then I had a couple of follow ups on <unk>.
So yeah, I think dishes become obviously very active.
They have had some announcements and the last couple weeks so.
We've been very engaged with dish and.
Will work with them as well.
We move forward.
And they continued to develop their plans.
On the <unk> side I'm, not I'm not sure that I understood. The question Scott I'm, sorry, just in terms of the pricing, it's not necessarily a full price incremental node, but you talked about basically be be being able to provide a broader regional set of services and sweet of services across through <unk> I'm, just kind of wondering how the old.
<unk> pricing is working out there it seems like from a gross margin standpoint at least in the early going it's good but what are you kind of kind of seeing what are the expectations from a carrier standpoint on the pricing front.
Yeah, I think probably.
What I've said in the past and it's actually we're executing against been working quite well is really having a broader more.
When I say global but brought her overall strategy with the carriers and all of the various.
Projects.
Technologies that they have and want to deploy so we obviously have.
Instead of looking at venue by venue, we're looking in working with them and total so <unk> becomes a big part of that.
Adding new venues becomes a big part of that and.
Adding onto the existing as we talk about touchless experience or other new capabilities that are coming where essentially providing the network and the converge network to enable those types of things. Some of those are services that operators and others will be able to deliver it to our combined customers.
E venues.
Gotcha, and maybe lastly, if I could on the C V. A restaurant, we've got auction 105 going on right now it seems like there's a high level of interest across operators Msos enterprises.
From an existing venue standpoint, I'm wondering are all new venues that are being built supporting <unk> do some of the legacy.
Like a better word legacy venues also support <unk> are you seeing that interest level kind of coming in from the carriers.
And are you seeing interest from new players as well or the msos starting to engage with you for things like that and maybe to just throw in the back end of that private networks big opportunity as well you guys have the neutral host capabilities to do something like that even with <unk>, you've got guys like John Deere in there who are bidding on some spectrum I'm wondering if you're seeing other more enterprise.
Nice centric types of opportunities as it relates to <unk>. Thanks.
Yeah. Thanks, Great question actually.
There's a lot there, but yeah the auctions.
I think everybody anticipated that that would be.
Ah valuable and robust auction.
And then I'll kind of combined I think the rest of the existing buildings legacy buildings new buildings, Yeah. I mean, we look at <unk> S. As just another.
Part of the spectrum that we can incorporate into our neutral host converged network that is going to provide robust services.
For multiple so take a big airport or a transportation Harper venue.
We're serving a lot of customers in that regard we served with people that come through those venues with their devices, we serve the venues themselves.
Work with our partners in the operators too we support them and work with them and I think see brs and some of the new opportunities.
That are coming forward and private networks and things like that we'll have a combination of that so some of those things will occur in our existing locations.
So there'll be private services that can occur.
And our existing locations and then I think as you mentioned.
Private networking and the additional entities.
Or coming forward and seeing those as opportunities will be in a great position to work with as well so.
Foundational ER strategy supports everything you've highlighted there and we're working towards that.
Great. Thank you.
Scott.
There are no further questions at this time I would like to turn the floor back over to the presenters for closing comments.
Thank you area.
And thanks to everybody for joining on the call really appreciate the time, we believe boingo as well position to not just whether these challenges presented by the unprecedented time in our history, but to thrive connectivity is more important than ever and our long term wireless rights and strategic venues are longstanding relationships with the carriers.
And our durable resilient business model allows boingo to maintain velocity. We're excited about what lies ahead for our business.
Thank you all again for joining today and stay healthy thanks.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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