NetSol Technologies Inc (NTWK) 2024 Q2 法說會逐字稿

Good morning, and welcome to the NetSol Technologies second-quarter 2024 earnings conference call. On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer; Roger Almond, Chief Financial Officer; and Patti McGlasson, General Counsel; and Naeem Ghauri, President and Founder.

早安，歡迎參加 NetSol Technologies 2024 年第二季財報電話會議。今天參加電話會議的是董事長兼執行長 Najeeb Ghauri；羅傑‧阿爾蒙德，財務長；和總法律顧問 Patti McGlasson；以及總裁兼創辦人納伊姆·高里 (Naeem Ghauri)。

I would now like to turn the call over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call. Please proceed.

我現在想將電話轉給帕蒂·麥克格拉森 (Patti McGlasson)，她將就管理層在本次電話會議中發表的前瞻性聲明提供必要的警告。請繼續。

Good morning, everyone, and thank you for joining us. Following the review of the company's business highlights and financial results, we will open the call for questions. I'll now provide the necessary cautions regarding the forward-looking statements made by management during this call. Please note that all the information discussed on today's call is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act.

大家早安，感謝您加入我們。在回顧了公司的業務亮點和財務表現後，我們將開始提問。我現在將就管理層在本次電話會議中所做的前瞻性陳述提供必要的警告。請注意，今天電話會議中討論的所有資訊均受《私人證券訴訟改革法案》的安全港條款管轄。

The company's discussion may include forward-looking statements reflecting management's current forecast of certain aspects of the company's future, and our actual results could differ materially from those stated or implied. These forward-looking statements are qualified by the cautionary statements contained in NetSol's press releases and SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q.

本公司的討論可能包括反映管理階層目前對公司未來某些方面的預測的前瞻性陳述，我們的實際結果可能與陳述或暗示的結果有重大差異。這些前瞻性陳述受到 NetSol 新聞稿和 SEC 文件（包括我們的 10-K 表格年度報告和 10-Q 表格季度報告）中包含的警示性陳述的限制。

I would also like to point out that we will be discussing certain non-GAAP measures. The press release issued earlier today contains a reconciliation of these non-GAAP financial results to their most comparable GAAP measures.

我還想指出，我們將討論某些非公認會計準則措施。今天稍早發布的新聞稿包含這些非公認會計準則財務表現與最具可比性的公認會計準則衡量指標的調節表。

Finally, I would like to remind everyone that this call will be recorded and made available for replay at www.netsoltech.com and via link available in today's press release.

最後，我想提醒大家，本次通話將被錄音，並可在 www.netsoltech.com 上或透過今天新聞稿中提供的連結重播。

Now I'd like to turn the call over to Najeeb. Najeeb?

現在我想把電話轉給納吉布。納吉布？

Thank you, Patti, and good morning, everyone. Like we began the fiscal year, our second quarter of fiscal 2024 was characterized by increases in total revenue, improved gross margins and profitability, which demonstrates both the strength of our business model and our ability to execute on our growth strategy. Revenue grew once again in the quarter, driven by solid performance across our business. As we continue to scale our SaaS business, our hybrid license and SaaS model has become a strong catalyst for our growth in both this quarter and throughout the fiscal 2024.

謝謝你，帕蒂，大家早安。與本財年伊始一樣，2024 財年第二季的特點是總營收增加、毛利率和獲利能力提高，這既體現了我們業務模式的優勢，也體現了我們執行成長策略的能力。在我們業務穩健的業績推動下，本季營收再次成長。隨著我們繼續擴大 SaaS 業務，我們的混合授權和 SaaS 模式已成為我們本季和整個 2024 財年成長的強大催化劑。

We recognized substantial license fees of $3 million in this quarter as part of a new large contract in Asia with a major automotive company. We are thrilled to have distinguished ourselves from a highly competitive pool of candidates to win this contract, which we expect to officially announce in the coming weeks. Our selection reflects both our visibility and recognition in the market as well as the superior performance and reliability of our products that is required by major companies operating on a global scale.

本季我們確認了 300 萬美元的巨額許可費，這是與一家大型汽車公司在亞洲簽訂的新大型合約的一部分。我們很高興能夠從競爭激烈的候選人中脫穎而出，贏得這份合同，我們預計將在未來幾週內正式宣布。我們的選擇反映了我們在市場上的知名度和認可度，以及我們產品的卓越性能和可靠性，這是全球範圍內運營的大公司所需要的。

License fees are a key part of our business, and we expect them to continue to represent a significant portion of our revenue for the foreseeable future. That said, license revenue can be a bit lumpy, and a major focus for us is to continue to build on an already robust pipeline of potential licensing and SaaS opportunities to deliver more consistent results over the long term.

