Q2 2022 Digimarc Corp Earnings Call
Greetings and welcome to the did you Mark Corporation second quarter 2022 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is.
Recorded I would now like to turn this conference over to your host Mr. John Mayer Chief Legal Officer, Sir. Please proceed.
Welcome to our Q2 conference call Riley Mccormack, our CEO and Charles Beck, Our CFO are with me on the call on the call today, we will discuss Q2 financial results and provide a business update this will be followed by a question and answer Forum, we have posted our prepared remarks in the Investor Relations section of our website.
We will archive this webcast there.
Before we begin let me remind everyone that today's discussion contains forward looking statements that have risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially.
Charles will now comment on our Q2 financial results.
Thank you Joel and Hello, everyone.
First year commercial bookings were $2 2 million during the quarter compared to $2 3 million in Q2 2021.
Bookings in Q2 last year included 800000.
Piracy intelligence product.
We are nearly complete and winding down.
We are not signing any new piracy intelligence deals and we are now effectively exited most of our legacy customer contracts.
Excluding piracy intelligence, our first year commercial bookings increased 700000 or 44%.
As a reminder, we are now selling a combined solution of did you Mark watermarks and everything product cloud.
Which makes it impractical to provide a breakout of bookings and revenue for each.
Revenue for the second quarter was $7 7 million up 23% from $6 3 million in Q2 last year, reflecting growth in both subscription and service revenue.
[laughter] description revenue grew 30% in the quarter from $2 5 million to $3 2 million.
Keep in mind, there are two offsetting factors impacting our year over year growth.
The addition of subscription revenue from everything offset by the decline in subscription revenue from sunsetting, our piracy intelligence product.
As we previewed last quarter the <unk>.
Setting of the piracy intelligence product was going to have a meaningful impact on subscription revenue starting in Q2, which it did.
The product was generating 600000 of revenue per quarter before we started exiting and now that we're more than halfway through that process. Our revenue was only 300000 in the second quarter.
We expect this revenue to be insignificant going forward as we finalize the wind down process.
These offsetting factors as well as the vagaries of revenue recognition rules that have an impact on our reported revenue at this stage in our growth is why we believe first year bookings is the best leading indicator of growth of our business.
As a reminder, first year bookings are committed first year contract amounts and will typically flow into revenue in the 12 months after contract signing.
Service revenue grew 19% in the quarter from $3 8 million to $4 5 million.
The increase largely reflects higher service revenue from Holy Grail 2.0 recycling projects.
The majority of which relates to the recycling contract we referenced on the last earnings call.
We are nearly complete with that contract. So we do not anticipate significant revenues in Q3 from this contract and the service revenue should revert to more normalized levels.
Gross profit margin for the second quarter was 52% compared to 67% in Q2 last year.
The decrease in margin reflects $1 1 million of amortization expense recorded on acquired intangible assets recognized in the acquisition accounting for everything.
non-GAAP gross profit margin, which excludes amortization expense and stock based compensation expense was 71% in Q2 2022 compared to 72% in Q2 2021.
Operating expenses for the quarter were $18 9 million down 700000 from Q2 last year.
Last year, we incurred $6 2 million of expense related to the separation agreement, we entered into with our previous CEO and $1 3 million of severance costs related organizational changes we made in Q2 2021.
Excluding these costs operating expenses increased $6 8 million, reflecting the operating expenses of everything and higher compensation costs due to higher head count and annual compensation adjustments.
non-GAAP operating expenses for the quarter were $15 million up $2 4 million from Q2 last year.
Everything added $3 3 million of non-GAAP operating expenses in the second quarter.
Excluding everything non-GAAP operating expenses decreased 900000.
The cash costs associated with the separation agreement, we entered into with our previous CEO and cash severance costs related to organizational changes we made in Q2, 2021, which totaled $2 5 million.
Partially offset by higher cash compensation costs due to higher head count and annual compensation adjustments.
