Data Storage Corp (DTST) 2023 Q1 法說會逐字稿

Greetings and welcome to the Data Storage Corporation Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Waldman, Investor Relations. Please, you may begin.

您好，歡迎參加數據存儲公司的財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係部門的大衛·沃爾德曼 (David Waldman)。請您開始吧。

Thank you, and good morning, everyone and welcome to Data Storage Corporation's first quarter business update conference call. On the call with us this morning are Chuck Piluso, Chairman and CEO; and Chris Panagiotakos, Chief Financial Officer.

謝謝大家，大家早上好，歡迎參加數據存儲公司第一季度業務更新電話會議。今天早上與我們通話的是董事長兼首席執行官 Chuck Piluso；克里斯·帕納吉奧塔科斯 (Chris Panagiotakos)，首席財務官。

The company issued a press release this morning containing first quarter 2023 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212- 671-1020.

該公司今天上午發布了一份新聞稿，其中包含 2023 年第一季度的財務業績，該新聞稿也發佈在該公司的網站上。如果您在通話後有任何疑問或想了解有關該公司的任何其他信息，請致電 212-671-1020 聯繫 Crescendo Communications。

Before we begin, I would like to remind listeners that this conference call contains forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995 as amended that are intended to be covered by the Safe Harbor created thereby.

在我們開始之前，我想提醒聽眾，本次電話會議包含 1995 年《私人證券訴訟改革法案》修訂案含義內的前瞻性陳述，這些陳述旨在包含在由此創建的安全港範圍內。

Forward-looking statements are subject to risks and uncertainties that cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements.

前瞻性陳述存在風險和不確定性，導致實際結果、業績或成就與此類前瞻性陳述明示或暗示的任何未來結果、業績或成就存在重大差異。

Statements preceded by or followed by that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans, and similar expressions or future or conditional verbs such as will, should, would, may, and could are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing.

其之前或之後的陳述否則包括相信、期望、預期、打算、項目、估計、計劃和類似表達或未來或條件動詞（例如將、應該、將、可能和可能），通常是前瞻性的儘管並非所有前瞻性陳述都包含上述內容，但其本質上並非歷史事實。

Although the company believes the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations include, but are not limited to the company's ability to leverage the scalability and performance of Flagship Solutions, the company's ability to benefit from the IBM cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its Nasdaq listing.

儘管該公司認為此類前瞻性陳述中反映的預期是合理的，但不能保證此類預期將被證明是正確的。可能導致實際結果與公司預期存在重大差異的重要因素包括但不限於公司利用旗艦解決方案的可擴展性和性能的能力、公司從正在進行的 IBM 雲遷移中受益的能力、公司對未來盈利能力以及公司維持納斯達克上市的能力進行定位。

These risks should not be construed as exhaustive, and to be read together with the other cautionary statements included in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2023, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission.

這些風險不應被視為詳盡無遺，應與公司截至 2023 年 3 月 31 日的季度 10-Q 表格季度報告、10-K 表格年度報告以及當前報告中包含的其他警示性聲明一起閱讀見向美國證券交易委員會提交的 8-K 表。

Any forward-looking statement speaks only as of the date on which it was initially made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or otherwise. Now I'd like to turn the call over to Chuck Piluso. Please go ahead, Chuck.

任何前瞻性聲明僅代表最初發表之日的情況。除法律要求外，公司不承擔更新或修改任何前瞻性陳述的義務，無論是由於新信息、未來事件、情況變化還是其他原因。現在我想把電話轉給 Chuck Piluso。請繼續，查克。

Thank you, David, and good morning, everyone. We continue to make strong progress as it relates to the implementation of the business initiatives that I highlighted on our last call. These initiatives are highly targeted to accelerate our growth and should assist in achieving our goal of long -term sustainable profitability.

謝謝大衛，大家早上好。我們繼續取得強勁進展，因為這與我在上次電話會議中強調的業務計劃的實施有關。這些舉措的針對性很強，旨在加速我們的增長，並有助於實現我們長期可持續盈利的目標。

Historically, we've had an impressive 23% compounded annual growth rate since 2017. But we believe that through these initiatives, we can generate even stronger growth going forward. In fact, our near-term goal is to get to $50 million in high-margin revenue run rate in the coming years through a combination of both strong organic growth and strategic acquisitions.

從歷史上看，自 2017 年以來，我們的複合年增長率達到了令人印象深刻的 23%。但我們相信，通過這些舉措，我們可以在未來實現更強勁的增長。事實上，我們的近期目標是通過強勁的有機增長和戰略收購相結合，在未來幾年實現 5000 萬美元的高利潤收入運行率。

For this end, we have a number of specific activities underway, including expanding our dedicated sales team, hosting revenue-driven sales events, growing our channel partner program at Flagship, Nexxis as well as CloudFirst, increasing our international footprint through strategic partnerships, and finally, we are actively exploring ways to increase our gross profit margins in Flagship and Nexxis on recurring services closer to 50%, much like CloudFirst gross profit on subscription services.

