Quotemedia Inc

Good day, everyone, and welcome to today's 2022 Q1 results. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your touchtone phone. Please note this call may be recorded, and it is now my pleasure to turn the call over to Brendan Hopkins. Please go ahead.

Thank you, everyone, for joining us today. We have a brief safe harbor, and we'll get started. Except for historical information contained herein, the statements in this conference call forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from forecasted results. With that said, I'd like to turn the call over to Dave Schwarn, CEO of Quote Media.

Thanks, Brendan. Welcome everybody and thank you for joining us. We're pleased to announce that we achieved an 18% increase in revenue in Q1 over Q1 of last year and we're very happy with our growth this quarter. We are expecting to maintain a great trajectory over the year with the accounts under contract that we'll be launching and ramping up over the course of the year and we're certainly excited to see what additional clients we can close. Our interactive content solutions, our web display systems, and our data APIs, along with our corporate CodeStream product lines, are showing very good traction. The release of new products and our proprietary new data sets to clients are also proving to be very successful. We're continuing to expand our CodeStream web trading application and connecting it to several client order management systems for release later this year. On the customer side, We recently announced that we closed one of the largest banks in Canada, and we're working through the paperwork on a second one now. We're definitely seeing many more large firms approaching us for proposals and price quotes, and we're displacing much larger incumbent data and application providers in the industry. In every case, the message is that they love our products, our pricing is fair, and they're hugely impressed by the customer service we provide and the agility in responding to their needs. We have built a fantastic team at Quote Media, and we're very proud of what we're achieving. I'll now pass the mic over to Keith Randall so he can take us through the numbers for the last quarter, and then we can answer any questions that you have. Thank you, Dave, and welcome, everyone. I will start with the income statement. Note that all comparisons are on a year-over-year basis unless otherwise noted. Overall, we had another good quarter with an 18% increase in total revenue and a profit of $105,000. Breaking down our revenue, our total closed stream revenue grew by 13%, driven by an 18% increase in corporate closed stream revenue. The increase in corporate closed stream revenue was really due to new contract signs since the comparative quarter and an increase in the number of subscribers for existing customers. Our new products recently added continue to gain traction in the market, and we continue to add and improve the functionality of our existing products. This has allowed us to attract larger customers and increase the average revenue for our existing customers. Our individual cool stream revenue decreased by 2%. There is an increase in total users, which can be attributed to new marketing efforts. But this increase was more than offset by a decrease in average revenue per subscriber, which can fluctuate depending on the exchange data selected by our subscribers. Interactive content revenue, which is web display content, increased 25%, mainly due to an increase in the number of clients and an increase in the average revenue per client. In particular, the increase was due to the new contract we recently finalized with the large bank in Canada that Dave discussed earlier. Our cost of revenue consists of fixed and variable stock exchange fees and other data costs. It also includes amortization of capitalized development costs. Our cost of revenue increased 9%, namely due to increased usage fees resulting from increased sales volumes. Vendor price increases in our ever-expanding data coverage also contributed to the increase in cost of revenue. Overall, the cost of revenue decreased as a percentage of sales as evidenced by our gross margin percentage that increased to 47% from 43% in the comparative quarter. The new contract discussed earlier accounted for the significant increase to our gross margin percentage as it has higher gross margins than our typical customer contracts have on average. Our total operating expenses increased 11% for the quarter. Most of the increase in operating costs relate to improvements made to our infrastructure, security, and business continuity management. Improvements were necessary to broaden our product lines and data coverage. The increase is also related to costs associated with obtaining SOC 2 Type 2 certification, which we expect to achieve this year. SOC 2 Type 2 certification provides independent assurance that an organization maintains a high level of information security and data integrity and has controls in place to assure business continuity. Sales and marketing expenses increased 8% and development expenses increased 15%, primarily due to additional personnel hired to achieve our expansion objectives. G&A expenses increased 11%, primarily due to an increase in personnel costs and software expenses related to the SOC 2 certification process. Net income for the quarter was $105,000 compared to $23,000 in the comparative quarter, an improvement of $182,000. Our operating profit increased to $189,000 from a loss of $111,000 in the comparative quarter, an improvement of $300,000. Finally, our adjusted EBITDA was $680,000 compared to $244,000 in the comparative quarter, an improvement of $436,000. Please refer to the reconciliation included in our press release for the calculation of adjusted EBITDA. Turning now to our balance sheet and cash flow statement, our cash totaled $396,000 at quarter end, which was $137,000 increased from year end. Our net cash flow from operations was $757,000, while net cash used in investing activities was $620,000 due to increased spending on infrastructure and product development. As circumstances dictate, however, we have the flexibility to reduce development spending to maintain a strong balance sheet and liquidity position. Looking forward, based on contracts already under Based on clients already under contract or in the final stages of negotiations, we anticipate particularly strong revenue growth in the second half of the year, and we remain on track to achieve full year revenue growth at 20% or higher. In addition to the large contract discussed earlier, we signed a preliminary agreement with another large bank in Canada to start development work while their contract is being finalized. Pursuant to that preliminary agreement, Subsequent to quarter end, we received partial development payments totaling $230,000. We also expect to significantly improve on our bottom line for the year due to the higher gross margins of the new contracts recently signed. We also believe that our pending SOC 2 certification will allow Quote Media to make even greater gains in market share, as SOC 2 certification is becoming a requirement for those providing services to larger financial institutions. Thank you, and I'll now pass it back to Dave. Thank you, Keith. I'm happy to now open up the call for any questions, and if you have future questions after the call, please feel to reach out to Brendan Hopkins, which is bhopkins at QuoteMedia.com. Our first question comes from Michael Kopinski.