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Yahoo
16-05-2025
- Business
- Yahoo
Q1 2025 Data Storage Corp Earnings Call
Charles Piluso; Chairman of the Board, Chief Executive Officer, Treasurer; Data Storage Corp Christos Panagiotakos; Chief Financial Officer; Data Storage Corp Matthew Galinko; Analyst; Maxim Group Adam Waldo; Analyst; Lismore Partners, LLC Operator Greetings and welcome to the Data Storage Corporation. First quarter 2025 earnings call. (Operator Instructions) I would now like to turn the call over to your host, Alexandra Schilt, Investor Relations for Data Storage Corporation. Thank you. You may begin. Thank you. Good morning, everyone, and welcome to Data Storage Corporation's 2025 1st quarter business update conference call. On the call with us this morning are Chuck Peluso, Chairman and Chief Executive Officer, and Chris Panagio Taco's Chief Financial Officer. The company issued a press release this morning containing its 2025 first quarter financial results, which is also posted on the company's website. If you have any questions after the call or like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before we begin, I'd like to remind listeners that this conference call contains forward-looking statements within the meaning of the Private Security litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that could cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words believes, expects, anticipate, intends, projects, estimates, plans, and similar expressions or future or conditional verbs such as will, should, would, may, and could are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations include, but are not limited to the company's ability to benefit from the IBM cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its Nadeck listing. These risks should not be construed as exhaustive and should be read together with the other precautionary statements included in the company's annual report for the year end of December 31, 2024, quarterly reports on Form 10, and current reports on Form 8K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as the date on which it was initially made, except as required by law, the company assumes no obligation to update or revise any forward-looking statements where a result of new information, future events, change the circumstances, or otherwise. I'd now like to turn the call over to Chuck Peluso. Please go ahead, Chuck. Charles Piluso Thank you, Ali. Good morning, everyone, and thank you for joining us on today's call to review our first quarter 2025 results. We appreciate the opportunity to update you on our progress. Before diving into our operational highlights, let me briefly touch on our first quarter of financial performance. Revenue was $8.1 million with our core cloud infrastructure and disaster recovery services growing 14% year over year. We delivered $2.86 million in gross profit, maintaining margin stability. Adjusted EBITDA came in at $497,000 reflecting our ongoing focus on operational efficiency, even as we make targeted investors investments such as Cloud First Europe. Finally, we closed the quarter with $11.1 million in cash and marketable securities, and we remain debt-free, a position we believe is critical as we explore future growth opportunities and strategic alternatives. I will now shift over to what we've built and how our strategy is enabling us to scale faster and smarter. At Data Storage Corporation, our mission is to support enterprises and institutions with cloud infrastructure, disaster recovery, and business continuity solutions that are mission critical in nature. This includes protecting core business systems, ensuring regulatory compliance, and enabling operational resilience in an increasingly complex IT environment. Our operating platform, Cloud First Technologies is purpose-built for reliability, scalability, and security, particularly for IBM power systems. These workloads remain prevalent in financial services, healthcare, manufacturing, and public sector organizations, sectors where performance and uptime are non-negotiable. Cloud First is optimized to meet these specialized needs, and as the migration is underway. And these industries and companies look towards cloud-based solutions. The uniqueness of our offering rooted in deep IBM power infrastructure expertise sets us apart. We are not chasing commodity cloud workloads. We are delivering enterprise grade hosting, backup, recovery to clients with rigorous infrastructure requirements, many of whom operate under regulatory oversight. It's a deliberate model. We've built up that value proposition around long term infrastructure partnerships. That foundation is increasingly attractive as clients prioritize resilience, compliance, and predictability. A key part of this momentum is our expanding infrastructure footprint and partner ecosystem in the UK through Cloud First Europe. Over the past several months, we've formed strategic relationships that significantly extend our capabilities in the region. In November, we partnered with Bright Solid, a trusted data center operator in Scotland with Tier 3 facilities. This partnership gives us secure high availability infrastructure in the region and enables cloud first to serve regulated clients in Scotland and Northern England with enterprise grade redundancy and performance. In January we expanded our relationship with Mega port into the UK, enabling private cloud connectivity via their Direct Connect platform. Positioning us to provide direct, secure, high-speed access to AWS, Azure, and Google Cloud. Without traversing the public internet. This improves performance, enhances security, and enables seamless hybrid cloud deployment. Later in January, we launched a partnership with Pulsa, the most geographically diverse edge data center provider in the UK. Through this relationship, Cloud First now operates across multiple edge locations throughout the country. Embedding our IBM power-based infrastructure directly into Paulsen's footprint. This accelerates our time to market and introduces us to new enterprises that are already or within the Polson ecosystem. These partnerships are highly strategic. They allow us to meet clients where they are geographically, operationally, and technologically, while offering the flexibility, compliance assurance, and performance they expect. Each relationship is built to support long term delivery. Deep integration and scalable growth. While we are encouraged by the ongoing performance of our business and overall financial position, we must acknowledge a disconnect between our operating fundamentals and our current equity valuation. Our stock price does not, in our view, reflect the value of the business, particularly the recurring nature of our cloud infrastructure revenues, our high retention rate, and our differentiated platform. We will continue to seek ways to unlock value for our shareholders. As we look ahead to the remainder