Verb Technology Q4 2024 Earnings Report

Verb Technology EPS Results

• Actual EPS: -$2.20
• Consensus EPS: -$2.52
• Beat/Miss: Beat by +$0.32
• One Year Ago EPS: N/A

Verb Technology Revenue Results

• Actual Revenue: $0.72 million
• Expected Revenue: $0.20 million
• Beat/Miss: Beat by +$523.00 thousand
• YoY Revenue Growth: N/A

Verb Technology Announcement Details

• Quarter: Q4 2024
• Date: 3/25/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, March 25, 2025
• Conference Call Time: 1:00PM ET

Verb Technology (NASDAQ:VERB), through its subsidiaries, develops Software-as-a-Service applications platform. It offers MARKET.live, a livestream social shopping platform, that allows brands, retailers, and creators to broadcast shopping events on various social media channels, as well as services that range from production of livestream events to host and event consulting, and drop ship and creator programs. The company also provides verbCRM, a customer relationship management application; verbLEARN, an learning management system application; verbLIVE, an interactive livestream eCommerce application; and verbPULSE, a business/augmented notification and sales coach application. In addition, it offers verbTEAMS, a self on-boarding, video based CRM and content management application for life sciences companies, professional sports teams, small businesses, and solopreneurs. Further, the company provides non-digital services, such as printing and fulfillment services to enterprise clients. Verb Technology Company, Inc. is based in Las Vegas, Nevada.

Verb Technology Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good afternoon, and welcome to the Full Year Fourth Quarter twenty twenty four Financial Results Conference Call for Verb Technology Company Incorporated. At this time, all participants are in a listen only mode. Please be advised the call is being recorded at the company's request. On our call today is Rory J. Pattaya, Verb's Founder, Chairman and CEO.

[Operator]

Before we begin, I'd like to remind everyone that statements made during this conference call will include forward looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, which involves risks and uncertainties that can cause actual results to differ materially. Forward looking statements speak only as of the date they are made, except as required by law as the underlying facts and circumstances may change. Verb Technology company disclaims any obligations to update these forward looking statements as well as those contained in the company's current and subsequent filings with the SEC. I would now like to turn the call over to Rory J. Gutia, CEO.

[Operator]

Rory?

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Thank you, moderator, and thanks to everyone for joining us today for our fourth quarter and full year twenty twenty four financial results and business update conference call. Well, it sure feels good being back before you speaking directly to you about our company, our business, our performance and sharing our direct transparent honest thoughts and strategies for how we intend to drive shareholder value in this business now and into the future. So I'd like to begin with a brief discussion about our history and challenging market conditions that influenced the formulation of the strategies that we undertook to insulate ourselves from those conditions. And I'm referring to insulating ourselves from those market conditions that became impediments to value creation in our former direct sales software as a service line of business, as well as those market conditions, particularly capital markets conditions that affected and are affecting many, many small and micro cap exchange listed companies even today. And then I'd like to discuss the strategies that we employed and the changes we've made that underlie the impressive results we're now seeing in the business.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

