MIXT - Earnings call transcript Q1 2023

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Operator

Thank you for standing by. This is the conference operator. Welcome to the MiX Telematics First Quarter 2023 Earnings Results Conference Call. [Operator Instructions] And the conference is being recorded. After the presentation, there will be an opportunity to ask questions. like Financial the Officer. now Paul over I’d Chief Dell, Instructions] to conference turn to [Operator Please ahead. go

Paul Dell

Thank you, for and on discussing joining of us the good year June morning, everyone. review fiscal in we Telematics’ We XX, MiX results XXXX. earnings will which announced results XXXX, the Today, quarter to first ended appreciate be you Joss. Stefan our He Telematics. you Officer, and Financial Dell, MiX’s press release Chief Chief of and issued President many a joined is few Joselowitz, by Executive hours know MiX as him, ago. I’m Paul of or I’m Officer

will forward-looking results are actual uncertainties we call, today’s business, risks could our that related to which differ During to and material make statements materially. our to cause subject

that in our those section of Investor For refer to of Form please our which could the website. affect SEC discussion material are important of the filings, contained results, Relations our and risks XX-K other and on all available factors other

is financial to be also press is will We website over available located I in the With will on call results and release, that, There referring schedule the turn our which SEC. our certain non-GAAP detailing these with currently filed Joss. measures. a to reconciliation

Stefan Joselowitz

consecutive $XX all-time a for quarter to third XX,XXX with XX% subscribers you for environment. We in adding base over is our began had to now an I’d Thanks, above performance categories Paul, driver thanks levels, X% a solution and sequentially subscriber light of All at an uncertain net X% constant Subscription economic the and constant financial contributed of X% we X increase in the fleet XX,XXX than our to basis. a It increasingly in we notably revenue our to all on XXXX now for more navigate important also the results strong call another today. to like continued million quickly as currency. the our and is with high quarter and was business. MiX Annual with results joining year-over-year of end revenue growth. of net expansion quarter. fiscal revenue up XXX,XXX. of operational growth, subscribers, year-over-year summarize financial solid ended million, the an of business strong adding currency and recurring company. our up This an $XXX.X are pre-pandemic

have the ongoing we supply challenges previous As our to deliveries of in quarters, impact to continue some chain discussed vehicle customers.

implemented. committed at future and is contract as still levels elevated represents delivered get growth backlog and Our vehicles

reported dollar headwind which addition, was our Paul on the strengthened this XX% EBITDA the margin. discuss increases a of meaningful pressure notably quarter, business parts to in In puts adjusted cost the was some a our later, detail during million quarter. but will the more during our results. profitability $X in QX at

our sales interest The meaningful recent We are to base and to circumstances. advanced across deliver strong steps margin to to reflects in Telematics cost our pipeline to addition continued continues reasonably in full current manage business expansion remain taking track guidance. in adjusted structure sizable customer the Overall, proactive our subscriber our on given growth ensure year well regions deploying our EBITDA perform solutions. we categories product quarters, of in

as some efficiency, vehicle productivity to manage Our solutions and in fuel tough enhancing greater as worker can their mitigate challenges more and fleet help operations. most well operations. includes promoting customers utilization safer markets This of the promoting sustainable pressing labor

