Park City Group Inc (PCYG) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Park City Group Fiscal Fourth Quarter 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeff Stanlis with FNK IR. And Mr. Stanlis, you may begin.

您好，歡迎參加 Park City Group 2023 年第四季財報電話會議。 （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，FNK IR 的 Jeff Stanlis。史丹利斯先生，您可以開始了。

Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Park City Group's Fiscal Fourth Quarter Earnings Call. Hosting the call today are Randy Fields, Park City Group's Chairman and CEO; and John Merrill, Park City Group's CFO.

謝謝接線員，大家下午好。感謝您今天參加 Park City Group 第四季財報電話會議。今天主持電話會議的是 Park City Group 董事長兼執行長 Randy Fields；以及帕克城集團財務長約翰‧梅里爾 (John Merrill)。

Before we begin, I'd like to remind everyone that this call could contain forward-looking statements about Park City Group within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not subject to historical facts. Such forward-looking statements are based on current beliefs and expectations. Park City Group's remarks are subject to risks and uncertainties, but actual results could differ materially. Such risks are fully discussed in the company's filings with the Securities and Exchange Commission. The information set forth herein should be considered in light of such risks. Park City Group does not assume any obligation to update information contained in this conference call. Shortly after the market closed today, the company issued a press release overviewing the financial results that we will discuss on today's call. Investors can visit the Investor Relations section of the company's website at parkcitygroup.com to access this press release.

在我們開始之前，我想提醒大家，本次電話會議可能包含 1995 年《私人證券訴訟改革法案》含義內有關 Park City Group 的前瞻性陳述。前瞻性陳述是不受歷史事實約束的陳述。此類前瞻性陳述是基於當前的信念和期望。 Park City Group 的言論存在風險和不確定性，但實際結果可能存在重大差異。該公司向美國證券交易委員會提交的文件中充分討論了此類風險。應根據此類風險考慮此處列出的資訊。 Park City Group 不承擔更新本次電話會議中包含的資訊的任何義務。今天收盤後不久，該公司發布了一份新聞稿，概述了我們將在今天的電話會議上討論的財務表現。投資人可以造訪該公司網站 parkcitygroup.com 的投資者關係部分，以獲取本新聞稿。

With all that said, I would now like to turn the call over to John Merrill. John, the call is yours.

話雖如此，我現在想把電話轉給約翰·梅里爾。約翰，電話是你的。

Thanks, Jeff, and good afternoon, everyone. Our fourth quarter was a strong end to a solid year in every area of the business, compliance, supply chain and traceability. As now a SaaS company, the results of fiscal 2023 (inaudible) to fiscal 2024 and beyond.

謝謝傑夫，大家下午好。我們的第四季為業務、合規性、供應鏈和可追溯性等各個領域的堅實一年畫上了圓滿的句號。作為一家 SaaS 公司，2023 財年（聽不清楚）到 2024 財年及以後的業績。

As I've said before, our business is easy to model and highly predictable. I will dive into the detailed results in a minute. However, in fiscal 2023, we delivered growth in both the total and recurring revenue, essentially flat expenses, growth in profitability, growth in net income and growth in EPS. We put up some very meaningful results. We generated just under $9 million in cash from operations, paid off over $2.5 million in bank debt, returned $1.4 million to shareholders in the form of a common cash dividend, and bought back $1.3 million in common stock, simultaneously strengthening our balance sheet. Meanwhile, we delivered $0.20 per share for the year. We achieved this performance while simultaneously navigating a challenging economy of rising interest rates and general economic uncertainty. Meanwhile, we continue to invest in our traceability offering. Randy will speak more to this. However, we already do track and trace for inventory and finance at scale for the leaders of the grocery industry.

正如我之前所說，我們的業務很容易建模並且高度可預測。我將在一分鐘內深入研究詳細結果。然而，在 2023 財年，我們實現了總收入和經常性收入的成長，費用基本上持平，獲利能力成長，淨利成長和每股盈餘成長。我們提出了一些非常有意義的結果。我們從營運中產生了近900 萬美元的現金，償還了超過250 萬美元的銀行債務，以普通現金股息的形式向股東返還140 萬美元，並回購了130 萬美元的普通股，同時加強了我們的資產負債表。同時，我們今年的每股收益為 0.20 美元。我們在取得這一業績的同時，也應對利率上升和總體經濟不確定性等充滿挑戰的經濟狀況。同時，我們繼續投資於我們的可追溯性產品。蘭迪將對此進行更多討論。然而，我們已經為雜貨業的領導者大規模追蹤和追蹤庫存和財務。

But the new requirements of FSMA 204 are much more in depth and in order to be successful, require us to invest further in both technical and customer-facing roles to position Park City Group for the acceleration of FSMA 204 compliance. We have responded accordingly. We had several new members to our commercial, technical and leadership teams, including industry veterans with relationships and expertise. Be clear, we simply don't add humans because one is good, so 2 must be better. It doesn't work that way. Instead of throwing money at the issue, we evaluate and assess the predictability and reliability of automation versus the efficiency and innate errors that come with humans. Our response is balanced. The result of this process was eliminating high-touch non-core revenue and return for the future growth opportunities, ideally those opportunities in our core food market. In other words, we are rationalizing our customer and product set to allow us to focus on and promote success with traceability and simultaneously placing less emphasis on lower short-term revenue opportunities.

但 FSMA 204 的新要求更加深入，為了取得成功，需要我們進一步投資於技術和麵向客戶的角色，以使 Park City Group 能夠加速 FSMA 204 合規性。我們已做出相應回應。我們的商業、技術和領導團隊中有幾位新成員，其中包括具有關係和專業知識的行業資深人士。需要明確的是，我們只是不添加人類，因為一個人很好，所以兩個人一定更好。事實並非如此。我們不是在這個問題上投入金錢，而是評估和評估自動化的可預測性和可靠性與人類帶來的效率和先天錯誤。我們的反應是平衡的。這個過程的結果是消除了高接觸的非核心收入和未來成長機會的回報，最好是我們核心食品市場的機會。換句話說，我們正在合理化我們的客戶和產品組合，使我們能夠專注並透過可追溯性促進成功，同時減少對較低短期收入機會的重視。

Our compliance and supply chain business continues to gain momentum for the year despite overcoming $700,000 of the high-touch non-core revenue we deemphasized that I previously mentioned. Yes, short-term revenue growth rates are impacted. We delivered a 6% revenue growth year-over-year, and this performance includes overcoming net revenue we deemphasized. In short, the strategic focus will free up significant personnel resource to focus on traceability.

儘管我之前提到的高接觸非核心收入超過了 70 萬美元，但我們的合規和供應鏈業務今年繼續保持成長勢頭。是的，短期收入成長率受到影響。我們實現了 6% 的收入年增長，這一業績包括克服了我們淡化的淨收入。簡而言之，策略重點將釋放大量人力資源，專注於可追溯性。

In my view, giving up a few hundred thousand to pick up $3 million to $4 million in 2025 ARR recurring traceability revenue is the right decision. As I said earlier, our core compliance and supply chain business continue to grow efficiently and profitably. The proof is in the numbers. Total revenue was up 6% for the full year and 5% for the June quarter. Recurring revenue increased 7% for the year and 6% for the quarter. Even with significant investments in our ReposiTrak Traceability Network, or RTN, our SG&A costs were essentially flat for the year and up modestly for the quarter.

