Q4 2023 TransAct Technologies Inc Earnings Call
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Greetings and welcome to transact Technologies' fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen only mode.
Question and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.
Now I'll turn the conference over to Ryan Burke Investor Relations. Thank you you may begin.
Good afternoon, welcome to transact Technologies' fourth quarter and full year 2023 earnings call. They will be discussing the results announced in our press release issued after market close joining us from the company is CEO, John Bill President and CFO, Steve too much about today's call will include discussions of the company's key operating strategies progress on those initiatives.
Sales of the fourth quarter and full year financial results.
Then open the call participants for questions. As a reminder, this conference call contains statements about future events and expectations, which are forward looking in nature statements on this call maybe deemed forward looking and actual results may differ materially.
Full list of risks inherent to the business. The company. Please refer to the company's SEC filings, including its reports on Form 10-K, and 10 people transact undertakes no obligation to revise any forward looking statements to reflect events or circumstances that occur after the call.
Today's call and webcast will include non-GAAP financial measures within the meaning of SEC regulation G. When required reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as the company's website.
I'd like to turn the call over to John.
Okay.
Thank you Ryan.
And good afternoon, everyone.
Thanks for joining us today.
23 has been a unique year transact in many regards and I'm happy to report that we close it out with a fair amount of good news and we believe that we are well set the.
We see increasing momentum in 2020 four.
Great.
Reported $13 3 million for the fourth quarter.
And $72 6 million for the full year, reflecting the results of changing dynamics.
With that of our main lines of business as we've been discussing in prior calls.
On the FSD side, it's foodservice technology, we saw revenue of $4 7 million.
That's up about 54% year over year, and 11% sequentially with the rig occurring component of that revenue $3 2 million up 33% year over year and 2%.
Sequentially.
Well to a record high.
As I discussed at length previously F. S. T was a major focus in our reorganization that transact technologies and.
And we believe that we now have the right pieces in the right places as we are now focusing selling our efforts to the top housing organizations in the U S and their related operations abroad.
The bahar the back of the house automation platform.
Additionally, we launched our new Ohio.
Terminal and it hurt.
The terminal two we call due to a 20.
'twenty three.
And I believe this is a hockey enterprise grade solution, which suitably.
Suitably it for.
Enterprise customers and so what we expect progress to be lumpy quarter to quarter any small business.
We believe that we're seeing first start momentum to build.
And we sold 1235, new Bohai terminals in the fourth quarter.
Bringing the annual total to 3655 units sold during the year.
We ended the year with a total of 14514 online terminals installed in the marketplace when we count that.
Statistic, because we think that's a platform event and it's an opportunity for cross selling and up sockets.
We.
We did see some benefit.
So hard that we talked about that.
On our last call.
Bruce.
Right.
And after almost a year instituting major changes across the FSD organization. We are encouraged by our sales numbers for the quarter, but acknowledge that we have.
Much greater goals in mind for both hot and FSC going forward.
Our terminal two and T to continue to be well received by the customers that have seen it and prospects. We showed up with too and we believe this new product will be crucial to growth going forward.
I also wanted to provide an update on the two new metrics, which I mentioned last quarter. One of them is pipeline growth and the other one is new logos also on TV customers.
As part of my commitment to the Transat shareholders. My goal has been to increase the transparency into the business. We felt this would be important to help investors evaluate the growth and future prospects for Baja.
And candidly I use both of these metrics to run the business myself, they really matter and I'm trying to watch sales progress in understanding the pipeline and understanding the success against that pipeline are really important on the cheap pipeline growth side, Let me give you some historical context first.
Under previous FSC leadership been sporadic.
The pipeline.
At what point do you think somebody.
No.
Right.
But after the Delta organization, we reorganized it moved some people around we took a hard look at the pipeline scrubbed. It boiled it down to a place where we felt the pipeline was really reflective of the opportunity.
We had in front of us and represented a.
Guidelines for the next four quarters, a possibility and we tend to look at the pipeline quarterly, but we run out of 12 quarter I'm, sorry, I got 12 month four quarter.
Rolling pipeline to look at the business and we can see pipe opportunities out four quarters out one quarter out two quarters three quarters and this is sort of what I'm reporting here.
This process was intensive time consuming but I'm satisfied that the pipe.
And our belief in the dollars and the opportunity in it are good and represent opportunities for transact to convert that into revenue.
