Latest / WTR Small-Cap Spotlight / Cloudastructure (CSAI): From Shell Casings to Safe Properties — Inside a 99% Retention AI Surveillance Platform

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Cloudastructure (CSAI): From Shell Casings to Safe Properties — Inside a 99% Retention AI Surveillance Platform · WTR Small-Cap Spotlight

• 0:01
  SPEAKER_02: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_02: I'm your host, Tim Gerdeman, Vice Chair and Co-Founder and Chief Marketing Officer of Water Tower Research.
• 0:10
  SPEAKER_02: Today I'm joined by James McCormick, Chairman and CEO, and Greg Smitherman, Chief Financial Officer of CloudAstructure, NASDAQ TickerSymbol C S AI.
• 0:20
  SPEAKER_02: Also joining is my WTR Equity Research Colleague, James Kisner.
• 0:24
  SPEAKER_02: CloudASTructure provides cloud native, AI-powered video surveillance and remote guarding solutions.
• 0:30
  SPEAKER_02: Its platform can work with customers' existing camera infrastructure or new installations, combining cloud video, AI analytics, and live remote intervention.
• 0:40
  SPEAKER_02: The company serves multifamily property managers and is expanding into commercial real estate, construction, critical infrastructure, transportation, and logistics.
• 0:49
  SPEAKER_02: Good morning, and thanks for joining us, both James's and Greg.
• 0:53
  SPEAKER_02: Good morning.
• 0:54
  SPEAKER_02: Good morning, Tim.
• 0:55
  SPEAKER_02: James, great to see you again.
• 0:57
  SPEAKER_02: And I'm excited to get an update from our last podcast recording.
• 1:01
  SPEAKER_02: For listeners who may not know Kata Structure, can you please provide a 30,000-foot overview of the company and what it does and perhaps talk about either major clients or major end market sectors the company is serving or pursuing?
• 1:13
  SPEAKER_03: Yeah, sure.
• 1:14
  SPEAKER_03: Sure, Tim.
• 1:15
  SPEAKER_03: Well, you, you, you, you, you took all of my summary in your introduction, but I'll try it a slightly different way.
• 1:23
  SPEAKER_03: So we are a ultimately we're a video surveillance company using sophisticated artificial intelligence to identify potential threatening activities and coordinating with uh remote guards or humans in the loop to uh evaluate what the AI has identified.
• 1:45
  SPEAKER_03: And what we find is that 98% of the time when those remote remote guards get involved, we stop the event from becoming something um uh more threatening, I guess you would say, which is one of the numbers we're incredibly uh proud of as a company.
• 2:03
  SPEAKER_03: And you know, as far as customers, you alluded to it at the front end.
• 2:07
  SPEAKER_03: Our main beachhead, if you will, is multifamily properties.
• 2:11
  SPEAKER_03: We work with eight of the top 10 and nine of the top 11 property management firms in the United States, including the top two.
• 2:19
  SPEAKER_03: We're in a small percentage of the portfolios of those people right now, today.
• 2:25
  SPEAKER_03: So in 2026 and beyond, we're we're both securing new logos as well as expanding into existing accounts.
• 2:35
  SPEAKER_03: And we think that holds a lot of future revenue potential for us.
• 2:39
  unknown: Great.
• 2:40
  SPEAKER_02: Well, thank you for that overview.
• 2:41
  SPEAKER_02: And I'd be remiss if I didn't say I think of the firm quite often since our last podcast because I'm starting to notice almost everywhere I travel around Miami, um, the portable, um, I don't know what they're properly called, you can speak to, but the portable uh devices where they elevate them a couple stories high.
• 2:55
  SPEAKER_02: They're in construction sites, concert venues, you name it.
• 2:58
  SPEAKER_03: Yeah, trailers.
• 2:59
  SPEAKER_03: Trailers.
• 3:00
  SPEAKER_03: Yes, yep.
• 3:00
  SPEAKER_03: Easiest, easiest way to put it, right?
• 3:02
  SPEAKER_03: Yeah.
• 3:02
  SPEAKER_03: Yes.
• 3:03
  SPEAKER_03: And basically, right?
• 3:05
  SPEAKER_03: I mean, we offer trailer trailers.
• 3:07
  SPEAKER_03: We have some new products that are in the pipeline uh that will uh that we think will be very, very popular in in some of the verticals you mentioned, like construction sites, those sorts of things.
