Remark Holdings Inc (MARK) 2023 Q3 法說會逐字稿

Good day, and welcome to the Remark Holdings Fiscal Third Quarter 2023 Financial Results Earnings Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference. over to Fey Tian. Please go ahead.

美好的一天，歡迎參加 Remark Holdings 2023 年第三季財務業績收益電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想轉向會議。交給飛田。請繼續。

Thank you, Sarah. Good afternoon, everyone, and welcome to Remark Holdings Third Quarter 2023 Financial Results Conference Call. I am Fay Tian, Vice President of Investor Relations for Remark. On the call with me this afternoon is Kai-Shing Tao, Remark's Chairman and Chief Executive Officer, and Mr. Todd Brown, Vice President of Finance. In just a moment, Mr. Tao will provide an update on our businesses, and Mr. Brown will recap our Third Quarter 2023 Financial Results.

謝謝你，莎拉。大家下午好，歡迎參加Remark Holdings 2023年第三季財務業績電話會議。我是投資者關係副總裁田飛，請發言。今天下午與我通話的是 Remark 董事長兼執行長陶開成以及財務副總裁 Todd Brown 先生。稍後，陶先生將介紹我們業務的最新情況，布朗先生將回顧我們 2023 年第三季的財務表現。

Following these remarks, we will open the call to questions. But before I turn the call over to Mr. Tao, I would like to take this opportunity to remind you that some of the statements made today may be forward-looking statements. These statements involve risk, uncertainties, and other factors that will cause actual results to differ materially from those expressed or implied by these forward-looking statements.

在這些發言之後，我們將開始提問。但在我把電話轉給陶先生之前，我想藉此機會提醒您，今天發表的一些陳述可能是前瞻性陳述。這些陳述涉及風險、不確定性和其他因素，這些因素將導致實際結果與這些前瞻性陳述明示或暗示的結果有重大差異。

Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation to update or revise any forward-looking statements after the date hereof. This disclaimer is only a summary of Remark Holdings' statutory forward-looking statement disclaimer, which is included in full in its filings with the SEC.

任何前瞻性聲明均反映 Remark Holdings 目前的觀點，並且 Remark Holdings 明確表示不承擔在本協議日期之後更新或修改任何前瞻性聲明的義務。本免責聲明只是 Remark Holdings 法定前瞻性聲明免責聲明的摘要，該免責聲明完整包含在其向 SEC 提交的文件中。

I will now turn the call over to Remark's Chairman and Chief Executive Officer, Mr. Tao, so he can provide additional information on Remark's businesses and recent developments. Please go ahead, Shing.

現在我將把電話轉給 Remark 董事長兼執行長陶先生，以便他提供有關 Remark 業務和近期發展的更多資訊。請繼續吧，盛。

Thank you today for joining our call. Over the last few quarters, given the economic difficulty that China is experiencing and the rising political tensions between the US and China, we've made a point in diversifying our business to outside of China, to the US, the UK and Europe, the Middle East, and South America.

感謝您今天加入我們的電話會議。在過去的幾個季度中，鑑於中國正在經歷的經濟困難以及中美之間日益緊張的政治局勢，我們已將業務多元化到中國以外的地區，包括美國、英國和歐洲，中東、南美。

We are on the right path to both successfully pivot our business to other parts of the world and look forward for this call to explain what we're doing. On this quarter's call, we'll update our projects in the US and other parts of the world. And please note, the common thread is that wherever we win first, we are now able to take that opportunity and scale to other cities or other parts of the world using the same technology platform that we have developed over the last seven years.

我們正走在正確的道路上，既可以成功地將我們的業務轉移到世界其他地區，也期待透過這次電話會議來解釋我們正在做的事情。在本季度的電話會議上，我們將更新我們在美國和世界其他地區的專案。請注意，共同點是，無論我們在哪裡首先獲勝，我們現在都能夠利用這個機會，使用我們過去七年開發的相同技術平台擴展到其他城市或世界其他地區。

Three immediate opportunities which we have spent a lot of time focusing on in the cities in the US. Number one is to handle the migrant city centers, which we've all seen has caused a lot of pressure to different cities' budgets. One city in particular is already testing our solution, which includes facial recognition, weapons detection, violence detection. And as you know, this problem is very serious for all the cities. And with our solutions, we're able to save 80% for the city on security costs.

