Q2 2020 Smith Micro Software Inc Earnings Call
[music].
Okay and welcome to the Smith Micro second quarter 2020, <unk> earnings conference call in light Cat.
All participants will be in listen only mode. So do you need assistance. Please take note conference specialist bypassing the Starkey followed by zero.
After today's presentation, there will be an opportunity to ask questions. Please note. This event is being recorded.
I'd now like turn the conference over to the child's nothing. Please go ahead.
Thank you operator, and good afternoon, everyone. We appreciate you joining us today, Scott Smith micro software financial results for the second quarter 2020 fiscal year ended June Thirtyth 2020.
By now you should have received a copy of the press release with the financial results do not have a copy it would like one please visit the Investor Relations section of our website Www Dot Smith micro dot com.
On today's call we have Bill Smith.
Women of the board, President and Chief Executive Officer, Smith, Micro and Tim Hoffmeyer, Chief Financial Officer.
Please note that somebody information you'll hear during our discussion today will consist of forward looking statements, including without limitation those regarding the company's future revenue and profitability new product development, new market opportunities operating expenses and company cash reserves.
Forward looking statements involve risks and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward looking statements.
For more information please refer to the risk factors, including our most recently filed form 10-K form 10-Q.
Micro seems no obligation to update any forward looking statements, which speak tour management's beliefs and assumptions only as of the date Jeremy.
I'd like to point out that in our forthcoming prepared remarks, we will refer to certain non-GAAP financial measures.
Please refer back to our press release disseminated earlier today for a reconciliation of non-GAAP financial measures.
I'll now turn the call over the Bill Bill.
Thanks, Charlie Good afternoon, everyone. Thank you for joining us today for our 2022nd quarter earnings Conference call.
I hope that all of you are well unsafe and these covance 19 drilling times.
Overall I'm glad to report that we're in good shape Smith micro and I remain pleased that we continue to be productive and efficient working remotely.
From a revenue standpoint.
I'm pleased to report is the second quarter exceeded the guidance we provided on our last call. It's important to note that we continued to deliver profitable results. However, cash flow positive during the quarter. Despite a slight sequential decline in revenues.
For the quarter revenues came in at 12.9 million, a 19% increase over the 10.9 billion, we reported in the second quarter of 2019.
Gross profit for the quarter was 11.7 million compared to 9.9 million for the same quarter last year.
Non-GAAP net income for the second quarter was $3 million or seven cents per share.
Looking at cash flow, we generated 2.1 million from operations during the quarter.
I'd like to address the recurring theme of Smith Micro's expanded investment in R&D over the last several quarters ended the year future.
We have talked about this on prior calls, but I think nows the time to be much more direct.
We are aggressively growing our engineering organization, even during a co. The during the short term decline in revenues.
We are doing this to ensure that our products are ready to meet the needs of our customers when they are ready to buy.
We are presently in pursuit of multiple new carrier customers.
Clearly the R&D investments our focus first on the safe path platform, followed by you slot and lastly cautiously.
Speaking about safe that many of these new product features are being delivered as a result was a circle acquisition earlier this year.
But many others are being developed as a result of accelerating our roadmap to me clearly stated prospect maps.
All of these prospects are in the late sales stages.
We are currently in contract negotiations with a number of these prospects.
Our recently announced tell us when was the first is what we believe will be a number of wins for Smith micro over the next few quarters.
We are confident we will convert most if not all of these prospects, but a failure to assess now but likely result in our losing out.
These future customers include some of the largest names in the carrier world. Some others are more midsize carriers well others are smaller collectively these new account should provide smith micro with significant revenue growth opportunities in 2021.
Later in this call I will provide more color regarding the progress we've made with our three main products safe that you spot and costly.
I will also provide an update on the new customer front as well shed some light our expectations for the third quarter and beyond.
Now I'd like turn the call over to Tim for a more detailed review of the second quarter financial results Tim.
Thanks, Bill for the second quarter, we posted revenue of 12.9 million compared to 10.9 million for the same quarter last year, an increase of 19%.
When compared to the first quarter of this year revenue was down 3%, which was favorable to the guidance range we provide.
For the second quarter year to date revenue was 26.3 million compared to 19.3 million last year, an increase of 36%.
The increase in revenues was primarily a result of the safe past platform revenue growth.
During the second quarter of 2020 safe pass increased 95% to 7.3 million compared to the second quarter of last year.
Revenue from the safe pad platform decreased 6% sequentially compared to the first quarter of this year.
