Methinks
3 months ago
https://www.accesswire.com/901068/widepoint-wyy-reports-second-quarter-and-year-to-date-2024-financial-results
WidePoint WYY Reports Second Quarter and Year to Date 2024 Financial Results
Wednesday, 14 August 2024 04:05 PM
FAIRFAX, VA / ACCESSWIRE / August 14, 2024 / WidePoint Corporation (NYSE American:WYY), the innovative enterprise cyber security and mobile technology provider, reported results for the second quarter and six-months ended June 30, 2024.
Second Quarter 2024 and Recent Operational Highlights:
Awarded $254 million contract modification by the U.S. Department of Homeland Security increasing the ceiling of the Cellular Wireless Management Services 2.0 contract from $500 million to $754 million
Selected by the U.S. Navy as one of seven contractors for the 10-Year, $2.7 billion Spiral 4 contract
Certified and successfully deployed new proprietary MobileAnchor Digital Credential into a Federal Agency
28th consecutive quarter of positive Adjusted EBITDA
Third consecutive quarter ending free cash flow positive
Second Quarter 2024 Financial Highlights:
Revenues were $36 million, a 35% increase from the same quarter last year
Adjusted EBITDA, a non-GAAP financial measure, was $811,000, a 479% improvement from the same quarter last year
Gross margin was 14%, and gross margin excluding carrier services revenue was 31%
Net loss decreased to $500,000 compared to $842,000 from the same period last year, or a loss of $(0.05) per diluted share
Free cash flow1, a non-GAAP financial measure, was $800,000, or an improvement of 467% compared to the same period last year
As of June 30, 2024, cash was $4.0 million with no bank debt
Six Months 2024 Financial Highlights:
Revenues were $70.2 million, a 35% increase from the same quarter last year
Adjusted EBITDA, a non-GAAP financial measure, was $1.4 million, a 764% increase from the same quarter last year
Gross margin was 14%, and gross margin excluding carrier services revenue was 31%
Net loss decreased to $1.2 million or a loss of $(0.13) per diluted share compared to $1.8 million in the same period last year,
Free cash flow1, a non-GAAP financial measure, was $1.4 million
1 Free cash flow, a non-GAAP financial measure, is defined as Adjusted EBITDA less capital expenditures
Management Commentary
"We continue to make significant strides in our sequential financial performance and growth, with notable improvements in both our top-line results and adjusted EBITDA," said WidePoint CEO Jin Kang. "Compared to last year, our position in the capital markets has improved, thanks to the effective execution of our organic growth strategy. Our strategic investments and partnerships, including advancements in our business solutions, certifications and credentials, project management offices, and strategic hires, have all contributed to driving sales growth and profitable projections in 2025. Additionally, we have received initial RFQs for the Spiral 4 contract and are currently setting up administrative arrangements with the Navy and establishing vendor agreements for services and equipment. We maintain a positive outlook for the remainder of the year, buoyed by promising sales developments and technological advancements that will further enhance WidePoint's ability to offer a diverse range of services and support our sales and marketing goals for years to come."
Second Quarter 2024 Financial Summary
THREE MONTHS ENDED
(In millions except per share amounts)
JUNE 30,
2024
2023
(Unaudited)
Revenue
$
36.0
$
26.8
Gross profit
4.9
3.9
Gross profit margin
14
%
15
%
Operating expenses
5.4
4.6
Loss from operations
(0.5
)
(0.7
)
Loss per share
$
(0.05
)
$
(0.10
)
EBITDA
0.4
0.0
Adjusted EBITDA
0.8
0.1
Six-Month 2024 Financial Summary
SIX MONTHS ENDED
(In millions except per share amounts)
JUNE 30,
2024
2023
(Unaudited)
Revenue
$
70.2
$
52.0
Gross profit
9.6
7.7
Gross profit margin
14
%
15
%
Operating expenses
10.7
9.3
Loss from operations
(1.1
)
(1.6
)
Loss per share
$
(0.13
)
$
(0.20
)
EBITDA
0.6
(0.1
)
Adjusted EBITDA
1.4
0.2
Conference Call
Wide Point's management will host the conference call today (August 14, 2024) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
U.S. dial-in number: 888-506-0062
International number: 973-528-0011
Access Code: 403107
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at (949) 574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the company's website.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through Wednesday, August 28, 2024.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 50911
About WidePoint
WidePoint Corporation (NYSE American:WYY) is a leading technology Managed Solution Provider (MSP) dedicated to securing and protecting the mobile workforce and enterprise landscape. WidePoint is recognized for pioneering technology solutions that include Identity and Access Management (IAM), Mobility Managed Services (MMS), Telecom Management, Information Technology as a Service (ITaaS), Cloud Security, and Analytics & Billing as a Service (ABaaS). For more information, visit widepoint.com.
Non-GAAP Financial Measures
WidePoint uses a variety of operational and financial metrics, including non-GAAP financial measures such as EBITDA and Adjusted EBITDA, and Free cashflow, to enable it to analyze its performance and financial condition. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP Net income to EBITDA and Adjusted EBITDA and Free cashflow is provided below:
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
NET LOSS
$
(499,600
)
$
(842,100
)
$
(1,152,700
)
$
(1,793,600
)
Adjustments to reconcile net income to EBITDA:
Depreciation and amortization
906,900
771,700
1,740,300
1,540,100
Amortization of deferred financing costs
-
-
-
-
Income tax provision (benefit)
15,800
48,800
(26,300
)
55,100
Interest income
(51,800
)
(9,200
)
(101,200
)
(11,400
)
Interest expense
72,400
56,900
131,100
115,700
EBITDA
$
443,700
$
26,100
$
591,200
$
(94,100
)
Other adjustments to reconcile net (loss) income to Adjusted EBITDA:
Loss on factoring of receivables
1,666
18,858
8,948
18,858
Stock-based compensation expense
365,900
95,500
783,700
235,600
Adjusted EBITDA
$
811,266
$
140,458
$
1,383,848
$
160,358
Capital expendatures
(11,507
)
(358,658
)
(18,001
)
(717,928
)
Free cashflow
$
799,759
$
(218,200
)
$
1,365,847
$
(557,570
)
WidePoint uses Adjusted EBITDA and Free cashflow as supplemental non-GAAP measure of performance. WidePoint defines EBITDA as net income excluding (i) interest expense, (ii) provision for or benefit from income taxes, (iii) depreciation and amortization, and (iv) Impairment charges. Adjusted EBITDA excludes certain amounts included in EBITDA. WidePoint is not providing a quantitative reconciliation of adjusted EBITDA in reliance on the "unreasonable efforts" exception for forward-looking non-GAAP measures set forth in SEC rules because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense. In this regard, WidePoint does not provide a reconciliation of forward-looking adjusted EBITDA (non-GAAP) to GAAP net income, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, WidePoint is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income being materially less than is indicated by estimated adjusted EBITDA (non-GAAP).
Safe Harbor Statement
This press release contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included herein are forward-looking statements. You can identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned," "predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including, the impact of supply chain issues; our ability to successfully execute our strategy; our ability to sustain profitability and positive cash flows; our ability to access sufficient financing on acceptable terms given the tightening credit markets due to the current banking environment; our ability to gain market acceptance for our products; our ability to win new contracts, execute contract extensions and expand scope of services on existing contracts; our ability to compete with companies that have greater resources than us; our ability to penetrate the commercial sector to expand our business; our ability to identify potential acquisition targets and close such acquisitions; our ability to successfully integrate acquired businesses with our existing operations; our ability to maintain a sufficient level of inventory necessary to meet our customers demand due to supply shortage and pricing; our ability to retain key personnel; our ability to mitigate the impact of increases in interest rates; the impact of increasingly volatile public equity markets on our market capitalization; the impact and outcome of negotiations around the Federal debt ceiling; our ability to mitigate the impact of inflation; and The risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 31, 2024.
The forward-looking statements included herein are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
WidePoint Investor Relations:
Gateway Group, Inc.
