WidePoint Q4 2024 Earnings Report

WidePoint EPS Results

• Actual EPS: N/A
• Consensus EPS: -$0.01
• Beat/Miss: N/A
• One Year Ago EPS: N/A

WidePoint Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $37.79 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

WidePoint Announcement Details

• Quarter: Q4 2024
• Date: 5/15/2025
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

WidePoint (NYSEAMERICAN:WYY) provides technology management as a service (TMaaS) to the government and business enterprises in North America and Europe. It offers TMaaS solutions through a secure federal government certified proprietary portal and secure enterprise portal that provides ability to manage, analyze, and protect communications assets, as well as deploys identity management solutions that provides secured virtual and physical access to restricted environments. The company's solutions includes telecom lifecycle management that provides customers a full visibility of its telecom assets; and mobile and identity management, a multifactor authentication solution to conduct business through a secure portals, as well as mobile security solutions that protects users, devices, and corporate resources, including effective mobile program policies. It also offers digital billing and analytics solutions to large communications service providers that enables its customers to view and analyze the bills online. In addition, the company provides IT as a service, including cybersecurity, cloud services, network operations, and professional services; outsourcing solution; development operations support, artificial intelligence implementation, and the Microsoft stack of technologies; and migration to the cloud services. WidePoint Corporation was founded in 1991 and is headquartered in Fairfax, Virginia.

WidePoint Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good afternoon.

[Operator]

Welcome to the WidePoint's Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. My name is John, and I will be your operator for today's call. Joining us for today's presentation are WidePoint's President and CEO, Jin Kang and Chief Revenue Officer, Jason Holloway and Chief Financial Officer, Robert George. Following their remarks, we will open the call for questions from WidePoint's publishing analysts and major investors. If your questions were not taken today and you would like additional information, please contact WidePoint's Investor Relations team at wyygateway grp dot com.

[Operator]

Before we begin the call, I would like to provide WidePoint's Safe Harbor statement that includes cautions regarding forward looking statements made during this call. The matters discussed in this conference call may include forward looking statements regarding future events and future performance of WidePoint Corporation that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10 ks filed with the Securities and Exchange Commission. Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website at www.widepoint.com. Now I would like to turn the call over to WidePoint's President and CEO, Mr.

[Operator]

Chin Keng. Sir, please proceed.

[Jin Kang, President and CEO at WidePoint]

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to review our financial and operational results for the fourth quarter and full year ended 12/31/2024. Before going into details of our 2024 results, I will briefly address the cost for the delay in our earnings call. As you have probably gathered from the SEC Form 12b-twenty five filed on March 31, we requested and received an extension to file our 10 ks. Subsequently, we have filed our 10 ks timely.

[Jin Kang, President and CEO at WidePoint]

Bob will provide further details, but briefly, WidePoint experienced significant growth in 2024, including a surge in the number of new customers, some with more complex terms. This increased activity caused the planned completion of our external audit to be delayed. We appreciate your understanding, and we prioritize quality and transparency in our reporting. As you can see from our filing, our audit opinion contains no qualifications. Now with that out of the way, let me move on to our operational highlights for 2024.

[Jin Kang, President and CEO at WidePoint]

We entered 2024 with three key goals: continuing our sales and marketing investments, enhancing operational execution, and driving technical innovations. I am pleased to share that we not only achieved but surpassed our expectations for all three of our goals. Our sales and marketing investments and operational execution deliver exceptional results for both the quarter and the year. I am pleased to report another quarter of year over year improvements in our financial performance. We closed out 2024, exceeding our revenue guidance, delivering approximately $142,600,000 for the year, a 35% increase compared to 2023 full year results, and exceeding our adjusted EBITDA and free cash flow guidance, recording $2,600,000 of adjusted EBITDA and $2,500,000 in free cash flow.

[Jin Kang, President and CEO at WidePoint]

We achieved our thirtieth consecutive quarter of positive adjusted EBITDA and fifth consecutive quarter of being free cash flow positive. For the year, we secured $51,200,000 in total contract value with $45,600,000 awarded by federal agencies and 5,600,000.0 from commercial organizations. The growth in our commercial contract awards is particularly noteworthy and encouraging. And our commercial sales pipeline remains strong, something Jason will discuss shortly. While the success of our sales and marketing investments, operational execution, and financial performance are all encouraging signs for us, our most significant achievements came from our technical developments and advancements.

