ITI - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the Iteris Fiscal Second Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Todd Kehrli, MKR Group. Please go ahead, sir.

Todd Kehrli

operator. you, Thank and call everyone XXXX for in participating quarter Good discuss thank Iteris' conference XXXX. to September fiscal financial today's ended afternoon, XX, you results second for

CEO, us Mr. CFO, Joining Doug Groves. Iteris' are President Mr. Joe and the today Bergera company's and

remarks, analysts. their covering the we'll for open your Following from questions call sell-side

of release select the instruction for answer also submitted dated will call XX that investors to our the press the We questions company October XXXX. in advance that

company's during to to that obligation regarding these on like company. files to may one substantially to from of remind future. from performance. the we'd statements And Iteris the refers the a continue, change is that is the time make the at statements time the should course are SEC. still later current undertaking call, participants looking future from differ you we documents to company future with in subject no future Iteris not provide updates with today. and may we based Before the today are These discussed statements the will comments this not what all they're be assume valid. of or to an information performance Actual results forward forward-looking of events guarantees date,

are section on you'll the Relations could the of most replay at our quarter actual and that second remind Investor webcast to company's any cause in I of website that that call identify financial today's everyone find results a the XX-K, those recent risk like report supplementary www.iteris.com. to XX-Q of forms important and metrics the materially of Specifically factors company's statements. contained and X-K, which the contain differ forward-looking from

proceed. to to like call the please Mr. CEO. I'd Now Joe Bergera. Joe, Iteris' President over and turn

Joe Bergera

good everyone. I Great. today. and Thanks everybody joining us Todd, appreciate afternoon,

of financial second results ended September issued release for market, XXXX. As the a XX, quarter you we press fiscal our saw close at announcing the

segment Weather and call. I'll periods LLC in Analytics XXXX, this for reporting Agriculture May X, our the operations be of are of sale discontinued such, we continuing today's on And only that our remainder discussing DTN, all segment the as Given as to operations of during announcement. results earnings presented the

proven months. delivery has over the last software Our highly enabled resilient model several

As compared experience a continues period. in Iteris demand we reported mobility our representing to quarter, despite our management to result, COVID-XX. prior for same solutions second smart strong the year revenue, XX% quarter second increase million a $XX.X total infrastructure In

quarter strategic which significant the in year-over-year. an reported actions more to we following of reach our quarter took continue Doug provide performance to the we the improved total $XX.X million, me In Similar drove quarter Additionally, X% a let a on in bookings total company's in million. a minutes. structure The and in ClearMobility bookings record metrics income net a $XX.X second net our second in by invest rose and even of to increase record meantime, sales the increase will adjusted EBITDA cost first our overview profitability ending few we basis of our is discuss a company's growth sequential our detail Platform. as total segment. net X% continued backlog combination growth,

a our to regions few year Mid Southeast and our performance flip second Our $XX segment increase conversion, period. reflect as in quarter right prior to the the transportation versus strong in some western delays recognized same segment's systems in particularly with The COVID-XX. projects to region, representing X% million due revenue, continues backlog a experiencing growth Atlantic

in recognize have connected Department majority Transportation. contract The completed the created expect normally revenue vehicle delayed I'd dynamic to US pandemic future unpredictable. COVID-XX that As of program an example, remain the our maintain delayed for reference market by travel quarters. activities restrictions automated to would some and architecture of conditions the under this we

nation's even $XX.X system Based advanced combined ended extend of increase South deployments. and with our solid $XX.X to for of demand two the recorded bookings, Our for some Carolina segments net lines of segment all quarter the represents COVID-XX. deep for million traveler after transportation software cooperative traveler million continued Federal automated architecture orders task Operations strong we Department bookings quarter out order also transportation, design a signal for $X Department the portfolio. bookings About bookings the an of second value manage nature the with solution include essential for a X% segment a transportation This recently and development. the a reported vehicle which develop intelligent net as Highway contract million is system, XX% net second X% $X.X maintain Virginia future for million sequential the to the the Transportation, reflects extension a the contract order, performance continue $X.X million of district $X operation reference system result to RIKP task task million IDIQ $X and of Department Transportation contract Department due implementation the northern of agreements a under and on with extension in Department as annual extension Center a year-over-year customer a connected a network clear revenue. known to advanced with be quarter information $X.X of the segment's of and business, center delivery recognized Virginia of contract system with for the of Administration the guide million of of Transportation for City will and And awarded notable clear backlog to is recurring across quarter a our net Transportation's support $X.X million also arterial which for to Recent the $X.X management increase. within with Transportation management Tampa the million quarter the region, the Florida Virginia bookings contract million, seven the district, and the for

a a the versus Now sensors the moving same revenue million, period. reported prior segment segment, year record increase roadway quarter sensors second XX% roadway which of $XX.X to represents

the In addition product revenue the and against segment to commercial made other tangible strong objectives. progress performance,

