Venzee Technologies Inc.

Q3 2021 Earnings Conference Call


spk_0: oh year two thousand and twenty one financial results conference call all lines have been placed on mute to prevent any background noise after the speakers remarks there will be a question and answer session if you like to ask a question during this time simply press star than the number one on your telephone keypad if you have my to withdraw your question press the pound key thank you i would wouldn't like to turn the call over to mister john abrams please go ahead sir
spk_1: that you operator and the into our discussion of nz technologies to three twenty twenty one financial results i'm john abrams as president and ceo i let a business model and operational turn around here and banzi starting in like twenty nineteen we began our pivot to assess model platform in the fourth quarter of twenty nineteen we come pleaded it's at the end of fiscal year twenty twenty with initial revenue generated from early sales of our mess an actor product today and our third consecutive quarterly earnings call and pleased to share that we are on track for our year and targets with zero churn building revenue strong pipeline conversion ducks contract and increase direct sales or mexican actor product or called today will cover our benzene growth is reflected in our key performance indicators and how are kp i progress insurers we meet or exceed or twenty twenty one and twenty twenty two goals for revenue am as connector sales following my remarks are see a po baron battersby or provide a financial review and we will conclude our call today as we do each quarter with an open q and a session before i get started i want to lie you know that the own earnings release reference done this call the associated em dna as well as the slides we'll speak to can all be found and mean buster section of our website investors that benzene dot com today's thought man claude forward looking statements about benz's future performance actual performance could differ from what as suggested by our comments information about the factors that could affect future performance is contained in our state are violence but those of you not familiar with them the we are software as a service technology platform operating in the very active consumer retail sector of the global supply chain we are a product we sell a product called a actor connected that allowed brands those that make products the digital they can act to retailers using a proprietary a i software available from a single cloud based global instance in commerce today digital content cells physical product without the ability to get product information in the right digital format products do not sell digital is the foundation for all retail sales so natural a consumer brands that have a digital advantage will men in their market then he's mask an actor is unique in the industry and use as a i artificial intelligence to provide the digital advantage brands need in order to expand and maintain complex global sales channels using tax revenue people are proprietary mess actor stand alone as most efficient digital path to more them four hundred retailers allowing proof sales margin programs and manufacturers are intelligent solution outperforms human teams and we know that because we have been able to measure how much time our clients save when using our a i compared to their legacy solutions today or clients tell us mess connectors allow them to expand a fraction of the manual human effort moving product information retailers one brand event oldest that because of menzie when faced with an unprecedented an unprecedented supply chain and labour challenge bends the allowed them surat that's remarkable a limited here do an area you are right to look at as a mark in our success revenue we can break taxing great organizational talent and a great plan if we can't deliver on revenue well then we just months at sea i see if i will cover the financial details on this call in a moment but let me address revenue straight on when i click i'm a c e o role the your events and twenty nineteen i said ambitious rabbit bills to achieve those goals we built a set of partnerships in like twenty nineteen and into twenty twenty those partnerships primarily with product information management company generated hundreds of mess connect the requests but ultimately have not deliver the revenue we expected in part that is due to mask connector discounts i discussed in our last are install but i'm an activity in the us has continued
spk_2: do in fact as well
spk_1: some of our initial partners have been purchased by competitors who had little interest in supporting our growth other partners while still keenly interested in our platform became engaged in a many activity that has pushed our ability to monetize those partners and twenty twenty two so while partner driven sales approach has merit it has not produced the results we expected in that timeframe we defined a we have dealt with that and the second quarter this year we committed ourselves approach to address mile and five job parts that have proven sales leader to accelerate revenue in line with our bills and que three joelle expanded his team to give us the horse power to directly targeted consumer brands manufacturers and retailers when i have the capacity to both and bird a robust sales pipeline and develop high value contract revenue opportunities four of those opportunities are quite significant in terms of revenue today we are in the final stages of negotiation on these opportunities and expect to share more details with you before you around by way of reminder our goals for twenty twenty one and twenty twenty two are big and include selling more than two thousand message and actors by the end of this year and recognizing one hundred ninety five thousand u s the monthly recurring revenue appropriate sales discounts card for the gap between er mest connector list price and the revenue we expected generate by year and for twenty twenty two year and we've set a goal of some thirteen thousand my skin actors and significant so she did m r our revenue goes haven't changed or sales approach has and we will deliver the results we expect may pivot to another set of numbers that drivers your danzig rtp eyes are key performance indicators our traction in the market is reeling growing we don't just say that we measure it we measure a success each quarter by recording our a traditional saf model set of take the eyes along with other financial information or quarterly kp eyes were released yesterday i want to quickly review our archaic i've metrics for two three the number of retail channels available the clients through our platform remained unchanged a four hundred and twelve get some perspective on that number or competitors typically offer a small fraction of the top us retail base we offer a far greater number of global reach out connections and can expand our connections rapidly in line with klein expressed and contracted need
