PowerFleet (AIOT) 8 Aug 232023 Q2 Earnings call transcript

Good morning. Welcome to PowerFleet's Second 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 up 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.

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

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

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

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

XXXX across and and ahead the schedule second strategic Good well QX executed performance half in We've today. remain a of with extremely morning, It's pleasure to and thank quarter we with share the our for plan. you of us transformation joining in our business, dramatic first you.

focused first for the The to of the profitable give XXXX changes company required high-scale, SaaS foundations been on aggressively growth. the has implementing half

evident rates our the shape journey, our still build value P&L, half in strong centered and of Our service of clear, growth XX% are sticky, our we And while are basis. is of on the constant overriding points the SaaS relatively in revenue. quarter business mix associated high-quality, currency superior a for now for priority on a early revenue, and to XX% recurring proof

go-forward of focused which XXXX. services Europe Israel, identified revenue, business America in the Our market expansion in North is generates core for currently total and as key additive XX% geographical with

of core our by platform margin The with business markets, These strategic coupled in Israeli in America an was customer early North these Unity strategy, encouraging. our business XX% pipeline, highly since are data XX%. business into gross impressive Double-clicking intelligent QX an a of our half grew in recurring commercial go-forward impressive metrics, service XX% a the combination wins services XXXX, release basis. currency with our in grew revenue in the constant by on while first strong

Switching in logistics macro segment our in buffeted to continue new confident Despite while industrial Unity macro we safety-led platform, prospects, market Israel needs, with data gear and connected growth our post-pandemic tempered headwinds. and in geopolitical currency offerings. their events headwinds, to demand product by trends, as to foreign the resulting be car the continue particularly we're continues see our asset to a customers slowdown recalibrate some solutions

pipeline sales cleaned extensively significantly year. We've compared revenue hardware-centric hardware-only to prior low-margin the and reduced business

undertaking deals, on focus mission-critical to a exercise and is prioritize strategy SaaS opportunities. high-margin sales high-quality to and we're Our challenging recurring brave software

new may customers, especially While transitioning slightly realization to take SaaS longer. sales, logo with revenue

towards revenue, shifting largely our goal However, quality top second us half. anticipate achieved higher to leading growth in we sequential line of have the

and Industries United confidence North Foods, boosted Bridgetown for second year of Group DB Wurth Enterprises, with National Moderna, sales our half esteemed the Mexico this wins Pride Recent and companies America like Schenker, have XXXX.

both on impact revenues We a controlled our territories total vector last Our progress our gross strategy a delivered half I in gross of particularly a to half that pivot XX% by core revenues. quarterly showing our yearly hardware-centric earlier. from impressive margin basis year, mentioned service the for thesis. versus $X million and is go-forward revenues supported is SaaS margin improvement value the year, profit This for in of creation highly gross the encouraging future good despite

and tuning transitioned cost reduction the on cost initiatives rate our engine cost side. a forward and the of accelerator across transformation, meet leadership senior putting the From terms to both out and the as run in adjusted have our and we of complete, a foot XXXX. look ahead basis move the integration on acquisition business is running In exiting challenging to to of broader activities Movingdots the of ensuring our second schedule vast EBITDA of highly The and the majority growth tough is now Movingdots necessary are have operations to half on executed we towards standpoint, third decisioning neutral XXXX the we quarter. commitment on ruthlessly the

Outside with South growth low of Argentina, low for in Brazil Africa. core we our have traction margin, initiative right business find subscale to good home our and the business, in our units

share call. expect to third of our favorable a this We quarter on resolution initiative

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

provide quarter prior that an and priorities our morning, second strategic financial everyone. good the will out to digest called which update context begin call, helpful I I provide key on on Steve, will performance. Thanks, with, To our

project XXXX. is accelerate portion significant third second of while the of quarters our the number and bandwidth one and limits within primary to is of staying execution in sheet. a the balance of strategic our consuming current integration Priority acquisition that's transformation Movingdots The

in complementary the an a the provided benefits, $X.X EMEA engineering for liquidity, in multiple and reminder, acquisition a including million region. As technology Unity, expanded presence talented team high-performance

