iPass Inc. (IPAS)
Q2 2012 Earnings Call
August 7, 2012, 05:00 pm ET
Anitha Gopalan - Director, Finance & IR
Evan Kaplan - President & CEO
Steven Gatoff - SVP & CFO
Donna Jaegers - D. A. Davidson
Scott Searle - Unterberg Capital
Marc Silk - Silk Investment Advisors
Kevin Henehan - KMH Capital Advisors
Previous Statements by IPAS
» iPass CEO Discusses Q1 2012 Results - Earnings Call Transcript
» iPass's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» iPass CEO Discusses Q3 2011 Results - Earnings Call Transcript
» iPass' CEO Discusses Q2 2011 Results - Earnings Call Transcript
Good day and welcome to the iPass second quarter 2012 financial results conference call. Today’s conference is being recorded. At this time, I would like to turn the conference over to the company for opening remarks. Please go ahead.
Thanks operator. Good afternoon everyone and welcome to iPass second quarter 2012 earnings conference call. This is Anitha Gopalan, Director of Finance and Investor Relations. I’m here today with Evan Kaplan, President and CEO of iPass and Steven Gatoff, our CFO.
We have distributed our Q1 earnings release over the wire services and have posted it on our website at investor.ipass.com. Please also refer to our website for our updated company presentation which also includes Q2 financial results.
This call is also being webcast at investor.ipass.com. A replay of this call will be available on our website for one quarter until the next earnings call. Please note that this webcast is the property of iPass and any copying or rebroadcast without the expressed prior written consent of iPass is prohibited.
Before we get started, we want to emphasize that some of the information and statements you will hear during our discussions today will consist of forward-looking statements, including without limitations, those regarding our expected performance of the business, revenue and operating model targets. These statements involve risk and uncertainty that could cause actual results to differ materially.
These forward-looking statements reflect our opinion only as of the date of this presentation and we undertake no obligation to revise or publicly release the results or make any revisions to these forward-looking statements in light of new information or future events. Please refer to our SEC filings for a more detailed description of the risk factors that may affect our results.
On this call, we will also provide and talk about our results using non-GAAP financial measures. Our GAAP results and reconciliation of non-GAAP to GAAP measures can be found in our earnings press release.
Before I turn the call over to Evan, we would like to note for you that iPass management will be meeting with investors and analysts in New York during the week of September 10th, and will be presenting at the ThinkEquity Growth Conference in New York on September 12th. If you are interested in connecting with us please feel free to send us an email at firstname.lastname@example.org.
With that, I would like to turn the call over to Evan.
Thanks Anitha. Good afternoon everyone. It’s good to talk to you today; thanks for joining us. We are now at the halfway point in our fiscal year and before I talk about our business and the progress we’ve made this past quarter I think it’s helpful to reiterate and level set the key value drivers for our stockholders; how they have been growing and importantly our expectation of further expansion in the second half of the year.
There are four key value drivers that I would like to highlight. First on the list is always users. Utility of our platform to end users is a source of all strategic and financial value. Specifically, we target the growth and monetization of open mobile enterprise users as we execute on the important migration from the legacy iPC platform to Open Mobile and strongly position our enterprise business for growth.
Second, we look for our OMX, WiFi roaming and exchange business to dramatically expand our market and value creation opportunity AS we move forward and put iPad’s at the center of the market we expect will grow significantly for many years to come.
Third, we focus on strengthening our competitive advantage with continued investments in our unique foundation of assets, specifically our Open Mobile mobility platform, our global authentication and transaction settlement infrastructure and our growing WiFi network footprint. We strongly believe we build strategic value and create barrier-to-entry for would be competitors with each new customer, each new interconnect and each new supply partner.
And finally and perhaps most important to you, we are very focused on delivering financial value as we drive growth in our core Open Mobile business expressed in terms of profitability, cash flow generation and revenue growth as we exit 2012.
I would like to now discuss our progress with regard to these value drivers. I’ll start by reaffirming the guidance we provided and have been executing to. Explicitly, as we laid-out in February, we expect to end the year with adjusted EBITDA profitability, positive cash flow generation, significant growth in the core Open Mobile business and sequential revenue growth for the entire company. In addition, we expect to continue to announce strategic OMX platform wins throughout the remainder of the year and begin to see a revenue ramp on OMX as we exit the year.
And then finally, and importantly, we expect to meaningfully exceed the year-end 300,000 or so Open Mobile active user target that we previous communicated. While we’re encouraged with this progress and the way we’re managing the risk associated with the declining legacy business, we always feel that we can do more, better and faster. And with that balance, I would like to go to our progress this quarter on each our businesses.