BIO-Key International Inc (BKYI) 2024 Q2 法說會逐字稿

Good morning, everyone.

大家早安。

Thank you for standing by and welcome to the BIO-key International first quarter 2024 conference call.

感謝您的耐心等待並歡迎參加 BIO-key International 2024 年第一季電話會議。

(Operator Instructions).

（操作員說明）。

As a reminder, this conference is being recorded today, August 15, 2024.

謹此提醒，本次會議的錄音日期為今天，即 2024 年 8 月 15 日。

I would like to turn the call over now to Bill Jones with Investor Relations.

我現在想將電話轉給投資者關係部門的比爾瓊斯。

Please go ahead.

請繼續。

Thank you, Rocco.

謝謝你，羅科。

Our hosts today are BIO-Key's Chairman and CEO, Mike DePasquale, and CFO, Cecilia Welch.

今天我們的主持人是 BIO-Key 的董事長兼執行長 Mike DePasquale 和財務長 Cecilia Welch。

As a reminder, today's conference call and webcast, as well as answers to investor questions, include forward-looking statements which are subject to certain risks and uncertainties that can cause actual realized results to differ from those currently expected.

提醒一下，今天的電話會議和網路廣播以及對投資者問題的回答包括前瞻性陳述，這些陳述受到某些風險和不確定性的影響，可能導致實際實現的結果與當前預期的結果不同。

Words such as anticipate, believe, estimate, expect, plan, project, or similar words generally express and identify forward-looking statements.

預期、相信、估計、期望、計劃、項目等字詞或類似字詞通常表達和識別前瞻性陳述。

Such forward-looking statements are made based on management's beliefs and assumptions using information currently available as of today pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

此類前瞻性陳述是根據管理層的信念和假設，根據 1995 年《私人證券訴訟改革法案》的安全港條款，使用目前可獲得的資訊做出的。

For a complete description of these and other risks that may affect future performance of the company, please see risk factors in the company's annual report as filed on Form 10-K with the SEC.

有關可能影響公司未來業績的這些風險和其他風險的完整描述，請參閱本公司向 SEC 提交的 10-K 表格年度報告中的風險因素。

Listeners are cautioned not to place undue reliance on forward-looking statements which speak as of today's date only.

請聽眾不要過度依賴僅截至今天的前瞻性陳述。

BIO-Key undertakes no obligation to revise or disclose revisions to forward-looking statements to reflect circumstances or events that occur after today.

BIO-Key 不承擔修改或揭露前瞻性陳述的修改以反映今天之後發生的情況或事件的義務。

Now let us hand the conference to Mike to begin.

現在讓我們把會議交給麥克開始。

Thanks, Bill and good morning and thank you for all joining our call today.

謝謝比爾，早安，謝謝大家今天加入我們的電話會議。

I'm pleased to report our Q2 results on time this quarter, issuing our Q2 release and filing our 10-Q after the close yesterday.

我很高興在本季按時報告我們的第二季業績，發布我們的第二季新聞稿並在昨天收盤後提交我們的 10-Q 報告。

I feel we are back to our normal reporting cadence and I'm really happy to report that.

我覺得我們回到了正常的報告節奏，我很高興能報告這一點。

After my remarks, Cecilia will provide a brief overview of our financial performance and then we'll open the call to investor questions.

在我的演講結束後，塞西莉亞將簡要概述我們的財務業績，然後我們將開始接受投資者提問。

Due to factors outside of our control, Q2 revenue of $1.1 million fell below year-ago revenue of approximately $1.9 million, principally as a result of delays we experienced in the completion of approximately $450,000 in software license contracts in our EMEA business.

由於我們無法控制的因素，第二季 110 萬美元的收入低於去年同期約 190 萬美元的收入，這主要是由於我們在 EMEA 業務中延遲完成約 45 萬美元的軟體授權合約。

Q2 has also impacted by lower services revenue related to customizations and upgrades for one large customer project in 2023 that didn't occur in 2022 -- in 2024, Q2.

第二季也受到與 2023 年一個大型客戶專案的客製化和升級相關的服務收入下降的影響，而 2022 年（2024 年第二季）並未出現這種情況。

Importantly, our PortalGuard, Identity, and Access Management franchise continued to grow, supported by deployments and project expansions in healthcare and the public sector.

重要的是，在醫療保健和公共部門的部署和專案擴展的支持下，我們的 PortalGuard、身分和存取管理特許經營權持續成長。

As our installed base and new customers take advantage of the unique technical advances we've made over the past year.

隨著我們的安裝基礎和新客戶利用我們在過去一年中取得的獨特技術進步。

Recent deployments include the City of Williamsburg, Virginia, which enhanced its Zero Trust framework with BIO-key's Identity Bound Biometrics, or IBB.

最近的部署包括弗吉尼亞州威廉斯堡市，該市利用 BIO-key 的身份綁定生物識別技術 (IBB) 增強了其零信任框架。

For those who are not familiar, Zero Trust is a security paradigm that challenges the traditional notion that people and devices within a network can be inherently trusted.

對於那些不熟悉的人來說，零信任是一種安全範例，它挑戰了網路中的人員和設備本質上可以信任的傳統觀念。

Instead, Zero Trust emphasizes continuous verification of trustworthiness in order to ensure maximum security, that's where BIO-key's cutting-edge biometric technology comes into play.

相反，零信任強調持續驗證可信度，以確保最大程度的安全性，這就是 BIO-key 尖端生物辨識技術發揮作用的地方。

IBB puts each individual user at the center of cybersecurity.

IBB 將每個使用者置於網路安全的中心。

IBB is used for authentication and identification, centrally storing biometric data in a secure way, preventing it from being stolen or reused.

IBB用於認證和識別，以安全的方式集中儲存生物識別數據，防止其被竊取或重複使用。

In order to create a unique biometric identity that is used in an ongoing basis to verify identity of the person taking action.

