Data Storage Corp (DTST) 2023 Q2 法說會逐字稿

Greetings, and welcome to the Data Storage Corporation 2023 fiscal second-quarter business update conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Data Storage Corporation 2023 財年第二季業務更新電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, David Waldman, Investor Relations. Please go ahead.

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)。請繼續。

Thank you. Good morning, everyone, and welcome to Data Storage Corporation's second-quarter business update conference call. On the call with us this morning are Chuck Piluso, Chairman and Chief Executive Officer; and Chris Panagiotakos, Chief Financial Officer. Sorry, bear with us for one second.

謝謝。大家早安，歡迎參加資料儲存公司第二季業務更新電話會議。今天早上與我們通話的是董事長兼執行長 Chuck Piluso；克里斯‧帕納吉奧塔科斯 (Chris Panagiotakos)，財務長。抱歉，請耐心等待一秒鐘。

So here we go. The company issued a press release this morning containing its second-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.

那麼我們就開始吧。該公司今天上午發布了一份新聞稿，其中包含 2023 年第二季的財務業績，該業績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'd like to remind listeners that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended that are intended to be covered by the Safe Harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements.

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》修訂案含義內的前瞻性陳述，這些陳述旨在涵蓋由此創建的安全港。前瞻性陳述存在風險和不確定性，可能導致實際結果、績效或成就與此類前瞻性陳述明示或暗示的任何未來結果、績效或成就有重大差異。

Statements preceded by, followed by, or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans, and similar expressions or future 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.

前面、後面或以其他方式包含相信、期望、預期、打算、項目、估計、計劃和類似表達或未來條件動詞（例如 will、should、would、may 和 can）的陳述通常是向前的- 本質上是前瞻性的，而不是歷史事實，儘管並非所有前瞻性陳述都包含上述內容。

Although the company believes that 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聲明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、公司的能力為未來的獲利能力以及公司維持納斯達克上市的能力做好定位。

These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the company's quarterly report on Form 10-Q for the quarter ended June 30, 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6 月30 日的季度10-Q 表格季度報告、10-K 表格年度報告以及10-K 表格當前報告中包含的其他警示性聲明一起閱讀8-K 已向美國證券交易委員會提交。

Any forward-looking statements speak 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.

任何前瞻性陳述僅代表最初發表之日的情況。除法律要求外，本公司不承擔更新或修改任何前瞻性聲明的義務，無論是由於新資訊、未來事件、情況變化或其他原因。

I'd now like to turn the call over to Chuck Piluso. Please go ahead, Chuck.

我現在想把電話轉給 Chuck Piluso。請繼續，查克。

Thank you, David, and good morning, everyone. We are beginning to witness the benefits of the business initiatives I discussed on prior calls, which are focused on accelerating our growth with the goal of achieving long-term sustainable profitability.

謝謝大衛，大家早安。我們開始見證我在之前的電話會議中討論的業務計劃的好處，這些計劃的重點是加速我們的成長，以實現長期可持續盈利為目標。

I am proud to report that we've achieved solid financial results for the second quarter with revenue increasing 22% to $5.9 million. Importantly, we achieved profitability for the second consecutive quarter, which we believe demonstrates our ability to execute our business growth strategy and the strength of our business model.

我很自豪地向大家報告，我們第二季取得了穩健的財務業績，營收成長了 22%，達到 590 萬美元。重要的是，我們連續第二個季度獲利，我們相信這證明了我們執行業務成長策略的能力和業務模式的優勢。

We also improved gross profit by 11% for the six-month period. Furthermore, we are continuing to simulate our Flagship business unit. And we are actively exploring ways to increase our gross profit margin on subscription revenue within Flagship and move closer to the 50% margin that we attained at CloudFirst.

這六個月期間我們的毛利也提高了 11%。此外，我們正在繼續模擬我們的旗艦業務部門。我們正在積極探索如何提高 Flagship 內訂閱收入的毛利率，並接近我們在 CloudFirst 實現的 50% 的毛利率。

Additionally, our equipment and software group generated $2.4 million in the second quarter compared to $1.9 million for the second quarter of 2022. Notably, CloudFirst as a standalone achieved $3.2 million in revenue for the second quarter with net income of over $550,000 and $800,000 in EBITDA, which is a 25% margin.

此外，我們的設備和軟體團隊在第二季度創造了240 萬美元的收入，而2022 年第二季為190 萬美元。值得注意的是，CloudFirst 作為獨立公司在第二季度實現了320 萬美元的收入，淨利潤超過55 萬美元，稅息折舊及攤銷前利潤(EBITDA) 超過80 萬美元，即 25% 的利潤。

We plan to continue to drive revenues by executing on our business initiatives, including expanding distribution channels, increasing our digital and direct marketing programs, continuing our lead generation program, hosting additional revenue-driven sales events, and exploring strategic M&A opportunities to assist with the overall growth of our company. Importantly, there is significant need for innovative solutions on a global basis as expanding internationally and increasing our geographic footprint and addressable market are priorities for us.

