Q2 2021 Digimarc Corp Earnings Call
[music].
Afternoon, and thank you for participating in today's conference call.
And the call over to Chief Legal Officer, Mr. Bob Chamness, Sir Please proceed.
Welcome to our Q2 conference call Riley Mccormack, our CEO, Charles Beck, our CFO and Jim price, our Chief rebel and revenue officer are with me on the call. Today, We will provide a review of Q2 financial results and an update on the business followed by a question and answer.
And your forum, we have posted our prepared remarks in the Investor Relations section of our website and will archive. This webcast there.
Before we begin let me remind everyone that today's discussion contains forward looking statements that have risks and uncertainties.
Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially Charles will now comment on our Q2 financial results.
Thank you Bob and good afternoon, everyone.
And the Holy Grail, and 2.0 program. The project is centered around phase 2 semi industrial test, which is the next step and the Holy Grail 2.0 roadmap and the.
The contract is expected to contribute nearly $1 million of bookings and revenues during 2021.
Due to the timing and structure of this contract there were no bookings recognized and the second quarter.
As we promise and the last earnings call. We have again included a table within the script that shows irrelevant booking and revenue details under both our prior and new market segments.
Gross margin for the quarter was 67% consistent with Q2 last year service margins improved 1%, while subscription margins declined and 1%.
Operating expenses for the quarter were $19 and $7 million and compared to $11 and $9 million and Q2 last year.
The increase is almost entirely related to non-recurring costs of $7.5 million incurred during the quarter associated with the separation agreement, we entered into and April with our former CEO as well as severance costs incurred for organizational changes we've made in June.
The $7.5 million is comprised of $5 million, a non-cash stock based compensation expense and $2.5 million of cash related expenses, most of which will be paid out over a 2 year period.
Excluding these on recurring cost operating expenses increased 2% to $12 and 12.
$12.2 million, reflecting higher consulting and legal costs, partially offset by lower recurring compensation costs.
We anticipate operating expenses for the third quarter will range from $12 and $1 million $12 and 6 million.
Net alot for Keiji was $15 and $4 million.94 per common share versus a net loss of $7.5 million or 62 cents per common share and Q2 last year.
Excluding the $7.5 million, a non-recurring costs I referenced earlier net loss of $7.9 million or 48 per common shares.
And does not mean that we're not focused on 2020, 1 at all and stay tuned.
I had mentioned and the last call I was going to have Tim price, our CRO and Kelly Haggerty, our CPO and today's call to give you all some color on how they are building, our 2022 and beyond the engine.
As you might have noticed during bobs introductory remarks, Tim is indeed with us today and a bit I'm going to turn the call over to him. So he can give you an update on our go to market build Kelly. However is no longer at the company. He has resigned for personal reasons.
I got to know Kelly from the Board and then was fortunate enough to overlap with them for a brief period of time, when I became CEO and I think the world with Kelly as a professional however, I think even more highly of him and the person and wish him all the best going forward.
It's been available as a part time consultant as we finish up our CTO search and his input has been invaluable.
I also wanted to give a big shout out to the entire product team led and interim by Chris shared it.
We are in the midst of a transformation to a product company as a stepping stone to becoming a true solutions provider and Kelly's departure, while handled and the most professional of ways frankly did not come at the ideal time, but.
But setbacks happen Brazilian organizations overcome those setbacks and use adversity to bond and get stronger. So like I said I want to give a big shout out to the entire product team for making fantastic progress and getting us to where we need to be all of your hard smart teamwork is noted and it's appreciate it.
We also executed a reorganization towards the end of June towards the end of June breaking down silos and streamlining our company, we're moving non aerodynamic corners from a racecar.
Marketing as and when combined with sales and already we are seeing the wonderful synergies that come from having a single go to market team.
We moved our professional services group as well as our education and training team to research and thus platinum plating the tip of the spear by uniting these 3 key components and 1 functional group.
We moved our infrastructure partner relationships to product uniting and 1 place the natural build by partner decision that product and needs to be driving.
When we find our CPO engineering will be reporting to him or her product and engineering don't exist 1 without the other and for this company to be truly scalable they need to have a direct line without any side types that fact will not be clearly codified.
And and finally as you all saw in yesterday's press release and you also need debt has joined the executive team as VP ESG engagement and corporate communications and she.
She will be driving our ESG strategy from the executive level, ensuring our commitment to ESG is not a passing fancy, but quarter to our very DNA <unk>.
She will also being in charge of all stakeholder engagement and corporate communications, including among other stakeholder relations Investor Relations.
In addition to the reorganization, we also reexamined all aspects of our sustainability initiatives as if it were day, 1 holding and Offsite can make sure. Our actions are driven by the careful mapping of all the stakeholders and our strongest influencers.
This during this 2 day intensive process, we came and the obvious conclusion that there are many wonderful benefits. Our technology is capable of providing the world and addition to the 1 front of mind for most of your improving plastics sortation.
While we continue to make great progress on plastic sortation, both from a technology as well as a business perspective, and our confidence has increased and increase from already high levels that we are indeed, the solution to this global problem, but the off site showed us as we are capable of doing so much more while at the same time, we're capable of doing so much more will it take time and also improving.
Plastics our station.
And thus we are now embarking on doing that and so much more.
Importantly, these additional benefits are directly related to and additive to our existing work and plastic sortation.
We are not reinventing the wheel, but strengthening the wheel to provide additional benefits.
New path, we are chartering and sustainability is and the result of a loss of focus but instead the exact opposite by increasing our focus and asking ourselves. The question. We are asking and company wide what is finite and we're augmenting the solution and we will provide and thats the value we will add.
We have also embarked upon a new methodology for meetings and 360 communications laser focused on getting to and then maintaining companywide clarity on where we are going and how we're getting their tech is fast tech of Starwood and thus.
Thus tech requires being nimble and being nimble and requires companywide cross functional clarity declined amount and so we will climb and this is table Stakes and we are ramping up.
Finally, we will be having our first annual our first ever annual product strategy meeting in September where product will tell us not based on sales our Rss feeds but on the real the research and the results and data. They are now finally empowered to provide where they believe we should be spending our most precious precious resource engineering time and as an executive team. We will then place.
Those bets.
As a side note and you might have noticed we have stopped and the tagline the barcode of everything while we will eventually get to everything if we don't start with some things we will be the code of nothing.
I want to be clear the height of amount and we will climb has not changed and the slightest if anything and it's grown taller what has changed however is by tackling the climate stages, we will not only ascent and mountain and a more scalable higher margin way, but perhaps as importantly, we will be much faster and putting real distance between us and base camp.
