PowerFleet (AIOT) 9 May 232023 Q1 Earnings call transcript

Good morning, and welcome to PowerFleet's First Quarter 2023 Conference Call.

Joining us for today's presentation is the company's CEO, Steve Towe; and CFO, David Wilson.

Following their remarks, we will open the call for questions.

Before we begin the call, I would like to provide PowerFleet's Safe Harbor statement that includes cautions regarding forward-looking statements made during this call.

During the call, there will be forward-looking statements made regarding future events, including PowerFleet's future financial performance.

operation, present company's facts, anticipated for plans position, forward-looking results than statements include future growth, other position, statements. industry anticipated the competitive trends company's regarding for of and demand statements for and regarding product which historical any financial company's the All expectations strategy, offering opportunities other business future considered operations, are

Factors imply financial the include, results company's technologies are results, of include, filings, are such could not cash expectations company's or for or differ may actual that the cause to but update the All products amongst conditions, which for any XXXX or from materially reflect statements new differ performance and forward-looking economic Such statements position. forward-looking control. overall company undertake services, not uncertainties those assumed to, events the to statements of presence risks, and of to statements. SEC actual contingencies, projected and emergence demand circumstances. intend duty beyond. and any company's business limited in achievements future materially The to many company's the and does any company's beyond The factors, others, competitive could forward-looking

website I company's for at will remind www.powerfleet.com. replay Finally, would section everyone available the to call be in Relations made like that this of the Investor

Sir, Steve like Now may Towe. Mr. would to I you CEO, over turn call PowerFleet's proceed. the to

a performance to review. morning, you Good today. our share and thank quarter first joining pleasure for It's

pressures and SaaS while expansion, our FX on the reflects growth, unwavering facing and profitability start headwinds. significant all to positive Our revenue highly focus new challenging macroeconomic year recurring driving

year. also recurring XX% up revenue exceeding currency our delighted XX%, from basis, in to X% in XX% revenue up profit prior margins a We're QX expansion our the QX XX% was On service by gross in last and increased the year. with quarter with a report constant total year-over-year, compared high-margin

Our growth with business prior for that is our future recurring be U.S. major XX% last period validated revenue the a a in thesis contributor a to story, increase seen year. as continues versus

notably also year, will our the versus highlight line We David shortly. bottom improved which metrics prior

Our change and includes our on and competitive revenue increased deliver advantage mix, superior capital shareholders. that areas PowerFleet's optimize to concentrate to business returns profitability. efforts drive our and to capital and key growth faster aim This geographies, resources allocating

of business part strategy, sub-scale transformation actively divest margin, units. this to low As we're low growth working and

Cellocator on the expansion, our attractive gross our overall but enhancing new hardware-only flow us finding which Brazil total and We've margin revenue continuing made for naturally cash revenue and and terminating moderates EBITDA. homes growth to allows loss-making in focus This contracts. turn value term improved in progress purchases through good sales on drives our Argentinian, units, potential channel short expansion, African business South exercise recurring

The most go-forward excellent is the gross transformation margin concrete QX. our of indicator the of businesses efforts in progress core our performance of

our our platform an core increased forward, units, we us accretive service This impressive for exciting margin to shareholder total expanded to margin and XX%. these business high-quality and with business XX%, to For drive margin value. excellent profile gross our going provides

module addition sales wins. QX, the customer a major In Unity in closed Movingdots major several executed on transformation secured acquisition, new successfully we and the we major to launched platform value-added activities our

to outlook, Before turn through I'll to I call you detail. David? our our numbers dive into and walk in David the deeper over more operational progress

transformation of accelerate sheet. of financial first the to staying To and Steve, our is balance our with, while an X our Thanks, morning, Priority number within in my overview after good provide XX begin days limits priorities would company's the I to everyone. strategic like current role.

