WISeKey International Holding AG (WIHN) Earnings Call Transcript & Summary

Greetings, ladies and gentlemen, and welcome to the WISeKey International First Half 2020 Financial Results Earnings Conference Call. As a reminder, this conference contains forward-looking statements. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievement of WISeKey International Holdings Limited to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. WISeKey International Holdings Limited is providing this communication as of this date and does not undue to update any forward-looking statements contained herein as a result of new information, future events or otherwise. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Carlos Moreira, Founder and Chief Executive Officer of WISeKey. Thank you, sir. You may now begin.

Thank you very much, and welcome, everybody, on this report on H1 2020 results of WISeKey. So my name is Carlos Moreira. I am the founder and CEO of the company, and I am presenting the figures together with Peter Ward, our CFO, that will speak after my turn. So first of all, I would like to describe the first 6 months of the year. As you -- I'm sure you saw already in the press releases that we issued and also on the statutory reports, during the first 6 months, the company has been very much focused in one side to offset any potential downside created by this terrible pandemic that we are suffering while at the same time, we continue executing our digital transformation strategy, which we started last year. So WISeKey, after we did our listing on the Swiss Stock Exchange in 2016 and consequently, our NASDAQ ADR 2 last December 2019, entered into a digital transformation as a way to integrate the different aspects that we believe it is required to create what we call an Internet platform. As you know, the Internet is getting fragmented. It has become geopolitical. Identity Management has become a major asset. Cryptographic root keys that provide digital trust to those identities are becoming strategic. Blockchain to disseminate and decentralize these assets through ledgers are becoming very important. And all that now reinforced by AI as data-driven decisions and operations are requested by companies to execute in a much more and efficient way as data is still located in silos and is untrusted, and it's very difficult to use analytical tools. So what WISeKey has done in the last 3 years is to develop, with our own research and development teams, the technologies that they are required to build up this platform. We can call WISeKey today something like a small Palantir. We are in the process of providing an end-to-end platform from the possibility of issuing digital identity to people and objects through our semiconductor capabilities, but also to integrate the data into a trusted platform, digitally signed by our cryptographic root keys, which is a critical asset that the company has. And in the last 6 months, we have been focusing on collecting, analyzing and making this data accessible to our clients so they can take data-drive decisions and operations, which is exactly what our clients want. So giving you examples, we have been signing deals with companies like Parrot. They produce drones. Those drones obviously are being used now for critical operation, in some cases, for defense operations, Army. And the drones needs to be authenticated, microchips needs to be installed at the device level, Identity Management needs to be incorporated in those chips, then they are then inserted into the object. And the data that those objects send to command centers, they are then be used to drive decisions and activation of operation in a trusted authenticated environment. So this is what the kind of thing WISeKey does. We do that for drones, we do that for luxury companies, we do that for pharmaceutical companies. And during the last 6 months, we have been intensifying our know-how on operation in bringing projects like that, which has all of them becoming a reference project as the integration of these assets are a very complex activity. So in terms of the way we see our business is that we are now able, after few years of being listed on the Swiss Stock Exchange and organizing ourselves towards this digital transformation process, we are able now to combine those assets in a package that our customers acquire in a way that allows to simplify our billing process. Now we can say that we have a structure that is moving towards a SaaS structure on where our clients will be paying a lump sum per year to benefit from our platform. Obviously, that lump sum can be expanded depending on the number of objects or depending on people that want to connect to those platforms, depending the data those platforms will be generating, depending on the analytical tools and artificial intelligence use that those platforms will be activating. And that lump sum is, obviously, activated and distributed among a number of clients that we have. So as we are saying, the visibility of this year is between $70 million and $80 million. We