Q3 2021 Intellicheck Inc Earnings Call
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[music].
Good day, ladies and gentlemen, and welcome to the <unk> third quarter 2021 earnings conference call.
All lines have been placed on a listen only mode and the floor will be opened for your questions and comments following the presentation.
At this time it is my pleasure to turn the floor over to your host Mr. Gar Jackson, Sir the floor is yours.
Thank you operator, good afternoon, and thank you for joining us today for the Intel a check third quarter 2021 earnings call before we get started I will take a few minutes to read the forward looking statement certain statements. In this conference call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 as amended.
When used in this conference call words, such as well believe expect anticipate encourage and similar expressions as they relate to the company or its management as well as assumptions made by and information currently available to the company's management identify forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward looking statements are based on management's current expectations and beliefs about future events as with any projection or forecast. They are inherently susceptible to uncertainty and changes in circumstances and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its word looking statements, whether resulting from such changes new information.
<unk>.
Subsequent events or otherwise additional information concerning forward looking statements is contained under the headings of Safe Harbor statement and risk factors listed from time to time in the company's filings with the Securities and Exchange Commission.
David has made on today's call are as of today November 10 2021.
Management will use financial the financial term adjusted EBITDA in today's call. Please refer to the company's press release issued this afternoon for further definition reconciliation and context for the use of this term.
We will begin today's call with Brian Lewis Intelligence, Chief Executive Officer, and then Bill White and <unk>, Chief Financial Officer, who will discuss the Q3 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors today's call will be limited to one hour and I will now turn the call over to Brian.
Thank you Garth and thank you all for joining us today for our 2021 third quarter in Telecheck earnings call.
Starting to see things open up although they are still lingering COVID-19 impacts to one component of our business year over year, we believe that more people will be shopping brick and mortar which of course is positive we recognized that due to savings rates and stimulus received during the pandemic right now shoppers are not necessarily buying on credit or more importantly, opening new credit card.
Our accounts, while we believe this will continue to impact us in the short term, we believe that as things start to return to pre pandemic levels and people begin to spend and normalized way. This will drive credit card applications and additional card not present transactions.
I would also like to point out the distinction I made just a moment ago. When they noted COVID-19 has lingering impact you one component of our business I talked to many people who seem to think we're just a brick and mortar credit card business three years ago that may have been the case, but we've been on a transformational path since I arrived we've expanded our client base.
Far beyond just credit cards into banking call centers gambling cannabis stadiums as well as the digital world, which continues to become an increasing portion of our business. This transformation continues with new technologies and partnerships I will be discussing shortly.
Returning to customer shopping habits, we noted shoppers will continue to make in store purchases online pickup in store purchases. They will make purchases online with delivery. They will make buy now pay later purchases and yes. The holiday shopping season will likely see an increase in credit purchases and what each of these behaviors haven't communism.
Risk of fraud and identity theft, neither is going away the data shows identity theft and fraud rates continue their upward trend at a record setting pace. The breaches. We continue to see in the enormous amount of personal information already available on the dark web, which suggests fraud is all going to get worse and criminals will continue to see dollar signs when it comes.
Identity theft.
Criminals continued who impersonate people with fake Ids created using the identities that are purchased on the dark web and we don't see this going away.
Looking at the quarter, our Q3 SaaS revenue was up 32% over Q3 2020, and it was flat to Q2 2021, driven largely we believe but what I was discussing at the start of the call we.
We saw an interesting mix in transaction volumes, among our clients department stores, particularly those predominantly selling apparel were down 7% to 10% in transaction volumes during the quarter, while those retailers selling electronics appliances, and our banking clients were up almost the same amount.
Interestingly the same retailers that were down in the quarter had October volumes that were up 15% over September.
Again this quarter much of what we have been investing in and working on this year has been transforming the company to be more of a digital identity company rather than purely an IV validation company.
