CalAmp (CAMP) 24 Jun 222023 Q1 Earnings call transcript

Welcome to CalAmp’s First Quarter 2023 Financial Results Conference Call.

As a reminder, this call is being recorded. I would now like to introduce your host of today’s conference call, Joel Achramowicz, Managing Director of Shelton Group, CalAmp’s Investor Relations Firm. Joel, you may begin.

Good afternoon and welcome to CalAmp’s fiscal first quarter 2023 financial results conference call. Managing Shelton Achramowicz, Relations CalAmp’s Joel firm. am Director Group, of Investor I are Chief President Gardner; us CalAmp’s With today and Financial Kurt and Officer, Executive Binder. Chief Jeff Officer,

this I’d remind like Before contain we you begin, that statements. forward-looking call to may

release reflect could risk these that by judgment, they and actual these update issued filings our future SEC our those factors statements earnings available implied no results in in to circumstances. to forward-looking which and best are While on CalAmp’s today, current These to the website. are subject discussed obligation statements periodic are risks to any reflect from undertake We projections. or revise events forward-looking cause or uncertainties differ materially forward-looking

with highlights to call company’s call it’s a With Gardner. Jeff, of Now, my results please will the provide session. pleasure begin a and the and detailed Kurt by to Jeff ahead. operational over review of CEO, followed that, go Jeff CalAmp’s great more President financial today’s the then question-and-answer review a will turn

for Thank you to and us on thanks all of call you, the Joel, today. joining

continue subscription contracts. to make progress recurring We on customers to converting

exceeded approximately grew of revenue represents Our and software subscription million, services XX% total consecutive quarter the for second the revenue. subscription of year-over-year first revenue to and $XX.X revenue representing services the first quarter This XX% total XX% quarter. software our

that customers group one-third of Mexico, to Young University secured accumulatively new During end second moments. the we the Consolidated further Leasing, both. our as among quarter new the few over we by the first to others. of supply impacted offering in and on we especially eligible I'll be chain such completing situation, base, particularly revenue and largest further sectors. touch BMW exacerbated converted current the selected orders continued representing quarter and goal and supply constraints, In conversions were manufacturing by for with by end, China of them Brigham the overall substantive the BMW first logistics as a year. quarter, we received the fiscal product provider of And the to Grupo the Volkswagen Salinas, with rest in a business in the quarter, lockdowns in XX% COVID-related another total of the in the from customers

and With transportation components. improvements regions -- to we affected the resuming, now lockdowns anticipate supply the that of the in gradual effective

industry of to vehicles. the to mentioned, with working mind select provides that accessible also detect network standards in inhibitor a from just provides Services Stolen Platform, our the clear from crank and and Bristlecone's chain GPS-based Europe. leadership and It services driver on smarter is engine application complex order technology, testament decisions unprecedented European CalAmp And thus tag both too of rich an we providing BMW this related data the board together, to BMW capabilities. XX/X market. based which decision across of security car tracking supply for platform, the presence global Bristlecone provider can is connected sets I activated a systems a enterprises chain and Vehicle CalAmp centers chains of innovation. BMW's journeys. visibility partnerships as in assured app. and and computing Telematics smartphone integrator a via visibility from Work for As the recently and initial offering and edge owners which help its peace real-time monitoring their AI-powered CalAmp's Bristlecone Group's supply ConnectedDrive cloud chain. integrated is connected with protecting telematics LoJack announce Solution, to received see enable of end-to-end BMW solution data by across phase reflect the enterprises CalAmp joint This theft new on an integrates Neo eliminate and spots case an opened in transformation secure initial CalAmp operating ahead of strategic This data-driven its these industry by to within blind key we leader opportunity trend authorized each driver Bristlecone and cloud-based more be supply shipments sizeable Technology new for devices, proprietary insights supply orders through Techmatics. as with We the their partnership sensors, [ph] will analysis aggregated pass in

Devices approved public to is footprints. and perishable solution cargo carbon ELD, and the America purveyors ELD provide necessary these or With and other commercial preventing with Techmatics a that data a conditions transport costly to compliance third-party by by Carrier commerce theft, Federal Safety electronic operators regulatory top accredited and transport commercial intrastate goods, such across computing prevent public safe monitor CalAmp critical its Producers Motor and offering enhanced Techmatics can food Logging logistical Electronic can efficiencies, fleet their minimize the Administration edge fleet in particular, as environmental pharmaceutical logging leader drive across and and has compliance transport goods, been insights, to U.S. their will that log assured America. in Mexico. can enterprises agencies operators. North device assured and and solutions couple for apollo spoilage. Canada for interstate offers devices of use or capture apollo