I am pleased to report that the F. S T pipeline increased to 151% and a little more over the past two quarters. This represents a total amount that is several times larger than the current F. S. T sales levels. So that's a good sign.
And as a reminder, the bolthouse sales cycle is typically pretty long and somewhat complex, but it pays dividends in the long run.
Four.
Businesses that operate in our franchise fashion, which are many of the clients that are in our prospect list, we almost always need to engage both the headquarters and the individual franchisees. If it makes the sales process a little more complicated, but it's typical for many of the most well established brands.
So with that in mind as part of the sales process. Let me just say that we're well on our way to getting headquarter type approvals for some of the key accounts that you would expect us to go after and we're optimistic that these approvals will begin to yield results as we move forward. The other new metric I want to provide is the FSD.
New logos.
Also known as new customers as opposed to follow on business from within the installed base and I think that's a good metric because if you can't sell new customers that tells you something is not right. So in the fourth quarter of 2023, we added 12, new logos, including the international Kuzara, which I mentioned previously.
Our reconfigured and retrain sales team is now focused on the enterprise part of the market, particularly the approximately the top thousand organizations in the United States and then any of their operations overseas.
And we will excuse me update you all next quarter on how each of these metrics are trending with the first quarter of 'twenty 'twenty four under our belt and moving forward and will provide the same metrics going forward every quarter.
Yeah.
Overall I.
I feel we're well positioned to see some accelerating growth from F. S. T. As we move forward in 'twenty 'twenty, four and while I anticipate the majority of tangible progress to occur in the back half of the year I have confidence in the team we have in place they're well trained we lowered the cost structure as a result of cost cutting measures that I do.
Just last quarter. So I think we're in pretty good place on the casino and Amy side, we reported $4 2 million for the quarter, which is down an enormous 62% year over year and I'm going to talk about that at the moment and approximately 54% sequentially.
Full year revenue of $41 2 million.
We've been discussing the challenge of the changing dynamics in the duopoly we share in the market we serve during the past several quarters and I wanted to provide.
More of an update on the two most important factors first from a competitive standpoint, we believe we're beginning to see a slightly wider scale reentry into the market from our main competitor and expect possibly two experienced some pricing competition as they attempt to regain some of their lost market share. This.
Is not been widespread as of yet and it's mainly confined to overseas markets. So we're watching it carefully it's there, but it's not significant at this point and we will keep you posted if that situation changes.
Second.
On the inventory side, we're now hearing from almost all of our OEM customers.
They are in an oversupplied position and had been slowing order rates substantially in short.
These OEM customers of ours over bought as the casino business rapidly rebounded.
And at the same time, they tried to offset supply chain uncertainty by over buying everybody was in a panic they couldn't ship machines without our units and so they would do anything they could to get them in the stockpile some of them for the future to make sure. They didn't have additional shortages. This dynamic continues to be the main reason for.
This sequential slowdown in the quarter as we discussed on our last call. We expect the first quarter. This current quarter that we're in a 'twenty 'twenty four and to be the peak of this oversupply effect with orders picking up as we move forward throughout the year.
Ultimately, we continue to estimate that our go forward annual net sales run rate in the casino and gaming market should be about 15% to 20% higher than the historical pre COVID-19 averages and believe that this will be the case for 2024 as a whole with sales numbers.
Improving sequentially quarter to quarter.
Finally.
I want to provide our financial outlook for 2024, we are currently expecting full year revenues of between 53 and 58 million.
Dollars and adjusted EBITDA approximately at the breakeven level. These ranges take into account all the points I've already discussed today I believe we're well positioned to see acceleration in the business in 2024 after a year of rebuilding and cost cutting across the organization last year.
We've got the right team in place sell it to the right customers and prospects on the F. S T side.
And believe this should result in growing momentum as we move through the year, but keep in mind. The business is still small and results selling into the enterprise market will no doubt be somewhat lumpy.
Beginning to see orders for this new T. Two terminal.
It's really a platform that can run a lot of different types of software and technology. So we're excited about it we saw orders start from our large international to U S. R and expect domestic orders for both from the same customer in the coming months.
Pipeline growth and net new logo metrics were solid for the quarter.
And I promise I will continue to update investors on these numbers going forward, whether they're good or bad I'm going to report them.
The casino and gaming line is seeing some increased pressure I think we've explained that well we have confidence in our long term run rates for 2024 and beyond and that's pretty much all I have for.
Prepared remarks, and with that I'll turn the call over to Steve Demartino deep.