在我看來，放棄幾十萬美元來獲得 2025 年 ARR 經常性可追溯性收入 300 萬至 400 萬美元是正確的決定。正如我之前所說，我們的核心合規和供應鏈業務繼續有效率、獲利地成長。證據就在數字中。全年總收入成長 6%，六月季度成長 5%。經常性收入全年增長 7%，季度增長 6%。即使我們對 ReposiTrak 追蹤網路 (RTN) 進行了大量投資，我們的 SG&A 成本全年基本持平，本季略有上升。

GAAP net income increased 40% for the year and 26% for the quarter. GAAP net income to common shareholders increased 46% for the year and 30% for the quarter. Earnings per share increased 52% for the year to $0.27 per share and increased 34% for the June quarter to $0.07. Full year cash from operations increased 45% to $8.9 million, and we bought back approximately 232,000 common shares at an average share price of $5.65 per share, paid off our bank debt entirely, paid $1.4 million in cash dividends and have just under $24 million cash in the bank.

GAAP 淨利全年成長 40%，季增 26%。普通股股東的 GAAP 淨利全年成長 46%，本季成長 30%。全年每股收益成長 52%，至每股 0.27 美元，六月季度成長 34%，至 0.07 美元。全年營運現金增加了45%，達到890 萬美元，我們以每股5.65 美元的平均股價回購了約232,000 股普通股，完全償還了銀行債務，支付了140 萬美元的現金股息，並擁有近2400 萬美元的現金在銀行。

As we have said, our profitability and cash flow will continue to grow faster than revenue. You are seeing that today as we grew revenue by 6% and net income by 40%. Meanwhile, cash from operations grew 45%. Consistent with our strategy, our focus is on increasing operating leverage. This requires us to continue to make difficult decisions to drive high-margin incremental revenue while keeping costs in line and driving profitability and cash. Importantly, the customers we have signed so far for our traceability initiatives, should generate additional dollars of recurring revenue once fully deployed. Our current estimate ranges from $3 million to $4 million per year just from suppliers we have in hand today and excluding contributions from individual stores.

正如我們所說，我們的獲利能力和現金流將繼續以快於收入的速度成長。您今天會看到這一點，我們的收入成長了 6%，淨利潤成長了 40%。同時，營運現金成長了 45%。根據我們的策略，我們的重點是提高營運槓桿。這要求我們繼續做出艱難的決定，以推動高利潤的增量收入，同時保持成本控制並提高獲利能力和現金。重要的是，我們迄今為止簽署的可追溯性計劃的客戶一旦完全部署，應該會產生額外的經常性收入。我們目前的估計範圍為每年 300 萬至 400 萬美元，僅來自我們現有的供應商，不包括個別商店的貢獻。

We ended the fiscal year with an exit rate of annual recurring revenue, or ARR, of $20.3 million. Meaning, as of June 30, 2023, those contracts in hand, billing monthly times 12 will generate $20.3 million in annual recurring revenue in the subsequent 12 months. This is absent any new contracts, future expansion of existing contracts or anticipated growth. Keep in mind, this is organic growth, meaning existing suppliers and retailers that have expanded compliance and supply chain services, adding stores or locations and traceability in the prior fiscal year. This does not include any revenue contribution from a projected new customer. An obvious question one might ask is are you generating traceability revenue yet? The answer is yes. But in fiscal 2023, it was minimal and our $20 million ARR for fiscal 2024 conservatively reflects the same.

本財政年度結束時，我們的年度經常性收入 (ARR) 退出率為 2,030 萬美元。這意味著，截至 2023 年 6 月 30 日，這些手頭合約按月計費乘以 12，將在接下來的 12 個月內產生 2,030 萬美元的年度經常性收入。這不包括任何新合約、現有合約的未來擴展或預期成長。請記住，這是有機成長，這意味著現有供應商和零售商擴大了合規性和供應鏈服務，在上一財年增加了商店或地點以及可追溯性。這不包括預計新客戶的任何收入貢獻。人們可能會問的一個明顯問題是，您是否已經產生了可追溯性收入？答案是肯定的。但在 2023 財年，這個數字很小，我們 2024 財年 2,000 萬美元的 ARR 保守地反映了同樣的情況。

I believe the momentum we are seeing initially with traceability customers faster than I anticipated, will only accelerate. We are confident that traceability will begin to generate meaningful revenue in calendar 2024. Further acceleration in contribution from traceability will only accelerate our top and bottom line growth. I've said it time and time again, it takes approximately $12 million in cash to run this place. Going forward, on each incremental recurring revenue dollar over and above our fixed cash cost of roughly $12 million per year, $0.80 to $0.85 will fall to the bottom line.

我相信，我們最初看到的可追溯性客戶的勢頭比我預期的要快，而且只會加速。我們相信，可追溯性將在 2024 年開始產生有意義的收入。可追溯性貢獻的進一步加速只會加速我們的營收和利潤成長。我已經說過很多次了，經營這個地方需要大約 1200 萬美元的現金。展望未來，每年約 1,200 萬美元的固定現金成本之外，每增加一美元的經常性收入，將有 0.80 至 0.85 美元落入底線。

As I just mentioned, our recurring contracted revenue significantly exceeded that $12 million. Our focus on operating leverage, rationalizing the revenue generated with the costs expended, so a 6% increase in recurring revenue generated a 46% increase in the bottom line this year, even as we invested heavily in RTN. We accomplished this through automation, utilizing our own proprietary tools. This drives more productivity across our entire business. Automation enables us to take excellent care of our customers without adding significant headcount or overhead costs.

正如我剛才提到的，我們的經常性合約收入大大超過了 1200 萬美元。我們專注於營運槓桿，將所產生的收入與支出的成本合理化，因此，即使我們在 RTN 上投入巨資，經常性收入增長 6%，今年的利潤卻增長了 46%。我們利用我們自己的專有工具透過自動化實現了這一目標。這提高了我們整個業務的生產力。自動化使我們能夠在不增加大量員工或間接成本的情況下為客戶提供優質服務。

Our customers are priority one, and we can deliver superior customer service while at the same time increasing our profitability. Again, our strategy remains very simple: take care of the customer, grow recurring revenue, rationalizing costs with the opportunity of future revenues, control costs, increase net income, accelerate EPS, buyback shares, which now includes the preferred shares and drive cash.

我們的客戶是第一位的，我們可以提供卓越的客戶服務，同時提高我們的獲利能力。同樣，我們的策略仍然非常簡單：照顧客戶，增加經常性收入，利用未來收入的機會合理化成本，控製成本，增加淨利潤，加速每股收益，回購股票（現在包括優先股）並推動現金。

Turning to the quarterly numbers. Fiscal year 2023's fourth quarter revenue was $4.8 million, up 5% from $4.6 million in the same quarter last year. Recurring revenue as a percentage of total revenue was 99.5% for the quarter. Recurring revenue in the quarter was 6% over the same period in fiscal 2022 despite the revenue deemphasized during the fiscal year.

轉向季度數據。 2023財年第四季營收為480萬美元，比去年同期的460萬美元成長5%。該季度經常性收入佔總收入的百分比為 99.5%。儘管本財年不再強調收入，但該季度的經常性收入較 2022 財年同期成長 6%。

To date, we have overcome the headwind of approximately $700,000 in what I have referred to as high-touch, low-opportunity revenue, simultaneously increasing both total revenue and recurring revenue for the period.