XXXX He organizations. in elevate directing as of managing team them Revenue of professionals. Senior level expertise and we Board Verizon America Brennen to was of by SaaS announce Brennen and professionals of in extensive President global industry and pleased at of effective has our Carson Fleetmatics, Annual Meeting continued significant as to new our a to the team large will sales another which lead Sales as company transportation with leadership on appointment and where previously well the acquired be Vice our startup of Chairman, quarter, our Chief a long-term of experience the in telematics, expanding our XXX were to Sales, SaaS at President logistics, Idelic, North pursuit Vice Officer. high long-term Independent he Brennen success, recently Connect, During served and top as build as of Stockholders. sales revenue growth sales software In our new Directors Henry Maier, appointed as objectives. effort focused has

many want Henry value will Board. of As served more spent XX has Chairman replace at than significant be He of Amal as of companies Johnson, and you the the know, will company has FedEx to who years our long-standing as made contributions a Director since CalAmp the I Chair. to Amal all for many personal has to XXXX her recently tenure. served and service as and during she thank most commitment and her

to leveraging encouraged looked offered recently an success. long-term recent slate forward a we the our Board to business as election continue Wes added Board, to forward. make where a recurring also of had progress in our the Wes sustainable dialogue, appointment Wes' Director we summary, transitioning enhance we our in to We expertise to model Director. are subscription resulting nominations Board. Independent to for path constructive our for we with Wes' an In strategic software to alternative Cummins Subsequently, engaged a as Director in previously

remaining and our believe I remaining end. over like turn we strong portion remain, our We contracts across device with remain software backlog to demand business. levels results by challenges With of call are high of convert on goal Although focused year financial the customers well-positioned our to the detail. Kurt that, now, I'd to in Kurt? fiscal eligible to more recurring to discuss

full this measures announcing non-GAAP and the lockdown million million afternoon. a will $XX.X Total Today, to decline attributable my closest quarter the the was $XX.X was GAAP reference ongoing constraints, in commentary same you, ago. and year XX% $XX.X financial COVID-related quarter included first of reconciliation quarter the measures during EBITDA, adjusted from corresponding supply quarter. income, the release prior margin. X% non-GAAP chain in is include XXXX particularly fiscal Thank A China with of in basis in EBITDA the earnings to revenue press down revenue from in the our quarter, issued that measures year The mainly these the basis net Jeff. adjusted the was million, in first the adjusted

beginning with International $XX.X component million revenue shipments being or regions. those are totaled quarter revenues. As of XX% a the the affected see in resumption lockdowns in now of Jeff lifted, we mentioned, to total

million, the subscription device customers year-over-year down Software XX% quarter, revenue and consolidated $XX.X of of achieved up eligible contracts. this The from the business converting prior and represented year-over-year growth recurring revenue. subscription telematics success we've to services X% approximately XX% in reflects

As of the and customers our of fiscal total our remaining quarter, eligible to one-third the telematics approximately of we've convert of by year. the end customers first device the expect converted end

quarter first million increase the quarter million business, software a ago. prior our for a metrics quarter main performance in million, of increase and the in approximately terms performance from year where obligations the $XXX services a from subscription XX% X% $XXX $XXX in and same In was

We over of this or expect the of fiscal million to rest approximately obligation our recognize during $XX XX% year.

The sequentially a quarter, decrease was levels shortages $XX.X Telematics the products and quarter ship supply high to against During $X.X XX% XX% the to year-over-year. subscriber continued to year-over-year and was in XX% fully grew our first ongoing which our million. backlog. of revenue sequentially a base X% million, impact ability decrease our

quarter quarter to Within in OEM $XX.X totaled compared quarter products the the revenue the in same products and million a year million ago. prior segment, in reporting $XX.X first telematics the million $XX.X

largest the $XX.X for a Our $X.X million customer but $X.X last of year down revenue from million quarter, the quarter, same quarter from up was million represented which ago. in

in the quarter. and this increase with remains we the with backlog high in customer shipments were Our sequential pleased

last to compared over gross was the product accelerate same a As expect quarters, quarter and the fulfillment Consolidated margin ago. ease margin higher XX% freight quarter costs XX% Gross continues the and XX% outstanding we supply charges. year quarter of to first chain to under in due pressure the constraints coming remain to in the orders.

