VerifyMe, Inc. (NASDAQ:VRME) Q1 2024 Earnings Conference Call May 14, 2024 11:00 AM ET

Company Participants

Nancy Meyers - Chief Financial Officer
Adam Stedham - President & Chief Executive Officer

Conference Call Participants

Michael Petusky - Barrington Research
Jack Vander Aarde - Maxim Group

Operator

Good day and welcome to the VerifyMe First Quarter 2024 Financial Results Conference Call. All participants will be in listen only mode. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Nancy Meyers, CFO. Please go ahead.

Nancy Meyers

Thank you, and good morning everyone. Thank you for joining us today for our earnings call presentation. On the call today, I'm joined by Adam Stedham, CEO and President who will give an operation and strategic update. Following our management presentation, we will have a Q&A session.

I would like to bring your attention to the note on forward-looking statements on slide three. Today's presentation and the answer to [Audio Gap] the reports on form 10-Q.

I will now turn the call over to Adam Stedham for some opening remarks.

Adam Stedham

Thank you Nancy, and welcome everyone. I'm pleased to report that in Q1, 2024, we realized an increase in year-over-year revenue and a significant improvement in gross profit, gross margin percentage and adjusted EBITDA. It's noteworthy. This is now the third consecutive quarter of positive adjusted EBITDA.

And even more meaningful, we're experiencing an increase in our sales pipeline. We previously announced that we anticipate our H2 2024 growth rate will exceed our H1 growth rate. We continue to believe this is the trend and the increases in sales pipeline are a key enabler of that growth. Q1, 2024 adjusted EBITDA did not convert efficiently into cash flow from operations in Q1, and that's primarily due to the timing of working capital items.

We continue to anticipate that there was positive cash flow for 2024 as the timing of these items balanced out and we continue to experience year-over-year growth. As a company with no net debt that is generating cash with meaningful growth prospects, I think our current valuation represents a significant opportunity for our shareholders.

At the end of Q1, 2024, we had $2.8 million of cash and only $2.4 million in debt. And this includes the convertible note, which we anticipate will likely get converted into stock rather than being repaid in cash.