This decrease was within the guidance range provide.
The primary reason for the sequential decrease in revenue is directly related to coded 19, causing sprint store closures and all related marketing initiatives for those stores.
To occur.
The coated 19 situation has also caused a reduction in the number of subscribers as unemployment rates have increased.
In the coming quarter based on the current status of the sprint stores and the current subscriber activity in July.
We expect safe cost to be down, 2% to 7% compared to the second quarter.
This guidance assumes a flat subscriber base equal to the second quarter subscriber exit rate.
We remain excited about a new safestop opportunities and are encouraged by progress with T mobile, including continued support of the existing sprint subscriber base.
Bill will discuss this further in a few minutes.
During the second quarter of 2020 comps, we revenue was 4.1 million down 5% compared to the first quarter and down 13% compared to the second quarter of last year.
The current quarter decrease was due to the loss of sprint subscribers within the quarter.
Offset by an increase in boost subscribers.
Bruce is now part of dish and comprised approximately 25% of the comps we revenue in the second quarter.
We continue to navigate the sprint T mobile merger subscribers now have an option to move from sprint to T Mobile network for voice services.
Additionally, we are excited to work with boost to increase the comp suite subscriber base.
Consequently, we expect calm suite revenues to be flat to down for the third quarter of 2020 compared to the second quarter.
Revenue for calm suite advertising during the second quarter was approximately 200000.
Which was less than both the first quarter of this year and the second quarter of last year.
The current quarter amount was inline with our expectations.
As a reminder, this is a variable revenue stream and dependent on third party activities.
We do expect the third quarter of 2020 calm suite advertising revenue to be between 100 and 200000.
Do you spot revenue was approximately 970000 for the second quarter of 2020.
Up 30% compared to the first quarter and down 28% compared to the second quarter of last year.
The current quarter results exceeded our expectation due to the greater variable revenue with our tier one U.S. customer.
Also during the second quarter, we added a new customer which contributed to an increase in our view spot revenue base.
This is the second new customer to be added in 2020, and we look forward to additional wins in the coming quarters.
As a reminder, we separate you spot revenue into two categories fixed and variable.
The fixed portion of the revenues related to license fees and is generally recurring component of the revenue.
The variable portion of the revenue is related to device and promotional campaigns, which are short burst of activity.
Holding in revenue.
And the volume is less predictable.
Based on the current run rates and we expect view spot revenue to be flat in the third quarter compared to the second quarter.
Overall for all the reasons discussed, including the impact Coven 19 is having on store activity. We are expecting third quarter total revenue to be down between two and 7% compared to the second quarter of this year.
For the second quarter gross profit was 11.7 million compared to 9.9 million during the same period last year.
Gross margin was 90% for the second quarter compared to 91% last year.
For the second quarter year to date gross profit was 23.8 million.
Compared to 17.4 million during the same period last year.
Gross margin was 91% for the second quarter year to date compared to 90% last year.
GAAP operating expense for the second quarter was 10.3 million, an increase of 3.3 million or 48% compared to last year.
GAAP operating expense for the second quarter year to date was 20.5 million an IND.
An increase of 6.1 million or 42% compared to last year.
Non-GAAP operating expense for the second quarter was 8.6 million, an increase of 2.3 million compared to last year.
And non-GAAP operating expense for the second quarter year to date was 16.8 million an increase of 3.7 million compared to last year.
The increase in non-GAAP quarterly operating expenses, primarily related to an increase of 1.7 million for compensation and employee related expenses.
As our headcount has increased 34% year over year.
In it and an increase of 400000 for third party contract development costs. These costs are variable and allow flexibility to increase or decrease the number of engaged resources.
As previously discussed and to provide additional comments around operating expenses, we continue to aggressively recruit and a higher resources and all of our markets and currently expect to add approximately 30 additional employees in the second half of 2020.
We will also continue to engage the third party contract development firm as needed.
These additional internal and external costs were and are necessary to come.
Please the safe past seven integration.
Accelerate the safe path roadmap by adding features and functionality sooner than originally expected and support the pursuit of new customers.
We operate in a highly competitive environment and timing of customer opportunities is very critical.
We are currently pursuing multiple opportunities to sell our safe Pat platform for both family and identity.
Although there is no guarantee this effort will result in additional revenue we are optimistic enough to make the investment and pursue the wins.
Based on this activity, we expect third quarter non-GAAP operating expenses to increase by approximately 600000.
Over the second quarter to 9.2 million.
