Operator: Greetings and welcome to the Mobivity Holdings Corporation Second Quarter Fiscal 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Chris Meinerz, Chief Financial Officer for Mobivity. Thank you Mr. Meinerz, you may now begin.

Chris Meinerz: Thank you and welcome to Mobivity's Q2 2016 financial results conference call. We appreciate your interest in our company. In order to be more efficient with your time, we will be reading Mobivity Safe Harbor statement following the Q&A session at the end of the call. On the call today is Mobivity's Founder and CEO, Dennis Becker and myself Chris Meinerz, CFO. It is now my pleasure to introduce Dennis Becker, our Founder and CEO.

Dennis Becker: Thanks, Chris, and thanks everyone for joining us on our call today. I'm pleased to report that we achieved another record quarter where revenues increased 90% year-over-year. For the second quarter of 2016 Mobivity generated $2.1 million in revenue and gross profit of approximately $1.5 million. We are also pleased to report that net cash used in operating activities decreased 35% and our non-GAAP adjusted net loss decreased nearly 50% from the same period a year ago. Before we go over the details of our financial results, I would like to quickly review Mobivity’s focus and mission as well as update everyone on some of our achievements and milestones over the last quarter of record growth. The U.S. Census Bureau tells us that only 7% of commerce is conducted online. That's why we're obsessed with cracking the code on achieving the same shopping cart visibility to offline brick and mortar marketers traditionally only afforded to e-commerce brands such as Amazon. To bring personalized targeted marketing to the other 93% of commerce carried out in the U.S. and our vision doesn't just stop there. We believe our solution is applicable globally and we already have customers operating in Canada, Ireland, Switzerland, the United Arab Emirates and the UK. Our current strategy is to license our technology to national and global brands through a mix of fixed and variable licensing fees ideally paid through recurring agreements with multiple year commitments. We believe our business model has the potential to scale beyond a $100 million annual run rate. We are continuing to see the impact on our growth from one of our global brand customers whose recent launch of our technology across their entire franchise system has had a material impact on our financial performance since launching our services less than a year ago. In fact the success of this program has gone viral and we're seeing increased inbound demand from other retailers and merchants to license our technology. For example, I'm pleased to announce that Baskin-Robbins has recently expanded their program with us to include mobile promotions via our SmartSMS program similar to the program we're powering for Subway. We're devoted to replicating the success with other brands in both the restaurant industry and beyond. In review the core of the problem we solve for brands is that unlike e-commerce where through various tracking strategies such as cookies, offline marketers have been challenged to craft their marketing messages in a personal and targeted way that has become common amongst e-commerce brand such as Amazon. In the online world consumers experience display advertising such as banner ads or social media posts as well as direct marketing such as email, all of which is personalized and relevant to their interests and past purchase behavior. This is made possible because online marketers have full visibility of the consumer shopping cart from the time they land on the website all the way through the point-of-purchase. Our unique approach to personalized targeted offline marketing is marketed through our SmartSuite portfolio of solutions that all leverage our proprietary path to point-of-sale data. You can see our technology in action at all of Subways more than 27,000 locations here in the U.S. as well as a growing list of other brands. Our most powerful SmartSuite product is SmartSMS, which utilizes SMS text messaging as a communications channel for targeted awareness and offer messages to consumers. Leveraging purchase data to measure and target those messages much in the same way an e-commerce operator such as Amazon uses online shopping cart data. For example, a consumer might receive a text message near lunchtime offering a special discount to purchase a 6-inch Sub at their nearest Subway location. Once the consumer shows that text message at check out our SmartReceipt technology kicks in to match that consumer’s purchase with their offer redemption, thereby providing the ability to assess the effectiveness of that SMS offer. It also builds the purchase history of that customer for more targeted offers in the future. In addition to SmartSMS, SmartReceipt is also capable of controlling the printed receipt to print targeted graphical messages including offers and coupons on the front of the receipt consumers receive following a purchase. With SmartReceipt we can transform the underutilized printed receipt into a targeted messaging opportunity. As an example, say a customer purchases a sandwich but doesn't purchase a beverage. SmartReceipt sees the customer's purchase information in real time and as the receipt is being printed it can automatically see that the consumer didn't buy a beverage and dynamically in real time add a strong beverage coupon to the printed receipt in an effort to influence that consumer to add a beverage on their next visit. Our SmartSuite portfolio of solutions is rounded out with SmartAnalytics which provides a set of reporting and analytics tools enabling brands to better understand their sales data across what could be a disparate collection of various point-of-sale devices. The development of our SmartAnalytics solution