BIO-key's (BKYI) CEO Mike DePasquale on Q3 2018 Results - Earnings Call Transcript
SA TranscriptsNov. 15, 2018 2:13 PM•bkyi
BIO-key International, Inc. (NASDAQ:BKYI)
Q3 2018 Results Earnings Conference Call
November 15, 2018, 10:00 AM ET
Executives
Scott Mahnken - Vice President, Marketing
Mike DePasquale - Chairman and CEO
Fred Corsentino - Chief Revenue Officer
Ceci Welch - Chief Financial Officer
Analysts
Anthony Vendetti - Maxim Group
Presentation
Operator
Good day. And welcome to the BIO-key International Third Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]
Please note this event is being recorded. I would now like to turn the conference over to Scott Mahnken. Please go ahead.
Scott Mahnken
Good morning and thank you for joining us on today’s call. With me this morning are Mike DePasquale, BIO-key’s Chairman and CEO; Fred Corsentino, Chief Revenue Officer; and Ceci Welch, Chief Financial Officer.
I’d like to remind everyone that today’s conference call and webcast may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements. The words estimate, projects, intends, expects, anticipates, believes, plan, may, or will and similar expressions generally identify forward-looking statements.
Such forward-looking statements are made based on management’s beliefs, as well as assumptions made in information currently available to management, pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
For a complete description of these and other risk factors that may affect the future performance of BIO-key International, see Risk Factors in the company’s Annual Report on Form 10-K and its other filings with the SEC.
Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. The company also undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made.
At this time, I’d like to turn the call over to Mike DePasquale. Mike?
Mike DePasquale
Thank you, Scott. Good morning, everyone, and thank you for joining us today. In addition to Q3 results announced last evening, we announced that BIO-key has secured orders in excess of $10 million for our WEB-key biometrical authentication software from two Hong Kong-based company’s both focused on technology and the financial services industries in Asia.
Our enhanced WEB-key biometric security platform now incorporates previously licensed multifactor authentication security technology, providing a solution that enables both employees and customers to conduct secure biometric authentication transaction and network access via mobile devices, as well as computers. We expect to recognize $5 million of revenue from this contract in the fourth quarter of 2018 and the balance in the same period next year.
While our financial performance in the third quarter and now with this large contract continues to reflect the variable nature of contract sizes and timing, our year-to-date results clearly demonstrate continued progress in the breadth of biometrics adoptions as enterprises are realizing the urgent need to deploy more user-friendly measures to protect themselves and their customers against unauthorized transactions and data access.
Importantly, the large WEB-key contract this year and the one that we announced in the fourth quarter of 2017 demonstrate that the market is looking -- is starting to look at solutions that can deliver multifactor authentication security at both the device level and in the cloud. Our unique technology delivers on this requirement, providing enhanced security and greater productivity for enterprises seeking to address security requirements across their user base.
We’ve been working towards this large WEB-key deployment over the past two years and so it’s a combination right now that’s exciting, and an exciting milestone for the entire BIO-key organization in the U.S. and in Asia. It is also an important step in our efforts to open the Asian markets for our security solutions.
Turning to other growth initiatives, we continue to advance our dialogue and marketing partnership with Microsoft in support of their focus on driving adoption of their Windows 10 operating system and new Windows Server Solutions for enterprise.
A core differentiator in these new systems is their reliance on multifactor authentication solutions, such as biometrics to deliver enhanced security in a related and very clear move to abandon passwords.
A major third quarter event was our participation sponsorship and exhibition space at Microsoft Ignite 2018 Event late September in Orlando. A key theme from the event was security and enabling password less authentication, including biometrics as a secure approach for users to access their devices and information. We had significant booth traffic and strong customer interest at this event, which led to a very promising number of customer leads that we are now pursuing.
They have been optimistic in the past about the potential of Microsoft to drive enterprise demand for our solutions. What is very different today versus two years ago is the extent to which Microsoft is devoting resources to driving adoption of its newest operating system and server solutions.
