Q1 2023 Genasys Inc Earnings Call
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Speaker 7: and welcome to the Gen Assistant Co-operated Fiscal First Corps 2023 conference call. All lines have been placed on a listen only mode and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator.
Speaker 8: I'm Kim Rogers with Hayden IR, the Investor Relations firm for Genoses. With me on the call today are Richard Danforth, Chief Executive Officer, and Dennis Clawn, Chief Financial Officer.
Speaker 9: During today's call, management will make forward-looking statements regarding the company's plans, expectations, outlook, and future financial performance that involve certain risk and uncertainties. The company's results may differ materially from the projections described in these forward-looking statements.
Speaker 10: Factors that might cause such differences and other potential risks and uncertainties can be found in the risk factors section of the company's Form 10K for the fiscal year ended September 30, 2022. Other than statements of historical facts, forward-looking statements made on this call are based only on information and management's expectations as it.
Speaker 11: which we believe provide helpful information to investors with respect to evaluating the company's performance.
Speaker 12: For reconciliation of a just-to-be-bedad adapt financial metrics, please see the table in the press release issued by the company at the close of the market today.
Speaker 13: We consider bookings and backlogs leading indicators of future revenues and use these metrics to support production planning. Bookings is an internal operational metric that measures the total dollar value of customer purchase orders executed in a given period.
Speaker 14: regardless of the timing of the related revenue recognition. Backlock is a measure of purchase orders received that are scheduled to ship in the next 12 months. Finally, a replay of this call will be available in approximately four hours through the Investor Relations page on the company's website.
Speaker 15: At this time, it's my pleasure to turn the call over to Genesis, Chief Executive Officer, Richard Danforth. Please go ahead, Richard.
Speaker 16: Thank you, Kamen. Welcome to everybody.
Speaker 17: If you look on our website, you'll see the earnings release as well as a press release that has been hung up on the wire service but likely come out during this call.
Speaker 18: announcing the win of a large enterprise SaaS award to a company called Aramco, which happens to be the largest company in the world from a market cap basis.
Speaker 19: So with that we are off to a strong start in fiscal 23 with our largest SAS booking quarter to date. Our software business continues to gain momentum as evidenced by the 6.1 million in SAS bookings in the first fiscal quarter of this year.
Speaker 20: The strong bookings include an enterprise award from, as I mentioned a moment ago, Aramco, the largest market cap company in the world.
Speaker 21: and the California counties of San Diego where they bought GEM, Riverside where they bought Zone Haven, subsequently they had bought GEM and IMS, San Mateo which bought Zone Haven, and Monterey County which bought Zone Haven and GEM.
Speaker 22: These results, along with our rapidly growing SAS pipeline, further reinforce our strategy of investing in software development, sales, marketing, and customer support.
Speaker 23: The addition of the world's largest oil and gas company in large California counties to our global automobile manufacturing and regional critical infrastructure customer base elevates our SAS profile and demonstrates our ability to successfully close, cross-sell, and
Speaker 24: and support large enterprise and public safety clients. Our international results are also robust this quarter, as a strategy to rationalize business development by establishing sales offices in APAC Europe and the Middle East have proven successful.
Speaker 25: During the first fiscal quarter, 50% of our bookings were international, an APAC revenue more than doubled year-over-year as the entire region emerges from COVID-related lockdowns.
Speaker 26: With the world economy picking up, we are seeing pipeline growth across all of our international sales regions.
Speaker 27: We expect strong fiscal year bookings in APAC Europe and the Middle East driven primarily by hardware orders as well as developing pipeline-assass opportunities.
Speaker 28: Total buckings for the quarter are 8.6 million up 23% year over year. Hardware buckings for the quarter were 2.5 million as pending orders moved into our fiscal second quarter.
Speaker 29: Fiscal second quarter, Hydeware Bookings through January were already 40% higher than the total first quarter, Hydeware Bookings.
Speaker 30: We expect fiscal 2023 bookings to follow our typical patent with a large step up in fiscal Q3.
Speaker 31: Driven by international hardware bookings in fiscal 2023, are expected to substantially exceed fiscal 2022 hardware bookings.
Speaker 32: In what is typically our slowest quarter, fiscal first quarter revenue was $10.5 million, slightly lower than the prior year quarter and in line with our expectations.
