Services revenue for the three months ended June 30, 2013 includes the impact of Route1's November 20, 2012 press release where Route1 announced that it had received a second purchase order from a component of the United States Department of Defense.
"We continue to make progress in growing our MobiKEY application software revenue base. Over the last four quarters we have grown our recurring, services revenue base by more than 22%," said Tony P. Busseri, CEO of Route1. "We continue to aggressively pursue business opportunities that will grow our paid user base and where possible, improve the quality of our services revenue."
Business Development Outlook
Route1 has advanced the plan it laid out to shareholders on April 11, 2013 during its fiscal year 2012 investor conference call and webcast. For confidentiality and competition reasons, Route1 is limited in what it can communicate to the market on any one specific business development opportunity but the below overview describes at a high level, current business development activity.
U.S. Department of Defense (DoD)
-- Route1 continues to work with its two key DoD accounts. The focus has been to improve direct relationships with key decision makers and reduce the dependency on channel partners.-- Government wide budget cutbacks have slowed growth in defense spending and funding of technology projects. The deployment of the MobiKEY technology saves enterprises money - in most cases saving more than the investment in the MobiKEY technology. MobiKEY is an effective solution in the current budget environment without compromising on security or functionality.-- Route1 is targeting continued services revenue growth from its DoD accounts.
U.S. Government Civilian
-- Adoption of the usage of PIV and FRAC cards as part of the authentication process for remote access sessions (HSPD-12 compliancy) has gained traction during fiscal year 2013, at least from a planning perspective.-- Route1 is targeting new sales from MobiKEY Fusion devices and a broader usage of its MobiKEY technology within DHS and the U.S. Department of Interior.
-- Route1 has focused on informing Shared Services Canada about its MobiKEY technology and is aggressively pushing to close on a couple of limited operational deployments prior to one or more request for proposals under the Workplace Technology Services (WTS) program being issued.-- Two of the primary goals of the WTS initiative, based on Government of Canada documentation, are to improve cyber security and data sovereignty, and reduce costs.
-- Route1 is experiencing an increase in unsolicited, inbound communication over the last 60 days.-- A message being repeated to us from prospective clients is the challenge they are having in putting in place a cost effective and safe BYOD program. Specifically causing issues for industry is the legal implication associated with enterprise data being placed on a personal device and the high cost of supporting a BYOD campaign.-- Route1 is targeting growth from the financial services sector as this sector seems to be a leader in deploying secure, mobile technology.
Product Development Progress
-- On April 2, 2013, Route1 announced the immediate availability of the MobiKEY technology for the Apple iPad. MobiKEY subscribers will now be able to use MobiKEY on an Apple iPad running iOS 6 and higher. The MobiKEY technology includes the use of both Route1's universal identity management and service delivery platform and MobiKEY application software.-- On April 5, 2013, Route1 announced that the Canadian Intellectual Property Office has issued Route1's first Canadian patent titled, "System and Method for Accessing Host Computer Via Remote Computer." The Canadian patent application was originally filed on February 26, 2007, claiming priority from a corresponding U.S. patent application (now U.S. Patent No. 7,814,216), filed on September 7, 2004.