我們花了很多時間關注美國城市的三個直接機會。第一個是處理城市中心的移民問題，我們都看到這給不同城市的預算帶來了很大的壓力。其中一個城市已經在測試我們的解決方案，其中包括臉部辨識、武器偵測、暴力偵測。如您所知，這個問題對於所有城市來說都非常嚴重。透過我們的解決方案，我們能夠為城市節省 80% 的安全成本。

This opportunity equates to roughly $1.4 million per migrant center. And there are hundreds of these migrant centers that are well-documented in different sanctuary cities in the US. A second large opportunity for us in the different cities in the US is working with the Department of Corrections. We've recently installed in several sites showcasing our technology. Again, it's for facial recognition, weapons detection, and violence detection.

這個機會大約相當於每個移民中心 140 萬美元。在美國不同的庇護城市有數百個這樣的移民中心，這些移民中心都有詳細記錄。我們在美國不同城市的第二個大機會是與懲教署合作。我們最近在幾個網站上安裝了我們的技術。同樣，它用於面部識別、武器檢測和暴力檢測。

Upon approval in this particular city, there are roughly 14,000 cameras and a $1,500 camera. This is a $15 million annual revenue opportunity for us. We are also testing with the city our fire and smoke detection. And as I've mentioned in the past, with the introduction of many more charging stations, the charging station causes becomes very combustible. And by the time the smoke detectors detect any type of potential problems, the fire already is out of hand. So, they're testing our AI platform to be able to detect the fire and smoke.

經批准在這個特定的城市安裝約 14,000 台攝影機和一台價值 1,500 美元的攝影機。這對我們來說是一個年收入 1500 萬美元的機會。我們也正在與市政府一起測試我們的火災和煙霧偵測系統。正如我過去提到的，隨著更多充電站的引入，充電站原因變得非常易燃。當煙霧偵測器偵測到任何類型的潛在問題時，火勢已經失控。因此，他們正在測試我們的人工智慧平台，以便能夠偵測火災和煙霧。

And this is important as we believe that we're one of only a handful of companies that are able to tell the difference between smoke, dust, and steam. The fourth part is working and introducing our Smart Chat agent to handle 311 service requests. As you know, the 311 call centers have been inundated with calls and experiencing 10-minute to 15-minute delays.

這很重要，因為我們相信我們是少數能夠區分煙霧、灰塵和蒸氣的公司之一。第四部分是工作並介紹我們的智慧聊天代理來處理 311 服務請求。如您所知，311 呼叫中心已被大量電話淹沒，並且出現 10 分鐘到 15 分鐘的延誤。

By using our Smart Chat service, we will be introducing not only will the calls be handled in a timely fashion, but the paperwork will be done without mistakes, and we'll be able to conclude the calls in 40 different languages.

透過使用我們的智慧聊天服務，我們不僅可以及時處理電話，而且可以準確無誤地完成文書工作，並且我們將能夠以 40 種不同的語言結束通話。

In the third quarter, we're also moving to Brazil. We also won one of the largest RFPs in history for the Rio de Janeiro police to provide mobile facial recognition and license plate reading. This project is expected to commence in Q4, as the police are looking to find people on their watch list for thefts and vandalism and riots can be easily detected and updated via central database.

第三季度，我們也將轉移到巴西。我們還為裡約熱內盧警方贏得了歷史上最大的 RFP 之一，以提供移動式臉部辨識和車牌讀取服務。該計畫預計將於第四季度開始，因為警方正在尋找列入盜竊和破壞行為觀察名單的人，並且可以透過中央資料庫輕鬆檢測和更新騷亂。

Moving to Las Vegas to the Clark County school system. As you might recall, the Clark County school system is top five in terms of size in the US. We expect to hear in a very short period of time the exciting opportunities, the $30 million opportunity to utilize our AI technology for gun and weapon detection.

搬到拉斯維加斯到克拉克縣學校系統。您可能還記得，克拉克縣學校系統的規模在美國排名前五名。我們期望在很短的時間內聽到令人興奮的機會，即利用我們的人工智慧技術進行槍支和武器檢測的價值 3000 萬美元的機會。

On our last quarter's call, we mentioned that our focus for the remainder of 2023, was to develop and strengthen our partnership relationships in selling our unique computer vision solutions. In the last few months, we have entered into partnerships with NVIDIA, PNY, our technology, and Intel. Our partnerships with them have started off with very encouraging initial results.

