Q2 2022 Socket Mobile Inc Earnings Call
Okay.
Speaker 1: Welcome to the 2022 second quarter financial results for socket mobile. My name is Hilda and I will be your operator for today's call.
Welcome to the 2022 second quarter financial results for socket Mobile my name is Hilda and I will be your operator for today's call.
Speaker 1: Before we begin, I like to remind everyone that this conference call may contain forward-looking statements within the meeting of Section 27A of the Security's Act of 1933, as amended. Section 21E of the Security's and Exchange Act of 1934, as amended.
Before we begin I'd like to remind everyone that this conference call may contain forward looking statements within the meaning of section 27 of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of 1934 as amended.
Such forward looking statements include but are not limited to statements regarding mobile data collection and mobile data collection products.
Speaker 1: Such forward-looking statements include but are not limited to statements regarding mobile data collection and mobile data collection products, including details in timing, distribution and market acceptance of products and statements, predicting the trends, sales and market conditions and opportunities in the markets in which Fucket Mobile sells its products.
Details on timing distribution and market acceptance of products and statements predicting the trends sales and market conditions and opportunities in the markets in which socket mobile sells its products.
Speaker 1: Such statements involve risk and uncertainties. And actual results could differ materially from the results anticipated in such overlooking statements.
Such statements involve risks and uncertainties and actual results could differ materially from the results anticipated in such forward looking statements.
Speaker 1: because of a number of factors, including but not limited to the risk that manufacture of socket products may be delayed or not rolled out as predicted due to technological, market, or financial factors, including the availability of product components and the necessary working capital.
Because of a number of factors, including but not limited to the risk that manufacture of sockets products may be delayed or not rolled out as predicted due to technological market or financial factors, including the availability of product components and Mr Ferry working capital.
Speaker 1: The risks that market acceptance and sales opportunities may not happen as anticipated.
The risks that market acceptance and sales opportunities may not happen as anticipated the risk that sockets application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so the risks that acceptance of sockets products and vertical application markets may not happen as anticipated as well.
Speaker 1: The risk that sockets application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so.
Speaker 1: The risk that acceptance of Socket's products in vertical application markets may not happen as anticipated, as well as other risks described in Socket's most recent ORM 10-K and 10-Q reports filed with the Securities and Exchange Commission.
If other risks described in sockets more.
Most recent Form 10-K, and 10-Q reports filed with the Securities and Exchange Commission.
Socket does not undertake any obligation to update any such forward looking statements.
Speaker 1: Socket does not undertake any obligation to update any such forward-looking statement.
Speaker 1: At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session.
Speaker 1: during the question-and-answer session. If you have a question, please press 01 on your touchtone phone. Please note that this conference is
During the question and answer session. If you have a question. Please press star one on your Touchtone phone.
Please note that this conference is being recorded.
Speaker 1: On the call with me today are Kevin Mills, Chief Executive Officer, Dave Holmes, Chief Business Officer, and Lynn Fowl, Chief Financial Officer.
On the call with me today are Kevin Mills, Chief Executive Officer, Dave Holmes, Chief Business Officer, and Lynn Zhao Chief Financial Officer.
Speaker 1: I will now turn the call over to Kevin Mills. Mr. Mills, you may begin.
I will now turn the call over to Kevin Mills, Mr. Mills, you may begin.
Speaker 2: Thank you, operator. Good afternoon, everyone, and thank you for joining us today.
Thank you operator.
Good afternoon, everyone and thank you for joining us today.
Speaker 2: In Q2, our revenue increased slightly to $6.05 million, over our revenue of $6 million in Q2 2021.
In Q2.
Our revenue increased slightly to $6 5 million, but where our revenue of $6 million in Q2 2021.
Speaker 2: A growth margins are 50.2% compared to 54.7% in Q2 2020.
Our gross margins were 52%.
<unk> to 54, 7% in Q2 2021.
Our margins were lower as we paid more for component and.
Speaker 2: Our margins were lower as we paid more for components, and freight costs were much higher due to the ongoing global supply issue.
And freight costs were much higher the ongoing global supply ships.
Speaker 2: Our next chair will one cent compared to 27 cents in Q2 2021, which included exact benefit of 20 cents per chair. In Q2, we explain.
Our earnings per share were one seven compared to 27 in Q2 2021, which included exact benefit 'twenty for sure.
In Q2, we experienced some strong headwinds.
Speaker 2: And our results were impacted by supply chain issues and material shortages that were outside of stone.
Our results were impacted by supply chain issues and material shortages that were outside.
Historically about 65% of our retail business is driven by the deployment of new.
Speaker 2: Historically about 55% of our retail business is driven by the deployment of new products by the sales system, but the scanner is sold as a component.
Point of sale system, but the scanner is sold as a control.
Speaker 2: The remaining 45% of our retail revenue comes from scanners purchased some time after the ancient deployment, which we refer to as upgrade.
The remaining 45% of our retail revenue comes from scanners purchased sometime after the initial deployment.
Which we referred to as upgrades.
Speaker 2: Thank you, too. We saw the deployment process of our retail business, a significantly impacted by a shortage of other hoggres from Poland, such as mobile printers and cash stores.
In Q2, we saw the deployment of our retail business was significantly impacted by a shortage of other hardware components, such as mobile printers and cash choice.
Speaker 2: It reduced our app partner's ability to deploy new solutions. As a result, our deployment-associated revenue dropped the 38% of our total retail revenue dropped.
This reduced our partner's ability to deploy new solutions.
As a result, our deployments associated revenue.
38% of our total retail revenue.
Speaker 2: These shortages were not expected and were outside our control and impacted our business despite the fact we worked hard to be in a position to deliver.
These shortages, we're not expecting more outside our control and impact their business. Despite the fact, we worked hard to be in a position to deliver.
The upgrade portion of our business, where end customers out of scanner stuff that's out there.
Speaker 2: The upgrade portion of our business, where end customers added better, some type of product, data flow, the lower quantity sales system, remained strong. And the upgrade portion of our business increased to 62% of the total retail business, and we were able to deliver without any issues.
Floyd the bullet point of sale system remain score.
And the App very closely.
Business increased to 62% of the Covid retail business.
We're able to delever without any issue.
In response to these market changes and the unforeseen supply issues, especially the bank doesn't pass shows we plan to focus more on the upgrade business for the remainder of the year.
Speaker 2: In response to these market changes and the interesting supply issues, especially in all the transfers and pastures, we plan to focus more on the updated business for the remainder of the
Speaker 2: In Q2, we announced ourselfish scan as 720. An updated version of our best selling S700, a drop-in replacement with QR scanning support. As many of you...