Yeah.
Net loss per common share for the quarter was <unk> 75 versus <unk> 94 in Q2 last year.
non-GAAP net loss per common share for the quarter was <unk> 47 versus 49 in Q2 last year.
We ended the quarter was $68 4 million in cash and investments.
We used $14 $7 million of cash and investments during the second quarter. If you exclude the impact of the $58 2 million of capital we raised in April .
The $14 7 million included roughly $3 million of cash to pay higher.
Excuse me cash to pay a larger than usual outstanding payables at March 31.
We incurred several large expenditures in Q1 related to the acquisition financing and other activities that were not paid until April due to timing of receiving the invoices and processing the payments.
Excluding the impact of paying off these higher payables, we used $11 7 million of cash and investments during the quarter compared to $9 6 million in the second quarter of 2021.
The last two quarters cash flows have been higher than our expected normalized rate going forward due to some nonrecurring items.
Internally, we look at non-GAAP loss, which excludes non cash expenses and layer on cash used for capital expenditures and share repurchases to estimate our normalized level of cash flows.
We expect cash flows each quarter may fluctuate from this metric due to timing of customer receipts and vendor payments, but it provides a good indicator of normalized cash flow at existing revenue levels.
For further discussion of our financial results and risks and prospects for our business. Please see our Form 10-Q that will be filed with the SEC.
Rodney will now provide a business update.
Thanks Charles.
A quarter into our relaunch I'm pleased with where we are as well as our direction of travel.
I want to use today's call to share, where we stand where we're going and importantly provide some examples of progress between those two points.
Messaged in the past why we made the move from selling tools to selling products I won't reiterate that here, but.
But driving this journey is our internal mantra that we must be easy to began doing business with an excellent guiding customers longer did you Mark journey. Our goal is simple we want to digitize the world's products and in doing so allow our customers to complete their digital transformation the transformation journey.
Many are pursuing but can't complete if their products remain stuck solely in the analog world.
And deciding what products to build we are focusing on those that address large and growing problems and hence allow us to participate in large and growing markets. We are prioritizing our efforts by applying the lines of whether our platform upon which all of our products are built provides significant technological differentiation we.
We are being purposeful in making sure our products are accretive to each other which means that the value of customer on walks from any single digit mark product is greater than more <unk> products to which they subscribe.
And we are fortunate because based on the almost unlimited unlimited applicability of our platform. We believe will be product hiring new functionality for years and in many cases, a spark of those new products.
We'll be prospect led demand.
But we also realize we will never have a monopoly on all good ideas are the best Avenue with which to address all potential customers problems.
While we will constantly.
Add new products to our product suite, we also realize theres value to selectively meeting metering out access to our platform. So that others can build their own products, because not only will metering out that access generate compounding revenue. It will further our goal of digitizing the world's products using our technology, allowing those digitized products to benefit from our <unk> solutions.
At some point down the road.
So that's just started strategy in a nutshell build an ever expanding product suite, a wide moat products, a luxury afforded to us by the unique synergistic nature of our platform mix.
Make sure those products address large fast growing markets.
Not only do we enjoyed the most provided to us by our platform, but whose existence is often initially brought to our attention by prospects who are anxious for us to solve their problems.
Use the accretive nature of our products add ever more value to our customers by cross selling them additional digit Mark doak products.
And at the same time smartly made access to our platform. So others can build upon it which is a very profitable way to digitize the world's products using our technology and allows us the luxury rare among platform based technology companies.
This way not only will we avoid channel conflict, we in our channel will provide each other compounding value, which ensures we will always have a large and robust ecosystem surrounding our platform.
Q2 brought demonstrable progress across all of these fronts.
Starting with brand integrity, we did indeed closed the second division of a large CPG company I referenced in our March call.
Moreover, we are in talks to further expand our brand integrity offering with our first division of that company.
