Sierra Wireless (SWIR) 14 May 212021 Q1 Earnings call transcript

Good afternoon, and welcome to the Sierra Wireless First Quarter Earnings Call. I would like to turn the call over to David Climie, Vice President, Investor Relations.

Thanks, and good afternoon, everybody. Thank you for joining today's conference call and webcast.

On the call today are Kent Thexton, President and CEO; and Sam Cochrane, our CFO.

presentation website webcast following today's available will reminder, our on the a is and being be As call. of provide Today's will agenda detailed will Q&A. provide Kent quarter review a his corporate followed is update, and as by our first follows: results, Sam

are Before that on the forward-looking meaning cautionary Page now securities the our information and forward-looking I'll statements for X note on cautionary note being reference of is presentation constitute laws. A and of based include our and facts and expectations outlook summary our not statements historical started, statements contains regarding objectives, within of displayed. can the strategy, we regarding get business. company's commentary statements. be certain the goals, Today's found webcast These

are on including webcast presentation, of material statements on X be forward-looking to prove number based significantly of assumptions, Page a incorrect. which the listed those Our could

based from his our I'll viewed also I and statements, forward-looking release. that on material to forward-looking results and now differ earnings well to as should other risks of update. our are with expectations, unknown longer discussion MD&A, attention our that, on and or for caution presentation longer factors and to conjunction investors call AIF risk be current as by management's periods EDGAR turn your implied filings. our substantial over which of With are found in of particularly that significantly our our Kent SEDAR can events be cause known Additionally, in regulatory the quarterly corporate or expressed actual This statements. subject statements to time could and those those uncertainties forward-looking to relate we draw

with happy will in environment. will Thanks, and year-over-year. momentum, comments be quarterly QX was start up I'm continues demand on before our the near-term supply expect the Total David. this results chain being I first my global $XXX.X report by revenue million, to in that Sierra planned gain X.X% transformation strengthening quarter offset retirement. my to Wireless update I last my highlights.

As the we production incident behind $XXX.X announced week, facilities we consensus million. slightly on March the down and shut of our as were for ransomware such, X XX,

our report supply that our our We expected during XX% running due challenges. global also higher QX about noted was results revenue demand to chain than

million, this During the XX%. increasing first orders and to our year-over-year. software materialize, figure connectivity, $XX.X the In quarter, up continued quarter, services revenue to XX.X% was

this one: we X, on are the Clearly, the increase we worst as monitoring existing to revenue are edge with need ramp starting We years; both and recovering pandemic. as what usage as real-time hopefully at us; their customers we have IoT through our for customer deployment is rates new X, global up importance. X X get the grow is to in of and secured economies customers seeing IoT based the last remote some what over of assets deployments growing hope their we processing wins design open the improved

marketplace securely endpoints gather maintenance industrial to research edge-to-cloud their analytics connectivity a for that companies, and of digitize data assets CEOs devices, they supplier XXXX. that reported IoT IoT and looking them they data equipment predictive X-way quadruple factories, clear the trusted for orchestration. data and their control provide these my Many are will want tools from can customers run analytics. so of with urgently with conversations insightful that fact, it's In they just enterprise can by expect In and

revenue. usage in including and the new revenue last metric our revenue performance is quarter to the in QX, growth indicates recurring of are introducing subscription for these All MRR Sierra's or trends recurring release, revenue, our and last subscribers. graph monthly certainly playing our we MRR are we a each have recurring right X In the month for In historical current in IoT in into included strengths. as monthly measure data fees years. of from defined earnings the a

can MRR in in million quarter, to over see has from our recurring $XX.X grown period. revenue $X.X a this that CAGR nicely You generating up X-year QX the million of XXXX, XX% in past

the XXXX March XX.X%. from last Over March by XX to months, XXXX MRR increased

to design you show Going each revenue forward, from updates wins stepping design our over was we will quarterly business certainly MRR when with until in information. were providing several years the LTARR services transforming we take the back to X starting and years and important be as quarter show It LTARR win building providing last results.

