Traders News Source Senior Editor Mark Roberts Interviews Arthur Smith CEO at Digerati Technologies, Inc.

Traders News Source Senior Editor Mark Roberts Interviews Arthur Smith CEO at Digerati Technologies, Inc.

Traders News Source Senior Editor Mark Roberts Interviews Arthur Smith CEO at Digerati Technologies, Inc.


Arthur L. Smith
Chief Executive Officer

Art has over 25 years of public company experience with a comprehensive background in technology and global telecommunications. Over the years, he has developed expertise in broad-based management including corporate finance, financial operations, business development, mergers and acquisitions, strategic and tactical planning, sales and operational management, and international business. As founder of Digerati Technologies, Inc., Art has held various positions within the Company, including Chairman, CEO, and President of the Company’s international subsidiary. Art is also co-founder and former Chairman of GlobalSCAPE, Inc. (NYSE: GSB), a leading provider of Internet-based information exchange solutions and former wholly-owned subsidiary of Digerati. GlobalSCAPE was spun-off to the Company’s shareholders as a separate publicly-traded entity.


Thank you giving us your time to answer some questions.

Can you give us a brief overview of your company’s operations and revenue streams? How would you describe UCaaS?

Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. The Company services a variety of industries in the small to medium-sized business market (SMB) primarily in Texas, Florida, and California. Through its operating subsidiaries NextLevel Internet ( T3 Communications (, Nexogy (, and SkyNet Telecom (, the Company is meeting the global needs of small to medium-sized businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions including, cloud PBX, cloud telephony, cloud WAN, cloud call center, cloud mobile, and the delivery of digital oxygen on its broadband network. The Company has developed a robust integration platform to fuel mergers and acquisitions in a highly fragmented market having completed and successfully integrated six acquisitions to date. 

Your Q322 earnings release indicated a dramatic revenue increase with an annualized revenue level of $32M, congratulations! Do you think DGTI will remain profitable over the next two quarters?

We have a recurring revenue business model and EBITDA profitability is the key financial metric for measuring our performance.    We produced nearly $1 million in OPCO EBITDA for the three months ended April 30, 2022.   We believe OPCO EBITDA is useful to our investors because it reflects EBITDA for the core operation of the business excluding corporate expenses, non-cash expenses and transactional expenses. The Company continues to execute on its integration playbook and expects additional cost synergies that will improve OPCO EBITDA over the next 2-3 quarters.

Your Q3 gross margin was at an enviable 61.3%. Can DTGI maintain that margin level as the company grows?

We expect gross margin to remain at these levels but with an increase in gross profit dollars as we continue to stack recurring revenue both through organic efforts and M&A.

What is your view of growth in the Cloud Communications Business sector both near term and over the next five years?

Globally, the current cloud communication/UCaaS market for is valued at approximately $48 billion and is expected to grow to $210 billion in value over the next 7 years as businesses continue to migrate from legacy systems to cloud-based communication systems.   Near-term, we will continue to focus on the strong demand from the SMB market for cloud-based telephony services. 

Would you describe any synergies you’ve identified with the acquisitions of SkyNet and NextLevel?

We categorize synergies in 4 segments that include technology stack, operational systems, personnel, and other SG&A.  Both of these acquisitions, as others we have completed, met the disciplined criteria under our M&A strategy that includes synergies in all 4 categories.  Our objective is to increase EBITDA from the target acquisition by 7-10 points post close by executing on our integration playbook.  This typically takes 3-12 months depending on the category. 

Is the company’s growth strategy in the near term (6 months) focused more on organic growth or growth by acquisition?

We are more M&A focused at this time, but this does not dilute our organic growth efforts. We organize around executing on both since M&A typically comes in waves.  We are always active in M&A, but timing on acquisitions can be impacted by a variety of factors, some of which are beyond our control.   

What does your company do well?

Digerati’s operating units maintain a superior customer service model in the UCaaS segment of the telecommunications industry with an emphasis on that local/regional touch that is necessary when serving the SMB market.  We capture business away from the flawed service models of our larger peers that find it difficult to move down market.  Cloud communication service providers like VG, RNG, EIGHT, typically focus more on the enterprise customer rather than being able to effectively work down-market to serve the large, underserved SMB market.

Based on financial metrics, a case could be made for a much higher market value for DTGI. What do you think could be an obstacle to a higher valuation?

It is our opinion that the OTC Exchange is not an orderly market.  We do not believe it is a viable marketplace to properly access the capital markets and for minimizing dilution while properly growing our share value for use as a currency to make acquisitions. The Company is actively pursuing an up-list to a primary exchange, either the Nasdaq or NYSE.

Would you describe your vision of growth for DTGI both in the near term and long term?

We have executed successfully on our business model launched 5 years ago and proven out our concept, so expect us to continue doing what we have done historically but at an accelerated pace.  We will capitalize on the opportunity to consolidate a highly fragmented UCaaS Industry while delivering business solutions to the SMB in a high growth market.  We believe this combination creates substantial runway to build a billion-dollar plus company.


Thank you for your time!

The Traders News Group


***The owners and operators of this website have NOT been compensated in any way for conducting or distributing this interview. Furthermore, we do not hold any form of equity in the publicly traded company/companies mentioned above***


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