In Q2, we announced our sockets Scott S seven factories and App.
<unk> version of our best selling at 700.
Drop and replace but you are scanning support.
As many of you see in your daily life.
Speaker 2: Your clothes have become ubiquitous and are officially used in payment for later activities.
<unk> have become ubiquitous.
Accretion of used and payments related to these activities.
Speaker 2: We believe many small retailers will need to support this requirement in the coming four.
We believe many small retailers those needed to support this requirement in the coming quarters.
Speaker 2: And the S720 has been designed to serve that with power.
Yes, seven square feet.
Has been designed to serve that requirement.
Yes.
Speaker 2: The S720 is aggressively priced at $249, a mere 8% higher than the S720.
Aggressively priced.
$49.
8% higher than the guest check with them.
Speaker 2: We also feel that we would be a desirable option for the more than 100,700 end users, especially within a interactive crazy program.
We also feel it will be a desirable puppet option for the more than 100700 end users.
With an attractive trade in program.
Speaker 2: We expect to start shipping the S720 in late-O.
We expect to start shipping B F 'twenty.
Well, that's impacting Q3 would be small.
Speaker 2: But the impact in Q3 will be small. We feel it will significantly impact Q4. And enable us to resume our growth regardless of the supply issues.
Feel it will significantly impact Q4, and enable us to resume our growth regardless of the supply issues at the moment.
Speaker 2: In Q2, we also made significant progress on initiatives that we believe will ensure our long-term growth and success.
You too we also made significant progress on initiatives that we believe will ensure our long term growth and success.
And I'd now like to hand, the call over to Dave Holeman, Our Chief business officer to provide an update on those initiatives.
Speaker 2: And I'd now like to have the call over to Dave Holmes, our chief business officer, to provide enough space on those initiatives. Dave. Thanks.
Thank you, Kevin and good afternoon, everyone.
Speaker 3: Today I'd like to highlight a couple of the key milestones that we achieved in Q2 as we continue our journey of becoming a more comprehensive data capture company.
Today I'd like to highlight a couple of the key milestones that we achieved in Q2 as we continue our journey of becoming a more comprehensive data capture company.
Speaker 3: We made significant strides with our Capture SDK software tools.
We made significant strides with our capture SDK software tools.
Speaker 3: We continue to provide best in class development tools for our application partners, and we support all of the major development environments in the market today.
We continue to provide best in class development tools for our application partners and we support all of the major development environments in the market today.
The SDK team has grown and we're very proud of the work that they have been delivering.
Speaker 3: The SDK team has grown and we're very proud of the work that they have been delivering.
Speaker 3: In Q2, we upgraded Capture SDK to include socket cams V820, our free camera-based scanning software that turns any mobile device into a high-performance barcode scanner.
In Q2, we upgraded capture SDK to include socket can see eight 'twenty, our free camera based scanning software that turns any mobile device through a high performance barcode scanner.
Speaker 3: our app developer partners can now begin offering free scanning to their customers.
Our App developer partners now began offering free scanning to their customers.
Capture SDK with CA 20 allows our developer partners to serve all of their end users from price sensitive to performance sensitive with one integration.
Speaker 3: Capture SDK with C820 allows our developer partners to serve all of their end users from price-sensitive to performance-sensitive with one integration.
Socket mobile scanners are primarily used in performance sensitive portion of the data capture market, but we have a commanding market share.
Speaker 3: Socket mobile scanners are primarily used in performance sensitive portion of the data capture market. We have a commanding market share. That said, our application partners have in users with different data capture needs and they're often not data capture experts.
That said our application partners have in users with different data capture needs and they are often not be recapture experts.
Speaker 3: Historically, they typically only add Capture SDK to support socket scanners when their customers ran into performance or productivity issues.
Storage really they typically only at capture SDK to support socket scanners, when their customers ran into performance or productivity issues.
Speaker 3: The addition of CA20 will allow our development partners to bring socket scanning, expertise and capabilities to a much wider audience.
Additionally, <unk> will allow our development partners bring socket scanning expertise and capabilities to a much wider audience.
Speaker 3: With the completion of phase one, by adding pre-camera scanning to capture SDK, the team is now working hard to deliver enhanced camera scanning through the SDK in the second half of 2022, which we will offer on a monthly subscription basis.
With the completion of phase one by App.
Adding free camera scanning to capture SDK. The team is now working hard to deliver enhanced camera scanning through the SDK in the second half of 2022.
Which will which we will offer on a monthly subscription basis.
Speaker 3: We think this is a critical piece in the data capture journey, and it will make us a more complete hardware and software data capture company heading into 2023.
We think this is a critical piece of the data capture journey.
And it will make us a more complete hardware and software data capture company heading into 2023.
Speaker 3: Also, we're seeing positive signs with our NFC business as more developers begin embracing contact with technology.
Also we are seeing positive signs with our NFC business as more developers began embracing contactless technology.
Speaker 3: Initial commercial deployments of our S550 NFC reader rider from mobile ticketing, e-money, and loyalty applications are resulting in exceptional consumer experiences, copy app development partners, and follow-on projects.
Initial commercial deployments of our <unk> hundred 50, NFC reader writer for mobile ticketing E money loyalty applications are resulting in exceptional consumer experiences.
Happy App development partners and follow on projects.
Finally, we reintroduce socket scan S $3, seven a universal NFC and QR code mobile wallet reader.
Speaker 3: Finally, we introduce Socket Scan S370, a universal NFC and QR code mobile wallet reader.
Speaker 3: This gives our app partners the flexibility to accept multiple formats with one device.
This gives our app partners the flexibility to accept multiple formats with one device.
Speaker 3: With the myriad of credentials types out there, S370 also provides our partners with the peace of mind that they can implement one device and not have to worry about choosing the wrong technology.
With the myriad of credentials types out there S. 370 also provides our partners with the peace of mind that they can implement one device and not have to worry about choosing the wrong technology.
Yes, 370 can also reach a dentulous falling ISO <unk> 18, <unk> <unk> five.
Speaker 3: The S370 can also read credentials following ISO 18013-5. This is the standard being adopted for mobile drivers license or MDL in most states and countries.
This is the standard being adopted for mobile drivers license or NPL in most states and countries.
We're seeing positive signs all around.
Speaker 3: We're seeing positive signs all around, and we continue to address individual ID and the NBL state.
And we continue to invest in digital and the NPL space.
Speaker 3: We feel this is a big opportunity for M at socket mobile as well positioned to become a significant player in the NBL reader space. This will mark another evolution in the...
