Phunware Q3 2024 Earnings Call Transcript

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November 7, 2024

There are 7 speakers on the call.

Operator

Participants in this call are advised that the audio of this conference call will be broadcast live over the Internet and is also being recorded for playback purposes.

Operator

A webcast replay of the call will be available approximately 1 hour after the end of the call through November 7, 2025. I would now like to turn the call over to Brooks Hamilton of MZ Group, the company's Investor Relations firm. Please go ahead, sir.

Speaker 1

Thank you, operator. Good afternoon, and thank you for participating in today's conference call. Earlier this afternoon, the company released its financial results for the quarter ended September 30, 2024. A copy of that press release can be found on the company's website at www.funware.com by selecting Investors under the About tab from the corporate homepage. I further encourage you to visit investors.

Speaker 1

Funware.com to access not only the earnings press release, but also the current investor presentation, SEC filings, FundWear's recently released letter to shareholders and additional information on FundWear. Joining me on today's earnings call from FundWear's management team are Stephen Chen, Interim Chief Executive Officer and Troy Reisner, Chief Financial Officer. During this call, management will be making forward looking statements, including statements that address Fundrise' expectations for future performance or operational results. Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Fundware's most recently filed annual report on Form 10 ks and subsequent periodic reports filed by FundWear with the SEC and FundWear's press release that accompanies this call, particularly the cautionary statements in it.

Speaker 1

Additionally, the matters being discussed today may include non GAAP financial measures. Reconciliation of GAAP to non GAAP financial information is set forth in the earnings press release. The content of this call contains time sensitive information that is accurate only as of today, November 7, 2024. Except as required by law, Fundware disclaims any obligation to publicly update or revise any information provided on this call to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Fundware's Interim CEO, Stephen Chan.

Speaker 1

Stephen?

Speaker 2

Thank you everyone for joining today's earnings call. I'm Stephen Chen and I am excited to update you on Fundware's progress. We're rooted in our legacy as a pioneer in mobile technology and our commitment to becoming a leader in the mobile plus AI solutions space. As we communicated in our recent shareholder letter, Fundware's mission is to leverage mobile devices as a foundation for AI driven personalized engagement that allows businesses to connect more effectively with their customers, partners and employees. Funware's history in mobile engagement uniquely positions us for an era where mobile technology and AI converge.

Speaker 2

From the beginning, Funware was among the first to recognize the transformative power of mobile devices as a primary way people interact with technology and with one another. This foundation allows us to now deliver generative AI directly into users' hands, creating experiences that are highly personalized, relevant and impactful. This legacy is more than history. It's also the springboard for our next chapter. As we step into the EraAI, we see mobile plus AI as the future standard for all enterprise engagements.

Speaker 2

By merging our strengths in mobile with generative AI, we are committed to turning mobile devices into dynamic context aware tools that offer unique insights and highly customized experiences tailored to each user's needs. Mobile devices remain one of the most accessible universal technologies globally, making them the ideal platform for our AI solutions. By combining mobile and AI, we're enabling businesses to create entirely new opportunities for meaningful engagement, transforming devices into highly adaptable real time tools for connecting with customers and employees. Our vision spans both consumer facing applications and internal employee productivity tools. For consumers, we're building personalized context aware experiences that elevate engagement, service and satisfaction.

Speaker 2

For internal use, we're designing AI enhanced productivity tools that streamline workflows, improves decision making and boost operational efficiency. This dual approach empowers enterprises to harness AI to enhance customer engagement while optimizing internal productivity. Our next generation AI driven SaaS platform anticipated to launch in mid-twenty 25 is designed to democratize mobile app creation by allowing companies of all sizes to create, build and deploy custom mobile apps quickly and affordably. This platform is rooted in our understanding that modern businesses need fast scalable AI solutions that reduce both the cost and complexity of mobile app development, giving them the flexibility to design high quality apps that respond directly to user preferences. Fundra's extensive experiences working with Fortune 500 Companies has given us a robust understanding of what it takes to deploy technology at scale.

