Snipp Interactive Inc.

Let's start. I think we have a good sized audience today. Good morning and welcome to the SNIP interactive third quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. Following the company's prepared remarks, we will open the call for questions. Please note that today's call is being recorded. Before we begin, I'd like to remind everyone that today's call contains forward-looking statements within the meaning of the applicable securities laws. These statements are based on our current expectations and involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and uncertainties, please refer to our public filings available on CDAR and our Investor Relations website. We do not undertake any obligation to update any forward-looking statements made during this call except as required by law. Good morning everyone and thank you for joining us. The third quarter continued to reflect the trends that I had previously spoken about that we had first observed in the second quarter. Clients continue to be holding out in budgets and program launches. The state of confusion, as I had mentioned in my previous quarterly call, sustained into the third quarter, where we continue to close business, but not launch programs at the same pace, affecting revenue recognition in the short term. but adding to our deferred revenue, which bodes well for the future. The difference, however, with this quarter is we were prepared operationally to adjust to this new operating paradigm. And consequently, I'm happy to say we delivered not just cash flow from operations, but also positive EBITDA and net income on a reduced revenue base. While our revenue recognition, as was the case in the second quarter, was impacted with slower pace of launches, With revenue declining 13% from the same period last year, however, we still managed to grow our revenue for 9 months by 6%. Also, the upside for the future is that our deferred revenue continued to stay at elevated levels reaching $7 million. This will eventually turn into revenue as we launch our backlog of programs. The good news is that our backlog remains healthy at approximately $15.2 million. Looking forward, I'm particularly excited by the soft launch made with our retail media partner, Inmar Intelligence. You can refer to our press release dated September 16th, announcing the partnership. Inmar Intelligence is a leader in data-driven media and incentive technology. A collaboration with them marks a fintech loyalty first, with Inmar partnering with SNIP as its exclusive digital incentive partner for SNIP's financial media network. Through this partnership, Inmar's retail partners can expand the reach of their loyalty programs to SNP's financial media network of over 67 million consumers and a growing list of financial institutions. As a reminder, Inmar's digital incentives retailer network currently reaches over 200 million shoppers across North America and delivers promotions at more than 40,000 retail locations. The partnership is slated to be fully live in Q4, launching within SNP's existing Integration into the Bank of America Deals program. While we work towards the full rollout, the program was soft launched on November 18th across nine regional grocers covering over 1,100 locations nationwide. Over 500 offers were made available from the Inmar network to Bank of America customers via SNP's network. And data from the first two weeks of the soft launch has been very, very encouraging. We look forward to sharing more with you in the coming weeks. With that, I'd now like to turn The call over to our interim CFO, Malcolm Davidson, for a more detailed look at the financials.

Thank you, Atul. Good morning, everyone, and thanks for joining our call this morning. As Atul noted, we continue to build on a solid financial and operational foundation that positions the company well for future periods. Revenue for the three months ended September 30, 2025, was $5.8 million, a slight decrease from $6.7 million in the same quarter last year, a decrease of approximately 13%. Gross profit for the quarter was $3.7 million, resulting in a gross margin of 64% compared to 62% in Q3 of last year. The increase in margin is a result of a decrease in operating costs. During the quarter, the company initiated several cost reduction initiatives to preserve cash until such time as new campaigns are initiated and the cash is received. Turning to EBITDA, we reported EBITDA of 0.5 million in Q3 compared to EBITDA of 0.7 million in the prior period. Moving to the balance sheet, we went to the quarter with 3.9 million in cash, up from 3.7 at the end of Q4 2024. Cash flow from operations for the quarter was 0.9 million, a decrease of about a million and a half. The primary reason for the ongoing investment, sorry, the decrease is the ongoing investment in infrastructure for our operating platforms, campaign infrastructure, and the addition of key personnel. Accounts receivable at September 30th were $3 million compared to $3.7 million at December 31, in line with the company's historical average. Cash and accounts receivable were $6.9 million, essentially unchanged from year end. The company continues to maintain a strong receivables turnover, and based on its current aging and collection trends, no provision for doubtful accounts or bad debts is required at this time. Booking's backlog was $15.3 million at September 30, compared to $15.5 million at the end of Q3 2024. The backlog, which coordinates closely with deferred revenue as it reflects contracted programs and not yet recognizes revenue, continues to provide solid visibility into the future revenue and reflects sustained customer engagement across the company's product suite. Deferred revenue was $6.9 million at September 30th, up from $5.3 million at the end of the year, reflecting a $1.7 million increase. This growth highlights strong customer commitments for upcoming programs that have not yet commenced. The company expects to recognize the majority of this deferred revenue as earned revenue over the next 12 months. Overall, the company remains focused on maintaining financial discipline while investing strategically in areas that support sustainable growth and long-term growth. With that, I'll open up the call for questions.

Thanks, Malcolm. Yeah, if people want to just ask questions via chat or put their hand up, I can unmute them. Thomas, you can unmute yourself. Hey.

Hey, Atul. Good morning. Nice to see you. It's nice to see gross margins pick up this quarter despite the softer growth. I know you guys did a lot of cost optimizations. I'm just wondering if we can expect a similar level of gross margins and costs going forwards?