was greatly accelerated by our recent acquisition of LiveLenz earlier this year. In the future, we will be expanding our solution offerings to include applications that will leverage offline purchase data to provide attribution and better power mobile and online ad networks. Shape marketing from real time inventory and sales data and apply emerging machine learning and artificial intelligence technologies to the massive purchase data sets we're accumulating to drive predictive and automated solutions. As we noted earlier this year, we are extremely encouraged by the results our customers are currently seeing using SmartSMS and SmartReceipt to change their consumers behavior. One case study we performed with a major national brand showed that consumers participating in a SmartSMS program almost doubled the amount of money they spent with that brand. This translates to millions of dollars in incremental revenue for a brand and an incredible ROI when comparing these revenue gains against the cost of licensing our technology. More recently, I'm excited to announce additional findings that further exemplify the efficacy of our technology on our customer's operations and financial performance. A new study dug deeper into the transactional data flowing through our customer’s point-of-sale systems to examine food and operational costs in more detail. We then analyzed operating costs across various products versus redemption performance on mobile offers to reveal cash flow returns on the licensing costs a large customer was spending on our technology. Our studies revealed more than a 900% cash flow return on every dollar spent on Mobivity’s technology powering their data driven mobile marketing program. As an example if a certain consumer visits a store two times per month, our solution was able to entice a third visit which created a net incremental sales gain on that customer where the cost of our technology was a fraction of the additional cash flow created by changing that consumer's behavior. We have also begun to leverage consumer purchase and redemption data to shape marketing campaigns themselves where each individual consumer receives an individualized offer based on their historical purchase platform. This marks the second phase of applying our technology to increase sales for our customers. To date we've been largely focused on attribution, which is tracking the effectiveness of generic offers and exploiting the advantages of using the mobile channel for offer delivery. In other words our customers have mostly relied on sending consumers the same offer and then evolving those offers based on aggregate redemption in sales performance data that our system provides. Over time the idea is that offers which perform better to large audiences are kept going, while lower performing offers are deprecated. While this application of our technology has shown great results. We believe individualizing offers rather than sending the same offer to groups will prove even more effective. I'm excited to report that we recently executed a campaign where our technology personalized offers to a subset of our customer’s audience and compared the results of those consumers versus a controlled set of consumers who all received an offer, which had historically produced the highest redemption in average ticket results. The consumers receiving the personalized offers had higher redemption rates and higher cash flow results versus the control offer. Our goal is to expand on these results and bring personalization to the forefront of our value proposition. The financial results produced for our client from this initial test has this initiative off to a great start. Aside from the recent case study success, we also tracked several key performance indicators that reflect the growth and usage of our products These measures show a healthy trend of expanding programs being executed by our customers. Primarily, we look to see growth in areas such as the number of messages delivered to consumers on printed receipts, the member of mobile messages processed between consumers and our national brand customers, as well as the total consumers subscribe to our customers mobile marketing programs. We’re proud to report the following growth in all these categories. Over 81 million receipts were printed in June of 2016, which is an increase of 103% over June of 2015. And over 35 million SMS text messages were processed by our platform in June of 2015, with an increase of 267% over June of 2015. And finally, over 5.5 million total mobile subscribers are on our platform as of June 2016, which is an increase of 136% over June of 2015. Beyond the great results we’re seeing from continued case studies and continued growth and product usage, I’m also happy to report that we’re seeing increased demand in the marketplace as the visibility of our product and technology has dramatically increased over the last year. It’s important to note that every printed receipt produced by our product, along with every mobile message, carries the Mobivity brand. We believe this has a ton of marketing value and building awareness of our products and services. Remember, we printed more than 81 million receipts and transmitted more than 35 million text messages in June alone, all with Mobivity branding. Combine this visibility with the expansion of our sales team in Q1 of 2016 and a result is a triple-digit increase in our sales pipeline from the same period last year. We’re also starting to see initial traction expanding beyond the restaurant industry and into the personal services space. This is an industry that is estimated to make up more than 70,000 locations, including businesses such as hair and nail salons. Now I will turn the call over to Chris for a more detailed review of our financial results and then I will come back for a few summary comments. Chris?