of 2025 and beyond, I want to take a moment to reflect on how far we've come and where we're headed. Through a combination of targeted geographic expansion and a clear focus on our core strengths, we have laid the groundwork to become a global leader in cloud infrastructure services. Today, we are proud to stand as one of the very few global single-source providers of both disaster recovery and multi-cloud hosting solutions, including integration with AWS, Microsoft Assure, and Google Cloud. This is particularly true of our IBM power platform. Where we continue to lead with unmatched specialization and performance. Our ability to support IBMI and AIX workloads gives us a valuable market advantage and a distinct competitive edge, especially as enterprise look to modernize our infrastructure without compromising legacy reliability. A differentiation here is not incidental, it's intentional. It's built on decades of expertise, long-term client relationships, and the proven ability to deliver. As we move forward, our priorities are clear. Grow a high margin recurring cloud first revenue, expand our global infrastructure. Expand our partnership ecosystem, maintain a strong financial footing to support scalable operations. And continue to evaluate paths that will enhance long term shareholder value. We are now operating across 10 global data centers serving over 400 clients and managing over 600 contracts. We are proud of what our team has accomplished operationally and financially and remain confident in our staff and our platform. While we operate in a complex and evolving IT environment, our core value proposition remains clear and relevant, ensuring continuity, security, and performance for mission critical systems while delivering a high level of client satisfaction. With that, I'd like to turn the call over to Chris Panagiotakos, our CFO, to discuss our financials. Please go ahead, Chris. Christos Panagiotakos Thank you, Chuck. Good morning, everyone. Total revenue for the three months ended March 31, 2025 was $8.1 million a decrease of approximately 2% compared to $8.2 million for the three months ended March 31, 2024. The decrease is primarily attributed to a decrease in one-time equipment sales during the quarter. Cost of sales for the three months ended March 31, 2025, was $5.2 million a decrease of approximately $45,000 or 1% compared to $5.3 million for the three months ended March 31, 2024. The decrease was mostly related to the decrease in one-time equipment related cost of sales. Selling general and administrative expenses for the three months ended March 30, 2025 were approximately $3 million an increase of approximately $200,000 or 2% as compared to $2.8 million for the three months ended March 31, 2024. The increases were primarily due to an increase in professional fees, stock-based compensation, and an increase in headcount. Adjusted EBITA for the three months ended March 31, 2025, was $497,000. Compared to adjusted EBITDA of $680,000 for the three months ended March 31, 2024. Net income attributable to common shareholders for the three months ended March 31, 2025, was $24,000 compared to net income of $357,000 for the three months ended March 31, 2024. We ended the quarter with cash and marketable securities of approximately $11.1 million at March 31, 2025, compared to $12.3 million at December 31, 2024. Thank you, and I will now turn the call back to Chuck. Charles Piluso Thanks, Chris. Let's open it up to some questions. Operator Thank you. (Operator Instructions) Our first question comes from the line of Matthew Galina with Maxim Group. Please proceed with your question. Matthew Galinko Hey, good morning. Thanks for taking my questions. Maybe we could start with, where should we, where are we on the European expansion? I guess like in terms of the business development side. I know you've sort of gone through the infrastructure side in Europe now, what, where are we in the business development and sort of bringing business into those assets now? Charles Piluso Thanks, Mitt, for the question. On the business development side. So, we had started investing in the UK in October time frame with some consultants, and then we solidified all of that. Now we have a managing director there. We have a solution architect and a partner manager. In the third week of January, we installed the equipment in three data centers, in the UK. During the time of the consultant to employee, let's call it six months, we've established approximate, I think it's there might be more right now, but the last number I saw was 10 partnerships, distributors that we have established, and the folks who are out there doing training on. On those three data centers, the data centers that we that we're in actually were training their sales reps so that they can actually take the orders and build them out. So we've installed it and we're part of their we'll call it product. List or service or solution list today. So training's been going on a lot of meetings have been going on to be able to educate them so that they can bring that out to their existing clients because we're talking about going after their client base. And our folks are involved when they go on those calls because we find a much higher close ratio when our folks are with them. The partner, but these are actually partnership type arrangements, not just a rack of equipment and we're putting salespeople on the ground. We're going after essentially with them their client base. So, you know they have we'll call it suspects, prospects, we're expecting to hopefully I would anticipate revenue to start. In the fourth quarter of 2025, we're hoping, I would imagine we're hoping that the month of January 2026, is that month will be the first month to break even. Chris, how much money has been invested so far in the in the UK for the quarter it. Christos Panagiotakos Was around $450,000. Charles Piluso So that's why you'll see that, decrease in inhibitor, right, Chris. That if that helps. Matthew Galinko Yeah, if, maybe if you could also, just give us some color on where the, from what you're seeing, where the European market is on, shifting to more cloud services consumption model versus just buying for their own, data center and managing their own infrastructure. Are they further along that process than the US market, or, are we sort of getting to an inflection point there? Charles Piluso Oh, it would be a lot of speculation on my part to actually give you an answer that's kind of definitive, but I will say that we know that IBM stated that there's approximately $90 million a year in revenue that will be migrating each year. So that we know that that and that was a conference we attended in Europe. So we were in the common, which is a user event that takes place every year. They've made that statement, and by the count of their customers that they actually have. I believe that Cloud First has more customers at that time than they do, from site