許可費是我們業務的重要組成部分，我們預計在可預見的未來，它們將繼續占我們收入的很大一部分。也就是說，授權收入可能有點不穩定，我們的主要重點是繼續建立已經強大的潛在許可和 SaaS 機會管道，以長期提供更一致的結果。

We achieved growth in our recurring subscription and support revenues in the quarter. At the heart of our SaaS business, our products like the Otoz digital retail platform and our API-first marketplace, Appex Now. We are committed to the continuous innovation and improvement of these additional SaaS offerings to meet the diverse demands of our customers, integrating leading technology, such as deep-learning AI algorithms, to ensure that we are positioned at the forefront of our industry.

本季我們的經常性訂閱和支援收入實現了成長。Otoz 數位零售平台和 API 優先市場 Appex Now 等產品是我們 SaaS 業務的核心。我們致力於不斷創新和改進這些額外的SaaS產品，以滿足客戶的多樣化需求，並整合深度學習人工智慧演算法等領先技術，以確保我們處於行業前沿。

During the quarter, we unveiled Otoz 2.0, implementing major updates to our digital retail and mobility platform to expand on existing offerings, with a phased launch planned over the next year. The Otoz platform is the premier SaaS offering, powering services such as MINI USA's MINI Anywhere retail platform since June 2021. Supported by Otoz, MINI Anywhere enrollment has doubled over the past 12 months and is now active across nearly two-thirds of the MINI USA dealership network in the US, enabling a five times increase in lead volume and vehicle sales.

本季度，我們推出了 Otoz 2.0，對我們的數位零售和行動平台進行了重大更新，以擴展現有產品，並計劃在明年分階段推出。Otoz 平台是首要的 SaaS 產品，自 2021 年 6 月以來為 MINI USA 的 MINI Anywhere 零售平台等服務提供支援。在 Otoz 的支持下，MINI Anywhere 的註冊人數在過去 12 個月中翻了一番，目前活躍於美國近三分之二的 MINI USA 經銷商網絡，使潛在客戶量和車輛銷量增長了五倍。

Also in the quarter, we expanded our relationship with one of our key automotive clients by supporting the launch of AutoNation Mobility micro-lease marketplace with Otoz's back-end technology. The automotive market is witnessing a significant shift towards shorter vehicle usage options in lieu of traditional long-term leases. And the Otoz 2.0 platform is ideally suited to support this new micro-lease marketplace that allows customers to navigate the entire leasing process, from vehicle selection, to deal configuration, to finalizing each transaction.

同樣在本季度，我們利用 Otoz 的後端技術支援 AutoNation Mobility 小額租賃市場的推出，從而擴大了與主要汽車客戶之一的關係。汽車市場正在發生重大轉變，轉向較短的車輛使用選擇，以取代傳統的長期租賃。Otoz 2.0 平台非常適合支援這個新的小額租賃市場，該市場允許客戶瀏覽整個租賃流程，從車輛選擇到交易配置，再到完成每筆交易。

Overall, we're very excited and pleased with our second-quarter results. As I said before, our performance is a demonstration of both the strength of our business model and our ability to execute on our growth strategy.

總的來說，我們對第二季的業績感到非常興奮和滿意。正如我之前所說，我們的業績證明了我們業務模式的實力以及我們執行成長策略的能力。

Moreover, we continue to strategically invest and allocate capital to further expand our presence across key high-growth markets like North America. And we are pleased to see steady progress across all three of geography markets, North America, Europe, and APAC. Given our recent results and trajectory, we expect to see strong double-digit organic revenue growth and improved margins in fiscal 2024 as we move into a period of more sustainability profitability.

此外，我們繼續進行策略性投資和分配資本，以進一步擴大我們在北美等主要高成長市場的業務。我們很高興看到北美、歐洲和亞太地區這三個地區市場的穩定進展。鑑於我們最近的業績和發展軌跡，隨著我們進入一個更具可持續性盈利能力的時期，我們預計 2024 財年將實現強勁的兩位數有機收入增長和利潤率的提高。

I'll now turn the call over to Roger Almond, our CFO, to go over our financials from this quarter. Roger?