Following the usual pattern, we expect sequentially quarterly revenue to increase in the fiscal second quarter and then strengthen in fiscal Q3 and 4, putting us on a solid footing for the seventh consecutive year of revenue growth.
Inflation resulted in increased hardware component cost and product mix was a factor in the decreasing first quarter gross margin to 43.3%.
We expect our gross margin to return to more normal levels in the second half of fiscal 23
As we discussed on our fiscal fourth quarter conference called, continue investment in our SaaS business.
Draw a 10.5% sequential quarterly increase in operating expenses.
in line with our expectations.
Given the confidence in these investments to accelerate our SaaS business growth, we anticipate operating expenses in fiscal 23 to increase by approximately 5 million year over year.
While SAS bookings and revenue are growing, hardware continues to be a majority of our business representing 90% of the total revenues in the fiscal first quarter.
Our commanding competitive position is to de facto global supplier of long range acoustic devices, gives our hardware business a compelling economic profile. We continue to diligently manage and dedicate resources to growing our global hardware business.
Recent attacks and increasing threats to critical infrastructure, particularly electrical substations, are generating large business opportunities for our remotely operated LRAD 950 NXT system.
The NXT uses a proprietary technology to identify and respond to potential threats.
Since the NXT launch last April , we have received orders from international navies and critical infrastructure orders for dams, data centers, ports, and electrical substations.
Large NXT critical infrastructure and international defense sales are expected to be a major contributor to hardware revenue this fiscal year and beyond.
Our hardware bookings are typically lumpy. We currently have a large number of hardware opportunities expected to curl as this fiscal year.
The US Army program record and international orders are anticipated to drive bookings growth and substantially lift hardware backlog in the second half
Hardware will continue to be the economic engine that powers the self-funding of our SaaS business development.
engine that powers the self-funding of our SaaS business development in the future.
Our priority focus is fully integrating our SAS solution and increasing the capabilities of a data-driven protective communication platform.
Our SAS system suite is evolving with the integration of GEM, ZoneHaven, and IMNS into a seamless platform, expanding our capabilities and empowering Genesys to address a much larger scope of enterprise and public safety crises.
New platform features including flood and traffic modeling continue to expand of platforms multi-hazard capabilities to use during hurricanes, storm surges, tsunamis, avalanches, flooding, debris flow, wildfires, chemical plumes, active shooter, and other natural and man-made disasters.
Some of our new capabilities were deployed during the recent atmospheric river condition that inundated Northern California.
Our protective communication platform was used in many counties to communicate the location and extent of flooding, avalanches, debris flows, road closures, hazard condition and recovery resources.
During the surveyor weather events, hundreds of thousands of residents access the Genesis Aware site to check the evacuation status of their neighborhoods and for other lifesaving information.
Our Land and Expands strategy continues to grow our footprint with government public safety customers.
Increasing demand for our protective communication platform has 16 California jurisdictions now using multiple Genesis platform elements with three counties using the entire platform
Riverside, one of California's largest and most populous counties, recently purchased ZoneHaven to integrate with the previously purchased GEM services and IMNS installations.
As we announced earlier this month, the City of Laguna Beach is a notable example of how to perform the performance of our IMS network created another upselling opportunity.
The successful use of I-MNAS during two wildfire last year led the Laguna Beach City Council to prioritize the further expansion of its Genesis network.
In Marin County, California, we have provided emergency warning services for the City of Mill Valley since 2019.
In 2021, IMS installation equipment was sold with power and battery backup were positioned in other areas within the county.
The follow-on order announced last week further expands the county's IMS network.
We have also expanded our footprint in Alameda County.
with UC Berkeley's purchase of IMS, which will be integrated with the City of Berkeley's Genesis Network.
As we announced last week, the extended network and the county's use of our Zone Haven evacuation platform will expand emergency warning coverage and notification channels during public safety threats for more than 45,000 students, staff, and facility.
We expect additional California jurisdictions to join Alameda, Marin, and Riverside counties in adopting the full Genesis platform this fiscal year.
In the enterprise market, the addition of a ramp co, along with previously announced global auto manufacturers, manufacturers, and critical infrastructure, elevates our SaaS profile and demonstrates our ability to successfully close large enterprise customers.
