Good afternoon. Welcome to the WidePoint's Fourth Quarter and Full Year 2024 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 wyy@gateway-grp.com. Before we begin, 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 involves 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-K 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. Jin Kang. Sir, please proceed.

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 December 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-25 filed on March 31st, we requested and received an extension to file our 10-K. Subsequently, we have filed our 10-K timely. 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. 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 $142.6 million for the year, a 35% increase compared to 2023 full year results and exceeding our adjusted EBITDA and free cash flow guidance, recording $2.6 million of adjusted EBITDA and $2.5 million in free cash flow. We achieved our 30th consecutive quarter of positive adjusted EBITDA and fifth consecutive quarter…

Thanks, Jin, and good afternoon, everyone. Over the past year, we have successfully developed and launched our new MobileAnchor 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 cost with clear ROIs and actionable insights as well as a license management module to manage the challenges of optimizing Microsoft 365 identifying expense savings. Regarding the CWMS 3.0 recompete with the previous 2.0 contract is set to conclude in November of this year. We are actively preparing for the next phase and have already responded to the request for information in August of 2024. 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 the DHS infrastructure further strengthens our bid. 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 3.0 contract and continue our long-standing partnership with DHS. Last month, we announced our exciting new task order award under the US NAVY Spiral 4 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 $2.5 million with one year base period and nine additional one year option periods totaling a potential value of $25 million if…

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 December 31st, 2024. As Jin mentioned at the outset of this call, the delay in our 10-K 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 fieldwork 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-K timely under the permitted extension. 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 $37.7 million, an increase of $9.4 million from the $28.3 million reported for the same period last year. Our full year revenues were $142.6 million, an increase of $36.6 million or 35% from $106 million in the same period last year. Now I'll provide a further breakdown of our fourth quarter and full year revenue. Our carrier services revenues for the quarter was $24.6 million, an increase of $8.9 million compared to the same period in 2023. The carrier services revenue for the year was $86.8 million, an increase of $28.6 million compared to the same period last year. The 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 $9.4 million and relatively consistent with the same period in 2023. For the year, our managed services fees were $35.8 million, an increase of $4.5 million last year. The increase was primarily a result…

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 4 contract totaling $25 million over a 10-year contract period. 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 champion long before it gained widespread recognition. Through our services, we've delivered significant cost savings for our government clients, and our mission is closely aligned with the current administration's focus on government efficiency. 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&A session, I'd like to outline our primary goals for 2025. First, we aim to expand our strategic relationship with our…

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Scott Buck with H.C. Wainright. Please proceed.

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

Good afternoon, Scott.

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

Yes. 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 on to 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-12. And the K-12 was a vocal supporter of this technology. And hopefully we'll be able to roll that out as part of our partnership with 22Vets.

Great. That's helpful. And then it sounds like from your comments that you don't see any kind of long-term detriments given some of the activity in Washington. But I'm curious just the turnover and administration, whether you're seeing any disruption or delays in your conversations with folks there. Just wondering how it impacts the first half of '25 I guess.

Yes. 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. 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, the 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. 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. There is also talks of streamlining the federal acquisition regulations, streamlining the FAR to remove what they call nonstatutory 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 streamline it. But still hard, 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.

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

Yes. 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 the 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 it not being somewhere between $9 million or $10 million, 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. So we should see cash position improvement. And we'll continue to 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&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?

Sure. Hi, Scott. Yes, I think from our 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 grands something like that. So it's nothing like in the past and it's -- a lot of that's going to be some build out of the new facility that we took in Columbus for the Device-as-a-Service. So it's deployed on revenue making items that modeling 200 grands.

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

Thank you.

Great. Thank you, Scott.

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

Hey, good afternoon, gentlemen.

Good afternoon, Barry, and welcome back to The States.

Thank you very much. I wanted to talk about DOGE and I noticed that you do have a new risk factor in your 10-K, but I don't want to 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, I can only imagine what's happening with the devices of some of those folks. So a couple of 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, DOGE, have you gotten their attention? 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, but perhaps billing analytics?

Yes. And so great question. Thank you for that. And as I mentioned in our prepared remarks, I mean, WidePoint has a deep rooted commitment to cost savings, especially saving taxpayers' money because it's yours and my money, right? From the beginning, one of our primary focus have been to reduce technology spend. So we were DOGE before DOGE became a household word. So we are optimistic and we're trying through various avenues to 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. And 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 CWMS 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 would manage and that would help the CBP to help manage all of their devices. 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 been 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 Homan and the folks over at DHS at the secretary level. I think we've gotten some a little bit of traction, but it's too early to tell. 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.

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

Excellent question. Always getting to the heart of the matter as they say. So in terms of we are one of the main goals 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 once we get all -- we'll have to dust off the forecast rolling 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 a 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. But it's a tyrannys of small numbers for EBITDA and free cash flow. This year, year-over-year free cash flow was up 933%. And we were up 200% some 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. We'll have to make sure that we analyze our forecast. Bob, did you want to add anything to that?

No, I think you covered it all. Hey, Barry, I think we typically give guidance after the Q1 or as a part of the Q1 call. And so we would expect to give something similar to what we did last year. And as Jin said, we've got a lot of moving parts, but they tend to be moving in the right direction, not all of them, but most of them.

Okay. 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 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 else being equal, likely we'll get some guidance with the 1Q call.

Yes. And I think, go ahead, Bob.

I was just going to say I saw what United did before, but I feel like we're not subject to the consumer. And everything we see demand signal from DHS is that and we have a 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.

Yes. So I mean we ended 2024 with roughly $290 million 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 4, which is a big deal for us, it's $2.5 million annually, and we're optimistic that we're going to get additional work out of the Spire 4 contract. And 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. I'm hoping that we could get in with DOGE and capture some additional work there. And with our M365 Analyzer and our MobileAnchor, 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 DOGE will be more of a tailwind than a headwind for us.

Thank you.

Great. Thank you, Barry.

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

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.

Thank you for joining us today for WidePoint's Fourth Quarter and Full Year 2024 Conference Call. You may now disconnect.