have reduced our target of $2 million. And the only reason for that is the fact that some of our clients had difficulties during this COVID 6 months period. Many of our clients, for instance, clients in the luxury industry, watch manufacturers have been harmed by the lack of demand during the COVID lockdown of their products. Obviously, those products not being manufactured, our capability of selling to them our technology has been handicapped and reduced. And that is reflected on the 30% drop in revenue that we have in comparison to last year. I must say that we are not too much concerned about that because it doesn't mean that those decisions to buy those products have disappeared. What happens in this kind of situation is that customers will eventually delay the process of buying the product. We should be able to see that revenue coming back once the COVID situation gets clarified and we have a vaccine, and people can go back again to normal life. The same applies to some strategic hardware manufacturers that has also reduced the number of devices that they require our technology. But we would like to reassure everybody that in no way this reflects the lack of interest in the technology or the lack of support to that technology. To the contrary, our projections towards the next years are very strong. We have a very strong pipe. We have about $250 million pipe visibility towards 2025. We have developed a financial model that shows that if we just increase the number of clients, if you divide our revenue by the $300,000, $400,000, which is the price -- average price our customer pays for platform, then -- you say that we have now 60 clients and they are willing to pay between $300,000 and $400,000 per year, plus the incremental payment they do for an extension of sits on the identities or chips, and if we just project those clients towards our target to be 400 clients by the year 2025, our incremental revenue will be from where we are now to something like towards $120 million revenue. So that's what I said before, we are a small Palantir. Palantir is a good example, and it's a good thing for analysts to analyze Palantir because it's a cybersecurity company doing an IPO or a direct listing. And it's one of the first end-to-end cybersecurity companies that are entering into the listed market and a very good reference because the way they break out their revenue is also in a similar way that WISeKey has. For instance, Palantir has 125 customers and those customers contribute the entire revenue for their entire ecosystem, on $739 million disclosed last year. So in the case of WISeKey, obviously, we are much smaller than we (sic) [ they ] are because we are a European company still. The market is still in Europe fragmented, is a market that you have to go country by country. But the good news is that WISeKey has put a very important investment during this year to expand into the United States. We have recruited a sales organization now in the United States, which is now developing the pipeline towards 2022. And we can see that it's a phenomenal potential growth in the United States, as the market on where we are acting, cybersecurity, IoT, Blockchain and artificial intelligence, is getting consolidated, and it's a market which any major company will need to enter if they want themselves to become competitive as the digital transformation is affecting anybody -- everybody. What we also realized during the COVID situation is digital identity, which is something that WISeKey is a pioneer. WISeKey has started to issue digital identities in the year 1999. So we have 22 years of downloading digital identities worldwide. But digital identities were not understood before, people didn't realize that they were a critical asset. Now if you read the latest article of The Economist and many others that say the COVID pandemic has increased the attention towards the requirement of digital identities because digital identities is what allows people to entrust their data, to certify their personas to be able to interact in a secure way on the Internet and being able to enter into transactions with third trusted party in an accountable way. Without digital identities, we will not be able to solve this pandemic issue. So the demand of digital identities on our technology for authentication of apps, we are behind many of the new apps that they are being developed to provide trustability and infection monitoring. All these health passports initiatives being developed at national level, WISeKey is behind many of them. We are also behind the certification of testing devices that they are being used to allow people to test themselves before entering into an airport or entering into a plane or entering into a large crowd environment, and they need a fast test and they need that test to be certified. That test should be also connected to their mobile phone, peering the data on the test stores, the mobile phone. And for that, you need a microchip, and those microchips are WISeKey microchips. And those WISeKey microchips not only