WidePoint Corporation

Good afternoon. Welcome to WidePoint's second quarter 2025 earnings conference call. My name is Matthew, and I'll 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 the call for questions from WidePoint's publishing analysts. If your questions were not taken today and you'd like additional information, please contact WidePoint's investor relations team at wyy at gateway-grp.com. Before we begin the call, I would like to provide WidePoint's 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-Q filed with the Securities and Exchange Commission. Finally, I'd 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'd like to turn the call over to WidePoint's President and CEO, Mr. Jin Kang. Sir, please proceed.

Thank you, Operator, and good afternoon, everyone. We appreciate you joining us today to review YPoint's financial and operational results for the second quarter ended June 30, 2025. This past quarter was a continuation of the deliberate steps we have been taking to position YPoint for long-term sustainable growth. Among the most compelling opportunities on the horizon is the upcoming recompete of the Department of Homeland Security CWMS 3.0 contract. In June, the draft Request for Proposal, or RFP, was released, and we have since responded to DHS and provided the requested information. We were pleased to find that the RFP requirements aligns closely with our ongoing work with DHS. As a two-time incumbent, our strong past performance underscores the alignment between the scope of work outlined by DHS and our current service portfolio and capabilities, including our enhanced IT as a service solutions. The new statement of work plays directly on our core strengths. It requires FedRAMP authorized status, a box we proudly checked with our FedRAMP authorized intelligent technology management system, or ITMS. ITMS is already the system of record and operational hub for DHS. We believe that this is a powerful validation of the trust DHS places in WidePoint and the critical role our technology plays in supporting their mission and operations. There are several other key requirements that position WidePoint well ahead of other firms competing alongside us. The contract mandates small business status, a criterion we meet. In addition, we bring a robust track record of past performance, active ATO or authorization to operate with DHS, and the necessary facility security clearance, all of which positions us well ahead of many competing firms. The government has also indicated that this will be a best value award, meaning technical solution, past performance, and reliability will matter more than cost. Again, given that we are two-time incumbent with a proven history of delivering high-quality, mission-aligned solutions to DHS, that is an encouraging sign for us and plays directly to our strengths. We have adopted a comprehensive, all-hands-on-deck approach to our pursuit strategy. Internally, we are holding weekly strategy meetings to coordinate efforts across teams to maintain alignment and momentum. Externally, we're actively evaluating additional investment and support staff, including the hiring of specialized consultants to ensure we present an even more compelling and polished proposal. To further reinforce our readiness, we have set up a full PMO model, complete with backup contingency resources to ensure seamless, uninterrupted support for DHS from day one. The substantial increase in the contract ceiling, which stands at $3 billion, up from the original $500 million ceiling under the CWMS 2.0, is a strong signal of DHS's growing demand for our solutions and presents a significant opportunity for YPoint. Notably, We already have been awarded task orders that extends through November 2026 under the current CWMS 2.0, giving us continuity, stability, and forward momentum during this recompete and contract transition period. The federal government typically prefers contracts to overlap to ensure uninterrupted service delivery. As existing CWMS 2.0 task order begins to expire, we anticipate new task orders will be issued under the CWMS 3.0 contract to minimize the risk of service gaps. This leads us to believe that the final RFQ could be released very soon. While the final requirements may still shift, the initial target for the RFP release was the end of July. so we do anticipate it could be issued at any time now. The government anticipate awarding the contract by the end of September 2025. However, considering the typical procurement timelines and potential for external factors, we recognize that the actual award may realistically occur closer to the end of this year. We have committed significant time, resources, and strategic focus towards CWMS 3.0 to ensure YPoint is well positioned to secure this contract for the third consecutive time. We believe our investments will deliver a strong return and serve as a catalyst for future growth. Our confidence in this opportunity remains high. and we continue to view CWMS 3.0 as a critical pillar in YPoint's long-term growth strategy. Turning to Spiral 4, we are seeing encouraging momentum as new task orders begin to flow in following the expiration of Spiral 3. I am pleased to share that YPoint has secured four task orders to date, with several more in development and multiple responses submitted to active requests for quotes or RFQs. We are confident additional Spiral 4 task orders will continue to be awarded to YPoint on an ongoing opportunistic basis. While we are competing against some of the largest players in the industry, YPoint stands out with our ability to deliver multi-carrier solutions, offering flexibility and value that no other member within the contract vehicle can match. We also plan on pushing for expansion of optional services under Spiral 4. particularly around lifecycle management services to deliver greater value to clients and create new pathways for growth and future deal flow. Overall, activity under SPIRO 4 continues to trend positively, and we remain focused on capturing additional opportunities as they arise. Jason will be sharing more about the opportunities within our device as a service program, or DAS, but I'd like to provide a brief update on where things stand. Our DAS pipeline remains strong, and while the timing of some key opportunities have shifted to later than we initially anticipated, we remain encouraged by the growing interest and engagement in the program. The investment that we have made throughout the year in the infrastructure for DAS to support and scale are a clear reflection of our strong belief in its potential to drive meaningful return and long-term results. While these investments haven't yet translated into results in the first half of the year, they have laid a strong foundation for long-term growth. We had expected several deals to begin closing