We're in conversations with additional divisions at the CPG, all while discussing what our brand integrity enterprise deal might look like at least for part of the company.
Beyond the single company, we are in active discussions with others in the same industry, who also want to benefit from our brand integrity product and we are anxious to begin the same land and expand strategy with them and expect to make progress on that front starting this quarter.
In other words, we seem to have found product market fit.
And are hard at work analyzing how we can use those learnings to get even better.
This virtuous cycle for a minimally viable product to finding product market fit to being attention about intentional about creating a feedback loop. So we can take those learnings and build even better product is made possible by having a product focus.
The multi tiered opportunities from this single early success present, great standalone potential, but the process that now surrounds that should give rise to a forest not just a single tree starting this quarter.
Moving to consumer engagement, we are applying the same discipline, we are being intentional about learning what we can from customers that came to us and do everything deal. So that our consumer engagement product is always getting stronger.
As a result, our consumer engagement pipeline is growing and more importantly, we expect to begin closing on that pipeline this quarter as well.
Included in that pipeline or new customers as well as expansion opportunities with existing consumer engage with customers.
Moreover, the fact that our products are accretive maybe the more products you adopt the more value. They each create is resonating not just in slide decks, but in customer interest.
We have one company that came to us for consumer engagement and is now also exploring brand integrity for these same items as part of their first contract.
I don't know if the realization of accretive value will be done most often after adoption of the first product or while the customer is still a prospect.
But having a clear product focus and benefiting from the learnings as focus allows will enable us to be prescriptive in helping our customers and their <unk> journey.
That's the expansion of the first conversation slow down the time to value realization or does it speed. It up if there is a delay or there are there specific actions, we can take to eliminate them.
It speeds up the time to value realization, how do we improve that time to value even more while amplifying that message to other prospects does he answer Barry by prospect or product type.
This is all data we are now positioned to capture and this data will inform us in our quest to always get be do better.
Did you Macrocycle was an example of a did you mark product that incorporates the base functionality of another <unk> product in this case consumer engagement into its core functionality.
The initial accretive value immediate.
Importantly, this embedded base functionality is resonating.
The conversations we mentioned in the last call that would be get in Q2 are helping raise awareness that beyond just providing a higher quality and quantity of recycle it and in addition to the novel on mind dataset that will come from having for the first time ever actual versus survey post purchase data did you Mark recycle adoption provides a content creation free means of engage.
Consumers on a topic about which day at regulators care.
And the easy upgrade path to full consumer engagement from the embedded base functionality founded <unk> Macrocycle should provide a win to all three stakeholders.
Or did you mark recycled customers their customers and us.
These conversations are happening against the backdrop of the June 30th announcement of the <unk> phase II results, which provided even more evidenced digit macrocycle can make a real impact on this ever increasing global problem.
These results coupled with the March 30th release of the <unk> Phase II results provides clear validation to our simple message to independent third party tests have shown almost the exact same incredible results in a real world setting it rollout conditions results that can save this planet.
Time to adopt is now.
We are currently active in two continents with bedroom Macrocycle in Europe . There are two upcoming document releases that'd be we believe will add to the course that now is the time to adopt <unk>.
And as we announced in June the global nature of our solve gained momentum with the announcement of our partnership with the circular plastics task force here in North America.
Conversations to expand into other geographies are also taking place.
Underlying these newer conversations is the fact that there is nothing left to be worn by running trials.
As I described on our last call there is unlikely to be as accurate or precise measurements of how our technology performs in a real world setting as a wholly as two Holy Grail Phase II results.
And at the risk of being repetitive those results left no doubt as to the real step change value we provide.
Also announced in June was our partnership with sealed air sealed air as many of you know is a tech forward innovative company with an incredible array of packaging solutions as well as a large and loyal customer base.
Sealed air chose to combine their new digital printing and packaging solution prismatic.
With our product Digitization platform as it means to add intelligence to their widely adopted packaging solutions.