our grow. our maturity and improving report backlog revenue, software and services a to our in gateways understood demand as metric. regards we of With monthly hardware the revenue see and to recurring to are and first strongly With the pipeline and recurring moving our devices, common and to our for business continued we more continue connectivity, growing quarter, continued modules easily

a which and We supply chain we call being widely. our conference during are last facing spoke environment, very reported tight is

diligently customers, our components balance to make sheet team and we're can ship advanced purchases and operations build so products component using Our secure we working of to is inventory. for our

we have are Our production necessary contract very teams to closely working the with also manufacturers our capacity. ensure

product to customers of to to and had In quarter, discovered the our isolate first expert identify, as this to valued incident. engaged mitigate of our in a continue to any immediately March we're constantly extra supply on incident, to we talking we ransomware advisers run implement But external XX. them We possible. was which facilitate measures possible, are that help get announced ability our QX. and an team working ahead suppliers we to closely as much have We will with demand supply major

worked incident, halted, and the throughout production was and since been factory with Our updates the minimize to providing communications but the have fully process. restored. We has impact we of been very customers quickly

clear limited internal IT to While our internal separation was ongoing, a incident incident this our is the customer-facing as investigation only our of and website services. the believe time systems between at the products systems and and we maintain we that

We the threat our that system locker. aware [indiscernible] was that are attacked actor a

security help monitoring. external added have enhanced for experts, for advisers tools and as tirelessly protection the detect corporate our enhanced an Our usual. I to our IT and security improved return to also detection and with We've like would of XX/X at with and activity. staff layer of thank endpoints team, malicious identify monitoring to business all to working

growth. Now back to discussing business

carriers and embedded in with now XG all carriers America Our programs North major globally. are leading and modules certified

shipping to We both sub-X products deployments. globally on are millimeter XG OEM customers wave and

end public video for networking our grow such wins applications demand are markets. modules are into laptops, as and video our design customers to safety XG, And as customers OEM going the devices, products. many from Our XG in continue primarily higher XG and security broadcast seeing their of

year off secure second up in a in XG this to sales half good of first new quarter, in we're expect XXXX. growth the a in global really half to the I'd pick and IoT coming wins. solutions the So examples. In few team of continued start XXXX, to activity with we share like our first to

products. pieces needed win with IoT is to technology multiple remote management supplier them company. SIM They that hardware, of for to solution tools. first struggling the of U.S.-based disparate source do They various leading enabled providers industrial industrial monitoring an with The been and have a

million. digitize are globally. bundled allowing data them doing for As them with using them recurring IoT assets solution our the to solution. design revenue first-class service improve to be Octave test and X expected this we with we their And their support, year of customer is a further value orchestration $X.X The a to is to and million, single provider, approximately expected quickly scale hardware $X.X first this with be now have new in

that expanding charging the that given vehicle long-term rapid infrastructure signed we station in IoT U.S. growth electrical customer EV connectivity up charging packaged This its is with market. Another relationship wanted with had high-quality a in gateways IoT services. QX an cellular customer the a company partner is

metering and high-value sensitive cargo be of Europe, the point-of-sale support the we devices times. also ticketing, of specific a assets. is provider so our also Sierra global all online I'll per LXXX our a commercial enables approximately Our X with this new technical theft. tracking fee. and of various design solution The used needs all in module event in win being carriers, of tracking smart tracking The expertise new managed solution It customer year. The Europe. cloud track win. our is a on freight announced services a Cargo, recurring LPWA in to and to be for recurring IoT announced monitoring, supplier supports registration be Europe asset carriers example to time SIM meet this international million, years' in monthly and design visibility, and QX, customer. hardware services We number management deploy together value spectrum, solution leading XXX level solution has managed and a based time locations around expected just new QX, the customer. condition prevent delays, shipping SIM connectivity, this this and that solution Wireless revenue In for a today revenue restrictions. a and sensitive is companies was that's built the customers utility third-party EV time customers, million. leverages to contracts in having high-value $X hardware, to approximately requirements last provide and logistics ready easily our expected cashless be sole signed avoid partners struggling quickly a throughout We gateways, reduce And in constantly and payments. can this IoT of fit key exception-based manufacturers, And device the initial customer expected and their they In of the $XXX,XXX start is unified and The track is product real-time years' so to with and X were and that this we that right was can global megahertz assets This to connect on launch X with strong the a at location with $X Acculink dwell single side.

