Q4 2020 Synchronoss Technologies Inc Earnings Call
Good day, everyone and welcome to the Synchrony was fourth quarter and full year 2020 financial results Conference call. Today's call is being recorded at this time I would like to turn the conference over to Todd currently of MTR Investor Relations. Please go ahead.
Thank you operator, good afternoon, and welcome to the Hudson's fourth quarter and full year 2020 earnings conference call.
With me on today's call are synchronous as president and CEO, Jeff Miller and CFO David Clark.
I turn the call over to Jeff and David I'd like to cover a few quick guidance. This afternoon synchronous issued a press release announcing its financial results that release is available on the company's website at some kind of stuck on this.
This call is being broadcast live over the Internet for all interested parties on the webcast will be archived on the Investor Relations page of the company's website.
I want to remind everyone that on today's call management will discuss certain factors that are likely to influence the business going forward.
Factors discussed today that are not historical facts, particularly comments regarding our long term prospects and market opportunities should be considered forward looking statements.
Forward looking statements may include comments about the company's plans and expectations of future performance.
Forward looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially.
Encourage all of our listeners to review, our SEC filings, including our most recent 10-K and 10-Q for a complete description of these risks.
Our statements on this call are made as of today on March eight 2021, and the company undertakes no obligation to revise or publicly update forward looking statements contained herein.
As a result of new information future events changes in expectations or otherwise.
Additionally throughout this call we will be discussing certain non-GAAP financial measures such as adjusted EBITDA.
Adjusted EBITDA does not necessarily equate to cash generated by operations as it does not account for such items as deferred revenue or the capitalization of software development.
Today's earnings release and the related current report on form 8-K describe the differences between non-GAAP and GAAP reporting.
The reconciliation between the two for the periods reported in the release.
With that said I'll now turn the call over to Jeff.
Thanks, Todd and good afternoon, everyone.
Thank you for joining us today.
As Todd mentioned also joining us on the call is the secret and CFO, David Clark will be providing a financial update on our results from fourth quarter and full year 2020.
As well as information pertaining to works way 'twenty one outlook.
Prior to discussing operating results.
I'd like to say that I'm honored and delight to be the next president and CEO of synchronous technologies as announced earlier today.
It's been my pleasure to serve as the interim president and CEO.
And I'm grateful for the support of our board of directors and the synchronous gene.
But enabled us to make forward progress over the past six months on me.
Refining our strategy.
On our operating results, which we'll discuss further on todays call.
I'm excited to continue to work closely with our customers.
King.
On our board to write the next chapter of the synchronous narrative.
As we focus on driving profitable growth.
And delivering trusted cloud messaging and digital solutions that consumers and enterprises count on every day.
I'm pleased to report that.
Synchronous delivered solid fiscal fourth quarter and full year 2020 operating results.
Driven by delivering and execution for our customers.
Disciplined cost containment.
And continued product innovation.
Our fourth quarter revenue of $69 4 million.
Our internal expectations and income.
It included improvements in gross and contribution margins as well as significant reductions in operating expenses from the prior year.
Again this quarter recurring revenue represented more than 80 per cent of our total revenues.
As an indication of the strong foundation established from our existing customers and multiyear contracts.
For the full year revenue was 279 $291 seven day.
Also consistent with internal expectations.
In the quarter.
We delivered $6 4 million and adjusted EBITDA.
<unk> in full year adjusted EBITDA of 27 eight day.
Exceeding our guidance range from $23 million to $26 million.
And providing further evidence of our commitment to improving operational efficiency efficiency and.
And our focus on improved profitability.
I would like to thank the employees of cigarettes per day, and outstanding contributions and a weighted the challenges brought on by COVID-19 throughout 2020.
I want them to know that.
Because of their records, we have built the foundation for success in 'twenty, one and be on.
In the quarter.
Secret is collaborating with Verizon to.
If you deliver enhancements, which support the Verizon unlimited cloud player that extends cloud into the <unk>.
This industry, leading approach offers unlimited shared storage from photos videos and documents.
Along with protection from vials on.
The amount of Capex in mobile book.
And I enjoyed it.
And computers.
We are truly excited to participate in this large and extending the Verizon cloud products beyond wireless.
Additionally.
Still on their first year of At&t's cloud introduction, you saw positive momentum in consumer adoption.
During the fourth quarter, which has continued into early 2021.
New devices that come to market with a streamlined on boarding experience.
