Intellicheck, Inc.

Greetings, and welcome to the IntelliCheck Q3 2023 earnings call. At this time, all participants are in the 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 and then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gar Jackson. Thank you. You may begin.

Thank you, operator. Good afternoon, and thank you for joining us today for the IntelliCheck third quarter 2023 earnings call. Before we get started, I will take a few minutes to read the forward-looking statement. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage And similar expressions as they relate to the company or its management, as well as assumptions made by and information currently available to the company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty, and changes in circumstances, and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether resulting from such changes, new information, subsequent events, or otherwise. Additional information concerning forward-looking statements is contained under the headings of safe harbor statement and risk factors listed from time to time in the company's filings of the Securities and Exchange Commission. Statements made on today's call are as of today, November 8, 2023. Management will use the financial term adjusted EBITDA in today's call. Please refer to the company's press release issued this afternoon for further definition, reconciliation, and context for the use of this term. We will begin today's call with Brian Lewis, IntelliCheck's Chief Executive Officer, and then Jeff Ishmael, IntelliCheck's Chief Operating Officer and Chief Financial Officer, who will discuss the Q3 2023 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors. Today's call will be limited to one hour, and I will now turn the call over to Brian.

Thank you, Gar, and good afternoon, and thanks for joining us, everyone, today for our third quarter 2023 earnings call. It was another solid quarter of year-over-year growth, with SaaS revenues up 17% versus the prior year quarter. I am beginning today's call with an update on some of the recent changes we have made as an organization. As I have shared with you before, I have continued to review organizational needs with an ongoing focus on staffing as a critical component in building our company and accelerating revenue growth. I continue to believe that key to our continued progress is putting the best people into operational positions that will enable us to drive growth and significant product evolution. Since Jonathan Robbins came on board as our VP of Engineering, he has made significant contributions and is engaged with our customers to really seek out what they need and address any issues or concerns that they might have. His efforts reflect our renewed focus on being proactive and partnering with our customers, recognizing that one size doesn't fit all. Without getting too deep into the technical details, here are just a few highlights regarding what Jonathan and his team have accomplished so far. Recognizing that we need to reduce transaction abandonment, Jonathan led the team and the redesign of our digital user interfaces to simplify the customer experience during ID validation. We believe that this reduction in abandonment will drive additional revenue But more importantly, we'll help our clients onboard additional clients faster and more efficiently. The team has redesigned our API and servers to improve security and reliability. We are no longer dependent on only one cloud provider. We are now platform agnostic, and this provides a tremendous amount of flexibility that had been previously lacking. Again, this is something that we believe will benefit our customers and better position them to work more effectively. Additionally, this is expected to further reduce our platform costs in 2024. And Jonathan and the team have ramped up our data science and machine learning R&D with an eye toward creating new products and furthering our fraud detection expertise. We believe this will lead to additional revenue opportunities in the future and will further position IntelliCheck's is top of mind when it comes to fraud prevention. We believe that this is only the beginning. As a result of the rapid strides he has made and the product and customer first deliverables, Jonathan was promoted to the role of Chief Technology Officer in September. Following up on point number three, we believe that there is a significant opportunity to monetize the vast amount of data that we collect on fraud, including when, where, and how it is occurring. We believe that this data will be beneficial to many different organizations. With that in mind, during the quarter, steps were taken to advance our efforts. We are augmenting this team with data scientists, and we anticipate that that we will start to be a revenue contributor in 2024. It is important to note, however, that this data harvesting goes beyond monetary benefit. We believe this also solidifies our position as experts and thought leaders in the field of fraud and positions us to be an industry leader and speaker on fraud with exclusive material. During the quarter, we also announced the addition of David Juergens to head up our channel partner program, and he really hit the ground running. Jeff worked with David in the past at Cylance, and David was a standout there. He built out the successful channel program from scratch that was a significant contributor to their growth. We recognize that we are good at bringing in the age-restricted accounts on one end of the spectrum and whales that take time on the other end of the spectrum. The channel program, we believe, will be good to augment mid-tier sales growth. Although David has only been here just over a month, he's off to a solid start, and we are very excited about the program he is putting in place. Looking now at our third quarter results, total revenues grew to $4,760,000 compared to $4,012,000, and SAS revenue was a record $4,635,000 versus $3,970,000 when compared to the same period a year ago. And we continue the trend. Our trailing 12-month SAS revenues have grown each month for the last 45 months. Real estate transactions continue to be a market vertical with significant fraud. And as a result, we have expanded our market penetration to reach beyond title companies. We have now gone live with the leading digital closing platform that is used by title, escrow, real estate, and mortgage lending professionals to transform home buying and selling into simple, secure, enjoyable experiences for millions of homeowners each year. Their platform provides a system of record for the real estate settlement ecosystem that through a suite of workflow, accounting, reporting, and collaboration products, as well as its expansive product and service integrations. We believe that this not only protects customers against fraud and transactions that can be very large and involve significant amounts of money, but also marks an important milestone because it further embeds IntelliCheck into the real estate transaction ecosystem. We continue to see growth in the title business. The nation's second largest title company started a paid pilot that launched in mid-October. Initially, they purchased a bucket of 50,000 transactions for their use in the Florida and Georgia markets. Looking at our continued efforts in the banking market vertical, the two regional banks that we have been talking about continue to make progress toward revenue generation. Both of the pilots we have spoken about, with the two regional banks totaling over 4,000 branches, are off to solid starts. Although this took longer than originally anticipated, through Jonathan's teamwork on the technology side, we have evolved the product to better fit their needs. As a result, we are seeing good velocity of use during this pilot period, and extended use cases for both banks are anticipated. In the automobile market, we are working with a 2,700-unit auto dealership on some requested technology updates. Jonathan and his team have updated the front-end capture to work better to fit their workflow. We continue to believe that the auto market is significantly underpenetrated, and that is another market where it doesn't take much fraud to add up to significant losses. The manufacturer that this company is working with was hit very hard by the UAW strike, so the launch has been slower than both anticipated, but the technology is now being evaluated by two additional automotive manufacturers in their networks. On the age-restricted front, we are continuing to build on the terrific success we had in Charleston, South Carolina. The extensive positive media coverage has reflected how well our public-private sector partnership has been, and it continues to receive high marks from the Mayor, the City Council, and the business community. We believe this program can be replicated in other communities struggling with the underage access issue that have had a negative economic and reputational impact on their communities. Right now, we are in discussions with the City of Clemson, South Carolina. The potential program was discussed at the recent city council meeting, and we are looking forward to seeing how their deliberations evolve. On another note, on our successful partnership with Charleston, this program is being recognized for its innovative approach to addressing underage access to alcohol. I was honored to be a featured speaker at the Pennsylvania Liquor Control Board 2023 Education Conference, where speakers' roles are highly coveted. A highlight for me was when a Pennsylvania Liquor Control Board officer spoke up during the Q&A. She offered to demo our technology, saying they use it and love it. We are also continuing to make strides with the branding agency. We believe that raising awareness about IntelliCheck will help drive interest and leads in markets where we know accuracy is important because the stakes are so high. So, as you can see, we're making significant progress on a number of fronts that we believe will accelerate our growth in 2024. We'll now turn the call over to Jeff.