為了創建一個持續使用的唯一生物識別身份來驗證採取行動的人的身份。

Generally, we're talking about biometrics in the form of fingerprints or palm scans, but our systems are also compatible with facial, voice, and iris recognition as well.

一般來說，我們談論的是指紋或手掌掃描形式的生物辨識技術，但我們的系統也相容於臉部、語音和虹膜辨識。

The core benefit of IBB is that it establishes trust and accountability that are rooted in a person's biometric identity so that organizations can be assured of each individual's genuine presence with full transparency and more importantly, audit capabilities.

IBB 的核心優勢在於，它建立了植根於個人生物辨識身分的信任和責任，以便組織可以確保每個人的真實存在，並具有完全的透明度，更重要的是，具有審計能力。

By developing a Zero Trust framework that uses BIO-Key's IBB, enterprises benefit from decreased susceptibility to attacks because our IBB authentication factors cannot be forgotten, shared, exchanged, stolen or forged, enterprise controlled enrollment prevents account handovers and ensures only approved individuals can use account privileges.

透過開發使用BIO-Key 的IBB 的零信任框架，企業可以從降低受攻擊的可能性中受益，因為我們的IBB 身份驗證因素不會被遺忘、共享、交換、竊取或偽造，企業控制的註冊可防止帳戶移交並確保只有經過批准的個人才能使用帳戶權限。

BIO-Key IBB also eliminates the potential for a single point of failure by removing physical devices as potential vulnerabilities, as it is possible with local or device-based biometrics, such as those used on most cell phones.

BIO-Key IBB 還透過消除實體設備作為潛在漏洞來消除單點故障的可能性，因為本地或基於設備的生物識別技術（例如大多數手機上使用的生物識別技術）可以實現這一點。

Importantly, we believe our patented technology and systems also provide superior flexibility and ease of use, as well as a lower total cost of ownership for Zero Trust environments and other use cases, which include passwordless workflows, remote workforces, customer IAM roving users, and shared workstations such as in call centers and in any workplace environment where mobile devices are not permitted.

重要的是，我們相信我們的專利技術和系統還提供卓越的靈活性和易用性，以及更低的零信任環境和其他用例的總擁有成本，其中包括無密碼工作流程、遠端員工、客戶IAM流動用戶和共享工作站，例如呼叫中心和任何不允許行動裝置的工作環境。

Given these advantages, BIO-Key has built a strong niche in highly regulated environments such as healthcare, banking, defense, and the government or public sector.

鑑於這些優勢，BIO-Key 在醫療保健、銀行、國防以及政府或公共部門等嚴格監管的環境中建立了強大的利基市場。

In Q2, our two notable clients, the University of Iowa Hospital and Dayton Children's Hospital, both expanded their BIO-Key PortalGuard deployments and the Los Angeles LBTQ center implemented a BIO-Key badge tap authentication solution, further demonstrating the versatility and flexibility of our systems to meet specific needs and use cases.

在第二季度，我們的兩個著名客戶愛荷華大學醫院和代頓兒童醫院都擴大了其BIO-Key PortalGuard 部署，洛杉磯LBTQ 中心實施了BIO-Key 徽章點擊身份驗證解決方案，進一步展示了我們的BIO-Key PortalGuard 的多功能性和靈活性系統以滿足特定需求和用例。

Underscoring the strength of our solutions, BIO-Key received the Global Infrasec Hot Company Multifactor Authentication Award from Cyber Defense magazine during the RSA Conference this May in San Francisco.

今年 5 月在舊金山舉行的 RSA 會議上，BIO-Key 榮獲《網路防禦》雜誌頒發的全球 Infrasec 熱門公司多因素身分驗證獎，凸顯了我們解決方案的實力。

On our last call, we discussed our latest product innovation, Passkey:YOU.

在我們的最後一次通話中，我們討論了我們最新的產品創新，Passkey:YOU。

We launched this product in the second quarter and initial customer reaction has been very favorable with a number of Fortune 500 prospects interested in the solution.

我們在第二季推出了該產品，最初的客戶反應非常積極，許多財富 500 強的潛在客戶對該解決方案感興趣。

The beauty of Passkey:YOU is that it specifically addresses underserved workplace scenarios that involve roving users who share workstations and more importantly, supports passwordless, phoneless, and tokenless authentication.

Passkey:YOU 的優點在於它專門解決了服務不足的工作場所場景，其中涉及共享工作站的行動用戶，更重要的是，它支援無密碼、無電話和無令牌身份驗證。

Mainstream authentication methods are based on something you have, such as your cell phone that receives a pin or host an authenticator app, or a phone-based passkey, or a hardware token such as a Yubikey.

主流身份驗證方法是基於您擁有的東西，例如接收 PIN 碼或託管身份驗證器應用程式的手機、基於手機的金鑰或硬體令牌（例如 Yubikey）。

However, device-based solutions are not ideal for workplace applications like on the manufacturing floor, in retail environments, call centers, healthcare, hospitality, or anywhere where roaming users require secure device access, particularly as workplaces often prohibit the use of phones due to safety, data privacy, or personal distraction, this leaves FIDO-key as another option.

然而，基於設備的解決方案並不適合工作場所應用，例如製造車間、零售環境、呼叫中心、醫療保健、酒店或漫遊用戶需要安全設備訪問的任何地方，特別是因為工作場所經常禁止使用電話，因為安全性、資料隱私或個人幹擾，這使得FIDO 金鑰成為另一種選擇。

However, outfitting hundreds or thousands of workers with a $25 to $80 per user FIDO token, that having 25% annual replacement rate can be cost-prohibitive and impractical for many enterprises.

然而，為數百或數千名員工配備每位用戶 25 至 80 美元的 FIDO 代幣，即每年 25% 的更換率，對於許多企業來說可能成本高昂且不切實際。

Passkey:YOU bring BIO-Key's biometric authentication to a hosted Passkey in the form of software, not hardware, allowing users to unlock their hosted Passkey with the touch of a finger at any of those shared workstations.