year-over-year. and in absolute non-GAAP first operating quarter expenses X% areas million, revenue EBITDA costs with EBITDA sales, year. quarter first sequentially of year-over-year quarter global lower basis in and expenses margin the was slightly same professional a increased to in an on personnel of $X.X and engineering, an to by million as personnel due decrease last higher $X.X adjusted operating XX% due The X% lower EBITDA incentive cost. of declined mentioned, employee and declined dollar the to quarter services in expense marketing. in and adjusted compensation margin previously and base attributable Adjusted as to in X% EBITDA our Non-GAAP X% $X prior increases First the was product the the in the compared million adjusted or quarter of

billings total in volume, end the position, $XX equivalents of first period. in subscription of arrangements the approximately cash The coupled unbilled customers upfront equivalents and of cash overall due free with a or as cash multi-year to total decline deferred a to $XX attributable conversion million devices from approximately services billing sales of cash an the terms The had device compared conversion and one-third eligible receivables liquidity In result cash arrangements. last increase cash under due to telematics combined with reduction at of of quarter. deferred subscription cycle we outlays our our over decline the to to of subscription as provision multi-year extends the quarter, cash in for in operations flow million the is

coming the in credit the relates finalize line to and capital added agreement to of working in give our order revolving us expect it flexibility are we as the of to We renewing weeks. process in

aggregate notes outstanding due convertible million, the August approximately $XXX X% Our including of senior XXXX. is million debt $XXX

the the supply We cash position of forward. In going fiscal of a capital and to our providing guidance. quarterly XXXX, for working are our quarter balance product reference solid for component with second shipments due remains maintaining shortages. to uncertain solid to outlook Visibility purposes into financial maintain expect still policy not a we sheet global

some over However, expect to revenue Jeff single-digit the the points. quarterly provide growth before With second sequential call high in mid quarter be call comments final up to Jeff? we to that, questions. the back percentage the for opening to turn in do I'll

Kurt. you, Thank

to continuing our telematics a with we encouraged progress software player. as are We leading transitioned SaaS

our listing China, rapid I'd objectives like Operator? energized customer in sales recent lockdowns conversions team open to that, the on the some With to CalAmp consistent questions. of established the contracts, we've in for the the in relentlessly recurring and organization, fixed to year. has our With and operating call pace leadership fresh device a new

comes question first with Thank you. Walkley Instructions] [Operator Canaccord. Our from Mike

Great. for Thanks question. taking my

grow you me but is mid-December both just services evenly more would the about software like question First or hardware Can expect subscription? split drivers sequential you and supply, better single-digits the and on for that? behind you kind expect It that and maybe growth. to software sounds high among talk of

Yes, for Mike, the thanks question.

first would our sessions, -- previous throughout that by is affected we've announcements in in the improving believe quarter. second know the with quarter supply end in we the a the call We mentioned in follow-up of specific lockdowns and what shock the China, of our that more affected As were earnings of you at be situation chain Q&A the year. cities the us I significantly in terms

opening out that Our original we view the as quarter that improving chain the We've shipments has side China of to expect supply impact are and we'll up that transportation throughout seeing end don't we the remained and recur. the at the was see. be saw and already that of -- year freight seeing as unchanged. We begun view

good that's news. I mean, So, --

feeling we our I and equipment sure as and our in making we've think heard I visibility working with a that. and bit contain of better we're hard supply terms chain. with overall, contract good and providers of in their better material done products quite year, terms that a about We're the at manufacturers look bills

growth it was giving do why year. sequential of range the in half we XQ. improving on see of we back the the terms in Kurt expect So, That's the

I of continue that. revenue the but important involve subscription side; sales on base the even you'll new forward. of subscription convert forward, is terms more to a aspect model. company are a improvement know going think to track to And see software two that difficult driving One, transformation I all to this through transformation, to going been going forward on this things continuing importantly, think out we're our In our it's that going what's I going

forward to not that's but subscription for the So, going for only very just going CalAmp. mean good for revenue, conversion, things

term just or are margins for mix one-third goals as through some And a of Kurt, over you you but you the completion company already base? follow-up for change as gross where that just gross your targeted that as as like, Thanks to that. full for business continues either to intermediate what get time, over software's have this margin XX%, trend

is Mike Kurt. So,

margin, to the can to you the revenue and hear our being way communicated as process. still That gross the that our customers answer -- Mike, long-term response Mike? and working driving costs remained yes, our to Just we've have is to gross -- through know, to we're do is but that, chain margin me, include opportunity we the XX%, coming said, doing that can through charge There in them out Yes, control question, clear pressures those between medium past, that as really in target best your to mix. you that sight to in thing goal to a the of chain. biggest when supply actually so, line freight, certain there's increases around when lag sometimes us. some that, short-term more pass for cost pass are XX%, some of our the them we're supply experiencing, components, things recently, on XX% Those principally and the we and We're tariffs. and when we

installed as a And moving getting base the the our were seeing heavily the on subscription over platform initially, device the so getting to customers upon models, is telematics devices dependent that and what move we is we're active.

