ITI - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Iteris Fiscal 2024 Fourth Quarter and Full Year Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Todd Kehrli of MKR Investor Relations. Please go ahead.

Todd Kehrli

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

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

the Following the the will in from questions answer instructions company's their that the call company sell-side dated covering were XXXX. questions we'll for open to in investor of advance analysts. per remarks, submitted release XX, press call the Then our we May

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

materially the company factors that with could refers to documents most those and important the risk from XX-Q are contain from identify forward-looking differ the that any Iteris of SEC, and time cause to XX-K, you results time specifically Forms files that contained the recent statements. company's the X-K, in to which actual

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

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

Joseph Bergera

million representing of us and fiscal million, Todd, XX% respectively. XXXX I year $XX.X appreciate you, year-over-year, revenue Iteris fiscal quarter total growth full of total you to X% rates everyone. reported Thank $XXX and afternoon fourth XXXX of Great. and joining revenue today. good all of

with global wake unusual, year rate several of very level comparison Therefore, fiscal the fourth full constraints. large provides accumulated the chain XXXX reminder, us a of more of shipping backlog supply quarter business. growth was the a in normalized view As over quarters double-digit our that a preceding

to adjusted addition substantial points quarter full XXXX this respectively. margins gross In improved and X,XXX gross margin, increasing basis in year our growth, year-over-year $X.X and adjusted improvement fourth fiscal respectively, fourth points, our organic XXXX fiscal XXX fiscal reporting respectively, and X,XXX year. our million quarter and EBITDA expense year-over-year, our operating and XX or in million margin in In by or drove discipline double-digit full $XX.X basis EBITDA turn, basis XXXX continued expansion points,

course, detail profitability in to address our more in going dynamics Kerry's comments. his Of

We estimate net will XX% increasing annual represents year revenue. increase year XXXX XX% recognized be million increasing This of full year-over-year. recognized recurring $XX annual bookings million, full year-over-year, a net XX% year-over-year total $XXX.X total fiscal recurring X% with quarter, as some a through bookings million, third is XX%. procurements achieving of XXXX expected bookings quarter This of win lumpiness of net revenue-based best-in-class very adoption in Iteris XXXX customer our fiscal believe translated remained strong fiscal fourth platform $XX.X XXXX ClearMobility or will net record as our of total Despite bookings into in revenue. total rate and record we what bookings win the fiscal competitive rate in be

more market as Iteris We are because, our will hand, to has of well as commercial road and, advantage the one map our even from full deployed attribute our our distinct capabilities best-of-breed platform, portfolio. as trusted sensors, hand, and a our opportunity since disproportionate to In as which breadth software on right, especially other aligned words, execution other powerful in our advisers strong have we Iteris, our all of recognized are and to positive product These are synergies share in we believe continue leading positioned ClearMobility when of the their benefit consultants valuable it our unique for the flywheel. differentiators to in capture making these of our combination. are and customers indicators for technology the on end own simple

Due to ending $XXX.X year-over-year. period XX, we net our a bookings, increase March representing strong ended total X% with million, of XXXX, an the backlog

value. portion, The that net backlog. from quarter-to-quarter, convert contracts, sizable of quarter. which, Our Also, excludes of within to orders our about period, of reflect backlog figures from customer than on ending total bookings of and XXX% ending varies to customer a averages shipments our course, an basis which, a period course, of total backlog total bookings rather varies sensor firm value contract single historical

of and At decrease product like We year to details of increase I'd year-over-year, this the portfolio. fiscal share fourth quarter revenue respectively. of some $XX.X point, a representing million XXXX million, an revenue product performance about XX% reported and fiscal full our product X% XXXX $XX.X

a XXXX over shipping due was backlog a year of that prior quarters. several the comparison fourth As quarter to affected high large an very by reminder, prior result accumulated unusually fiscal of significantly level

cellular the of XXXX, what we country. the C-VXX detection, vehicle call sensor to travel sourced won Over virtually across fixed course large time fiscal every Iteris sometimes everything believe we competitively initiative and or

SaaS of attach Additionally, smart we various revenue and improve rate of our continue sale. recurring annual to the other the at sensors to point

most VantageARGUS you comprehensive intersection VantageLive! Maricopa system, VantageLive!, modernization comprehensive notable Some know, purchase agreement and with a agreement Arizona, Coachella with agreements from software Vantage the Signals include the in as system million multiyear new a vehicle Park, purchase well ClearGuide ClearGuide the our in sales. Collectively, $XX purchase customer fourth California new a initiative; more a initiative; Valley modernization as in nation, arterial than of Cedar for may this the sensors city intersection of a is Texas to detection handful CV our Governments Vantage time of travel to sensors for the which, use connected Signals our represent phase county sensor and Association initiative. Apex deals second in County master deploy our order Apex populous future new BlueTOAD and modernization system region-wide for VantageLive! Next software and of and Vantage detection detection software citywide and a as for

addition portfolio. to In fiscal of and solid commercial sensor the extend throughout feature we performance our continue to execution, XXXX, advantages