Passkey：您可以以軟體而非硬體的形式將 BIO-Key 的生物識別身份驗證引入託管的 Passkey，從而允許用戶在任何共享工作站上用手指觸摸即可解鎖其託管的 Passkey。

Workers carry nothing, and Passkey:YOU provides unmatched, secure, phoneless, tokenless, and passwordless authentication.

工作人員什麼都不帶，而 Passkey:YOU 提供無與倫比的、安全的、無電話、無令牌和無密碼的身份驗證。

Passkey:YOU also easily integrates into existing Zero Trust frameworks, including our competitor and Partner IAM platforms such as Microsoft, Entra, Okta, Ping, and Duo, without requiring any special configuration of high -- and includes high margin annual recovering revenues.

Passkey：YOU 還可以輕鬆整合到現有的零信任框架中，包括我們的競爭對手和合作夥伴IAM 平台，例如Microsoft、Entra、Okta、Ping 和Duo，無需任何高額特殊配置，並且包括高利潤率的年度恢復收入。

In 2023, we began a strategy to partner with larger IAM providers like these, as well as SailPoint, and ForgeRock.

2023 年，我們開始實施一項策略，與此類大型 IAM 供應商以及 SailPoint 和 ForgeRock 合作。

Passkey:YOU represents a powerful, differentiated tool we can bring to these large platforms to better serve their customer's needs.

Passkey：YOU 代表了一個強大的、差異化的工具，我們可以將其引入這些大型平台，以更好地滿足客戶的需求。

So again, we believe Passkey:YOU has enormous market potential due to its ability to solve some of the most challenging IAM use cases and the fact that it fits with already installed security infrastructures that I just mentioned.

因此，我們再次相信 Passkey:YOU 具有巨大的市場潛力，因為它能夠解決一些最具挑戰性的 IAM 使用案例，並且它適合我剛才提到的已安裝的安全基礎設施。

We fully expect that it will take time for our partners and customers to vet this new solution.

我們完全預期我們的合作夥伴和客戶需要時間來審查這個新解決方案。

So while we don't expect any significant contribution to our results this year, we are excited about the potential for this unique solution going forward.

因此，雖然我們預計今年的業績不會有任何重大貢獻，但我們對這項獨特解決方案未來的潛力感到興奮。

Today, we made an announcement that brings our PortalGuard IDaaS platform and IBB authentication solutions to the Amazon Web Services marketplace, and that solution has gone live today.

今天，我們宣布將 PortalGuard IDaaS 平台和 IBB 身份驗證解決方案引入 Amazon Web Services 市場，並且該解決方案已於今天上線。

The marketplace provides a digital catalog where customers can discover, purchase, and deploy software solutions designed to run on the AWS Cloud Services.

該市場提供了一個數位目錄，客戶可以在其中發現、購買和部署旨在在 AWS 雲端服務上運行的軟體解決方案。

By making our solutions available on the AWS marketplace, prospective customers will be able to quickly and seamlessly purchase PortalGuard and our IBB solutions from anywhere around the globe.

透過在 AWS 市場上提供我們的解決方案，潛在客戶將能夠從全球任何地方快速、無縫地購買 PortalGuard 和我們的 IBB 解決方案。

This is a force multiplier with a captive audience and great expectations to generate strong recurring revenues in the coming quarters.

這是一個力量倍增器，擁有忠實的受眾，並期望在未來幾季產生強勁的經常性收入。

I've mentioned in the past, BIO-Key solutions are increasingly essential for enterprises, who want or require cyber insurance or to meet new SEC cybersecurity risk management and reporting rules and government-mandated CISA regulations.

我過去曾提到過，對於想要或需要網路保險或滿足新的 SEC 網路安全風險管理和報告規則以及政府強制執行的 CISA 法規的企業來說，BIO-Key 解決方案變得越來越重要。

These frameworks are really driving enterprises to prioritize spending on securing access to their IT systems and their data and information.

這些框架確實促使企業優先考慮在確保對其 IT 系統以及資料和資訊的存取方面的支出。

So despite our lower-than-expected revenues this quarter, we remain very encouraged by the growing enterprise awareness of the importance of implementing secure Zero Trust deviceless IAM solutions which form the core of BIO-Keys offerings.

因此，儘管我們本季的營收低於預期，但我們仍然對企業日益認識到實施安全的零信任無裝置 IAM 解決方案的重要性感到非常鼓舞，該解決方案構成了 BIO-Keys 產品的核心。

We remain focused on driving revenue growth and progressing our business to profitability and positive cash flow over the next several quarters.

我們仍然專注於推動收入成長，並在未來幾季推動我們的業務實現盈利和正現金流。

Importantly, we continue to grow our business of high-margin, annual recurring revenues that have solid potential to build on our base moving forward.

重要的是，我們繼續發展高利潤、年度經常性收入的業務，這些業務具有堅實的潛力，可以在我們的基礎上繼續前進。

Given our size, our financial performance will likely remain variable on a quarter-to-quarter basis and on a year-over-year basis due to the size and timing of customer contracts and commitments.

鑑於我們的規模，由於客戶合約和承諾的規模和時間安排，我們的財務表現可能會在季度和年度基礎上保持變化。

And I'll make a comment here, our average sales value -- prospect's average sales value is going up significantly, and so that's a good thing in the context of larger deals, greater revenue opportunity, but sometimes it also means a lengthy or a longer sales process.

我將在這裡發表評論，我們的平均銷售價值——潛在客戶的平均銷售價值正在顯著上升，因此，在更大的交易、更大的收入機會的背景下，這是一件好事，但有時這也意味著漫長的或銷售流程較長。

And so, despite quarterly variability, we remain confident in our ability to drive sequential growth on a full-year basis in 2024, and we continue to seek and implement cost reduction opportunities to support our path to profitability and positive operating cash flow.