As more enterprises embrace Windows enterprise applications, such as Windows Hello for Business, Asure and Windows Servers, we anticipate rising demand for BIO-key’s hardware and software offerings, which are compatible with Windows 10 and earlier OS versions.
Identifying new markets of opportunity remains an important component of our sales and marketing efforts. One such area of market opportunity was identified in the area of voting security, where we were successful in selling our ID Director for Windows software and EcoID fingerprint biometric readers to two Florida County Election Boards. The solutions will be utilized to deliver enhanced security for the identification and authentication of Election Board’s staff members and volunteers managing the voting process.
While it is a small initial contract, we are optimistic in the prospects to expand our reach into this market, which will need to address growing concerns about voter tampering, fraud and possible security breaches, especially in the next two years with the upcoming Presidential Elections.
Similarly, we see potential in the financial services sector, where customer prospects such as banks, credit unions and others are faced with growing levels of regulatory compliance. In the third quarter, a New York regional bank selected BIO-key to enable compliance with the New York State Department of Financial Services Cybersecurity Law.
Our solutions enabled the bank to comply with multifactor authentication requirements for employees accessing company computer devices and connected banking applications, and we look forward to building on this initial deployment.
Also during the third quarter, we launched a strategic partnership with Quantum Business Advisory, an IT infrastructure and security firm that is bringing our solutions to enterprises in India. Given India’s focus on deploying technologies to enhance the country’s economy and the lives of its citizens, we believe it represents a very attractive potential market for BIO-key.
Turning to our corporate structure. During the third quarter we appointed Fred Corsentino as our Chief Revenue Officer, a new role at the company. Fred possesses substantial experience in managing sales processes at emerging technology companies, with a strong track record of success.
In particular, Fred is helping to focus our business development, sales and integrated marketing functions on those areas with greatest potential to maximize growth and bottomline performance. I’m pleased to have Fred join our team and to have you all hear from him directly a little later in this call.
In summary, though our financial performance remains highly variable on a quarter-to-quarter basis, we are very pleased to now be solidly positioned to achieve revenues of $8 million to $9 million for the full year 2018.
Reflecting our outlook, we have revised our full year guidance to $8 million to $9 million in revenue from an initial range of $8 million to $12 million at the outset of the year. Our revised revenue guidance represents anticipated growth of approximately 30% versus last year’s revenue of $6.3 million.
Importantly, while we have positioned BIO-key to achieve very solid year-over-year growth in 2018, as well as expected EBITDA breakeven results, we will enter 2019 with roughly $7 million in contracted sales, which to form a very solid base to achieve further growth.
With that, I’d like now to introduce Fred Corsentino, our new Chief Revenue Officer to comment on his vision and areas of focus moving the company forward. Fred?
Fred Corsentino
Thanks, Mike. I’m excited to be helping BIO-key advance its revenue growth during the period of such substantial opportunity security solutions. I’ve been on the job six weeks and already have identified several areas where I can apply my experience and skills in advancing BIO-key to the next level.
As Mike mentioned, I bring lots of experience managing sales processes for emerging technology companies. That said, my priority is to streamline and prioritize BIO-key sales processes.
First of my agenda is to develop a consistent sales forecasting methodology. From my experience applying sound forecasting techniques on anticipated customer demand, competitive issues and industry trends can make a substantial impact on your ability to properly forecast and execute on future sales opportunities. BIO-key is now at a point where the development of these disciplines can make a tremendous difference to its future performance.
Next on my agenda, is to evaluate and rationalize our current reseller and channel relationships. Optimizing performance from our various distributor relationships will require implementing a range of initiatives to ensure that our biometric authentication solutions remain high in their priorities and sales efforts.
Now much of our historic sales efforts have been directed towards large enterprise customers, we intend to expand the focus of our sales efforts to address the hundreds of small medium and large enterprise customers’ opportunities that we have developed through our marketing efforts with Microsoft.
