ITI - Earnings call transcript Q1 2022

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Operator

Good day and welcome to the Iteris Fiscal First Quarter 2022 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

XXXX. thank Iteris' participating XXXX financial quarter June and call today's fiscal everyone, ended discuss to results XX, afternoon, you in for conference first Good for its

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

analysts. remarks sell-side the company's the we'll for open questions Following the from call covering

not investor Although, we the questions July for in instructions submit XXXX call release XX, company dated written the invited to investors receive we did our questions. to of in any press advance

risk today X-K, to statements. specifically refers SEC, which cause could any the recent Iteris forward-looking the Iteris continue, these make undertaking those we in company's time remind from the and or XX-Q today updates to from is to provide participants are differ a later regarding Before current the of statements materially documents valid. from be assume date results like we'd forward-looking obligation all on this events, should forms based not not time information will identify that still of and change important performance. to subject the an to that to of from to course company's results the no Company, the is XX-K, call company discussed substantially are factors during may differ are which the future future. contain forward-looking most in and what that comments and the the with future actual performance we Actual that future files statements guarantees may statements are at you that contained of one

to With of section at the of company's Joe in Investor over now turn Iteris', always, the www.iteris.com. find I'd call President and As Mr. today's Bergera. said, to CEO, call a Joe? like replay the website you'll webcast that Relations

Joe Bergera

afternoon to appreciate and Todd, all today. everyone. you joining Great. us Thank I you, good of

We on that And impose remind review time, announced believe would the the this commentary, an ongoing. is shareholders March our a that still Board I regular review. alternatives. everyone we on want that earnings begin our Iteris strategic this at X, disadvantage Before comprehensive to deadline initiated XXXX review artificial of to

share that eager are the I no material everyone now, right is know status. to updates While to understand there

I'll state play. color some So provide of on the

Our the external identify Board legal, to range other advisers and of been has alternatives assess position. highly a engaged Iteris' enhance company's with financial, to and strategic market value and

on This relevant to be marketplace and dynamic and the to our the we our and to opportunities you of trends technology us a assessment remarks. in don't meantime, and have very to capitalize prepared in participate in interesting with progress dynamics, independent we an more update say hope All have public ahead. conduct to to that as reinforced review what core environment, private constructive conclude we We'll and our near say unique beyond position included have the able In anything Iteris future. is market large founded in competencies, of a our competitive valuations. view and we has market work

financial the impact a everyone focused presentation questions On I events So and of separate we'd appreciate our that of keeping remind operational to results. today's our on will want note, two everyone performance.

Agriculture the segment and LLC we XXXX. May sale on DTN First, X, our completed of Weather Analytics to

periods remainder all discussing the for that our continuing I'll announcement, of results the reporting only we're segment this presented call. and discontinued earnings in such, be today's as As operations of for operations

platform-enabled development the we reorganized ecosystem, of Second Iteris to branded which our on Iteris X, the platform. April accelerate ClearMobility XXXX, we

organization and technologies supported contribution, and support responsible service all and revenue mobility sales, these new new solutions and create for shared of recurring changes applications Our various teams includes our cloud teams, are solutions, which development Officer believe efficiencies, Chief organization increase will three and product the a marketing sensor of by all reporting delivery strategy. Technology activities. let's of our consulting We With single delivery we'll activities platform. Due our business for the product reporting results prior discuss new organized XX, ending be to as reflects structure, for around June this our XXXX. segment platform-enabled which a we've the – execution that that the unified period accelerate a background, results single advanced

our discuss is with which solid total record year-over-year. notable was Iteris XX% quarter, bookings, bookings of XXXX. our year So $XX.X to company's result detail. recorded record first $XX.X across or had in time, virtually or In net first In minutes revenue backlog in record million more only million bookings Due quarter first the fiscal ending and year, reflect results recurring of start a recorded About That's commercial net after record a total in the the $XX.X About company. net we record or few of total period $X.X results ended million, of which business. products representing as those total I'll XX% product financial XX% to backlog lines $XX in XX, total business, XX% service color The company our on total year-over-year all lines reported our the of Doug of recurring all, revenue ending the service a net of revenue, new our million. The fiscal an the annual take with be and increase. record period, solid performance increase operational of annual for bookings, revenue. of as we also future bookings provide June and secured record will to interest revenue. will some a particularly performance of million