Thank you John.
And thanks, everyone for joining us today.
I'd like to start by discussing our fourth quarter and full year 'twenty three results in more detail.
Total net sales for the fourth corner were $13 3 million, which was down 26% compared to $18 million in the fourth quarter of 'twenty two.
For the full year 23, total net sales were $72 6 million, which was up 25% compared to $58 1 million in 'twenty, two and within our financial outlook range. We gave for the 2023 years.
Sales from our foodservice technology market or F. S. T for the fourth quarter were $4 7 million, which was up 11% sequentially and 54% compared to $3 1 million in the prior year period for.
For the full year FSC sales were $16 3 million, which was up 32% compared to $12 4 million or 22.
These increases were largely due to higher terminal sales, including the launch and first sales of our new ball Hot terminal too as well as sales of sensors and gateways to our newest sits in living customer and higher recurring revenue.
We sold 1235 terminals in the fourth quarter 'twenty three and ended the year with 14540 net new terminals installed in the market.
Our recurring FSD sales, which include software and service subscriptions as well as consumable label sales for the fourth quarter reached a record high of $3 2 million, which was up 33% compared to $2 4 million in the prior year period.
For the full year recurring to FSD sales were $11 1 million also a record high and up 28% compared to $8 7 million for the full year 'twenty two.
Our our pool for the fourth quarter of 23 was $926 that was up 15% compared to $8 six in the fourth quarter of 'twenty, two but down slightly sequentially from 929 in the third quarter of 'twenty three.
As a reminder, we're currently selling some bolthouse terminals with no recurring revenue attached to them to start.
While this presents an opportunity to sell recurring element to the future for now they represent a drag to our pre number.
Our casino and gaming sales were $4 2 million for the fourth quarter, 'twenty, three which was down 62% from the fourth quarter of 'twenty. Two that was largely due to Oems working down high levels of printer inventory that they stockpiled during the supply crisis earlier in 'twenty three that's now east.
For the full year twenty-three casino and gaming sales were $41 2 million, which was up 37% year over year.
As John mentioned, we expect the dynamics, we experienced during the fourth quarter to continue into the first half of 'twenty four with the most significant effect likely in the first quarter and improving thereafter.
P O S automation sales for the fourth quarter decreased 47% from the prior year to $1 6 million for.
For the full year P. O S automation sales were $6 9 million, which was down 35% from the full year 'twenty two.
This decline was largely the result of difficult comps as we experienced unusually high sales in 'twenty two due to a competitor's inability to supply product.
We believe the competitors in this market are now fully back online and expect Q4 to represent close to our normalized go forward sales rate.
Moving to transact services group our T S G sales.
For the fourth quarter T. S. G sales nearly tripled year over year to $2 8 million.
This increase was largely due to unusually high sales of legacy lottery spare parts.
For the full year twenty-three test used sales were $8 2 million, which was up 61% from the full year 'twenty two.
So we had a very strong quarter and year of T. S. G sales in 'twenty three.
Sales of legacy lottery printer spare parts are sporadic, they're hard to predict and they can vary significantly from quarter to quarter as.
As a result of this we don't expect this level of sales to repeat in 2024.
Moving down the income statement, our fourth quarter gross margin was 48%, which was down sequentially from 51, 9%, but up from 45, 8% in the prior year period.
Gross margin was 52, 9% as compared to 42% of the full year 'twenty two.
This comes as a result of significantly higher sales and an improved mix of higher margin casino and gaming printer sales.
Also contributing to the increase wasn't a continued positive effect from two rounds of price increases that we instituted during 'twenty, two and we were able to largely maintain throughout 'twenty three.
However, based on an expected return to more normalized competitive dynamics in both our casino and gaming and P. O S automation markets and 24, we expect our gross margin for 24 to be somewhere in the mid 40% range.
Our total operating expenses for the fourth quarter decreased by 11% to $6 9 million.
On a sequential basis operating expenses declined 11% as well.
These declines come as a result of our previously discussed savings achieved from the cost cutting efforts, we began to put in place late in the third quarter.
We estimate that these actions will produce operating expense savings of approximately $3 million on an annualized basis and we experienced the full effect of these reductions during the fourth quarter.
For the full year 'twenty three operating expenses were $32 7 million, which was up 2% from the full year 'twenty two.
However, our 23 operating expenses included a one and a half million dollars severance charge related to the resignation of our former CEO.