secures the data between the testing device and the app, but also ensures that the testing device cannot be counterfeited. Obviously, that generates a lot of data. That data is very important to governments, and they are trying to determine now on the infection levels, the localization of the infection where the people are getting infected and what are the measures. So that data is then analyzed using artificial intelligence. And as you might also have been made aware through the press, WISeKey made a strategic investment on arago. Arago is one of the leading artificial intelligence companies in the world, very strong in Germany. One of the platforms for the Industry 4.0 revolution in Germany. WISeKey has acquired 5% of arago and has transferred a permanent license agreement of HIRO, which is the arago algorithm into the WISeKey platform, into something we call WISeAI. WISeAI was World Internet Secure Artificial Intelligence. So as we believe in the future, the monetization is going to be on data. Data is going to be the oil. It is already the oil of the digital economy. But this is going to be incrementally the case as data is becoming the base for all potential transactions. In order to make those algorithms efficient and being able to provide analytics to the customers, you need to be sure that the data comes from authenticated sources, and there is where our chips makes a lot of sense because they authenticate that the data comes from a unique object, cannot be duplicated, that the object is a real object, it's not a counterfeited object. The data is encrypted with our PKI capabilities from the object to the cloud. So therefore, the data cannot be tampered. The data is then decrypted in the cloud level by -- or encryption and decryption capabilities. And then the AI algorithm starts to be used to data mine the data, organize the data and convert the data into data-driven decisions. So companies using our technology like automobile companies using now our technology to secure connected cars, like we announced already some wins on that sector, can now use that data to anticipate potential security issues with the car, make sure that the data also gives them analytics on behavior. And obviously, making those cars more secure and reduce the risk of using new technologies in these kind of critical devices. Also an important aspect of our technology being used this year is brand protection. We made a strong move in brand protection. WISeKey is well-known to the one of the pioneers in protecting objects, especially luxury objects and watches on the Internet. This has been expanded now to many other areas such as medical products, spare parts, supply chain, food distribution, food security and areas related to making sure that everything that is basically sold by e-commerce platform is genuine. As you all know, one of the major issues with many platforms, Amazon, Alibaba and others, they are still selling a lot of counterfeiting products because they don't know that they are selling the counterfeiting product because they don't have any mechanisms of validating that, that product is genuine. With our technology, it will be very easy for this e-commerce platform to authenticate and only be able to sell products that they are genuine. So as typical in European companies, we have been grabbing opportunities in many sectors with the new digital transformation strategy of WISeKey. It's now going from what I call a rainbow strategy to a laser strategy, which is, as I said, to become a baby Palantir with the uniqueness that contrary to other platforms in the United States, the geopolitical neutrality of WISeKey is a major asset as we are Swiss, as we are also cryptographic root keys located in the country, as Switzerland is well-known as being a neutral country in what concerns data protection and sovereignty. And those assets, obviously, will be very important to power the Internet of Things economy, which is emerging ahead of us. The potential is huge. We are talking 1 trillion objects to be connected to the Internet. You imagine the quantity of data those subjects are going to be sending to cloud, imagine the quantity of identities those objects will require the number of chips that needs to be added. Obviously, the potential is massive. But the only way that you can really grasp that potential and convert that into revenue is by acting as a platform, rather just one company that only sell chips or one company that only sells AI or one company that only sells digital identities. You have to bundle all that into a platform effect. And this has been the major achievement of WISeKey during H1 this year. And this is going to be reinforced with many new things, and they are going to happen before the end of the year. So I would like now to transfer the session to Peter Ward, our CFO, who's going to give you an update on the financial performance of the company during this period. Thank you very much for your attention. And later, I will be available for a Q&A at the end of Peter's presentation. Thank you very much.