Matt Glover or John Yi
949-574-3860
WYY@gateway-grp.com
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30,
DECEMBER 31,
2024
2023
(Unaudited)
ASSETS
CURRENT ASSETS
Cash
$
4,000,899
$
6,921,160
Accounts receivable, net of allowance for credit losses
of $78,334 and $81,359, respectively
10,560,802
8,219,793
Unbilled accounts receivable
25,784,217
16,618,639
Other current assets
1,527,940
1,083,671
Total current assets
41,873,858
32,843,263
NONCURRENT ASSETS
Property and equipment, net
617,203
780,800
Lease right of use asset
3,707,771
4,045,222
Intangible assets, net
6,098,664
7,336,348
Goodwill
5,811,578
5,811,578
Other long-term assets
489,700
483,288
Total assets
$
58,598,774
$
51,300,499
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$
14,033,887
$
12,633,658
Accrued expenses
22,594,181
16,175,702
Current portion of deferred revenue
2,269,718
2,009,343
Current portion of lease liabilities
600,819
638,258
Total current liabilities
39,498,605
31,456,961
NONCURRENT LIABILITIES
Lease liabilities, net of current portion
3,874,080
4,114,516
Contingent consideration
6,900
6,900
Deferred revenue, net of current portion
1,059,922
1,027,770
Deferred tax liabilities, net
138,077
16,923
Total liabilities
44,577,584
36,623,070
Commitments and contingencies (Note 14)
-
-
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 10,000,000 shares
authorized; 2,045,714 shares issued and none outstanding
-
-
Common stock, $0.001 par value; 30,000,000 shares
authorized; 9,485,508 and 8,893,220 shares
issued and outstanding, respectively
9,487
8,894
Additional paid-in capital
102,676,148
102,151,381
Accumulated other comprehensive loss
(363,835
)
(334,899
)
Accumulated deficit
(88,300,610
)
(87,147,947
)
Total stockholders' equity
14,021,190
14,677,429
Total liabilities and stockholders' equity
$
58,598,774
$
51,300,499
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
SIX MONTHS ENDED
JUNE 30,
JUNE 30,
2024
2023
2024
2023
(Unaudited)
REVENUES
$
36,040,771
$
26,762,857
$
70,248,050
$
52,036,538
COST OF REVENUES (including amortization and depreciation of
$654,122, $508,025, $1,231,027, and $1,010,585, respectively)
31,147,549
22,853,220
60,688,937
44,316,961
GROSS PROFIT
4,893,222
3,909,637
9,559,113
7,719,577
OPERATING EXPENSES
Sales and marketing
559,926
542,172
1,171,819
1,063,850
General and administrative expenses (including share-based
compensation of $365,958, $95,454, $783,741 and $235,570, respectively)
4,542,769
3,830,513
8,991,252
7,741,333
Depreciation and amortization
252,112
263,684
508,646
529,527
Total operating expenses
5,354,807
4,636,369
10,671,717
9,334,710
LOSS FROM OPERATIONS
(461,585
)
(726,732
)
(1,112,604
)
(1,615,133
)
OTHER (EXPENSE) INCOME
Interest income
51,725
9,245
101,151
11,441
Interest expense
(72,331
)
(56,910
)
(131,068
)
(115,688
)
Other (expense) income, net
(1,534
)
(18,864
)
(36,405
)
(19,058
)
Total other (expense) income, net
(22,140
)
(66,529
)
(66,322
)
(123,305
)
LOSS BEFORE INCOME TAX (BENEFIT) PROVISION
(483,725
)
(793,261
)
(1,178,926
)
(1,738,438
)
INCOME TAX (BENEFIT) PROVISION
15,828
48,812
(26,263
)
55,114
NET LOSS
$
(499,553
)
$
(842,073
)
$
(1,152,663
)
$
(1,793,552
)
EARNINGS PER SHARE, BASIC AND DILUTED
$
(0.05
)
$
(0.10
)
$
(0.13
)
$
(0.20
)
WEIGHTED-AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED
9,390,154
8,794,704
9,151,265
8,767,163
DILUTED EARNINGS PER SHARE
$
(0.05
)
$
(0.10
)
$
(0.13
)
$
(0.20
)
DILUTED WEIGHTED-AVERAGE SHARES OUTSTANDING
9,390,154
8,794,704
9,151,265
8,767,163
WIDEPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30,
2024
2023
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(1,152,663
)
$
(1,793,552
)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Deferred income tax expense
117,700
-
Depreciation expense
516,833
532,557
Provision for credit losses
13,725
34,037
Amortization of intangibles
1,223,491
1,007,555
Share-based compensation expense
783,741
235,570
Loss on disposal of fixed assets
-
3,211
Changes in assets and liabilities:
Accounts receivable and unbilled receivables
(11,774,202
)
(2,158,825
)
Inventories
82,917
(85,066
)
Other current assets
(511,277
)
(54,040
)
Other assets
(6,412
)
27,161
Accounts payable and accrued expenses
7,856,266
2,197,714
Income tax payable
(90,629
)
25,535
Deferred revenue and other liabilities
303,130
1,049,118
Net cash (used in) provided by operating activities
(2,637,380
)
1,020,975
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment
(18,001
)
(103,014
)
Capitalized hardware and software development costs
-
(614,914
)
Proceeds from beneficial interest in sold receivables
259,125
143,116
Net cash provided by (used in) investing activities
241,124
(574,812
)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances on bank line of credit
4,600,000
6,493,284
Repayments of bank line of credit advances
(4,600,000
)
(6,493,284
)
Principal repayments under finance lease obligations
(278,574
)
(255,436
)
Withholding taxes paid on behalf of employees on net settled restricted stock awards
(258,381
)
(3,628
)
Net cash used in financing activities
(536,955
)
(259,064
)
Net effect of exchange rate on cash
12,950
57,150
NET (DECREASE) INCREASE IN CASH
(2,920,261
)
244,249
CASH, beginning of period
6,921,160
7,530,864
CASH, end of period
$
4,000,899
$
7,775,113
SOURCE: WidePoint Corporation
Methinks
3 months ago
From Seeking Alpha.com -
WidePoint Corporation (WYY) Q2 2024 Earnings Call Transcript
Aug. 14, 2024 8:30 PM ETWidePoint Corporation (WYY) Stock
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WidePoint Corporation (NYSE:WYY) Q2 2024 Earnings Conference Call August 14, 2024 4:30 PM ET
Company Participants
Jin Kang - President and CEO
Jason Holloway - Chief Revenue Officer
Robert George - CFO
Conference Call Participants
Barry Sine - Litchfield Hills Research
Operator
Good afternoon. Welcome to WidePoint's Second Quarter 2024 Earnings Conference Call. My name is Matthew, and I will be your operator for today's call.
Joining us for today's presentation are WidePoint's President and CEO, Jin Kang; Chief Revenue Officer, Jason Holloway; and Chief Financial Officer, Robert George. Following their remarks, we will open up the call for questions from WidePoint's publishing analysts and major investors. If your questions were not taken today and you like additional information, please contact WidePoint's Investor Relations team at wyy@gateway-grp.com.
Before we begin the call, I would like to provide WidePoint's Safe Harbor Statements 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 the future performance of WidePoint Corporation that involve 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-Q filed with the Securities and Exchange Commission.
Finally, I’d 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’d like to turn the call over to WidePoint's President and CEO, Mr. Jin Kang. Sir, please proceed.
Jin Kang
Thank you, operator, and good afternoon to everyone. Thank you for joining us today to review our financial results for the second quarter ended June 30, 2024. I am pleased to share that we have continued to build on the momentum from previous quarters, having finished Q2 ahead of forecast for the second consecutive time and seeing significant year-over-year improvements in revenue, adjusted EBITDA and free cash flow.
Our revenue for second quarter was $36 million, and our six month revenue ended June 30, 2024, was $70 million, both a 35% increase from the same period in 2023 and a testament to our team's ability to execute our sales and marketing strategy. We achieved our 28th consecutive quarter of positive adjusted EBITDA, concluding with $811,000 or 479% increase from the same period last year.