Excluding this charge our operating expenses expenses actually declined 3% year over year.
Breaking down our operating expenses a bit more our engineering and R&D expenses for the fourth quarter were essentially flat from the prior year, increasing just 1% to $2 2 million.
For the full year twenty-three these expenses increased 10% year over year to $9 4 million.
Our selling and marketing expenses decreased 19% to $2 1 million for the fourth quarter on a year over year basis.
For the full year 'twenty, three our selling and marketing expenses were $9 9 million, which was down 12% year over year.
The decrease was largely due to right sizing changes related to our F. S. T market that we made during the latter half of 'twenty, three including reductions in head count Tradeshow and overall marketing spend.
Lastly, our G&A expenses decreased 12% to $2 6 million for the fourth quarter, largely due to lower stock and incentive compensation expense as well as lower bad debt expense and recruiting fees and post go live support of the implementation of next week that we incurred in the fourth quarter of 'twenty two that did not repeat.
For the full year twenty-three, our G&A expenses were $13 3 million, which was up 9% from the full year 'twenty two largely due to the one and a half million dollars severance charge I mentioned earlier.
Excluding discharged G&A expenses declined 3% year over year.
For the fourth quarter, our operating loss was 522000 or three 9% of net sales and this compared to operating income of 494000 or two 8% of net sales in the prior year period.
For the full year, we generated operating income of $5 7 million compared to an operating loss of $7 7 million and 22.
And on the bottom line, we recorded a net loss of $62000 or a penny loss per share for the fourth quarter compared to net income of 260000 or <unk> <unk> per diluted share in the year ago period.
For the full year 'twenty three we had net income of $4 8 million or <unk> 47 per diluted share compared to a net loss of $5 9 million or 60 cents per diluted share in 'twenty two.
Our adjusted EBITDA for the quarter was $600000, which compared to $1 3 million for the fourth quarter of 'twenty two.
And for the full year, our adjusted EBITDA was $10 million, which compared to negative $5 2 million in 'twenty two.
As an FYI, our adjusted EBITDA for the full year 'twenty three put us at the high end of our financial outlook.
And turning to our balance sheet it remains solid.
We finished the year with $12 3 million in cash, which was up $4 4 million over the cash balance we had at the end of 'twenty two.
And in terms of debt, we had only the minimum required borrowing up to two 5 million under our credit facility with Seattle lending.
And before I open the call for questions and answers I wanted to take a moment to discuss our projected cash flow for 'twenty four.
With our 'twenty 'twenty four outlook for projected adjusted EBITDA of around breakeven. We expect the business will also be around working capital neutral for the year.
We ended the year with a relatively high level of net inventory about $17 8 million, which we expect to sell down as we move throughout 'twenty four.
We believe this inventory liquidation should provide enough cash to fund any anticipated growth in receivables and any other working capital items.
We also expect a fairly typical year for capital expenditures.
So given these factors combined with our current financial outlook range. We believe we will be like we will likely end 2024 with a similar amount of cash and cash equivalents as we had at the end of 'twenty three.
And that's it and with that I'd like to turn the call over to the operator for questions operator.
Thank you.
Like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our first question is from George Sutton with Craig Hallum Capital Group. Please proceed.
Thank you John I wondered if you could walk through the.
The decline in core quarter over quarter, just give us a sense of the significance of the inventory issue in the quarter relative to the competitive change in the quarter and as you look forward into Q1, I think you're suggesting Q1 will be below Q4.
In that segment is that correct.
You'll have to answer that.
Yeah.
Yeah, Yeah, we are expecting that that inventory overstock position that we experienced in Q4 is going to continue into the first half up most of the effect that we're going to see is going to be in the first quarter. So a lot of the Oems really have just really slowed down in some cases turned off the orders for a quarter or so.
Yeah, you know, it's kind of interesting.
It's been so supportive of our client base that they can call us up and say I need machines next week, our tomorrow, and we could get them out to them, but when the supply.
Shortage hit.
By chain.
And they couldn't ship machines, whether they were getting the machines from us or they getting from somebody else and I wouldn't say they panic.
They overbought, because if you're making up to $15000 slot machine and you need a tito printer ticket in ticket out printer to basically handle the card and you don't have one whether you are getting it from us or from our main competitor you can't ship that machine. So they went crazy and the uncertainty in the supply chain caused them to.
Place orders and frankly, it was kind of a happy problem, we had a we.
We were doing a little bit of arbitrage.