readings, but I don't want to make a commitment on that, but that's what it seemed like. But if the migrations going across the board, that people are moving to it, the bigger the big obstacle in a lot of cases was that, people were concerned about security, when they're moving to the cloud, and I think that that pretty much has been showing with the momentum that's going on that the security objections and stuff, we're able to overcome that today and actually in many cases have newer equipment, a better environment, tier 3 data centers, so. I think we're positioned very well. We may move into Europe itself so that we can serve it a couple of the distributor partners that we do have that are very large are saying their customer base is also in Europe, so we're expecting. I would anticipate seeing something in Europe to be able to tie that together. Our CTO Chuck Piluso is working on all of the security requirements and regulations in Europe as we speak. Matthew Galinko Thanks. Great caller. I'll jump back in the queue. Operator Thank you. Our next question comes from the line of Adam Waldo with Li More partners. Please proceed with your question. Adam Waldo Good day, Chuck and Chris. I hope you can hear me okay. Charles Piluso Sure, Adam, how are you? Adam Waldo I'm well, Chuck. How are you? Charles Piluso Good, thanks. Adam Waldo So if you don't mind, I'm going to start with a couple of financial reporting, housekeeping questions for Chris and then turn to strategic and capital allocation questions for Chuck. Chris, when do you expect to file your Form 10Q for the quarter? Christos Panagiotakos Well, it's going to be filed today. Adam Waldo Great, okay. And then as you exited the first quarter, how did the run rate annual recurring revenue of the business compare with the $21.5 million that you had exiting the fourth quarter that you recorded with the fourth quarter results back in March? Christos Panagiotakos So the annual recurring revenue for the quarter was about $6.7 million. The new estimate for the annual recurring revenue is a little bit over $22 million for the year, the estimate. Adam Waldo Okay. All right, good. And then the remaining customer contract value at the end of the first quarter was what is compared with the $39.2 million that you reported at the end of the fourth quarter? Charles Piluso I don't have a number for you right now. On that, I could give you some color on a little bit differently is that all of the contracts that are in place today, the total contract value on that was in excess of $41 million and you know I would say that more than 95% of those have an auto renewal clause in there that auto renews at their initial term but you know for the most part, it's the total contracts that are in existence today when they were signed up and they were billing around $41 million. Adam Waldo So that's really helpful. Will the contain a specific number on that, Chris, as we've seen in the K and some of the cus in the past, or is that okay, it won't. Christos Panagiotakos We're not going to be reporting that number in Q1. Charles Piluso Just to give some color on that a little bit so just so we're very transparent on it, what ends up happening is the renewal rate that we have is very significant. So what happens is you have a sales organization, some people, that, if they've turned over a little, what ends up happening is when a renewal takes place, they have to put in the new beginning, and to the term because it just renewed over and what ends up happening is that we're making a major effort to be able to say beginning and end turn on the new agreement. So you know we keep on trying to refine that, but what we do know is that those initial terms were the (40), $41 million. So you know when we work with Salesforce on this, we're always kind of looking what that is, looking who has an automatic. An automatic renewal rate and whatever their term is that they renew in very few cases, we have folks that are there, I'm going to say probably less than 10, that are on short term agreements because let's say they're trying to move off of the platform, which is very hard for them to do, but say they're doing that, so they might be on a six month agreement to transition off of the platform. So those folks we have as non-not automatically renewable, but there's not many of them. So we're really trying to refine that, but we always look at what the total contract value is of who's billing today. And in our agreements that we have, how Schwartz made some adjustments to that, I think a few years ago where in the agreement it says that we have the right to increase them 10% at the end of the term so that when you look at that $41 million, if all of them. Over again you're looking at, $4 million on top of that, unless they fall out or something. But so that's pretty good, we made those adjustments. Hal did in the past, so you know we like that and that's what's happening. So when they renew it's 10% higher. Adam Waldo Okay, that's really helpful. One last financial reporting question, and then I'll jump back in for the strategic and capital allocation questions for Chuck later. On the financial reporting side, can you just give us a sense for what the revenue would have been in the first quarter of this year and what it would have been last year in the first quarter of 2024. If we'd stripped out just the equipment sales from both quarters numbers, what would the year over year revenue growth rate of them? Christos Panagiotakos I can get you that number, Adam and email it to you. Adam Waldo But back in the envelope it'd be strongly into the double digits, right? Christos Panagiotakos I'm not sure. I'd rather just look at the numbers and just give you a definite answer. Adam Waldo Okay, thank you. I'll jump back in the queue. Christos Panagiotakos Okay. Operator Thank you ladies and gentlemen. (Operator Instructions) Our next question is a follow up from the line of Adam Wo with Lismore Partners. Please proceed with your question. Adam Waldo Okay, thanks. On the strategic and capital allocation side, checking your prepared remarks, you made reference to strategic alternatives. You made reference to continued understandable frustration with the stock price relative to the sort of private market value of the company. This has been a source of frustration I know for a number of quarters. What steps might the board pursue here? Does that include potentially pursuing strategic alternatives? Could management start to Institute quarterly and annual financial performance guidance for the markets. What are some of the things that you all are thinking about to try to close that valuation disconnect between where stocks trading and the private market value of the company? Charles Piluso We were in OTC Hell from 2008 to 2021. Now we're in micro-cap space which, we have some great institutions that have invested in the company. They're there long term, and then we have retail that moves us