Q4 2021 BIO-Key International Inc Earnings Call
Good morning ladies and gentlemen, thank you for standing by and welcome to Bayaki International's four-year 2021 conference call.
Good morning, ladies and gentlemen, thank you for standing by and welcome to biotech International full year 2041 conference call.
Doreen Management for Paragramarks, all participants will be in list of only mad.
During managements prepared remarks.
Participants will be in listen only mode.
Afterwards, listeners will be invited to participate in a question and answer session.
Afterwards listeners will be invited to participate in a question and answer session.
As a reminder, this conference is being recorded today, Tuesday, March 29, 2022.
As a reminder, this conference is being recorded today Thursday March 29 2022.
I would now like to turn the call over to Kimberly Bittians by her keys vice president of product, please proceed.
I would now like to turn the call over to Kimberley billions.
Vice President of product. Please proceed.
Kimberly: Great, thank you, and thank you for joining our call this morning. With me today, our bio-key's chairman and CEO , Mike DePasguel, Alex Roca, bio-key's newly appointed president of bio-key Amia, and our CFO CC Welch.
Great. Thank you and thank you for joining our call. This morning with me today are <unk>, Chairman and CEO , Mike <unk>, Alex Roca biotech is newly appointed President of bio key EMEA <unk> and our CFO Cc Welch I will remind everyone that todays conference call and webcast contain forward looking.
Kimberly: I will remind everyone that today's COSCO and webcast contain four looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements.
Statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements words, such as estimate project expect anticipate believe think plan may will or similar words.
Kimberly: Words such as estimate, project, expect, anticipate, believe, think, plan, may, will, or similar words typically identify and express forward-looking statements.
Typically identify unexpressed forward looking statements.
Kimberly: Such four working statements are made based on management's beliefs and assumptions using information currently available, pursuant to the safe harbor provisions of the Private Security's Litigation Reform Act of 1995. For a complete description of these and other risk factors that may affect the future performance of BioKey, please see risk factors in the company's annual report filed on Form 10K with the Securities and Exchange Commission.
Such forward looking statements are made based on management's beliefs and assumptions using information currently available pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
For a complete description of these and other risk factors that may affect the future performance of bio key please see risk factors in the company's annual report filed on Form 10-K , with the Securities and Exchange Commission.
Speaker Change: Listeners are cautioned not to place undue reliance on forward-looking statements which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to such forward-looking statements to reflect future events or circumstances that occur after today. With that, I will turn the call over to Mike, APA, Squally. Mike? Thanks, Kim, and good morning, and thank you for joining today's call.
Centers are cautioned not to place undue reliance on forward looking statements, which speak only as of today's date.
Company undertakes no obligation to revise or disclose revisions to such forward looking statements to reflect future events or circumstances that occur after today with that I will turn the call over to Mike de Pasquale Mike.
Thanks, Kim and good morning, and thank you for joining today's call.
Mike Alex: After my prepared remarks, I will turn the call back to Kim to review some of our sales and marketing initiatives.
After my prepared remarks, I will turn the call back to Kim to review some of our sales and marketing initiatives, followed by Alex <unk> to discuss our expanded opportunity in Europe , the middle East and Africa. Following our acquisition of swivel secure Europe earlier this month.
Kim: followed by Alex Roja to discuss our expanded opportunity in Europe , the Middle East, and Africa, following our acquisition of Swibble Secure Europe earlier this month. And then CC will close
And then C C will close with financial highlights.
Kim: In 2021, we grew our revenues 80% reduced our net loss by approximately 50%.
In 2021, we grew our revenues, 80% reduced our net loss by approximately 50%.
Kim: and substantially strengthened our suite of product offerings and our global reach.
And substantially strengthened our suite of product offerings, and our global reach with.
Kim: With the swivel secure acquisition, we now have 60 employees and management to support our growth around the globe, including a multicultural team that speaks 12 languages and man's a 24-7 Security Operations Center in Lisbon, Portugal.
With a swivel secure acquisition, we now have 60 employees and management to support our growth around the globe, including a multicultural team that speaks 12 languages and managed a 24 seven security Operation Center in Lisbon, Portugal.
Kim: We advanced our core identity and access management business, launched the range of new solutions, expanded our channel partner program to over 100 partners.
We advanced our core identity and access management business launched a range of new solutions expanded our channel partner program to over 100 partners and commenced appointments for our large scale civil I D related contracts in Africa. Additionally.
Kim: and commenced appointments for our large-scale civil-ide related contracts in Africa.
Kim: Additionally, we forged a master aged referral program with Intellysis to offer Porto Guard as the first IAM platform in their extensive network.
Additionally, we forged a master agent referral program with the telesis to awful Porto guard as the first I a N platform and their extensive network.
Kim: We also expanded deployments of our cloud-hosted portal guard IDAF solution, which supports 16 multi-factor authentication methods, including bio-keys advanced biometric solutions or identity bound biometrics.
We also expanded deployments of our cloud hosted portal guard I Das solution, which supports 16 multifactor authentication methods, including <unk> advanced biometric solutions or identity bound biometrics.
Kim: We are achieving solid new customer engagement in higher education, enterprise, finance and government vertical.
We are achieving solid new customer engagements in higher education enterprise finance and government verticals.
Kim: forming a growing base of recurring software subscription revenue that we will look to build on in years to come.
Forming a growing base of recurring software subscription revenue that we will look to build on in years to come.
Kim: Porto Guard Ideas Revenue currently accounts for approximately 80% of our total software and services revenue.
Porto Guard IDEXX revenue currently accounts for approximately 80% of our total software and services revenue.
Kim: Our continued investment in innovation and new product development enabled the launch of several new products and upgrades, including Mobile POS Pro, a handheld point of sale mobile commerce terminal with biometric ID verification targeted for deployment in Africa.
Our continued investment in innovation and new product development enable the launch of several new products and upgrades, including mobile Pos Pro a handheld point of sale mobile Commerce terminal with biometric IV verification targeted for deployments in Africa.
Kim: We also introduced a line of phyto2 compliance security keys for expanded authentication options and launched our new ECOID-2 compact USB fingerprint scanner with this tested algorithm.
We also introduced a line of vital to compliance security keys for expanded authentication options and launched our new eco <unk> two compact USB fingerprint scanner witness tested algorithms. Additionally.
Kim: Additionally, we debuted our single sign-on or SSO Concert Solution, which eliminates the need for passwords for thick client application.
Additionally, we debuted our single sign on or SSO, concierge solution, which eliminates the need for passwords predict client applications.
Kim: These enhanced solutions positioned bio-key to address a broader array of customer needs which state-of-the-art technology.
These enhanced solutions positioned <unk> to address a broader array of customer needs, which state of the art technologies.
Kim: BioKey also earned the number of industry awards and accolades in 2021 for our technology and solution.
<unk> also earned the number of industry awards and accolades in 2021 for our technology and solutions.
Kim: Our company was also certified as a great place to work for the first time in our history.
Our company was also certified as a great place to work for the first time.
In our history.
Speaker Change: And also for the first time, Kim Bittings, who will speak momentarily and who gave the intro, was included in CRN's 2021 Woman of the Channel Power 100.
And also for the first time, Kim bidding Sue will speak momentarily and who gave the intro was included in <unk> 2021 woman of the channel power 100 list.
Speaker Change: We began initial hardware shipments on our large scale Africa projects in 2021 after a range of external delays.
We began initial hardware shipments on our large scale Africa projects in 2021 after a range of external delays. These.
Speaker Change: These projects continue to represent very large revenue opportunities for our company and there are increasing signs of growing momentum in 2022.
These projects continue to represent very large revenue opportunities for our company and there are increasing signs of growing momentum in 2022.
Speaker Change: We are currently supplying our pocket 10 by metric fingerprint readers in a partnership with Specta, an online lending platform owned by Sterling Bank, Nigeria.
We are currently supplying our pocket 10, biometric fingerprint readers in a partnership with Spectre and online lending platform owned by Sterling Bank Nigeria.
Speaker Change: These deployments are part of Nigeria's National Identity Management Commission's mandated citizen enrollment program.
These deployments are part of Nigeria's National identity management commissions mandated citizen enrollment program.