Speaker 2

This expertise allows us to create modular rapidly deployable AI solutions that can adapt to a wide range of industry needs. For retail and healthcare to advocacy and large scale enterprise applications, we are where our customers need us to be and allow for a quick mobile plus AI deployment for specific use cases or a comprehensive cross departmental AI integration and we're built to scale. This gives our customers a unique advantage to adopt AI incrementally while leveraging our infrastructure to scale their operations seamlessly. Let's talk about some of the specifics. Through our relationship with MyCanvas, we are actively exploring AI power solutions to transform civic engagement, leveraging FundWear's expertise in mobile and AI.

Speaker 2

This partnership enables us to deliver a next generation platform that combines mobile engagement with advanced AI capabilities tailored for both federal and local applications and powered by localized LLMs. Our vision is to go beyond traditional voter outreach, equipping advocacy groups, nonprofits and public agencies with tools for broader civic participation and engagement. We can provide nuance context specific insights to support a wide range of activities. And we allow organizations and governments to have tools that deliver precise data informed strategies and help them connect more effectively with diverse communities. This is a real time optimized outreach approach based on hyper local data and allows us to have community relevant messaging.

Speaker 2

We hope to set a new standard in civic engagement. PhoneWords investment in infrastructure has positioned us to capture strong demand in the market for AI driven solutions. We have a focus on scalable modular frameworks that integrate with existing platforms giving our partners a foundation for sustainable growth. We can support high value customer engagements across a myriad of industries and fuel momentum in both bookings and sales. Firmware remains debt free.

Speaker 2

We have adequate resources to support our continued investment in AI, sales and engineering. We have financial stability that allows us to pursue a growth strategy judiciously while also ensuring we deliver long term value to stockholders. Our commitment to fiscal responsibility is demonstrated in our efficient use of capital and in our balanced investment in strategic areas that align with our vision. We have a robust level of liquidity and allows to support operational flexibility and resilience and will allow us to respond effectively to emerging opportunities and address challenges while allowing us to have sustained stability and growth. Fenway's vision, leading a $500,000,000,000 generative AI market.

Speaker 2

Fenware's foundational work in mobile technology is now propelling us into the rapidly expanding generative AI marketplace. We see our roles as the AI integration engine that provides scalable, adaptable solutions to enterprises looking to enhance their mobile platforms with personalized AI. By driving engagement, operational efficiency and long term growth, we believe Fundware is exceptionally well positioned to redefine how businesses and governments engage with customers, citizens and employees in the AI era. PhoneWords journey from a mobile pioneer to a leader in mobile plus AI represents an exciting evolution. And with our recent changes including the search for a new CFO underscores our commitment to aligning our team with the strategic direction.

Speaker 2

This leadership adjustment is part of a broader effort to strengthen our alignment across all levels ensuring we can fully leverage our foundation in mobile engagement while advancing our AI driven initiatives. We're actively seeking individuals who can provide fresh perspectives and guide us towards achieving this vision with precision and agility. Thank you. And now I'll turn over the call to Troy to discuss our financial performance.

Speaker 3

Thank you, Stephen, and good afternoon, everyone. I'd like to thank you for joining us today for our review of FundWear's Q3 2024 financial performance. As we move through our results, I'll be discussing GAAP financial measures unless otherwise specifically noted. Our press release, 8 ks and website provide a reconciliation of all GAAP to non GAAP financial results. As a reminder, our previous business, Light Technologies, is reflected in our financials as a discontinued operation in accordance with GAAP.

Speaker 3

The financial information I'm about to share is solely focused on our continuing operations. And with that said, let's take a look at the numbers. Year to date software subscriptions and service bookings, which represent executed contracts and future revenue, for the 9 months ended September 30 were approximately $2,200,000 in 2024 as compared to approximately $600,000 in 2023, nearly a 300% increase. Net revenues for the Q3 of 2024 totaled approximately $665,000 compared to approximately $1,300,000 in the Q3 of 2023, with 2023 net revenue benefiting nearly $300,000 from a contract breakage fee. Net revenues for the 9 months ended September 30 were approximately $2,600,000 in 2024 as compared to $3,900,000 in 2023.