spk_3: our four hundred and twelve retail channel connections represent the vast majority of big box and e commerce retails retailers and provide benzene advantage over competitors are ready therefore we do not face pressure from clients at this point add more channels however as we grow our operations and twenty twenty two we will
spk_1: add to this number but for now expected to remain generally as is sales pipeline growth for the quarter just and it remains strong with more than ten thousand active sales opportunities representing a forty three percent increase from end of two to thanks increase is due in part to end up great of our website the now allows direct purchase of or match mask and actor product of the most part or site functions as lead generation a brand for instance would not purchase several hundred connections through that site but they do seem to find are offered a purchase would say proof of our product utility that drives those larger brands to connect with our sales team for deeper contract based discussion while growing our sales pipeline as important converting those opportunities is more so to do that and two three we had a good a so proven sales leaders to our team and have been able to convert sales pipeline opportunities more quickly and fact we have recently moved for large clients in the contract negotiation for mask and actor purchases that if close suggested the combined sales opportunity above are twenty one and twenty twenty one and even are twenty twenty two revenue goals you'll note on or to be our chart we reached eight hundred and twenty sold mess connectors by the end of the three as i called i my previous comments some of those connectors were added in ball through partnerships partner relationships and que wanting you to and are not generating revenue as expected said we determined that some number of these connectors will ultimately not perform they'll be removed from our kp i report and will disclose that publicly finally i want to call out the term remained at zero for the quarter as a close up my prepared remarks for today i know you can tell my enthusiasm for growth of are disruptive technology platform continues to increase our hard work from the quarters generating contract now being finalized the will help us achieve
spk_3: revenue target
spk_1: we are winning more we're winning deals more frequently now and i'm an out several brand wins and our first significant contracted revenue deal but activated a set of well known multinational consumer brands with mess connectors for several of the big box retailers in north america we are confident about our year angles are take the eyes are indicative of strong performance or ai platform is the most advanced than our industry and our sales team will continue along their strong trajectory we are on the path to use our tech and sales momentum to get at the head against market leaders in our space or ai is a significant advantage against in tatters because unlike any of our competitors are ai allows memes a to grow our customer base without hurting our margins for every client added to the them a platform are a i get smarter and better at doing it's job and the time it takes time or to client decreases it has taken a hard work by telling people to put us some a strong position where am i continued contract wins and a competitive market are helping new unlock rp cancel the transform this market dominate our competitors thank you for your engagement participation in our two three earnings scalp i'm going to turn the fall over to deron batters me or cfl in vancouver canada for more discussion on our financial results
spk_4: derek
spk_5: thank you john
spk_3: much money than battersby served as though when they see a thousand so i jumped over in one night he a marker and it's and member of the games do that cherry national campaigns and my history is that now helping in advising in staging both i'll be discussing the oven the results for iraq inquiry into and the thirtieth
spk_4: one and the numbers i know reference here are in us that the unless i analyzed know for going into the financial that i love with you on an important items on as i noted that we did it to the
spk_5: software is a service or sas model our one and the company seen for consecutive quarters of the feast on now when he broke
spk_4: starting from zero and
spk_5: gov mac relating to the thinnest them we'd moved on monday that margin sales to positive margin revenue sales and he can see significant girls that are says each that message if i plan on noted in in a slight we also out recently and that a u s o t c ticker and be nz as an onion of see both board in the financial sam yeah season three months earlier apartment and sixteen
spk_4: thousand dollars of revenue and the nine months due to date we had thirty nine thousand hours of sad
spk_5: a fire them are you to the carriers we and milk in the three months and twenty six thousand in revenue for the nine months
spk_3: that have in the previous year was not on model harlem's as model of the lower revenues from the said they are higher class salesman that and then he wasn't playing and then heard of the pivots out and leniency prevailed galvin to act as a benefit from the sale muslims by night about and it's funny
spk_4: it's funny the to paradigms now will be based on out and rarely on on my already i'm where them see yeah the second consecutive quarter we're we're so a positive margins go out there are three months ago pop it was eleven thousand
spk_3: as profit margin of sixty seven ballot and sixty seven percent of could sixty two to to you today we had the accident on a two thousand after a that
spk_4: that margin was fifty six percent in a family or a person to our best selves relatively minor it's primarily now just server software costs
spk_3: overhead you'll know said this has been an increase primarily due the additional hires over the last year we them increase the sales and marketing teams and are excellent implementation attack there are also dna about of increase he was a meager about a year ago and going a mile from a very red skelton staff with very little overhead i'm