QX. committed our we down end the to to Movingdots the On by of driving impact the impact mitigating before business last call, EBITDA breakeven of

costs pleased we have by million complemented with OpEx necessary steps in scheduled reductions. all target million challenge, these $X achieve to by $X of eliminated to an to executed I that million $X run-rate successfully be mid-September. from expense We our the upsized in announce extra taken have am savings cost

As EBITDA restructuring of in burn an expected, plus additional source transaction and million, an costs. acquisition was of $X.X significant headwinds the in QX the $XXX,XXX with

to number underlying Priority is by of platform improve operating across geographies. leverage and two ERP the common scalable our a business all implementing

expect QX in in $XX I on call, cornerstone through out core run additional that our million of businesses rate an a the cost the As the noted NetSuite across rolling meeting we XXXX. expectation savings is course

this Mexico report on to rollout processes with details creating precursor by the a migrating shared tools Success proceeding to is the Israel and successful project am for to the be scheduled will US plan US on expected swiftly. month this More for the third year-end. project to NetSuite for as I relies according with quarter in follow our repeatable ERP rollout pleased in migration call. serving

'XX revenue. $XX.X planned Now revenue in XX, on and to financial was service necessary million which growth EBITDA the decline markets, to the taking integrate Movingdots. strategically last reflects investments we for by with our core transform revenue steps quarter, the Total our performance the year, business hardware aggressive proactively the in robust a million for June to ended product from are the compared offset quarter important to $XX.X

an Our and absolute high-value respectively. XX% $XX up constant revenues totaled currency services million, and on basis, X%

in service up total with XX% Revenue prior standing towards product to of in in from becoming revenue service of decline to increased our software year. continues XX% gross transition high-margin improve This at business, revenue, revenue strategic QX 'XX prior margin mix the by a in revenue. SaaS contributed and XX% reflects higher the shift The margin a year, focusing on expansion strategic from XX% advantages. driven

Our by Pro per common EBITDA the $X.X EBITDA million, share. operating the the increase of for loss totaled million acquisition solely basic year Movingdots adjusted sequentially. attributable from $X.X $XXX,XXX. loss Movingdots. to $X.XX $X.X to to million period, XX% same million million, $XX.X $X.X with expenses forma ago million of EBITDA up increased stockholders Net in attributable compared $XXX,XXX $XX.X to was Adjusted or or was

revenue our again, turning by compared planned the with XXXX. was important product our growth $XX.X revenue market, last results decline million strategically for $XX.X months offset revenue. first continued six Now a million service to hardware Total to in from in core of robust year,

revenue up currency with services revenue an XX% accounting XX% for XX% total absolute respectively, and from improvement year. in and $XX.X high-value basis, constant on X% of with up service Our revenues, totaled mix million, continued prior the in

expanded versus product to XX.X% high-margin by XX.X% margin profit period, revenue. Gross an revenue year the mix prior improved driven services from of in

added slightly OpEx period, half the with operating attributable in Movingdots, for same to to acquisition of of of million first $XX.X year-ago $X the XXXX. million $XX increased million expenses to the compared increase incremental the which Our

gain on million of loss loss compared per the in and or totaled same diluted to and common to stockholders common $X.X inclusive share Adjusted million period. purchase period or million of attributable $X.XX $X.X share stockholders, basic per year. in a to same last $X.XX Movingdots, $X.X to basic was attributable the Net EBITDA compared for diluted bargain net $X year-ago $XXX,XXX million

the positive last $X.X from year. the period operations from Cash a same year million, half flow for was $X improvement a million

we equivalents cash at million. capital strong $XX of recommenced million $XX.X end and paying quarter, and cash working quarter and versus our ABRY a preferred in dividend cash the remains balance During of sheet the with position PIK