Okay. Good morning, good afternoon, ladies and gentlemen. I'd like to give you a brief overview of the 6 months to June 2020. Consolidated half year revenues actually decreased by 36% in comparison to the same period of last year, which is driven by the difficult market environment impacting the semiconductor sector, as many manufacturers of product secured by WISeKey reduced their inventories, watches manufacturers, router manufacturers, automobiles, with around 45% fewer deliveries year-on-year. This was partly offset by new sales in products such as drones and medical products due to our investments in high-growth future revenue segments such as brand protection and new technologies added to our platform, such as data, Blockchain and AI, through equity ownerships in start-ups and/or market leaders in these technologies. Although gross profit decreased from $4.9 million to $3.3 million in the first half, our gross margin actually improved to 41.4%, up from 38.9% in the previous period. Our operating loss decreased by -- to $7.3 million as compared to $7.9 million in the same period last year due to steps we took to reduce our operating expenses by $2.1 million year-on-year. The R&D expense has remained the same, while sales and marketing and G&A expenses decreased by $400,000 and $1.8 million, respectively, as compared to the first half of 2019. The decline is due to lower travel-related expenses, decreased legal costs due to less M&A activities and reduced staff costs. Operating free cash flow, representing cash flow from operating activities net of investments and tangible and intangible assets, is a net outflow of $4.1 million during the first half of 2020 as compared to a net outflow of $5.9 million in the same period of last year. So given the uncertainty associated with the impact of COVID-19, we expect our full year 2020 revenue to be in the range of $17 million to $18 million. Our few key financial milestones and highlights of the half year. We had a strong cash position. Our cash and cash equivalents together with restricted cash increased to $17.4 million as of June 30, up from $16.6 million as of December 31, 2019. Substantially improved financial position has paved the way for significant investments in growth initiatives and strategic partners, such as that recently announced with the AI specialist, arago GmbH. We continue to support our R&D work with $2.8 million invested during the year-to-date to develop new products and create business opportunities in cybersecurity, IoT, microprocessors, Blockchain and AI. We had revenue of $8 million, with an improved margin of 41.4%. Those revenues were reduced year-on-year against the first half of 2019 due to a combination of factors with 2019 including some one-off revenues, such as that related to the sale of the ISTANA platform to a major car manufacturer, whilst 2020 was hit by delays to deliveries as a result of the COVID-19 pandemic, with several clients delaying their deliveries into the second half of 2020, whilst others were impacted by border restrictions. However, WISeKey's enhanced position as a vertically integrated Identity Management, IoT and Blockchain service provider and our razor and blade: hardware and software revenue model has positioned us well to take advantage of massive opportunities in the market and return to increasing revenues and improved profitability. The company incurred $2 million less G&A cost during the 6 months till June, as we made a conscious effort to reduce this expenditure and ensure that its cash reserves would support it through its digital transformation process. The COVID-19 global pandemic had an impact upon WISeKey's first half results. Although initially, WISeKey did not see any significant reduction in demand for its products, as the pandemic evolved and more countries around the world implemented partial or full lockdown orders, some of its clients asked to deferred the delivery of products to a later date. In particular, deliveries to clients in certain countries became impossible due to measures on border controls imposed on imports by governments, whilst other clients in sectors such as retail placed order delays. WISeKey received some support from the Swiss government in the form of 2 long-term loans and also received funding under the Swiss partial unemployment Support. WISeKey's strong cash reserves, combined with agreements by senior management and the Board to defer a part of their salaries, resulting in no reductions in workforce. Currently, WISeKey is requesting government support for a relatively small portion of its Geneva-based workforce due to work reduction, whilst the rest of its team remains fully employed. Although it is impossible to predict the full extent of the impact of the COVID-19 pandemic, the group remains confident that it has sufficient cash reserves to ensure that it will be able to continue to finance its operating activities for the foreseeable future. The cash and cash equivalents together with the restricted cash at June 30, were $17.4 million compared to $16.6 million at December 31, 2019. During the year, management took several steps to reduce costs in the wake of the COVID-19 pandemic, which has, in turn, enabled WISeKey to maintain a healthy cash reserve. WISeKey negotiated a new facility -- a new financing facility as well as revising existing facilities to maintain the cash balance and is well placed to use its funds to support its operating activities through the COVID-19 pandemic to implement its digital transformation plan and to make strategic investments. WISeKey's management believes that it has sufficient funds to carry its operations through to the end of 2021 and beyond. With that overview, I would like to hand the conversation back to Carlos.