I'll also touch on the strategies we employed that resulted in what I'm proud to state is a well cash infused, extremely healthy debt free balance sheet and a super clean cap table, the combination of which provide the all important foundation for the impressive revenue growth we're now enjoying. All right, let's jump in. Historically, we were an R and D driven technology business built around a SaaS platform with a customer base that was comprised of for the most part direct sales companies or as they are sometimes referred to multi level marketing companies. Well, when we entered the market with our interactive video based sales software, we set out to become the dominant player in the sector and we did. What we saw at that time was the opportunity to address a market that included the large scale sales teams, including tens of thousands of independent sales reps that these companies managed, all of whom needed a simple and effective mobile based sales tool.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Over time, we learned some valuable lessons. First, while we onboarded large numbers of new sales reps every month, the attrition rate among sales reps at these companies was extraordinarily high, making it difficult and costly to generate meaningful revenue growth. In addition, while we developed what we believe were extremely effective sales tools to help sales reps even inexperienced sales reps generate and convert sales leads, outdated internal communications policies that these companies prohibited us from communicating these tools and how to use them directly to the fields of sales reps, which may have curtailed much of the sales rep attrition as the companies that manage these reps were often ineffective at doing so themselves. Finally, the ever changing nature of the customer base we served as well as the given away below cost pricing models adopted by competitors who found themselves marginalized by our superior product offering required continued costly R and D expenditures and continued returns to the capital markets. These factors coupled with what we perceive to be declining market multiples for SaaS businesses generally drove our decision to sell that business unit and focus instead on our new, though not yet revenue generating, Market.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Live livestream shopping business, a bold move indeed, but one that has certainly proven now to have been in the best interest of our shareholders. So this was the first prong of our multi pronged strategy to restructure, reconstitute and reinvent VERB. The next prong of our strategy was to insulate ourselves from the predatory financing terms imposed universally on companies like ours who relied on access to the capital markets to fund continued R and D and other growth capital requirements. Almost every finance initiative we undertook was fraught with last minute retrading of material deal terms, ridiculous warrant coverage terms and conditions, post deal financing exclusivity arrangements tying the company to bad financings into the future when additional capital was needed, all of which made us and so many other companies in the same situation perfect targets for short sell and for companies with any kind of trading volume, greed driven illegal, naked short sell. It wasn't hard to target companies that announced an upcoming financing as short sellers can be confident that deal terms and corresponding share prices would be below whatever the then current trading price was.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

This capital markets environment eroded share prices across the board, resulting in reverse splits required to maintain exchange listing requirements and destroyed cap tables and balance sheets, causing an unprecedented level of exchange delistings. Ultimately, it was the individual retail investors left without sufficiently aggressive regulatory intervention who bore the brunt of this market activity and still do. To avoid this awful outcome, we developed a unique strategy to utilize Reg A to structure our capital raise initiatives and avoid the predatory hedge fund investors, allowing us to issue straight common shares priced at the market with no warrant coverage and no investment banking fees. This financing vehicle unique for publicly traded companies among other financing strategies that we utilized, allowed us to pay off all of our debt, redeem all of the previously issued preferred shares, completely restructure our balance sheet, adding it with cash, taking shareholder equity from almost $2,000,000 negative in June 2023 to more than $16,000,000 positive in December 2024 and giving us a cash runway conservatively assuming zero revenue growth well into 2028 and beyond. The shareholder approved reverse split we did last year resulted in an extremely tight less than 1,000,000 share float and essentially eliminated all of the warrant overhang from the years ago predatory financing.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

We are very proud of how well that series of initiatives was executed, completing that important second prong of our multi pronged strategy to restructure, reconstitute and reinvent Burbn. The next prong of our strategy was to diversify our revenue streams to insulate ourselves from changes in the market, including economic and regulatory changes as well as changes within our own customer base and demand for our products and services. So the challenge was to identify and develop independent yet complementary revenue producing business units that could leverage the cost savings produced by a unified internal finance, sales, marketing and technology department structure utilized by and across all the business units. We're recognizing that the core of our business was our interactive social video commerce technology and know how, our strategy was to exploit those capabilities by entering the exploding telehealth industry leading to the development and launch of Vanity Prescribed, followed by Good Girl RX in partnership with TV and social media celebrity Savannah Chrisley. And then the development and launch of GoFund Yourself, a very exciting fast growing crowdfunding marketing platform.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