50% of this increases related to compensation and employee related costs and 50%.
Is it related to third party contract development costs.
During this time of investments, we expect to remain profitable and cash flow positive.
The non-GAAP net income for the second quarter was 3 million or seven cents diluted earnings per share compared to a non-GAAP net income of 3.6 million or 10 cents earnings per share last year.
The non-GAAP net income for the second quarter year to date was 7.1 million or 17 cents diluted earnings per share compared to a non-GAAP net income up 4.3 million or 13 cents earnings per share last year.
Within the recently issued press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric.
For the second quarter. The reconciliation includes the following adjustments.
Compensation expense of 808000, and intangible amortization of 849000.
All of which are noncash.
For the second quarter year to date. The reconciliation includes the following adjustments.
Compensation expense of 1.4 million intangible amortization of 1.4 million and acquisition costs of 918000, some of which are.
Non cash.
Due to our cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes.
For the non.
GAAP purposes, we utilize a zero percent tax rate for 2020 and 2019.
The resulting non-GAAP tax expense reflects the actual income taxes expense during each period.
To wrap up my financial review I will add some comments around capital.
We closed the second quarter of 2020 with 23.6 million of cash during the quarter, we generated 22.1 million of cash flow from operations and receive 2.2 million of cash from warrant exercises, resulting in 3.7 million warrants still outstanding.
In the short term, we will continue to invest the excess cash balance to preserve capital.
In the mid to long term the company will continue to evaluate strategic alternatives for utilization of capital to maximize shareholder return.
This concludes my financial review.
Now back to you Bill.
Back to Dallas discuss some of the key product milestones, we achieved during the second quarter.
As Tim just discussed we have been investing heavily R&D recently to drive continued improvement and expansion of product functionality.
You saw our smart retail platform is a perfect example of this investment.
Recently, we announced some exciting new features to view side that we see is incredibly relevant and useful in today's retail environment.
As we all know the code is 19 pandemic has caused a rapid shift in consumer sentiment regarding health and safety.
Many consider shopping and traditional brick and mortar retail stores did the risk.
To help wireless carriers adapt to shifting consumer expectations, our patent pending technology enables touched flea interactions with Daimler devices in wireless retail stores to help minimize physical contact and he shopper concerns about contaminate.
Sure.
Touched every interaction is accomplished by using the embedded components on smartphones and tablets.
Test human phase, either with or without a face covering.
Once a device detects human phase you saw launched on device demo experienced automatically.
Eliminating the need for human touch on the device.
To complement this news touchless component of you spot. We also integrated dynamic Sanitization notifications IZEA track Lou.
Then on in store demos devices.
What enable these onscreen notifications notify shoppers the device has been sanitized by retail associated.
What's the view spot power device is touched the notification will disappear and must see manually reset my associate once the device as clean as sanitize.
This is a simple yet powerful tool developed in response to our new normal.
We have received very positive feedback from existing you spot customers as well as process and we'll continue to explore new ways to extend the platforms touchless feature set.
Continuing on the R&D theme, we also completed our self service management tools that produced but during the second quarter.
Caused you spot studio this new platform tool makes it much easier for wireless carriers to create and deployed content for in store Demoed devices.
As I discussed on last quarter's call useless studio greatly expands the total addressable market of the platform, particularly in the European marketplace.
Moving on to do you spot customer news I'm excited to report that we began deploying useless and another north American wireless carrier during the second quarter, while the beginning of the launch was pushed back slightly because as a pandemic I am happy to see the continued growth.
Diversification of our you spot client base.
This deployment is our first was a prepaid wireless brand and we have been very pleased to see the rollout of abuse, but at a large number of stores.
Looking forward, we continue to develop new features or do you spot increased market demand.
In addition to the new features I've already mentioned, we also made good progress on the platform integration capabilities during the second quarter.
With these improvements you spot integrate more seamlessly to other digital signage platforms that power electronics shelf labels further broadening the market opportunities.
Constantly are mainstay voice messaging solution continues to generate profitable results for Smith micro.
Well constantly revenues continued to trend slightly down in their remained several unknowns as we navigate the sprint T mobile merger the platform remains key to our business.
Overall I am pleased with the progress our team has made in migrating existing visual voicemail customers over to both T mobile and dish.
As dishes acquisition of boost mobile was only recently finalized on July 1st we are still in the beginning stages of this migration effort and see good opportunities as dish begins to roll out its mobile services.
I look forward to providing everyone with more updates on the comp sleep.