We feel this is a big opportunity for socket mobile is well positioned to become a significant player in the NPL reader space.
This will mark another evolution in the data capture journey.
Speaker 3: In addition to reading barcodes to capture data about products and things, who will also be reading QR codes and NFC credentials about people and identity.
Additionally, reading barcodes to capture data about products and things you will also be reading QR codes NFC credentials about people and identities.
Speaker 3: With that, I'll turn it over to Lynn for more details on our financial results. Lynn? OK.
With that I'll turn it over to Glenn for more details on our financial results.
Thanks, David.
Thank you everyone for joining today's call.
Our kitchen of the result, pizza revenue was flat compared to last year at $6 million.
Speaker 4: Our Q2 revenue was flat compared to last year at $6 million.
Speaker 4: and decreased by 4% sequentially compared to 6.3 million in Q1.
And the decreased by 4% sequentially compared to $6 3 million in Q1.
Speaker 4: We believe that their slowdown in Q2 was because of our retail customers having unable to obtain their mobile printers and cash stores etc. with which our standards pair.
We believe that Theyre still down in Q2 with because of our retail customers have been unable to obtain their mobile concurs in cash for the sector was switched our scanners per.
The second quarter's gross margin decreased by four basis points compared to prior year quarter.
Speaker 4: The second quarter's growth margin decreased by 450 basis of points, compared to the prior ear corners, but it increased the 50 basis points compared to the preceding corner. The decrease in margin versus prior ear corners was driven by persistent, higher component and a freight cost.
Great.
At this point compared to the preceding quarter.
Great in margin versus the prior year quarter was driven by participant the higher components and our freight costs.
Speaker 4: 2-2 operating expenses or $2.85 million in place of 70% over the prior year.
Q2, operating expenses were $2 $85 million, increasing 17% over the prior year quarter.
Speaker 4: We have moved our business to a new location in Fremont, California.
We have most of our business, it's really a new location in Fremont, California.
Speaker 4: The lease agreement that we entered was effective May 1st, 2022.
These agreements that we enter that was effective may <unk> 2022.
Speaker 4: Although we are entitled to free rent in the first three months, the street rent for May and June was charged to our expenses, which caused the 3% increase of the operating.
Although we are entitled to free rent in the first three months.
The straight line rents for me in the channel was charged to our expenses, which cost a 3% increase of the operating expense.
So then on engineering increased to 15% driven by hiring in our SBA team.
Speaker 4: Then on engineering, increase the 15% driven by hiring in our SDK teams. As the continued commitment to research and development activities, which is essential to provide a new product offering.
As to continue.
Research and development activities.
Essentially to provide a new product offering so.
Speaker 4: to provide engineering support for key customers and to maintain our existing products.
To provide engineering support for key customers.
And then to maintain our existing products.
Increases in sales marketing and customer support are 31%, reflecting the costs associated with higher headcount and consulting and external professional services.
Speaker 4: Increases in sales, marketing, and the customer support are 31%, reflecting the cost associated with a higher headcount and the consulting in the external professional services.
General and administrative expenses increased by 4%.
Speaker 4: General and administrative expenses increased by 4%.
Q2, operating income was $189000, representing a 3% operating margin.
Speaker 4: Q2 operating income was $189,000 representing a 3% operating margin.
Speaker 4: earning for $104,000 or one cent per footly diluted shares compared to 27 cents per footly diluted share for the prior year quarter, which included an income tax benefit of 20 cents per footly diluted share. Adjusted Aveda in-
Or $104000 or one cents per fully diluted share compared to just 27.
Fully diluted share for the prior year quarter.
Which included an income tax benefit of 20 cents per fully diluted share.
Adjusted EBIT in the first quarter was six.
Speaker 4: 0.6 million decreased by 46% of the farm part of the quarter of 1.2 million.
6 million decreased by 46% from prior year quarter of one point to mention.
In Q2, we generated a free cash flow.
Speaker 4: In Q2, we generated a free cash flow of $0.6 million, and they invested the $0.4 million in capital assets, including equipment, software, and a website.
Many and they invested deploying formerly in capital assets, including equipment software and website development.
Speaker 4: We ended Q2 with a cash balance of $5.6 million.
We ended Q2 with a cash balance of $5 $6 million.
As of June 30, our inventory level net of reserve was at one.
Speaker 4: As of June 30th, our inventory level net offer reserve was at $4.9 million compared to $5.2 million at the end of 2021.
$1 $9 million compared to five point too many at the end of 2021.
Speaker 4: Increased the inventory was related to purchases committed prior to quarter Q2 or even last year.
The inventory was related to purchases committed prior to quarter Q2, or even last year.
Speaker 4: Although the increase in inventory helps us navigating the supply chain disruption, we are taking steps to manage the inventory for the remainder of 2022, in the face of the near-term headwind.
Although the increase the inventory.
Navigating the supply chain disruption.
We're taking steps to manage the inventory for the remainder of 2022 in the face of the near term headwinds.
Speaker 4: We believe our balance sheet and the liquidity continue to be in a healthy position to meet the challenging environment.
We believe our.
And the liquidity continues to be in a healthy position to meet the challenging environment.
Is the rest of our prepared remarks, now I will hand, the call over to the operator for questions.
Speaker 4: This is Reptile to all prepared remarks. Now I will hand the call over to the operator for questions.
Thank you.
But thank you we will now begin the question and answer session.
Speaker 1: Thank you. We will now begin the question and answer session.
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We have a question from Charlie Chan Chambers from C. Three please.
Speaker 1: We have a question from Charlie Chambers from C3. Please go ahead.
Please go ahead.
Thank you.
Speaker 3: Thank you. Question about the share by bat. Can you shed some light on that? Thank you.
Question about the share buyback can you.
Shed some light on that thank you.
Speaker 4: Okay, yeah, we entered the 10, the 5th plan in April . So as of today, we have purchased.
Okay.
Yes.
<unk> five plan in April .
As of today, we have purchased.
Speaker 4: 150 K shares of the common stocks from the market. And there we...
150, K shares of the common stock from the market.
And then we will.
Speaker 4: Can you do the purchasing of another 30k shares for this quarter? Then our...
Can you that purchasing.
Another 30 shares for this quarter.
Then.
Our can be five plan.
According to our 75 clients for the next quarter will enter.
Speaker 4: According to our 25 plan, for the next quarter, we'll enter a new purchase after we started the next quarter.
A new you know a new purchase.
After we started the next quarter.
Thank you.
Thank you. The next question comes from Frank Petrone from Prudential Securities. Please go ahead.