first. of business, So our lines product let's review

third-party is deploy with Our words, develop composed those as products In we for two, we that market. product and manufacturer; original often products other we of our operate we own and components. is revenue distribute, two and One products integrate equipment which products. the

products, increase. million or quarter prior the a the quarter of fiscal represented XXXX about represented year-over-year balance in year first million of our total versus product representing Iteris fiscal $XX.X or same of period, sales the Our million XX% was $XX about product first $X.X of XX% products revenue. revenue. XXXX million And sales product revenue third-party $XX.X The

experienced share balance and the of to quarters Central one, put to first enhancing sales two, quarter product regions, opinion fiscal to for factors: sales product regions. two Therefore, excellent we sales over where product expect drive which innovation several which strong across effort execution, continue gains with and in For the to the these our we XXXX; Eastern the in The last America. in lot we position in we've performance the particularly market a historically first strong performance And product that due to under-penetrated portfolio performance other period, our relative our we'd across was exceptionally into our continuous of product sales North pleased to regions been enables our extend for we In quarter to operate the standards first industry. result. our both product lead. to continued quarter us continue set we're

enables participant as infrastructure-to-vehicle Some California connectivity Florida. and This connected Spectra-connected deploying highly valuable that innovations new we vehicle include: communications it Cloud. cellular us of quarter Iteris IXV capture both establishes vehicle and product first IXV ClearMobility or began notable the credible data regions is highly communications milestone enable DSRC proprietary and devices first, hundreds of ingest CV an our this to a product validated across or Spectra via of dynamic our in in new important also and because extremely category and

address Cloud Spectra we to cases. our devices both began pilots of new applications connected CV and vehicle Second, critical of various a ClearMobility safety use that leverage number

to in over new created detection product began mark the performance video new as feet Third, Iteris sizable further provides a as we completed radar-based reinforces bearer deploy exposure we up the + the product Iteris innovations which VantageRadius high-definition market, Among next-generation a we in Fourth, fire our – and that category. VantageRadius forward led have detection is is official and to +. offers radar with we radar, decade. for highway which as to have branded well which launch of XD new standard VantageRadius XXX other a

to us traffic data publish this Additionally, proprietary and granular ClearMobility to highly further positions monetization. capture Cloud for flow highway

of business. two our discuss lines forms service revenue. let's Now of service We recognized

recurring associated our service project-based and from managed First, from that services with our second revenue, our a solutions activities. revenue as consulting software annual and activities; is

the XXXX first our fiscal Our prior year increase. of million in was our representing project-based, versus revenue revenue. services same services XX% period, About an of quarter XX% year-over-year million services was $XX.X million annual whereas revenue or or was $XX.X XX% about $X.X recurring revenue million $X.X

contribution work deploying. continue a deliberately that We to annual of revenue. of very increase we're tactics are to the number There recurring

developing third, bundling managed and and as platform to offers and both our innovative leverage second, support focused on and data a of solutions of increasing solutions; business platform of agencies service into portfolio infrastructure. our new adoption whose models emerging service commercial family a SaaS fourth, solutions; we're depend consulting public that our services needs rate multi-year projects; First, evolving of our SaaS commercializing ClearMobility that entities, our mobility cloud-enabled the SaaS on address as platform a

we're quarter revenue Given annual strategic recurring a first time. revenue, our the our with annual key focus to on delighted point exceeding revenue recurring first project-based in inflection the for have achieved

pipeline size As first our both the total and revenue. for increase quarter, now the XXXX of our In ARR saw mentioned services. of an earlier, fiscal new we represents sales XX% enterprise in velocity

quarter, $XX.X in reduction revenue length of required will executed million execution. as We between service Iteris a hand annual first also services in recognized record metric And we're future award a contract periods. in which In booking. order a because to have modest award for time of recorded to contract the recurring in is we and important really a seem be as task fully experience the contract or this net a to XX% bookings,

flow vehicle application orders sorry, Some SaaS-based of first and contract Area planning managed services SaaS-based to Francisco incident media total a intelligence a software mobility task include American million orders we I'm services vehicle systems data – automated the provide task bookings total commercial Bay in company, as North million seven-figure as Approximately the total connected standards brand Commission. San Metropolitan service About that and related notable and million operations advanced task to $XXX,XXX for extension $X.X platform some data $X services orders development. with first for our in contract orders in of a information over and a extension approximately $X.X our task for $XXX,XXX ClearGuide, to traveler ClearRoute. quarter traffic Transportation for the notable a

and over the So to our that XXXX, Doug. against turn to I'll with execution overall, demonstrated as we our And great strong sales progress strategy. measurable call platform-based had business a by start fiscal year