為此，我們正在進行許多具體活動，包括擴大我們的專業銷售團隊、舉辦以收入為導向的銷售活動、擴大我們在 Flagship、Nexxis 和 CloudFirst 的渠道合作夥伴計劃，通過戰略合作夥伴關係擴大我們的國際影響力，以及最後，我們正在積極探索如何將 Flagship 和 Nexxis 的經常性服務毛利率提高到接近 50%，就像 CloudFirst 訂閱服務的毛利率一樣。

I'd like to note that we are still assimilating Flagship, including the recent realignment of management with Tom Kempster, Flagship's new President. All of our efforts are focused on the primary goal of efficiently deploying capital based on measurable returns, while increasing our penetration into this multibillion dollar marketplace.

我想指出的是，我們仍在吸收 Flagship，包括最近與 Flagship 新總裁 Tom Kempster 進行的管理層調整。我們所有的努力都集中在基於可衡量的回報有效部署資本的主要目標，同時提高我們對這個數十億美元市場的滲透率。

In fact, we are increasingly being sought out for our products, services, and proven ability to execute. Validating this, our work in process on executed subscription revenue contracts are over $5.5 million in total contract value, and this is further supported by the increasing visitation to our websites with over 19,000 visitors in the first quarter alone.

事實上，我們越來越多地因我們的產品、服務和經過驗證的執行能力而受到追捧。驗證這一點的是，我們正在執行的訂閱收入合同的合同總價值超過 550 萬美元，而我們網站的訪問量不斷增加，僅第一季度就有超過 19,000 名訪問者，這進一步證明了這一點。

Additionally, we received and we announced receiving a seven-figure order from a global 2,000 listed company on Forbes. This order is from an existing customer from whom we have established relationship, and which we believe will further demonstrate our ability to meet any and all of the needs of our customers, specifically large enterprise customers.

此外，我們還收到並宣布收到一家福布斯全球 2,000 強上市公司的七位數訂單。該訂單來自我們已建立關係的現有客戶，我們相信這將進一步證明我們有能力滿足客戶（特別是大型企業客戶）的任何及所有需求。

To provide additional clarity for our shareholders on performance of each subsidiary, we have decided to break out our revenue by business segment, and the first quarter is the second reporting period, which we have done this. While we did report a decrease in revenue in the first quarter of 2023 when compared to 2022, I'd like to note that during the first quarter of 2022, we reported a $2.6 million equipment sale to an NFL team. Excluding this sale, our revenues increased 14% over the same period last year.

為了讓我們的股東更清楚地了解每個子公司的業績，我們決定按業務部門細分我們的收入，第一季度是第二個報告期，我們已經這樣做了。雖然我們確實報告稱，與 2022 年相比，2023 年第一季度的收入有所下降，但我想指出的是，在 2022 年第一季度，我們向 NFL 球隊出售了 260 萬美元的設備。除去此次銷售，我們的收入比去年同期增長了 14%。

As I mentioned in the past, we are focusing our efforts on recurring revenue. We're not turning away from equipment and software sales, and we continue to explore and take advantage of these opportunities since we have experience, and we benefit from the cash injection. However, our long-term goal is steady profitability, which can only be sustained with long-term, subscription-based contracts, which provide high-margin recurring revenue streams.

正如我過去提到的，我們將重點放在經常性收入上。我們不會放棄設備和軟件銷售，我們會繼續探索和利用這些機會，因為我們有經驗，並且我們會從現金注入中受益。然而，我們的長期目標是穩定的盈利能力，這只能通過長期的、基於訂閱的合同來維持，這些合同提供高利潤的經常性收入流。

Concurrently, we're able to decrease our SG&A expenses by 13% from 2.5 million in the first quarter of 2022 to 2.1 million in the first quarter of 2023, which is a result of reallocating resources and eliminating redundant expenses.

與此同時，我們能夠將 SG&A 費用從 2022 年第一季度的 250 萬美元減少到 2023 年第一季度的 210 萬美元，減少 13%，這是重新分配資源和消除冗餘費用的結果。

As a result, and very importantly, we've achieved profitability for the first quarter with $35,000 in net income, and an adjusted EBITDA of $334,000 on revenue of 6.9 million for the first quarter of 2023. With a solid experienced leadership team, we are focused on subsidiaries to secure long-term recurring revenue contracts.

因此，非常重要的是，我們第一季度實現了盈利，淨利潤為 35,000 美元，調整後 EBITDA 為 334,000 美元，2023 年第一季度收入為 690 萬美元。憑藉一支經驗豐富的堅實領導團隊，我們專注於子公司以獲得長期經常性收入合同。

While we believe CloudFirst is hitting the mark, given its ability to sustain profitability on a stand-alone basis, we are extremely dedicated to having Flagship and Nexxis achieve the same, thereby increasing overall profitability.