Our next call in the fall.
Now, let's look at say fat.
We're excited to announce the launch of our Safepath IC solution at tell us last month.
They tell us track plus the new service will enable tell us subscribers to track Pes luggage bikes another valuables.
Well. This is the first Canadian carrier to launch our safe past platform.
We are hopeful that this deployment will serve as a springboard for further expansion of say Pat will tell us.
As I've discussed before the modular architecture of safe that enables us to easily expanded offering once it's installed at a wireless carrier.
The subscriber value of revenue potential other saves time, they solution will only grow as a care implement additional modules.
Whether support is another io to use case or launching safe that family or say Oh.
Easy for us to ramp these deployments once the relationship is establish.
So integration efforts are underway continued expansion of capabilities and customer base of safe that.
These endeavors will broadly a mountain tyco's connected devices assays to have aiotv can support.
For example, we are currently expanding our platform to bring to market a wearable location device in the coming months.
Currently there are several devices that are well entrenched that we expect to support.
With regards to the ongoing integration efforts directly related to the circle acquisition, our engineering teams isn't hard work integrating the two co spaces into an overall solution.
The finish line. His insight we are pleased we will be able to demo the new safe pass them before the end of summer.
Once the integration is complete safe past family will be the most complete white label offering of its kind on the market and our connected home offering safe pass home will be available on the platform as well.
Well I didn't efforts for the launch of safe Tessa at both T mobile and Sky the acquired customers from the circle acquisition are moving along nicely.
While the enormity of T mobile spread merger complicated by the impacts of code 19 are having an impact on our ability to move the new T. Mobile to say said before the holiday season begins we remain focused on transition in contract consolidations.
We think the processes.
Progressing well and look for early 2021 implementation.
In addition to significant safe that integration efforts. We have also develop several new platform features that will debut with the launch of safe fast version seven in the near future.
These features are critical as they tie directly to the customer opportunities we are pursuing.
Overall this has been a very large undertaking for the company.
Timing is extremely important I couldn't be prouder of the progress our team has made on assays path over the past few months.
It is truly the all hands on debt watch for our official announcement regarding say fast very soon.
To summarize todays call, we're purposely investing in the future Smith micro.
Yes, we are doing so thoughtfully, even though revenues are declining in the short term driven by the effects of coven 19.
Again.
We are doing this to ensure that products are ready to meet the needs of both our current customers and our sales prospects, who wants to become our customers going forward.
As I stated earlier, we are in the enviable position of having many prospects desiring to purchase our products now.
These efforts are all in late sales stages, which will allow us to announce new customer wins in the next few quarters, all resulting in significant revenue growth opportunities in 2021.
But this will only be possible if we invest now to enrich our products to include the features these customers are seeking.
This micro is in the great position for increased revenue and profitability.
I'm very excited with the road ahead in spite of the code created challenges I have every confidence that our team is prepared to complete the task at hand.
Operator at this time I'd like to open the call for questions.
Thank you we will now begin the question and answer session.
Ask a question you May press Star then one on your Touchtone phone.
If you are using these speakerphone, please pick up your handset before passing the Keith.
Withdraw your question. Please press Star then Q.
This time, we will pause momentarily to assemble the roster.
The first question today comes from Scott Zero Roth Capital. Please go ahead.
Hey, good afternoon. Thanks for taking my questions a nice job guys in a in a difficult operating environment. It Tim just quickly I want to make sure I heard a couple of numbers correctly, the comps suite AD revenue in the second quarter could you just tell us that figure again, and then as it related to the boost comment around 25% of sales with that specific to view spot.
Or is that for overall revenues and then I have a couple of questions around say path.
Yeah, Hi, Scott the calm suite AD revenue was about 200000 in the quarter.
And the a revenue associate or the comment that I made about boost had to do with calm suite.
I'd view spot and I was a indicating that about 25% of the comps we revenue 4.1 million in the quarter was related to boost the perfect and if I could on the safe that front. It sounds like the integration with circles on track that I want to make sure that just to follow up on that and clarify.
If the integration is expected to be completed still by the end of the current September quarter.
And as it relates to some of the incremental investment I'm wondering if he could provide a little bit more color around what that exactly means you have been investing in expanding the ecosystem, but what are some of those feature sets you've got pets and other devices today, but are you starting to bring health applications in auto you know what what should we be looking for as part.
Of safe at 7.0.
Yes, Scott this is bill.
I think the first so yes, we are very comfortable that we will have the success of.