performance. ABRY preferred the instrument One final item trading has to on understand cover, current the our we impact

on addressing issue this on good finding successfully year-end. are focused proactively progress resolve and are options by it We making to

my That remarks. Steve? concludes

David. Thanks,

on call, articulated key strategic laser-focused are our we XXXX delivering. on objectives focuses on plan we our four As last operating

operating Objective number and profitability. structure optimizing OpEx enhance one base to our is

we in five discussed additional operating by million management, allowing to capacity. rigorous us months, expenses engineering As through Movingdots annually an last $X onboard cost reduction reduced the successfully

swiftly to exceptional easy board which task. for solution and immensely markets. enabled change and may capabilities say, the proud the Movingdots' it skills insurance, a this challenging on I'm us of sustainability bring team's While executing to industry-leading safety brave unwavering the be is commitment,

talent and to also expect second in services. our further EBITDA we we positively impacted science, our half it of rapidly the AI, in in expanded drive as growth This year. QX, EBITDA integration has data as initiative Additionally, and data support performance expansion architecture critical areas pool cloud underlying have we the such

expected Additionally, $XX a to shift ERP strategic beginning are initiatives and common integrated chain, EBITDA include in hardware with These global our schedule. annualized are midterm on an service shared and progressing million and results result early well supply tangible incremental which of in seismic rationalization XXXX. centers projects,

recurring centered two high-quality key in is around number organic regions, driving robust growth fueling revenue expansion. Objective

As compelling our achieved Mexico. momentum sales the in efforts, and US we've proof of SaaS strong

North last the year. for first America revenue half grew impressive same by XXXX the of compared recurring an SaaS to XX% Our period in

advanced avoidance news we vertical great collision vertical in new share industrial pedestrian in in driven solution. wins have Our terms safety the to remains strong, of some by QX, very and logo our

the applications opted Corning, IT Owens secured security selected for leading following address specialty company, needs. industrial PowerFleet improvement. compliance for America, DB charged food in manufacturer, has for PowerFleet Foods, and challenges. selected distributor, to transportation proximity replacing and PowerFleet Industries comprehensive prominent and and safety material a in a QX. key safety and competitor. distribution, logistics PowerFleet's provider, access control United a global capabilities access for control PowerFleet North detection leader a to Schenker, strong pharmaceutical pedestrian and a PowerFleet’s safety significant partnerships products Wurth solutions. solutions compliance chose and Moderna, National compliance address a health its

our platform, and In PGE in execution. PGE, is Group technology of for strategy a validate power the notable up highlight deals signing across Unity's and Enterprises, operates sales US not secured PGE holistic points. also SaaS we value showcases Unity only X,XXX four vehicles mission-critical and Unity Mexico. with various our platform-focused improved sales prime delivers. trailers. Pride and but the key These deals subscriptions Unity XX,XXX June, value in Initially example through industries QX,

in Unity risk fleet. land and to leasing with division rental plans and their already other of expand PGE the utilized parts expand. First, has to to their capability manage

all and complete device-agnostic ingestion, data Unity's vehicles. across Secondly, visibility capability OEMs, enabling and third-party harmonized allows devices with integration

for and maintenance Thirdly, PowerFleet integrating Unity built SaaS intelligent single label their solution, PGE an serves PowerFleet as customers, to a PGE's suite collaborating finally, hub, fleet platforms And operations white pane through on integrated of white-label enterprise glass. Unity. analytics is offer into data a management. enterprise application with

and the clearly While value the this to power the important detailed extremely example, is provides it thought built of was we've proposition that platform demonstrate a to unique it software the I market.

which world's partnerships include platform rubber capabilities. Unity Bridgetown contributing HX which suppliers relationship customer largest all dealer examples of Caterpillar the new months with the over also Unity in-brand improve enhance and safety PowerFleet for of experiencing in expanded pipeline a for Other monitor tire equipment transportation leading a PowerFleet Power, US, and with their a Mexico, in expanded in interest to maintenance notable to their of US, Ring to service, our manufacturer, in subsidiary relationship visibility increase and six and the fact, the the doubling a We're productivity XXXX. to past third-party stronger utilizing their solutions,

