Operator: Good morning, ladies and gentlemen, and welcome to the Voxtur Q3 2024 Earnings Call. At this time, all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] Also note that this call is being recorded on Monday, December 2, 2024. I would now like to turn the conference over to Mr. Jordan Ross. Please go ahead, sir.
Jordan Ross : Good morning, everyone. Thank you for joining us for the Voxtur 2024 Third Quarter Earnings Call, where we will discuss our financial results and business highlights. Please note that our results for the three months and nine months ended September 30, 2024 were released November 28, 2024 and can be accessed on SEDAR+ and on our website at voxtur.com. Joining me today are Executive Chairman, Gary Yeoman; CEO, Ryan Marshall. And unfortunately, Robin Dyson, our CFO, had an urgent and unexpected matter arise and will be unable to join the call, but we’ll make yourself available for any and all questions after today's call. We will begin with prepared remarks and then move into Q&A. If we are unable to get to your question, you are always welcome to contact me directly at jordan@voxtur.com. I will begin by going over our financial results. After that, Ryan Marshall will provide updates as to how we are progressing towards our objectives. Before we get started, please be advised that some of the information that we will share on this call today may contain forward-looking statements. We caution you not to place undue reliance on forward-looking statements and undertake no duty or obligation to update any forward looking-statements, as a result of new information, future events or changes in our expectations. Further, on today's call, we will report using both IFRS and non-GAAP financial measures. We use these non-GAAP financial measures internally for financial and operational decision-making purposes, as we believe that they provide a meaningful measurement of financial performance and valuation. These non-GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with IFRS. To see the reconciliation of these non-GAAP measures, please refer to our management's discussion and analysis, which is available on SEDAR+. A replay of today's call will also be posted on our website. Finally, please note that all references to amounts or currency during today's call are to Canadian dollars unless otherwise stated. I will now provide an overview of the financial highlights for the three and nine months ended September 30, 2024 in place of Robin Dyson. But I again remind you all that she will make herself available as necessary for any follow-up questions that we may not be able to answer during today's call. As noted on the second quarter earnings call in July 2024, the company entered into a definitive agreement to divest 50.5% of the interest of Blue Water Financial Technologies Holding Company, LLC, a subsidiary of the Company. This transaction is subject to various closing conditions, which have not yet been met and further updates on the transaction will be provided when available. However, we are functioning and operating as if the business is still 100% owned by the company and therefore, Ryan Marshall will also be including this in some of his updates during his portion of the call. As at September 30, 2024, management was committed to a plan to sell the controlling interest in Blue Water. Therefore, in accordance with IFRS standards, as at September 30, 2024, this business has been classified as a discontinued operation. As such, all P&L activity related to this business for the current and prior periods have been carved out of the individual revenue and expense line items in the financial statements and have been reflected, as a single line item in the presentation of each of net income loss and comprehensive loss. The Q3 MD&A presents key financial metrics for both continuing and discontinued operations. The metrics to be discussed on today's call, for the most part, will be based on continuing operations only, unless otherwise noted specifically. Revenue for continued operations decreased to $8.5 million from $10.1 million for the three months ended September 30, 2024, and 2023 respectively. This decline was primarily attributable to settlement services and software and data licensing. For the nine months ended September 30, revenue decreased to $25.7 million for 2024 as compared to $30.7 million for 2023. While there were declines in the software and data licensing and technology managed services revenue streams, the decline is primarily attributable to the settlement services related revenue. The company is actively pursuing and rebuilding these revenue streams through expansion of our client base, a new product offering, and reshaping of the business model for settlement services and will be discussed in more detail by Ryan Marshall later on this call. Gross profit decreased to $4.9 million from $6.5 million for the three months ended September 30, 2024 and 2023 respectively and decreased to $14.6 million from $18 million for the nine months ended September 30, 2024 and 2023, respectively. Again, these decreases are attributable to the decrease in revenues previously noted. Gross profit as a percentage of revenue decreased to 58% from 64% for the three months ended September 30, 2024 and 2023 respectively, and decreased to 57% from 59% for the nine months ended September 30, 2024 and 2023 respectively. Adjusted EBITDA from continuing operations was negative $2.1 million for the three months ended September 30, 2024, as compared to negative $846,000 for the same period of the prior year. The decline of approximately $1.2 million is primarily attributable to the decline in revenue of approximately $1.6 million. offset to some extent by a reduction in operating expense. Adjusted EBITDA from continuing operations was negative $6.4 million for the nine months ended September 30, 2024, as compared to negative $8.7 million for the same period of the prior year. While revenue for this period declined, this was more than offset by operational savings. I will now turn the call over to our CEO, Ryan Marshall, to provide the business updates. Ryan?