Thank you very much, Peter. So I'd go back to the moderator. The floor is open. If you have any questions or remarks, we are here both available to answer them. Thank you very much.

[Operator Instructions] Our first question is coming from Andrew Nowinski of D.A. Davidson.

Congrats on the first half results. Just wanted to follow-up on a few things you had mentioned. So you said your guidance was influenced by some customers in the luxury industry that were adversely impacted by the pandemic. Can you give us any color on your customer concentration, specifically with regard to your 10% customers, if you have any?

Yes. It's actually -- Andy, nice to talk to you. It's actually -- if you really look, the numbers of customers are very, very small as basically what they are doing is delaying the acquisition of technology because their inventory is getting very high. Normally, they have a threshold on which they activate or not the new commands. But this is reflecting about 30% of our clients. And as I said in my initial remarks, it's very likely that they are going to be increasing the demands by the end of the year or early next year as in Switzerland and internationally, the market is getting more organized. I mean the post-COVID market reaction is getting more organized. This happened during the worst time possible, which was end of Q1, beginning Q2, where there was this terrible lockdown, people basically couldn't even leave their houses to go to the shop to buy a watch or to buy a luxury item, neither they had the need to do so. Another area which has been reduced, we don't want to disclose names because we are a cybersecurity company, we also have concerns about disclosing the name of our client, but it's a major company in the United States that for the same reason -- is a manufacturer of routers, for the same reason is postponing the acquisition of the technology for the new generation of routers because the product has been delayed of 6 months. So there is a delay, as everybody is delaying. Apple is delaying the iWatch and everybody is delaying everything, right? So this is the only reason. Otherwise, we should be growing. I mean the integration between the IoT, cybersecurity and the integration now with the new platform elements I mentioned before, like Blockchain and artificial intelligence is creating a 30% to 40% growth per year in normal circumstances, I will say. So this is the situation. It's very unique and a special year.

We don't have any customers -- On your revenue concentration, we have one customer that's just at 10%, Andy. That's it. The rest is a broad spectrum of customers.

Yes. Exactly.

That's great. That's great. And then one last question regarding the monetization of data. Have you started monetizing that with any customers yet? Or -- and if not, when do you expect to start charging for the data?

So yes, actually, we did start already. And this is the -- basically, what we're doing is not with only one consumer, with all the customers because before, in many cases, we used to sell the semiconductor separated with the cybersecurity. And now what we are doing is packaging all that in a SaaS agreement on where customers will pay a lump sum for that SaaS agreement, which includes already the data. So our views is that in the future, depending the type of contractual agreement we reach with a client, some of the things that we need to collect that data, including microchips, could be drastically reduced in terms of price because we will be able to sell the services related to data-driven decisions and operations to the client through the software. So this is why we invested into arago because we didn't have, as an asset, -- I mean, we had done a deal with IBM Watson. But obviously, we don't want to depend on IBM for doing that. We prefer to have that critical technology asset in our platform. And that's why we invested in arago. The arago HIRO algorithm basically allows us to data mine all the data we produce. So our customers are getting now the same -- I would say, for the same money, much more because now they are also authorized to data mine and provide data-driven decisions with the same money they used to pay before only with IoT before.

Our next question is coming from Kevin Dede of H.C. Wainwright.

I was wondering if we could talk a little bit more about the arago deal. I understand you made a $5.5 million investment, and you have this algorithm. But I'm wondering how the joint venture is structured? And how revenues flow going forward?

Yes. So absolutely. Although this is not H1, this happened actually H2, but I can give you some information on that. So arago -- as I just mentioned to Andy, we needed to have these AI capabilities, and we didn't want to outsource that capability outside the company. So arago has got an investment from KKR, they invested $50 million into arago a few years ago, arago become a very well recognized AI algorithm. Chris Boos, which is the founder of arago, also sits on Madam Merkel Advisory Board on COVID. There is huge initiatives happening in Europe on COVID, and WISeKey is very much involved into all that. So it made a lot of sense from the strategic point of view to team together. So that was the first step. We teamed together. We signed a partnership then because Chris Boos exited KKR from his capital, he bought back the shares. There was a good opportunity to start to acquire some parts of arago. It doesn't mean that we're going to stay there. For the moment, it's 5%, but obviously, we have options to go much higher than that. My -- as you know, Kevin, from previous discussion, my objective is to create the European platform, right? I mean China has a platform. United States have 2, 3 platforms. Europe don't have yet a platform. We have a bunch of companies totally detached from a platform strategy. As I say, the future of the Internet, every major geographic zone will needs to have its own aircrafts carriers. And that's what we need. We need the European aircraft carrier on the Internet that will support the planes that will be landing and taking up. Otherwise, you will have to land somebody else. And that vision is -- it wasn't there in Europe. Now it starts to be, and arago and WISeKey, they are pillars of that strategy. So that's why we made the investment and the possibility in the future will be to continue that integration as we go forward. Obviously, arago has its own path, potentially an IPO, and we will be observing that. Now in terms -- the investment included a licensing, perpetual exclusive licensing agreement of using euro for the purpose of cybersecurity and IoT. Euro can also be used for other things. Euro is being used in IT automation processes in Germany. The algorithm has been programming in many other functions. But what concerns the cybersecurity, IoT and analyzing and any data-driven decision and operation generated by digital identities or objects authenticated with WISeKey technology, the exclusivity agreement is part of the investment. And then a special purpose vehicle, which is a joint venture, has been created on which WISeKey is majority shareholder. So the consolidation revenue is for WISeKey. And the model is -- I mean, WISeKey is going to be driving the joint venture, that's WISeAI. And the joint venture, obviously, this involves some royalties to arago and back to WISeKey for the technology, but the consolidation is done at the WISeKey level.