And develop the For example, California the Central and geographic term segment exclusive California, equipment radar expanded US the Phoenix continues Islands Cisco near coverage plant agreement a And million competitive This equipment single customer Valley, to largest into major segments and at order distributor receiving seven the contracts commitment across every with approximate Pacific its new traffic the the leading video Secured Pacific, the distribution milestones figure is municipal detection in intersection solutions. the deliver year- Valley. through Moreno to critical a in launch an of segment for provide next segment city. advanced generation in a $X.X the to-date. relationship, our Cisco against continues availability monetize for from region.

product financial my expect the both recurring results going segment's I'll With contribute after to which streams So to forward. remarks. let we conclude on I'll and that, revenue comment our Doug

Doug Groves

Thank Good you, afternoon, Joe. everyone.

IR reminder, all please see the further Company's filing, of the our call matters a description metrics today. supplemental of during posted As XX-Q on under discussion document are and for press which website release financial

in the SEC results, operations. we've the QX Consistent Agriculture improve our in key few QX with of the and top operations comments drive the Weather be the and the and quarters efforts today my growth, discontinued focused business only backlog took expansion. to and Analytics with including the restructuring company last reported filings continuing you'll we we to seen notice, with see line results in benefits expansion. year-over-year will As to our segment help performance as trends We're in are of manage favorable operating certain margin on to the continuing increasing continue diligently of metrics basis starting margin cost the

of I'll quarter details move results. the Now to the second

million $XX.X Joe XXXX As to for ago. total quarter in increased compared year to a XX% revenue the the quarter same mentioned, million, second $XX.X fiscal

prior million $XX.X of Operating Our in to gross quarter were by mix $XX.X were system do year. in proposal decrease compared activity margin this in year a driven third the in was XX.X% primarily to last We first quarter segments. SG&A margins driven the compared million reporting product XX.X% both an quarter our to due million from was expect the same transportation in decreasing to see in the activities in by the decrease bid quarter. of gross increase quarter. the segment. expenses The same The $X.X first timing

or quarter mentioned of the income our Adjusted year. of compares same reported $XXX,XXX share, we $X.X compared As or $X.X call, second quarter GAAP with and improving X.X% income continue. million to $X The quarter ago. loss our profitability million on first second of revenue the we're trend million or the compared of last the quarter loss second expect EBITDA $XXX,XXX share $XXX,XXX from was in a quarter $X.XX the revenue, with in operations in X.X% quarter year for which net $X.XX GAAP of continuing to million last operating in per GAAP operating year. earnings increased We per this second $X.X the or to

results. Now, into turn let me our segment

decrease systems second $X.X for expansion driven the X.X%, prior million million year. compared expenses operating in our $XX margins increase the line was by volume for from to operating in and compared income expectations. primarily level segment. transportation with revenue last order of and operating second in the were XX.X% related Segment an XX.X% increased prior quarter, Our year was and a year million the to to $X.X $XX margin compared quarter the The in million quarter was

broad in second million increase the flat record of $XX.X as primarily the million, adjusting million share million of by roadway income last operating Albeck quarter expenses the And or were to $X.X in improvement the volume. was operating quarter sensors revenue our increased the segment million expenses $X.X in Our Segment margins our products. to prior margins and compared we was year-over-year. After of compared were $X.X level the quarter year were competitors versus year, year. XX.X% year. XX.X%. prior prior The take leverage the from for in compared market $XX.X related was year. an corporate the quarter the the to for quarter in acquisition $X.X for This to was Gerken for Corporate driven continue million portfolio last XX.X% a cost

to position cash the the another capital And forward. investments expenditures second continue the our working $XXX,XXX expect QX taking we're million focus light and and solid for glad remain on liquidity will from our impacts the of We turn whole improving call our top our of Joe. profitability of on improved asset $X.X and at we our continue model. typically to the Turning resources, and solid third quarter year, we build flow cash over and quarter summary, to trend quarter. that, to quarter, X% and was to $X.X spent going cash to were seasonality results With in capital. to bottom-line costs Operating this in account the I reflects due acquisitions, holidays prior million continued expect expect in results. short-term into and increase weather. focus that continued capitalized continued in revenue report Absent to operations any Joe? reflecting improvement expect compared million we expenditures do end In execution, in to under the back performance. business software quarter, $XX.X With and year capital we these total continuing

Joe Bergera

Doug. Thank you, Great.

