Q1 2024 Intellinetics Inc Earnings Call
Greetings and welcome to being Telanetix first quarter 'twenty 'twenty four earnings call.
Operator: Greetings and welcome to the Intellinetics first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tom Bauman, with FNK Investor Relations. Thank you, sir. You may begin.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: Brief question and answer session will follow the formal presentation.
Operator: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Operator: As a reminder, this conference is being recorded.
Operator: It is now my pleasure to introduce your host Tom Baumann with F N K Investor Relations.
Tom Baumann: Thank you Sir you may begin.
Tom Baumann: Thank you and good afternoon, everyone I'm pleased to welcome you to a telematics 2024 first quarter conference call.
Tom Bauman: Thank you and good afternoon, everyone. I am pleased to welcome you to Intellinetics' 2024 first quarter conference call. Before we begin, I would like to remind listeners that during this conference call, comments made by management may include forward-looking statements regarding Intellinetics Inc. that are not historical facts. Such forward-looking statements are based on the current expectations and beliefs of managers, and they are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results.
Tom Bauman: Intellinetics, Inc. undertakes no duty to update any forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release issued today, as well as the risks and uncertainties included in the section under the caption, Risk Factors and Management Discussion and Analysis.
Management: Before we begin I would like to remind listeners that during this conference call comments made by management May include forward looking statements regarding Tonetics, Inc. That are not historical facts.
Management: These forward looking statements are based on the current expectations and beliefs of management and.
Telanetix, Inc.: And they are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results in Telanetix, Inc. Undertakes no duty to update any forward looking statements.
Telanetix, Inc.: For more information about factors that may cause actual results differ materially from forward looking statements. Please refer to the press release issued today as well.
Telanetix, Inc.: Those risks and uncertainties included in the section under the caption risk factors and management discussion and analysis.
Tom Bauman: Financial Condition and Results of Operations in Intellinetics' Annual Report on Form 10-K or the quarterly report on Form 10-Q filed today. Also, please note that on the call today, management will discuss non-GAAP financial measures such as adjusted EBITDA and recurring revenue. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies.
Telanetix, Inc.: Answer condition and results of operations and tell them that in the report on Form 10-K or quarterly report on Form 10-Q filed today.
Management: Also please note that on the call today management will discuss non-GAAP financial measures such as adjusted EBITDA and recurring revenue.
Management: non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.
Management: It may be different from non-GAAP financial measures presented by other companies.
Tom Bauman: A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today. With all that said, I would now like to turn the call over to Jim Disocio, Intellinetics President and CEO. Jim, the call is yours.
Management: Reconciliation between GAAP and non-GAAP measures can be found in the press release issued today.
Jim: With all that said I would now like to turn the call over to Jim just socio.
Jim: Telanetix, President and CEO, Jim the call is yours.
Okay.
Jim Disocio: Thank you, Tom. The transition of Intellinetics to a SaaS-centric company continues. Our recurring revenue continues to grow faster than our consolidated revenue, and the SAS portion of our recurring revenue is an increasingly important part of our business. This progress comes even as our newest SaaS offering, IntelliCloud Payable Automation Solution, or iPaaS, has just started contributing to our results. Response for I-PASS has been very strong, and our pipeline of opportunities for I-PASS is growing rapidly.
Tom Baumann: Thank you Tom.
Jim: The transition of an Telanetix to SaaS centric company continues our recurring revenue continues to grow faster than our consolidated revenue and the SaaS portion of our recurring revenue is an increasingly important part of our business.
Jim: This progress comes even as our newest SaaS offering and telecom payable automation solution or Ipass has just started contributing to our results.
Telanetix CEO: Bonds for Ipass has been very strong and our pipeline of opportunities for Ipass is growing rapidly.
Jim Disocio: Demand for the Yellow Folder K12 SAS solution is also growing, and overall, Intellinetics is well positioned across all our SAS offerings. Accordingly, we are accelerating our investment in marketing our SaaS offerings, not just to support iPaaS but to support all of our SaaS solutions. FAS revenue, as a percentage of our consolidated revenue, increased to 31% in the first quarter, up from approximately 29% in the first quarter last year. Our goal is to make recurring revenue the majority of our total revenue, with as much contracted DAS revenue as possible. This will make our business very easy to model, reduce earnings volatility, and benefit shareholders.