So Carlos, is -- as arago makes improvements in their software and their algorithm, are those improvements open for your use as well in the joint venture?

Yes. Totally, totally, absolutely. Although AI is -- improvement on AI, they are more on the data analytical capabilities of the AI, as we will be making improvement ourselves as well on their own AI. I mean you don't have what you call a general-purpose AI. AI has to be verticalized on industries, right? The AI that knows how to fix cars is not the same one that the AI to fix airplanes, right? So what we are doing is verticalizing this algorithm in IoT. And this will be disrupted by itself because this will be the first time ever that this is done. This is a very interesting integration platform because it's digitally signed by the cryptographic root key of WISeKey. So we have no interference there. The additional Identity Management system belongs to us. The microchips belongs to us. So we have full control on what goes inside the microchip. You know what is happening now between United States and American semiconductor. So that solves that problem because we can show our clients that nothing goes inside those microchips without their consent. And the data that then is created by those microchips and identities then collected by the WISeAI HIRO algorithm and converted into data-driven decisions, which is very much what Palantir does. Palantir is a data-drive decision platform, right? And look their valuation and compare their valuation with WISeAI, even at the level of multiples. I mean they are talking about $20 billion valuation for a company with $739 million revenue. So they -- obviously, the market is paying attention to this integration, and this is why we are putting so much effort to get there.

Okay. You touched on this a little bit in your remarks already and answering some of the earlier questions, Carlos. Could you just talk a little bit more about, I guess, this -- sort of this evolution of the Internet and its geopolitical nature. I mean my understanding was that there was a recent announcement with regard to global standards in data security in China and that they're trying to create a geo fence. And I'm just wondering how you see that evolving? And I know that you sort of see that happening in the United States. And I'm just curious on how you see WISeKey playing across borders as well as being instrumental in developing that same type of Ring fence Internet development within the European Union?

