Socket Mobile Inc (SCKT) 2024 Q1 法說會逐字稿

Welcome to Socket Mobile, Inc.'s Q1 2024 Earnings Call. My name is Paul, and I will be your operator for today's call.

歡迎參加 Socket Mobile, Inc. 的 2024 年第一季財報電話會議。我叫保羅，我是今天電話的接線生。

Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding mobile data collection and mobile data collection products, including details on timing, distribution and market acceptance of products and statements predicting the trends, sales, and market conditions and opportunities in the market in which Socket Mobile sells its products.

在開始之前，我想提醒大家，本次電話會議可能包含 1933 年《證券法》修訂案第 27A 條以及 1934 年《證券交易法》第 21E 條含義內的前瞻性陳述，如下：已修改。此類前瞻性陳述包括但不限於有關行動數據收集和行動數據收集產品的陳述，包括有關產品的時間、分佈和市場接受度的詳細信息，以及預測趨勢、銷售、市場狀況和機會的陳述。 Mobile 銷售其產品的市場。

Such statements involve risks and uncertainties, and actual results could differ materially from the results anticipated in such forward-looking statements because of a number of factors, including, but not limited to, the risk that manufacture of Socket's products may be delayed or not rolled out as predicted due to technological, market or financial factors, including the availability of product components and necessary working capital; the risk that market acceptance and sales opportunities may not happen as anticipated; the risk that Socket's application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so; the risk that acceptance of Socket's products in vertical application markets may not happen as anticipated; as well as other risks described in Socket's most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. Socket does not undertake any obligation to update any such forward-looking statements.

此類陳述涉及風險和不確定性，由於多種因素，包括但不限於 Socket 產品的生產可能被推遲或不滾動的風險，實際結果可能與此類前瞻性陳述中預期的結果存在重大差異由於技術、市場或財務因素（包括產品組件的可用性和必要的營運資金）而超乎預期；市場接受度和銷售機會可能無法如預期發生的風險； Socket 的應用程式合作夥伴和目前分銷管道可能選擇不分銷產品或可能無法成功分銷的風險； Socket 產品在垂直應用市場上的接受度可能無法如預期發生的風險；以及 Socket 最近向美國證券交易委員會提交的 10-K 表格和 10-Q 表格報告中所述的其他風險。Socket 不承擔更新任何此類前瞻性陳述的義務。

On this call with me today are Kevin Mills, Chief Executive Officer; Dave Holmes, Chief Business Officer; and Lynn Zhao, Chief Financial Officer. I will now turn the call over to Kevin Mills. Mr. Mills, you may begin, sir.

今天與我一起參加電話會議的是執行長凱文·米爾斯 (Kevin Mills)；戴夫‧霍姆斯，首席商務官；趙琳，財務長。我現在將把電話轉給凱文·米爾斯。米爾斯先生，您可以開始了，先生。

Thank you, Paul. Good afternoon, everyone, and thank you for joining us today. Our Q1 revenue was $5 million, a 15% increase compared to $4.3 million from Q1 2023. We had an operating loss of $0.5 million in Q1, an improvement compared to the $1 million operating loss we reported in Q1 2023. In Q1 2024, we were EBITDA positive. Overall, Q1 was in line with our expectations, and we were pleased with our operational performance during the quarter as we maintained our focus on promoting and demonstrating our newer products. Most of these newer products were launched in late 2023 and early 2024, and initial deliveries were made in Q1.

謝謝你，保羅。大家下午好，感謝您今天加入我們。我們第一季的營收為 500 萬美元，比 2023 年第一季的 430 萬美元成長了 15%。我們第一季的營運虧損為 50 萬美元，比 2023 年第一季報告的 100 萬美元營運虧損有所改善。2024 年第一季度，我們的 EBITDA 為正。總體而言，第一季符合我們的預期，我們對本季的營運表現感到滿意，因為我們繼續專注於推廣和展示我們的新產品。這些新產品大多於 2023 年底和 2024 年初推出，並於第一季首次交付。

As you know, after we make initial deliveries, our products are then subjected to a series of end user evaluations before a deployment decision is reached. Initial feedback has been positive, and we expect to see the first deployments in the second half of the year and expect these deployments to make a meaningful contribution to our revenue. I would now like to turn the call over to Dave Holmes, who will provide a more detailed update on our progress. Dave?

如您所知，在我們進行首次交付後，我們的產品將接受一系列最終用戶評估，然後才能做出部署決定。初步回饋是正面的，我們預計將在今年下半年看到首次部署，並預計這些部署將為我們的收入做出有意義的貢獻。我現在想將電話轉給戴夫·霍姆斯，他將提供有關我們進展的更詳細的最新資訊。戴夫？

Thank you, Kevin, and good afternoon, everyone. As Kevin said, today, I'd like to talk about the progress we are making with our newer products and strategic initiatives and highlight a few of the significant milestones that we achieved in Q1. Our investments in innovation are helping transform Socket Mobile into a more comprehensive data capture company. We've made significant progress in promoting our camera-based scanning technology. Our early adopter app partners have integrated SocketCam into their platforms, enabling their customers to scan barcodes directly into their apps using the mobile device camera.