到目前為止，我們已經克服了大約 70 萬美元的逆風，即我所說的高接觸、低機會收入，同時增加了該期間的總收入和經常性收入。

Operating expenses increased 5% to $3.6 million in Q4 2023. Depreciation and amortization increased 55%, which reflects investments in traceability, upgrades to equipment to address cybersecurity and other routine CapEx expenditures. Sales and marketing expenses decreased 1% and G&A expenses increased 5%. These modest increases reflect RTN investments and our sales staff return to travel as COVID abates.

2023 年第四季度，營運費用增加 5%，達到 360 萬美元。折舊和攤提增加 55%，這反映了在可追溯性、解決網路安全問題的設備升級和其他常規資本支出方面的投資。銷售和行銷費用減少 1%，一般管理費用增加 5%。這些小幅增長反映了 RTN 的投資以及隨著新冠肺炎疫情減弱，我們的銷售人員重新開始出差。

For the fourth fiscal quarter of 2023, GAAP net income was $1.4 million or 29% of revenue versus $1.1 million or 24% of revenue. GAAP net income increased year-over-year by 26%. Net income to common shareholders was $1.2 million or $0.07 per common share based on 18.8 million weighted average shares versus $950,000 or $0.05 per common share based on 19.4 million weighted average shares. You'll also note, we have reduced our capitalization by over 10% through the repurchase and retirement of shares since we initiated our stock buyback plan.

2023 年第四財季，公認會計原則淨利為 140 萬美元，佔營收的 29%，而這一數字為 110 萬美元，佔營收的 24%。 GAAP 淨利潤年增 26%。普通股股東的淨利為120 萬美元，即每股普通股0.07 美元（基於1,880 萬股加權平均股），而淨利為95 萬美元，即每股普通股0.05 美元（基於1,940 萬股加權平均股）。您還會注意到，自從我們啟動股票回購計畫以來，透過股票回購和退役，我們的資本減少了 10% 以上。

Turning to the fiscal year numbers. For the year ended June 30, 2023, total revenue increased 6% from $18 million to $19.1 million. Recurring revenue for the same period grew 7% from $17.8 million to $19 million. Total operating expenses increased 3%, largely due to investments in the RTN. This was partially offset with the ERTC payroll tax refund, increases in bad debt, and lower costs associated with software maintenance fees.

轉向財政年度數字。截至 2023 年 6 月 30 日的年度，總營收成長 6%，從 1,800 萬美元增至 1,910 萬美元。同期經常性收入成長 7%，從 1,780 萬美元增至 1,900 萬美元。總營運支出增加了 3%，主要是由於對 RTN 的投資。這部分被 ERTC 薪資稅退稅、壞帳增加以及與軟體維護費用相關的成本降低所抵銷。

Income from operations increased from $4.4 million to $5.1 million, an increase of 15%. Net income was $5.6 million versus $4 million, an increase of 40%. Net income to common shareholders grew 46% to $5 million or $0.27 per weighted average share compared to $3.4 million or $0.18 per weighted average share.

營運收入從 440 萬美元增加到 510 萬美元，成長了 15%。淨利潤為 560 萬美元，較 400 萬美元成長 40%。普通股股東淨利成長 46%，達到 500 萬美元，即每股加權平均收益 0.27 美元，而此前為 340 萬美元，即每股加權平均收益 0.18 美元。

Turning now to cash flow and cash balances. Total cash at June 30, 2023, was $24 million compared to $21.5 million at the end of fiscal year 2022. As of June 30, 2023, the company had zero bank debt. Fiscal year-to-date, we generated cash from operations of $8.9 million compared to $6.1 million last year, an increase of 45%. In the fourth quarter, we repurchased approximately 48,000 common shares at an average price of $6.90 per share for a total of $328,000. The company has approximately $9.5 million remaining on the $21 million total buyback authorization since its inception.

現在轉向現金流和現金餘額。截至 2023 年 6 月 30 日，該公司的現金總額為 2,400 萬美元，而 2022 財年末的現金總額為 2,150 萬美元。截至 2023 年 6 月 30 日，該公司的銀行債務為零。財年迄今，我們從營運中產生的現金為 890 萬美元，而去年為 610 萬美元，成長了 45%。第四季度，我們以每股 6.90 美元的平均價格回購了約 48,000 股普通股，總計 328,000 美元。該公司自成立以來已獲得 2,100 萬美元的回購授權，目前還剩約 950 萬美元。

We continue to gain momentum in the growth of recurring revenue, delivering 80-plus percent gross margin, double-digit EPS growth. We have $24 million cash in the bank, no debt, and a shrinking capitalization. Currently, we are paying a $0.06 dividend to common shareholders. We paid our first dividend in the second fiscal quarter and again in May and once again in August. We also just announced our September dividend, which will be paid on or about November 1. Subsequent quarterly dividends will be paid within 45 days of the quarter's end.

我們的經常性收入持續成長，毛利率高達 80% 以上，每股盈餘將達到兩位數成長。我們銀行有 2,400 萬美元的現金，沒有債務，資本也不斷減少。目前，我們向普通股股東支付 0.06 美元的股息。我們在第二財季支付了第一次股息，並在五月和八月再次支付了股息。我們也剛剛宣布了 9 月份的股息，將於 11 月 1 日左右支付。隨後的季度股息將在季度結束後 45 天內支付。

As we have said previously, our goal is to take half the annual cash generated from operations and return to shareholders in the form of a dividend, buying back additional common shares and as we announced recently, redeeming the preferred. The other half goes in the bank or will be used to fund initiatives like traceability.

正如我們之前所說，我們的目標是將營運產生的年度現金的一半以股息的形式返還給股東，回購額外的普通股，並正如我們最近宣布的那樣，贖回優先股。另一半存入銀行或用於資助可追溯性等措施。

We also carefully evaluate M&A opportunities, but we are selective. We certainly have ample dry powder if the right opportunity comes along. As I said before, from time to time, the Board will evaluate its capital allocation strategy and they adjust the different levers, including the dividend, buybacks, considering M&A opportunities, paying down debt or other liabilities based on whichever lever is more favorable to shareholders at that time.

我們也會仔細評估併購機會，但我們是有選擇性的。如果有合適的機會，我們當然有充足的乾粉。正如我之前所說，董事會會不時評估其資本配置策略，並根據對股東更有利的槓桿調整不同的槓桿，包括股息、回購、考慮併購機會、償還債務或其他負債當時。

As part of the process, the Board of Directors recently announced our intent to redeem the preferred stock over the next 3 years. After repurchasing our common stock, paying off debt, initiating a quarterly cash dividend and growing our cash reserves, this was the next logical step of our comprehensive capital allocation strategy. That's all I have. Thanks, everyone, for your time today.

作為流程的一部分，董事會最近宣布我們打算在未來 3 年內贖回優先股。在回購普通股、償還債務、啟動季度現金股利和增加現金儲備之後，這是我們全面資本配置策略的下一個合乎邏輯的步驟。這就是我的全部。謝謝大家今天抽出時間。

At this point, I'll pass the call over to Randy. Randy?

此時，我會將電話轉給蘭迪。蘭迪？

Thanks, John. Over the last several years, we've made several key strategic decisions about our course. So far, as you've heard from John's review of the quarterly and full year metrics, these decisions have demonstrated excellent financial results.

