- Earnings call transcript Q2 2023

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Operator

Good day and welcome to the Iteris Fiscal Second Quarter 2023 Financial Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to Todd Kehrli of MKR Investor Relations, please go ahead.

Todd Kehrli

Good afternoon everyone and thank you for participating in today's conference call to discuss Iteris's financial results for its fiscal 2023 second quarter ended September 30, 2022.

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

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

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

As of on webcast the always, you replay section will call the company's www.iteris.com. Investors find of today's website at

Iteris's, CEO, Mr. and over Joe President like go I'd to Now, Joe, ahead. turn the call to Bergera.

Joseph Bergera

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

to demand our quarter, the as chain backlog. increase improvement This of million, progress services, mitigation XX% $XX.X our quarterly sensor fiscal strong well that year-over-year. XXXX to revenue for supply second due was Vantage of representing helped For unlock reported Iteris program and as total our record the or products growth an the

to both This our balance inventory sensors, program reduced to and quarter flush unshipped we P&L. the able goods second of we a in us to fiscal supply cost Vantage meet management commitments in to in high enabled backlog from chain extraordinary to resulted of items increase record our the Because number sold were $XXX,XXX. cost XXXX our quarter. second our continue reference, through an customer ship sheet Vantage For the

inventory quarter, million, period. net However, will remains Despite net broader we in forward. total to prior XX% a our customer improve representing our platform positive. a position increase adoption reports increase a month reported going In it representing the year of period. of same our second XX% the million, very bookings total This economy, ClearMobility $XXX.X of $XX.X trailing the relative to bookings a the compared XX prior same to brings record slowdown

funds in reminder, IIJA month Act XX and Infrastructure or our figure of IIJA. the to us formula include grant local entities the does flow front As through either trailing large Jobs not a bookings Investment opportunity or with will funding.

US specific just first state up With XXXX show into is in issued transportation date. funding, and to IIJA DOT after which X, in state funding and from grant beginning Formula for went law has to respect to fiscal intelligent budget year effect, the October not funding any most entities. the local grant systems is local the

pricing applications, other UST in those submitted Safe grant the and various state from awarded grants, and of we've calendar have even their for not time, for be local applications. cities will wave X will with this start included Safe At preparation early dedicated grant be to Initiative. Iteris next which year first All to we Streets The involved were though all and entities of applications grant Streets

designated backlog of ending September the ended record basis. and or for total representing a $XXX.X applications a of revolutionized in which X% Due smart strong total we sustained sequential on the are for with grants, increase bookings, increase wave Additionally to to net transportation program. mobility period work a we're submit million, beginning strength XX customers the to year-over-year XX% second a and with

representing supply after Otherwise, constraints. firm about product in The been the or million of increase same XXX,XXX orders. from contracts due of slipped the a second higher value a have varies product $XX.X customer total As always, year year-over-year out which even backlog total quarter million, increased to shipments net relative the reported on and our total quarter-to-quarter revenue ending XXX% backlog. XXXX averages for chain would of figures XXX,XXX the historical products customer bookings to ending Fiscal XX% reflect basis quarter, our revenue $XX.X revenue quarter prior to period. XX% global

X, that underlying XXXX, to revenue meaning second price primary the contributed estimated revenue, an quarter January Vantage X% unit increase product product growth. sensor of to Our was driver demand X%

intelligence new introduction Streets portfolio sensors, and extended quarter, we to continues performance safety primarily Safe features that capabilities Vantage sensor our all share market performance. important for take sensors second Our and our superior large with do priorities to performance, product sensor, across of artificial In we Connected our to address due for sensor the the Apex release win fixed for prototype enhancements to Sensor on the focus of year of to next virtually new the will Vehicle detection lead continue cellular Connected Vehicle intend relentless every Because sensor initiative competitive prototype, release time our we country. completion VXX calendar resource Sensor product or new of XXXX. market travel a in to