spk_5: so you see those numbers have increased am looking through the numbers you'll notice at the at the stock based on and to the options and parse user which best for her arafat on another so adjust the fair and these non cash it enters we see our costs for the three months being around eight hundred and twenty thousand
spk_4: in our first quarter the service five thirty second quarter seminal work on i just a to be as a tying it around the eight twenty fifth
spk_5: he sort of that level
spk_4: after the nine months ago he said just over two million of or costs
spk_5: in the previous year is one point it's easy to the there
spk_6: overall we posted net losses of and seven hundred ninety two thousand and three months two point four million and nine once and it give us the and zero cents per share for three months know once and for share loss or be
spk_4: nine not here today
spk_5: i'm
spk_4: elsa get to point out that we have received on one point five million a us s funding support and rarely see the exercise of words and some two options and some to recover
spk_5: i'm from us and canada after us the yeah if it be program in the us a check protection program you're able to access ninety thousand the u s their arm and that those repeat again and by the government in this switching to us the snake slide that be air cav table
spk_4: he we have two hundred and twenty eight million shares issued an outstanding day approximately our car one an athlete on and nine million outstanding warrants or two point two million stock options and one point nine million sir chair units
spk_5: sort of fully deluded approximately three hundred fifty four million shares outstanding and i'm a cynic current sales
spk_4: share price about and canadian we're at a mccaskill it's only two million a
spk_5: i'm all in all i'd say this quarter was on target where we expected from a sale
spk_4: those on a view out and we are set up tara strong use work out and jungle strong and on sales and the million am so do expect peter sales and in the arts arts and in here yeah setting us up for and very strong and know encouraging just of crete i'm seventy three times
spk_1: i'm for the directly partners all of our shareholders please reach out to ira and besser relations teams needs for and websites
spk_0: then that my form of discussion and had a bad done
spk_7: i there and operator if we can now open me a call to investors questions that would be great at this time i would like to remind everyone if you if i to ask a question please best ice and the number one on your telephone keypad will pass just a moment to compare the can a roster so john at some around here we had a couple questions come in be a mouse
spk_1: i guess it did one question here is what's different keep going to have more detail on the difference between these pim partnerships and these new contracts that year discussing of they've closed yeah at the so them partners are missouri very specific type of
spk_3: software solution that most large brands used to organize their product information we know several of those comprise
spk_1: that the challenge this has been a very active sector we're supply chain our consumer products he in the supply chain so a lot of investment over the last two years and and we've talked about that while we didn't realize is is how much that emanate activity would affect the partnerships we're building so that he interfered with a lot of those deals are the the idea of working with cams
spk_8: is not a bad a difference a really good idea
spk_1: there there was interference to monetizing mouse the difference with are contracted revenue now is twofold one most of our partner agreements were that they were a partner agreement and they didn't have set revenue and they didn't have said mess connector ah ah purchases in them so they would they would request a lot of of and actors for a particular brand but those worn under contract and as am and a activity interfered a lot of those requests would would go on hold the difference now is these are contracts they are with friends or or the marketing a marketing agencies for those brands so it is ah at essentially a direct relationship that we can monetize and much of the work is being done for those already so
spk_7: ellsworth contract signed will be able to recognize that revenue which is why you can you look i'm always tampered about them the i love over on i know it's disruptive i know it's a big deal but the difference in town between my previous investor calls is now we have the contract on the table they have revenues in them it's contracted and were in a much different position so long answer to a seemingly simple question that that's what inspires us here and fancy and validates the work we're doing
spk_1: and then you had discussed about increasing margins i guess the more the more connections that year
spk_3: your ears you're adding to to the to the brand's can you discuss settled that more yeah so this is an important point an ab i'd you you know arlen that i've been in in the supply chain sector for big companies for a long time and every time you add a a retail relationship for the you you have to add labor and so ah some of our competitors follow that model specifically in fact i would say all of our connect all of our camp petitions can petition follows that model so if you add a channel for a brown so
spk_9: brand day talking to retailer be you have to add labour to move that product information that what we do it then the in this was the attraction
spk_3: for me to avenge the to begin with
spk_1: is that the ai allows that connection to exist without a labour overhead so our competition
spk_3: every time they had a new customer they are road the margin because they had more labor work as well we do every time we out a customer we sucked in all of their data apply it to the ai ai as a learning i compute based learning algorithm and so every time we bring in a
spk_10: quiet our algorithm gets a bit smarter and it's easier for us to match with the retailers that's i don't want to get to talking about it but net net every time we out a customer are a i gets more intelligent and it gets easier for us to move content to a retail channel or
spk_3: set of channels so not only do we have not a labour overhang by the process becomes easier for our clients so our margin improves over time and we're already seeing that happen
spk_11: that's all i had an email to the you
spk_3: i've seen my i've seen a yeah go ahead
spk_1: there are no questions on this answer
spk_3: so i have a two and a