As I said earlier this transformation will allow us to move into many more markets and provide more services to our clients and prospects and purely I'd validation.
Anytime you need to validate and identity, whether in a physical or digital setting we believe our efficacy makes us the best and most vital first step and therefore, the logical partner to get other risks signals from we stop the bad guys from getting in but even if you are who you say you are there is additional information we can provide.
<unk> do partnerships to help clients and prospects with their Ky see or know your customer obligations.
We believe that this opens up opportunities for new verticals need that need a much more in depth identity check that goes beyond is the idea of panic. We view this as incremental product offering with a large addressable market that includes fintech gambling and other markets.
Moving forward there are developments on a few fronts that I want to share with you and bring you all up to speed as usual, we're going first going to look at some highlights with our existing clients and some new wins were also going to look at the changes we made to our pricing model in our new efforts on channel partner sales.
So you're going to tell you about the reseller agreements we have entered into to expand the product set we can offer our clients and the launch of our new platform Ciudadano that makes this all possible.
First the updates on our financial services clients.
Financial services company number two completed its project to provide applications and account look ups to a tablet instead of having to go through the point of sale system. This allows them to get their clients up and running and using our services much quicker.
In addition, we are working with two new retailers with approximately 600 locations each and they expect to be live in early Q2 for credit apps and account lookups.
Number two is also very excited about their new business pipeline and they tell us it should be a very good year for new clients using our services.
Financial services company number three has rolled out their pilot of their teller workstations. So far all is going well and they expect full deployment to their 720 branches in Q1. They continue to work with their home improvement client to expand to their multiple point of sale systems. However that requires some changes to the bank's internal systems.
And that timing it remains out of our control given the speed at which number three moves I would expect that to be second half of 2022 events.
The good news is that they continue to be an excellent reference for us both with industry analysts and prospects. It never hurts to have the SVP of fraud tell prospects that he thinks we are one of the top five fraud fighting tools of all time.
Financial services company and number four is pushing to integrate our services into all of their retailers digital channels, a big benefit of online is it does not impact their point of sale system. So we can be working during the normal holiday code freeze. In addition, as they look to increase the use of our products in Canada, we're bringing lie.
The ability to authenticate Canadian health cards. These are valid forms of I'd for some provinces and have barcodes like the Canadian driver's licenses.
Additionally, they are in the process of rolling out their mobile banking project that allows their clients to validate themselves on the bank's mobile app.
This effectively adds a layer of security for both the bank and their client as the banks add more digital use cases, they estimate that 40% to 45% of their clients have the mobile app installed on their phones.
In addition, you'll remember may remember from the last call that they prepaid for what they believed would be a year's worth of transactions.
At the current rate of consumption. It looks like they will draw that current allocation down by May we anticipate that if the additional clients and use cases. They plan on rolling out happened on time more likely they'll run out by Q2.
I'm also pleased to share with you that delays in development with the Bank consortium owned company. We signed late in Q4 last year that helps financial firms detect and prevent fraud, they've agreed to be a beta client for our new platform to dot O, which I'll be discussing shortly this.
This will allow them to use our products more frequently in their call center and their intention is then to roll our services out to their digital payments network.
In addition, we now have a new financial services client.
We signed a master services agreement with a California based provider of among other things mobile banking personal loans credit cards and student loan refinancing.
They're going to start with our no integration product, while they integrate our API into their systems.
Expect rollout in Q1.
As we look at expanding into other markets one of the markets. We have been targeting as college stadiums with more colleges and universities selling alcohol and Theyre stadiums on game days. There is an increased focus on preventing on your age access.
We're talking about more than football games. This trend is creating across a variety of sports, but brought greater focus on the continuing and growing use of its sophisticated fake ids by minors, recognizing this opportunity we've been targeted an increasing number of college stadiums.
<unk> alcohol with good effect.
Recently signed two major FCC schools, where our pre purchasing 20000 transaction buckets that automatically refill when the balance gets low we have proposals out to several other schools as we continue to grow our footprint and what we see as a very promising market.