在上一季的電話會議上，我們提到 2023 年剩餘時間的重點是發展和加強我們在銷售獨特電腦視覺解決方案方面的合作夥伴關係。在過去的幾個月裡，我們與 NVIDIA、PNY、我們的技術和英特爾建立了合作夥伴關係。我們與他們的合作已經取得了非常令人鼓舞的初步成果。

And because of this initial success, our partners have already engaged us to do much more. For example, we have already deepened our partnership relationships with both NVIDIA and PNY technologies. NVIDIA's technology and product roadmap and ours will be more closely integrated, which means we'll be involved in the new product and future launches.

由於取得了初步成功，我們的合作夥伴已經讓我們做更多的事情。例如，我們已經加深了與 NVIDIA 和 PNY 技術的合作關係。 NVIDIA 的技術和產品路線圖與我們的技術和產品路線圖將更加緊密地結合在一起，這意味著我們將參與新產品和未來的發布。

With PNY technologies, we'll be working to develop our product market materials together, introduce our products to their sales team, and train their sales teams on how to sell our products. And PNY has a very strong existing sales and partners in the Middle East. Already, they're introducing to projects in the Middle East. For example, we are already down the path and working with one of the new high-speed railways in the Middle East using our computer vision to help them with traffic analysis and insight.

借助 PNY 技術，我們將共同開發我們的產品市場材料，向他們的銷售團隊介紹我們的產品，並培訓他們的銷售團隊如何銷售我們的產品。並且PNY在中東擁有非常強大的現有銷售和合作夥伴。他們已經在中東推出專案。例如，我們已經在與中東的一條新高速鐵路合作，使用我們的電腦視覺來幫助他們進行交通分析和洞察。

In addition, we also expect to break through into France, utilizing our AI to help manage five marine sites in its most high-profile area. Other areas that we talked about in the press release is our expansion to Malaysia, Colombia, India, and Mexico. You'll see more details in the future, but just for example, with Mexico City, we've begun our POC with one of Mexico's largest banks in Mexico City.

此外，我們也期望突破法國，並利用我們的人工智慧來幫助管理其最受矚目地區的五個海洋站點。我們在新聞稿中談到的其他領域是我們向馬來西亞、哥倫比亞、印度和墨西哥的擴張。您將來會看到更多詳細信息，但僅以墨西哥城為例，我們已經開始與墨西哥城最大的銀行之一進行 POC。

In this particular case, they'll be deploying our facial recognition for VIP and blacklist, queue management, and people counting to enhance the in-branch customer experience. We expect this to begin at the end of November and are running for 30 days. This particular bank has over 1,500 branches in Mexico, and upon the successful completion, we will roll out our analytics to all the branches in Mexico City in Q1, and then a similar rollout per quarter to the rest of the country.

在這種特殊情況下，他們將部署我們的臉部辨識來進行 VIP 和黑名單、隊列管理和人數統計，以增強分行內的客戶體驗。我們預計活動將於 11 月底開始，為期 30 天。這家特定銀行在墨西哥擁有 1,500 多家分行，成功完成後，我們將在第一季向墨西哥城的所有分行推出我們的分析，然後每季向該國其他地區進行類似的推廣。

Our pipeline, as we mentioned, is very broad and deep, which leads us to looking forward to signing a large partnership deal in Q4 with one of the world's top three cloud providers installing our systems. Our computer vision AI is very unique in its service and capabilities, and we look forward to being able to leverage upon the sales force to really marketing our opportunities around the world. With that, I'll pass it over to Todd.

正如我們所提到的，我們的管道非常廣泛和深入，這使我們期待在第四季度與安裝我們系統的世界三大雲端供應商之一簽署一項大型合作夥伴協議。我們的電腦視覺人工智慧在服務和功能方面非常獨特，我們期待能夠利用銷售團隊在世界各地真正行銷我們的機會。這樣，我會把它交給托德。

Thank you, Shing, and thank you to everybody for joining us on today's call. Our revenue for the third quarter of 2023 totaled $0.2 million compared to the $2.8 million during the same quarter in 2022. The $0.2 million of revenue we did recognize during this third quarter of 2023 resulted primarily from additional installations of our campus solution in China.

