Release Date: November 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 seen a 44% CAGR in recurring revenue over the past three years, driven by its land and expand strategy.
- The company has strengthened its sales and distribution strategy by partnering with large global IT services firms like Tata Consulting Services and HCL Tech.
- Boardwalktech's Velocity solution is gaining traction in the financial services sector, with successful deployment in a top five US bank.
- The company reported a positive net cash inflow from operations of $219,000 in the second quarter, a 24% improvement year-over-year.
- Boardwalktech is focused on achieving cash breakeven adjusted EBITDA with modest revenue growth assumptions and cost-saving measures.
Negative Points
- Total revenue for the second quarter of fiscal 2025 decreased by 16% year-over-year, primarily due to a decline in software and subscription services.
- The company experienced a 21% decline in professional services revenue as two customers declined to renew licenses.
- Adjusted EBITDA for the second quarter was a loss of $366,000, indicating ongoing financial challenges.
- The company's net IFRS loss for the quarter was $0.7 million, showing only a slight improvement from the previous quarter.
- Boardwalktech's cash position remains limited, with approximately $800,000 of cash and collected trade receivables at the end of the quarter.
Q & A Highlights
Q: Could you explain the roadmap for your products, as there seems to be a shift from three products to two, Unity Central and Velocity? What is the progress on the Digital Ledger?
A: Andrew Duncan, CEO: Our Digital Ledger platform continues to expand, contributing to a 44% CAGR over the past three years. We are transitioning towards an information intelligence platform, integrating AI into our offerings. The Velocity product is an Excel automation engine on the Digital Ledger, while Unity Central focuses on document and information management. Demand remains strong for both the Digital Ledger and Excel automation, especially in large corporations and banks.
Q: How is the deployment going with your top five US bank, and what feedback have you received about the Velocity solution?
A: Andrew Duncan, CEO: The deployment is progressing well, with over 1,000 employees using the Velocity product. The bank has expressed satisfaction, noting that our solution helped them meet regulatory requirements. The commitment from the bank is significant, with a doubling of the team size from 30 to 60 people. This is a multiyear engagement, and we expect continued expansion into other business units.
Q: Can you elaborate on how AI is integrated into your core technology and its impact on your offerings?
A: Charles Glavin, CFO: Our core technology already incorporates elements of AI, particularly in predictive analytics. We are not chasing the AI market but enhancing our existing technology. Our platform's unique capabilities position us well for future AI developments, especially in enterprise usage and predictive analytics.
Q: What is the significance of signing new partners, and how does it relate to revenue growth?
A: Andrew Duncan, CEO: Signing new partners is a leading indicator of future opportunities. Our partner channel strategy is gaining traction, and we expect significant expansion in 2025. While immediate revenue impact may not be visible, these partnerships are crucial for long-term growth and market penetration.
Q: How does Boardwalktech plan to leverage its technology for future growth, particularly in the banking sector?
A: Andrew Duncan, CEO: Our Velocity product is gaining momentum in the banking sector, with significant ROI and compliance benefits. We are focused on expanding our client base and deepening our partner ecosystem. The strategic execution and market validation set the stage for sustained growth, with increased revenue expected in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