Completed by the end of this quarter.
We will be them really started to focus in on customer Yep, yeah, implementations, which will roll out over the coming quarters.
The the way the view it is a wheel we talked about affected.
We will be adding a new consumer I have to support for wearable device.
We talked about.
A number of other feature enhancements that are being asked for by various carriers and because none of this is announced yet I really don't want to get into exactly what they are just I will say. These were features that were on our road roadmap they have been access.
Elevated substantially.
To have them ready for for launch with say et cetera, and they represent a very significant undertaking so.
We will expand the feature set they will expand the total addressable Mark Gotcha, very very helpful and if I could follow up just in terms of this sprint T mobile integration and progress on the front sounds like Youre.
Increasingly optimistic that something is going to happen on the T. Mobile front could you I just want to want to clarify what that timeframe looks like it sounded like you said you expected.
Some positive event later this year, but start to see subscriber growth and contribution next year is that correct.
Yeah, what we've said was that.
The combination this is a major merger effort for everybody involved and then you compound that with the effects of code. It just makes is that much more difficult I think.
We had hoped that we could get the.
Chemo up on say pass them for the holiday season. It just seems this that might be a bridge too far, but we're more likely looking at at a launch.
After the first year I think that's fine.
I think everything so you had five.
I think that we have some really.
The things that we will be able to offer to the G T mobile customers.
That are coming from the circled platform in the past and we'll be able to offer some really nice upgrades for the sprint Cup customers that will become interested about perfect and lastly, if I could just I know this is looking out further on the horizon, but given the feature sets and investments and how you're accelerating thing.
Forward and it sounds like there or a number of relationships that are getting.
Lower in the opportunity funnel. If you will is how should we be thinking about 2021 and safe path.
Not only from a diversification standpoint, but but how should we be thinking about that opportunity or that Tam as we go into 2021 seems like you're going to be working with multiple operators I'm not sure. If there's a number that you're willing to to sign up to at this point in time or diversification away from that sprint base to give us some more color as we're looking at 20.1. Thanks.
Yeah, I mean, clearly there's a number of our operators they there around the world heavy focus on.
On the Americas, Europe, and the Middle East.
No I would say that.
We think that the growth of safe say fast will be profound and it will be the lead to engine, but I also would say that our other two products.
As you view spot I think you'll see or the number of wins there and then you'll see continued growth, especially the dish on on the comp costly for us so.
Feel very very bullish about where we're headed 2021 and and beyond.
Great. Thank you.
Okay.
Your next question comes from Josh Nichols of B. Riley. Please go ahead.
Yeah. Thanks for taking my question.
I guess could you provide a little bit of color as far as what you've seen for subscriber trends from like the beginning of a pandemic you know in late April in late March early April to July and have you seen now like a leveling out of churn where we are today.
Yes, I think Josh the way to view it is that Weve saw.
Hey drop off in number of subs right. After the started the pan pandemic and the closing of the stores and then the closing of the merger and.
There was just the cascading number of events that happened I think by the by the ended the quarter, we've seen things level out and I think if we look at where we'd like to.
The for the next quarter so is.
As to kind of stable level.
Other words.
Able to grow back the user base or from the standpoint.
The trial platform.
That that'd be the able to cover any churn that might happen at all and.
Keith This is kind of go flat.
Mhm.
Thanks, and then I guess, let's say that you were to finalize new agreement with T mobile.
Late this year or something that would ramp up in early 2021.
Is it fair to assume that you know that's whenever you start to see like a fairly quick quick ramp.
Let's say a user's again shortly thereafter or would there be a little bit of ramp up period, how should.
We think about that in 2021.
Yeah, I would say that we see a great opportunity for growth at the duty T mobile once the product is lost.
We still have to deal with the whether stores are generally open or not we'll have to deal with that issue we have visibility now.
Refining a lot of our digital marketing campaign efforts and we think that.
That is an area of growth for us going forward.
So that even if the stores can't fully reopen or be fully functioning. We can still continue to really grow. This this this user base.
I would say that Theres, a great Pat the manner and we think that we are going to have a really great product and we're looking for some really good good growth.
Throughout 2021.
And so that.
Clearly you're pretty optimistic about the future securing some new carriers on multiple fronts outside of the clear T mobile opportunity that most people on the call are aware up could you help frame the size and somebody is potential customer opportunities that you're in late stage negotiations with I mean.
Compared to the company's current revenue base.
Yes, I would I would say to you that.