as countries, solutions. LTE-M grid for the and Netherlands XXX energy and Some megahertz smart such spectrum they for reserving are Germany, smart so provide can Austria connectivity networks

launched delivered to more has replacements. and embedded rolls of XRXX battery firmware consumption The can The WiFi connectivity routers. module for or and across internal that performance over-the-air than this the reducing XX of XRXX interfaces in lastly, for for capabilities. provides speeds it's high-speed connectivity. being whether XG network, And and be business-critical series the new meters data that any mobile and backup XG XG extended new full XR maximize processing path. Our core environments to streaming across primary, applications. mission-critical truck multi-gigabit network battery utility fixed The life quad new customers years, accelerates and pleased allow wireless week, power XG number Ethernet X high-performance Both I'm OS our temporary smart advanced XRXX used or the needed routers and of best-in-class architecture we video data XRXX multi our real-time the using the applications

So growth in revenue our business we're summary, this high-speed strongly throughout to In strong and demand is leader to design a solutions proceeding market. higher-margin excited transformation XXXX. recurring series and about strong with router growing areas IoT pipeline our of orders taking wins,

with for his the on over pass comments Sam quarter. now first So will and that, to I it review

Thank U.S. dollars that a on everyone. report we financial our results in GAAP you, U.S. Good and afternoon, Note basis. Kent.

our to results and the operating our Total of and provide is revenue million, year-over-year. present our services understanding software recurring was We performance. available Connectivity, up compared website. QX non-GAAP revenue, in on A to results called between GAAP $X and first full a was in services revenue XXXX. we QX, or X.X% XX% quarter also non-GAAP reconciliation previously up other had $XX.X which million better million $XXX.X

increased first in quarter the And the constrained the revenue. factors: main in to manufacture X XX% the services products. ransomware Our gross the at total which constraints was semiconductors quarter, was ability first connectivity, end reflecting in the other quarter and continued software higher-margin compared supply and our the impact to of margin prior quarter, in chain for XX% the components. incident Non-GAAP by revenue of affected

million quarters. last over $X.X reduction non-GAAP This Our down our reflects been X that XX.X% we've cost in operating million, undertaking year-over-year. expenses QX $XX.X the were initiatives or

high-margin negative Our chain EBITDA was ransomware in tightness cost of build negative of compared segment a ago. partially and an year-over-year. to was the Solutions offset our incident to services $X.X improvement business, impact the growth the routers constrained our tightness decrease million initiatives. This in ability Solutions $XX.X growing our and reduction or of quarter. at capacity to adjusted components the Revenue in was due the all primarily Enterprise and X.X% $X.X and in order we hardware the had million the up at year was IoT increase and revenue supply by is in on segment connectivity and The from the EBITDA EBITDA by due negative million was X.X% incident IoT adjusted ship quarter. adjusted million constrained was end which in our software to the reflects primarily manufacturing that or the year-over-year. $X.X connectivity, offerings gateways The end the Revenue down and that ransomware lower

primarily million XX% $XX.X in compared or ago, to in non-GAAP first a gross Looking QX was our year with software compared supply or X%, to increased $XX.X due growing XX% connectivity, chain. quarter margin due gross at improvement services margin gross first the XXXX. continued tightness by and to costs associated million the The in total to declined Sequentially, the margin quarter primarily was in offering. the

the of referenced that with in we inventory factors cash. due increase approximately our In Moving during QX QX working forecast during many the 'XX tightness. increased X related ended to to efficiency; to consume approximately and quarter, had previously and majority the improve key the components; systems the industry-wide related onetime to support costs to X QX At XX, original million call. $X sheet. In to the and also million the and to stated during to the capital below faster supply the the suppliers of as with outflows XXXX our One, and the million demand direct at was the accounts in quarter, our ransomware the factors: balance of we on supply And invest capital unwinding the second in to the XXXX position to call we component to expected in current that our $XXX.X improve $XX factor first February associated capital QX, million quarter, approximately second indirect of build half factoring being We we of need receivable working incident, impact additional continued current had X, with to were program cash of ransomware million that capacity quarter to our our earnings paid $XX the approximately our cash our than temporary access the in restructuring to for sales. component we to working shortage adjustments $XX expected combat of receivables. of combat approximately as no global end automotive we million the some $XX X, the year. X, unable of operating end primary constraints. we incident; our supply allocations due Two, one,