• 3:19
  SPEAKER_03: But in essence, all those trailers are doing, they're doing exactly what we do in a fixed multifamily environment.
• 3:26
  SPEAKER_03: On top of that mast is where the brains reside, right?
• 3:31
  SPEAKER_03: So when we have the trailer system that we offer, on top of the mast is our cloud video recorder, cameras, uh strobe lights, speakers.
• 3:42
  SPEAKER_03: So it's it's it's it's a it's a mobile um uh it's a mobile solution that uses the exact same technology as our fixed solutions.
• 3:54
  SPEAKER_02: Without the hassles of human resource worrying about uh humans doing it.
• 3:57
  SPEAKER_02: So with that, I'll turn it over to James Kisner.
• 4:00
  SPEAKER_01: Thanks, Tim.
• 4:01
  SPEAKER_01: So um, and again, uh welcome to James and Greg.
• 4:04
  SPEAKER_01: So um, you know, let's talk about Q2.
• 4:07
  SPEAKER_01: So subscription subscription revenue grew 164% year over year uh to around uh 764,000.
• 4:15
  SPEAKER_01: It's about you know 62% of the total revenue um that you just reported.
• 4:19
  SPEAKER_01: So uh up to 27% versus a year ago um in terms of uh percentage of revenue.
• 4:25
  SPEAKER_01: Um while your annual revenue run rate uh for recurring revenue reached around 3.1 million.
• 4:32
  SPEAKER_01: So, what did the quarter tell you about how that business model is evolving?
• 4:36
  SPEAKER_03: Yeah, that's it's a very good question.
• 4:39
  SPEAKER_03: And I I think you'll find the answer perhaps a little bit strange.
• 4:43
  SPEAKER_03: Uh, it doesn't tell us much.
• 4:46
  SPEAKER_03: That's the easiest way to put it.
• 4:48
  SPEAKER_03: Uh Greg will get into it a little bit more, I think, later, but um I think what we saw in the first half of the year is that we had a significant number of takeover opportunities.
• 5:04
  SPEAKER_03: And that's exactly what it sounds like.
• 5:06
  SPEAKER_03: As opposed to new construction or a new installation, we actually are inserting our brains on top of existing customer infrastructure.
• 5:18
  SPEAKER_03: And um, right, so we we we don't get certain components of revenue, but we get the recurring revenue piece.
• 5:26
  SPEAKER_03: And frankly, that's just the way things went in the first half of the year.
• 5:30
  SPEAKER_03: We expect that it will change in the second half of the year uh to more traditional metrics that we have shown in the past.
• 5:39
  SPEAKER_03: And, you know, again, just to reiterate, our business model or our revenue model, there's there's basically three components, right?
• 5:48
  SPEAKER_03: There's hardware, which is cameras and speakers, which we get pretty decent margins on.
• 5:53
  SPEAKER_03: There's installation, which generally through third parties that that that we utilize to do the installations.
• 6:00
  SPEAKER_03: Then there's the curring recurring revenue piece as well.
• 6:04
  SPEAKER_03: So um those are the three components.
• 6:07
  SPEAKER_03: We think in the first half of the year, the recurring revenue went up because frankly, we we we because of the takeover scenario, we had less hardware sales and less installation revenue.
• 6:22
  SPEAKER_03: Right.
• 6:23
  SPEAKER_03: And we think we think that that'll shift in the second half of the year.
• 6:27
  SPEAKER_01: I'm gonna kind of drill down a little more on this sort of uh takeover dynamic.
• 6:31
  SPEAKER_01: Um, I think you said that 77% of the cameras signed in new contracts during the first half were were takeovers from another vendor, up from 57% in 2025.
• 6:40
  SPEAKER_01: So pretty big jump.
• 6:41
  SPEAKER_01: Um, is the ability to use a customer's existing cameras uh an advantage in competitive displacements?
• 6:48
  SPEAKER_01: And and you know, pressures were directed towards Greg, just how the economics of a takeover differ from a ground up installation.
• 6:54
  SPEAKER_01: And uh sounds like you don't think this is gonna be uh necessarily a lasting change, but you know, in the short term, but maybe with the long term, if you comment kind of on the trend.
• 7:03
  SPEAKER_00: Sure.
• 7:04
  SPEAKER_00: So um well, as James alluded to, this wasn't something we targeted to do to say, gee, we want to do a lot more takeovers in in the first half of this year than we did last year.