Speaker Change: subsequent to the end of the year, we acquired swivel secure Europe for approximately $2.25 million.
Subsequent to year to the end of the year, we acquired swivel secure Europe for approximately $2 million to $5 million.
Speaker Change: The transaction substantially expands our international team operations, customer base and growth potential.
The transaction substantially expands our international team operations customer base and growth potential and should make an important contribution to our 2022 performance and beyond.
Speaker Change: and should make an important contribution to our 2022 performance and beyond.
Speaker Change: The CEO of Social Secure, Alex Roja, has joined BioKey to lead our Amea business, and shortly he will discuss this significant growth opportunity for our company.
The CEO of <unk> secure Alex ROA has joined bio key to lead our EMEA business and shortly he will discuss the significant growth opportunity for our company.
Speaker Change: The war on Ukraine and resulting sanctions have increased fears of significant potential cyber attacks on U.S. critical infrastructure.
The war in Ukraine, and resulting sanctions had increased fears of significant potential cyber attacks on U S critical infrastructure.
Speaker Change: The U.S. Cybersecurity and Infrastructure Security Agency, or SEESA, which is part of the U.S. Department of Homeland Security, recently issued an unusual, shield-up warning to business
The U S cyber security and infrastructure Security agency or <unk>, which is part of the U S Department of Homeland Security recently issued an unusual shields up warning.
Businesses that says they should be prepared to defend against cyber attacks potentially originating from Russia.
Speaker Change: That says they should be prepared to defend against cyber attacks, potentially originating from Russia.
Speaker Change: The agency said every organization, large and small, must be prepared to respond to disruptive cyber activities.
The agency said every organization large and small must be prepared to respond to disruptive cyber activity.
Speaker Change: The warning also indicated that state and local government entities were in the crosshairs of the attack.
The warning also indicated that state and local government entities were in the crosshairs of the attackers.
Speaker Change: This continues the history of CISA warnings about vulnerable password and other non-biometric credentials.
This continues our history of Cecil warnings about vulnerable password and other non biometric credentials.
Speaker Change: Also in the past few weeks, two competitors in the IAM and authentication space were themselves hacked.
Also in the past few weeks two competitors in the Gaiam and authentication space were themselves hat.
Speaker Change: What differentiates BioKey from these competitors is our expertise and our patented biometric technology.
What <unk> bio what differentiates bio key from these competitors is our expertise and our patented biometric technology.
Speaker Change: We have long held the belief that identity-bound biometrics, or IDB, must be part of a robust multi-factor and holistic cyber defense.
We have long held the belief that identity bound biometric so our IBD must be part of a robust multi factor and holistic cyber defense.
Speaker Change: These recent breaches underscore the importance of IBB, which remains the only method of verifying the actual individual behind a transaction or data inquiry.
Reaching these recent breaches underscored the importance of IBP, which remains the only method of verifying the actual individual behind a transaction where data inquiry.
Speaker Change: Considering this backdrop and the progress we have made, we have never been more optimistic about our company's prospects.
Considering this backdrop and the progress we've made we have never been more optimistic about our company's prospects.
Speaker Change: Between our PortalGuard business and Swivel Secure, we now serve an install base of over 500 valued IAM customers.
Between our portal guard business and swivel secure we now serve an installed base of over 500 valued IEM customers. Our business is now predominantly recurring subscription based revenue.
Speaker Change: Our business is now predominantly recurring subscription-based revenue.
Speaker Change: In 2021, 40% of our new portal guard business was sold through partners and virtually all of Swivel Secure's business is sourced via partners.
In 2021, 40% of our new portal Guard business was sold through partners and virtually all of swivel secures business is sourced via partners in.
Speaker Change: In 2022, we expect more than 50% of our revenues to come from the channel and this partner-centric trend should continue going forward.
In 2022, we expect more than 50% of our revenues come from the channel and partner centric trend should continue going forward.
Speaker Change: excluding Africa and hardware equipment, we expect 70% of our 2022 revenue will be contracted annual recurring revenue.
Excluding Africa and hardware equipment, we expect 70% of our 'twenty to 2022 revenue will be contracted annual recurring revenue.
Speaker Change: Reflecting the growth drivers, we are initiating full year 2022 revenue guidance in the range of 10 to 13 million dollars, which would represent approximately a doubling of revenue relative to 2021.
Reflecting the growth drivers, we are initiating full year 2022 revenue guidance in the range of $10 million to $13 million, which would represent approximately a doubling of revenue relative to 2021.
Speaker Change: Within this range, we anticipate potentially break-even operations depending on our mix of hardware and higher-margin software replicas.
Within this range, we anticipate potentially breakeven operations, depending on our mix of hardware and higher margin software revenues.
Speaker Change: Valuations for IAM and multi-factor authentication companies are some of the highest in the security sector.
Valuations for Iam, and multi factor authentication companies or some of the highest in the security sector.
Speaker Change: As we execute our growth strategy, we believe the market will recognize our progress.
As we execute our growth strategy, we believe the market will recognize our progress my focus is on I'm sure is in ensuring that the momentum we have built continues into 2022 and beyond.
Speaker Change: My focus is in ensuring that the momentum we have built continues into 2022 and beyond. With that, I'll turn the call back over to Kim.
With that I'll turn the call back over to Kim.
Great. Thanks, Mike.
Speaker Change: And so our PortalGuard solutions provide secure and efficient identity and access management for applications on an enterprise-wide basis. Our cloud solution addresses significant IT security challenges posed by remote work or study while also supporting a broad range of authentication factors. Our solution also allows customers to move their IT off-premises, eliminating the capital expenditures and resources required to host and maintain a secure authentication system.
And so our portal guard solution provide secure and efficient identity and access management for application on an enterprise wide basis, our cloud solution addresses significant IP security challenges posed by remote work or study while also supporting a broad range of authentication factors are.
Our solution also allows customers to move their T off premises, eliminating the capital expenditures and resources required to host and maintain and secure authentication system.
Speaker Change: In today's release, we highlighted recent customer wins, primarily within the verticals of higher education, government, finance, and enterprise.
In today's release, we highlighted recent customer wins, primarily within the vertical of higher education government finance and enterprise in.
Speaker Change: In higher education, we added new clients in 2021, including the University of Denver, Oklahoma Wesleyan University, and Grand Rapids Community College in the fourth quarter.
In higher education, we added new clients in 2021, including the University of Denver, Oklahoma Wesleyan University, and Grand Rapids Community College in the fourth quarter.
Speaker Change: As of March of this year, we now support over 2.5 million students at over 200 institutions across 12 states, including 30 cloud-based, or what we call IDAS, or Identity as a Service, customers.
As of March of this year, we now support over $2 5 million student at over 200 institutions across 12 states, including 30 cloud based on what we call <unk> our identity as a service customers.
Speaker Change: Existing customers continue to migrate from our earlier on-premises solutions to our cloud offering and many also are expanding their adoption of our solutions.
This thing customers continue to migrate from our earlier on premises solution to our cloud offering and many also are expanding their adoption of our solution.
Speaker Change: I should point out that just this month, we showcased our IAM solutions at the California Community College Tech Summit, where several customers hosted sessions demonstrating the success they've had with our platform. In Q4, we also showcased our solutions at the 2021 EDUCAUSE Annual Conference in Philadelphia.
I should point out that just this month, we showcased our isolation at the California Community College Tech summit, where several customer hosted sessions demonstrating the success they've had with our platform.
Q4, we also showcased our solutions at the 2021 <unk> annual conference in Philadelphia.
Speaker Change: In the government sector, we added new customers in 2021 and expanded relationships with others. Customers included a U.S. Department of Justice division, a foreign defense ministry, a West Coast state, several election boards, and county government customers in New Mexico, South Dakota, Missouri, New York, and Florida. Our large-scale biometric projects in Africa are also government related projects.
And the government sector, we added new customers in 2021 and expanded relationships with other customers.
Customers include a U S Department of Justice Division.
Born defense Ministry of West Coast State several election Board and County government customers in New Mexico, South Dakota, Missouri, New York, and Florida are large scale biometric projects in Africa are also government related projects.