API to maximize edge cloud an connected that a directly the detection unit for applications scale For to the our that ecosystem example, branded vehicle we integrated sensor enhancements safety and and traffic as ClearMobility agencies control combines is and that by vehicle system, Vantage Next well investments; as vehicle service new doubles communication in CV, and connected sensors detection, publish traffic intersection their VantageCare lines. that Next into participants; Apex a of enable detection Vantage vehicle released process a branded to which each connected as our as connected vehicle comprehensive at product and system; managed Vantage in-cabinet services better Vantage platform sensors processor; to to new both help leverages supported data massive number everything single features central and packets our cellular fusion

going into about double Industries about into exclusive detection solutions pedestrian technical believe with enhancing integrated our We and billion mobility total solution to entered our this state-of-the-art curated sensor $XXX and an million ClearMobility data pedestrian Electric detection set. for we States integrate addressable Sumitomo platform. partnership will its advanced Furthermore, commercial United and detection Iteris' to today $X in from further forward uniquely the market transform

service XXXX reported respectively. like performance fiscal The XXXX to and our which and acquisition fiscal I'd service year benefit fourth quarter of We revenue first full initiated labor and in backlog representing year-over-year, sensors portfolio. demonstrates XX% increase of review and full million, the to conversion. of year quarter, quarter is increase talent $XX.X a million we XXXX our capacity in $XX.X fourth the services program, that, revenue service revenue With XX% fiscal starting

In fiscal revenue comprised other of and services recurring of our XXXX, services consulting managed based, and Software-as-a-Service, revenue Data-as-a-Service, XX% words, was annual our of from revenue was comprised in offers. XX% project Platform-as-a-Service about

basis, represented enterprise of at on look XXXX. our XX% you total ARR in revenue If it fiscal an

the bookings year net and bookings In XX% in increasing and XX% our quarter addition million services to fourth services million, full $XX.X services $XXX.X improvement posted respectively. revenue, net of year-over-year, we solid of

we the attach increase revenue to forward. the capability, County to As Authority Orange our by XX, in to which to Transportation improvements rate will further of revenue to of This going our recurring recurring recent contribute March on continue XXXX, XXXX that annual announced unique the again order the demonstrated rate flywheel, throughout fiscal annual continued projects. Iteris growth is consulting we

also In Data-as-a-Service, that Platform-as-a-Service continued to annual we recurring Software-as-a-Service, growth. enhancements significant to fiscal XXXX, managed portfolio services and revenue will introduce drive future we believe our

collection without connected trajectory to Trends, alone, traffic half signal infrastructure; we travel second for the ClearGuide its which timing dependence mobility count Maps any on presentation contextual map which and and in a Signal ClearData for system; and support data VantageARGUS example, will we data use feed, our fiscal data announced next-generation anonymized OpenLR uses time is or Scout For XXXX released CV, vehicle data temporary Telenav recently application. optimize which communications

gross XXXX So bookings, growth backlog execution, revenue and our whether strong as win well by double-digit adjusted our EBITDA with rate. organic you we're margin our in our pleased as measure significant improvement or that fiscal competitive summary, commercial and

company's fiscal in associated impact the Iteris. mirror, results validate XXXX strategy the represent our supply With disruptions our of and inflection COVID-XX an rearview the chain business believe point for we important and

and want I'll expectations. call over and more color come quarter fourth to that year after fiscal provide also discuss turn on results, our So which note, I financial our our full on some the Kerry to XXXX to back

Kerry A. Shiba

everyone. Thanks, evening, Joe, or good afternoon and

when results, regarding you the year our I comments As quarter assessing fourth of full Joe's to the review business. you overall revenue encourage consider results our momentum

that call the dynamics supply X -- seasonality for quarters our constraints in call of the both relative I and shipping affected and fiscal the unusual third fourth last our products from recall prior may to global Joe in year last quarter have for prior of XXXX combination stemming noted our revenue that and comparisons You year. the

want to described, will levels sales both revenue our the the exciting line. in As statement year, I for continue we our market and the a make record fourth full progress. only addressed down Joe to demonstrated the the Joe that gross also double-digit already continues and pipeline by Because full bookings underscore I strength to for to profit quarter the year. be commercial income revenue results, move significant growth

results X,XXX fourth our compared the year. and As margin prior were gross year, full fiscal markedly increasing XXXX, in the when Joe improved basis respectively, to for and points XXX noted, quarter