While advancing any enterprise sales dialogue takes time and persistence, we do expect these efforts to stop progressing more quickly and by leading these engagements we will have the benefit of greater sales visibility.
Finally, BIO-key’s growth will only be achieved through consistent, systematic and efficient sales efforts, which I believe will require an expanded base of sales talent. We are recruiting heavily to bring together proficient, capable sales professionals who we believe will help us accomplish our growth goals.
There is a lot of work that lies ahead, but based on what I have seen so far in the job, I’m confident that it’s only a matter of time before BIO-key is able to reach a new level of sustainable and recurring revenue.
Now, I would like to turn the call over to Ceci, who will provide an overview of our Q3 financial performance and financial position. Ceci?
Ceci Welch
Thank you, Fred. BIO-key’s total Q3 2018 revenue decreased 21.5% to $740,000 from $942,000 in Q3 2017, due to lower fingerprint hardware and biometric lock sales, as well as lower service revenue related to the timing of certain products.
Gross margin was negatively impacted as non-cash software license amortization expense rose from $660,000 -- rose to $660,000 in Q3 ‘18, compared to $390,000 in Q3 ‘17. Excluding the software license amortization costs, BIO-key’s Q3 ‘18 gross margin would have increased to 62% versus the 43% in Q3 ‘17, with the difference largely due to the revenue mix that included more high margin software license revenue in Q3 ‘18 versus the prior year period.
Total operating expenses declined $184,000 or 11% to $1.4 million, due to lower selling, general and administrative costs. Lower operating costs relating to primary -- primarily to lower personnel compensation in Q3 ‘18, as well as the absence the NASDAQ uplisting costs that were incurred in Q3 ‘17.
During Q3 ‘18 BIO-key incurred a one-time non-cash expense of $0.4 million related to the modification of outstanding warrants, which were re-priced in connection with our common stock and warrant offering, which I will discuss more in a moment.
Including the warrant modification expense, BIO-key’s Q3 net loss available to common stockholders was $3.1 million or a loss of $0.23 per basic share versus a net loss available to common shareholders of $1.8 million or a loss of $0.28 per share in Q3 ‘17. Per share results are based on approximately 13.1 million and 6.5 million weighted average basic shares outstanding in Q3 ‘18 and Q3 ‘17, respectively.
In August, we completed an underwritten offering of common shares and warrants at a purchase price of $1.50 per unit. The offering was intended to support the company’s working capital needs and growth initiative. Net proceeds from the offering were approximately $1.8 million.
As a result of the non-dilutive provisions related to the existing outstanding currents stock options, the recent common stock offering required that we re-price certain warrants in conjunction with the offering. As a result of lowering -- the lowering of the strike price at certain warrants BIO-key recorded a $1.4 million in non-cash warrant modification expense in the third quarter of 2018.
BIO-key’s net working capital remains constant at $4.7 million as of both September 30, 2018 and December 31, 2017. Net working capital included approximately $1 million of cash and cash equivalents at the close of the third quarter 2018 versus $289,000 of cash at year end 2017.
And with that, I think, we can move on to questions. Operator, could you please start the question-and-answer period.
Question-and-Answer Session
Operator
[Operator Instructions] And looks like today’s first question will be from Anthony Vendetti with Maxim Group. Please go ahead.
Anthony Vendetti
Thanks. Mike, I was wondering if you could talk a little bit more about the -- this $10 million -- $10 million in contracts. It seems like it’s a financial company and a technology company, is it two separate contracts? And then the revenue recognition, did you say, $5 million this quarter and then $5 million all in fourth quarter ‘19 or is that going to be spread out in 2019?
Mike DePasquale
Okay. So, thank you Anthony for a good question. Let me start, it’s two contracts with two different parties. One is focus on the financial services sector. One is focused in the technology area. It will utilize our WEB-key security platform for a series of different applications. So we’ll talk more about those as they -- as we’re able to, as we approach the New Year.
