Release Date: May 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Presto Automation Inc (PRST, Financial) completed a $3 million financing, which, along with cash on hand and projected revenues, is expected to finance the company through June 15, 2024.
- The company has made significant commercial progress, including active expansion negotiations with seven franchise groups and successful pilot programs with four well-known QSR brands.
- Presto Automation Inc (PRST) launched Presto Voice Pure AI, which has shown promising results with AI efficiency rising from around 50% to 80% at the initial test location.
- The company has developed a Spanish language ordering feature, enhancing inclusivity and customer experience in diverse markets.
- Presto Automation Inc (PRST) has a proven ability to integrate into a broad range of customer environments, including multiple point of sale systems and customer hardware, demonstrating flexibility and scalability.
Negative Points
- Revenue for Q3 2024 was $4.5 million, a decrease from $6.6 million in the same quarter the previous year.
- Operating expenses for Q3 2024 increased to $15.5 million from $15 million in Q3 2023, driven by higher general and administrative expenses.
- Adjusted EBITDA for Q3 2024 was a loss of $12.2 million, compared to a loss of $9.7 million in the same quarter last year.
- The company is still in the process of winding down its heritage Touch pay-at-table business, which has been a challenging transition.
- Presto Automation Inc (PRST) faces ongoing financial uncertainties, including the need to raise an additional $3 million in equity by June 7, 2024, to extend forbearance with its principal senior secured lender.
Q & A Highlights
Q: Can you provide more details on the recent financing and its implications for Presto's financial stability?
A: (Gee Lefevre, Interim CEO): On May 20, 2024, we completed a financing of $3 million in common equity and subordinated debt from various parties, including our existing investor, Remus Capital. This, along with cash on hand and projected revenues, is expected to finance the company through June 15, 2024. Metropolitan Partners Group, our principal senior secured lender, has agreed to extend forbearance until July 15, 2024, if we raise an additional $3 million in equity by June 7. This agreement is crucial for creating a capital structure that positions Presto for the future.
Q: What is the status of the wind down of the Touch pay-at-table business?
A: (Gee Lefevre, Interim CEO): We have decided to focus all efforts on Voice AI and are winding down the Touch business. This process is expected to be completed by the end of the next quarter. This strategic decision allows us to concentrate on improving our Voice AI product, leading to greater innovation and significant cost reductions.
Q: Can you elaborate on the commercial progress and new customer acquisitions?
A: (Gee Lefevre, Interim CEO): We are expanding live deployments among existing customers and are in active negotiations with seven franchise groups, representing nearly 500 locations and approximately $10 million in ARR. We also have successful pilot programs with four well-known QSR brands, representing 1,300 locations or $25 million in ARR. We recently signed an MSA with one brand for immediate deployment in 25 drive-thrus and are close to completing negotiations with the other brands.
Q: What advancements have been made in the Presto Voice AI product?
A: (Gee Lefevre, Interim CEO): We launched Presto Voice Pure AI, which eliminates humans in the loop, and it has performed above expectations, with AI efficiency rising from 50% to 80% at the initial test location. We are also developing unsupervised AI, which has shown efficiency improvements from 45% to 70%. These advancements will help improve margins and accelerate profitability.
Q: How is Presto addressing the needs of the mid-market restaurant operators?
A: (Gee Lefevre, Interim CEO): We are targeting the mid-market restaurant operators, leveraging our ability to integrate into various customer environments and our 10-year track record with restaurant operators. Our new approach to menu ingestion simplifies the menu-building process, enabling rapid expansion across multiple brands. We are the only player in the market capable of serving the mid-market of the North American QSR space effectively.
Q: What are the financial highlights for Q3 2024?
A: (Stanley Mbugua, Interim CFO): For Q3 2024, we reported revenue of $4.5 million, down from $6.6 million in Q3 2023. Operating expenses were $15.5 million, a modest increase from $15 million in the prior year. Adjusted EBITDA was a loss of $12.2 million, compared to a loss of $9.7 million in the same quarter last year. We expect Q4 2024 revenue to be between $1.6 million and $1.9 million.
Q: What are the new features and tactical product developments in Presto Voice AI?
A: (Gee Lefevre, Interim CEO): We piloted a Spanish language ordering feature in Southern California, allowing seamless transitions between English and Spanish. We are also working on multi-lane support, customizable upsell, next hero integration, and further audio improvements to optimize our Voice AI platform.
Q: How is Presto enhancing its customer support and success functions?
A: (Gee Lefevre, Interim CEO): We have streamlined our customer support process, integrating it with engineering and product teams to triage and prioritize issues quickly. This approach has led to higher non-intervention rates and improved customer satisfaction. We are committed to investing heavily in customer success and support to differentiate ourselves in the market.
Q: What is the vision for the evolution of Presto Voice AI's capabilities?
A: (Gee Lefevre, Interim CEO): We envision five modes of Presto Voice AI: Pure AI, Unsupervised AI, Supervised AI, Agent-led, and Snooze. We are focusing on developing unsupervised AI and testing a single solution that allows different modes to be used at different times of the day. This flexibility maximizes non-intervention and customer satisfaction while optimizing agent costs.
Q: What are the strategic steps taken to reduce operating expenses?
A: (Stanley Mbugua, Interim CFO): We have reduced operating expenses by winding down the Touch business, closely managing headcount and vendor costs, and streamlining operations. These steps allow us to maximize the rollout of new Voice AI locations and move towards a profitable business model.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