Is the most public example of our meter metering out access to our platform and we standby eager to help our wonderful partner advance their own customers and their digital transformation journeys.
Yeah.
In terms of the almost unlimited applicability of our platform and our prospects can spark the exploration of potential product candidates. One of the deals. We closed in Q2 was for an application of our platform. We believe might have a bright future as a new <unk> product.
Reinforcing that he was another deal in the pipeline of significantly larger size that we expect to close in the back half of this year.
The product team is hard at work researching the opportunity to product ties. This solution as a potential addition to our product suite.
Near term the product candidate we've discussed in the past that could act as a top down driver of product Digitization and thus provide a huge boost in our goal of digitizing. The world's products continues to move forward and we expect to be able to share more on this in the near future stay tuned.
As I said, a quarter and I am pleased with where we are as well as our direction of travel there is no doubt in my mind that we're on the right path and the fruits of this transformation are already beginning to show will only get more obvious in the months ahead.
At quarter end were taking early wins and learning from them, having a product focus allows for these wins to not only be repeatable, but improved upon.
Thankful for all the hard work of my teammates over this past quarter as we began to see the fruits of our year long transformation.
Laura we'll now open up the call for questions.
At this time well be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two.
Question from the queue for participants using speaker equipment. It may be necessary for you to pick up your handset before pressing the star one.
Moment, while we poll for questions.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Your line is in the question queue, you May press Star two.
From the Q, but participants using speaker equipment. It may be necessary for you to pick up your handset pricing Mr. Keith one moment, while we poll for questions.
Ladies and gentlemen, we have reached.
Today's question answer session I would like to turn this call back over to Mr. Riley Mccormick for closing remarks.
Well, thanks, Laura and thank you everybody for attending today's call and I Hope you have a great rest of your day.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation during the rest of your day.
[music].
[music].
[music].
Greetings and welcome to the did you Mark Corporation's second quarter 2022 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded I would now like to turn this conference over to your host Mr. Don Meyer Chief Legal Officer, Sir. Please proceed.
Welcome to our Q2 conference call.
Mccormack, our CEO and Charles Beck, our CFO are with me on the call on the call today, we will discuss Q2 financial results and provide a business update this will be followed by a question and answer Forum, we have posted our prepared remarks in the Investor Relations section of our website and will archive. This webcast there.
Before we begin.
Mind, everyone that today's discussion contains forward looking statements that have risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially.
Charles will now comment on our Q2 financial results.
Thank you, Joe and Hello, everyone.
First year commercial bookings were $2 2 million during the quarter compared to $2 3 million in Q2 2021.
Bookings in Q2 last year included 800000 from our piracy intelligence product now.
We are nearly complete and winding down.
We are not signing any new piracy intelligence deals and we are now effectively exited most of our legacy customer contracts.
Excluding piracy intelligence, our first year commercial bookings increased 700000 or 44%.
As a reminder, we are now selling a combined solution of did you Mark watermarks and everything product cloud.
Which makes it impractical to provide a breakout of bookings and revenue for each.
Revenue for the second quarter was $7 7 million up 23% from $6 3 million in Q2 last year, reflecting growth in both subscription and service revenue.
Description revenue grew 30% in the quarter from $2 5 million to $3 2 million.
Keep in mind, there are two offsetting factors impacting our year over year growth.
The addition of subscription revenue from everything offset by the decline in subscription revenue from sunsetting, our piracy intelligence product.
As we previewed last quarter the <unk>.
Setting of the piracy intelligence product was going to have a meaningful impact on subscription revenue starting in Q2, which it did.
The product was generating 600000 of revenue per quarter before we started exiting and now that we are more than halfway through that process. Our revenue was only 300000 in the second quarter.
We expect this revenue to be insignificant going forward as we finalize the wind down process.