Joe Joe the the The unusually stronger primarily to product's consolidated noted, benefit profit purchase me increase profit as gross the mentioned decline, consolidated $X.X Let reached the the well On million in reflects million more decline revenue improvement as decline products. hitting was comparison $X details of quarter a services, benefit by or basis, from gross XX% year. from variances XX% over of revenue labor $XXX,XXX comparison mix increased million, fourth an gross the a year. $XX impact The a P&L which the prior by fourth full a increase improvement price profit quarter provide a resulting fourth decline reflects internal XXXX for the followed was year-over-year partially quarter in The this in labor strong some first revenue which, year. year. lower fiscal offset products the capacity. last XX% The year-over-year an negative services as reflects by driven of offset improvement than

the In the and quarter. compares quarter expediting XXXX, purchase fiscal fees, of only expensed variance negative year's to price about which in million current we fourth $XXX,XXX $X.X of fourth

negative purchases electronics recall, other and may of you last semiconductors As components. purchase aftermarket price resulted from year's variance

were Looking XX.X% same at quarter basis year. this The of services gross last margins. year up improvement both compared of products. points period to and Margins aggregate, for reached the an fourth XXX in the

program, earlier. XX.X% by supply having year's of in year for For product offset the X,XXX slightly year's as margin increase reflects for for Joe the Services improvement and products, supported chain the which margin basis was points. benefit fourth quarter the some points, Products the gross XXX adjustments. was services, was mentioned success cost mix impact mix of labor the acquisition the issues, current and negative improvement talent gross current us, basis weaker a behind our by XX.X% was clearly while inventory revenue last of from was

and or supply pricing and approximately million resulting stronger mix, For in volume. fiscal $X the profit with profit us year, $XX behind full XXXX XX% $XX about combination $XX.X Products gross million year. consolidated having XX% the a chain issues was increased higher the of drove almost total the of than higher gross million from just million, prior product over improvement reflecting

and grew loss higher of profit gross to year. the mix had adjust X higher XXXX improved data benefit of as as the the for during services, providers by revenues labor XX% we were in costs offset partially For onetime

Although adjustment, the of contracts to as costs provide realigned increased due revenues software expected our grow to are positive future. structure supply in this the our cost data leverage

gross fiscal the of and, by X,XXX chain for points Services was For to improvement margin behind a year. same gross margins, year's having gross Products was for products. increase was in XX% of the 'XX for from overall resulting basis XX.X% the fiscal fiscal with year factors points. prior and 'XX fourth we for improvement product full improvement an the smaller reflects with the basis mix impact XX.X% points and from supply when similar for higher stronger primarily margin products quarter, both X,XXX services primarily gross driven profit aggregate the benefit growth us primarily up reached services prices. cost negative and the issues were XXX Margins comparison. affecting for last XXXX, compared to the margin The basis reflects

costs just for in adjusted compared a resulting the basis litigated year litigation aggregate points of dispute XXXX fourth to last in was largest XXX when excluded as over fiscal cost from percentage a of the period The signed measured from were when contract higher X/X G&A same in back the are category expenses quarter These the EBITDA. increase related Operating higher revenue. XX.X% the of and of XXXX. with increase to

as to We in R&D invest increase. also and support continue sales in to well as products marketing the revenue

operating XXXX prior increase I XX% were increase increase. than XXXX and sales fiscal entire The revenue year, litigation expenses points more our About improving in G&A as revenue. full reflects just and percentage noted. most expense products. categorically expenses cost The increase but a the to measured primarily declined operating XX in expenses the higher operating the activity on pronounced expenses, the marketing full in the reflects when X.X% the of was For software in than total of basis research increased year fiscal and category development focused support in

operating The expense income to factors gross operating net explain revenue, income. profit comparisons just and discussed related fundamentally and major the in

which, impact mentioned exception adjusted these the I from same previously, of apply are EBITDA, For with also adjusted factors EBITDA. excluded the of the costs, litigation as

Joe noted, double EBITDA for million was quarter fiscal As for adjusted $X.X the prior result the fourth of approximately year. XXXX, which the was

EBITDA an adjusted year, $XX.X million full last fiscal $XX.X the for year. For of was improvement XXXX, over million

$X $XX.X for XXXX reflecting year capitalized were in million increased Total the an than million, Investing and software XXXX from or year XX% the by XXXX last $X.X end operations balance compared at million higher of primarily end of preceding development. of year million the were fiscal activities and the Full at to at cash the representing year. same prior the over $X.X equivalents quarter. cash increase the $XX.X balance fiscal continuing cash million time flow total,

back I guidance will provide who now will comments. over turn the to XXXX and discuss closing call our Joe, fiscal