For the six months ended June 30, 2024, our adjusted EBITDA was approximately $1.4 million, which is a 764% increase from the same period last year. We also achieved a third consecutive quarter of positive free cash flow sequentially improving from $310,000 in Q4 2023 and $566,000 and $800,000 in the first and second quarter 2024 respectively. Compared to where we were last year, our position in the capital markets has improved significantly, thanks to our team's dedication to executing our organic growth strategy.
Our sales and marketing team continues to deliver and capture new high-margin contracts that have positioned us well for potential positive earnings per share for 2025. Additionally, all of our capital investments and fixed costs have been paid for and we continue to aggressively manage our costs, supporting our future bottom-line results, margin improvements and profitability projections.
As evidenced by our consecutively improving free cash flow figures, we are heading in the right direction. Our strategic partnerships and investments, particularly in our different business solutions, have played an incremental role in driving our sales growth and have significantly contributed to our topline performance over the past several quarters. These efforts, along with our certification and accreditation, superior and diverse suite of offerings as well as recently announced MobileAnchor Digital Credential solutions have positioned us well to be able to successfully target our competitors' business.
WidePoint is now in a strong position where our strategic partners seek us out and want to work with us, a significant shift from a few years ago when we were the ones pursuing them. The investments and efforts we have made over the years are paying off, and we are excited to continue building on this upward momentum towards profitable return for our valued shareholders.
Moving on to some second quarter contract highlights and operational developments. The standout this quarter was our $2.7 billion Spiral 4 contract award, where we were one of seven companies, including the US Big 3 wireless carriers, to provide a full range of wireless and telecommunication services to military personnel and federal civilian employees stationed within the country and the US territories. We also received the contract modification, adding $254 million to the ceiling of the CWMS 2.0 contract with DHS.
Specifically with Spiral 4, we have started receiving initial RFQs and are in the process of setting up administrative arrangements with the US Navy, as well as establishing vendor agreements for services and equipment. We have a differentiated set of offerings for the Navy and believe that we will be able to successfully compete with previous incumbents on this contract. We look forward to sharing more good news with you on this front on our future calls.
Our CWMS 2.0 contract with DHS is an Indefinite Delivery, Indefinite Quantity or IDIQ contract valued at $754 million reflecting an increase of $254 million, which represents nearly a 55% increase from the original contract value. And as announced in our previous earnings call, we have begun to receive additional task order requests for quotes from DHS since the contract ceiling increased. We should see the results from these new task order awards that will improve our topline and bottom line results.
Additionally, as many of you have seen in our press release, we made a strategic hire by bringing on Michelle Richards, who is now our lead for CWMS program. Michelle has an extensive background working within the DHS community and brings to WidePoint over 3 decades of experience in the mobile telecommunication industry and over 15 years of federal government contracting experience.
Michelle's industry stature will help WidePoint enhance our commercial and federal presence and impact. And our expertise will be invaluable in preparing for and capturing significant portions of the Spiral 4 contract. We are excited to have her on board and with her vision and mission perfectly aligned with WidePoint, we look forward to the immense value she will be providing.
In addition to these two IDIQ contracts, we have two more exciting milestone deals currently in the works. First is the CWMS 3.0 RFI, a 10-year and approximately $1.5 billion to $2 billion contract. Our systems and processes are closely integrated with DHS systems and our strong track record for past performance positions us in the best spot to rewin this contract. We hold certification and accreditations that our competitors cannot match and our pending FedRAMP authorized status will further strengthen our competitive edge.
Additionally, we are pursuing the SEWP VI contract with NASA. This opportunity is a 10-year $60 billion government-wide acquisition contract or GWAC, that can be utilized by every government agency. This contract's scope of work includes all manners of IT products and services. We believe that we have the qualification, the certifications and accreditations to be a winner on this contract. We will also be positioned well with a differentiated set of products and services to capture a significant amount of work under this contract.
To maximize our ability to capture significant work under these outstanding IDIQ contracts, we have recently implemented a project management office model or PMO. This model will aid WidePoint in outperforming our competitors in capturing work under these IDIQ contracts. The PMO model takes a team approach to managing large programs, ensuring that there is no single point of failure and a model that has worked well in our other marquee programs. We will continue to leverage this PMO model and are excited to see our team capture additional work to further drive our top and bottom-line growth.
These billion-dollar IDIQ contracts we pursue such as the $2.7 billion Spiral 4 and the $60 billion SEWP VI contracts are crucial to our company's long-term growth strategy. These contracts provides a target-rich environment, offering a unique competitive advantage for WidePoint's sales and marketing team. Many companies aspire to operate in such a target-rich lucrative ecosystem, but very few have the opportunity.
With our recent strategic investments, partnerships, certifications and accreditations and application of the PMO model, we continue to aggressively invest in our sales and marketing efforts to position ourselves to maximize our ability to capture work and more importantly, the opportunity to even do so in the first place. This proactive approach aims to ensure that WidePoint secures a meaningful portion of these contracts. Even capturing a small percentage of the $1 billion opportunity from these two contracts alone could substantially elevate our growth trajectory.
In the commercial sector, we are seeing pilot projects launched and strategic partnership consummated with systems integrators, which are resulting in new opportunities. We are pursuing sizable opportunities with Fortune 100 companies and look forward to providing you with news of contract awards later this year.
In the second quarter alone, we saw contractual actions across all WidePoint solution lines, including our managed mobility services, identity and access management, IT as a service and interactive billing and analytics. These new opportunities are the high-margin SaaS contracts, our sales and marketing team is aggressively pursuing, which are expected to contribute greatly to our bottom-line performance.
We began the third quarter with approximately $320 million in federal contract backlog. Additionally, our current qualified sales pipeline is healthier than it has ever been. To provide you some additional color on our sales pipeline, I’ll now hand the mic over to Jason, who will dive deeper into our sales and marketing efforts and recent technological developments, specifically our new proprietary MobileAnchor Digital Credential solution. Jason?
Jason Holloway
Thanks, Jin, and good afternoon, everyone. As Jin just mentioned, we successfully developed, tested and authenticated our new proprietary MobileAnchor Digital Credential. This digital credential solution no longer requires a smart card, but instead is deployed directly on to smart mobile devices, providing the highest level of security for mobile digital credentials available while ensuring that cyber interactions use the most secure identity management solutions on the market today.
This is a technology breakthrough and places WidePoint ahead of our competition in the cyber identity world. We have already successfully deployed MobileAnchor in a federal agency and are actively marketing it to other federal and commercial agencies that currently use the traditional smart card-based credentials. We continue to establish our competitive edge, and this new product will enable us to win business from our competitors as they do not offer similar solutions. This coincides with our strategy to win work away from our competitors in the IdM sector. We're excited to continue marketing this new product and look forward to potentially implementing it within our pipeline of deals currently in the works.
On a related note, MobileAnchor has traction within the Department of Education. As you are aware, we've been aggressively pursuing K-12 at the district level. Now we are seeing a shift in getting closer to securing the necessary customer funding to move this initiative forward. Even though WidePoint has been at the forefront of identity and access management since the inception of PKI, it takes time to reconfigure our solution to address a market such as K-12. We will keep you posted as MobileAnchor gains traction within the Department of Education.
As Jin mentioned earlier, SEWP VI is a very exciting opportunity for WidePoint. Due to its 10-year, $60 billion ceiling, WidePoint is uniquely positioned to provide our Managed Mobility Services, as well as gain additional market share for our proprietary platform, intelligent technology management system. Along with the impending FedRAMP authorized status, we are cautiously optimistic that WidePoint will be positioned to capitalize once the SEWP VI has been awarded.
As I've stated previously, we are optimistic regarding our pipeline, and there are many opportunities that we are aggressively working. That being said, we are proactively hiring additional strategic resources in anticipation of these contract awards as well as pursuing additional sales opportunities. We have established our program management offices or PMO for both the DHS 3.0 recompete effort and the Spiral 4 contract. We will also be utilizing the same PMO model for SEWP VI.
Lastly, for Q3 and onwards, we plan to continue advancing our efforts to enhance WidePoint's overall capabilities. The ongoing innovation in our technological capabilities is critical for strengthening and maintaining our competitive position. By improving our technological capabilities, we aim to offer more solutions and better meet the needs of our clients. This strategic focus on technology will significantly enhance our ability to secure new contracts and expand our marketing presence in the future. We are confident that these efforts will play a vital role in driving our long-term growth and success, and we look forward to announcing relevant developments as they arise.