Extending the capabilities of our software platform further differentiates us and opens doors for new and follow on business opportunities.
Our approach to the vast enterprise sector is to target key verticals where we can reference our proven execution.
We have spoken before about our ongoing investment in the SAS platform and SAS sales growth.
Since late 2021, we've expanded our software development, sales marketing and customer support teams, and added new personnel with the skill set needed to achieve our revenue goals.
To build brand awareness and accelerate platform growth, we have recently appointed Abnida Gulati as Vice President of Marketing.
Evneeter is a highly successful enterprise marketing executive with extensive experience leading revenue-based marketing organizations.
She has implemented global go-to market strategies and led customer acquisition programs for leading companies in the software semiconductor medical and financial market.
Abneeter is a key addition to our leadership team who will help us drive scale and growth.
The whole team here is energized and psyched by the increasing adoption of our software SaaS platform and the burgeoning opportunities fueling growth in our pipeline.
A pipeline of qualified SAS opportunities is now 25% greater than it was just a few months ago.
The SAS bookings we delivered in the first quarter, further validate the investments we were making in our protective communication platform.
And we believe our strong indicator of its potential.
With Genesis software now in use in 23 states and 7 countries, soon to be 8 with the addition of Aramco, we are gaining traction in new markets and building our software footprint globally.
We are reiterating our expectations for continued revenue growth in 23 with strong international sales, continuing LRA delivery to US military, and increased software services, sales, and significant SaaS revenue growth.
With that, I'll turn it over to Dennis.
Thank you, Richard. Revenues for the fiscal 2023 first quarter were 10.5 million, 2% less than the prior year quarter.
As compared to the same prior year period, L-RAD revenue increased 19% to $9.3 million. Software revenue increased 39% to $903,000. However, this was offset by a $2.3 million decrease in IMS revenue, which was $300,000 in this year's quarter.
I am an S-Revenue throughout fiscal 2022, benefited significantly from a single $10 million order from the U.S. Army.
Recurring SaaS revenue from North America increased 87% compared to last year's quarter.
Gross profit margin was 43.3% this quarter compared to 48.2% in the prior year quarter.
The gross margin percentage was impacted by inflationary pressures on product costs, the mix of revenue this year, and increased software costs to support software revenue growth.
We expect the Q2 grows more profit margin to be similar before improving to closer to our historical margins in the second half of this year.
Operating expenses were $8 million, up from $6.5 million in the same period a year ago.
The planned increase is largely due to greater sales, marketing, and related travel expense, plus additional compensation expense this year, including a 14% increase in our engineering sales.
Net loss for the quarter was $3.5 million, or 10 cents per share, compared to a net loss of $1.3 million, or 4 cents per share, in the Fiscal 22 first quarter.
The increase increase loss was largely due to the lower gross profit this year and the planned increase in operating expenses to support the software growth initiatives.
Adjusted EBITDA for the fiscal 23 first quarter was a loss of 2.4 million compared with an adjusted EBITDA loss of 412,000 in the prior fiscal year first quarter.
We believe this information in comparisons of adjusted EBITDA enhances the overall understanding and visibility of our business performance.
To that effect, a reconciliation of our gap results to non-gap figures has been included in our earnings release.
Cash, cash equivalents, and marketable securities total $15.1 million as of December 31, 2022 compared with 19.9 million as of the prior year end.
working capital totaled 17.4 million at December 31, 22 compared to 20.7 million at September 30, 2022.
Cash used in operating activities for the first three months of fiscal year 2023 was $4.9 million.
This compares to cash used in operating activities of 2.7 million in the same period last year.
The fluctuation primarily reflects the higher negative adjusted epita in this year's quarter.
We'll now open the call to Q&A. Operator?
Thank you. The floor is now open for questions. If you do have a question, you may press star 1 on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing 1. Again, ladies and gentlemen, it's star 1 and our first question comes from...
Brian , call me from...
from Stephen's go ahead.
Hey guys, thanks for taking my question.
Congratulations, first off on the Ramco deal. I'm curious if there's any numbers you could provide around that contract or just any.
Qualitative information you could provide us with and help us size that up
It was the largest SAS booking we've ever taken.