Yes, we will recognize $5 million in revenue this quarter 2018 and we will recognize $5 million in revenue a year from this period, so this period in 2019. We will be paid for this contract over the next 21 months. So it’s split up such that it will be paid on a monthly basis, starting in February through the course of 21 months for this initial -- and I call this initial $10 million contract.
Anthony Vendetti
Okay. And just to follow-up on the initial, what’s the total opportunity long-term if this is the initial phase?
Mike DePasquale
I really can’t say, again the orders that we received are north of $10 million, if we’re successful in the deployment of the solutions, as you know the Asian market is significant, it’s growing, its rapidly growing and they are widely adopting and accepting advanced especially mobile technologies.
So we think this has a significant potential for us and not just again in Hong Kong and China, but across Taiwan, Singapore and even into India. We mentioned a few minutes ago that our operation, our partnership in India is really gaining traction now and we’re very optimistic about the potential there.
The size and magnitude of the population there, it just provides a significant opportunity for us. And they are facing the same, especially now, trying to get there, I’ll call it, try to clean up the regulatory act in many of the different countries across Asia.
They are really looking at compliance-related solutions, solutions that can provide greater levels of security and greater levels of transparency, and we kind of fit in that range and the two parties that we contracted with are really going to help us expand our business there.
Anthony Vendetti
Okay. Great. And then just on two other points that you made. The Election Boards, and obviously, Florida continues to come under scrutiny regarding their voting process.
Mike DePasquale
You said the least.
Anthony Vendetti
Right. So you have two counties there, what’s the -- can you talk about the opportunity to expand it to other counties in Florida and then what’s the opportunity nationwide for your authentication process?
Fred Corsentino
Yes. Anthony, this is Fred Corsentino. So I’ve been directly involved in some of that. And yes, there is an opportunity to work with some of the other counties and actually some of expressed interest even though the news is front and centre these days, and so we are scheduling meetings and appointments with a couple of other counties and reaching out to the others. So we expect more -- we expect to go national with that as well in developing names and list, so we are progressing on that path.
Anthony Vendetti
Okay. And then on the Microsoft relationship, it is, I guess, I’m trying to find out is it more they’re highlighting you and you’re allowed to present there or is it beyond that, is it -- are you a preferred vendor? How does that work, and once again, what could be the opportunity with Microsoft?
Mike DePasquale
Okay. So let’s start by answering the middle question first, are we a preferred vendor? The answer is, yes. If you go to their website, the Microsoft website and look at biometrics, you’ll see that they highlight three products.
As you know, they make a keyboard that has a fingerprint sensor embedded in one of the keys. That’s one product. They have a third-party product for facial recognition that they highlight, that’s a Logitech’s camera. It’s an infrared camera which is $199 I think.
And then, third, you’ll see them highlight the BIO-key solution our SideTouch, our EcoID and soon to be our SidePass finger print scanners, that sell for $39.99. So from a preferred perspective we are certainly one of the vendors that is clearly front and center with them.
The driver, one of the drivers, and Satya their CEO highlighted this at Ignite. One of the drivers for moving customers to Windows 10 is security and they are espousing the demise of passwords and promoting biometrics. So by inference we are really getting a lot of play with them.
At the Ignite event we had a booth and we were a sponsor, they also had a kiosk in their security pavilion that highlighted BIO-key and our finger scanners. They were fundamentally sending their large enterprise customers to our booth where we captured in excess of 350 highly-qualified leads and potential prospects that we’re now following up on.
So that relationship is a very, very tight one. It’s one of mutual respect. They want to drive sales of their platform. They’re using security as a reason for customers to upgrade. They want to provide biometric capability to eliminate passwords and we’re kind of their go-to vendor for finger biometrics. So it’s a relationship that has incredible opportunity and potential.
