Q4 2022 Kaleyra Inc Earnings Call
Good afternoon, welcome declare us fourth quarter and full year 2022 earnings conference call.
After the market close Clairol released unaudited results for the fourth quarter and full year ended on December 31 2022.
The press release as well as a replay of today's call can be found on the company's investor relations website at investors declare a dot com.
Please view the release for additional information on what will be discussed today.
At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Joining us today are Clarus, founder and Chief Executive Officer, Daurio colors Euro Chief Financial Officer, Giacomo The dog, Leo and VP of Investor Relations Colin Gillis.
Following their remarks, we will open the call for your questions I would now like to turn the call over to Claris, Vice President of Investor Relations Colin Gillis.
Sir Please proceed.
Thank you before we begin we'd like to remind everyone that during today's call management will be making forward looking statements. Please refer to the company's SEC filings, including the company's annual report on the Form 10-K for a summary of the forward looking statements and the risks uncertainties and other factors that could cause actual.
<unk> differ materially from those forward looking statements.
Clara cautions investors not to place undue reliance on any forward looking statements. The company does not undertake and specifically disclaims any obligation to update or revise the statements to reflect new circumstances or unanticipated events that occur except as required by law.
Today's press release and on the call we'll refer to adjusted gross profit adjusted gross margin adjusted EBITDA and adjusted earnings per share. These metrics are not determined in accordance with generally accepted accounting principles definition calculation and reconciliation to the financial statements of these non-GAAP measures.
It can be found in the tables included in our press release, we believe these non-GAAP measures of Claris financial results provide useful information regarding certain financial and business trends and the results of operations now I'd like to turn the call over to Dario for an overview of Claris fourth quarter Dario.
Thank you Colin and thank you to everyone for joining US yesterday, our fourth quarter started the next series of forward momentum for Kelly.
With revenue exceeding the upper end of our guided range as we build on our existing customer base develop new valuable Enterprise Partners Inc.
<unk> success layering in I got them.
[laughter] communication channels.
The fourth quarter was highlighted by record revenue of 93 7 million, an increase compared to the 90 million in the year ago period.
When adjusted for fourth quarter, 2021 foreign exchange the quarterly revenue would have been 97 7 million.
Fourth quarter revenue showed healthy seasonality with over a 10% sequential increase when compared to the first quarter of 'twenty to 'twenty two.
Results for the fourth quarter also exceeded the stated guidance range of 86 to 90 million.
Only a 2022 revenue market that record increasing 26, 27%.
359, $2 million from $267.7 million in the comparable year ago period, or 32% to for younger than 53.3 million, that's when using fiscal year 2021 foreign exchange rates.
Only a quarterly record revenue was driven by growth with existing customers ramping volume with new customers and the constant focus on the enterprise businesses. They believe that a large amount of volume of communication.
As we discussed previously at Calais that bumped up the way we measure success is with the following key operating metrics.
One billable messages through voice calls and foot.
Dollar based net expansion for.
For the fourth quarter, we delivered 12 billion billable messages connected all the 2.2 billion by schools and the dollar based net expansion rate was 98.1%.
But looking at top.
Top 50 customers our dollar based net expansion rate was 139% in the quarter.
In 2022 our technology manage 51.5 billion messages and they buy 1 billion box coast utilizing our relationship with all those 16, I'm the telecom operators, including Oh tier one U S. God. He is directly connected one would discuss the Colorado is a global deal.
Okay. The 51.5 billion messages to leave it and in 'twenty to 'twenty two is over 5 million messages to leave it at the parent hour for every single hour after a year.
As it relates to margin expansion in order to change sales mix with products. We finally get to profitability, we identified three different strategic initiatives to help our customers and delivering safe effective and efficient communication.
Focus on global enterprises.
Focus on global connectivity and focused on intelligent he passed new products.
During the fourth quarter, we managed to make significant progress on all of the three initiatives.