to COVID-XX balance as on recover flat incident. ransomware pandemic remain we The the quarter the continues uncertain. from global impact second cash to However, to business the ending of we remain XXXX our expect QX

in QX to is working duration of revenue XXXX demand second the revenue financial industry-wide to in this related above supply, XX% we in reasonably beyond adverse to the Demand our Due business, we condition, strong have range of of evaluate While on guidance. that and investment the strong cash the our the to capital overall $XXX of orders we of our flows and and results in midpoint effects the business, impacts at combat be XXXX tightness on continued secured the approximately estimated recurring operating to be time. revenues the for million. COVID-XX remained to XXXX our $XXX cannot and continue in XXXX, expect and second and hardware million quarter quarter severity

I demand. global tight the the With fully the to please of However, source we continue Operator, level turn all open that, over now will strain our questions. environment lines. to to components ability a as deliver chain this to face to call necessary supply and

[Operator Instructions].

question comes Mike first Walkley. the of Your from line

with any Great. up demand the revenue can't away if indications, but nice to million Lots you above idea ordering the demand supply? And $XX developments, then meet this, goes tight you growth that of this it? on customers maybe wanted area, sequential supply of your fill is see given from Do supply improving any second on half going in double a your to year? ability focus how positive in the if the

every overall. customers I of is globally now. This closely question. Good suites right Mike. our almost with executive manufactured the We're working we've Thanks, Sure. consuming -- been product very think

the of demand very So them with most this on to Most part, product are go For we first to will us. take single-sourced the of responsibility away? And our question, your customers get part our seriously. no.

make I'm So that customer there. on on I'm we are calls calls to getting parts and frequent supplier frequent those sure

Secondly, been what doing of customers. strong you COVID time from And calls, pushing for shortage. to need. customer suppliers, it's our paper of tell parts can not These needs our buffers. we've the It's been in real terms visibility, And we've out toilet are customers. lead of is have time requesting It's not lead the from order enhanced over-ordering, our we we've and building customer that. all dozens and I real we've doing been been

we we customers. that can ensure earlier in into have We so orders order some to parts to visibility as QX significantly can and expand parts our more our we 'XX of work business supply that

move been amount a along. of it's continues significant work, to So

been have tremendous. suppliers Our

tight for feel in of We difficult areas. increase to allocations the is but I support. remain this foreseeable we're to future. a have many doing lot in environment, got able well our We've that going been it

Great.

balance that for needed customers. because monthly certainly competitors I'll your as I sheet to is, build use sharing to might up for that advantage my great revenue to have and data. the think balance the guess new not certainly follow-up question, recurring have your sheet I thanks pass the line it's you

that's I pretty straightforward. think

thoughts high the longer given thoughts on you're I in best pass term low your sustainable, supply Just your XX% have as given just too too on now your or in And retirement. wishes Just a you large a the initiatives the that. you line, out get you numbers? issues, growing base -- is to CAGR, of that off larger place before

show been talking to and Great. Thanks, about we're know, talking getting. the Mike. that Well, you been as LTARR design we've about wins we've transformation, the

So on we've MXM the we And mid-XXXX comps into million $XXX the about. by XX% think XXXX. remain trajectory continued recurring there, added QX. we that see -- We in I moving in revenue part we towards in had growth we're early business the We had, that our talked forward. growth of

which stronger XXXX there's It's QX QX, growth, acquisition. in the this that than is So of benefit numbers. even no

organic reporting seasonality good the We CAGR. very trend here. and is continue is drive this data And the helps strong number, and the I give MRR have to think do in clear. think So I shape but a we'll quarters, and that from to a view some

we in year. XX% As we the X over past that, past XX% years, said in had the

that seeing to continue are improve. we So

Your next question comes from Markets. from Capital the line of Thanos BMO Moschopoulos