現在我將把電話轉給我們的財務長羅傑·阿爾蒙德（Roger Almond），讓他檢查我們本季的財務狀況。羅傑？

Thanks, Najeeb. Our total net revenues for the second quarter of fiscal 2024 were $15.2 million compared with $12.4 million in the prior year period. On a constant currency basis, total net revenues were $15.3 million. For the six months ended December 31, 2023, total net revenues were $29.5 million compared to $25.1 million in the prior year period. On a constant currency basis, total net revenues were $29.6 million.

謝謝，納吉布。2024 財年第二季我們的總淨收入為 1,520 萬美元，而去年同期為 1,240 萬美元。以固定匯率計算，總淨收入為 1530 萬美元。截至 2023 年 12 月 31 日的六個月，總淨收入為 2,950 萬美元，而去年同期為 2,510 萬美元。以固定匯率計算，總淨收入為 2,960 萬美元。

License fees for the quarter ended fiscal 2024 were $3 million compared with $16,000 in the prior year period. License fees on a constant currency basis were $3.1 million. In the first six months of fiscal 2024, license fees were $4.3 million compared with $266,000 in the prior year period and the same on a constant currency basis.

截至 2024 財年的季度授權費為 300 萬美元，而去年同期為 16,000 美元。以固定匯率計算的許可費為 310 萬美元。2024 財年的前六個月，許可證費為 430 萬美元，而去年同期為 266,000 美元，以固定匯率計算也是如此。

Recurring revenues or subscription and support revenues for the second quarter of fiscal 2024 were $6.8 million compared with $6.5 million in the prior year period and the same on a constant currency basis. Recurring revenues for the first six months of fiscal 2024 were $13.3 million compared with $12.5 million in the prior year period and the same on a constant currency basis.

2024 財年第二季的經常性收入或訂閱和支援收入為 680 萬美元，而去年同期為 650 萬美元，以固定匯率計算也是如此。2024 財年前六個月的經常性收入為 1,330 萬美元，而去年同期為 1,250 萬美元，以固定匯率計算也是如此。

Total services revenue for the second quarter of fiscal 2024 were $5.4 million compared with $5.9 million in the prior year period and the same on a constant currency basis. Total services revenues for the first six months of fiscal 2024 were $11.9 million compared with $12.3 million in the prior year period and the same on a constant currency basis.

2024 財年第二季的服務總收入為 540 萬美元，上年同期為 590 萬美元，以固定匯率計算也是如此。2024 財年前六個月的服務總收入為 1,190 萬美元，而去年同期為 1,230 萬美元，以固定匯率計算也是如此。

Total cost of revenues were $8.1 million for the second quarter of fiscal 2024 compared to $9.2 million in the second quarter of fiscal year 2023. On a constant currency basis, total cost of revenues was $9.4 million.

2024 財年第二季的總營收成本為 810 萬美元，而 2023 財年第二季的總營收成本為 920 萬美元。以固定匯率計算，總收入成本為 940 萬美元。

Gross profit for the second quarter of fiscal 2024 was $7.2 million or 47% of net revenues compared with $2.1 million or 25% of net revenues in the prior year period. On a constant currency basis, gross profit was $5.9 million. Gross profit for the six months of fiscal 2024 was $13.3 million or 45% of net revenues compared with $7.4 million or 29% of net revenues in the prior year period. On a constant currency basis, gross profit for the six months ended December 31, 2023, was $10.6 million.

2024 財年第二季的毛利為 720 萬美元，佔淨收入的 47%，而去年同期為 210 萬美元，佔淨收入的 25%。以固定匯率計算，毛利為 590 萬美元。2024 財年前六個月的毛利潤為 1,330 萬美元，佔淨收入的 45%，而去年同期為 740 萬美元，佔淨收入的 29%。以固定匯率計算，截至 2023 年 12 月 31 日止六個月的毛利為 1,060 萬美元。

Operating expenses for the second quarter of fiscal 2024 were $6.1 million or 40% of sales compared to $6.2 million or 50% of sales in the same period last year. On a constant currency basis, operating expenses for the second quarter were $6.7 million or 44% of sales.

2024 財年第二季的營運費用為 610 萬美元，佔銷售額的 40%，而去年同期為 620 萬美元，佔銷售額的 50%。以固定匯率計算，第二季營運費用為 670 萬美元，佔銷售額的 44%。

Operating expenses for the six months ended December 31, 2023 were $12 million or 41% of sales compared with $12.3 million or 49% of sales in the prior year period. On a constant currency basis, operating expenses for the first six months of fiscal 2024 were $13.1 million or 44% of sales.