我們計劃透過執行我們的業務計劃來繼續增加收入，包括擴大分銷管道、增加我們的數位和直接行銷計劃、繼續我們的潛在客戶開發計劃、舉辦更多收入驅動的銷售活動以及探索策略併購機會以協助我們公司的整體成長。重要的是，全球範圍內迫切需要創新的解決方案，因為國際擴張和擴大我們的地理足跡和潛在市場是我們的首要任務。

Another validation of our growing presence in the marketplace is the fact that we had over 45,000 visitors to our websites year to date. We also have over $9 million in total contract value and proposals to potential clients. In addition, we have what we refer to as a nurture group of companies with over 25,000 organizations that receive our information that do not opt out and receive marketing and technical information they have continued to send over the years and interface with them on an ongoing basis.

迄今為止，我們網站的訪客已超過 45,000 人，這也是我們在市場中不斷增長的影響力的另一個證明。我們還為潛在客戶提供了總價值超過 900 萬美元的合約和建議。此外，我們還擁有一個培育集團，擁有超過 25,000 個組織，這些組織接收我們的訊息，這些組織不會選擇退出，並接收他們多年來持續發送的行銷和技術訊息，並持續與他們互動。

Companies on this list have expressed interest in implementing our solutions and could provide meaningful revenue, should we secure new contracts. In particular, and perhaps more important to note, are the secured contracts announced recently, which we believe demonstrates our contract momentum during the second quarter and into the third quarter of 2023. Many of these are high-margin, subscription-based contracts.

此名單上的公司表示有興趣實施我們的解決方案，如果我們獲得新合同，它們可以提供可觀的收入。尤其值得注意的是，也許更重要的是最近宣布的擔保合同，我們認為這證明了我們在 2023 年第二季度和第三季度的合約勢頭。其中許多是高利潤、基於訂閱的合約。

Let me touch on these contracts quickly, and I'd like to highlight that we continue to maintain a 94% renewal rate with an average term of 29 months, validating that we continually meet or exceed our clients' needs.

讓我快速談談這些合同，我想強調的是，我們繼續保持 94% 的續約率，平均期限為 29 個月，這證明我們不斷滿足或超越客戶的需求。

First, we secured a multi-million-dollar contract with a leading business process solution provider that has customers around the world. We are implementing cloud-based infrastructure to support their large data sets while providing 24/7 dedicated support and data recovery services. Our solutions allow for the client to run at full performance during planned maintenance or unplanned outages. This contract provides an avenue to penetrate international markets, and we intend to pursue the opportunities.

首先，我們與一家擁有世界各地客戶的領先業務流程解決方案提供商簽訂了價值數百萬美元的合約。我們正在實施基於雲端的基礎設施來支援他們的大型資料集，同時提供 24/7 專用支援和資料復原服務。我們的解決方案允許客戶在計劃內維護或計劃外停機期間以最佳性能運作。該合約提供了進入國際市場的途徑，我們打算抓住這些機會。

Next, we secured a large subscription-based contract with a promotional products company. This contract specifically came through our Flagship subsidiary, and we believe illustrates we are executing on our goal of increasing Flagship's recurring subscription-based revenue contracts. This customer sought us out following an unpredictable natural disaster.

接下來，我們與一家促銷產品公司簽訂了一份大型訂閱合約。該合約特別是透過我們的旗艦子公司簽訂的，我們相信這表明我們正在實現增加旗艦的經常性訂閱收入合約的目標。這位客戶在一場不可預測的自然災害後找到了我們。

Unfortunately, following this event, the customer quickly realized that they were unable to recover and resume operations within the required time frames, making it a costly and an extended outage. As a result, we were contracted to provide cloud-based disaster recovery and cloud-based infrastructure to allow them to move from legacy hardware to running all of their critical applications on our fully managed, highly secure enterprise cloud with dedicated support teams, ensuring seamless and rapid recovery.

不幸的是，在此事件發生後，客戶很快意識到他們無法在規定的時間內恢復和恢復運營，導致成本高昂且停電時間延長。因此，我們簽訂了合同，提供基於雲端的災難復原和基於雲端的基礎設施，使他們能夠從傳統硬體轉移到在我們完全託管、高度安全的企業雲端上運行所有關鍵應用程序，並配備專門的支持團隊，從而確保無縫和快速恢復。

Furthermore, we secured a multi-million-dollar project with one of the nation's leading sports and entertainment companies. For this project, we built a custom solution and are providing cloud storage infrastructure to improve response times to files, recovery of files, and increasing their storage capacity.

此外，我們還與美國領先的體育和娛樂公司之一簽訂了價值數百萬美元的項目。對於這個項目，我們建立了一個自訂解決方案，並提供雲端儲存基礎設施，以縮短檔案回應時間、檔案復原並增加其儲存容量。

We believe this contract demonstrates our ability to address each client's needs and build that specific solutions to assist in reaching their goals. In addition, the sports and entertainment industry has been increasing the adoption of data storage and security solutions. As a result, we are gaining traction in this industry.

我們相信這份合約證明了我們有能力滿足每個客戶的需求並建立特定的解決方案以幫助他們實現目標。此外，體育和娛樂產業一直在增加資料儲存和安全解決方案的採用。因此，我們在這個行業中越來越受歡迎。

And most recently, we have a contract to one of the largest food distributors in the United States to provide managed disaster recovery solutions. This is another subscription-based contract and increased our reach within the vertical, while enhancing our recognition within the food industry.