the the FRAME FRAME selected initiatives. sensors Sensors were to of our Advanced International program Department and announcement Radar at John mobility I-X Connected following corridor a Counties connecting the cellular of VXX radar radius and certified detection recently section XX York the along Highway the support For Connected State. And sensors use Hartford support in transportation Berlin sensors State Irvine, example, was initial analytics in highway of detection of Connecticut. the (FDOT) City our for and Airport Turnpike F. radar District State Video and (FDOT) for in or Elements Vehicle large sensor detection Regional US program smart the intersection video Haven for follows the across Florida California, in Kennedy X. recent radar detection District for Florida Hybrid of video for the New California. and Transportations in deployment collection Vehicle Sensors to hybrid Mobility sensors which X. across New that a or

portfolio our detection categories. During last discussed X intersection Day, our address the we for adjacent to Investor our total addressable by the to market intent product sensors enhancing expand

highway validate I-X our the Highway addressable product and expand strategy total XX our of the to customer infrastructure market the We vehicle market. recent continue and demonstrate new merits Berlin ability and contracts to Turnpike, fixed First, FRAME, the US sensor second believe our analytics market. integration to other

sensors, substantial alternative of improvement to penetration the following begin we achieved global for While with this program. our the is semiconductors In at alternative normalized supply objective to the third management to month Refactored program quarter, boards, financial strategic costs. our chain released our sensor it component We milestones. board of will continue renormalize our circuit maximize the is priority X to attention to we shipping circuit manufacturing alternative current X long-term to on our product measured manufacturing devote as portfolio. model validation test the by high certain our through and with Therefore, prototype your -- financial earlier on mentioned designs re-optimize released I boards we alternative for we of and degree earlier, impact. inventory based the the inventory flushing replacing components components at And P&L normalized them began cost costs. alternative for prioritize feedback, new X, circuit circuit on to the based Perform reference XXXX. release board November subsequently was prototype of design the

prior period, of increase performance Fiscal our million business. to same year-over-year. a XXXX XX% service Now $XX.X revenue service the the versus I $XX.X was lines quarter want representing total second review of million in year

to new to $X.X from addition known million $XX.X Federal Reference services from the Bay and Transportation as $X development renewal IXX; a reference San order customer order XX% $X.X Angeles task the Authority Program. or for lanes continued Highway smart Transportation our prior the county to bookings, revenue recorded Bernardino to or with million use task year SBCTA Metropolitan Orange Cooperative $X provide our to Florida A million over a Architect of related use support to ITS County to the to provide same order the our Commission service of for support service express the period. $X a the Line Transportation task strong order In the District of architecture implement the X agreements million $X.X software. million implementation the order $X.X an plan nation's and million increase transportation on a now and of include ARC-IT; with freight ClearRoute million continued Transportation support Corridor Metro Virginia task Department CLEARASSET the Intelligent extension; for and net task Corridor the of a services; technical Administration asset in from million Transportation a development representing Area task and SBCTA we Integrated Los a a support growth, Notable technical to management managed services software the Management the of Department order

to data-as-a-service As and service second growth. with the managed long-term our solutions cloud-enabled our sensor portfolio, in support quarter to enhance we continued sustained software-as-a-service, bookings

trailing end ending as to uniquely market further of summary, to to datasets. data And transit included second prior month quarter which and assets ClearMobility clear product. for pleased and the record for as SaaS variety feeds growth with clear front ClearGuide real as cases time which both In management historical, real to visualization to signal net record total that integration total support of a we differentiate an bookings for enhancements of prioritization milestones feed well Enhancements record CLEARASSET enhance data data with address use signal addressable new revenue -- the quarter our of Second data. transit cloud curated provides a publish total mobility release the expands and clear backlog. are data time INRIX's XX our the

believe we platform demonstrate All made strategy. we've considerable of which against progress our

enabled Doug to inventory expectations. a actions the alternative cash start half at second call circuit normalized that over I'll had which of achieved production however the our significant flows point components provide our global after on more further for and net chain the a on releasing half significant impact to position financials newly our in the include turn to inflection management in and Additionally, costs. boards to to discuss supply XXXX. qualified fiscal profit second us Iteris to milestones like margins These component note, color that program I'd second gross quarter second critical they On quarter, re-optimizing