Ryan Marshall: Thank you Jordan. Good morning, everyone. Thank you for joining us today. It's an honor to address you for the very first time as the CEO of Voxtur. My journey here began just 90 days ago. And while it's been a brief period, I'm proud of the progress that we've made and fully aware of the significant challenges that we face. Over the past four to five years, Voxtur's journey has been turbulent, yet I still remain and I believe that the story is growth, ambition and the unique synergies that sets us apart from anyone else in the industry. Our top priority has been to bring focus and clarity to Voxtur's operations. The one Voxtur initiative goes beyond being a mere message. It's about fostering alignment within our internal teams and reinforcing our reputation as a reputable, reliable and trusted partner for our clients and employees. Equally important has been my commitment to providing greater clarity and transparency to shareholders and key stakeholders. I recognize the importance of gathering all of the facts, understanding the context and outlining a clear and strategic path forward. Second, we made a commitment to all of our employees and clients to provide them with a safe and stable workplace. This is vital to building a company that can sustain itself while delivering maximum value to our stakeholders. These goals required tough decisions, but what has truly inspired me is the unwavering dedication of our team, individuals who have sacrificed personal time, taken on additional workloads and embrace discipline to create cost effective solutions, is both an honor and a privilege to lead this remarkable group. I want to note, for IRFS purposes, we are required to report that Blue Water is a discontinued operation. However, we continue to maintain 100% control, and it remains entirely under our management and until that time, 100% under Voxtur. All of the numbers in forecast that I will be sharing today include Blue Water's revenue, expenses, dedication and associated management initiatives as our path forward. In the last 90 days, some of our key accomplishments, let me outline some of the critical steps that we've taken to realign Voxtur to its true potential. Number one, we focused on profitability. We shut down all projects and initiatives that did not generate revenue or had less than an 80% probability of doing so in the next 12 months. This initiative included over six business lines under previous management and control. Furthermore, we separated our products from individual business units to remove any and all conflicts of interest to ensure that our solutions remain impartial and client focused. Number two, we streamlined operations, we continued consolidating corporate resources and conducting regular reviews of critical vendors to optimize our performance and our costs. By fostering synergies across business lines, we started breaking down the internal silos. Our business units no longer compete with one another or our clients. Instead, we leverage a collaborative and collective experience, talent and contacts to empower growth and drive results. Mitigated liabilities, number three. To date, we have successfully resolved, settled and mitigated serious threats to the business without compromising our integrity. Our legal team has worked diligently to find alignment with even our fiercest adversaries, ensuring our vision of unity and stable and stability remains intact. Number four, cost optimization. We've identified and began reducing our third quarter monthly operating expenses by approximately $800,000 a month once all changes have been realized. Now I'm going to go over some internal projections that I've been using to track results within the company. I want to make note all of my numbers include Blue Water, they are all in CAD. This also goes against my DNA, which is reporting or somehow suggesting forecasted numbers that have not occurred yet. All of the numbers that I am about to present to you are numbers that I personally have line of sight on and include Blue Water as a continued operation in 2025. In 2024, I am forecasting a total gross profit of approximately $25 million to $28.3 million. In 2025, if we maintain a gross profit of approximately [$25 million to $28 million] (ph) and we achieved an 11% to 15% growth rate from current signed SOWs and first quarter 2025 targeted initiatives, our gross profit will reach approximately $30.3 million to $33 million. With our expenses under $26.6 million once all changes are in place, Voxtur would be on track to achieve EBITDA positivity, ensuring sufficient working capital for debt service. Now this upside potential, this shift in our title business strategy from our service-focused model to technology-driven approach has created exciting opportunities for growth and profitability in 2025. This includes the launch of Voxtur Rate Advisor, an innovative and first-of-its-kind platform for the industry. Again, these projections are based only on our core products and do not account for any upside revenue from our new offerings such as Voxtur Rate Advisor, Voxtur Verify, Voxtur Direct, which now includes a management of AMC's lean monitoring and/or bundling products that we are anticipating on doing in 2025. These products show tremendous promise, but require much more data for me to provide you with a reliable forecast. Additionally, as competitors contract we anticipate material increases in our volume from our organic and per click products, further strengthening our position in the marketplace for 2025. In closing, I want to emphasize that while identifying problems is straightforward, executing solution requires trust, discipline and timing. The progress we've made in the last 90 days is a foundation for a stronger, leaner and more focused Voxtur. One that is positioned for sustained profitability and growth. I am deeply grateful for all of our employees for their tireless efforts and to our clients and shareholders for their patience and their trust. Together, we are building a Voxtur that is aligned, resilient and ready to meet the challenges of tomorrow. Thank you, and I'll open the floor for questions.