Ipass representative: Demand for your for the K 12, SaaS solution is also growing and overall and telematics is well positioned across all of our SaaS offerings.
Speaker Change: Accordingly, we are accelerating our investment in marketing our SaaS offerings, not just to support Ipass book to support all of our SaaS solutions.
Gas revenue as a percentage of our consolidated revenue increased to 31% in the first quarter.
Speaker Change: Up from approximately 29% in the first quarter of last year. Our goal is to make recurring revenue. The majority of our total revenue with as much contracted cash revenue as possible.
unknown: This will make our business very easy to model reduce earnings volatility and benefit shareholders will also enable us to appropriately size fixed cost that we are systematically profitable, creating a durable sustainable scalable platform for profitable growth.
Jim Disocio: It will also enable us to appropriately size fixed costs so that we are systematically profitable, creating a durable, sustainable, scalable platform for profitable growth. Meanwhile, the document conversion portion of our digital transformation business, including business process outsourcing and document storage and retrieval, continues to generate positive contribution margins.
Speaker Change: I remind me trying software revenue continues to become less and less relevant to our story.
Speaker Change: Meanwhile, the document conversion portion of our digital transformation business.
Speaker Change: <unk> business process outsourcing and document storage and retrieval continues to generate positive contribution margin.
Jim Disocio: As you may recall, we significantly expanded this business with the acquisition of Graphics Sciences in 2020, and since then, this business has provided additional cash flow to create and acquire SaaS offerings. However, over time, the organic growth opportunities in this business will become less consistent.
Speaker Change: As you May recall, we significantly expanded this business with the acquisition of graphics Sciences in 2020.
Speaker Change: Since then this business provided additional cash flow to create and acquire SaaS offerings.
Speaker Change: However overtime.
Speaker Change: Growth opportunities in this business will become less consistent.
Jim Disocio: Additionally, the non-recurring nature of this business makes budgeting and modeling more difficult. We have no plans to divest this business as it continues to generate cash. However, we plan to maximize our promotional activities around SaaS offerings rather than non-recurring revenue streams, with the goal of accelerating our SaaS growth. This strategy is a non-revision, and is not a revision of our prior strategy.
Speaker Change: Additionally, the nonrecurring nature of this business makes budgeting and modeling more difficult we have no plans to divest this business as it continues to generate cash.
Speaker Change: However, we plan to maximize our promotional activities around SaaS offerings, rather than nonrecurring revenue streams with the goal of accelerating our SaaS growth.
Speaker Change: This strategy.
Speaker Change: One revision is not a revision of our prior strategy those who have followed and telematics recognize that we have been increasingly emphasizing our SaaS business lines over the past few years, even more so since the yellow folder acquisition.
Jim Disocio: Those who have followed Intellinetics recognize that we have been increasingly emphasizing our SaaS business lines over the past few years, even more so since the Yellow Folder acquisition. This is an acceleration of that strategy, based on the success we have had over the past two years and the early response to IP. We see a path to evolving into a nearly total SaaS company, a transformation which we strongly believe will benefit shareholders. As I said, our I-PASS solution has given us significant momentum.
Speaker Change: This is an acceleration of that strategy based on the success, we have had over the past two years and the early response to Ipass <unk>.
Speaker Change: We see a path to evolving into a nearly total SaaS company, a transformation, which we strongly believe will benefit shareholders.
Speaker Change: As I said.
Ipass representative: Before I pass solution is giving us significant momentum the lower end of our pipeline has increased by 50% over the past six months, we have signed nine customers in eight of the nine have already paid in full which is uncommon for SaaS deployments, where customers typically do a payment until deployment is fully complete.
Jim Disocio: The lower end of our pipeline has increased by 50% over the past six weeks. We have signed 9 customers, and 8 of the 9 have already paid in full, which is uncommon for SAS deployments, where customers typically delay payment until deployment is fully complete. This data point reinforces our optimism regarding this solution, validating the customer support for I-PASS, and demonstrating the tangible value I-PASS provides to users. In the aggregate, these nine customers represent an estimated combined annual revenue of $500,000, and we expect to more than double the customer count in this business over the next few quarters.