subscribers with to Australasia, bus provide due driver this tracking coach our their in provide for existing build long-term expanding enterprise various for MiX. in of contract. I’d to subscriber South Several their investments further upsell core also electric on Isuzu contract connected in our We an well represent see Africa. used us management The their XXXX. relationships their comprehensive ranges with X further America Japanese be to ongoing leading operator, solutions high investment fourth contracts metro renewed customers value-added are for actively signed go fleet a ahead solution repeatedly customers. line expanding for and to is to group to by awarded technologies U.K., vehicle utilities expand nearly to with imminently. simultaneously, In large AI Australia serving board manufacturers their South produced in as all Originating Africa, expansion have on solution has ability has vehicle our renewal presents the from been its safety their portfolio. for as further us almost mixed This Telematics East, to MiX’s A with locally a app, agreement will vehicles opportunity Isuzu worldwide, a than solutions and subscribers been a adopted will ongoing. asset XXX including Latin electric Nearly leading improve specialists the quarter. premium us fleets adding customers our commercial production XXX their bus assets product Isuzu will our MiX. and their to and fleet customers. Branded implementation by testimony few A America significant in telemetry in-cab scheduled X,XXX the MiX commercial deal in the partnership X,XXX-plus selected be Vision coaching. in integrated installed more global came like our Middle confirmed into and fleet their XXX highlight Europe, We additional and the In wins as clients our South standards. with insights. service, fleets. journey with truck and ahead MiX proven deliver on value battery customer key ROI have vehicle first since that countries and AI solution in Go operator video, services agreements with QX soon The

in ARR fiscal margins the high that mid and We position year are to in growth in continue a the we addition constant for generate to to single-digit to adjusted low subscription to EBITDA growth currency to low mid-XXs. revenue single high believe double-digit

we growth things We has our exceptional control, always, cloud-based for we long-term in all As of very Despite our and in in on discipline is initiatives. strategic focus broad-based that targeted fleets nothing particularly expectations investments service, early customer of changed solutions about adoption can the The will about on our our stages Telematics those market ability sizes. market, cost business. near-term the good of constant the feel across adjusted EBITDA success. our to call margins. all of targets growth for is their our and turn the thank work plus more I’d our and detail. long-term our the to on like to currency an deliver XX% to now revenue Paul? to in I financial of hard employees results subscription time Paul and for This to to exciting over commitment want customers’ XX% XX% financial company, uncertainty review

Paul Dell

installations. relationship excited and to subscription keep U.S. results all to in currencies be XXXX, of quarter U.S. our are rand at I to by year Starting our revenues fiscal the of revenues to the not And channel X.X% and came our majority net for growth The bringing make in continues million contributed that ARR constant on first compared transition Thanks, Officer, moving categories, subscription the were with to the It during South the to business. approximately quarter. XX% XXXX our Please which by backlog to all longer second in also million, that profit is revenue fleet Subscribers Please a first on fiscal other turn quarter. solution as say derived constant anticipated year-over-year $XX.X unless result, of QX of the premium the XXX,XXX refer can at note It last than decrease the the African quarter contributing large The in in representing loss. X.X% Financial did and I’m light the weakened the fiscal reported was we fleet dollar our the now changes, continue subscription South of forward. is the to and figures fiscal our of growth up XX% the otherwise. and sustained we dollar. better was Joss. level. in we Total and expected the a in the a currency somewhat that pre-pandemic comparisons quarter X.X% larger the ARR some impacted and customer, now against year-over-year that on financial year-over-year. implementation Chief mind subscribers, are for revenue to sequentially discussed the were a of noting pending role an for the We call, to sequentially, adds driven I’d X.X%, QX. over primarily from first grew have X.X% increases like African confident of $XXX.X over by back quarter first success base year, than million, during in for $XX revenues. African I’m with end worth net the going currency be ended cycles path XX,XXX the quarter as strong respectively. previous occur increase basis. expected. the wins the in South of

of their delays as large have part have who expansion. customers experienced We receiving vehicles fleet planned

ARR in year-over-year. related to Russia revenues up the in sanctions $X.X due impact to a were did million of we of Finally, of $XXX,XXX quarter Hardware approximately this out customer in come have and other region. the X.X%

Subscription strong expenses. at XX.X% XX% Moving operating gross period. on margin XX.X%. to ago to compared remained Gross was margin and in year the margin

do some As we supply as of a challenges work impact chain volatility reminder, that costs. the through expect we some

mix are marketing million million and can higher annually $X sales Adjusted overall or The XX% was to revenue were $X.X were of $XX.X XX.X% confident million up and increase or to X.X% revenue XX% margin stabilizes. includes sustain compared and chain our compared as gross We XX.X% supply prior last year. of to Operating expenses EBITDA year. investments. hardware

is quarter adjusted QX timing a EBITDA merit given the pay margin of As lowest increases. reminder, our typically

cost are fiscal $X.X the the on by from to margin down net was driving are the $X.X into quarter We million taking and income focused for inflationary address range current in across board XXXX period. year steps Adjusted for the our million, caused ago the the environment target dynamics year.