謝謝，約翰。在過去的幾年裡，我們對我們的課程做出了幾個關鍵的策略決策。到目前為止，正如您從約翰對季度和全年指標的審查中聽到的那樣，這些決策已經展示了出色的財務表現。

Our core business is based on compliance and supply chain management with additional services like our out-of-stock offering and scan-based trading. Our core business is structurally profitable and generating very significant cash. You heard John describe the 7% growth in recurring revenue, continued expense management, a 40% increase in GAAP profitability and a 50-plus percent growth in earnings per share. This strategy creates a foundation for the business that we have today and more importantly, supports our objectives for traceability, the next major growth driver of our business.

我們的核心業務基於合規性和供應鏈管理以及諸如缺貨服務和基於掃描的交易等附加服務。我們的核心業務在結構上獲利並產生大量現金。您聽到 John 描述了經常性收入增長 7%、持續的費用管理、GAAP 盈利能力增長 40% 以及每股收益增長 50% 以上。這項策略為我們今天的業務奠定了基礎，更重要的是，支持我們的可追溯性目標，這是我們業務的下一個主要成長動力。

The compliance model gives us tremendous credibility in the industry. We are, by far, the largest and best respected supplier retailer, wholesaler supply chain network. You see the results in our widespread industry endorsements. As we often repeat on these calls, we are driven by our customers. Not only do we offer technology that works, but we offer an old fashion level of human customer service, no bots ever.

合規模式為我們在業界帶來了巨大的信譽。到目前為止，我們是最大、最受尊敬的供應商零售商、批發商供應鏈網路。您可以在我們廣泛的行業認可中看到結果。正如我們在這些電話中經常重複的那樣，我們是由客戶驅動的。我們不僅提供有效的技術，而且還提供老式的人類客戶服務水平，絕不使用機器人。

As we continue to gain recognition as a dominant expert on traceability, we recently announced that we are leading the committee of food industry experts called the ReposiTrak Traceability Network Advisory Committee, or RTNAC, hard to say, but I think you get the idea. These are very highly respected thought leaders and are working with us to help their particular product categories in the food industry overall to have an interoperable low-cost food traceability solution for compliance with FSMA Rule 204, that they've chosen to work with us in these critical industry issues as well, humbly to say the least.

隨著我們作為可追溯性方面的主導專家的地位不斷獲得認可，我們最近宣布，我們正在領導一個名為ReposiTrak 可追溯性網絡諮詢委員會(RTNAC) 的食品行業專家委員會，這很難說，但我想您已經明白了。這些都是非常受人尊敬的思想領袖，他們正在與我們合作，幫助他們在整個食品行業中的特定產品類別擁有一個可互操作的低成本食品追溯解決方案，以符合FSMA 規則204，他們選擇與我們合作至少可以說，這些關鍵的產業問題也是如此。

They are (inaudible) in the food industry. Our industry presence, including our customer relationships, our industry endorsements, the advisory committee created a durable, very significant competitive advantage for our ReposiTrak Traceability Network, or as we call it, RTN. This technical and reputational lead of ours is growing. Others talk about traceability with some unproven, not yet in actual use or whatever. But we're actually doing traceability now live with our customers end-to-end with the technology that we've had in existence for some period of time. It was even designed in close collaboration with the industry leaders, so we know it's a fit.

他們（聽不清楚）從事食品業。我們的產業影響力，包括我們的客戶關係、我們的產業認可、諮詢委員會為我們的 ReposiTrak 可追溯性網絡（或我們稱之為 RTN）創造了持久、非常顯著的競爭優勢。我們的技術和聲譽領先地位正在不斷增強。其他人談論的可追溯性有些未經證實，尚未實際使用或其他什麼。但實際上，我們現在正在利用我們已經存在一段時間的技術，與客戶進行端到端的可追溯性。它甚至是與行業領導者密切合作設計的，所以我們知道它是合適的。

Our solution is agnostic as to whether customers also use some other additional system, and this is a really important point. We work with any labeling system, any bar coding system, any blockchain system, really we'll work with any system at all, we don't care. We provide the traceability interoperability layer. This is critical and is value added to literally everyone across the supply chain. A supplier, say with 100 customers can't create 100 different custom labeling systems to help them comply with each different customers of his ability to read some particular label.

我們的解決方案不知道客戶是否仍使用其他一些附加系統，這是非常重要的一點。我們與任何標籤系統、任何條碼系統、任何區塊鏈系統合作，實際上我們將與任何系統合作，我們不在乎。我們提供可追溯性互通層。這一點至關重要，而且對供應鏈上的每個人來說都是增值的。一家供應商表示，擁有 100 個客戶，無法創建 100 個不同的客製化標籤系統來幫助他們符合每個不同客戶讀取某些特定標籤的能力。

So suppliers see value in our interoperability approach, immense value. We create inexpensive simplicity for suppliers. A supplier who's already done the work to get connected to our RTN (inaudible) want to use our RTN with as many of his customers as possible. Why? They've already done the one-time connection work. It's done. They've already paid our unlimited use fee for it. So it's good for the customer, and it certainly helps us spread the word. Even at this early stage, a number of our new RTN supplier customers are working to take us to their customers and help the organic growth of our network. Distributors and wholesalers see value too. Their business is based on speed and accuracy and frankly, lack of complication is critical to their success.

因此，供應商看到了我們的互通性方法的價值，巨大的價值。我們為供應商創造廉價的簡單性。已經完成連接到我們的 RTN（聽不清楚）工作的供應商希望與盡可能多的客戶一起使用我們的 RTN。為什麼？他們已經完成了一次性連線工作。完成。他們已經向我們支付了無限制的使用費。所以這對客戶有好處，而且肯定有助於我們傳播訊息。即使在這個早期階段，我們的許多新 RTN 供應商客戶也在努力將我們引向他們的客戶，並幫助我們網路的有機成長。分銷商和批發商也看到了價值。他們的業務基於速度和準確性，坦白說，避免複雜性對於他們的成功至關重要。

So new logistic complications like Rule 204, frankly, a disaster. We streamlined that (inaudible) rules and allowed them to maintain their current processes and technologies. And of course, retailers love the system. For a retailer, end-to-end traceability helps them irrespective of the FDA rules. They've always wanted more visibility into their supply chain. They've always wanted an easier way to recall products, and we give that to them. We make it easy in every single respect, and traceability is working now, working now in actual customers. That's a very powerful message. Our way of doing it is live and functioning. So where are we today in the -- if you think about it, the traceability life cycle. Well, since March of 2023, we have signed 2 wholesalers and 2 self-distributed retailers, not pilots but deployments.

因此，像第 204 條規則這樣新的後勤複雜性，坦白說，是一場災難。我們簡化了（聽不清楚）規則，並允許他們維持目前的流程和技術。當然，零售商也喜歡這個系統。對於零售商來說，無論 FDA 的規定如何，端到端的可追溯性都可以幫助他們。他們一直希望能夠更清楚地了解自己的供應鏈。他們一直想要一種更簡單的方式來召回產品，我們為他們提供了這種方法。我們在各個方面都讓這一切變得簡單，可追溯性現在正在發揮作用，現在正在實際客戶中發揮作用。這是一個非常有力的訊息。我們的做法是活生生的、有效的。那麼，如果你仔細想想，我們今天處於可追溯性生命週期的哪個階段。那麼，從2023年3月開始，我們簽了2家批發商和2家自營零售商，不是試點，而是部署。

These 4 customers together with their 26 distribution centers, potentially nearly 1,500 suppliers and thousands of their stores are entering into the ReposiTrak Traceability Network, RTN again, as I said, we call it. No one else is actually dealing with real committed customers. They're talking and they're issuing press releases. We're doing it.

