Altigen Communs Inc

Good afternoon, ladies and gentlemen, and welcome to the Altogen Communications fourth quarter and fiscal year 2022 results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Brian Kriegel. Sir, the floor is yours.

Hello, everyone, and welcome to Altogen's earnings call for the fourth quarter of fiscal 2022. Joining me on the call today is Jerry Fleming, President and CEO, and Carolyn David, VP of Finance. Earlier this afternoon, we issued an earnings release reporting financial results for the period ended September 30th, 2022. This release can be found on our IR website at altagym.com. Please note that we have added some supplementary tables with new revenue breakouts and metrics. We believe this will help improve transparency into our business and we will continue to evaluate additional metrics as our new products begin to contribute to our results. We've also arranged the replay of this call, which may be accessed by phone. This replay will be available approximately one hour after the call's completion and remain in effect for 90 days. The call can also be accessed from the IR section of the website. As a reminder, today's call may contain forward-looking information regarding future events and the future financial performance of the company. Wish to caution you that such statements are just predictions and actual results may differ materially due to certain risks and uncertainties that pertain to our business. We refer you to the financial disclosures filed periodically by the company with the OTCQB over the counter market. Specifically, the company's audited annual report for the fiscal year ended September 30th, 2021, as well as a safe harbor statement in the press release the company issued today. These documents contain important risk factors that could cause actual results to differ materially from those contained in the company's projections and forward statements. All of this assumes no obligation to revise any forward-looking information contained in today's call. During this call, we will also be referring to certain non-GAAP financial measures. measures are not superior to or replacement for comparable GAAP measures, but we believe these measures help investors gain a more complete understanding of results. The reconciliation of GAAP to non-GAAP measures and additional disclosures regarding these measures are included in today's press release. Now I'd like to turn the call over to Jerry Fleming for opening remarks. Jerry?