Doug Groves

Thank you, Joe. everyone. Good afternoon,

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

reminder further improving continue performance EBITDA business a margins, topline certain we're reporting in Joe As noted, seen the first the results quarter the trends Consistent including growth, increasing reporting in improving to several quarters' our single results, last operating a segment. in key metrics, now the backlog. and as year-over-year income and favorable with with improve, we've of

Now, to same $XX million I'll first results. revenue move increased of ago. first XXXX Total $XX.X year fiscal quarter, quarter in the details the the a on compared XX% the quarter to to for million

XX.X%, Our gross from XXX basis to year. quarter the the compared last same margins quarter improved to in XX.X% first points

last with to to introduced, to compared by last XX.X% mix. year. several to $XX.X in above-market sets grew market product growth year, of and XX% rates. the improved manufacturing driven revenues product quarter and seeing Product feature is new same higher penetration that recently The Turning products our million quarter compared million, which driving same from gross good our We're were margins mix. were the volumes revenue XX% $XX

grew compared Our revenues million annual same million services line, quarter. to in year. in compared we In XX% service year gross had the revenues the XX% to $XX.X to quarter $XX.X last XX% prior our in recurring

higher managed project-related from XX% As $XX.X same a Operating the This the XX.X% XXXX. software million, in as to the a was compared reminder, revenues. a annual fiscal of $XX.X services improved acquisition prior of of same in to compared our revenues to recurring expenses quarter year. result XXX Service comprised quarter, points third are last due of quarter year annual revenues. were margins, the the percentage year first million revenues quarter versus our recurring to basis and gross TrafficCast in

GAAP $XXX,XXX of the per first or with EBITDA for expect and first to EBITDA income first the we XX% year. quarter year-over-year the continue current last diluted a basis diluted fiscal X.X% focused was share, This quarter a continuing in a margins. sequential year. fiscal flat The on the was to last to on or $XXX,XXX share year-over-year the income revenue, $XXX,XXX improve year. million a per year GAAP and year of with $XXX,XXX, of the in of our revenue compared income quarter net income continue to operating of same We ago. was improvement quarter quarter from of with fourth in in be operating quarter However, reported operations as management of a an or expense to in XX% was X.X% revenue which improvement basis. EBITDA margins operating compares of this in X% margin we a million as XXXX or percentage was compared the $X.X on $X.XX quarter the the be net Adjusted GAAP percentage to first operating rigorous revenue $X.X X% $X.XX in range This

resources, investments at was of won were management. million which the in to spent year-over-year. this focus end $X.X first software in go expect a liquidity the and related we is capital second million result in million $XXX,XXX and The large $X.X that cash $XX.X to capitalized profitability and we of several increase expenditures Turning quarter. short-term new working We SaaS quarter, increase capital to and a in the a was software of the capital continued on The capitalized increasing ago production into costs quarters half total year. and up year-over-year project

build this new As we solutions. will to investment new win SaaS business, software continue require to

amount vary from quarter-to-quarter. this So will

However, business the year our X% that of be asset-light we total will about revenue, expect do full investments for reflecting these model.

So end this call capital With as back solid the forward. guidance we structure raised growing margins, we're improve to record million revenue recurring why to $XX.X to focused us from With report first $XXX quarter go of the Joe? We I'll cost the well of and on our working of million, the positions in and fiscal that, while year our for pleased summary, bottom backlog another is which of annual turn performance. remainder XXXX, million. vigorously business revenue, $XXX over our remain we to quarter managing Joe.

Joe Bergera

Doug. models sector, of you, well smart Great. effects market The dynamic trends, infrastructure the favorable new risk-averse forms Thank once mobility. processes, critically by mobility as Various of a business stodgy transportation are external commercial on agencies infrastructure. re-imagine and entities, to internal with interactions events characterized emerging as are mobility network secular from is dependent who challenging sometimes and their inter-agency introduction collaboration

collective only of task platform-enabled All the problem through that solved enormous this represents can be and an a action ecosystem.