最近，我們與美國最大的食品分銷商之一簽訂了合同，提供託管災難恢復解決方案。這是另一份基於訂閱的合同，擴大了我們在垂直領域的影響力，同時提高了我們在食品行業的認可。

We have the opportunity to expand these contracts and provide additional services, which we will explore and execute accordingly. We are securing large high-margin contracts and have been focused on subscription-based services, providing recurring revenue as we add these important companies to the list of 450 companies we currently serve.

我們有機會擴大這些合約並提供額外的服務，我們將相應地探索和執行這些服務。我們正在獲得大型高利潤合同，並一直專注於基於訂閱的服務，隨著我們將這些重要公司添加到我們目前服務的 450 家公司名單中，我們可以提供經常性收入。

I am proud to report that CloudFirst and Flagship achieved profitability on a stand-alone basis for both the first and second quarters. We are targeting large market opportunities and continue to secure contracts and believe we are better positioned to penetrate the market as well as expand our geographic footprint, which should assist in accelerating our growth.

我很自豪地報告，CloudFirst 和 Flagship 在第一季和第二季均實現了獨立盈利。我們瞄準巨大的市場機會並繼續獲得合同，並相信我們能夠更好地滲透市場並擴大我們的地理足跡，這將有助於加速我們的成長。

We also continue to explore strategic acquisitions that complement and improve our current operations, including companies leading a technology trend or may increase our distribution channels, while they'd add important technical staff and create economies of scale. Through all these initiatives I have highlighted, I am confident we can continue to grow revenue, improve our gross profit margins and net income.

我們也繼續探索策略性收購，以補充和改善我們當前的運營，包括引領技術趨勢或可能增加我們的分銷管道的公司，同時他們會增加重要的技術人員並創造規模經濟。透過我強調的所有這些舉措，我相信我們能夠繼續增加收入，提高毛利率和淨利潤。

To wrap up, as mentioned, at the start of the call, we are effectively executing on our business initiatives and achieved profitability for the second quarter. At the same time, we maintained a solid balance sheet with over $10.6 million in cash and short-term investments and intend to deploy capital efficiently to assist in the growth of the company, while continuing to secure meaningful contracts. We believe our growth strategy will support long-term profitability and create long-term value for our shareholders.

最後，正如在電話會議開始時提到的那樣，我們正在有效地執行我們的業務計劃，並在第二季度實現了盈利。同時，我們保持了穩健的資產負債表，擁有超過 1,060 萬美元的現金和短期投資，並打算有效地部署資本，以協助公司的發展，同時繼續獲得有意義的合約。我們相信我們的成長策略將支持長期獲利並為股東創造長期價值。

With that, I'd like to turn the call over to Chris Panagiotakos, our CFO, to discuss the second-quarter financials. Please go ahead, Chris.

說到這裡，我想將電話轉給我們的財務長 Chris Panagiotakos，討論第二季的財務狀況。請繼續，克里斯。

Thank you, Chuck. Total revenue for the three months ended June 30, 2023, was $5.9 million, an increase of $1.1 million or 22% compared to $4.8 million for the three months ended June 30, 2022. The increase is attributed to an increase in all of our revenue streams during the current period.

謝謝你，查克。截至2023年6月30日止三個月的總收入為590萬美元，與截至2022年6月30日止三個月的480萬美元相比，增加了110萬美元，即22%。這一成長歸因於我們所有收入的增加當前期間的流量。

Cost of sales for the three months ended June 30, 2023, was $3.3 million, an increase of $56,000 or 2% compared to $3.3 million for the three months ended June 30, 2022. The increase was mostly related to an increase in equipment-related cost of sales.

截至2023年6月30日止三個月的銷售成本為330萬美元，與截至2022年6月30日止三個月的330萬美元相比，增加了56,000美元，即2%。這一增長主要與設備相關費用的增加有關。銷售成本。

Selling and general and administrative expenses for the three months ended June 30, 2023, were $2.5 million, a decrease of $122,000 or 5% as compared to $2.6 million for the three months ended June 30, 2022. The decrease was primarily due to a reduction in salary expenses, a reduction in advertising expenses, offset by an increase in professional fees and commission expenses.

截至2023年6月30日止三個月的銷售及一般及管理費用為250萬美元，較截至2022年6月30日止三個月的260萬美元減少122,000美元，即5%。減少的主要原因是減少在工資支出中，廣告支出的減少被專業費用和佣金支出的增加所抵消。

Adjusted EBITDA for the three months ended June 30, 2023, was $530,000 compared to an adjusted EBITDA loss of $259,000 for the same period last year. Net income attributable to common shareholders for the three months ended June 30, 2023, was $227,000 compared to a net loss of $1.1 million for the three months ended June 30, 2022.

截至 2023 年 6 月 30 日止三個月的調整後 EBITDA 為 53 萬美元，而去年同期調整後 EBITDA 虧損為 25.9 萬美元。截至2023年6月30日止三個月的歸屬於普通股股東的淨利潤為227,000美元，而截至2022年6月30日止三個月的淨虧損為110萬美元。

We ended the quarter with cash and short-term investments of approximately $10.7 million at June 30, 2023, compared to $11.3 million at December 31, 2022. Thank you. I will now turn the call back to Chuck.

截至 2023 年 6 月 30 日，本季末我們的現金和短期投資約為 1,070 萬美元，而 2022 年 12 月 31 日為 1,130 萬美元。謝謝。我現在將電話轉回給查克。

Thanks, Chris. We'd like to open it up for questions if any.