謝謝你，凱文，大家下午好。正如凱文所說，今天，我想談談我們在新產品和策略性舉措方面的進展，並強調我們在第一季實現的一些重要里程碑。我們對創新的投資正在幫助 Socket Mobile 轉型為更全面的數據採集公司。我們在推廣基於攝影機的掃描技術方面取得了重大進展。我們的早期採用應用程式合作夥伴已將 SocketCam 整合到他們的平台中，使他們的客戶能夠使用行動裝置攝影機將條碼直接掃描到他們的應用程式中。

Now that we have fully released the pro version of SocketCam on all development platforms, we are advocating for the adoption of the advanced SocketCam C860. The free and subscription versions of SocketCam enable our app partners to serve all of their diverse end users' needs, from the most cost-conscious with our free SocketCam C820 to a more feature-rich data capture requirements with our subscription-based SocketCam C860. And the most intense users can still use our array of handhold hardware scanners. All of these are made available to our app partners' ecosystem with a simple, single, free integration of our Capture SDK. As adoption builds and end users upgrade to our SocketCam C860, this will generate recurring revenue streams for us each month.

現在我們已經在所有開發平台上全面發布了SocketCam專業版，我們提倡採用先進的SocketCam C860。SocketCam 的免費版和訂閱版使我們的應用程式合作夥伴能夠滿足其所有不同最終用戶的需求，從最注重成本的免費 SocketCam C820 到使用我們基於訂閱的 SocketCam C860 的功能更豐富的資料收集要求。最活躍的用戶仍然可以使用我們的一系列手持式硬體掃描器。透過我們的 Capture SDK 的簡單、單一、免費集成，所有這些都可供我們的應用程式合作夥伴的生態系統使用。隨著採用率的提高和最終用戶升級到我們的 SocketCam C860，這將為我們每個月帶來經常性收入流。

We also see traction with our XtremeScan military-grade industrial scanners as well as our DuraScan wearable products. These products were built for the industrial barcode scanning market, facilitating the use of iPhones and iOS applications in rugged work environments. These product families represent a significant milestone in our commitment to delivering high-quality data capture solutions for our customers in industrial, manufacturing, warehousing, energy and airports.

我們也看到了 XtremeScan 軍用級工業掃描器以及 DuraScan 穿戴式產品的吸引力。這些產品專為工業條碼掃描市場而設計，有助於在惡劣的工作環境中使用 iPhone 和 iOS 應用程式。這些產品系列是我們致力於為工業、製造、倉儲、能源和機場客戶提供高品質資料採集解決方案的承諾的一個重要里程碑。

XtremeScan is designed to enable iPhones to withstand harsh industrial conditions and offer robust scanning capabilities with the ultimate durability. It opens the door into new customer segments in the massive ruggedized computing space that demand the ultimate performance in the most difficult environments. In Q1, our initial customers were putting these products through rigorous testing and reports back have been extremely encouraging. We passed some of the most intense testing with flying colors and expect to move into deployments, which will begin to contribute to our revenue in Q3 and beyond.

XtremeScan 旨在使 iPhone 能夠承受惡劣的工業條件，並提供強大的掃描功能和終極耐用性。它為大規模加固計算領域的新客戶群打開了大門，這些客戶群需要在最困難的環境中提供終極效能。在第一季度，我們的最初客戶對這些產品進行了嚴格的測試，而回傳的報告非常令人鼓舞。我們出色地通過了一些最嚴格的測試，並預計將進入部署階段，這將開始為我們第三季及以後的收入做出貢獻。

Our new Xtreme products will extend our reach and diversify our customer base. SocketCam will provides Socket Mobile with a recurring revenue stream each month, and ultimately, these initiatives will make us a more diversified, sustainable and less dependent on retail. We're becoming a more complete hardware and software data capture company. And with that, I'll turn it over to Lynn for more details on our financial results. Lynn?

我們的新 Xtreme 產品將擴大我們的覆蓋範圍並使我們的客戶群多樣化。SocketCam 將為 Socket Mobile 每月提供經常性收入流，最終，這些措施將使我們更加多元化、可持續發展並減少對零售的依賴。我們正在成為一家更完整的硬體和軟體數據採集公司。接下來，我會將其交給林恩，以了解有關我們財務業績的更多詳細資訊。林恩？

Thank you, Dave, and thank you, everyone, for joining today's call. During Q1, our revenue increased by 15% to $5 million from $4.3 million in the prior year's quarter, and it also increased by 13% sequentially from $4.4 million for the preceding quarter. Alongside the growth in our run rate business, we also observed an increase in deployment business.