You noticed that I've been saying transaction buckets as we discussed on our last call. We're having customers prepay for a specific amount of transactions. They can use in a month or a year.
Gone very well most new clients are being signed this way all renewals are now under this model.
And looking at renewals I am pleased to report that we've continued to have a very sticky client base as our clients contracts come up for renewal is important to note that we are raising prices for each of those contracts are client acceptance of these double digit price increases underscores the value our technology solutions continue to.
<unk>.
Earlier in the year I alluded to our plan to refocus our efforts involving channel partners to resell our products and we're making strides in that area.
First we signed an agreement with one of the largest providers of inventory and point of sale systems for the cannabis industry integration is complete.
We began joint marketing efforts targeting their customers.
We have also signed agreements with two major point of sale system providers to the hospitality industry to incorporate IV validation into their systems collectively. These two point of sale system providers represent over 2400 bars and restaurants integration with both is now underway.
In addition, we have signed an agreement with a company that sells an omnichannel multi biometric platform to banks marketplaces, and health care systems to use our I'd validation tools as part of their onboarding process.
Pre purchased 250000 transactions.
We continue to work on other channel partners and resellers as part of our intelligence inside strategy that features right.
Technology solutions, and then selling them through our partners.
In a similar vein, we've signed deals where we are the reseller of additional validation tools in a similar manner to what we've done with biometrics.
As part of the <unk> process, many clients need to know about criminal backgrounds. So we've signed a deal with a company to sell access to criminal background data.
Another significant development that opens up global opportunities revolves around the expansion of our validation capabilities beyond North America we.
We signed a deal with a company that will give us the <unk> capability to validate identity documents from over 200 countries.
We will be sharing more details with you shortly.
But what it comes down to is this we believe our superior accuracy compared to what some view as our competition in North America, coupled with being on par with over 200 additional countries with less sophisticated forms of identification gives us a distinctive competitive edge for clients that need international coverage, while at the same time.
<unk> expanding our footprint globally.
Integration for both the background checks and international validation is underway and we intend to update you with press releases when we are ready to launch in Q1.
As I said earlier this has been a very transformational year and to achieve this advancement is required additional investments in the business. We started by retooling the sales force and by the prospects I see in our CRM. This is paying off looking ahead. We believe we should show notable growth in 2022.
As you know we also invested in creating a marketing department and that also has paid off.
We signed twice as many clients in Q3 from inbound leads as we did in Q2.
While so far most of these new agreements signed had been for smaller clients given the number of these deals the HCV or annual contract value adds up.
I can also say that lately, we've had inbound leads from ranking people at major financial institutions. So our brand and market awareness continues to grow.
The stage for this major phase of transformation is what we are calling platform two dot.
Historically, we did only one thing and we believe we did it far better than anyone else and that is validating north American Ids driver's licenses and military Ids.
Unfortunately, our backend was lacking the level of flexibility needed to become more of a powerhouse within identity validation and digital identity.
For example, what we formerly called <unk> was a separate platform from what we call retail idea.
This level of complexity didn't make a lot of sense as they both did the same thing validate the idea. The only difference was what was returned to the client and how they wanted to consume the services a handheld device or a direct integration. It also made it difficult to quickly incorporate new features that clients want to utilize.
As part of their <unk> process.
Remember to open an account I may be who I am but there are other things you might want to know about me to evaluate the risk of doing business with me depending on the nature of your business. Other essential questions. You may need to answer include MIF politically exposed persons and my special interest person <unk>.
Relative or close associate of any of those people are there any sanctions against me or have I committed a crime. These are important data points to know that we need to offer to fully support many of the markets we are attacking.
We can easily integrate new risks signals into the platform.
And while doing so we are able to make it very easy for our clients to pick and choose off of our menu based on their needs, enabling them to select additional risks and identity services, they would like us to provide them.