to efforts of used from $XX.X quarter investments cash million leading balance million chain. proactive million. manage in flow to operating prepurchase in the the invested free The bonus cash XX, as compared first of payments million. of reflects activities against suppliers quarter, cash includes amount use seeing building part backdrop. cash for $X.X capital region million components the hardware The as Turning cash ended into under negative our million certain $XX.X in-vehicle $X.X stress cash in net to year-end in devices of as to million is significant expenditures, are in well a this We We and additional the XXXX. with In $X prudent our to negative of believe of equivalents $X.X flow of supply inventory The free our market inflation. and our in and cost $X.X elevated March of sheet. buffer we

We in XXXX again flows the cash elevated fiscal half free expenditures expenditures expect seeing as year. full levels our the next capital normalize. of for quarter capital significant to currently flow we will of have the expect before generate that second We year improvement cash in

I I XXXX. to like the up, fiscal reiterate remainder our of Before expectations for wrap would

and constant with high that growth single-digit the As low evolving closely, this customer growth growth we another solid mentioned, African The to double presents potential of are expect demand Joss our markets ARR encouraging second rapidly relationship mid end growth. to half. to we in before up quarter for across channel subscription perspective, to digit would and activity be some monitor global we but given see second a high we facing the a challenges picking targeting the to economy single currency ARR solutions. challenges muted major linearity year continue From the transition revenue large

low targeting EBITDA the adjusted previously, margins mentioned still to for year. we full are As mid-XXs

way MiX, manage to disciplined consistently through and We steps cost necessary years we structure the a current will the have environment. many for take at the in managed

we long-term additions. in Importantly, solid strategic in not priorities, wrap our and we will subscriber To delivered which encouraging investments our are quarter growth up, results be delivering first on crucial objectives. trends sacrificing to

substantial of We and variety our manage and our shareholders. business can Operator, ability combination Q&A, cycles business generate are the begin of believe in attractive please. a confident to growth through for this profitability value let’s

Operator

Instructions] William [Operator first comes Pfau The question Blair. Matt with from

Matt Pfau

could that strength seeing I of provide you just that? called there if in wanted segment first terms what’s in light you’re out. to Maybe start driving the you fleet and detail any off the that more

Paul Dell

business, we sector, in to our have strong our working South traction. We various on get business, African relationships certainly been particularly that starting channel African performance are in saw that

Matt Pfau

the maybe you Is relationships? you’re of OEM specifically I every have with team And -- of on? then you and overall few a a detail have you working more pursuing that Do of think sort signing, going Maybe quarters. evolving these there a just deals these there? Isuzu been time? relationship coming over are of or pipeline been out How OEM just they’ve few envision in terms that you you’ve now, could about and the you business prospects on how some

Paul Dell

key the that is we that do full-time are absolutely. field OEM driving yes, Yes, And relationship. a It experts matter subject -- in our relationships. have word is team

so the comfort then a as the sales people level to able building appreciate. be you engage to to to with can it party, process, speak, a significant transaction right with a So and fairly finding conclude a of is third relationship, lengthy developing

So with that making pleased it’s they’re they forward. that others on we’re regard. one harvest installing quite their worth Isuzu and the in programs we require production life and the is line And some they -- compared in these our The of to using on the we’ve so warranty this that the make done that in unusual data to customer very cycle hardware ongoing as our are evolve. manage terms going expect of mentioning hardware announcements progress quarters -- in coming to that the to we’re