Speaker 3

Gross margin for the 9 months ended September 30 was approximately 51% in 2024 as compared to approximately 32% in 2023. Excluding non cash stock based compensation, gross margin was approximately 56% in 2024 as compared to approximately 43% for the comparable period in 2023. Total operating expense was approximately $3,500,000 for the Q3 of 2024 versus approximately $4,900,000 for Q3 2023, which excludes $9,000,000 of goodwill impairment expense in Q3 2023. Excluding the 2023 goodwill impairment, our operating costs decreased approximately 28% period over period. On a year to date comparison, excluding the goodwill impairment, our operating expenses decreased approximately 44% in 2024 as compared to 2023.

Speaker 3

Non GAAP adjusted EBITDA loss was approximately $2,900,000 in the Q3 of 2024 compared to a loss of approximately $3,300,000 for the Q3 of 2023. Year to date, our non GAAP adjusted EBITDA loss was approximately $7,300,000 versus approximately $13,000,000 for the comparable period in 2023. Net loss from continuing operations for the Q3 of 2024 was approximately $2,800,000 or $0.25 per share compared to a net loss from continuing operations of approximately $13,700,000 or $5.72 per share for the Q3 of 2023, which reflects a 96% improvement. The weighted average shares used to calculate earnings per share was approximately $11,100,000 versus approximately $2,400,000 in the Q3 of 2023, which does reflect the reverse stock split effectuated in February 2024. Moving to the balance sheet, we closed the quarter of 2024 with approximately $35,600,000 in cash and no debt.

Speaker 3

During the Q3 of 2024, our cash increased a result of utilizing the at the market equity program having sold approximately 2,900,000 shares of common stock, which raised gross proceeds of approximately $16,800,000 before commissions and fees. Subsequent to the end of the Q3, we have continued to periodically utilize our ATM equity program selling additional shares of approximately $8,000,000 which raised gross proceeds of approximately $79,800,000 through November 5, 2024. Fenware has approximately $70,000,000 of capacity remaining under our existing ATM program. As a result of all that, as of November 6, we have approximately $110,000,000 of cash and cash equivalents on hand. The utilization of our ATM equity program has significantly boosted Fenware's cash reserves and fortified our balance sheet.

Speaker 3

With that, we'd like to turn the call back over to the operator so that we can begin the question and answer session. Please go ahead, operator.

Operator

Thank you. At this time, we will be conducting our question and answer session. Our first question is coming from Darren Asahi with ROTH Capital. Your line is live.

Speaker 4

Hey, this is Dylan on for Darren. Thanks for taking my questions. First, regarding some of your plans around your SaaS platform that you're set to launch sort of mid next year. Can you talk about some of your goals with that? And then do you have some of the resources that you need to get there such as staff or technology or like how are you looking at investing in that in order to get from where you're at today to the platform that you envision when you're launching that?

Speaker 2

Yes. This is Steve Chen. I'm happy to take that call. Thanks for that call. Thanks for my question.

Speaker 2

It is actually not as much of a shift as what we've traditionally done already. Fundware has been around for 19 years in the mobile space. And what we've historically done is when customers would like to have a mobile app, we can spin it up in a matter of days, sometimes a matter of hours. Typically, the limiting reagent is actually of the Apple Store, the Google Store. We've accelerated that process not even further.

Speaker 2

On the back end, historically, our engineers have been pulling together different modules to create the app. All we're doing now with our platform is adding a field to the very front end of it, so that you can put in the desired app you like to create. And we're currently in the process of automating everything on the back end. To answer your question, yes, we are best in class. We have done it for among some of the biggest companies in the U.

Speaker 2

S. On the Fortune 500. So we absolutely do have the tools to do that. We're focused also on being it's actually kind of the opposite. We understand that we currently have a burden and we're looking at ways that we can be more cost effective and be mindful of shareholder dollars.