These offsetting factors as well as the vagaries of revenue recognition rules that have an impact on our reported revenue at this stage in our growth is why we believe first year bookings is the best leading indicator of growth of our business.
As a reminder, first year bookings are committed first your contract amounts and will typically flow into revenue in the 12 months after contract signing.
Service revenue grew 19% in the quarter from $3 8 million to $4 5 million the.
The increase largely reflects higher service revenue from Holy Grail 2.0 recycling projects.
The majority of which relates to the recycling contract we referenced on the last earnings call.
We are nearly complete with that contract. So we do not anticipate significant revenues in Q3 from this contract and that service revenue should revert to more normalized levels.
Gross profit margin for the second quarter was 52% compared to 67% in Q2 last year.
The decrease in margin reflects $1 1 million of amortization expense recorded on acquired intangible assets recognized in the acquisition accounting for everything.
non-GAAP gross profit margin, which excludes amortization expense and stock based compensation expense was 71% in Q2 2022 compared to 72% in Q2 2021.
Operating expenses for the quarter were $18 9 million down 700000 from Q2 last year.
Last year, we incurred $6 $2 million of expense related to the separation agreement, we entered into with our previous CEO .
$1 3 million of severance costs related organizational changes we made in Q2 2021.
Excluding these costs operating expenses increased $6 8 million, reflecting the operating expenses of everything and higher compensation costs due to higher head count and annual compensation adjustments.
non-GAAP operating expenses for the quarter were $15 million up $2 4 million from Q2 last year.
Everything added $3 3 million of non-GAAP operating expenses in the second quarter.
Excluding everything non-GAAP operating expenses decreased 900000, reflecting the cash costs associated with the separation agreement, we entered into with our previous CEO and cash severance costs related to organizational changes we made in Q2, 2021, which totaled $2 5 million.
Partially offset by higher cash compensation costs due to higher head count and annual compensation adjustments.
Net loss per common share for the quarter was <unk> 75 versus <unk> 94 in Q2 last year.
non-GAAP net loss per common share for the quarter was <unk> 47 versus <unk> 49 in Q2 last year.
We ended the quarter was $68 4 million in cash and investments.
We used $14 7 million of cash and investments during the second quarter. If you exclude the impact of the $58 2 million of capital we raised in April .
The $14 7 million included roughly $3 million of cash to pay higher.
Excuse me cash to pay a larger than usual outstanding payables at March 31.
We incurred several large expenditures in Q1 related to the acquisition financing and other activities that were not paid until April due to timing of receiving the invoices and processing the payments.
Excluding the impact of paying off these higher payables, we used $11 7 million of cash and investments during the quarter compared to $9 6 million in the second quarter of 2021.
The last two quarters cash flows have been higher than our expected normalized rate going forward due to some nonrecurring items.
Internally, we look at non-GAAP loss, which excludes noncash expenses and layer on cash used for capital expenditures and share repurchases to estimate our normalized level of cash flows.
We expect cash flows each quarter may fluctuate from this metric due to timing of customer receipts and vendor payments, but it provides a good indicator of normalized cash flow at existing revenue levels.
For further discussion of our financial results and risks and prospects for our business. Please see our Form 10-Q that will be filed with the SEC.
Rodney will now provide a business update.
Thanks Charles.
A quarter into our re launch I'm pleased with where we are as well as our direction of travel.
Wanted to use today's call to share, where we stand where we are going and importantly provide some examples of progress between those two points.
<unk> in the past, while we made the move from selling tools to selling products I won't reiterate that here, but.
But driving this journey is our internal mantra that we must be easy to begin doing business with an excellent guiding customers along their <unk> journey. Our goal is simple we want to digitize the world's products and in doing so allow our customers to complete their digital transformation the transformation journey.
Journey, many are pursuing but can't complete if there are products remained stuck solely in the analog world.
And deciding what products to build we are focusing on those that address large and growing problems and hence allow us to participate in large and growing markets. We are prioritizing our efforts by applying the lines of whether our platform upon which all of our products are built provides significant technological differentiation we.