Speaker Change: Recent wins include the Orange County, Florida Supervisor of Elections, Herkimer County, New York, Audrain County, Missouri, and Lawrence County, South Dakota. Importantly, county government decision-making is being driven both by the need to enhance data and cybersecurity and also for compliance with cybersecurity insurance requirements.
Recent wins include the Orange County, Florida supervisor of elections, Parker, Martin County, New York, Adrienne County, Missouri, and Morris County, South Dakota.
Importantly county government decision, making is being driven both by the need to enhance data and cyber security and also for compliance with cyber security insurance requirement.
Considering the increasing pace of data breaches and compliance requirement, we expect more counties and government agencies will look at oral guard frictionless and secure solution.
Speaker Change: Considering the increasing pace of data breaches and compliance requirements, we expect more counties and government agencies will look at PortalGuard's frictionless and secure solutions.
Speaker Change: To support this end market, in March, BioKey sponsored a cybersecurity workshop at the New York State Association of Counties, or NYSAC, Legislative Conference in Albany. And in Q4, we were at the 2021 National Association of State Chief Information Officers, or NASIO, Annual Conference in Seattle.
To support this end market in March <unk> sponsored a cyber security workshop at the New York State Association of counties or night that Legislative conference in Albany, and in Q4, we were at the 2021 National Association of State Chief Information officers are nasty Eau annual conference in Seattle.
Speaker Change: Other Q4 customer wins included America's Auto Auction and Orange Bank and Trust Company, who selected PortalGuard IDAS with biometrics to secure network and data access across all of their branch locations.
Other Q4 customer wins included Americas Auto auction and Orange Bank and Trust company, who selected portal guard I'd ask with biometric to secure network and data access across all of their branch location.
Speaker Change: We are targeting 1,200 of the largest credit unions and regional banks, and we expect this vertical to represent a significant portion of our growth in 2022.
We are targeting 200 of the largest credit unions and regional bank and we expect this vertical to represent a significant portion of our growth in 2022.
Speaker Change: In terms of marketing, which is my focus, we completed more than a dozen media interviews in 2021 and placed our byline submissions in key publications such as Security Boulevard, Security Magazine, Payments Journal, DCN, and HelpNet Security. We also are expanding our social media presence, resulting in increased and higher quality traffic to our website, BioKey.com.
In terms of marketing, which is my phone.
We completed more than a dozen media interviews in 2021 and placed our <unk> submission and key publications such as Security Boulevard Security magazine payment Journal, CCN and hope that security.
We also are expanding our social media presence, resulting in increased and higher quality traffic to our web web site <unk> Dot com.
Speaker Change: Touching for a moment on our Channel Alliance Partner, or CAP, program, Mike mentioned that we added over 100 channel partners in 2021. 2021 partner additions included NGen, Appian, CyberLitica, Crystal Communications, and UVS InfoTech, along with our Master Agent Referral Partner Program with Intellisys.
Touching for a moment on our channel Alliance partner or Cabinet program, Mike mentioned that we added over 100 channel partners in 2021 'twenty.
2021 partner additions included N. Gen apps in cyber liquor Crystal communication and UBS Infotech, along with our Master agent referral partner program within tell us that.
Speaker Change: Channel partners represented nearly 50% of the net new bookings in Q4, and we expect the CAP program to continue to be an integral part of our future growth.
<unk> partners represented nearly 50% of the net new bookings in Q4, and we expect the cap program to continue to be an integral part of our future growth.
Speaker Change: To support these efforts, we launched our Partner Web Portal in mid-2021. This portal provides a central location for resources, training, and a new deal registration process, and we also exhibited at the 2021 Channel Partners Conference and Expo in Q4.
To support these efforts, we launched our partner web portal in mid 2021. This portal provides a central location for resources training and a new deal registration process and we also exhibited at the 2020 , One channel Partners Conference and Expo in Q4.
Speaker Change: In summary, our marketing efforts continue to expand our brand and position BioQI for further expansion in 2022.
In summary, our marketing efforts continue to expand our brand and positioned <unk> for further expansion in 2022.
Speaker Change: At this time, I would like to introduce and welcome Alex Roja, the former CEO and sole stockholder of Swivel Secure Europe , who now heads our European, Middle East, and African efforts.
At this time I would like to introduce and welcome Alex Ross <unk>, the former CEO and sold stockholder of Global Security Europe , who now heads our European Middle East and African effort.
alexrohaa: Alex is an innovation enthusiast who's lived and worked in several countries and he speaks four languages. This is Alex's first public call since joining the BioKey team. Alex, over to you.
Alex is an innovation enthusiasts, who has lived and worked in several countries and he speaks four languages.
This is Alex its first public call since joined the biotech team, Alex well, where do you.
Okay.
Thank you Kimberly.
Alex Rojha: I like to keep my comments briefly, but I like to express my sincere optimism about the business opportunity in the major.
I would like to keep my comments briefly but I'd like to express my sincere optimism about the business opportunity.
Region five so we host acuity is the industry leader in authentication solution in Europe .
Alex Rojha: First, Suivo Secure is the industry leader in authentication solution in Europe . It is an award-winning out-of-the-box solution delivered multi-factor authentication, single sign-on, and risk-based authentication to secure cloud and on-premise applications.
Yes.
Weaning outcomes all solution believer multifactor authentication single sign on and risk based authentication to secure cloud and on premise applications.
Alex Rojha: Our solution can authenticate access for employees, customers, and suppliers.
Our solution can opt into access for employees customers and supply.
Alex Rojha: to log in onto Office 365, transacting to e-commerce, B2B or B2C, or accessing ERP or CRM.
Logging onto all restricting supply.
Rob Fink, too, Eric Palmer, B to B to C or accessing.
Our CRM.
Alex Rojha: Our existing business, SWIVO Secure Europe , has over $3 million in revenue in 2021 and was profitable.
Our <unk> business. So we have to give Europe has over $3 million in revenue in 2021 and was profitable.
Alex Rojha: We currently have three offices, 28 staff members, and three MSI-focused products under our flagship OutControl brand, designed for small and large enterprise and management service provider, MSI.
We currently have three offices.
Okay.
<unk> members I'm pleased MSI focused products and our flagship Alt control brand designed for small and large enterprise and Miranda Sotheby's provider.
Alex Rojha: We have approximately 300 Spelich active customers, also counting with the channel network of more than 100 parts.
We have approximately we have to establish a speed customers.
Customers also counting with a channel network of more about a handful of partners.
Alex Rojha: as we employ a 100% channel strategy in the EMEA region.
We employ the handle <unk>.
Channel strategy in the EMEA region.
Alex Rojha: Our technology partners include SAP, Red Hat, Samsung, Citrix, Microsoft, SoundPoint, and Oracle.
Our technology partners, including Red Hat, Samsung C peaks Microsoft.
Boyd article.
Alex Rojha: Marquis clients include Vodafone, Telefonica, Toyota, Maersk, DB Center, DHL, IBM, and Invitel.
Marquee clients, including Vodafone Telefonica Bouillon.
DB, Chengdu, DHL IBM and <unk>.
<unk>.
Alex Rojha: more well known as the owner of Zara. In this case, we protect more than a quarter of million of employees spread over 93 countries every day with the operation of 24 for seven.
More well known as the owner of Zara.
These guys, we put a bit more that a quarter of median of employ spread over 93 countries. Every day, we the operation of 24 for silver.
Alex Rojha: I will say that we know too and we have proven how to build brand awareness in the region.
I will say that we know too and we have proven how to build brand awareness in the region.
Alex Rojha: and you will hear from us as we quickly roll out of our strategy for the combiners business over the next 90 days.
And you will hear from Us us weekly and rollout of our strategy.
Combined this.
Over the next 90 days.
Alex Rojha: For example, one special project that will be rolled out is BioKey University, which involves an on-demand online training platform to help launch the brand and build awareness in those new markets.
One example, one special project that will be a rollout.
Is by Yogi.
You'll hear about sandy, which involve an on demand online training platform to help launch the brand and build wherever this in those new markets.
Alex Rojha: and knowledge channel allow us to multiply our presence and localize the strategy.
Knowledge shallow allows us to multiply our Brazos and look along the strategy.
Once we build awareness.
We see significant opportunities for bio key innovative products employ you'd entity balls biomass IBD in the mall.