I am excited by where all of these developments are taking us we truly believe we have effectively moved the company forward to become a future ready on demand global platform are allowing our clients a more flexible refined solution for validating any idea in both physical and digital use cases with <unk>.
Additional risks signals of their choice.
All of that while continuing to distinguish ourselves in the industry by providing what no one else can with near perfect certainty. We believe we continue to be a leader in authenticating a government issued I'd.
As the first critical step in combating identity fraud, keeping age control products out of the hands of the under age and increasing police officer effectiveness and safety.
In closing early in my tenure I told you that I was excited by the prospects that I believe the future held my feelings have not changed I remain excited and energized by the opportunities I believe lie ahead, and why do I believe that bright future for this innovative company.
I will now turn the call over to Bill to go over our financial results for the quarter.
Thank you Brian.
And good day to our shareholders guests and listeners I'd like to discuss some of the financial information that was contained in our press release for the third quarter ended September 32021.
I'll begin with the third quarter results.
<unk> over quarter SaaS revenue grew 32% to $3 245000 versus 2.451 million in the prior year total revenue for the third quarter ended September 2021 increased 79% to 4 million $8 31, compared to $2 million 699000 and the.
Prior year comparable period.
Gross profit as a percentage of revenue was 68, 7% for the quarter ended September 32021, compared to 89, 1% for the quarter ended September 32020.
During the quarter the company sold scanning equipment to a bank that is continuing to rollout our software to their bank branches, which are normally sold at lower margins. Excluding the sale of hardware both periods on a pro forma basis gross profit as a percentage of revenue was 93% for the quarter ended September 32021 compared to <unk>.
Two 6% for the quarter ended September 32020.
Operating expenses consist of selling general and administrative and research and development expenses increased by 79, 5% or $1 million 892000 to $4 million and 272000 for the quarter ended September 32021 versus 2.380 million for the quarter ended September.
32020.
The increase was primarily due to higher stock based compensation cost increased head count and related accrued incentives along with expanded marketing costs.
The company posted a net loss of 952000 for the three months ended September 32021, compared to a net income of 32000 for the quarter ended September 32020.
Net loss per diluted share was <unk> <unk>.
Versus a net income per diluted share of zero in the prior period.
Adjusted EBITDA for the quarter ended September 32021 was a negative 271000 compared to a positive adjusted EBITDA of 169000 in the September 32020 quarter.
Interest and other income expense were negligible for the quarters ended both September 32021 and 2020.
Now I'd like to focus on the Companys liquidity and capital resources.
As of September 32021, the company had cash of $13 3 million working capital defined as current assets minus current liabilities of $12 9 million total assets of $25 9 million and stockholders' equity of $21 8 million during.
During the nine months ended September 32021, the company gain net cash of 145000 compared to a net cash provided of $9 5 million. During the nine months ended September 32020.
Net cash provided by operating activities was 407000 for the nine months period ended September 32021, compared to a net cash used of 311000 for the same period in 2020.
Net cash used in investing activities was a negative 339000 for the first nine months of 2021 compared to a net cash used of negative 408000 for the nine months period ended September 32020, and we generated 776000 from financing activities for the nine months ending September 32021 compare.
To $10 2 million for the same period in 2020.
The company has a $2 million revolving credit facility with Citibank that are secured by collateral accounts. There are no amounts outstanding under this facility. We currently anticipate that our available cash as well as expected cash from operations will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months.
As of December 31, 2020, the company had a net operating loss carryforward of approximately $17 million.
I'll now turn the call back over to the operator to take your questions operator.
Thank you ladies and gentlemen, it is star one if you have a question or comment at this time. If you are using a speaker phone we asked that while you're posing a question you pick up your handset to provide the best sound quality.
Again, it was star one on your telephone keypad, if you have a question or comment.
Our first question is Mike Grondahl with Northland Securities. Your line is open Sir Please go ahead.
Hey, guys.