截至 2023 年 12 月 31 日的六個月營運費用為 1,200 萬美元，佔銷售額的 41%，而去年同期為 1,230 萬美元，佔銷售額的 49%。以固定匯率計算，2024 財年前六個月的營運費用為 1,310 萬美元，佔銷售額的 44%。

Turning to our profitability metrics, GAAP net income attributable to NetSol for the second quarter of fiscal 2024 totaled $408,000 or $0.04 per diluted share compared with a GAAP net loss of $2.1 million or a loss of $0.19 per diluted share in the second quarter of fiscal 2023.

談到我們的獲利指標，2024 財年第二季NetSol 的GAAP 淨利總計408,000 美元，或稀釋後每股虧損0.04 美元，而2023 財年第二季的GAAP 淨虧損為210 萬美元，或稀釋後每股虧損0.19 美元。

GAAP net income attributable to NetSol for the first six months of fiscal 2024 totaled $439,000 or $0.04 per diluted share compared with a GAAP net loss of $2.7 million or a loss of $0.24 per diluted share in the prior year period. Included in our net income this quarter was a loss of $15,000 on foreign currency exchange transactions compared to a gain of $657,000 in the second quarter of fiscal 2023. On a constant currency basis, we realized a loss of $23,000 on foreign currency exchange transactions.

2024 財年前六個月，NetSol 的 GAAP 淨利潤總計 439,000 美元，或稀釋後每股虧損 0.04 美元，而去年同期的 GAAP 淨虧損為 270 萬美元，或稀釋後每股虧損 0.24 美元。本季我們的淨利潤包括 15,000 美元的外匯交易損失，而 2023 財年第二季的收益為 657,000 美元。以固定匯率計算，我們在外幣兌換交易中實現了 23,000 美元的損失。

Included in our net income for the six months ended December 31, 2023, was a loss of $149,000 on foreign currency exchange transactions, compared to a gain of $2 million in the prior year period. On a constant currency basis, we realized a loss of $197,000 on foreign currency exchange transactions.

截至 2023 年 12 月 31 日止六個月的淨利潤中，外幣兌換交易損失 149,000 美元，而去年同期收益為 200 萬美元。以固定匯率計算，我們在外幣兌換交易中實現了 197,000 美元的損失。

Because we operate in several geographical regions, a significant portion of our business is conducted in currencies other than the US dollar. A decrease in the value of the US dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues, but it also increases our expenses denominated in currencies other than the US dollar. Similarly, as the US dollar gains strength relative to foreign currency exchange rates, it tends to reduce our revenues, but it also reduces our expenses denominated in currencies other than the US dollar.

由於我們在多個地理區域開展業務，因此我們很大一部分的業務是以美元以外的貨幣進行。與外幣匯率相比，美元貶值通常會增加我們的收入，但也會增加我們以美元以外的貨幣計價的支出。同樣，隨著美元相對於外幣匯率走強，它往往會減少我們的收入，但也會減少我們以美元以外的貨幣計價的支出。

Moving to our non-GAAP metrics, our non-GAAP adjusted EBITDA for the second quarter of fiscal 2024 was $725,000 or $0.06 per diluted share, compared with a non-GAAP adjusted EBITDA loss of $1.3 million or $0.12 per diluted share in the second quarter of the previous fiscal year.

轉向我們的非GAAP 指標，我們2024 財年第二季的非GAAP 調整後EBITDA 為725,000 美元，即稀釋後每股0.06 美元，而第二季非GAAP 調整後EBITDA 虧損為130 萬美元，即稀釋後每股0.12 美元上一財政年度。

Non-gaap adjusted EBITDA for the first six months of fiscal 2024 was $1.2 million or $0.10 per diluted share, compared with a non-GAAP adjusted EBITDA loss of $1.4 million or $0.12 per diluted share in the second quarter of the prior fiscal year. Please see the reconciliation schedules contained in our earnings release for a revised calculations of adjusted EBITDA for the quarters ended December 31, 2023, and 2022.

2024 財年前六個月的非GAAP 調整後EBITDA 為120 萬美元，即稀釋後每股0.10 美元，而上一財年第二季非GAAP 調整後EBITDA 為140 萬美元，即稀釋後每股0.12美元。請參閱我們的收益發布中包含的調節表，以了解截至 2023 年 12 月 31 日和 2022 年的季度調整後 EBITDA 的修訂計算。

Turning to our balance sheet. At quarter end, we had cash and cash equivalents of approximately $15.7 million or approximately $1.38 per diluted common share. Total NetSol stockholders' equity at December 31, 2023, was $34.5 million, or $3.03 per share.