Speaker 1: Thank you. The next question comes from Frank Petroni's from Poudential Securities. Please go ahead. Hi, Kevin. Hi, Lynn.
Hi, Kevin Hyland Frankfort drums here.
Speaker 5: I think one of my questions on the buyback was partially answered. My question is...
Well one of my questions on the buyback was partially answered my question is.
Speaker 5: It wasn't going to be my first question, but the criteria that you use, I hear you using chair.
It wasn't going to be my first question, but.
The criteria that you use I hear you're using shares.
Speaker 5: Is it predicated on the previous volume of the previous week or previous month on how many shares you can buy back in a certain percentage? That's the first question.
Is it predicated on the previous volume of the previous week or previous months on how many shares you can buy back.
In a certain percentage that's the first question.
Yeah of course, it can be.
Go ahead please.
Speaker 4: Yeah, according to the 10B5 plan, we only, we purchase their shares to the rule 10B18, which defines as their volume, the pricing, their, and their, in general, it's their average for weeks, trading volume, preceding their, the 10B5 plan starting date.
Yes. According to the <unk> five plan, we only would purchase it.
Sure so pursuant to rule <unk>, 18, which is which defines as the volume and the pricing there and then in general into the App.
Average of four weeks volume trading volume preceding that.
It can be five plan starting date.
Okay.
No.
Speaker 5: Now, the final question is twofold. One example, I recently tried to lease or buy a new car.
The final question is twofold one.
Example, I recently tried to lease or buy a new car.
Speaker 5: dealers very enthusiastic, pop, pop, pop, and then
The dealers very enthusiastic by Bob and then.
Speaker 5: as I'm ready to exit the car, he says, oh, we are missing a couple of chips, but we expect all the chips and everything. This is General Motors, by the way, to settled by year end. And my question is, since like locally here, there are houses...
At the edge, where I'm ready to exit the car he says Oh.
We are missing a couple of chips, but we expect all Egyptian everything this is general motors by the way two settled by year end.
And.
My question is.
<unk>.
Like locally here.
Our houses.
Well over $500000 App.
And with the interest rates now going up.
Most of the companies have had.
Speaker 5: pretty good heads up with power, telegraphing effects moves well in advance. But the...
Pretty good heads up.
Paolo.
Telegraphing, but move well in advance.
But the housing market, which was booming.
Speaker 5: was booming, now it's subsiding to a point where the builders are reducing lots by some $50,000, houses by $50,000, so that people can qualify for the houses. Now, I see you have new products. Is it possible that you could?
Now, it's subsiding to a point, where the builders are reducing blocked by some $50000 houses by $50000. So that people can qualify for the houses.
I see.
See you have new products.
Is it possible that.
You could come.
Come up with.
Some.
The business plan that could be not the each product and what your expectations are for them.
Speaker 5: that could denote the each product and what your expectations are for them. If all the things fell in place when you're supply chain and your material.
All the things fell in place I mean, your supply chain and your material sure I know, it's been tough with the Covid I know, it's been tough with the gyrations that are going on around the world but.
Speaker 5: I know it's been tough with the COVID. I know it's been tough with the gyrations that are going on around the world. But there's a lot of people that, you know.
There's a lot of people, but you know they still have their phone in their hand.
Speaker 5: businesses. I mean, the world is run by iPhones and you know, I
I mean, the world is run by iphones.
You know I applaud you for your products.
Speaker 5: But the question is, I'm in the novice in the arena. The question is, right.
But the question is.
In the arena.
Question is like each product.
Speaker 5: What is your projection for if everything was normal?
What is your projection for if everything was normal.
Speaker 5: to what would each one contribute to the bottom line?
Two what would each one contributes to the bottom line.
Speaker 5: Once your course has been abated and you're on stream.
And you know once your costs have abated and.
You're on Street.
So question Alright.
Speaker 2: All right, so it's a bit of a complicated question, but let me answer it in the following.
Alright so.
It's.
A bit of a complicated question. So let me answer it in the following.
Speaker 2: 70% of our business is driven by activity in the retail space. Primarily, we benefit as people deploy iPad-based cash registers in various boutiques and
70% of that business is driven by.
Activity in the retail space.
Primarily we benefit as people deploy.
IPad based cash registers in various boutiques and.
Small business.
Speaker 2: We have a range of products that allow the end customer to choose what level of scanning performance they need.
We have a range of products.
Wow.
The end customers to choose.
Boston level of scanning performance they need.
Speaker 2: The products we're introducing now, the F720, is an entry-level product that has the additional benefits of leaving not only the living of barcode but a QR code also because...
The products, we're introducing now as <unk> 'twenty.
Is it entry level product that has the additional benefits of leading not only the linear barcode, but.
Awesome.
We.
Steve from our customers that more and more people are coming into their stores with Q1, Covid gauged coupon.
Speaker 2: We see from our customers that more and more people are coming into their stores with QR code-based coupons, QR code-based payment requirements, etc. And therefore, the merchant who needs to service this requirement needs to have a scanner that supports that requirement.
Our code base payment requirements and.
And therefore, the merchants who needs to service just to repair that needs to have a scanner.
At this point.
Speaker 2: And as you are just bought a car, you know, even with general voters, they do offer, you know, the same car with a two-liter engine, three-liter engine, four-liter engine, a diesel option, a petrol option, electrical.
And as you are just bought a call.
Even with general Motors, they do offer.
Same car with a two liter engine, that's really needs right.
Right and just a diesel auction the petrol option electric option.
We basically have some of the same issues and it's very difficult to just have one car.
Speaker 2: We basically have some of the same issues. It's very difficult to just have one car that is going to serve the market because different people, whether they're more fuel conscious or performance conscious,
<unk> is going to serve the markets because different people, whether they're more fuel conscience conscious or performance conscious.
Speaker 2: determines what they need to buy. And similarly, our product falling to a range, where we offer variations just like the general motors between diesel and petrol and electric and engine size. And then ultimately, the consumer finds a fish that meets those.
Determines what they need to buy.
And similarly.
Power products fall into a range, where we offer.
Variations, just like general motors between diesel and petrol and electric and engine size.
Then ultimately the consumer finds a fix that meets their requirements.
Speaker 6: So we get a lot of leverage through this model. And the benefits, I mean,
So we get a lot of leverage through this model.
And.
The benefit I mean.
The short term interest rates.
Speaker 2: The short-term interest rates impact our customers because people have less disposable interests.
Impact our customers because people have less disposable income.
Speaker 2: But ultimately, if you're running a shop and you have a cash register system, even if you have less traffic, you do need to scan the items to make sure your inventory is correct and that your book's balance at the end of the period. So that's the answer to your question.