ClearMobility long-term and remain for infrastructure really integration transportation Although we expect a four of market. and allocation align strategy execute solution represent vehicle as our ClearMobility well for transportation to of volatile technology bullish that remain software continue to favorable foster vehicle infrastructure government Platform, the prospects models the enabled trends uncertain to smart to will budgets, the trends, these mobility projects capture levels Indeed, management their as to portfolio of the to and continue we the delivery environment cloud element electrification, service, Iteris will our advanced initiatives. mobility change same pick another all agencies to we to quarters, the economic against as at end, that shovel key will roadmap. continue ClearMobility to vehicles opportunities. To is about from fulfill automated connected Platform And service new to which and traditional a shift infrastructure secular missions. two

capabilities other the framework in ClearGuide ClearGuide a release The product. use example, easy of we common integration our seamless Then our software to the of release will API to a enable valuable interoperability other we for API we API ClearGuide our with QX, For is our introduce plan highly datasets, site. our will products, that ClearMobility in segments between between and and new which introduce scheduled going demand will continue perspective, of central our a to of will we of the roadway which us among respected enrich ClearGuide sensors cloud. provide for to new goal reference of our sensor leading our new both first ecosystem, software Department forward. Transportation enabled ClearMobility From revenue ClearGuide solutions. QX, cloud, cloud State and recurring components QX, a plan a a to to their and is creating believe managed that, transportation various third-party In things, healthy and market see deploy by solutions, contribute commercial ClearMobility service certain utilization extended systems

we light concentration susceptible delays opportunities, some will our than transportation to in higher However, pipeline this second first especially the lumpiness in the in sales of of large normal some in experienced COVID-XX particular, half. system has more segment our a of which make half,

one events we're do which cautious pipeline. holiday economic limit about normally commentary COVID-XX and season, net backlog at a level We of recognize to period weather quarter is record form financial to happened the mid enter yield a of an days is will that for third current the medium of impacted long about third and of first growth continue marketplace, in some our in to digit single winter quarter time active sales some guidance equilibrium. by continue operate. both the to we to which today our Furthermore, Therefore, remain revenue expected shift the commentary While has until on provide quarter. will in anticipate The these environment uncertainty focus term effect period. reestablishes prospects Accordingly, bullish the we available with only the we'll revenue. projects the half. right our of But to number our our we the

will seasonality net decline profitability, with of consistent revenue and terms sequentially both EBITDA income expected In adjusted and typical mix.

significant adjusted software third However, our we in net we the to improvement words, other Iteris expect to and continue year-over-year income from quarter. another to see In in EBITDA expect benefit model and agility very us? to Operator, delighted comments. for any delivery would navigate are challenging respond be With operational there questions enabled landscape. that economic our a and questions as we

Operator

first question Jeff Our from Van Riley. Instructions] with [Operator comes Sinderen B.

Richard Magnuson

of least, us revenue. for you're recurring maybe have overall you revenue. and us that you then, for what revenue now thank give Sinderen. this Magnuson bookings faster mentioned you these can that taking quickly your systems is you call. [Indiscernible] how what than thoughts targeting net mind, Well, you your Van you - reach And new percent is your SaaS And as are with At a in Richard for remind SaaS Doug, targets, of about any or XX% Jeff you of And may targets. And percent also revenue. can approach represents

JoeBergera

want to but I I heard pass make just to just Sure, correctly. of Richard, first this I'm going kind to that Doug to I'll elaborate, you Joe, start is And this kind I off. of over sure

the XX% case correctly, that I just nature. in recurring heard, bookings be heard that were as XX% wanted to I And in going total clarify annual recognized would revenue I I you or the the may meant in bookings have system's miss case of I think say to said forward. that of recurring

expectations questions additional do revenue rather on forward? then Dough - going and you than XX%? would levels, mind regarding XX% Richard's commenting So recurring current you want And to our our

DougGroves

Sure, yes.

revenue. that annual closer look as about So, our Richard, forward to of recurring a we lot XX%. our our goal get runs is current to XX% revenue total And

this bookings you annual quarter were to going the from but couple recurring and half see can not systems, of of that quarter a transportation revenue. quite last take it's Now, years,

particularly good different deal customers, continued like. obviously, these for I revenues reasons of think the we're our the scale that's see that to we're in business, about will past, with that create extremely take but But in that there. years, to predictability more we more sign we've So a a flow of are talked a just also, good us but in sticky couple which lot on focused