With that, I will now turn the call over to Bob to discuss our second quarter financial results. Bob?
Robert George
Thank you, Jason, and thanks to everyone for joining us today. I'm pleased to share the details of our financial results for the second quarter and first half of 2024. We delivered strong three and six months 2024 results, and I'm happy to report we are trending towards the higher end of our guidance range. Total revenues for the quarter were $36 million, an increase of $9.3 million or 35% from $26.8 million reported for the same period last year. Revenues for the first half of '24 were $70.2 million, an increase of $18.2 million or 35% on the $52 million in the same period last year.
Now I'll provide a further breakdown of our second quarter and first half 2024 revenues. Our carrier services revenue for the quarter was $20.4 million, an increase of $6.2 million compared to the same period in 2023. Carrier services revenue for the first half of '24 was $39.8 million, an increase of $11.9 million compared to the same period last year.
Our managed services revenue for the quarter was $9.2 million an increase of $2.3 million or 25% compared with the same period in 2023. For the first half of 2024, our managed services revenues were $17.9 million, an increase of $4.1 million or 23% in the same period last year. The increase in both carrier and managed services revenue is principally due to new federal and commercial customers signed in the third and fourth quarter of 2023, which are not reflected in the comparison period last year and also, due to growth within several existing federal customers.
Billable services fees for the quarter were $1.2 million, a decrease of $618,000 compared to the same period in 2023. For the first half of 2024, billable services fees were $2.4 million, a decrease of $678,000 in the same period last year. The second quarter and the first half of 2024, the decrease was due to comparatively less project work at a US government customer. Reselling and other services in the second quarter were $5.2 million, an increase of $1.5 million from the same period last year.
For the first half of 2024, reselling and other services were $10.2 million, an increase of $2.9 million from the same period last year. The increase for both periods was due to increased demand and sales activity for items that we sell to our federal and commercial customers. A reminder, reselling and other services are transactional in nature and the amount and timing of revenue may vary significantly from period to period.
Gross profit for the second quarter was $4.9 million or 14% of revenue compared to $3.9 million or 15% of revenues in the same period in 2023. Gross profit for the first half of 2024 was $9.5 million or 14% of revenues compared to $7.7 million or 15% of revenues in 2023. The more significant metric of gross profit percentage excluding carrier services, was 31% in the second quarter which is consistent from the same period last year.
For the first half of 2024, gross profit percentage, excluding carrier services, was 31% compared to 32% in the same period last year. Slightly lower gross margin percentage excluding carrier services is impacted by our revenue mix and increased depreciation and amortization related to our completed delivery platforms. Our gross profit percentage will vary from period to period based on our revenue mix.
Sales and marketing expenses in the second quarter were $600,000 or 2% of revenue compared to $500,000 and also 2% of revenues in the same period last year. In the first half of 2024, sales and marketing expenses were $1.2 million or 2% of revenues compared to $1.1 million and 2% of revenues in the same period last year.
We expect to see further dollar increases in sales and marketing expenses as we continue to invest in sales and marketing efforts, though we expect sales and marketing to be constant to slightly lower as a percentage of revenue. General and administrative expenses in the second quarter are $4.5 million or 12% of revenues compared to $3.8 million or 16% of revenues in the same period of 2023. General and administrative expenses in the first half of 2023 are $8.9 million or 13% of revenue compared to $7.8 million or 15% of revenue in 2023. The increase in absolute dollars relates primarily to an increase in share-based compensation expenses.
Net loss for the second quarter decreased by $342,000 to a net loss of $500,000 or a loss of $0.05 per share compared to a net loss of $842,000 or a loss of $0.10 per share for the same period last year. Net loss for the first half of 2024 decreased by $600,000, with a net loss of $1.2 million or a loss of $0.13 per share compared to a net loss of $1.8 million or a loss of $0.20 per share in the same period last year.
Moving to the balance sheet. We ended the quarter with $4 million in cash, which, in our view, is a significant decrease compared to the $6.9 million at December 31, 2023. This is significant, particularly considering our strong free cash flow metrics over the last three quarters. The decrease in cash was primarily due to new customer implementations, which have temporarily impacted billings and accordingly our cash position.
We want to highlight that we have additional liquidity options available with our revolving line of credit facility with $4 million of potential borrowing capacity, although we do not anticipate having to rely on that facility. Further, we don't expect these issues to persist and are actively working to resolve them to improve our cash position in the coming quarters.
This completes my financial summary. For a more detailed analysis of our financial results, please refer to our Form 10-Q, which was filed prior to this call.
With that, I'll turn the call back over to Jin.
Jin Kang
Thank you, Bob and Jason. One ongoing initiative we'd like to update you on is our FedRAMP certification status. We have submitted responses to all of GSA's questions, and they are currently under review. While we are still in the in-process stage, we expect to achieve FedRAMP authorized status by the end of 2024. This certification is one of the key technological investments that Jason mentioned, which will diversify our offerings and capture business from competitors, while enhancing WidePoint's competitive edge and position in the market.
With the upcoming federal election cycle, budget discussions are expected to take center stage once again. A change in administration could lead to delays in federal budgets regardless of which party wins the presidency. We will closely monitor the situation as it unfolds. Currently, we anticipate minimal or no impact from the administration change, given that we operate in the critical sector of cybersecurity and mobility management. These areas are essential services that will remain in high demand for the foreseeable future.
Lastly, I'd like to reiterate our guidance where we expect revenues to range between $120 million and $133 million, adjusted EBITDA range between $2.1 million and $2.4 million. Additionally, we expect free cash flow to range between $2 million and $2.3 million.
I'm happy to report that we have been ahead of our forecast for the past two quarters and are trending towards the higher end of our guidance for the full year. Our sales and marketing efforts, technological advancements and the deals currently in the pipeline are strong indicators of improvements in our bottom-line and margin for the upcoming quarters.
Our team continues to aggressively push for profitable operations in the fourth quarter, and we anticipate achieving positive earnings per share in 2025. Our executive team maintains a positive outlook on our future as evidenced by several board members and executives acquiring additional shares in the open market. We remain dedicated to unlocking sustainable growth and delivering strong returns for our valued shareholders.
That concludes our prepared remarks, and now we'll take questions from our analysts and major shareholders. Operator, will you please open the call for questions.
Question-and-Answer Session
Operator
Certainly. Everyone at this time we conducting a question-and-answer session. [Operator Instructions] Your first question is coming from Barry Sine from Litchfield Hills Research. Your line is live.
Barry Sine
Hi, good evening gentlemen. First question is on CWMS. I don't think my hand was writing fast enough to get all the details down. So it sounds like there is visibility on letting out 3.0. If you could just repeat the dollar amount, give us any sense of the timing on that? And then just to put that in some perspective, obviously you won 2.0. You recently had a very significant increase in the ceiling on that. And then I remember vividly, 2.0 just took forever to get extended. So the government works pretty slowly. So I guess we shouldn't be expecting a fast decision on 3.0?
Jin Kang
Hi ihGiBarry, this is Jin. It's good to hear from you again. The answer is yes. It will probably take longer than anticipated. Right now the timeline for the 3.0 award is going to -- they want to get it done by the end of 2015 -- I mean, 2025, sorry. And the reason for them upping the cap on the contract is because they have already reached the ceiling on the contract with task orders that were already awarded under 2.0. And I believe also that the additional dollars will also provide an overlap between the 2.0 and 3.0, so that they can smoothly transition from the 2.0 and the 3.0.
And so we believe that this contract now is going to go from a five-year contract to a 10-year contract. And we did sort of a mathematical extrapolation to come up with the $1.2 billion to $1.5 billion ceiling. And so based upon where we are today, we are at $750 million or so million. So if you multiply that by two for a 10-year period, that will put you at like $1.5 billion in a delegated procurement authority. And so that's what we are seeing.