Douglas Groves

afternoon, Joe. everyone. you, Good Thank

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

top the and $X.X we had normal to we needed mentioned have challenges line we anticipated The chain approximately Joe no we quarter. expect a the and standpoint, needed, markets million and inventory to continuing is sales a continue from of there cost. year-over-year. prices $X.X million order the X again and cost available brokers, secondary that see results. by supply cancellations million second at that that i.e. to decreased this are as at the We this orders to which sourcing the the be bottom we we and to several however challenge cost the over to channels. growth in expected current current ship quarter, $X.X QX their components both the in To not in growth year-over-tear which didn't be our ship the in As amount why continue with continue half face certain million QX revenue the that revenue through If quarter quarter in end of point, of was hardware these QX, the components negatively $X.X XX% expected, components components many been the the QX we XXX in from were all we $X.X XX%. to challenge normal all impacted in purchases times were reasonable almost would unshipped up million of spent revenue from From backlog impacted to be second

once only As ongoing situation to to improve why is which half we the by mentioned, we as and first services backlog products record Demand million. strong of second XX.X% to Joe hardware gross in compared expect our of have year. in million bookings $XXX.X this for mid be the strong half continues be the XX% initiatives our margins of evidenced many $XX.X range, to again and

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

quarter second the XX.X% of same the Adjusting would margins in for component basis-points prior compared last gross increased the or million, $X.X have quarter. X,XXX gross quarter year points XX.X% Our in decreased XXX margins the costs to basis compared the to year. XX.X%, up same to been

continue for to those As unavailability be gross pressure previously constrained mentioned, higher market. cost the of our certain components due to and margin the to revenue to was components through the purchased be that broker had due

because the record been to million Turning quarter to revenue the on decision deals. on increased the sensor have take $X.X basis year to position revenue gross and conscious of This gross mix, come revenues would the time X,XXX demand points we revenue market continue X.X% made sensor a underscores quarter-over leading the Product delivery at in product and XX% meet significant as expectations $XX.X it the The to Taking year. the issues XX.X% component same market and cost declined to the our compared last to market due product shortages, into recognized quarter cost $XX.X margins. was not that same to million revenue to but large growth was million of compared last quarter. strong account, margins Joe mentioned XX% our competitors, previously. customers win supply noted, were chain from in from a did share

managed reminder, $XX.X service stronger quarter, revenue prior $XX.X services last software year from gross in XX.X% In second to to driven Service XX.X% of of Our software the year. revenues. the managed the services revenues a quarter, XX% compared increased million increased and as basis gross margins quarter to XXXX revenues. comprised was XX% points revenue, our to total primarily by recurring recurring and is revenue annual compared same annual million

QX 'XX included fiscal a reminder, of a of million. As nonrecurring onetime year charge $X.X

redesign expenses of or in board of of circuit last million The operations second or revenue, we're $X.X than which share million compares a a loss continuing were spent this, primarily cost points, contract adjusting $XX.X the quarter million anticipating margin QX. in extensions to were which the or the up in General million. on EBITDA and the revenue certain million after XX.X%, labor board $X.X made was expenses compares redesigns, primarily was of administrative gross timing decrease contract and second net mix. loss, the Sales to flat QX, efforts. second the loss in XXX and So GAAP was of being while million increased for by of attributable and operations spending EBITDA or less the $X.X a R&D operating basis was quarter or the driven second XXX,XXX, noted. circuit down from Adjusted the Operating million the in which which to We of product related support chain components with previously GAAP which and as The the higher million of going-forward. $X.X headcount sales loss issues million year The same was to the higher in loss costs marketing were compared quarter with share, a year. a year million X.X% supply loss attributable XXX,XXX approximately ago. in as ago. driven progress GAAP increased was of GAAP in EBITDA quarter second same significantly a $X.X $X.X operating GAAP broker loss our The solely down loss $X.X for a $X.X in adjusted quarter mentioned. to loss XX.X% support the $X.XX net by quarter is operating the operating from costs continuing and reported the was loss sales the per $X.XX net previously a of component $X from quarter

