IPAS

iPass Inc. (IPAS)

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iPass Inc. (IPAS)

Q1 2011 Earnings Call

May 9, 2011 5:00 pm ET

Executives

Steven Gatoff – CFO

Evan Kaplan – President and CEO

Analysts

Frederick Ziegel – Blue Water Capital Markets

Justin Orlando – Dolphin Management

Kevin Hanrahan – KMH Capital Advisors

Bernie Sandford – Winslow, Evans & Crocker

Daniel Weissman – WeissCo

Presentation

Operator

Good day and welcome to the iPass first quarter 2011 earnings conference call. Today’s conference is being recorded.

At this time, I would like to turn the conference over to iPass Inc. Please go ahead.

Steven Gatoff

Thank you. Good afternoon, everyone. Thank you for joining us to discuss our financial and operating results for the first quarter of 2011. I’m Steven Gatoff, Chief Financial Officer of iPass, and I’m here today with Evan Kaplan, President and CEO.

Before I turn the call over to Evan, I’d like to bring the following to your attention. The date of this call is May 9, 2011.

Our discussion today contains forward-looking statements about events and circumstances that have not yet occurred. Statements regarding our projected financial results for the second quarter of 2011 and the full-year 2011, statements containing words such as, will, expect, anticipate, believe, plan, intend and should, and other statements in the future tense are forward-looking statements.

Actual outcomes and results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including those set forth in today’s press release, our quarterly reports on Form 10-Q and our annual report on Form 10-K that are filed with the Securities and Exchange Commission. These reports are available on our website and at www.sec.gov. Please note that iPass undertakes no responsibility to update the information in this conference call.

On this call, we will also provide a talk about our results using non-GAAP financial measures. The press release and our website include text and tables that explain how we define and calculate the various non-GAAP metrics and a reconciliation of non-GAAP results to GAAP results.

The press release and Form 8-K announcing our financial results are available on our website at www.ipass.com. This earnings call is being recorded for replay. It is being webcast and will also be available on our website for one quarter until the next earnings call. Please note that this webcast is the property of iPass and any copyright or rebroadcast without the express prior written consent of iPass is prohibited.

With that, I’d like to turn the call over to Evan.

Evan Kaplan

Thanks, Steven. Good afternoon, everyone. Thanks for joining us. Let me jump right into it. On today’s call, I would like to accomplish three things. First, I want to give you an update on the progress we are making in our enterprise business with our Open Mobile Platform. Second, I want to lay out some of the specifics of the important announcement we made today regarding our new partnerships with Deutsche Telekom and the parent company T-Mobile. And third, I want to continue to outline for you the important role that Wi-Fi networks in general, and iPad specifically are poised to play in the clearly capacity constrained wireless world.

Let us start with our enterprise business. I’m pleased with the progress we’re making with our Open Mobile Platform. As a reminder, Open Mobile is our technology platform that includes our Cloud-based mobility management portal, our various client agents for Mac, Windows, iPhone, iPad, android and other devices. It also includes our worldwide transaction infrastructure that securely authenticates bills, and clears Wi-Fi transactions for enterprise customers and carrier partners.

With respect to our enterprise business, it is now clear that our enterprise customers are committing to the new platform. This past quarter we almost doubled the total number of Open Mobile customers under contract, and we now have more than 90 customers committed to the new platform, including the recent additions of Boeing, Honeywell, Dow Jones, Cable & Wireless, Baxter Healthcare, Fujitsu, and Newell Rubbermaid among others.

And while deployments are still slower than I would have liked, I’m happy to say that we now have more than 14,000 enterprise users paying us each month for our open mobile service. I believe we are poised for some significant large-scale deployment in the latter half of this year, particularly as our larger carrier partners finish their productization efforts, and bring their versions of Open Mobile to market over the next few quarters.

As a reminder, today we have in average of 610,000 paying users per month, and approximately 1.8 million unique users over the course of the year. The vast majority of those are on our Legacy IPC platform, and our top goal is to migrate those users over the course of the next few years.

From a broader perspective, the really good news is that while the sample size is still relatively small, those early Open Mobile customers are using the Open Mobile product more actively than the users of the Legacy IPC platform. That is the result we were targeting, and speaks to the early success of the value proposition and our goal to increase the effective revenue generated by each end-user. To be even more specific, with each new deployment of Open Mobile, we expected to see increased migration of existing users, we expected to add more unique users, and of course we expected to see more usage from all users. While it is still a small data set, we are pleased to be seeing exactly what we expected.

Read the rest of this transcript for free on seekingalpha.com