Speaker 2

Thank you.

Speaker 4

And as a follow-up, with the balance sheet now, how do you think about growth sort of organically with some of the things you're working on and also inorganically? And then what sort of if it is through acquisition, what sort of companies would you be looking for?

Speaker 2

Yes. We want to be judicious in the way that we're looking at this. I think that from an organic growth process, we're looking at opportunities that will allow us to scale the SaaS platform. With most of these SaaS platforms, we're still testing out the price point, but it would take a lot of volume for us to reach the kind of volumes of revenues that we're looking for. So while we're focused on automating that process and building a sales automation approach, that's what we'll be pursuing.

Speaker 2

Above and beyond that, we have a desire to lean on our history both as a public company, now with a very strong balance sheet with audited financials and a highly professional team. We think we can take a meaningful approach towards engaging with enterprises as well as federal governments and helping them apply AI tools. And specifically within that approach, there's many very powerful LLMs out there that folks are very aware of. However, with both enterprise as well as with governmental contracts, one would need to have a localized solution that is easy to audit, that is easy to secure, where you could tie back every data input. And should things go awry, one would need to be able to tie it back to the exact amount of code.

Speaker 2

I think that because we have that focus on it and because we have such a long history of building enterprise apps, for example, our old history with 21st Century Fox, where we're streaming content all around the world, We have a tool that is built to scale. We'd like to use that historical legacy and use some of the balance sheet dollars that we now have to build out teams that can help us engage and go solicit some of these enterprise as well as federal type contracts. Great. Thank you. No.

Speaker 2

In terms of an M and A approach, what you'll come to find is that our team is highly metric based and highly rubric based. Internally, what we've done is without going into too much detail, we have a diligence checklist and rubric, which talks about I'll give you sort of the highlights to help you understand. We're looking at market analysis. Does on a scale from 1 to 5, does it help us position be in a stronger position for AI, federal contracting as well as for enterprise. From a financial assessment, look at how strong they are in terms of revenue growth or stability, profitability margin is important to us.

Speaker 2

We're not interested in accelerating cash burn of any capacity. And we're really interested in products that are in the ticket size of somewhere between $1,000,000 to $10,000,000 Any of the smaller, more traditional SaaS products, while are interesting and we can do quite easily now, simply don't have the ability to move revenue dollars in the speed and velocity we like it to. We look at things like operational fit. Does it fit with what we're doing already? We're standardizing a lot of our processes internally.

Speaker 2

We bought an external price, evaluate for using best practices. Everything that we're focused on is KPI driven, metric driven, as well as scalability. If we can't scale, it becomes very unattractive to us. From a technology evaluation, we're looking at the tech stack. What are the integrations and how can we use whatever they're building into what we're existing into what our existing infrastructure is.

Speaker 2

If it doesn't fit within our modular app ecosystem, it becomes very hard because we spent 2 decades building it. No matter how powerful it is, it probably make more sense just to build it for ourselves internally. In terms of a synergy assessment, we are very much focused on cross selling opportunities. If it's a consultancy, if they're currently selling to federal contracts, if they're currently selling cloud solutions to enterprise companies and they're profitable and they're rapidly scaling up their book of business, that becomes interesting to us. That said, I think we're very reticent in overpaying for anything.

Speaker 2

I have a background in the ABL credit markets, and I'm very much around aligning sort of success together collaboratively, which you'll see, for example, the campaign nucleus transaction were done. That's largely stock based. And that it shares our philosophy how we grow together. And then lastly, it's we look at regulatory compliance, of course, but cultural fit is something that I care a lot about. Do they align with the culture, the corporate culture that we want to build?