a the region. the and onboards the largest of of set million by $X.X that meets Movingdots one noted, accelerate brought completed Unity, high-performance move recently growth standards help technology providers brings in in Steve insurance expands acquisition, which complementary EMEA additional our world's also the data an scientists engineers rollout of presence team to we liquidity. talented accelerate and to the As This

cover we absorbing existing are in of a transition executing $X resulting the to impact we to bring activities of As the Movingdots a to with million, series parallel million as OpEx we hit our business In also to the EBITDA quarter, exit cut QX. transition, second EBITDA. in actions, team to $X.X spend Movingdots expect we short-term to challenge down including breakeven the

implementing currently number have key resulting by a operating our of leverage an common costs. X improve software of is amount underlying across of in scalable ERP massive manual assortment a the and business platform all working Priority to We geographies. systems,

complete XX complete to an accelerated by made deep the which it B, decision my from the that days, to we first us plan to to During rollout we plan taken would ERP initial expect year-end. into pivot have cost-effective XXXX more

the longer-term with to rollout, will cause spend issues and in targets. currently our project above operating root and addition saving ERP peers the time our In well that money G&A result address being

to onwards. P&L this QX substantial see from from expect XXXX savings We project the in

headwinds. to where $XX.X solid higher-value quarter ended of low-value I'm planned $XX.X million been by 'XX results XX, with Total was revenue to X%. in compared financial annual total to a QX pleased have basis, performance, increase decline million our report would demonstrate growth our performance in despite on challenges product and March year, for revenue. economic On offset Now that $XX.X FX million, currency service an revenue, revenue the last the constant

total for XX%, impressive service of million strategy. currency basis, is Our of our high-quality through existing services services. revenue strategy SaaS our delivery growth our million, year-over-year revenue This constant accounting value grew $X.X cloud-based $XX.X for customers an of focused totaled reflecting a execution base successful the and expanding revenue. more and our On XX% driving on up customer

and and key contracts, revenue discipline Product by million revenue, $X or the $XX.X terminating declined profitable million drivers. total with to of deal XX%

lower-margin more invest This making. exposure to deal implemented enabled business. continue while approach development, to in approach us opportunities, disciplined we value, higher has higher focus to on While reducing new to a we've product our margin

QX expanded 'XX Gross year, field price from an high-margin margin improved lower in by mix to in the variances. discipline of revenue, product driven and profit versus prior purchase service revenue XX% XX%

to M&A compared increased Our $XXX,XXX million to adversely by $XX.X in nonrecurring $XX.X impacted year-ago other the operating was million in in quarter expenses the out-of-period Performance and by same $XXX,XXX period. costs. and

areas cost is the XXXX. of growth of expected second on us investment to focus in and management return, accelerated be ongoing with higher to compelling revenue Our marketing, with half shift sales including evident into enabling results

shareholders gain Movingdots totaled $X.XX a $X.X $X.XX purchase of for a share, $X.X basic or million attributable million from to per ago. diluted per up on bargain basic share Net profit or attributable loss $X.XX and to million common and stockholders inclusive share diluted of common a net $X.X per year

expansion reflects our Adjusted benefiting to margin. from $X.X on million continued EBITDA customers. to in This gross ability $X.X million, profitability focus services our our high-margin to and significantly improved deliver

drive Movingdots. services, strengthened with cash value end, working position for At our and of with net cash focus delivering from quarter in high-quality we acquisition of in balance from a and $XX.X $XX.X had capital equivalents and to proceeds sheet, growth the believe our we million combined benefiting well our We positioned $X.X are shareholders. on million, million

remarks. concludes my That Steve?

ahead execution delivers currently team FX Thanks, PowerFleet schedule world-class provider a has experiencing, plans is and growth solutions our to operational remain on us David. focused profitability. SaaS to we're that on into Despite enabled of the macroeconomic highly and challenges transform our high

number delivering. four we Objective operating XXXX are Our one is focused laser strategic operating key on plan base and OpEx focuses objectives optimizing our on structure.

optimization engineering our started by which Phase In mid-term is an $X further We've of also providing operating March, to we and sales seismic reduce room launched Movingdots our ship expected onboard capability. projects. million to plan, X annually, additional expenses

hardware believe incremental shared centers integrated supply rationalization which and centralized of million $XX terms XXXX. during EBITDA, annualized chain an global we'll early will begin In of realize we translate and that to service and into