Triage trying to give people enough machines. So they can ship as the casino and gaming industry rebounding, but the net result is both we.
And and our clients have increased inventory and we're just gonna have to work through that and the good news is all of our inventory is salable and frankly.
I've been to Las Vegas, lately, and a lot of the casinos in the back full tilt.
We think that it's just been an anomalous spike gain a supply.
Supply and demand disruption that will work its way out and realized probably towards the end of the year and as we pointed out we believe that.
We picked up about 15% to 20% isn't sustainable market share.
Given that our competitor was missing in action during this whole rigamarole with the supply chain and we're not we see then a little bit here and there, but not much yet we expect them to be back but the inroads. We made we believe we can keep most of them.
And just to be clear did you say the the revenues and casino. This quarter were something that you would anticipate is more normal going forward.
Did I hear that correctly.
No what I was saying was the the revenue for the P. O S market George that would be the run rate for Q4 should be a similar run rate as we go into 2024.
Okay, I'm happy I heard that incorrectly.
Yeah, Yeah, Yeah casino gaming is going to be lower in the beginning of that should it should ramp up as we go through the year once the once the customer the oem's worked through their inventory issue it should ramp again back to normal.
Lastly, John I Wonder if you could just give us a sense of the 12 logos that you signed in the quarter just a composition of them what types of outlets are they and how significant if you fully roll out to them what would those be.
It's hard to predict.
Just from a sales focus standpoint, we're not focusing on a from an outbound standpoint on organizations that really can't place.
Place orders for 50 to 100 units minimum.
There are some holdovers I mean, we don't turn people away when they say hey, you know I really need these machines, even if they're small so we've got a mix in there that's pretty much across the board.
We mentioned.
You know we had an interesting.
The opportunity that we close where we're monitoring.
Refrigerators and storage for additional <unk> in.
A retirement home setting where you can imagine people are taking a lot of expensive medicines and if a small little reefer and the hallway goes out.
You might lose thousands of dollars in and medicines or you might risk providing a medicine that is damaged somehow because it is not too hot.
I'd say these things or some of its residual from the organization.
Structure, we had before some of the deals were in the pipeline, but I'd say, it's a mix across the board, but I do think it represents.
Thousands of units over a period of time.
Yeah.
Perfect.
You guys I appreciate it.
Okay.
As a reminder, it is star one on your telephone keypad, if he would like to ask a question. Our next question is from Jeff Martin with Roth and can proceed.
Thanks, Good afternoon, John and Steve.
John just curious hi could you give us an update on and I know you've talked in the past you alluded it to it brief very briefly this afternoon, but.
In terms of adding technologies, perhaps partnering with other technology providers are software companies.
On the boat T. Two terminals are you seeing that become more prominent in the a potential offering.
It's its a keen focus of mine, but it's early days. So there really isn't any color commentary that would be meaningful at this point, but.
I'll point out that most of the well first of all in the foodservice technology space.
Anything in that to be.
Yeah.
Denigrating or procure pejorative, but they're technologically they're kind of laggards, they might be greater hospitality, great in the kitchen, great with cooking ingredients and packaging and all that but they're kind of slow to adopt technology.
And what.
What's happened is we've kind of as an industry. We've kind of realize that this is a place where we can make a lot of improvement you know minimum wages are going through the roof.
Labor is hard to get and automation is possible and we're hoping that this industry, which has a very very large tam total addressable market.
We'll grow we're approaching it sort of I think.
Right.
Way, we are delivering more what I would call fast and by that I don't mean software as a service solution as a service now we don't price it that way other than there are recurring components to the pricing model, but the idea here.
Is that most of the other vendors are older software vendors and they've written a couple of apps that work and then when you want to be a customer. They ship you a couple of tablets in the couple of printers in a box maybe they get them from zebra and maybe they get them from epson are in some cases, they try to put them in a little plastic container, but you're kind of.
Stuck as a customer to kind of figure this stuff out find shelf space in the back of the house and alike, and we think that the.
<unk> terminal that we have available now the bolthouse terminal two is a platform I mean, it's got a lot of things that are kind of mundane, but they matter a lot like theres no power block that you can trip over and if you walk through all restaurants are places where people are doing food prep, you're fine tablets and terminals sort of lying all over the place.
You know sort of modular design that is fully enabled both from a software and hardware standpoint, its telematics connected back to a cloud it can do Wi Fi Bluetooth near field Communications, and it's a perfect platform and I jokingly say that if you wanted to you could run angry birds in the back of the house.