謝謝成，也謝謝大家參加今天的電話會議。我們 2023 年第三季的營收總計 20 萬美元，而 2022 年同一季度為 280 萬美元。我們在 2023 年第三季確認的 20 萬美元收入主要來自我們在中國額外安裝的園區解決方案。

We did also complete certain projects during the same time period worth approximately $1.4 million, but the agreement with our new customer did not yet meet the requirements for revenue recognition during the quarter. Overall, our project completions slowed in China due to the business and economic recovery efforts that consisted of the related restrictions were lifted at the end of last year, as well as due to the political tensions that Shing mentioned, which had been increasing between the US and China. All of those conditions made it more difficult than expected for us to complete projects on a steadily increasing pace.

我們確實在同一時期完成了價值約 140 萬美元的某些項目，但與新客戶的協議尚未滿足本季收入確認的要求。總體而言，我們在中國的專案完工進度放緩，原因是商業和經濟復甦努力（包括去年底取消的相關限制），以及成提到的美國與美國之間日益加劇的政治緊張局勢。和中國。所有這些條件都使得我們以穩定成長的速度完成專案比預期更加困難。

Our operating loss decreased to $4.1 million in the 2023 third quarter compared to $6.7 million in the same period of 2022. In addition to the decrease in revenue and a $2.2 million decrease in cost of revenue, operating loss primarily decreased due to activity in general and administrative expense, including decreases of $2.3 million in the amount of reserve for doubtful accounts recorded, $0.8 million in legal and professional fees, $0.5 million in stock-based compensation expense, and $0.3 million in business development expense.

2023 年第三季度，我們的營運虧損降至 410 萬美元，而 2022 年同期為 670 萬美元。除了收入減少和收入成本減少 220 萬美元外，營運虧損的減少主要是由於一般活動和管理費用，包括減少230 萬美元的呆帳準備金、80 萬美元的法律和專業費用、50 萬美元的股票補償費用以及30 萬美元的業務開發費用。

The decreases in administrative and general expense were partially offset by a $0.7 million increase in technology and development expense. Net loss totaled $7.2 million or $0.39 per basic and diluted share in the 2023 third quarter compared to a net loss of $8.9 million or $0.85 per basic and diluted share in the same quarter of 2022. In addition to the 39% decrease in operating loss compared to the same quarter of 2022, the decrease in net loss was primarily the result of the 2022 third quarter, including $0.4 million of an accrual that did not recur in the 2023 third quarter, as well as a $0.3 million loss on investment that did not recur in the 2023 third quarter.

行政和一般費用的減少被技術和開發費用增加的 70 萬美元部分抵消。 2023 年第三季的淨虧損總計720 萬美元，即每股基本股和稀釋股0.39 美元，而2022 年第三季的淨虧損為890 萬美元，即每股基本股和稀釋股0.85 美元。此外，營運虧損比去年同期下降了39%到2022 年同一季度，淨虧損的減少主要是由於2022 年第三季的結果，包括2023 年第三季未發生的40 萬美元的應計損失，以及2023年第三季未發生的30 萬美元的投資損失。2023 年第三季再次發生。

At September 30, 2023, our cash balance was approximately $0.3 million compared to a cash balance of less than $0.1 million at December 31, 2022. Net cash used in operating activities was $9.1 million during the nine months ended September 30, 2023, which was a 33% decrease compared to the $13.6 million used in operating activity during the nine months ended September 30, 2022. And with that, I'll turn the call back over to the moderator to begin the question-and-answer portion of the call.

截至2023 年9 月30 日，我們的現金餘額約為30 萬美元，而截至2022 年12 月31 日的現金餘額不足10 萬美元。截至2023 年9 月30 日的九個月期間，經營活動使用的現金淨額為910 萬美元，其中與截至2022 年9 月30 日的九個月期間運營活動所用的1,360 萬美元相比，減少了33%。之後，我將把通話轉回給主持人，開始通話的問答部分。

Thank you. (Operator Instructions) So no questions. I would like to turn the conference back over to Fay Tian for any closing remarks.

謝謝。 （操作員說明）所以沒有問題。我想將會議轉回田飛做總結發言。

Thank you, Sarah, and thank you, everyone, for participating in Remark Holdings' third quarter fiscal 2023 financial results conference call. A replay will be available in approximately four hours through the same link issued in our November 15 press release. Have a good afternoon. Thank you.

謝謝莎拉，也謝謝大家參加 Remark Holdings 2023 財年第三季財務業績電話會議。重播將在大約四個小時內透過我們 11 月 15 日新聞稿中發布的相同連結進行。祝你下午好。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。