to to install As improve know, the that's because revenue us. the base subscription subs start subs incremental that for generate when starts you grow, -- as actually those margins

target years and slightly So, to that will from that do chain, with from five gradual over XX%, supply that to we was be going base. three install pressures XX% say this XX% it that next start we were to gross up by monetize XX%, see down and moving and XX% although as this will we evident XX%, upward more a progressively quarter, install driven margin to the becomes that the we base

Great. it Thanks. on. pass I'll question Last and

to past but relationship? maybe long-term will the little customer with in like a snapback changed pass anything has customer, largest years levels your for or they to get mid-teen you that Just visibility within bit this give backlog, were

backlog China about already do had particular, we earlier. disruption module significant particular provider a supply a mean, customer have in very that had -- the was we with China down on in largest quarter, We I -- up whose as chain pretty our shut already and largest and talked with our that customers said that it's No, improving. factory which that's strong impact with this I opened I back

XG of demand expect terms to bit has strong. customer both do demand, build to revenue the been still levels. to that a very there quite strong to that the normal to XG in we do With migration, large kick those There's back for more plus

for conversion Great. taking the hitting my base questions for Thanks so far. and congrats one-third

Thank you.

Our next George Jefferies question with comes Notter from

I Hi, the the from wanted guys, another any lot. customers? you one doesn't And ask I you customers along? perspectives into subscription are you guess customer like, with migrate to thanks transition of moving process, getting on And to percentage a what quarter pushback can pushback the Are models. is them? new you the a of terms Obviously, you're share? in metrics that any any share from if can

all, of for first George, the Yes, question. thanks

the security. software's more more robust, a software about of excited we're over but really air, for opportunity a offering customers, devices in are a the provides better and terms customers just change them new to Remember, do manage their better the their tons is ability and in them billing, the rapidly, to not them of to offers technology. serve the this Our upgrades

successful very that. about a So, to, and some takes they're new billing but little it excited today. used bit is been arrangement The we've getting

customers, we going one-third, the move pretty We've from with this no our In way is this away decide do business clear been because forward us pleased of fact, arrangement. to through so had really we're the and customers with that. we've first

and in the anxious end In the script, of as of said, control that we're we the our to process. this terms we're this the the of by get on to model future, And terms all pace year. I customers conversion fiscal converted going

a some well. me think that going a I confidence transforming in be recurring going the I investors, about we're little we but model it's what disruptive wish how So, business. I think with be would it gives as causes and terms company. know of comfort are a bit I less is to future concerns

of end for can equity over will on signing reliable and the new CalAmp subscription. at that count that customers So, of be consistent, revenue an time the involve be going is to investors services day, up all a for our

Got of it. out one-third or And have this are of then units in that you are think skewing is said you there I the one-third just larger towards as customers smaller migrated, telematics you customers installed units base or like also that of transition? terms -- initiate

Kurt, that if Yes. take let you you I'll could. one,

Sure, Jeff.

and mentioned, think, XX and XX then them that the the convert a sizable XX a had sized pretty we to there's -- last about somewhere were converted group looking quarter over. total I eligible device three small-sized had quarter that XX it's device pretty population first we to customers of So, telematics defined or in and that medium customers are there's without mix. George between we've say a Through here, of good I would four to mix. customers telematics we with a customer

we represents typically into are really about we've to we're what and excites far potential feel months larger a are contracts. is most about that of some here tied XX. probably fiscal contracts the that service base further. XXX,XXX year, customers. good so with represents, XX but good XX% targeting renew the ones out I on -- What that multi-year that XX% There that generally, subscribers throughout later of So, that incremental the progression mix us think These

in subscriber here And begin base, so we to that weeks the quarters. will coming and start monetizing

embarking to year, progress, So, as XX that's we the true and that some we're this really model of the that's what great those to that we the them, subscribers have this see we're start real success see on. customers end and platform, on to XX, from fiscal making targeting. we We get want to ability to by when coming of we're that total monetize

of would be Got at services then would factor ask number wanted that And just it. was great. the revenue be sequentially? I software in guys. lot, that. That's other Any subscription the to But insights looking be installation know was a devices Thanks is sequentially, the great. down a would down more and probably one why I

Yes, George.