Again, we feel like we are ahead of our competition in our software platform, our subject matter expertise and our past performance with DHS. Just like when we competed for the 2.0, our systems and workflows are all integrated with DHS's processes and systems, and we have the security accreditations and certifications that others cannot match. So we feel pretty good about our prospect of winning the 3.0. But we're not sitting on our hands. We are constantly looking for improvements, constantly looking for value-add services that we can offer to DHS so that when it come the award time for 3.0, we will be the ones receiving the award.
Barry Sine
And just a few more points of clarification on CWMS. What is the official contract end date for 2.0? And then when that happens, last time, it ended they didn't renew, but you were made whole the whole time. So I know there was investor angst that you were made a whole the whole time while they took an extended period to renew that. So could you give us the expiration date? And then just remind us what did happen previously. And hopefully, that's an indication of what may happen if they're late on issuing 3.0.
Jin Kang
Sure, sure. So the official end date for the CWMS 2.0 is November, I believe, 19th or 20th of 2015. And so -- '25? 2025. Yes. Did I say 2015 again? I'm looking back. But anyway, it is November 19th or 20th of 2025 and likely, it may be extended -- and so the last time what happened was the government came up to the end date, and they put in a bridge contract for a year. The contract was supposed to have been a five-year contract, and it ended up being 8. So they had extended the contract with like a 12-month contract. They put another bridge contract in for 1.5 years. And then they exercised another option to go another six months beyond that, making it an eight-year contract for a five-year contract.
So it is -- it could be that the contract may have to be extended. But what they did with CWMS 2.0, is that they put in an option, so that they can actually award task orders 12 months beyond the end of the official contract date. So the official contract date ended November 19 of 2025, so they can actually issue task orders that go until November 19, 2026. And if they need additional extensions, they can modify the contract to extend the contract further. They can also put a bridge contract in.
So they have a lot of tools in their tool belt to be able to extend the contract if they do fall behind on their acquisition schedule. So we won't be left holding any unpaid bills or anything like that during the time the contract is going through the recompete.
Barry Sine
What is the deadline for you to submit your bid for -- has that been given for CWMS 3.0.
Jin Kang
Not yet. What was released was a request for information. And what that is -- is that they're looking around for qualified bidders for the contract. And we intentionally didn't put out a press release because we didn't want to publicize this information, so we will get more competitors. But the deadline for the request for information had expired. I believe this was at the end of July sometime. And so we did all of our responses, and we sent it back in. And now we're letting people know that the RFI was out there on the street and that they're in the process of going through the recompete process. They have not put out the schedule for the award or when the proposals are due but it will be released in the RFP as government gets prepared to send out and receive the proposals.
Barry Sine
And I believe that context is for ITMS and ITMS is also the product that you are applying for FedRAMP certification. That's on a product-by-product basis, not on a company-wide basis. How does the delays we're seeing with the FedRAMP? And I mean you won 2.0 without FedRAMP certification. So I assume it is nice to have but not needed to have for -- to win the 3.0.
Jin Kang
Right. So that's a great question. The answer is ITMS is the product that is going under the FedRAMP certification process. As I said, we've answered all of the questions for GSA and they had an extensive list of questions, but most of them were pretty superficial questions. And I think we answered the mail on all of those things. But what I will tell you is that for DHS is that we had ATOs, authorization to operate. Essentially, what that means is that we meet all of the cybersecurity requirements that the Department of Homeland Security requires.
None of our competitors can say that. And the last time around, they did not make the FedRAMP certification specifically a requirement because there weren't that many vendors that had the system that met the FedRAMP authorized status. And so this time around, it is probably going to be the same thing. Even if we do get our FedRAMP certification because we might be the only company that has that certification, they need to open up the bidding to have some additional competitors. But what FedRAMP authorized status will do for us is that they will give us a higher point in the technical section so that we get extra points for having that capability.
Barry Sine
Okay. Got it. And then switching gears to the SEWP contract vehicle. I just want to clarify, that's S-E-W-P not soup?
Jin Kang
Correct.
Barry Sine
Okay. These acronyms. Solutions for enterprise-wide procurement. I don't quite understand why NASA is ahead for a government-wide contract and not TSA. But that's a topic for another call. So if you could give us some specifics on that. What is the deadline there for a contract award? And then also, I don't believe you were the prime previously. Are you bidding to be the prime for SEWP VI?
Jin Kang
Yes. We are bidding to be prime on SEWP VI. We were partners with other contractors like Carahsoft and I think that there was one other where we were subcontractors too. But because we have a differentiated product set, we are now pursuing this as a prime contractor. And so SEWP VI and NASA -- NASA has been going through this acquisition process for SEWP for now many years. This is the sixth iteration. So they have been doing this for a long time. And it is been a very successful contract for NASA, not only because they can get products and services for themselves because this contract is managed well, other government agencies have decided to forego their own acquisition cycle and go after using the SEWP vehicle to purchase.
There are other contracts that we are also pursuing, and we'll talk a little bit more about that on our future calls, but the SEWP contract is a fairly large scope of work, and it has products and services that goes -- again it covers the entire waterfront in information technology, products and services. So it is a very general contract for anybody to come and use the contract vehicles. That's why they increased the delegated procurement authority to $60 billion.
Barry Sine
What was it previously?
Jin Kang
I believe the previous one was like $20 billion.
Barry Sine
Okay. And switching gears to Navy Spiral 4. You had announced the win some time ago. How are we doing with task orders on Navy Spiral 4?
Jin Kang
Right now, we are in the initial stages where RFQs are coming out, and a lot of them are small and a lot of them are for renewal contracts. And so right now, we're in the process of setting up our relationship with our resellers, getting all of our pricing, all of our items and services and products, get them all nailed out. So when the RFP comes out for our specific differentiated product set, we will be bidding on them.
Barry Sine
Okay. And then Spiral 4, you've announced a product called MobileAnchor, which sounds like it would be perfect for the Navy, but I guess that's not the -- it's not intended that way. Could you elaborate, there is a lot of jargon associated with MobileAnchor. But essentially, my understanding is it allows the cell phone to be the computer processing engine for the security card rather than having a separate card.
Jin Kang
Right. So that was the MobileAnchor product that is a differentiated asset that we will be offering under SEWP. We will be offering it under Spiral 4. There is one thing that I'd like to point out for every -- all the listeners here today is that the Spiral 3 doesn't officially end until September of this year, September 2024 or something like that. And so the task orders are starting to roll in. And hopefully, we'll see some that actually meet with our specialized product and service set.
Getting back to the MobileAnchor, yes, we are going away from the traditional smart card form factor to the smartphones. And Jason can tell you a little bit more about that our MobileAnchor and our -- how that is differentiated from our competitors.
Jason Holloway
Hi, Barry how are doing?
Barry Sine
Hi Jason.
Jason Holloway
As Jin mentioned, so with MobileAnchor, historically, people have been using their smart card credentials. That's the credential that has the chip on it. And typically, what they are doing is they stick it into the side of their laptop or they have a sled that's connected to the mobile device itself. Historically what some people have been doing to get what's called a derived credential which all that means is that it allows you to do secure communications from your mobile device is they've been using what's called a mobile device management container. But what that does is, without getting too technical on everybody is that transmission and authentication is happening over the airways. So essentially, there is no real security or authenticating that's actually happening.
So what WidePoint has figured out how to do is how to generate a net new digital credential on the device itself, and that's what makes it so game-changing. So we've taken all of the vetting, the identity of the cardholder, right, of that person, so it will be very signed. And then we've been able to derive that data and then put that information on the device itself and then that allows you to be able to securely sign e-mail transmissions and all of the things that are happening on the mobile device itself.
So it's -- like I said on the call, it's a big-time game changer. There's -- we know that a lot of the federal agencies are going to be very interested in this because they clearly understand that MDMs -- using MDM containers over the airways has been one of those good enough solutions, and I think all of our listeners will agree that good enough, it's just not -- it's not good enough anymore. So we're very happy to be in the position that we're in as well as the timing. So stay tuned, and then we'll have more good stuff for you.
Barry Sine
Okay. And then lastly, I'd like to put Bob on the hot seat with a couple of questions. And first, to compliment Bob for getting that Q, I'm already looking at it. It's already filed. So thank you. That makes life a lot easier for us analyzing the company.