Richard Magnuson

sorry. the a second. my since That's Yes, second great. I'm - while last sorry. question, been question. it's And It's

you've You synergies additional said acquisition AG? you it can with to see speak developing that well; and integrated you any that

Joe Bergera

Are go Doug, going say, that? ahead. you on to comment

Doug Groves

just a the been there than would quickly largely I wasn't have out, ton, big weren't company, synergies cost say integrated and less Well, it it pretty wrung like a six months. we in

a they're that what much just larger geography revenue we're is I'll say So in opportunities, seeing with where now, headquartered. though, footprint further

a that's created that focused we've we to by Iteris as think Gerken. we're run region to I and that Jeff So where of And that Albeck is things former of is that offer successfully one refer new all business. to of southeast really bringing can principals the Gerken, bear the the

Joe Bergera

of been win. district that penetrate that that an of as in Florida working the the and other new the Florida, relationship But we on is the a winning secure result of of minimize were Germen that capability we kind one is that are had able accidents. of country. to Germen that miss where relationships by to And, the Albeck Transportation. Richard, project that there parts through to Florida we've with in something particular business in and there of contribute if of SaaS just with at a it's we're entirely to public Department agency large, also but monitoring various identify that, is intersections traveling the the some, and announced the the near factors able we're I we recently to both add is that consulting with being for certain almost some analytics alerts This conditions provide of but try intent to to accidents Albeck type where That offices example doing agreement,

that to we're our of cross Florida our you'll leveraging by software into geography. can Albeck see the over the in quarters think sell other demonstrating next that that expect relationships ability couple our deals like Germen I you market where

Operator

comes Our Latimore from next Mike question Northland capital markets. with

Mike Latimore

quarter of lots there. Bought the thanks. in Hey, right records

of extra were drove sensor what business any of on In looking what came kind color the roadway the that terms nicely in for, I there? we above demand guess,

Joe Bergera

a Joe; crack take Yes, I'll at this is that.

I think things. were there a couple

think of setting pedestrian years family, is sophisticated First eight now we've which radar the also vantage added introduced, new market. capabilities about introduction detection, the very talking standard which classification couple certain enhanced of object in last of really all, a generation over quarters our actually sensor the that we the algorithms, detection, product we've we've including actually over the to last been

a so the to of we growth due the simply introduced, we've are don't competitors the enhancements just taking of industry we any performance Due of capable these And big market we share. we're is move continue just piece think fact fact to the which the bar in our that matching. believe to that with that

like I agencies So due some has superior And do in of at to certain a reduction of lining, activities on otherwise they that weekends we that's result, been to a or full areas, have perhaps big allowed product a believe also, would some want to pressure in do silver a respects has the a on put sort factor, while their as in the traffic. COVID-XX in in it's the tend we that have compete little areas geographic And of limited severe performing performance. taking sure been in which a bit to we're accelerate share. that that some folks night, understand for in seen we traffic. the lot transparency, market just that make has just there of market,

just that additional point the some expect think, to which we that significant superior pulling can - extend is some further you market. silver product in features, there to that next want sales first forward. in So little most we performance. contributed effectively I the the and introduce has we'll But is continue even that platform, which and performance our factor think deals bit, some And is technology made, lining, to go lead I generation has will back to the been a there by

Mike Latimore

ClearMobility quarter. on sense. the that use you're it, bit? service Can to solved? with you be a cloud elaborate in launching Got customer a you the being just a Joe entity? What's third make the mentioned going What's that case little problem

Joe Bergera

going Platform, allow our our we're talking to provide people the for effortlessly from software and customer specific is that just understand better another so the one talk And Cloud. to that our and create basis time to that But also lake competitive one who we're and and our things as more those this is explain integrate in ClearMobility of the I'll allowing existing reasons together ways to easily just of various between easily one But allows reminder, unique that to we right then going to products capabilities with a about solutions and what to our years, services of reasons, the try which consume we're not service to number agencies trying Platform to sensors more ClearMobility difference our continue market for to bundled more to applications provide Yes, But ClearMobility now. of with spend do a the economic briefly a data. cloud us we've with because data that about help the we're to and is products platform to these That's on is data to in sets. lot new our set products our for includes it the services provide are solution existing had APIs a our us customers. services investors

more ClearMobility about So this next to call. And customer on about enabled information to by our go is new have this in that that operation in that anyway live with going a we'll be that talking Cloud service what we're respect quarter. providing particular customers we're is