I'll guess, handle I So, that one, Jeff.

very focused been our converting call telematics on we base So, we eligible what customers. device of have the

scenarios, performance the is do -- customers been those with in we have with when those initial scenario associated upfront execute have M&A device. So, which of device-oriented, large once MSA the is predominately that you're where revenue with we a these portion working associated the obligation

into requires revenue that part arrangement us revenue, bundle right of it subscription. customer, GAAP to build application not under put product And requires with that -- to it's a the now so although it us the

know While our our and have at which low of I gross level. in from a target probably revenue margin was good, focus we say, -- terms of years that's finance of couple that's would at you're a is, ARPUs large overall -- margin you not our was gross generating our vehicle base our a albeit of the where ago, pretty revenue, subscriber and and portion consistent also while pretty that was one-off business, happening what

while year-over-year is that somewhat an So, is offset that to seeing. convert and which base, that to hard we're this you're off, working decline having running causing

appreciate much, I guys. it. very Okay. Thanks

welcome. You're

Our Mike next Capital Markets. with Northland question comes from Latimore

Great. finance, much Yes, that how quarter from came category? the around the just I guess in vehicle revenue

but it Mike, one $X.X here well late. a of had million pretty that a off been $X million, was It has dropping point as business to trending at been less in quickly time, $X million quarter, in than

and sort kind how do And that subscription be, of base end, it. much of category? the you software of, revenue then quarterly range you a incremental convert the recurring if Got year would by in have revenue

ahead haven't We Go quantified Jeff. it.

Go sorry. No, ahead. ahead, Kurt. go I'm

on of we've run that the XX million, quarterly done revenue but that XX annual back customer to that as say of in customers, is somewhere that it we've base million terms XX in million of what population go customers Mike, high around if XX identified history. historically haven't represented is let's as So, revenue we quantified rate, maybe an XX you target, to

relates we the, model legacy on So, that go-forward we it of of say, we actually an revenue basis, let's have operating and a quarter. will under generally by idea it but to have how a convert much sense haven't what broken down ultimately

Okay, then-- got That's And it. helpful.

will Mike Jeff. I is just this say --

on we're to Just anticipate a that XX% headed. supply represented directionally chain talked the percentage we grow we're that's give services about into -- and that an subscription where and do, by we you of idea we should percentage do you recovery the just revenue And believe then of -- to give our so one, I of do represent software year. some throughout today, that's at insight business

Good.

quota of Okay. your think, sales is adding, talked fall guess, or I And salespeople I a think XX goal target carrying then organization, just in people that last change believe by quarter, I end, that about with -- you CRM? as I is still last new the think sales the I year

in putting No, sales him was throughout. for allowed He meet the -- We place manage some of one his sales success, great the a he has about all system process that to able new running, XX national off team already day remains and here he's accountability kickoff, -- been great the really instilled leadership team. to to and target is days in with which he's now. and sales was start our the Brennen

the strength business to specific This that was that a see sales I on company that of improved at to Connect Idelic really new team his or logos tied new new focus complete and Some the of things as you'll seeking acquisition. leadership are as in customers. result big is our a think to terms of And different really out at in conversion, we focus target on success our is sales Verizon future at logos. our Brennen's

consistency CalAmp. sales addition that, our going the In and mid-market, velocity which to at up increase opening to is he's

So, in doing in that to to of support doing right lot new company, we're track our we're improving those a this the sell. the way lot ops he's -- like areas ability and people G&A margins, for do going improve add to sales sales other down in a thing sales a to taking on the to it year, allow of expenses and which us still to it's function, while really salespeople feels we're and

Got just and business. just I in -- subscription, sequentially. You've sequential new conversions, obviously software into back more you're was winning lot to of clarify lot it. yet? you that little a a on just you've bit the And sort decline down a bit done that can a maybe of added dig guess little why

Yes, that, could please? take you Kurt,

Right.

it to combination portion in year things. this the device -- year. very fact subscription customers not we've software happens, the and revenue that on are XX-Q, So, versus in Again, last the of in application I it's we where disclosed think, the the hardware the converting the by penetrated category. category, to over our we're Mike, of -- The it's focused you're category, our services application just to referring from a been and that base predominant subscription revenue way product when decline the product and of the positioned gets recurring models, revenue that

that's So, the first thing.

second as contracts at been $X term. in that at has get down was to first prepaid thing those existed vehicle quarter least has million XXXX $X.X their in come XXXX, was revenue when revenue base down, there -- fiscal service The that the of of dwindling is million there finance you that -- look to

and year fall off, decline. had they portion three as fall two, the revenue servicing So, terms they probably and so they although them, of that off, we're

to cross part sell those come a as or bit term. of contract million mix certain longer contracts been couple dollars. minimum that we're are the of a are working process to arrangements, a But the renewing off their on on the fruition and renewing, that's of they and of we working So, that, are then latter the either them. in that upsell have there we in And them, sometimes taper term in

earlier, of building customers So, XXX,XXX will the and you're I thereby of start we subscription recurring base, decline good start there's incremental feel grow subscribers our over revenue. fact factors, application an combination mentioned that telematics legacy that will that are a seeing to and our the offsetting that base we're in really little converting about as customers, we monetize install this but to device we it, that

as that described you a sequential Kurt year-over-year And as effect, well? also was that but Okay. in drivers a

and But think at it. But of have that don't we was I fairly XX-Q. I'd was I flat. our sequentially, what in I were to front have look referring through but in go that me, stated to

right. all you. Thank Okay,

Thanks.

question Searle next Capital. Scott Our with from ROTH comes

my taking questions. for Thanks

change Just of number sales a then I you OEM front, immediately how quick seeing in improve supply be product missed the that clarifications. in some in best or on if to quarter? fiscal quarter. could What's starting are starting current is gross And up open time? will sequentially? China guess things your the the margin point chain to at back, the up, I this couple come

would you Yes, those Kurt, take please?