謝謝戴夫，也謝謝大家參加今天的電話會議。第一季度，我們的營收從上一季的 430 萬美元增加到 500 萬美元，成長了 15%，並且從上一季的 440 萬美元環比成長了 13%。除了運行率業務的成長之外，我們還觀察到部署業務的成長。

In Q1, our gross margin reached 50.3%, up from 48.1% in the prior year's quarter but down from 52.8% in the preceding quarter. The increase was primarily due to the allocation of manufacturing overhead costs across higher production volumes. While the decrease was attributed to fewer direct sales from our Socket store compared to Q4 2023, which yielded a higher gross margin. Operating expenses for Q1 totaled $3 million, unchanged from prior year's quarter but increased from $2.8 million in the preceding quarter.

第一季度，我們的毛利率達到 50.3%，高於去年同期的 48.1%，但低於上一季的 52.8%。這一增長主要是由於製造管理費用在較高產量中的分配。下降的原因是與 2023 年第四季相比，我們 Socket 商店的直接銷售額減少，毛利率更高。第一季營運費用總計 300 萬美元，與去年同期持平，但較上一季的 280 萬美元增加。

Our annual financial audit expenses typically occur in the first half of the year. During Q1, we recorded a net loss of [$72,000] or $0.07 per share compared to a net loss of $993,000 or $0.12 per share in Q1 2023. Q1 EBITDA is [$40,000], an improvement from the negative $459,000 in Q1 2023. Total noncash expenses, including depreciation, amortization, and equity expenses are $525,000 in Q1 2024.

我們的年度財務審計費用通常發生在上半年。第一季度，我們錄得淨虧損 [72,000 美元]，即每股 0.07 美元，而 2023 年第一季的淨虧損為 993,000 美元，即每股 0.12 美元。第一季 EBITDA 為 [40,000 美元]，較 2023 年第一季的負 459,000 美元有所改善。2024 年第一季的非現金支出總額（包括折舊、攤提和股權支出）為 52.5 萬美元。

Our cash balance at the end of Q1 was similar to the balance on December 31, 2023, at around $2.8 million. We have maintained our inventory at a similar level at the end of the year at $5.4 million. Our Board has approved extending the maturity date of the secured subordinated convertible note initially issued in 2020 from August 30, 2024 to August 30, 2025.

我們第一季末的現金餘額與 2023 年 12 月 31 日的餘額相似，約 280 萬美元。截至年底，我們的庫存保持在類似水平，即 540 萬美元。我們的董事會已批准將最初於2020年發行的有擔保次級可轉換票據的到期日從2024年8月30日延長至2025年8月30日。

Our annual shareholder meeting will take place on May 15, 2024, in a virtual format. We encourage all eligible shareholders to cast their votes and participate in the meeting. This wraps up our prepared remarks. Now I will hand the call over to the operator for questions. Paul?

我們的年度股東大會將於 2024 年 5 月 15 日以虛擬形式舉行。我們鼓勵所有符合資格的股東投票並參加會議。我們準備好的演講到此結束。現在我將把電話轉交給接線員詢問問題。保羅？

(Operator Instructions) And our first question comes from William Carroll, private investor.

（操作員說明）我們的第一個問題來自私人投資者威廉·卡羅爾。

So I'm just trying to understand the business...

所以我只是想了解一下業務...

Sorry, you just want to understand?

抱歉，您只是想了解一下？

I want to understand these new products. How does that displace previous revenue? So I'm trying to get what's the revenue with these new products? And how does that help grow your business?

我想了解這些新產品。這如何取代之前的收入？所以我想了解這些新產品的收入是多少？這如何幫助您發展業務？

All right. So none of the new products or the newer products displace any of our current business. So our current business is primarily, we provide scanning solutions to iPad-based retail point-of-sale systems, and you'll see a lot of our scanners in higher-end specialty retail stores using Shopify, Square, et cetera.

好的。因此，任何新產品或更新的產品都不會取代我們目前的任何業務。所以我們目前的業務主要是，我們為基於 iPad 的零售銷售點系統提供掃描解決方案，您會在使用 Shopify、Square 等的高端專賣零售店看到我們的許多掃描器。

What we have done over the last 2 years is using the same technology to expand into newer markets by, A, supporting people who want to use the camera-based scanning, which we believe will primarily be in the commercial services area and making the products more ruggedized and suitable for the industrial market. So the newer products are complementary to the existing products, and we don't see a lot of cannibalization or downside. It's more an expansion of the capabilities into parallel markets.

在過去的兩年裡，我們所做的就是使用相同的技術擴展到新的市場，A，支持那些想要使用基於攝影機的掃描的人，我們相信這將主要在商業服務領域並製造產品更加堅固耐用，適合工業市場。因此，新產品是對現有產品的補充，我們沒有看到太多的蠶食或缺點。這更多的是向平行市場的能力擴展。

Okay. Another question is your market cap right now is about $8 million. What are your -- are you able to share your projected 12-month revenue...