[Jin Kang, President and CEO at WidePoint]

Last July, we officially launched our new proprietary mobile anchor solution, and more recently in February, our new M365 analyzer. Jason will provide an update on these two solutions and some of the plans we have in store for 2025. Most notably, after more than three years of dedicated team effort, WidePoint achieved a long awaited FedRAMP authorized status for Intelligent Technology Management System, or ITMS, marking a major milestone in our commitment to security and innovation. Though we announced our FedRAMP news via press release, I'd like to take a moment to highlight its true impact on WidePoint. FedRAMP is a US government wide program that established a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.

[Jin Kang, President and CEO at WidePoint]

Achieving FedRAMP authorized status is a major milestone that sets WidePoint apart in the marketplace. This certification validates our ITMS solutions, meet stringent federal cybersecurity standards, and reinforces our commitment to protecting customer data with industry leading security measures. ITMS is now listed on the FedRAMP Marketplace, making it accessible to federal agencies across various business categories. This opens new doors for YPoint, further expanding our sales and marketing reach and unlocking contract opportunities that were once beyond our grasp. This FedRAMP authorized status also positions YPoint favorably for major upcoming contracts, such as the DHS CWMS three point o recompete, the Decennial Census 02/1930, and NASA SEWP six among others.

[Jin Kang, President and CEO at WidePoint]

This milestone strengthens our long term growth potential and further solidifies YPoint as a trusted partner for government enterprise cybersecurity solutions. Jason will expand upon the DHS CWMS three point zero recompete and discuss the US Navy Spiral four contract. As we near submission, we continue to make progress on Supe six and Alliant three. Again, Jason will expand upon both contracts in his prepared remarks. In late January, we announced the complete integration of IT Authority into the WidePoint brand.

[Jin Kang, President and CEO at WidePoint]

Over the past three years since acquiring ITA, we've successfully integrated our solution sets and have been operating at full capacity. With the earn out agreements now concluded, this integration has streamlined our organization, which has enabled us to respond quickly to customer needs and enhance our ability to capture new customers while increasing wallet share with existing ones. Although we have been upselling and cross selling our solutions, the full integration allows WidePoint solutions to now be seamlessly layered on top of ITA's offerings. This will enable even more effective upselling and cross selling efforts, further strengthening our market position. Lastly, as of 12/31/2024, our contract backlog stood at approximately $290,000,000 This number did not include our recent SPIRO-four task order award for 25,000,000 Our sales pipeline continues to remain healthy across all sectors, and we are optimistic about continuing to grow our backlog throughout 2025 and beyond.

[Jin Kang, President and CEO at WidePoint]

With that, I will now hand the call over to Jason, who will speak further about the sales and marketing pipeline and specifically the opportunities we are seeing in the commercial sector. Jason?

[Jason Holloway, Chief Revenue Officer at WidePoint]

Thanks, Jen, and good afternoon, everyone. Over the past year, we have successfully developed and launched our new Mobile Anchor digital credential solution, offering the most secure level of multifactor authentication through smartphones. We have already secured two contracts with both federal defense and civilian agencies. We also launched the M365 analyzer solution for our Microsoft clients, delivering a unique dashboard, detailing volumes and costs with clear ROIs and actionable insights, as well as a license management module to manage the challenges of optimizing Microsoft three sixty five identifying expense savings. Regarding the CWMS 3 dot 0 recompete, with the previous two dot o contract is set to conclude in November of this year.

[Jason Holloway, Chief Revenue Officer at WidePoint]

We are actively preparing for the next phase and have already responded to the request for information in August of twenty twenty four. WidePoint is in a very strong position to secure this contract. Thanks to several key advantages. Our authorization to operate from DHS combined with our proven track record of excellence positions us as the ideal candidate. Additionally, the seamless integration and alignment of our systems and processes with DHS infrastructure further strengthens our bid.