Speaker Change: This data point reinforces our optimism regarding this solution.
Speaker Change: Our data and the customer support for Ipass and demonstrating the tangible value I pass provides to users.
Speaker Change: In the aggregate. These nine customers represent an estimated combined annual revenue of $500000 and we expect to more than double the customer count in this business over the next few quarters.
Jim Disocio: As we move through 2024, we anticipate IPAS becoming a larger and larger contributor to our consolidated revenue. As I previously said, our 2024 budget includes an incremental $400,000 of spending towards accelerating I-PASS. This includes sales and marketing dollars, as well as growing our development staff. Simultaneously, our K-12 operations now have 597 K-12 districts generating significant SAS revenue, which more than doubles our presence in this vertical market since before we acquired Yellow Folder in April of 2022.
Ipass CEO: As we move through 'twenty 'twenty, four we anticipate ipass, becoming a larger and larger contributors contributor to our consolidated revenue.
Ipass CEO: As I previously said, our 'twenty 'twenty four budget includes an incremental $400000 of spend towards accelerating Ipass. This includes sales and marketing dollars as well as growing our development staff.
Speaker Change: Simultaneously, our K 12 operations now had 597, K 12 districts generating significant cash revenue, which more than doubles our presence in this vertical market.
Speaker Change: Before we acquired yellow folder in April 2022.
Jim Disocio: Importantly, each of these districts is a target for additional and telemedic services, including iPads. We anticipate launching a K-12 I-PASS pilot this summer to address this opportunity. At this time, I'd like to turn the call over to our Chief Financial Officer, Joe Spain, to talk to you about our finances. Thanks, Jim.
Speaker Change: Accordingly, each of these districts is a target for additional telematics services, including Ipass.
Speaker Change: We anticipate launching a K 12, I pass pilot this summer to address this opportunity.
Joe, Spain: At this time I'd like to turn the call over to our Chief Financial Officer, Joe, Spain to talk to you about our financials.
Joe, Spain: Thanks, Jim.
Joe Spain: I will now review our financial results for the first quarter of 2024. Total revenue for the quarter ended March 31, 2024, increased 7.7% to $4.5 million as compared to $4.2 million for the same period last year. The following are the material components of our revenue presented in our Statements of Operations. Subscription software, which is comprised of SAAS, including hosting revenue, and software maintenance service revenue, increased to $1.76 million for the quarter from $1.59 million for the same period last year.
Joe, Spain: I'll now review our financial results for the first quarter of 'twenty 'twenty four.
Joe Spain: SAS grew 13.5%, and, consistent with history and as expected, our software maintenance services are growing more slowly at 2.4% over 2023. Professional services revenue increased 7.8% to $2.5 million for the quarter from $2.3 million for the same period last year.
Joe, Spain: Total revenue for the quarter ended March 31, 'twenty Port increased seven 7% to $4 5 million as compared to $4 2 million for the same period last year.
Joe, Spain: The following are the material components of our revenue presented on our statements of operations.
Joe, Spain: Subscription software, which is comprised of SaaS, including hosting revenue and software maintenance service revenue increased to 1.76 million for the quarter from 1.59 million for the same period last year.
SaaS: SaaS grew 13, 5% and consistent with history and as expected our software maintenance services are going more slowly at two 4% over 2023.
Joe, Spain: Professional services revenue increased seven 8% to $2 5 million for the quarter from $2 3 million for the same period last year.
Joe Spain: As a percent of total revenue, professional services revenue was 55% for the quarter, the same as last year. Consolidated gross margin increased 115 basis points to 64.3% for Q1 this year, compared to 63.2% last year. This increase was driven by both a better revenue mix, more weighting towards recurring revenue, and a positive impact from price increases. Operating expenses increased 24.2% to $2.9 million for Q1 2024 compared to $2.4 million in Q1 2023. The increase is largely due to investments in structure and scale, as well as timing of equity compensation expenses. Of note, we expensed a $398,000 charge for restricted stock awards to employees in the quarter, of which $328,000 was non-CAS.
Speaker Change: As a percent of total revenue for professional services revenue was 55%.
Joe, Spain: For the quarter the same as last year.