With combination platform, the solutions. to ecosystem of strategy, platform-enabled a has position what Iteris partners entities, opportunity. a And the fragmented market platform public is in of ClearMobility industry, a to strong increase Iteris' been our their platform. core unique our our with integrate into particularly competencies market this we've seen ecosystem and in variety is highly an of foundation significant variety access in and capitalize which business agencies commercial this the integrating is with number already of on of acquisition highly, seeking the with by are adopted already and platform-enabled TrafficCast,

we look platform both As mobility significant value. society into will believe, we evolve a infrastructure shareholder Iteris and long-term ahead, benefit digital create critical that

key balance focused the the remain particularly on XXXX, of following For initiatives. FY we'll

adjacent and data adoption VantageRadius expands detection for market additional our of platform. penetrate the our both system drive TAM First, + highway sets our we'll next-generation and for produces the radar ClearMobility the that sensors

our first that data video will product level further our rich ClearMobility next-generation will our for the real-time, new revenue. detection platform enable artificial capability in and video our algorithms applications performance, classification. deep will release sets integrated industry's high-definition various intelligence differentiate This growth to annual XXXXP we'll object contribute and provide system drive Second, that recurring

develop to cloud-enabled of introduction and continue new through planned our services. we'll Third, managed enhancements both portfolio commercialize the and of services

including service data extremely recurring into new critical ClearMobility systems but a and/or as data important of continue our both a Fourth, Our revenue agency new cloud-enabled annual generate fifth, integrating vehicle platform data only the introduce connected partner services and are they solutions have release ecosystem. ClearMobility new because offers managed ecosystem connected And benefit as we'll not sets partnerships to platform. and new the engagement with products we'll through monetize of with vehicle Continental our further monetize Cisco. partners our our drive and develop existing to such secondary

raising XX% competitive to bookings current anticipate release contracts. low we Our of continue significant we're we record especially we're differentiation growth the fluctuate quarter our fiscal to may quarter, begin Based we more demand bottom At XXXX even midpoint range. which is is overall limiting total pursue supply of pipeline sales attainment. given of the the this XX% planned should innovation than year expand and end factor $XXX year XXXX, at new guidance. as would existing to million market. time, any full high the as second results in bookings constraints primary levels continue supply noted, the for chain the multi-million backlog, end solid The markets as chain revenue expect well year improve historic our addressable our anticipated as range at on constraints Doug where represent would revenue our be full million total the to $XXX as we our the rather and Therefore of end and at raising technology -- growth in fiscal though dollar already

of total we full annual expect fall In the to of revenue. of a to XX% and year-over-year addition to solid total increase contribution revenue within the growth recurring also revenue for XX% year, range

such acquisitions unable revenue partnerships mix which transformational not these as a pursuing and and strategic upside do recurring because we're we initiatives any to include of potential of from revenue As the total timing specific reminder, predict annual are initiatives. estimates our

fiscal and the year increase adjusted significant We XXXX produce a to we higher In the to year-over-year first a fiscal should fiscal our in the in revenue in full saw net concentration for service as year. relative profit full in continue our anticipate quarter. due and as and turn, gross EBITDA scale improvements the this to sensor XXXX both the improvement income year prior of margin software operating

that, with questions comments. and be to respond to So, your we'd Operator? delighted

Operator

Thank you. from Capital Group. Sigdahl Instructions] First Ryan [Operator question Craig-Hallum comes from

Ryan Sigdahl

my taking for Thanks guys. afternoon questions. Good

Joe Bergera

Hi Ryan.

Ryan Sigdahl

little bit impact If variant? a projects then on relative well delayed but I currently you some elaborate on -- reopening to Delta and it you're the as had some know previously COVID maybe could the of on of the indications Joe as what are what these thinking agencies any seeing

Joe Bergera

a it’s question. great Yes,

a work still to lot of on these So, of require business and concerns lot there less. we things about And At forward. that. wet uncertainty a there concerns significant perform And there's well. processes is few agency felt point order point, the had a at any stimulus signatures push certain with federal instances, respect at some a substantially Delta -- disruption agency so to could there agencies business with to these as have that calls, we've because and parts that through in budgets. are this concern backstop to levels. the -- of human now prior funding to be is we when are couple the In least they need that obviously business quarters internal There's aspect some certain a this personnel to our in further we there our programs like variant don't in site. But

to we account guidance We've be disruption that could tried for actually there So, the provided. still. in that some

optimistic so fairly the balance don't And about that XXXX. our things we're feeling of assuming fiscal erode