[Jason Holloway, Chief Revenue Officer at WidePoint]

Our certifications and accreditation, many of which our competitors cannot match along with our newly achieved FedRAMP authorized status gives us a significant competitive edge. Given our industry leading technologies and our past performance, we remain confident in our ability to secure the CWMS three point zero contract and continue our long standing partnership with DHS. Last month, we announced our exciting new task order award under the US Navy Spiral four contract vehicle to provide managed mobility services to a combat support agency within the US Department of Defense. This task order carries an annual value of approximately 2,500,000.0 with one year base period and nine additional one year option periods totaling a potential value of 25,000,000 if all options are exercised. As a reminder, WidePoint is competing against six other companies within the spiral for contract vehicle, including the big three US wireless carriers.

[Jason Holloway, Chief Revenue Officer at WidePoint]

Winning this task order shows our ability to compete with industry giants and highlights the unique and differentiated solutions we bring to the table. We are honored to support the US military mission and take great pride in being a trusted partner of the DoD. This award is an encouraging sign of momentum within Spiral four and with many past task orders set to expire under spiral three contract in the coming months, we hope to see increased activity and additional opportunities developed through this contract vehicle. We continue to make progress in early stages of the SOAP six contract as we near the submission of our proposal. Additionally, WidePoint is preparing to compete for the Alliant three contract, a government wide acquisition contract managed by GSA, which provides federal agencies with access to a broad range of IT services and solutions.

[Jason Holloway, Chief Revenue Officer at WidePoint]

The Alliant three has no contract ceiling, though for context, its predecessor Alliant two had a $75,000,000,000 contract ceiling. We are actively working on our response to the request for proposal and look forward to sharing material updates as progress unfolds. Jen will outline our goals for 2025 at the end of today's call, but I'd like to highlight one in particular, leveraging strategic partnerships. This goal is closely aligned with our sales and marketing initiatives as forming partnerships enables us to leverage shared client networks, expand our customer base and ultimately grow revenue. Early stage examples of this includes the direct to consumer program with a mobile virtual network operator for Mobile Anchor.

[Jason Holloway, Chief Revenue Officer at WidePoint]

Additionally, the success of our devices and service program we mentioned during our last earnings call will also depend on building these types of strategic alliances. We are also working with a strategic partner to deliver our identity and access management certificates as part of a smart city initiative. Encouragingly, the primary opportunities in this area are with commercial clients, which supports our broader goal of diversifying beyond government customers. Device as a service continues to gain very strong momentum with our longstanding and exceptional partner. I hope to have some exciting news by the next call regarding the potential closure of some deals.

[Jason Holloway, Chief Revenue Officer at WidePoint]

The robustness of our sales pipeline is a direct result of our innovative development of our WidePoint proprietary solutions, our sales team and our strategic partnership. And we look forward to announcing further innovations and new contract wins in the near future. With that, I will now turn the call over to Bob to discuss our financial results. Bob?

[Robert George, Executive VP & CFO at WidePoint]

Thanks, Jason, and thanks to everybody for joining us today. I'm pleased to share the details of our financial results for the fourth quarter and the full year ended 12/31/2024. As Jen mentioned at the outset of this call, the delay on our 10 ks filing was primarily a result of growth in our business and the complexity of new contracts that began in 2024. As a result, the annual audit field work took longer than planned, and we appreciate everyone's understanding as we prioritize quality and transparency in our reporting. We did in fact file our Form 10 ks timely under the permitted extension.

[Robert George, Executive VP & CFO at WidePoint]

And just as important, the associated audit report had a clean opinion. Further, no previously issued financial statements were impacted. Now, moving into the financial performance details. Total revenues for the quarter were $37,700,000 an increase of $9,400,000 from the $28,300,000 reported for the same period last year. Our full year revenues were $142,600,000 an increase of 36,600,000.0 or 35% from the $106,000,000 in the same period last year.

[Robert George, Executive VP & CFO at WidePoint]

Now I'll provide a further breakdown of our fourth quarter and full year revenue. Our carrier services revenues for the quarter was $24,600,000 an increase of $8,900,000 compared to the same period in 2023. Carrier services revenue for the year was $86,800,000 an increase of $28,600,000 compared to the same period last year. Increase is due to increased contracting activity with our federal customers where we pay carrier invoices on behalf of those customers. Our managed services fees for the quarter were $9,400,000 and relatively consistent with the same period in 2023.