We announced our strategic partnerships with global enterprises, like Amazon Oracle and with telecom operators in key markets like P. L. D T in the Philippines and cloud only in Central America.
We also achieved significant growth in our registry business with the campaign registry and we acquire new customers for Colombia don't like Chloe in Italy, and we launched new products, such a chat bot that will help our customers develop the conversation like capabilities across all of the communication channels.
Why we are positive on the quarterly results. We are also aware of the uncertain economic environment facing global companies in 'twenty, 'twenty free including color here.
The management team has created the value creation, Prague, and I'm going to stop them in January and is focused on reducing cost to invest in the free strategic programs with COVID-19.
Right is that the thought you can imagine our.
Our Chief Financial Officer will have more comments on the program shortly.
To finish this portion of the call. It has been two decades since got laid out I think section and I'm very proud of how far we as a company have done so my startups to our colleagues diabetes is a global leader I look forward to continuing to be part of the bright future.
With that I will now turn the call back over to Colin.
Thank you Dario.
Brands want to communicate with their customers and are going to use multiple channels to do so.
We are a communication platform as a service as our customers' needs change, we changed wisdom and the most cost effective manner, given our unique ability to be agile. This.
This is very much a fragmented market with only a few global players, which is why our partnership with over 1600 operators and direct connectivity and over 100 countries as an advantage to our enterprise customers that can use calera as a single source to leverage their global needs.
Regardless of the economic environment. This industry is expected to grow but it's hard to judge the long term growth curve as we take into consideration economics across the globe.
Giacomo who's going to run through the financials in detail, but before he does I'm going to address our first quarter expectations.
We remain focused on delivering on our promises throughout the year.
We expect the company to grow revenue in 2023, when compared to 2022, but the exact rate for the full year is difficult to forecast at this time.
Therefore, we're giving specific guidance one quarter at a time for the near future.
With that we expect first quarter revenue to be in the range of 77 million to $81 million compared to $80 5 million in the first quarter of 2022.
Before I turn the call over to Giacomo I also wanted to touch on December 22, Gordon Hansman.
As previously announced the company added two new independent Board members Kathy Miller.
And Karin Joyce ties on both.
Both Cathy and KJ bring extensive experience in previous leadership roles, including CFO .
Keep operating officers.
So all skills in corporate finance accounting financial planning and analysis and Treasury regulatory filings tax procurement and Investor Relations. We are very fortunate to have their experience and we welcome both to the Calera Board.
I'll now turn the call over to Giacomo to detail our financial results.
Thank you, calling I will now run through our financial results in greater detail.
Is that you noted our total revenue in the fourth quarter was $93 7 million, an increase of $3 7 million versus $19 million in the comparable year ago period, and again above the previously provided the projections.
The fourth quarter and the full year were both records for revenue.
We have a glove butter revenue footprint, and well balanced portfolio across geographies and sectors.
Supporting these are revenues are sort of the customer base with virtually zero churn within our top 10 customers, which accounted for 43, 3% of revenues during the fourth quarter.
Gross profit in Florida, the full EBITDA was 74 1 million.
At 21, 9% increase when we compare to $57 5 million for 2021 or.
For the fourth quarter gross profit was 17 million compared to 21 point to 1 million in the comparable year ago period.
Gross margin for the fourth quarter of 2022 was 18, 2% compared to 23, 5% of the fourth quarter of 2021.
Q4, net losses totaled $57 8 million or $1.28 per share based on $45 2 million weighted average shares outstanding compared to a net loss of $7 3 million or 17 cents per share based on 41 49.
Median weight average shares outstanding in the comparable year ago period.
Net loss includes an impairment loss of intangible assets of $49 four.
4 million.
For the full year net loss totaled $98 5 million or $2.25 per share based on $43 9 million weighted average shares outstanding compared to a net loss of 74 million or 92 cents per share based on <unk>.
Two 7 million weighted average shares outstanding in the comparable year ago period.