Mike Latimore

one; a highlighted macro headwinds maybe last just just some COVID from bit. you And little

Or more the and IT just budgets record quarter, Is on kind influence and of negative projects in accessing right a COVID. people of you're the but resources the is influence right terms amount seeing, quarter from to said you that of great it resources done? Although and more state local available? get but it essentially on

Joe Bergera

both. it's say would I Yes,

the I of some think than second. of miscommunication in kind we've and probably the more quarter people first dislocation

operating I think gotten agencies in that have new at this mode. generally, our better observation is that

there understand been what what their say we There So perform saw we was classified high kind general point, under evaporate. in at revenue a in as a to some slow lot to we communication program of some to less resources this lot pressure have its But essential of seen from Because in they access is are going first activities to the to the we than look some seen put highest of are like people probably to I going ensure preserve XXxX certain priority, instances, certain budget lack forward, that we their to priorities. we've transportation and of that impact just saying or infrastructure. a quarter. activities. because down therefore, that budget to that of operation in standing, order trying is that on think will agencies better haven't pause are

process, again, seen perform some being there down. this we so we've seen little been activities of We've very canceled. agencies have And things slowed outright while go that of kind through been have that

Operator

Osha Our next Securities with question comes JMP from Joseph

Joseph Osha

there. just that again. ask asked, My so Hi, the question was compliments on I won't first quarter. And

OpEx it Are $XX.X Second of level sustainable? level for Can going operating kind the And to growing? of at quarters that about think one running on My see that Is spending at we two number seem about move of P&L. now basically to forward? the up? that OpEx going compliments be sort we million. you enterprise

Doug Groves

much I efforts comments, we're Doug. the cost think I I working I little around flows. company. and proposal sales focused It'll that and Joe, alluded the reasonable as a upon think It marketing range. fluctuates, on is probably if, we're basis though, say a extremely managing and assumption. bit. this how of mean to reasonable that's on, a move But depending ebbs But that in our we've and would that's

Joseph Osha

is a there kind least a target intermediate at for want there might that this of is wanted, the now target got where operating of term, with model business to you've you kind share Okay, a us? you

Doug Groves

have They're that. question. we do around good And thoughts some

as OpEx line, in here grow in line P&L. will that million that range, think create in I endgame top $XX alluded the past the $XX that in leverage to the to to is and million keeping we've the which

and said, post expand things up in leverage be line, term our we're goal that the in As Joe pandemic, near see only but to the going think quarter-to-quarter, to on use margins the here, top operating we'll would volume the we pick

Joseph Osha

Okay, now from mundane shift far the great. gears And I'm going out. to to the

two So is I Joe have questions. laughing. I guess

a nice you that question. it. think Those that your extent in to impact are aggregate of has the and got The the of of To kind API do on of the talked far predictive analytics about. things sitting there how the out, second XG set? data I'm some be tools might potential of data a you've question, and been been that ability sitting is talking that first enough additional relates front deployment you've wondering of platform. for to my then could the some to that other platform the And And you've with which demonstrations lot. you or I've really acquire do of place fortunate to see what top

Joe Bergera

talked deployed vehicle data not improve visibility provides specifically, collecting, congestion, we have automotive to those one is or about And we to we're please a think the valuable collect think at information a integration; of important reduce crack potentially because we that actually And of public some take a have unique first I that environmental safety, in lot insights of infrastructure I'll in. today you understanding, OEMs. environmental a efficiently. We've that. Doug, a And, of or the where infrastructure. lot we Yes, actually, to but position or XG. about the really of that traveling that to place lot feel challenges we really we to if all, think the themselves, we're agencies, we're to we're want the But, ways excited just regarding are free chime getting in contextual have that's yes, data valuable

it cost the that do more question will our the And is data, the adoption just set I first broadly data so predictive it is that And we our huge analytics then and is think to to will second your data. come provide to yield step was that insights, to opportunity available, predictive one information that access then absolutely. and talking against is the therefore able answer to for So about a to absolutely extent to to think we to to the that business? easy to access run analytics insights run and think that down, going analytics, more I second more it's thing easy or the the of And help get we're we And is, to valuable. be XG that about. that predictive there's be continues to apply data, that AI, XG the think then the And people

So think, see definitely start XG talk to the And actually we our yes, proceed think that that we that opportunity highly And doing us about predictive then area, things there's to secondly, in on more help. we to quarters. next analytics four will data. valuable an we're perform you'll as

