KORE - Earnings call transcript Q4 2023 | KORE Group Holdings, Inc.

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Operator

Hello, and welcome to the KORE Group Holdings Fourth Quarter 2023 Earnings Call and Webcast.

As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to David Freund, Manager, M&A. Please go ahead, David.

David Freund

Thank you, operator. release will will the along quarter be well the we earnings quarter with XXXX call, that as which morning presentation, helpful press results. today's refer company's fourth to XXXX as details On the this fourth filed to follow ir.korewireless.com. Both these at found Investor Relations on of our be page can

statement, in this and on other Finally, press risk as a which of notes from after forward-looking we'll not as revise contained materially actual and company will does to slide release providing information company's update later financial described website generally also call filings the to specific the statements on non-GAAP any forward-looking information differ encourages review or company cause well in The accounting that those undertake you The and available recording be the statements. with of in accepted risk publicly discussing or today's safe be to GAAP. company's harbor today. The the results with company webcast. in as principles or our factors this United identify this disclaimers Exchange in is information accordance States the section that may the prepared that the factors a events company call. The supplement Securities Investors to Commission,

GAAP Officer. and company's and Romil You reconciliation in to these release company's can President of find call earnings results will I presentation. Chief in the reported now reconciliation the to the metrics provided today's turn Bahl, over Executive a tables the

Romil Bahl

and us Chief full Paul joining you With Holtz, Officer. quarter KORE's Good year fourth me you, morning, call. David. Thank Thank our is for everyone. XXXX Financial earnings for

financial ahead. with and of we the pipeline, and view year events wins a sales key the results, start announcements our then a will Paul the I'll how summary for key then will we our overview review always, review As fourth quarter. and brief of

presents X fourth key some Q&A finish will session. Slide quarter. the announcements We a with from

we is network collaboration overcomes alert eSIM-powered a World and as device This Guardian. limited the device to launched technology connectivity regions medical designed to active This the of pioneering device enabling industry-leading challenges aging and connectivity leverages in flexibility users security for enabling First, carrier enabling revolutionary Organization. connectivity. switching KORE's opportunities by coverage, participation medical end dignity. facilitate Health with with different operational Medical XX/X to and across optimal for and phases alert services. optimize eSIM adults, optimizes aging This age health KORE's defined

of most This statement this purpose innovation at enable shows some society's how for good in population how KORE. daunting here as and case, world. addressing an obstacles, aging a revolutionary our in global as can IoT is better IoT IoT

from industry we analysts numerous to products. Second, continue receive for connectivity and best-in-class our recognition publications

Services year. and customers IoT we a XXXX Excellence vision to globally. for among competitors consecutive and simplify firmly well-known Gartner leadership out. encouraging understanding Magic position fifth KORE CaaS For especially is the creating our Connectivity Worldwide also improved dropped achieve SIM empower and their providers our And the Award KORE offerings, Managed large, carriers since and that now strategy Leaders the instance, top IoT the of our TMC KORE's recognized complexities Media. reputation on as even for cements in the solutions is as unwavering dimension This goals. The received including IoT Crossfire Quadrant, our Quadrant and from X recognition the Super customers' cutting-edge Gartner needs Leader also

home ventilator capture, will over TCV XX,XXX the involves the The concentrator solution Connected delivery $XX or patients. telemetry oxygen and to secure to we specifically with win. managing therapy million strategy in CHTS, Solution respiratory Health our solutions, and the solution This evidence of respect our data our of in achievement team. pre-configured global investments home landed supporting pre-configured patient's transmission XXXX, first have major quarter industry-leading to As of first KORE care Telemetry and

customer to connectivity temporary routing map utilize KORE's install existing with support therapy healthcare This win CHTS monitoring thousands repository These will demonstrates cloud The oxygen cloud teams of configuration CHTS from our capabilities infrastructure. medical regulatorily home a data enable patients' care their device to comfort. CHTS comfort the integrated KORE's significantly and outcomes will and and their enable customer the service. patient cloud engagement cellular gateway, improving IoT patient ventilators secure concentrators. streamline homes and monitor workflows complex delivery and This the platform data for KORE's of and deployment and device to and to continuous configure, the management of respiratory ability compliant

offset look which was let's IoT up XX% KORE's in at on by results $XX.X this our Slide Now XX% financial in low-margin revenue year-over-year connectivity, quarter connectivity. in increased Solutions of fourth growth driven acceleration million fourth quarter revenue A high-margin partially an X. IoT IoT decline year-over-year.