For proximity a of finalization a with million. detection an $X aiming of contract underway is major TCV nearly are value soda with million. to instance, strategic a close contract US valued at our introduce total to solution, leading agricultural Advanced US manufacturer of bottler second-generation pedestrian machinery, impressive with a negotiations $X

to X,XXX contract. solution in we substantial secured the TCV on car last As have in a leading expansion QX, deploying deal across amounting a PowerFleet the connected to call, million with I geographical alluded space now vehicles $X a customer,

market continue platform In two the for major wins expecting XXXX half Mexico, three make related products. also, in Unity our to in FMCG progress we significant and

Our this worldwide launched to first and end This advanced application, businesses green software of our empowers by modernizing drive and highly the second delivering to with fleets strategic enterprise initiatives goals. advanced aligning environmental, is objective enterprise all year June. corporate, at platform. Unity governance the social We on models the their sustainability, module built market,

fleet, sustainability the while capabilities carbon integral powered customers' emissions government include our tons ecoscoring or operational and produced of real-time Intelligence to footprint, to as each to sustainability efficiency, and with usage. the per planning, and and and identification maintenance Budgeting leveraging low Key providing Fleet part of efficiency on enabling positive COX driver, platform, visibility and vehicle our fuel comply maintenance minimize emissions and application transition offers electric range data driving vehicles. improve incentivize predict mandates into Unity of data high an growth. emission-increasing timely a to by customers fuel vehicles, enhance behaviors and COX and insights saved capabilities Ecoscoring the costs reduce to As reduce historical tracking accelerating idling of through behaviors. of such model efficiency energy designed

costs rising towards customers ESG existing transitioning expectations, prioritizing well companies our this base in support our their In to response With we prospects. more as efficient reflected future. see EVs. initiatives, sustainability, government greener to as continue and customer and We and are consumer our a journey trend fuel in to more

to Objective number four is growth new market expanding our channels to drive and opportunities. routes

Movingdots, SVP, are recently and gravity together for which Heinz-Hermann we I in delivery, European sales Following record up building of personally we SaaS across our of space. growth Europe track two wealth in a an telemetry of worked acquisition Sales Heinz center and appointed have Tiben witnessed businesses the experience impressive our has in as of Europe.

and on initial leveraging in European Our will the emphasis be accounts capabilities for global vertical. our our industrial market unique

a are channel. both indirectly expanding channel. through this dealer success Secondly, in Mexico of performance and US, building channel solutions anticipate we a half in industrial robust for in the from Mexico, second the business on new our the our directly industrial in distribution We

looking major and extensive we announcing in largest white Furthermore, are material offer safety, us solution their will enable and a This one handling to technologies agreement agreement label of with North to QX providers. forward our base. customer equipment productivity optimization to America's

milestone cost long-term capital all we our for the and our activities, a QX core in are earnings We to we heavy for profitability lift on of engine upcoming indicators are as a shareholders. a several our now positive, our have us SaaS increasingly marked the lower growth compelling providing the allowing strategic summary, achieving potential, believe confidence In objectives. creation our on go-forward tuning quarters. and business items greater for completed business value transformation foundation the heavy-lifting model more focus that SaaS in significant completed

we drive in these addition, continue investor support PowerFleet initiatives. are confident to In financing that trends will interest greater and

prepared That remarks. concludes our

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

at coming [Operator Lake Jaeson Instructions] from today first is for Schmidt Capital Markets. question Street Your

and This guys out Thank you. customers? count the new was year-over-year. existing that is saw wondering subscriber guys. could you I up for I X% on break Jaeson. between customers Hey, if Max

growth doing of transparency, But more Yeah. level Obviously, there's been that that's providing something there significant we'll at point. this of so has historically. terms be in than from not new