Scott. Sure,

in the one first was products OEM the quarter. the revenue So,

our indicated portion believe, $XX.X I you was question, million. associated $X.X $XX.X our then So, previous device can million or And to that was sales of And largest of approximately the million, so, we a telematics customer. Scott, with $XX.X associated I your with of that that, million had the amount apologize. of revenue, restate OEM then customers

we issues just, otherwise, and given shaping Kurt the in the it about it how Is up? that be sort think on of up to going visibility on now. is product supply quarter? How should immediate front, sequentially product the gross chain margins front margins Gross

our in that, what by I volume our revenue obviously, our Well, we're growth. particular, is would are and guidance not getting but Scott, margins gross say impacted

as uptick in be quarter-over-quarter, initial do we or will so there in our indicated an believe remarks, And we increase that revenue.

would margin. increases been was there possible those improvement can those freight it's are a persistent these rapid hit more off those gross cost naturally the of Obviously, absorb others China. and/or but that from components have we at well to So, can it's you little us as costs compounded increase a a of space. of always when tariffs being were when the doing product when say to continues be cost customers them. have will costs on chips assume also lag in we're challenge, everything our are and of coming to recently, pass out our coming as we and been some through It we there's pace passed But that a around terms pass and opportunity. which actually absorb some at with pace and pretty will that pretty with or bit them unusual in some been we that between be I

RPO from. the if I and could Yes? Okay, on

the wanted PPV our get that -- our -- add I what increases supply to against from Kurt like our Every or talk on our and about looks and month, to the I -- chain vendors. like, side. with we're that on price margin just look increases our global the team price seeing

And so we're keeping track of that.

As Kurt of feeling but about percentage that lag, PPV. customer we're a the it's better include total POs said, our

top perspective, on really lag, which of help a bit As will improve we're there's Kurt the but from customer-by-customer throughout said, a year. that margins of a

I fiscal delivered the $XX current Okay, RPO to for an helpful. would under the there XXXX. talked in be roughly it's There's fiscal most recent the million, in that last still And plus the clarify over correct? $XX million on for year, recognized million being quarter? of that was so wanted million terms full was could about remaining the $XX think, year, So, increase I fiscal that, in quarter, quarter, XXXX in RPO about a in versus million if is there I to has you I $XXX little the think RPO, continued $XX that

Scott. Yes,

really were RPO with the we So, growth. pleased

about we At we this end the of ended when maybe for quarter, -- $XXX $XXX million. were at million, finance what include over to million. core our million, fiscal about the million about $XXX last for So, business $XXX left business, you was year vehicle $XXX

converting is So, healthy. that very is forward-looking. reflect efforts us the growth, these It a does into device I customers subscription think, over of model telematics

three visibility that have think recognize over could two, into of we the we some what next you gives years. service and one, to we'll and it So,

we We to we our $XXX logos. of million continue that XX months. number or million And continue upcoming, in momentum XX%, grow new $XX have on approximately indicated will more driving and as the recognized to do that say expect converting that customers be

with pleased several RPO pretty the the So, over last expansion months.

What couple And ARPUs do the the how conversion are up? ARPU that And if that be are the that two-thirds ramp Volkswagen, trending next how of quarters? an meaningful does How against big I does blending -- of we should from thinking customers of could they? it standpoint? over how quickly remaining about converting, BMW, the kind of existing the MRM

But course, of a you'll take then in, insight, you tip shot would that at Kurt, and some first very early opportunity but that's very has BMW, PO, more have sure. I'm a of on pan-European our first significant opportunity significant share It's us terms I'll all, in of because if a Yes, that's for for that region. us. market BMW We in a issued that and, days relationship.

logos very time. future. going you between lower conversions which base, upselling got in really means to initial one new but is these as good base, many When base to I that us ARPU our the logos. customer. up the base It's the is new two subscriber think remember attention of some ARPU. in with, that believe see very on the lower sell terms the say continue as total when you'll you at So, of Step we ARPU going conversion ARPU and many, sophisticated to And to which things relatively of kinds it the a gets Overall, subscriptions up excited. our about than steps. see we're on a difference sets all begin to our to you've a of over to I'd And drive things on new the turn company to the our existing you'll has application, ARPU, transformation at and