And so with the conclusion of the annual product strategy process, but I don't want to understate the work and we'll always take declined to the levels. We are targeting the new engine will be dropped and the race car and we can focus less on transformation and more on execution.
We will be able to begin to harvest the years, the fruits of years of World class World changing work finally unleashed by our taking the time to re imagine everything and plan our path not reactive distractions.
I want to turn the call over to Tim now who will discuss the work he and his team are doing either go to market strategy.
Yeah.
The first thing we've done is created 2 core teams within sales sales enablement and sales execution visitors given this greater focus and will allow us to iterate and grow faster or sales enablement team consists of sales engineering subject matter experts customers success and sales development reps.
Our sales and execution team is comprised of our quota carrying team members and is broken into 3 core teams or enterprise sales team channel sales team and digital media and sales.
<unk> media and sales as a new group leveraging what we used to refer to as our media business, which includes our digital images digital documents and piracy intelligence product lines Beast.
Besides having real unexploited revenue generation promises a standalone. This is also a strong crossrail opportunity build therefore, our enterprise sales team.
The next thing we've done and as we move from from a global sales quota and commission to individual quotas and commission. This will drive greater individual team member accountability and more predictable results and.
Next we have implemented a forecast Friday call to track all sales opportunities and it is attended by a cross functional team, including executives. This leads to increased visibility and accountability next we have we are holding quarterly business reviews qbr's with each sales rep to go over their accounts.
And prospects to help poor C and remove blockers and deliver predictable revenue.
Sales and marketing teams have both and train and Miller Haim and strategic selling methodology and large account management processing training will occur in queue for this year at our annual global sales and marketing meeting.
In addition, we have trained and certified our sales engineering team and demo and to win a world class demo and presentation skills training module.
Where do and product and bananas are currently we are working with product and finance on new pricing models no discounting our goal state, which is a growth day for great companies has to be easy to buy from easy to sell for our pricing must make sense and simultaneously maximize our value at.
Next we are engaging agencies for enhanced messaging positioning and go to market assistance, we need loud and proud messaging for our vision solutions and products.
Lastly, we are fully re imagining the national retail Federation show and January 2022, 2022, including speaking engagements more clarity around our core messaging and and much more focused on customer and partner events and meetings.
And more importantly, trusting your teammates Iot, each fully and completely though and the belief will pay off for us many times over in the coming quarters.
As I started off this call by saying the planning we are now close to finishing up Mike strike zone is boring and like all of you I can't wait until we are spending these calls discussing the real progress, we are making and the market not internally.
But all of the above and addition to a lot of other important initiatives and accomplishments too numerous to mention on this call are the foundation upon which all of our future progress will be built as an executive team we stress the organization because there was a lot to do with the open and infrastructure to take all the time necessary, but not 1 second more and and responded wonderfully.
I want to thank all my teammates are being such amazing dual trackers and focus not only on the why not and letting us but also the here's how we're setting up the foundation for our next many years and while of course, we will always be tweaking and optimizing the engine, we are close to putting away the blueprints and starting our test drugs.
And we're building something really special here at this company something that we all do we all realize outsiders will only believed when we start demolishing lab records as always judge us on the judge us on the results.
1 last thing before we open the call up for questions I do want to alert everyone. We'll be filing a form S..3 with the SEC shortly to register the shares TCM strategic partners bought last September and this is a normal process that will allow these shares to be freely tradable once the 1 year lock has passed.
The truth is however, I have zero intent of selling a single share anytime soon or much more importantly anywhere near these levels. There's just too much good yet to come and like.
Like our 2 previous calls we'll be taking questions from anyone interested in asking 1 operator.
And asking questions.
Star 1 on your telephone.
Your question. Please press the pound key.
Please standby, while we compile the Q&A roster.
Okay.
Our first question.
And with van <unk> with Craig Hallum capital.
Hey, Jeff.
Hey, How's it going and this is actually Aaron on for Jeff.
And thanks for the thanks for taking my question first question I had for you alluded to becoming the barcode and something and I'm looking at other avenues, Besides classic expectations and interested in a little more color. There. What are you seeing progress anything top of mind couple of areas. If you could give any more color.
Absolutely after avs area, and we happy to share that with you to Aps's annual product strategy.
And so.
Historically.
We have been trying to figure out exactly how best to use our technology based on where customers have been taking us that is changing we are a product company. We are becoming a solutions company, we need to lead and product due to time to perform that research and collect the data and tell us where we need to be gone. So obviously I mean, it gets opened a spoiler here to stay.
And the ability we will be 1 of those product lines.
But stay tuned after avs will be more than happy to share with you guys exactly where we're going from a product perspective and.
And in addition, as Tim alluded to also encourage you to come to and our App Youll see a lot more there.
Fair enough fair enough and another question for me.
I'm just curious on that.
On any updates and the retail side of things.
Specifically around the relationship with Walmart any any color you can provide there.
Obviously, we're not going to talk about it and customer in particular, but as I said and the last call Wal Mart is a wonderful forward looking company.
If you look at the overlap of where they want to go and whether you can provide there is a lot of overlap.
There is.
And a major retailer that we would want to be close to a Walmart is that retailer. So we're excited to continued and belt that relationship.
And then 1 more for me if that's okay.
Curious you mentioned, the and bookings aren't where you want them to be at the midpoint here, but so there's a lot of room left and the year just curious what it takes to get to that at triple digits.
Booking growth.
And we talked about previously what do you see happening to get us there.
Closed deals.
Fair enough is enough alright cool. Thanks, that's it from me Thanks Ed.
Our next question is from and Jeff Bernstein with Cowen.
Hey, good afternoon.
Just wondering if you've got if you have an update at all on.
Laser utilization and and whether that looks like you're going to be able to do that.
So we can absolutely do it right and Theres no question about whether we can do it. The question is where does that fit and our product roadmap again stay tuned for avs.
And again going back and appoint the fastest way to lead based scan the fastest way to put real distance on a bookings basis between where we have been and where we're going is to focus right. There is anything that is not made by hand are not made by mother nature and we can do the.
The question is where do we start and that has to be driven by research and not.
Wins, not customers, saying, hey, can I wait us out in front of your face and get you to pivot the whole engineering organization to go follow that so theres nothing we can do at least Theres nothing I don't believe and we've come across we can do besides weather.
Made by my mother nature of it day by hand.
And there is a lot of ways to.
Better code Red laser ablation is just 1 of those ways, whether that will be and area of key focus for US. We'll let you know after Aps.
Got you, Okay and then.
The potential for the significant bookings growth. This year was in part driven by sort of fallout from COVID-19 and supply chain weaknesses that that potential.
Customers had and I think produce some applications.
And felt were worthy.
And did some are going after.