SaaS last Objective were deliver established The number and recurring revenues sales versus where two in revenue points respectively, XX% driving period year. and the high-quality Mexico, where in regions the proof recurring our is growth. in can growth up we momentum QX same we've U.S. significant organic XX%, key

in delivering avoidance, increase pedestrian the strong by collision advanced industrial U.S. driven Our for our vertical channel XX% our year-on-year, solution. team remains with safety very revenue total a

secured Unity the multiple and improve Mexico. demand several vertical platform and U.S. on company, sales in deals expand to little In have in of To full their to integration notable QX, state Unity visibility strategy we and in and the the offer selecting customers brand services our with sustained. assets utilization the to validating with success accelerated markets further, points has a begun for proof fleet cart light sales Unity U.S., in

with also us their partner long-term warehouse subscriptions X,XXX QX their sales solution confidently with for commitment PowerFleet a further dollar Unity XX sites. in avoidance has expanded with with of Unity for the new assets. new a multimillion relationship Nestle advanced for selecting has safety collision PowerFleet, orders expanded over partnership Walmart,

Additionally, platform money subscriptions. in effectiveness chassis we for for PowerFleet value Unity the the rental our a and in them competitive with and in continue lives, with QX leasing partner and Unity time to highlight to advantage XX,XXX validate and give of a saving NACPC commitment markets customers. These additional successes

now fleet X,XXX already be of expanded vehicles, for part on to relationship new safety camera module. as to Unity the continue has us, vehicle PowerFleet adding FEMSA who entire in X,XXX selected where security Mexico, platform We and has Unity with momentum their their safety over new solutions

And insurance for partnership further pilot X,XXX QX. in goes strategic secured from notably, adding proposition to Movingdots and to Unity corporate smartphone-as-a-service XX,XXX strength, AXA for and with value cars. to subscriptions aim were safety insurance AXA's efficiency we The AXA solution the a a business improve for the PowerFleet's level our commercial risk is of market. reduce metrics fleet strong vehicle passenger implement strength

and more fleet, model of largest PowerFleet's the second chosen region in in The employees than expand of one the relationship has Mexican FMCG employee XXXX. who transportation Unity we Airbus further X,XXX plan half with our safety have division of for security companies significantly the to world's

is encouraging, by several platform in our large quarter, X for Unity sales strategic XXXX half pipeline first Our notable by XX% very global with improving highlighted opportunities enterprises. the

As of visibility and analytics largest evaluating needs shoe its solution's organization. accessory meet ability their the Unity, and to actively world's sports is one the examples, manufacturers total across piloting

had we've the replicate success fleet in the estate. of customers One the region, deploying large rental our to solutions by vehicle APAC across U.S. car Unity in connected planned is their the leveraging global

our top-tier of piloting this, another on-demand international company is also rental On car currently Unity solution. top

out We expect to during a roll the by of the end decide and solution QX the fourth quarter. on this prospect vendor preferred

to sources market. powered data new application modules security driver safety Our to prevent is advanced features In brings advanced strategic and new together reconstruction multiple March, application year we data platform. best-in-class capabilities. to the software collision highly delivering our objective enhance The third enterprise introduced our Unity management, and loss this

security The be of safety applications a and application delivered first XXXX. new and of throughout to is number module the improved

electric Our telematics at on the centers module vehicle schedule and that advanced the June. is end next sustainability COX on of reporting release, ESG next-generation be launched and to capability

and market and off full beachhead the alongside for for the Movingdots, to new expanding A our In partnership channels European this aggressive Objective great our insurance advantage now an acquisition is plan our creative launch the competitive Movingdots with sales routes providing number our us put opportunities. solutions. teams partners. European four, expansion breadth bluechip Unity with already expansion, team, of of of the distinct to of example in to the is adding with go-to-market meaningful established vertical go-to-market drive we've our highly service growth a

for evaluating looking We're markets. enterprises received we've local East. offers from the to create assets mobile Middle number We're partnership a joint of in the propositions growth channel also large

total PowerFleet's third half the are current from providers second performance mobile expect maximize announce own the partnership visibility the data their their major deployment with transportation from to new relationships through strategic the in Unity we In looking U.S., and contractor of platform. and data year, and telematics by to integrating in gateways vendors with OEMs also asset from who fleet multiple