chain progressive redesign supply anticipate position improvement a time shift Joe, improvement take our some the of outlined circuit to all in the plans in the second by our through the half chain will it we this supply since With of boards customers. for to year,

mentioned. key and in our broker X this year. new to return this will the largely customers need this components third one the fourth has XX% gross quarter shipping should that as about of With by margins the redesign production to the already week, the more previously gone procure to These board already product markets designs activities in into mitigate quarter circuit

and $X.X costs. to capital the second end quarter of the The working of and the Turning quarter-over-quarter $XX cash higher million resources. was was driven decrease at liquidity capital net result which component the was million million. Cash loss, net $X approximately in by was a

markets, costs the a components negatively the practice our we in terms, which we in mentioned, carrying million secondary inventory the were previously to market offset As capital working in also unable from business and is procured get $X.X extended to normal impacted these quarter. meaningful so this payment

that to cash our will working and the positive to capital market parts quarter third circuit less substantially we decrease would QX our board the be in our than With continue and expect position flow redesign continue broker beyond expectation this and will purchased to as QX million, increase progress. to improve projects $X in cash in

spent we which in Lastly, full and purchases the reflecting year be still $XXX,XXX prior year expect model. was equipment our asset-light X% property $XXX,XXX same in second from business than second of quarter. of CapEx revenues, the And less quarter, down the in to we

continue our the with turn chain designs and our Vantage that that, without on confident quarter, come and production Joe. mentioned, the features that with to Joe have any products supply to other designs circuit With back multipoint rely in the leading over side multiple as stronger supply circuit Joe? be summary, board laser-focused and call upon. sacrificing well to I'll even customers functionality for on board chain weather we're sensor out challenges, our market third plan storm our in X So is we'll the we in new come the progressing

Joseph Bergera

Doug. you, Thank Great.

proposition, safety offerings safety ClearMobility for and private intelligence vehicle Vantage the monetization to Planned Streets enhance features price will and which are stream industry. productive and based features application obscured which we is our provide connected CV extremely several roadmap executing a front ability detection market 'XX safety new Fusion half constraints improves current which in connected have supply improve position. may about features large our is believe favorable include Iteris and mobility the among our the significant channels will sector other a Although, continues We solutions Safe in the proposition the dynamic alert Apex ClearGuide, enable the Vantage in should better To trends mobility Spectra our for the to vehicle represent that that recession. all drive vehicle investment and infrastructure strengthen that sensors a intersection ClearMobility certain environment to historic data our mobility enhance competitive COVID Apex releases value capture and in at secular IIJA, that subsequent new even the and value of sets. meaningful sales quarters, for visibility reporting the differentiate market, benefit both our for on ClearMobility adoption new and of Vantage enhance should new analytics chain smart future optimistic markets, leadership Iteris Iteris ClearMobility connected its new scalability public from is features last the management platform, given characteristics, are Cloud. opportunities believe backstop FY of data enter for aggressive new cross-sell a our our sensor opportunity, and an to Therefore, to our this against we most second opportunity targeted further of position

pursue detection. effect which to the continue particularly to ex In to gains. of to XXXX, of maximize programs capabilities into implement enhancements fiscal rate as opportunities XXXX, market area October average an share we'll XX% distribution underserved actually our and platform optimize as our service the new capitalize offers XXXX, a introduce to our the everything-as-a-service attach our Intermountain X, the or our Sensor additional went various in price to regions continuous on for continue second increase to on model, increase portfolio, such Vantage half we However, and fiscal

supply ongoing in due quarter fiscal typical although execute the may seasonality to to conversion. other initiatives holidays bookings. sustain and drive to expect improvement backlog We these further continue strong bookings program unshipped reductions backlog our and momentum, to accelerate advantage chain Simultaneously, XXXX third overall sensor temper we'll