Is that kind of continued are you actually getting some ideas from customers that you think are going to survive.
Aps filter.
And just give us a little bit of color on that.
So a big part of the avs filter and what product areas and voice of customer right. So we.
We might be the 230 smartest people and the world, but if we just stop our ideation with US we're going to fail. So theres a lot of research and they talked about research not reach our research internal and <unk>. Its research with the World were 230 people. There were 7.6 billion people, we got to sell to.
Yeah. So we're not going to talk about any customer all I'll say is.
We have a lot of value to add to a lot of different customers I would say something that maybe I'll turn it over to Tim and talking about the pipeline and Japan.
It seems like it's waking up 6 there are some great opportunities there, but what's really important Jeff is closing deals not not pipeline.
Yes.
And our teams or anything and I want to say and in Japan and general.
And I would say day to double down on the EPS strategies that that's going to be very illuminating and very constructive for our go to market. There. So I do think that will increase as a result of our EPS.
Thank you.
Thanks, Jeff and.
And again that is 1 of you would like to ask a question and at this time.
Our next question is from Robin Knipp with it.
Great.
Thanks, Steve Rob and rally.
So I felt like I was listening to the field of dreams introduction and building build it and they will come.
Lastly, my question Robin.
Robyn and I don't know how to pick it up and thank you I think.
[laughter] taken it and a good way.
So my question is actually a hard right turn from.
From a plastics more towards global packaging I had the occasion yesterday listening to fill Stafford and John Dwyer and West rock talking about the opportunities there and the fact that global packaging is a 450 billion dollar business today.
And yet 5 years from now nearly 20% of the package and it's gonna be targeting.
The anti counterfeit market now.
To me this is a no brainer for us, but how do we get there.
I'm trying to decide when and how to answer that question, Rob What I wanted to say first of all and stay tuned for Aps right Avs Big stepping stone and where we're going from there.
And that delivers the product and.
And in general and leaving alone any specific product line I think you heard from Tim and how we're going to get there right. Tim is going to take what product doesn't get it to market and yet.
And the bookings but.
Interesting inside Robyn.
So just as a follow up and when I think about invisible digital.
Watermarks versus the QR code and everybody sees a QR code and they know how the QR code can bring our call to action there, but if they don't even see an invisible watermark on upon and object how do we get that same called action.
So when you're talking about for product authentication or are you talking about just in general from consumer engagement.
Both actually.
And we're talking about counterfeit and verification counterfeit.
Deterrent when we're talking about.
The pursuit of finding more information about our product talking about just getting the whole story out there about a digital watermark. That's invisible and then they cannot I think we have to be doing a better job of telling the story.
Bruce We did you Mark yes, Sir.
Yeah. So a couple of ways to answer that right and does not we will be the solutions provider to book.
Let me parse your question a couple of different ways. When it comes and product authentication and brand protection that is really up to the customer whether they wont convert over correct and so there's plenty of ways to do call to action and you don't need to say scan. This QR code or even have a QR code would be the call to action you can put in and I would call to action and they are saying.
And as Jim and George there's ways to use QR codes complimentary to us and I don't want to get too far down this path I'm not worried about it when there is a specific application because it's sometimes it's not having a universal call to action that provides a lot of value okay.
On the brand protection and product authentication when Youre talking overall consumer engagement I'll give you my personal belief thesis to be verified and to the term we use internally here, meaning it's just a belief I can't wait until product and tell me what the truth is I don't think consumer engagement Standalone broad consumer engagement is really compelling use case for our technology.
Until we get and much more ubiquity.
And we always called it actually there was a net theres a native reader again thesis to be verify and it could be 100% round is 1 person's opinion. There is $7.6 billion people was opinion matters a lot more than mine because they are the ones with the money to buy our product.
I believe that.
And consumer engagement Standalone abroad, QR does a great job, we don't need to go out and say, we have no competition and a big believer and Co-opetition and I'm a big believer there are sometimes better solutions for specific it's all been whatever service company has that's okay. There is plenty of room left for us.
Fair enough. Thanks, appreciate your time and Bill and Rob you dominate that 1 little postscript on that that's also true advantage of being a platform right where.
And the beautiful thing is if we architect our products and our solutions correctly, if consumer engagement and a nice to have that can add on okay. Right. So even take sustainability range. So if we're solving real problems and sustainability and and there is a way to get consumer engagement to help at the front of that funnel okay.
Right, but standalone consumer engagement and.
And just don't see it again and thesis to be verifiable no a lot more when product tells me I told all of US what the research and what the truth is.
Fair enough. Thanks.
Thanks Robert.
Your next question is from Ari Blaine.
Yes.
Hi, guys. Thanks for taking the call.
Right Riley and a previous call you had mentioned.
Is that the company has sufficient cash and did not need to raise any additional capital.
And I was just wondering if that's still the case.
And it really to prevent any further dilution.
Sure I don't believe I said that on the call are you talking about the press release, they put out before I joined the board.
Yes.
Yeah, So obviously I'm not going to update.
I spent about 10 minutes last call talking about the utility of giving guidance out.
Certain number of quarters right for various reasons right, we're a small company.
There's so many ways that customers can choose to engage with us and delight enterprise license or et cetera.
Tell you this and so the comment you're referring to I made before I joined the board as a private investor any comment I'm, making now as CEO as the board member.
And has a lot more of a forward looking guidance to it I will tell you that of all of the things that keep me awake at night here, our access to capital or need for that capital and not worry about that that is a net of the bridge if we need to cross we will cross it and just.
Not something that.
But I think about I mean, there is.
Multiple different ways that plays out right. So there is as you know we have a 100% build basically a 100% contribution margin and our business. It doesn't take a whole lot of new business to get our to get this company and lead to a much reduced.
Cash burn, let alone to breakeven or profitable right. There is other ways to raise money outside a dilutive.
Deals.
And then lastly, the third option is.
Essentially would there be and need to raise to sell shares and the future share, but not any time soon and after we've proven a lot where I believe the stock price would be a lot higher I and the single largest shareholder and this company.
Dilution, we are a real issue I'd be thinking about it I'm not worried about it okay.
Okay.
Excellent and the second question and I'm happy you.
In regard to some of the deals that didn't consummate this quarter are those deals potentially still on the table for the coming the next few quarters.
Absolutely.
Great.
And as I said I said the sales organization put upon us.
And if they didn't just.
And they didn't give up and we didn't walk away.
Understood.
Thank you very much guidance.
Thanks Eitan.
And your next question is from party.
A private investor.
Hi, Robyn.
They already are you done.
Got it.
Can you enlighten us a little bit about youre, having brought Ravi onboard and.
Where do you see them being utilized.
Oh, yes.
So.