Yes. So the Internet, as we know it, as we knew it, the integration between ARPANET, Internet and the Web is dead. Even I know and you know and we have been with Tim Berners-Lee in Davos, and he says, "My invention is gone." I mean -- so the reality of the game is that the Internet is dead, as we knew it. So this global interoperability method of people exchanging knowledge and wealth and data is gone. Now we are retrieving ourselves in a very nationalistic view of the infrastructure. That's why 5G and all this war between America, China and who owns the 5G because 5G is actually a decentralized Internet or what Tesla or Elon Musk is doing with the satellite mesh. I mean what we are creating is an Internet of boundaries, geo fences, as you say. So every country is going to want to control their digital territory as we control our physical territory with our own frontiers. So that digital territory can only be controlled if you have critical assets as the one I described before. You need to have cryptographic root keys because this is the anchor of trust. I mean cryptographic root key is the mathematical algorithm that allows you to initialize trust from 0 all the way up to whatever that trust needs to go and has revocation capability, and you can now solve algorithmic technologies with cryptographic root key capabilities. So this -- who has the cryptography root keys? Some very big companies in the United States. Some very big companies in China and in Europe because many of the cryptography root keys were acquired by telcos and disappeared from Europe, actually, WISeKey is the only one left. So it's normal that WISeKey will use that foundation, that base to build up this platform that European needs. And arago is a German company and WISeKey Semiconductor is a French company. So I mean, we are in the core of where innovation is in Europe. Germany is very strong on AI, IoT because of their manufacturing capability. And France is very strong in issues related to the production, design and manufacturing of microchip. They invented the microchip, right, with Gemplus many years ago. So this is the element. Now -- so that means that WISeKey will be competing not only as a company but also as one of those platforms. It doesn't mean that my vocation is not to make WISeKey an European platform per se, but a European base platform that can obviously have activities anywhere in the world, as we have now in the United States, in many other countries. And we will then let the consumer decide what platform they are more confident with. Are we more confident to have our data with a European company that is maybe more concerned about GDPR, eIDAS and regulation on privacy than Americans company could be? I mean the consumer will decide. The good news from our observation is that the consumer, including the United States, they are saying, actually, we like that. We like that model that you guys are building because we don't want our data to end up in places that we don't have any oversight. So this is the bet, right? This is the design. It takes a while because it's an aggressive and ambitious strategy. But obviously, the potential upside is enormous. Because in the future, you're going to have then those platforms and those platforms are going to have to negotiate between themselves if they want to exchange data. Data produced in China will not be available to the United States as you already can see with the TikTok negotiation and vice versa. So you need to have some kind of bridges, and that is where Switzerland makes a lot of sense. Switzerland's DNA is interoperability. This is where everybody comes to make peace and to establish compromises. So we believe that WISeKey being a Swiss company is an asset because it aggregates something more than just being European. We are European Plus in the sense that we can use this neutrality and this treatment of privacy on data and many other protections that the Swiss do in plus of anybody else in the world. So as we are building our entire platform on those assets, we believe the company is going to be very successful, and that's why we are all very excited about this.

So if I understand correctly then, your initiatives in China are continuing?

So our initiatives in China -- I mean to be honest, China has been paralyzed due to the COVID with any foreign player or activity. I mean we had identified in China areas where we could introduce our microchip technology for their connected car, that was my major driver because it's going to be 35 million connected cars in the next year. And they are all looking for the technology we sold in Europe to Daimler and a few others. But this has been for a moment, I will say, postponed until there is more clarity about what is happening in China. China is also moving towards redesigning their entire Internet. There are decisions internally that they are reconsidering whether they're going to close themselves into a China-net or they're going to be open. And this obviously depends a lot on the bilateral relations with Europe and the United States. So it's work in progress. But China is not for the time being my major market at all. It's actually the United States.

At this time, I'd like to turn the floor back over to Mr. Moreira for closing comments.

So I would like to thank you for your continuous interest and questions. The full report is available in our Investors website at WISeKey. Peter and I, we're going to be talking in several investors meetings in the next days actually, both with DADCO and HCW. We will also have one-to-one and fireside chats. We are very active on the Internet on using Zoom for our webinars on all the technology we cover, and you are most welcome to join us in any of those webinars. I will give you the possibility of understanding better the company and its progress. So for the time being, thank you all for your participation and attention. Thank you for the organizers to put this together in place and Lena and the team to put the invitations in play. Thank you very much.

Mr. Moreira -- sir, can you hear me?

Yes. Yes, I can hear you.

We did have Mr. Dede come back into queue. Can I rejoin him through to you, sir?

Yes, please.

Carlos, I'm so sorry. Somehow I was dropped on the call. I apologize sincerely.

No worries. No worries.

Okay. I was also hoping you could talk a little bit about your business development initiatives. I know it's really important in order to meet your longer-term targets to build your client base. And I was wondering if you could be a little bit more specific about some of the sales teams that you've decided to build in the United States, where you are with regard to that? And what your targets are?