performance customer their enhanced information plan channels is data their advanced operating full efficiency processes. Combining We operations. to gives provide their suite customer data capabilities customer unified of their this call and business to ability utilize improve The and the propositions the the clients. enrichment for and business service integrating their sources end also optimize our systems simplify of to to

in at is the future and of strategy very operation the plan unified hard PowerFleet drive Our consolidation of our the industry. to

our and In cash on integration the foundational ultimately track summary, profitability increased we with will Movingdots we top confident focus of and our combined which generate the game-changing growth, with future, to strategic line remains plan truly and can sustainable how fully immediate on our transformation in we ability are market maximize business. the flow. on potential In deliver will pillars,

That our prepared concludes remarks.

Now I'll back the for over to operator turn Q&A. Operator? it

is from question first Our Walkley Mike Instructions] coming [Operator with Canaccord.

You may proceed.

for on Mike. Daniel is This

So you I guess savings the during different moving this just initiatives? the prepared additional of some if remarks, provide apologies but parts missed my I cost your on details could

Sure.

So largely gross was was in year, at million savings there margin terms line. last both a $X combination that's a the of That realized. been target of

from So terms in sold a product on side standpoint, driving of things. of the efficiencies cost of particularly goods

things. savings In to were on of addition that, G&A there the side

of been back reinvested business. into terms dollars, have those they In the

the the is the And half terms and next-generation major and So focus of accelerated of we're out SaaS invest terms are now other Unity goal a track acceleration second is see in we building growth in marketing. on to platform. sales this to of Obviously, of there see investing a year. to more area in strong in

XXXX? then with And

a million room QX, track the XXXX, ourselves OpEx absorb to the is target on acquisition. to set part Yes, Movingdots so in there's $X large creating for that. we This, in realize

we're Again, we're in R&D will teams of pool M&A given we those major that our working on transition way That a activities that driver through to, need over there's huge board. bringing There existing overlap teams. a from So decision. savings. some talent Movingdots to effect, be was

the overlap will with, us QX, expectation Movingdots profile. in as and cost some absorb in the breakeven but will we be realized acquisition of there'll So effect, EBITDA enable terms QX, in those to that a exit savings be is

P&L savings seismic And XX then roll the that about but global that's $XX projects the there's rationalization expect business. of savings the finally, we centers to about back, going sometime take service of longer-term underway that during of to chain, as previously, through supply so a XXXX. shared hardware, longer a from the shifts, our globalization efficiencies talked And to to everything ERP expansion start number million operational the from the that are the that's through talked time around EBITDA we down to X other plus we of the as for realize devices

provide just And guess for all for the could additional some on of detail. platform Thanks how Right. color follow-up, trending? the I integration Movingdots just into a the Unity you is

into only, We're I or very think, weeks integration. It's four early days. five the

talk obviously of borne it's what to So in I very that Ultimately, insurance is science largest algorithms, highly sophisticated early by the is that about one AI some level think reinsurers. Movingdots too world's out of kind in data detail. Swiss Re, industry, capabilities any validated who brings of and been have the

They COX as sustainability have well emissions. around and also propositions

So we've launched new overall module. safety our

capabilities And sustainability and that new that will bring full our launching are module. We -- Movingdots platform of full time, one over sorry, Unit one modules. set into we

I’ll hop the Thank Great. much. you very back queue. in

from coming question Street [Operator Max Lake next Michaelis Instructions] Markets. Capital is Our with