Yes interesting developments kind of expanding the platform a little bit and.
Hey, maybe Brian can you give a little bit more color on.
The prepay.
What are you seeing all new customers are prepaying, I guess I'd, just like a little bit more color there and then maybe bill.
If you could kind of mentioned what's the outlook for hardware sales is there anything to call out. The next couple of quarters that you may be expecting.
Hey, Mike It's Brian I'll start so yes. The model that people are doing is they are buying.
Buckets of transactions and it just makes it easier for us to get a handle on.
What we expect things to be so instead of last what we used to do is you pay a small minimum and then youre going to pay US every month based on what you used now we know we've learned that people have a pretty good idea of how much they're going to use.
So, let's just enter into a contract where you are going to sign up for this amount.
If you go over we'll charge you for it.
But for the most part people are either buying a bucket that theyre going to they think will cover a period of time and if they use that bucket up just they reroll their contract.
So it's a much simpler way for us to track what our clients are doing with more certainty.
Okay.
Do you have a rough guess of the percent of revenue that's under that model.
Right now I'd say that the certainly number four went to that model.
We will be moving number three to that when they come up for their renewal.
Number two I think is also up for renewal later on in that year, but right now it's anybody that we have signed for the most part that's been.
Not major banks, yet, but it's a model that they all seem comfortable with you know we had really no issues. When we were renegotiating with four to do it and so we're doing it with everything from.
The corner bar, all the way up to major banks.
Yes, it seems smart.
<unk> got.
The.
The functionality to kind of dictate that.
Yes.
And as far as deals yeah, we don't have any major.
On the horizon here that we know about.
At this point.
Yeah, and Mike remember, we do hardware only as an accommodation.
It's not it's a line of business, we want to be and it's you know it sounded like the salespeople make really any money off of it if it helps us get the deal done because we might have a better way to get the hardware to get them started we'd do it but we're not actively out selling hardware.
Alright.
Yeah, No I understood I just wanted to.
You had a couple of quarters, there with hardware and I just wanted to make sure. Most of it was done and if we should be thinking about modeling it going forward.
Alright, thanks, guys.
Thanks.
Well move next to Scott back with H C. Wainwright, Sir Your line is open. Please go ahead.
Hi, good afternoon guys.
Hey, Scott.
A little bit of color on the competitive environment. Once you get out of your kind of legacy <unk>.
Credit card vertical and get into some of these whether it's candidates or gambling or.
So that's why I think we're seeing some wins in casinos in other areas is that they want to do the right thing because at the end of the day the loss could be really big to them if they lose their liquor license and they're pretty strict on it and casinos I'm going to the casino down the street, where I can get a drink so theyre looking.
King at it is more than just so the one off fine of getting.
Selling to a minor as to the overall big picture.
So I think that you know we had some major competitive advantages in the traditional business in that no new hardware.
Same type of thing plays into this world, but I think because we're coming into it a little bit later, we first started wanting to own.
The banks and have real reference clients.
Here, we're seeing more where we might be looking at somebody who is already in place and we're doing a replacement.
But the smart clients prospects want to do the right thing and want the most accurate system. So I think we still win there.
Alright, that's very helpful and second one can you help us understand how you guys think internally about the balance between investing in growth in <unk>.
Maybe generating positive Eva dollar showing some operating leverage in the model to appease some investors.
The way that I look at it is.
We're not and we've been pretty frugal in how we spent.
We certainly added head count this year, which I think was necessary.
Right.
Mostly sales mark.
<unk> and then also some developments so we could get things like two dot O out their platform to auto.
I don't see us needing a ton more than we currently have obviously I'm always going to be looking I think I've said this multiple times for really good salespeople because they pay for themselves. So that is something that we should add especially as now that I look at what we have brought to our system and the platform we.
We have a lot more markets I'm going to need some some salespeople to get into that.