release For represent component we that to the circuit the boards associated example, alternative in second remaining cost. half, scarcity production to and high plan

components Due a costs our boards Vantage meaning cost we renormalize high improvement of normalize sourced the Sensor working Iteris' circuit fiscal financial with half. for come supply alternative these to and performance year-over-year traditional further capital XXXX turn, our we to dynamics, of to terms. growth various portfolio. we'll the second inventory, optimize in half channels, will to improvement of and combination online, anticipate of approximately levels these components aftermarket this As In structure anticipate which chain we payment dramatic continue standard be the will in offer our through More second program. demand sold XX% comparable sustained replace goods to solutions benefits positive due beginning company's revenue the our specifically, for

EBITDA our to exit at chain as adjusted cost revenue revenue, half Sensor the second for a of in X.X% our of XXXX our year be raising guidance million, to expectations, are end flow a of goods range the renormalize global million half these portfolio. range XX% in the low $X.X Based fiscal our challenges negative our closing, EBITDA X% platform-centric XXXX impact many constraints half fiscal to our COVID XXXX the and million over Vantage we to on with enabling of the adjusted fiscal $X In reflect run chain $XXX and and to fiscal sold million several smart lowering rate we quarters structure supply to $X X% $XXX range a chain on of results. Second benefits, are but we full to due the market. we our X%, we've negative the program, capital global business $X million to management revenue last our full benefits first full value of experienced half year EBITDA. year execute to working supply Nonetheless, we million cash improvement lasting to near-term on only year which company second chain strategy against adjusted company. be continue net constraints. to progress infrastructure our leadership improvement And position of the significant program, compounding to will the generate global for approximately supply supply extend mobility made and in of global or subsequent Most of not significant the to range recently,

As critical is as by realize XXXX positioned a in deliver our and Iteris value result, shareholder to half model forward. a second our inflection operating fiscal outlined XXXX point significant going creation Vision

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

up for the And open so operator, let's that please. line

Operator

[Operator Instructions].

first Group. for from Capital today at Sigdahl question is coming Ryan Your Craig-Hallum

Ryan Sigdahl

I cetera, last to same The sounds side board here. costs, as the into the supply that bookings, bringing all revenue solid et challenges, into production, want quarter. boards chain so X dig circuit new Really cost in circuit

the given expectation pretty and guess, in on challenges. material year margins change of the EBITDA I those So for rest

I quarter So guess those what last what like last challenges few in the to challenges? months and relative knowing similar seemed changed

Joseph Bergera

I this over to Ryan, I'll you. that pass then, Well, front Joe, is end it why don't Doug, and

But following each boards. the clarify was to production would the earnings wanted of we had to we or one quarter, plan X -- subsequent we quarters. release X and in is of the circuit So complete to call, boards circuit that, our introduce thing testing explained alternative we when I that last design each were

required X to shipping expected that the of -- we those factors, we due didn't and to September terms had September circuit the testing boards to circuit benefit period. end X a for XX in of meant redesigned XX a realize XX that of have is, circuit expected that quarter. the as the been -- the we what of refactoring would before that some X result, boards Due already feedback extended. number So September the those largely would have further we in initially period enhancements we got the boards, the And was dates it the release from

XX of question? a realize of Now we that lose anyway, But as to will the the the that any will you with couple did we'll December additional XX that December realize September in benefit do XX to want further period response in released Doug, be background, we the but boards period. manufacturing in Ryan's months well provide to period,

Douglas Groves

Sure.

add, was a I about that because quarter. broker think I will our so the thing it $X in the still that timing do inventory flush we have million only third would issue is through Ryan, of in inventory, that

the will quarter margins So be flushed. back inventory the that until don't fourth and has all when bounce been compressed all way

from happen QX think timing it happen happen were me, really I excuse happen a So just to pushed became just issue -- what everything and we in will the in right QX expecting to to in so QX in quarter. one