Thrilled absolutely thrilled to have somebody and Robin's calendar, both raw intelligence character and.
And also here this is.
His professional visibility.
Honest day rate, but he has a very high profile executives.
And the tech industry is a thought leader.
As a thought leader not just on the tech issues, but.
And workplace issues.
And 1 of the.
Early conversations and it was a it was a couple of them on the process. During the interview process to bring Robbie onboard and.
He said so many insightful things I always about 4 minutes and bye.
Original conversation with them and I was giving a brief background.
And what we do and he said something that was so brilliant and cycle.
4 minutes of talking to them, if you needed to be on our board Fortunately.
He agreed eventually.
But he is he's he's a thought leader in this space is extremely well connected <unk> got wonderful introduction and so you can make for us as a company.
He has time to give to us.
Over the last day, and I'm going to say this.
Broaden out and behind our IP beyond <unk>, we are blessed with an incredible board.
We have a world class Board, we haven't board much better than the company size. We are today now we're going to grow into it and we're going to prove them right and for taking these early bets on us.
But there is so much that we ask about and all of our board members and what's amazing is not only do they deliver they come back and say what else can we be doing so Ravi is just the latest in addition to what has been absolutely fantastic growth.
As he ever been on our board where he is.
The company ended up.
Acquiring that company.
I have no idea.
Okay.
Yes yesterday's conference.
And with West rock and everything.
Very excellent.
Do we ever get to know how many people are actually listening to that.
And what kind of results or are we seeing from it.
You're asking us to share that with you.
Say again.
But when we get to see that absolutely and you're asking us to share that with you.
Yes, hi.
And how many people are actually watching that listen to it and is it.
<unk>.
Absolutely productive and wonderful incredible engagement and Thats why we are having I mean, Tim do you want to talk about all we're doing with our webinars and that whole process.
Yes, it's a great strategy and especially in today's marketing world and getting mind share from people and.
And no more white papers and blog posts and we wanted to give people an experience and.
And that webinar, you listen to yesterday with 1 of our channel partner sales leaders still and West Rock is a great example of that interactive.
Spirit and learning about experiential learning.
And we have several other webinars that are on our website at and there's going to be.
Covering all the various topics, especially come out EPS not only topics that are relevant and our industry.
Topics and around our product sales.
Very productive as you probably know everything is measurable and sales and marketing and these days vis vis sales force automation and marketing automation solution. So we're watching that.
Very very closely and debt.
And we're doing that.
And those activities have seen our lead generation and so yeah. Most most most definitely looking for those to be productive and we will rinse and repeat all day and once we find.
Good topics.
Great.
And last thing is I've been around long enough that I haven't enjoyed.
Moving dividends from debt remark and I was just wondering if you have any timeframe as to when we might see.
Experience getting a dividend again.
When we are profitable.
And I actually.
Actually flow that would kind of said flippantly actually dividends and a horrible inefficient use of capital right why do the double taxation of dividends dividends.
The real owners of stocks you wanted to and wanted to buy back stock. So and every single share that they own is a higher and higher percentage of the company every time, we redeploy the capital to reduce the share count. So actually let me answer that question I was being a little flip and I think we're profitable and the answer is probably never youll get a dividend, but maybe.
Let us first focus on getting reducing the cash burn and the next step or get to breakeven and then we'll get to profitable then we can retire and kind of stock and then we get cross average.
Sounds terrific.
Thanks, so much.
Thank you.
Yes.
At this time. This concludes our question and answer questions and I will now turn the call back over to Riley Mccormack Sir. Please proceed.
Well. Thank you very much everybody for your time.
And stay tuned and we'll be back.
Thank you.
This concludes today's call. Thank you, ladies and gentlemen for joining us today for our presentation you may now disconnect.
Okay.
[music].
[music].
[music].
Good afternoon, and thank you for participating in today's conference call and I'll turn.
And the call over to Chief Legal Officer, Mr. Bob Chamness, Sir Please proceed.
Welcome to our Q2 conference call Riley Mccormack, our CEO, Charles Beck, our CFO and Jim price, our Chief revenue Officer are with me.
On the call today, we will provide a review of Q2 financial results and an update on the business followed by a question and answer Forum, we have posted our prepared remarks in the Investor Relations section of our website and will archive. This webcast there.
Before we begin let me remind everyone that today's discussion contains forward looking statements that have risks and uncertainties.
Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially.
Arnold's will now comment on our Q2 financial results.
Thank you Bob and good afternoon, everyone revenue from the second quarter was $6.3 million down 3% from $6.5 million and Q2 last year and service revenue decreased 3% from $3.9 million $3.8 million, reflecting lower government services due to timing of program work with the central banks, partially offset and.
And by higher commercial services related to Holy Grail, 2 <unk> projects.
Subscription revenue decreased 5% from $2.6 million to $2.5 billion, reflecting lower revenue from digital media customers.
Revenue from government customers was $3.8 million down 5% from $4 million and Q2 last year, reflecting the timing of program work with the central banks for.
For the 2021 fiscal year, we still expect revenue from the central banks to grow modestly from fiscal 2020.
Revenue from commercial customers was $2.5 million essentially flat with Q2 last year.
Commercial services were higher due to new Holy Grail, 2 pointed out and project work offset by lower commercial subscriptions from digital media customers.
Total commercial bookings were $2.3 million up 13% from $2.1 million and Q2 last year the increase in bookings reflected new bookings and several areas of the business.
During the quarter, we signed our first major contract associated with the Holy Grail..2 pointed out program. The project is centered around phase 2 semi industrial test, which is the next step and the Holy Grail to point out roadmap.
Contract is expected to contribute nearly $1 million of bookings and revenues during 2021 due.
And due to the timing and structure of this contract and there were no bookings recognized and the second quarter.
As we promise from our last earnings call. We have again included a table within the script it shows relevant booking and revenue details under both our prior and new market segments.
Gross margin for the quarter was 67% consistent with Q2 last year service margins improved 1%, while subscription margins declined 1%.
Operating expenses for the quarter were $19.7 million compared to $11.9 million and Q2 last year. The increase is almost entirely related to nonrecurring costs of $7.5 million incurred during the quarter associated with the separation agreement we entered into in April with our former CEO as well and severance costs incurred for organizations.
Changes we made in June.
The $7.5 million is comprised of $5 million of noncash stock based compensation expense and $2.5 million and cash related expenses, most of which will be paid out over a 2 year period.
Excluding these nonrecurring costs operating expenses increased 2% to 12.
$12.2 million, reflecting higher consulting and legal costs, partially offset by lower recurring compensation costs.
We anticipate operating expenses for the third quarter will range from $12.1 million to $12.6 million.