Those places very quickly, but I think that we've got a lot of leverage in the model, we don't need to spend a ton more money on the advertising and people other than sales. So I think it will end up coming out through growth that you know we're doing well.
Alright, that's great and then last one for me I imagine you have even better visibility under the new pricing structure or are we approaching somewhere where you guys might start to feel comfortable providing some guidance.
[laughter] Yeah. It's a question we get all the time is something that.
As discussed at the board level so.
So I would say that remains to be seen.
Fair enough I appreciate the time guys. Thanks.
Thank you.
Yeah.
We'll go next to Jeff Battery at Craig Hallum. Your line is open Sir Please go ahead.
Great. Thank you for taking my question several E.
Implementation.
Two questions how many implementations in the quarter I think the company coming into the quarter you had 40 in the backlog.
So I guess just one how many implementations and then any other quantification of the increase in value pipeline.
Ah I think we did the implementation slowed down.
In the quarter I think we only did about six correct me if I'm wrong on that Bill.
Yeah, that's right some things that our clients were looking at got pushed out so not canceled or anything like that but moved farther out you know sometimes unfortunately, we're always ready the other side of the equation is not.
I look at the pipeline and the one thing I really try and shy away from is putting a dollar value on our pipeline because it.
You can really in my mind screw yourself up doing that because at the end of the day it becomes pretty binary and if I've got a salesperson, saying Oh. This is gonna be it a million dollar account and they could be but they don't come in what I will say about the pipeline is that I look at it on strengths based on who are the client types that we're talking to.
You know have we had traditionally everyone in that space are we having conversations at the right level.
No because the salesperson getting get all excited about talking to somebody but their junior and read it and you know they really haven't gotten their way in there yet.
So the quality of the prospect the quality of the people that we're talking to and are we making headway in new markets and I would say that the answer to that.
All three questions is you know plus plus plus I'm happy with how each of those work. So I think that you know the investments that we made in the sales team.
They're good people, they're doing the right job.
You know as these sales are not short cycle sales you know selling to a bar short cycle getting the buy in of a major financial institution, certainly not short cycle, but.
The road marks that we have to see if the sale is moving along the way that we should.
All are positive.
Was there a commonality in terms of the customers.
Why are they slowed or pushed out mutation.
No I wouldn't I'd say it was really it was it was two major clients that just had a just some internal issues going on there their dev.
<unk> ran into roadblocks you got you.
Issues that they had nothing that I'm concerned about the business sponsors behind all of it you know are pushing very very hard to get things as soon as possible are the.
The good thing is some of these things are not issues related to any sort of a point of sale.
Shut down development for the holiday season so.
For my end, sometimes things happen in I T. You know happens to us sometimes so it's unfortunate I wasn't very happy about it out of our control, but it's not a cancel its just a delay.
I think the commentary following Q2 with pet scan volume.
Roughly 10%, Joe will probably end up for Q3.
Okay.
Uh huh.
I didn't yeah, how did we look on that Unfortunately, I was running all the numbers and that's when I didn't do it because I was really looking at how have how did you we track quarter to quarter to look at things and again you know the way I was looking at it is by our major clients and that's where I see.
Sure that there was certainly a distinct difference between the type of retailer and again apparel was down you know.
Electronics and appliances were up as were banking transactions and I think the other thing that was really interesting number to look at is the Q3 digital transactions over the year. They were 34% over Q1. So I think it shows that our push into the digital world is working.
A mix it was a real blend I don't know if COVID-19 didn't you know the delta variant slowed people down going into certain stores, but not others, but again I'm, hoping that as we just trying to continue to get back to a normal world. We go back to completely pre pandemic levels I just don't think we're.
Are there yet.
Last for me if I could in terms of the sales reps I think you had.
Some commentary, obviously been adding to capacity.
Hum.
I think last quarter, you commented that there's time to productivity was running it and learning and in many cases.
Overall on average is running well.
Head of expectations.
