Pivotree Inc (TSXV:PVT) Q2 2024 Earnings Call Highlights: Navigating Revenue Declines with ...

GuruFocus News
3 min read

In This Article:

  • Total Revenue: $20.3 million in Q2, down 11% year-over-year.

  • MIPS Revenue: $4 million, over 30% growth year-over-year.

  • Legacy Managed Services Revenue: Down 32% year-over-year.

  • PS Revenue: $11.1 million, down 8% year-over-year.

  • Gross Margin: 44.2%, compared to 45.5% in the prior year.

  • Adjusted Operating Expense: $8.7 million, reduced from $10.3 million in the prior year.

  • Cash Position: $6.2 million at the end of the quarter.

  • Cash Used from Operations: $1.1 million in Q2.

Release Date: August 13, 2024

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

Positive Points

  • Pivotree Inc (TSXV:PVT) delivered its seventh consecutive quarter of positive adjusted EBITDA.

  • Revenue from Managed & IP Solutions (MIPS) increased by 56% year-over-year, with bookings up 19% on a rolling four-quarter basis.

  • The company achieved a record $10.1 million in total managed service bookings, driven by large multiyear renewals.

  • The migration of customers to the cloud from data centers is expected to improve profitability and operational efficiency.

  • The average deal size has increased by nearly 50% year-over-year, indicating larger customer commitments.

Negative Points

  • Total revenue for Q2 was $20.3 million, representing an 11% decline year-over-year.

  • Legacy managed services revenue declined by 32% year-over-year, reflecting a continuing downward trend.

  • Professional Services (PS) revenue decreased by 8% year-over-year, with bookings also down sequentially.

  • The company faces challenges with deal closures being pushed into future quarters, affecting revenue realization.

  • Pivotree Inc (TSXV:PVT) has paused its M&A activities due to current stock price levels and market conditions.

Q & A Highlights

Q: Last quarter, you mentioned that customer conversations were more optimistic. Is that still the case given the mixed demand commentary in the industry? A: William Di Nardo, CEO: We have seen some positive signs in our pipeline, but the challenge remains with deal closures being pushed to subsequent quarters. The demand is there, but the time to close deals is longer. We're seeing quicker decisions in data-related deals, while commerce and supply chain deals reflect industry trends.

Q: What is the demand for your data management services? A: William Di Nardo, CEO: Customers are looking to simplify their ecosystems and improve data quality. Clean data is crucial for efficient data flows and leveraging AI and machine learning. We are helping customers achieve cleaner data, which is foundational for better system efficiency and future automation.

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