Thanks, Brian, and good afternoon, everyone, and thank you for joining us on today's call. So I'm going to begin the call today with a State of the Union update on our business. Following this, I will turn the call over to Carolyn to review the financials. Our fiscal 2022 was marked by significant advancements in our new products, the acquisition of ZACT Consulting, subsequent enhancements to our organizational structure, and the implementation of new business systems. So all in all, as I mentioned in the press release, FY22 has been a year of monumental change for Altagents. For the business update, I will start with our legacy PBX business. Altogen has historically been a developer of business PBX systems targeting the SMB market. Over the years, we morphed the product from a hardware-centric to a software-centric solution, which we call MaxCS. Not only did that allow us to exit the proprietary hardware business, it also enabled us to deploy MaxCS in the cloud, offering that PBX platform as a hosted managed service. We then worked to migrate our on-premises MaxCS customers to the cloud, which of course is a much more profitable business model. Today, we have about 300 MaxCS customers deployed in the cloud with another 600 or so still on-premise. Because the feature sets of the MaxCS cloud and the MaxCS on-premise versions were virtually identical, many customers elected to continue using the on-premises version since they had no compelling reason to migrate to the cloud. In response to this dynamic and shifting market requirements towards integrated unified communications, in the fourth quarter of fiscal 2022, we introduced the first version of our new UCaaS solution, MaxCloud. The benefits are twofold. For customers, MaxCloud adds much-needed unified communications capabilities on a scalable, high-availability, and redundant platform. The benefit to Altogen is that we receive approximately eight times the revenue from a MaxCS Cloud customer versus a MaxCS on-premises customer. Our new MaxCloud platform will continue to be sold through our third-party reseller channel and through Fiserv. Version 1 of that platform includes a number of new enhanced features compared to MaxCS. And as a new solution with many enhancements, we first rolled out MaxCloud on a limited release basis to ensure that all of the kinks were worked out before moving full steam ahead. That being said, in fiscal 2022, we deployed more than 30 customers representing over 1,000 subscribers. Roughly half of these customers migrated from on-premises Mac CS, with the remainder being net new. We plan to release version two, which includes new mobile apps, soon. which will then allow us to more aggressively target the approximately 600 or so remaining on-premises customers that we will migrate to the cloud. Of course, we also plan to move existing MaxCS Cloud customers to the new MaxCloud UCaaS platform to ensure that we retain this valuable cloud customer base. In addition, MaxCloud has also now been fully deployed in Fiserv's data centers. Fiserv will be targeting their base of approximately 100 legacy MaxCS customers, of which about one-third are using the cloud version of MaxCS and the remaining two-thirds using the on-premises version of MaxCS, in total representing approximately 3,500 subscribers that Fiserv will migrate to the new MaxCloud platform. In FY22, Fiserv deployed three MaxCloud customers representing about 200 subscribers All of these customers were net new to Altogen. The majority of Fiserv's customers also have a requirement for our new front stage contact center as a service platform. In FY22, we deployed front stage for the first two Fiserv customers, representing an average revenue per customer of approximately $10,000 per month. Based on Fiserv's stringent security and network requirements, we've had to invest quite a bit of time and resources to meet their requirements. With most of that work now behind us, we expect to see a much more robust contribution from Fiserv in FY23. Additionally, to address the heightened security issues for banks and credit unions, we introduced our new secure access SIP service for Fiserv, which authenticates callers by their caller ID and registered device, as well as by our new voice biometrics technologies. Together, these virtually eliminate fraud by callers attempting to impersonate an actual customer. This service became available right at the end of fiscal 2022 and is now being piloted by the first few customers. Just to give you an idea, the revenue to Altagen for the secure access SIP service, we expect to range from approximately $2,500 to $7,500 per month per customer that take that platform. I should also point out that while Fiserv is targeting their base of 100 or so MaxCS customers to upgrade them to both MaxCloud and FrontStage, they are also going after the more than 2,000 customers that use Altogen's IVR or interactive voice response platform. Over the years, Altogen has developed integrations between our IVR platform and more than a dozen of Fiserv's core processing platforms. These integrations can be heavily leveraged for both the front stage contact center solution as well as our new secure SIP access service. In addition to this, Fiserv has about 3,000 existing customers which are not currently using an Altagen solution that will provide a very nice pipeline to go after for additional business. Overall, the opportunity with both the legacy Altagen customer base and Fiserv remains significant and unchanged from our prior calls. With things now starting to progress on both our UCaaS and CCaaS platforms, I'll turn to an update on our Microsoft Teams solutions. As Microsoft has been reporting, Microsoft Teams is continuing to grow, particularly in the mid-market and enterprise spaces, which are the areas we're targeting. We've also heard reports from quite a few UCaaS providers that Teams is very much negatively impacting their businesses. On the other hand, the growth of Microsoft Teams is a very good situation for Altogen, given our business strategy of enhancing and extending the capabilities of Teams with what we believe is the most comprehensive suite of Teams phone system solutions on the market. Now, reviewing our solutions for Teams, our SIP direct routing solution has been growing by about 50% annually and is our number one revenue contributor today. However, I believe the most significant opportunity going forward lies in CornerAct, our digital customer engagement platform for Teams phone system. As many of you know, we initially released CornerAct several quarters ago, and after gaining experience in deploying CornerAct, we came away with solid feedback and recommendations from most customers for new and upgraded capabilities. We rolled out phase one of these enhancements just this past September, which were largely centered on improved performance and ease of use capabilities. Phase two, which adds significant new functionality for users, managers, and administrators, is scheduled for release in early January. These two significant updates dramatically upgrade the value proposition of this product line for our customers and will allow us to more fully engage with enterprises, especially when combined with professional service capabilities we acquired through ZAC Consulting. Just as a reminder, Core Interact is now comprised of four integrated applications. First is the base Core Interact product, which includes the engine for routing and queuing customer requests along with a new systems administration module that runs natively within Teams. Second is Workgroup Insights. This displays real-time performance statistics for both a workgroup and each individual in that workgroup. With Workgroup Insights, departmental supervisors can now easily manage the performance of their individual departments, which is particularly useful in today's distributed workforce environment where employees are not sitting in cubicles under direct supervision. Our third application is Core Engage, which is a new application allowing Core Interact users to interact with their customers via any communications channel, those being phone, SMS, web chat, and emails, and we deliver all of these capabilities into a single desktop application. Fourth and final, is Core Attendant, which is our operator council for Microsoft Teams. While we expect Core Attendant to generate revenue, we are offering this product on a freemium basis with a limit of one per customer so that we can seed the market not only for additional Core Attendant modules, but also for our entire suite of Teams solutions. Now, the reason our customers and business partners are so excited about Core Interact is that it allows an organization's customer-facing employees to interact with their customers using their customers' preferred communications channel. This is unique for the enterprise users. This capability has been historically limited to the contact center, which, due to cost and complexities, simply cannot be deployed for enterprise users. Core Interact completely changes that paradigm. Regarding our progress with the Corner Act solution suite, in FY22, we licensed 18 new customers, having a total of approximately 200 users, many of which will go into larger deployments as more departments are brought on. Our pipeline continues to grow and includes quite a few opportunities with customers, a single customer, having more than 200 users for Corner Act. We also signed approximately 15 new partners during FY22 who came on board to be selling the Core Interact solution. I think it's safe to say that we are beginning to see real traction with Core Interact. So with that, I'll now turn the call over to Carolyn to discuss our financial results. Carolyn?