The first question, Bob you mentioned the decline in the cash balance is due to government ramp-ups. Are those -- have you issued bills? So does that show up in accounts receivable? Or have you not yet issued bills, so those are receivables that will still come? And what are we looking at in terms of having calculated DSOs? Are DSOs going up?
Robert George
DSOs have gone up. And in these ramp-ups, we essentially pre-agree the billing with the customer. And with our existing customers where we're in ordinary course of business, we send them the invoice, then we explain the detail and they approve it, we bill it, and they pay it very quickly. With these new customers, there's lots of discussion around the minutia on these bills. One of them has 8 different contract officers. So it's kind of a democracy process has happened.
So once they do approve these bills, it's been very excruciating, then we bill it and we get paid. We've been paid, I think the last one was paid in less than a week or maybe just a little over a week. But it is just been very hard to get the bills into an improved state. We looked at kind of how quickly they're peeling off now. And we think that by the end of the year, we'd be in a normal steady state.
A couple of other ones are causing some difficulties. It's the same situation in a sense that the customers moved line counts and funding between different contracts -- different agencies within DHS. And so it's longer to sort that out. And once you sort it out with some of the bill and they pay very promptly.
Barry Sine
So it sounds like there's three kind of moving -- related moving pieces. First of all, accounts receivable balance is up. Second, overall DSOs are taking longer. And then third, it sounds like you still have unbilled work that is out there that is not on the receivables line yet. Is that correct?
Robert George
Well, it's on the unbilled receivable line. So we do book an asset and accrued revenue, and we also accrue for the most part, almost all the costs because these are carrier invoices which are causing the problems. And so we have an increase in the accrued expenses and an increase in billed and unbilled AR.
Barry Sine
Okay. So I see that $25.8 million in unbilled accounts receivable.
Robert George
Yes.
Barry Sine
Okay. I got it. Okay. That's a good explanation. And I did not jot down the backlog number, and that's not in the Q. Could you give me the backlog number again? And then I always ask this, but remind me how long to expect that backlog to turn to revenue?
Robert George
The backlog number is $320 million. I think we said that in the call. And in terms of when it peels off, a lot of that backlog is over the next two years because of the ending -- or the recompete on the CWMS 20. But I kind of say maybe an average life of that backlog is two years.
Jin Kang
Yes. And on that front, Barry I just want to make sure that I'm clear on this, is that the Department of Homeland Security cannot issue task orders beyond the contract official end, but they can issue task orders before that date. In other words, they can issue a task order in October to go out until November of 2026.
Barry Sine
But I mean, if the whole thing hypothetically were to run out, the DHS's phones would stop working. So they are going to find a way to get that extended if they haven't let 3.0. And they did last time.
Jin Kang
Yes, yes. They have plenty of avenues to do that. So I'm not – we are not too concerned about them losing coverage or us holding the bag for any cost that is not reimbursed. And they will extend the contract. And we're pretty confident that they will get the contract in place in time.
Barry Sine
Okay. You're an optimistic man. All right. Will end my questions on that note. Thank you.
Jin Kang
Thank you.
Jason Holloway
Thank you Barry.
Operator
Thank you. 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.
Jin Kang
Great. Thank you, operator. We appreciate everyone taking the time to join us today. As the operator mentioned, if there were any questions that 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.
Operator
Thank you for joining us today for WidePoint's second quarter 2024 conference call. You may now disconnect.
Methinks
6 months ago
From Seeking Alpha -
WidePoint Corporation (WYY) Q1 2024 Earnings Call Transcript
May 15, 2024 7:49 PM ETWidePoint Corporation (WYY) Stock
146.79K Followers
WidePoint Corporation (NYSE:WYY) Q1 2024 Earnings Conference Call May 15, 2024 4:30 PM ET
Company Participants
Jin Kang - President and CEO
Jason Holloway - Chief Revenue Officer
Robert George - Chief Financial Officer
Conference Call Participants
Barry Sine - Litchfield Hills Research
Operator
Good afternoon. Welcome to WidePoint's First Quarter 2024 Earnings Conference Call. My name is Kelly, and I'll be your operator for today's call. Joining us for today's presentation are WidePoint's President and CEO, Jin Kang; Chief Revenue Officer, Jason Holloway; and Chief Financial Officer, Robert George.
Following their remarks, we will open up the call for questions from WidePoint's publishing analysts and major investors. If your questions were not taken today and you'd like additional information, please contact WidePoint's Investor Relations team at wyy@gateway-grp.com.
Before we begin the call, 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 the future events and future performance of WidePoint Corporation that involve 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-Q filed with the Securities and Exchange Commission.
Finally, I'd 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.
Jin Kang
Thank you, operator, and good afternoon, everyone. Thank you for joining us today to review our financial results for the first quarter ended March 31, 2024.
Before I begin, I wanted to share that, this earnings call will be relatively brief, given that we provided an extensive overview just a month and a half ago. Nonetheless, our team has been very busy executing our corporate mission, and we're excited to share some of the recent development with you all.
With that said, let's dive in. We concluded the first quarter on a strong note, slightly ahead of our forecasts with encouraging sequential quarter-over-quarter and year-over-year improvements across revenue, adjusted EBITDA, and free cash flow. Our revenue, adjusted EBITDA, and free cash flow were $34.2 million, $573,000, and $566,000 respectively. Bob will provide additional details on these remarkable improved financials in his financial summary. Additionally, we achieved our 27th consecutive quarter of positive adjusted EBITDA. These achievements are largely attributed to the success of our sales and marketing initiatives, which we outlined in the previous earnings call and intend to aggressively continue pursuing throughout 2024.
In the first quarter, we saw over 18 contractual actions totaling approximately $22.7 million in contract value. A majority of these contracts consisted of federal government agencies, including the U.S. Department of Homeland Security, U.S. Customs and Border Protection, the National Science Foundation, and the Transportation Security Administration. This success underscores our commitment to delivering integrated solutions tailored to the unique needs of our customers. We have strategically positioned each of our solutions to complement and enhance one another while leveraging our as-a-service business model to ensure a seamless approach to secure mobility management.
As a result of our laser-focused approach of a more proactive sales and marketing strategy, we have more recently conducted advanced talks on several potential contract deals that could contribute to significant growth for the future quarters ahead. First, we recently were awarded the Spiral 4 contract by the U.S. Navy to provide wireless and telecommunications services. WidePoint was selected alongside six other companies, which includes the U.S. Big 3 wireless carriers to provide a full range of wireless and telecommunication services. This indefinite delivery indefinite quantity, or IDIQ contract has a one-year base period valued at a total contract value worth approximately $267 billion, and nine option periods with a total contract value worth approximately $2.7 billion if all options are exercised. This award is a testament to our commitment to providing superior, secure, managed mobility solution to large enterprises, both public and private. And to give you a flavor of how significant this deal can be, we are creating a program management office to ensure, there is ample bandwidth to capture more than our fair share of work under this contract. We are honored to be included in this group and look forward to providing our services to U.S. Navy personnel and civilian team members.
Second, we are in active negotiations with a California city to provide managed services. Though we are unable to disclose specific details at this time, we are very optimistic about the direction of these discussions and anticipate sharing further details when appropriate. Outside of these contracts, I just mentioned, our pipeline remains robust with additional deals and opportunities currently under negotiation. This pipeline of new deals serve as a testament to the effectiveness of our sales and marketing team that has positioned us favorably for a promising 2024. Investment in these initiatives are ongoing, and we are actively looking to add resources at senior staffing across the D.C. area to bolster our capabilities to attain higher margin contracts.
Furthermore, our $350 million contract backlog serves as a potent catalyst in our back pocket to propel our financial performance to even greater heights in the foreseeable future. With additional deals currently in the pipeline, we are well-positioned to potentially increase this contract backlog total. I also want to point out that, we are beating our competitors, especially in the managed mobility and interactive billing arena with several recently announced contracts where we displaced our competitors. We are actively targeting our competitors' clients, as we believe that our solution sets are superior in technology, performance, and cost.