Adjusted gross profit.
I don't get measure of operating performance reported that 19 million in the fourth quarter compared to 22.8 million in the fourth quarter. The prior year and increasing 1 billion from the third quarter 2022.
Adjusted gross margin for the fourth quarter of 2022 was 23% compared to 25, 3%.
In the comparable year ago period.
For the full year adjusted gross profit increased 24, 9% to 76.6 million I'm throwing was $61 4 million for the full year 'twenty 'twenty. One adjusted gross margin was 22, 6% versus 2021 adjusted gross.
Margin of 22, 9%.
Adjusted net income a non-GAAP measure of operating performance in the fourth quarter was a loss of $4 4 million or 10 cents per basic and diluted share based on $45 2 million weighted average shares outstanding compared to $3 nine.
Oh, nice trends and eight cents per basic and diluted share based on 41 950 were unemployed 9 million weighted average shares outstanding respectively.
In the comparable year ago period.
For the full year adjusted net loss was at 1.2 million or three cents per basic and diluted share based on $43 9 million weighted average shares outstanding compared to a net income of $6 1 million or 16 cents per basic and <unk> 13 cents.
Per diluted shares based on seven and 48 point to 1 million a weighted average share outstanding respectively in the comparable year ago CTO.
Lastly, adjusted EBITDA.
Sure. It off operating performance was $2 5 million compared to $9 6 million in the fourth quarter of 2021.
Yeah I'll.
Adjusted EBITDA was $18 7 million $18 6 million in the full year 2021.
At the end of the fourth quarter, our cash cash equivalents restricted cash and short term investments were a $78 6 million compared to 97 9 million in December 31st 2021, or 82.2 million when using 2021.
And the foreign exchange rates.
The company is also now the beginning golf is 2023 restructuring and cost reduction program.
The program is designed at the position in Colorado to serve the demand from grille, but our business is to interact with their customer base using existing and emerging communication in China.
While driving labor and cost efficiency, the daughter, I V bullets calera from its geographical scale.
The program seeks to achieve the following goals.
Ah.
Adjusted EBITDA to exceed the 20% growth in 2023, compared with 2022 with additional growth in 2024.
Our organization streamlining our aim to reduce our monthly cash payroll cost by more than 15% in 2023.
Three increasing net cash provided by operating activities by trying to trailing three year.
And the compare to 2022.
Poor continuous focus on our R&D investment to always provide the quality service standards and offer new products to our customers.
This completes my financial summary, I now like to turn the call back over to Daniel for.
His closing remarks.
Thank you Giacomo <unk> summary, we are pleased with the record top line results, we achieved during the fourth quarter and full year.
Oh, the broader global economic landscape continues to prove all kinds of thing that you can layer that provides the need that suite of products to customers.
By focusing on and investing in ways to layer in our high growth channels to existing customers maintaining success, winning new customers and consistently expanding our operating footprint, we can expect to keep our new momentum.
And with that we're ready to open the call for your questions. Operator, please provide the apathy infractions.
Thank you we will now begin the question answer session.
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We will pause for a moment as callers join the queue.
The first question comes from Mike Latimore with Northland Capital markets. Please go ahead.
Great. Thank you congrats on the strong revenue growth.
Cost controls look a.
Very logical there I guess on the.
30 customer net dollar based expansion rate of 139% can you give a little bit more color on that or these customers.
And their current applications or are they launching new ones or is it more channels coming on board, what what's driving kind of those type of the top 30 in <unk>.
Yeah.
Yeah.
Oh Hello, Mike This is Scott ill take this question.
Well the key driver for the man dollar expansion rate is the increase in volume and revenues.
Oh, gosh alert, but existing customers, we are still experiencing very significant growth most of our customers.
And that's the key that either obviously also upselling new China. She was part of this but it's not really match affecting the topline it's more effective.
The mix of product is more affecting the <unk>.