Thus.
Ultimately, if you're running a shelf and you have a cash register system, even if you have less traffic.
Do need to scan the items to make sure you're in good Tony is correct and that's your book balance at the end of the period. So that's the answer to your question.
Now.
Speaker 2: As Dave Holmes has pointed out, we have some new areas we're going into. And we believe the investment in those areas will open up new opportunities going forward. So sorry that is a bit of a queueer to answer, but I...
Yes, it's Dave Holmes has pointed out we have some new areas, we're going into and we believe the investments in those areas will open up new opportunities going forward.
Sorry, that's a bit of.
So acuity answer, but hey.
Speaker 2: It's the best I can do to kind of cover the question you ask.
It's the best I can do to kind of cover.
The question you asked.
Speaker 5: Well, I appreciate the answer and believe me, I try to understand the company from three years ago when I first got interested in your products. And I saw this growth factor and I did not expect these huge bumps in the road.
Well I appreciate the answer and believe me I T.
Try to understand the company from three years ago. When I first got interested in your products and I saw you know disclose facts.
I did not expect these huge bumps in the road.
Yeah.
Speaker 5: the larger companies, you know, they've got a big.
Larger companies.
They've got a big.
Everybody is starting to say Oh, well, so ourselves that 50 billion loose 12 billion moves and all that I mean, I understand you are a small but.
Speaker 5: everybody's starting to say, oh, well, so-and-so's got 50 billion loose and 12 billion loose and all that. I mean, I understand you're a small, but I consider you a little gross company and I thank you for the understanding.
I consider the gross company in.
Thank you for the year.
But the understanding.
Okay I appreciate it thank you very much.
Okay. Thank you. Thank you.
Speaker 1: Our next question comes from Steve Swanson, who's a private investor. Please go ahead.
Our next question comes from Steve Swanson, a private Investor. Please go ahead.
Speaker 7: Good afternoon. Hey, it looks like you sold about 27,500 scanners in first quarter. What was the county unit sold for second quarter?
Good afternoon.
It looks like you sold about 27500 scanners in first quarter, what was the comp units sold for second quarter.
Okay. It was 26537 I believe.
Speaker 2: I was 26,537, I believe.
Speaker 8: You know if that's awesome to analyzing the unit, a little bit less but no close.
So while the thousands of units.
A little bit less but novels.
Thanks.
Speaker 7: Are we going to, is fact planning on increasing scan and prices going forward to help offset the increased component in poor prices? And I guess what I'm trying to, what a round about way of asking is, what's our long-term gross margin target going to be and how are we going to get back to it?
Are we going to how is socket planning on increasing scanner practices going forward to help offset the increased component input prices and I guess, what I'm trying to what a roundabout way of asking is what's our long term gross margin target is going to be and how are we going to get back to it.
Well.
Speaker 2: Well, we increased cross margin by about 0.5% last quarter. We are comfortable that we have stabilized the prices. We did pay a lot of premiums in the first six, nine, in the previous nine months that I think were paying less premiums.
We increased gross margin by about.
5% last quarter.
We are comfortable that we have stabilized.
Prices, we did pay off.
A lot of premiums.
Premiums and the <unk>.
First.
Six nine and the <unk>.
Previous nine months, but I think we're paying less premiums.
Speaker 2: And we on the components side are comfortable that we have a plan to get back to the 54 point gross margin range without increasing price.
And we.
On the component side are comfortable that we have a plan to get back to the 54 point gross margin range without increasing prices.
Speaker 6: Obviously, we're introducing some new products like the S720, which will help on the margin side even though the price point is still very attractive.
Obviously, we're introducing some new products like the F 2020.
To help on the margin side, even though the price point is celebrating attractive.
Speaker 2: I think in the short term, the biggest impact on the margins is actually the overhead allocation, which is really fixed. I think last quarter because we made a few last units.
And I think in the short term the biggest impact on the margin is actually the overhead allocation, which is really fixed.
I think last quarter, because we made a few less units.
Speaker 6: that's impacted by, you know, as much as, you know, another quarter to half percent. So, yeah, we're comfortable. We have a plan to get back to the 54 points, gross margin, without raising prices. And we don't think raising prices in the short term is the right thing to do either because it makes us much more attractive against the competition, some of whom average.
This impacts us by as much as.
Hey, you know another quarter to half a percent.
So yes.
We're comfortable we have a plan to get back to the 54 points gross margin.
Without raising prices and we don't think raising prices in the short term.
It is the right thing to do it either because.
It makes us much more attractive against the competition several of whom have raised up right.
Okay.
Speaker 7: Thanks for that. Another question, sales and marketing caused up 31% in the quarter and 33% for the first half of the year, which is just under a million dollars increase. So we're last year run rate for the full year. Is this more heads? Is this...
Thanks for that another question sales and marketing costs up 31% in the quarter and 33% for the first half of the year, which is just under $1 million increase over last year run rate for the full year.
This more heads is this what do we actually spending this money on and is it is this is a step change is going to be permanent or is it is it first.
Speaker 7: What are we actually spending this money on? Is this a step change going to be permanent? Or is it a first half kind of a thing? And if it's permanent, what are we actually...
First half kind of a thing and if it is permanent and what are we actually.
Speaker 7: See, long term getting out of this extra money we're spending on sales.
See long term getting out of this extra money, we are spending on sales and marketing.
Speaker 2: We've spent a lot of money to revamp and upgrade our website to make sure that
We've spent a lot of money to revamp and upgrade our website to make sure that.
Speaker 2: It is our primary go-to market vehicle, including launching sites in other countries, and other languages.
It is our primary go to market vehicle.
Clothing launching sites in other countries in other languages.
Speaker 2: I think that to be honest, we were understanding for quite some time. And I think the level is more in line with what we want to do. It's not going to increase much more. But in today's global world, a person in Japan who's buying our product expects to be able to read about the product and buy the products in Japanese.
I think that to be honest, we were under spending for quite some time.
I think the level is more in line with what we want to do it's not going to increase at much more app.
In today's.
Global World a person in Japan, who is buying our products expects to be able to reach.
The product and buy the products and Japanese.
Speaker 2: And we have incurred the cost to do a lot of this work, which is largely a one-time investment. We will have to obviously maintain this, but at the moment there's a bit of a lift, particularly as we have.
And we have incurred the cost to do a lot of this work.
Is largely.
A one time investment we will have to obviously maintain this but at the moment there is a bit of a lift.
<unk>.
We have.
In my opinion upgrades in our website significantly over the last six months.