Net loss for Q2 was $15.4 million or <unk> 94 per common share versus a net loss of $7.5 million or <unk> 62 per common share and Q2 last year.
Excluding the $7.5 million of nonrecurring costs I referenced earlier net loss of $7.9 million or <unk> 48 per common share.
We ended the quarter was $61.1 million in cash and investments.
We used $9.6 million of cash and investments during the quarter, which included $2.4 million of cash to repurchase shares and satisfaction of required tax withholding on the stock awards associated with the separation agreement with our former CEO.
Our application for forgiveness of the $5 million Paycheck protection program loan and still in process of being reviewed by the small business administration, we do not have any visibility on when they may complete their review.
For further discussion of our financial results and risks and prospects for our business. Please see our form 10-Q that we expect to file shortly.
Riley and Tim will now provide a business update thanks, Charles as I mentioned last quarter across the whole company. We are questioning every assumption and being patient to come up with the right answers good and.
And this is the way it has always been done are no longer answers we need to accept.
Nothing has shaken our belief and following very simple facts and 2022 and beyond will be much better if we take the time and do things right today and acting with the wonderful freedom to plan and not react.
And this is our number 1 priority and where we as a management team and we as a company are spending most of our time and want to use the bulk of this call discussing what exactly that means.
And I fully appreciate there are some investors who might buy and the story, but there are no shortcuts to repeatable and scalable. Moreover, every call. We do for the next decade will bear the results of our Oregon and organizing ourselves today.
For those investors, who get the results are a function of input and process I am happy to provide this color.
And not only is it by far the most important thing we're doing right now, but its impactful effect our shared investment for years to come.
Before I get to that I want to make clear that we still believe that as we are building and getting ready to drop the spacex and into the racecar. Our existing engine is going to deliver strong results for 2021.
We fully realized our first half bookings did not reflect that back all I will say on this.
I will say on that is the year that you had done while we are much more focused on 2022 and beyond that does not mean that we're not focused on 2021 and I'll stay tuned.
And I mentioned on the last call I was going to have Tim price, our CRO and Kelly Haggerty, our CPO and today's call to give you all some color on how they are building, our 2022 and beyond and.
As you might have noticed during bobs introductory remarks, Tim is indeed with us today, and a bit and I'm going to turn the call over to him. So he can give you an update on our go to market build Kelly. However is no longer and the company. He has resigned for personal reasons.
I got to know Kelly from the Board and then was fortunate enough to overlap of him for a brief period of time and <unk> CEO and I think the world with Kelly as a professional however, I think even more highly of him and the person and wish him. All the best going forward. He has been available as a part time consultant as we finish up our CTO search and and.
And what has been invaluable.
I also wanted to give a big shout out to the entire product team led and interim by Chris shared it.
We are in the midst of a transformation to a product company as a stepping stone to becoming a true solution provider and Kelly's departure, while handled and the most professional of ways frankly did not come at the ideal time.
But setbacks happen Brazilian organizations overcome those setbacks and use adversity to bond and get stronger. So like I said I want to give a big shout out to the entire product team for making fantastic progress and getting us to where we need to be all of your hard and smart teamwork as noted and its appreciated.
We also executed a reorganization towards the end of June towards the end of June and breaking down silos and streamlining our company, we're moving non aerodynamic corners from a racecar Maher.
Marketing is and when combined with sales and already we are seeing the wonderful synergies that come from having a single go to market team.
We moved our professional services group as well as our education and training team to research and thus platinum planning the tip of the spear by uniting these 3 key components and 1 functional group and.
We moved our infrastructure partner relationships to product uniting and 1 place to the natural build by partner decision that product and needs to be driving.
When we find our CPO engineering will be reporting to him or her product and engineering don't exist 1 without the other and for this company to be truly scalable they need and a direct line without any side test that fact will now be clearly codified.
And then finally as you all saw in yesterday's press release. When you also need and has joined the executive team as VP ESG engagement and corporate communications, she will be driving our ESG strategy from the executive level, ensuring our commitment to ESG is not a passing fancy, but quarter to our very DNA if.
She will also be in charge of all stakeholder engagement and corporate communications, including among other stakeholder relations Investor Relations.
In addition to the reorganization and we also reexamined all aspects of our sustainability initiatives as if it were day, 1 holding and Offsite can make sure. Our actions are driven by the careful mapping of all the stakeholders and our strongest influencers.
And this during this 2 day intensive process, we can't be the obvious conclusion that there are many wonderful benefits. Our technology is capable of providing the world and addition to the 1 front of mind and most of your improving price expectation.
While we continue to make great progress on plastics sortation, both from a technology as well as a business perspective, and our competencies and increase and increase from already high levels that we are indeed, the solution to this global problem, but the off site showed us because we are capable of doing so much more while at the same time.
Moving so much more relative to same time and also improving plastics are patient and thus we are now embarking on doing that and so much more.
Importantly, these additional benefits are directly related to and additive to our existing work and plastic sortation and we are not reinventing the wheel, but strengthening that will provide additional benefits.
New patent we are chartering and sustainability is and the result of a loss of focus but instead, the exact opposite by increasing our focus and asking ourselves. The question, we're asking and company wide. What you pointed out we are augmenting the solution and we will provide and thats the value we will add.
We have also embarked upon a new methodology for meetings and 360 communications laser focused on getting to and then maintaining companywide clarity on where we're going and how we're getting there tech as fast and tech of Starwood, and thus tech requires being nimble and being nimble requires companywide cross functional clarity declined amounts.
We will climb and this is table stakes and we're ramping up.
Finally, we will be having our first annual our first ever annual product strategy meeting in September where product will tell us not based on sales or Rss feeds, but on the real research and the results and data. They are now finally empowered to provide where they believe we should be spending our most precious precious resource engineering time and as an executive team. We will then place those bets.
Yes.
As a side note you might have noticed we have stopped using the tagline the barcode of everything while we will eventually get to everything if we don't start with some things we will be Lakota and I think.
I wanted to be clear at the height of the mountain and we will climb has not changed and the slightest if anything it has grown taller and what has changed however by tackling the climate stages, we will not only ascend and mountain and a more scalable higher margin way, but perhaps as importantly, we will be much faster and putting real distance between us and base camp and.
So with the conclusion of the annual product strategy process, but I don't want to understate the work and we'll always take decline to the levels. We are targeting the new engine will be dropped and the race car and we can focus less on transformation and more on execution.
And we'll be able to begin to harvest the years, the fruits of years of World class World changing work and finally unleashed by our taking the time to re imagine everything and plan our path not reactive distractions and why.
And I'd turn the call over to Tim now, who will discuss the work he and his team are doing on our go to market strategy.