But we started.
I look forward to address you on the future call and discuss our progress in the EMEA region.
Israel, Australia and the <unk>.
Questions.
At this time I will pass the call over to safety Wells to review by you'll keep financial through December which not includes sweetheart. Thank you.
The deal closing in March.
But should benefit.
Waters.
Thank you Alec.
Alex Rojha: Hierarchy's revenue increased to $5.1 million in 2021 from $2.8 million in fiscal year 20.
<unk> revenue increased to $5 1 million in 2021 from $2 8 million in fiscal year 'twenty.
Mainly due to the revenue derived from portal guards I am solutions and increased sales of biometric fingerprint meters.
Q4 revenue was <unk> 9 million versus $1 1 million in Q4 'twenty.
In the prior year period benefiting from the launch of the portal guide I guess and the strength in services and hardware sale.
Alex Rojha: Gross profit grew to $3.4 million in FY21 from $2 million in FY20, primarily due to a 166% increase in higher margin license fee revenue in FY21.
Gross profit grew to $3 4 million in fiscal year 'twenty, one from $2 million in fiscal year 'twenty.
Primarily due to a 166% increase in higher margin license fee revenue in fiscal year 'twenty one.
Alex Rojha: Gross margin on the license fee revenue was 93% in fiscal year 21 versus 95% in fiscal
Gross margin on the license fee revenue was 93% in fiscal year 1921 versus 95%.
In fiscal year, 'twenty Q4, 'twenty, one license fee revenue increased 52% to 544000 and represented 88% of the total gross profit in Q4, 'twenty one versus 69% in Q4 'twenty.
Alex Rojha: Q4-21 license fee revenue increased 52% to $544,000 and represented 88% of the total gross profit in Q4-21 versus 69% in Q4-20.
Alex Rojha: Operating expenses increased to $8.4 million in FY21 from $7.2 million in FY20. The increase reflected higher investment and research.
Operating expenses increased to $8 4 million in FY 'twenty, one from $7 2 million in FY 'twenty.
The increase reflected higher investment in research.
Alex Rojha: development and engineering expense related to our active slate of new product introductions, as well as a full year of expense related to the portal guard operation in FY20.
Development and engineering expense related to our active state slate of new product introductions as well as the full year of expense related to the portal got operation in FY 'twenty one.
Alex Rojha: The company reduced its operating loss by 5% to $4.9 million in FY21 versus $5.2 million in FY20 as the revenue growth surpassed expenses.
The company reduced its operating loss by 5% to $4 9 million in FY 'twenty, one versus $5 2 million in FY 'twenty as the revenue growth surpassed expense growth.
Alex Rojha: by a key report, excuse me, a reduced net loss available to common shareholders of $5.1 million or $0.65 for FY21 versus $9.8 million or $2.08 per share in FY20.
<unk> reported.
It gives me a reduced net loss available to common shareholders of $5 1 million or 65 cents for FY 'twenty, one versus $9 8 million or $2.08 per share in FY 'twenty.
Alex Rojha: to a successful capital raise in Q320, interest expense was reduced.
Due to our successful capital raise in Q3 'twenty interest expense is reduced.
Alex Rojha: to $18,000 in FY21 versus $4.3 million in FY20.
To 18000 in FY 'twenty, one versus $4 3 million in FY, 'twenty and Q4, 'twenty, one net loss to shareholders increased to $2 million from $1 4 million in Q2, Q4, 'twenty, primarily due to the lower operating income.
Alex Rojha: In Q4-21, net loss to shareholders increased to $2 million from $1.4 million in Q4-20, primarily due to the lower operating cost.
Alex Rojha: BioKey ended the year with $1.4 million in current assets.
Okay ended the year with $1 4 million in current asset.
Alex Rojha: 7.8 million of cash and cash equivalents and 14 million of current assets, 7.8 million of cash and cash equivalents, 12 million of working capital, and 15.6 million of stockholders equity.
7.8 million of cash and cash equivalents.
I'm, sorry, 40 million current assets $7 8 million of cash and cash equivalents 12 million of working capital and $15 6 million of stockholders' equity for comparative Iot had $18 9 million of current assets.
Alex Rojha: Comparative, BioKey had $18.9 million of current assets.
Alex Rojha: $15.4 million in net working capital and $20.3 million in stockholders' equity at the end
For $15 4 million net working capital and $20 3 million and stockholders' equity at the end of 2020.
Alex Rojha: In 2021, we invested $5.2 million of networking capital to support our growth. These investments were primary in inventory as we thus have managed our supply chain without any significant negative impacts to our business, while also prepping for an anticipated increase in business volume in the coming quarter.
In 2021.
At $5 2 million of net working capital to support our growth.
These investments were primarily in inventory as we.
Have managed our supply chain without any significant negative impacts to our business. While also prepping for an anticipated increase in business volume in the coming quarters and with that we can turn the call back to the operator for any questions from investors.
Alex Rojha: With that, we can turn the call back to the operator for any questions from investors.
Speaker Change: Thank you. We will now begin the question and answer session.
Thank you we will now begin the question and answer session.
Speaker Change: To ask a question, you may press star, then one on your touch-tone phone.
I ask a question you May press Star then one on your phone.
Speaker Change: If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys.
If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If your question has already been addressed and you'd like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.
Question has already been addressed I like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Speaker Change: And today's first question comes from Jack Vanderaar with Maxim Group. Please go ahead.
Today's first question comes from Josh vendor or with Maxim Group. Please go ahead.
Jack vanderar: Great. Good morning, guys. Appreciate the quarterly update. Congrats on the latest acquisition as well. A couple questions from me. I'll start with a housekeeping question. I'm not sure I saw the 10K filed, or if you mentioned it, but will that be filed today, or when will it be? Will it be filed today?
Great. Good morning, guys appreciate the quarterly update.
That's on the lease acquisition as well.
Couple of questions from me I'll start with a housekeeping question I'm not sure I saw the 10-K filed or if you mentioned it but will that be filed today or when will it be.
We filed in the next day or so.
It has not been filed yet.
Okay. So it sounds a minute though.
Jack vanderar: Okay, so it's not a minute though. Okay, that's helpful.
Okay. That's helpful.
<unk>.
Speaker Change: Then, Michael, you mentioned in your prepared remarks that you're seeing increasing signs that business
And then Michael you mentioned in your prepared remarks that youre seeing increasing signs that business is starting to pick up and likely to ramp throughout 2022.
Michael: starting to pick up and likely to ramp throughout 2022 specifically regarding those two large initial Africa contracts.
Specifically regarding those two large initial Africa contracts.
<unk>.
Speaker Change: I heard some of your points, but maybe can you help me better understand or just clarify what the key points are that suggest this building momentum and gives you confidence for these two Africa contracts?
I heard some of your points, but maybe can you just help me better understand or just clarify.
What the key points are that suggests is building momentum and gives you confidence for these two Africa contracts.
Speaker Change: Yeah, thanks, Jack. Absolutely. So I think it was probably early in or mid Q4, we made some announcements that financing for our equipment
Yeah.
Thanks Jack.
Absolutely. So I think it was probably early in mid Q4, we made some announcements that financing for our equipment.
Speaker Change: that we were delivering into Africa was starting to process through the banks. And we made a
That we were delivering into Africa was starting to process through the banks.
And we made a formal announcement.
Speaker Change: We issued a press release late February , early March that we have a relationship with Sterling Bank and a product they have called Specta, which basically finances the purchase of equipment, software and hardware that's necessary for the agents that are going to go out and do all of these enrollments in the remote location.
We issued a press release late February early March that we have.
Our relationship with Sterling Bank, and a product they have called Spectre, which basically finances, the purchase of equipment software and hardware that's necessary for the agents that are going to go out and do all of these enrollments in the remote locations.
Speaker Change: To get to get into business in essence. And so that's very encouraging for us right now, and we have a number of Financial institutions that are going to be coming on board doing the same thing So we're encouraged by that because the biggest issue that we've seen is the money
To get to get into business senescence, and so that's very encouraging for US right now and we have a number of financial institutions that are going to be coming on board doing the same thing. So we're encouraged by that because the biggest issue that we've seen is the money at a very high.