• 7:16
  SPEAKER_00: That was um, you know, at the end of the day, there it's it's deals come in, you win the deals as they they uh as you get your customers excited.
• 7:25
  SPEAKER_00: And it was just the way it uh happened.
• 7:28
  SPEAKER_00: It was just so starting, startlingly different, right?
• 7:32
  SPEAKER_00: From 57% last year to 77% this year, that was a big shift uh that we didn't anticipate.
• 7:42
  SPEAKER_00: Right.
• 7:43
  SPEAKER_00: Now, as James said, and based on what our you know, the pipeline that we see, we don't believe that this trend is going to continue.
• 7:51
  SPEAKER_00: Um but it will other than it will continue to bounce around quarter to quarter, year to year.
• 8:00
  SPEAKER_00: Right.
• 8:00
  SPEAKER_00: So uh now longer term, as that recurring revenue just continues to build, that is the ultimate engine that drives uh our company and drives any SaaS company.
• 8:12
  SPEAKER_00: Um and over time, yes, that will become a larger and larger component of our revenue because as James said earlier, right?
• 8:25
  SPEAKER_00: We are deterring 98% of threatening activities.
• 8:29
  SPEAKER_00: That 98%, one of the reasons we're so proud of us is it leads to 99% customer attention.
• 8:36
  SPEAKER_00: People see the difference, they feel the difference at their properties.
• 8:42
  SPEAKER_00: Um we had a one of my favorite stories, a a property manager before we came in, uh a little bit of a rougher neighborhood, said every Monday he would walk around the property and pick up shell casings.
• 8:59
  SPEAKER_00: And once our system was installed, he said, I don't have to do that anymore.
• 9:05
  SPEAKER_00: And that that's a huge change in the quality of life at that location, right?
• 9:09
  SPEAKER_00: That's the kind of impact we have, and because of that, that's that's what leads to the 99% customer attention.
• 9:14
  SPEAKER_00: So, yes, over time, we think long term uh the the recurring revenue stream or services will be a larger and larger percentage.
• 9:25
  SPEAKER_00: But in the near term, and and and in the near term, certainly for the next couple of years, we've got huge growth potential.
• 9:32
  SPEAKER_00: Uh, we expect to be adding uh site after site after site, and you know, a lot of those will have camera installs um and and hardware sales.
• 9:42
  SPEAKER_00: Now, to your second part of the question about the economics, um, the the the great thing about a takeover is generally you can get to the service revenue quicker, right?
• 9:54
  SPEAKER_00: All they need to buy is a small um uh a small appliance from us, it's relatively inexpensive, that they put in their network closet, they plug their cameras into it, and we're off to the races.
• 10:08
  SPEAKER_00: Right.
• 10:08
  SPEAKER_00: And so the services can get going pretty quickly.
• 10:11
  SPEAKER_00: Where you know, our largest install, our largest deal that we signed, which was almost a half million dollar contract, and had a three-month planned installation.
• 10:23
  SPEAKER_00: Now we actually did it in two months, customer was super pleased by that.
• 10:27
  SPEAKER_00: Uh, but that just delays the service component.
• 10:30
  SPEAKER_00: So um yeah, we we miss out a little bit on the margins of of the hardware, and and there's a small margin on the installation, but it's it's uh it's not huge.
• 10:41
  SPEAKER_00: Uh but the core thing is we continue to add that SaaS revenue, which moves our SaaS revenue margins, you know, continues to inch up and inch up uh quarter by quarter.
• 10:55
  SPEAKER_00: So in the in the in the we're happy with any new business.
• 11:02
  SPEAKER_00: Whether it's a takeover or not, uh, and we will be doing both going forward.
• 11:09
  SPEAKER_01: Yeah, that's helpful.
• 11:10
  SPEAKER_01: That showcasing is very illustrative of the impact that that you guys are having.
• 11:14
  SPEAKER_01: That that's pretty cool.
• 11:16
  SPEAKER_01: Um so just relatedly here, so gross margin uh was up 13 points year for year to 49%.
• 11:22
  SPEAKER_01: I think that was your your highest ever, um, if I recall correctly.
• 11:26
  SPEAKER_01: But um, knowing that mix is kind of you know not fully predictable, just how should we think about the gross margin profile from here?
• 11:34
  SPEAKER_00: Well, you know, I think if you uh our gross margin, again, going back to as you continue to build that SaaS, that's naturally going to move your gross margin up.