Ryan Sigdahl

and in Or year? there that guess but couple risk now in expected that? points of confidence confidence we're months, how about that EBITDA last weren't the margin where I of guess, I from things visibility and as in is have that What talking do rate pinch the improving that? how then next And exit you exit this on you think about much rate over year, targeting the XX% are much

Douglas Groves

of if good say handle expecting really to we've those, look our pretty on I'd remainder flat similar the second at this got and the you expenses, a Well, year-over-year we're those that for quarter year. operating exited be as were we

professional So business come the I all software there. was the the It's supply all in be the we to efforts chain the has evolution we risk give backlog the think X hit continued that, down us visibility need, the managed are would business, quarters risk pretty EBITDA just just are only services and that chain, would that last we that getting we year. can the been number be, really consistent that and talked those think that are as components referenced, risk redesign no XX% completed with to with have largely going of the we've but a and the about to into the ongoing the confidence supply exiting the

Ryan Sigdahl

agreement credit September, but your had Last one which you there. terminated for in liquidity good option me, was untapped, so

you're some you guiding how have do million flow and flexibility? you to $X some of back know need operate just in cash ongoing cash reserve positive and think give much to yourself headwinds, I half. But cash You modeling this business, to the

Douglas Groves

we quarter, certainly more in cash inventory, $X million build broker not up operate we're here the October, terms need the I'll going the to look degree had going And the cash because purchase end since parts, these remix mean to to the we're don't only biggest driver and been market the cash balance to say, it's you to like back the million Well, we the third the we've for reason with the decline than I to as already where all payment that's at be in was really, balance, we've have our to if balance to get related in $X $X.X of of start seeing high confidence business. we'll of the build, $X million million. cash of any

that prepared outlined in get going I remarks. the it's to guidance certainly So we think that to

Ryan Sigdahl

Thanks, luck. guys. of Best

Douglas Groves

Thank you.

Operator

question Van next for B. at Sinderen today Your Jeff Riley. from is coming

Jeff Van Sinderen

Hi, everyone. Thanks for taking my question.

recurring remind caught quarter just quarter, in revenue, you the year-over-year, recurring the about I'm what was And wondering if ask said can to us? of the then XX% not I think wanted I what you growth during that prior was Just sure that. revenues?

Joseph Bergera

that? Doug, do take to you want

Douglas Groves

year-over-year. of it total Sure. consistent revenue pretty no, as a Yes, was percentage

referenced, revenue. the year-over-year head there adding into bookings we not have did be as we So as the that to that second Joe some in significant growth But we'll recurring half. nice was

second to growth expecting see the of So a we in percentage total recurring the revenue half. revenue as some in are

Joseph Bergera

most we the point just recurring So getting increase Jeff, a of a of But recent. was I little the percent in amount revenue. maybe proportion than add larger a XX which as that impacted The in revenue you're this the of that. is the I'll at quarter September prior think huge recurring to revenue bit the period, course, that -- Joe, is of the saw in product revenue,

basis it up year-over-year If and you between also just at basis. sequential look somewhere, a revenue, recurring the on XX% XX% believe, a actual and up on was I

Jeff Van Sinderen

what And year-over-year to was know, component the SaaS footfall XX% to Okay. yes recurring. Good. of in Good that, XX% that... growth

Joseph Bergera

recurring Yes, and haven't total total perhaps break But say and would if in point prepared in SaaS is so about that said this that we explicitly is split we the to some it time. will, is this managed revenue service, we what services of I the at out. the the XX/XX. overtaken past and already probably point at revenue have that in -- not annual SaaS we XX% which of but what we're recurring constitutes at that between past means revenue managed is haven't our is about excess to hasn't

Jeff Van Sinderen

your half, sure gross Good And in implied second I mean, to for of what's -- half, for know. consolidated kind a our through I go to had Okay. wanted to but I you, ask that? guidance projections haven't wasn't for second then we chance margin

Douglas Groves

From margins yes, a half. gross margin percentage, gross XX% the it's mid -- kind mid second low of in it's -- to

Jeff Van Sinderen

For both quarters or?