謝謝，克里斯。如果有任何問題，我們願意開放。

(Operator Instructions) Matthew Galinko, Maxim Group.

（操作員說明）Matthew Galinko，Maxim Group。

Hey, good morning, and thanks for taking my questions. Can we start with -- it just seems like given the last couple of months that the velocity of large deals has been picking up a little bit, am I right to see that pattern? And is there anything specific you could attribute that to in terms of your go-to-market and execution that just -- there's an uncertain cadence to when large contracts land or just help me understand how that came to be.

嘿，早上好，感謝您回答我的問題。我們可以先考慮一下——考慮到過去幾個月大宗交易的速度有所加快，我對這種模式的看法是否正確？在你的上市和執行方面，有什麼具體的東西可以歸因於——大型合約落地的節奏是不確定的，或者只是幫助我理解這是如何發生的。

Good morning, Matt. Let me start off by saying that we've been preaching that the migration is underway for these large, powerful IBM systems. We know that it's plateaued, maybe even declined slightly on Amazon, Google, or Microsoft. And a lot of those systems, Azure, whatever are in play and have in play for 10-plus years.

早安，馬特。首先我要說的是，我們一直在宣揚這些大型、強大的 IBM 系統的遷移正在進行中。我們知道，亞馬遜、谷歌或微軟的銷售量已趨於穩定，甚至可能略有下降。其中許多系統、Azure 等等都在使用，並且已經使用了 10 多年。

But this migration on the IBM side is happening and it's accelerating. And so companies that are midsize as we know that most of these systems on the IBM side are enterprise level and mid. And so with that, the migration is underway, and that's why when you see 45,000 visitors -- and that's combined for all three companies, but I believe it's over 38,000 for just CloudFirst alone. It could be a little higher than that, but let's just assume around 38,000.

但 IBM 方面的這種遷移正在發生並且正在加速。我們知道，IBM 方面的大多數系統都是企業級和中型的中型公司。因此，遷移正在進行中，這就是為什麼當您看到 45,000 名訪客時，這是所有三家公司的總和，但我相信僅 CloudFirst 就超過 38,000 名。可能會比這個數字高一點，但我們假設大約是 38,000。

So this we could see by the number of visitors to the site, how many times migrating your IBM systems to the cloud has been downloaded off of our site. So there's a very high awareness to it. There's limited competition in this area at this particular point, and we're taking advantage of it. But it's about the migration now, Matt.

因此，我們可以透過網站的訪客數量來了解從我們的網站下載將 IBM 系統遷移到雲端的次數。所以大家對它的認知度非常高。目前該領域的競爭有限，我們正在利用它。但現在是關於遷移的問題，馬特。

Got you. That's helpful. I think you touched on a pipeline number. I think it was -- I think you said $9 million in prepared, but correct me if I'm wrong. I guess is that -- do your pipeline numbers generally include the large multi-million-dollar opportunities that are moving through or that $9 million, like how is that -- what does the competition look like in terms of [site]?

明白你了。這很有幫助。我想你提到了管道號碼。我想是——我想你說準備了 900 萬美元，但如果我錯了，請糾正我。我的猜測是——你們的管道數字通常包括正在經歷的價值數百萬美元的大型機會還是900萬美元的機會，就像這樣——就[網站]而言，競爭是什麼樣的？

So what happens is Hal Schwartz, President of CloudFirst has -- because he's like a scientist on evaluating at what level that particular proposal is. So everyone puts in, if it's 5%, 10%, 20%, 50% on the probability side. So when you see the $9 million, it means that these are individuals, these are companies that have requested or have worked with the technical staff and our sales staff on receiving proposals. So this is total contract value on the $9 million.

所以發生的事情是 CloudFirst 總裁 Hal Schwartz 所做的事——因為他就像科學家，正在評估特定提案的等級。所以每個人都投入，如果是5%、10%、20%、50%的機率。因此，當您看到 900 萬美元時，這意味著這些是個人，這些是已請求技術人員和我們的銷售人員或已與技術人員和我們的銷售人員合作接收提案的公司。這是 900 萬美元的合約總價值。

Now when there's very, very large deals, we really typically don't include that. Now when it moves to a 90%, I believe they're negotiating terms and conditions. So it's fairly scientific. So when we look at $9 million, you could say if the average is 29 months, which is our average contract rate, although most of them are 36 months, you could divide that out and come up with what the monthly recurring revenue is on that. But for the most part, we have folks at 12 months and we have some at 60 months.

現在，當有非常非常大的交易時，我們通常不會將其包括在內。現在，當它達到 90% 時，我相信他們正在談判條款和條件。所以說還是比較科學的。因此，當我們考慮900 萬美元時，您可以說，如果平均值為29 個月，即我們的平均合約費率，儘管大多數合約期限為36 個月，您可以將其除以每月經常性收入是多少。但大多數情況下，我們有 12 個月大的嬰兒，也有 60 個月大的嬰兒。

But -- so it varies, but these are folks that have requested and have worked with our technical team to get our proposal on our services. But if it's a real monster deal -- which that happens sometimes because Flagship works on some very large equipment-type deals -- we typically do pull that and we don't put that in there. Or we reduce it down to a 5% or 10%.