雖然我們相信 CloudFirst 正在達到目標，但考慮到其獨立維持盈利能力的能力，我們非常致力於讓 Flagship 和 Nexxis 實現同樣的目標，從而提高整體盈利能力。

We continue to drive this strategy by expanding our distribution channels, while also increasing our digital and direct marketing programs, which have been performing well, giving us social and digital lead generation programs. CloudFirst alone has over 16,000 visitors to the website from the beginning of the year through April.

我們通過擴大分銷渠道繼續推動這一戰略，同時增加我們的數字和直接營銷計劃，這些計劃表現良好，為我們提供了社交和數字潛在客戶開發計劃。從今年年初到 4 月份，僅 CloudFirst 網站就有超過 16,000 名訪問者。

Additionally, we continue to explore synergistic acquisitions that complement and enhance our current operations, including companies leading in technology trend or that add important technical staff and create economies of scale to improve our gross profit margins and net income.

此外，我們繼續探索協同收購，以補充和增強我們當前的業務，包括領先技術趨勢的公司或增加重要技術人員並創造規模經濟，以提高我們的毛利率和淨利潤。

We will also drive growth by developing and managing collaborative solutions as well as embark on joint venture, joint marketing initiatives with our established distribution partners like IBM, our software vendors, IT resellers, managed service providers, application support providers, consultants, and others.

我們還將通過開發和管理協作解決方案來推動增長，並與 IBM、我們的軟件供應商、IT 經銷商、託管服務提供商、應用程序支持提供商、顧問等現有分銷合作夥伴開展合資、聯合營銷計劃。

Furthermore, we continue to believe there is a significant need for our solutions on a global scale, and we are pursuing growth opportunities internationally as these markets are increasing their use of multi-cloud solutions, which we are very well positioned to handle.

此外，我們仍然相信，全球範圍內對我們的解決方案有巨大的需求，並且我們正在國際上尋求增長機會，因為這些市場正在增加對多雲解決方案的使用，而我們完全有能力處理這些問題。

To give you a better sense of the market, there is an estimated 160,000 systems in the market with multiple partitions. In total, there are about 1 million of the unique partitions. Once virtualized, we typically price these partitions at $36,000 per year, which equates to a global addressable market of roughly $36 billion in annual recurring revenue.

為了讓您更好地了解市場，市場上估計有 160,000 個具有多個分區的系統。總共大約有 100 萬個唯一分區。一旦虛擬化，我們通常將這些分區的定價為每年 36,000 美元，這相當於每年經常性收入約為 360 億美元的全球潛在市場。

It is also worth noting the average contract term is about 29 months, and we have maintained an impressive 94% renewal rate. So hopefully, you can see, with the effective rollout of these initiatives, we believe our profitability can accelerate and be maintained long term.

還值得注意的是，平均合同期限約為 29 個月，我們保持著令人印象深刻的 94% 續約率。因此，希望您可以看到，隨著這些舉措的有效推出，我們相信我們的盈利能力可以加速並長期維持。

Overall, we are positioning ourselves as a leader within the industry. There is very limited competition in the market today. And unlike others, we have a 20-year proven track record with an established first-class customer base. With approximately $11 million in cash and short-term investments and no debt, we can deploy capital effectively, execute on our strategic business initiatives, and substantially grow our business. We look forward to announcing additional accomplishments throughout the year.

總體而言，我們將自己定位為行業內的領導者。如今市場上的競爭非常有限。與其他公司不同的是，我們擁有 20 年可靠的業績記錄和一流的客戶群。憑藉大約 1100 萬美元的現金和短期投資且沒有債務，我們可以有效地部署資本、執行我們的戰略業務計劃並大幅發展我們的業務。我們期待著在這一年中宣布更多的成就。

And with that, I'd like to turn the call over to Chris Panagiotakos, our CFO, to discuss our first quarter financials. Please go ahead, Chris.

說到這裡，我想將電話轉給我們的首席財務官 Chris Panagiotakos，討論我們第一季度的財務狀況。請繼續，克里斯。

Thank you, Chuck. Total revenue for the three months ended March 31, 2023, was 6.9 million, a decrease of 1.8 million or 21% compared to 8.7 million for the three months ended March 31, 2022. The decrease is attributed to a decrease in equipment sales during the current period. Cost of sales for the three months ended March 31, 2023, was 4.8 million, a decrease of 1.2 million or 20% compared to 6 million for the three months ended March 31, 2022. The decrease of 20% was mostly related to a decrease in equipment related cost of sales.