I'm also pleased to share today.
This quarter, we signed an agreement with Allstate protection plans to integrate our cigarettes personal cloud solution.
Select device protection plan offerings for Android and iOS devices.
Along with our client relationship with assurance.
Which was announced in 2020 today.
Today's announcement related to Allstate represents further progress in leveraging on our cloud solution into the insurance device protection plans segment.
Where digital content protection plans triple net.
Device protection offerings from a share all states and the other insurance providers.
The messaging, we finished the year by signing a new multiyear contracts with Altice USA.
To provide SaaS based email services for their base of broadband video and wireless customers.
<unk> is one of the largest broadband and video service providers in the United States, serving residential and business customers in 21 states.
This award followed a rigorous.
Selection and evaluation process.
It enabled synchronous to displace one of our competitors.
Also in the quarter, we sold additional Rcs messaging licenses to our Japanese customers.
The plus message service that includes K G D I N.
NTT Docomo and <unk>.
Softbank recently announced that they've now reached the milestone of $20 million Rcs subscribers on the service.
Our digital business contributed revenue growth during the quarter.
From additional sales of our spatial licenses and maintenance.
Strong performance from a financial analytics product line.
And then my last call.
I referenced the signing of an agreement with AT&T.
On the extension of our activation services.
The end of 2020.
And I'm now pleased to report that we saw.
Signed a three year extension to that relationship that began in June.
On our last call.
Talked about more practically a more pragmatic approach.
The business by focusing on those lines of business.
The greatest potential for profitable growth.
And allow us to leverage our trusted share.
Great cloud messaging and digital platforms.
In parallel.
Narrowing our portfolio focuses.
We're continuing to streamline the organization and associated operating expenses to deliver meaningful improvements in profitability.
Free cash flow.
We believe the combination of these efforts will enable us to deliver compelling products that meet the high expectations of our customers.
And delivered sustained top line growth over time.
I have spent a great deal of time with our customers and strategic partners.
And there's no doubt that.
Net singularly, they're focused on their fiber rollout and.
And ways to monetize technology <unk> will disrupt.
And to be at the forefront on new opportunities the <unk> label.
Beyond just providing the plumbing.
Mobile devices.
We're seeing that the carriers are looking to take a larger share of the consumer home and mobile digital ecosystem.
We believe the path to realizing that goal.
First and foremost true cloud and messaging.
There are a few companies that have a decades long track record that day.
Livery and carrier grade software.
Telecommunications industry and have the trust.
That can only accrue from years of reliable on it.
Interrupted service, which is why I'm. So excited about the opportunities that lie ahead, we're seeing Chris.
We see <unk> evolving our cloud platform.
As we move from an archive of use case dependent on how data is stored.
Do you use cases in collaboration.
With you more about how data is used.
More specifically.
Slide you allow us with greater content to be pushed to the mobile devices and the edge.
Near zero latency.
Cloud will allow Richard media creation, and real time content sharing and engagement.
Looking at the cloud market.
A recent study conducted by Arthur do you book.
As revealed that by 2025, the market opportunity for personal cloud services in the U S alone will reach $8 $9 billion.
With greater up to $15 billion of opportunities globally.
At present.
Telecom operators only own about one per cent of the U S personal cloud user base.
We believe <unk> will be a catalyst for better carry on penetration in this market.
Over $200 million.
Wireless and fixed line subscribers around the world now have access to synchronous personal cloud.
And we believe that by building more engaging experiences.
Can increase that subscriber count in 2021.
Future years with both our with increased penetration of our existing customers as well as expansion from new cloud accounts.
Thank you Joe.
It's dominated by SMS.
David Technology that is ripe for disruption.
And the time, we're finding can deliver gigabit speeds to your mobile device.
That's my message is 160 characters limitation.
Links to hybrid.
Simply will not do.
That's the message is insufficient.
So Paula <unk> E Commerce is it cannot deliver your interactions with consumers now expect.
Laura deliver engaging experiences that brands want to present to them.
There are over 5 billion global messaging users.
And the value of business to consumer messaging today for the operators is already greater than $20 billion per year.
Preliminary results.
Indicate that it's this enhanced form of messaging to drive exponential growth for carriers and results and increasing their revenue opportunities.
For example.
Jewelry, Vodafone UK trials.
Rates for the Rcs message campaign were 80%.
This is only one per cent for SMS response rates were 25%.