You proceed. may

quarter. on guys, Hey the congrats

an on get so have and April tracked May. would far in First to how understanding like question here just patterns I is, order

strong a quarter the think of start we've terms orders. So to seen in very I

today. was in we're January, So we were the and good In we're plus May. about about start contemplating continued on seeing the which through momentum. March, good a pipeline of the sense, I April investments, you've February, call we've that traction while dramatically There think as that talking as built has very slowish into results talked that's seen increasing sales some but people that

rest few I you throughout going I know next has then QX your you to key of touch on wondering given to of points confidence and is I there the point my anything just grown the was your year, strong, pipeline that -- was can XXXX. commentary a but And else to? outlook on Yes, if can question. going was be for the

ago and Well, what I we year think coming back if talked look company. into at you stand about this a

of of impressive element -- said of the revenues. in the we focus pretty I that So high-quality far those terms there we business. on levels that performance recurring is SaaS so our growth would And think

and the a PowerFleet a in wins forward. talked terms the pipeline And customer new that about the for is of being pipeline being game-changing growth in opportunity we and moving strategy business for winning proof the Secondly, platform. of point the super validating Unity the size think industry-defining of I and terms

a perspective out our I gross and services think businesses already get from in towards revenue a have be to XX% from margin, now. company couple years reached margin gross for that to go-forward expansion to ambitions the recurring at that's had the of starting

gives that, confidence that continue strong that So to will us expand.

Unity from getting only the then that create doing the see should that and future. more can more And the us bring that get, if expansion customers by opportunities with obviously, upsell you within opportunity, we getting high degree repeatable We're we're that. just the more on for we cross-sell/upsell margin solutions the a understand started. of platform, cross-sell, of our get customer we talking about confidence the that then we're base all for And

then one And me queue. basis? could see this a margin guys. Is we QX gross quarter. I'll back out QX, jump this then a on in in It's color just last QX, uptick and expansion -- future Great for sequential the going nice

one. Yes, can take that I

with we've A but been for a this terms driver XX% But that what there's So is obviously up go discipline product expect We key improvement Max, and the last just gross forward, earlier. were to of we about it that was in above. work in the that things us. of deal significantly be few too, year-over-year margin year-over-year. pretty talked of gross we for clear year, will terms quarter margin, in XX% line

expensive year that acquire we face. inventory the way the supply we still others last Firstly, we're and some of our issues of given had some chain working through to

of So that's a part piece it.

mix. the is thing other The

customers of the mix in quarter-over-quarter are the that buying. terms tends vary to just So

We margin mix I underlying who have first have sweet others. as customers certain are would that terms quarter. was just in of say as in customers we than QX the higher see the products a typically not acquiring

So again, -- so QX, that's QX, QX. normalized

would standard our quarter-to-quarter, but on some long-term basis expectation fluctuations XX% pretty a XX% be would with So above. sort of above be trend and

for that in realize, put on mid-XXs than also of on cross-sell/upsell opportunity in to We on more that's platforms, but communication the into we date work think of the then lot of perspective. yet, then side from cost the the a start that more services our services out, And earlier There's in of I consolidation our sight going expected. expand are that can't getting a Yes. in that get range, the side, able margins terms modules new that we to of the line. we'll costs us background on terms

So we ground. a stake and think it's good feel I confident, very in the

As is now pretty I've forward, for moving this be impressive core those at said to XX% stage. markets

very much Thanks And good guys. luck.

you. Thank

MKM. is Scott Our question Roth Searle next coming from with

proceed. may You

Thanks up doing you what start to new the that's you XX%. the pipeline, And per modules morning. the of the calibrate acceleration I of talked Steve to in of content introduce ARPU as late. taking on by gross transaction? in the But in half was then we absolute color wondering this that numbers. in I the safety, a And of it that provide And business. for specifically followed wondering year, like with the I a I'm looks got core into terms the questions. and impact Unity bit us sustainability, Good bit little on dollar SaaS what could means. what with now the sales second apologize Dave, margin if or you congratulations of could expansion I think exactly terms little being if about

of again, XX%. noted sales Steve earlier pipeline So acceleration, sort as increased

tens In pipe in of of that terms in value, means the the millions of just size terms of through. that's coming the of terms it's dollar what

help will of you that there. you in of So we're Scott, about there, give talking sort quantum just a sense terms that

bit Yes. months contract repeat the during your of three year. so. a you the added value us, quickly Can It's the of a You $XXX pipeline to million second went for question? first

the terms in Oh, overall what connected terms apologize. in the they're size? doing new just the ARPU modules, of Steve, per I deal device of or

Yes.