謝謝你，查克。截至2023年3月31日止三個月的總收入為690萬美元，較截至2022年3月31日止三個月的870萬美元減少180萬美元或21%。減少的原因是期內設備銷售減少。現時階段。截至2023年3月31日止三個月的銷售成本為480萬元，較截至2022年3月31日止三個月的600萬元減少120萬元或20%。減少20%主要與銷售成本下降有關與設備相關的銷售成本。

Selling, general, and administrative expenses for the three months ended March 31, 2023, were 2.1 million, a decrease of 329,000 or 13% as compared to 2.5 million for the three months ended March 31, 2022. The decrease is primarily attributed to a reduction force, a decrease in Software-as-a- Service expense, and a reduction in commissions. Adjusted EBITDA for the three months ended March 31, 2023, was $334,165 compared to adjusted EBITDA of $604,492 for the same period last year.

截至2023年3月31日止三個月的銷售、一般及管理費用為210萬美元，較截至2022年3月31日止三個月的250萬美元減少329,000美元，即13%。減少的主要原因是減少力量、軟件即服務費用的減少以及佣金的減少。截至 2023 年 3 月 31 日的三個月調整後 EBITDA 為 334,165 美元，而去年同期調整後 EBITDA 為 604,492 美元。

Net income attributable to common shareholders for the three months ended March 31, 2023, was $50,666 compared to net income of $156,010 for the three months ended March 31, 2022. We ended the quarter with cash and short-term investments of approximately 11 million at March 31, 2023, compared to 11.3 million at December 31, 2022.

截至 2023 年 3 月 31 日止三個月的普通股股東淨利潤為 50,666 美元，而截至 2022 年 3 月 31 日止三個月的淨利潤為 156,010 美元。截至本季度末，我們的現金和短期投資約為 1,100 萬美元。 2023 年 3 月 31 日，相比之下，2022 年 12 月 31 日為 1,130 萬。

Thank you. I will now turn the call back to Chuck.

謝謝。我現在將電話轉回給查克。

Thanks, Chris. I'd like to open the call up for questions.

謝謝，克里斯。我想打開電話提問。

(Operator Instructions) Matthew Galinko, Max Group (sic - Maxim Group).

（操作員說明）Matthew Galinko，Max Group（原文如此 - Maxim Group）。

Hey, thanks for taking my questions. I guess, can we start with the Fortune 2,000 deal that you announced late last week. Was that software equipment? Was that recurring? Anything you could add to how we could expect that to fall into your future results.

嘿，謝謝你回答我的問題。我想，我們可以從您上週晚些時候宣布的《財富 2000 強》交易開始嗎？那是軟件設備嗎？那是反復出現的嗎？您可以添加的任何內容，我們都可以預期它會落入您未來的結果中。

Hi, Matt. The deal was software. With this particular company, we don't like to wait around for approvals from all these companies to have our press releases go through their organization. So we don't actually go through, actually the client is. But this particular client, we provide managed services to this client, and that was a software sale.

嗨，馬特。這筆交易是軟件。對於這家特定的公司，我們不喜歡等待所有這些公司的批准才能讓我們的新聞稿通過他們的組織。所以我們實際上並沒有經歷過，實際上是客戶經歷過。但是對於這個特定的客戶，我們為這個客戶提供託管服務，那就是軟件銷售。

We expect that to recur every year, hopefully, but it does go out for bid, but we consider it annual recurring revenue because we've had it for the previous year. But you need to compete for it and win it. But it is a customer that we provide a number of different managed services, software-related patch management, things like that.

我們希望每年都會出現這種情況，但它確實會進行投標，但我們認為它是年度經常性收入，因為我們在前一年就有了它。但你需要競爭並贏得它。但我們為客戶提供了許多不同的託管服務、軟件相關的補丁管理等。

Got it. And I guess, this year, was there an expansion of the scope of the contract or size or is it relatively the same as the prior year?

知道了。我想，今年的合同範圍或規模是否有所擴大，或者與去年相比是否比較相同？

I believe it was expanded.

我相信它已經擴大了。

Got it. Terrific. I guess maybe going to a couple of the growth drivers that you're looking at, I think, the first one you mentioned was expansion of the sales team. So anything new this quarter, did you add a number of heads that you could point to or any notable hires or generally, how is the process of adding your new qualified reps?

知道了。了不起。我想也許是您正在考慮的幾個增長動力，我想，您提到的第一個是銷售團隊的擴張。那麼，本季度有什麼新變化嗎？您是否添加了一些您可以指出的負責人或任何值得注意的員工，或者一般來說，添加新的合格代表的過程如何？

Sure. One example is Verizon's layoff of their sales organization of their mid-market has benefited us. We've hired two individuals, one to cover the Southeast US for Nexxis, and Nexxis also brought on someone in the New York metro area. And so that was good as well as we have other candidates that are lined up. And those are two examples of that. So these layoffs, to some degree, has helped us, but the recruiting is ongoing.