Which is just over 1% per S. M S.
Synchronous is the leading provider.
On cross market Cross carrier scale for Rcs based messaging and communications.
In addition.
I have another leg in the store.
As the preferred provider of over 250 million active mailboxes globally.
While we are a belt tightening overall.
We plan to strategically increase investments in our cloud and messaging platforms.
It's new features and capabilities to keep our platforms at the leading edge of these evolving and growing markets.
Our products must not only worked well and scale to carrier demands.
But also deliver engaging experiences to our customers and their subscribers such that day for carriers.
Can monetize an increasing share of their subscriber base.
I would also note that these investments into our cloud and messaging platforms can be leveraged across our existing as well as new customers globally.
And believe these actions will add significantly to the leverage in our business model.
We've also made changes to our digital business to help tighten the value proposition by.
By combining our financial analytics.
Special.
I know portfolio.
Into what we call our total network management suite of products.
While technically a legacy business.
We believe this portfolio still offers significant value to our customers.
Contributes profitable revenue.
And it's tightened value proposition has the potential to contribute to growth on the top line.
Over the past six months, we've taken definitive steps to improve our operations efficiency.
We got a 2021.
This includes <unk>.
Global restructuring of our sales organization.
Reducing a layer of management.
Thereby improving our customer intimacy and accelerating the speed of decision making.
Additionally.
We renegotiated key contracts with third party suppliers.
We made reductions in our global real estate footprint through a combination of consolidating and closing office space.
All of these actions have contributed to reducing our ongoing operating expenses.
In addition, I'm on.
Also announcing that we will no longer be investing resources in to build out our Iot practice.
Well, there's no doubt a large and growing market.
My goal is to refine our product line focus to where we have a market leading position.
We did not see the same level of synergies and our Iot business as the rest of our platforms.
That said, we will continue to support the customers that we serve today.
Before I turn it over to David.
I wanted to report that we continue to work on delivering a sustainable capital structure for our shareholders.
We understand that the preferred is at.
Significant overhang to the value of our company.
And we are actively pursuing a number of more favorable options to refinance.
Now I'll turn the call over to our CFO, David Clark David.
Thanks, Jeff and thank you everyone for joining us I will review, our fourth quarter and full year 2020 results and provide guidance for 2021.
Before I start I'd like to remind listeners that because of the five year extension.
Our cloud contract with Verizon in July of 2020, we had to extend the recognition of approximately $10 million on noncash deferred revenue across the term on the new contract as required by ASC 606, which also had a direct impact on EBITDA for the second half of 2020.
I'll be referring to results that correctly. This accounting treatments throughout this call as we believe it does not accurately reflect the true progress we've made year over year.
Now on to results.
Total revenue from the fourth quarter was $69 $4 million up from 68 point.
$6 million last quarter, but down 23%.
From $96 million reported in the fourth quarter of smoking in 19.
Recall that last year's fourth quarter revenue benefited from a large initial purchase by T. CMI of Rcs messaging licenses.
As mentioned adjusting for the recognition of approximately $5 million in deferred revenue associated with the horizon cloud contract new under ASC 606 fourth quarter revenue would have been $74 $6 million.
For fiscal 2020 total revenue was 291 $7 million down 5% from $308 $7 million in 2019.
Or adjusting for the previously mentioned ASC 606 revenue adjustment 301 seven.
$7 million down 2% from the prior year.
Recurring revenue was 82 three per cent in the fourth quarter compared to 84% in the third quarter and 62, 4% in the fourth quarter last year.
For the full year 2020 recurring revenue was 78, 1% up 700 basis points over 71, one per cent for the full year of 2019.
This metric combined with the fact that approximately 85% of our revenue was under multiyear contracts brings significant predictability and stability to our business model.
Cloud revenue of $39 $2 million was comparable to the third quarter's $39 $5 million, but down from last year's $41 1 million or 5%.
On a dollars.
Cloud revenue would have been $44 $2 million or up seven 5% adjusting for the Atwood mentioned ASC 606 adjustments.
Also worth noting is that while fourth quarter revenue was comparable from the third quarter. The recurring component continued decline as cloud subscriber adoption grew across our carrier partners.
Recall, there was an elevated professional services revenue last quarter from work on Verizon Unlimited Cloud initiative, which successfully launched in the fourth quarter.
For 2020 cloud revenue was $116 $2 million comparable to the $162 $7 million in 2019.