Joseph Osha

by of sets if the asking got there's skill highly highly you've that of there's is Is something a this specialized guess think maker you predictable, a - internally, skill need there? kind analytics situation? this I'm - very you lot predictive sets Do that out this I

Joe Bergera

great that's a and Yes, question.

transportation. employees AI have that understand understanding in work think importantly, I that applied of we to AI a really And science, and do good but a and highly more So have really on understanding you it. said, obviously the application I monopoly in we're of lot have those we skilled actually going But good data think space, means traffic a interesting on intersection, being no points of to position this if a by from will. that and perspective that there's of

there And open. to that so And ensure to our of is ClearMobility potentially various also is could that be certainly and acquire with partner some that's strategy part Cloud our expertise, another to opportunities of people. cloud

- we're to to that. datasets And even parties we a that allow particular provide going they as solutions And the to our to position in want getting the datasets so on not simply the be value cases, to on in of for that'll under use chain, if analytics of be third perform part want do we predictive kinds develop necessarily better one be cases. well, various may top some of to certain

Joseph Osha

that by And sounds open, your clarify you're that, just, what that get previous like or mean? And insights whatever you to about by mean, you when where then vehicle opportunity those back then the it get yes, be out is field right. of XG, used. API to talked backhaul the you and open the so into can just it sort Is saying to point, it to is

Joe Bergera

that by longitudinal Yes, more get and can an for like be cloud that some in so the be might vehicle. to in some then some from infrastructure you're That'd the the do of sophisticated if efficiently kind deployed alert computer in purposes analysis to the information instances or and from device or you to the the it used that's against of onboard contextual device to the analysis scenario secondly, doing that. vehicle it of get form an

Operator

Shlisky Securities. comes question Mike from next Colliers with Our

Mike Shlisky

hopped issues entities had and transcripts. same the and I me go feel guys. ago I refer had Yet, some few been budgets concerns record budgets. are I a comment their we the too bookings, Is at are just backlog help in other? minutes to with Are the or facing time on concerns? your which the record revenues are free quarters of new Have Can us guess I directions one their kind of about record going here? headed just we gap back quarter. between think couple to from some continue out want afternoon, next you guess minutes I we to please few late; curious. the found not in a asked to of of questions that to have I'm the Good my bookings if answered, winning you - kind really? you the top against or coming And some line there the over the bridge customers? to grow on

Joe Bergera

it have really the Mike, Well, I over and to team. brief remarks to give I'll just turn some applaud Doug.

executing I a that period. think Iteris well difficult during incredibly really is

due that. I we're and its relative think proud team a of feel of that our day, execution. against performance performing And competition, And so am the the end the for basis, at on I to I really favorably is the

we'll including execute that's But the also dynamics at continue to factor. circumstances. are do whatnot. we major best that difficult other work, to And under So a can really there timing and

So, Doug, question? response to you additional on have anything do that in want you'd Mike's to elaborate

Doug Groves

sure. Well, no,

and quickly business at number do as think under the seasonally, out always is are third Just COVID-XX. to past for just the down And guiding ready too we're certain really changing fewer geographies. and it's our so like just because that I looking that workdays holidays, of think quarter, And are just is because that of we which quarter-to-quarter not why that to do, of weather mentioned quarter-to-quarter. we're things looking something I we because had past, far

from with be seen more. But the they in things the there haven't other significant. are six environment. macro happens of play some couldn't what be that's to the say But upon pandemic, case, have slipped now We that not lot this been and right months orders to at depending and could a that that

Mike Shlisky

favorable your Okay, in any of away not local all election I'm last time business? Did any touch results still air, curious, president, which of moving those a also night, other issues some for Can are the unfavorable right. state is were day? the on that but up or we as elections? the just either of

Joe Bergera

Mike, and Yes, say impact we level. didn't that state I at local any the see would

they whether that of a something a of which and asked us discussion investors we about people infrastructure bill, federal an also but One the can people still about stimulus. a is were be there years about will ourselves that the also lot it talking they've infrastructure lot now have it, necessary added four are provide talking to bill that think ago, is things about

that the some for infrastructure there's bill. plus of rationale initial additional kind rationale there's So

infrastructure size than to of administration think think And administration Biden occurring, that and the potential I think are I Given everyone, Senate. quite situation, going is that scenario it's so a presidency, likelihood or the under Republicans some probably under the could is would where that the be which We for be Biden Joe the the of very a will bill. to there but form an like we larger clear I would of Trump current such a there retain guess murky bill think win a but