但是，情況有所不同，但這些人已經要求並與我們的技術團隊合作，以獲得我們的服務提案。但如果這是一筆真正的巨額交易——這種情況有時會發生，因為旗艦公司從事一些非常大的設備類型交易——我們通常會拉出來，但不會把它放在那裡。或者我們將其降低至 5% 或 10%。

So we're fairly between Tom Kempster who's -- runs the CEO, President of Flagship. They're pretty -- I'll use the word, not just conservative, but very scientific at what stage the discussions take place with the client and the client's technical team and our technical team.

因此，我們的立場是湯姆·肯普斯特（Tom Kempster），他是旗艦公司的執行長和總裁。它們很漂亮——我會用這個詞，不僅僅是保守，而且非常科學，在與客戶、客戶的技術團隊和我們的技術團隊進行討論的階段。

So in answer to the question, $9 million in proposal is outstanding. When it moves to 90%, Hal has those numbers, and we basically know for the rest of '23 and the beginning of '24 what that recurring revenue will be -- in addition to they move out of these proposal and it goes into work in process, which we're not reporting at all right now. I don't think we have, Chris, right?

因此，回答這個問題時，900 萬美元的提案尚未完成。當它達到 90% 時，哈爾有這些數字，我們基本上知道 23 年剩餘時間和 24 年初的經常性收入將是多少——除了他們退出這些提案並投入工作之外正在進行中，我們現在根本沒有報告。我想我們沒有，克里斯，對吧？

No.

不。

We haven't reported that. I think that -- I believe we have around $160,000 not pending but being installed right now on the recurring revenue side alone that -- I believe that's the number. So that will be added in over the next few months. But it's a continual process. I don't know if that helps at all. But we're pretty conservative in the way we do it.

我們還沒有報道這一點。我認為——我相信我們有大約 16 萬美元沒有懸而未決，但現在僅在經常性收入方面就已經安裝了——我相信這就是數字。因此，這將在接下來的幾個月內添加。但這是一個持續的過程。我不知道這是否有幫助。但我們的做法相當保守。

No, that's very helpful. I guess maybe the last one for me at the moment. So I think your SG&A line tends to bump around a fair bit. But how big -- I guess how would you categorize or frame your spending on go-to-market through the balance of the year, just given the momentum you seem to have year to date?

不，這非常有幫助。我想這對我來說可能是最後一次了。所以我認為你們的SG&A線往往會出現相當大的波動。但是，考慮到今年迄今為止的勢頭，我想您會如何對今年餘下的上市支出進行分類或框架？

I think when you're looking at the SG&A, sometimes when there's equipment sales, just before we go into the marketing piece of it, with the equipment sales, you'll get large commissions on it. The percentage of the gross profit is paid to the sales rep on equipment. And so you'll see that type of bump on there. But you also have stock compensation that is sitting in the SG&A as well, which we get hit with on the stock options and stock grants.

我認為，當你查看SG&A時，有時當有設備銷售時，就在我們進入行銷部分之前，透過設備銷售，你會獲得大量佣金。毛利的百分比支付給設備銷售代表。所以你會在那裡看到那種凸起。但股票報酬也包含在 SG&A 中，我們在股票選擇權和股票授予方面受到了影響。

So that's the other reason why you might see a bump like that. I believe it was over $400,000 for Flagship in 2022; and in 2023, $52,000. So we gave the executives there at the time at Flagship stock compensation because they didn't achieve what was intended to at Flagship based on performance and we wanted them to be able to be part of the company. So that's why you'll see that bump in stock compensation. I believe it was approximately $460,000 for Flagship in 2022.

這就是您可能會看到這樣的腫塊的另一個原因。我相信 2022 年旗艦版的售價將超過 40 萬美元；到 2023 年，將達到 52,000 美元。因此，我們向當時 Flagship 的高管提供了股票補償，因為他們沒有實現 Flagship 基於業績的預期目標，我們希望他們能夠成為公司的一部分。這就是為什麼你會看到股票薪酬上漲。我認為 2022 年旗艦版的售價約為 46 萬美元。

Got it. All right. Thank you. I'll jump back in the queue.

知道了。好的。謝謝。我會跳回到隊列中。

(Operator Instructions) Adam Waldo, Lismore Partners.

（操作說明）Adam Waldo，Lismore Partners。

Good day, everyone. Chuck, thanks very much for taking my questions again this quarter. I want to really drill down again on the new business pipeline and backlog metrics, which certainly as we met last quarter and when you reported fourth-quarter results back in the winter, we're illustrating what you qualitatively termed a migration acceleration, right, in customers to the IBM platform.

今天是個好日子。查克，非常感謝您本季再次回答我的問題。我想再次深入研究新的業務管道和積壓指標，這當然是我們上個季度遇到的，當您在冬天報告第四季度業績時，我們正在說明您定性地稱之為遷移加速，對吧，客戶轉向IBM 平台。

So when we met last quarter, you reported 19,000 inbound inquiries over the three divisions' websites year to date and that compared with 6,000 back in the winter. Now, today you're reporting 45,000. So I think that really puts a fine point on it, right? How do we think about how those kinds of inbound inquiries compare with a year ago, keeping in mind that you have also been upgrading your websites this year relative to last?

