Release Date: November 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quisitive Technology Solutions Inc (QUISF, Financial) reported solid sequential financial improvement with marginal upticks in both revenue and EBITDA.
- Gross margins in the cloud business remained healthy, consistently above 40%, showing slight sequential gains.
- Recurring revenue stayed firmly within the 40% range, reflecting consistent customer engagement and retention.
- The company has a robust pipeline of over 200 AI opportunities, with significant traction in state and local government sectors.
- Quisitive's strategic alignment with Microsoft's AI initiatives and ecosystem positions it well for future growth in AI platform engagements.
Negative Points
- Revenue in the global cloud solutions segment remained relatively unchanged compared to the same quarter last year.
- Adjusted EBITDA decreased compared to last year's performance, despite sequential improvements.
- The company faces seasonal impacts in Q4, with reduced revenue-producing days due to holidays and decreased customer availability.
- There is a significant amount of market noise around AI, which can create challenges in customer engagement and decision-making.
- Many customers are not yet ready to activate AI due to data and security readiness issues, which could delay implementation and revenue realization.
Q & A Highlights
Q: Given the macro improvements and seasonality, do you see continued positive customer purchasing intentions in Q4?
A: Mike Reinhart, CEO: We see steady stabilization with modest growth. Seasonality will impact Q4 results due to fewer billable days, but customers are prioritizing AI evaluation and readiness for 2025.
Q: With the AI Blackbelt team fully onboarded, when will they start contributing to revenue?
A: Mike Reinhart, CEO: The team is already engaging with customers. We expect momentum to build through Q1, with impact showing in Q2 and beyond, as they are well-versed in Microsoft technology.
Q: Can you describe the experience level of the AI Blackbelt team and their potential impact?
A: Mike Reinhart, CEO: The team consists of eight members with 15+ years of experience, including five years in AI. They are strategists and pre-sales solution architects focused on custom AI and CoPilot solutions.
Q: Are you seeing an increase in pilot projects for CoPilot adoption, and what is the inflection point?
A: Mike Reinhart, CEO: We focus on quality over quantity, prioritizing projects that lead to meaningful deployments. Recent updates from Microsoft, like CoPilot Studio, are expected to drive significant adoption in 2025.
Q: What are the barriers preventing enterprises from moving from AI proof of concept to implementation?
A: Mike Reinhart, CEO: The main barriers are readiness issues, such as data state and security posture. We help customers prepare their environments to avoid rushing into deployments that could pose security risks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
