Givex Corp , an established provider of integrated end-to-end management and customer engagement solutions, recently announced its financial results for the third quarter of 2023, which reflect the company's steady growth and commitment to innovation. Givex has demonstrated consistent growth, with revenue climbing from $41.4 million to $55.2 million in 2022 and $58.2 million through Q3 of 2023, a clear indicator of the company's expanding market presence.
00:04 And something that we love to do here at Benzinga is to get executives from publicly traded companies to go ahead and get the questions answered directly from them.
00:11 And today we've got a great interview with Don Gray, the CEO of Givex Corporation.
00:16 Ticker on the TSX is GIVX and ticker on the OTCQX is GIBXF.
00:22 Don, thank you so much for joining us.
00:24 Pleasure to be here.
00:25 Absolutely.
00:26 We've got so much to get into.
00:28 You've had some exciting news.
00:29 But before we really dive into the nitty gritty, if you'd explain it to me like I'm five, what is it that your company does?
00:34 Well, Givex is a software as a services company.
00:37 It's been around for almost 23 years.
00:39 Our primary business is gift card transaction processing.
00:42 We have clients all over the world, about 125,000 locations, about 40,000 customers, customers in Canada, United States, Europe, Asia, Australia.
00:56 But what we do is if you go and buy a gift card from, say, Starbucks or anywhere, Starbucks is not a client, just to be clear.
01:03 If you buy a gift card, you have to swipe that gift card through a planning sales system to add value to it.
01:08 And then when you use it, you have to take the value off it.
01:10 You swipe the card again.
01:12 And those transactions go to the Givex servers and the Givex servers keep track of the money on and off that card.
01:18 We started doing that business back in 1999 and it's grown since then.
01:25 And about 2013, we added a point of sale system to our network so that we could then provide clients with the ability to actually control their transactions at the customer level.
01:39 When you're in the store, you actually gather the transaction.
01:42 Givex is integrated with thousands of different POS systems and APIs and online ordering systems in all of our jurisdictions around the world.
01:51 So we've been able to, you know, we know a lot about POS.
01:54 So we were able to take that same knowledge and add it to our platform.
01:59 So Givex now is able to not only do a gift card transaction and a loyalty transaction, but we also now can keep track of all the other transactions that occur on the point of sale and provide a rich data set that we then can give our clients the information they need to run their business more effectively.
02:16 So we've been doing that for quite a while.
02:18 We've continued to add new functions and features to our system.
02:22 But primarily we're a technology company that provides software services of the nature I just talked about.
02:30 Wow, there's so much that y'all do.
02:32 And I can only imagine how much of an overload, if you will, or how much of growth you see during the holidays with November, Thanksgiving, and of course, December right around the corner as well.
02:41 What's interesting to me is that I read about how y'all have a statement of make every transaction meaningful.
02:48 How do you do that?
02:50 Well, that basically by having a rich data set where we have as much information as we can on every transaction that occurs between a merchant and a consumer, we gather the data so that we can then help our clients understand who their customers are, what they're buying, the trends, etc.
03:04 So basically, by default, every transaction becomes powerful.
03:08 It becomes something that is useful for our customers.
03:11 And this is why, you know, what we've done and we built a very strong analytics program to be able to help our customers understand this information so they can build campaigns and they can do the necessary work internally if they have helped manage their costs or labor costs or their inventory costs or turnovers, etc.
03:30 So this is all part of the systems architecture that Givex has put together for our clients over the years and why we've been able to retain those customers for many, many years.
03:41 We have clients who have been with us for over 20 years.
03:43 And now what's interesting to me is that you're doing all these transactions.
03:47 You have all this data set.
03:48 I'm wondering, how is it that Givex actually makes money?
03:52 Like what's the revenue model for y'all?
03:54 Well, what we do is we charge per month per client a flat fee.
04:01 It used to be when we first started, we would charge based on transactions, but as the power of computers grew and the dollar value of a transaction, the cost of it went down lower and lower and lower.
04:13 It became that really our major cost was people.
04:17 So what we've done is we fix those costs for our clients where we charge them a flat rate per month per location.
04:23 In general, there are other services that we have that are a little different than that.
04:27 But Givex makes money by charging these service fees to our clients on a monthly basis and hopefully keep our costs in line so that we can make a profit, which we've done.
04:38 Givex has basically made a profit or positive cash flow virtually since the day we started.
04:43 And speaking of money and the annual growth that you're seeing, you actually your Q3 revenue increased about $1.2 million from $18.4 million to $19.6 million, which represents roughly about 7% growth year over year.
04:56 Can you talk about how you're able to achieve this exactly?
04:58 Well, we threw a lot of hard work.
05:01 We have sales teams in all of our locations in the countries around the world.
05:08 We have outreach programs.
05:10 We go to trade shows.
05:11 We just continue to talk to clients and prospects.
05:13 We also have existing customers that buy more from us.
05:16 So a customer may start off with a gift card program and then we get them to buy a loyalty program.
05:20 And then maybe if we're lucky, we'll get them to buy our POS system or they'll start with a point of sale system and then buy some of the other services.
05:26 With the POS, you can add functionality like kitchen display systems, online ordering, different kiosks, etc.
05:35 So this is the way we've been able to continue to grow the business on a consistent basis over the years at anywhere from 8 to 12% per year.
05:43 Now, we did have some bigger growth in 2022 because we made some acquisitions, which we didn't do in 2023, but we plan on making acquisitions in 2024.
05:53 But right now, with the economy the way it is, we've just been keeping our powder dry and being conservative.
05:58 And we think there'll be some great opportunities next year for us to do a couple more acquisitions to help speed that growth up a little bit more.
06:05 But we will only grow if we can do it profitably and we will only make acquisitions if they actually contribute to our profitability.
06:11 Yeah, you mentioned the economy and with the experience that you mentioned of yourself, you know how up and down it can be sometimes.
06:16 But let's talk about a trend.
06:18 Is there what's kind of like the biggest trend in the payment space that you're seeing right now?
06:23 Well, Givex technically is not a payments company, right?
06:26 We are really more of a marketing company because gift cards are really more of a gift that you give to somebody.
06:33 It's a reference that says, you know, I like this restaurant.
06:35 Go try it yourself or this is a great shop.
06:37 You know, give it to your mother as a gift.
06:39 It's not necessarily even though payments are involved.
06:41 We don't we don't consider ourselves a payments company.
06:44 The trend obviously has been over the last couple of years that a lot of companies that are not traditionally payment companies such as POS companies, etc., are getting into payments and are adding payments as part of their as part of the point of sale system.
07:00 Givex has done this, but we don't see it as a big revenue growth for us because it's more expensive for our merchants.
07:06 We would like to give our merchants the choice to decide, OK, well, you can buy our POS system or you can use our gift card programs, but you don't have to use our payment programming.
07:15 If you've already got a payment processor that's doing a good job for you, use that.
07:19 We've integrated with virtually all of them.
07:20 So it's not that you have to use our system.
07:22 If you want to use our system, we can gather more data.
07:25 We can make it a little richer database for you, but you have to pay a premium for it.
07:29 So that's our approach.
07:31 I think over the year, coming years, whether or not these what I would call non-bank or non-acquirer payment pro companies are going to be successful in the long run, that remains to be seen.
07:43 Most of them do not make any money.
07:45 So Givex is there to make a profit.
07:47 That's our whole objective.
07:48 Well, thank you so much for joining us once again.