因此，儘管存在季度變化，我們仍然對 2024 年全年推動環比增長的能力充滿信心，並且我們將繼續尋求和實施降低成本的機會，以支持我們實現盈利和正運營現金流的道路。

We're also working to identify potential strategic opportunities to leverage our core expertise, products, and corporate assets and create value for our shareholders.

我們也致力於尋找潛在的策略機會，以利用我們的核心專業知識、產品和公司資產，為股東創造價值。

We're spending a fair amount of time in this regard, and given that we do not believe that our market cap of approximately $2.5 million adequately reflects the value of our technology, products, and customer base of approximately $6 million in high-margin ARR.

我們在這方面花費了相當多的時間，考慮到我們認為大約 250 萬美元的市值並不能充分反映我們的技術、產品和客戶群（高利潤 ARR 大約 600 萬美元）的價值。

Our strategic value is much higher, and so again, even just the strategic value of our Nasdaq platform is significantly higher.

我們的戰略價值要高得多，因此，即使只是我們納斯達克平台的戰略價值也要高得多。

For these and other reasons, we are optimistic regarding the future of our company and we are grateful for the patience and support of all of our shareholders.

基於這些和其他原因，我們對公司的未來感到樂觀，並感謝所有股東的耐心和支持。

Now let me turn the call to Cecilia to review the financials before we take questions.

現在讓我給塞西莉亞打電話，在我們回答問題之前先回顧一下財務狀況。

Thank you.

謝謝。

As Mike referenced earlier, we have filed our 10-Q yesterday and issued our earnings release.

正如麥克之前提到的，我們昨天提交了 10-Q 報告並發布了收益報告。

Now I'll review some of the financial highlights, as compared to our restated Q2, '23, and six-months ended June 30, 2023 results.

現在，我將回顧一些財務亮點，與我們重述的 23 年第二季和截至 2023 年 6 月 30 日的六個月業績進行比較。

BIO-Key Q2 '24 revenues were $1.1 million, down from $1.9 million in Q2 '23.

BIO-Key 2024 年第 2 季的營收為 110 萬美元，低於 23 年第 2 季的 190 萬美元。

The current year period was impacted by software license orders from our domestic business and European subsidiaries, sliding into the third quarter.

本年度受到我們國內業務和歐洲子公司軟體授權訂單的影響，滑至第三季。

The prior year period had benefited by approximately 200,000 for non-recurring services related to customizations and upgrades for one large customer.

在上一年期間，與一個大客戶的客製化和升級相關的非經常性服務使約 20 萬美元受益。

We also had one large recurring maintenance contract that did not renew in Q1 '24, which negatively impacted the current year top line revenue.

我們還有一份大型經常性維護合約在 24 年第一季沒有續簽，這對本年度的營收產生了負面影響。

Our gross profit and gross margin comparisons improved in the current year period, primarily due to the $1 million hardware reserve that was taken in Q2 '23 and the higher gross margin from services realized from Q2 '24.

我們的毛利和毛利率比較在本年度有所改善，主要是由於 23 年第二季度取得的 100 萬美元硬體儲備以及 24 年第二季度實現的服務毛利率較高。

Excluding the impact of the reserve, the gross profit would have been higher in Q2 '23 because of higher revenues, but gross margins would still have improved to 77% in Q2 '24 from 69% realized in 2023, and this was due to the gross margin of services of 74% in Q2 '24 versus 42% in Q2 '23.

排除儲備金的影響，由於收入增加，23 年第二季的毛利將會更高，但毛利率仍將從 2023 年實現的 69% 提高到 24 年第二季的 77%，這是由於2024年第二季的服務毛利率為74%，而23 年第二季為42%。

On the expense side, we reduced total operating expenses by 168,000 in Q2 '24 relative to Q2 '23 due to reductions in administration and sales personnel as well as marketing show expenses, lower headquarters expenses.

在費用方面，由於管理和銷售人員以及行銷展示費用的減少以及總部費用的降低，我們在 24 年第二季相對於 23 年第二季減少了 168,000 的總營運費用。

These were partially offset, however, sorry -- partially offsetting lower SG&A, a [$33,000] increase in research, development, and engineering related to new product development, reflecting lower costs in the year-ago, hardware reserve BIO-Key's net loss improved to $1.7 million, or $1 per share, in Q2 '24 from $2.6 million, or $4.71 per share, in Q2 '23.

然而，抱歉，這些被部分抵消了——部分抵消了SG&A的下降，與新產品開發相關的研究、開發和工程增加了[33,000美元]，反映了去年成本的降低，硬體儲備BIO-Key的淨虧損改善從 2023 年第二季的 260 萬美元（即每股 4.71 美元）增至 24 年第二季的 170 萬美元（即每股 1 美元）。

Similarly, the net loss for the first six-months of 2024 was reduced to $2.2 million, or $1.33 per share, compared to $4.3 million, or $7.74 per share, for the first six-months of 2023, including a hardware reserve of $1.5 million through June 2023.

同樣，2024 年前六個月的淨虧損減少至220 萬美元，即每股1.33 美元，而2023 年前六個月的淨虧損為430 萬美元，即每股7.74 美元，其中包括150 萬美元的硬體儲備至 2023 年 6 月。

We will continue to focus on increasing revenue and controlling costs for the remainder of 2024 in support of our path to cash flow, breakeven, and profitability.

在 2024 年剩餘時間內，我們將繼續專注於增加收入和控製成本，以支持我們實現現金流、損益兩平和獲利的道路。

In terms of our balance sheet and cash, as of June 30, 2024, BIO-Key had current assets of approximately $3 million, including $1.3 million of cash and cash equivalents, [$932,000] of accounts receivable and due from factor, and [$433,000] of inventory net of reserves.