Operator: Thank you sir. [Operator Instructions] And your first question will be from Mariusz Skonieczny at MicroCap Explosions. Please go ahead.
Mariusz Skonieczny: Ryan, you're talking about projections, gross profit projections. I would like to ask you about today, right now, no future as you stand, where are you right now in terms of gross profit?
Ryan Marshall: Are you asking what our gross profit is through October or through September?
Mariusz Skonieczny: No, that's past. Where are you run rate right now? With no new clients, nothing new.
Ryan Marshall: Nothing new. So right now, we are trending total gross profit forecast ending December 31, 2024, $25 million to $28 million of gross profit.
Mariusz Skonieczny: Okay. So like you said, that includes Blue Water?
Ryan Marshall: Yes, it does.
Mariusz Skonieczny: Okay. Could you tell me this number without Blue Water? Like if the business was completely gone 100%?
Ryan Marshall: The gross profit would be somewhere close to $11 million - $10 million to $11 million of gross profit for the year without Blue Water.
Mariusz Skonieczny: Like right now, are you saying that right now, Blue Water's gross profit is like $11 million, $15 million?
Ryan Marshall: Right now, I'm not projecting -- if we sold Blue Water today, I'm not projecting what the revenue, with the gross profit would be from Blue Water for the fourth quarter. That's correct.
Mariusz Skonieczny: Okay. So all right. So let me go back to these numbers. So you said 25% to 28%.
Ryan Marshall: Correct.
Mariusz Skonieczny: Okay, with everything. What are your expenses? To operate the --.
Ryan Marshall: For the whole -- our operating expenses that I suggested to you will total an amount of approximately $26.6 million for the year of 2025, that includes all business expenses and corporate expenses for 2025.
Mariusz Skonieczny: Right now, what's the running rate right now?
Ryan Marshall: Right now, it's -- so right now we are trending -- and this is now in USD because converting it to Canadian is -- gets confusing. Right now, on my models, we are tracking for December, our total expenses to be approximately $1.6 million to $1.7 million a month.
Mariusz Skonieczny: Okay. That's USD, right?
Ryan Marshall: Correct.
Mariusz Skonieczny: Yes. Okay. So if I translate it to Canadian that gives me about a little bit $26 million something. So if I look at your gross profit between $25 million and $28 million and operating expenses of a little bit of $26 million that shows me that you are EBITDA positive or neutral right now.
Ryan Marshall: That shows us that we've controlled our expense. Our gross profit slightly exceeds our expenses going into 2025, based off of what I'm trending at two-day.
Mariusz Skonieczny: Okay. And what was just for the reference, what was the expense number -- so let's go back to USD because this is what the [new has] (ph). So USD, you're saying that your operating expenses are about $1.6 million per month. What was the number in January?
Ryan Marshall: Right. Let me qualify the $1.647 million. So in the last 90 days, right, we've been able to identify and create a path to reduce expenses to $1.647 million. The challenge that we are faced with today is every vendor that we have, we have contractual obligations to give notice to that vendor. Some of them are in annual agreements. We have severances that we are paying. We have PTO that is paid over time, right? So that $1.647 million as it is -- as if we could assume and realize all of those changes going forward starting January 1, 2025.
Mariusz Skonieczny: Okay. And where was your -- where were your expenses like, let's say, in January, so people can see the difference --.
Ryan Marshall: In January of 2024, our total expenses USD was $2.7 million.
Mariusz Skonieczny: Per month?
Ryan Marshall: Per month.
Mariusz Skonieczny: Wow. So you went from $2.7 million to about $1.6 million. So you cut off $1 million per month of expenses in USD?
Ryan Marshall: Correct. And I think to give credit to the team, the existing team, it would be better to have a reflection of what the third quarter average was rather than January of 2024. And the average in USD was -- sorry, the average was $2.1 million per month during the third quarter of 2024. So we've reduced it another $600,000.
Mariusz Skonieczny: Yes. Okay. And I looked at the previous years, I think that number was about $5 million per month previous years under previous, I think, Jim Albertelli that's -- they were like $5 million a month. So that's a huge drop from about $5 million to $1.6 million.