by the end of Q1 and into Q2, but these timelines have extended. That said, we did secure our first DAS contract with a federal health research agency, delivered in close collaboration with our strategic Fortune 500 partner. We're confident that this initial win is just the beginning. The momentum is real, the conversations are active, and we're confident that the second half of 2025 and into 2026 will begin to reflect the progress and groundwork we have laid. We are also making meaningful progress in building and expanding our strategic partnerships, an important pillar of YPoint's long-term growth strategy. We're continuing to invest the necessary time, energy, resources, and mindshare into cultivating these relationships. We firmly believe this strategy will yield tangible results and long-term return on investments. While some near-term opportunities, similar to what we have experienced with DAS, have experienced delays, we view our partnership strategy as a foundational investment. These relationships are not just about immediate wins, but about unlocking access to new markets, expanding our solution offerings, and creating joint go-to-market pathways that can scale over time. In many ways, we're laying the groundwork today for the next phase of WidePoint's evolution. WidePoint brings to the table a robust portfolio of secure, high-performance solutions that that have been battle tested by some of the most demanding government customers. Our track record speaks for itself. When combined with the strength of our existing partners and the credibility we have earned, the decision to expand and deepen our partner ecosystem is a strategic imperative, not just a growth tactic, but a growth multiplier. We're confident that this continued investment will expand our reach, open up new revenue streams, and ultimately position WidePoint for sustained success well into the future. Regarding our recent FedRAMP authorized status, this significant achievement underscores WidePoint's commitment to delivering highly secure and compliant cloud services for government agencies today. demonstrating our adherence to the most rigorous security standards and solidifying our position as a trusted provider in the federal space. FedRAMP authorized status translates into a very powerful competitive advantage, opening doors to nationwide government contracts and fostering confidence in our ability to securely manage sensitive data and mobile solutions. It positions YPoint as the leader in secure, compliant technology solutions, boosting our reputation and market reach in the public sector. Now, to provide a quick update on the Census 2030 opportunity. We are starting to see early activity with the Request for Information, or RFI, expected soon. The timeline looks similar to the 2020 cycle, and we anticipate a comparable scope of work. this time with a smoother path forward, free from the unique challenges of the pandemic period. Despite those challenges in 2020, we delivered flawlessly with zero devices compromised, which speaks to our reliability and ability to support mission-critical efforts at scale under any conditions. We expect to support and manage roughly 700,000 devices in secure mobility and lifecycle management, Of course, the investment we are making in DAS now will play a critical role in supporting this effort. Additionally, last Thursday, President Trump called for a new census that would be used for congressional appointments. He also stated that he has already directed the Department of Commerce to begin work on this effort. While it remains early, Should this effort gain traction and move forward, the Census Bureau may look to rely on established vendors such as YPoint and CDW to support the process. The situation still remains fluid and we will continue to monitor developments closely and provide updates as the situation evolves or as meaningful milestones are reached. Turning to macro factors, tariffs and rising labor costs have impacted many businesses. We have been able to mitigate any major effects through a combination of automation, streamlining processes, rate adjustment proposals with customers, alternative sourcing for equipment, and other optimization strategies. Federal government downsizing, layoffs, and DOGE initiatives have not had a material impact on White Point, though potential downstream effects remains a consideration. However, we also believe DHS may receive expanded responsibility related to border security, which could potentially create tailwinds for us. Before I hand the call over to Jason, I'd like to take a moment to address our outlook regarding our previously disclosed guidance. While achieving positive EPS in 2025 was one of our initial goals, some of the promising opportunities we have previously outlined, particularly within our DAS program, have shifted in timing has impacted our first half results. That said, the opportunities in our pipeline remains intact and substantive. They have merely been deferred slightly in timing, and we continue to view them as highly achievable. In light of this timing shift, while we still expect to meet our revenue guidance, we anticipate that both our EBITDA and free cash flow guidance will ultimately need to be adjusted. We are deferring any formal adjustment until next quarter. as several of these opportunities in the pipeline still hold potential to materialize in the second half of 2025. We believe it is prudent to allow them sufficient time to develop so we can provide our shareholders with the most accurate and informed outlook for 2025. Importantly, we fully expect EBITDA and free cash flow to remain positive for the remainder of the year, and we remain confident in the underlying strength of our business. we have made deliberate decisions to continue investing in high-impact initiatives, including CWMS 3.0 preparation, DAS infrastructure, strategic facility lease in Columbus, and into our strategic partnership strategy, all of which are fundamental to unlocking these future opportunities. These investments reflect our focus on building long-term value and positioning YPoint for sustainable, profitable growth. Rather than focusing narrowly on achieving a modest EPS gain this year, we believe that reinvesting in the business is the more strategic forward-looking approach. While we are naturally eager to see these opportunities come to fruition, we remain confident that the momentum will pick up in the second half of this year and into 2026 and that we're laying the groundwork for long-term success. We remain optimistic in the future outlook for White Point and firmly believe that deliberate strategic steps we are taking now will result in valuable growth and return for our shareholders. I will now turn the call over to Jason to walk you through our sales pipeline and upcoming opportunities. Jason?