The gross profit type of thing.
Okay.
And.
Sorry, the last part of you talked about sales cycles elongated a little bit.
Any notable change this quarter do they belong anymore or improve or what's the general sense, because that's our view on that.
Oh well.
Generally speaking the demand seems to be still a little bit Oh wait.
Waiting on decision, making processes because of the anticipated mentally.
We experienced.
Overall, I'd say, it slowed down and the demand, which is not very much related to the lack of need for these kind of services from the enterprises, but more for the attitude of enterprises, even slowing down your investment in innovation.
Escalation processes. So nothing has really changed in that even though I feel a pressure on the business when they killed that three steel.
A significant space for growth going forward, depending on the overall macro scenario.
Experiencing this weird period.
Yeah, I guess just last one.
R&D was.
It was down sequentially quite a bit is that was there a one time benefit there or how should we think about that.
Oh.
Not sure of the question.
Just the R&D cost I think it was $2 8 million versus 5.2 of the prior quarter. Just is there a one time benefit in there or something.
Well I'll leave this question to Jakob.
Jack.
Oh, sorry, sorry, I was talking on mute sorry.
So.
One is the one time benefit and second these day capitalization. So yeah, you have to see R&D not only in the line on expenses, but also consider the capitalization, but improved compared to last year.
Okay.
Great. Thank you.
Once again, if you have a question. Please press Star then one.
The next question comes from George Sutton with Craig Hallum. Please go ahead.
Thank you.
Good evening gentlemen, so.
I wanted to clarify the two numbers that you gave for dollar based net expansion you mentioned your top 50.
50 customers were 139% your overall customer base was 98 my assumption is you're taking the Brazil customer out of the base. That's what gets you to that higher number indicative of strength across the rest of the top customer basis that.
Is that why you gave those two numbers the way you did.
But clearly the top 30 customers not the top 50.
Got it.
And then I'll leave to Jacquie will transcend because yeah.
You're correct in the top 30 gas from R. Brasil is not anymore present, and also there is a and in fact, Oh FX in some customers that we have in Europe in particular, a comparatively less teams.
Gotcha, Okay, one other thing.
Colin you mentioned that you know you have.
Working off of a global macro challenge you you want to be the single source for global needs from customers.
Just help us how that message is resonating or are you finding customers coming to you as a single source.
Sizable companies coming to you as a single source or are they still very aggressively looking at each market opportunities distinctly.
Well I'll take this one in general larger count all of them are going through a Bangalore.
The consolidation process, because 60 messaging space is extremely fragmented in different geographies.
In the last year as you add maybe 15 to 25 lenders to sell the same that we expect to reach all the geographies. If you all are all about service provider like Moscow. The U S large companies, especially digital one.
Software was established lung.
Single sourcing is typically some specific industries, especially in banking and financial services because he used to be a very significant piece of our integration and software middleware. So switching vender implies also ran a battery significant migration problem project that is.
Outcome with them.
But I.
I would say as long as they do.
The sector the market is getting into the mature phase.
There's more Russia rationalization of the partnership in tandem there.
So manny calculated using the IMO 'twenty provide us in the last year's malware. They are consolidating on three to five and we obviously wrong to be one of these three to five because we tend to provide high quality established since especially towards the routes where we have.
Oh, Dear all one off interconnection and we are best of breed in terms of quantity.
Understand okay. Thanks, guys appreciate it.
Thank you very much for you.
At this time. This concludes our question answer session I'd now like to turn the call back over to Mr. Carlos <unk> for his closing remarks.
So thank you very much operator, thank you all for joining us on today's call as always we would like to thank our extensive worldwide network of five months in the investor as well our employees for their continued support.
Operator.
I would like to remind everyone that a recording of today's call. It will be available for replay via a link available in the investors section of the company's website.
Thank you for joining us today for Claris fourth quarter and full year 2022 earnings Conference call you may now disconnect.
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