You know, I buy a lot, Brian . I think our largest one prior to that, Dennis is ribosited, a million one twenty or million one fifty.
So this was substantially higher than that.
little color on it was a competitive solicitation uh... there were competitors from the united states the uk and from Europe
and
They select the genesis, which is terrific. It's a testament to the team.
We have the team here in the United States and the team in Europe . There's just a stunning win for us. We mentioned in the last call, Brian . We were going to...
begin to focus more on enterprise as well as continuous sled.
and we were able to go out and win the largest enterprise in the world.
So that was terrific.
Yeah, really. We a lot of work between now and when we go live, but we're all very, very pleased.
Absolutely. Definitely impressive and impressive when I'm curious. When do you expect to go live on that on that contract?
It will go live with the channel. It will go live with the channel.
So it was book to Q1 we signed the contract in December 27th I think.
Okay.
There's been an extended period of approvals for releasing the press release, which we received earlier today, the approvals finally. So they've had the process ongoing since early January . It's taken over a month to get their approval. It surprised us that it showed up this morning.
So we scrambled a little bit to make sure we could get it out there as quickly as possible.
but you're not insane? wise thin
The internal current plan.
is that they go live internally at the end of March.
but won't begin to use it in
in a public forum for about 60 days after that, just training and practice.
Got it. And this is just for the, this is for the gym software.
Yes.
And is it all fast?
And is it all sass?
It had an incumbent system, Brian , that was on-prem.
So this is a big deal for RAMCO.
hoarding this stuff up on the
on the network.
Was it the incumbent provider? Was it one of the other large competitors like an Everbridger or your own solver?
Any color you can provide there
Yeah, it was one of those.
Okay.
I'm curious what you're seeing from your competitors more recently.
I mean by the looks of this deal it seems like your win rates are improving But obviously everbrough both everbrough, and on solve kind of have
Some other stuff going on at the companies
You know, ever bridges go through some restructuring. So I'm curious just if you're benefiting it all from, from call it maybe some distractions.
Structuring some curious just if you're if you're benefiting at all from from call it maybe some some distractions Your competitors
I can't speak to that Brian . I know we've picked up a handful of sales people that have been laid off by those companies, particularly over bridge.
you know we booked six point one million dollars in SAS.
in our first quarter.
which was the biggest we've ever done. And obviously it's being driven by a ramp co. But we also picked up several counties again here in California.
I mentioned in my remarks we're currently selling our software in 23 states in the union and now seven countries soon to be eight.
And I also mentioned our pipeline is grown by 25% of the last handful of months, so it's...
It's behaving the way we expected it to. And I'll do respect to the competitors here in the United States.
And I'm behaving the way we expected it to. And I'll do respect to the competitors here in the United States.
They might struggle some but they still they still
Formable competitors.
Right. That makes sense. One last one, and I'll see the floor here, but I'm curious, Dennis, if you could provide any color on kind of why the outsize move and gross margins this quarter.
That makes sense. One last one, and I'll see the floor here, but I'm curious, Dennis, if you could provide any color on kind of why the outsized move and gross margins this quarter. And.
I guess in the back half you're expecting them to get closer to you know the 50% range is that correct.
Yes, we are.
quarter over quarter, the decrease as we saw over the last half of last year's fiscal year, the margins decreased last year as well. They picked up in the fourth quarter of last year, but that was because of the volume. If you take a look, $16 million of revenue in the fourth quarter of last year versus ten.
the second quarter we should see that we'll have the orders that we'll be shipping will be based upon our in chances that we the orders that we have booked from the higher
list prices of our products. We have reprised that. It just takes time to get into the system and be part of the backlog.
Understood. Okay. Thank you for the time today gentlemen.
Thank you for the time today gentlemen.
And our next question comes from Mike Lattimore from Northland Capital. Go ahead, Mike. Thanks, everyone, for having me.
Thanks very much.
that can grab on the strong and fast booking. That's exciting news for sure.
The, just to be clear, is it is a 6.1 million data, a annual contract value or total contract value?
It's the contract value total.
We're gonna check out Star Wars 8 Oh
Yep, yeah, OK. And then, um.
It doesn't seem like you guys have seen really any.
sort of macro effects on sales cycles or anything like that. I mean, it sounds like things are going very strongly, but have you seen any kind of elongation of sales cycles in the enterprise market or public sector for that matter? I guess it doesn't really seem like it, but just want to check how many other staff companies have seen that.