• 11:46
  SPEAKER_00: And so, and we'd said this in in you know earlier talks, uh, earnings calls.
• 11:53
  SPEAKER_00: Yes, we expect our gross margins to continue to increase over time as the SaaS component continues to build.
• 12:01
  SPEAKER_00: This quarter it was, as you said, the highest it's been.
• 12:04
  SPEAKER_00: It was a big jump from where it was.
• 12:07
  SPEAKER_00: Um, a lot of that had to do with the particular mix this quarter.
• 12:11
  SPEAKER_00: Uh I so I don't expect it to remain there uh every quarter as the mix continues, but over time, we'll actually not only hit that, you know, be there, we'll exceed it, but as the SaaS component gets larger and larger and and and those customers continue to pay us.
• 12:35
  SPEAKER_01: Got it.
• 12:35
  SPEAKER_01: That's helpful.
• 12:36
  SPEAKER_01: So one more uh pretty CFO focused question, I think.
• 12:39
  SPEAKER_01: Um Greg, you missed a quarter with around 3.8 million of cash.
• 12:42
  SPEAKER_01: Just how are you thinking about your cash runway and and funding your investment in growth from here?
• 12:48
  SPEAKER_00: Yeah.
• 12:49
  SPEAKER_00: So um, and again, every quarter varies a little bit and and as we're hiring right.
• 12:56
  SPEAKER_00: We there is so much growth.
• 12:57
  SPEAKER_00: We do continue to uh invest in people, and people are our biggest expense.
• 13:02
  SPEAKER_00: Right.
• 13:03
  SPEAKER_00: So we do expect salaries to go up.
• 13:06
  SPEAKER_00: But we've been kind of um you know somewhere a little north of half a million a month in in in burn, net burn.
• 13:16
  SPEAKER_00: Um again, that will vary by quarter.
• 13:20
  SPEAKER_00: Uh so if if you look at that, you kind of do the math, and that kind of gives you runway.
• 13:28
  SPEAKER_00: Do we have enough cash to get to cash flow break-even?
• 13:32
  SPEAKER_00: No, we will be doing a little bit of uh fundraising.
• 13:36
  SPEAKER_00: We don't think we have to do significant fundraising.
• 13:38
  SPEAKER_00: We think we've got um uh things in place to get us the funds we need to get to cash flow break-even.
• 13:48
  SPEAKER_00: While we don't give revenue guidance per se, you know, we're we are targeting being cash flow back break-even by you know the end of next year.
• 13:59
  SPEAKER_00: Um that's uh that's that's our goal.
• 14:03
  SPEAKER_00: And and we think that's achievable.
• 14:06
  SPEAKER_00: Uh and we think we've got, like I said, everything in place from both our cash on hand and and our fundraising um lines of credit and and such to get there.
• 14:20
  SPEAKER_01: All right, that's helpful.
• 14:21
  SPEAKER_01: So um this could be early for either one of you.
• 14:24
  SPEAKER_01: Um so uh there are two recent announcements that sort of stood out to me anyway.
• 14:29
  SPEAKER_01: Um in Southern California, you're building camera camera infrastructure from the ground up across a five-building office portfolio and replacing the on-site jar program outright.
• 14:40
  SPEAKER_01: Um and in Baltimore, uh, you're specified into a multifamily development while it is still under construction.
• 14:46
  SPEAKER_01: So those are pretty you know, different entry points.
• 14:48
  SPEAKER_01: Just what does that say about how the platform lets you engage a property at the various stages of its life cycle and about the momentum you're seeing beyond multifamily?
• 14:56
  SPEAKER_03: Sure.
• 14:57
  SPEAKER_03: Yeah, I'll I'll take that one, James.
• 14:59
  SPEAKER_03: So uh I A all great announcements, all different types of opportunity, right?
• 15:06
  SPEAKER_03: And I think what it speaks to is the flexibility of our application.
• 15:12
  SPEAKER_03: Right.
• 15:12
  SPEAKER_03: Depending, you know, if if it's if it's new construction, we can deal with it.
• 15:16
  SPEAKER_03: Greg mentioned earlier, right?
• 15:17
  SPEAKER_03: Last year, largest contract we ever had, 30-story uh high-rise luxury high-rise facility that that was new construction, and we went right along with them and right, installed across the entire uh the entire property.
• 15:32
  SPEAKER_03: So we can do that.