Chris Meinerz: Thanks, Dennis. For the Company’s second financial quarter ended June 30, 2016 Mobivity recorded record revenues of $2.1 million, a 90% increase over the prior year quarter and more than 12% sequential growth over Q1 2016. This improvement is attributed to significant, continuing growth in our SMS and SmartReceipt revenues contracted with large enterprise customers. Revenues for the six months ended June 30, 2016 were $3.9 million, an increase of $1.9 million or 93%, compared to the same period in 2015. Gross margin was 73% in Q2 2016, as compared to 75% for Q2 2015. Gross margin for the six months ended June 30, 2016 was 75%, compared to 74% for the same period in 2015. The decrease in gross margin for the second quarter is principally due to higher cloud-based software licensing fees, short code maintenance expenses, personnel-related costs and other expenses as they relate to the increase in revenues. General and administrative expenses decreased $115,000 or 11% during Q2 2016, compared to the same period in 2015. General and administrative expenses decreased $222,000 or 10% during the six months ended June 30, 2016, compared to the same period in 2015. The decrease in general and administrative expenses was primarily due to decreased facilities expenses and share-based compensation expenses. Sales and marketing expenses increased $307,000 or 38% during Q2 2016, compared to the same period in 2015. During the six months ended June 30, 2016, sales and marketing expenses increased $440,000 or 23%, compared to the same period in 2015. The increase was primarily due to higher personnel costs as a result of hiring and staffing to support growth, as well as the LiveLenz acquisition. Q2 2016 engineering, research and development expenses increased $77,000, compared to Q2 2015. Year-to-date engineering research and development costs increased $312,000 or 99% through June 30, 2016, compared to the same period in 2015. The increase was primarily a result of hiring and staffing to support growth to serve large enterprise customers. Non-GAAP adjusted net loss, a non-GAAP metric, which generally excludes non-cash expenses such as stock-based compensation and depreciation and amortization, was $427,000 for Q2 2016, compared to $802,000 in Q2 2015. This represents a year-over-year improvement of nearly 50%. The year-to-date non-GAAP adjusted net loss was $1.2 million, compared to $1.8 million for the same period in 2015. Net cash used in operating activities decreased to $1.2 million through June 30. 2016, a 35% decrease as compared to $1.8 million during the same period in 2015. Cash and cash equivalents totaled $2 million as of June 30, 2016. I would now like to turn the call back over to Dennis for his closing remarks.

Dennis Becker: Thanks Chris. In review, we’re very pleased with the continued momentum reflected in this recent quarter. However, we believe we’re still in the early stages of our upside potential. We worked hard to prepare the technology for scale. And it’s important to note that much of our growth to more than 30,000 active locations in the U.S. and abroad, has transpired over just the last eight months of this year. In this short period of time, we've accumulated strong case study evidence, from millions of consumer transactions across thousands of locations, suggesting that our technology can deliver on the vision of targeted, personalized marketing to the offline marketplace. And when that’s achieved significant financial results are produced. Our technology and services are trusted by some of the world’s most recognized brands and we look forward to capitalizing on our recent momentum and working endlessly to accelerate growth. We appreciate your continued interest and look forward to sharing our ongoing progress with you. Operator, you could open up for questions.

Operator:

Dennis Becker: Thank you, operator. We’ll go ahead and run the – pass it back to Chris to read out our Safe Harbor.

Operator: Thank you.

Chris Meinerz: Thank you. I’d like to thank you all for your time on today’s call and your interest in Mobivity. Before we close, I’d like to read our Safe Harbor statement. On this call management personnel’s prepared remarks contained forward-looking statements which are subject to risks and uncertainties and management made additional forward-looking statements during the Q&A session. Therefore, the company claims protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those contemplated by our forward-looking statements as result of certain factors and not limited to general economic and business conditions, competitive factors, changes in business strategy or development of our plans, the ability to attract and retain qualified personnel and changes in the legal and regulatory requirements. In addition, any projections as to the company’s future performance represent management’s estimates as of today, August 16, 2016. Mobivity assumes no obligation to update these projections in the future as market conditions change. The company has filed its 10-Q with the SEC on August 15, 2016 and also issued a press release on the same day announcing financial results for Q2 2016. Participants on the call who may not have already done so, may wish to look at these documents as they provide a summary of the results discussed on this call. Today’s call may include non-GAAP financial measures which require a reconciliation to the most directly comparable financial measures which are calculated and presented in accordance with GAAP and can be found in last week’s press release which is also available at mobivity.com. This concludes Mobivity’s Q2 2016 financial results conference call. Thank you.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation.