Snipp Interactive Inc.

Okay, I think we have everybody in now. So thanks for joining this morning, everybody. Good morning. Thanks for joining the SNP Interactive third quarter 2020-2024 earnings conference call. I am Atul Sabharwal, founder and chief executive officer of SNP. Joining me today is also Richard Pistelli, who recently took over as our interim chief financial officer. Jason Garcha couldn't make it today. He will continue to support the company as we transition into next year and through our audit. Please visit our investor relations site at snip.com for a copy of our earnings press release and detailed financials. which have also been filed on CDAR. We present all financial figures in US dollars, unless otherwise indicated. Before we proceed, I'd like to remind everyone that today's discussion may contain forward-looking statements. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. So let's start with a summary of the third quarter and key developments. The third quarter of 2024 marked a pivotal moment for Snip. We reported record EBITDA of $708,649 for the quarter, our highest ever. This represents a significant milestone for the company as it highlights the operational discipline and strategic focus that we've implemented over the past year. It's also worth noting that this achievement comes on the heels of a $600,000 EBITDA loss in the first half of 2024, underscoring the pace of our turnaround. Equally important is our margin improvement. The third quarter gross margin surpassed 62%, up dramatically from 32% in the same period last year. This improvement stems from our deliberate strategy to transition away from a single lower margin legacy contract Q3 revenue was 6.65 million. Sorry. Down 22% year over year. This decline. Sorry. More people in the waiting room. Just have to get them in. I apologize. Yeah. Equally important is our margin improvement. For the third quarter, gross margin surpassed 62%, up dramatically from 32% in the same period last year. This improvement stems from our deliberate strategy to transition away from a single lower margin legacy contract. Q3 revenue was $6.65 million, down 22% year over year. This decline was again solely driven by the termination of a single low margin contract that continues to weigh on our year-to-date reported revenues. Our core business remains very healthy and is comprised of high margin revenue stemming from our over 90 plus clients, many of whom are Fortune 1000 members. That single contract was expected to sunset. It has and now our core growth is emerging as we have now completed the gambit integration into our Snipcare platform. Looking at the first nine months of 2024, we achieved a positive EBITDA of $120,866, a strong improvement compared to a $1.94 million loss in the same period last year. Our bookings backlog also hit a near record $15.5 million as of September 30, 2024, compared to $14.5 million a year ago, setting the stage for sustained growth. I'd now like to turn the call over to Richard Pistelli, Interim CFO, who will discuss our financials in more detail.

Thank you, Atul. To build on what Atul has already mentioned, I'd like to provide a deeper dive into our financial performance for the quarter. Revenues in Q3 totaled $6.7 million, down from $8.6 million in Q3 2023, and $16.2 million for the first nine months of 2024, as compared to $22.6 million for the same period last year. As you've already stated in previous communications, this decline in revenue has been deliberate as we exited a single low-margin contract that was inherited as part of our last acquisition. Gross margins have now reached 62% for the quarter and have averaged 60% year-to-date, as compared to 32% and 28% in the respective periods last year. Q3 EBITDA of $708,649 marked a significant increase from $33,408 in Q3 2023, while year-to-date EBITDA of $120,866 reflects a major turnaround from a loss of $1.9 million during the prior year. Our net income in Q3 amassed $295,580, as compared to a net loss of $184,885 in the comparative period. However, year-to-date net loss remains at $1.4 million, which includes $1.6 million in non-cash expenses. As of September 30, 2024, our cash balance increased to $4.6 million from $2.9 million at the end of 2023, and the company remains debt-free. We believe that the strategic investments made over the past two years in our people and our product suite now firmly position the company for sustained profitable growth. These results validate our strategic initiatives and highlight the underlying strength of our business model.

Thanks, Richard. Let's move on to a bit of a strategic outlook. Let's start, of course, with our core business, which continued to have a strong quarter and healthy top line growth for the first nine months of the year. Our updated investor presentation on our website should help shed some more light on our underlying strength in our core business on both the top and bottom lines. More of our largest clients are increasing their spending on our solutions, and we've had some new logo wins as well. As we stated earlier, we ended the quarter with a record bookings backlog of close to 15.5 million. Those following us closely on LinkedIn, they've seen us recently post the results from our proprietary SNIP 2024 holiday shopping trend survey, have seen a SNIP leadership present at the Parts to Purchase Institute, Digital Grocery Summit in Hamburg, Germany, and the Digital Grocery Summit in Amsterdam, launch holiday digital programs for Snickers, Keto's, Vodka, Jim Beam, Kellogg's, Nestle, Purina, Conagra, O'Reilly, and Lego, just to name drop a few key customers. Our core SNIP business continues to thrive by focusing on high margin contracts and operational excellence. We've achieved a seamless integration of Gambit into our infrastructure. With all costs related to Gambit now behind us, it's fully positioned to contribute to our margin profile going forward. Now I want to take a moment to highlight performance and potential of SNIP Media, our financial media network. This platform has been live with Bank of America for six months and it was recently deployed on Amplify. We haven't made an announcement about that yet. It's a leading banking loyalty platform that serves over 250 regional banks across the US. FMN, our financial media network, is already delivering impressive results. The platform currently reaches over 30 million monthly active users and is growing steadily. In-stores Q-level grocery offers are experienced redemption rates of between 5% and 10%. Active users clip six offers on average, redeeming two per shopping trip. All great metrics. This performance demonstrates the scalability and effectiveness of our media platform. Looking ahead, several other financial institutions, including Triple, who we have previously announced, are already integrating for targeted deployments in 2025, further helping us to grow our audience of active users. In closing, Q3 2024 represents a very successful quarter for Snip. We have emerged from a period of operational realignment and the results of our hard work are evident. As we have one month left in traditionally our strongest quarter, I am pleased to report that SNP will be EBITDA positive for the full year 2024, a significant achievement compared to both 2023 and the first half of this year. This milestone reinforces our confidence as we enter 2025 with momentum. Thank you to our team, partners and shareholders for your support. We can now move to Q&A. If you have a question, can you raise your hand virtually or in the chat, ask us a question and we'd be happy to respond. The first question from Jeremy, how are you doing? Can you speak on the deferred revenue? Yep, Jeremy, that is correct. simply clients who trust us with their money, prepay us for the contracts that they've signed with us, and that deferred revenue will eventually convert into revenue as those programs go live and we get to recognize the company.