And the portfolio of leads that we were -- we had generated out of that event, are across industry. So they cut across banking, financial services, healthcare, even some state and local government, federal government, retail. So it’s a -- telecom. It’s a really rich portfolio of opportunities that cuts across everything, because this is a horizontal opportunity for us not a vertical one.
Anthony Vendetti
Okay. Very helpful.
Mike DePasquale
I think it’s both vertical and horizontal. Thank you.
Anthony Vendetti
Thank you.
Operator
Next question will be from questionably from Dan Kamis [ph] with Private Investor. Please go ahead.
Unidentified Analyst
Hey. Good job guys. I want to clarify that, you said you’re going to be collecting starting in February for 21 months. Are those like even payments and does that mean that you don’t really collect any of the revenue until February?
Mike DePasquale
No. We will recognize $5 million in revenue in the fourth quarter and the payments for the $5 million is split over nine months next year beginning in February. So I believe it comes to. I don’t know, if you divide in half, it’s about, we see collective -- a little over $1 million -- $1.1 million in cash in the first quarter and then about $1.5 million in the second, $1.5 million in the third and $1.5 million in the fourth.
Unidentified Analyst
Okay. I noticed OpEx was down $184,000 to about $1.44 million, which is pretty good. I’m just wondering what do we look at for OpEx going forward.
Mike DePasquale
I think right now where we are today, a pretty much steady state. As the business continues to grow, I think, Fred is looking at, as he indicated in his comments, expanding sales. We’re going to do it methodically. We’re going to do it as the business expands, and so, I think, you could look at us to go into 2019, fundamentally at the same level or maybe even a little bit lower.
Unidentified Analyst
Well, that was -- that leads into this next question about how much your SG&A will have to go up to implement your salesmen hiring. I know that you’ve tried sales before, you’ve tried to come up with sales plans before, just wondering are you planning on hiring sort of bunch of salesmen upfront and what’s different, I guess, this time than previous times you’ve tried this?
Mike DePasquale
Yeah. I think I just answered that question. But I can do it again.
Unidentified Analyst
Okay.
Mike DePasquale
I said that we would look at, as Fred mentioned in his comments, bringing additional resources onboard as our business grows. So it’s going to be contingent on our ability and the timing for this growth. We’ll go into the year steady state at this point.
Unidentified Analyst
Okay. I -- last night I did a search for enterprise cybersecurity biometrics and BIO-key came up as the number one link, which is a huge change in terms of your, the kind of placement for BIO-key on searches. I’m wondering if you’re seeing increased hits to your website from search engines.
Mike DePasquale
I’m going to, Scott is smiling here. Scott Mahnken is the person who’s in the room. He is our VP of Marketing and he also reads the introduction to the call. So now he’s finally going to get an opportunity to answer a question. So Scott?
Scott Mahnken
Thank you, Mike, and Dan, great question and thanks for your due diligence there. SEO is something we’re highly committed to. We re-launched our website in the latter part of September of 2018 and that was with a sole purpose of really making our content very visible to those prospects that are out there searching for these biometric solutions.
So we moved to a different website environment and we added content, I would say, probably, a 50% increase versus our previous site. So, indeed, we’re seeing some very positive indicators in all part of that opt-in marketing world that we want to dominate. Thanks for your questions.
Unidentified Analyst
Okay. I will get back in the queue.
Operator
[Operator Instructions] Next question will be from Gary Hammond [ph], a Private Investor. Please go ahead.
Unidentified Analyst
Yes. Good morning. My concern is about the locks in the Bike Locks. Question I have, first, I know you’ve been overseas, you’re hooked up with this major bike company and I would like to know how the sales are going there?
And then in regards to the U.S. sales of, I asked a lot of people about, you ever know anything about push a button, open up your lock with your fingerprint? People don’t know. They don’t even know what’s out there.