we But expectation of How would be? margins QX going the mean, QX back while, little Or attack. of what noise with should I we I next of mean, kind constraints? to light levels? kind obviously there was the the And margins ransomware some supply think about should for think your about in in

here a for benefits we're but in Thanos, Hi to that. second, ask thanks of Sam getting jump in mix. And I'll

and the is So of build where ransomware, had by and quarter. supply part for was lot revenue, held quarter back the we our we're a of issues last the which margin, our revenue seeing recurring enterprise with planned increasing enterprise late high

extra from are mix elements those costs help us, there some but supply headwinds chain. with So

to do you to talk So Sam, that? want

Thank Yes. you.

had procure specifically, to business enterprise to that gray increased some in we parts the the in market. some costs So due we had

mix in about next the from headwinds that's see where not going to away component with on in So growing constrained term, revenue and the high-margin to future, going little parts then improvement. for recurring the margins, the it's going giving a We're space But and better be it services going the be the you're short headwind connectivity, software guidance but is. to in environment and while.

And with was there as Okay. there? being of indicative attack meaningful associated think OpEx should ransomware an the QX rate then the as from the we run perspective? dynamic or then anything about And OpEx, what's far

Sam. Go ahead,

So the into you was cost, event, and the $XXX,XXX believe insurance financials, I if that the of there deductible. about net was cyber look about

not -- of in initiatives was place. disclosed rate So OpEx. the in cost OpEx that The that and in we expenses, so run put the reflects other

about at we level again, expected. the So

Okay.

-- travel did benefit maybe is cost mean, think I Or wage you guess don't is the there though, things expense much COVID subsidies, I had On going side, from back. like I you?

But but I Not non-GAAP it think you the it if non-GAAP for $X about much. there, was it's quarter, again, out. the million at we look rec, in

Okay.

terms of then And in some Okay. finally, applications of driving XG. the I guess Kent, you mentioned

And are sorry, area. American geographic that? where I don't Or think any Is comments as dynamic? North a far primarily you that as seeing

No, XG demand and we're interest seeing globally.

Europe have with selling to that on XG in going We're deliver customers So take our significant we the -- looking globally routing modules are many for deliver and our connectivity. XG to XG products. demand activity

of seen significant space. course, all from announcements activity the is AT&T work are and number Japan strong the customers Verizon, T-Mobile active very with who XG in and with And we've that with a with interest. then, made have of very with you've carriers, North Asia, particularly with America in the in and We

XG, I mean, equal. higher be should all that margins not? headwinds a those XG drive for appreciating equal given have and actually, it other of margins, constraints on, mean, record mix some right? positive but I almost the going you And Should

quite Well, XG products are still expensive.

basis. dollar margins on And good so our are a

impact it's opportunities, will still bigger percentage ticket the a down will prices more those basis on item. us of innings and early I give very we're see come won't but a because time, in think And big You a over XG.

to a comments, As good off start. I in said my we're

of those design for win they're relying stages early of us But We in have their that number be XG -- our of with terms people couldn't the space rollouts. in just and products. are happier I

So we we'll get further standard, we grow we'll a year, see and throughout see XXXX, significant to that that as the of and think the maturity growth.

Kent. Best for your retirement. Thanks, Great. wishes

Thanks, Thanos.

Your next line from comes from of Nichols B. Riley. the question Josh

the provide for color some given bit you headwinds And quarter. little Could on really what more outlook the first a see the demand XQ, good company in the expectation supply is? level impacted think margins bps I going know the gross chain? were XXX the you able you're maintain Do current quarter-over-quarter. forward to by faced of to the the with or around expectations

Yes, like I said...

let Sam that. elaborate I'll Yes, on

Yes. we revenue, the earlier margin. will better with supply Like are I in high-margin said growing routers with and higher question, software and more mixed out, gateways in have which mix Thanos' as connectivity, that environment get services improvement the

So products that gray to margin. will cost market will engineering improve. in improve the extra more having our And and buy also parts expensive rework to then mix

So it's I the but the here, future. a term, lot where in tailwinds think short of good we're in QX for level at

that attack. year? It's enterprise kind point that the on know you just tangentially doubled mentioned are pipeline before we down the obviously because half it on front? expectations of in I margin to move last pipeline ransomware what back of this of the And know first like quarter I is made. business? was a of company's bit little and But that you as looking kind just your fairly of that that accretive the then into higher And kind this year. how

Sure.