Speaker 6: in my opinion, upgraded our website significantly over the last six months.
I do agree that your website it looks a lot more professional and user friendly than it did in the past so.
Speaker 7: I do agree that your website looks a lot more professional than a user friendly than it did in the past. So it sounds like there's a half a million or 470,000 increase in sales and marketing for the first half of the year. You're saying that that isn't gonna be the run rate going forward. It'll tail off a bit. There will be some more spend because of maintaining it, but you had a bigger push in the first half of the year to get that upgraded. Is that what I'm understanding?
So it sounds like there is.
This half a million dollars or 430000 increase in sales and marketing for the first half of the year.
Youre, saying that that is going to be the run rate going forward. It will tail off a bit there will be some more spend because of maintaining it but you had a bigger push in the first half of the year to get that upgrade is that what I'm understanding.
Speaker 6: Yeah, but we're not done yet. I mean, this we're honest, I think that we have to push.
Yeah, but we're not done yet.
We're honest I think that we have to push.
Speaker 2: and maintain the higher levels, probably further. Another quarter, maybe a quarter two, and then it'll level out. But we're still doing a lot of work to include things like product collectors and other things, which we believe will enhance the business going forward.
And maintained at higher levels, probably for <unk>.
Another quarter.
Maybe a quick too.
Then it'll allow us, but we're still doing a lot of work to do with things like product selectors and all those things, which we believe will enhance.
The business going forward.
Speaker 6: And this is our primary go to market strategy. As you know, we don't actually have these on the tree sales people anymore. So the web page really is our showcase.
And then Brian right go to market strategy.
Don't actually have.
Street salespeople anymore.
So the web page really is.
Our showcase.
Display window, if you will.
Speaker 7: Okay, thanks for that, Kevin. Last question I got is, can you provide a little more color around this Q3 upgrade program? This is where you're, I think you're moving people from the S700 to the S720. Is that something that they're gonna keep their existing scanner and you just upgrade the software at a cost? Or is this a, they send you the old scanner, you send them a new scanner? Well, kind of, can you help me understand what we're trying to accomplish with this program?
Okay. Thanks for that Kevin last question I got is could you provide a little more color around this Q3 upgrade program.
Where do you guys think you're moving people from this 700 or 720 is that something that theyre going to keep their existing scanner or are you just upgrade the software at a cost or is this.
And give us their old scanner, you sent them a new scanner.
Can you help me understand what we're trying to accomplish with this program.
Speaker 2: Yeah, so the way that this would work.
Yeah. So.
The way that this would work.
Speaker 6: is that you would be able to buy the upgraded scanner and we would then send it to you. You would then return the old units and we would rebate you something in the region of $50 to $100 depending on the unit you returned and whether you allowed us to use the motherboard from the old units in the units that we had.
Is that you would be able to buy the app.
David scanner.
And we would then send it to you.
You would then returning to the old <unk> and we would rebate you something in the region.
50 to $100, depending on the unit returned whether you allowed us to use.
The motherboard from the old Yogurts in the yoga.
Hum.
Speaker 2: upgrade it. We made it reasonably straightforward. We do have return centers in most countries. For a person in Germany, if they bought us, they would be returning their scanner to a local
Great.
And so we've made it reasonably straightforward and we do have returns sectors in most countries so far.
There are of course in Germany.
If they stay would be returning the scanner to a local.
People in Germany, So the cost of returning it is quite small.
Speaker 6: people in Germany. So the class returning is quite small. And then they get upgraded and they get the benefit of the new system and they commence for two articles.
And then.
Get upgraded.
They get the benefit of the new system and they can then sports QR codes.
Speaker 2: So we'll have a pretty good plan, a massive plan to reach out to the people that already have scanners.
So we'll have a pretty good plan and aggressive plan to reach out to people that already have scanners.
We see that their requirements have changed and we want to make them happy customers going forward as.
Speaker 6: We see that the requirements have changed and we want to make them happy customers going forward as well as they've been in the past. So it'll work pretty well and actually...
As well as they've been in the past so.
And our work pretty well and actually.
Going back to your previous question, we've done a lot of work that the way to make this a automated process. So.
Speaker 6: Going back to your previous question, we've done a lot of work in the way to make this an automated.
Speaker 2: So all of your units are now cracked. You can see them in terms of the upgrade is we automatically check.
All of you.
<unk> are now track you can see them.
In terms of.
The upgrade.
We automatically check.
When Youre unit was manufactured and we can then customize the re banks based on how long delays et cetera. So.
Speaker 2: when your unit was manufactured and we can then customize the rebanks based on how all the days et cetera. So we think it'll actually go quite well, but people will get a new or fully refurbished scanner and it's not a software for this to be.
We think it will actually go quite well, but people will get a new or fully refurbished scanner and it's not a software update as the physical upgrade.
Speaker 7: Okay, so if I'm a customer and I opt for this program, I'll send you some money. You'll send me a brand new standard, the S720, so I can keep working with my S7100.
Okay, So if I'm a customer.
After this program I'll save some money Youll semi a brand new standard set of 'twenty two.
We keep working with 700.
Speaker 7: Convert to that and send you back the old 700. I think you said there were a hundred thousand of these in use currently That might be potentially upgraded over time Does the return unit just get thrown in the trash or use cabins even after parts? What happens with what you turn?
To that and send you back the old 700. Thank you said there were 100000 of these.
It used currently.
That might be potentially upgraded over time.
The return unit just gets thrown in the trash <unk> app for parts.
What happens with China.
Speaker 2: Well, I mean, when you select...
Well I mean when you.
Select.
Speaker 6: how much rebate we would, the motherboard in the return unit is fully usable and can be recycled. And we would encourage people to do that. Certainly we don't want to be throwing goods units into landfills, etc. So the idea would be that we would read Farbitch and make sure that the return unit is...
How much rebates, we would the motherboard and the return here and it is fully usable.
It can be recycled and we would encourage people to do that certainly we don't want to be throwing wood units into land channels et cetera. So the idea would be that we would leave.
Furbish and make sure that the return is.
Speaker 8: fully functional and meets all the specs, and that would be reused in a 720, which we think is, you know, the responsible and environmentally friendly thing to do.
Fully functional and mutual respect and that would be re used in the second advantage.
<unk>, which we think is the responsible and environmentally friendly thing to do.
Speaker 7: Got it. So if I wanted to, I guess there'll be some pricing differences. If I wanted to refer to this unit, it'll be a lower cost. And if I wanted to brand new unit for the second one. Exactly. Exactly. All right. Yeah. So you're going to try to establish these parts where you can see you don't end up throwing these all into a landfill, which is good to hear. Yeah. I appreciate the feedback on the questions I had. So that's the whole hamper today.