focusing are were from So you heard we're as customers we that very much the mid-to-large-sized enterprises. talking

thousands. are So up to sizes, the from good these XXX anything subscribers multiple ranging the

seeing around new modules ARPUs in of In to versus uptick terms would the about of pre-Unity. nice sales I ARPU, the we're terms at our XX%. of moment on versions say of of a old the historical improvement XX% kind

So investment hardware I a we We're the roadmaps doing terms we're a higher focusing long-term adding selling, to ultimately rather be people putting when value upgrades value. SmartBox We're also are the contribution, customers. in, think job then in device having are in modules much where building value-based with our our software is remotely hardware. on can of on seeing fitted better customer return we're that than with on all getting concept, our more turned the keep

of their pleased. are companies the proof major are who early exclusive think the who it, be expanding Obviously, up to days, still in the kind good. So of I already putting different test points, the out parts the Unity, brands reaction brands that for fleet of to in the proving but now to solution, have pilots terms are vectors even couldn't out pipeline, of we different more the the really strength geographies. signed And or major

we forget, not QX Unity market. bring the to until really let's And didn't

So a are pitch on pipeline. building We've sales put there's a new to long way go. the team for that us

really there's lot And in and they is more we oxygen treat create moving forward. provider, us particularly how that how to we levels providers service to market multiple from think in in in the be that partner PowerFleet we kind comparison relationship But today. as the for long-term look growing get of customers So I and a shift. confidence that couldn't a of by a delighted

up, current the portfolio, new just given but are economic cycle from you follow maybe quickly seeing sales landscape? the to also product a what Steve, perspective

Yes.

a bit So elongated. it's more

there made, efficiency are organization. said. that providing taking solutions provide providing a as So investments think being mission-critical, we really longer, That ultimately gates a being said, that still to huge to can I've of the and really decisions we're optimization made, well are I confidence, and compliance an as are get matter but it's the

QX, conversations good think So the through. where doubt kind to QX it, we it's lot But that's a taking that that get is of into of talent bring over get period into the cost decision-making about we've feel in and have less the of business. kind tied longer really and kind the but and no the the there's business harder brought we top-to-top of can I to that those asset more value

maybe quickly in dialogue. on active Great. or a P&L $XX -- you've from about of some the terms divestiture businesses, provide like It front, a sales? you like it you from And broken timeline that generate I Cellocator those looks Did looks annualized it it's out million would standpoint. and a guess sounds amount to the dollar in non-core like other there's got expect

We haven't done either.

rush. currently. something So in We spoke that this we're We've of we -- business, and to going right evaluating we think teams and business, is going make the right obviously, which isn't for had this last we those parts that the March, were we to our that said for I We're for customers. opportunities. offers sure exploring our are

that valuation entities those today. to So anything the haven't will And of terms continue. we market in of provided process again,

front, Okay. And could, if OpEx just Dave. the I lastly, on

taken amortization. think pro I forma, in deal past had out you the

offset programs quarter? first saving still million in OpEx $X to removed clarify optimization by that Was and And want otherwise not sounds of of the clarify, bump just But then current to start that there you in. to I this want I I into like get we as expected ERP got million just that over that. Is then in plans related see systems think in is year, to pro up correct? the any kick Movingdots numbers. Movingdots. the should course $XX it forma there's 'XX, OpEx of partially another various the we

Scott. correct, That's

but terms the of the balance no pickup, the was closed expense in So we got so March there XX, deal year. Movingdots, sheet in

So true. that's

for the be on the And in we're the of Movingdots, said, integration of the absorbed business, I terms track time of is an the out In basis. bringing in will the managing yes, neutral of million. effect expenses, on the expectation that EBITDA $X it of by through as terms

that by September, exit expect happened we to So as so end QX. have the we of

looking driven get in a next that by half then in be there's would year, G&A common portion efficiencies a that platform that of his I remarks, place. can to we as significant Steve million of prepared mentioned $XX as opportunity. And A really say

portion come will of there. of the we're terms improvements in of doing largely we that terms of other of The terms out have in SKUs rationalization product in supply, number

