WidePoint Corporation

Good afternoon. Welcome to WidePoints' fourth quarter 2021 earnings conference call. My name is Katherine, and I will be your operator for today's call. Joining us for today's presentation are WidePoints President and CEO, Jin Kang, Executive Vice President, Chief of Sales and Marketing Officer, Jason Holloway, Executive Vice President, CFO, Kelly Kim, and incoming CFO, Bob George. Following the remarks, we will open up the call for questions from WidePoints publishing analysts and major investors. If your questions were not taken today and you would like additional information, please contact WidePoints' investor relations team at wyyatgatewayir.com. Before we begin the call, I would like to provide WidePoints' safe harbor statement that includes cautions regarding forward-looking statements made during this call. The matters discussed in this conference call may include forward-looking statements regarding future events and future performance of WidePoint Corporation that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10-K filed with the Securities and Exchange Commission. Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website

at www.widepoint.com now i would like to turn the call over to wide points president and ceo mr jin kang sir please proceed thank you operator and good afternoon to everyone thank you for joining us today to review our financial results for the fourth quarter and full year ended december 31 2021 the fourth quarter and the past couple of months have been a blend of encouragement as we've continued to successfully execute our strategy for profitable growth, but also reality as we find ourselves still traversing through macroeconomic headwinds. On par with what I share on our last call as it relates to our growth strategy, we've been laser focused in continuing to make investments across the board. Internally, we have sales and marketing and operational initiatives. The bottom line for our organic and inorganic growth strategy is simple. Grow the top line and operate profitably and stably to maximize our company's potential. We've encouragingly begun to witness the previous investment made into our business bearing fruit as a result of an expanding sales pipeline and greater percentage of those sales opportunities getting close to execution. One short-term highlight I want to share is that we exceeded our prior guidance on revenue by achieving 87 million for full year 2021. We also achieved approximately 3.8 million adjusted EBITDA. We were able to achieve these goals through a combination of effective operations and taking advantage of COVID-related programs offered by the federal government in the form of Employee Retention Tax Credit, or ERTC. Furthermore, with a dynamic transformation of our company, more specifically, bringing information technology as a service, or ITAAS, under the White Point umbrella, and further focusing on our cybersecurity capabilities and broadening our customer base, we are maximizing our opportunities for future growth. We are also adopting our technology management as a service business model to ensure that we're optimally operating and charging for our services. I want to once again address the elephant in the room and share that we are still facing macroeconomic headwinds that are out of our control, affecting our business. Whether it be geopolitical events such as the war in Ukraine, supply chain disruptions, the pandemic, the unprecedented status of the job market, or the difficulty to still meet face to face with prospective customers, we are still feeling the impact of these external circumstances in our business. Before I move on, I'm sure you all are following the unfolding events in Ukraine as Russia's invasion continues. Our thoughts and prayers are with the people of Ukraine. We truly hope that this unjustified, cruel invasion ends soon. That said, the reality is that our federal government's attention and budgets are also focused on Ukraine and the potential cybersecurity events emanating from Russia on US targets. As a result, We believe that this will provide some tailwinds for us as potential customers will look for more secure multi-factor authentication solutions, or MFAs. Additionally, the hiring of new high-quality employees have been more arduous than we anticipated. As an organization that is looking to expand, we are in need of top-notch workers across several divisions. However, Due to the booming job market and the increase in labor rates instituted by the federal government, it's been difficult to garner employees in this market. Due to the increase in labor rates, we've had to offer higher salaries to employees to gather top talents and thus have had to adjust our budgets accordingly. It is important to note that this isn't just affecting YPoint, but it is impacting a majority of organizations across the country. However, An encouraging point is that, unlike most companies, YPoint has historically had and continues to have low turnover rates of employees, thanks to the great working environment and culture we've built, which stems from the competitive compensation structure and flexibility we provide in giving a majority of our employees the ability to work from home, all the while expecting high performance. Therefore, we have only seen minor impacts from the so-called great resignation that seemed to be ubiquitous in our society today. Despite these headwinds, we are fortunately continuing to see opportunities get delayed rather than seeing them dissipate outright. Thanks to the proactive measures implemented by our management team to ensure for profitable growth, we are confident that we can weather the storm. Still a noteworthy issue, we are slowly beginning to see signs of more and more prospective customers becoming open to conducting new joint projects with the slowdown in the COVID cases. Y-Point has been and will continue to fully operate during the pandemic. We are cautiously optimistic that the current situation with the pandemic will improve. Next, I'd like to provide an update on our transformative acquisition of IT authorities. As I mentioned on the last earnings call, we were able to successfully acquire IT authorities, a company that has many potential synergies, as they strengthen our footprint within each growth market by offering a multitude of cross-sell and up-sell synergies within IT operations and identity management, deep expertise in Microsoft ecosystem, access to their commercial customer base, and their recurring managed services revenue. With that reminder out of the way, I want to report that the integration process almost six months after the acquisition is progressing as planned. More specifically, we continue to see material commercial sales opportunities being generated. And overall, we have been very pleased with the progress of the strategic sales opportunities coming to fruition. Jason will provide additional color on it once I pass the mic over to him. The last update I'll provide, which relates to ITA, is with respect to our Microsoft CoSell certification status. We continue to maintain our Microsoft CoSell certification status and are in fact combining it with ITA's Microsoft Gold Partner certification, which gives us quite an edge as we continue to push into the commercial markets. Additionally, I'd like to provide a couple more updates regarding some of the other investments we are making within our business. Earlier in November of 2021, we achieved FedRAMP ready status for our proprietary intelligent technology management system or ITMS platform. Achieving FedRAMP ready status is a strong indicator of success for full FedRAMP authorization and means that our readiness assessment report has been approved. As a result, we are now listed on the FedRAMP marketplace as a FedRAMP ready vendor. Though we have successfully achieved this milestone, we are still in the midst of pursuing full authorization by the end of this calendar year. Once fully authorized, we will open up the opportunity for more U.S. government agencies to benefit from our intelligent technology management platform. Second, we continue to further enhance our digital billing and analytics, or DB&A division, to take advantage of the dramatic shift from traditional voice platform to unified communications, such as Microsoft Teams. We have invested in the development of our Unified Communication as a Service, or UCAS, solutions that will address the data analytic needs for services offered by Microsoft Teams, Zoom, and other video teleconferencing solution providers. Last but not least, we're beginning to gain traction from our ESG initiatives In particular, we are seeing our green initiatives such as our recycling program bear fruit. I am confident that this part of our business will continue to profitably grow over the coming quarters and years. With that overview completed, I will now turn the call over to Jason to provide you with some details on the investment we are making on the sales and marketing front and the sales momentum we've been building since the start of the year. Then our CFO, Kelly Kim, will walk us through the financial results. Jason?