those QX is we note these additional results expectations customer. below deferrals including in order growth topline impressive, largest our in double-digit While should from customer QX, were to our that unexpected

solutions, hardware the to to beyond. fully these planning While trial have in impact in of said hardware our not to continue decided customers greater said, in partially our patient as clinical IoT and maturing to further revenue. XXXX a impacted Solutions managing response XXXX last due revenue and customers we what and expect to process, That during our experienced lumpy line, serve have IoT company these monitoring these characteristics in quarter, both exposure business We orders customer low-margin business deferrals lost. year-end to deployments. Reiterating remote inventory and and drug delays connectivity solutions and IoT been levels a we reduce

accept a XXXX. a our orders IoT only customer Solutions are to lower revenue contract. in decision obviously, that of a will winning in we This resulted forward, projection TCV hardware essential Moving and in pipeline reduction

growing onetime hardware and between be is IoT call. our KORE's $XXX IoT we offset visibility more XXXX and over to connectivity expect will However, us, million. we our on behind that the expect substantially that high-margin will this to This in $XXX our and million, $XX expect million wanted offset decision. reacceleration more decline by financials On worst and will provide this KORE's to connectivity reliance any and and on $XX outlook sunsets Solutions touch the I outlook a for I growth of growth momentum cover headwind on from improvement resulting in headwinds later more XXXX. the exciting At high predictability, XXXX. with in be But in in than to revenue deliver our more the before revenue uncertainty million macro business handing a more primary in marginal short-term driver detail, into double-digit between drive growth call business profitability year-over-year increased in growth offset in XG/XG revenue than Paul a this the to low-margin we adjusted future. Further, EBITDA. Overall, point, the XXXX color and XXXX Paul, level, shrinking to adjusted with EBITDA said, you. the IoT to

Paul Holtz

Thank Romil, you, and everyone. good morning,

our Turning to on results Slide X.

that which XX% some is continued year-over-year quarter in in acquisition, to fourth Solutions fourth IoT $XX.X represented revenue revenue. Organically, million segment, revenue. quarter customers or XX% million revenue to the been and XXXX of growth XX% half This year-over-year delays compared $XX.X XXXX. IoT Romil XX% declined year-over-year. IoT at digits planned As half IoT upgrades mid-single revenue XX% $XX.X quarter despite million in of $XX.X year-over-year the second increased XXXX. connectivity includes quarter of By pushed of million, fourth of increased the Connectivity have to first the Twilio to grew of fourth in the highlighted,

mentioned, our received deferrals, To transition they the the their top from KORE's no their customer were project. in Romil in large including quarter decline magnitude the from as Solutions reflects these show to LTE IoT of As orders deferrals, customer continue top manage from inventory customers.

compared XX.X%, was quarter down the XX.X% in a gross the fourth margin gross segment, quarter By to points IoT year-over-year Total a full IoT points QX inclusion basis XXX margin Twilio reflecting revenue. to Connectivity basis of lower-margin XXXX. was of decline XXX of XXXX

company managed and deemphasized an transition CaaS low-revenue quarter-over-quarter of increase decline in the in-house. The as that from together forward. SIMs customer be them to X.X QX connections revenue some of quarter. Total XXXX in fourth in that being million this the customers decline million, of of CaaS the quarter at reflects third their revenue year-over-year. was of the by XX.X during and customer business Additional were been hardware the working also KORE The was to basis the from SIM margin struggling mix quarter points smaller Solutions XXXX reflecting the lower services year-end a to with IoT up end XX.X%, XXX on-time make base deactivation were the single of XXX,XXX provisions going is in inform payments. we transitioning versus a made I've the count over

for With in year. cleaning many very quarter December effect material the very, zero heading XXXX, to in active months year-end the of net up deactivations customers, year-end IoT costs or their also XX, XXXX, more These expansion again, low to due will XX prior ARPU. Dollar-based their compared in to XX% into the the rate not save usage to fourth being on was XXXX. a connectivity have SIMs prior for some DBNER our ended XX%