Thank you, Andy and Hello, everybody over the past 4.5 months, we have embarked upon a journey of change most notably and intense focus on process and methodology and culture all.
All of which are essential ingredients for success in this case success equals predictable results and the ability to scale.
Per rallies earlier comment we have been thoughtful on our approach taking time to plan and exercising patience to get the right answers swapping out the engine mid range is difficult, but I know we are up to the challenge we must be very calculated and our approach we wanted to perfect the newly and changes and making sure that.
Every last mile and as the current line.
We are driving our internal sales and marketing systems to a whole new level, our system support and processes, yielding sales enabling functionality.
On top of our systems and processes, we have implemented a sales methodology, which is actually a company wide methodology Miller heiman strategic selling that now support and it's how we address and process and our sales engagements. This is for both new and existing customers. It is a common framework and.
Language, we all used to speak and efficient enabling and transparent.
I wanted to take a moment to callouts and key progress that we have made over the past 5 months.
<unk> that will get us predictable results and give us the ability to get scale progress that we will deliver success.
The first thing and again, it's created 2 core teams within sales and sales enablement and sales execution. This has given us greater focus and will allow us to iterate and grow faster and our sales enablement team consists of sales engineering and subject matter experts customer success and sales development reps.
Our sales execution team is comprised of our quota carrying team members and is broken into 3 core teams our enterprise sales team channel sales teams and digital media sales.
Digital media and sales as a new grid, leveraging what we used to refer to and our media business, which includes our digital images digital documents and piracy intelligent product lines.
Besides having real unexploited revenue generation promise as a stand alone. This is also a strong cross sell opportunity for our enterprise sales team.
The next thing leads and as we move from our global sales quota and commission to individual quotas and commission. This will drive greater individual team member accountability and more predictable results.
We have implemented and forecast Friday call to track all sales opportunities and it is attended by a cross functional team, including executives and this leads to an increase visibility and accountability next week, we are holding quarterly business reviews, qbr's with each sales rep to go over their accounts.
And prospects to help foresee and remove blockers and deliver predictable revenue.
Sales and marketing teams have both been trained and Miller heiman strategic selling methodology and large account management processing training will occur in Q4. This year at our annual global sales and marketing meeting.
In addition, we have trained and certified our sales engineering team and gender to win a world class demo and presentation and skills training module.
Working with product and finance currently we are working with product and finance and new pricing models no discounting our goal date, which is a growth day for great companies is to be easy to 5 brands easy to sales for our pricing less <unk> and simultaneously and maximize our value at.
Next we are engaging agencies for enhanced messaging and positioning and go to market assistance, we need loud and proud messaging for our vision solutions and products.
Lastly, we are fully re imagining the national retail Federation show in January 2000, 22022, including speaking engagements more clarity around our core messaging and much more focus on customer and partner events and meetings.
We have made great progress and short time that we are focused even more and where we are going we are putting the finishing touches on our really fast Tianjin and excited to produce the results as we like to say, let's win. Thank you and I'll now turn the call back over to Riley. Thanks, Tim as a company we've been.
On running the existing engine and part of it can be run something that will be important over the next couple of quarters as we fully get the new edge and up to speed and I want to be very clear here.
That doesn't mean, there isn't some amazing prospects for real company changing opportunities and our existing engine as I said on the last call. We are going and we're going to make this hot swap and such a way that if we didn't just tell you we're going to do it you wouldn't have known to the path and Tim and his team and collaboration and collaboration with the entire <unk> team have done an amazing job of keeping the lights on.
And while the whole organization has been planning how exactly it is we're going to shoot the lights out but.
But I do want to highlight something that has just been incredible to see and great Tech companies. So there's always a natural contention between maximizing today's results and setting oneself up to make tomorrow that much better harvest. Some now our harvest and more later and saying something I don't imagine a lever say again I strongly believe the most impressive thing about this quarter from a sales perspective.
As the deals we didn't close deals that from a variety of reason.
Alrighty of reasons, including not having our tech exactly where we want it either for us or for our customers. We put on pause and delaying short term gratification from the long term when it takes courage it takes a belief and our roadmap and our belief and team I believe and where we're going and who will get us there that is exactly what our sales organization did this quarter and so I want.
And it uses very public form to deliver and very personal message to our entire sales organization I know, it's tough to Neil and the 2 yard line and not score that touchdown your actions and I appreciate it.
So thankful for how you Didnt for 1 second think about anything but team and made a confident decision and prioritizing team and more importantly, trusting and repeat base <unk>, each fully and completely though and the belief will pay off for us many times over in the coming quarters.
As I started off this call by saying the planning we are now close to finishing up might strike some as boring and like all of you I can't wait until we are spending these calls discussing the real progress, we are making and the market not internally.
But all the above and addition to a lot of other important initiatives and accomplishments too numerous to mention on this call are the foundation upon which all of our future progress will be built as an executive team we stress the organization because there was a lot to do with the open and instructions will take all the time necessary, but not 1 second more and and responded wonderfully.
I want to thank all of my teammates are being such amazing dual trackers focus not only on the why not and letting us but also the here's how we're setting up the foundation for our next many years and while of course, we will always be tweaking and optimizing the engine, we are close to putting away the blueprints and starting our test drugs and we're building something really special here at this company.
Something that we all do we all realize outsiders will only believe when we start demolishing lab records as always judge us on the judge us on the results.
1 last thing before we open the call up for questions I do want to alert everyone. We'll be filing a form S..3 with the SEC shortly to register the shares TCM strategic partners bought last September and this is a normal process that will allow the shares to be freely tradable. Once a 1 year lock has passed.
The truth is however, I have zero intention of selling a single share anytime soon or much more importantly anywhere near these levels. There is just too much good yet to come and.
Like our 2 previous calls we'll be taking questions from anyone interested in asking 1 operator.
You're asking a question you will need to price.
Star 1 on your telephone.
Your question. Please press the pound key.
Please standby, while we compile the Q&A roster.
Alright.
Our first question and Jeff.
Van <unk> with Craig Hallum capital.
Hey, Jeff.
Hey, How's it going and this is actually Aaron on for Jeff.
Yeah. Thanks for the thanks for taking my question first question I have for you alluded to becoming the barcode and something I'm looking at other avenues. Besides plastics and rotation is interesting and a little more color. There. What are you seeing progress anything top of mind couple of areas. If you could give any more color.
Absolutely. After avs are we happy to share that with you to Aps's annual product strategy.
So.
Historically, we.
We have been trying to figure out exactly how best to use our technology based on where customers have been taking us that is changing we are a product company. We are becoming a solutions company, we need to buy the product through the time due to perform that research and collect the data and tell us what we need to be done. So obviously I mean, it's all going the spoiler here to stay.