好的。另一個問題是你現在的市值約為 800 萬美元。能分享一下您預計的 12 個月收入嗎？

We don't provide forecasts because small differences in whether you receive an order change it greatly. As you know, last year, we did around $19 million, and we would expect to be north of $20 million this year. So that's the current plan.

我們不提供預測，因為您是否收到訂單的微小差異都會帶來很大影響。如您所知，去年我們的收入約為 1,900 萬美元，預計今年將超過 2,000 萬美元。這就是目前的計劃。

Does the Board of Directors share repurchase program in place right now?

董事會目前是否實施股票回購計畫？

There is no repurchase plan in place right now. We did have one in 2021, '22. Our cash position isn't strong enough to have a repurchase plan. So at the moment, there is none.

目前尚無回購計畫。我們確實在 2021 年舉辦了一場，'22。我們的現金狀況不足以製定回購計畫。所以目前還沒有。

And then if for some reason, you need to raise more cash, would you do debt or would you do equity offering?

然後，如果出於某種原因，您需要籌集更多現金，您會舉債還是發行股票？

We have available bank lines that we're currently not using. So as the business grows, we believe we can self-fund our fund with debt, our short-term debt. We have a $2.5 million revolving credit line that we currently don't use. So we feel we have enough avenues to continue to grow without any more equity.

我們有可用的銀行額度，但目前尚未使用。因此，隨著業務的成長，我們相信我們可以透過債務（即短期債務）為我們的基金提供資金。我們有 250 萬美元的循環信貸額度，但目前尚未使用。因此，我們認為我們有足夠的途徑繼續成長，而無需更多的股權。

Are you able to share any possible quarter in the future or you're cash flow even?

您能否分享未來任何可能的季度，甚至您的現金流？

Well, we were cash positive. We were EBITDA positive in Q1. We would expect to basically stay around that level in Q2. And then we would expect in the second half of the year to move towards profitable operating levels, which would generate something in the region of $700 million of cash each quarter.

好吧，我們現金積極。我們第一季的 EBITDA 為正值。我們預計第二季將基本保持在該水平附近。然後，我們預計下半年將實現獲利營運水平，每個季度將產生約 7 億美元的現金。

Our next question comes from Richard Greulich of REG Capital Advisors.

我們的下一個問題來自 REG Capital Advisors 的 Richard Greulich。

What was the percent of revenue derived from the online store in Q1?

第一季來自線上商店的收入百分比是多少？

Approximately. In the U.S., approximately, I would say, 17%, 1-7.

大約。在美國，我想說，大約是 17%，1-7。

I'm still learning about the company so this is kind of a basic question. Where do you provide added value? Is it in the actual physical scanning device or is the scanning capability inherent in that device?

我仍在了解這家公司，所以這是一個基本問題。您在哪裡提供附加價值？是在實際的實體掃描設備還是該設備固有的掃描功能？

No, where we provide the core value, if you boil us down to our essence, if you will, but we do better than anyone else is we capture data in the physical world and transport it to the application world, right? So we provide a lot of software that allows an app developer to, I would say, have automated data collection without caring a great deal about it.

不，我們提供核心價值，如果你將我們歸結為我們的本質，如果你願意的話，但我們比其他任何人都做得更好，我們捕獲物理世界中的數據並將其傳輸到應用程序世界，對吧？因此，我們提供了很多軟體，我想說的是，這些軟體允許應用程式開發人員自動收集數據，而無需過多關心。

So from an application development point of view, they just get the data delivered. And we look after all of the software required to get it through the various layers that you have to do. We talk to the physical device and then our scanner actually then collects the data. So really focused on data capture from the physical to the application layer. So somebody like Square or Shopify don't have to worry about pairing the scanner. They don't have to worry about formatting the data or any of those things.

因此，從應用程式開發的角度來看，他們只是獲取交付的數據。我們負責處理您必須執行的各個層所需的所有軟體。我們與實體設備交談，然後我們的掃描器實際上會收集資料。因此真正專注於從物理層到應用程式層的資料擷取。因此，像 Square 或 Shopify 這樣的公司不必擔心掃描器的配對問題。他們不必擔心格式化資料或任何其他事情。

They just get a delivery service that's basically the end result arrives at their doorstep, if you will, and they're able to focus on using the data. So we collect our revenue because we deliver a physical scanner, but most of our value-add is actually on the software side.

他們只需獲得一項交付服務，基本上最終結果就會到達他們家門口，如果你願意的話，他們就能夠專注於使用數據。因此，我們獲得收入是因為我們提供了實體掃描儀，但我們的大部分增值實際上是在軟體方面。

Okay. So when you provide with some of your newer camera scanned products, how do you earn revenue from that if you're providing the [stream] to the app developer?