Speaker 2

And for us, the way we think about it and that we're measuring all of the folks on our team as well as folks that would be engaging externally would be based on a metric of integrity, a sense of urgency, a sense of ownership, a sense of innovation and curiosity, because it's my belief that with those characteristics rigorously measured against and ticked and tied, we can really build the kind of culture that I think would be needed to be nimble in this space. There's a lot of dollars floating around within the AI space and there's a lot of opportunities, but only if we have a high sense of ethical standards, if you have a sense of personal integrity that will be imbued throughout the organization as well as a sense of urgency and ownership would be the only way that we could do this. Internally, the tools are advancing so quickly that without a sense of curiosity, we'd be left in the dust. And with our sense of innovation and engaging with our customers, we would have no one to work with. So given our history of working with hospitality and given our history of working with hospitals and other clients of the sort of political sort of affiliations, we're eager to work with partners.

Speaker 2

So for those that are currently out there that are looking for a well positioned, highly high integrity, highly motivated folks that move with lots of urgency and ownership reach out to us, because we're taking a hard look at ourselves and we'd love to work with you. And for organizations that have products that could use a capital partner and build something really great, please reach out to our partners. Thank you.

Operator

Thank you. Our next question is coming from Scott Buck with H. C. Wainwright. Your line is live.

Speaker 5

Hi, good afternoon guys. Steven, very nice to meet you.

Speaker 2

Pleasure.

Speaker 5

I'm curious, can you help us understand what exactly you're getting with MyCanvas and Campaign Nucleus? Is there a real revenue generating business there? Or is it more about people and tech?

Speaker 2

Yes. I'm happy to answer that to the extent that I can. The answer is and I'll have to couch it to a certain extent just because it's a new partnership and we're still working our way around when to disclose, how to disclose and what those approval processes are. With myCanvas, absolutely. We've worked out how do I put this?

Speaker 2

Campaign tools are largely developed from the hyper local all the way up to the state, the federal, the national level, so on and so forth. Those are largely mature. The part that remains sort of largely segmented and fragmented is this hyper local canvassing. Put it this way, when I was a high school kid, I ran around and I did canvassing for different elected officials. And that process was largely still the cash transaction.

Speaker 2

That's the same process as this is today. Your local assembly person, it's a manual process. It's a messy process. And it is not a data process, right? It's the assembly person wants to get into office and they find 20 people, they take a map, they carve it out, they send 10 people there and 15 people there and they pray for what comes back.

Speaker 2

You might leave some door knockers, you might get your you might get rejected away. And the way that we imagine it, we can have lots of highly relevant content on matters that matter to these individuals and or communities. And we're able to track it real time on a platform. And that level of rich data to better understand your constituency and better figure out how to plan for rules and regulations and policies is a tremendous power for civic engagement and democratization of having your voice heard. And the value to that to interested parties, government or otherwise is tremendous.

Speaker 2

We have a robust pipeline, I guess, of folks that are ready, willing and able to pay us already. From a tools perspective, we're ready. This is not a product that we need to work on very much. It's been in motion for a very long time. And it's not just for presidential elections.

Speaker 2

It's effectively for any type of civic discourse, local elections, national elections, the technology is the same. Even for sentiment analysis, being able to break it on not just by zip code, but on a mile by mile basis is tremendous. As you know, we have a long history of wayfinding and being best in class than that. And there's just a tremendous amount of power to have hyper localized contextual information combined with generative AI, combined with insights and all in the power of your hand that you now transform these canvassers into real time ambassadors to share with their fellow citizens. Things they really care about is at the heart of it is, it's what democracy is, right?

Speaker 2

It's true civic engagement in a really meaningful way. And the information only gets better with time. These are conversations that folks are not necessarily willing to have. And given how polarized the country is, this is one way where we can share our core beliefs in a meaningful fashion with our peers. So I hope that answers some of your questions.

Speaker 5

Yes, I can appreciate that. And my second one is just in terms of visibility. Speaking for myself, it's a challenge at this point to envision what this business looks like 12 months from now or 24 months from now. I know there are a lot of kind of things in the pipeline here. But if you could give us any kind of color on how to think about how kind of revenue develops from where we are today, which is basically 0.