因此，當我們上季度會面時，您報告了三個部門網站今年迄今為止收到的 19,000 項入站查詢，而冬季時為 6,000 項。現在，今天您報告的人數為 45,000。所以我認為這確實很有意義，對嗎？考慮到您今年相對於去年也升級了您的網站，我們如何看待這些類型的入站查詢與一年前的比較？

Good morning, Adam. Let me try to separate the questions. On the new business, the pipeline, and this migration, I just wanted to say that on the migration, it's not that people are moving to IBM, although the platform is increasing by, I believe, 9% over the previous period.

早安，亞當。讓我嘗試分開這些問題。關於新業務、管道和這次遷移，我只是想說，在遷移上，並不是說人們正在轉向IBM，儘管我認為該平台比上一期增長了9%。

So people are moving there, but it's not -- it's the folks that have these systems installed already that are seeing that it might be better to preserve capital and to have the pay-as-you-grow kind of concept and build it up for the latest and greatest systems and get the best disaster recovery.

所以人們正在搬到那裡，但事實並非如此——那些已經安裝了這些系統的人看到，保留資本並採用“隨增長付費”的概念並為之建立起來可能會更好。最新、最好的系統並獲得最佳的災難復原。

So it's not that they're moving to IBM Power, although there is some growth. These are folks that have these systems in there. IBM is typically -- I'll use the term culture and they stick with it.

因此，儘管有一些成長，但他們並不是要轉向 IBM Power。這些人擁有這些系統。 IBM 是典型的－我會使用「文化」這個詞，他們也堅持使用這個詞。

On the acceleration with the inquiries, when I mentioned 45,000, that's for all three sites. So if we're comparing because they are accelerating the other two subsidiaries, but let's just talk about CloudFirst.

關於查詢的加速，當我提到 45,000 次時，這是針對所有三個網站的。因此，如果我們進行比較是因為他們正在加速其他兩家子公司的發展，那麼我們就只討論 CloudFirst。

Yes, that was, I believe, around 38,000 year to date today. When I gave that number the last time, I think it was as of the April-May time frame on those numbers. So yes, the increase are coming in. We have a pretty good close rate on it when they're calling in to us. An inbound lead is usually better, something's going on in their environment, whether it's a -- the CFO is saying, let's take a look at this. It might be more beneficial to us.

是的，我相信，迄今為止，這大約是 38,000 年。當我上次給出這個數字時，我認為這些數字是在四月至五月的時間範圍內的。所以，是的，成長正在到來。當他們打電話給我們時，我們的成交率非常高。入站線索通常更好，他們的環境中正在發生一些事情，無論是——首席財務官說，讓我們看看這個。或許對我們更有利。

Our IBM technicians that are managing the hardware are getting a little older possibly, getting ready to retire. And these custom applications that are sitting there, that have been built on this platform, the developers are still developing that. And it could be folks that just graduated from college. But the folks that are actually maintaining this hardware, that is an exposure for these companies.

我們管理硬體的 IBM 技術人員可能年紀越來越大，正準備退休。這些客製化應用程式就在那裡，是在這個平台上建立的，開發人員仍在開發它。也可能是剛從大學畢業的人。但真正維護這些硬體的人，對這些公司來說是個風險。

And so with that, they are investigating. And that's why that nurture list is very large. And we continue and they don't opt out either. So it's pretty interesting that we continue to send information, inquiries come in. So this migration is, number one, underway. Our pipeline, we're starting to close them. It's not just proposals sitting in a pipeline and just sitting there for years.

因此，他們正在調查。這就是為什麼這個培育清單非常大。我們繼續，他們也沒有選擇退出。因此，非常有趣的是，我們繼續發送訊息，詢問不斷出現。因此，這一遷移正在進行中。我們的管道，我們開始關閉它們。這不僅僅是擱置多年的提案。

So I would say that we have a good close rate. Migration is underway. Our pipeline is $9 million. That pipeline was higher, but we closed some of those deals, and that's why it's reduced from what it was before. But it's underway. And I think we're going to take advantage of that.

所以我想說我們的成交率很高。遷移正在進行中。我們的管道是 900 萬美元。管道數量更高，但我們完成了其中一些交易，這就是為什麼它比之前減少。但它正在進行中。我認為我們將利用這一點。

And if we can look to utilize some of the cash we have in the bank for some additional growth in potentially the UK that we are looking at and also expanding Canada with the two data centers we have there with our partners in Canada. So we expect to grow the pipeline. And the migration is happening and there's limited competition. So, Adam, we're kind of excited about it, frankly.

如果我們能夠利用銀行里的一些現金來實現我們正在考慮的英國潛在的額外增長，並透過我們與加拿大合作夥伴在那裡擁有的兩個資料中心來擴展加拿大。因此，我們希望擴大管道。遷移正在發生，而且競爭有限。所以，亞當，坦白說，我們對此感到有點興奮。

In the case of -- just to go back to Flagship for a moment, the cross-selling is finally working. Deals are coming in from Flagship and they have -- I'm going to say 25 very large recognizable accounts that are looking at these cloud-based solutions that's provided through CloudFirst. At the same time, they're doing a great job with selling equipment and provisioning.

在這種情況下——讓我們回到旗艦版，交叉銷售終於開始發揮作用了。交易來自 Flagship，我想說的是，有 25 個非常大的知名帳戶正在研究透過 CloudFirst 提供的這些基於雲端的解決方案。同時，他們在設備銷售和供應方面做得很好。

So yeah, I'm excited. I think it's good. More excited than previously, although, I'm never satisfied as a personality disorder, but I would say that it's moving. And you take a look at that EBITDA on CloudFirst, it's good. And I believe that Tom Kempster is moving up those gross profit margins because they are visiting the accounts and improving the margins on those accounts. I don't know if that answered your question fully.