Speaker Change: at a very high level through the World Bank and the International Monetary Fund and even the government is available. But getting that money down to the street level to actually get something done has been the challenge.
Level through the World Bank and the international Monetary fund than even the government is available, but getting that money down to the street level to actually get something done that's been the challenge. So now that the banks are onboard we're encouraged and believe that the deployments will accelerate.
Speaker Change: So now that the banks are on board, we're encouraged and believe that the deployments will accelerate.
Okay got you know it makes that makes sense and are you still expecting let's say it does accelerate.
Speaker Change: Okay, gotcha. No, that makes that makes sense. And are you still expecting let's say it does accelerate um Are you still would you?
Are you still would you expect.
The initial batch or upfront revenue mix related to those contracts to be related to hardware sales.
Speaker Change: The initial batch or, you know, upfront revenue mix relate to those contracts to be related to hardware sales and have, you know, some sort of lumpy batch deployment of those hardware sales or.
And as you know some sort of lumpy batch deployments of those hardware sales or.
Speaker Change: I don't know, just any comments there would be helpful in terms of the mix and how you would deploy things at once it really starts.
I was just any any comments there would be helpful. In terms of the mix and how you would deploy things at once it really starts.
Speaker Change: getting going? Yeah, so what we've done, if you look at our guidance, for example, we took a very conservative approach as it relates to the hardware.
Getting going yes, so so what we've done if you look at our guidance. For example, we took a very conservative approach as it relates to the hardware we did that because again over the last 18 months, we had been anticipating the things. We're gonna start up they were gonna happened more quickly and they obviously did so we took a very.
Speaker Change: We did that because, again, over the last 18 months, we had been anticipating that things were going to start up, they were going to happen more quickly, and they obviously
Speaker Change: So we took a very conservative approach. So the hardware will be episodal. We do believe there's still significant, significant upside for the sale of product. But what's also happened over the last six to nine months
<unk> approach so the hardware will be episodes, we do believe there's still significant significant upside for the sale of product, but what's also happened over the last six to nine months is our software platform, which again will be a recurring revenue stream for secured.
Speaker Change: is our software platform which again will be a recovering revenue stream for securing access to the devices and to authenticate to applications for example in finance and banking and health care that has also started to come into play so we're going to see a combination of hardware and
<unk> access to the devices and to authenticate to applications for example, in finance and banking and health care that has also started to come into play. So we're going to see a combination of hardware and recurring revenue software revenue subscription.
Speaker Change: Recurring revenue, software revenue, subscription revenue, transaction revenue begin to get deployed in the second quarter and beyond. So it's going to be a combination of both. But our guidance takes into consideration a very, very, very conservative approach on the hardware side for Africa.
<unk> revenue.
Transaction revenue.
Begin to get deployed in the second quarter and beyond so it's going to be a combination of both but our guidance takes into consideration a very very very conservative approach on the hardware side for Africa.
Okay.
And then.
I guess.
Speaker Change: If I'm looking at your fourth quarter revenues, and I appreciate the comments on the channel. It sounds like new bookings are heavily weighed to the channel as well, over 50% or nearly 50%.
If I'm looking at your fourth quarter revenues and I appreciate the comments on the channel.
Sounds like new bookings.
Our heavily weighed to the channels well over 50% or nearly 50%.
Speaker Change: And that's going to represent, you know, the channels that represent a big portion of your 2022 revenue over 50%.
And that's going to represent the champion represent a big portion of your 2022 revenue over 50%.
Speaker Change: But if I look at just like from a segment perspective, fourth quarter license revenue and services revenue was down sequentially.
But if I look at just like from a segment perspective.
Fourth quarter license revenue.
And in services revenue was down sequentially.
Speaker Change: I would imagine with the building momentum and traction with the channels and you know portal guard being
I would imagine with the.
Building momentum and traction with the channels and portal guard being in the mix now for four quarters at least that license fees would be linear.
Speaker Change: in the mix now for four quarters at least, that license fees would be linearly increasing sequentially, but can you help me understand the disconnect there?
Linearly increasing sequentially, but can you help me understand the disconnect there.
Speaker Change: uh... they are absolutely going to increase sequentially uh... what you saw was a uh... we had a very very large uh... one single large contract that uh...
They are absolutely going to increase sequentially.
What you saw was a.
We had a very very large one single large contract that rig.
Renewed.
Speaker Change: kind of off-cycle, and so that's why we saw the fourth quarter license revenue off a little bit. That's going to change dramatically even as we approach and finish out the first quarter this week.
Kind of off cycle and so that's why we saw the fourth quarter license revenue off a little bit that's going to change dramatically, even as we approach and finish out the first quarter. This week. So you will see you will see growth across the board what you will also see.
Speaker Change: you will see you will see growth across the board. What you will also see
Speaker Change: Keep in mind, the Swivel Secure transaction closed in March, so in our first quarter we'll pick up a little bit of revenue for that transaction.
Keep in mind, the swivel secure transaction closed in March so.
In our first quarter will pick up a little bit of revenue for that transaction in the first quarter and then obviously every quarter beyond into and through 2022 as you know swivel secure Europe as we acquired it generated a little over $3 million in revenue and over a half a million.
Speaker Change: uh... in the first quarter and then obviously every quarter beyond into and through twenty twenty
Speaker Change: As you know, Swivel Secure Europe , as we acquired it, generated a little over $3 million in revenue and over a half a million dollars in net income. So it was accretive, it's profitable, and it's going to have a significant impact on our financial picture going forward. That business is also nearly 100% channel related.
And net income so it was accretive it's profitable.
And it's going to have a significant impact on our financial picture going forward that business is also nearly 100% channel related so the bulk of of that business. If not all of it is channel related.
Speaker Change: So the bulk of that business, if not all of it is channel related, all of it is.
All of it is.
Speaker Change: The majority of it is all software, so it's high margin, and that's going to certainly support our financial.
The majority of it is all software so it's high margin and that's going to certainly support our financial picture in 2022.
Speaker Change: Okay, great. That's helpful. Speaking of swivel, they generated about $3.1 million of revenue.
Okay, Great that's helpful and then.
So speaking of swivel just so they generated about $3 1 million of revenue and.
Speaker Change: pretty solid profit of 578K, or operating profit during.
Pretty solid profit of 570 8-K or operating profit.
During 2021 do you expect swivels revenue, so that $3 $1 million to grow in 2022, just any key quantify maybe provide a range any any added color would be helpful.
Speaker Change: Do you expect SWVL's revenue, so that $3.1 million, to grow in 2022? Just any...
Speaker Change: quantify it, maybe provide a range, any added color would be helpful.
Speaker Change: We're not breaking things down at that level at this point. We are providing guidance on an overall basis. I will say this, we expect all of our business to grow.
And then just to understand I tie it back to you. Okay. Yeah, we're not we're not breaking things down at that level. At this point, we are providing guidance on an overall basis I will say this we expect all of our business to grow.
Speaker Change: And obviously, there's another component here. There's the cross cell opportunity for our IBB or our identity bound by metrics, which is becoming more of a mandate now with everything that's going on in the geopolitical scenario across the globe. So that in and of itself will create an upsell opportunity throughout that install base of over 300 cuts.
And obviously, there's another component here, there's the cross sell opportunity for our IBD or our identity bound biometrics, which is becoming more of a mandate now with everything that's going on in the geopolitical scenario across the globe, so that in and of its.
Shelf will create an up sell opportunity throughout that installed base of over 300 customers. So we do expect that business to grow and we expect it to grow as a result of again integrating and making available immediately the biometric option for all of those clients.
Speaker Change: So we do expect that business to grow and we expect it to grow as a result of again integrating and making available immediately the biometric option for all of those clients.
Speaker Change: Okay, gotcha. And then in terms of just, you mentioned something about headcount, the combined headcount, I think I heard was over 60 employees.
Okay got you and then in.
In terms of just you mentioned something about head count the combined head count I think I heard was over 60 employees.
Speaker Change: What does this mean for OPEX and what does that mean for, I guess, your offerings? How do I think about gross margin? It sounds like Swivel's all software and high margin. And how do I also think about the impact, you know, obviously the first quarter is different.