Joe, Spain: Consolidated gross margin increased 115 basis points to 64, 3% for Q1 this year compared to 63, 2% last year. The increase was driven by both better revenue mix.
Speaker Change: Our weighting towards recurring revenue and positive impact.
Speaker Change: From price increases.
Speaker Change: Operating expenses increased 24, 2% to $2 9 million for Q1 24 compared to 2.4 million in Q1, 'twenty two 'twenty three.
Speaker Change: Increase is largely due to investments in structure and scale as well as timing of equity compensation expenses of note we expense of $398000 charge for restricted stock awards to employees in the quarter of which 328000 was non cash.
Speaker Change: Sales and marketing expense for the quarter decreased seven 8% compared to compared to the same period in 'twenty, three which is largely a timing matter. We continue to invest in marketing and sales. For example, we hired an additional sales rep last quarter.
Joe Spain: Sales and marketing expense for the quarter decreased 7.8% compared to the same period in 2023, which is largely a timing matter. We continue to invest in marketing and sales. For example, we hired an additional sales rep last quarter. We are also increasing our trade show activity in 2024, which is important to both our I-PASS and K-12 acceleration. Net loss for Q1 was $175,000 compared to net income of $113,000 for the same period last year. The primary driver here was the $398,000 equity compensation expense I referenced a moment ago, which is also called out in the earnings release, including that $375,000 of it was one time. Loss per share was $0.04 per share compared to earnings per share of $0.03 last year.
Speaker Change: We are also increasing our trade show activity in 2024.
Speaker Change: Which is important to both our ipass and K 12 acceleration.
Speaker Change: Net loss for Q1 was 175000 compared to net income of 113000.
Speaker Change: The same period last year.
Speaker Change: The primary driver here was at 398000 and equity compensation expense I referenced a moment ago, which is also called out in the earnings release, including about 375000 of it was onetime.
Speaker Change: Loss per share was four cents per share compared to earnings per share up three cents last year.
Joe Spain: Our adjusted EBITDA for the quarter was $673,000, compared to an adjusted EBITDA of $630,000 for the same period in 2015. Next, I'll turn to a brief overview of Intellinetics Balance. At March 31, we had cash of $1.2 million and a countable net of $1.9 million. Our total assets were $18.9 million, including $9.5 million in intangible assets and goodwill as part of acquisitions made since 2020. Total liabilities were $8.8 million, including $2.6 million in deferred revenues, reflecting signed SAS and maintenance contracts, and $2.46 million in debt principal as of March 31.
Speaker Change: Our adjusted EBITDA for the quarter was 673000.
Speaker Change: Compared to an adjusted EBITDA of 630000 for the same period in 'twenty three.
Speaker Change: Next I'll turn to a brief overview of <unk> balance sheet.
Speaker Change: At March 31, we had cash of $1 2 million and accounts receivable net of one 9 million.
Speaker Change: Our total assets were $18 9 million, including $9 5 million in intangible assets and goodwill.
Speaker Change: That's part of acquisitions made sense 'twenty 'twenty.
Speaker Change: Total liabilities were $8 8 million, including $2 6 million in deferred revenues, reflecting science SaaS and maintenance contracts.
Speaker Change: And 2.46 million in debt principal as of March 31.
Speaker Change: As noted in our fourth quarter earnings call in March we prepaid 500000 of our long term debt and we expect to have no net debt, meaning debt less cash at the end of 2024.
Joe Spain: As noted in our fourth-quarter earnings call in March, we prepaid $500,000 of our long-term debt, and we expect to have no net debt, meaning debt less cash, at the end of 2024. We intend to prepay an additional $325,000 of our debt principal this month, which leaves the remaining debt principal of $2.1 million due December 1, 2025.
Speaker Change: Further.
Speaker Change: We intend to prepay, an additional $325000 that principle this month.
Speaker Change: Which leaves the remaining debt principal of $2 1 million due December one 2025.
Speaker Change: I want to wrap up with our financial outlook.
Joe Spain: I want to wrap up with our financial outlook. Based on our current plans and assumptions, and subject to the risks and uncertainties we describe in our filings and this call, we are reiterating our expectations to grow revenues on a year-over-year basis for fiscal year 2024. Regarding Adjusted EBITDA, we are revising our guidance in expectation that Adjusted EBITDA for 2024 will be at or slightly less than 2023 levels.