What are you seeing this border with respect to the latest cohort and the pace of ramp to productivity for the reps.
Ah I think that by and large they're doing quite well.
I think we've added another one since we spoke so one thing we were at 10 before now we are at 11, we've got some interesting candidates that we're looking at so I.
I look at our target rich <unk>.
Environment out there and say you know you guys are overworked, you'll do better off if we get more and then start to focus on you're going to sell into this market and you're into this market right now I think what's kind of tough with the size that we have you got to kind of jump from the language of this industry to the.
We do that industry to the next one and I think it's better off to maybe have people who specialize in the language of each industry. Because you have way more credibility now even on that initial cold call.
So we will be expanding again as we feel that it's right.
You know, particularly Bruce feels that he's got the training bandwidth to make sure that they ramp up quickly. So so far I would say it's working.
And we're just going to continue to push the envelope and bring people in as we find the right people and Bruce is ready for them.
Great I'll leave it there thank you.
Thanks.
Yeah.
We'll take our next question from Rudy Kessel D. A Davidson your line is open Sir Please go ahead.
Yes, thanks for taking my questions I want to go back to kind of the commentary on the different types of retailers. I guess, you know Q3, SaaS revenue being essentially flat with Q2, and the apparel companies being down about 7% to 10%.
Sequentially, just what percentage of <unk>.
Either total scan volumes or revenue, where the number of retailers you have out there our apparel versus the rest.
They're there.
A larger part for sure.
They are.
I'm going to say the majority are.
Yeah, I'm going to guess Bill correct me, but I'm just thinking about overall transaction volumes, they're probably the majority.
Okay.
Got it that's that's helpful with a customer number three when did that price increase to go through they go through in the quarter after the quarter.
And with them you know maybe changing to the new kind of purchase volumes ahead of time does that maybe limit.
The the impact that might've had on the quarter just some more color there would be great.
No because it happened in the quarter. So the effect of it wasn't there in the full quarter and since it's they basically have bought a bucket of transactions.
We built as they go so it's just a guarantee on what theyre going to do as opposed to the old pricing model. It was the only thing they guaranteed was kind of a minimum to cover hardware.
Now, they're guaranteeing what they think they're going to do on volume.
So.
You know and we're billing as they go and as I said and it was it was number four who who put this on.
They thought it was going to last for the full year.
It certainly appears as there's no way, that's going to happen and you'll have to re up.
Which means they'll they're smart they buy a larger bucket.
And that was going to be my next question I mean with them in both some of the I don't know the college stadium. Some of your other new customers that you've signed typically are people buying what they estimate will be about a year's worth of transactions or shorter or longer.
It depends you know I'd say that there's a mix of it.
Cause we will give you if you want a guarantee will give you a better deal. If you know the longer that you want to guarantee we might discount a little bit more not a ton because I hate that word, but it's there's a benefit to them for prepaying for a longer period of time.
And then just lastly.
You know as I think about.
Hum platform, So point I'm, sorry, I lost my train of thought platform to point out in some of these new capabilities during the global IP stuff like that whereas all of that stuff in terms of being generally available.
We assume that we're gonna most of this will launch.
For full production launch we're looking in Q1.
As I said, we have beta clients I think we've got a.
Around 10 of our existing clients who want to.
Test it with US go beta on it so there's certainly interest in the platform.
I got it that's it for me guys.
Yes.
Thank you.
Yeah.
So we have no other questions holding I'd like to turn the conference back to Mr. Lewis for any additional or closing comments.
So I just want to thank everybody for dialing in you know as I think you can see we're quite different company than we were at the start of the year and I believe that the transformation in our new platform opens up new markets to us.
And plenty of opportunities for the company as a whole and I just want to say I look forward working with the team to make great things happen. So thank you very much and enjoy the rest of your evening.
Ladies and gentlemen that will conclude today's call. We thank you for your participation you may disconnect at this time and have a great day.
Yeah.
[music].
Hum.
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