Ryan Marshall: I agree. Yes, I can't comment on that. I have not reviewed that, but that is a significant savings.
Mariusz Skonieczny: What about margins -- gross profit margins? Where are you trending?
Ryan Marshall: So right now, we are trending to be back up between 63% to 64% of our gross profit margin. We've also been very mindful that any expenses that we are reducing do not materially affect our revenue or gross profit margins?
Mariusz Skonieczny: Okay. And so how -- give me some specifics of how were you able to attack these expenses? Like give us some details, what would you do exactly?
Ryan Marshall: So the first thing that we had to do was identify the businesses that did not have a line of sight on generating revenue for 2025. That was the first place that we started. As a result of that, we were then able to offer a reduction in force where applicable and appropriate, both at the corporate level and supporting levels with other businesses. Second, what we did was we've identified critical vendors that are critical to our revenue and we've only -- and we've essentially canceled any vendors or any other expenses that we had that we could not assign a revenue number to it -- and it's still ongoing.
Mariusz Skonieczny: Okay. So -- okay. So your growth -- I mean, you're pretty much with the business that you are not including that, you're pretty much on track, EBITDA neutral, as we speak right now with no new clients, no new products. Is there anything else that you can do with the current state, in other words, can your revenues improve or margins improve without new clients, without new products, the way it is right now.
Ryan Marshall: So the suggestion that I made earlier on in the call, the 11% to 15% increase of revenue -- gross profit -- I'm sorry, the increase of gross profit is directly attributed to our current clients, the blend or the introduction between clients and other business units which I would refer to as the SOWs that I referenced before. In addition to increasing our some of our pricing on staple products, where we have never increased pricing before. And so we are expecting as part of our initiatives in the first quarter of 2025 to start undergoing those initiatives, where we could reliably see an 11% to 15% increase in gross profit for -- starting in 2025.
Mariusz Skonieczny: Okay. So you're saying that if you do that, again, no new clients, no new products, your gross profit, not revenues, your gross profit would go to between $30 million and $33 million, while your expenses -- operating expenses would stay at $26 million or something like that?
Ryan Marshall: That's correct.
Mariusz Skonieczny: So you are saying with slight -- so with a slight increase, no new clients, no new products with a slightly increase, you would be on track for EBITDA between $4 million and $7 million positive?
Ryan Marshall: Canadian, that is correct.
Mariusz Skonieczny: Yes, yes. Wow. Okay. Okay. And then you can also add more clients and more products like the ones that you listed on top of it.
Ryan Marshall: Absolutely. That is the upside that we have going into 2025. And unfortunately, because I don't have empirical data to support some of the pipelines and some of the sales initiatives. I'm reluctant to comment on what that looks like in 2025. But absolutely, that is the upside. Right now, we’re focused on [indiscernible] business.
Mariusz Skonieczny: I mean you realize -- do you realize how significant it is going from -- I'm hearing people going from we're going under the bank is pulling the plaque to now you telling me that you're EBITDA positive right now with some increases, it just [imprises] (ph) to be $5 million to $7 million EBITDA positive? Like do you realize the significance of this?
Ryan Marshall: Well, I like to celebrate it. I'm the type of person that I hope you can appreciate. I like to celebrate it with the team when it happens. Right now, these are trends. Keep in mind right, all of the cost savings that we have or all of the cost savings that I'm referencing right now, we're trending to. We've given notice to vendors. We've done the appropriate risk right? There's still contractual obligations that we're working through. But in theory, the trends are extremely positive.
Mariusz Skonieczny: Okay. Now let's talk about the debt.
Jordan Ross: Mariusz. Can I just -- I wanted to highlight one thing. You made a few statements there that we've never made going under bank pulling the rug, et cetera. Those are things that maybe you or some of your other investors have said elsewhere. I want to make it very clear. We have never represented that. Right. So it's important to distinguish the difference between things we've represented and things that you're insinuating, I guess.
Mariusz Skonieczny: Right. So my next question is about the debt because this is the main concern -- so like let's -- what -- I want to know how the bank feels about the -- just the results that you've been able to achieve?
Ryan Marshall: So I can't comment on, obviously, how the bank feels. But keep in mind, our first order of priority is ensuring that we have a company to come back to, making sure that we get it to a healthy state, and making sure that those that are investing in the company, our stakeholders are equally supported and secured with our physician. That's our first-line. I've only been here Mariusz for 90 days. right? So I mean, you can imagine how they feel about what we are alleging, what we are putting forth, right? The reduction in any draws that we have on bridge financing, et cetera. But with that being said, I mean I can't comment on what the -- how the bank feels.