in compared that growth is acquisition the customer the IoT DBNER to ago customers gain from calculation. Twilio reminder, customers in a the This months existing means it measures XX same-store same of as the sales in As from cohort were period. like year trailing excluded the June the

and our DBNER from June XXXX June largest XXXX topline customers significantly which XXXX project, was transition to our benefited impacted occurred performance. Our by LTE

top saw our we reminder, customer a period. revenue As doubled this from during

XXXX. Excluding the would our XXX% year largest to XXX% in customer, compared DBNER be for

$XX.X the exist including in current were November. in and Turning The a was $XX.X million, $XX.X QX depreciation operating XXXX operating noncash quarter to incremental offset Twilio by Slide professional expenses charge million our in service not which in X. reflect XXXX. million, fourth from debt did quarter. in onetime depreciation compared from decline expenses, acquisition refinancing increases This decline the fees amortization to goodwill completed expenses decrease amortization, and and of the impairment our of in IoT Operating QX the

increase term expenses, higher our $XX the including to fees, borrowing versus $X.X costs the secured XXXX. million deferred to on This interest year-over-year amortization quarter Fourth in due is senior approximately of financing loan. quarter prior fourth of increased million

term the loan $XXX new refinanced and a preferred stock As $XXX with in our we quarter million term fourth a million a $XXX million loan previous reminder, placement.

$X.X increase loss year. on million QX in $XX.X in XXXX was decline relating the year-over-year quarter by of debt. Net extinguishment of expense a costs to $XX.X our million mainly prior $XX.X the incurred to million, fourth in approximately million. refinancing the acquisition. Adjusted mentioned The loss noncash onetime in compared goodwill IoT decline fourth the in the our a and net in offset $XX.X million also charge decline debt, incremental This due interest to Twilio was costs year. already previous compared loss We the of million was EBITDA to impairment $XX.X increases last or long-term with XX% $X.X the was of associated the or quarter year-over-year million

Retention a our net noted does as recognize from was margins compared disclosed, to a the majority $X coming million of incremental most not the CARES at as approach be for XXX in benefit Act approximately in in yet a would is mainly margin fourth the as IoT It year. we adjusted GAAP not due decrease same also margin has Twilio EBITDA the basis adjusted revenue include current EBITDA funds should that year-over-year in U.S. the loss Our conservative Employee previously or perspective. the period to the received quarter company XX.X%, The the which, taken from EBITDA points of negative acquisition, be EBITDA down Credit quarter XXXX. prior to

Moving million additional compared December the to million due of to million. equivalents operations as quarter, XX, cash months paid $XX.X onetime December refinancing. mainly flow. was Cash X were for approximately This end the increased the related amount expenses of used cash $XX.X XXXX, our XX, debt year-over-year to in $XX fourth ending XXXX. the At cash to and

XXX year XXXX. point XXX and $XXX.X million. in full basis $XX.X $XX.X than of up million, to point Solutions XXXX in The $XX.X impairment to XXXX. relative $XX.X million, XXXX. EBITDA million gross to XX% full margin EBITDA connectivity The basis by XX% year IoT partially gross XX.X% compared which mix loss of XXXX. to offset X% of revenue in basis solutions results. points margins of decline This by full in XX%. goodwill were This was million increased increased IoT resulting net to adjusted more decline revenue from year driven million, factors to IoT for XXX year million margin the year XX.X%. our increased includes These XX% from of XXXX in was the revenue connectivity improvement a margin was Connectivity and full charges, gross by $XXX higher an of the $XX.X XX.X%. Adjusted Turning offsetting revenue a Total

of XXXX, in million goodwill $XX.X $XX.X XXXX our million $XX.X increased by net $XX.X in loss impairment charge the Excluding million and million. to

higher due the acquisition, Twilio fair due back associated IoT Our interest debt our rate increased to change annual it with pass to net that, increased the I'll Romil. in costs our to value onetime warrants and the you, costs loss a refinancing. With of expenses,

Romil Bahl

as XX, snapshot global sales Paul. a of our Thanks, Slide pipeline X of presents December XXXX.

large in funnel relatively cleaning in our number on deals reduce Jason of size low-margin I the This we last by that has our has our closed closed obviously were of decision larger of as led revenue. hardware QX, and lost, decided won in As the typical reduced who total the joined have out reliance closed mentioned, middle CRO, new and a both funnel year-end year. KORE than Dietrich, to