Speaker Change: Based on our current plans and assumptions and subject to risks and uncertainties. We described in our filings on this call. We are reiterating our expectations to grow revenues on a year over year basis for fiscal year 'twenty 'twenty four.
Speaker Change: Regarding adjusted EBITDA, we are revising our guidance and expectation that adjusted EBITDA for 'twenty 'twenty, four will be at or slightly less than 2023 levels.
Speaker Change: We have revised our guidance due to our expectation that had long standing customer our largest we'll take steps to ship certain tasks performed by a doctor and conversion business from one office location to another location in a way that can reduce annual revenue by a document conversions segment, starting with Q4 'twenty 'twenty four.
Joe Spain: We have revised our guidance due to our expectation that a longstanding customer, our largest, will take steps to shift certain tasks performed by our document conversion business from one office location to another location in a way that could reduce annual revenue for our document conversion segment, starting in Q4 2024. Our management team believes the total value proposition which we provide our customers is substantial, that the customer understands that the timely and accurate execution of the tasks we perform are extremely important to it, and hence, we intend to educate and negotiate in good faith with the customer to have a mutually agreeable outcome. Thanks, Jim. As a reminder...
Speaker Change: Yeah.
Speaker Change: Our management team believes the total value proposition, which we provide our customer is substantial.
Speaker Change: That the customer understands that the timely and accurate execution of the tests. We perform are extremely important to it and hence we intend to educate and negotiate in good faith with the customer to have a mutually agreeable outcome.
Speaker Change: Right.
Speaker Change: Yeah.
Speaker Change: Yeah.
Joe Spain: Yes, as a reminder, our document conversion business has multiple contracts with the customer beneath the overall master contract. These contracts assign different prices in different locations for the same or similar work and have done so for many years. If you cherry-picked locations strictly on price without understanding that these contracts are economically linked, a customer could save for a short period of time until contract renegotiation, which for us is May 2025. Further, Graphic Sciences, our subsidiary, has been performing this specific work since 2017 and is quite good at it, and we have many incumbent advantages aside from high change costs.
Speaker Change: Thanks, Jim do you want to add as a reminder.
Speaker Change: Yes.
Jim: A reminder, our document conversion business has multiple contracts with the customer beneath the overall master contract.
Jim: These contracts you signed different prices and different locations for the same or similar work and have done so for many years.
Jim: Cherry picked colocation strictly on price without understanding that these contracts are economically linked.
Jim: Customer could save for a short period of time until contract renegotiation, which for US is may 2025.
Jim: Further graphics Sciences, our subsidiary has been performing this specific work since 2017 and is quite good at it.
Speaker Change: And we have many incumbent advantages aside from high change course.
Joe Spain: A new provider would have to be willing to accept same-day service level agreements and financial fines for every single error made in the process, which I'm very happy to say we rarely incur, perhaps once every two years, which is just about error-free for five million images processed annually. We can work out a mutually acceptable solution with this customer, but there are no guarantees in these sorts of negotiations. So we're doing our duty to advise you on this developing situation.
Graphics Sciences: Can you provide it would have to be willing to accept same day service level agreements and financial fines for every single error made in processing.
Speaker Change: Which I'm very happy to say, we rarely inter.
Speaker Change: Perhaps once every two years, which is just about every free for 5 million images processed annually.
Speaker Change: We expect.
Speaker Change: We can work out a mutually acceptable solution with this customer, but there were no guarantees and these sorts of negotiations. So we're doing our duty to advise you on this developing situation.
Joe Spain: I'm proud that this business can withstand potential revenue reductions from our largest customer and still anticipate delivering adjusted EBITDA for 2024 in a similar range as 2023. With that said, we thank you all for listening. And at this time, I'd like to open the call to Q&A.
I'm proud: I'm proud that this business can withstand potential revenue reductions from our largest customer.
I'm proud: And still anticipate delivering adjusted EBITDA for 'twenty 'twenty four in a similar range as 2023.
I'm proud: With that said, we thank you all for listening.
Speaker Change: And at this time I'd like to open the call up to Q&A.