We are being purposeful in making sure our products are accretive to each other which means that the value of customer on walks from any single digit mark product is greater the mortgage market products to which they subscribe.
And we are fortunate because based on the almost unlimited unlimited applicability of our platform. We believe will be product sizing new functionality for years and in many cases spark of those new products.
We'll be prospect led demand.
But we also realize we will never have a monopoly on all good ideas are the best Avenue with which to address all potential customers problems.
While we will constantly.
Add new products to our product suite, we also realize theres value to selectively meeting metering out access to our platform. So that others can build their own products, because not only will metering out that access generate compounding revenue. It will further our goal of digitizing the world's products using our technology, allowing those digitized products to benefit from our <unk> solutions.
At some point down the road.
So that's the strategy strategy in a nutshell build an ever expanding product suite, a wide moat products, a luxury afforded to us by the unique and synergistic nature of our platform.
Make sure those products address large fast growing markets.
We're not only do we enjoy the moat is provided to us by our platform, but whose existence is often initially brought to our attention by prospects who are anxious for us to solve their problems.
Use the accretive nature of our products add ever more value to our customers by cross selling them additional digit Mark doak products.
At the same time smartly meet art access to our platform so others can build upon it.
It is a very profitable way to digitize the world's products using our technology and allows us the luxury rare among platform based technology companies.
Done this way not only will we avoid channel conflict, we in our channel will provide each other compounding value, which ensures we will always have a large and robust ecosystem surrounding our platform.
Q2 brought demonstrable progress across all of these fronts.
Starting with great integrity, we did indeed closed the second division with a large CPG company I referenced in our March call.
Moreover, we are in talks to further expand our brand integrity offering with our first division of that company or.
In conversations with additional divisions at the CPG, all while discussing with our brand integrity enterprise deal might look like at least for part of the company.
Beyond the single company, we are in active discussions with others in the same industry, who also want to benefit from our brand integrity product and we are anxious to begin the same land and expand strategy with them and expect to make progress on that front starting this quarter.
Another words, we seem to have found product market fit and.
And are hard at work analyzing how we can use those wondering if to get even better.
This virtuous cycle for a minimally viable product to providing product market fit to being intentional about intentional about creating a feedback loop. So we can take those learnings and build even better product is made possible by having a product focus.
The multi tiered opportunities from the single early success present, great standalone potential, but the process that now surrounds that should give rise to a forest not just a single tree starting this quarter.
Moving to consumer engagement, we are applying the same discipline, we are being intentional about learning what we can from customers that came to us and the everything deal. So that our consumer engagement product is always getting stronger.
As a result, our consumer engagement pipeline is growing and more importantly, we expect to begin closing on that pipeline this quarter as well.
Included in that pipeline or new customers as well as expansion opportunities with existing consumer engagement customers.
Moreover, the fact that our products are accretive maybe in the more products you adopt the more value. They each create is resonating not just in slide decks, but in customer interest.
We have one company that came to us for consumer engagement and is now also exploring brand integrity for the same items as part of their first contract.
I don't know if the realization of accretive value will be done most often after adoption of the first product or while the customer is still a prospect.
But having a clear product focus and benefiting from the learnings. This focus allows will enable us to be prescriptive in helping our customers and their <unk> journey.
The expansion of the first conversation slow down the time to value realization or does it speed. It up if there is a delay.
Are there specific actions, we can take to eliminate them.
If it speeds up the time to value realization, how do we improve that time to value even more while amplifying that message to other prospects does he answer vary by prospect your product type.
This is all data we are now positioned to capture and this data will inform us in our quest to always get B do better.
Did you Macrocycle was an example of a benchmark product that incorporates the base functionality of another <unk> product in this case consumer engagement into its core functionality, making the initial accretive value immediate.
Importantly, this embedded base functionality is resonating.