這 4 家客戶連同他們的 26 個配送中心、潛在的近 1,500 家供應商和數千家商店正在進入 ReposiTrak 可追溯性網絡，正如我所說，我們再次稱之為 RTN。沒有其他人真正在與真正忠誠的客戶打交道。他們正在談論並發布新聞稿。我們正在做。

On-boarding just the business we have currently will be an extensive process. We recognize that. It will likely take a year to be fully deployed. We have a well-defined process, an amazing team of people holding our customers' hands as we lead them down the road to FDA compliance. No one else has our real-life experience and therefore understands the twists and turns they'll have to face as they deploy. Others are still at the concept stage. Our process is today being continually tuned. We're on a path to add additional automation to the methodology over time, of course.

僅加入我們目前擁有的業務將是一個廣泛的過程。我們認識到這一點。全面部署可能需要一年時間。我們有一個明確的流程，一個令人驚嘆的團隊，握著客戶的手，帶領他們走上 FDA 合規之路。沒有人擁有我們的現實生活經驗，因此了解他們在部署時必須面對的曲折。其他仍處於概念階段。今天，我們的流程正在不斷調整。當然，隨著時間的推移，我們正在為該方法添加額外的自動化。

So what's (inaudible) might ask from the already signed up wholesalers and retailers. On-boarding just these 4 customers that we have today, once fully implemented and deployed, should generate somewhere in the area of $3 million to $4 million per year of additional annual recurring revenue. So what are our customers feeling about our traceability program you might ask. Well, so far, (inaudible) reviews from both the hubs, retailers and wholesalers, as we call them, as well as the suppliers.

那麼（聽不清楚）可能會向已經簽約的批發商和零售商詢問什麼。僅加入我們今天擁有的這 4 個客戶，一旦完全實施和部署，每年就應該產生 300 萬至 400 萬美元的額外年度經常性收入。那麼您可能會問，我們的客戶對我們的可追溯性計畫有何看法。嗯，到目前為止，（聽不清楚）來自中心、零售商和批發商（我們稱之為）以及供應商的評論。

Our customers acknowledge our technology and our team is the right solution. Hence, as I mentioned, we are already starting to get referrals from the early users to other retailers and wholesalers. Our trade associations are becoming more vocal in their support for our efforts. So at this point, we're not just optimistic but really pleased with the industry position that we have in traceability.

我們的客戶認可我們的技術，我們的團隊是正確的解決方案。因此，正如我所提到的，我們已經開始從早期用戶那裡獲得向其他零售商和批發商的推薦。我們的產業協會越來越明確地支持我們的努力。因此，在這一點上，我們不僅感到樂觀，而且對我們在可追溯性方面的行業地位感到非常滿意。

Beyond these early adopters, our pipeline is large and growing. Our hands are (inaudible) as we tool our way through the first group of suppliers, distributors and stores. As we scale, though, on-boarding is becoming easier as we come down the learning curve and add even more internal automation. We are already seeing an acceleration in the process, much more to come. We've been here before when we first started doing compliance, if you remember. We know the drill. Year 1 in compliance, for example, we did 200 connections. 2 years later, it was in the thousands. Scaling is our forte.

除了這些早期採用者之外，我們的通路規模龐大且不斷成長。當我們穿過第一組供應商、分銷商和商店時，我們的雙手（聽不清楚）。然而，隨著我們規模的擴大，隨著我們降低學習曲線並增加更多的內部自動化，入職變得越來越容易。我們已經看到這個過程正在加速，而且還會有更多。如果你還記得的話，當我們第一次開始合規時，我們就曾經遇到過這樣的情況。我們知道演習。例如，在合規性的第一年，我們進行了 200 個連接。 2年後，數量已達數千。規模化是我們的強項。

As we said last quarter, the traceability opportunity now that the rules are defined, is emerging somewhat faster than we anticipated.

正如我們上季度所說，既然規則已經定義，可追溯性機會的出現速度比我們預期的要快一些。

RTN revenue in 2023, was better than we expected given our expectation, frankly, of zero. We believe RTN revenue will accelerate in calendar 2024. So calendar '24 will be excellent and '25 will likely be a crush. There's no doubt about it. The amount of work to get the industry doing traceability is complex and time-consuming. It's an enormous endeavor. We would welcome the FDA pushing back the beginning of enforcement a year or so because of the depth and scope of the rule. Hopefully, they will do that, don't be surprised if they do.

坦白說，我們的預期為零，2023 年 RTN 的收入比我們的預期好。我們相信 RTN 收入將在 2024 年加速成長。因此，「24 年」將會非常出色，而「25 年」可能會很受歡迎。毫無疑問。讓業界進行可追溯性的工作量既複雜又耗時。這是一項巨大的努力。由於該規則的深度和範圍，我們歡迎 FDA 將開始執行的時間推遲一年左右。希望他們會這樣做，如果他們這樣做了，請不要感到驚訝。

There will be numerous reports of new technologies from start-ups that propose to address the FDA rules through labeling or some other nifty idea. We view these entrants actually as potential customers, not competitors. Labeling alone, in fact, won't do the work that's needed. Labeling and barcodes don't actually contain all of the information that the FDA requires. It will not enable people to be compliant with labeling alone.

將會有大量關於來自新創公司的新技術的報告，這些新技術提議透過標籤或其他一些漂亮的想法來解決 FDA 的規則。我們實際上將這些進入者視為潛在客戶，而不是競爭對手。事實上，僅靠標籤並不能完成所需的工作。標籤和條碼實際上並不包含 FDA 要求的所有資訊。它不會讓人們僅僅遵守標籤規定。

Do those promoting these solutions expect the kid at a grocery store, for example, to know which of the cases is the right one to scan with whichever new nifty label is on the box? No, can't happen that way. The landscape for how we do what we do is not competitive per se. We can work with any system that someone adopts and help them. It's not a zero-sum game. But we are confident that we are the component, the key component to make industry-wide traceability work in a cost-effective manner.

例如，推廣這些解決方案的人是否希望雜貨店的孩子知道哪個箱子適合用盒子上的新漂亮標籤進行掃描？不，不可能那樣發生。我們做事的方式本身並不具競爭性。我們可以與某人採用的任何系統合作並幫助他們。這不是一場零和遊戲。但我們有信心，我們是使全行業的可追溯性以具有成本效益的方式發揮作用的關鍵組成部分。

The industry leaders are apparently in agreement with us. The industry requires a much more complete solution than simply labels, barcodes or blockchains. An obvious question though, for investors is how does the RTN initiative affect our operating costs. Simple. While the revenue opportunity is significant, we do not expect a significant increase in our cost structure because our automation ability, in fact, trumps additional personnel costs. We do not anticipate a major step-up in costs and we expect only a modest increase in our expenses as we on-board new customers. We've been using home-built tools with an AI foundation to help manage our internal processes for years. That work continues. In fact, we're doubling down on it.