So, because you do to and on in might ARPU sales still there. more up sets on -- begin customers these to team converting to the one, step ARPU very subscription model that. feel good keenly a about the that's lower our with, all front, have Kurt focused we're We future. And

just a on just I little wanted touch to bit BMW. about Yes,

we've -- been penetrate sure BMW out vehicle in that years a large how want the what most, got advanced of to our doing they are it's Italian type us BMW many can to vehicles all service as this of and business of drive to their BMW of I'm arrangements if we OEMs if number expand, and within pan-European with land characterized people aware, a but is So, came shows area. telematics story fantastic would solution We've with with not them. they And call recovery office. ship for not -- embed a what I that incremental

with So, of what we account. expand And and itself incremental opportunity. is that have ARPU expansion accounts what to that shows typically and in expanding on you within comes the ability service

we a ARPU. of that see do we itself, BMW expand as on can to example what So, do fantastic

On in will of next in will might very primarily favorable but base service services for near itself run, some a have our and build and to the broader and platform or which on pressure so, because pressure, downward thing we start base some stickiness. our the be long year platform, we them trend converting see on the But installed of into we're customers question of in device telematics of on we ARPU, in that a the where there our that ARPUs will just the we our access to as downward term, be contracts, multi-year us. moving deliver and creates

a the to OpEx I perspective, flattish. should could How if couple modeling trend like from lastly over Thanks. And that of quarters? was next be you. Got we non-GAAP Kurt, expecting looks

thanks. Yes,

OpEx, navigate the the here need and service a we as for through; that certainly the two, of area target contracts; of chain really into challenges. is area navigating obviously, that of things our become to customers an near-term, multi-year these them supply some key base and through especially On us. on converting in we we're concentrating moving focus It's two that one,

So, absolutely we OpEx. focused are on

customers those based As through and through Jeff challenges we how see we're will the functional the our supply and conversion with we and in keeping other are things upon rationalizing of the chain ensure as transformations. the that working paced expenses be that to I unfolding check our and groups navigate and we departments appropriate --

you. Thank Great.

next Revich Our Jerry with Instructions] with question Sachs. [Operator Goldman is

Yes. helpful. point comments would margins Hi, gross coming about be mentioned? any I Can good to revenue the a on given level put you this about high afternoon. for but the Thanks. you it's sequential your tough talk expectations it, know outlook that quarter fine progression

believe is that and ease supply that in aren't revenue -- a growth Jerry, given have as will we up mentioned will will to gross the margin. that expectation given improvement now, of So, I into that there as do going do we in before, guidance. an guidance terms in given bit giving forward-looking challenges chain guidance. we not right quarter some the a But that second it, we're that, be not position we're quantifying

differently, so asked Maybe margin XX% today. out targets, we're gross folks Okay. you laid at XX%

from the supply Can price XX% other bridge how and we reduced path to improved you is much what's there? chain moving us, Just the get costs, of friction pieces? for that get How to just XX%?

coming our margins is Sure. mid are in that low in XXs general, software more the subscription Sure, on Jerry, services, more to of we margins. part And as to I'll product move revenue take our the compared biggest from of that. the and and to that

more as affected will said moving comments, we've we're We've respectful of to of customer -- over that that. been as way revenue on challenges over important customers. with we lag And should fewer that. we're customers you been his see those getting there time an lag. dynamic by supply or you're in PPV, of Should the we seeing. caught increases with lagged during increases working subscription these be successful our that assure on XXX%, a in to our that then relationships chain. time, that's the additional over Kurt that situations we're and that run, We're doing to are the But them right, that in passing our chain that So, supply have time, But software in our classes driver. I'll diminish our short and up

Okay.

and the we're is gone reason gross working the XX%. have from question XX% the So, to for margins towards conversion

be the to a to price/cost I the to think extent can what's point XX% from trying other we put moving improvement, understand XX% on and pieces? just helpful. finer that'd I'm expected path maybe So,

so, me Yes, jerry, -- let

ahead. Go

Jeff, out sum I on thoughts -- that up me want lay so? you our could to

Sure.

we the about converted that of and arrangements, basic multi-year arrangement. in subscribers. customers. sense and our we one-third as total between over multi-year come the a for multifaceted subscription somewhere move They subscription active are we mentioned, charging XX or population, Jerry convert it's with over XX a response those we've customers as In will

going going of are incremental are part be optimize three addressed. they to structure of our to improve As as doing those to that high revenue the margins. things actually devices that on these base, will are that, costs us we to ensure have we're that that help five supply that mean, we're In are to and base incremental period that some the that coming come By chain, as experiencing, And as gross with we very subscription ensure of challenges these I doing provide are through maybe like of tight years. a cost we subscribers use trying parallel of will active a possible minimum monetized our a over everything arrangements.

