VerifyMe Inc (VRME) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth and ...

GuruFocus Research

15 May 2024 at 3:06 am·4-min read

Revenue: Increased by 2% to $5.8 million in Q1 2024 from $5.7 million in Q1 2023.
Precision Logistics Revenue: Grew by 4% from $5.4 million in Q1 2023 to $5.6 million in Q1 2024.
Authentication Revenue: Decreased from $250,000 in Q1 2023 to $150,000 in Q1 2024.
Gross Profit: Rose by 49% to $2.3 million in Q1 2024 from $1.5 million in Q1 2023.
Gross Margin: Increased to 39% in Q1 2024 from 27% in Q1 2023.
Net Loss: Improved by $1 million to a loss of $0.6 million in Q1 2024 from a loss of $1.6 million in Q1 2023.
Earnings Per Share (EPS): Loss of $0.05 per diluted share in Q1 2024, improved from a loss of $0.17 per diluted share in Q1 2023.
Adjusted EBITDA: Increased by $0.6 million to positive $0.1 million in Q1 2024.
Cash and Debt: Cash of $2.8 million and debt of $2.4 million at the end of Q1 2024.

Warning! GuruFocus has detected 7 Warning Signs with VRME.

Release Date: May 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

VerifyMe Inc (NASDAQ:VRME) reported an increase in year-over-year revenue and significant improvement in gross profit, gross margin percentage, and adjusted EBITDA for Q1 2024.
The company has experienced three consecutive quarters of positive adjusted EBITDA, indicating a stable financial improvement.
VerifyMe Inc (NASDAQ:VRME) has a strong sales pipeline which is expected to support higher growth rates in H2 2024 compared to H1.
The precision logistics segment showed revenue growth despite a general downturn in parcel shipping volumes, highlighting the strength of VerifyMe Inc (NASDAQ:VRME)'s offerings.
VerifyMe Inc (NASDAQ:VRME) has no net debt and is generating cash, positioning the company well for future operations and growth.

Negative Points

The authentication segment experienced a decline in revenue, generating $150,000 in Q1 2024 compared to $250,000 in Q1 2023.
Q1 2024 adjusted EBITDA did not efficiently convert into cash flow from operations, primarily due to the timing of working capital items.
VerifyMe Inc (NASDAQ:VRME) repurchased minimal shares in 2024, which might raise concerns about the company's commitment to returning value to shareholders through buybacks.
The company faces challenges in the authentication segment with longer sales cycles than anticipated, which could delay expected revenue growth.
There is potential for gross margin erosion if the company needs to respond to increased pricing pressure in the market, despite having strategies to mitigate bottom-line impact.

Q & A Highlights

Q: What was the percentage revenue growth or negative comp in each of the segments for the quarter? A: Nancy Meyers, CFO of VerifyMe, stated that precision logistics increased by 4%, while authentication revenue decreased from $0.2 million to $0.1 million.

Q: Are you seeing certain industries that are holding up in terms of shipping versus others that may be more problematic? A: Adam Stedham, CEO of VerifyMe, mentioned that life sciences and high-end consumer products are more resilient and less impacted by economic conditions, contributing to the company's strength in the current market.

Q: Regarding the top-line growth, are you still confident about achieving double-digit growth in both segments? A: Adam Stedham confirmed the company's confidence in achieving double-digit growth, citing the addition of sales resources and strategic investments as key factors supporting this target.

Q: Can you discuss the potential for gross margin changes going forward, especially with expected growth in authentication sales? A: Adam Stedham explained that while there might be some pricing pressure that could affect gross margins, the company expects to maintain its bottom-line margin profile through operational efficiencies and strategic pricing adjustments.

Q: What are your expectations for the authentication segment, particularly with the trust code business and ink business in India? A: Adam Stedham highlighted longer sales cycles in the authentication segment but maintained a positive outlook on conversion rates and growth, driven by strategic expansions and partnerships, particularly with Amazon.

Q: Are there any concerns about the potential for pricing pressure affecting your financial guidance for the year? A: Adam Stedham reassured that despite potential pricing pressures, the company is well-positioned to achieve its revenue targets by focusing on less impacted market segments and maintaining efficient sales strategies.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

