Good afternoon. And welcome to Inpixon Earnings Conference Call for the third quarter ended September 30, 2019 [Operator Instructions]. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A telephone replay of the call will be available approximately 1 hour after the end of the call through November 6, 2019. I would now like to the conference over to David Waldman, President and CEO of Crescendo Communications, LLC, the company's Investor Relations firm. Please go ahead, sir.

Thank you for joining today's conference call to discuss Inpixon's corporate developments and financial results for the third quarter ended September 30, 2019. With us today are Nadir Ali, the company's CEO and Wendy Loundermon, the Chief Financial Officer. At 4:05 Eastern Time today, Inpixon released financial results for the third quarter ended September 30, 2019. If you have not received Inpixon's earnings release, please visit the investors page at www.inpixon.com. During the course of this conference call, the company will be making forward-looking statements. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. This includes any projections of earnings, revenues, cash or other statements related to the company's future financial results; any statements about plans, strategies or objectives of management for future operations; any statements regarding completed or planned acquisitions or strategic partnerships; any anticipated impact of those transactions on our business; any statements concerning proposed new products; any statements regarding anticipated new customers, relationships or agreements; any statements regarding expectations for the success of the company's products in the U.S. and international markets; any statements regarding future economic conditions or performance; statements of any belief and any statements of assumptions underlying any of the foregoing. These statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Some of these risks are described in the section of today's press release titled Cautionary Note on forward-looking statements and in the public periodic reports the company files with the Securities and Exchange Commission. Investors or potential investors should read these risks. Inpixon assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. In addition to supplement the GAAP numbers, the company has provided non-GAAP adjusted net loss and net loss per share information in addition to non-GAAP adjusted EBITDA information. The company believes that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in the company's financial release. I'll now turn the call over to Nadir Ali, Inpixon's CEO. Please go ahead.

Thank you, David, and good afternoon, everyone. I'm very pleased to report we achieved strong year-over-year increases in revenue and gross profit with improved margin. Both Wendy and I will discuss the financials in more detail, but first I'd like to review some of the ways we've achieved success and discuss our plans going forward. Over the last year, we have taken a number of strategic actions aimed to put us in a position to deliver the most comprehensive, integrated indoor data solution available in the Indoor Positioning Analytics market and to be recognized as the go-to search and visualization engine for indoor data. In a global market estimated to reach $54.6 billion by 2026, our ability to offer intelligent mapping, positioning and analytic services for the indoors across a multitude of verticals and industries, creates a nearly uncontested blue ocean opportunity for Inpixon. In a pursuit to secure our position as the leader in this converged space, this year, we have continued to strengthen our key capabilities, solutions and technology by building and acquiring complementary products and companies that completes our indoor data platform. This includes our previously announced IPA Pod, which enhances positional accuracy for visitor analytics, and when integrated with the enhanced video management system we acquired with Locality, allows us to uniquely deliver sensor fusion, specifically RF data, radio frequency data, correlated to security video. We added GPS tracking technology to provide indoor and outdoor campus solutions for school, enterprise and government customers. And most notably, with the completion of the Jibestream acquisition and its premier intelligent mapping technology, we are now able to offer all four of the essential building blocks needed to make indoor spaces information rich and helpful. These include mapping, positioning, analytics and development tools. We believe that this transaction together with…