[Robert George, Executive VP & CFO at WidePoint]

For the year, our managed services fees were $35,800,000 an increase of $4,500,000 last year. The increase was primarily a result of implementing a new commercial contract for a US government end customer in the third quarter and the full year execution on our FEMA contract. Billable services fees for the quarter were 1,000,000, an increase of 700,000 compared to the same period in 2023. For the year, billable services fees were 5,100,000.0, a slight increase of approximately 147,000 from the same period last year. Reselling and other services in the fourth quarter were 2,700,000.0 and relatively consistent with the same period last year.

[Robert George, Executive VP & CFO at WidePoint]

For the year, reselling and other services were $14,900,000 an increase of $3,400,000 from the same period last year. The increase is primarily related to increased selling of third party software for recording and storing text messages, which is now required under an expansion of the Federal Records Act. Reselling and other services are transactional in nature and the amount and timing of revenue may vary significantly from period to period. Gross profit for the fourth quarter was $4,800,000 or 13% of revenues compared to $4,000,000 or 14% of revenues in the same period in 2023. Gross profit for the year was $19,000,000 or 13% of revenues compared to $15,600,000 or 15% of revenues in 2023.

[Robert George, Executive VP & CFO at WidePoint]

The lower gross margin as a percentage of revenues is related to increased carrier services in 2024 compared to 2023. The more significant metric of gross profit percentage excluding carrier services was 36% in the fourth quarter compared to 32% in the same period last year. For the year gross profit percentage excluding carrier services was 34% compared to 33% in the same period last year. Our gross profit percentage will vary from period to period based on our revenue mix. Sales and marketing expenses in the fourth quarter was $560,000 or 1% of revenues and remained relatively constant with the same period last year.

[Robert George, Executive VP & CFO at WidePoint]

Sales and marketing expenses for the year were $2,300,000 or 2% of revenues compared to $2,200,000 and 2% of revenues in the same period last year. We expect to see further dollar increases here as we continue to invest in sales and marketing efforts, though we expect sales and marketing to be lower as a percentage of revenues in the future. General and administrative expenses in the fourth quarter were 4,300,000.0 or 11% of revenues compared to 4,200,000.0 or 15% of revenues in the same period of 2023. General administrative expenses in the year were 17,600,000.0 or 12% of revenue compared to $15,900,000 or 15% of revenue in 2023. The dollar increase primarily relates to employee compensation and increased health insurance costs compared to the same period last year.

[Robert George, Executive VP & CFO at WidePoint]

We expect general and administrative expenses to increase as our business grows, but to remain constant or lower as a percentage of revenue. Adjusted EBITDA, a non GAAP measure for the fourth quarter was 631,000 compared to 423,000 for the same period last year. Adjusted EBITDA for the year was 2,600,000 compared to 791,000 in the same period last year, reflecting a robust 229% increase over the prior year. Free cash flow for the quarter, which we define as adjusted EBITDA minus capital investments, $593,000 compared to $300,000 in the same period last year. This marks a full year of positive free cash flow, which is a trend we expect to continue into 2025 and beyond.

[Robert George, Executive VP & CFO at WidePoint]

Free cash flow for the year was $2,500,000 compared to negative free cash flow of approximately $300,000 in the same period last year, representing a 933% increase. Again, these significant improvements over periods were a result of increased adjusted EBITDA and lower capital expenditures. We're continuing to see significant reductions in our net loss period over period. Net loss for the fourth quarter improved to $356,000 or a loss of $04 per share compared to a net loss of 1,300,000 or a loss of $0.15 per share for the same period last year. Net loss for the year improved by $2,100,000 to a net loss of $1,900,000 or a loss of $0.21 per share compared to a net loss of $4,000,000 or a loss of $0.46 per share in the same period last year.

[Robert George, Executive VP & CFO at WidePoint]

Moving to the balance sheet, we ended the year with $6,800,000 in cash, steadily improving from last quarter and staying consistent with our cash balance from the end of twenty twenty three. We are continuing to work with a major customer that has presented administrative challenges in approving our invoices to allow us to bill timelier and increase our cash generated from operations. We also have additional liquidity options available with our revolving line of credit facility, which was renewed in February. The terms of this new agreement are unchanged from the previous agreement. The revolving line of credit provides us with $4,000,000 of potential borrowing capacity, although we do not anticipate having to rely on this facility.