Speaker 2

I really appreciate that. I'm not one to sort of blow smoke that your assessment is accurate. And that's part of the reason why we are as harsh with ourselves as we're more harsh with ourselves and why I started with the word around integrity. We truly value we understand that this is shareholder capital, it's not our capital. And a desire to build something and scale it is what we really care about because it's what folks have entrusted us with.

Speaker 2

Because we're starting with 0, that's actually an opportunity for us. And that's afforded us an opportunity to delve into things like the localized AI and generative AI. How we approach this was we said, hey, look, we have a very robust balance sheet now and we have no debt and we have increasingly culturally aligned individuals that are passionate about building something. And as we look at the macro trends, the most obvious thing that hits you in the face that's untapped where there are no market leaders and would be generative AI space. And then when you look at it and say, hey, look, we the power of technology will never be a guy whipping a laptop out of his pocket.

Speaker 2

It just won't be the case, right? What we have is the legacy of the most powerful computing devices inside your pocket. If we can merge those 2 and help everyone be able to access this in a meaningful way, in a hyper secure way, whether you work for government or otherwise, that becomes incredibly powerful. Immediately, because we're building from the ground up, it will take some time to work. And what we've done is we've built out what we've done is we've done a postmortem type approach.

Speaker 2

So we now have a very long runway to the tune of 2 decades if we stretch that out, but at least a decade, even without being particularly conservative. We're looking at it and say, hey, look, in 2 years on a postmortem and we completely mess this up and deliver no shareholder value. What went wrong? Where do we not put the time and effort to focus on it? And then we're doing everything we can to do tabletops and their appliance to completely avoid that scenario.

Speaker 2

And the way we look at it is that some of the biggest wins are within enterprise and the federal government. And that does require a different Rolodex. It does require different partners and it does require a different approach to market, engaging in conferences and talking to hospitality. It's great. I think we have a legacy of doing it.

Speaker 2

But the things that I'm much more interested in is engaging in channel partners that already are working with enterprise customers that we want to work with, that are already working with federal government and our gov cloud. And how can we add our unique value, our stability, our insight, our urgency, our dedication, and how can we deliver value in a way that broadens the pie. And for those type of engagements, it's just a different world. It's a slightly longer sales cycle, but frankly, our sales cycle has been dismal anyway. That's what we're looking for.

Speaker 2

We're looking for those $1,000,000 to $10,000,000 type boogies, building a long strong rapport, building up Board Advisors and continuing to leverage the relationships we've historically had and are now only deepening with individuals like those affiliated with MyCanvas and those are increasingly coming into our constellation as we have a renewed focus on things that have a high sense of integrity and delivering real products and solving real problems.

Speaker 5

Super. Well, I appreciate that guys. Thanks for the time.

Speaker 2

Absolutely. These are conversations we're having with ourselves. So but always happy to share what we're thinking.

Operator

Thank you. Our next question is coming from Ed Woo with Ascendiant. Your line is live.

Speaker 3

Yeah. Thanks for taking my questions. Very nice to meet you. My question is, will you still predominantly focus on the U. S.

Speaker 3

Or have you thought about international opportunities?

Speaker 2

That I come from a very I come from emerging markets background and I've spent much of the last few years overseas and the answer is absolutely. That said, I realized that much of our core relationships are here domestically and our affiliations and current partnerships are domestic. We plan on our roll ups as we look at differentiation, we look at niche specialization, we look at cost effectiveness and we look at our Rolodex. The rollout plan is identify target clientele, establish and deepen those channel partnerships, be highly compliant and create a robust moat based on the relationships that we have and government contracts we hope to sign up. From that, we plan on launching pilot programs and case studies, which will demonstrate our capabilities and success.

Speaker 2

And yes, call it Phase 3, 3 years out, we can start looking at larger market outreach and leverage on success stories and attend more international events and do more targeted digital campaigns. Our partners are doing that today, but they also have a much more robust and fully built out business. We want to walk before we run. We want to demonstrate real value. We want to sell and solve real problems.

Speaker 2

And then we'll engage on a larger conversation. But until we can look ourselves in the face and say, hey, we saw someone's problem and we got paid adequately for and profitably for solving that problem, we'll be looking to the U. S. Principally.