轉向我們的資產負債表。截至季末，我們的現金和現金等價物約為 1,570 萬美元，即每股稀釋普通股約 1.38 美元。截至 2023 年 12 月 31 日，NetSol 股東權益總額為 3,450 萬美元，即每股 3.03 美元。

That concludes my prepared remarks. I'll now turn the call back over to Najeeb. Najeeb?

我準備好的發言就到此結束。我現在將把電話轉回給納吉布。納吉布？

Thank you, Roger. This was an excellent quarter for NetSol. We're excited by our progress and are very optimistic for the journey ahead. We believe that we are well positioned on a path towards growth and sustainable profitability, and we look forward to driving value for our shareholders as we continue to execute on our growth strategy in the later half of 2024.

謝謝你，羅傑。對於 NetSol 來說，這是一個出色的季度。我們對我們的進步感到興奮，並對未來的旅程非常樂觀。我們相信，我們在實現成長和永續獲利的道路上處於有利地位，我們期待在 2024 年下半年繼續執行我們的成長策略，為股東創造價值。

With that, I'd like now to turn the call over to operator for questions. Operator? (technical difficulty)

現在，我想將電話轉給接線員詢問問題。操作員？（技術難度）

(Operator Instructions) [Eric Green, Buttress Management].

（操作員說明）[Eric Green，支撐管理]。

Hey, guys, thanks for taking the question. You mentioned integrating deep-learning AI algorithms into your technology. Can you elaborate a little more on those algorithms and how you're leveraging that AI to enhance your product offerings?

嘿，夥計們，謝謝你提出問題。您提到將深度學習人工智慧演算法整合到您的技術中。您能否詳細說明這些演算法以及您如何利用人工智慧來增強您的產品供應？

Thank you for that question. Naeem, you want to jump in?

謝謝你提出這個問題。納伊姆，你想跳進去嗎？

Yes, sure, Najeeb. So what we do is that we have access to a lot of data and we actually build, if you like, a warehouse of metadata. And then we run our algorithms based on that data that's coming from thousands of dealers, and our installations are across the globe, coming from different markets. So what we are able to determine are behavior and trends and patterns on, for example, what type of products are sold in one market as opposed to another, credit risk, credit underwriting, residual values on cars, how they're moving.

是的，當然，納吉布。因此，我們所做的是我們可以存取大量數據，如果您願意的話，我們實際上建立了一個元資料倉儲。然後我們根據來自數千個經銷商的數據運行我們的演算法，並且我們的安裝遍布全球，來自不同的市場。因此，我們能夠確定的是行為、趨勢和模式，例如，在一個市場而不是另一個市場銷售哪種類型的產品、信用風險、信用承保、汽車的剩餘價值以及它們的移動方式。

So that data is really a treasure trove in terms of -- if you like, we run about $300 billion worth of assets on our portfolios across the globe. So you can imagine the amount of data that we get. And on that data, we can build large language models, which is -- primarily can be used for generative AI. And then that is how we actually build our algorithms based on data that can generate a two-way conversation with any consumer going directly on our platforms, as well as our dealers who are accessing systems are able to understand somebody's credit risk pretty quickly based on how that data presents itself.

因此，如果你願意的話，這些數據確實是一個寶庫，我們在全球的投資組合中經營著價值約 3,000 億美元的資產。所以你可以想像我們得到的數據量。基於這些數據，我們可以建立大型語言模型，這主要可用於產生人工智慧。這就是我們實際上如何基於數據構建演算法，這些數據可以與直接進入我們平台的任何消費者進行雙向對話，並且訪問系統的經銷商能夠基於以下資訊快速了解某人的信用風險：這些數據如何呈現。

So really, we are at, literally, the tip of the iceberg, if you like, in terms of on exploiting and manipulating that data to just add so much more value into our tech stack. And going forward, you'll be hearing a lot more about more specialized modules and more discrete modules that we can deploy just for AI based on the amount of data we have and how much information we have on behavior patterns, credit risk, and in fact, down to even what type of cars are being sold down to what color, which markets.