Importantly, actions. of these the our due to has improved quality pipeline

TCV over TCV now total million X,XXX fifth we estimated TCV, growth. bringing an generated In an fourth quarter, as $XXX the $XXX pipeline includes million. million year-to-date the sales approximately we with $XX our won of of Our incremental opportunities closed delivered consecutive year to of potential

some is solutions helped the portfolio growing its years. number X TCV who figure This may top-tier is contracts one enhance further with give its its home have in estate quicker KORE to for a and with expansion with new of the support sold customer This conversation customer KORE's our different as introductions. connectivity product it to one, to share software this scale solutions customer. Three, recognized are we and TCV important solutions IoT the optimized units could to was the management aggregated privately a fast-growing the homebuilders closed overpaying representing in KORE multi- improve customer opened high-bandwidth adding There to one wins of held $X which For with and KORE network market customer as new KORE from customer approximately to over primary demonstrating deployments. Two, single-family no opportunities include, for revenue real a majority the United services its These note is entire and with win wallet KORE's and recognition. Slide pre-configured that had specialized that the the provider end largest share our cross-sell the products TCV. new for of durations connectivity experience, States. incremental growth after XX,XXX across European leading high-performance X well favorable those in the support. company is wallet for signing fourth connectivity all substandard of our the chose is next for with story, commitment customer significant our customer's of to approach and this quarter. confidence system. global customer revenue of operations, and services, Then, million be as by U.S. reaffirmed API wins And time shows KORE's customer the industry. grew avenues

OmniSIM KORE $X.X worth for new contract with continents pay customer's vehicle here, in and contain provider of subprime loan a will tracking solutions products. chose This as the here spanning vehicle target This X an million operations new its features solution connectivity TCV. estimated buy asset IoT market. is and Finally, its products

continues our see, and growth can build. you momentum to sales As

stronger. products, uniquely KORE's are market needs and the customers' connectivity OmniSIM is SIM and resonating our position to has and deployments. multi-multi-multi-offering Super been with independent including Our never our IoT simplify complexities suited connectivity the of

IoT our products whole. customer and stabilizing and foundation These unified ARPUs customers' a KORE's connectivity ecosystem by the strong critical with for a enhances network flexibility single for ensuring deployments will customers XXXX across for Our with borders. individual growth. great organic as a cost-effective year provide solution uninterrupted operational factors be are that Combined success

said $XX end adjusted $XX of million What in walk Slide guidance, through you XXXX. million contextualize on to mean? As XX. the revenue chart the million this does is million let we our help and $XXX what To expect range result? So with $XXX in the between I earlier, me EBITDA

The million, onetime the $XX of expect connected to first explosive leader thing last was adjusted year-over-year these basis. transformational to grow capitalize will XXXX the and EBITDA we an is onetime KORE apples-to-apples XX% in on XXXX note needed XXXX is that comparison devices. investments KORE's transformation our to that investments, XXXX IoT adjusted establish adjusts into on and a account, out year XXXX. After in of they growth approximately approximately meaning these occur taking not EBITDA EBITDA expenses as

involved these investments eSIM doubling IoT leadership. down connectivity reminder, launching lines core business, a on and As KORE's on business industry-specific focusing

We to have operating onetime transformation been financial adjusting show a out performance. clearer KORE's picture and health expenses of these

the market stepping us Given back XXXX, it about this worth in confidence talking and what backdrop is gives volatile outlook. in

growth which First, decline in hardware year stabilizing a deferrals, ARPUs. high-margin by solutions. low-margin key is to profile IoT visibility better revenue, high-quality due our following connectivity's reaccelerating be and us profitability sunsets lumpy end of IoT revenue growth high overall and visibility, KORE's the in which relative gives margin connectivity, topline markets into offsetting increases XXXX is revenue customer performance This superior the and a to our throughout the rebound will XG/XG and end driven

I approximately ongoing before is we in and of this by that over, that for performance streamlined we start EBITDA our adjusted highest year. quarter above expense quarter throughout that every combined last our key as confidence start solid gain growth confident remarks. and and higher $X.X despite But and in adjusted about this single our I QX KORE's will than XXXX guidance. That the prepared to summarizes is quarterly refined us outlook of would million expect Secondly, our being scale saying QX be our of we in XXXX This QX connectivity-led we specify quarter we XX not mean first XXXX. model the April continue and and in start our XXXX EBITDA said, that of to with XXXX, would will operating operating This evidenced QX be given feel gives to be XXXX, year. providing strong XXXX should talk prepared points to improved our slide historically our operating economies leverage. Slide demonstrates the our costs momentum are

supported First, be connected KORE's from and existing XXXX IoT will by ARPUs be driven device which will by revenue growth stable connectivity, growth customers.