好的。因此，當您提供一些較新的相機掃描產品時，如果您向應用程式開發人員提供[串流]，您如何從中賺取收入？

Yes. What we found over the years of selling hardware scanners is many of our app developer partners and their end users try out free camera scanning first. And when they try that out, oftentimes, there's a fairly large percentage of them that find out that the capabilities in the free camera scanning aren't good enough for at least some percentage of their end users' needs. Those end users end up upgrading to an enhanced camera scanner, which provides more in-depth data decoding or they end up buying a hardware scanner. That's where most of our customers have come to us ultimately to buy our hardware.

是的。多年來我們銷售硬體掃描器發現，我們的許多應用程式開發合作夥伴及其最終用戶首先嘗試免費的相機掃描。當他們嘗試這一點時，通常有相當大比例的人發現免費相機掃描的功能至少不足以滿足最終用戶的部分需求。這些最終用戶最終升級到增強型相機掃描儀，它提供更深入的數據解碼，或者他們最終購買硬體掃描儀。這就是我們大多數客戶最終來找我們購買我們的硬體的地方。

And so the way that we would make money in this is inserting ourselves further up the value chain. So we provide the free scanners, and we're willing to provide those for free because we know that there's going to be some percentage of those that need to upgrade to the subscription-based version. And then ultimately, some of those customers will upgrade to a hardware scanner. So we make money when people do those upgrades to either the subscription-based or to a hardware scanner.

因此，我們從中賺錢的方式就是將自己進一步推向價值鏈的上游。因此，我們提供免費的掃描儀，我們願意免費提供這些掃描儀，因為我們知道會有一定比例的掃描儀需要升級到基於訂閱的版本。最終，其中一些客戶將升級到硬體掃描器。因此，當人們對基於訂閱的掃描器或硬體掃描器進行升級時，我們就能賺錢。

And the process by which you bill, invoice or however you want to call it, with the subscription upgrade, is that directly to Socket or how does that work?

透過訂閱升級，您開立帳單、開立發票或以任何方式稱呼它的過程是直接透過 Socket 進行的嗎？

Yes. It's -- we use the mechanisms that are already in place in the market, which are basically through the app stores, the App Store and the Play Store, but the revenue does come directly to Socket.

是的。我們使用市場上已經存在的機制，這些機制基本上是透過應用程式商店、App Store 和 Play Store 進行的，但收入確實直接來自 Socket。

Okay. And that's very small, I'm assuming, right now. Is there any time frame in which you might think it could become at least moderately significant?

好的。我認為現在這個數字非常小。您是否認為在某個時間範圍內它可能會變得至少具有一定的重要性？

Yes. We're just getting started with it now. We are seeing pretty positive signs, and we expect it to start contributing to our revenue in the second half of this year.

是的。我們現在才剛開始。我們看到了非常積極的跡象，我們預計它將在今年下半年開始為我們的收入做出貢獻。

Okay. Expanding into the industrial world, how are you making the market participants there aware of what you're doing and offering?

好的。擴展到工業領域，您如何讓那裡的市場參與者了解您正在做的事情和提供的產品？

Yes. So we're spending a lot of time marketing directly to the customer segments that we're going after in the target market that we mentioned during the call. So those are market segments that we traditionally haven't dealt with in the past so we're having to do a lot of new marketing efforts to reach those new audiences. And we're essentially trying to communicate with them in the pools where they play today.

是的。因此，我們花了大量時間直接向我們在電話中提到的目標市場中追求的客戶群進行行銷。因此，這些是我們過去從未涉足的細分市場，因此我們必須做很多新的行銷工作來吸引這些新受眾。我們本質上是在嘗試在他們今天打球的泳池中與他們溝通。

And so we're making ourselves known in those industries. They might know us as more of a retail player today, but we're making it known that we're now entering this industrial segment. And we have some exciting new products to show and we've been out showcasing them with a lot of marquee customers.

因此，我們正在這些行業中提高自己的知名度。他們今天可能更多地將我們視為零售企業，但我們正在讓人們知道我們現在正在進入這個工業領域。我們有一些令人興奮的新產品要展示，並且我們已經向許多大客戶展示了它們。

So these are individual end user customers -- companies. So you're not really -- but you're distributing through distributors. Are you not?

這些是個人最終用戶客戶—公司。所以你不是真的——而是透過分銷商進行分銷。你不是嗎？

We have channel partners and we sell direct as well through our Socket stores.

我們有通路合作夥伴，也透過 Socket 商店直接銷售。

So the people you're actually marketing to, are these fairly large companies or large opportunities for you as opposed to just 1 or 2 little orders?

那麼，您實際向其行銷的人，這些公司對您來說是相當大的公司還是很大的機會，而不是只有 1 或 2 個小訂單？

Yes, that's correct. I mean, a lot of the folks that use these types of devices are large enterprise customers. But I would say there's everywhere from Tier 1 all the way down to Tier 4, 5 and 6 that we're addressing with these things.