North XX%. you Okay. into in half the segment at and And gave of I growth looking was growth expectations Israel, then, could for first if your American QX and out XX% you guys XXXX. rates wondering going share that

Yeah.

basis. a XX% on We currency see was North the So, was The acceleration XX% did an constant in America. for in Israel QX. growth for

in that out, how good out, sense of it just trending, in So, trend. breaking of the it not give in give insight terms breaking that a terms to actually you of but terms you we're should is

is, trends And from SaaS, and into I internally, very into made growth shift I to think we now really And very prospects to expect we've our our continue. transition QX overall XXXX. both we growth. view through then and QX strong solid think base customer and have those It's the that

That's guys. for you. Thank me. it right All

you. Thank

Your next question at Gary Barrington Prestopino is coming from Research.

Good morning, to lot here. unpack David, Steve and a

First neutral and on talked your going read should what you be all drag Movingdots press is EBITDA QX, I as for to correct? of you release of be a that but Is QX. all, in EBITDA about, still

That's correct, Gary.

flow completed. taking obviously QX little Those And actions costs put of the a color little those said a through in from to bit that, time business the million substantial last on actions we $X as will million out just to And deeper savings through QX. we have cut we some Yeah. to take and just to take annualized. $X as actually went on our were We call, been cover.

EBITDA you're we'll From yes, September. QX neutral, be right. but -- So onwards,

you. Thank Okay.

out wasn’t discussed then correct? -- QX? platform, the one of you now. right in One in what have and Is Unity the one that was two modules So, terms you

That hearing They're in do Obviously, was safety lot the so. the terms safety of wins drivers terms customer of dominating module. our a our to you're in space. wins in

in the first second quarter safety So and in sustainability quarter. the

what's then cadence the public? the And that rest Can the year? make Okay. for you of

Yeah.

ingestion device all, lot getting of traction the we're the into agnostic and a integration first with So, applications. with of third-party also

So, we've on because resource kind of expense scaling of level into and of some the demand really pivoted those both.

priority year that in followed our fuel advanced one. later and And that's the number around compliance. will also with modularity more be So

Okay.

that break not you have you still as to you've So, nice have able this everything, what these at is -- number, which core of in you're reported you markets countries been I look here, still in. terms that out

sold or You planning have yet, You're them not recall do in QX, jettisoned as from your to them right? that narrative. I

correct. is That

call, So, next update to next we give an on the on the a expect update substantive call.

currently If core for and look core obviously our the growth Europe, we sorry, Mexico currency is our at are year-on-year Israel constant is terms XXXX our then which a plus of territories, of then US, which on America, you basis. and revenues XX% at segment for America, in margin North Israel is SaaS -- North added kind XX%

that and services margin is XX%. gross business for core XX% at gross overall Our margins at

center you business. to about should efforts, looking we're are investments where metrics So think go-forward our be if the then kind the going that for and we focus, at those of

Okay.

senior you get So things management integrating in you -- to of EBITDA to there terms you integration that's and gotten side going then, What terms said out. in Movingdots, doing cost are help breakeven? other the of on the you've

Yeah.

our are resources for positions resources. and development Movingdots actions globe, some also made had complete, Movingdots the we're out those three of in resources leadership contractors terms We senior kind and that put transitions that. all a exiting guys was around realigning We've and the there. into number of the and using So, of a

got Those we organization driven in how are now now running team annualized. we've and in executed of reference done in us other business I being we where across we've the to then, of million such has everything to of our skill where fact were terms European previously, realize saved of led ultimately The the need obviously upon. efficiencies our which extremely able people the which And costs But country, is we've to $X the space efforts is have of be to a proud that. to time. in out, I'm months, short that and do five flow things

for mean, shares total And that haven't. been with I convert. there Is And lastly, had shares convert ABRY, just would effect then, guess, your the this you that? with the the be you reporting a And of what exercise? quarter, outstanding I Okay. outstanding reason

get me back let on to Gary, Yeah. you that.

