VerifyMe, Inc. (NASDAQ:VRME) Q2 2024 Earnings Conference Call August 13, 2024 11:00 AM ET

Company Participants

Nancy Meyers - CFO
Adam Stedham - CEO

Conference Call Participants

Jack Vander Aarde - Maxim Group
Michael Petusky - Barrington Research

Operator

Good day, and welcome to the VerifyMe Second Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today's event is being recorded.

I'd now like to turn the conference over to Nancy Meyers, Chief Financial Officer. Please go ahead.

Nancy Meyers

Good morning, everyone, and thank you for joining us today for our earnings call presentation. On the call today, I am joined by Adam Stedham, CEO and President, who will give an operations 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 3. Today's presentation and the answers to questions include forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward-looking statements caption and on the risk factors of the company's annual report on Form 10-K and quarterly reports on Form 10-Q.

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

Adam Stedham

Thank you, Nancy. Welcome, everyone. I'm pleased to report that although Q2 2024 revenue is effectively flat with 2023, we had significant improvement in gross margin, gross profit and adjusted EBITDA on a gross margin percentage that is. Noteworthy is that this is now the fourth consecutive quarter of positive adjusted EBITDA. Given the previously announced change to a large single contract that was subcontracted to us from FedEx, we anticipate the adjusted EBITDA for Q3 may be slightly negative but we anticipate H2 and full year positive adjusted EBITDA.

We previously announced that we anticipate mid-single-digit revenue growth in 2024 over 2023. As we further evaluate the progress within the authentication segment and the fluctuations in existing customer shipments for Precision Logistics, we now believe 2024 revenue will be roughly in line with 2023, which is much like H1 2024.

With that said, we anticipate our gross profit gross margin percentage and adjusted EBITDA will exceed 2023. I'll address the revenue drivers a bit more in a minute. However, I would like to point out that we continue to have confidence in 2025 because we do not believe the types of unexpected items that have impacted our revenue growth in 2024 are likely to repeat or impact results to the same extent in 2025. Now our current cash net of debt is slightly better than this point last year. We anticipate that we will be roughly flat to slightly positive for cash net of debt for 2024 and we continue to have sufficient cash flow to execute all of our organic current growth plans.