就我們的資產負債表和現金而言，截至2024 年6 月30 日，BIO-Key 的流動資產約為300 萬美元，其中包括130 萬美元的現金和現金等價物、[932,000 美元]的應收賬款和應收保理商款項，以及[433,000 美元] ] 扣除儲備的庫存。

Recall that in 2023 we had written down over $3 million in inventory slated for a project in Africa to zero.

回想一下，2023 年，我們將非洲一個專案的超過 300 萬美元的庫存減記為零。

We are expecting to convert some of the hardware to inventories to cash shipments in the current quarter to support our growth initiatives and our operations.

我們預計在本季將部分硬體從庫存轉為現金出貨，以支援我們的成長計畫和營運。

We also have several large projects with new and existing customers that are in request for proposal and proof of concept stages with financial and public sector companies and a foreign defense force that's an existing company, which could potentially benefit our results in the second-half of 2024.

我們還有幾個與新客戶和現有客戶合作的大型項目，正在向金融和公共部門公司以及現有公司的外國國防軍徵求建議書和概念驗證階段，這可能有利於我們下半年的業績2024 年。

In addition to existing partnerships and relationships, as Mike discussed.

正如麥克所討論的，除了現有的合作夥伴關係和關係之外。

That concludes our prepared remarks, and I'll ask the operator now to prepare for Q&A.

我們準備好的發言就到此結束，我現在請接線生準備問答。

(Operator Instructions).

（操作員說明）。

Jack Vander Aarde, Maxim Group.

傑克·范德·阿爾德，Maxim 集團。

Okay, great.

好的，太好了。

I appreciate the update and thanks for taking my questions.

感謝您的更新並感謝您提出我的問題。

So, Mike, I do got to ask, just on the license -- just from the revenue results, kind of this year or this quarter, and in the first-half of the year.

所以，麥克，我確實要問，只是在許可證上——只是從今年或本季以及上半年的收入結果來看。

License revenue was down year-over-year, even if that 450,000 order wasn't delayed.

即使 450,000 個訂單沒有延遲，許可收入仍同比下降。

In the first-half, total revenue looks like it was down year-over-year from first-half last year.

上半年，總收入看起來比去年上半年年減。

So you've talked about kind of ramping growth in your recurring revenue base and ramping channel partner programs.

因此，您談到了經常性收入基礎的快速成長和通路合作夥伴計畫的快速成長。

I guess, can you just help us understand why reported revenue hasn't picked up substantially if that's the case, and what needs to change for meaningful revenue growth to start kicking in going forward?

我想，如果是這種情況，您能否幫助我們理解為什麼報告的收入沒有大幅回升，以及需要做出哪些改變才能開始推動有意義的收入成長？

Thanks.

謝謝。

Good morning, Jack, and thank you.

早上好，傑克，謝謝你。

Clearly, the answer to that question is pretty simple.

顯然，這個問題的答案非常簡單。

It's really about closing more of the opportunities that we have in our pipeline.

這實際上是為了關閉我們管道中的更多機會。

And as I mentioned in my prepared remarks, the average sale value that we're pursuing directly now and through most of our partners are through our partner network, is a larger sale, and it's with a higher profile customer.

正如我在準備好的發言中提到的，我們現在直接追求的平均銷售價值以及透過我們的大多數合作夥伴透過我們的合作夥伴網絡實現的平均銷售價值是更大的銷售，並且是針對更高知名度的客戶。

And the timing on those deals is significantly different than the smaller ones that I mentioned, like the City of Williamsburg or some of the installed base customers that we have where we have them captive.

這些交易的時機與我提到的較小交易有很大不同，例如威廉斯堡市或我們擁有的一些已安裝的客戶群。

So I think it's what we're going to see is we're going to see significant revenue growth in periods that may not necessarily be repeatable every period.

因此，我認為我們將看到的是，我們將看到收入的顯著增長，但不一定每個時期都會重複。

I mentioned that our variability will continue.

我提到我們的可變性將繼續下去。

We're pursuing, and have been pursuing a number of very, very large opportunities with notorious companies that are considering our solutions for all the reasons I described.

我們正在並且一直在與臭名昭著的公司尋求許多非常非常大的機會，這些公司出於我所描述的所有原因正在考慮我們的解決方案。

Our Passkey:YOU solution in and of itself is creating significant interest because there's no infrastructure interruption.

我們的 Passkey:YOU 解決方案本身就引起了極大的興趣，因為沒有基礎設施中斷。

It's a very simple overlay independent of the infrastructure that you have in place or the vendors that you have in place, perhaps securing your higher-level in Identity and Access Management or securing your data and your IT infrastructure.

這是一個非常簡單的覆蓋，獨立於您現有的基礎設施或現有的供應商，也許可以保護您的更高級別的身份和存取管理或保護您的資料和 IT 基礎設施。

So I mean, a simple answer to that question is we just need to increase the number of opportunities and we need to shorten the sales cycles and we need to, get our close ratio up.

所以我的意思是，這個問題的一個簡單答案是我們只需要增加機會數量，我們需要縮短銷售週期，我們需要提高我們的成交率。

That's really what we're solely focused on now.

這確實是我們現在唯一關注的事情。

And, we recognize that as much as we have been pushing to sell through, partner networks and our partner infrastructure, which is building significant -- has been built significantly over the last two years, we need to have more control over some of those larger deals, and so we're also focused on direct selling, which again gives us more control, but it's the larger opportunities.

而且，我們認識到，儘管我們一直在努力推動銷售，合作夥伴網路和我們的合作夥伴基礎設施正在建設中——在過去的兩年裡已經取得了巨大的進展，但我們需要對其中一些較大的項目有更多的控制權。

We brought a couple of new resources on board just over the last six months this year who are enterprise-focused, who are very, very experienced in the security space and they're making really nice headway in some of these larger deals.