company, I'm so connect not given history to the with just on the you familiar So but with my happy offline. with that tenure

I All there's to read Gary, nothing say, it. into would

philosophy has in to in our reporting. happened, any has led So, change which or our nothing

No, that’s fine.

the an have we Because in PIK impact of cash, dividend terms ABRY know were I count. EPS does paying versus in that

PIK] sort we're I we with have been if think So, and were (ph). of we [$X.XX PIK the $X.XX

in paying we're So cash.

may I'm be you issue. with that to So the offline. connect happy again, And

in Yeah, it the subscriber I shares mean, it year-over-year were what it's to or million like about X And I QX be possible? the you counts quarter. gave the Would get is then, something subscriber it that. counts think increase? lastly, and that great for was possible

can that sequential is increase you, we The Gary. get The [X%] year-over-year is Yes, X%. (ph). to

on ARPU that's the QX because what want number and to subscriber accounts, helpful. an like start you that, stuff doing For and really like that's

much appreciated. QX, plus So, would year-over-year increase number the be the subscriber for

Yeah.

that fix will for We you.

thank Okay, you.

Thanks.

coming for is Scott from today next ROTH question Your Searle MKM. at

to that not Or cost-cutting one just you in have seems onetime picking taking Thanks reference particularly the just sold like the for growth to a know to breakeven that to morning. side, it's look clarification. clarifications. you charges are does? the services side equation. really fact specific if hardware in the it any it as a then, it see And that that questions. the an should in reference depressed a of cost quickly in to in to moving normalize, good relates are there what are ongoing? couple jump up? quarter, just of insurance the fourth my but little to area on Is if of cost forward, the quarter. the Maybe Hey, going Nice necessarily the focus of on this there, on starts efforts It Movingdots David, Steve, goods front? I making vertical on

then answer financial one David take So, and the I'll first, can last the ones.

this the exercise. is So around cost

So, was you and came skilled highly revenue to the us that the Movingdots, main in a drivers talent for to the engineers our couple know, bring Unity with insurance drive propositions, us drive XX-plus ultimately, Europe. plus as of wasn't it in give beachhead

in referencing. that So, our $X sheet, cut and made that's to we're to million accommodate balance we've that order within the those cover,

And terms there's Yeah. no Scott, of margin, in product one-time.

So, one-time isn't really in the major driver is, here. But seeing what we're we are pressure seeing Israel.

sort So, position [indiscernible] we're whereby in costs the dollars. in our are of US

bulk of So, that cost dollars. into are products the go the in US

given it situation macro share, end very the a maintain we're pass to user. where costs those Just situation the situation the political increased to challenging market in on there, there, is given to

to most thing think the we do for value maintain share. important is to So, long-term

So said, in from reduction Israel. in standpoint. margin a getting essence, we're was squeezed in concentrated sequentially, And margins as I the

around of could I relative bit you follow incremental the $XX Very provide ERP I'm a to color on savings sounds sounds largely schedule. ongoing. little you integrations some comments. if have ahead of in million last It little like bit could of focused a that's cost And you. the up, like helpful. Got your wondering that if that

Yeah.

absolutely is it crucial. So,

us things, opposed as the example, side I for at of, G&A us. just that to the high, we of look you reflective If for is on work is and against that spend would have, say, systems it that relative

driving absolutely that. we're So,

not aggressive, the we would In we said, want last say, on with terms but frame, shared doing ourselves hard time call. time. it's what the doing things inconsistent pride to it well on the of is and I them on That

driving that. So we're towards

That's by key end that would the work There's we last level our done, the of and be right doing right be the with lot focus. finish across this but a aim year. the to So, of time. to markets of people work have consistent

In seeing benefits $XX million XXXX. the terms we'll the during ERP the costs, specifically, of start