[Robert George, Executive VP & CFO at WidePoint]

This completes my financial summary. For a more detailed analysis of our financial results, please refer to our 10 ks, which was filed prior to this call. With that, I'll turn the call back over to Jim.

[Jin Kang, President and CEO at WidePoint]

Thank you, Bob and Jason. Given the recent nationwide news and developments, I'd like to address the current situation with the federal government pertaining to their ongoing budget cuts. At this time, the agencies we support are largely insulated from these cuts, and we anticipate they will continue to spend at the rate they have done so previously. We remain cautiously optimistic that these government wide cuts in the near term will not impact WidePoint's business with government agencies, nor our ability to execute our contract pipeline and secure new government work. A clear example is our recent task order award under Spiral four contract totaling $25,000,000 over a 10 contract period.

[Jin Kang, President and CEO at WidePoint]

Despite the potential budget cuts, the department we support are expected to continue spending at their usual rate. For additional color, our services are must haves for the government, not nice to haves. WidePoint distinguished ourselves through a deep rooted commitment to cost saving strategies, seamlessly integrated into our company's culture. Our focus on reducing expenses aligns well with the current presidential administration push to curb federal spending by tackling waste, fraud, and abuse, a philosophy we championed long before it gained widespread recognition. Through our services, we deliver significant cost savings for our government clients, and our mission is closely aligned with the current administration's focus on government efficiency.

[Jin Kang, President and CEO at WidePoint]

Even with projected cuts, essential government work will need to be done. The contractors will inevitably take on a portion of this work. I am cautiously optimistic that these budget cuts will not pose headwinds for our business, and we remain committed to executing our services to the same level of efficiency and performance we always have. Before we move on to the Q and A section, I'd like to outline our primary goals for 2025. First, we aim to expand our strategic relationship with our existing partners as well as new partners to leverage shared client networks, expand our customer portfolios, and grow our contract backlog even further.

[Jin Kang, President and CEO at WidePoint]

As Jason stated, we've already begun developing new partnerships with the device as a service program, opportunities with the new presidential administration, and our direct to consumer program with a mobile virtual network operator partner for Mobile Anchor. The demand for Mobile Anchor remains strong, and while we are still in the early stages of many opportunities, we're excited to fully commercialize this solution in 2025. While pursuing new strategic partnerships is essential for growth, expanding and deepening our collaboration with existing partners is equally important. These relationships are already built on a foundation of trust and proven performance, and we see clear synergies that we can further leverage to unlock additional value, drive innovation, and accelerate mutual success. Second is to prepare for the DHS CWMS three point zero recompete.

[Jin Kang, President and CEO at WidePoint]

Although we are the incumbent contractors are in the best position to re win this opportunity, we are not resting on our laurels. It will be a full court press on our part to ensure that we re win this opportunity. We have already formed a proposal team to address all of the requirements that we anticipate will be part of the RFP process. To reiterate, we are confident that our solution sets, proven track record with DHS, our FedRAMP authorized status, and innovative offerings will position us for success in this recomplete process. Third, commercialization of our newly developed solutions, particularly Mobile Anchor and M365 Analyzer, will be another point of focus for us this year.

[Jin Kang, President and CEO at WidePoint]

As Jason highlighted, forming strategic partnerships will be key in securing a significant share of the mobile digital credential market, as well as unlocking substantial cost saving opportunities for our clients in the Microsoft three sixty five environment, both in the public and private sectors. Finally, as previously stated, our goal remains to deliver positive earnings per share for the full year 2025. The progress we made driven by technological innovations, strategic sales and marketing investments, strong performance across all of our business lines, and judicious cost management have positioned us well to maintain our growth trajectory and reach this goal. That concludes our prepared remarks, and we will now take questions from our analysts and major shareholders. Operator, will you please open the call for questions?

[Operator]

Thank you. At this time, we will be conducting a question and answer you. Our first question comes from Scott Buck with H. C. Wainwright.