• 15:34
  SPEAKER_03: We can go in after the fact and and and retrofit, if you will, right, existing buildings like the uh the five property campus that you mentioned.
• 15:43
  SPEAKER_03: And again, I think that just speaks to the flexibility, right?
• 15:46
  SPEAKER_03: We we don't we work, we obviously sell cameras from a takeover standpoint.
• 15:52
  SPEAKER_03: We work with virtually any camera that's out there, including older analog cameras.
• 15:57
  SPEAKER_03: Um, and you know, our one piece of proprietary equipment is a cloud video recorder that takes the AI images that we're capturing, sends them up to the cloud, and then down into our AI servers for further processing, right?
• 16:12
  SPEAKER_03: So flexibility is the key from that standpoint.
• 16:16
  SPEAKER_03: You mentioned uh additional, you know, additional verticals, additional traction, those sorts of things.
• 16:22
  SPEAKER_03: Let's just let's just very quickly talk about some of the areas that we have active installations in.
• 16:28
  SPEAKER_03: Critical infrastructure, think um uh a remote solar farm, large solar farm in the middle of nowhere that wants to protect potentially against theft, safety issues, those sorts of things.
• 16:41
  SPEAKER_03: Uh, active construction sites, I think that we were talking about at the front end, right?
• 16:46
  SPEAKER_03: We have a variety of existing solutions and new solutions that we're that we're launching that will be perfect for construction sites, particularly after hours when there's an increased risk of uh tool and material thefts and safety issues as well.
• 17:04
  SPEAKER_03: Uh, transportation and logistics, I can't begin to tell you how excited we are about that.
• 17:10
  SPEAKER_03: Um, right, we've now have some internal expertise in this area and some initial deployments uh that are uh really doing a couple things.
• 17:22
  SPEAKER_03: They're giving us a chance to uh work closely with the operators of certain types of properties and getting us um additional knowledge, I guess you would say, right, in understanding these different verticals and what's important to these customers.
• 17:39
  SPEAKER_03: So, yeah, there's a number of ways, other than multifamily, that we continue to, uh I guess you would say, extend the business to?
• 17:47
  SPEAKER_03: And we're just really excited about all of them.
• 17:50
  SPEAKER_02: James, I'm gonna uh I rarely jump in on these calls, but I'm going to for just a minute because my brain is very active because I think of all the incredible amount of opportunities or the total addressable market for you.
• 18:01
  SPEAKER_02: Um, having been a marketing professor for two years at a college after I left Lehman Brothers, I'm putting that hat back on for a second.
• 18:07
  SPEAKER_02: Does your firm do a deep dive into crime stats and then try to really aggressively sort of solicit business in those areas?
• 18:15
  SPEAKER_02: Or is that just an afterthought at this point?
• 18:17
  SPEAKER_03: Yeah, great, great, great question.
• 18:20
  SPEAKER_03: So specifically transportation and logistics, let's use that as an example, right?
• 18:25
  SPEAKER_03: Reported cargo theft in the United States is$30 billion a year.
• 18:29
  SPEAKER_03: Reported.
• 18:31
  SPEAKER_03: Um when you when you extrapolate unreported cargo theft, replacement costs, et cetera, it's over$50 billion a year in the US.
• 18:41
  SPEAKER_03: So there's a perfect example where uh we're taking internal expertise, external statistics, and using it specifically to target additional opportunities in that space, be it distribution centers, be it secure truck lots, be it individual truckers.
• 19:04
  SPEAKER_03: I mean, there's there's a lot of ways that you can address that um that uh uh that market.
• 19:11
  SPEAKER_02: And that's indeed how we're doing it.
• 19:13
  SPEAKER_02: Yeah, that's great to know.
• 19:14
  SPEAKER_02: And uh the FBI has not been shy in the last year about being very public, actually, about uh gang activity with both both um rail railways as well as 18-wheel truck lots.
• 19:24
  SPEAKER_03: Absolutely.
• 19:25
  SPEAKER_03: And you know, kind of interesting if you think about what's happening in the world now AI components, whatever it might be, chips, servers, you know, whatever, uh, that's becoming a big, big, big target, right?
• 19:43
  SPEAKER_03: And if we think about a tractor, the value of a tractor, because you don't know if it's vegetables or iPhones on there, right?
• 19:50
  SPEAKER_03: Is$150 to$300,000 value on average.
• 19:54
  SPEAKER_03: Well, AI components keep going.