Thank you, Nadir, and thanks to everyone for joining us today. Revenues for the three months ended September 30, 2019, were $1.53 million compared to $940,000 for the comparable period in the prior year or an increase of $594,000 or approximately 63%. This is our third consecutive quarter with year-over-year growth, demonstrating our momentum in the indoor data market. Gross profit for the three months ended September 30, 2019, was $1.15 million compared to $642,000 for the comparable period in the prior year or an increase of 79%, while gross margin for the 3 months ended September 30, 2019, was 75% compared to 68% for the 3 months ended September 30, 2018. This increase in margin is primarily due to the increase in higher-margin IPA revenue. Loss from operations for the three months ended September 30, 2019, was $5.7 million as compared to $3.3 million for the comparable period in the prior year. This increase in loss of approximately $2.4 million was primarily attributable to the higher gross margin, offset by higher operating expenses during the 3 months ended September 30, 2019, including acquisition-related expenses, the addition of Jibestream's operating expenses as well as other noncash items, including amortization of intangibles, stock-based compensation and other expenses. Net loss attributable to stockholders for the 3 months ended September 30, 2019, was $6.6 million or $0.28 per share compared to a loss of $5.2 million or $4.84 per share for the comparable period in the prior year. The higher loss of approximately $1.4 million was primarily attributable to higher revenue, offset by higher operating and interest expenses during the 3 months ended September 30, 2019. Non-GAAP adjusted EBITDA for the 3 months ended September 30, 2019, was a loss of $2.4 million compared to a loss of $3.4 million for the prior period in 2018. Non-GAAP adjusted EBITDA is defined as net income or loss before interest, provision for income taxes and depreciation and amortization plus adjustments for other income or expense items, nonrecurring items and noncash stock-based compensation. Pro forma net loss for basic and diluted common share for the 3 months ended September 30, 2019, was $0.17 per share compared to a loss of $3.61 per share for the prior period in 2018. Non-GAAP net loss per share is defined as net loss per basic and diluted share, adjusted for deemed dividends and noncash items, including stock-based compensation, amortization of intangibles and onetime charges, including gain or loss on the settlement of obligations, gain on earn out, acquisition costs, provision for doubtful accounts and the costs associated with the public offering. This concludes my comments. And I'd now like to turn the call back over to Nadir.

Thanks, Wendy. I'd like to thank everyone for participating on our third quarter conference call. As I mentioned earlier, we are pleased with our third quarter results, including the increase in revenue as well as improved gross profit margins, and we are aggressively working towards our goal to be cash flow positive, as evidenced by our improving EBITDA. The integration work in connection with our strategic transactions are progressing in a positive direction, significantly enhancing our capabilities. We now offer what we believe is the most robust product offering within the indoor positioning market, bringing even greater benefits to our customers and partners. Combined, we have a unique and powerful portfolio, changing the way people live, work and play indoors. We look forward to providing additional updates in the near future. I'll now turn the call over for questions.

Thank you [Operator Instructions]. And our first question comes from Ellen Litvak with Forest Capital.

Congrats on another strong quarter. I mean, it really sounds like the integration is going well. In terms of cross-selling opportunities between Inpixon and Jibestream, can you guys comment further on how do you plan to go about this?

Ellen, yes, thanks, and thanks for the question. The cross-selling opportunities is one of the motives we have behind these acquisitions. And we've already started seeing that not only with Jibestream, but also our Locality customers across the entire portfolio of products. In fact, having this one-stop shop, if you will, with the suite of products we now have is going to allow us to do a land-and-expand strategy with our customers. They can start with any of our products and then move towards a migration path as their requirements grow, which I think from a customer perspective, it saves budget and time for them. They don't have to deal with multiple vendors, right, and they have no integration challenges because our solutions are optimized and intelligently connected. So I think there's definitely value in that. And the cross-selling upsell opportunities for us, start with the fact that we also now have entry point price point solutions for our customers, who previously may have not had the budget to buy Inpixon's IoT sensors. Now they can start with not only the mapping product from Jibestream, but also the Inpixon Pods or the Locality video management solutions and then move up to our full-blown sensors. So we're pretty excited about the upsell cross-sell opportunities, and we're seeing that becoming a reality.

I mean, that definitely sounds great. I mean, obviously, we're seeing continued improvement in revenue and expanding margins. And you mentioned during the call that your goal was to turn cash flow positive. I mean, obviously, that would be a major milestone for shareholders. How exactly do you plan to get there? And how confident are you in achieving this goal?

We're very confident, and it's a priority for us and focus. As you can see, we are growing our top line revenue over the last few quarters, and we expect that growth to continue. And we have gross margins in the mid-70s range, which as we grow the top line, our operating costs won't grow as significantly. So a lot of that gross profit will fall to the bottom line, reducing our burn and then helping us achieve the cash flow positive cash flow that we're targeting for sooner rather than later. So we're very focused on it. We understand it's important to our shareholders, and it's a priority.

And that does conclude our Q&A session for today. I'll turn it back over to management for any closing remarks.

Great. Thanks, Kristi. Please everyone remember to vote if you haven't already for our shareholder meeting. You can go to proxyvote.com or call 1-800-690-6903, and thank you for joining our call today.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time, and have a great day.