So which Steve we'll be you there's of towards think But through. will walk sources savings I other working that. too,

Yes.

and thing distribute outsource mention, goods and additive we manufacturing just with and manufacture the just that the that, didn't efficiency everything in our we we our one chat get So more us of world, give couldn't to is contract completed IONIX was, ahead into to to far schedule. deals packed the around way we've Flextronics

some because pressure a see aggressively of we of come And little we've some accelerated Plus, are of certain terms getting in will geographies. particularly center we've started to therefore, in start price well. our shared earlier. we Mexico, of So, that some that work moving, some service in as

Okay, helpful. lot in the that to building heard opportunity. pipeline like And pipeline TCV you a there's there examples, very number. there quarter? maybe if maybe not then, a sure the I'm in a a was of And terms TCV. shifting I TCV on of It of going but a sounds number, gave the number couple

they're XX% sustainability, so business of think XXXX, grew highlight mix up. some us talking on And if you we I kind they're Obviously, of the services you that blended And for XX%. the think far do going safety, you're new last update an winning? But well ARPUs as year-to-date. think I as quarter, talked start into about growing about what about it of you does where could when I trending? wonder of that the there's ARPUs if front? that

You're talking XXXX. about as we into services 'XX? How accelerating thinking we go growth in should be Thanks. about

$XX terms of pipe, $XX up the -- net during pipe. during qualified million million the the it in in quarter So, quarter was of terms

Scott. higher from layering for way is something well, services be I ARPUs, think that that our that overall, shift allows is higher-quality we're we're into which we've deals, channels that real Plus, before, XX% in of about range the uplift of we're we'll we hardware than totally up logo us overall XX% tick top attacking -- Unity commoditized see is in range layer Then service the once growth And of value, XX% hardware then rather as XXXX, to highly which, services terms ultimately part we're those significant winning the core obviously talked on that we that are to hardware again, side. not our feel territory we've side get revenues, European achievable. seeing, on with the to doing we all In markets. strategy. the plus new that, as the we for focused If on previously, more that on which mix, is software growth the markets Ultimately, within revenues can a SaaS had business. you

on modularity, third-party side, more integration with ARPU the is that's bringing OEM gives This the we of that the our within expansion fees advanced have standard which whether the application about, in incremental device whether base. software. different We the integration that's ability all are us to Unity elements the customer versions talked plus the platform side, agnostic

of phase of out a came coming talked feel across the now we we feel six stuff months would done said outs that and about the proof really satisfied the call, confident are be in why that The So, having change. early lot We're strategy. and points and and transformation very this ins we on hard. And and fast a We that's of about. that. very, with coming transition and lot

Now it's tuning about the engine.

for bringing Now our bear our overall our customers, to and shareholders. that in it's value the really about we numbers create

will I much. so the get queue. Thanks back Great. in

Scott. Thanks,

coming question Your is Gary from follow-up next question a Prestopino.

back to want just pipeline. to get I the sales Yes.

said that You year-over-year? million. Is $XX sequentially or added you

sequential number. a That is

So, net million -- pipe grew the on in $XX quarter by the TCV.

were $XXX You million. at

about net million So, $XXX pipe? year-to-date, it's

in an number. versus increase the number to will we in more pipe That be referred the was was than time last pipe the It pipe. that. Again, total increase number

you. Thank Okay.

over session, the I to We Steve of turn now call and will question-and-answer have the remarks. for closing end reached the

thank joining just everybody for like us today. I'd to

we're we months, progress. even that terms have over sure last that to with And us It's the We've trying doing. of know very making I It's you complex and six forward. keep and that, guys. tried view understand for very everything for we XX unpack think we've that very, very is hard business happy harder progress to in to we're made. moving a transparent in significant making the I'm the much

Have look your great time. Thanks. to for you attention. to thank So you well. safe, Keep next keep forward We a speaking day.

for Thank you our us today for presentation. joining

disconnect. now may You