當然。一個例子是 Verizon 裁減中端市場的銷售組織，這使我們受益。我們聘請了兩名人員，其中一名負責 Nexxis 的美國東南部工作，Nexxis 還聘請了紐約都會區的人員。所以這很好，我們還有其他候選人在排隊。這是兩個例子。因此，這些裁員在某種程度上對我們有所幫助，但招聘仍在繼續。

Got it. Terrific. And last one for me. You called out the M&A pipeline again, or at least you called out M&A as a growth opportunity, so can you touch on the pipeline? Are you seeing a lot of possible acquisition targets? And are the valuations in the right range these days? How do you think about that today?

知道了。了不起。最後一張給我。您再次提到了併購管道，或者至少您稱併購是一個增長機會，那麼您能談談管道嗎？您是否看到很多可能的收購目標？目前的估值是否在正確的範圍內？今天你對此有何看法？

Well, on the last call, I believe I stated that we put out somewhere between four or five term sheets last year alone. And these typically were companies doing $10 million in revenue. They had net income, but they are very small companies, really didn't have sales force. And we decided to try to look on the larger side to move up north of $15 million, folks that are growing, growing the business, have the recurring contracts going on.

嗯，在上次電話會議上，我相信我說過僅去年一年我們就推出了四到五份投資意向書。這些公司通常收入為 1000 萬美元。他們有淨利潤，但他們是非常小的公司，確實沒有銷售隊伍。我們決定嘗試從更大的角度考慮，將資金增加到 1500 萬美元以上，那些正在成長、發展業務、有經常性合同的人。

So this year, we are looking internationally to find managed service providers, and we're looking at that. At the same time, folks that are really trying to grow the business, not someone that's been in the business for 25, 30 years, and they have a low golf handicap, nothing that's wrong with that, but they are not really growing the business.

因此，今年，我們正在國際範圍內尋找託管服務提供商，我們正在考慮這一點。與此同時，那些真正在努力發展業務的人，而不是那些已經在這個行業工作了 25 年、30 年的人，他們的高爾夫差點很低，這沒什麼問題，但他們並沒有真正發展業務。

So we are looking internationally with that as well, and we do have an investment bank that's under engagement to continue to look for M&A opportunities, but north of this $10 million mark. There is not folks that do exactly what we do.

因此，我們也在放眼國際，我們確實有一家投資銀行正在參與繼續尋找併購機會，但金額超過 1000 萬美元。沒有人完全按照我們的做法做事。

So it's not that we're focused on a CloudFirst where we have the $7.5 million of assets deployed in six data centers, and it's IBM AIX and IBM i, we're looking for managed service providers that are growing the business. They are focused on cybersecurity. Cyber has an element of AI in it. So we're looking, we continue to look, but we're just -- we're pretty selective, and we're just not jumping into things. But we are looking internationally on the M&A side.

因此，我們並不是專注於 CloudFirst，我們在六個數據中心部署了 750 萬美元的資產，而是 IBM AIX 和 IBM i，我們正在尋找能夠發展業務的託管服務提供商。他們專注於網絡安全。網絡中有人工智能的元素。因此，我們正在尋找，我們將繼續尋找，但我們只是——我們非常有選擇性，而且我們只是不介入。但我們正在將目光投向國際併購方面。

Got it. If I could just add one more follow-up to that, I guess the international expansion comment that you made earlier, I guess, would be solved by you making a slightly larger MSP type international acquisition. So is that what you have in mind for international expansion or is there also just organic partner expansion in the international market, can you touch on that?

知道了。如果我可以再添加一個後續行動，我想您之前提出的國際擴張評論將通過您進行規模稍大的 MSP 類型的國際收購來解決。這就是您所考慮的國際擴張，還是國際市場上也只是有機的合作夥伴擴張，您能談談嗎？

Sure. For us to go into, for example, the UK, and for us to set up a data center with some racks in two cities in the UK, it's not such a big deal for us. We really know how to do it. Well, what we're looking to do is we're looking for those MSPs that are providing similar services to us as ABC did in 2017 with equipment and software focused in that same marketplace.

當然。例如，對於我們來說，進入英國，在英國的兩個城市建立一個帶有一些機架的數據中心，對我們來說並不是什麼大問題。我們真的知道該怎麼做。好吧，我們想要做的是尋找那些為我們提供類似服務的 MSP，就像 ABC 在 2017 年所做的那樣，其設備和軟件專注於同一市場。

And so if we can acquire one of those companies, now, all of a sudden, we can deploy that. We have that folks that are part of our organization on board and running their own unit, their own subsidiary. So we can still do that, and we can still move in, spend whatever it might be, $0.5 million to get started in two cities based under our multi-tenant design for -- that CloudFirst has. We can do that.