So there well. good progress as

of guess, can there's obviously, amount terms back activity and I on step back, terms the you been generation the to huge a just Scott, taking of take costs business. And before it But of a out see gone evidence business. in arrived into even cash just I reinvesting in of the underlying

quarters, for I free for unlevered you is couple example, the of history cash generating flow, the So which we've last been think of at look unusual if Movingdots.

over I last So free X.X% cash sort good six progress think or of the unlevered so flow there, of months.

have a those little the for have for be double Movingdots bit types of we'll QX given fees transaction Again, the settle Movingdots, to things. bumpy expense we of will just

will some QX of out me, made also six incentive that's a generated the bit months. unlevered XXXX the little that progress in we've the of But of be in of be that's over evident flow the We'll paying So in definitely free and just comp terms predates tougher. terms last cash quarter. the much from been second

all Movingdots. make add aligned to just on sure we're And to

not provided. market where Re an element So of are bought had acquisition there the Movingdots to to is sales Swiss be really the out solutions that

the they've these world-class amazing planning the team with there, an perfectly product, for built team, they invest we're more basically, to tech a fit guys in scenario. were delighted And and that So business. part Unity we into R&D even become of

as our sales we and well, insurance channel have revenues significantly drive the Re with that the both channels we And feel the to ability Swiss in space.

expand So of bottom it's out and expand and as line on now, the will well. as into we top quickly right we on but a value very line the ultimately burden European translate as our the cost particularly operation it business

got to much a European market. solutions of sell we've a capability full and better now the go range So in

Thanks much. so

you. Thank

question coming next Barrington with Our Prestopino from Research. is Gary

proceed. may You

David. Hi, good Steve and morning,

First into related there you of you quarter. lot just But David? questions to to answered I'm adjusted trying -- EBITDA of all, follow M&A were a Did of calculation, asked expense back back have that Movingdots in here been the said along. $XXX,XXX the here,

Yes.

$XXX,XXX costs. certain out-of-period together M&A and one-time it of was So costs with

there's of out $XXX,XXX in the out. not So that in was in there's transaction other terms about costs still sort quarter but was backed that of OpEx of the costs backed one-time EBITDA, also non-recurring $XXX,XXX at but and of riding

then, Steve, with markets this, bulk and want you if I of Would once and business? are it base Mexico? that U.S. don't in, be is growth the the low be the your to these where And you're you understand -- finished

do Europe, the about. as Israel the the margin Mexico, do channels have what line gross we're those markets U.S., obviously, we'll But well. top of we've of and foothold in talked we seeing terms growth, our that in indirect we've our once the we'll those markets. through And from profitability is strong emerging really got cooking core business them

want multi-territory got terms their market we've some go own. in organizations on with and us So offers to significant of to for partner

for way We're established those make markets can that's We But we've scalable we X think significant got where entities. a having our know a of because core today. that's and opportunity money. in more markets emerging we Phase own really

opportunity, lot focus. we to We white with great space a want and have base customer of

to very things that to organization in leadership market think a has high-quality you on see the has take laser by play One the gone terms true got the done it's of markets. And of margin that we already I the where side, of and want revenue, we've broad tried focus those accounts those core a to results had set with position core as strategy gross we've on businesses in markets. create -- in spectacular

sell? $XX you then annualized you of And that question revenue mentioned million something these are another Right. was about to markets -- total from there's trying

Yes.

annualized basis in from Argentina. million, it of which of So on of -- million the it, $XX the that's South Africa, about piece $XX piece with terms of the an Brazil, in million again, $XX.X is annualized it, recurring service terms

All right.

less been XX%. quarter, been you pretty pro I what of have margins mean, reported would would have about would it gross you XX.X% revenue million So margin, significantly. in forma you're a have your basis, saying on but this $X up

Correct.

Okay.

Steve, So going You of for safety here. year Unity, sequence have other of out, in you're right? the things just the platforms market? what is security this what the other couple are issue put out a and or to

advanced is security and then compliance. next. management, looking out, Safety fuel then at we're looking We're comes Yes. at and sustainability

that So the in we those are delivered that sequence. ones

'XX, by out be all will 'XX? of that end And Okay.