[Operator]

Please proceed.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Hi, good afternoon guys. Thanks for taking my questions.

[Robert George, Executive VP & CFO at WidePoint]

Good afternoon, I believe

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

last call you indicated that you had one or two federal agencies in pilot mode with Mobile Anchor. I'm curious if we could get an update there and maybe with some of the feedback that you guys have gotten to date.

[Jin Kang, President and CEO at WidePoint]

Yeah, so we are in the, we completed our pilot with, I can't name the name, but I will tell you that it is one that's been in the news lately has to do with some transportation industry. But that is going well and we're looking to increase the number of credentials that are going to be issued onto these mobile devices. And so we are continuing the progress that we also have another agencies that we are looking to that's related to the K-twelve. And the K through twelve was a vocal supporter of this technology. And hopefully we'll be able to roll that out as part of our partnership with twenty two vets.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Great, that's helpful. And it sounds like from your comments that you don't see any kind of long term detriment given some of the activity in Washington, but I'm curious just the turnover in administration, whether you're seeing any disruption or delays in your conversations with folks there. Just wondering how it impacts the first half of twenty five, I guess.

[Jin Kang, President and CEO at WidePoint]

Yeah, so far we haven't seen any negative impacts from all of the efficiency efforts that are happening. And we are on these long term contracts with the federal government. That doesn't mean that the federal government cannot terminate any contract for convenience and they've done so with various agencies. And so we're very careful. We're keeping our eyes and ears, eyes open and ears open just to make sure we can get this information ahead of time.

[Jin Kang, President and CEO at WidePoint]

But so far, we've been insulated, as I said in our prepared remarks. And the agencies that we work for, Department of Homeland Security specifically, will probably get additional mission as they've been in the news for a while about closing down the border. And one of the primary customers that we support is the part of DHS, Customs and Border Protection. And so we've been talking with our counterparts at DHS, looking at potential increases in the amount of services that they purchase from us. So we're optimistic.

[Jin Kang, President and CEO at WidePoint]

The other customers like Department of Defense and Department of Justice, these are all sort of protected, if you will. But there are things that are changing in Washington. There's talks about all of the contracts department falling under GSA and a lot of the contracting departments within the various other agencies being consolidated in under GSA. So a lot of the contracting acquisition and competition will be conducted by GSA. And so we're not quite sure exactly what that means, but we're following it very carefully.

[Jin Kang, President and CEO at WidePoint]

There is also talks of streamlining the federal acquisition regulations, streamlining the FAR to remove what they call non statutory clauses, and placing them into a best practice volume. And what that means so far is that that should open up the competition to more contractors and potentially shorten the acquisition cycle and streamline it. But still very hard to gauge. But we are keeping a close eye on all of the developments that are happening to make sure that we're not caught flat footed when things change.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Great. That's really helpful color. And then if I can sneak one more in. Looks like balance sheet cash has finished the year a bit higher than what we've seen in the past couple of quarters. First, what is the CapEx outlook for '25?

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

And then how do you think about kind of cash deployment through the year? I mean, are we talking about repurchase, M and A or we just continue to kind of fortify the balance sheet?

[Jin Kang, President and CEO at WidePoint]

Yeah, so I'll start off the answer and then I'll have Bob weigh in here. Our cash balance is a little bit better than what it was at the end of year last year. And admittedly, I think it was about the same as last year and admittedly, it should be better based upon our free cash flow metric. And the reason for, and not being somewhere between 9 or 10,000,000, it has to do with, we had some unbilled issues and that we're working through and I believe that that was addressed in Bob's prepared remarks. And we are making good progress on that.

[Jin Kang, President and CEO at WidePoint]

So we should see cash position improvement and we'll continue to quote unquote, fortify our balance sheet. And we're going to continue to do that. In terms of our CapEx, we don't have any material items that are sitting out there other than the usual O and M type of stuff that we may have to put some investment in. So with that, let me just turn it over to Bob with some additional details. Bob?

[Robert George, Executive VP & CFO at WidePoint]

Sure. Hi, Scott. I think from a CapEx, we did a pretty good job last year of really tightening the belt. We'll see a little bit more this year, but no, I mean, maybe 200, something like that. It's nothing like in the past.