Thanks, Jen, and good afternoon, everyone. As Jen explained, while the DAS opportunities in the pipeline have shifted slightly to the right, we are still encouraged with the increase in activity and progress. The pipeline of DAS is composed of 90% large commercial opportunities, which align directly with our broader goal of expanding beyond our traditional government work. It represents a meaningful step forward in diversifying our revenue stream and deepening our presence in the commercial sector. We're currently engaged in discussions with notable firms across healthcare, financial services, public IT sectors, among others, all of which manage large fleets of devices, which is the exact type of environment where our DAS offerings deliver the most value. DAS contracts offer higher margin, managed services revenue stream, precisely the kind of scalable business we've been aiming to grow. We wholeheartedly believe that once scaled, The DAS program has the potential to rival and even surpass some of our largest current managed services work. The investments we've made and continue to make are not just about supporting today's pipeline. They are about positioning WidePoint for long-term success. We see this as the foundation for successful growth, improved margins, and meaningful progress towards our goals. of delivering double-digit percentage growth of our annual revenue. This early phase of DAS is laying the groundwork for what we believe will be a major contributor to WidePoint's future success, particularly in the commercial space and to our overall bottom line in the long run. On to our partnership strategies. We are continuing to put time and effort towards not only cultivating new relationships, but deepening and expanding existing ones. We are actively building on the strong foundations we've established with our current partners, growing both the scope of work and the strategic alignment of these collaborations. Some of these partners include our longstanding partnership with CDW, Leidos, Intercede, Hyperion, just to name a select few. For example, our strategic alignment with CDW's DAS program presents significant and apparent synergies. Given the strong strategic fit between our respective approaches, we see clear potential for joint initiatives in the long term, especially as we look ahead to large-scale opportunities like the Census 2030 and potential DAS opportunities. Not just with CDW, but the example above represents our overall strategy with each of our longstanding partners to ensure that we are collaborating most effectively. White Point has positioned itself as a required partner in both the cybersecurity space as well as the managed mobility space. That said, I would like to extend my heartfelt congratulations to CDW on their current to recent achievements of being named the official technology solutions provider for the upcoming Los Angeles 2028 Olympic and Paralympic Games. This is an incredible recognition of CDW's leadership in the industry, and particularly of the strength and reliability of their DAS program and other comprehensive software solutions they offer. Where operational efficiency and technological reliability are critical in such a large-scale environment. CDW's DAS platform will serve as a vital enabler to streamline device deployment, support, and lifecycle management. Congratulations again to CDW on this well-deserved honor, and we all look forward to seeing their solutions in action on the world stage. Our continued progress in the Smart City initiatives has also expanded in scope with the recent announcement of our partnership with BroadSat. White Point is not only working on new opportunities in Texas, but with BroadSat, we've now added Tennessee to the list. As you may have seen this past Monday, we proudly announced a new identity and access management contract in support of the U.S. Department of Education. This is especially meaningful as the K-12 sector has long been an area we aim to support, making this engagement a promising milestone for potential future activity. We are also actively collaborating with a major U.S. telecommunication carrier on a new strategic opportunity that could involve upwards of $2 million to 2.5 million in devices that will require our command center proprietary platform, ITMS, or Intelligent Technology Management System. On the mobile anchor front, I am pleased to share that a few weeks ago, we secured a new contract award from an agency under the U.S. Department of Energy. This award is a meaningful milestone That not only validates the growing demand for our solution within the federal space, but also underscores the increasing traction Mobile Anchor is gaining across our broader customer pipeline. We continue to see strong indicators of customer and market acceptance, an essential step forward scaling the commercialization of Mobile Anchor. Encouragingly, interest is not limited to government customers. we see compelling commercial potential as well, particularly in emerging markets that require secure, reliable, and flexible mobile connectivity solutions. One exciting opportunity lies in the Smart City Initiative, where Mobile Anchor is in a position to play a transformative role. We have taken strategic steps to advance the Smart City Initiative, together with Brotsat, We aim to support smart cities and federal agencies by delivering a powerful dome of defense, providing end-to-end security connectivity, computing, and content distribution at the edge for all connected applications and devices. To build on this, mobile anchor represents a significant opportunity to advance the smart city project. Its ability to provide endpoint management in the highest multi-factor secured environment positions Mobile Anchor as an ideal solution for commercial partners aiming to modernize infrastructure without compromising cybersecurity or operational agility. Lastly, given our strong relationships with strategic insiders who have relationships with members of the current administration, Countries that have positive standings with the United States have recently shown a strong interest in White Point's mobile anchor and our proprietary command center platform, ITMS, or Intelligent Technology Management System. We remain committed to executing on our robust pipeline and are excited to continue driving these initiatives forward. We are steadily building the foundation to further expand our robust pipeline. The opportunities ahead are both tangible and substantial, and we remain optimistic that momentum will begin to pick up throughout the second half of 2025 and into 2026, allowing our efforts to yield meaningful results. With that, I will now turn the call over to Bob to discuss our financial results. Bob?