up and moves us down. We need to be able to see a very stable share price for us to be comfortable that's in line where Matt, who follows us and writes about us, and we're not seeing that $9. So as to strategic alternatives, I mean there it's everyone's strategic alternatives. What would it be, if I went into chat GPT and say give me the strategic alternatives for every micro-cap that has a great. What would it be, undervalued with cash in the bank? Well, buy back shares, carve out the company, and sell it to someone to a P/E firm, buy back warrants, just suffer along and watch the thing at $3.50 and others take advantage for a short period of time of running it up $2 and running it back. I mean, it's just you can go into chat GPT and get like five alternatives. I mean, there's just, I mean, there's probably five alternatives that go on. We're just looking at everything, quite frankly, but it is, we just need to deliver shareholder value. We just need to do that and where it's sitting right now and for me, I, with various, trust or individually, I have 13% of the company, so it's. It's not that much, not that little, but for the most part it's, I'm with everyone else on this, and our objective is to be able to deliver shareholder value. So, as I say, all the alternatives, it's like, when you meet with somebody and you say, gee, what's your plan? Do you have a great company, what's the exit? You always ask that question. So frankly, I think there's a number of different alternatives, and we'll see what that is, but our focus is on shareholder value, we have insiders who own 41% of the company and frankly we're always focusing on the other folks that are all owning public shares and feel that responsibility to be able to deliver that and not languish it where we are. So, it's very frustrating. Adam. Adam Waldo No, understood. And just to follow up though, do you, are you all considering instituting a formal quarterly and annual financial guidance process to the street to to potentially help close that valuation GAAP or is that still something that is really not being contemplated? Charles Piluso We've been encouraged by folks that actually own shares, when we have, investor conferences and things like that to do that. And even though Cloud first had what, $1.5 million in EBITDA (1.5 IIA) for the quarter, I'm not going to say that it's $6 million for 2025. I'm not going to say that, but that would be great. But for, it's $1.5 million for the quarter. We've been encouraged to do that. We probably could, but I don't think we want the it's just we've been advised against it, quite frankly, so we're taking the advice that we pay for not to do that. Adam Waldo Okay. Well, thank you very much and best wishes for the rest of 2025. Charles Piluso Thank you, thanks, Adam. Thanks for the questions. Operator Thank you, ladies and gentlemen. There are no other questions in line. I'll turn the phone back to Mr. Peluso for any final comments. Charles Piluso Thank you. Thanks for the questions, Matt and Adam. Before we conclude, I want to reiterate that our priorities remain clear delivering reliable, high-performance infrastructure to organizations with complex regulated IT environments, expanding into new markets and geographies, and doing so with financial discipline and operational integrity. We recognize that our current market valuation does not reflect the true strength of our core business, particularly the performance of cloud first. Our growing international reach and our recurring revenue model. That is why we've shared with the board and the leadership team. They were actively evaluating a range of strategic alternatives to unlock and deliver long term shareholder value. We appreciate your continued support and interest in data storage Corporation, and thank you once again for joining us today, and we look forward to keeping you informed as we move ahead. Thank you. Operator Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
Yahoo
16-05-2025
- Business
- Yahoo
Q1 2025 Edible Garden AG Inc Earnings Call
Kostas Dafoulas; Interim Chief Financial Officer; Edible Garden AG Inc Operator Good morning everyone and welcome to the Edible Garden AG Incorporated 2025 first quarter Business Update conference. At this time, all participants are in a listen-only mode and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Evas, Investor Relations at Crescendo Communications. Ted, the floor is yours. Thanks, Jenny. Good morning and thank you for joining Edible Garden's first quarter 2025 earnings conference call and business update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden and Kostas Dafoulas, interim Chief Financial Officer of Edible Garden. Earlier this morning, the company announced its operated results for the three months ended March 31, 2025. The press releases posted on the company's website In addition, the company will file its quarterly report on Form 10Q with the US Securities and Exchange Commission, which will also be accessible on the company's website as well as the SEC's website at If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communication at 212-671-1020. Before Mr. Kres reviews the company's operating results for the quarter end of March 30, 2025 and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial positions, strategy and plans and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will and the negative of such terms and other words in terms of similar expressions are are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short term and long term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's filings with the SEC, including the company's annual report on form 100 for the year ended December 31, 2024. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievement. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. Having said that, I would not like to turn the call over to Mr. Jim Kras, Chief Executive Officer of Edible Garden. Jim. Thanks. Good morning and thank you to everyone for joining us today. We're pleased to report that Q1 2025 marked a strong start to the year, reflecting the continued momentum behind our strategic transformation. Our realignment towards higher margin shelf stable products such as kick sports nutrition, tickle party, squeezables, pulp, and vitam weight is gaining traction, and the results are becoming increasingly visible across our business. We also made meaningful progress expanding our national retail presence. During the quarter, we launched or strengthened our relationships with several major retailers including Walmart, Stop and Shop, Wakefront Shoprite and Burcott Superfoods. These relationships are driving growth across both our fresh and non-perishable categories while also leveraging our patented in-store merchandizing solutions such as our self-watering displays and reinforcing our omni-channel strategy. Total revenue declined 414,000 to 2.7 million in the first quarter. This decline was primarily