Mariusz Skonieczny: Okay. All right. And just my last question is -- do you plan to continue with the sale of Blue Water?
Ryan Marshall: So right now, like I mentioned earlier on in the call, right, we have a couple of different models that we're tracking. I'm suggesting because it seems to be top of mind with every investor that texts me, phones me, they find me on e-mail. They are most concerned about the Blue Water transaction and if it doesn't go through what our position is. That was the model that I shared with you on today's earnings call. Simultaneously, we have a few different models that we are tracking. One of them does include the disposition of Blue Water and how that impacts our growth going forward. All of them end in a very similar result, right, with the gross profit slightly exceeding our expenses, but it also starts to change the trajectory of our growth models that we have in 2025. So maybe in another call, we can discuss what the other models look like, but we are fully prepared to deal with either disposing of Blue Water, not disposing of Blue Water or finding another strategic partnership or selling another non-strategic assets. So we're tracking all of them simultaneously in parallel.
Mariusz Skonieczny : Okay, thank you. I don’t have any further questions. I think I asked more questions than I ever did on the conference call.
Jordan Ross: Awesome. Thank you Mariusz.
Operator: Thank you. [Operator Instructions] Next question will be from [Dan Milik] (ph) at Interference Point. Please go ahead Dan.
Unidentified Analyst: Yes, hi. Thanks Ryan for taking the call. Just wanted to maybe get some thoughts around the pipeline, RPTO some of the sort of the ongoing projects and the backlog, maybe anything that you've sort of learned in the past 90 days that you can share, that would be great. Thank you.
Ryan Marshall: Awesome. Thank you, Dan. So I think you are referencing RPTA. RPTA has not been fully recognized or included in my forecast or my projections, only because I don't have a clear line of sight. I do believe that it is occurring. I am more confident than ever today that it is effective two weeks ago, you could find publicly that the government did post an RFI, RFP on the project. So you could see that it is progressing. It appears that responses are due by January 11. And so we should hear some time shortly after that, how that the results of that are. As it relates to some of the other projects, I -- there's a few of them that we are hyper-focused on. As I mentioned before, we have transitioned from our title business which was more service-focused, and we’re now driving a technology-driven approach still focusing on the industry itself. So as an example, of Voxtur Rate Advisor and Voxtur Verify, right where those were internal products before. We've now opened that up to all of the clients in the distribution channels of the other business units that support title agents my revenue projections that I'm trending on that I'm using internally, do not reflect what those numbers could potentially look like only because I don't have a clear line of sight. I'm not looking at an SOW as I sit here today for any meaningful amount. I think maybe in another unit of time, what we could do is we could do another demo day, and I could publish those videos for all of the investors and shareholders to take a look at again.
Unidentified Analyst: Thank you for that. And maybe just as a follow-up, the Blue Water, I love for the business to stay 100% Voxtur, but that's just a personal sort of thing. Just wanted to see how -- on prior calls or interviews with the management there, Blue Water, as a conduit was sort of the main concept or play that was supposed to be leveraged. Can you maybe just talk about -- is that the idea going forward with the super transfer and sort of having the platform be the primary sort of technology that you would leverage for Voxtur? Or has that shifted with everything that’s going on.
Ryan Marshall: Thanks, Dan. So again, as we sit here today, the disposition of Blue Water is still unknown. So we're operating as if we still control 100% of it. I am personally 100% vested with the Blue Water team, right? I support them, right? I will bend over backwards to make sure that we move that company forward in a meaningful way if it's with Voxtur or if it's without. I do believe in the products. I do believe that Super transfer, along with TTR flow and a lot of other key integrations that is still very much a focus for Voxtur and for Blue Water and we continue to go down that path. I mean in 2025, if we keep the business, then I can genuinely say from this position that, that is going to be a meaningful part of our revenue going forward.
Unidentified Analyst : Thank you for that and all the best.
Jordan Ross : Thank you sir.
Operator: And at this time, gentlemen, it appears we have no further questions. Please proceed.
Jordan Ross: Thank you, all. Just wanted to say we appreciate your dedication, your support and we look forward to executing and showing you even further more positive results on a go-forward basis. So I'd just like to say thank you for dialing in today, and we look forward to sharing more hopefully more positive news in the not-so-distant future. Thank you.
Operator: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.