An area I want to spend a brief moment addressing the impact the carrier services revenue have on our overall gross profit margin, which has generated a sizable misconception in our equity story. As many of you know, a notable portion of our revenue and cost of sales contain our pass-through carrier services revenue, which relate to carrier invoices we process and pay on behalf of our DHS customer as part of our overall service to this customer. These carrier payments do not include any margin and when looked at as part of the total revenue, lowers our gross profit percentage. This has resulted in some people believing that due to these margins, WidePoint isn't a technology company. I wanted to dispel you of that misconception and reiterate that though we certainly do have a blend of margins, our aim and focus looking ahead pertains to growing our higher-margin businesses. By investing into our promising sales and marketing team that has been executing our strategy of securing higher margin managed services revenue and SaaS contracts, where the bulk of our profitability comes from, we aim to secure higher margin contracts similar to our flagship DHS contracts, which is our only carrier pass-through customer.
Beyond securing new contracts, our post-COVID customer retention rate continues to improve, bolstering our top-line performance and reaffirming the trust our value customer place in our solutions. As an update to one of our newest contracts with the Federal Emergency Management Agency, we are delighted to announce that the implementation process has now been completed. As a reminder, this contract is valued at approximately $60 million over a three-year period of performance with a one-year base period and two, one-year option periods. Our solution remains as a top-tier trusted security provider, and we are confident in executing our services to unlock the full scale and potential of this contract. Our identity and access management pipeline continues to grow. We've been able to add new digital certificates to an existing contract that will have a material impact once it's fully deployed. Like the mobility side, we have been displacing our major competitors due to our reputation for providing excellent customer services continues to gain awareness. Additional customer implementation and integration is ongoing and remains on track, as we maintain our commitment to delivering our secure mobility solutions.
Moving to the progress on two investments made in previous quarters. We continue to await final approval from GSA for our FedRAMP certification. As mentioned last quarter, we are confident in attaining the full certification by the end of the first half of 2024. We recently received communication from GSA that they are actively reviewing our FedRAMP package. Also, our Continuity of Operations Plan or COOP site enhancements are also moving in the right direction with testing scheduled for the end of May. We look forward to announcing relevant updates once the time is right. We continue to make significant headway across all our initiatives and remain on track to meet our guidance numbers announced during the last quarter's call.
We are reiterating our guidance, and we expect revenues to range between $120 million and $133 million, adjusted EBITDA range between $2.1 million and $2.4 million. Additionally, we expect free cash flow to range between $2 million and $2.3 million. As we have shared during the past several calls, we have concluded materially all of our capital investments, as reflected by our growing EBITDA and free cash flow figures. However, we will continue to invest in our sales and marketing to ensure that we keep our momentum in growing our top-line. The future remains extremely bright for WidePoint, which is why several Board members and executive leaders of our company acquired shares of our common stock in the open market. Our executive team remains very confident in our corporate outlook and remains committed to driving and unlocking sustainable growth for our valuable shareholders.
I will now turn the call over to Bob to discuss our first-quarter financial results. Bob?
Robert George
Thank you, Jim, and thanks to everyone for joining us today. I'm pleased to share the details of our first quarter 2024 financial results. As Jim mentioned earlier, we delivered a strong quarter, being slightly ahead of our internal forecast, recording the second consecutive quarter being free cash flow positive, a trend we anticipate carrying across 2024 and beyond.
With that, I'll now give a breakdown of our first quarter 2024 results compared to the first quarter of 2023. Total revenues for the quarter were $34.2 million, up 35% from the same quarter last year. Our carrier services revenue for the quarter was $19.3 million, an increase of 44%. Our managed services revenue for the quarter were $8.7 million, an increase of 27%. The revenue was due to new federal contracts signed in the third and fourth quarters of 2023, which recorded a full quarter of revenue in 2024 but did not have any revenues in the first quarter of 2023.
Billable services fees through the quarter were $1.2 million and remained relatively constant period-to-period. Our reselling and other services revenue for the first quarter were $5 million, an increase of 38%, primarily due to an increased variety of products we offer for sale. I do want to highlight that reselling and other services are transactional in nature, and the amount and timing of revenue could vary significantly from period to period.
Gross profit in the first quarter was $4.6 million or 14% of revenues, compared to $3.8 million or 15% of revenues in 2023. The slight decrease in gross profit margin percentage is related to increased amortization expenses, as our delivery platforms are placed into service and increased reselling revenues, which carry lower margins. The more significant metric of gross profit percentage, excluding carrier services was 31%, compared to 33% in the same period last year. The lower gross margin percentage excluding carrier services was due in part to increased amortization on our delivery platforms and due to increased reselling revenues, which have lower margin. Accordingly, our gross profit percentage will vary from period to period, based on our revenue mix.
Sales and marketing expense for the first quarter of 2024 were $600,000 or 2% of revenues, compared to $500,000 or 2% of revenues in 2023. The increased period-over-period is the result of our increased investment in our sales and marketing capabilities. General and administrative expenses in the first quarter were $4.4 million or 15% of revenues compared to $3.7 million or 13% of revenues in the same period of 2023. The increase primarily relates to increased share-based and other compensation expenses compared to the same period last year.
Our net loss for the quarter decreased by $298,000 to $653,000 or a loss of $0.07 per share compared to a net loss of $950,000 or a loss of $0.11 per share in the same period last year. The decrease in net loss is due to the relatively higher gross profit dollars in the first quarter that was only partially offset by increases in sales and marketing and general and administrative expenses, I previously mentioned.
Our non-GAAP measures of adjusted EBITDA and free cash flow are as follows. Adjusted EBITDA for the quarter was $573,000, compared to $20,000 in the same period last year. Our free cash flow, which we define as adjusted EBITDA minus capitalized items was a positive $566,000 in the first quarter compared to negative $340,000 in the same period last year. The reason for the EBITDA improvements are related to increased gross margin dollars relative to operating expenses compared to the same period last year. With respect to free cash flow, the positive period-over-period change was related to the increase in EBITDA, I just mentioned and cessation of our material capital investment activities in the first quarter of 2024.
Moving to the balance sheet. We ended the quarter with $5.3 million in cash compared to $6.9 million on December 31st, 2023. The primary driver of the change in cash from year-end was due to typical delays that occur in invoicing activities related to new contract as the invoice process gets worked out with our customer. We believe our forecast for positive free cash flow and refinements to our invoicing of our new customers will provide sufficient liquidity for our operations. For additional information related to our liquidity and capital resources, please refer to that Section of our Form 10-Q for March 31st, 2024.
We are in a strong position to execute our growth strategy, and we look forward to meeting our guidance that Jin previously reiterated. This concludes my financial summary. For a more detailed analysis of our financial results, please refer to our Form 10-Q, which was filed prior to this call.
With that, I'll turn it back over to Jin.
Jin Kang
Thank you, Bob. As evidenced by our remarkable improvements in our financial performance, our healthy contract backlog, new contract awards and a growing sales pipeline, our future is very bright. I look forward to providing additional contract award announcements and other positive news about our company going forward. That concludes our prepared remarks, and now we'll take questions from our analysts and major shareholders.
Operator, will you please open the call for questions?
Question-And-Answer Session
Operator
[Operator Instructions]. Your first question is coming from Barry Sine with Litchfield Hills Research. Please proceed with your question. Your line is live.
Barry Sine
I think I was muted. Can you hear me now?
Jin Kang
Yes, we can hear you. Hi, Barry.
Barry Sine
Good afternoon, gentlemen. First of all, on Spiral 4, congratulations on winning that contract.
Jin Kang
Thank you.
Barry Sine
A number of questions about that. Obviously, government contracts are not as straightforward for investors to understand and you can't really take them at face value. So, here's what we know, $2.7 billion over 10 years. Does that equate to $270 million a year? And then you're one of seven participants. Does that mean you get one-seventh of that or how does that work? And then finally on that contract, would that include any carrier services, zero margin pass through or is that all managed services?
Jin Kang
Very good question, Barry. So the answer to your first question is at $270 million per year. The first base year is funded at $270 million, but I think that that could change depending on how many task orders that can come out.