• 19:57
  SPEAKER_03: So so it is it it's an area that we're uh uh very cognizant of and very clearly targeting.
• 20:06
  SPEAKER_02: Yep.
• 20:06
  SPEAKER_02: To use uh military uh nomenclature high value targets, and with that, I'll turn it back over to James Kisner and be quiet.
• 20:13
  SPEAKER_02: All right.
• 20:13
  SPEAKER_01: All right.
• 20:14
  SPEAKER_01: Um so uh yeah, you had two pretty significant hires recently.
• 20:20
  SPEAKER_01: Um I think I'm gonna ask them about both of them at once.
• 20:23
  SPEAKER_01: Very, you know.
• 20:24
  SPEAKER_01: So Nile Coates is uh your new chief register revenue officer, uh, you know, joined from ECAM.
• 20:30
  SPEAKER_01: So led one of the sales force for the largest physical security services organizations in the world.
• 20:34
  SPEAKER_01: And you also uh early this year at Ed Burnett, um, you know, from uh you spent several decades at UPS um Chief Security and Operations Officer.
• 20:44
  SPEAKER_01: So those are both just two pretty amazing hires, and I think potentially, you know, validations um that people like what you're doing.
• 20:51
  SPEAKER_01: But can you kind of say you know more about what each of these folks um you know brings your organization, what kind of impact you expect them to have where they're already having uh cloud structure?
• 21:02
  SPEAKER_03: Yeah, absolutely.
• 21:04
  SPEAKER_03: Um let's start with the CRO.
• 21:06
  SPEAKER_03: Let's start, let's start with with Nile codes.
• 21:10
  SPEAKER_03: So uh we had the opportunity to be introduced to Nile, and it just became abundantly clear that his background and experience were yeah, if if we wrote down a list of items that would you know generate the perfect CRO profile, he has it.
• 21:31
  SPEAKER_03: So, right when he was at ECAM, uh he was responsible for US revenue of over$350 million in a sales force approaching 100 people.
• 21:42
  SPEAKER_03: We got a little bit less than that right now.
• 21:45
  SPEAKER_03: But all the same thoughts, all um the processes, the sales playbook, whatever you wanna call it, it it's transferable from company to company.
• 21:56
  SPEAKER_03: Let's talk about Ed, and then I'll circle back to both of them.
• 22:00
  SPEAKER_03: Ed Burnett, Chief Security and Operations Officer, 30 years at UPS.
• 22:05
  SPEAKER_03: Last 10, he was responsible for all of US security and global fraud investigations.
• 22:13
  SPEAKER_03: He was responsible for the safety of uh hundreds of thousands of employees and multiple millions uh of package deliveries.
• 22:23
  SPEAKER_03: So, what is it that drew both of these individuals to cloud structure?
• 22:28
  SPEAKER_03: Jokingly, I like to start by saying that both of them, I think it was the opportunity to work with me.
• 22:33
  SPEAKER_03: But other than that, other than that, I think what they both realized, Niall, when he was at ECAM, he saw this upstart cloud structure taking business away from him.
• 22:47
  SPEAKER_03: When we talk about takeovers, honestly, eCamm is one of the customers that we've had some success in uh in doing in winning takeover opportunities from.
• 22:59
  SPEAKER_03: He saw that.
• 23:01
  SPEAKER_03: And also, I think at this stage in Hinck's career, he realized that maybe he doesn't have too many opportunities to come in close to ground floor and really make a difference in an organization and build a sales organization and structure to his uh vision and uh and and prior experience.
• 23:24
  SPEAKER_03: So that's Nile.
• 23:26
  SPEAKER_03: Ed, uh, as you might expect, coming from a company like UPS, uh very process-oriented individual.
• 23:35
  SPEAKER_03: And I will say, right, when you're in a startup, a restart, a growth environment, process is one of the things that usually gets pushed to the side, to be quite honest with you.
• 23:50
  SPEAKER_03: And it's been refreshing to work with someone like Ed, who um he he he doesn't care what level of growth the company is in.
• 24:02
  SPEAKER_03: When it comes to process, holding people accountable and and demanding results, he is an absolute taskmaster.
• 24:11
  SPEAKER_03: And I will tell you, it has helped our business uh just incredibly since he's been on board to help us add that level of discipline.
• 24:21
  SPEAKER_03: And that's all on top of him being one of the leading experts on cargo theft, transportation and logistics, safety issues, et cetera.