XXXX. of XX% in orders up was orders over first are orders year strong our our from the for And an the from first the Our perspective. half QX half of

the robust. to demand to ship that all So be product. Challenge continues of

side. it's about So not demand

lot we're -- as the very move to to continuing One catch lot forward. we with been and that the late able QX. to going a with those get a been our in shortage we on able ransomware shipped. alleviate be to were QX, but work supply So quarter, of particular well, of the products product in we up we've customers, then we doing in that part weren't able partners think see We products, has going

to definitely down which it's were slight of hence, hands the So is customers it. where right into disappointing tirelessly reflective we're get product that our because year-over-year, at, not our the more now working of and orders need

don't you impact get for this be could able you impact easy term last I But if me. and like of do. that I'm then know to for if to quantify and component or the for also the quarter, the some cyberattack how And of revenue shortages, try question could think ballpark regarding the had opportunities? as longer revenue I figure a an just to about trying much how

of XX% shipped QX, higher guidance then have and possible, that impact those QX. Sam think our guidance his out, what midpoint like for million chain work but that at I Well, is orders XX% that above as in now said before and that as look we supply number that that in orders we'll there'd that ship. the revenue be than into as mean get put that sliding had $XXX said added supply that we we the weren't we we through to talked had to -- above shortages release going that you our thought the And QX, we in of to mostly chain was orders that soon but looks able have we XX%

Sam. to get ahead, those work be as we're the unable -- of parts to likely time nature that the to okay. sort build Anything lead to the that's with now Go of world the So be for And possible. time lead a get working going right products. comes in as where as shipped short able to orders component much to we is get

going just tell the could that, resumed that as I ransomware the from from discovery production. for you was to to quite mention when incident, we recovered quickly we

that would quarter. And from brief can I a analysts estimate did. of kind So have you been the what impact from think few period the

questions, that Josh? answer Does your

it. Yes. Appreciate clarification. for it. Thanks the That's

Thanks. Great.

Scott Your from next the Capital. question ROTH Searle of from line comes

the wondering In market the you Kent, an of demand like perspective, things enterprise color around that and starting if enterprise the also you're play if router opportunity I forward? in end in? if end when CBRS within type that like could out kind like bit to that and seeing of little services CradlePoint, segment recurring if of for there, was opportunity of And the provide are going you're would from enterprise terms a seeing markets, stay then reporting you're business services, in where opportunity,

Scott. to from your Good Sure. Thanks for hear Thanks, you. questions.

enterprise of So areas. a in we're demand number seeing

yes, -- deployments, deployments. partners your a So with in and CBRS interest driving is quite We're seeing working -- asked number you question, demand. those few others a of Motorola that a of on like bit specifically quite

And very so that's a nice growth area. strong. safety Public remains

business in also lot needs a grid applications, public smart in with commercial those areas. winning good area happen. safety seeing our of in and and as growth we're so And utility We're

we're focus performing -- into well, we that on on move strong that. our are and product continuing focusing build through pipeline that we're as So areas to and delivering we all

On but our the new cloud yes, attach I attach. XG in do solutions couple rolled software With service to launch, support a to and support a we we've revenue think out, previously, side, and I years new complete our recurring gateways. mentioned our development, of

sophisticated continue our area we think customers. that have opportunities our we of to attach that support for cloud more grow to So to and gateways

it's But instances, to to there. with for will we continue recurring support our the connectivity attach part, drive gateways. around our cloud we some in and our most So gateways. Also, revenue

where I terms provided, it numbers that terms remains lines still if in lastly, outlook. the gross -- know could thinking backing margin you're module assuming XX% Kent, get is term? But And this is in of the margins. environment? gross a a guidance 'XX, to Is luck component And under bit challenged, new wondering business not helpful. Or of something XX% like Very going that be margin in gross I'm seems plus? best I into a this the retirement. business you the little you're your XX% you in normalized about the Great. could, how revenue side immediate providing longer of

Okay. Thanks, Scott.