So yes. So Kevin, we mentioned that briefly in our introduction. So we put together a senior management team. We recruited an ex-Disney executive now, which is working for us full time in the United States. We also recruited the CTO of OpSec. OpSec is a very large brand protection company. So he's now leading what we call as the Chief Revenue Officer. His job is to consolidate the entire company revenue structure and obviously increase our revenue by bringing more clients. This is what I mentioned before about this strong pipeline that we have. We also reinforced the team in Germany. We recruited a Senior Vice President for sales in Germany, building -- he is on German team as Germany, especially now with the virus situation, is going to be a major revenue country for us. And Germany is very advanced on this digital transformation process. And obviously, reinforcing our team in France as we continue forward. Also, we announced beginning of the year, there's a lot of progress. We also created a joint venture in Saudi Arabia with Juffali Group, which is one of the largest private group in Saudi Arabia, a big manufacturer and importer of cars. And we are now deploying several interesting projects in Saudi Arabia and the Middle East, especially in the security and connectivity of connected cars through the Internet that they are going to be reflected in 2021 revenue. We are entering into new niches like drones. Drones was very excited initiative with Parrot. This is now opening many other initiatives because those new drones are becoming like iPhones, the new iPhones connected to the base, they need security. And this is giving ideas to many hardwares manufacturers to have the same capability. So my objective is to inject a substantial amount of resources. As Peter said, we are in good shape in terms of we have no debt, and we are sitting on $60 million plus. So that is to put that money at work by reinforcing the sales organization in those areas where we think the revenue is going to be the key drivers for this end of the year and 2021.

I only have a couple more questions for you, if you'll let me continue.

Yes. I don't know if everybody else left because I -- before you arrived, we closed. But never mind, I am available for you, Kevin.

Great. Okay. I was wondering if you might talk about your M&A pipeline. Because I know at one point, you had entertained the idea of buying other interesting technology. The AI thing certainly very interesting, but also slightly unexpected.

Yes. The question was which will be the priorities? My priority first is investing in technology versus investing in companies that they have very large pipe ecosystems, right? Because obviously, what I would like to do is converting whatever acquisition, those potential acquisition we'll have, into the technology we can offer, right? So that's why we put priority first in reinforcing the technology offering, reinforcing the business model, converting the entire technology to a SaaS offering and then moving to those acquisitions. Obviously, as you know, WISeKey has done only an ADR 2. We still have possibilities in the United States to do an ADR 3 or even an IPO. That's why we are looking into this Palantir model because it's a good reference for us. It's a cybersecurity company. They have concentration in customers, which is pretty similar to us. So we are looking how they're going to progress. And maybe if they are successful, maybe we will follow their path. That obviously will allow us to further accelerate our potential merger and acquisition capabilities. For the moment, we are a foreign issuer, Swiss foreign insurer through an ADR 2, which is good because our volume in the United States has substantially increased. If you go to the NASDAQ, and you see the number of shares WISeKey is trading now, it's nearly 300,000 ADRs per day, which is amazingly high in comparison to where we were in December last year. So that shows that there is more institutional support for the stock, and that should be continuing increasing as we move forward in the United States strategy.

A couple of questions for Peter, just sort of housekeeping things. I didn't see the full -- I haven't had a good chance to look around, but I didn't see the full P&L with some of the details that you normally disclose, like the share count. Could you give me the share count for the 6 months versus the full year '19?

Yes. So if you -- actually, as Carlos said, if you look on to the website, you'll see the entire report there. You've got all the usual reports, P&L, balance sheet, equity, cash flow. It's all on that, Kevin.

We can send you that to you after this call, we can send, but as you see, it's available on the -- you just press the PDF file and you will download everything, yes.

Okay, okay. Thank you, gentlemen. I appreciate it. I -- it's just sort of early here in San Francisco, and I didn't have time to get through it all. I apologize.

No worries, no worries.

Mr. Moreira, we are now showing no questions in queue. Did you have anything else before we close today's call?

No, just thank you for your cooperation, and thank you, everybody, for the participation.

Ladies and gentlemen, thank you for your participation. You may disconnect your lines or walk-off the webcast at this time.