是的，這是正確的。我的意思是，許多使用這些類型設備的人都是大型企業客戶。但我想說的是，從第一層一直到第四、第五和第六層，我們都在用這些東西來解決。

Maybe I could add -- maybe I could just add. One of the things that we see happening is that people are more willing to use apps on smartphones than they were in the past. And we're particularly strong if you're using an app and you need data capture. Most of our business comes from the lower small, medium businesses because they are -- they were the first to embrace iPads and with iPhones for business because in many ways, they didn't have a choice.

也許我可以添加——也許我可以添加。我們看到正在發生的事情之一是，人們比過去更願意在智慧型手機上使用應用程式。如果您使用應用程式並且需要資料捕獲，我們會特別強大。我們的業務大多來自規模較小的中小型企業，因為他們是第一批使用 iPad 和 iPhone 開展業務的企業，因為在許多方面，他們別無選擇。

Now that it's been successful with the smaller companies, the larger companies are saying, "Well, what about us?" And again, we understand it will take time, but we have the data capture accessories that they need so they could use an application on an iPad or iPhone and have the same type of experience they would get with the more ruggedized, dedicated device from Zebra or Honeywell at a lower price and also avoid the training that's associated with those more dedicated devices.

既然它在小公司中取得了成功，大公司就會說：“那麼我們呢？”同樣，我們知道這需要時間，但我們擁有他們所需的數據採集配件，以便他們可以在 iPad 或 iPhone 上使用應用程序，並獲得與使用 Zebra 更堅固的專用設備相同的體驗或霍尼韋爾以較低的價格，並且還避免與那些更專用的設備相關的培訓。

So that's kind of what we're seeing and we're servicing. Obviously, before anyone can make that decision to go with the iPads, they need to test us and they need to know it's robust enough. And those are the things we've been making sure are in place so those trials will be successful.

這就是我們所看到並正在提供服務的情況。顯然，在任何人做出使用 iPad 的決定之前，他們需要對我們進行測試，並且需要知道它足夠強大。我們一直在確保這些事情都到位，以便這些試驗能夠成功。

I would think that going -- expanding into the industrial market, it'd be tempting to spend a lot more on sales and marketing then. But how do you draw the line between and the fact you're unprofitable now, controlling costs while you continue to try to expand your sales and marketing in that area?

我認為，如果要擴展到工業市場，那麼在銷售和行銷上投入更多資金是很誘人的。但是，您如何在繼續嘗試擴大該領域的銷售和行銷的同時，控製成本，與目前無利可圖的事實之間劃清界線呢？

So our business model doesn't require sales in a traditional sense. We provide an SDK and we work with the application provider. And the application provider, by integrating our SDK, enables all of the users of that application to try and use our products. If we don't have the application -- or the SDK in the application, it's a 0. If we do, then they basically get a choice. And that really is what happened with Shopify, Square, LightSpeed, et cetera, is that Square integrated our devices, our SDK into their application. And then every Square end user, if they buy our product, it automatically works because it's already enabled, if you will.

所以我們的商業模式不需要傳統意義上的銷售。我們提供 SDK，並與應用程式提供者合作。應用程式提供者透過整合我們的 SDK，使該應用程式的所有用戶都能夠嘗試和使用我們的產品。如果我們沒有應用程序，或者應用程式中沒有 SDK，則為 0。如果我們這樣做，那麼他們基本上就有選擇了。這確實是 Shopify、Square、LightSpeed 等公司發生的事情，Square 將我們的裝置、我們的 SDK 整合到他們的應用程式中。然後每個 Square 最終用戶，如果他們購買我們的產品，它會自動工作，因為它已經啟用，如果你願意的話。

So the business model hasn't changed. It takes a little bit longer. But at the end of the day, we are an accessory to the application. People don't buy our scanners. They buy Square and decide they need a scanner and ours is the one that works. This is the same as true with Shopify. We're following the same, I would say, methodology. It will take a little bit of time, but we are seeing interest from app providers to integrate our SDK because they're getting pressure from their end users to be allowed to use off-the-shelf iPhones and iPads.

所以商業模式沒有改變。需要的時間稍微長一點。但歸根結底，我們只是應用程式的一個附件。人們不會購買我們的掃描器。他們購買 Square 並決定需要一台掃描儀，而我們的掃描器可以正常運作。這與 Shopify 的情況相同。我想說，我們遵循相同的方法。這需要一點時間，但我們看到應用程式供應商有興趣整合我們的 SDK，因為他們受到最終用戶的壓力，要求被允許使用現成的 iPhone 和 iPad。

But we won't have a lot of traditional marketing, our traditional sales expense. As you can see, we control our expenses quite tightly. We will spend a little bit more money on our SDK development and our marketing development, but we feel there's a lot of leverage in that spend.

但我們不會有很多傳統行銷，我們的傳統銷售費用。正如您所看到的，我們非常嚴格地控制開支。我們將在 SDK 開發和行銷開發上花費更多的錢，但我們認為這筆支出有很大的槓桿作用。

So just so I understand, so Square incorporated your capabilities. And have they -- do they do that with other people as well or no?