今年過去六個月，我們引進了一些新資源，他們以企業為中心，在安全領域非常非常有經驗，並且他們在一些較大的交易中取得了非常好的進展。

So I think what you're going to see in the future periods is these deals are going to begin to drop and that's going to help us.

所以我認為在未來一段時間內你會看到這些交易將開始下降，這將對我們有所幫助。

The other opportunity which we introduced and announced today with the Amazon marketplace is also significant for the smaller and medium-sized customers that we're pursuing.

我們今天在亞馬遜市場上推出和宣布的另一個機會對於我們正在追求的中小型客戶來說也很重要。

So Amazon has about 300,000 customers globally that utilize the platform that can now take advantage of our solutions without, first of all, they can try them, they can investigate them, they can basically sign up for evaluations and then they can purchase them right through the marketplace, and the install is a simple slide to get BIO-Key solutions up, authenticating, in essence, their front doors.

因此，亞馬遜在全球擁有約 30 萬名客戶，他們使用該平台，現在可以利用我們的解決方案，首先，他們可以嘗試它們，他們可以調查它們，他們基本上可以註冊評估，然後他們可以直接通過市場上，安裝只需一張簡單的幻燈片即可啟動BIO-Key 解決方案，本質上是驗證他們的前門。

So that's a really powerful, powerful opportunity for us, and we have high expectations about what that means.

所以這對我們來說是一個非常強大的機會，我們對這意味著什麼抱有很高的期望。

The other benefit of getting into that program, and it took us a considerable period of time, is that there is joint marketing, not only support, but there's joint marketing money and there's joint marketing relationships that all come with that -- with that relationship in general.

加入該計劃的另一個好處是，我們花了相當長的一段時間，這是聯合行銷，不僅是支持，還有聯合行銷資金和聯合行銷關係，所有這些都伴隨著這種關係。

So we're going to be doing joint marketing, we're going to be doing joint events, and you're going to see all of that unfold as we get to the end of this quarter and the beginning of next.

因此，我們將進行聯合行銷，我們將進行聯合活動，當我們到本季末和下個季度初時，您將看到所有這些都展開。

In fact, we've got meetings set up with all of their resources to train them and get them up to speed on everything that we do and that's going to have a significant impact.

事實上，我們利用他們所有的資源召開了會議，對他們進行培訓，讓他們了解我們所做的一切，這將產生重大影響。

So Jack, that's what we need to do, that's what we're working on, and I believe that's going to have a real impact on our business as we get to the end of the year and also into next year.

所以傑克，這就是我們需要做的，這就是我們正在努力的，我相信這將在年底和明年對我們的業務產生真正的影響。

Okay.

好的。

I appreciate the color there.

我很欣賞那裡的顏色。

And just for clarity with regard to the Amazon marketplace announcement today, is this a continuation or related to your announcement from the fall of last -- I think it was the fall of 2023 that you were accepted in Amazon's AWS independent software vendor program.

為了澄清今天關於亞馬遜市場的公告，這是延續還是與您去年秋天發布的公告有關 - 我認為您是在 2023 年秋天被亞馬遜 AWS 獨立軟體供應商計劃接受的。

Is this a continuation of that?

這是那個的延續嗎？

Just help me understand what the nuances are?

請幫我理解其中的細微差別嗎？

Well, it is a continuation, so first we were accepted as a vendor and then second, you have to develop your storefront, in essence, right, to get into or be in the marketplace and you have to be approved and you have to meet all of the hurdles, and that's taken us a considerable period of time, and so now this is the extension to that announcement about six or eight months ago.

嗯，這是一個延續，所以首先我們被接受為供應商，然後第二，你必須開發你的店面，本質上是對的，為了進入或進入市場，你必須獲得批准，你必須滿足所有的障礙，這花了我們相當長的一段時間，所以現在這是大約六到八個月前宣布的延期。

So now we are fully live on their marketplace allowing, as I just described, their customers to acquire our solutions very easily.

因此，現在我們完全融入了他們的市場，正如我剛才所描述的，他們的客戶可以非常輕鬆地獲得我們的解決方案。

Okay, got it.

好的，明白了。

Is it fair to assume then you would expect -- you'd expect revenue to -- from Amazon to this Amazon channel this year -- just to start this year?

假設您預計今年從亞馬遜到這個亞馬遜頻道的收入將在今年開始，這是否公平？

Absolutely.

絕對地。

There's no question we had to go live first, and we're live now and you can click on the link and you can see what it's all about.

毫無疑問，我們必須首先上線，我們現在已經上線，您可以單擊鏈接，然後查看全部內容。

Next steps are the integrated training of all of their resources, and then the marketing and promotion begins at the end of this quarter and into October.

下一步是對所有資源進行整合培訓，然後在本季末至十月開始行銷和促銷。

So there'll be joint events, joint webinars sessions.

因此，將會有聯合活動、聯合網路研討會。

We'll actually be going to conferences that are funded partially by AWS so they really get behind the Company if they believe the technology can really benefit all of their customers, but more importantly create -- greater revenue levels for them.

實際上，我們將參加由 AWS 部分資助的會議，因此，如果他們相信該技術能夠真正使他們的所有客戶受益，但更重要的是為他們創造更高的收入水平，他們就會真正支持公司。

Okay.

好的。

Okay, great.

好的，太好了。

And then can you help me understand from, you mentioned your prepared remarks and it's quoted in the press release just kind of regarding your outlook commentary.

然後你能幫我理解一下，你提到了你準備好的言論，並且在新聞稿中引用了它，只是關於你的展望評論。

If I quote, "you remain confident in your ability to drive sequential growth on a full year basis".

如果我引用的話，「您對自己推動全年連續成長的能力仍然充滿信心」。

Just trying to understand what that means?

只是想了解這代表什麼？

Does that mean you expect third quarter revenue to be above this second quarter and fourth quarter revenue to be above the third quarter?