Once again adjusting for the full impact of ASC 606, our cloud revenue would have been $172 $2 million, representing a 6% increase year over year.
As Jeff discussed earlier, we expect continued growth from cloud in 2021, driven by new customer wins on subscriber expansion within existing customers and particular, AT&T, which should ramp in 2021.
Headwinds subside.
Messaging revenue in the fourth quarter was $14 5 million compared to $35 $5 million in the fourth quarter of 2019, which included the large conditional license purchases by CCM on them.
And it was down 12% from prior quarters 16 from $5 million decline.
Sequentially was largely result of the completion of large nonrecurring professional services contract.
In the third quarter weighted to work being done to enhance the functionality for our C&I Rcs product.
We continue to receive Rcs.
Messaging license revenue from our Japanese carrier customers grew in the fourth quarter announced the number of processors used in Japan had exceeded $20 million.
As I've discussed on earlier calls Japanese license purchases may vary quarter to quarter as they exceed certain user levels.
From 2020 messaging revenue was $73 $4 million down from $92 $3 million reported in 2019 due to the aforementioned large initial license purchase on <unk> in the fourth quarter of 2019.
Digital revenue of $15 $7 million was up 12% compared to the $14 million.
In the year ago quarter, and up 24, 6% from the prior quarter's $12 6 million.
Jeff mentioned during the fourth quarter, we extended our activation service for AT&T per in three years and increase financial analytics transaction bonds.
In addition, solid sales execution, a bunch of additional sales force of our spatial software license and maintenance, which more than offset revenue loss due to the strategic decision not to continue our Iot business.
Digital revenue was $56 million from 2020 up 4% versus $53 $8 million in 2019.
The unit is profitable on the site.
It's tightened value proposition, we believe continue to be a growing contributor to synchronous in 2021.
Total costs and expenses were $71 $8 million on the fourth quarter down, 34% compared to $108 $8 million in the fourth quarter of last year.
For the year total costs and expenses in 2020 were $339 $8 million versus $416 $5 million in 2019.
The reduction in total costs and expenses in the fourth quarter and the full year of 2020, reflecting cost reduction on the organizational right.
Sizing initiatives, we executed on year.
Recall, we targeted a reduction of $55 million in annual operating costs of which we expected to realize approximately $45 million in calendar 2020, I'm pleased to report we achieved these calls I believe we continue to reduce annual operating costs in 2020 one through continued focus on operational efficiency.
Adjusted gross profit in the fourth quarter was $41 $5 million and adjusted gross profit margin was $59 eight per cent compared with $48 million and 59, 4% from the prior quarter.
And $48 9 million and 54% in the fourth quarter of 2019.
For 2020, adjusted gross profit was 172 $6 million and adjusted growth.
Margin was 59, 2%.
Versus $187 $7 million and 68% in 2019.
Improvements to adjusted gross profit adjusted gross margins was driven by lower cost of goods sold and lower expenses related to the migration.
Net from company managed data centers to the public cloud.
We are pleased to deliver gross margin expansion despite top line revenue pressure.
Adjusted EBITDA was $6 4 million in the fourth quarter and came in above the high end of our guidance range and compares to $6 5 million in the fourth quarter of 2019, despite topline pressure.
Adjusting for the impact of ASC 606, adjusted EBITDA would've been $11 $4 million on increased 75% from the fourth quarter of 2019.
For 2020, adjusted EBITDA was 27 $8 million relatively flat from $27 $6 million in 2019.
Again adjusted for the impact of ASC 606, adjusted EBITDA would have been $47 8 million up 47% from 2018.
Improved adjusted EBITDA comes as a result of among other things the cost cutting measures.
I mentioned earlier as well as our strategic focus on profitable business.
With the best near term growth potential.
Cash and cash equivalents totaled $32 7 million down $12 $7 million from $46 $4 million on a third quarter of 2020, our fourth.
Fourth quarter, ending cash balance reflects the payment of 2019 management bonuses, which had been previously deferred as a result of the economic uncertainty related to COVID-19.
Regarding our preferred stock refinancing for and positioned the company on a cost effective and preliminary cash long term capital structure is a top priority for Sunquest. We continue to actively pursue on a number of different options to achieve this goal.
Turning to guidance as Jeff discussed earlier, we continue to look for ways to streamline operational efficiency and increase business agility as book to grow recurring revenue.
The company expects revenue for the full year of 2020, we wanted to be in a range of $275 million to $285 million.