And ability will be 1 of those product lines.
But stay tuned after Aps will be more than happy to share with you guys exactly where we're going from a product perspective and.
And in addition, as Jim alluded to also encourage you to come to and RF Youll see a lot more there.
Fair enough fair enough and another question for me.
I'm just curious.
On any updates and the retail side of things.
Specifically around the relationship with Walmart any any color you can provide there.
Obviously, we're not going to talk about any customer in particular, but as I said and the last call Wal Mart is a wonderful forward looking company.
If you look at the overlap and where they want to go and where we can provide there is a lot of overlap.
There is.
Any major retailer that we would want to be close to Walmart and that retailer. So we're excited to continued and built that relationship.
Good day, and then 1 more for me okay.
Curious you mentioned, the and bookings arent, where where you want them to be at the midpoint here, but so there's a lot of room left and the year just curious what it takes to get to that that triple digits.
Booking growth.
And we talked about previously what do you see happening to get us there.
Closed deals.
Fair enough easy enough alright cool. Thanks, that's it from me Thanks Ed.
Our next question is from Jeff Bernstein with Cowen.
Hey, good afternoon.
Just wondering if you are if you have an update at all on.
And laser serialization and whether that looks like you're going to be able to do that.
So we can absolutely do it right and Theres no question about whether we can do it. The question is where does that fit and our product roadmap again stay tuned for avs.
And again going back to the point and the fastest way to lead base camp, the fastest weighted but real distance on and bookings basis between where we've been and where we're going is to focus.
There is anything that is not made by hand are not made by mother nature and we can do.
<unk> is and where do we start and that has to be driven by research and not.
Wins, not customers, saying, hey, can I wait with Dow and front of your face and get you to pivot to whole engineering organization and will follow that so there is nothing we can do at least theres nothing I don't believe and we've come across we can do besides weather.
Bye Bye mother nature made by hand.
And there is a lot of ways to embed.
Better code Red laser ablation is just 1 of those ways, whether that will be and area of key focus for US, we'll let you know to Aps.
Got you, Okay and then.
The potential for the significant bookings growth. This year was in part driven by sort of fallout from Covid and supply chain.
Weaknesses that.
And that potential customers had and I think produced some applications.
And we've been felt worthy.
Digital are going after.
And that kind of continued are you actually getting some ideas from customers that you think are going to survive.
Aps filter.
Or can you just give us a little bit of color on that.
So a big part of the EPS filter and wood product does his voice a customer right. So.
And we might be the 230 smartest people and the world, but if we just stop our ideation with US we're going to fail. So theres a lot of research and I talked about research not reach our research internal to <unk>. Its research with the World were 230 people and there were 7.6 billion people, we got to sell to.
And so that voice of customer and the huge part of the product.
Product and working obviously product driving EPS.
Okay, and then and then lastly.
A quick update.
Japan grocery seem to be starting to move forward a little bit.
Just wondering what the update is there and and as you can say anything also about how net <unk> is progressing.
Yes, and so we don't like to talk about individual customers.
Obviously their business and talk about the great way to to anchor our customers talk about their own business.
So I mean net is growing great. They are a great customer of ours, where we've made a bet I don't know.
And the Japanese grocer, I don't know nothing to grocery.
Average you've made I'm not familiar with us have been talked about debt now.
And not by name.
So no no buybacks.
And it's generally.
There was a lead customer there I believe you have a relationship with a very dominant packaging player over there and and.
And just sort of wondering where that is.
Yes, so we're not going to tag revenue customer I'll say.
We have a lot of value to add to a lot of different customers I would say something that Nick I'll turn it over to Tim and talked about.
And the pipeline and Japan.
Seems like it's waking up the glitters and great opportunities there, but what's really important Jeff is closing deals.
Sure.
Yes.
And so I think I want to say and on Japan and general.
I would say that double down on the EPS strategy that that's going to be very illuminating and very constructive for our go to market. There. So I do think that would increase as a result of our EPS growth.
Thank you.
Thanks, Jeff and.
And again that is star 1 if you would like to ask a question at this time.
Our next question is from Robin Knipp with Janney Montgomery.
Thanks Day Roswell rally.
So I felt like I was listening to the field of dreams introduction and building build it and they will come.
Yeah.
My question is Robin.
Robin and I don't know how to pick that up and thank you I think.
[laughter].
Taken and a good way.
My question is actually a hard right turn from from.
From a plastics more towards global packaging I had the occasion yesterday listening to fill Stafford and John Dwyer from West rock talking about the opportunities there and the fact that global packaging is a $450 billion business today.
And yet 5 years from now nearly 20% of the packaging is going to be targeting.
Anti counterfeit market.
To me this is a no brainer for us, but how do we get there.
And I'm trying to decide when and how to answer that question, Rob what I want to say first of all to stay tuned for Aps Aps.
Aps is a big stepping stone and where we're going from there.
And that delivers the product and then and general leaving alone any presented product line I think you heard from today and how we're going to get there Tim is going to take what product doesn't get it to market.
The bookings but.
Yes.
Interesting inside Robyn.
So just as a follow up and when I think about individual channel.
Watermarks versus the QR code and everybody sees a QR code and they know how the QR code can bring our call to action there, but if they don't link and the visual watermark on upon and object how do we get that same call to action.
So we're talking about for product authentication or are you talking about just in general from consumer engagement.
Both actually.
And we're talking about counterfeit and verification of counterfeit.
Deterrence when we're talking about.
And the pursuit of finding more information about our products talking about just getting the whole story out there about a digital water markets and visible then they cannot I think we have to be doing a better job of.
Telling the story.
Who is weak.
Yes, Sir.
So a couple of ways to answer that right and does not we will be the solutions provider to book.
Let me price requests a couple of different ways. When it comes to product authentication brand protection that is really up to the customer whether they want comfort over correct and so there's plenty of ways to do call to action right, you don't need to say scanned and QR code or oriented and the QR code visa called action you can put it and I would call to action on their savings scanned this image.
And there's ways to use QR codes complimentary to us and I don't want to get too far down this path I am not worried about it when there is a specific application because sometimes it's not having a universal call to action that provides a lot of value okay.
And the brand protection and product authentication when Youre talking overall consumer engagement I'll give you my personal belief thesis to be verified and to the term use internally here and maybe it's just a belief I can't wait until product and tell me what the truth is I don't think consumer engagement Standalone broad consumer engagement is really a compelling use case for our technology.
Until we get and much more ubiquity.
And there is called and actually there was a net theres a native reader again thesis to be verify that could be 100% wrong. There was 1 person's opinion. There is $7.6 billion people, whose opinion matters a lot more of them because they are the ones with the money to buy our products.