Douglas Groves

I third the just for inventory through Well quarter flush be high-cost fourth second the it's in getting margins more to then to in this reasons the that's remaining the quarter. going mentioned on half. and lower back got we've traditional the to No,

gross half margin second range. is in XX% that the low So mid to

Jeff Van Sinderen

Okay.

I you remainder half, QX So SG&A? know I SG&A, -- can low the keep that in second you said And XX year the of for you to think dollars, they were of close then flat. kind the what saying in for dollars Are for said -- you holding got it.

Douglas Groves

Yes, that's in the plan absolute dollars.

half revenue, first revenue of because percentage second it would is than a the half. come the as down in So the greater

Jeff Van Sinderen

Right.

just then I macroeconomic mentioned think, potential you And Good. recession. Okay. Joe,

how Just be thoughts any kind by might a recession? business impacted the on of

Joseph Bergera

we've the last very period years. an of unusual in couple well, been Yes,

moment our And variety through which never happen reasons. are found being more we cycles, when But We've what recessionary been what months not that maybe gone there that later, for time. generally, only muted XX tends -- tends sectors, said, impact you XX of in that we've up interest to impacted sensitive be at that after impacted. rate end sectors the is this but show impact than know so a also other are other found to could has market oftentimes to approximately less

provides Iteris. IIJA under there backstop. a and such So sector on circumstances impact that think expect potentially the being as we modest circumstances, all on being strong That worst to standard of the a our that said, or we'd be really said,

an to their after reductions customers because the cycle. are So remain adjustment next even of talking to projecting potential I potential their again, in making that the into extent any the estimates. certainly the to But the which than for even IIJA compensating event net-net, they the they some in years, more don't we're of or for even over recessionary expect increase same recession, recessionary to X grow budgets revenues. agency have tax they're budgets cycle in potential factored their budget know

modest, waters expect here, in again, So impact be of but recession we're to we the if any. uncharted Jeff, would

Jeff Van Sinderen

helpful. jump All I'll else right. That's Thanks. someone in. Okay. let

Operator

Instructions]. [Operator

today for is Latimore Northland question coming from Capital. next Mile at Your

Aditya Dagaonkar

This Mike Latimore. behalf is Aditya of on

Joseph Bergera

Hello.

Aditya Dagaonkar

if could increases? the seeing you So to you're some due color give demand on fluctuations any price

Joseph Bergera

say, of I a It's hearing talk buy intended our a I'm than the licenses would customers, spending. unfortunately, the from able of originally fewer I to do that, meaning or in units any available. budget haven't less fewer question. number user But sure. the of cost that's amount Yes, fewer like have budget them of amount for what when great amount reduction seen equipment, they because is of of let's to increases, I of sensors, they're

if mobility are we're they're in projects, customers our of that smart answers unfortunately, question? your amount So some the less, in cases to committing but getting any seeing reduction not budget that

Aditya Dagaonkar

operating color flow right. right, second all for Fine. some be cash also All half might this on of what And year? the

Joseph Bergera

Sure. Doug, about to that? do want talk you

Douglas Groves

be half $X positive optimize what we it in return the second to talked yes, to Sure. we and with million in inventory we about our as expect $X to would cash million profitability. line of Yes, flow so

Aditya Dagaonkar

helpful. right, you, All That's guys. fine. Thank

Douglas Groves

Of course.

Operator

questions queue. for Bergera closing in over no any further are the Mr. There floor comments. back I to like would to turn

Joseph Bergera

your Super. And appreciate Well, I operator. support always, thank questions. and thoughtful everyone's as you, Great.

know winter updates this investor series technology front, starting a let of short Relations and topics. Investor business variety you we'll of to introduce that the I On wanted that will a address

as in the our our XXXX have we progress continued be various Additionally, to In again available we're on meantime, when always, questions. plan follow-up any fiscal events we should you investors to with speak forward look results. to outreach we participating third investor updating quarter report you and

today's call. concludes you. this Thank So

Iteris (ITI) 13 Nov 222023 Q2 Earnings call transcript