attributed to our strategic decision to exit lower margin, floral and lettuce categories. Cutter sales rose 13% on a seasonal basis, high highlighting sustained consumer demand for freshness and convenience. This deliberate shift in our product mix is already contributing to margin expansion and setting the stage for scalable, profitable growth, highlighting the traction in our non-perishable portfolio where revenue rose 15% year over year. Each of our non-perishable shelf stable brands have contributed to this performance. Kick sports nutrition achieved a milestone with new brick and mortar replacement at a major Midwest big box retailer. The brand includes clean labeled whey and plant-based protein powders with planned expansion into pre and post workout formulas and hydration products. These offerings support performance, recovery and overall wellness for today's health conscious consumers. Pickle party. Created in partnership with Herman Pickle Company, it's the world's first functional pickle, fermented, refrigerated, and gut health focused, featuring kosher and non-GMO non-GMO ingredients. It's launching across all Burkhart food superfood stores. And has secured pre-orders at Food Town, Lincoln Market ahead of summer season. Squeezables. A shelf stable stern pace line has successfully completed its pilot and is moving into full scale production. Pulp, a line of organic fermented, gourmet hot sauces and chili-based condiments continues to gain momentum in the premium condiments category and resonates with consumers seeking healthy, elevated alternatives to traditional sauces. Vitamin Way and Vitamin Way offer a growing portfolio of whey and plant-based protein powders with designed to support recovery, overall wellness, and daily nutritional needs. The brand continues to combine advanced supplementation with consumer friendly taste and value. Following a successfully established retail presence, we launched a dedicated e-commerce platform at to broaden access and accelerate brand growth. Gross profit increased 283% year over year, nearly quadrupling from Q1 2024, while gross margin improved to 3.2% from 0.7%. This improvement reflects strong stronger cost control and improved Skemix. One of the most transforming milestones of the year announced just yesterday was a $15.5 million dollar acquisition from natural shrimp farms funded through a mix of preferred equity and institutional investment. This deal strengthens our balance sheet without increasing debt and further extends our vertically integrated model. The acquisition includes a fully operational aquaculture facility in Fort Dodge, Iowa and two patented water treatment technologies. These patented innovations will be integrated into our greenhouse operations to enhance water efficiency and reduce environmental impact, complementing our ongoing nano bubble irrigation trials with Presea New Jersey Institute of Technology. Institute New Jersey Institute of Technology, the EPA and the USDA, which have already shown up to a 55% increase in yield and 30% reduction in harvest cycle time. In addition, the Iowa facility offers valuable infrastructure for expanded R&D warehousing and potential nutraceutical development, supporting our goals around vertical integration, sustainability and long-term innovation. Our commitment to sustainability remains central to our identity. Though initiatives like Walmart's Project Gigaton, we helped avoid nearly 11,800 metric tons of virgin plastic in 2024, conserved over 28,000 gallons of diesel, and diverted 103 tons of food through donation programs. We're proud to be recognized in the Food Tech 500 as the TOP50. Company and continued to lead the way in our controlled environment, agriculture with real measurable impact. With a focused strategy, brand momentum, and an even stronger operational foundation, we believe edible garden is well positioned to deliver long term value for our customers, partners and shareholders. I would like, I would now like to turn the call over to Kostas Dafoulas, our interim CFO, who reviewed the financial results for the quarter ended March 31, 2025. Costas. Kostas Dafoulas Thanks, Jim, and good morning everyone. For the quarter ended March 31st, 2025. Revenue totaled $2.7 million a decrease of 13.2% compared to $3.1 million for the three months ended March 31, 2024. This decline was primarily driven by the company's strategic exit from the lower margin floral and lettuce products. Non-perishable revenue, however, grew 15% year over year in the quarter, a clear indication that our innovative shelf stable brands like kicks, Forcecentrtion, Pickle Party, Squeezables, Pulp and Vitamin Way are resonating with customers. Cost of goods sold was 2.6 million for the first quarter of 2025 compared to 3.1 million for the same period in 2024. The decrease reflects the decreased revenue in the quarter and as we've seen previously in Q1. Gross profit increased to 88,000 compared to 23,000 in the prior year period, representing an increase of approximately 283% year over year. Gross margin improved to 3.2%, up from 0.7% in 2024, reflecting early returns from the company's shift to higher margin shelf to stable product lines. Selling general administrative expenses for 3.3 million for the quarter, down from $3.9 million in the prior year period. The reduction was primarily attributable to lower personnel costs as we continue to optimize our cost structure in the roll off of severance expenses incurred in the first quarter of 2024 related to executive transitions. Net loss was 3.3 million for the first three months ended March 31, 2025 compared to a net loss of $4 million for the first three months ended March 31, 2024. The year over year improvement in net loss was primarily driven by cost reductions along with increased contribution from higher margin, non-perishable product sales. With that operator, please open the line for questions. Operator Thank you very much. We will now be opening the floor for questions. If you would like to ask a question, [Operator Instructions]. Please wait a moment whilst we poll for questions. Thank you very much. Your first question is coming from Anthony Vendetti of the Maxim Group. Anthony, your line is life. Thank you. Good morning. I was just wondering, this acquisition of national, it's, it was completed. Hey, can you talk about what your initial plans are, for natural shrimp and talk about what synergies are available to you immediately and then down the road what the cross-selling synergies could be. Anthony, good morning. How are you? Thank you for dialing in. Yeah, a couple of quick things here to answer your question. The two, it's like basically three driving sort of initiatives that'll that'll happen immediately at the facility. First of all, facilities in a key place for us as we're expanding our relationships with, big, the big retailers out that are based out there whether it's target or Walmart or Meyer and the facility has considerable