Now I know that we using Amazon and Best Buy. Now the only way you can find out about those locks. You’ve got to push it in. I’ve never seen a display, I wouldn’t know how to find one. Now, in regards to Best Buy, where I live there’s a major Best Buy, it’s not in that store. It would be shipped there. And I’m just concerned about advertising out there to let people know about this new great thing that we have about pushing your finger on lock. I’ve talked to guys at the gym, they know nothing about it. I just think we need to get the knowledge out there of what you people do. Thank you.
Mike DePasquale
Great. So, good questions and good comments, so let me start first with the Bike Locks and how are we doing with sales in particular in Asia. We just recently launched that in the U.S. and so we’re in the early stages of really developing that business and evaluating it.
In Asia we are linked up right now with the Asahi bicycles. They’re one of the largest manufacturers of bikes in Japan. They sell all over the world, but in particular in Japan. You can go to their website and you can even do a translate and you’ll see that our Bike Locks is highlighted on their website.
We are also working on an integrated model that will be part and parcel of the bicycle itself not removable, but it will enable a biometric lock of the bike right integrated and embedded within the cycle itself.
So sales there are going well and we’re doing well in Asia, across the Board in not just the bike lock, but across the Board in our other models locks as well. Our designer series, as well as the travel locks.
Your second comment more than even question was, no one knows. Well, you’re absolutely right we’re selling on Amazon. We got our own shop a buy site setup. We’re using the techniques that Scott just described with our website and SEO. Social media, you can go to Facebook, you can go to Instagram, you can go to LinkedIn, all of those sites where the millennial typically the buyer, the person who buys these things is generally engaged. So we’re already have very heavily involved in that segment of marketing.
The broad-based marketing like for example television or print and software is very, very expensive. And so we are evaluating where and when, and how we will engage those methodologies and where it makes sense to do so.
Because we certainly want to make sure that as we’re building this business and expanding it we do it in a way that can create a level of profitability. We don’t want to be in the business just to be in the business to have a cool lock. We want to make money with it. So these are things that we’re evaluating virtually every day.
Unidentified Analyst
Thank you very much. Just one little thing like, I went on the Amazon and I look for all the products you sell. There were lot of bad reviews and I noticed that we’re not addressing them. In other words, they said, it didn’t work, I couldn’t program and I could do this and just left them idle, I just think going forward that everyone that speaks bad about us we should straighten that out that’s just my last point. But thank you and if you could address that? Thank you.
Mike DePasquale
Yeah. I can. You go to Best Buy, for example. I think we’re up to 30 plus reviews and by the way Best Buy has the lock stocked into 200 plus stores and then they will ship the store in the other stores.
So that’s the way they start with the product and that’s the way they start with us. So we have to follow their model. But can buy our lock online. You can go to some stores and see if there others that will ship it there for you so you can pick it up.
The reviews, you’re right, in the beginning especially with our early product we had some negative reviews. But we also have many really positive reviews as well. And so you don’t always get the opportunity to report a review depending upon where it comes on Amazon for example you don’t in -- on Best Buy you may be able to.
So we’re certainly cognizant of that and we recognize that. You’re going to see good and bad in virtually every product. We want to see more goods and bad, right, that’s what gives consumers confidence that they should or will buy the lock.
Unidentified Analyst
Thank you very much.
Mike DePasquale
You’re welcome.
Operator
Next question will be a follow-up from Dan Kamis [ph]. Please go ahead.
Unidentified Analyst
Oh! Hey. I noticed in these release for TouchLock Bike there was something about facial biometric. Are you in the facial biometric business now?
Mike DePasquale
No. Good question. Believe it or not we integrate TouchID into as a form factor to open the lock. So if you have the iOS application on your iPhone you can use TouchID. Well, they also have FaceID on the later models phones and believe it or not you can use FaceID to open your lock.
Unidentified Analyst
That’s a good interface there. Next question do you have any actually, I guess, a follow up to what the other investor was talking about. Can you give us any specific preliminary data in Amazon sales or Best Buy sales or even trend or order of magnitude?