據我了解，Square 整合了您的能力。他們也對其他人這樣做嗎？

In the case of Square, you have 2 choices. If you want a cordless scanner, we are the only choice on Square iOS. If you want a -- you can have a wired scanner, right? In the case of Shopify, we are the only scanner that Shopify support. So if you're using Shopify and you want to scan, then basically you'll end up with the Socket scanner.

對於 Square，您有 2 個選擇。如果您想要無線掃描儀，我們是 Square iOS 上的唯一選擇。如果你想要一個——你可以有一個有線掃描儀，對吧？就 Shopify 而言，我們是 Shopify 支援的唯一掃描器。因此，如果您使用 Shopify 並且想要掃描，基本上您最終會使用 Socket 掃描器。

And forgive me. Again, I'm new to the company, just trying to understand. So the fact that you're basically the only provider of that service, for example, those 2 companies. And again, then you earn revenues based on people buying your accessory device in a sense?

並原諒我。再說一次，我是公司的新手，只是想了解一下。事實上，您基本上是該服務的唯一提供者，例如，這兩家公司。再說一遍，那麼從某種意義上說，您的收入是基於人們購買您的配件設備而獲得的收入嗎？

Correct.

正確的。

So Square doesn't pay you anything?

那麼 Square 不付你任何費用嗎？

No, actually, Square actually is a reseller for us. So if you go to the Square website, you can buy the Socket Mobile scanner direct from Square. If you go to the Shopify website, you can buy. And they buy through distribution, right? And then some customers decide to buy directly from us or from Amazon or some other mechanism.

不，實際上，Square 實際上是我們的經銷商。因此，如果您造訪 Square 網站，您可以直接從 Square 購買 Socket Mobile 掃描器。如果你去Shopify網站就可以購買。他們透過分銷購買，對吧？然後一些客戶決定直接從我們或亞馬遜或其他一些機制購買。

But the key to all of this is that when the scanner arrives, regardless of the avenue you used to purchase it, when you take it out of the box, it works for shopkeeper who has a little interest in technology and they're off and running. And most of these people have no IT support, so it needs to be pretty user-friendly, robust, bulletproof. And we've achieved all of that in the retail space. And now what we're trying to do is expand that into other areas.

但這一切的關鍵在於，當掃描器到達時，無論您通過什麼渠道購買它，當您從盒子中取出它時，它都適用於對技術有一點興趣的店主，他們就走了跑步。而且這些人中的大多數人沒有 IT 支持，因此它需要非常用戶友好、強大、防彈。我們已經在零售領域實現了所有這些目標。現在我們正在嘗試將其擴展到其他領域。

Particularly we would describe commercial services where people are asset tracking or doing kind of remote work, whether it be in nursing or things like fumigation, delivery services, those type of areas where they can use the barcode to augment and improve their process. A lot of them start with the camera-based scanning.

特別是，我們會描述人們進行資產追蹤或進行遠距工作的商業服務，無論是護理還是熏蒸、送貨服務等領域，他們可以使用條碼來增強和改進其流程。其中很多都是從基於相機的掃描開始的。

And to the earlier question, we believe that the free camera-based scanning covers 80% of the requirement. We're willing to provide the free camera-based scanning to the 80% to have a good position on the remaining 20%. And it becomes a very simple upgrade process, whether it is to an enhanced camera or a physical scanner at the end user level. And the application guy doesn't need to get involved because their business model is about selling subscriptions.

對於先前的問題，我們認為基於攝影機的免費掃描可以滿足 80% 的需求。我們願意為 80% 的人提供免費的基於攝影機的掃描，以便在剩下的 20% 的人身上佔據有利的地位。無論是增強型相機還是最終用戶級的實體掃描儀，它都成為一個非常簡單的升級過程。應用程式人員不需要參與其中，因為他們的商業模式是銷售訂閱。

What is the monthly subscription fees for the upgrade then?

那麼升級的每月訂閱費用是多少？

$5.99 a month.

每月 5.99 美元。

That's a pretty hefty fee, I mean, for somebody -- unless somebody is actually using it in a fairly robust manner.

我的意思是，對於某些人來說，這是一筆相當高的費用——除非有人實際上以相當穩健的方式使用它。

Well, it's not -- well, think of it this way. I don't know if you've ever tried to use a free camera-based scanner. But even if you go to a restaurant, there will be a day when because of the light and the clouds and the shadow, you're sitting there trying to read the menu and your phone won't do it, right? And it takes an extra 30 seconds.

好吧，這不是——好吧，這樣想吧。我不知道您是否曾經嘗試過使用免費的基於相機的掃描器。但即使你去餐廳，也會有一天，因為光、雲、影，你坐在那裡想看菜單，你的手機卻看不到，對吧？並且還需要額外的30秒。

Well, if you're doing hundreds of scans a month and what, 10% take an extra 30 seconds, basically, it's a no-brainer to upgrade because it saves you time. And again, you have to remember, we've been servicing the people who have given up with camera-based scanning. It's not like we believe anyone is using our physical scanners that hasn't already given up on the camera-based scanning, right?