因此，如果我們能夠收購其中一家公司，那麼我們現在就可以突然部署它。我們有屬於我們組織一部分的人員，並運營著自己的部門、自己的子公司。因此，我們仍然可以這樣做，我們仍然可以搬進去，花多少錢，50 萬美元，根據我們的多租戶設計，在兩個城市啟動——CloudFirst 已經這樣做了。我們能做到這一點。

But we are looking at the same time for acquiring MSPs and MSP in that area. UK first because the English speaking will be a little bit easier for us. I don't think we are large enough now to say, oh, let's go into other parts of Europe, multilingual Asia, but the UK is the target.

但我們正在同時尋求收購該領域的 MSP 和 MSP。首先是英國，因為說英語對我們來說會更容易一些。我認為我們現在還不夠大，不能說，哦，讓我們進入歐洲其他地區、多語言的亞洲，但英國是目標。

Got it. Thank you.

知道了。謝謝。

Thanks, Matt.

謝謝，馬特。

Adam Waldo, Lismore Partners, LLC.

亞當·沃爾多 (Adam Waldo)，利斯莫爾合夥人有限責任公司。

Good day, everyone. Chuck, thanks very much for taking my questions. I wonder if we can start just to flush out the recent enterprise win just a little bit more beyond Matt's questions a few minutes ago. You press released it obviously as a seven-figure deal.

今天是個好日子。查克，非常感謝您回答我的問題。我想知道我們是否可以開始把最近的企業勝利比幾分鐘前馬特的問題稍微多一點。你按新聞發布的，顯然是一筆七位數的交易。

You've disclosed now on the call also a software deal, so we have a sense for what the margins look like. Can you give any more color as to how far end a seven-figure deal it is? And to what extent there is opportunity for increased scope of sale based -- for new services based on that sale?

您現在在電話會議上還透露了一項軟件交易，因此我們對利潤率有所了解。您能否進一步說明這筆七位數的交易到底有多遠？在多大程度上有機會擴大銷售範圍——基於該銷售的新服務？

Sure. Hi, Adam. I believe it was 2.2 million, Chris?

當然。嗨，亞當。我相信是 220 萬，克里斯？

Correct.

正確的。

2.2 million, I think last year, don't hold me to it, I think it was $1.9 million. So, it continues to expand on that side. But at the same time, this is an organization, a company that's growing very, very rapidly, and it's a Forbes Global 2,000 company. And we have project managers on this. We have technicians on this. This is through Flagship, and we provide what's called patch management with BigFix and a number of other services to them.

220萬，我想去年，別讓我堅持，我想是190萬美元。因此，它繼續向這方面擴展。但與此同時，這是一個組織、一家發展非常非常迅速的公司，而且是福布斯全球 2000 強公司。我們有這方面的項目經理。我們有這方面的技術人員。這是通過 Flagship 實現的，我們通過 BigFix 和許多其他服務向他們提供所謂的補丁管理。

So, it is one of the larger accounts at Flagship. Tom Kempster and the team, sales team that works on that, along with the technicians continue to try to penetrate more of this account. So the relationship is good. I don't know if I could say more than that, if there is proposals pending, but it's a constant working relationship.

因此，它是 Flagship 較大的客戶之一。 Tom Kempster 和負責此工作的團隊、銷售團隊以及技術人員繼續嘗試深入了解該客戶。所以關係很好。我不知道我是否可以說更多，是否有待決的提案，但這是一種持續的工作關係。

Just as an example, I believe that our project manager meets on the phone, set meetings twice a week with them. So we are very, very deep with the account and the account has significant opportunity to grow larger than what we are doing with them right now.

舉個例子，我相信我們的項目經理會通過電話見面，每週與他們舉行兩次會議。因此，我們對該賬戶的了解非常非常深入，該賬戶有很大的機會發展得比我們現在所做的更大。

Well, that's very helpful. Stepping back a level, last quarter you gave some helpful quantification in terms of the dollar value of your new business pipeline in your biggest segment CloudFirst, and then also some quantification of the step-up in unsolicited inquiries coming from the website if I am remembering properly in the 6,000 range in the first quarter, and that was quite a bit higher than in the fourth quarter.

嗯，這很有幫助。退一步說，上個季度，您對最大的 CloudFirst 細分市場中的新業務管道的美元價值進行了一些有用的量化，如果我沒記錯的話，還對來自網站的主動詢問的增加進行了一些量化第一季度正好在 6000 左右，比第四季度高了很多。

I think you said earlier in today's call that you are now seeing about 19,000 so far. I don't know if that's year-to-date for 2023 or 19,000 new ones in the second quarter. Can you quantify a little bit more for us the dollar value of the new business pipeline as it stands right now in each of the three principal business segments, and the size of the backlog, and then any changes recently in your close rates? Thank you.