所以說真的，如果你願意的話，在利用和操縱這些數據為我們的技術堆疊增加更多價值方面，我們確實處於冰山一角。展望未來，您將聽到更多關於更專業的模組和更離散的模組，我們可以根據我們擁有的數據量以及我們擁有的關於行為模式、信用風險和行業的信息量來部署這些模組。事實上，甚至包括銷售什麼類型的汽車、什麼顏色、哪個市場。

But really, it's a very exciting time for us in terms of getting into the AI, if you like, generation and iteration to now building more use cases out of the data that we have. Hopefully that answers your question.

但實際上，對我們來說，這是一個非常令人興奮的時刻，因為我們進入了人工智慧領域，如果你願意的話，從生成和迭代到現在利用我們擁有的數據來建立更多用例。希望這能回答你的問題。

(Operator Instructions) Todd Felte, AGES Financial.

（操作員指令）Todd Felte，AGES Financial。

Congratulations on a great quarter there. Nice to see the improvement. Just had a few quick questions here. On the deals with MINI Cooper and AutoNation, I think if I remember correctly, we're in 50 or 60 dealerships now, can you quantify as to how much revenue that produces on a yearly basis for you guys?

恭喜您度過了一個美好的季度。很高興看到改進。只是有幾個簡單的問題。關於與 MINI Cooper 和 AutoNation 的交易，我想如果我沒記錯的話，我們現在有 50 或 60 家經銷店，您能量化一下每年為你們帶來多少收入嗎？

Thank you for this question, Todd. Both Roger and Naeem can help, but this is almost 60-plus dealerships that we've onboarded so far.

謝謝你提出這個問題，托德。Roger 和 Naeem 都可以提供協助，但到目前為止，我們已經服務了近 60 多家經銷商。

Roger, you have specific numbers, right, for the annual revenue?

羅傑，你有具體的年收入數字嗎？

Yes. Currently we have, as Najeeb said, 60 dealers, and it brings in about $100,000 a year with the 60 builders, so that's like $100,000 --

是的。正如納吉布所說，目前我們有 60 個經銷商，這 60 個建築商每年帶來約 10 萬美元的收入，所以大約是 10 萬美元——

No, a month.

不，一個月。

Sorry. $100,000 a month, which is $1.2 million a year, currently, with the 60 dealers.

對不起。目前，有 60 家經銷商，每月 10 萬美元，相當於每年 120 萬美元。

That's great to hear. And on the AutoNation, I know you're growing really fast there. How much revenue is AutoNation contributing now and what would you project for the current fiscal year?

聽到這個消息我很高興。在 AutoNation 上，我知道你們在那裡成長得非常快。AutoNation 目前貢獻了多少收入？您對本財年的預期是多少？

Naeem, you want to jump in? Naeem is a champion of AutoNation and mobility products. Go ahead, Naeem.

納伊姆，你想跳進去嗎？Naeem 是 AutoNation 和行動產品的擁護者。繼續吧，納伊姆。

I can pick that up. So Todd, this is a different use case. For MINI, we're doing digital retail. For AutoNation, we're doing subscription. And what they've done is that they've launched the subscription products, they did a soft launch. But in terms of the revenue, we've generated already just over $1 million in terms of implementation and just tailoring the platform for their use case.

我可以把它撿起來。托德，這是一個不同的用例。對於MINI，我們正在做數位零售。對於 AutoNation，我們正在進行訂閱。他們所做的是推出了訂閱產品，他們進行了軟啟動。但就收入而言，我們在實施和針對他們的用例客製化平台方面已經產生了超過 100 萬美元的收入。

Going forward, we believe if they hit the targets, this could be big, or as big at least if not bigger than what we're doing with MINI, subject to them hitting targets because the subscription is based on certain tiers. If they hit those tiers in terms of usage, then the revenue starts to grow. So it's an exciting model because it's a win-win. If they grow, when they grow, we grow with them. And there's no upper limit or ceiling to where the revenue could grow if they do grow the product with the right marketing and planning.

展望未來，我們相信，如果他們達到目標，這可能會很大，或者至少與我們在 MINI 上所做的一樣大，但前​​提是他們達到目標，因為訂閱是基於某些級別的。如果他們在使用方面達到這些水平，那麼收入就會開始成長。所以這是一個令人興奮的模式，因為它是雙贏的。如果他們成長，當他們成長時，我們就和他們一起成長。如果他們確實透過正確的行銷和規劃來開發產品，那麼收入的成長就沒有上限或上限。

Okay. That's great to hear. And I assume that since it's set up, the margins on that AutoNation business, now that everything is set up, are extremely high for you?

好的。聽到這個消息我很高興。我想，自從它成立以來，AutoNation 業務的利潤率（現在一切都已就緒）對您來說非常高？

I'm sorry, what's the question? It's all set up, yeah.