The Smart Investor
4 Singapore REITs to Look Out for in June
Here are four Singapore REITs you should keep your eye on in June. The post 4 Singapore REITs to Look Out for in June appeared first on The Smart Investor.
The Smart Investor
SATS’ Profit Leaps 10-Fold for 2H FY2024, Resumes Paying Dividends: 5 Highlights from the Ground Handler’s Latest Earnings
The airline food caterer enjoyed a surge in revenue with the consolidation of WFS. The post SATS’ Profit Leaps 10-Fold for 2H FY2024, Resumes Paying Dividends: 5 Highlights from the Ground Handler’s Latest Earnings appeared first on The Smart Investor.
Insider Monkey
The Richest Country in the World by GDP
We recently compiled a list of the 50 Richest Countries in the World by GDP and in this article we will talk about the country with the largest GDP in the world. Global Economic Outlook of Richest Countries The global economy has been facing strong headwinds since the COVID-19 pandemic including the world’s richest countries […]
Associated Press
Shares in Trump Media slump after former president convicted in hush money trial
Shares of Trump Media & Technology Group, the owner of social networking site Truth Social, slumped before the opening bell Friday after former President Donald Trump was convicted in his hush money trial. A New York jury found Trump guilty of falsifying business records in a scheme to illegally influence the 2016 election through hush money payments to a porn actor who said the two had sex.
Yahoo Finance
Fed's stance of higher for longer likely not shaken by new inflation reading
The Fed's stance of holding interest rates higher for longer likely won't be shaken following a fresh reading from the central bank's favored inflation gauge.
Zacks
3 Stocks to Buy for Big Growth
Growth-focused investors have been rewarded considerably over the last year amid the market's remarkable run, enjoying significant gains.
Zacks
The Cheapest AI Stocks to Buy Now
All stocks have pullbacks and the AI stocks will too. Which should value investors keep on their watch lists?
Simply Wall St.
An Intrinsic Calculation For Q & M Dental Group (Singapore) Limited (SGX:QC7) Suggests It's 44% Undervalued
Key Insights The projected fair value for Q & M Dental Group (Singapore) is S$0.43 based on 2 Stage Free Cash Flow to...
Zacks
Are You Looking for a High-Growth Dividend Stock?
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Exxon Mobil (XOM) have what it takes? Let's find out.
Yahoo Finance
Stock market today: Dow extends slide as Salesforce plunges, rate jitters rattle tech
Lingering concerns about higher-for-longer interest rates and a Salesforce sell-off put a damper on investors' spirits.
Simply Wall St.
SGX Dividend Stocks To Watch In May 2024
As global markets navigate through various economic challenges, the Singapore market remains a focal point for investors looking for stable returns, particularly through dividend stocks. In light of current market conditions, selecting stocks with robust dividend yields and strong fundamentals is crucial for those looking to enhance their investment portfolios in May 2024.
Yahoo Finance
Stock market today: Stocks cap another winning month, S&P 500 logs best May since 2003
Investors waited for the release of the Fed's preferred inflation data, seen as a potential turning point for a market gripped by rate-cut jitters.
Reuters
Oil settles down ahead of OPEC+ meeting, posts weekly loss
NEW YORK (Reuters) -Oil prices fell on Friday and posted a weekly loss as investors awaited an OPEC+ meeting on Sunday that will determine the fate of the producer group's output cuts. Brent futures for July delivery were down 24 cents, or 0.3%, to $81.62 a barrel, while the more liquid August contract was down 77 cents, or 0.8%, at $81.11. U.S. West Texas Intermediate (WTI) crude futures fell 92 cents, or 1.2%, at $76.99.
Associated Press
Stock market today: Wall Street rallies to close out a bloom-filled May
An already verdant May for Wall Street finished with another push higher as stocks rallied Friday after a report showed inflation is at least not worsening. The main measure of the U.S. stock market’s health set an all-time high late in the month after clawing back all its losses from a rough April. The Dow Jones Industrial Average jumped nearly 575 points, or 1.5%, while sagging prices for some big technology stocks held back the Nasdaq composite.
Reuters
Yen weakness persists despite Tokyo's $62 billion intervention
TOKYO (Reuters) -Japanese authorities spent 9.79 trillion yen ($62.23 billion)intervening in the foreign exchange market to support the yen over the past month, in moves that kept the currency from testing new lows but are unlikely to reverse longer-term declines. The Ministry of Finance data released on Friday confirmed the suspicions of traders and analysts that Tokyo entered the market in two rounds of massive dollar-selling intervention shortly after the yen hit a 34-year low of 160.245 per dollar on April 29, and again in the early hours of May 2 in Tokyo. "This was larger than expected, underscoring Japan's resolve to ease the pain of imported inflation," said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities.
Reuters
China's factory activity unexpectedly dips as property pain persists
BEIJING (Reuters) -China's manufacturing activity unexpectedly fell in May, keeping alive calls for fresh stimulus as a protracted property crisis in the world's second-largest economy continues to weigh on business, consumer and investor confidence. "I think the data particularly reflects soft domestic demand, the housing sector continued to worsen and retail sales were not strong," said Xu Tianchen, senior economist at the Economist Intelligence Unit.
Yahoo Finance Video
April PCE data is 'pretty meaningful step down' for inflation
Treasury yields (^TYX, ^TNX, ^FVX) are on the decline this morning after inflation data from the PCE (Personal Consumption Expenditures) Index came in line with expectations with April's core PCE rising 0.2% month-over-month and 2.8% year-over-year. As inflation slows but price pressures remain a big risk, what does this print mean for the bond market? JPMorgan US CIO for Fixed Income, Currencies, and Commodities Kay Herr sits down in-studio with Yahoo Finance's Catalysts to look deeper into April's inflation data and what this means for the Federal Reserve's inflation rate target. "If you look underneath in some of the details, if you look on a three-month annualized basis, we've gone from a 4.4% number in March down to 3.46% in April. That's a pretty meaningful step down," Herr explains. "If you look on a month-over-month [basis], in April that was running 0.33%, March we're running 0.249%. And then on an average monthly basis in the first quarter, things were at about 0.36%, for April [it's] 0.25%. So a reasonable step down moving in line with what the Fed thinks." Herr underlines the Fed's dual mandate objective in regulators' decision on cutting interest rates or holding them higher for longer: "We're going to start to see a little bit of softness in in the labor market. And that's going to lead the Fed... to move toward cutting rates, yes."For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Luke Carberry Mogan.
Reuters
Struggling Dow transport stocks could be economic warning signal
It's been a banner year for the major U.S. stock indexes, but one economically sensitive corner of the market sticks out as a sore spot. The Dow Jones Transportation Average has fallen about 5% so far this year, a significant contrast with the 9% year-to-date rise for the benchmark S&P 500 and the 1% rise in the Dow Jones Industrial Average, which topped 40,000 points for the first time this month. While major indexes including the S&P 500, the Nasdaq Composite and the Dow have all set new all-time highs this year, the Dow transports have yet to top their November 2021 record, and are some 12% below that level.
Yahoo Finance Video
Salesforce is still the 'gold standard': Analyst
Salesforce (CRM) shares dipped on Thursday after the company missed revenue estimates and reported a weak outlook. Wedbush Managing Director Dan Ives joins Market Domination to discuss his perspective on the company's future trajectory. Ives notes that the current pressure on Salesforce represents "a bump in the road," characterizing its guidance as conservative to "clear the deck" for the next quarter. He emphasizes that Salesforce remains "a gold-standard tech play" and now is an ideal opportunity for investors to acquire the stock. "This is a situation where they have it all in front of them, and I just view this as a speed bump, not the start of a structural decline," Ives tells Yahoo Finance, expressing confidence in the company's long-term prospects. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Angel Smith
Reuters
India cenbank moves 100 tons of gold from UK to domestic vaults, TOI reports
India's central bank has moved a little more than 100 metric tons of gold from the UK to its domestic vaults, the Times of India newspaper reported on Friday, citing sources. A similar quantity of the precious metal might be coming to the country in the coming months, the report said, adding that the move was for logistical reasons and diversified storage. The Reserve Bank of India held 822.10 tons of gold at March-end, of which 408.31 tons were held domestically.