improve overall the and devices. design trying the We are proficiency to of

the We and with subscription also that to our with down work overall monetize cost chain devices. are to supply the components in build parallel of various the trying arrangement. And in

services. margin it's improving being mix margins. improvement trying around to and the approach So, to revenue a more the concentrated subscription software to of target overall been We've multifaceted

for quarter, transformation. This of XX% few at we were we years. we do can the that high about are healthy think as XX%, that next the the as in which increase level potentially a course over XX%, where think is We

range. supply of to a we the And so delivery while optimize base and years. But take grows chain going trying tick to monetize that's couple the gradually that years, as the believe around five margins base that install that device of that up XX% and service, increases three and install we to the probably concentration to can

discussion. appreciate the I Thanks.

Thank you, Jerry.

Our with Partners. AIGH next from Orin question comes Hirschman Investment

for you taking question. my Thank

that sequential of different slight will asked I that recurring year, little that caused that that that When the a the the were we before a meaning a line in us that grow growth every line there sequential pain in call. What's the at that call you completely business things -- know that the variations confidence mostly that have that it's mean other through But in of the line. the pain points mentioned lot been bit causing as different feel there -- in you be Just on quarter-over-quarter this variables away in decline does quarter in line, the drained give gone sequentially or point. are have that either in business? direction decline can pressuring points off things grow

of at initial get I effort as we've as day every time sales logos better new more one better base, And for -- and think able talked upselling these base. we about, was customers done, are more -- -- teams conversions on and of Yes, especially, business, amount conversion required and selling new spend The it. to our that us we a to the to more get will our part focus that's some that. these big allow I of

So, that be will helpful.

forward a in the involve of I going same as the we're base continue all make will will subscription. progress -- said, terms to purchases my and new percentages, converting to addition, customers time, the In going on in script their that

get we're supply inventory locations we've stranded just that we because got China, of business, not And some also the we about So, lockdown. side, a side, good in solution those on earlier, impact doesn't those was chain the goods it this were Certainly, that in in that our were software feel finished that business, some mentioned impact product the the of quarter absolutely impacts over time. device-enabled devices. to as --

get already seen immensely. that situation So, the better will China well. as ease We've

growth. sequential those all So, will of -- that the help

There's just that one more note. question on

case, attrition, direction. there's growth in of some terms they're beauty you designed. good actually how much and You have revenue visibility the is of went of additions, in the the recurring assuming contracts, that items that new your the The of other sequential typically not line put pressure a the through in particularly on

metric the we those, that underlying where quarters, and I end that say, would underlying them could So, is revenue you few rising let's where if you items, last recurring some been at, on there strip what look out for see say, growth life I of it's the itself? the rapidly guess recurring some can of

Kurt, that, Yes, you take would please?

we've that going, been remaining and is, RPOs, provide to a one really obligations. so we metrics working disclose the growth performance where first we're Yes, and the insight forward-looking think the two to key the

very million, that million, $XXX actually So, we $XXX $XXX is million, good. growth, believe from

you We that increase greater think the subscribers in also gives visibility. also

solution. element thought that within that the that Now, device and of there's sell of well, process know RPO, I device-enabled we there's an is this true,

incremental incremental is to doing to So, the our in there fact have be in service element, working every multi-year these bundled volume observed we there's no a device customers RPO is adding will in commits to But what being the multi-year that. contracts with monetizing subscribers around a arrangement, what and that customer we are and as are to path those subscribers. getting

we up have is into on legacy the trends given forward-looking growth on, RPO able new of winding that very and subscribers bring for that forward-looking parts have the But been metrics as real we we on customers, look new healthy, you becoming the and showing trends us base. business convert it as to addressing. see, are down less places to us, subscriber are are the a and distraction the some can So, short-term of and

Okay. Thanks very much.

You're welcome.

no further questions. There are

to any pass team the management call remarks. So, for final I'll over the back

attending Thank you'd all and earnings a to and forward Annual continued us with in call. Operator, XXth you or Please again like do late in CalAmp. disconnect on call schedule Conference you our with for contact We second plan Kurt Jason. Technology your call Internet the you XXth. during Group if quarter to September. speaking and look sales the Shelton I. for We'll Oppenheimer may meeting your Sure. Oppenheimer's on you, interest August contact joining today Thank on Communications

CalAmp's for quarter call. first Thank financial concludes That you participation. the XXXX conference results your

may You lines. your disconnect now