抱歉，請問有問題嗎？一切都已經安排好了，是的。

Yes. So the margins should be very high on that AutoNation business as it continues to grow?

是的。那麼，隨著 AutoNation 業務的持續成長，其利潤率應該非常高？

Well, what happens is that there is a setup cost, which the client pays for and our product is deployed on the cloud and it's very, very scalable. So it's like we could grow the Otoz revenue by five-fold, 5x, without having a major impact on cost. So really it's the adoption. The faster or bigger the adoption, the better the margins, because we do have a fixed amount of costs to run the platform. And we are already in profit in terms of what we bring from MINI and AutoNation.

嗯，發生的情況是存在安裝成本，客戶支付該成本，我們的產品部署在雲端上，並且具有非常非常大的可擴展性。因此，我們可以將 Otoz 的收入成長五倍，五倍，而不會對成本產生重大影響。所以這實際上是收養。採用的速度越快或規模越大，利潤就越高，因為我們運行該平台的成本是固定的。就 MINI 和 AutoNation 帶來的收益而言，我們已經實現了盈利。

So we're already in the black. However, as they scale and they grow and we get additional customers -- so we have a pipeline of new customers we are bidding for -- and as that happens, with scale, the profit margins would grow quite rapidly.

所以我們已經獲利了。然而，隨著它們規模的擴大和成長，我們獲得了更多的客戶——因此我們有一系列正在競標的新客戶——當這種情況發生時，隨著規模的擴大，利潤率將快速增長。

That's great to hear. I know your license agreement can be lumpy, and I know that currency exchanges or the currency gains and losses can affect your net income. But have you all reached a point yet where you're able to project positive operating income every quarter going forward? Are you comfortable thinking that will happen?

聽到這個消息我很高興。我知道您的授權協議可能很不穩定，我知道貨幣兌換或貨幣損益會影響您的淨收入。但你們是否已經達到了能夠預測未來每季實現正營業收入的程度？您認為這會發生嗎？

(multiple speakers) My take, Todd, is that, ultimately, the future for us is SaaS. But we are operating on a hybrid model where license is still very attractive. And although it's lumpy, good news is that, from where we were three, four years ago, we're depending completely on license, now we are offsetting a large portion of our revenue within ARR, which is annual recurring revenue, as opposed to lumpy license revenue.

（多名演講者）托德，我的看法是，最終，我們的未來是 SaaS。但我們正在採用混合模式，其中許可證仍然非常有吸引力。儘管情況不穩定，但好消息是，從三、四年前的情況來看，我們完全依賴許可證，現在我們正在 ARR（年度經常性收入，而不是許可證收入不穩定。

So even if we don't get a big license revenue, or if you like, a win, we continue to grow our SaaS revenue at a decent pace, so that at some point we'll have a tipping point where we will get to a position, where, even without any license income, we are profitable as a company.

因此，即使我們沒有獲得大量的授權收入，或者如果你願意的話，一場勝利，我們也會繼續以適當的速度增長我們的 SaaS 收入，因此在某個時候我們將有一個轉折點，我們將達到即使沒有任何許可收入，我們作為一家公司也能獲利。

Also, let me add one more point, Todd, to Naeem. The beauty of our model is that, like Naeem said, it's a hybrid model. We do have a pretty good demand for our flagship Ascent in all three markets.

另外，托德，讓我再向納伊姆補充一點。我們模型的美妙之處在於，正如 Naeem 所說，它是一個混合模型。我們在這三個市場上對我們的旗艦產品 Ascent 確實有相當好的需求。

Yes, it's a much longer sales cycle, then it goes through a lot of, I think, iteration, but combination is amazing, with the license revenue and of course the SaaS, which is a growing trajectory for us. So all in all, I believe we are in a good position. If you look at the competitor, I think really you see a company which has such an amazing history for license sale in all these 25 years.

是的，這是一個更長的銷售週期，然後它經歷了很多，我認為，迭代，但組合是驚人的，有許可證收入，當然還有 SaaS，這對我們來說是一個成長的軌跡。總而言之，我相信我們處於有利地位。如果你看看競爭對手，我想你真的會看到一家在過去 25 年裡擁有如此驚人的許可銷售歷史的公司。

Now, we're managing both sides quite well effectively. And we believe eventually, as I said in my prepared remarks, the growth is quite positive for coming quarters and hopefully will continue in the following year.