So we work I to to if think solutions. that pivot

so the just ready modules We we in SIM into not drive we're So technology built-in module. to selling connect that connectivity. -- are built our a can

the a to And adding we're the recurring module be very stream but so on sometimes low, high-margin gross may that. revenue margin

that but margin, that the recognize recurring extends XX% module there's you're length margin timing low differences, for to then that seeing gross of the So XX% sell slight revenue asset. and gross XX% you'll

of overall value increasing up module why complete trusted think as complete that's rates. I attach on solution we device as very strategy and one came our our solution each So cloud to And increase of leader being from being with to customers. The side. that is IoT tight environment able that we the competitive deployments see the we the our provide that remained to

we're with and in with it we've so can with the LTARR see now revenue our wins, growth, out as coming recurring our that And provider. described module-only offer, in expect design being environment space that significant the from winning marketplace and solution competitive you our and gross grow we revenue remain will the we complete the on tight. margin have wins, to opportunity But

line RBC the from comes Treiber Capital of question next Your from Paul Markets.

attacks. Was cash recover Just from the you just on next of the being was for cash I although some are mentioned hoping hoping flow of what delve flow? you'd moving next of -- terms you in could your quarter ransomware just outline said can parts quarter, flow, into cash on you comments flat, you

I'll and -- Sure. Sam Paul I'll Hi jump let one. let into Paul, that

Thanks, Paul. Kent. the for Thanks question,

see to going You're revenue improve.

going XXXX XXXX big -- versus seen in reduction You're improvement already we've initiative. that from OpEx see cost our to

you'll of start cash from operations. better to kind So see

are bit in cost, And supply. AR factoring from do see some environment investment You're as of program, in of unprecedented around the terms going -- our capital insurance to in pretty to at combating X%. recovery we we do you'll in the continued plus able an low a recovery see ransomware little incident being which a working

big are those moving pieces quarter. the for So the

coming the recovery by So of it would there supply that factor insurance be maybe recovery a from side? little in that right offset -- the the back bit to the factoring in is benefit the and characterize on investment

That's it. basically to about the right way think

investment big huge in investing other quarter, The but in we're next-gen numbers, not XG. the

believer some big dollars XG a we're in we're and there. in putting CapEx So investment

think that yes, about So sort piece, will it. way smaller to buy, be good that's another of a

And Kent, I helpful. retirement. luck mean, then, That's good in Okay. your

update expect the some in I there quarter. going? completed? On do When search? this is on mentioned that Is the via CEO that noticed you be you conference to the -- an call. costs How last the

converged early an see a run the strong announcement on this make expect point The search They've good well, us a your for candidates. many and candidate wishes. going in CEO good you'll QX. in is Thanks process Sure. at Board's and

to my So than I had longer that I that be bit out around -- target put likely going little make XX a expect we'll June there, but transition.

So help have. then transformation, the off we my very goal successful that QX and building is to deliver a very momentum strong a

QX you'll from that hear in in us regard. And so

the from question Securities. Derek next The Soderberg from [Operator Instructions]. line of Colliers comes

with sort competitive want the and start I Kent, environment XG to there. of

then it this relates the take product solution, of entire rollout feel share alone the accelerates? to do what's there? versus And you piece As about expect do as you XG market your how to guys out differentiation and the hardware

to Thanks the you, talk for Derek. Good question. Sure. to

So new market. and very and history air we've Sierra interfaces on well to of XG has bringing great Wireless done depth

industry So and we're partner the came the now came, as trusted as with XG really XG XG. in

to product. challenges able And very complex been complex, product ever obviously antenna So the brought to and we've this deliver market. lot most of

So XRXX X launched we with to many them. we've made been And modules gateways. on in working slots this week we're just the we picked router players our the XG market, into of -- own press very our share is deliver new part a those. and our XRXX. that and have release and brought second to to industry and proud gateways our And We've then up

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that? do you to to Sam, talk want

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think So XX-XX-ish about. would be fine to think

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conference today's call. for This all Thank you concludes joining.

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