warehousing ex room for us, which we need frankly we're in Grand Rapids and Grand Rapids is getting full and as we start to shift into more shelf stable products. Some of which will require refrigeration, those capabilities are already existing at this facility. So that I'm excited about. There's, to the where it's located, going to give it allow us to continue to stretch out further west allow us to penetrate where we're already strong as a company in the Midwest and getting stronger and start to run some really great programs, especially leading into the second half of the year. These products that require refrigeration will be able to be housed there, transported. I mean it's in the central part of the country, so that's great. The RD aspect of it, I'm extremely excited about, shrimp has many therapeutic qualities in addition to tasting great. So it's kind of twofold. It's not only are we going to continue the innovation that the existing team has in order to leverage, better, healthier, cleaner shrimp in a in an era where people are concerned about tariffs and whatnot and yet being able to do things stateside like that long term, in a sustainable fashion plays right into what we're known for with being. Always always inspired, so that's, I could just, I don't have another word for it other than just very cool. And then there's and then there's, just the opportunity to take what we learned from raising shrimp. There's a bunch of patterns that they already have right, that'll help us not only in the greenhouse aspect but also in water treatment but also just with the nutraceutical business that just continues to accelerate for us, as I've mentioned to you in the past. I come out of that business, that's where I started, between twin lab years ago and then and then Nature's bounty for for years before we sold out to Carlisle. I'm excited about just developing, new innovative ingredients, utilizing shrimp and we know that. Shellfish in general is used for joint care and other, growing areas of that business. So, for us it's a super exciting time. I've been out there quite a few times, through due diligence, and it's quite a facility and these guys, they got a real head start on quite a peop, and people in the industry focusing on this part of the business. So I think we're going to be able to do, quite a few things with it. Okay, and then are you able to provide what what the revenues were for national shrimps in 2024 and then would this be gross margin accretive? As of right now, it's fairly nominal, the sales part of the business, it's not going to be I wouldn't say it's going to be margin of creative but I think, from their existing business but as we sort of morph and expand their business utilizing like I said, some of the existing space that they have using, I think this is like I said, this is a large facility that really gives us penetration to markets. There's a lot of excitement around, the shrimp shells, to develop, new products and nutraceuticals. So for us, the existing business is the existing business. It's not, it wasn't, it was really kind of a demonstration mode and R&D facility, we're going to accelerate the R&D pieces start to leverage the facility, in order to immediately impact our margin as it relates to warehousing and logistics. So that to answer your question, we'll be able to leverage our distribution to accelerate what they're currently doing and their sales, as well as, leverage their, the space of the facility to be able to lead to, margin accretion. So I think that'll happen pretty quickly. It's just a function of totality of what's sitting out there. Okay, and then lastly switching back to edible gardens, can you talk about the sports nutrition line, how that specifically did this quarter, and, are you happy with that ramp? And do you expect that to continue in . Am, I am, I'm ecstatic. Look, I love the business, so it's always like people love to work on things that they really take pleasure and so, coming out of brands like Body Fortress and Metrics and pure protein and then to be able to do this, better is with this type of wine which is the right product at the right time, which is so much of what we're focused on as a company we just gained distribution in the Midwest big box retailer. Those orders got shipped in Q2, so in April, so they're not reflective in Q1. So, and then, we've got, some big launches coming up, in the very near term, so, I couldn't be happier. We developed the product with Neutricom. They've been a great partner, we just continue to deepen that relationship. And, I think we're just in such a great spot and you know we're continuing to invest in not only in people, infrastructure, but also marketing support. We're we're adding some salespeople to really continue to push out into the marketplace. We continue to go to key trade shows, so I'm excited. I think you're going to see more from us our some of our existing nutraceutical businesses really started to pick up. I think it's an interesting time, protein, different forms are hot and and continue to be hot. All you have to do is, go and look into the news and see where people are at with that. So it's a great time to be doing what we're doing. It really is. I just want to get there faster. But also be able to do it where we can do it, in the right manner so that we can continue to have the infrastructure and the integrity we need to deliver on what we, what are great relationships that we have out there because we've always worked hard for our retailers shipping at a super high rate. We've excelled in fresh goods, which is super challenging. Now if we can marry the two and then leverage the platform of the stores that we're in and pick up new stores. And and being almost every corner of the grocery store as well as our significant online presence that will, that's going to be growing and accelerating with our relationship with Proana, which is an agent an agency that was basically approved by Amazon for us to work with. So I, once again, I'm pretty, I'm very psyched about about the business and and particularly Kick because I think it's just, timing is everything sometimes, and I think we got it. Okay, great. Thanks, Jim. I appreciate all the color. I'll hop back in the queue. All right, thanks, Anthony. Operator Thank you very much. Just as a reminder, if there are any questions, you can press one on your phone keypad now to join the key. Our next question is coming from Nick Pincus of Forest Capital. Nick, your line is life. Hey guys, congrats on the solid results and the positive shift in the product mix. You touched on this a bit, but I was just hoping if you could elaborate some more on the drivers behind the sustained improvement and gross margin, particularly as you transition towards. Higher margin shelf stable products, but also specifically what strategic initiatives are you pursuing to accelerate the growth of these product lines and how do you see this part