行業領導者顯然同意我們的觀點。該行業需要一個比簡單的標籤、條碼或區塊鏈更完整的解決方案。不過，對於投資者來說，一個明顯的問題是 RTN 計劃如何影響我們的營運成本。簡單的。雖然收入機會很大，但我們預計成本結構不會顯著增加，因為事實上我們的自動化能力勝過額外的人員成本。我們預計成本不會大幅增加，隨著新客戶的增加，我們的費用只會小幅增加。多年來，我們一直在使用具有人工智慧基礎的自製工具來幫助管理我們的內部流程。這項工作仍在繼續。事實上，我們正​​在加倍努力。

So let me see if I can summarize all of this. We've built a consistent cash generation machine in 6 consecutive years of real GAAP profitability. Two, we're going to continue to deploy our capital allocation strategy, buying back stock, paying the dividend, growing our cash, paying off debt, now redeeming the preferred. We maintained a fortress balance sheet with nearly $24 million in cash, no debt and a current ratio of over 6. Our business is efficient. We think it should be easy to model, and we're positioned to scale. We will continue to shrink the number of shares, both common and preferred, outstanding and return capital to the shareholders by both buying back stock and paying a cash dividend. So the net result of that should be faster revenue growth, even faster net income growth and faster earnings per share growth.

讓我看看我是否可以總結所有這些。我們已經建立了連續 6 年真實 GAAP 獲利能力的穩定現金生成機器。第二，我們將繼續部署我們的資本配置策略，回購股票，支付股息，增加現金，償還債務，現在贖回優先股。我們維持著堡壘式的資產負債表，擁有近 2,400 萬美元的現金，沒有債務，流動比率超過 6。我們的業務效率很高。我們認為它應該很容易建模，並且我們已經做好了擴展的準備。我們將繼續減少普通股和優先股以及已發行股票的數量，並透過回購股票和支付現金股利的方式向股東返還資本。因此，最終的結果應該是更快的收入成長，甚至更快的淨利潤成長和更快的每股盈餘成長。

So with that, I'd like to now open the call for questions. Operator?

因此，我現在想開始提問。操作員？

(Operator Instructions) And our first question comes from the line of Tom Forte with D.A. Davidson.

（操作員說明）我們的第一個問題來自 Tom Forte 和 D.A.戴維森。

Great. So Randy and John, congrats on the quarter and fiscal year. I have a handful of questions. I'm just going to go one at a time. So Randy, you mentioned that the FSMA delay on compliance that could -- that could be helpful, you said. Can you expound on that?

偉大的。蘭迪和約翰，恭喜本季和財年。我有幾個問題。我每次只去一個。蘭迪，您提到 FSMA 延遲合規可能會有所幫助，您說。你能解釋一下嗎？

Well, yes, let's -- the background really is this. Hopefully, you can hear me okay. I'm having some phone issues. But net of -- the net position that we have is it can't get done, not by us, but by the industry. As we've said before, there's 1.5 million businesses at a minimum, that have to change very fundamental processes in their supply chain to be able to do traceability. There's now 2 years and 2 months left until enforcement begins. It can't happen. So we're reasonably confident that the FDA will go low -- let's give everybody an extra year. And that would help us because it spreads out the rush, it enables us to deal with customers on a more rational basis, it would be excellent. I'm not positive. We're not at the FDA, not positive it's going to happen. But if it does happen, it's certainly salutary to our business.

嗯，是的，讓我們——背景確實是這樣的。希望你能聽到我的聲音。我的電話有一些問題。但除此之外，我們的淨立場是，這件事無法完成，不是我們，而是整個產業。正如我們之前所說，至少有 150 萬家企業必須改變其供應鏈中非常基本的流程才能實現可追溯性。現在距離執法開始還有兩年兩個月。這不可能發生。因此，我們有理由相信 FDA 將會降低——讓我們再給每個人一年的時間。這將對我們有所幫助，因為它分散了匆忙，使我們能夠在更理性的基礎上與客戶打交道，這將是非常好的。我不積極。我們不在FDA，不肯定這會發生。但如果它確實發生，對我們的業務肯定是有利的。

Okay. And then the second question is, I think you've talked in the past about the opportunity at the restaurant level. Can you talk about that opportunity again and where you are on that?

好的。第二個問題是，我認為您過去曾談論過餐廳層面的機會。您能再次談談這個機會以及您對此的進展嗎？

Yes. The restaurant business is, in some ways, the opposite of our food business, meaning they have lots of stores, not many suppliers where food businesses tend to have retail food, tend to have lots of suppliers, not many stores. So we've made some really terrific hires and marketing efforts. And I think in the next 6 months, we're likely to begin to do a little bit of work and then from a little bit of work to a lot of work potentially in both restaurants and -- as well as that QSR, quick service restaurants.

是的。在某些方面，餐廳業務與我們的食品業務相反，這意味著他們有很多商店，但供應商不多，食品企業往往有零售食品，往往有很多供應商，但商店不多。因此，我們做出了一些非常出色的招募和行銷工作。我認為在接下來的 6 個月裡，我們可能會開始做一些工作，然後從一點點工作到可能在餐廳和 QSR、快速服務方面進行的大量工作餐廳。

And then are there opportunities to expand into other fields, especially those where there's a lot of regulations, oil and gas, pharmaceutical? How should I think about that?

那麼是否有機會擴展到其他領域，尤其是那些有許多法規、石油和天然氣、製藥等領域？我該如何思考這個問題？

Yes. Fundamentally, if you think about what our technology platform can do, it can measure whether or not a business is in conformity with a set of regulations or business rules, et cetera. So what we do could apply, for example, to Department of Transportation regulations or EEOC regulations. We have some of our customers now beginning to use us in -- well, think of it as sustainability initiatives and whatnot. So all we care about is does someone know the rules. And if they can explain the rules to us, our system can, in fact, enforce that a supplier or someone in that business is in conformity with that rule set.

是的。從根本上來說，如果你考慮我們的技術平台可以做什麼，它可以衡量一個企業是否符合一套法規或業務規則等等。因此，我們所做的事情可以適用於交通部法規或平等就業機會委員會法規等。我們的一些客戶現在開始使用我們——好吧，將其視為可持續發展計劃之類的。所以我們關心的是是否有人了解規則。如果他們可以向我們解釋規則，我們的系統實際上可以強制供應商或該企業中的某人遵守該規則集。

But beyond that, remember that once traceability becomes the dominant standard here in the U.S., there's 2 other things that we think are going to happen. Number one -- and by the way, we're already seeing this, it's remarkable. Traceability is going to expand from the initial list to likely almost all foods. We've already -- in fact, this is interesting to note, we'll talk about it a little bit more later. The very first supplier, literally the #1 supplier who signed up for our service is in the onion business, and onions are not covered by Rule 204. They're not part of the traceability list. They're heavily recalled -- don't eat onions. They're heavily recalled, but they're not on the list. And the attitude of this company was they're going to be on the list. Traceability is better for me and better for my customers, I'm going to do it. So we think traceability will expand anyway within the U.S. But it's only a matter of time, remember how much of our food comes from outside the U.S. until this becomes the standard globally. So the opportunities are really very, very large compared to what we see today.

但除此之外，請記住，一旦可追溯性成為美國的主導標準，我們認為還會發生另外兩件事。第一——順便說一句，我們已經看到了這一點，這非常了不起。可追溯性將從最初的清單擴展到幾乎所有食品。事實上，我們已經注意到這一點很有趣，我們稍後會詳細討論它。第一個供應商，實際上是簽約我們服務的第一供應商，是洋蔥產業的供應商，而洋蔥不在規則 204 的涵蓋範圍內。它們不屬於可追溯性清單的一部分。他們被強烈召回——不要吃洋蔥。他們被大量召回，但他們不在名單上。這家公司的態度是他們將被列入名單。可追溯性對我來說更好，對我的客戶也更好，我會這麼做。因此，我們認為可追溯性無論如何都會在美國境內擴大。但這只是時間問題，請記住我們有多少食品來自美國境外，直到這成為全球標準。因此，與我們今天看到的相比，機會確實非常非常大。

Great. And then I have a modeling question for John. So John, you talked about the conversion to recurring revenue and SaaS and things of that nature. But how should we think about your top and bottom line over the next 12 months, especially as you ramp the traceability effort?