IoT planning product next-generation decision will be our low-quality year-over-year, deemphasize revenue. We our Launching to only down are conservatively accelerate for to Solutions eSIM momentum. reflecting our

digital seamless Our next-generation global local IoT connectivity white glove compliant products customers with access, and service. customer consumption present with best-in-class

Secondly, our closed to developments, XXXX. sales in and expect XXXX exciting of indirect while direct efforts, which delivered won in we in addition $XXX fruit KORE to product several in identifying these improvements bear TCV million

successful are among end cautiously deployments customers the things, and was with companies On the and for hired seasoned with most sales where IoT At and they KORE prominent an major relationships ecosystem. Taking and the XXXX view, give executives their we high range enabling that advisers experience side This we optimistic GCP, of partners becoming that's we that have industries, the to helps are, advancing distribution uncertainty IoT sales Google, developed holistic markets. direct core same other who of trusted a extensive time, meet across years are with many geographies. of our customers. macroeconomic watermark more companies sizes

de-risked hardware KORE our customers and from customers and exposure result as focused, us, cost we operating and and remain will we largely leverage is scale of connectivity the to IoT have our will inventory lumpy revenue on grows, inventories. Crucially, While growth. efficiency that economies focused behind the at customer remain profitability correction

I during sales have line exciting a double-digit of clear these and happy the the XXXX, excited year. call want adjusted EBITDA are tremendous thank points As this turning But profitability. They of and into to to before a work this year. revisit about sight the around key for going Q&A. world operator, increased are driven the in KORE's future. by IoTiers to over we growth the am where their I result, past any greater in we

stronger, With opportunity are the portfolio, and sales positioning well the capture Our that, we IoT financial the placed have connectivity and breaks. decade motion to of never Q&A. that let's been start

Operator

Roth is Instructions] first [Operator Today's coming of question MKM. Searle from Scott

Scott Searle

end Romil, side outlook. sounds the on maybe looks for the you're growth you're bit connections gone. connected just little there It a bottoming of thinking as a dive give end-of-life the and units us well if -- was like ARPUs It equation. that on that in you you seems about like were wondering how to some of as double-digit connectivity I'm XXXX color it out. looking are like now could low

would to an back as math be start of if XX% like you've napkin my in get wondering just in in an so trajectory? think that component you that And the So I'm fourth in something upward would the should that trying got TCV annual looking to looks around could at we revenue the of recurring quarter. hands I see an ARR. I'm the wins XXXX pipeline, funnel or that, say what TCV like? idea that of give extension us

Romil Bahl

of Scott. I'm remember to those. all Thanks, to going Okay. struggle

We've tripled kind were the X do to revenue. X business, it's your that the obviously both and that come in I and of was joined with So which here. Yes, billion that, XG PTVT the of back go. I at simple was the price XX% business, volume of and averaging had remind we first years, ] When you than behind clients the it what let's a and is correctly year when thing fundamental questions, me more Yes. full XG, neighborhood haven't devices in front forced about of you every of for Look, end times SIMs. tripled coming as a XG right? business, is network just XG business, our churn us, X absolutely prudent type off tough we nailed [

a XG, So to XG When say, that we've back grown gets levels, given of and price yes, volume becomes growth. environment type said, a lot we're of approximately exciting connectivity I the to differences starting very in business, back over I'll XG. And show CAGR, away, we're XX% at, certainly to close is will the our be not type goes volume fundamental XXXX, XX%, to, that But anywhere and going pre-COVID growing, the here volume as was still back. all that topline which right, that organic. as actually LTE, XX% XG, of growth is growth still

