Release Date: June 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boardwalktech Software Corp (BWLKF, Financial) has a strong base business with a roster of Fortune 50 clients, providing a solid foundation for future growth.
- The company has shifted its sales strategy to leverage teaming agreements with large global IT services and consulting companies, which is expected to improve conversion rates and decrease sales cycles.
- Boardwalktech Software Corp (BWLKF) has seen a 12% increase in revenue from new and recurring SaaS licenses year over year.
- The company has maintained high gross margins of around 89.6%, indicating efficient cost management.
- Boardwalktech Software Corp (BWLKF) has a stronger balance sheet with $2.2 million in cash balances and another $0.5 million in trade receivables from new and renewing annual licenses.
Negative Points
- Total revenue for fiscal 2024 decreased by 8% compared to fiscal 2023, primarily due to a 50% decline in professional services revenue.
- The company's annualized recurring revenue (ARR) remained flat at $5.6 million as of March 31, 2024.
- Net loss for fiscal 2024 was $3.1 million, although this was a 13% improvement from the previous year.
- The impact of the company's realignment and cost efforts announced in January 2024 is expected to be realized in the upcoming quarters, indicating potential short-term financial strain.
- Despite improvements, the company still reported a non-IFRS loss of $1.6 million for fiscal 2024, comparable to the previous year.
Q & A Highlights
Q: Can you elaborate on the realignment and upgrade to your sales and marketing strategy?
A: Andrew Duncan, CEO: We shifted from a traditional direct sales model to leveraging teaming agreements with large global IT services and consulting companies. This approach allows us to access new prospects and customers through our partners' existing relationships, improving conversion rates and decreasing the sales cycle.
Q: What impact did the new sales strategy have on your business in fiscal 2024?
A: Andrew Duncan, CEO: The new strategy has already shown positive momentum, with increased deal flow and accelerated uptake within existing clients. A key partner's study demonstrated a 10x ROI improvement using our Velocity product, which has boosted our confidence in this approach.
Q: How did the financial performance of fiscal 2024 compare to the previous year?
A: Carmelo Marrelli, CFO: Total revenue for fiscal 2024 was $6 million, an 8% decrease from $6.5 million in fiscal 2023. However, revenue from new and recurring SaaS licenses increased by 12%, offset by a 50% decline in professional services revenue.
Q: What is the current state of your annualized recurring revenue (ARR)?
A: Carmelo Marrelli, CFO: Our ARR as of March 31, 2024, was $5.6 million, which is flat compared to the prior quarter. We calculate ARR based on the past three months of recurring revenue, reflecting our rate exiting the year.
Q: Can you provide more details on your gross margin and net loss for fiscal 2024?
A: Carmelo Marrelli, CFO: Gross margin for fiscal 2024 was 89.6%, slightly down from 90.6% the previous year. Net loss for fiscal 2024 was $3.1 million, a 13% improvement from the $3.6 million loss in fiscal 2023, mainly due to a $5 million decrease in adjusted operating expenses.
Q: What are your expectations for professional services revenue in the upcoming year?
A: Carmelo Marrelli, CFO: While we expect a rebound in professional services revenue, our primary focus remains on increasing ARR. The impact of lowering professional services revenue was larger than expected last year, but we aim to balance this with growth in recurring revenue.
Q: How is your partnership with TCS progressing?
A: Andrew Duncan, CEO: Our partnership with TCS is going very well, with over 35 TCS team members certified on the Velocity platform. This collaboration is expanding our footprint at a large mutual banking customer and attracting interest from other IT services and consulting companies.
Q: What are your plans for future growth and profitability?
A: Carmelo Marrelli, CFO: Our goal is to achieve profitability by the end of the year without compromising long-term growth opportunities. We have made strategic sales and marketing investments and expect to see increased growth in the coming years.
Q: How are you managing cash flow and financial stability?
A: Carmelo Marrelli, CFO: We ended fiscal 2024 with $2.2 million in cash and $0.5 million in trade receivables. We expect cash balances to grow as we close new licenses and receive renewals. Additionally, several large customers have negotiated quarterly payments, leading to more linear and predictable cash flows.
Q: What message do you have for your investors?
A: Andrew Duncan, CEO: We appreciate the patience of our investors as we continue to build Boardwalktech. Our officers and directors have participated in recent financings and bought shares in the open market, demonstrating our commitment to long-term success.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