Correct. What does this mean for Opex and what does that mean for I guess your operating expense how do I think about gross margin. It sounds like swivels, all software and high margin and how do I also think about the impact you know obviously the first quarter is different because just partial contribution from the acquisition, but on a normalized full quarter basis. What does this do to your gross margin profile.
Speaker Change: just partial contribution from the acquisition, but on a normalized, you know, full quarter basis. What does this do to your gross margin profile? I mean, it's going to vary because of mix probably, but imagine gross margin goes up. And I imagine operating expenses go up as well.
Very because of mix, probably but imagine gross margin goes up.
And I imagine operating expenses go up as well, but.
Just.
Speaker Change: how much, I guess, just any color would be helpful. Well, again, you know, we'll, as we get in and announce our first quarter, I think we'll put, there'll be a lot more color on that right now. You know, I can't provide those numbers, but I will say this, again.
How how much I guess, just any color would be helpful. Well again, we'll.
We will as we get in and announced our first quarter I think we'll put there'll be a lot more color on that right now I can't provide those numbers, but I will say this again.
Speaker Change: Swivel is profitable It will continue to be profitable. And so there will be no drag only upside and so You'll be able to model. I think you'll be able to model the the year a little bit better as we announce our
<unk> is profitable.
It will continue to be profitable and so.
It would be no drag only upside and so you'll be able to model I think you'll be able to model to the year, a little bit better as we announce our first quarter.
Okay and then just.
Speaker Change: Okay, and then just, you know, another kind of tough question, just in terms of.
Another kind of tough question and just in terms of.
Speaker Change: I can try to understand the guidance a little better from the revenue side. So, 2022 revenue guidance, $10 million to $13 million. If I were to back out swivel and just assume it was flat of $3 million, then I'm at $7 million to $10 million.
If I can try to understand the guidance a little better.
From the revenue side, so 2022 revenue guidance $10 million to $13 million.
If I were to back out swivel and just assume that it was flat a $3 million right.
At $7 million to $10 million.
Speaker Change: At the low end of that guidance range of like seven million from the core bio key business with pistol pistol star or portal guard
At the low end of that guidance range of like $7 million from the core <unk> business with pistol.
I'll start with Cologuard.
Speaker Change: Is there any Africa baked, is that like the worst case scenario is like no Africa contract revenues really recognized, it's more of just the core channel business picking up and driving
Is there any Africa baked is like is that like the worst case scenarios like no Africa contract revenues really recognize it's more of a.
Core channel business picking up and driving that growth from.
Speaker Change: from like a worst-case scenario, and then at the top of the range, obviously, it's going to incorporate swivel.
Mike.
Worst case scenario and then at the top of the range I would say it can incorporate swivel and it probably still doesn't include all of the Africa potential that could happen, but just trying to understand the lower end and then and then the upper bound to those ranges I think I think you figured it out I think you said it.
Speaker Change: And it probably still doesn't include all the Africa potential that could happen. But just trying to understand the lower end and then the upper bounds of those ranges.
Speaker Change: I think you figured it out. I think you said it. I was pretty clear and articulate in saying that we took an ultra-conservative approach on Africa.
Was pretty clear and articulate in saying that we took in ultra conservative approach on Africa. So.
Speaker Change: For sure, we're taking a minimalist approach, saying it's episodal. If it happens, when it happens, and we believe it will happen, we have quite a few.
For sure.
We're taking a minimalist approach, saying, it's episode or if it happens when it happens and we believe it will happen we have quite a few <unk>.
Speaker Change: uh... significant opportunities again now that the funding is starting to roll but we've taken a very conservative approach in our guidance
Significant opportunities again now that the funding is starting to roll, but we've taken a very conservative approach in our guidance.
Speaker Change: There's another element here, and I mentioned it in my prepared comments, and I've been speaking about this as I've made...
There's another element here and I mentioned in my prepared comments and had been speaking about this I'd make the conference rounds.
Speaker Change: It's pretty clear if you look at the valuations in the Identity and Access Management.
Clear if you'd look at the valuations in the identity and access management space in particular and the authentication.
Speaker Change: in particular in the authentication, privileged access management.
Privileged access management.
Governance space, a big companies like for example, okta Sailpoint larger companies like theirs, do well, which is a division of Cisco when you look at the multiples.
Speaker Change: Big companies like, for example, Okta, and SailPoint, larger companies like theirs, Duo, which is a division of Cisco.
Speaker Change: in that sector of the security space, they're amazing. And if you look at BioKey's revenue, especially now, 70% of what we described there will be contracted and subscription-based and recurring. Our valuations and multiples centered just solely around the identity and access management space.
In that sector of the security space, there are amazing and if you look at <unk> revenue, especially now 70% of what we described there will be contracted in subscription based and recurring.
Our valuations and multiples centered just solely around the identity and access management space.
Speaker Change: really put us in, in my opinion, a good position, and our investors in a very good position for us.
Really put us in my opinion in a good position and our investors in a very good position for upside.
Speaker Change: So, not that I'm trying to change the narrative here, but at the end of the day, the real value for Bioki going forward centers around our identity and access management business because again, it's recovering, because it's high margin, because.
So.
Not that I'm trying to change the narrative here, but you know at the end of the day the real value for bio key going forward centers around our identity and access management business because again, it's recovering because it's high margin.
Because.
Speaker Change: the way the world, unfortunately, has changed over the last six months, in particular over the last 90 days.
The way the World. Unfortunately has changed over the last six months in particular over the last 90 days.
Speaker Change: There is going to be an incredible demand for super strong MFA, and we are one of the few, if maybe the only, companies.
There is going to be an incredible demand for super strong MFA and we are one of the few if may be the only company that can offer with our identity bound biometrics positive identification of an individual who's sitting behind the computer accessing information or consummating a transaction.
Speaker Change: that can offer, with our identity-bound biometrics, positive identification of an individual who's sitting behind a computer accessing information or consummating a transaction.
Speaker Change: uh... we announced the product in halfway through last year called mobile off with palm positive which is a mobile authentication
We announced the product halfway through last year called mobile off with Pompe positive, which is a mobile authentication solution.
Speaker Change: The first method of biometrical authentication was POM. You'll see some additional announcements from us in the near term and expanding that product. That will give us the ability to go CIM, meaning to go to the customer, to go B to C. So to have some of our enterprise customers who has consumer data and information, to allow them to be able to use biometrical authentication for their customers coming into their portal.
First method of biometric authentication was palm.
You'll see some additional announcements from us in the near term and expanding that product that will give us the ability to go CIA meaning to go to the customer to go be to see so to have some of our enterprise customers, who house consumer data and information to allow them to be able to use biometric authentication for.
Are customers coming into their portals. So we think we're in a very very good position to take advantage of that.
Speaker Change: So we think we're in a very, very good position to take advantage of that. And again, our guidance is based.
And again our guidance is based.
Speaker Change: Predominantly on that mantra and growing our IAM business and growing it profitably, my focus is absolutely going to be getting the company to profitability this year and doing it sooner rather than later.
Predominantly on that mantra and growing our iam business and growing it profitably Mike.
My focus is absolutely going to be getting the company to profitability this year and doing it sooner rather than later.
Speaker Change: Okay, fantastic. Well, I appreciate the color and appreciate the time. Thank you.
Okay Fantastic well I appreciate the color and I appreciate the time. Thank you.
Speaker Change: And ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star then 1. Today's next question comes from Dan Kim, he's a private investor. Please go ahead. Morning. Morning, Dan. Yeah. Yeah.
Ladies and gentlemen, as a reminder, if you wanted to ask a question. Please press Star then one.
Today's next question comes from them.
Prevalent.
As a private investor. Please go ahead.
Good morning.
Good morning, Dan.
I was wondering if so is the long term plan to transition all of swivel customers to Portugal.
Yeah.
I would say that.
Many of those customers will ultimately move to Porto guard because of the enhanced security capability with biometrics, but.
Dan Kim: Many of those customers will ultimately move to PortalGuard because of the enhanced security capability with biometrics, but some of those customers will stay with the product that they have and we have the ability to continue to sell and to market and support that product as well. But ultimately, there will be a shift because of the nature of our PortalGuard platform.
Some of those customers will stay with the product that they have and we have the ability to begin to continue to sell and to market and support that product as well, but ultimately there will be a shift because of the nature of our portal guard platform.