I'd say no from a SAS perspective, from a hardware perspective, and I'd probably put a little color on that, like, given where we came from.
with a very low number.
would have been able to grow very nicely. From our hardware perspective,
The international was
most affected
bookings from a COVID kind of thing. So, APAC, Middle East, and even Europe were terrible over the last 10 years.
a COVID kind of thing. So, APAC, Middle East, and even Europe were terrible over the last three years.
Frankly, coming down, we can't coming down prior to that.
So I'd say on a positive note, we see pipeline growth in all of our international markets.
And we expect, as I mentioned in my remarks, significant uptick in international bookings of this fiscal year.
Yep, that's great.
In terms of the Aramco win, which was competitive and a replacement,
Are there one or two things that stand out here is to, you know, why you won the deal from a technical perspective?
I can't answer that. I have my own opinion, but I don't have the information from the Aramco folks. You know, we're just getting started with them.
Yeah, you know, part of it, Mike, is from a technical perspective. Our team in Madrid has been working with network providers around the world since the early 2012 timeframe.
So they're very comfortable with the large network providers.
So we put a compelling technical case together and they select it as I'm sure we'll get more color from them as we continue to work with them over the coming months.
If you look at that pipeline, how is there a way to rank order the applications in terms of their representation in that pipeline? You know, one clearly got a bigger chunk of the pipeline, then another here among the three main ones you have?
Well, if you look at the three being the gem of zone haven in I am an ash.
I haven't asked by its nature will drive higher revenue.
but lower SaaS.
And Gem and Zonehaven, as I mentioned in my remarks, they're being combined.
And we've seen many counties now by both.
have one and buy both and as I mentioned, Monterey bought both to begin with.
And that's significant for us from our
A revenue perspective.
So if you look at SAS...
Combined.
Sled and Enterprise.
It's a great opportunity for us.
I didn't get Straight...
Thanks a lot.
Thank you.
And our next question comes from Ed Wu from Assent Capital. Go ahead Ed.
Yeah, congratulations on the quarter. My question is on the increase in operating expenses of $5 million. How much of that is in sales and marketing versus development, and when can you really begin to leverage the revenue growth on your margins?
I don't have it sitting here in front of me. What was more R&D or sales and marketing down to Steve?
I can't give you a break out of my sense would be that it's more sales and marketing oriented then.
then with strictly R&D development. We've added, since a year ago, we now have our first chief revenue officer and as Richard announced, we have Vice President of Marketing. So, you know, they're leading and building out their teams. So it's probably going to be...
We've added a substantial number of sales and marketing folks already this fiscal year. So it's more likely sales and marketing.
And in terms of when the lever starts to hit, you know, the
A revenue, the dentist remarked, a revenue for Q1 was 900K up. How much? As up of a, I guess, a hundred thousand. Yeah, as a significant percentage.
But as we bookboard orders and it's a curve that's sort of asymptotic.
that will begin to improve.
certainly by the end of this year I would expect.
Great, well thanks for answering my question and I wish you guys good luck. Thank you.
my question and I wish you guys good luck. Thank you. Thank you.
And our next question comes from Chris Tuttle from IPO. Go ahead. of
Hey, thanks for taking my question. I just actually have a couple of them. Just had a curiosity. What was the time since when you first started selling your marketing on the Aramco deal to the closed? What was the chronological time on that?
It was shockingly quick for the Middle East particularly.
It's just a rough order magnitude, Chris, but...
Chris, but...
Are.
Dubai office became aware of the opportunity in the fall.
My office became aware of the opportunity in the fall. There were...
multiple demonstrations and responses to RFIs.
A proposal was submitted.
In December I think.
and the award was made on December 27th. So that's shockingly fast for an enterprise of any size.
So that's shockingly fast for an enterprise of any size.
So notwithstanding this was the largest enterprise in the world. So they were determined to get it under contract. I think they have some issues with their existing system that was the impetus to
this was the largest enterprise in the world. So they were determined to get it under contract. I think they have some issues with their existing system that was the impetus to sort of fast track this.
But it was again a great team win.