[Robert George, Executive VP & CFO at WidePoint]

And it's a lot of that's gonna be some build out of the new facility that we took in Columbus for the device and the service. So it's, you know, deployed on revenue making items, but so that model in $200.

[Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC]

Okay, perfect. Thanks guys. That's it for me and congrats on the results.

[Robert George, Executive VP & CFO at WidePoint]

Thank you.

[Jin Kang, President and CEO at WidePoint]

Great. Thank you, Scott.

[Operator]

Our next question comes from Barry Sign with Litchfield Hills. Please proceed.

[Barry Sine, Analyst at Litchfield Hills Research]

Hey, good afternoon gentlemen.

[Jin Kang, President and CEO at WidePoint]

Good afternoon, Mary and welcome back to The States.

[Barry Sine, Analyst at Litchfield Hills Research]

Thank you very much. Wanted to talk about Doge and I noticed that you do have a new risk factor in your 10 ks. But I didn't wanna talk about those from a risk perspective. I wanted to talk about it from an opportunity perspective. As you mentioned in the script, you were born for Doge, right, your services are perfectly aligned with what they do, especially as they're doing headcount reductions.

[Barry Sine, Analyst at Litchfield Hills Research]

I can only imagine what's happening with the devices of some

[Barry Sine, Analyst at Litchfield Hills Research]

of those

[Barry Sine, Analyst at Litchfield Hills Research]

folks. So a couple questions on Doge. First, your key agency is Department of Homeland Security, I believe. And do you have Border Patrol within that? And then within some of the other opportunities with Doge, have you gotten their attention?

[Barry Sine, Analyst at Litchfield Hills Research]

Do they know you exist? Have you been able to make a broader presentation on how you can assist some of these efforts with not just handset management, perhaps billing Yeah,

[Jin Kang, President and CEO at WidePoint]

and so great question. Thank you for that. And as I mentioned in our prepared remarks, I mean, why point has a deep rooted commitment to cost savings, especially saving taxpayers money because it's yours and my money. From the beginning, one of our primary focus have been to reduce technology spend. We were doge before doge became a household word.

[Jin Kang, President and CEO at WidePoint]

So, we are optimistic and we're trying through various avenues, get the attention of doge so that we can assist in identifying savings while at the same time, preserving government staff. I mean, we can do all of these savings without having to cut staff and we can help them do their jobs better. Specifically with the customs and border protection, they'll probably get additional mission and additional mission would be not only the addition of border guards, but also applying technology and wireless technology, cellular wireless technology, which is the scope of the contract, which is the cellular wireless managed services. And so things like drones and securing the drones and putting cameras with Internet of things and putting digital certificates on these devices that will increase the number of endpoints that we will manage. And that would help the CDP to help manage all of their devices.

[Jin Kang, President and CEO at WidePoint]

And another one that we've been trying to get some traction on is there have been many mobile devices and wireless devices that have handed out to undocumented migrants that are coming across the border for making sure that the courts can locate them to have them come to their court proceedings. And we don't know, at least I don't know how many of these devices have been handed out, what devices are being used, what devices have zero usage on them. We could do all of those things and find all of the provide all the data analytics associated with that. And so we've been trying to get access to Tom home and the folks over at the HS at the secretary level. I think we've gotten some little bit of traction, but it's too early to tell.

[Jin Kang, President and CEO at WidePoint]

But we are knocking on the doors of the various political operatives so that they could get us in the door to talk about the potential savings that we could provide.

[Barry Sine, Analyst at Litchfield Hills Research]

Okay, that's very helpful. And one more if I could shift gears and talk about the guidance that you're giving for 2025. You're not giving traditional numbers or even ranges. There's a couple of things you've You do expect to be positive on EPS for the full year. And then you also said that you expect to maintain your growth trajectory.

[Barry Sine, Analyst at Litchfield Hills Research]

Would that mean having the same growth rate as last year? Or I don't know what trajectory means.

[Jin Kang, President and CEO at WidePoint]

Excellent question. Always getting to the heart of the matter as they say. So in terms of, are one of the main goal that we have for 2025 is to be earnings per share positive. And as we actually had a forecast put together toward the end of last year, and then there's a lot of changes since then. And so we will put out a guidance for 2025.