Got it.
Yes, there'll be some pricing differences if I wanted to refurbish you that it'll be a lower cost than if I wanted a brand new units exactly exactly yes.
Friday scavenge. These parts, where you can see you don't end up growing these all into a landfill which is good good to hear.
Yes, I appreciate it I appreciate the feedback on the questions I had so that's all I have for today.
Thanks.
Speaker 8: All right, thanks very much, Steve. Take care. Thank you. Our next question comes from Chris Sakai from Singular Research. Please go ahead. Hi, Kevin and Lynn.
Alright, thanks, very much Steve take care.
Thank you. Our next question comes from Chris Sakai from singular research. Please go ahead.
Hi, Kevin and Lynn.
I just had a question on <unk>.
On the 50 basis point increase in gross margin what was the driver of what were the drivers there.
Speaker 6: on the 50 basis point increase in gross margin. You know, what was the driver, what were the drivers there? What led to the increase?
Led to the increase.
Speaker 6: Well, there was a few things, but I think the main thing that let's increase is that we compress the See a little bit lower reach out or margin.
Well there was a few things, but I think the main thing that led the increase is that we compressed the reseller margins at the halfway through the quarter.
Speaker 2: at halfway through the quarter. So we didn't increase their end user price, but we did reduce the discount we give to certain elements of the channel. And as a result, the R-affect of price into distribution went up in certain categories. And that was part of how we started to reduce the margin.
No we didn't increase our end user price, but we did reduce the discounts that we give to certain elements of the channel.
And as a result.
They are effective.
Into distribution went up in certain categories.
That was part of how we started to reduce the margin.
Speaker 2: The other thing that is happening is that the premiums we paid on components during the
The other thing that's happening is that the.
Premiums we paid on components during the.
First half of the year.
Speaker 2: First half of the year have come down to the wash and therefore the component cost are slightly...
Down somewhat and therefore.
The component costs are slightly better.
Speaker 2: So, I mean, we did feel that we could get our margins back into the mid-50s and Q2 was kind of the first step on that process. But going forward, I think it'll be primarily based on less premium as opposed to adjustment in the distribution channel.
So I mean, we did.
Feel that we could get our margins back into the.
Mid <unk>.
Q2 was kind of the first step on that path, but.
Going forward I think it will be primarily based on.
So less premium as opposed to adjustment and the distribution channel.
Okay, alright, thanks for that and.
Speaker 6: You know, you're operating expenses increased, 17% from year over year. Just wanted to get a sense, you know, will these...
Your operating expenses increased 17%.
From year over year.
Just wanted to get a sense.
It will be.
Speaker 6: I know it was 7% increase sequentially, but will we see a decrease in operating expenses back to lower levels?
I know when it was 7% increase sequentially, but will we see a decrease in operating expenses back to lower levels.
Well.
Speaker 2: Well, in Q2, you also had about $100,000 due to this.
In Q2, you also had about $100000 due to this.
Speaker 2: gap requirements to straight-line rents. To answer your question, our expenses will come down a little bit, but we find ourselves in a position where we have what we feel is an enormous opportunity with the 3D scanning and the enhanced scanning in the camera-based stuff, plus we have a lot of early traction in the NFT world.
GAAP requirements to straight line rent.
But I hate.
Answer your question.
Our expenses will come down a little bit.
But we find ourselves in a position where we have what we feel is an enormous opportunity.
With the free scanning and beam scanning in the camera based stuff plus we have a lot of early traction in the NFC ones.
Speaker 2: So we're not overly inclined to reduce our engineering.
No.
It's not overly inclined to reduce our app.
Nearing.
Our sales and marketing expenses.
Speaker 2: or sales and marketing expenses. We tighten our belts a little bit, but we'll be a little bit, because we think the opportunity we have in front of us is too good not to keep our foot down on the gas if you will, even in these tough times, over the next six months.
Our belt, a little bit, but it will be a little bit.
Because we think the opportunity we have in front of us.
It's too good not to keep it.
Our foot down on the gas if you will even in these tough times over the next six months.
Okay. Thanks.
Speaker 1: Thank you. The next question comes from Charlie Chambers from C3.
Thank you. The next question comes from Charlie Chambers from Ctrip.
Speaker 3: Yes, thank you. Stock buyback. The average strike price for 1Q to 2 in year to date is this first question.
Yes. Thank you.
Stock buyback the average strike price for <unk> <unk> and year to date is the first question.
Speaker 3: I think the total was mentioned as about 150,000. I think one queue was about 96,000 shares. And then the second question is going to be on the QR code strategy moving forward. Do you see it something like a WeChat in China?
I think the total was mentioned is about 150000 I think one two was about 96000 shares and then the second question.
There's going to be on the QR code strategy moving forward do you see something like a wechat in China.
Speaker 3: combined with QR code for access, which is barely used here in the United States.
Combined with QR code for access which is barely used here in the United States.
Alright, so I'll, let nadeem.
Speaker 2: Alright, so I'll let Lynn answer the first question on the number of the prices we paid. But we do have, in the 10b5, when we did the 10b5, we are limited to 1.5% of the outstanding shares in any given quarter, which is about 90,000 shares. I don't know the exact prices, so maybe Lynn could answer that question.
And so just first question on <unk>.
The number of the prices, we paid but we do have in.
In the <unk> side, when we did the <unk>, we are limited to one 5%.
The outstanding shares in any given quarter, which is about 90000 shares.
I don't know the exact prices. So maybe you could answer that question.
Yes, I'd say, it's a 125% of the yes.
Speaker 4: Yes, actually it's 1.25% per quarter of the outstanding shares. So, in the first quarter, we purchased 91,000 shares at the average price of about $410,000. And as of yesterday, 2.2, we have bought their
Yes.
Two 5% per quarter of the outstanding shares.
In the first quarter, we purchased a 91.
91000 shares.
Every comprised about 14.
A S R.
Walter yesterday key too we have bought.
Uh huh.
That's one.
Yes.
Speaker 4: about 60 sound chairs as their average price of about $3.
About 60, some chairs at their app.
The price of about $3.
Perfect. Thanks.
Okay as regard to cure them.
Speaker 2: Okay, as regards the QR, so I think you're exactly rising your question in much of Asia, particularly in China. QR codes are used for payments.
So I think you're exactly right in your question.
<unk> and <unk>.
Actually in China.
QR codes are used for payment.
Thanks, everyone.
Speaker 2: everywhere. Which is not a bit in the case in the US and to a large extent in Europe . However, this is changing.