Your second question is about, there are seven winners on the contract. Does that mean you will end up being you will get one-seventh of the revenue? No, it depends on how successful we are on the various task orders that will be coming out. So, the way the contract works in these IDIQ situations is that, they will be issuing little tiny, sort of small task order RFPs, as the contract period of performance continues, and each vendor – each of the seven vendors will be able to bid on these little task order RFQs that come out and whoever has the best solution for that particular task order will be awarded the task order. I think I answered your question. Does that answer your questions?
Barry Sine
To what extent does it include zero gross margin pass-through carrier services in that contract or is it all managed services?
Jin Kang
Right. For us, we will be bidding on all of the managed services task order and sometimes the customers may wrap in the carrier services and merge the managed services with the carrier services. But this contract is a little bit different than the DHS contract, where the carrier services must be all passed through. This contract will allow for some fee on top of the carrier services. It will depend on how the task orders are structured. We don't know as of yet. There's been a lot of speculation around this contract and we will provide some additional color as some of these task orders come out and we will know a little bit more, but it will be very difficult for us to gauge that, at this point but we believe that this contract will be more profitable because the managed services is merged in with the carrier services.
Barry Sine
Okay. And last question on this contract. You mentioned that there were seven winners of which you're one and that included the three big wireless services companies. I don't know if this has been publicly announced by the Navy or not, but who are the other managed services companies that you'd be likely competing with on each of these task orders?
Jin Kang
Yes. There's AT&T, T-Mobile, Verizon, a company called MetTel, who we partner with from time to time. There was Hughes Telecommunication, then there was one, a small mobile device management provider and I don't quite recall the other one, but it is published along, it's in the Navy release. So, you can just do a quick Google and you should be able to find who the other vendor was.
Barry Sine
Okay. The next question is, you announced a $350 million backlog at this point. Could you kind of define or give us a definition of how you include that? I assume that's not just one year, that's over multiple years. And then, you've talked about some things like FEMA is already out there with $60 million. I assume that's in there. What's when you say $350 million can you better understand what that means?
Jin Kang
Sure, sure. The $350 million does not include any of the Spiral 4 task order that is contemplated but our contract backlog includes contracts that are signed and some of them are multi-year contracts. And so, these are contracts that we -- the $350 million includes only the contracts that we've already executed with the customer, and that's what's included in our contract backlog.
Barry Sine
Is the FEMA that you mentioned $60 million over three years, is that fully included or not included or how does that work in?
Jin Kang
FEMA, the $60 million is included in our contract backlog. Yes. I just did a quick look-up on the Navy release. It's the three main wireless carriers, Hughes Network Systems, Real Mobile, and us, WidePoint. That's all of the seven carriers.
Barry Sine
And then, shifting gears again. Over the last year, you've made a number of significant investments in and technology and it's starting to show in terms of new contract wins. Could you tell us, where we are in that process of those investments starting to bear fruit in new revenue? You just had a very good quarter, but I assume there's a lot more, as a result of those investments in the pipeline.
Jin Kang
Yes. We have made some significant investment in capital and refurbishing and enhancing our delivery system, our IT system, and all of those are materially completed, as you've seen the improvement in our profitability. And so, in terms of our investment in sales and marketing, we have made some key hires and we're continuing to hire, especially we're looking for resources in the DC area. We have several folks that we are courting right now that have some significant network and Rolodex to use an old terminology. And so, we're looking to hire some additional folks, but we have higher sales and marketing and account management ranks. And those are the folks that are filling our sales pipeline, and that's going well.
Barry Sine
And on the same topic, but maybe for Bob, on the new hires, sales and marketing expense went up about $90,000 year-over-year. Is that a result of some of the new hires, Jin just talked about? Do they show up in that line or are they also in the G&A expense?
Robert George
They're in the sales and marketing line. There's a tick-up of $100 million roughly. It will be higher when you get a full year of salaries in there.
Barry Sine
Okay. And then the impact on capital spending. If I look at the delta between your EBITDA guidance and your free cash flow guidance, CapEx looks like, it's to be pretty minimal this year. So, it looks like the capital spending part of those investments is largely complete, correct?
Robert George
Yes, that's absolutely correct. It rounds to $100 million. I think it's maybe a little higher than that, like $120 million, but that's what we plan to spend on just regular IT items and refresh.
Barry Sine
And then my last question, again for Bob. You've given guidance on several key line items. How does that translate into the impact on GAAP, net income, EPS? I know you still have parentheses around your EPS numbers, and I know it's a lot less relevant than EBITDA or free cash flow. But how might that translate into the march towards positive bottom-line net income?
Robert George
It translates pretty linearly in terms of whatever the delta is in D&A and stock-based comp subtracted from EBITDA to get to net income. We are not booking tax expense for all intents and purposes. So, if you look at D&A and stock-based comps, that's really the difference to get into net income.
Barry Sine
And you are not comfortable giving EPS guidance at this point or you are not giving EPS guidance at this point, correct?
Robert George
Not at this point. I just don't have it right in front of me, so I don't want to just go off the cuff on it.
Barry Sine
Okay. Just want to make sure I have my numbers right. Those are my questions. Thank you very much, gentlemen.
Jin Kang
Thank you, Barry. Thank you for joining the call.
Operator
[Operator Instructions]. There have been a lot of speculation around your new contract with the U.S. Navy, namely Spiral 4 contract. Can you provide any additional color on this new contract and what it could mean to WidePoint?
Jin Kang
Thank you, operator. I think we covered this question, but I'll cover it again. It's been approximately a week since the award was made to seven winners. We are the new kid on the block. However, that gives credence to the quality of our solution and business model to be among the awardees, among some of these larger competitors. We are busy putting together a program management office for a full-court press so that we can put a full-court press to capture work under this contract vehicle. This is a $2.7 billion contract, so capturing even a small portion of the contract would have a large impact on our business.
Operator
Thank you. The next question, can you give us any additional status on your cyber security solutions, one that is quantum computing resistant?
Jason Holloway
Thank you, operator. This is Jason Holloway and I'll provide that answer. So, I'm excited to say that, WidePoint continues to make progress with our cybersecurity solutions. For example, WidePoint recently began issuing derived digital certificates on the smartphones for a major federal agency that will no longer require a mobile device management or as known as an MDM solution. So, the MDM solution was not secured because the credentials were issued over the air onto the MDM container on the smartphones. So, although we are in the early stages of adoption, this is still a testimonial that WidePoint is progressing and eliminating the good enough solutions. So, I encourage everybody to stay tuned for additional information.
Operator
Thank you. Your next question, on your last call, you mentioned in your remarks that you have won another contract with the federal government that may grow into one of your largest government contracts. Can you please provide additional details?
Jin Kang
Thank you, operator. We can't mention any end customer's name at this time, this particular one anyway. However, we can mention that this award was attained through one of our strategic partners and our strategic partner program is going well and we displace one of our main competitors. I won't give out the names, but it's within the telecom life cycle management. I don't want to give them any credit or credence, so I won't mention their name here. The implementation is ongoing and we are optimistic that this contract will grow beyond this initial awarded contract value and we'll rival our DHS contract in managed services revenue, hopefully in the near future.
Operator
Thank you. And the final question is, you mentioned in our comments that your sales pipeline is large and growing. Can quantify or provide some additional color on this front?
Jin Kang
Sure. At a high level, the sales pipeline is absolutely growing and it's at a level that we haven't seen in recent memory, if at all. I will not comment on specific opportunities. However, suffice it to say, there are material opportunities in the pipeline and we look forward to providing updates of awards through our press releases. I cannot be more definitive because as you can imagine, it is difficult to predict when or if we will receive contract awards for any particular opportunity. But again, stay tuned.
Operator
Thank you. At this time, this does conclude our question-and-answer session. If your question was not taken, please contact WidePoint’s IR team at wyy@gateway-grp.com.
yy@gateway-grp.com
I'd now like to turn the call back over to Mr. Jin Kang for any closing remarks.
Jin Kang
Thank you, operator. We appreciate everyone taking the time to join us today. As the operator mentioned, if there were any questions that 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.
Operator
Thank you for joining us today for WidePoint's first quarter 2024 conference call. You may disconnect.
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