我想您在今天的電話會議早些時候說過，到目前為止您看到的人數約為 19,000 人。我不知道這是 2023 年迄今為止的數字，還是第二季度新增的 19,000 個數字。您能否為我們進一步量化一下目前三個主要業務部門中新業務渠道的美元價值、積壓訂單的規模，以及最近成交率的任何變化？謝謝。

That is a multi-answer. That's a lot of information (multiple speaker) let me try to break it out a little bit. So overall, on all three websites, first of all, we have Nexxis, we have Flagship, and CloudFirst. So CloudFirst, which was the original Data Storage Corporation operating company that we changed the name last year to CloudFirst to avoid confusion and allow it to be more aligned with what it does, had 16,000 visitors to the website.

這是一個多重答案。這是很多信息（多個發言者），讓我嘗試稍微分解一下。總的來說，在這三個網站上，首先我們有 Nexxis、Flagship 和 CloudFirst。因此，CloudFirst（原 Data Storage Corporation 運營公司）的網站訪問量為 16,000 名，我們去年更名為 CloudFirst，以避免混淆並使其與其業務更加一致。

I believe it was the first quarter or let's call it through April. It increased because we started moving away -- not moving away, but not just doing the i on the IBM, but also AIX. So it's increased significantly. So it does a great job with the lead generation programs on that, it is really significant. The other two companies had the difference with the 3,000 additional visitors combined.

我相信這是第一季度，或者我們稱之為四月份。它增加是因為我們開始離開——不是離開，而是不僅在 IBM 上使用 i，還在 AIX 上使用 i。所以顯著增加了。因此，它在潛在客戶開發計劃方面做得很好，這非常重要。另外兩家公司的總訪客人數增加了 3,000 名，差異較大。

It's only beginning now since we realigned management with that, Kristi Cates, who's the Director of Marketing, she has been working with Tom, and they are refreshing the Flagship website to be able to get that to be closer to a lead-generating machine that the CloudFirst is, but that does take time.

自從我們重新調整管理層以來，這才剛剛開始，克里斯蒂·凱茨（Kristi Cates）是營銷總監，她一直在與湯姆合作，他們正在刷新旗艦網站，以便能夠使其更接近潛在客戶生成機器， CloudFirst 是，但這確實需要時間。

Nexxis also is working on their website for lead generation on that. So the company that we have been with for a long time, CloudFirst, it takes time to build up the SEO and all of the things that go on with that, but we are working on that to be able to increase the inbound lead gen and visitors to both of the other websites. But that is, let's just call it through April on that, so fairly significant.

Nexxis 也在他們的網站上致力於開發潛在客戶。因此，我們合作了很長時間的公司 CloudFirst 需要時間來建立 SEO 以及隨之而來的所有事情，但我們正在努力增加入站潛在客戶開發和其他兩個網站的訪問者。但也就是說，我們就將其稱為四月吧，這非常重要。

On the pipeline, CloudFirst uses salesforce.com sort of the other two companies' subsidiaries. And it's a very sophisticated in the sense of which rated at a 10% probability through a 90% probability. So what we use is we use anything where the proposal is 20% or more, something that we are negotiating the final terms is a 90%. But I believe it's over -- Chris, you remember it's over $12 million in total contract value, the pipeline.

在管道中，CloudFirst 使用 salesforce.com（類似於其他兩家公司的子公司）。從 10% 的概率到 90% 的概率來看，這是一個非常複雜的問題。所以我們使用的是提案達到 20% 或以上的任何內容，我們正在談判的最終條款是 90%。但我相信一切都結束了——克里斯，你還記得管道的合同總價值超過 1200 萬美元。

I believe so.

我相信是這樣。

Yeah, I think it's over $12 million in that pipeline on total contract value, so if that answers that question. So we had the website, we had the pipeline. But you didn't ask me the question, Adam, about the $5.5 million in executed contracts at the service delivery team right now what CloudFirst is in the process of installing. I think that's fairly significant.

是的，我認為該管道中的合同總價值超過 1200 萬美元，所以如果這回答了這個問題。所以我們有了網站，我們有了管道。但是，Adam，您沒有問我有關服務交付團隊執行的價值 550 萬美元的合同的問題，CloudFirst 正在安裝這些合同。我認為這相當重要。

No, absolutely. Maybe I wasn't clear. I was hitting at that in the backlog, and that's the vast majority of the backlog at this point, right? Is the $5.5 million on the CloudFirst side?

不，絕對是。也許是我沒說清楚。我在積壓的工作中遇到了這一點，這是目前積壓的絕大多數，對吧？這 550 萬美元是在 CloudFirst 方面嗎？

Yeah, and that's if you break that out --

是的，如果你把它打破的話——

Yeah, that's a big uptick.

是的，這是一個很大的上升。

Yeah, and the average term, we have accounts that are might be six months term to 60 months term. But when you calculate it out, it's through sales force calculations, it's a 29 months average. And with $3,000 a month on our, what I will call the more, the number that's occurring the most in billing is $3,000 a month, it's fairly significant.