Correct, yes. module That's is what well. optimization there kind module of was the exists obviously, productivity kind of out as well. And already as already that the base

generating X a safety and People more pipeline. the the different is XXXX. if ultimately, you module, to what see because its XXXX wins drive there to simplified pipeline have got terms drive fully in for security and are to we'll out through out, is see getting obviously, the improvement But modules we've really So it change and reaction ability the you way. in of behind that this

exciting. that's So

about module. then secondly, not it's And the just

data we cool and operating where folks' about from other on from and talked data systems. devices, and normalized from into in OEMs operations, unified stuff we is a then data-agnostic other capability device, bring do some that, have really that third-party own this send to sources, data integrated normalize So it our

a providers. couple data They're this telematics total overpowered got. the these We've of all and got can of performance what of -- different amount where U.S. they've So very different we of by referenced ultimately, the the They've their their is other sources. this payroll, driver different we're ERP, of they their data major their systems. lots organizations planning, spaghetti And got drive is training, seeing in

also give to all And different can it they and active improve their exists is the customer a want estate, them ultimately partner the visibility customers. business and to away take noise our end their providers and of need from the of that they complexity exists who advantage efficiency, their drive provide what productivity, insights but all all own allows these that their them with and true of their which to

excited And really play that super. something wanting on early people of that the That and to is something that about terms that in Unity and is that's think coming modules. enterprise voice, That's table of right outside from us power the just we're software traction can kind generation it's modules I hear exciting now. a really creating next my and telematics you Unity. of And space the pretty of super for

I great. sounds that Yes, just want clarify to something.

said had that now? just of that there right pipeline is a You that negotiating you business out signed $XXX new million of you're is business, or

in to total our quarter million our contract for pipeline. first the added value $XXX have future pipeline we So

time, you take of going to you've about you're right. that -- doing very could I you your had was to it to been mentioned the to that something talk much David, simply replace what got effect said the Could a with on -- else. common so you you're something what's about then All mean, too Okay. in just doing put something And explain just with you maybe lastly, going what platform. you there? going what

absolutely. Yes,

is that different PowerFleet through just was too. the M&A. system never were were that Even planning So little ones inherited getting place. resource amalgamation One a probably of thing archaic of the happened obviously, entities in bit of common a a number enterprise

being to the activity, essence, drive amount and results manual these of costs, of business delays just amount in huge terms well both that costs huge things as All -- actionable. asset of in would So basically top we of information high-quality be. of a direct wish manual getting terms on in costs as as not indirect in

the platforms change assortment of we anyway. out were So existing going to

And take that So a money get there frank, do we time done. door, plan the I we was have through nor was XXXX into deep until but to there. as the want the spend going to to in don't to walked place be

it means quickly, is So we to. incremental by we shedding can forward, as basically basically sooner cost if more the But more driving it done and start it which key. less it done get we quickly, importantly, spending that getting more can means calories on spend business

have. on across of same services start start expectation system getting example, better the And that the creating we all We can in lot stewards of So Mexico we today. everybody to can assets that is City manually the that, other our information year. shared ERP key exiting work a as for centers that's markets, can of we also shedding we things, be this and do we done start have better

we those drive All help a to fruits that and above both will here G&A targets. be to in with something start for business harvesting to because you [indiscernible] honest, it's way would down more we today, expect that's peer our in what our and size, line sit as group the XXXX, expect long-term

be ERP is to the So catalyst expectation that few a percentage a shed will there's happen. key can points we and make

Thank you. Okay.

Thank you.

We have session. our the question-and-answer end reached of

back I Mr. for closing will call over Towe the remarks. to So now turn his

Yes.

So call. the We appreciate thank your attending everybody, you, for support.

come and been that Our in transparent That transformation business. substantial. style very as transformation has is way very much a walk and through to activities we're remains undertaking the a

those progress you all I key making very solid a think vectors. to if of high-growth, business, become wanting terms we're strategy the vectors look against at SaaS our all of in profitable

ahead ultimately, hard volume for execution We the changes But it's plan we appreciate and plan, that very of and ins we're believe the making, and future. some follow the confident is of sometimes to changes of the the we're outs.

day, soon. for speak today. Enjoy your you thank you So and to we'll

for for today you presentation. us joining Thank our

now may You disconnect.