Adjusted EBITDA from a full year of 2021, but you shouldn't be in the range of $30 million to $35 million and that represents a growth of 8% to 26% respectively.
Also we expect margins to trend higher as the year progresses, as we benefit from leverage in the business model.
In closing I want to congratulate Jeff for being named the new President and CEO of <unk> and I look forward to continuing to work with him as we focus on delivering profitable growth.
Lastly, on the Investor Relations front, we will be participating in the upcoming Roth Conference March 15th.
17th if you're interested in participating in that event. Please scheduled visit with us.
And with that I will turn it back over to Jeff.
Thank you David.
In summary on.
I'm proud of the team's accomplishments during a challenging 2020 for all of us.
Our efforts as an organization to spend cautiously and maintain focus on our most profitable and fastest growing businesses.
And on our second quarter of better than expected expected EBITDA generation.
With a renewed focus on operational excellence excellence across the business.
We believe we can continue to improve our profitability in 2021.
So began delivering topline growth in those areas we outlined previously.
In the coming quarters, we expect to share additional news regarding consumer adoption of our service offerings and introduced new cloud and messaging customers to the <unk> portfolio.
And with that.
I'll turn the call back over to the operator for questions.
If you'd like to ask a question. Please press star followed by the number one on your telephone keypad, Okay, calling from a speaker phone. Please make sure you give me a sense from the Doctor will say you sit on how can we check right now again I wanted to ask a question first we'll go to Mike Walkley from Canaccord Genuity. Your line is open.
Great. Thanks for taking my question and hope everybody is doing well on the call and Jeff Congratulations on the permanent CEO announcement today.
Thank you Mike.
Our first question is for you Jeff just.
If you talk to your carrier customers given.
We've been dealing with these customers for a long time and in the <unk> opportunity that certainly points towards the cloud and the personal cloud and the Rcs messaging growth can you can you talk about maybe the sales cycle with customers and.
Embedded in your guidance, maybe any new customer additions expected net guidance or or or how many customers. You think we could add to each area during the year.
What I'll say is that sales cycles.
Sure.
Solutions that are integrated as our cloud and messaging solutions or with their respective customers are pretty extended sales cycles. Those engagements take many months oftentimes many quarters to cultivate and bring to market.
Do expect during the course of 2021 that we will add additional messaging as well as cloud customers certainly starting off on the right foot with al <unk> introduction and messaging.
On the Allstate relationship here in Q1 for cloud.
In terms of what that exact number I'm not in a position to provide that level of detail at this time, but I expect expansion in both of those categories.
Okay, and just building on that as you look at share guidance for the year, you're going to have.
Pipeline what areas are you most excited about driving growth or is it just getting AT&T up and running is that the biggest opportunity.
Growth drivers in calendar 'twenty one.
Well, we certainly are excited about AT&T and you heard our comments about that not only because we would like to expect that but we're seeing tangible results related to it.
But beyond AT&T, we do expect to see expansion in cloud adoption from our existing customers, which would be the largest or one of the largest contributors to our growth potential.
On a year over year basis.
And because of the opportunity in Europe to contribute revenue of new customers, while they will be additive we believe to our growth. They will not have the largest impact not as big as expansion of subscribers. If you will do the existing customer base.
Okay. Thanks, and then for both of you in terms of the guidance on the Opex side, you had really good execution, there and you had a nice upside from this our estimates for Q4 on the adjusted EBITDA line.
As we think about the year, what's embedded in the guidance on Opex is the current run rate. How we should think about it are you building in any increase in Opex later in the year as maybe work travel returns or do you think it continues to maybe come down a little more with some of your streamline comments.
I think implied in the guidance.
Our guidance itself is continued streamlining maybe not on the scale that we've done in the past couple of years Mike.
We are consciously Inc.
Vesting in businesses, we think have the highest growth potential cloud being the most obvious but also you've heard on the call today. We've exited a couple of businesses August one and so you get the opportunity to even with investing in the businesses that we want to move forward with we've got now and do you think it takes some expenses out as well as the year progresses.
Okay and last question, maybe on a past line just based on your comments with more leverage as the year progresses as debt.
How we should think about seasonality or just.
He is recovering and look at AT&T, putting on new subscribers, just thinking about kind of slow steady growth throughout the year on the top line yeah.
I think suffice it to say so we've returned now where we're giving our annual guidance for both revenue.