偉大的。然後我有一個建模問題要問約翰。約翰，您談到了向經常性收入和 SaaS 的轉換以及類似性質的事情。但是，我們應該如何考慮您未來 12 個月的收入和利潤，尤其是當您增加可追溯性工作時？

Sure. So as you heard, it's -- our forecast right now based on what contracts we have at hand, June 30, was $20.3 million. So there's your top line conservative, assuming no growth and modest traceability. Well, obviously, that's not going to happen. So whatever growth factor would come in from there. You heard Randy and I both say it's about $3 million to $4 million once fully deployed. Well, all of those will not start in July, they'll be laddered in over the next 12 months. So what that looks like, your guess is as good as mine, but start with a top line of a modest $20.3 million. You heard me say it always takes $12 million to run this place, and then you have another $2 million on top of that of accounting, depreciation and amortization, stock comp. So that pretty much gives you the P&L and you can see what our conversion is from revenue and bottom line into EPS. So I think it's pretty easy to model at this point with us effectively at 100% recurring revenue. Does that answer your question?

當然。正如您所聽到的，我們現在根據 6 月 30 日手頭上的合約進行的預測為 2030 萬美元。因此，你的收入是保守的，假設沒有成長和適度的可追溯性。嗯，顯然，這不會發生。所以無論什麼生長因子都會從那裡進來。你聽到蘭迪和我都說，一旦完全部署，大約需要 300 萬到 400 萬美元。好吧，所有這些都不會在 7 月開始，它們將在接下來的 12 個月內逐步實施。所以看起來，你的猜測和我的一樣好，但從 2030 萬美元的頂線開始。你聽我說過，經營這個地方總是需要 1200 萬美元，然後除了會計、折舊和攤提、股票補償之外，你還有另外 200 萬美元。因此，這幾乎為您提供了損益表，您可以看到我們從收入和利潤到每股盈餘的轉換。因此，我認為此時我們很容易以 100% 的經常性收入有效地進行建模。這是否回答你的問題？

Yes. All right. And then last question for me. So you've talked about -- you gave some high-level comments on where your thoughts are on strategic M&A. Can you talk about returning cash to shareholders, both buyback and the dividend side? And on the dividend side, have you thought about increasing the dividend? I think you have a pretty modest yield right now, but how do you think about potentially raising the dividend over time?

是的。好的。然後是我的最後一個問題。所以你談到了——你對戰略併購的想法發表了一些高層評論。您能否談談向股東返還現金，包括回購和股利方面？在股息方面，您是否考慮過增加股息？我認為你現在的收益率相當適中，但你如何看待隨著時間的推移提高股息的可能性？

Randy, you can take that one?

蘭迪，你可以拿那個嗎？

Well, let me give you my opinion as CEO. John mentioned it, and I think it's important to recognize that each year and even within a year, we're going to take several looks at where we are from a cash flow perspective. The intention is really still the same as we've stated historically. Half of each year's cash flow will go on the balance sheet to strengthen our -- how we look to our customer set because our customers are getting bigger. The world is getting weaker and our customers want to see a strong partner. So we owe that to them. The other half of our cash flow, free cash flow each year, we're going to decide between one of several possible levers. Are we going to pay an increased cash dividend. That's certainly under consideration, no decision yet, but it's under consideration. Are we going to buy back more stock? That's certainly under consideration.

好吧，讓我以執行長的身份向您發表我的看法。約翰提到了這一點，我認為重要的是要認識到，每年甚至在一年內，我們都會從現金流的角度來多次審視我們的處境。其意圖實際上仍然與我們歷史上所說的相同。每年一半的現金流量將進入資產負債表，以加強我們對客戶群的看法，因為我們的客戶規模越來越大。世界變得越來越弱，我們的客戶希望看到一個強大的合作夥伴。所以這是我們欠他們的。我們現金流的另一半，每年的自由現金流，我們將在幾種可能的槓桿之間做出決定。我們是否要支付增加的現金股利？這當然正在考慮中，尚未做出決定，但正在考慮中。我們要回購更多股票嗎？這當然正在考慮中。

We do that every year so far. And then finally, how much are we going to spend in terms of paying back the preferred. We've given ourselves 3 years to get that done, redeem the preferred. So all of those things are on the table, but definitely an increase in the cash dividend could be on the cards. John, do you agree?

到目前為止，我們每年都會這樣做。最後，我們要花多少錢來償還優先貸款。我們給自己3年的時間來完成這個任務，兌換首選。因此，所有這些事情都已擺在桌面上，但肯定會增加現金股息。約翰，你同意嗎？

I agree. I mean I think the other element too is M&A. We've talked about that. So if there's something that comes up strategically. But to Randy's point, we have these levers, so we put up $9 million for fiscal 2023, so call it, 4.5 in the bank and 4.5 going forward to -- we don't have any bank debt anymore. So logically, one could assume that we would -- obviously, we're going to buy back the preferred. We have 3 years to do that. The next logical solution to your point as far as a modest yield on the comp dividend would be to increase that, but no decision has been made yet.

我同意。我的意思是，我認為另一個因素也是併購。我們已經討論過了。所以如果有什麼策略上出現的事情。但就蘭迪的觀點而言，我們有這些槓桿，所以我們為2023 財年投入了900 萬美元，這麼說吧，4.5 美元存入銀行，4.5 美元用於未來——我們不再有任何銀行債務。因此從邏輯上講，人們可以假設我們會——顯然，我們將回購優先股。我們有 3 年的時間來做到這一點。就你的觀點而言，下一個合理的解決方案是增加股息收益率，但尚未做出決定。

Our next question comes from the line of (inaudible) private investor.

我們的下一個問題來自（聽不清楚）私人投資者。

Congratulations on the great results. I wanted to ask about the current quarter. Are you going to see a ramp-up of that revenue for the current quarter? Or should we just be thinking about the current quarter, maybe like a 1/4 of that $20 million you guided from current customers?

祝賀取得的優異成績。我想問一下當前季度的情況。您會看到本季的收入增加嗎？或者我們應該只考慮當前季度，也許是您從當前客戶引導的 2000 萬美元中的 1/4？

Well, conceptually, we've said and we haven't repeated it as frequently as we should. We're just not a quarterly company. We don't think about it in those terms. We think about it on an annual basis. So we are as focused, I think, as a business can be on on-boarding traceability. As we mentioned, we're the only company actually doing traceability. Everyone else is talking about traceability and issuing press releases. Doing it is very difficult. It is intensive from a development perspective, an implementation perspective, a customer management perspective. In every respect, it is difficult to do. So we are heads-down, completely focused on how do we do this, number one, right, and we are doing that. Two, how do we do it more and more efficiently. We're focused on that.