And so gridlock. of could portend that some degree

with that feel pretty look Biden like. So what administration proceed an know we infrastructure confident while don't some of will would initiative. We form that

about that's we're operate but far at That's point, change so today. didn't mark. question would the which the this we state as and see - that that's what landscape And outcomes as wandering election really local that anything we in

Mike Shlisky

M&A in market Can job, I'm touch doing as course you excess cash on to but that, you Okay. of great a as should the the size curious, maybe close that the And soon use Anything build It's about the got a of timeframe that at or And well? deals have pipeline? any on we something on here. Albeck interesting to Germen we least. be how thinking be larger here? might

Joe Bergera

it. on name Doug's got that think I

Doug Groves

Sure. Yes.

range small, that like the there yet. we'd of have size wouldn't integration looking an in sizes the evolution we that continue I all active we're and size I in things size but shapes that of And Albeck that and risk pipeline. for are the And nature in that imminent, And terms is to are say we're on there typically. what But our at So, several Mike, they we in mean look at are relatively where that's Germen yes, bolt-on front, something at. they're was, opportunities. we of M&A

look And the we're that do to So we fortunately, you to targets that. checks those sheet all you boxes, have of the like And that. of just, balance find before to a lot got kinds do things. one it's at and continuing we've

move we find we have the the if could like that we it really with quickly balance could sheet. cash So something, we on we on

Mike Shlisky

gets Okay, for with maybe back? for the to like Pacific opportunity last had share new Phoenix details there business one one of that me, Is and new Islands. I the a that's and you It ask about going what's about Can kind Pacific you months with kind a share any a Pacific that's work, the sounds for you of you agreement? geography to there? there's large one if a wanted agreement few how

Joe Bergera

representing were Yes, which is Florida, infrastructure the on there, have like Islands integrators to actually we and enormous But market one time they time us smart markets, area. US. but are distribution had have view that extremely in that that we leading representing an if by said, for or an that smart And insignificant. not that isn't which distributors, that Pacific some never leading, pleased the we Phoenix, so our market; the being in it's broadly equipment. it's mobility were any actively we for from resellers And There of the three or mobility interest not in approached traffic had pleased, not the product in us California, we've not Texas in in largest markets focused region.

the California to as distribution agreements And or not it's we're in far time, would as be the of other deal they're to going And what to of it that throughout we the not that only we have actually to margins not particulars agreement, the it so but over exclusive it world. solution representing where be around Texas And insignificant. we that size to of agreements geography. isn't But the But into expect we structure market, is our to have. that additive entered similar again, any we the going disclose expect North in it's be this that like, an is have detection they're America the with that distributors the and the like revenue.

Operator

with Sigdahl question comes Craig-Hallum Ryan Group. next from Our

Unidentified Analyst

Matt actually on our questions. Hey, guys, thanks for this taking is for Wagner Ryan,

maybe looking I and just the of think I of near-term puts color quarter, the opportunity third color, little but on touched after. for going the kind you're of market guys a fiscal was lot extra on take you a the

$X.X each a just presentation, infrastructure within within touch you're on about consulting, third of to key at focused? opportunity. or in you're just the wanted at kind that where recurring, feel pillar. talked think drivers I you most each you where operations are of of those mobility billion, And to on pillars, A ask recent or from just you to kind sensors guys where of just smart

Joe Bergera

manage categories. that drivers sensitive bit well, a to a have that know But congestion, traffic improve time And purchase I we that generally, of unfortunately, are that fact driving would what's that, is each. say little participate they I as am for the the here. to dynamic different is are great because question, like lot are in that a customers you I our better Yes, and making And to striving market complicated, safety. different decisions

of that geographic end day, of it's manage and quality to, of area, the metrics, the in life the kind to those in response expectations citizens largely that right. to at the trying are so they're of And

like, And so there's like of of some degree sort to of pressure kinds things. political for those solve

functioning, their it's to a of and these And area. motivations, or the to attract infrastructure have some lot it kind considered is of various political having health but economic network does that business regions. a a of aspect competing of to economic these high retain motivation, new One business essential is regions it the to are transportation

but they're these that, them level if beyond you take local of Department, kind agency, also maximize of budget. the their can level outcomes like as And of it's think within to a next most of in just quality of terms to a specific So, or down basic it you on trying then, Works Public well. like the are economic measures, again, certain life

or output. they believe increase our activities software being of their investments, some detection certain in devices, or even it their help could capital expense to in our their perform advanced able by outsourcing their manage And they we improving also them times better so form operation, lot be return operating see times capabilities, they get us their using so operating they to in more better our the a help of them longer-term of planning, to but on or their because operation, cases, lot reduce A efficiently. can

us drive helping So factors a that the at certain quality regional it productivity. there with view then economic agency as at are and purchase of the of decisions. day, the they life, them their would of lot individual And department do level, end to has improve

Unidentified Analyst

helpful. that's Great,

ago. it is feel a you just Just to to interest and years quickly think five to the in it roadways like versus of infrastructure about that, like the that feels sensible if was kind desire generate five to area? like attract intersection business business a years you on there just it today, ago have modernize greater said, and Or modernized does retain

So over just landscape in changed the few how has interested just the last years?