of the business developing going forward? Thank you. Great question. Welcome, Nick. Look, it's gets boiled down, to kind of a few things and for us, it's continue invest the continued investment in the company, starting with getting the right people. That we continue to do and we continue to elevate the people that come into the business as we become more and more successful. It allows us to drive innovation, build strong relationships, the right products, as I just mentioned about kick and having the right products at the right time and then the right support, that right support, ties back to not only the products and the people, but also investment in marketing and branding. So for us, this shift to just diversification of the portfolio on the heels of skew rationalization, I think has really positioned us to drive that gross margin top line, which I think is going to be exciting coming into the second half as we start to gain traction with these products and get them into stores and get them online and get people, trying them and we had a great trade show at Expo West with Pickle Party and we just came out of the show with a lot of excitement around that whole line which is just like I said, functional and exciting. So, right now, it's a great time to at Edible Garden because it's exciting and the company's really evolving and it's fun to watch the people who've been here with with us and with management with myself for the last decade, watch the company evolve and transform to, from a one greenhouse and a handful of accounts to spreading out through the country and internationally and bringing in diverse products that people like and are relatable and and the people who work are are responding so it's fantastic. Well, that's great and just look forward to following your progress. Good luck. All right, thanks, Nick. Operator Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now turn the call back over to the management team for any closing comments. Sure. Thank you for joining us today. Q1 2025 marked a strong start to the year with clear progress on our strategy to focus on a higher margin, non-perishable products, brands like Kick, Pickle Party, Squeezables, bulk, and Vitamin Way are gaining traction. And we're seeing early financial returns to improved margins and reduced losses. The recent acquisition of natural shrimp facility adds valuable R&D and operational capabilities while supporting our commitment to sustainability and vertical integration. Combined with expanded retail relationships and growing e-commerce commerce reach, we believe we've built a strong foundation for continued growth. We're confident in our path forward and excited about what's ahead. Thank you for your continued support. Operator Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for thank. You. Thank you everybody. Kostas Dafoulas Thanks. 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Yahoo
15-05-2025
- Business
- Yahoo
Q1 2025 Reliance Global Group Inc Earnings Call
Ted Ayvas; Investor Relations; Crescendo Communications Ezra Beyman; Chairman of the Board, Chief Executive Officer; Reliance Global Group Inc Joel Markovits; Chief Financial Officer; Reliance Global Group Inc Operator Good day, everyone. Welcome to the Reliance Global Group first-quarter business update conference call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Ted Ayvas, Investor Relations. Ted, the floor is yours. Ted Ayvas Thanks, Kelly. Good afternoon, and thank you for joining Reliance Global Group's 2025 First Quarter Financial Results and Business Update Conference Call. On the call with us today are Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group, and Joel Markovits, Chief Financial Officer of Reliance. Earlier today, the company announced its operating results for the quarter ended March 31, 2025, and the press release is posted on the company's website, In addition, the company will be filing its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission today, which can also be accessed on the company's website as well as the SEC's website at If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. Before Mr. Beyman reviews the company's operating results for the quarter ended March 31, 2025, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations are forward-looking statements. The words anticipate, estimate, expect, project, plan, seek, intend, believe, may, might, will, should, could, likely, continue, design and the negative of such terms and other words and terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's Form 10-K filed with the U.S. Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. Having said that, I would now like to turn the call over to Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra? Ezra Beyman Thanks, Ted. Good afternoon, and thank you to everyone for joining us today. I'm pleased to report that we're starting off 2025 on a strong note with improved financial results that build on the solid momentum we've established in 2024. We've seen meaningful growth in our organic revenues, which speaks to the progress we're making in expanding our market share. At the same time, we significantly reduced our net loss and delivered an increase in EBITDA. These gains reflect the continued benefits of our disciplined financial approach, the efficiency we've achieved through our streamlined OneFirm operating model and the absence of impairment charges that impacted last year's results. Altogether, the momentum we're seeing has strengthened our foundation and positioned Reliance Global Group for scalable long-term growth with greater profitability. One of the most exciting developments this quarter is the launch of RELI Auto Leasing, a transformative new service that enables our RELI Exchange agency partners to offer vehicle leasing to clients. Any vehicle delivering to any location in the U.S. are earning commissions on both the lease and the [indiscernible] insurance policy. This service is fully integrated into the agent dashboard requiring no additional training in auto finance. Agents now can guide clients through leasing options during standard policy consultations, whether for new vehicles or replacements after accidents. Clients benefit from competitive pricing, nationwide delivery and advanced insight into how different vehicles may impact their premiums. This integration deepens client relationships and introduces a powerful recurring revenue stream for our partners. Early feedback from agents has been outstanding, and we believe this innovation further distinguishes RELI Exchange as a complete solution for independent agencies. We are also nearing completion of the Spetner's Associates acquisition, a strategic transaction that will expand our market footprint and enhance our agency network. Spetner brings deep experience in personal and commercial lines, along with strong client relationships and a proven team of agents. Their integration will add scale, complement