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| Statement |
|---|
| We see tailwinds from improved business optimism and increased interest in applying VIQ Solutions to address business needs [or either a lengthening plan for main cycle] (ph) |
| During Q2, we continued to make great strides in our transition to SaaS |
| By combining JAVS expertise and recording and AV support with our advanced transcription workflow technology powered by AI, we can provide a powerful solution that transforms the user experience and enhances courtroom efficiency |
| It leverages knowledge learned during the documentation editing process to improve its performance, resulting in increased efficiency and even greater usability of our draft documents |
| In Q2, we began delivering on our commitment to drive margin improvement from this client base, and the results we see in terms of productivity enhancements are the highest of any segment we have migrated |
| The private placement will accelerate the commercialization of the AI models to further strengthen accuracy and usability FirstDraft and continue to increase margins |
| Our solid net new bookings, combined with the planned restructuring and migration in Australia, supports a clear path to return to adjusted EBITDA profitability by end of the year |
| Our FirstDraft and AI workflow derive their value from the domain-specific AI models that we've developed, which further improves gross margin |
| We are proud to have been selected as the 2023 Fortress Cyber Security winner in the Data Protection category |
| This will allow us to improve gross profit and create a more efficient production environment to expand and manage capacity |
| Fewer edits equal greater efficiency and higher productivity and more capacity for a turnaround of orders, time savings and cost reductions |
| While we plan to bring back positive EBITDA in the second half of 2023, the placement was an important part of our AI acceleration to further expand our competitiveness and competitive lead in our domain-specific AI models for the verticals and the region in which we operate |
| We plan to utilize global resourcing where allowed by our clients via our secure platform to drive incremental volumes and margin expansion |
| And while it was a little bit, even if you're not onboarding contracts, I would assume the run rate of revenue is stronger than -- 5% more than the March quarter |
| The organic wins validate that we've got the right offering at the right time for our industry segments |
| As of June 30, we set a record for the net new organic bookings of $8.9 million in the last 12 months |
| All of our top 20 accounts, which represent a very high percentage of our overall revenue, are trending ahead of last year |
| Excluding the impact of the Queensland contract change and foreign exchange, Q2 results indicate a trend towards higher volumes and an accelerated adoption of vertical AI-based workflow |
| We announced two patent applications that augment our speech engine-agnostic workflows, improving documentation accuracy and usability of documentation |
| We are accelerating growth from current customers, and we -- to go back to one of your first questions, we have not lost any customers |
| While we developed the highly complex requirements to transform court workflows over three years ago, the Auscript acquisition helped us to further refine the requirements to create our highly effective technology |
| Our teams are very excited to bring this new technology to this segment |
| During the quarter, we continued to see stabilization of the Queensland contract, growth in new client contracts in Australia, and the beginning of transcription services volume for two large insurance companies booked in Q1 of 2023 |
| We're seeing expansion in our insurance client base in July, and the backlog in law enforcement from Q2 has been clear |
| Volumes are all trending higher than last year among these top 20 customers |
| This will save legal and professional time and improve accessibility of all information for all interested parties |
| We remain focused on stabilizing capacity while aggressively deploying NetScribe globally to recognize the margin expansion that we have seen in the US |
| In fact, normalized Q2 results, when factoring the new Queensland contract and foreign exchange rates, were up by 3% compared to Q2 2022 |
| As a result of the productivity gains realized by the rollout of our AI-powered workflow technology in the United States and in the UK, the draw is an important part of our restructuring, which is expected to yield between $2 million and $2.5 million in reduced expenses over the next 12 months |
| But again, every day, it gets better |
| Statement |
|---|
| The unfortunate thing about the two very large ones is that project management on the part of the customer, not on our ability to accelerate those ramps, has been significantly slower than we had hoped |
| The court reporter shortage continues to plague the US courts |
| And finally, our adjusted EBITDA was negative $0.9 million versus negative adjusted EBITDA of $0.7 million in the same period last year |
| They also had several, what I would call, unexpected events within Australia that impacted the run rate there as well |
| The change to the Queensland contract, as previously disclosed, continue to negatively impact some of our key metrics when compared to prior quarters |
| Q2 is [wrought] (ph) with some challenges in terms of seasonality, particularly in June in Australia where they begin the court shutdowns at the end of the month, and that continues into the first month of July |
| Our revenue was $10.5 million, a decrease of $1.8 million or 15% in the same period of the prior year |
| I guess one of the questions would be help to clarify is March is a seasonally weak quarter |
| These delays negatively impacted Q3 revenue -- Q2 revenue, but we're seeing increased volumes in June and in July |
| So it was a combination of the scheduled court shutdowns, along with a couple of unexpected recesses within the courts in Australia that had major impacts on June |
| Decreases in revenue and gross margin are largely due to the contract changes |
| Capacity constraints that bled into Q2 restricted our ability to expand, but there is more demand, certainly from our clients than we were able to take in Q2 |
| The items that impacted our adjusted EBITDA included delays in ramping up some of our largest new insurance and disposition wins from earlier in the year, decreased gross profit, as previously mentioned, partially offset by decreased selling and administrative expenses, primarily due to lower insurance premiums, reduction in IT-related costs because of system integrations and lower headcount-related costs due to organizational restructuring |
| So that process took a little bit longer than expected |
| The decrease in gross margin percentage was primarily due to the change in the Queensland contract and foreign exchange |
| Our net loss was $3.6 million or $0.10 per diluted share versus a net loss of $3.2 million or $0.11 per diluted share last year |
| It is -- they are ramping, but they are ramping at a much more slower pace than we had anticipated |
| Unfortunately, Alexie Edwards, our CFO, is not able to attend the call today as he is attending a personal matter |
| After a tough cycle for the pandemic and Great Resignation, our customers are back on their feet and processing again to normal cadence |
| While this is not without challenge or risk with our highly constrained capacity, we believe that taking on this challenge now reduces longer-term exposure in this critical market |
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