Straits Times Index

Nikkei

Hang Seng

FTSE 100

Bitcoin USD

CMC Crypto 200

S&P 500

Dow

Nasdaq

Gold

Crude Oil

10-Yr Bond

FTSE Bursa Malaysia

Jakarta Composite Index

PSE Index

VerifyMe Inc (VRME) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth and ...

Positive Points

Negative Points

Q & A Highlights

Latest stories

4 Singapore REITs to Look Out for in June

SATS’ Profit Leaps 10-Fold for 2H FY2024, Resumes Paying Dividends: 5 Highlights from the Ground Handler’s Latest Earnings

The Richest Country in the World by GDP

Shares in Trump Media slump after former president convicted in hush money trial

Fed's stance of higher for longer likely not shaken by new inflation reading

3 Stocks to Buy for Big Growth

The Cheapest AI Stocks to Buy Now

An Intrinsic Calculation For Q & M Dental Group (Singapore) Limited (SGX:QC7) Suggests It's 44% Undervalued

Are You Looking for a High-Growth Dividend Stock?

Stock market today: Dow extends slide as Salesforce plunges, rate jitters rattle tech

SGX Dividend Stocks To Watch In May 2024

Stock market today: Stocks cap another winning month, S&P 500 logs best May since 2003

Oil settles down ahead of OPEC+ meeting, posts weekly loss

Stock market today: Wall Street rallies to close out a bloom-filled May

Yen weakness persists despite Tokyo's $62 billion intervention

China's factory activity unexpectedly dips as property pain persists

April PCE data is 'pretty meaningful step down' for inflation

Struggling Dow transport stocks could be economic warning signal

Salesforce is still the 'gold standard': Analyst

India cenbank moves 100 tons of gold from UK to domestic vaults, TOI reports