[Jin Kang, President and CEO at WidePoint]

Once we get off, we'll have to dust off the forecast, roll in all of the things that happens between November and December and January and February. And we're closing the books on Q1. And so we will have guidance for top line and EBITDA and free cash flow. And when we say continue our trajectory, we've always quoted, we've always been quoted as saying, double digit percentage growth of our top line. And we should have similar growth in EBITDA and cash flow.

[Jin Kang, President and CEO at WidePoint]

But it's a tyrannies of small numbers for EBITDA and free cash flow. This year, year over year, free cash flow was up nine thirty three percent. And we were up 200 some percent for EBITDA. And so can we maintain that kind of increase? Possible certainly because our again, the numbers are small, but we'll have a better guidance ranges as we flesh out all of our things, all the things that happened Q4 and Q1.

[Jin Kang, President and CEO at WidePoint]

And we'll have to make sure that we analyze our forecast. Bob, did you want to add anything to that?

[Robert George, Executive VP & CFO at WidePoint]

No, I think you covered it all. Hey, Barry. I think we typically give guidance after the q one or as a part of the q one call. And so we would expect to give something similar to what we did last year. And as Jim said, we've got a lot of moving parts, but they tend to be moving in the right direction.

[Robert George, Executive VP & CFO at WidePoint]

Not all of them, but most of them. Doing good.

[Barry Sine, Analyst at Litchfield Hills Research]

And so just to clarify on that, there's a lot of companies during this earnings season who said because of the macro environment and the uncertainty that they're just not going to give them guidance this year. You sound to be and obviously you normally give your guidance with the 1Q call. You sound to be, you don't sound to be as uncertain as a lot of other companies out there. And as Bob just said, all the else being equal, likely we'll get some guidance with the one you Yeah,

[Jin Kang, President and CEO at WidePoint]

and I think, go ahead, Bob.

[Robert George, Executive VP & CFO at WidePoint]

I was just saying, I saw what United did before. I I feel like we're not, you know, subject to the consumer and everything we see demand signal from DHS is that and we have, you know, pretty good line of sight to the contract activity with our backlog and such. So, we'll be able to give some pretty confident guidance at Q1.

[Jin Kang, President and CEO at WidePoint]

Yeah. I mean, we ended 2024 with roughly $290,000,000 in contract backlog. So we'll be working down that contract backlog. So we have, as Bob said, we have a pretty good line of sight on our revenue coming in for 2025. And we had some additional with the spiral for, which is a big, big deal for us.

[Jin Kang, President and CEO at WidePoint]

It's 2,500,000.0 annually. And we're optimistic that we're going to get additional work out of the spiral for contract. We're going to continue to add incremental revenues to our top line. And we have a good base with our contract backlog. And so not everything is doom and gloom.

[Jin Kang, President and CEO at WidePoint]

I'm hoping that we could get in with Doge and capture some additional work there. And with our M365 Analyzer and our Mobile Anchor, these are new products that looks to have there's a lot of need in the market for our product and solutions. So we feel pretty good. And I think those will be more of a tailwind than a headwind for us.

[Barry Sine, Analyst at Litchfield Hills Research]

Thank you.

[Jin Kang, President and CEO at WidePoint]

Great. Thank you, Barry.

[Operator]

At this time, this concludes our question and answer session. If your question was not taken, please contact WidePoint's IR team at wyygateway grp dot com. I'd now like to turn the call back over to Mr. Jin Kang for his closing remarks.

[Jin Kang, President and CEO at WidePoint]

Thank you, operator. We appreciate everyone taking the time to join us today. As the operator mentioned, if there were any questions we did not address today, please contact our IR team. You can find their full contact information at the bottom of today's earnings release. Thank you again and have a great evening.

[Operator]

Thank you for joining us today for WidePoint's fourth quarter and full year twenty twenty four conference call. You may now disconnect.

Participants

Executives

• Jin Kang, President and CEO
• Jason Holloway, Chief Revenue Officer
• Robert George, Executive VP & CFO

Analysts

• Scott Buck, Managing Director & Senior Technology Analyst at H.C. Wainwright & Co., LLC
• Barry Sine, Analyst at Litchfield Hills Research