Okay.
Dan Kim: So the next question would be, are there technical difficulties?
So the next question would be are there technical difficulties and swivel customers switching of Paraguay or they require additional development on your part or is it pretty much turnkey.
Dan Kim: customers switching to Port-au-Prince they require additional development on your part or is it pretty much?
Dan Kim: Pretty much turnkey, you know, those customers can utilize the cloud, they can utilize our on-prem solution if that's what they so desire, they can take advantage of the 16 factors of authentication that we provide today, and of course our integrated and identity bound biometric solutions which again provide strong authentication options.
Pretty much turnkey.
Those customers can utilize the cloud they can utilize our on Prem solution. If that's what they so desire they couldn't.
Take advantage of the <unk> factors of authentication that we provide today.
And of course, our integrated and identity by bound biometric solutions, which again provides strong authentication options as well as our mobile app. So there's really no technical hurdle for them to go one or the other.
Dan Kim: So there's really no technical hurdle for them to go one or the other. Okay.
Okay.
I just had a question for Mr. I guess.
If he can answer your question.
Dan Kim: uh... i'm just wondering why he believes that he can double his earnings
I'm just wondering why he believes that.
He can double as earnings from 500 K too.
Two 1 million.
I'm wondering if you could give me some color on that or if you can't that's okay too.
Dan Kim: Of course. First of all, thank you for the question.
Of course first of all.
Thank you for the question.
Ed.
Dan Kim: I think what we're going to see here is the combined effort going to make that happen. Again, today in Swivel Secure, we have three products, but we don't have the IVB platform. IVB platform is going to make a difference, also be associated with the NASDAQ brand, going to make the difference.
I think I think what we're going to see here is the combined airport going from Microsoft Pamplin, Okay again to die in single secured we have three products, but we don't have.
IBD platform.
<unk> platform is.
Going to make a difference and also <unk>.
The NASDAQ brand going to make to the defense.
Dan Kim: Everything is positive right now. Again, we're going to present the numbers.
Everything is positive right now again, we're going to present the numbers that's going to be in line with what we we agreed and you're going to see R&D growing at all.
Dan Kim: that's going to be in line with what we agreed, and you're going to see already a growing of that revenue.
All of that revenue.
Dan Kim: The strategy behind is very simple, continue what we have been doing for these years.
Yes.
<unk> signed its very seen bulk continue what we have been doing for BCS.
Dan Kim: But if you see, we have been double our revenue and our profit year over year. That means I think this is the normal process right now and what we expect to present.
But if you see we have been double.
Our revenue of $1 profit.
About a year.
I think this is the normal process right now and what do you expect to prevent.
Okay. Thank you.
Dan Kim: Um, let me switch to Nigeria, uh, uh, has Nigeria paid any, uh, more than five
Let me switch to Nigeria.
Has nigeria paid any more of the 500 K hardware delivery yet.
Speaker Change: Yes, they paid some, it's slow but they paid some setting up these banking relationships that I described before.
Yes, they paid some.
Slow, but they paid some setting up these banking relationships that I described before.
Speaker Change: my prepared comments and then in my answers to Jack are really going to help. And we're hoping that that's going to accelerate that significantly in the near term. That's been the holdup all along quite.
Our prepared comments and then in my answers to Jack are really going to help and we're hoping that that's going to accelerate that significantly in the near term.
That's been the holdup, all along quite frankly.
Okay.
Speaker Change: Should we expect the revenue guidance to be pretty much back end loaded in the back half of 2020?
Should we expect the revenue guidance to be pretty much back end loaded in the back half of 2022.
No.
Okay, no absolutely not.
Speaker Change: No, absolutely not. I think as I described,
As I described.
I think <unk>.
Speaker Change: I think extensively with the subscription-based recurring nature of our revenue stream right now, we expect it to be more even and more predictable. So I don't believe that
Sensibly with the subscription based recurring nature of our revenue stream right now we expect it to be.
More even and more predictable so I don't believe.
That it will be back end weighted.
That's fantastic.
Speaker Change: have any revenues been received so far based on the sterling bank deal and i know it's early
Have any revenues been received so far based on the Sterling Bank deal I know it's early.
Yes.
Yes.
Speaker Change: Yes, we're making progress. It's slow. The biggest challenge for them, just kind of a little side note, is KYC.
Yes, where we're making progress is slow.
The biggest challenge for them just kind of a little side note is <unk>. So.
Speaker Change: So when you onboard, for example, you open a bank account here, the bank needs to know who you are, they need to get some background information on you, they'll do a credit report, they can use knowledge-based questions to ensure that you really are who you say you are. That's a significant challenge in the third world because
When you onboard for example, you open a bank account here the bank needs to know who you are they need to get some background information on you you know they'll do a credit report.
They can use our.
Knowledge base questions to ensure that you really are who you say you are.
That's a significant challenge in the third world because.
Speaker Change: For example, the Experians, or TransUnions, or Equifaxes of the world don't operate there. So that's a big challenge for them. So knowing who they're doing business with takes a lot longer than it would take, for example, here in the U.S., or in Europe , or in the developed world.
For example, the experience or trans unions or Equifax. This of the world don't operate there and so that's a big challenge for them, so knowing who theyre doing business with it takes a lot longer than it would take for example here in the U S or in Europe or in the developed world.
Speaker Change: Chicken and the egg, huh? Yeah, it really is. It's kind of amazing. And that's why tying in an identity to an individual is so critically, critically important. Because here, again, you can run a credit report on anyone as a business, on an individual. You can do it five times a month.
Like a chicken yeah, yeah, yeah. It really is it's kind of amazing and Thats why tie.
Tying it in identity to an individual is so critically critically important because.
Here again, you can run a credit report on anyone has as a business.
I mean individually you can do at <unk>.
Five times a month, if you want you can continually monitor that individuals but in the third world. That's almost impossible. So once you have a bound identity. Then you really know who that individual is as they travel from one place to another or they access one system or another so now that's what again in essence the World Bank is trying to accomplish here right.
Speaker Change: continually monitor that individual, but in the third world, that's almost impossible. So once you have a bound identity, then you really know who that individual is as they travel from one place to another, or they access one system or another. So, now that's what, again, in essence, the World Bank is trying to accomplish here, right? Knowing that the only way that they're going to be able to pull people out of poverty is to create an ecosystem that has credibility, and that's what we're doing with.
Knowing that the only way that they're going to be able to pull people.
Out of poverty right is to create an ecosystem.
That has credibility.
And that's what we're doing with all of the enrollments and beginning phases of the digital transformation in Nigeria and other countries in Africa as well.
Speaker Change: and other countries in Africa.
Okay I understand.
Speaker Change: uh... let's say let's assume that africa really starts to roll this stuff out and the revenues start to flow what
If let's say, let's assume that Africa really starts to roll this stuff out and the revenues start to flow.
What's to stop major.
Major competitors from coming in and knocking out of the market.
Speaker Change: Well, I would say two things. Number one, we have some pretty good inventory and access to
Well I I would say two things number one we have we have some pretty good inventory and access to.
Speaker Change: manufacturing to be able to produce and to source a lot of equipment very quickly. That's number
Manufacturing to be able to produce and to source a lot of equipment very quickly that's number one.
Speaker Change: Number two, we're, as I described also before, we're now pretty far along in incorporating our software and our identity management.
Number two where as I described also before where we're now pretty far along and incorporating our software.
And our identity management solutions across those platforms, which will create.
Speaker Change: solutions across those platforms, which will create, you know, a pretty strong
A pretty strong barrier to entry.
Speaker Change: biometric technology, especially our mobile biometric technology.
Our biometric technology, especially our mobile biometric technologies.
Speaker Change: will provide a pretty significant barrier
We'll provide a pretty significant barrier to entry.
Speaker Change: look at across the board at all of the IAM players that I mentioned a number of them before. I won't go through it again. They have and support all the traditional factors of authentication that are getting hacked, that are getting compromised. We're the only one that really has the innate integrated biometric solutions that can be automatically and immediately dropped in by any customer if they want to strengthen their
Look it.
Across the board at all of the Iam players.
I've mentioned, a number of them before I won't go through it again.