是的，平均期限，我們的賬戶期限可能是六個月到 60 個月。但當你計算出來時，是通過銷售人員計算的，這是 29 個月的平均值。每月 3,000 美元，我稱之為“更多”，賬單中出現最多的數字是每月 3,000 美元，這是相當可觀的。

Now we don't really take too many annual contracts. I put that at $36,000 annually, but it's typically $36,000 a month on average 29 months. But it is $5.5 million in contracts that were taken, that are executed, that are in the process of being installed.

現在我們並沒有真正簽訂太多的年度合同。我認為每年 36,000 美元，但平均 29 個月通常每月 36,000 美元。但已簽訂、已執行、正在安裝的合同金額為 550 萬美元。

Right. And then finally, in terms of close rates, can you give some color or quantification around close rate changes here in the first quarter and into the second. Are they pretty stable? Are they improving? Can you quantify that, please?

正確的。最後，就成交率而言，您能否對第一季度和第二季度的成交率變化進行一些說明或量化。他們相當穩定嗎？他們有進步嗎？請問你能量化一下嗎？

Well, what happens is, on Flagship, they have a smaller number of accounts than CloudFirst. And typically, those accounts, the relationship with these very large accounts, whether that's the Miami HEAT or accounts like that, the Falcons, the close rate is extremely high. The population sample is smaller, let's call it, it's 50 whatever accounts, but the population is small, their close rate is very high. I'm going to estimate that it's probably like 80%.

嗯，實際情況是，在 Flagship 上，他們的帳戶數量比 CloudFirst 少。通常情況下，這些賬戶，與這些非常大的賬戶的關係，無論是邁阿密熱火隊還是獵鷹隊這樣的賬戶，關閉率都非常高。總體樣本較小，姑且稱之為50個賬戶吧，但總體規模較小，他們的接近率非常高。我估計大概有80%左右。

When you take CloudFirst that's dealing with a much higher volume, I believe Hal Schwartz said it's around 23%, don't hold me to that. Nexxis on the other side, I am not exactly sure with, but I would go with one out of four on the close rate for John Camello and his running of Nexxis.

當您採用 CloudFirst 來處理更高的容量時，我相信 Hal Schwartz 說大約是 23%，請不要讓我這麼認為。 Nexxis 在另一邊，我不太確定，但對於 John Camello 和他對 Nexxis 的運行，我會選擇四分之一的接近率。

But with the Flagship, the rate, I'm probably going to just estimate it around probably 80%. Very rarely, they lose a deal. Sometimes the budget will be pushed up. And by the way, it's the same thing for CloudFirst. What's in the pipeline, sometimes it just gets delayed and pushes out because it's a big deal to move someone's on-premise infrastructure to off-premise and someone can easily delay that. Disaster recovery, if someone just had a whole loss, those things move quick. But I think Hal said, on average, it's around 23%.

但對於旗艦版，我可能只會估計 80% 左右。他們很少會失去一筆交易。有時預算會被推高。順便說一下，對於 CloudFirst 來說也是一樣的。正在醞釀中的事情有時會被延遲並推出，因為將某人的內部部署基礎設施遷移到外部部署是一件大事，並且有人可以輕鬆地推遲這一點。災難恢復，如果有人完全損失了，那些事情會很快發生。但我認為 Hal 說，平均而言，大約是 23%。

Right. Tremendously helpful. Thanks very much.

正確的。非常有幫助。非常感謝。

Excuse me, we are closing our question-and-answer session. Now I would like to turn the floor back over to Chuck Piluso for closing comments. Please go ahead.

對不起，我們的問答環節即將結束。現在我想把發言權交還給查克·皮盧索 (Chuck Piluso) 以供結束評論。請繼續。

Thanks, [Priscilla], thank you. And thank you all for the questions; appreciate it. And to wrap up, we are actively pursuing aggressive growth strategies and have effectively implemented our business initiatives that we believe will drive revenue and assist in sustainable profitability.

謝謝，[普里西拉]，謝謝。感謝大家提出的問題；欣賞它。總而言之，我們正在積極推行積極的增長戰略，並有效實施了我們的業務計劃，我們相信這些計劃將增加收入並有助於可持續盈利。

We remain committed to reducing redundant expenses, streamlining operations, and maintaining a solid balance sheet to position ourselves as a leader within this industry. We are proud of our progress, and we look forward to reporting additional developments as they unfold. Thank you all for joining today.

我們仍然致力於減少冗餘開支、簡化運營並保持穩健的資產負債表，以將自己定位為該行業的領導者。我們為我們的進步感到自豪，並期待著報告更多的進展。感謝大家今天的加入。

This concludes today's conference call. You may now disconnect your lines at this time. Thank you for your participation and have a great --

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您度過愉快的時光——