Joe Bergera

remarks building roadway Yes, talk I about infrastructure. to is trying I have that was focused think back to the in my right, prepared it physical goes we've the on for what seen decades, agencies

continue infrastructure so most out largely the And into pick of they'll people and a and roadway projects, shovel been in think even I and to there's realize areas, maintenance built major of a lot the out. of physical investment build be that's that new infrastructure. lot is gone some physical But

infrastructure? what turning becomes increasingly you improve more to get you the like, areas safety And then the answer congested? do so technology. to the question throughput that can And in are these do What people physical can are better that is across that that to

large a degree starting of the kind those But of OEMs, adoption - promise the of lens on through to that's even going then looking agencies to are in integration. vehicles; changing automated large vehicle just connected communication that people adoption XXX% additionally, infrastructure you've of providers So to see interested parties getting automotive And orientation at the the vehicles. of it strictly got agency. dependent of you're in, be is other models are service and to

like at ago. existed, these it got political transportation force budget allocation. the that But didn't changing the works other orientation are of play a years an the five also also you've that public now department, force so stakeholders hasn't agency And economic exist and there's major

the at are phenomenon we two accelerating we see go kind as that those it same So occurring of time, and forward.

Unidentified Analyst

intersection with have to kind you in level? then - you preliminary just up the one, kind that, related any I'll Got queue. Have kind automotive business follow with as anyone a to Last the discussions had of of in OEMs conversations any that or suppliers at back hop been you. and of realm

Joe Bergera

more what that the Yes, that six able months, I entail be we sometime have. about And to talk expect. we'll could would I in would next expect

Operator

sessions. concludes it further I'll covering back Q&A for This Iteris the analysts turn our to Q&A. management

Joe Bergera

appreciate respond some of allocate submitted right, committed investors We Alex investors Q&A to were portion I had by the that All questions great, it. to to advance. try to in

received. to up what process states revenue? Florida infrastructure outlined and some are try states, you're Virginia, X% such activities that question, in more a I if answered the And two expand to to everyone We've budget than to one that tell focus that what states just wanted couple came of on And represent your not they additional Texas, management. on mobility to our I in of when analyst smart you development that a take an We But more was, due ago, receive that already amount specific or California, your plans investor notice to. tended are we've those X% to that on did of respond submit was we've us into dedicate a revenue. response so question questions. them to reach our annual in the release already to to market that press four are make And weeks minutes your know total that list? so currently issued response couple, from call, the didn't in question case And states we our the want of this, questions there to to we

those national large a And acquisition and would the Illinois, market been states see generally for we smart Other basis, has markets, such mobility represent as a did looking efforts, infrastructure markets infrastructure. experience in experience to Now however, Texas. New markets like on an on York. organic Michigan, our successful about Albuquerque, develop various XX% opportunities those prefer mobility new entire include at expenditure combined mart of four we also with through new enter to would we're

there. to remember position it in build did opportunities enter large establish the that's those, you Some continue can And well that to of we the such other in two Again, our as may other at large geography look will that markets, Illinois a and ago. you as about of expect York. direct as presence years markets out New Michigan one

be her and are I call. more to I XX, Virtual say front, thoughtful Craig-Hallum Northland out So Virtual investor appreciate at couple November assistance. Capital with XXXX, the I Alpha the on questions relations think and on I for on Conference Technology so specifically everyone's AI upcoming to presenting time, X, that, Markets, and just anyway, the thank support and operator to of did this December going conferences, Select on wanted we're want the a we XXXX. Investor Conference that Safety IoT

everyone. participating on these in would again us. that enjoy of with look visit quarter you're you, with our to either the XXXX If report conferences, schedule to results. the Thank And please will forward we We meantime, you when today's continued you opportunity updating talk in our we with third call. progress a more. And conclude fiscal

Operator

Thank concludes you this participation. gentlemen, today's call. and for your Ladies

now may You disconnect.

Iteris (ITI) 4 Nov 202021 Q2 Earnings call transcript