As I said in my prepared prepared comments.
You know.
This this list of new customers includes some of the biggest names in the carrier World.
These are substantial opportunities.
And with that then with me.
Other wins, which would be more mid sized carriers and helping some smaller ones as well, but collectively when all this is said.
And launched in public has.
You are going to see a very.
Nice and broadened a customer base.
That will.
Reduce risk.
From an investment standpoint, yes, also provide us with a upside opportunity through which we can really you know look to grow our revenues and profitability going going forward.
This is a very exciting top Adam.
These things don't happen a lot in one's career I'm glad I'm here to experience.
Got to be a lot of up.
Yes.
Oh I look forward to that is a future announcements and then just on the hiring front I get the need to invest ahead of right the revenue growth.
But as far as the trajectory of the hiring you're looking at Opex going up 600000 quarter over quarter. In Threeq. You is most of the hiring going to be a little bit more like threeq, you waited to or you're going to see a similar increase in the fourth quarter regarding opex expenses.
Yeah.
Josh I would expect most of it to occur in the a third quarter as I've got it.
And then.
Grounded in Howard.
Got it perfect and then last question just housekeeping what did you say the safe path revenue once a quarter.
A 7.3.
Thanks, I'll hop back into queue.
Thanks.
Again, if you had a question. Please press Star then one the next question comes from can kill rate of brought the woods. Please go ahead.
Thank you and good afternoon.
Tim you talked about contract cost that Delta in Q2 in Q3 can you tell us what the level of contract costs.
Our.
Q2.
[noise].
The current we're gonna we're gonna nearly double the contract costs in a threeq versus Twoq Q.
So we're growing them by about 300000 is what I guided so that's that's nearly double what were.
Sorry, that's going to be double what the rate was in twoq.
Right.
No I get that.
But were contract cost a de minimis in Q1.
But I'm really trying to get at one I just got it didn't listen to what I'm trying to.
What happens.
Okay. Thank you so what happens and it didn't exist in Q1. They were about 300 to 400000 in Q2, and we're going to add 300000 in Q3.
Right what I'm, Thank you and what I'm really trying to get at is what happens. After these projects are completed do these costs get distributed elsewhere or.
Do they.
Do they go away completely or you know so what happens after these projects are done.
Yeah, I see a the third quarter is being a high watermark for us a Jim.
And then I see those costs coming down in the fourth quarter being offset by hiring that we've talked about and then oh leveling off to the to the best I can see right. Now you know leveling off we might always have some of those contract costs out there. There are nice lever that we can pull from when we need it <unk>.
Guide on 2021 later, but I see that's how I see the the third and fourth quarter playing out.
Great. Thank you and maybe let me add maybe a little color to that and that is that clearly we're seeing that the products that we're building.
Our in high the man and we expect as we continue to.
Rollout with the new customers that I've been talking about that probably will drive others to take a good good look at what we have offers so.
We don't see this is a onetime event. This is a I think we're on a gross true true trajectory. As you know, we just have to stay very vigilant and making sure that our product is a market leader and is the best product out out there.
That's what this is all about.
Sorry, I'm not sure if you like Jim if we didnt.
No.
You faded out your favorite out at the end to Bill I wasn't sure. If you're finished I just wanted to.
To make sure that so.
The features that you're developing for.
The new customers if for some reason to new customers decide not to sign up are those features relevant or excuse me are those features reserve for those new customers.
Or their freely available to offer due to anybody out there.
Yeah those features.
The revenue level for a lot all all customers.
Yes, I'm, sorry, Jim I Didnt catch one.
That's great. Thanks, I, just want to verify that and then they're freely available to our customers.
Okay, and and as far as the.
As far as the circle.
Current subscribers are concerned.
I I just want I want to make sure I understand if are are they under the current contracts are they all are they enabled to use the safe past seven features or only if the contract is.
His renegotiated our they do they have access to the safe past seven.
Features.
They have access to the original circle features on Visicon contract.
Any extensions that come.
I will say fast data would require a enhanced cod caught contract coverage.
Very good perfect. Thank you so much and good luck with everything.
Thanks, Jim.
This.
Concludes our question and answer session I would like to turn the conference back over to Charles nothing for any closing remarks.
Thank you everybody for joining today watch that you're doing a couple of virtual conferences. So maybe we'll get a chance to talk to you in the future. If you have questions or comments, please feel free to reach out to us here.
And I wishing everyone to be safe as we go for thanks for taking the time today have a great. Thanks.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.