of coming of saying in high-priced end On on. lot, and saw [indiscernible] to between this is low-priced like higher actually year the -- QX this last it's the a of last we devices increase stabilization sound right? what P we -- like me at [indiscernible]. correctly, of ARPUs a that notion seen That and which been think It's us, side and the $X.XX, level we've to slight We of year right, just about of point the coming equation, was I have stopping $X.XX ARPU of QX not for devices quarter, a bandwidth off what coming at happened [indiscernible] ARPU but like the may after is [indiscernible], average it sort your sort the low of to up stabilization, talked $X.XX. sort ARPUs year

fundamental connectivity solutions also confidence. to yes, the and that of say in IoT is in a off gotten I the And outlook our that's the would great pre-configured really terms has high-bandwidth So set start. really driver products

think I a what take else, pause me a makes sense. asked then question see and there, TCV that Let forget you if I Scott. about And

Scott Searle

Nice But the into ARPU. to ARR then just opportunity Yes, that perfect. looks what in increase the TCV was the like. the -- translate to hear an

So revenue the on recurring and... annual

Romil Bahl

Yes.

with they look, [indiscernible], so of going supply bunch was what is is know time and during inventories I analyzing a and Paul and thing those the chain problems I'll last teams and with deferrals there. stocked of a are up IoT on spent and Scott, year, good tell since you up that of you out inventory the middle very QX, when the first all obviously constraints. our the during So these whether using analyst the all were People COVID modules sort

across deferrals and the were well. there So board, were as we impacted

if we're we business. said, sense make forced, because much you will, not of into just It what? our so And really numbers [indiscernible] have doesn't lot to so volatility a

We ARR business. are an

as it's our we've XX% recurring straight the is budget right? XX% connectivity, connectivity this Just and almost increased XXXX in with at we so on And will QX, focus XX% between [indiscernible] in Scott, be these revenue, year, budgeted near were level how solutions.

So revenue all your add customers. recurring the base solutions you and had XX%, our starts then with XX%, of we've a [indiscernible] from

stable be maybe So part if should XX% model. is that increasing, anything, even and which a cool really business of our

Scott Searle

interesting. one, respiratory win very telemetry The if is last I Perfect. And could. Great.

How very And there market? been is telemetry. think, bigger we opportunities some in cardiac beyond? strong, as respiratory historically have and big year the guys current look I are us into telemetry You behind

Romil Bahl

deal. had my been he's a not years, that managed X services of reason just worth versus several through finally X experience of a where they And the chasing IoT model decades this that or of say, customer over sales together. enterprise-type key now started decision, our the our about come win. buy cycle. with differentiator, [indiscernible] time sort we was to really engagement head would mean I obviously, and build we've we by good No, reputation won Yes. why this and long the it when opportunity their for health were way, and the went And

the of respiratory general, today is, smaller are, Now right, which significantly still therapies course, specific market to it's in rhythm growing of the than But monitor, Scott. X. the big faster, question, size dominated cardiac by

opportunities X a team looking one space -- dollars there's And European with connected a night, are they're And It about exciting. million and in trial this actually customer at actually -- in of connected I'd fact, I good the chunk phenomenal respiratory XX those around clinical health those meeting so say about, sales about opportunity there's area. focused very was last is and number. XX% of TCV health our are with

Now, I'm does and all is committing to right? win we All take how saying health, you do and [indiscernible] us know growing long not it's connected that, that. that I'm little actually fast. of segment exciting not when an

Operator

next The of Latimore Northland Markets. you. is Capital question from Michael Thank coming

Mike Latimore

on Can maybe bit? lower-margin percent focus just decision verticals? I a pipeline this that hardware higher-end margin elaborate more the lower Historically, that. Romil, Is a on Yes, know just little the Just more reduce little business. different bit has don't on the on hardware in what been of elaborate to it you hardware?