這是否意味著您預計第三季營收將高於第二季度，第四季營收將高於第三季？

Or are you talking about you expect full year '24 revenue to be above '23?

或者您是在談論您預計 24 年全年收入將高於 23 年嗎？

All of the above.

上述所有的。

So I think we're still confident we're going to grow our business year-over-year, and we're obviously, this was a terrible quarter from a revenue perspective for us.

因此，我認為我們仍然有信心我們的業務將逐年成長，而且顯然，從收入角度來看，這對我們來說是一個糟糕的季度。

Right.

正確的。

It's one of the lowest quarters we've had and I guess we Cecilia can go back and look and tell me maybe while I'm speaking here, but it's got to be at least almost two years.

這是我們經歷過的最低季度之一，我想我們塞西莉亞可以回去看看並告訴我也許當我在這裡講話時，但它必須至少快兩年了。

So our expectation is much higher for the second-half of the year, and obviously, again, that will lead to a year-over-year increase in revenues.

因此，我們對下半年的預期要高得多，顯然，這將再次導致收入同比增長。

That's our goal and objective and that's our expectation.

這是我們的目標和目的，也是我們的期望。

Okay, got it.

好的，明白了。

That's helpful to know.

了解這一點很有幫助。

And then I know the third quarter is seasonally slower for you, but it sounds like that larger order, that 450,000 order from your European, I'm taking that as swivel secure that will land, then would that be recognized in the third quarter entirely?

然後我知道第三季對你們來說季節性較慢，但這聽起來像是更大的訂單，來自你們歐洲的450,000 個訂單，我將其視為將落地的旋轉安全裝置，那麼這會在第三季完全得到認可嗎？

Yes, anything that obviously closes in the third quarter will be recognized in the third quarter, and as Cecilia said, we've had, a number of orders left.

是的，任何明顯在第三季結束的事情都將在第三季度得到認可，正如塞西莉亞所說，我們已經留下了許多訂單。

So yes, our expectation is that the third quarter will, will be a good quarter.

所以，是的，我們的預期是第三季將是一個好的季度。

Okay, great.

好的，太好了。

And just a couple more for me, just, just for clarity, I figured I'd circle back on.

對我來說還有幾個，只是為了清楚起見，我想我應該再繞回來。

I know it's been many years now, delays, but those two large Africa contracts, have they -- have they, I think you've written down the projects, but I mean are they still -- is there still potential that as things kind of get.

我知道現在已經很多年了，延誤了，但是那兩份大型非洲合同，有嗎？有潛力嗎？

So I mean there's a lot of political issues going on over there, obviously, but are they -- are these contracts dead now canceled or -- I mean are they still -- is there still an opportunity there?

所以我的意思是，顯然那裡正在發生很多政治問題，但是它們是——這些合約現在已經取消了嗎？

Just looking for clarity on that?

只是想弄清楚這一點嗎？

Yes, I mean there's still an opportunity there, but there have been significant, significant delays in -- in everything they've done underneath their national identity management Commission, kind of registering all of, in particular in Nigeria, right?

是的，我的意思是那裡仍然有機會，但是他們在國家身份管理委員會下所做的一切都出現了嚴重的延誤，尤其是在尼日利亞，對吧？

Registering all of their citizens, getting them in the database, everything has been just fundamentally delayed with change in administration, finances, money, as you know, their economy is so dependent on oil and there's been a lot of ups and downs right over the last two years, but the projects are still alive and we still have aspirations of selling some of our equipment in that market.

登記所有公民，將他們存入資料庫，隨著行政、財政、貨幣的變化，一切都從根本上被推遲了，如你所知，他們的經濟如此依賴石油，而且在過去的幾年裡經歷了很多起起落落。

We also have another project that we've been working on in the payment space that is continued.

我們還有另一個在支付領域持續進行的項目。

It's under development, but it's more commercially oriented.

它正在開發中，但更加商業化。

So not relying on the government, but really relying more on the banking and the finance infrastructure within the country.

因此，不是依賴政府，而是更依賴國內的銀行和金融基礎設施。

And so that's another opportunity that we've been working for quite some time.

這是我們已經努力了一段時間的另一個機會。

So we're optimistic about that, as we do really, really well in South Africa and we have done really, really well in the financial services space there.

因此，我們對此感到樂觀，因為我們在南非做得非常非常好，而且我們在那裡的金融服務領域做得非常非常好。

And we're creating some new partnerships in other African countries that we're optimistic can lead to greater levels of business.

我們正在其他非洲國家建立一些新的合作夥伴關係，我們樂觀地認為這可以帶來更高水準的業務。

But we have really downsized our focus and our operation there, given that we've already spent so much money.

但考慮到我們已經花了這麼多錢，我們確實縮小了我們的重點和業務範圍。

We again spent money on that hardware, which we've written down and we expect obviously to sell that inventory is as fresh as it was when we bought it.

我們再次在硬體上花了錢，我們已經將其減記，並且顯然我們希望出售的庫存與我們購買時一樣新鮮。

Good news is there's no later generation of products, so we're feeling pretty good about that.

好消息是沒有更新一代的產品，所以我們對此感覺很好。

But yeah, it's just -- we spent a lot of money against an expectation that these projects would move forward, but unfortunately, it's a market that just is very unpredictable, and I'm sorry to say we, I can't say I regret doing that, but, because at the time, it was the right thing to do.

但是，是的，這只是 - 我們花了很多錢來預期這些項目將會向前推進，但不幸的是，這是一個非常難以預測的市場，我很遺憾地說，我們，我不能說我後悔這樣做，但是，因為在當時，這是正確的做法。

But it's definitely a market that's tenuous

但這絕對是一個脆弱的市場

Understood.

明白了。

I appreciate the color there.

我很欣賞那裡的顏色。

And just maybe one last question, because it is a key part of your existing business, I believe, to go forward growth strategy is the Channel Alliance Program, the CAP program.