And user us fee, the a gives significant end subscription up-sell so also opportunity vehicle. us they’re a it paying that with and of

we’re it. So pretty about excited

Matt Pfau

all? ago, of some in one serious And was last at impact Africa. I’m any wondering couple months a operations that flooding know for me. your on had I that if there South

Paul Dell

prefit OEM these And that had customer had example In words, vehicles. that we the The short would left supplying with motor the other is units the hundred the is answer fitting both did. left the for several customer is the the -- it OEM factory. And deal and one we before were the a yes, the factory. customer was that the we vehicles at vehicles that that

our much still is assembly vehicles not that XXX post-production ended devices that line installed delivered water was up This and Nearly So kind this be is fitment. has them. fit, those of pretty of vehicles fitment. to under already for been customer to with waiting

ended vehicles course, scrapped. those of our up So delays that being recognition. And revenue

so for install we So are can adds ARR, we waiting get that and to revenue we customer those so customer, for vehicles to be the vehicles the can replaced, hardware et subscription cetera. our delivered, the billing our start

did So one is impact. It an example. have that

come revenue process I But ARR from well. think we’ve to see reasonably navigated we subscription quarters and that will some recovery still that. in through coming

Operator

Sklar The next question Alex from James. comes with Raymond

Alex Sklar

looking also wage then Joss, I the on inflation if demand back equipment rising to but a you’re side? side, any of on on the your and costs, to or from that’s both pass to the whether about business, ask want having through

Stefan Joselowitz

Sure.

endeavor our to it long-term on through. that So let’s our with pass -- in contract, contracts are when do whilst the contract an we not favorable we renew customers. Obviously, ability to mind we’ve discussion. we Bear end, And terms. -- that more in most start midterm with to comes a pricing on a got there’s much can of

opportunity the to least the at customer with So at there will be an discussion end that contract. have the of

stage, at customer course, is a Of the for reduction. looking that

We of up an end in wrestling a territories. some that our match. have do does of arm bit So

an we based been other where typically, in contracts. many our a an inflation South Africa index a price is And have increase inflationary example issue number in for contracts, consumer some built has annual or those on years. good predetermined into

I first push get of that, doubt guess, guess, issue I it proactive compensate where with software So most as would in months, your part steps to of steps up. which the taking input we we no to to and have certainly prices our to believe in is proactive We recent deal from are with deal element year our in that there’s increases to and those contracts some our the an that inflation is And get does, continue doubt XX but I I annual a last and consider an gouging for, what it. endeavoring we’re And taking over we’re increasing pressure we that But all guess, degree, to businesses. we’re certain business of steps unreasonable. at we certain will regions, to of least an price had there’s in seen component no pressures. suppliers that proactive the and for question, for quarters, escalation, take suppliers those services suppliers, seen to we’ve changing

Alex Sklar

want I sales increase. overall is I a of the line goal that in to efforts the year of in of and that Joss, about just team ask your the but thing about expense other there, hiring know talk can The lot the we saw you kind growth terms hiring planned sales there’s and for team? what marketing

Stefan Joselowitz

So back where that last we’ve growth. yes, over a we’re year I so as we’re the focused we indicated phase are on in think or

containing time, to a while we our And at same and very make managing strategic are and making the we’re look costs. So investments. nonstrategic continue taking at close

investments side. plan finish it and but And continue prior So act, elevated we on the year. we more in marketing would we bit than certainly level sales it’s had at that to a particularly in a the balancing our a certainly expect is year of those and a the

Operator

The next Genuity. question with comes Canaccord Walkley from Mike

Mike Walkley

subscribers. plus XX,XXX with Congrats on another quarter

of What on sounds a that renewed want world? you what you of region in I like Africa kind just I highlighted stronger adds. regions. seeing maybe trends know out are Europe demand Europe large the customer called you one pockets South with, seeing region? more as It and to you for little in you net So other are get but the view the a