The conversations we mentioned in the last call that we'd be getting Q2 are helping raise awareness that beyond just providing a higher quality and quantity of recycling and in addition to the novel on mind dataset that will come from having for the first time ever actual versus survey post purchase data did you Macrocycle adoption provides a content creation three means of engage.
Consumers on a topic about which they had regulators care.
And the easy upgrade path to full consumer engagement from the embedded base functionality founded <unk> micro cycle should provide a win to all three stakeholders.
Or did you mark recycler customers their customers and us.
These conversations are happening against the backdrop of the June 30th announcement of the <unk> phase II results, which provided even more evidenced <unk> macrocycle can make a real impact on this ever increasing global problem.
These results coupled with the March 30th release of the <unk> Phase II results provides clear validation to our simple message to independent third party tests have shown almost the exact same incredible results in a real world setting if railroad conditions results that can save this planet.
Time to adopt is now.
We are currently active in two continents with bedroom Macrocycle in Europe . There are two upcoming document releases that we believe will add to the course that now is the time to adopt <unk>.
And as we announced in June the global nature of our solve gain momentum with the announcement of our partnership with the circular plastics task force here at North America.
Conversations to expand into other geographies are also taking place.
Underlying these newer conversations is the fact that there is nothing left to be learned by writing trials.
As I described on our last call there was unlikely to be as accurate or precise measurements of how our technology performs in a real world setting as a wholly as two Holy Grail Phase II results.
And at the risk of being repetitive those results left no doubt as to the real step change value we provide.
Also announced in June was our partnership with seal there sealed air as many of you know is a tech, Florida innovative company with an incredible array of packaging solutions as well as a large and loyal customer base.
Sealed air chose to combine their new digital printing and packaging solution prismatic with our product Digitization platform as it means to add intelligence to their widely adopted packaging solutions.
This is the most public example of our meter metering out access to our platform and we standby eager to help our wonderful partner advance their own customers and their digital transformation journeys.
Okay.
In terms of the almost unlimited applicability of our platform and how prospects can spark the exploration of potential product candidates. One of the deals. We closed in Q2 was for an application of our platform. We believe might have a bright future as a new <unk> product <unk>.
Reinforcing that B was another deal in the pipeline of significantly larger size that we expect to close in the back half of this year.
Product team is hard at work researching the opportunity to product ties. This solution as a potential addition to our product suite.
Near term the product candidate we have discussed in the past that could act as a top down driver of product Digitization and thus provide a huge boost in our goal of digitizing the world's products continues to move forward.
We expect to be able to share more on this in the near future.
Stay tuned.
As I said, a quarter and I am pleased with where we are as well as our direction of travel there is no doubt in my mind that we're on the right path and the fruits of this transformation are already beginning to show will only get more obvious in the months ahead.
At quarter end were taking early wins and learning from them, having a product focus allows for these wins to not only be repeatable, but improved upon.
Im thankful for all the hard work of my teammates over this past quarter as we began to see the fruits of our year long transformation.
Laura will help open the call for questions.
At this time, we'll be conducting a question and answer session. If you would.
I'd like to ask a question please press star.
Star one on your telephone keypad.
Tim will indicate your line is in the question queue. You May press star to move your question from the Q.
Happens using speaker equipment, it may be necessary for you to pick up your handset before pressing the star.
One moment, while we poll for questions.
As a reminder, if you would like to ask a question. Please press star.
One on your telephone keypad.
Okay.
Line is in the question queue, you May press Star two.
Question from the queue.
It happens.
Equipment and may be necessary for you to pick up your handset before pressing the star keys one.
One moment, while we poll for questions.
Ladies and gentlemen, we have reached.
Question and answer session I would like to turn this call back over to Mr. Riley Mccormick for closing remarks.
Well, thanks, Laura and thank you everybody for attending today's call.
Hope you have a great rest of your day.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation during the rest of your day.