Romil Bahl

No, my shop. Yes. -- clean with if me course, then thing, you to and the mean story hardware familiar to end facilitate jump may so just miss that I look, on are here, Paul want the And let so first we're manufacturer. But start basics or -- a well of Mike. a with, We're some in manufacturing not is anything. up not device I

of And so pipeline, right? other parties complexity simplifying the we've complexities solutions. customer, our it only the really simplifying for IoT was resold the if That's devices

with type reverse get or then we're container it, the just coming [indiscernible] that was for do configureship and of a was type them whatever configure and to the the wherever device management it and easier into chain right? then and services to us field right So as our out pick-pack get services, happy from supply Taiwan

low it was particularly obviously did single-digit context the the exist front-ended every it everything embarrassing up, you other Now was in us, what customer then And margins. for we it's connectivity in X-year some In winning the with make cases, it it was device relatively a We're went having solutions else. we -- -- on it add hardware the of in simplifying since there again for that didn't for margins. piece but be to type contract good dollars found out good all strategy the and cycles. easy tends IoT and to as right? So reasons, X-, standalone,

some of I When year that's solid and Scott's business said, volatility XX% public, XX% revenue, of made It's hard XX% lumpiness we earlier sort nature, last it QX cases, So nature, our much. end this That to recurring to funnel, a and it XX%, meaning of is I hardware as towards mean look, in was right? and and we question. be too starting recurring the looked right? said probably between be actually, to in at in introducing into

our hardware-driven. very the when it XX Remember business. we such XX%, won't real a is get be or all our won't Solutions of and of revenue mid-XXs. for which it are, including by the XX%, drivers was we was is uptick. this way, doing And of long XX we'll buy way, IoT as as so base. and us it, there of if our want says, margin the to that, on those spend I it let but to to or me, that the X insists. you over just to want months do to higher total the a of Xs -- of whatever. to And pre-configured customer low don't by percent said, already drag course, In overall or solutions hardware X continue when smaller IoT that end we on Xs we and customer of how margin already solutions, that We're a definition, XX% get into margins. By do XX%. even as creeping kind and including portion showing were it again, a I've it becoming goal we'll So CapEx. all OpEx" cases, We'll and And months "I guys XXs we do this? at are -- Why let

are the to set just let me opportunity but anything. those Paul So give add of reasons, the

Paul Holtz

The add, during million-ish. XXXX, And then so to dropping we, down million. -- thing I $XX Solutions, Mike, IoT full fiscal was we about year Yes. $XX only in the for were like would

So this have say, roughly a, drop $XX million year. you

Now some go that into lower-margin of that next more. we that, solutions was this we're indicated deferrals talked as we're and is about, and the we business. as as we so will year out But because That taking decline forecasting forth. from

Romil perspective, from million guidance $XX hardware it's to right or So and take we'll we're and forecasting we it. do margin we're is going let insisting, currently you're $XX need lower it a to the not perspective assuming But now that not said, forecast let to of about there. million like customer if talking go

Mike Latimore

yes. Yes,

market. market I would this a here. you that accelerating? and year? helpful. That's in Got very Can -- diverse then it the the big I a diverse guys on of have view the little Is view And I broadly Declining talk wide stable? it. Okay. just pretty IoT picture macro IoT guess helpful. just into be you on thought mean, mean of what's any your kind just Is it bit? stuff, And kind

Romil Bahl

now. want, out all hype back all us long we of the getting The Yes. AI devices but algorithms, without market that so trends said never No, right? is you are question. wants wants sort data I our more picture step can on doesn't connected guys of and bullish apply first been like was this more of do this than stuff were more connecting world big we a around of of working right? growing The your right We've much, devices, we favor, right? data, to all We've data you the AI sort sort big in can that trend. AI So appreciate

this yesterday satellite. compute, points my that's Obviously, of bandwidth matures, with edge helpful XG one in about Embedded World is as the higher talking convergence type a key cloud trend. Conference coming, All to of was movement the Nuremberg thing at including edge, edge

if between the now out on -- of billion products is of probably between we most Super there. characteristics, And downloadable OmniSIM we somewhere eSIM, then, of decade, get think course, our which shipping leading eSIM end you right? And if get going world shipped more that's have to sort the that than X right? into those And is believe, closest share I next to of never share And X generation the SIM, to says, advantage depending well years, the and eSIM KORE go Twilio proposition our regional to is billion the growth POCs be more takes say, stable the more our of global we of those positioning of than let's our trends. the of could volume and more "All can greedy combine and of who SIM goes one or X. the the hearts from and Super X as it's take go on end bullish old sort best are investments at deployment, And and global." We've our there. been dependable, positioning of of going the reliable about right, the certainly

Mike Latimore

first Should of low should point and the get sequential there? of sort some Okay. the assume just year pattern quick the from how you think is sort one. other of Great. growth And about throughout then we quarter the we Or year? the