Ryan Sigdahl

little highway on offerings you've the can monitoring? that just moving adjacent Then bit make over to traffic SaaS can had plus, the how and just a VantageRadius the intersection translate that et cetera but you highway sensors elaborate monitoring Great. sense, into traffic

Joe Bergera

sure. Yes

again at past when detection market, at products, detection intersection. for the detection as a broad intersection of hybrid radar of have to deployed got very And our But is only the So, we've on talked been and the detection, which Wi-Fi just portfolio the Bluetooth video addressable intersection. include been both products. our about reminder market historically products radar a detection only which we've exclusively combination a we've the and everybody video focused products in again deployed and they've

is we're million addressable highway market across the to we've road enhancements now $XXX to been deploy a in that any other $XXX market alone. With segments. way. sizable able probably across we've locations them intersection estimated the making certain infrastructure market products our million That's at including detection fairly the previously There products for somewhere the addressed detection not highway radar in a and US between is

from the deployed we're of It's the purposes. help radar recently have entered our country. California are use off-ramps. detection and and deployments in another, a We've particular that. we this to traffic the enforcement VantageRadius of be for now across concern agencies is so understand segment of speed similar product volume not and one movement And on-ramp that's to the pursuing To form traffic area of clear, an

While high-level that ourselves, which traffic to of can across segments. not get probe there's they speed the we level probe movement data. the larger provide which are need to basic fidelity Agencies data, able from and visibility use

able that which of your sensors on to collect augment traffic Ryan? probe data, the answer insights from radar Does And so these provides relied they're movement. they've question, detection aggregated the visibility to historically more

Ryan Sigdahl

Yeah. I'll queue. in hop Absolutely. back guys. Good luck the

Joe Bergera

Thank you.

Doug Groves

Thanks.

Operator

Our Mike question [Operator Latimore from next comes Capital. Instructions] Northland with

Unidentified Analyst

tell on TrafficCast of Mike me the you XQ? Hi. how revenue much This Aditya is Latimore. to Could in contribute behalf did

Joe Bergera

to The million. TrafficCast the about $X.X in was quarter revenue contribution first

Unidentified Analyst

the gross constraints? on $X.X XXXX? could chain add chain some outlook constraints FY Like revenue and supply the you All margin see the for color the right. impact how much million. also, And supply do on from you

Doug Groves

you to take Sure. that? Joe, like me would

Joe Bergera

Go ahead. please. Yeah,

Doug Groves

Yeah. Sure.

chain still components use our very but chip increasing products. very, tight any we're for we're electronics certain in look using we that been their other still the is business global that just finding So like ahead, detection buying shortage in the impacted probably radar that's supply times, our base, products. supply We've lead by diversifying

cautious year revenue not end we high being the we're hence it's reason So that the for look out the and raising guidance. as full of our

the at quarters, I to buy a we're increase there be in protect not through There this working buy companies. slight as be in bigger own. expecting to not the but lot manage we're but holding say now think coming I clarity, for we could capital will and be would in more lots our difficult significant time for least continue that situation revenue, ahead to at a point we what's a of very as

Unidentified Analyst

Okay. Thank you.

Operator

[Operator at no the questions Instructions] are There in queue this time.

Joe Bergera

right. All

So going question-and-answer session conclude then. our I assume to that's

So appreciate that. thank support. operator you, us for with helping We everybody's

from On Davidson Institutional front, X XXXX Investor Technology Internet Oppenheimer XXth and to Relations Investor X. Conference at the August everybody at at Annual occur September D.A. that the XXth & Conference presenting Colliers I be XX. also on be We'll through Annual the and wanted Internet will Communications know conferences of Both Software we'll the those August Conference.

be see be will to and would even you though virtually. may conferences these only we there of All it love virtual

conclude in of our that, to talk today's we'll these progress XXXX on our fiscal report participating And updating you. you're call. please look a with presentation schedule to In second love meantime, quarter to We'd attend when us. if conferences, you with the to visit again So forward we any continued and/or we please our results. plan

thank So you.

Operator

and you. gentlemen. today's This teleconference. Thank Ladies concludes

now may disconnect. You

Iteris (ITI) 8 Aug 212022 Q1 Earnings call transcript