spk_1: on my screen so there's a couple of questions in am i see if they'd been covered the question is it's good to see quarter over quarter revenue growth from the new sas model that we've all been waiting for yes
spk_3: can you explain are you going to convert eight hundred and twenty so connectors to hundred and ninety five and emma are by and of year
spk_1: so you you've heard a consistent theme the my remarks today about contract revenue as a sudden with my remarks we have several of those contract on the table they aren't him the in the negotiations stage and and
spk_3: very comfortable with how those revenues look for us the durability and the number of met connectors that are are signed up for the other part that's really interesting to me is that the aggression that these ah
spk_1: contracts the company's behind them out about getting up an operational we are already doing work with some of those camp well i would say all of those companies and so that tax validation we're not going to have some some downside late in the game or after the contract such as sign that says oh this isn't my we're expecting they know exactly what the platform does in many cases they have some type of operational experience on our platform already and so we are performing for big brands to big retailers and am very happy that that the numbers in those contracts get us that where we need to be this year and are are really a good indicator that week and get our numbers which are huge numbers for twenty twenty two but these contracts get us there some very pleased with the progress very pleased with our new sales team they are an aggressive bunch of folks at and and really doing a good job at looking a pipeline opportunities in converting those i am another one that popped up on the screen or must uphold operator and arlen if there's others out there
spk_3: and not not doing anything out on go through this next one
spk_1: company has been saying it is quote strongly position to achieve two thousand mexican actor
spk_3: assume that to be sales by the end of the year
spk_1: we're now more than halfway through the year with eight hundred and twenty what will allow wednesday to reach two thousand by the end of year again i'm gonna go back to the contract on the table there's there's in excess of those numbers in those contracts and so that's what gives me the confidence
spk_12: and very pleased with where we are
spk_13: other one has popped in
spk_14: his
spk_15: we do have a question answer when you're ready they have a question from a line of riot road with high financial great
spk_16: is how you doing
spk_1: great dream would you guys consider doing like i'm mid quarter update or something like if you've already got one of these contracts in place just to give those numbers ted make most of the question though is a are all around how you get two thousand nine hundred ninety five thousand
spk_17: m r misery value and doing that and with the when you already have contracted to so the taking people can do the metrics on their owner
spk_1: yeah that's yes and and and the metrics the people wanna do his job given the numbers that you're selling and the m r r as you know what exactly is is the sales price let me just be clear on that are list prices two hundred and fifty dollars per reach out and action per month so it's a it's a great model we have discounted is from that two hundred and fifty and so what people would be able to get out of that recording is where those discounts are and i'm quite happy with them discounting is is a part of the sales game and and i'm okay with that we have our list price it is what are some the smaller brands who have been buying connections they are panelists price the bigger contracts for discounting that the core of your question would we out amid quarter yes certainly i you know we're kind of
spk_18: getting to the end of the year so arranging that isn't it impossible but you know around christmas or something
spk_11: but mid quarter but sir wicked wicked consider that and we will press release these
spk_1: are very pleased with where we are today and will release that information as as it matures but doing a a call by i i would love to do that we spend a lot of time interacting with and baxter's though are doing it in a consolidated fashion is is easier for me to begin with and and i'd love to share that goodness they so the question
spk_3: and they are no further questions on this end
spk_1: as it or a one that came in that very insightful so what's the average time it takes to close a large accounts from first contract to the new client committed to them they so ah that will more call that commitment a contract here's a here's i'd let me tell us short story on that
spk_3: if you've been to our website lately you can see expressed on their website
spk_1: maps connectors for sale first call out on that none of our competitors can offer that so you gave them i don't think i should call up it matters but you can find them through our investor deck none of our competitors can do that because most of those engagements become consultative in nature we can actually provide you the code we can take your credit card you can buy that connection so here's an interesting story wanna bark at large contracts and has kids so significant contract hey man vague they were coming to our site and they were investigating connectors to big box retail and we can see who they are and we can see what they're looking at they did that for i would say a couple of weeks we were aware or marketing team was aware of sales team was aware and eventually they reached out to sales directly and said hey we see all these channels were very interesting
spk_3: in them and more how do we put together a deal that happened
spk_1: less than sixty days ago so in under two months we've taken somebody who we didn't know was interested or in play for a deal and with converted that to a very thorough vetting with our tech team they were meetings at the company site with our tech team talking about our yea i what it does so thoroughly vetted
spk_0: those meetings all took place last month and on this month we are in breadline discussions so i don't know that that represents at we don't have enough time in see yet to know that that is normal for a contract conversion but i'm very pleased that going from zero to a row
spk_1: really large contract and under sixty days so hopefully that get to that question and i'll just pause any more questions out there my my q is is sort of dry so we'll poll one more time arlen an operator and if not we will wrap the call and
spk_0: i'm good

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