Yeah, actually, you know, we're continuing to work on the cost side. Let's start with the cost side. So you know we've built out a lot of infrastructure for our media business so some of those you know some of those now costs will start falling now it's a matter of you know partnerships and selling offers into that channel so you should see a continued focus on cost reduction the next you know the next set of cost reductions that we think will show up will actually be visible in the second quarter of next year um as we continue to optimize our you know our delivery models right um that's one on the margin side yeah we think our margins will continue to be in these in these ranges um they've always historically been in these ranges um so that should also continue um as as things evolve

Yeah, that's great to hear. And also on the outlook, you know, you previously said that there were some slowdowns in the second half here. Given that we're in December now, do you see anything changing as we head into the new year?

At this stage, honestly, you know, you can see the numbers from this quarter and last quarter. We continue to have a good backlog and we continue to have high deferred revenue. um it's just a lot of indecision and that indecision seems to be the new standard so um we are adapting to that new indecision um quite rapidly like i said last quarter and you know we don't see any real clarity in terms of i mean do you guys know where the economy is going i mean there seem to be two parallel economies running in america right now right um there's the economy of of you know people who you need, for example, if you need someone to come and fix your drywall, you're not going to find someone or you need a doctor's appointment, it's going to take ages. But on the other side, people are continuing to spend money and cash. And there's a great study that just came out about these two parallel economies. So, you know, our business kind of like, gets impacted by how people spend and what their views are in terms of where the world's going, our clients really, right? And they don't actually have a clear view because they're trying to service to economies. So I think this is just a new operating paradigm and we are adjusting to it.

Yeah, that's definitely understandable here. I guess my last question is on the partnership with Inmar Digital. I know you guys have like a pilot launch in Q4. Maybe if you can detail what that ramp would look like going into 2026 and maybe some of the financial implications. Thanks.

Yeah, so this is part of our financial media network, part of SNP media that we've built out. To remind everybody, we have an audience of over 60 million people. That audience is people using the Bank of America app, banking customers, the PNC Bank app, and about 250 credit unions that are slowly expanding, hopefully to get to about 800 credit unions. We actually have a bigger audience than most of our apps out there. We already do, actually. Now the question is, you know, the chicken and egg in terms of now that we have the audience, now we have broken the chicken and egg, now we have to go after clients to come in and partners who want to publish their offers into these channels. So Inmar was the first of these partners, and, of course, they're a whale. I don't know how many of you know of Inmar, but I would strongly encourage you guys to go look at the Inmar business. They run retail media networks and, you know, loyalty programs for, the leading retailers in North America. So they have, at any given time, over 2,000 offers running across different retailers. You know, Kroger is one of their biggest retailers. You know, that we have now the ability to tap into for them. You know, they have a channel to publish these offers into this audience that has not been tapped before. And that's the scope of where we are with them. So in terms of the rollout, right this launched it launched pretty rapidly in November middle of two weeks back about you know 500 offers were pushed through small regional retailers and as we continue to ramp with them we should see national retailers come on board and that would be one channel of offers that we can monetize through our audience right of course at the same time these offers coming in are all from marquee clients if any of you guys have the bank of america app i would encourage you guys to open it and go look at the bank of america deals page you'll see a section called my heart icon grocer and this is the first you know ever skew level based offering that we have brought to the banking channel and we're the first in the world to do it um As we put in more nationwide retailers and as more offers hit that channel, we're going to see obviously our revenue start increasing too. The pace of that adoption is something new for consumers too. It takes a little bit of time to train users on new behavior, but the early feedback and the early click-throughs that we're seeing are just, it's incredible. It's about 2% of the people are interacting with our tile on the Bank of America app, which is very, very high. and as they build their shopping carts and get used to seeing everyday offers inside their banking apps when they go to check their bank accounts, pay their mortgages, pay their car loans, we'll start seeing adoption of this at a larger and larger scale. Cardlytics, I mentioned Cardlytics because they bring retail-based offers to banking channels. What we've done is we've taken a page out of the playbook to bring skew level offers to the banking channel because no one's been able to solve that equation so far. So we have a lot of great hope that this business starts ramping and with our revenue too. But the best part is that it has a flywheel effect because the clients who are sitting there looking at this new channel saying, hey, will this audience actually work for us? All our existing clients in our core SNP business whom we already have relationships with, who will also start putting in offers directly because they do offers outside of retail environments too. So we hope that, you know, as they see their own offers coming into these channels that are controlled by Enmar, right, they'll be, you know, they'll think about their overall couponing strategy. Also, to come back to us and say, hey, now you guys can do that. Can you actually take more of our budget to do nationwide couponing based on our receipt engine, based on our barcode offers, etc.? ? So, sorry, long answer to your question, but it is, you know, one of those things that could really benefit the company in a big way outside of our core business, which continues to chug along quite nicely.

That sounds great, Keller. Thank you.

Any other questions that we can help answer? Okay, I guess No other questions at this moment. So thank you, everybody. And we will come back to you next year, I guess, with our audited financials. We're working hard already on the audit to deliver it on time with our auditors. And we hope to get back on our, you know, timely fashion with everybody with the audits. But thank you.