Yeah, that's helpful and that is for enterprise sale. That's a fee to light. Yeah. One other question just in terms of the overall business, you know, you talk a lot about, you know, the strength and A-PAC Europe Middle East. It kind of begs the question, you know.
Did you see some weakness or a slow ramp or any kind of delay? Pattern in the US where deal
maybe needed longer approvals or you know you you cited all the other TOs except for the US in terms of strength so I'm just curious if we should be you know thinking about that what your observations are.
The international mentioned a moment ago has been...
poor for the last handful of years and most recently driven by COVID shutdowns.
So our bookings from international have been down.
So I see them returning to normal levels.
So I see them returning to normal levels, beginning this year.
Domestic orders have historically been somewhat lumpy.
and they remain somewhat lumpy.
where second half is typically substantially stronger than first half, and that's what we're seeing.
So I think the U.S. is following the patent it usually follows and international is improving a lot.
eram d
I had two questions on the technology side. One of them is, I know we've talked a little bit in the past about kind of a unified, um, systems and how do you help them? It's very hard to do that on a research firm like NOAA, but they are working on the right
product
Can you provide any insight in where that is on the priority spectrum and what kind of timing there might be in terms of...
You don't want upgraded unified product and branding around the software business.
or weeks we are.
In devouring to do that, I mentioned in some of my remarks the unified protective communication platform, that's what we're calling it, that will include all the functionality of Gemzone Haven and IMS.
I mentioned in some of my remarks the unified protective communication platform, that's what we're calling it, that will include all the functionality of Gemzone Haven and IMS. We will be rolling out a...
campaign on this late spring early summer.
this late spring, early summer.
And then one other question on the technology side at all hotline is, you know, one of your, you know, one of the bigger names in the space ever bridge that's been around for awhile.
My question is about interoperability. Like them, love them, they are failing, succeeding, whatever. They signed a lot of large contracts with governments and states to provide emergency notification. I am wondering, is there an opportunity for
Genesis, you know, on the interoperability side to come in and say, well, they want this award. You can't walk away from it because it's the embarrassing, but we should provide some of the functions that you need now in terms of, you know, evacuation and other sorts of, you know, deeper, deeper software and data services.
What level of interoperability you have with them and is that a legit opportunity or is that does it not really hit your radar screen?
We have a handful of states in our...
We have a handful of states in our...
We won't call it an up, certainly not in our backlog yet, but we are pursuing multiple states across the unit.
And so you'd be able to be interoperable with them or they'd have to replace them.
But what certainly want to replace them, but our system can operate the Everbridge channel, the Everbridge Mass Notification channel.
Okay. All right. In many cases, we have installed our IMS systems here in California and other states, and counties and cities may in fact have Everbridge or Unsolved, so it becomes a channel that's on the GEM platform.
I see. Alright, I get it. Thanks very much. That helps. Alright, thanks very good. Talk to you soon.
Ladies and gentlemen, a reminder to get in the phone queue, it is star one. And our next question comes from Brian Colly from Stevens. Go ahead, Brian .
Thanks for taking the follow up. I'm curious if you could just talk about your visibility to returning to revenue growth from a hardware perspective in the second quarter through the fourth quarter. It seems like you have enough backlog to do that, but I'm just going to curious how we should think about
The growth to take second half hardware second half higher than first half for sure Our first quarter revenue
By the way, it was the second largest in company history.
was the second largest in company history.
weeks and my remarks I told you I thank you to Brian will be higher than Q1.
And then recovering very nicely in the second half.
Got it. When you mention in the press release, like you expect continued growth, is that...
Does that include... year over year?
Year over year for two, like including two Q correct.
The comment is full year to full year.
Okay.
Got it. I wanted to ask about just the go-to-market strategy for software.
And maybe some of the initiatives that Dennis Walsh is working on, are you looking more at kind of partnering with, you know?
any type of resellers or channel partners to kind of help you extend your sales reach without needing to hire a bunch of additional people.
sales, sales reps or is there just kind of curious? Yes. What you're doing from a channel perspective and also what just any initiative that the Dennis has kind of put in place that might be working so far.
Yeah yeah...
international channels for sure.
And domestically, I think we have one, so it's not a big piece of anything we do right now, but it's something we're certainly looking to go do.