Speaker 3

Great. Thank you. And I wish you guys good luck.

Speaker 5

Thank you.

Operator

Thank you. Our next question is coming from Howard Halpern with Taglich Brothers. Your line is now open.

Speaker 6

Congratulations on this big transformation.

Speaker 2

Thank you. Thank you.

Speaker 6

So we know this part of going to enterprises and going to the We know this part of going to enterprises and going to the federal government through channel partners is going to take time. What about the digital advertising part or opportunities out there? And might that bring in revenue quicker using AI technologies?

Speaker 2

That's such a great question. And thank you for the well wishes. We are focused on transformation and that transformation is not skin deep. It cuts straight to the core. You've seen the recent management movements and we wish our former colleagues very well, but we're also moving in a dramatically different direction.

Speaker 2

And it truly is a transformation and one that will take a lot of dedication and focus and mindset and just a real cultural shift in true to its heart. And I really want to emphasize that cultural component because you can launch, I mean, Fundware has a history of pivoting into a number of different things. But that's not a true transformation in the sense that if the mindset and the people are the same that it doesn't change anything. And that's really where the departure is and why I transitioned from being the chair and with the support of my former colleagues have not become not independent but taken on a day to day role because I care, we care, the people surrounding ourselves care about our transformation, about protecting shareholder dollars. Your question is great and it's dilient.

Speaker 2

If we look at it, at the revenues, you got $5,000,000 $2,500,000 came from hospitality and hotels and hospitals and $2,500,000 came from advertising. Our burn largely comes from the former and our revenue comes from the latter. What we've done is we've engaged with an external sales consultant focused on SaaS, procedural documentation, standard operating procedures and scalability and focusing on that and understanding lead attribution and sales automation and how to scale them up. So your answer is absolutely, that is what we're focused on. That team is really small and it's profitable.

Speaker 2

And we are very excited to shift individuals over to that team to give it the love and the support demands. And we're the team is excited and we're engaged. We're paying attention to this. We're focused on value attribution, breaking down variable costs, breaking down fixed costs, chopping and chipping. We've come up with a new rubric of who we bring on board, ensuring that we reduce our costs while maintaining revenues.

Speaker 2

And we've put metrics to it, right? So if a guy comes in, this is the salary while we plan on making double that in terms of revenues within 6 months. And we set the expectations day 1 of 30 days is what you expect, 60 days is what you expect, 90 days is what you expect, and we proceed from there. The same thing with being mindful with shareholder dollars, right? I personally as a CFO equate integrity with stewardship of capital.

Speaker 2

And that is very core to who I am and I'm sure many of the CFOs out there believe the same way. And the other half of this course is being mindful of dollars and reducing our burden. If we were to bring on more folks, how quickly can we automate things? How quickly can we do more things with less capital resources and what can we code? Even some of the automation tools out there, we've now added as a metric internally of how can we accelerate productivity.

Speaker 2

Because if you're not using these tools internally, then what are we doing?

Speaker 6

Right. So you're going to be using your own developed generative AI internally to help productivity and advance?

Speaker 2

We have been doing that every single day for the last 2 months. We are quickly seeing adopters. We are clearly seeing the non adopters. And it goes back to that same metric of curiosity, right? This is the most transformative technology for God knows how long.

Speaker 2

And if we are not using it, I can only imply that we're not curious about it. So yes, very much we are using that tool every single day.

Speaker 6

Okay. Thanks. And I look forward to the future.

Speaker 2

We all are. Yep.

Operator

Thank you. As we have no further questions in queue at this time, I will turn the call back over to Mr. Chen for his closing remarks.

Speaker 2

Yes. Thank you all for joining us today. We're excited about the future and we expect to I think we're well positioned for our next phase of growth. We have strong financial stewardship and disciplined execution And we look forward to reengaging you shortly.

Operator

Thank you, ladies and gentlemen. This concludes today's call and you may disconnect your lines at this time. And we thank you for your participation.

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