Thank you, Jen, and good afternoon, everybody. As stated on the last call, the prevalence of cyber threats become more and more rampant every day, forcing corporations to find a safe and trustworthy solution to rely upon. That's where we and our identity and access management solution come into the mix. I am proud to share that the phased approach which segments the potential users into tier one through five groups to sell our identity and access management solution on a pure subscription monthly recurring model has been working extremely well for us. As a reminder, tier one customers are critical users such as systems administrators, super users, executives with high user privileges. Tier two is senior managers with elevated privileges. Tier three comprises of managers with moderate privileges. Tier four is general users with minimal privileges, and tier five is external users. We are finding that this five-tiered approach has been extremely effective so far, but we are constantly looking to refine and make prudent investments into the structure going forward. With that refresher, I'd like to share some updates related to the results of our go-to-market strategy. First, the conversations with the K-12 institutions has been extremely productive thus far, and we have garnered only positive feedback from these initial talks. However, as eager as some of the prospective schools are to implement our IAM solution into their workflow, they simply aren't able to, given the fact that educational institutions aren't allowed to implement new processes and solutions until the schools summer break for logistics reasons. In the interim, we are continuing to expand our footprint within this vertical to ensure we are capturing as much market share as possible. Thankfully, higher education does not operate under the same type of integration constraints, and we are able to successfully implement our IAM solution into a major university. We also successfully completed our IAM solution implementation with a major District of Columbia government agency. Next, as I alluded on the previous call, our initial work with the commercial enterprise beverage production vertical has resulted in a purchase order with a beverage company. This is a direct result of the acquisition of ITA and is a positive affirmation that we can cross-sell our managed services into their existing customer base. We are cautiously optimistic that our cross-selling initiatives will continue to yield additional managed services contracts in the near term. To go even a layer deeper, we continue to have daily meetings internally to ensure we are capitalizing on all upsell and cross-sell opportunities in this growing sector for both perspective and current customers. Additionally, as I mentioned on the prior call, We were able to win a contract agreement to provide our IT as a service capabilities with a large marketing and multimedia rights holder for some of the most prestigious sports venues across the country. While the initial agreement was for our IT as a service capabilities, after working with them for the past couple of months, they have expressed interest in wanting to expand the working relationship. We've also continued to move full steam ahead with our indirect sales strategy, which is to team with large entrenched systems integrators and expand our relationships with both prominent players in the commercial and federal sectors. Furthermore, we continue the search for strategic partners that have access to new niche businesses that cannot normally be tapped into. Our two-pronged approach has fared well for us. as we've already won and are continuing to gain more leads with areas we previously would not have had access to. Relating to some of the other investments we are making into sales and marketing, as Jen mentioned, we are looking to hire folks across the corporation and within our sales and marketing division. We recognize that our employees are the lifeblood of our organization, so we want to ensure that we are meticulous in hiring and high quality folks that not only excel at their jobs, but also match the culture of what white point is about. Another exciting investment that has already been fulfilled is with our revamped corporate website. Our internal team has done a phenomenal job in refining the look, feel and functionality of our website with an increased commitment to social channels and content marketing. We are sharing our success stories and industry expertise regularly. We have only received positive feedback and are proud of this accomplishment. Great job team. Next, we have persisted in our efforts to make investments with our branding and name recognition. As a reminder, we were listed in the 2021 Gartner Magic Quadrant for managed mobility services. which was a big win for white point as over 70% of the fortune 1000 and over 10,000 midsize and large enterprises rely on Gartner for their advice and guidance in key technology areas. We continue to proactively work with Gartner on a regular basis to raise our company profile in the MMS sector. Speaking of Gartner, Our team has been proactively carrying a dialogue with Gartner as it relates to identity and access management conversations. These talks have been progressing well, and we are now conducting deep dives on our IAM solution. I will have additional updates in Q1. Overall, we are continuing to make notable progress on all fronts of the sales and marketing end and are confident that as we return to the former old normal pre-pandemic, we'll be able to ramp up our sales activities more and more. With that, I will hand the call over to Kelly.