I believe that.
Bad debt as consumer engagement Standalone abroad, QR does a great job, we don't need to go out and say, we have no competition and the big believer and co op petition and I'm, a big believer that are sometimes better solutions for specific assault and whatever search company has that's okay. There is plenty of room left for us.
Fair enough. Thanks, appreciate your time and Red Robin I'll take that 1 level postscript on that that's also true up the advantage of being a platform right where are you.
And the beautiful thing is if we architect our products and our solutions correctly and consumer engagement and a nice to have that as an add on okay. Right. So even take sustainability right. So if we're solving real problems and sustainability and and there is a way to.
To get consumer engagement to help at the front of that funnel, Okay, Brian Standalone consumer engagement.
I just don't see it again and thesis to be verified we'll know a lot more when product tells me and tell us all of us what the research and what the true fixed.
Fair enough. Thanks.
Thanks, Rob.
Your next question is from Blayne with Jack.
Hi, guys. Thanks for taking the call.
Right quietly and a previous call you had mentioned.
Is that the company has sufficient cash and did not need to raise any additional capital.
And I was just wondering if that's still the case.
And it really to prevent any further dilution.
Sure I don't believe I said that on the call are you talking about the press release, they put out before I joined the board yes.
So obviously I'm not going to update.
And I spend about 10 minutes last call talking about the utility of giving guidance out.
And certain number of quarters right for various reasons right. We're a small company.
<unk>.
There are so many ways and customers can choose to engage with us and delight enterprise license or et cetera, I will tell you. This and so the comment you're referring to I made before I joined the board as a private investor any comment I make now as CEO as the board member.
And has a lot more of a forward looking guidance to it I will tell you that of all of the things that keep me awake at night here, our access to capital or need for that capital Im not worried about that that is a debt of the bridge if we need to cross we will cross it.
Not something that.
But I think about I mean, there is.
Multiple different ways that plays out right. So there is as you know we have a 100% build basically a 100% contribution margin and our business. It doesn't take a whole lot of new business to get our to get this company at least at a much reduced.
Cash burn, let alone to breakeven or profitable rate, there's other ways to raise money outside a dilutive.
Deals.
And then lastly, the third option is true.
Essentially would there be and need to raise.
All shares and the future share, but not anytime soon and after we've proven a lot where I would believe that the stock price would be a lot higher and I and the single largest shareholder and this company.
I thought dilution, where our real issue I'd be thinking about and im not worried about it okay.
Okay.
Excellent and the second question I had for you was in regard to some of the deals that didn't consummate this quarter are those deals potentially still on the table for the coming the next few quarters.
Absolutely.
And.
Right.
And as I said I said the sales organization put upon us.
And interest.
And they didn't give operating and walk away.
Understood.
Thank you very much guidance.
Thanks Eitan.
And your next question is from party.
A private investor.
Hi, Robert.
Hey, Doug.
Got it.
Can you enlighten us a little bit about youre, having brought Ravi onboard and.
Where do you see and being utilized.
Yes.
So.
Thrilled absolutely thrilled to have somebody of <unk> caliber volume.
And intelligence character and.
And also as.
His professional visibility to be honest here right and he has a very high profile executives.
And the tech industry is a thought leader.
And the thought leader not just on tech issues, but.
And workplace issues.
1 of the.
Early conversations and it was it was a couple of months process. During the interview process to bring Robbie onboard and.
He said so many insightful things I always about 4 minutes and.
Original conversation with them and I was giving a brief record background.
And what we do and he said something that was so brilliant and the cycle I do under 4 minutes of talking to them. If you needed to be on our board Fortunately.
He agreed eventually.
But he is he's.
He's he's a thought leader in this space is extremely well connected has got wonderful introduction. So you can make for us as a company.
He has time to give to us we are collapsed and that and I'm going to say this.
And now behind drop beyond <unk>, we are blessed with an incredible board.
We have a world class, where we have a board much better than the company size. We are today and now we're going to grow into it and we're going to prove them right and for taking these early bets on us.
But there are so much that we ask of our all of our board members and what's amazing is and I believe they delivered they come back and say what else can we be doing so Ravi is just the latest in addition to what has been absolutely fantastic.
Fantastic growth.
As he ever been on our board where.
His company ended up.
Acquiring that company.
I have no idea.
Okay.
Yes yesterday's conference.
And with West rock and everything.
And very excellent.
Do we ever get to know how many people are actually listening to that.
And what kind of results or are we seeing from it.
Youre asking us to share that with you.
Say again.
But when we get to see that absolutely you guys got to share that with you.
Yes, when we get to know how many people are actually watching that listening to it and is it productive.
Absolutely productive and wonderful incredible engagement and that's why we're having and maintaining that you wanted to talk about all we're doing with our webinars and net hold process yes.
Yes, I'd say its a great strategy, especially in today's marketing world and getting mind share from people.
And.
No more white papers and blog posts and we wanted to give people an experience and.
Net webinar, you listen to yesterday with 1 of our channel partner sales leaders still and West Rock is a great example of that interactive.
Spirit and learning about and experiential learning.
And we have several other webinars that are on our website at and there's going to be dozens.
Covering all the various topics, especially come out and EPS not only topics that are relevant and our industry.
Topics around our product sales.
Very productive as you probably know everything is measurable and sales and marketing and these days vis vis sales force automation and marketing automation solution. So we're watching that.
Very very closely and.
And we're doing that.
Those activities as well.
Lead generation and so yeah. Most most most definitely looking for those to be productive and we will rinse and repeat all day and once we find.
Good topics.
Alright.
And last thing and I've been around long enough that I've enjoyed receiving dividends from debt remark and I was just wondering if you have any timeframe as to when we might see.
Experience getting a dividend again.
While we are profitable.
I actually.
Actually flow that would kind of said flippantly actually think dividends and a horrible inefficient use of capital right why do the double taxation of dividends dividends.
The real owners of stock should wanted to wanted to buy back stock. So that every single share that they own and a higher and higher percentage of the company every time, we redeploy the capital to reduce the share count. So actually let me answer that question I was being a little flip 1 I said, we're profitable and the answer is probably never youll get a dividend, but maybe.
Let us first focus on getting reducing the cash burn and the next step of getting to breakeven and then we'll get to profitable then we can retire and kind of stock and then we get cross average.
Sounds terrific. Thanks.
Thanks, so much.
Thank you.
Yes.
At this time. This concludes our question and answer session and I'll now turn the call back over to Riley Macquarie. Sir. Please proceed.
Well. Thank you very much everybody for your time.
And stay tuned we'll be back.
Thank you.
This concludes today's call. Thank you, ladies and gentlemen for joining us today.
You may now disconnect.