嗯，從概念上講，我們已經說過了，但我們沒有像我們應該的那樣頻繁地重複它。我們只是不是季度公司。我們不會用這些術語來思考它。我們每年都會考慮這個問題。因此，我認為，我們就像企業一樣專注於登機可追溯性。正如我們所提到的，我們是唯一一家真正進行可追溯性的公司。其他人都在談論可追溯性和發布新聞稿。做到這一點是非常困難的。它從開發角度、實作角度、顧客管理角度都是密集的。從各方面來說，都很難做到。所以我們低著頭，完全專注於我們如何做到這一點，第一，對吧，我們正在這樣做。第二，我們如何做得越來越有效。我們專注於此。

We're making changes literally every week to our internal processes and technology to make it easier and faster. And we have to keep our heads down doing that. So what happens as we now are on-boarding people who are actually paying us is that there will be a ramp in terms of how we go from zero to several millions a year over the next year, 18 months, and it won't be exactly equal. We just don't know the rate at which we can bring the paying customers into the system. So the answer is the way our numbers should run, Q1 is always the lowest of the year. Q4 is always the highest because of the growth of the on-boarding, if you will, in terms of traceability. So it will continue to increase throughout the year and hopefully for the next several years on that same basis. Hopefully, that answered your question.

我們幾乎每週都會對內部流程和技術進行更改，使其變得更容易、更快。我們必須低頭這樣做。因此，當我們現在僱用那些實際向我們支付工資的人時，我們的收入將在未來一年（18 個月）內從零增加到數百萬美元，而且不會是這樣。完全相等。我們只是不知道將付費客戶帶入系統的速度。所以答案就是我們的數字應該如何運行，第一季總是一年中最低的。第四季始終是最高的，因為就可追溯性而言，如果您願意的話，由於入職人數的增長。因此，這一數字將在全年繼續增長，並希望在未來幾年保持同樣的基礎。希望這回答了你的問題。

Yes, definitely. And about -- about your traceability customers, how -- how do they decide to going first. I mean the deadline is '26, obviously, not everybody wants to be like right before the deadline. But for whom is it more important to get it done now? And are you guys serving them on first-come-first-serve basis? Or are you prioritizing?

當然是。關於您的可追溯性客戶，他們如何決定先採取行動。我的意思是截止日期是 26 年，顯然，並不是每個人都想在截止日期之前做到這一點。但現在完成這件事對誰來說比較重要呢？你們是按照先到先得的原則為他們服務的嗎？或者你有優先考慮嗎？

That is a fabulous, fabulous question. It's the one we think about a lot. Remember, we've been in the compliance business for a number of years. So the truth is we've developed really, really good relationships with our customers. We've been talking to our customers for several years about this traceability requirement, literally years. So a number of them in thinking about their own business came to grips with the fact that doing a full implementation of traceability is anywhere from one to 2 years of work. So several of them simply in conjunction with us, took a look at the calendar and said they don't want to be done in January of 2026. They want to be done ahead of that so that any issues in terms of process and procedure on their part could be worked out.

這是一個絕妙、絕妙的問題。這是我們常常思考的一個。請記住，我們從事合規業務已有多年。事實上，我們與客戶建立了非常非常好的關係。多年來，我們一直在與客戶討論這項可追溯性要求，實際上已經有很多年了。因此，他們中的許多人在考慮自己的業務時意識到，全面實施可追溯性需要一到兩年的時間。因此，他們中的幾個人只是與我們一起查看了日曆，並表示他們不想在 2026 年 1 月完成。他們希望提前完成，以便在流程和程序方面出現任何問題。他們的部分可以得到解決。

So I would argue there's sort of, let's call them conservative, knowing that things in retail take a while. They are all large systems, meaning one of them owns several hundred stores. Actually, they're all between 200 and 400 stores that they own. One of them is a wholesaler with 2,000 stores, for which it's a wholesaler, another one has, I think, 800 stores at its services. When you're at that scale, nothing goes fast and that's how they think. So I think their decision to get started was really based on, one, how long might it take? And since nobody has done it before, no one has done it before end-to-end across thousands of items, thousands of items and many, many stores and distribution centers and all of that complexity, why not allow yourself plenty of time. So I think that's why they made the decision to get started. And it's also why we're completely convinced that the FDA should back off and give people another year. We believe, and remember, we're in the market all the time talking to people, there are some people who say, well, I don't need to think about that now.

所以我認為，我們可以稱他們為保守派，因為他們知道零售業的發展需要一段時間。它們都是大型系統，這意味著其中一個系統擁有數百家商店。事實上，他們擁有 200 到 400 家商店。其中一家是擁有 2,000 家商店的批發商，它是一家批發商，另一家是一家擁有 800 家商店的批發商。當你達到這樣的規模時，一切都不會很快，這就是他們的想法。所以我認為他們開始的決定實際上是基於，一，可能需要多長時間？由於以前沒有人這樣做過，沒有人在端到端地處理數千種商品、成千上萬的商店和配送中心以及所有這些複雜性之前這樣做過，為什麼不給自己足夠的時間呢？所以我認為這就是他們決定開始的原因。這也是為什麼我們完全相信 FDA 應該退縮並再給人們一年的時間。我們相信，並記住，我們一直在市場上與人們交談，有些人說，好吧，我現在不需要考慮這個。

I need another year and then I can start thinking about it. And what we say to them is, you won't get it done. It's not a one-year project. It's longer than that, and it's difficult to do. Well, I suppose to some people, that sounds like sales talk, it isn't. It's true. So that's why we suspect that '24 is very busy for us, calendar '24, and the calendar '25 is going to be a crush. By the time the word is out, the traceability is doable but difficult that it involves changing lots of things in your business. Our phone will ring. And the problem that we worry about is having to say to a customer, God, we talked to you 2 years ago and you said you thought you could get it done in a year and now you're calling us and you want us to get it done in 6 months. Can't happen. So '25 will be a crush.

我還需要一年的時間，然後我才能開始考慮它。我們對他們說的是，你不會完成它。這不是一個為期一年的計畫。比這更長，而且很難做到。嗯，我想對某些人來說，這聽起來像是銷售談話，但事實並非如此。這是真的。所以這就是為什麼我們懷疑「24」對我們來說非常忙碌，「24」日曆，「25」日曆將是一個迷戀。當消息傳出時，可追溯性是可行的，但很困難，因為它涉及改變您業務中的許多事情。我們的電話會響。我們擔心的問題是不得不對客戶說，上帝，我們兩年前和你談過，你說你認為你可以在一年內完成它，現在你打電話給我們，你希望我們得到6個月內完成。不可能發生。所以25年將會是一場暗戀。

And hopefully, the FDA backs off and gives the world at least another year, 2 years would be better. One more year is desirable. So I hope that -- I know that was long-winded, but hopefully, that gave you some color around your question. People who are conservative want to start now because it is a bigger problem than they thought. And then people will come in later, and we're not sure they'll all get done.

希望 FDA 能夠退縮並給世界至少再一年的時間，兩年會更好。再多一年是可取的。所以我希望——我知道這很囉嗦，但希望這能讓你對你的問題有所了解。保守的人想現在就開始，因為這是一個比他們想像的更大的問題。然後人們會稍後進來，我們不確定他們是否都能完成。

We have reached the end of the question-and-answer session. And I will now turn the call back over to the management for closing remarks.

我們的問答環節已經結束。現在，我將把電話轉回給管理階層，讓他們發表結束語。

Thank you all. Appreciate you taking time this afternoon. You know what to do if you have questions, contact John or Randy, and we'll try and help. Thanks a lot.

謝謝你們。感謝您今天下午抽出時間。如果您有疑問，您知道該怎麼做，請聯絡約翰或蘭迪，我們會盡力提供協助。多謝。

Thanks, everyone. Have a great day.

感謝大家。祝你有美好的一天。

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，大家可以掛斷電話了。感謝您的參與。