好吧，如果您每月進行數百次掃描，其中 10% 需要額外花費 30 秒，基本上，升級是理所當然的，因為它可以節省您的時間。再次強調，您必須記住，我們一直在為那些放棄基於攝影機掃描的人提供服務。我們不相信任何人在使用我們的實體掃描器時還沒有放棄基於相機的掃描，對吧？

And whereas the subscription is $6 a month, to buy a physical scanner is $200 a month -- $200. So it's -- we sell 100,000 scanners to people who essentially have given up on camera-based scanning because it doesn't meet their needs. And we're trying to have an interim step that gives them the ability to have a better camera-based scanning. And they also will have the opportunity to have a physical scanner depending on their needs, right?

訂閱費為每月 6 美元，而購買實體掃描器則為每月 200 美元——200 美元。所以，我們向那些基本上已經放棄基於攝影機的掃描的人出售了 100,000 台掃描儀，因為它不能滿足他們的需求。我們正在嘗試採取臨時措施，使他們能夠進行更好的基於相機的掃描。他們還將有機會根據自己的需求擁有實體掃描儀，對嗎？

Maybe I misunderstood you. When you said 5 99, that's $5.99 a month or $599?

也許我誤解了你。當您說 5 99 時，這是每月 5.99 美元還是 599 美元？

Sorry. No, no, no, $5.99.

對不起。不不不，5.99 美元。

That's why I said what I did when you said 5 99. Wow, $600 a month is a lot...

這就是為什麼當你說 5 99 時我才這麼說。哇，一個月600塊，很多啊…

No, no, no. $5.99.

不，不，不。5.99 美元。

If you can find us customers that are willing to spend that, we'll take them.

如果您能為我們找到願意花錢的客戶，我們就會接受他們。

I appreciate you bearing with me. I just have 2 more questions. So deferred tax asset on your balance sheet, you've taken no reserves against that, and yet you've been unprofitable for the last year to 2.

我很感激你對我的包容。我還有 2 個問題。因此，你的資產負債表上有遞延稅資產，你沒有為此準備任何準備金，但你在過去一年到 2 年間一直沒有盈利。

Yes, I'll take that question. Yes, there -- actually, at the end of the year, we had a professional who did the analysis of our position, of course, based on the management's forecast for the next 5 years, et cetera. Then our auditors have reviewed their analysis. And then all 3 sides basically concurred that we currently don't need any reserve for the deferred tax assets.

是的，我會回答這個問題。是的，實際上，在年底，我們有一位專業人士對我們的職位進行了分析，當然，這是基於管理層對未來 5 年的預測等。然後我們的審計員審查了他們的分析。然後三方基本上一致認為我們目前不需要任何遞延所得稅資產準備金。

Okay. Appreciate it.

好的。欣賞它。

Yes, just a quick comment. We take that practice on an ongoing basis so as needed as well as annually, we do the analysis.

是的，只是一個簡短的評論。我們持續採取這種做法，以便根據需要以及每年進行分析。

(Operator Instructions) And we have a question from William Carroll, a private investor.

（操作員說明）我們有一個來自私人投資者 William Carroll 的問題。

Yes. So explain a little bit about, so as you're getting into the industrial markets, what would that type of customer look like? Would that be a Graybar, (inaudible)? Or what would be your path to market for those (inaudible) distribution where you have manufacturer's reps selling the product? How does that work?

是的。請解釋一下，當您進入工業市場時，這種類型的客戶會是什麼樣子？那會是灰條嗎？（聽不清楚）？或者，對於那些由製造商代表銷售產品的（聽不清楚）分銷，您的市場路徑是什麼？這是如何運作的？

In the case of the industrial, we're primarily targeting Apple premium resellers, so that would be where we think it would go. In most of the solutions we're proposing, we are scanning elements that works very well with an iPad, iPhone-based solution. And therefore, those customers would already have a preferred Apple reseller. And that Apple reseller, we would hope would also sell our products to those customers.

就工業而言，我們主要針對蘋果優質經銷商，因此我們認為這將是我們的目標。在我們提出的大多數解決方案中，我們正在掃描與基於 iPad、iPhone 的解決方案配合良好的元素。因此，這些客戶已經擁有了首選的蘋果經銷商。我們希望蘋果經銷商也能向這些客戶銷售我們的產品。

And seeing no more questions, I'll turn the call back over to our moderators.

看到沒有更多問題，我會將電話轉回給我們的主持人。

Okay. If we have no more questions, then we'd just like to thank everyone for participating in today's call and wish you all a good afternoon. Goodbye.

好的。如果我們沒有其他問題，那麼我們只想感謝大家參加今天的電話會議，並祝大家下午好。再見。

That concludes today's conference call. Thank you for attending.

今天的電話會議到此結束。感謝您的出席。