Akerna Corp.

Good morning, and welcome to Akerna's fourth quarter and full year 2021 financial results conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Peter Seltsberg, Investor Relations for Akerna. Please go ahead.

Thank you, and welcome to today's fourth quarter-ended December 31st, 2021 conference call. On the call today are Jessica Billingsley, CEO and Chairman of Akerna, and John Fowle, CFO of Akerna. Before management begins with formal remarks, I'd like to remind everyone that during this conference call, certain statements will be made that are forward-looking within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act 1995. Words such as estimate, project it, expect, anticipate, forecast, plan, intend, believe, seeks, may, will, should, future, Proposed and variations of these words or similar expressions or versions of such words or expressions are intended to identify forward-looking statements. These statements include but are not limited to statements regarding the future growth and prospects for Aperna and statements regarding expected future revenue recognition. These forward-looking statements are not guarantees of future performance, conditions, or results and involve several known and unknown risks, uncertainties, assumptions, and other important factors which could cause actual results or outcomes differ materially from those discussed, including risks related to changes in the cannabis market and risks related to the impact of the COVID-19 pandemic. These risk factors are more fully described in Akerna's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Akerna undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Now, without further ado, I'd like to turn the call over to Aperna's CEO, Jessica Fillingley. Jessica.

Good morning, everyone. Thank you for joining us today. Today, we reported our fourth quarter and full year financial results for 2021. And I'm pleased to say we posted another year of solid top-line growth, achieved improvement in growth margins, and closed two important acquisitions that boost our capabilities in the enterprise market. We delivered software revenue growth of 59% for the year, with total growth of 49%. We improved our adjusted EBITDA loss by 32% year over year, and our revenue run rate is in excess of 25 million today. John will cover the specifics of our financials in his remarks shortly. We continue to develop and acquire connecting technologies to provide real value to our clients and to drive our future growth. Our growth drivers remain intact and largely unchanged since our Q3 report, in which we noted the inevitable opening of new markets, continued consolidation of the industry, new regulations, and ultimately legalization at the U.S. federal level. Akrona has been at the forefront of preparing for these growth drivers. At the heart of every decision we make as your executive management team is this question. Does this provide value to the cannabis industry of tomorrow? We are committed to being the best software solution available to serve both the cannabis industry of today and of tomorrow, accounting for every level of government regulation and every point in the supply chain. We intend to expand and solidify our position as the leading enterprise solution for the cannabis industry and execute a plan to deliver economic, social, and other business value. There are three central ways you can measure our success in creating value. The metrics we use in report, the strategic partnerships we cultivate and announce, and the way we structure our product offering to simplify the complexity of the industry. Let's start with metrics. The primary drivers of long-term value in our business include these three key performance indicators. Committed annual recurring revenue, VARR, growth in bookings, and growth in client transactions. I'll clarify what each of these metrics means, why they are important, and how we are performing. Most of our revenue today is comprised of subscription revenue. As a result, The most important metric we track to measure our present success is our total CARR, or the total amount of contracted recurring revenue for which clients have signed contracts. Our CARR was $20.9 million as of December 31, 2021, which represents a 51% increase year over year. Our growth in bookings and growth in transaction metrics are both leading indicators of the future value we are building in the business. Acurnis reported bookings represents the dollar amount of new signed software contracts, the value of which will be recognized over the life of the contract. We consider growth in bookings to be a near-term leading indicator of our performance. Our Q4 software bookings were 1.5 million, a record for Acurnis, and more than a 50% increase over prior quarter indicating increasing growth. Turning to our clients' transaction growth, we can see they're the industry leaders of tomorrow. Collectively, both their transaction dollar amounts and transaction volume consistently grow between 25 and 50% year over year, which has held true for every quarter since we began reporting our clients' transaction growth. These clients are scaling in two ways. Expansion through acquisitions during the overall consolidation of the market and same facility growth. For example, more consumers are visiting a given retailer dispensary, and they're also repeating their visits more frequently. These numbers demonstrate that more of the industry is running on Akerna. We believe transaction growth is the single most important long-term leading indicator of our true market share. in addition to providing a future revenue stream once regulatory changes bring opportunities to monetize transaction volume through retail and wholesale payments opportunities. The next way we create long-term value is through our strategic partnerships, such as those with SAP, Microsoft, Oracle's NetSuite, and Domo, which enable us to leverage a pool of shared resources to help our clients solve their problems of today and tomorrow. To illustrate how quickly these strategic partnerships can evolve to provide additional value as the industry grows, let's look at our partnership with Hyper, an omnichannel digital payments and compliance provider for the cannabis industry. This partnership stemmed from our shared understanding that the cannabis industry of today faces a major challenge when it comes to payments. With non-compliant payment solutions, such as the so-called cashless ATMs, taking advantage of cannabis stores across the U.S., securing this partnership with Hyper enables retailers to complete payments in a compliant manner. Compliant pin-debit solutions, such as Hyper, are gaining mainstream popularity, especially among independent operators. We expect Hyper's solution to continue to be a valuable payment solution offering for a current post-federal legalization. Lastly, we continue to build a product portfolio that provides value to the industry of today while ensuring relevance and a deep and wide moat tomorrow and post-federal legalization. When architecting our ecosystem, we took care to use an approach that would not only address the needs of the small, medium-sized business segment, but also those of the growing enterprise market. This decision allows us to grow with our clients as they scale from our starter business solution into our larger business offering. We focus on providing the network that connects applications with solutions for compliance, payments, and integration. This structure enables our clients to custom select the ecosystem connected suite of products and services right for them at this point in their growth journey. This ability to customize becomes increasingly important as companies grow in complexity. Larger companies require tailored solutions that address needs specific to their organization and workflows. The predefined one size fits all regional compliance only solutions that suffice for smaller businesses just getting started can no longer be justified as these businesses scale. Instead, Larger companies must evaluate their technology solutions based on their return on investment gained by having superior reporting and analytics and by knowing their compliance needs are met today in each market in which they operate as well as any to which they might wish to expand. As an example, a large multi-site operator might contract with us for our enterprise cultivation and manufacturing modules our mid-market retail solution with e-commerce and loyalty features, and their preferred backend financial solution. For this example, let us assume they choose the most popular mainstream tax and financial planning solution, Microsoft. This client can then choose from a suite of other products connected to our ecosystem to provide additional features and functionality. Perhaps they will add payments, a learning management system, route planning, or menu advertising from our ecosystem partners. Across all our products and services, we are equipped to serve operators across all verticals and in every phase of their growth cycle, large regulatory agencies and brands looking to expand their market share. The data is proving the success of this strategy. Our enterprise businesses are focused and this line of business is growing. In closing, we are very excited about the many value creation opportunities ahead and the business we have built to leverage the upcoming waves of growth. Our current, near-term, and long-term leading indicators all indicate good progress and positive momentum heading into 2022. And we believe we have secured and continue to secure the right strategic partnerships for the business while we have designed our system to solve some of our clients' biggest challenges by reducing their complexity. All our hard work and achievements to date have positioned us very well for this moment, and we look forward to driving long-term shareholder value as the path unfolds in front of us. Now, I will hand the call over to John, who will take us through the details of our financial results. John, please take it from here.