Speaker Change: Thank you.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2 if you'd 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 start key. Our first question comes from the line of Howard Halpern with the Taglich Brothers. Please proceed with your question.
Kim: We'll now be conducting a question and answer session if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question. Kim you May press star two if you'd like to remove your question from the queue.
Kim May: All participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question comes from the line of Howard Halpern with <unk> Brothers. Please proceed with your question.
Howard Halpern: Congratulations on the Q1 results guys. In terms of the total number of sales reps, you said you added one. How many do you have, and are they structured in a way where you're developing an I-PASS team, or are they integrated with the K-12 operations?
Howard Halpern: Well congratulations on Q1 results guys.
Kim: Uh huh.
Howard Halpern: In in terms of the total number of sales reps you said you added one.
Howard Halpern: How many do you have and are they structured in a way where you're developing ipass team or are they integrated with the K through 12 operation.
Howard Halpern: So we have.
Jim Disocio: So we have five direct sales reps, and then our management team are sales reps, too, and they carry quotas. And yes, we are. We hired a new sales rep into our I-PASS team, who will handle finding new partners to resell our I-PASS product through, and also reselling to our K-12 customer base, where our other two sales reps, one being the executive in charge of that, are selling I-PASS to one of our existing partners. And that's where the great successes come from, Howard.
Management team: Five direct sales reps and that our management team our sales reps to we'd carry quotas and yes. We are a we hired the new sales rep into our Ipass team.
We: We'll handle finding new partners as we sell our ipass product through and also reselling to our K 12 customer base, where our other two sales rates one being the executive in charge of that are selling I pass to our one of our existing partners and that's where it would be great.
Howard Halpern: Access has come from Howard.
Howard Halpern: Okay, and is the implementation process going to be simpler for K-12 than it is for the larger, you know, Constellation customers?
Howard Halpern: Okay, and it's the implementation process going to be yet.
Howard Halpern: Simpler with a K K 12 than it is for the larger you know customer of constellation's customers.
Jim Disocio: We believe so. We just inked our first beta site customer out of our K-12 customer base, and it's going to be a little bit different to start. Not as complex as some of our commercial businesses that are using the product. Certainly, with multi-state, multi-tax, multi-country situations, with our commercial product, K-12 is a little bit more straightforward.
Howard Halpern: We believe so we we just inked our first beta site customer out of our K 12 customer base, and it's going to be a little bit different to start not as complex as some of our you know our commercial businesses that are using the product.
Speaker Change: Certainly with multi state multi tax multi country situations with our with our commercial product K 12 is a little bit more straightforward. So we think it'll be simpler and the other good great news as you know this is a fairly new release and over the last year or so our people have gotten much better.
Jim Disocio: So we think it'll be simpler. And the other great news is, you know, this is a fairly new release, and over the last year or so, our people have gotten much better. The product has matured, and we've gotten much better at implementing it, et cetera. I've been doing this for a couple of years now. When all of your SaaS customers pay, that means you've got a pretty darn good product and a pretty good implementation.
our people: The product has matured more and we've gotten much better at implementing it etcetera.
Speaker Change: I've been doing this for a couple of years and.
Speaker Change: When all of your SaaS customers pay.
Speaker Change: That means you've got a pretty darn good product at a pretty good implementation and.
Jim Disocio: And I've never really seen that before. Usually, people are holding money until you go live, or they say you've got a bug, or you say you've got this. They've all paid, which is a great metric for us to track how our business is going, how the product is going.
Speaker Change: And yeah, we'd never I've never really seen that before usually people are holding money till you go live or do they say you got a bog you say you got this they've all paid which is a great metric for us to track how our business is going how the product is doing.
Jim Disocio: And is that why some of the incremental spend that you have is on, I guess, support or implementation type people also?
Speaker Change: And is that why some of the incremental spend that you have it is on a I get support or implementation type of people also.
Jim Disocio: Exactly, exactly. We're a little concerned that we oversell the product and don't have the support staff to get it up and running as quickly as we like, so we're investing in these support staff as well.
Speaker Change: Exactly exactly we you know we we were a little concerned that we oversell the product we don't have the support staff to get it up and running as quickly as we'd like so we're investing in the support staff as well.
