Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BIO-key International Inc (BKYI, Financial) has launched its Passkey:YOU product, which has received favorable initial customer reactions and interest from Fortune 500 prospects.
- The company has expanded its PortalGuard deployments with notable clients such as the University of Iowa Hospital and Dayton Children's Hospital.
- BIO-key's solutions are now available on the Amazon Web Services marketplace, potentially increasing global reach and recurring revenues.
- The company received the Global Infrasec Hot Company Multifactor Authentication Award from Cyber Defense magazine, highlighting the strength of its solutions.
- BIO-key is focusing on high-margin, annual recurring revenues, which have solid potential to build on its base moving forward.
Negative Points
- Q2 2024 revenue of $1.1 million fell below the year-ago revenue of approximately $1.9 million, primarily due to delays in software license contracts.
- The company experienced lower services revenue related to customizations and upgrades for a large customer project that did not occur in Q2 2024.
- A large recurring maintenance contract did not renew in Q1 2024, negatively impacting the current year's top-line revenue.
- BIO-key's financial performance remains variable due to the size and timing of customer contracts and commitments.
- The company has faced significant delays in large projects in Africa, impacting its financial results and leading to a write-down of over $3 million in inventory.
Q & A Highlights
Q: Can you explain why reported revenue hasn't picked up substantially despite efforts to grow the recurring revenue base and channel partner programs?
A: Michael DePasquale, CEO, explained that the key issue is closing more opportunities in their pipeline. The company is pursuing larger sales with higher-profile customers, which have longer sales cycles. They are focusing on increasing the number of opportunities, shortening sales cycles, and improving close ratios. Additionally, they are enhancing direct selling efforts and leveraging new resources to target enterprise-focused opportunities.
Q: Is the recent Amazon marketplace announcement a continuation of your previous acceptance into Amazon's AWS independent software vendor program?
A: Yes, Michael DePasquale confirmed that it is a continuation. Initially, they were accepted as a vendor, and now they have developed their storefront to be live on the marketplace. This allows Amazon customers to easily acquire BIO-Key solutions.
Q: Do you expect revenue from the Amazon channel to start this year?
A: Michael DePasquale affirmed that they expect revenue from the Amazon channel to start this year. The company is live on the marketplace, and marketing and promotion efforts will begin at the end of the current quarter and into October.
Q: What does your outlook commentary mean regarding sequential growth on a full-year basis?
A: Michael DePasquale clarified that they expect to grow their business year-over-year and anticipate higher revenues in the second half of the year compared to the first half. Despite a challenging quarter, they are confident in achieving year-over-year revenue growth.
Q: Are the two large Africa contracts still viable, or have they been canceled?
A: Michael DePasquale stated that the projects are still alive, but there have been significant delays due to political and economic issues in Nigeria. They remain optimistic about selling equipment in the market and are exploring other opportunities in the payment space and financial services in Africa.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