Stefan Joselowitz

So was performance certainly business, our think in Brazil. I standout quarter, this terms African the followed by of of

mind, bear both environments. in well and tough of -- So performed businesses those extremely in very

according and Certainly, bit in don’t we quite it’s see factors So marginally still full issues, evolves, in And And the for diversified a same of built maybe a ARR times elevated region the world. we to more of little our that year confident as to at quarter example. performance or Russian-based and few They yes, simultaneously. one regions had of a We plan. we’re are view customer, continue on geographies, better. teams high list. our worth we’re there the an we our a ARPU are clearly maybe level. where from of that will pace have because our a business an headwinds our had at control. sanctions always of have as terminated we unable consolidated control very -- and sanctions all that terms -- their always, our in at regions or shifting of that plan, areas see will And payments performing on the did and when use uncertain to other customers plan wasn’t less perform all them we one one But our as behind of took growth we effect outside have the a proud outside it there. service, to but bankers make mentioned due a services were to muting we continuing Paul

Mike Walkley

question. my for Just follow-up

starting cetera. areas, pockets to on trailing help should the looks which look supply, in market, like finally it’s auto you et As technology, some it certain especially in node ease at

of ability second you’re your waiting a improving. seeing of guidance on then of the or for this supply, vehicles, take things as to your those on get in half? maybe talk color any you you’re to ramping, consistent are with customers who second stronger improved year calendar As your And own to looking signs kind any especially half

Stefan Joselowitz

Yes.

on is shifting levels -- that we other aware, elevated in elevated most level premium those are you’re fleet. And contracted of of words. As backlog

-- that be are orders the expansion we a back number themselves and these and their subscribers. ability for contracted have So customers holding out roll waiting do that’s of to to fleet delivered, vehicles that our

will that quarters. hoping over see that of we’re backlog, certainly, expectation current easing some So levels we’re the we’ll planning be back our of normal And next to that. couple

expectation see our we is there. So will easing an current

supply, build for as of and far component we’ve year. level view completely to elevated a recent concerned our Thus of a an terms as kind cash stock out. the we’ve that cut that navigate to over In we sufficient And avoided far, got inventory stock has we’ve quarters. we’re any that’s taken such plans feel reaching

of that. So And signs with we pleased easing not yes, are yet. obvious

suppliers orders we continue to think the customers situation, is are force lot advance. a in of their of advantage a XX still there I personal cannot that a My taking trying to year, view to are game that’s kind of months place play.

future We the have to kind more we’ve And normalized our to enough that plans. reach levels of is manage hence, for cycle. once reached we a us good think

going focus a big returning meaningful ease with We’re and little cash to to a bit generation. to back

Mike Walkley

me, question Last Joss. for

backlog like these As at strong vehicles or maybe really you a off premium the that backlog? if about that? it’s feel start those back they pretty how want customers Can you for they to sticky is worry and vehicles, look tier macro,

Stefan Joselowitz

Yes.

I think that secure. backlog is pretty

placed customers down are that I high-grade have have really et So the customers growth such would basis. a don’t deposits nature big in et that and for cetera. think imagine I of orders the these put they high for them, are cetera, are vehicles. -- in the in

So about backlog. confident feeling that we’re uninstalled

think it in quarters I in will happen, year. and coming think I happen this fiscal it will

Operator

would I the back Joss to questions are concludes question-and-answer remarks. closing over conference there As turn any for line. to more phone the the This like session. no from

Stefan Joselowitz

and today. you, Thank time much so everybody’s thanks operator, for

deliver in on Telematics. the focused to interest targets financial XXXX solid are and operational off year. appreciate strategy to We’ve in start to fiscal and continue MiX our for a gotten We on our executing your on

for to Conference look able Growth coming called the are do next time. over Duty But out attend day. thanks we longer as with for no in Jury Federal and forward I’ve speaking again joining month’s of us, As this and a many have great to been said, you Canaccord we weeks,

Operator

does call. conclude This today’s conference

disconnect may day. have Thank and your a for participating, You line. pleasant you

MiX Telematics (MIXT) 30 Jul 222023 Q1 Earnings call transcript