也許還有最後一個問題，因為它是您現有業務的關鍵部分，我相信，前進的成長策略是通路聯盟計劃，即 CAP 計劃。

How does, maybe just help me understand how that is specifically, I guess, contributed to the business.

我想，也許只是幫助我了解這對業務有何具體貢獻。

Have you added more channel partners and how does that channel, that CAP program, compare to the opportunity with Amazon's program from a sales perspective?

您是否新增了更多通路合作夥伴？

And just so I have some idea of how the two compare?

這樣我就知道兩者如何比較？

Thanks.

謝謝。

Great question, actually really good question.

很好的問題，其實是很好的問題。

So let me take the first part, which is our CAP program.

讓我來談談第一部分，即我們的 CAP 計劃。

The CAP program is evolving, so and we signed up a lot of partners, and that's the first thing you want to do, you want to get a lot of attention, and you want to get partners in the program and get them to learn about the product and go out and represent it.

CAP 計劃正在不斷發展，因此我們簽署了很多合作夥伴，這是您想做的第一件事，您希望獲得大量關注，您希望獲得該計劃的合作夥伴並讓他們了解產品並走出去並代表它。

At the end of the day, we're in kind of the second phase or second generation of our program, where we're beginning to focus on a select group of partners that are making a more serious investment and are actually bringing opportunities to us, or that we're bringing opportunities to them for fulfillment so that they will again trust us and create and generate more opportunities on their own.

歸根結底，我們正處於計劃的第二階段或第二代，我們開始關註一組精選的合作夥伴，他們正在進行更認真的投資，並且實際上為我們帶來了機會，或者我們為他們帶來實現的機會，以便他們再次信任我們並自己創造和產生更多機會。

So we're in the second generation of that program right now, working with a select group of, I'll call it larger partners that really have made a commitment to us and want to do deals, and so that's where you're going to see, I think, better productivity.

因此，我們現在正處於該計劃的第二代，與一組精選的，我稱之為更大的合作夥伴合作，他們真正向我們做出了承諾並希望進行交易，所以這就是你要去的地方我認為，是為了提高生產力。

That's the model in Europe.

這就是歐洲的模式。

I mean, almost every single thing we sell in the EMEA region comes through a partner.

我的意思是，我們在歐洲、中東和非洲地區銷售的幾乎每件商品都來自合作夥伴。

In fact, everything goes through a partner, but they've evolved their model is very mature, but they've evolved their model to the point where, again, through a select group of partners, they drive most of their business.

事實上，一切都透過合作夥伴進行，但他們的模式已經非常成熟，但他們已經將自己的模式發展到這樣的程度：再次，透過一組精選的合作夥伴，他們推動了大部分業務。

So we're moving in that direction.

所以我們正在朝這個方向前進。

The second part of your question was, how does that relate to the AWS marketplace?

您問題的第二部分是，這與 AWS 市場有何關係？

Well, it's entirely different, remember that on the AWS side, with 300,000 customers on their platform, those customers can look sideways and look for solutions on their own, or they might have a partner or someone who is responsible for security or security infrastructure within their environment, but it's running on the AWS platform, so that might pull the partner into the deal to begin with, right.

嗯，這是完全不同的，請記住，在AWS 方面，他們的平台上有300,000 個客戶，這些客戶可以橫向尋找自己的解決方案，或者他們可能有合作夥伴或負責內部安全或安全基礎設施的人員。

The partner might recommend to that AWS Client that, hey, BIO-Key's got a really good solution.

合作夥伴可能會向 AWS 客戶推薦，嘿，BIO-Key 提供了一個非常好的解決方案。

And so there is a potential for us to have kind of a bifurcated sale, right, where the partner is working with an AWS customer, and they recommend a BIO-Key solution, but that sale goes through the marketplace.

因此，我們有可能進行某種分叉銷售，對吧，合作夥伴正在與 AWS 客戶合作，他們推薦 BIO-Key 解決方案，但該銷售是透過市場進行的。

So it's -- I think we're going to see how that evolves over the next quarter to two quarters, but they certainly don't compete, but they could be more collaborative.

所以，我認為我們將在下一個季度到兩個季度看到這種情況如何發展，但他們肯定不會競爭，但他們可以更加合作。

Got it.

知道了。

Okay, that's really helpful color, too, and I think that's it for me.

好吧，這也是非常有用的顏色，我想這就是對我來說的。

I appreciate the update, Mike, and good luck moving forward and look forward to watching you guys execute.

我很欣賞這次更新，麥克，祝你好運，並期待看到你們執行。

Great.

偉大的。

Thank you, Jack.

謝謝你，傑克。

(Operator Instructions).

（操作員說明）。

And at this time, we are showing no further questions, and the Q&A session has ended.

此時，我們不再提出任何問題，問答環節也結束了。

I'll ask Mike DePasquale for any closing remarks

我會請 Mike DePasquale 發表結束語

Thank you, everyone, for joining our call today.

謝謝大家今天加入我們的電話會議。

We look forward to updating you on future investor calls.

我們期待在未來的投資者電話會議上向您通報最新情況。

Please reach out to our IR team whose contact information is listed in today's press release with any follow up questions.

如有任何後續問題，請聯絡我們的投資者關係團隊，其聯絡資訊列於今天的新聞稿中。

We look forward to updating you on our Q3 call, and as always, we'll provide news and updates in the interim by press release.

我們期待在第三季電話會議上向您通報最新情況，並且一如既往，我們將透過新聞稿臨時提供新聞和更新。

Again, thank you for your time today, and have a great day.

再次感謝您今天抽出時間，祝您有美好的一天。

Thank you.

謝謝。

This concludes today's conference call.

今天的電話會議到此結束。

We thank you all for attending today's presentation.

我們感謝大家參加今天的演講。

You may now disconnect your lines and have a wonderful day.

您現在可以斷開線路並度過美好的一天。