And EBITDA, but I think suffice it to say, we think the slope of the line.
For the year will be higher in the second half.
As some of these programs that have prescribed to get traction on the second half of the year. So yeah as I'm thinking about the business, we're really expecting it to ramp in the second half of the year as opposed to the first half.
Right I'll jump back into queue and that's the secret to success this year.
Thank you Mike.
Okay.
And next we'll go to Mike Latimore from Northland Capital markets. Your line is open.
Right, Yeah, Thanks, a lot and yeah, congratulations Jeff great to hear.
Thank you.
So I guess just starting on the cloud business.
Can you give a little more detail around AT&T. What did you see anything you talked about you know new Onboarding features in the fourth quarter, helping I guess.
You know, maybe just sort of qualitatively what ways on host that and then are there any other initiatives this year that.
Our important att's growth, whether it's your own sort of technology initiatives are kind of specific promotions that might occur there.
Yeah, what I'll say on the AT&T and this is true for many of our cloud customers as we implement our new program. It's an iterative process of working with the carrier and the way that their systems work and integrate to the.
Interact with their consumers and what we're starting to see that has provided encouragement for us is that we have changed and streamlined the number of steps required for a consumer to participate on electric trial work to sign up for consistent service itself or AT&T cloud and on.
It has absolutely impacted.
Our trajectory of growth.
Associated with the launch of new devices.
I don't have an absolute preload from <unk>.
AT&T cloud solution.
And we only saw that intermittently in 2020.
As a result, we feel like we don't have a solid plan day.
Nation as well as our execution platform that will be applied to future devices, both Android and iOS as they launched within the agency portfolio.
Okay.
Great.
And then I guess on Horizon can you give any color on the subscriber growth Youre seeing there and then maybe.
Whether it's a perfectly Verizon the hardest generally remember prepaid category, how important might not be disappearing.
Well a couple of things I'll say there first off.
We do anticipate continued growth of the subscriber base within Verizon as we have seen in years past, including certainly 2020.
Having said that there is a muted effect on our revenue growth as it pertains or as it correlates to subscriber growth specifically in the Verizon circumstance due to the nature of the accounting approach that we have for that contract.
Essentially contemplates the expectation of growth over the life of the contract and flattens the revenue impact of that over time.
So we expect subscriber growth.
We see an additional catalyst for growth.
Coming from the unlimited offer which truly is an industry leading offer the day provided to the marketplace that is just coming to market. So we're optimistic and bullish on that.
And as it pertains to prepaid as you well know.
Verizon is in the midst of.
Acquiring tracks on the transaction not yet complete.
But as I've said in the past we are bullish on the opportunity for horizon, our largest cloud customers bring the tracfone business as well as the cloud business.
And their umbrella.
And at this point, it's too early to comment on that since that transaction is not yet complete.
Got it and then.
You mentioned.
The potential for more.
You said cloud customers, specifically on it and there's.
Messaging as well on the mix there.
Generally kind of a tier one service provider category.
Well as you see we're going to see them in a variety.
Shapes sizes and scales.
The circumstance that we just introduced with Allstate is a beginning of a new penetration are a step further in the direction of <unk>.
The insurance industry, and we don't anticipate that they would represent the volume or the potential of a tier one carrier, but there are tier one carriers around the globe that have yet to adopt their own personal accounts cloud strategy and we are certainly pursuing those opportunities in the market.
It's also true in the messaging arena.
Globally, there are a number of opportunities both in core email as well as advanced message or Rcs based messaging that we're in discussion point.
We hope and expect that we will introduce new clients throughout the course of 2021.
Okay. Thanks.
Thanks, and good luck to share.
Thank you Mike.
Okay.
Oh I'm not thrilled go to Richard Baldry from Roth Capital. Your line is open.
Thanks could you talk about sort of debt.
The challenges on how you're working around the challenges on lots of major marketing events like mobile World Congress.
I think people take work from home per per granted that people can do that but marketing I think it's a bit different. So how are you I know that the number of care carriers as you know pretty well known but how are you feeling about getting to them with messages new offerings things like that.
Net something that's working well.
Sorry on a few quarters and a change status.
Yeah, Rich I would comment to say that it's still a learning process, but it's something that we pivoted well into 2020.
To not expense that would be back from Barcelona, mobile World Congress or at CES in Las Vegas, and as such we've created a whole series of campaigns and programs to help place our products and value propositions in front of the right customers and targets that we believe will find value in our <unk>.