our existing capabilities and create immediate cross-selling opportunities across RELI Exchange offerings, particularly Quote & Bind and RELI Auto Leasing. We expect this acquisition to contribute meaningfully both -- to both revenue growth and margin improvement through synergies, and we view it as a significant step toward our InsurTech growth strategy. With these milestones, RELI Auto Leasing, the continued enhancement of our Quote & Bind platform and the upcoming Spetner Associates integration, we are more confident than ever in our trajectory towards scalable long-term growth. Each initiative adds meaningful dimension to our strategy, expanding services for our agency partners, increasing revenue opportunities, and strengthening our presence across key markets. RELI Auto Leasing introduces a powerful new offering that allows agents to better serve their clients while generating additional income. Our Quote & Bind platform continues to streamline the insurance process through automation and expanded carrier access. Meanwhile, the integration of Spetner Associates is expected to broaden our footprint, complement our capabilities and create valuable cross-selling opportunities across the platform. Together, these efforts reflect our ongoing commitment to innovation, disciplined growth and shareholder value. We look forward to building on this momentum as we move through 2025 and beyond. I would like to now turn the call over to Joel Markovits, our Chief Financial Officer of Reliance Global to review the financial results for the quarter ended March 31, 2025. Joel? Joel Markovits Thank you very much, Ezra, and good afternoon. It will be my pleasure to share with you some of our key financial highlights for the quarter ended March 31, 2025. All figures presented are approximates. Commission income increased by $154,000 or 4% to $4.2 million in Q1 '25 compared to $4.1 million in Q1 '24. The 4% increase reflects encouraging continued organic growth across our insurance distribution channels. Commission expense increased by $200,000 to $1.5 million in Q1 '25 compared to $1.3 million in Q1 '24. Increase reflects higher payouts to agents in line with the increased revenues. Salaries and wages increased by $400,000 to $2.2 million in Q1 '25 compared to $1.8 million in Q1 '24. $400,000 increase is primarily due to non-cash equity awards in the amount of $540,000. And removing the impact of these non-cash equity charges, salaries and wages actually decreased quarter-over-quarter, a testament to cost efficiencies deployed by the company while still being able to grow revenues. General and administrative costs increased by $140,000 to $1.5 million in Q1 '25 compared to $1.4 million in Q1 '24, primarily due to $485,000 of non-cash equity payments to certain of the Company's directors and service providers. And when removing the impact of these non-cash equity charges general and administrative costs show a handsome decrease quarter-over-quarter, a reflection of management's disciplined approach to cost controls and the success of our OneFirm business model. Net loss decreased by $3.6 million or 68% to $1.7 million in Q1 '25 versus $5.3 million in Q1 '24. This substantial 68% improvement is a result of no new asset impairment charges during our current quarter and the company continuing to remain laser focused on streamlining its operations, increasing its revenues and controlling its costs. EBITDA, our adjusted EBITDA metric, a non-GAAP measure by key company performance indicator improved significantly by 300% in Q1 '25 from a loss of $74,000 in Q1 '24 to a gain of $145,000 in Q1 '25, a $220,000 increase. This marks another quarter of AEBITDA gain for the company and demonstrates our continued trend towards sustained and increased profitability. In summary, as mentioned by Ezra, we've gotten off to a very good start in 2025 with exciting organic growth in our revenues, decreasing cash operating costs and increasing net EBITDA gains. With our scalable operating model, focus on innovation and expansion of our market footprint by organic and acquisitive growth, we remain firmly committed to continuously build a highly profitable business enterprise that delivers long-lasting value to our employees, investors and shareholders. We'll now turn the call back to the operator to open the lines for questions, comments and/or feedback. Operator? Operator (Operator Instructions) [Nicole Kaufman], BlackRidge Capital. Congrats on the positive quarter. My first question is related to the Spetner acquisition. So once this is complete, can you share some insights into the key benefits that Spetner will bring to Reliance? Ezra Beyman Yes, sure. That's -- we're excited about that. Well, God willing, it first of all brings us to a very important -- significant increase in EBITDA positivity, profitability. And also doubles our revenue, and that doesn't even take into account the amazing and tremendous cost selling potential. Remember, they service over 85,000 employees. And we have many insurance products that they haven't had access until now. So we really see that as a tremendous potential as well aside from the intrinsic on day one increase in profitability and revenue. But we're really excited about it. And then going into adjusted EBITDA. So congrats on achieving positive adjusted EBITDA again. Obviously, this is an important milestone. What were the key drivers behind the positive adjusted EBITDA in the first quarter? And how do you see it trending moving forward? Ezra Beyman So I think the -- I mean, it's really a multi approach, not just one, focusing, like Joel mentioned, on the OneFirm approach, streamlining expenses when we can across different the different agencies. Also cross-selling and offering more selling abilities to our in-house agents and the downline agents. And bring, of course, focused also on good old-fashioned, not wasting money. Trying to be cost conscious when we know as time goes on, you see where to spend the money and where not to waste the money. So a combination of increasing revenue, like we've actually showned on the reducing expenses. And we look forward actually with today, more and more technology available to -- in all these areas to improve. We look forward to even more exciting increases. Well, I appreciate that insight. If I have another question, I'll hop into the queue. Ezra Beyman Thank you very much. Operator (Operator Instructions) There are no additional questions in queue at this time. I would now like to turn the floor back over to management for any closing remarks. Joel Markovits Thank you. On behalf of Ezra and entire Reliance team, we appreciate your participation in today's business update. We're very enthusiastic about the horizon for Reliance. I'm grateful to you, our valued shareholders and stakeholders for being with us on this onward journey together. Thank you, and all the very best. Operator Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