Jim Disocio: And you anticipate, if you were to sign eight or nine new contracts, do you think, from the commercial side, you could get them all up and running before the end of the year?
Speaker Change: And you anticipate even if you were to sign eight or nine new contracts do you think you know from the commercial side do you think you could get them up and run well up and running before the end of the year.
Speaker Change: It depends on when we sign them if we sign them in the next couple of weeks most definitely we're looking at a probably a conservatively a 60 day implementation and it shows us that slows it down its usually you know they have to get their systems ready, we need to do integration into their systems. So they have.
Jim Disocio: It depends on when we sign them. If we sign them in the next couple of weeks, most definitely.
Jim Disocio: We're looking at, probably conservatively, a 60-day implementation. And it's usually not us that slows it down. It's usually them that have to get their systems ready. We need to do integration into their systems, so they have to have a developer available to work with us. So there are a couple of things out of our control, but we've been very successful once signed, getting people up to speed pretty consistently in 60 to 90
Speaker Change: That would develop or available to work with us. So there's you know there were a.
Speaker Change: Couple of things out of our control, but you know we've been very successful Oh once signed getting people up.
Speaker Change: Pretty pretty consistently in 60 to 90 days.
Howard Halpern: Okay. And one last one. We should see incremental increases in G&A expense from that 1.8 level if you take out the one-time stock compensation expense.
Speaker Change: Okay, and one last one we should see incremental increase.
Speaker Change: Increases in G&A expense from that 1.8 level, if you take out the.
Speaker Change: The one time stock compensation expense.
Joe Spain: Yes, Joe, do you want to elaborate on that? Yes, that's what I did. Okay.
Joe Spain: Yeah, Yes, Joe do you want to elaborate on that.
Joe Spain: Yes.
Joe Spain: Yes.
Joe: What I gave you.
Howard Halpern: Okay. Okay. Okay. Thanks, guys, and keep up the great work. Thank you, Henry.
Joe: Okay. Okay.
Joe: Yeah, Thanks, guys and keep up the great work.
Henry: Thank you Henry.
Jim Disocio: Going forward, any questions, please feel free to contact us directly, Joe and myself, or you can contact Tom Bauman at FNK-IR, and we'd be happy to have a conversation and answer any additional questions that you might have. So with that, I'd like to wrap up.
Speaker Change: Going forward any questions. Please feel free to contact us directly Joe and myself or you can contact time bound meant at F. N K I R and we'd be happy to have a conversation and answer any additional questions that you might have.
Henry: So with that I'd like to wrap up.
telematics: And telematics is well positioned for continued success, we have significant momentum.
Jim Disocio: Intellinetics is well-positioned for continued success. We have significant momentum, a strong competitive position in growing markets, and a diverse set of solutions with ample cross-selling opportunities. Our business model, structured around recurring revenue, is working.
Joe: Our strong competitive position in growing markets and a diverse set of solutions with ample cross selling opportunities are.
Joe: Our business model structured around recurring revenue is working.
Jim Disocio: We appreciate the continued support of our long-term shareholders and aim to attract new investors as well by delivering strong, consistent financial results. Thank you for joining us today, and we look forward to speaking again on our next conference call. Thank you all. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: We appreciate the continued support of our longtime shareholders and aim to attract new investors as well by delivering strong and consistent financial results.
telematics: Thank you for joining us today, and we look forward to speaking again on our next conference call.
telematics: You all.
telematics: This concludes today's teleconference. You may disconnect your lines at this time.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
telematics: You for your participation.
telematics: Okay.
telematics: [noise].
telematics: Yeah.
telematics: [music].
telematics: Hum.
telematics: [music].
telematics: Yeah.
telematics: Oh, Oh Oh.
telematics: [music].
telematics: Hum.
telematics: [music].
telematics: Hum.
telematics: Hum.
telematics: [music].
Operator: [inaudible] Music Music Music Music Music Music Music Music Music Music Music [inaudible]
Operator: Mhm mhm.
Operator: [music].
Operator: Hum.
Operator: [music].
Operator: Uh huh.
Operator: [music].
Operator: Yeah.
Operator: Hum.
Operator: Hum.
Operator: [music].
Operator: Hum.
Operator: Hum.
Operator: [music].
Operator: [noise] [noise].
Operator: [music].