Mike DePasquale
No. We -- as you know, we launched on Best Buy midyear. We just launched the Bike Locks weeks ago. I really don’t have any data that I can share or provide across the Board. We also launched in Brookstone, and of course, they went bankrupt, but believe it or not sold out our inventory. So it’s been good. It’s been positive. Certain models are selling better than others and so we’re just in the process of really evaluating all of that. As we report in the first quarter, I think, we’ll have, certainly, have much more data and to share with everyone especially after the holiday season.
Unidentified Analyst
Fair enough. Question on Microsoft, if enterprise, say, if your biometrics really gets traction I could see Microsoft incorporating an ID Director I guess type feature into their OS, I guess, they could either do so by attempting to license your software or building the capability themselves. How do you see that playing out?
Mike DePasquale
I think, what you say is absolutely accurate and we’ll see how it plays out. Microsoft is now a very big proponent of biometrics. They provide a native solution called Windows Hello and Windows Hello for Business that allows for device authentication.
We provide an extension to that, allowing enterprise customers to integrated into their active directory, which is usually have a manage users for email and enterprise applications. We also are providing an overlay for SAML, which is a new standard for access to web portals. So we complement each other very nicely, and I think, over time we’ll see how that plays out.
Unidentified Analyst
Okay. Last question, let’s say, I think, on your website there is a little chart and looks like the estimates or maybe for the biometrics technology market to go from $50 billion currently to maybe $200 billion in the next 10 years. Should we expect proportional growth from BIO-key from -- along that line or do you see any reason that BIO-key could increase its market share above its current 0.01%?
Mike DePasquale
10-year projections, industry projections, I mean, who knows, right, are they real, are they not. Every survey you read or every analysis that you can find has different numbers and so forth. So it’s hard for me to really address that.
I think we’re -- you seen us and our performance over the last couple three years. We’re certainly growing. We’re certainly landing larger contracts with marquee names across various industries. We think it’s about scale. We’ve said this last year. We believe it now more than ever. With Fred on Board, which is why Fred’s on Board and we made the changes we made. We believe it’s scaling the business. It’s taking advantage of the platform we have, the successes we had and expanding those out to more and more customers and prospects.
Unidentified Analyst
Okay. Great. Good job guys.
Mike DePasquale
Thank you.
Operator
[Operator Instructions] The next question will be from Frank Wolfe [ph], Private Investor. Please go ahead.
Unidentified Analyst
Good. So I just wanted to know what type of promotions are you guys doing on Amazon for the TouchLock. I know they have a lot of keyword search and promotions, it doesn’t seem like you guys doing it?
And then, my second question is you guys did a fairly large deal with a Mexican telecom earlier in the year, you said there could be potential to expand that, is that still on the table for next year? Thanks.
Mike DePasquale
The answer to the second question on the Mexican opportunity is absolutely. There’s a plenty of expansion -- potential and opportunity there. There are large -- they are division of a very large entity in America Mobile. So there’s plenty of opportunity to expand. We did just an initial deployment there.
In terms of the keyword search and social media expansion and sales on Amazon, we’re doing all of that. I think I described enough of that before in terms of what we’re doing with Facebook, what we’re doing with Instagram, what we’re doing with LinkedIn. Certainly social media is a very, very big part of the retail process these days.
On Amazon, we are very selective about where we spend and how we spend. To be sure that, again, we’re maximizing our potential and opportunity without losing money, so we’re very selective about that.
But we’re right now really evaluating our wholesales and marketing process for the consumer business, including even our finger scanners. We sell our fingers scanners on Amazon. We’ve been selling them now for nearly a year and a half, and we do very, very well there. Even enterprise customers sometimes go to Amazon and buy our finger scanners there. So it’s a great platform.
You may have noticed also that we separated our website. So we separated our consumer website from our enterprise website back in September when we launched the new version. Because we believe they’re really, really two separate businesses, right.