是的，我很興奮。我認為這很好。比以前更興奮，雖然，作為一個人格障礙我從來不滿足，但我想說它很感動。你看看 CloudFirst 上的 EBITDA，這很好。我相信湯姆肯普斯特正在提高這些毛利率，因為他們正在訪問這些帳戶並提高這些帳戶的利潤率。我不知道這是否完全回答了你的問題。

No, that's very helpful color, Chuck. I appreciate it, and very encouraging. As you look at sales cycles and close rates, are those remaining pretty stable or is the large increase in inbound inquiries affecting sales cycle lengths and close rates in any meaningful way?

不，那是非常有用的顏色，查克。我很感激，也非常鼓舞人心。當您查看銷售週期和成交率時，它們是否保持相當穩定，或者入站查詢的大幅增加是否以任何有意義的方式影響銷售週期長度和成交率？

I tell you what, I think we're doing a good job with the great job and what we need to do more of, frankly, because on the inbound lead side, it is moving. Actually, Flagship is moving up now. There's been some changes to the website, but on the inbound lead side, it is going great. We have to do more with our indirect, with the alternate channels, with channel partners, and looking for -- typically in the past, we always look for the companies that sold these IBM systems.

我告訴你，我認為我們做得很好，做得很好，坦白說，我們需要做更多的事情，因為在入站領先方面，它正在發展。事實上，Flagship現在正在崛起。網站發生了一些變化，但在入站銷售方面，一切進展順利。我們必須透過間接管道、替代管道、通路合作夥伴進行更多工作，並尋找——通常在過去，我們總是尋找銷售這些 IBM 系統的公司。

And as you look at that, eventually, it gets a little tired. And there's a lot of other revenue we believe that's out there that the fiber is already in the ground. Think about cable companies and telecom companies that are looking to increase the revenue per customer where they have the relationships. So we have to look at more non-traditional type of channel partners.

當你看到它時，最終，它會變得有點累。我們相信還有很多其他收入來自光纖已經埋在地下。想想有線電視公司和電信公司，他們希望增加他們擁有關係的每個客戶的收入。所以我們必須尋找更多非傳統類型的通路合作夥伴。

I'm not saying we're doing a poor job there. Don't misunderstand me. We do a good job there, but I think we could do more and we need to expand the support that the team that focuses on channel partners, we need to be able to expand that. But there's way -- when you bring it -- when you have a channel partner that has sold the customer already, it's an easier sale.

我並不是說我們在那裡做得很糟糕。別誤會我的意思。我們在這方面做得很好，但我認為我們可以做得更多，我們需要擴大對通路合作夥伴團隊的支持，我們需要能夠擴大這種支持。但有辦法——當你把它帶來時——當你有一個已經向客戶銷售過的通路合作夥伴時，銷售就會變得更容易。

First is you're not knocking on doors anymore or making phone calls. So inbound leads, networking, and going after the folks that have these customers that are trusted advisers or that have the customer base. Look at the cable companies. They're just getting crushed, but they do have the network. So it's things like that that we're also looking at.

首先，您不再敲門或打電話。因此，入站銷售線索、網路以及尋找擁有這些客戶的值得信賴的顧問或擁有客戶群的人。看看有線電視公司。他們只是被壓垮了，但他們確實有網路。所以我們也在關注類似的事情。

Right. And as you prioritize, Chuck -- and you made a point obviously that trusted partners as channel partners obviously accelerate the sales cycle and close rates relative to -- so as you compare that to international expansion, right, where you'd be going more de novo or maybe plan to go internationally with channel partners, maybe you could just flesh that out for us a little bit more.

正確的。當你確定優先順序時，查克- 你顯然指出了一個觀點，值得信賴的合作夥伴作為通路合作夥伴顯然會加速銷售週期和成交率- 所以當你將其與國際擴張進行比較時，對吧，你會更多地去那裡從頭開始或計劃與通路合作夥伴一起走向國際，也許你可以為我們進一步充實這一點。

As you think about the UK and Canada, would that be with channel partners or would that be de novo? And how are you prioritizing the relative capital efficiency of channel partners and the returns on that versus potential international expansion if it will be de novo?

當您想到英國和加拿大時，是與通路合作夥伴合作還是從頭開始？如果是從頭開始的話，您如何優先考慮通路合作夥伴的相對資本效率及其回報與潛在的國際擴張？

Yeah. Just a little background on me for just 30 seconds. I did this with International Telecommunications Corporation and we had switches globally and partners globally. And we did it through partners. That company went public after we were rolled all together for $800 million. So I've been around internationally before. And the best way of doing it is doing it with partners, you can accelerate faster.

是的。僅用 30 秒介紹一下我的背景。我與國際電信公司合作完成了這項工作，我們在全球範圍內擁有交換器和合作夥伴。我們透過合作夥伴做到了這一點。那家公司在我們以 8 億美元的價格合併後上市。所以我以前就去國際舞台。而最好的方式就是和夥伴一起做，你可以加速得更快。

We have the cash to be able to support those partners, which is key because a lot of these companies really do not have the cash. So being able to pick up channel partners in the UK, we already have that in Canada. But to be able to pick them up in the UK and work with them and then put the equipment under the way we build it -- Chuck Paolillo, our CTO and the way they -- what he builds it and his team, basically, we can roll it out to UK very fast. But we want to do that with channel partners.