• 24:32
  SPEAKER_03: So we were very fortunate to get the caliber of individuals that we did in both Ed and Nile.
• 24:40
  SPEAKER_03: And we looked forward, we we looked forward to working with them going forward.
• 24:44
  SPEAKER_03: And honestly, we'll stack our management team right now up against anybody that's out there.
• 24:50
  SPEAKER_01: Yeah, really impressive, like I said, really impressive hires.
• 24:53
  SPEAKER_01: Um, all right.
• 24:54
  SPEAKER_01: So wrapping up here, um, you know, you've said that uh you think the second half is gonna be you know stronger than than the first half in terms of revenue.
• 25:02
  SPEAKER_01: Just um in general, what milestone should listeners watch for over the balance of of the year and through early next year in terms of showing that you're that your strategy is working.
• 25:12
  SPEAKER_03: Yeah.
• 25:12
  SPEAKER_03: Uh let me start and then I'll I'll let Greg uh you know wrap up with his thoughts and uh probably use an opportunity to correct whatever I'm gonna say next.
• 25:23
  SPEAKER_03: Um here's what I would here's what I would say.
• 25:26
  SPEAKER_03: We don't provide revenue guidance, as you know, James, but you know, 270% revenue growth 2025 over 2024.
• 25:36
  SPEAKER_03: It would be great if we could sustain that and and roll with that into 2026.
• 25:42
  SPEAKER_03: We don't think that's realistic.
• 25:43
  SPEAKER_03: And frankly, we need to give the new chief revenue officer uh some time to figure a few things out and and and and help us figure out how to grow quicker, right?
• 25:58
  SPEAKER_03: If you will.
• 25:59
  SPEAKER_03: So do we think that you you know the the external community can expect revenue growth year over year, 26 over 25?
• 26:09
  SPEAKER_03: Yes.
• 26:09
  SPEAKER_03: Will it be akin to what we saw 25 over 24?
• 26:14
  SPEAKER_03: No.
• 26:14
  SPEAKER_03: Uh milestones and and things that people should look for, look for additional press releases announcing wins, not just in multifamily, right?
• 26:25
  SPEAKER_03: Not just expansion in existing accounts and getting new logos, but particularly in additional verticals, because that's where we get the diversification.
• 26:35
  SPEAKER_03: That's where we get a different set of customers, and and that gives us multiple paths or multiple uh avenues to additional revenue growth.
• 26:46
  SPEAKER_03: That's what I would say, Greg.
• 26:49
  SPEAKER_00: Uh absolutely.
• 26:51
  SPEAKER_00: And you know, what you will see and what what we have seen in the past, right, Q3 uh is usually pretty good, but Q4 really packs it in, right?
• 27:05
  SPEAKER_00: People are trying to get their budgets finished for the end of the year.
• 27:08
  SPEAKER_00: Um but the expansion, right?
• 27:17
  SPEAKER_00: I think you will see more expansion within our existing customer base.
• 27:23
  SPEAKER_00: I think you will see new verticals.
• 27:27
  SPEAKER_00: Uh and those two that's our core strategy, right?
• 27:34
  SPEAKER_00: Continue to expand.
• 27:36
  SPEAKER_00: Take what we've got, expand within, and add new things, right?
• 27:40
  SPEAKER_00: It's the the opportunities are so rich that we're gonna be able to kind of get things from from everywhere.
• 27:51
  SPEAKER_00: And and that's going to just continue to position us for a great 2027 and and hopefully get into cash flow break-even in 2027.
• 28:03
  SPEAKER_01: That's that's that's a great summary by both of you.
• 28:05
  SPEAKER_01: So um I'll hand it back to uh to Tim.
• 28:08
  SPEAKER_01: Thanks again, guys, for coming.
• 28:09
  SPEAKER_01: Thank you.
• 28:10
  SPEAKER_01: Appreciate it.
• 28:10
  SPEAKER_02: Thanks, James Kisner, and thanks, James McCormick and Greg Smithherman, for joining us today.
• 28:14
  SPEAKER_02: I'm not envious of your CRO because I do believe in my heart of hearts that there's so many opportunities in this very large addressable market that he's probably very busy trying to force rank.
• 28:23
  SPEAKER_02: What do I go after first?
• 28:24
  SPEAKER_02: 100%.
• 28:28
  SPEAKER_02: Thank you for listening, and don't forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 28:44
  SPEAKER_02: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 28:49
  SPEAKER_02: Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.