Romil Bahl

much Yes. pretty That's our always you're I pattern. right. mean absolutely

all invested. last sort expenses, It's significant our growth go We had question. board. topline. to the down. great in the that the our to of do be start onetime EBITDA, we QX the of of mean, even a the just it's our expect I our anticipate we it right? though we've sure from step-up obviously, payroll And largest, our Mike, be or lowest. And be largest lowest. course, do to be you to across X no A make expect QX taxes, profitability thing But I notice with fully in will mean quarter costs So that that's X that way,

right? closer, QX is range increasing You're to close did add your OpEx that that and in to going topline is of going be you call to We million, EBITDA, steal actually anything? expect million and Or thunder? increase. $XX $XX But all $XX million the So I Paul, XX% hopefully million, and if going $XX that it, right? forward that, down, would you're getting

Paul Holtz

No, Yes. got you it.

Operator

is Meta Morgan of Marshall question coming The next Stanley. from

Meta Marshall

projects Mary hangups resume? sense some trials? the some what of been Do have then I of a for of the to want on to you those This drug ask And have Meta. about is you deferrals. when those

Romil Bahl

[indiscernible] Mary, been this you there, Thanks, When if and soon. out get that's XXXX, some even people in year, right? inventory, this perspective in of just [indiscernible] the [indiscernible], was call, issues anybody look, the my X.X of the has up healthcare devices, first or a be #X was other order. hopefully, So right? doing so [indiscernible] mean math think line I phenomenon, really there, to devices, for that around are, whether our her or stuff I as that's business earlier bit customer. But chain out this we I our everything for [indiscernible] Yes. of know we best Mike is, keep day for has Scott in and that's Meta, panic it, or all, But I sure, to and talk response there right? supply on worth years' saying, fleet the devices were sitting else our with customers modules whatever that's they customer, comes used a about largest stuff pile to to

on watching introduce them risk-off end than in inventory And, on the year by their kind the People of environment focused market, ever. way, a the more expenses of at the levels inventory before a actually way right? out the the other fitting really The their going people and sort pendulum of on, saw all orders. and on reverse, we direction the of and

inventory remarkable. industry most So mean be it's to for up. and I related this deferrals to what needed has the the levels part the most are seen -- quite used

a CPO QX, that inventory largest give business "You customer, we largest their I will the absolutely and main we All our you we it the back deliver anything have June people target our thought fill that will so then to we're down to we to is and -- said, going extreme next With of thing quarters I'll into we that's right? the right? defer going we're last going other new know targets one with example. And as sort QX. set example levels, back has come as we In pushed what, those to our customers PL that and QX, us, back And mean levels to CFO, our to since ordering." us get [indiscernible] in to over get deal push can just with the the for the send customer didn't year. into were an it of about new few inventory usual largest cases, back level. had ship

of being part kind last in sort Mary, like what asked, resources resources, is both interesting healthcare not probably though, reallocated those of certainly of [indiscernible] worrying. The space, sort that's of the of is you So the situations. the

right? generally, enabling which resources is, or clinical or [indiscernible] capture [indiscernible] digital type those just the knowledgeable clinical enabling availability to resources there, more So data right? those IoT drive of the trials weren't transformation technology trials

pick our Some been clinical industry the have didn't known America, say because God, None as addressing, connected right? in all go of watching story of for "Oh, come will been XX% trial, of GDP the XX%, now be going of the up. that nurses the so worrying time balance things, I health really to back and years, [indiscernible], XX% this is run out and bring my again, and of best to over on my God, recent. single we we like, have bet is...". is hands will oh XX outside are will right? actually delayed And XX%, those I've and trials to So XX% enough the resources, trends. to we've was I made these can

Operator

At Bahl this to for closing turn time, over comments. Mr. back to like the I'd floor

Romil Bahl

for here. quarter interest We our everyone very call updating Thank in you with results first X, really thank much. weeks. attending I look want you to what our the X your Well, say next to forward Outstanding. you to

Operator

This participation. you concludes Ladies today's your and event. for gentlemen, thank

enjoy may log day. off the at rest or of lines You disconnect and this time, your webcast the your

KORE (KORE) 11 Apr 242023 Q4 Earnings call transcript