In terms of strategy from an enterprise perspective, it's
narrowing it down. We've been, frankly, taking a shotgun approach, Brian , on going after everything.
but necking that down to very specific verticals.
but necking that down to very specific verticals.
I mentioned we've hired a DP of marketing. So our marketing effort will be then, we'll pinpoint it at large manufacturing for example. With the automobile wins we've had and now, a ramp go.
We'll be focusing on a handful of protocols as opposed to everything.
You know a handful of verticals as opposed to everything. Got it.
That's super helpful. And I wanted to ask lastly just about ZoneHaven and the progress you're making just on expanding, first of all just beyond California but also internationally and also the integration.
with Jam, I wanted to get an update on how that's going. The integration with Jam is ongoing. It says, I mentioned to the prior caller, it's an initiative that we've called protective communication. It says, all the functionality of mass notification and evacuation.
We've recently released software feature sets that include flood modeling and traffic modeling.
which further enhances the platform and enables the first responders to determine what zones they want to evacuate.
running the fire model when the fire will hit that.
and then how long is it going to take for all the cars in that?
If the answer comes back, the file will be there in three hours and it takes four hours to evacuate, let it doesn't work. So we've continued to put software feature sets that we think are very, very helpful to first responders in both the gym and the zone haven platform. And we expect that platform to be combined and come out into the market as protective communication. Okay. I got it. Then just one last thing, I mean, for the Aramco deal, are there any like startup costs or anything?
any expenses, we should expect to hit the model over the next quarter or so as that deal goes live or is it just kind of turning it on with SAS.
We're not hiring anybody else to prosecute the Aramco deal, but it will be a significant focus of our software development team for the next handful of months for sure.
As part of the contract, there was a relatively small up front fee that they pay us, but most of it will be, most of the upfront stuff will be done as we typically do our sad stuff.
Okay, got it. Perfect. We'll appreciate all the time today and congratulations on the big one.
Thanks very much, Frank.
And our next question comes from Martin Yang from Oppenheimer. Go ahead, Martin.
Thank you for taking my question. Again, another question is, don't haven't. Can you maybe outline a longer term vision for zone haven and sales process? Do you think that it will be in future sold, more through as a feature as a gem?
as opposed to a standalone software. The combined platform will be our go-to market.
as opposed to a standalone software. The combined platform will be our go-to-market. CCO box release???.
You know, it's a process to redefine what mass notification is. It's not just getting notifications, but it's also getting relevant information of where and when the threat is coming from whether it's from a hurricane or a river flooding or The disastrous things we've seen in California
with the atmospheric rivers. In that period of time, recently at the atmospheric rivers, the communities were using it for warning people and evacuating people for avalanche, for debris flow, for the location of sandbags, for the location of fresh water.
The utility of the GEM and Zone Haven platform was on stage here in California during that horrific weather event. Talk about two weeks.
So the application of the combined platform is not just forest fires.
It's any emergent situation where lots of people lives maybe at risk.
Got it. Yeah, that's very clear. Thank you. Another question on a current sales process, were they currently sold in different ways and supported by the same team, or do they have slightly different sales process?
between the two? No, it's the same. So when the SAS sales team goes out, they're demonstrating the combined platform.
And in the case of Monterey, they bought the combined platform with both functions of Germans on either.
In Riverside, as I mentioned, they bought everything, but at three different times. So they have jammed, they have zone haven't they have, I have IMS.
As I said in my remarks, I think we'll see more and more of that out of the installed base as an upsell cross-sell opportunity.
And if I showed you the picture of the state of California, you'll see that...
you the picture of the state of California, you'll see that I think we're in.
34 of the 58 counties and four more in the contracting phase.
So those counties that have jammed not zone haven and not I am an <expletive> , it's all an opportunity
Thank you. That's all for me.
And at this time, there are no further questions. I would now like to turn it back to management for any closing remarks.
Thank you. We regularly discuss our business at investor conferences throughout the year. Later this month, we will be participating in the Winter Wonderland Best Ideas Virtual Investor Conference. Additional investor conference presentations are planned throughout this fiscal year. Thank you for participating in today's call. Thank you.
We look forward to speaking with you again next quarter when we report fiscal second quarter 2023 results. Thank you this is so conclude today's conference we thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
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