我們有足夠的現金來支持這些合作夥伴，這很關鍵，因為許多這樣的公司確實沒有現金。因此，我們已經在加拿大找到了英國的通路合作夥伴。但為了能夠在英國接他們並與他們合作，然後將設備置於我們建造它的方式之下 - Chuck Paolillo，我們的首席技術官和他們的方式 - 他和他的團隊，基本上，我們可以非常快地將其推廣到英國。但我們希望與通路合作夥伴一起做到這一點。

It doesn't mean we won't have sales reps or country manager, and technicians. But they'd be geared to support the partners that we try to bring into agreements in the same way that happens here in the United States under Steve Romweber, Director of our Channel and Chris Annese and the team and all. So we're going to do it with partners.

這並不意味著我們不會有銷售代表或區域經理和技術人員。但他們會準備好支持我們試圖達成協議的合作夥伴，就像在我們的通路總監 Steve Romweber 和 Chris Annese 以及團隊和所有人的領導下在美國發生的那樣。所以我們將與合作夥伴一起做這件事。

Okay, that's terrific. One last one if you'll quickly permit me. Last quarter, Chris, and you acquired $5.5 million executed contracts that the service delivery team was in the process of installing and implementing. How does that look here at the end of the latest quarter?

好吧，那太棒了。如果你能盡快允許我的話，最後一篇。上個季度，克里斯和您獲得了價值 550 萬美元的已執行合同，服務交付團隊正在安裝和實施這些合約。最新季度末的情況如何？

Well, I don't really want to give guidance on it. And I really can't give a timing on it. But no, it's okay, but I want to answer the question. What happens a lot of times when you're putting up infrastructure-as-a-service, you have to work closely with the client's technical team.

好吧，我真的不想提供指導。我真的無法給出具體時間。但不，沒關係，但我想回答這個問題。當您提供基礎設施即服務時，很多時候會發生這樣的情況，您必須與客戶的技術團隊密切合作。

So even though our folks might be ready to go, their folks might be ready to go, but it's not such a fast process on the infrastructure side. So I really couldn't give the timing on that. I could tell you right now that approximately, I believe $160,000 in monthly recurring revenue is in the process of being installed. But I can't give you a timing on what month that might hit or what quarter because it could be client delays, their priorities, and all, but these are executed contracts.

因此，即使我們的人員可能已準備好出發，他們的人員也可能準備好出發，但在基礎設施方面，這並不是一個快速的過程。所以我真的無法給出具體時間。我現在可以告訴您，我相信每月大約有 160,000 美元的經常性收入正在安裝過程中。但我無法告訴您可能會在哪一個月或哪一季度發生，因為可能是客戶延遲、他們的優先事項等等，但這些都是已執行的合約。

Right. Okay. And so about $160,000 in process and about 29, 30 months' average length or is it a little longer than that -- than the historical averages?

正確的。好的。正在處理的資金約為 16 萬美元，平均週期約為 29、30 個月，或比歷史平均值稍長？

Yeah. I mean, some could be 12 months, some could be 60, in that range. I really don't know top of my head, but it does range in that area. But the way -- the average is 29 months on that. But yeah, the timing is tough to be able to give that.

是的。我的意思是，有些可能是 12 個月，有些可能是 60 個月，都在這個範圍內。我真的不知道我的頭腦，但它確實在那個範圍內。但話說回來，平均時間是 29 個月。但是，是的，時機很難做到這一點。

And if we knew exactly I would give guidance on it, it will be the first time we gave guidance. But sometimes we expect something to happen in a month and it goes up. And then all of a sudden, something goes on the networking side or it's delayed because of their projects that are going on the client side. So it's tough to actually predict that, but these are executed agreements.

如果我們確切地知道我會就此提供指導，這將是我們第一次提供指導。但有時我們會預期一個月內會發生一些事情，結果就會上升。然後突然之間，網路方面發生了一些事情，或者由於他們的專案正在客戶端進行而被延遲。因此很難實際預測這一點，但這些都是已執行的協議。

Okay. Thanks very much.

好的。非常感謝。

Thank you. There are no further questions. I would like to turn the floor over to management for closing remarks.

謝謝。沒有其他問題了。我想請管理階層發表結束語。

Matt and Adam, thank you for the questions. Overall, we are beginning to witness the benefits of the business initiatives and anticipate realizing the full benefits over time. As we roll out initiatives, we believe we can achieve sustained profitability and increase value for our shareholders. We are very excited about the outlook for the business and look forward to announcing additional milestones in the near term.

馬特和亞當，謝謝你們的提問。總體而言，我們開始見證業務計劃的好處，並預計隨著時間的推移實現全部好處。隨著我們推出舉措，我們相信我們能夠實現持續盈利並為股東增加價值。我們對業務前景感到非常興奮，並期待在短期內宣布更多里程碑。

I'd like to thank everyone who joined today. We appreciate it; and have a great day.

我要感謝今天加入的所有人。我們對此表示讚賞；祝您有美好的一天。

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.

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。