So anybody who's making software that you might use in a restaurant or a foodservice.
Uh huh.
Rabbit.
Right.
So any of that so.
And we liked it.
And so or how many units out there online.
I'm envisioning the opportunity for us to sell additional software in there or to partner with additional firms much like you mentioned Jeff.
Hey, we can ship our box with your offering or you can ship or we can ship their offering with our box and or we can have a joint sale opportunity and I think it's early days, but that's a keen area then I following up on and Jeff I wish I had some color commentary besides what I'm talking about.
Now they've got to say this is what we're doing this is where you can expect it to be but I think it's a key part of what we're doing and I believe as the adoption cycle accelerate in the foodservice technology space Youre going to see platforms.
That role.
Great. So John here your cellphone has been cutting in and out a bit throughout the call I think.
I guess the things, but just just as a as a fair warning.
Thanks for the question it relates to the types of end markets that you're.
Im looking at when you talk about the pipeline being up 100, and I think he said 160% or so.
Could you characterize the qualified near term 12 month pipeline in terms of maybe C stores, Qs Sars restaurant groups and alike.
Yeah.
I don't have the specific numbers in front of me, we have a team dedicated to about four or five of the sub verticals we have.
<unk> of course, we have to.
Casual and fine dining we have grocery we have grab and go and we had foodservice management I would say from an opportunity standpoint, it's about even even though in some cases like <unk> could have.
Stores, a thousand shops, whereas.
Yeah.
At Foodservice management firm might have a very different operation not lots of units.
But big units and.
So from a unit standpoint, it's pretty much spread evenly and the sales team is targeting each one of those we've implemented some account based marketing.
Which is sort of like looking at who you're trying to sell to and then who in that organization do you need to know and then how do we reach those people.
And a little bit of a color commentary.
They have implemented and are continuing to enhance it essentially in merch frac.
A lot.
I talk to say well that sounds great.
They don't say no.
And then I have to say anything at all but really not know, but not now and he says they may have five other projects under way they might be building new distribution centers. You know we have one of our large.
I guess convenience store customers.
You know put a pause on buying our machines and our systems because they were reconfiguring their stores and then the same case they had a large acquisition they had to consume but point is is that so we've got a nurture track, where we actually stay in touch with these people instead of let them fall on the floor and it's just good sales.
It's all part of the go to market and the idea that the marketing department can deliver if you will a conversation ready prospect to the sales team is part of the efficiency that we're baking into the whole G. T M process as a whole and it's early days, but we're beginning to see real progress there. If we go to a trade show.
Or we could do outbound we get some leads we begin the conversation and how we're engaging with them through a nurture track, which might be six to 12 months, sometimes it might take that long for a large organization to say, okay, I'm ready and we want to be there when they're ready we want to keep them appraised of the progress we're making other.
Our clients in the same industry that have adopted the technology and they're seeing the savings and the benefit. So all of these things that we've implemented.
None of them are rocket science, but theyre very appropriate for the third decade of the 21st century, and that's where we are now and I think you're beginning to see a if.
If you will the light at the end of the tunnel. The numbers are up the pipeline is much much better than it was six months ago and I think I think we're on the way.
Still got a lot of work to do.
Selling to the enterprise customers, there's going to be somewhat lumpy.
Have progressively better results every quarter forever.
Reality is it's going to be up or down back to the original 14, plus thousand units that are out there. The more other technology that we can say hey, all you have to do is download there. So we can push it you can run it you pay us a little bit of money every month or every quarter.
Like that model that recurring business is something that we're going to be focused on our focused on now, but we think theres a lot of potential there and that plays back to the original question, which is who are you working with it might participate in that ecosystem and like I said, it's early days, but it's a key focus of mine and the team.
Thank you John.
We have reached the end of our question and answer session I would like to turn the conference back over to John Dillon for closing comments.
Well listen I don't have a lot of extra things to say.
We're excited about.
This quarter, even though the gaming and casino industry's been up and down.
Yeah.
You know I'm disappointed that it that way, but you know it's it's not broken it's just that it this equilibrium and all of the systems that disequilibrium.
Usually regress to a mean or a norm and that's what we expect and we look forward to talking to some of you individually and again I will continue to focus on transparency and share as much as possible with you as I can and.
You know godspeed and.
I appreciate your time and attention to this call and we look forward to working with you through the quarter.
Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
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