現在，我們對雙方的管理都相當有效。正如我在準備好的演講中所說，我們最終相信，未來幾季的成長將非常積極，並希望在明年繼續成長。

So I think overall, the higher revenue, whether it's license or of course SaaS, it just affects all the way to the gross margin and net income. And company has done a good job to be more efficient and a bit more leaner. That will impact all our metrics in the coming quarters.

所以我認為總的來說，更高的收入，無論是許可證還是 SaaS，都會影響毛利率和淨利。公司在提高效率和精簡方面做得很好。這將影響我們未來幾季的所有指標。

That's great. And that tipping point that Naeem spoke about where you won't even need licensing agreements to achieve an operating profit, would you expect that to happen this year or next year? Or is there any sort of --

那太棒了。Naeem 談到的臨界點是，您甚至不需要授權協議即可實現營業利潤，您預計這種情況會在今年或明年發生嗎？或有什麼類型的--

Yeah. I believe next year is more probably because you're still building the sales trajectory here. So I think, Naeem, next year is a better way to look at it. But to your question specifically on the margins?

是的。我相信明年更有可能，因為您仍在製定銷售軌跡。所以我認為，Naeem，明年是一個更好的看待它的方式。但對於你的問題，特別是在邊緣？

Yeah. Look, I think in terms of when that tipping point is, I don't think we could predict that, but I think it's imminent. If you see a growth and if you see how subscription revenue has grown from single digit millions to where we are in a relatively short time, I think we're reaching that point very soon. I can't put a, if you like, a flag on exactly which quarter, which month, but I think we're not far off.

是的。聽著，我認為就臨界點何時而言，我認為我們無法預測這一點，但我認為它迫在眉睫。如果你看到成長，如果你看到訂閱收入如何在相對較短的時間內從數百萬成長到我們目前的水平，我認為我們很快就會達到這一點。如果你願意的話，我無法在確切的季度、月份上貼上一個標誌，但我認為我們離這個目標已經不遠了。

Okay, that's great to hear. And then my final question is, I know in the past you've had several share buybacks going, that you look at the stock now, I think we're right around $3 a share in book value and we're doing over $5 a share in sales. Do you have any share buybacks going on now? Or do you plan to announce any in the near future?

好的，很高興聽到這個消息。然後我的最後一個問題是，我知道你過去已經進行過幾次股票回購，你現在看看這隻股票，我認為我們的帳面價值約為每股3 美元，而我們的每股帳面價值超過5 美元銷售份額。您現在正在進行股票回購嗎？或者您計劃在不久的將來宣布任何消息？

Well, at this stage, we don't have any plan immediately in the short run, simply because, as I mentioned, we are investing in key markets, whether it's North America and some other region. And there's lots of activities and new business opportunities and new markets also, which we'll share with the market in the appropriate time. So obviously, we have done buybacks a few times in the past. And you're right, it is the attractive price to do that. We are open about it, but we have not made that decision at this point.

嗯，在現階段，我們短期內沒有任何計劃，只是因為，正如我所提到的，我們正在投資關鍵市場，無論是北美還是其他一些地區。還有很多活動、新的商機和新的市場，我們會在適當的時候與市場分享。顯然，我們過去已經進行過幾次回購。你是對的，這樣做的價格很有吸引力。我們對此持開放態度，但目前尚未做出決定。

Okay. Well, I really appreciate you all taking my questions and congratulations on a fantastic quarter.

好的。嗯，我真的很感謝你們大家回答我的問題，並祝賀你們度過了一個美好的季度。

Thank you. We have reached the end of our question-and-answer session. So I'd like to pass the floor back to management for any additional closing remarks.

謝謝。我們的問答環節已經結束。因此，我想將發言權交還給管理階層，以徵求更多的結論。

Thank you for joining us today, and I do apologize for the little glitch in the beginning of the Q&A. I especially want to thank all of our investors, for their continued support, our loyal customers, and our most dedicated employees worldwide for their ongoing contributions, and we look forward to updating you on our next call. Thank you.

感謝您今天加入我們，對於問答開始時的小故障，我深感抱歉。我特別要感謝我們所有投資者的持續支持、我們忠實的客戶以及我們全球最敬業的員工的持續貢獻，我們期待在下次電話會議上向您通報最新情況。謝謝。

Ladies and gentlemen, this does conclude today's teleconference. Once again, we thank you for your participation and you may disconnect your lines at this time.

女士們、先生們，今天的電話會議到此結束。我們再次感謝您的參與，此時您可以斷開線路。