Which has not been the case in the U S and to a large extent in Europe .
However, this is changing.
You know even on an airplane.
Speaker 2: You now, you know, even on their plane, can convert your credit card into a QR code so that they can do the payment using that mechanism instead of having to swipe or insert your half the card. And we do see that coming as a big wave, especially as QR code.
Yeah, Ken convert your credit card into a QR code. So that they can do the payment using that mechanism instead of having stripe or in sectors.
The card.
And we do see that coming.
As a big way, especially as QR codes.
Kind of.
Speaker 2: became the norm during COVID with certifications and
Became the norm.
Covid with certifications and other types of identification et cetera.
Speaker 8: types of identification, etc. And many of the merchants that use our products have a reader that was designed for products and it doesn't.
Many of the merchants that use our product.
Have a reader that was designed for product.
It doesn't support QR code.
Speaker 2: which is why we're doing the upgrades. So the newer version would just do everything the S700 does in the one-day world, but also support.
Which is fine.
So the newer version.
Do everything.
Dawson.
The one day world, but also supports app.
QR codes is one of them out in a few codes that they made me too far the payment activities that we see coming at them.
Speaker 8: that they may need for the payment activities that we see coming at them. We are not really in charge of the timing of these activities, but we do see a lot of indicators that you will have a weak chance of equivocating.
We are not really in charge at the timing of these activities bus.
We do see a lot of indicators.
You will have a wechat equivalents.
And it can be driven by our Paypal or.
Speaker 2: and it can be driven by a PayPal or
Yeah.
Speaker 2: credit card, something, etc. Going forward and the merchant has been a position to respond and have a device that we
Credit card companies et cetera, going forward and the merchant test being in a position to respond and how 'bout device that we sell.
No.
Going back I mean I.
Speaker 2: going back, I mean, I think that you are exactly right. The issues that have been common in Asia, in particular China, will go global, based on QOR, will deal over the next 12 months.
Think that you're exactly right.
It shows that have been common in.
In Asia, and particularly China.
When it goes global based on cure will play out over the next 12 months.
Perfect. Thank you.
Thank you we have a question from Frank Frank Petronas from Prudential Securities. Please go ahead.
Speaker 1: Thank you. We have a question from Frank Petronis from Prudential Securities. Please go ahead.
Speaker 5: One more question, on the sales force, national and
Okay. One more question on the sales force.
National and international.
Speaker 5: I don't see Vietnam. Example. I had my Japanese friends. I was showing them golf courses in Florida.
Don't see Vietnam.
Example, I had my Japanese friends.
Among them golf courses in Florida.
The cost.
Speaker 5: The cost is so high, we ended up in Hawaii, they ended up selling out. Now their major businesses are in Vietnam.
We ended up in Hawaii, they end up selling out now they're major businesses are in Vietnam.
Speaker 5: What is our potential for salesmen directing?
What is our potential for salesmen directing.
Speaker 5: like all of the majors to your website. What is your...
Potential customers like.
All the majors to your website.
What is your driver as far as.
Why would they.
Speaker 5: tune into your website versus, you know.
Tuning to your website versus you know.
Mike.
Speaker 5: like a logical or one of that. The law. All right. So we don't have any Vietnamese websites.
The logic or one of them.
Tomorrow.
We don't have any.
Vietnamese.
Right.
<unk>.
Speaker 2: How have it, Jeff, in these websites and we saw it, I think that we get a number of products in...
Japanese website, and we sell a significant number of products in Japan.
Speaker 8: You know our business model follows with the ice punch and
Pat.
You know.
Our business model as follows with the ipads and.
Speaker 2: The iPad is too expensive in a number of countries and Apple products, even though they sell very well in the US.
The iPad is too expensive.
<unk> countries and Apple products, even though they're there sells very well in the U S.
Speaker 8: in China, Japan, and in Western Europe countries. They don't sell that well in Asian countries because of the price.
In.
John .
And in Western Europe countries.
They don't sell that well and Asian countries.
Because of the price points.
Speaker 8: Primarily we've been focused on
Primarily we've been focused on.
Speaker 2: being the companion scanners be out of line. Now this is changing. One of the things we're doing with the free camera scanning is we would be able to service the Android market, which is much bigger. And by starting people at a lower price point, we feel we'll be able to support more of the world with the app.
The companion scanners.
Now this is changing.
One of the things we're doing with the free camera scanning is we would be able to service the Android market, which is much bigger and by starting people at a lower price points.
We feel.
The porch.
More of the world with these options going forward.
We would not.
Our templates, adding a jeopardy.
Speaker 8: It's a place adding a jeopardy of other websites unless we already had some business in that area.
<unk>.
Other websites unless we already had some business in that area.
Speaker 8: So it's a little bit further down this path before. We would consider that. And today I think we have...
And so it's a little bit further down this path before.
We would consider paas.
Today I think we.
Speaker 2: United States Office
Six steps website, including Germany, France, Spain.
Obviously, the U K and Ireland.
English would give Japanese Australia et cetera.
Speaker 8: But all that takes maintenance, okay.
But all of that to take place and support.
Okay.
Speaker 5: OK, and going back to your iPad situation, too expensive abroad. All I can tell you is my grandkids, eight and 12 years old, they are up to date.
Going back to your iPad situation too expensive abroad. All I can tell you is my grandkids, eight and 12 years old.
Our app today.
Speaker 5: nagged their mother and father. They have to have that new iPad and of course games, but they're showing a crazy either way whenever they update. Okay, thank you.
The mother and father.
The new iPad.
Of course games.
They're selling a crazy either way whenever they update okay. Thank you.
Thanks Penni.
Speaker 1: Thank you. Once again for any questions, please press 0-1.
Thank you once again for any questions. Please press seaworld one.
Speaker 1: At this moment, we show now for their questions. I would like to turn the call back to Mr. Mills for final remarks.
At this moment, we show no further questions I would like to turn the call back to Mr. Mills for final remarks.
Speaker 2: Thank you, Operator. So, in summary, in Q2, we delivered solid results and made significant progress in a very challenging environment.
Thank you operator, so in summary in Q2, we delivered solid results and made significant progress in a very challenging environment.
Speaker 8: We will we are continuing to build a solid foundation that will enable us to go revenue and importance over the next few years. And I'd like to thank everyone for your time and interest in socket mobile and wish you all a good afternoon.
We are continuing to build a solid foundation that will enable us to grow our revenue and importance over the next few years.
Everyone for your time and interest you thought could mobile and wish you all a good afternoon.
Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Speaker 1: Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.
[music].