So to give a sense of the revenue potential for GoFund Yourself, we launched it in Q3 with little to no marketing and we recognized 25,000 in revenue. Okay. And then in Q4, we recognized $233,000 in revenue. And if any of the more recent developments come to fruition for the show, 2025 may be an extraordinary year for GoFund Yourself and Verb stockholders. Vanity prescribed was in development during Q3 and Q4, identifying suppliers, onboarding suppliers, then replacing suppliers, developing our online patient screening and prescription approval process, customer service and support and shoring up our supply chain and anticipation of participating in the extraordinary growth of the telehealth space following the introduction and rapid adoption of the new GLP-one weight loss drugs.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Revenue though now growing was modest through that period and we're excited for a broad based launch and marketing campaign that is about to get underway. As to Market. Live, at the end of Q3, we changed our focus and product offering by providing what we believe is an industry leading end to end solution for brands, seeking to adopt a social commerce strategy that they cannot manage in house on a cost effective basis. That strategy has proven to be enormously successful producing exponential revenue growth. As reflected in our 2024 Form 10 ks filed today, in Q1, we generated revenue of just $7,000 In Q2, we generated revenue of $37,000 In Q3, we generated revenue of $103,000 And in Q4, we generated revenue of $490,000 an impressive and most welcomed trend by anyone's standards.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Combined 2024 revenue was $895,000 an increase of $832,000 over 2023, representing revenue growth of 1321% over that period. This performance is the greatest amount of revenue generated since the strategic sale of the company's direct sales SaaS business unit in June 2023. Okay, looking at Q4 alone, we generated $723,000 an increase of $694,000 over the same periods last year, representing revenue growth of almost 2400% over that period. And as compared to Q3 twenty twenty four, revenue in Q4 increased by $595,000 representing growth of almost 465% quarter over quarter. Okay.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

So while we historically don't provide going forward guidance, we are very comfortable sharing our expectation that Q1 twenty twenty five will surpass Q4 twenty twenty four. Finally, as to the last prong of our multi pronged strategy to restructure, reconstitute and reinvent Verb, we recognized that any business that fails to identify and develop an artificial intelligence strategy will be marginalized. And with that in mind, we explored a number of different strategies, including developing our own AI capabilities in house, which we smartly rejected and instead we scoured the market for a company with a developed tested proprietary AI solution uniquely tailored to video based social commerce. Upon testing the AI and social commerce capabilities of Livecom, a leading edge video based social commerce startup, but we entered into a licensing agreement to incorporate that technology into our market. Live platform.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

Well, to our great surprise, we found that the integration of Livecom's tech resulted in a massive operational cost reduction. In fact, we anticipate a direct operational cost reduction of approximately $1,000,000 per year. However, perhaps more importantly, we also recognized that the addition of Livecomm's technology created an entirely new updated platform feature rich with capabilities far beyond our then current platform and certainly beyond that of many other social commerce platforms. So rather than simply license the technology and risk that Livecom would be acquired by a competitor, limiting our access to the technology and future iterations of it, we decided to acquire it ourselves. And it is our expectation that the acquisition will be highly accretive and produce meaningful value for Verb's stockholders.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

With the closing of the LiveCom acquisition, which remains on track and is expected to occur in the coming weeks, we will have effectively completed the transition of Verb from an unprofitable cash hungry business in a challenging market to an extremely well capitalized, well diversified business with proven strong fast growing revenue generation capabilities and AI ready with a tight float, clean cap table and debt free balance sheet poised for meaningful continued growth. In closing, I refer you to our 10 K filed today for greater details concerning our 2024 financial results as well as the press release we distributed today summarizing those results for additional information I've not covered in my conference call today because I've chosen instead to use this time to provide context to those results and share our strategies and ongoing initiatives for continued growth and value creation for Verb stockholders. And finally, and as anyone who could read a balance sheet could see, with under 1,000,000 shares issued and outstanding as of 12/31/2024, and debt free with more than million dollars in cash and highly liquid securities and assuming zero value given for our three revenue generating business units, I would be remiss if I didn't point out that our net cash value per common share is at least $13.5 which we believe represents a very compelling opportunity, very compelling indeed.

[Rory Cutaia, Founder, Chairman, President, CEO & Secretary at Verb Technology]

I thank you for allowing me to address you all today and share with you our excitement and optimism for Verb shareholders now and into the future.

Participants

Executives

• Rory Cutaia, Founder, Chairman, President, CEO & Secretary