WidePoint Corporation

Good afternoon, and welcome to WidePoint's third quarter 2024 earnings conference call. My name is Ali, and I will be your operator for today's call. Joining us for today's presentation are WidePoint's President and CEO, Jin Kang, Chief Revenue Officer Jason Holloway and Chief Financial Officer Robert George. Following their remarks, we will open up the call for questions from White Point's publishing analysts and major investors. If your questions were not taken today and you would like additional information, please contact White Point's Investor Relations Team at www.gateway-grp.com. Before you begin, I would like to provide White Point's Safe Harbour 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 White Point Corporation that involves 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-Q 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.whitepoint.com. Now, I would like to turn the call over to White Point's President and CEO, Mr. Jin Kang.

Sir, the floor is yours. Thank you, Operator, and good afternoon, everyone. Thank you for joining us today to review our financial results for the third quarter ended September 30, 2024. I am pleased to report consistent year-over-year improvements in our financial results as we maintain effective cost management and build on our year's momentum. We closed the third quarter with revenues of $34.6 million and nine months revenue of $104.9 million, both reflecting an approximate 35% increase over the same period in 2023. We achieved their 29th consecutive quarter of positive adjusted EBITDA and the fourth consecutive quarter of positive free cash flow. Adjusted EBITDA for a quarter total 574,000, up 149% from last year, while the nine-month figure rose to 1.9 million, a significant increase from the 387,000 in the same period last year. Free cash flow also grew by 120% to $511,000 for the quarter, compared to a negative $391,000 in the same quarter last year, with nine months' results improving 394% to $1.9 million compared to negative $590,000 in the previous year. The growth in these figures continues to stem from the implementation of new customers, judicious cost management, and strong contribution from each of YPoint's solution lines, and our strategic partnership, investment, certification, and accreditation that continue to separate YPoint from competitors in our space. As highlighted in last quarter's call, early in the third quarter, we successfully developed tested, and authenticated our proprietary Mobile Anchor derived digital credential solution that delivers the most secure level of multi-factor authentication solution to our customers' applications and services via their smartphones. We're already seeing strong demand for this product as we sign two new contracts in the third quarter, primarily high-margin SaaS revenue. Mobile Anchor presents YPoint a robust opportunity to capture a large share of the mobile digital credential segment. Again, this solution enables YPoint to deliver the most secure identity management solution on smartphones, ensuring cyber interactions are protected by the most secure multi-factor authentication solution available on the market today. Mobile Anchor's capabilities are a technological leap forward and positions YPoint ahead of our competitors who lack similar solutions, which is on brand with our broader ongoing strategy of capturing work away from our competitors. Next, we recently received an encouraging update regarding our pending FedRAMP authorization. With our status moving to the in-process finalization phase, to reiterate, obtaining FedRAMP authorization is another key technological investment that will enhance our solution offerings. and strengthen YPoint's competitive position in the market. This authorization will also position us more favorably for the upcoming $1.5 billion CWMS 3.0 ReCompete and the $60 billion NASA SUP6 contract. Jason will provide additional updates on our preparation efforts for these two contracts, but we believe our past performance on similar contracts, qualifications, certification and accreditation, positions us to be a winner for both contracts. We anticipate being granted the FedRAMP authorized status in the coming months. However, with the holiday season upon us, it could be delayed. We will continue to monitor the review process and provide any status updates as quickly as possible. In the third quarter, we saw over 39 contractual actions resulting in approximately $15.2 million in contract value. This includes the previously mentioned mobile anchor contracts, multiple managed mobility solutions or MMS contracts with leading transportation, insurance, and healthcare companies, as well as a major MMS program for a new federal civilian agency. We also implemented a major customer in Q3, which is expected to add material managed services revenue in the fourth quarter. Our investments in sales and marketing continue to pay dividends, and our strategy remains focused on capturing high-margin contracts while differentiating Y points offering to take business away from our competitors. The success of this approach was apparent in our gross margin excluding carrier services this quarter, which increased to 38% compared to 35% last year. Bob will provide further elaboration on the gross margin improvements in his prepared remarks. Regarding Spiral 4, we continue to receive initial RFQs and are actively establishing administrative arrangements with the Navy, along with vendor agreements for services and equipment. We are still in the early stages of Spiral 4, and thus, it will take some time for us to see meaningful impact on our financial performance. However, these efforts are laying the groundwork and positioning us to capture valuable work when the time comes. And as previously mentioned, our unique solution set, strategic partnership, technological innovation like Mobile Anchor, implementation of our program management office model, and sales and marketing strategy continue to differentiate YPoint from our competitors on Spiral 4. We will continue to provide updates as they arise. Lastly, as of September 30, 2024, our contract backlog stood at 300 million. Our sales pipeline remains strong and healthy across all sectors we have presence in, and we expect to further increase our backlog as opportunities across our portfolio of billion-dollar contracts continues to expand. With that, I will now hand it over to Jason, who will speak further into sales and marketing efforts and our growing sales pipeline. Jason?

Thanks, Jen, and good afternoon, everyone. To reiterate Jen's point earlier, WidePoint's proprietary mobile anchor has gained notable momentum and demand in the federal market. To date, mobile anchor has been integrated into two federal agencies. There are additional federal agencies that are currently in pilot mode, including a federal agency tied directly to K-12. We are cautiously optimistic that these additional agencies will be using mobile anchor in the near term. Additionally, capturing meaningful work through the $2.7 billion Navy Spiral 4 contract and pursuing the $60 billion NASA Suit 6 contract will be a center of focus for the newly created PMOs. I am excited to report that WidePoint has entered into a new DAS or device as a service strategic partnership with one of the most respected systems integrators in the industry. WidePoint has excellent past performance with this specific systems integrator, and we are honored that this systems integrator chose WidePoint to be a key component of their device as a service program. WidePoint's proprietary platform Intelligent Technology Management System is strongly being considered to be the system of record for the program. This program will also allow us to showcase some of our capabilities that are the result of our acquisition of IT authorities. Lastly, I want to report that our pursuit of the CWMS DHS 3.0 ReCompete remains one of the highest priorities. We are honored to have it outstanding program manager leading the effort, along with a new deputy program manager to ensure that every aspect of excellent customer service is being accomplished. YPoint has some of the most dedicated personnel on-site at DHS providing outstanding services. I would also like to recognize those dedicated YPoint team members currently deployed at our newly implemented program and with the civilian agency that we recently announced. This new client is one of the largest implementations that White Point has ever conducted, and I am happy to report that initial startup and implementation has gone smoothly, and we are now in full operation mode. As mentioned in last quarter's call, We will remain focused on driving innovation and our technological capabilities to enhance our competitive edge, diversify our service offerings, and position ourselves to secure more contracts. Our pipeline is a byproduct of the development of WidePoint's proprietary software products, and we look forward to announcing future innovation. With that, I will now turn the call over to Bob to discuss our third quarter financial results. Bob?