If CIO from a large enterprise is looking for a solution, he doesn’t want to come to a website that highlights a biometric Bike Lock, vice versa consumers who come to the site want to see more about the product that they’re interested in purchasing.
So we’re doing a lot of work in slicing, dicing and analyzing that whole consumer space, and coming up with the spend plan that’s going to be appropriate for what we think the revenue opportunity is.
Unidentified Analyst
Great. Just a real quick thing on Amazon. So I do a little work with some of the sales -- different items on Amazon, and you can actually go in there and put in a keyword search and yeah, you have to pay for it. Like you can put in there locks and then you can kind of advertise your locks to be higher up on the pages, and that’s what I’m talk about as far as keyword search. You do have to pay for it, but I’m just kind of nervous that your locks and things of that nature are kind of fourth or fifth page, where they use the keyword search on Amazon itself and pay for it, you might be able to be on that first page, but that’s a side comment…
Scott Mahnken
Yeah.
Unidentified Analyst
So -- go ahead.
Scott Mahnken
Frank, this is Scott, the VP of Marketing. Indeed you’ll notice we do that exact strategy with our scanners.
Unidentified Analyst
Okay.
Scott Mahnken
And we just had meeting this week, maybe we’re a fly on the wall, but we had meetings this week about our Amazon locks strategy. Part of what we wanted to do is make sure we had the quality control and quality assurance there before we go into our major promotion period. But you can rest assured as an investor that we’re very conscious that we’re coming up to that heavy shopping window, right, Black Friday, Cyber Monday. So you can expect to see those locks up in those sponsored areas in short order.
Unidentified Analyst
Okay.
Scott Mahnken
So thanks for your observation, you’re actually spot on.
Unidentified Analyst
Yeah. I figured you knew. I just wanted to make sure of that. It’s again kind of when I saw you guys are on the fifth or sixth page and like, I wonder if they know you do a little keyword search you can get a little higher up there, so.
Mike DePasquale
Yeah. Marketing has changed more in past two years than the previous 20. So we don’t ever claim to know it all and we appreciate again, we really embrace our investors taking a team atmosphere and sharing any ideas or thoughts they have. You can never have too many.
Unidentified Analyst
Yeah. Thank you. And then, finally, Mike, you talked about the standard protocol for, I guess, it’s cold web authentication or something of that nature where everybody is getting together to try to do biometrics even for web pages. And it seems like it’s getting a lot of news early in the year and I haven’t seen a whole lot about that lately. Can you give us your insights on that and where it’s moving? And thank you very much.
Mike DePasquale
Yeah. I think, actually it is front and center just at the Microsoft event about a month ago or a month-and-half ago, again, their CEO was very vocal about the incorporation of biometrics as a strong option for the replacement of password. So it’s still in the news, but it’s sporadic and every day you can read something different, and there’s a different highlight or topic.
I mentioned a standard called SAML, which is gaining momentum as a standard across the Board that can be used to access all of the largest web portals like sales force -- on the enterprise side, that’s what we really care about, right, so on the enterprise sites like know sites like, salesforce, for example, and SAP.
So that standard is continuing to evolve. It’s well entrenched, but it’s getting more widely deployed and we have a connector to support that. And that along with Windows Hello and Windows Hello for Business, which is Microsoft’s initial play, we support as well in a very big way. So we’re right there front and center to be able to satisfy that password-less experience as it continues to evolve.
Unidentified Analyst
Okay. Great. Thank you very much. Appreciated.
Operator
At this time, this will conclude today’s question-and-answer session. I’d like to turn the conference back over to management for any closing remarks.
Mike DePasquale
Thank you. And thank you again everyone for participating in today’s call. We hope you will join us again for our Q4 and year end conference call after the close of the year. Thank you, everyone.
Operator
The conference is now concluded. We do want to thank everyone for attending today’s presentation. At this time, you may now disconnect