<unk> started with solutions that we have promoted four our special suite of products.
And our initial campaign, there have generated new opportunities and new clothes business. We've taken similar approaches to our core messaging, our advanced messaging into our cloud offering so it becomes a multifaceted marketing campaign and outreach.
On to attract new prospects and customers that might have otherwise been accomplished at a trade show.
It is a different set of tools different set of skills, but we have a great marketing organization who's made that digital pivot.
Quickly.
Yes, we're still learning.
And customers are still responding in a different way.
We all know that no longer have to educate anybody on how to hop on a zoom call. Microsoft teams call and they are all quite used to having interactions dialogues about even potentially negotiations from both media and we've embraced them as well and have never missed a beat due to our it infrastructure to be ready to interact with our customers.
Hi.
Thanks, and I'm curious, if you're going to continue to support existing Iot customers partners over some intermediate term range do you think there's an ability to maybe spend macro powered into a different entity and not focused there just trying to monetize it or do you feel like that'll just.
Uh huh.
And in fact, the business long term.
I would say the scale of the implementations in the customers, we're serving today on the Iot Arena never reached.
Anything that would significantly material.
As such.
By and large participate just supporting those clients as they are in place if new opportunities create themselves or because you are themselves to help monetize the assets and the relationships. We have in place, we'll certainly entertain that.
But again the scale of that business is something that we.
Never reached a certain level that it was particularly material.
Okay, and lastly, it would be on 'twenty 'twenty, one, it's obviously a pretty chaotic year for your end customers in the carrier side.
Sort of curious if you have any sort of.
30000 foot view of their marketing efforts are going into 2021 versus 2020, and I think as long as they they have to drive the subscriber side right. So they had a pretty challenging on 2020 I'm. So sorry, I'm curious if you see you know.
Greater initiatives better focus on sort of a thought process around their ability to create demand generation improving in 2020 versus 21 from.
A high level.
Well at the highest level on what I mentioned in my comments is that they are very focused on slide <unk>.
Making that message clearer to the consumer as to what new capabilities and what features are available to consumers by virtue of being in a five day economy and public side your speeds available to them.
Things like unlimited cloud are clearly an example of that brought to market by Verizon.
But we're also seeing them attack other segments of the marketplace more aggressively you've seen plenty of articles recently about the attacks. After the enterprise market segment by a number of the players in the United States marketplace as well as those in Europe and in Asia.
And I do think that the subscribers are we moving their focus on growth.
Because subscriber retention has not been a problem per se.
And I think that it'll largely be on trying to differentiate their five new service from their competitors.
Great. Thanks.
You bet. Thank you.
Oh, that's true go to Jon Hickman from Ladenburg Your line looks like.
Yes.
Hi, Jeff.
Jeff I might have missed this but can you talk about.
What's going on with <unk>, and Verizon and AT&T are they starting to like marketed to consumers yet.
There hasn't been no announcements actually by <unk>, which has been the case for some time as it relates to the go to market plans for the Rcs based messaging network.
Can tell you is that we have continued to make great progress on preparing and Rcs Rcs based network to be introduced into the United States and we continue to hear from all the carriers in the U S on their commitment and their prioritization of Rcs as the next generation of messaging within the U S. I'll have to leave it to them. However, tell you that.
Fans are in go to market.
So is it available anywhere to consumers from the United States yet.
We didn't have not been publicly launched.
No there has been no public launch.
At this point.
Okay.
Do you have any you don't have any visibility into when that might happen.
That's really up to the participants on today's joint venture and.
And we have not.
Taking a lead position to communicate anything with regard to that and it really is up to them who comes up share with the marketplace with their plans are.
Okay, and then on accounting question.
Now that you're no longer like focusing on Iot.
What was the revenue number that guidance.
That's going on.
Not generate from last year into true 21.
'twenty time.
Iot is a pretty small number.
In 2020, and probably would not have been a little higher but still in the single digits.
Yes.
Single digits.
Millions in 2021%.
Had we kept in the business book.
So like less than $5 million.
Yes.
Okay.
I think that's it from me.
Okay. Thank you.
Now I'll turn it back to the company for closing remarks.
Thank you operator, and thank you everyone for joining us today.
Look forward to updating you again next quarter. Our call has concluded have a wonderful day.
Thank you that does conclude our call for today. Thank you for your participation you may now disconnect.
Yes.
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