Q4 2023 NowVertical Group Inc Earnings Call Transcript
Key Points
- Revenue in Q4 2023 was $10.1 million, a 20% increase over Q4 2022, with gross profit at $6.3 million, reflecting a 62% gross profit margin and a 75% increase over the previous year.
- Adjusted EBITDA for Q4 2023 was $0.8 million, marking a 358% increase from Q4 2022, demonstrating significant improvement in profitability.
- For the fiscal year 2023, revenue reached $51.7 million, a 91% increase over 2022, with gross profit at $26.6 million, about a 52% profit margin and a 130% increase over 2022.
- Adjusted EBITDA for the fiscal year was $5.4 million, a 378% increase over 2022, highlighting strong operational performance and efficiency gains.
- NowVertical Group Inc has a robust client portfolio with over 250 clients, including 100+ key accounts with major enterprises like Sky, Disney, and GlaxoSmithKline, indicating strong market penetration and customer trust.
- The revenue numbers for Q4 2023 and the fiscal year were impacted by a major currency devaluation in Argentina, leading to a 131% decrease in the Argentine peso from Q3 to Q4, which required a significant restatement of prior quarter results.
- A change in accounting policy from principal to agent for a newly acquired company led to a $5.9 million reallocation from cost of revenue to revenue, complicating financial reporting and impacting revenue recognition.
- The company faces challenges with 36% of AI projects failing to deliver results or ROI, and 85% being slowed down by organizational limitations, indicating potential risks in project execution and profitability.
- High levels of data complexity and a lack of knowledgeable staff in 82% of organizations pose significant challenges to NowVertical Group Inc's operations and service delivery.
- The company's significant reliance on acquisitions for growth could pose risks related to integration and maintaining a unified corporate culture.
All right. Well, thank you, everybody, and good morning, and welcome to NowVertical's earnings call for the fourth quarter of our fiscal year 2023, which ended on December 31, 2023.
We'd like to, first off, thank you for your patience. Our intention was to release this on the 29th. And at the request of our auditors for some extra time as they were working through some of the complexities and volume around our acquisitions in 2023, they needed a little more time to complete their review.
My name is Glen Nelson. I'm the Vice President of IR at NowVertical. And with me on the call today is Sandeep Mendiratta, our Chief Executive Officer and Director of NowVertical. He's been in his role since 2024. Before joining NowVertical, he led Acrotrend for 15 years, which was acquired by NOW in 2023 and was one of the most profitable businesses within our portfolio with a 35% EBITDA margin.
He spent 25 years in the data and analytics space and has held key roles in Metricsphere, Deloitte and Datamatics.
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