They have and support all of the traditional factors of authentication that are getting hacked that are getting compromised.
We're the only one that really has the innate integrated biometric solutions that can be automatically and immediately dropped in by any customer if they want to strengthen their their cyber defenses.
That's why Kim mentioned.
Speaker Change: banks, many of our banking customers, many of our county government customers are going by
Banks, many of our banking customers many of our county government customers are going biometrics.
Speaker Change: because that is the strongest form of authentication that's available, and it's the only way again to positively identify.
Because that is the strongest form of authentication that's available and it's the only way again to positively identify an individual behind the transaction.
Speaker Change: So I think that's the barrier to entry for us, right? It's that we provide a full and complete solution, not just
So I think that's the barrier to entry for US right. It's that we provide a full and complete solution not just one component of it.
Speaker Change: And, you know, look, we're not going to, you know, go and spend $50 million sourcing hardware. But you know, at the end of the day, if we can do it in a managed way.
And look we're not going to go and spend $50 million sourcing hardware, but at the end of the day.
If we can do it in a managed.
Way if we can.
Speaker Change: grab the margin and we can remain in control of the solution. It makes sense for us to do that as long as it continues to make sense for us to do it. We'll do it if it doesn't.
Grabbed the margin and we can remain in control of the solution. It makes sense for us to do that as long as it continues to make sense for us to do it we'll do it if it doesn't we won't.
Okay.
Speaker Change: last question here to uh... would you say you're in the bullseye of this 2021 security executive
Last question here too.
Would you say you are in the Bull's eye of this 2021 security executive order or.
Just in the periphery.
Speaker Change: You know, I probably will let Kim comment on that, because we've been doing an awful lot of work around that area. I would say we're in the bullseye, but we're also, you know, have tremendous advantages as I just described. And maybe Kim will have something to say on that.
You know I, probably will let Tim comment on that because we've been doing an awful lot of work around around that area I would say we're in the bullseye, but we're also you don't have tremendous advantages as I just described but maybe Kim will have some additional comments.
Kim Biddings: Yeah, sure thing. So I agree. I think, you know, right in the bullseye of it.
Yeah sure thing.
So I agree I think right in the Bull's eye of it.
Kim Biddings: You know, looking at even the past 10 years of what companies have been using to do security, authentication, there's never been a more compelling time at this point to use, as we mentioned, identity bound, biometrics, and really help, especially government, what we've seen with county government strings in their defenses and finally bring up, you know, their cybersecurity posture to where it needs to be to handle the attacks and the threats that are happening today. So, we'll see you next time.
Looking at even the past 10 years of what companies have been using to do security authentication.
There's never been a more compelling time at this point to use as we mentioned I got inbound biometrics and really help especially government what we've seen the county government strengthen their defenses.
And finally and bring up their cybersecurity posture to where it needs to be to handle the attack from effects that are happening today. So.
Kim Biddings: I think Square within the Bullseye of it, in terms of the executive order with your trust strengthening defenses and multi-factor authentication, that is what we have our government customers coming to us for, and we are square in the position to offer them something that competitively speaking is not available other places. So right in the Bullseye, I am very excited to go into this year in that position.
I think Claire within the Bull's eye of it in terms of the executive order with.
Trust strengthening defenses and multifactor authentication.
That is what we have our government customers coming to us for.
And we are square in a position to offer them something that.
Competitively speaking is not available in other places so right in the Bull's eye and are very excited to go into this year in that position.
Speaker Change: Okay, uh, Kim, do you have any, like, is that showing up statistically at all yet in reaches or calls or websites?
Okay. Kim do you have any like is that showing up statistically at all yet in.
Reaches or.
Calls or website or.
Do you have any stood at physical evidence of that.
Speaker Change: in terms of the traction with the actual government implementations or custom.
In terms of the traction with the actual government input implementations or customers.
Yeah in terms of that order him.
Speaker Change: I mean, I think, you know, from the mentions that I had in the part that I read through, the influx of county government is a great example there. And our continued participation with the National Association of Counties at the national and now actually at the state level is New York State Association of Counties. They're really leaning in to partners like us.
Okay.
I mentioned that I had in the part that I read through the.
The influx of County government is a great example, there.
And our continued participation with the National Association of counties at the National and now actually at the state level with New York State Association of counties and.
They are really leaning in to partners like us.
Speaker Change: And that traction is seen not only in customer acquisition, but in also our participation in those events.
That traction you've seen not only in customer acquisition, but also our participation hasn't been speaking engagements thought leadership.
They really are leaning into us to provide the guidance.
I see that's great that's great last question.
Speaker Change: Last question. Yeah, go ahead. Now, I was only going to make one other comment, and it's interesting. We've also seen a sell cycle on the county government side that almost really has amazed us that from start to finish, a number of these counties that we closed, we were in a cycle of less than 90 days.
Go ahead.
Only going to make one other comment down it's interesting.
We've also seen a sales cycle on the county government side that that almost really has amazed us that from start to finish a number of these counties that we closed we were in a cycle of less than 90 days, which is amazing. So I think that's a good example of the heightened awareness and needed.
Speaker Change: So I think that's a good example of the heightened awareness and needed requirement to get something done and get it done quickly. And there also is money available to make it happen. And a money can also be allocated on an emergency basis to make it happen. So it's a good place to be right now. Well, that must have been competitive. Why did they pick you?
Requirement to get something done and get it done quickly and they're also was money available to make it happen and money can also be allocated on an emergency basis to make it happen. So so it's a good place to be right now.
Well that must have been competitive why did they pick you in 90 days or how could they pick in 90 days.
Sorry to ask you I was just curious.
Speaker Change: Well, I think it's pretty straightforward. You know, they have a need. They have a requirement. They have heightened awareness and compliance issues that they face.
Yeah.
It's pretty straightforward you know they have a need they ever requirement.
They have heightened awareness and and compliance issues that they face and they can move very very quickly as long as we are available under the buying vehicles.
Speaker Change: And they can move very, very quickly. As long as we're available under the buying vehicles that we participate in with our partners, it's very easy for them to buy. And so that's the trick. What people don't understand is that you really, even though you're selling directly to the county, they're not procuring directly through you. They're procuring through a buying vehicle that is a partner that we work with or support like an SHI and there are a million others. So that's it.
That we participate in with our partners, it's very easy for them to buy and so that's the trick what what people don't understand is that you really even though youre selling directly to the county theyre not procuring directly through their procuring through a buying vehicle that is a partner that we work.
With their support like in S. H I and there are a million others. So.
That's how they could buy so quickly.
I see last question.
Speaker Change: Last question, can you say
Can you say who were the competitors that were hacked.
Speaker Change: uh... i think it's public information uh... the octa one was so broad and it was all over the news uh... so uh... you know that one pretty clearly i guess was announced maybe a week or so ago
I think it's public information.
The Okta one was so broad it was all over the news.
So that one pretty clearly.
I guess, it was announced maybe a week or so ago.
So that one I can I conclude we talk about the other I won't.
Okay. Thank you very much guys for answering all my questions.
Youre welcome.
Speaker Change: And ladies and gentlemen, once more if you'd like to ask a question, please press star then 1 at this time.
Hello, ladies and gentlemen, once more if you're going to ask a question. Please press Star then one at this time.
Yeah.
Speaker Change: And ladies and gentlemen, this concludes the question and answer session. I'd like to turn the conference back over to Mike DePasquale for any closing remarks.
Good day, ladies and gentlemen. This concludes the question and answer session I'd like to turn the conference back over to Mike <unk> for any closing remarks.
Mike: Thank you. I just want to thank everyone for joining today's call. We look forward to updating you on our Q1 call in May, which will come around pretty quickly now. In the meantime, we will participate in the H.C. Wainwright Conference, which is May 23rd to the 26th, and we will continue to provide regular news and updates and press releases as developments occur within the business. Again, thank you for your time, and have a great day.
I just want to thank everyone for joining today's call. We look forward to updating you on our Q1 call in May which will come around pretty quickly now in the meantime, we will participate in the HC Wainwright conference, which is May 23 to 26, and we will continue to provide regular news and updates in press releases.
Developments occur within the business again, thank you for your time and have a great day.
Mike: And ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Gentlemen, This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Yes.