Joseph Bergera

and Great. local Thank have well end past continues smart multiyear continue long-term funding agencies The represent as infrastructure obligated through you, to Kerry. Congress opportunities statutory committed expected to to legislation to date. is management tail by been historic a XXXX spend market federal state mobility and funding funds due further that's will the significant

drive various investments the agencies artificial local entities. private Additionally, continue significant vehicles as state trends sector by well smart and as and intelligence technology will of cloud by include that adoption mobility connected automated infrastructure, to and

reach, and a to extensive about customer ability platform Given the optimistic capture share our capabilities, are very Iteris' significant brand revenue of stream. this disproportionate equity of we breadth

remote available Vantage releases that continue detection the edge XXXX: aggressive cases To and factor monitoring and with and pedestrian with Sumitomo our serviceable on both cloud-connected annual road statewide new our new is a applications of and the for recurring transportation local integrated end, in third-party set expand will revenue; radar-based significantly for will solutions advanced system that that address various for will Iteris subscription networks; will and of mobility deployed provided form against and and data transform be market a North map pedestrian of partnership for new will detection platform across vehicle detection will to latest data; edge a system; major combination ClearMobility basis solution with and product an our advanced Apex, deliver following a pedestrian management America. expected critical fully connected for our intersection and fiscal assets buyers a that cloud system a portfolio the prospective expand drive both developed new solutions detection use safety will to expand planned in AI-based mobility highly most universe that

XXXX fiscal release sets adoption ClearMobility XXXX improve and fiscal our addressable total mobility and our the data our platform market, our in beyond. believe monetization expanding We accelerate plan of of increase the will

For example, fiscal more addressable as And our release quarter. XXXX billion. shipping also, our you to total detection solutions $X in than new this new that of third noted for earlier, system Iteris' system know from we'll approximately the I begin detection $X.X to will double market pedestrian want billion

sales we improve on continue our the productivity our will capitalize release channels. plan, various To to of

our For XX% maintain example, that dedicated net our sensor team and dollar a from XXX% customer XXX%. software to current segments network model our rate both retention optimize success retention a we'll sector sales further private on enhance distribution than greater for enterprise the focuses to expand increase our rate portfolio, and

These and implement to our will conversion improve and consulting some as improvement activity and consulting continue various sales backlog historic on our fiscal but In very should well have enable more even talent the further labor forward. supply we data talent. improvements opportunities engineering engineering of traffic This software initiatives talent addition initiatives efficiencies given acquisition to in the primarily talent of focus further operational teams. require XXXX, pursue remains the science seen investment development the civil going to supply talent accelerate of will such us short-term talent create of to pace continue of some while as tight to channel and capacity we'll sales in

organic million of representing to we in dynamics, at total these the be the year-over-year Given fiscal revenue midpoint. expect million, of XXXX $XXX $XXX XX% to range growth

revenue. the continued cost revenue improvement range a As of guidance basis discipline, total margin expect adjusted X% initiatives. and in This talent of also to to midpoint EBITDA margin represents the improvement we our XXX even range in continue in XX% at in and our points EBITDA increase after of talent to an we the of development adjusted invest in result acquisition the be

lumpiness While our I that comparisons fourth XXXX will we're several providing do we due the fiscal over not particularly in first high orders. net also bookings to that bookings want create difficult quarter to want some timing next result some expect bookings of several large reiterate I and quarters continued to pending the note guidance, XXXX. And fiscal

the our With the $XX.X revenue representing $XX.X guidance third quarter. guidance, This reflects growth organic respect of of product be fiscal X% XXXX to XXXX releases at midpoint second very million our timing start quarter of range. million, well to year total quarter in expect the new for rate various our the to XXXX difficult first fiscal growth fiscal end and of of comparison revenue a the the as year-over-year scheduled we of range prior as

prelaunch the products, of related expect fiscal and EBITDA a representing adjusted of margins Due revenue, quarter final for points of range those year-over-year be to activities associated to and X.X% in the to first XXX our development release X.X% we basis midpoint. the at decline XXXX the costs

fiscal While sequential implies. providing full guidance fiscal second certainly in we're time, margin guidance we our quarter as not year improvement adjusted XXXX at this anticipate EBITDA XXXX

COVID-XX. Albeck XXXX of relative we provide adequate market to continued purchases and Gerken anticipate margin, total At should revenue fund of and tuck-in adjusted prior to Iteris the undervalues liquidity EBITDA we that our forecasted the International TrafficCast same acquisitions Due time, precedent acquired repurchases to transportation believe systems cash to fiscal improvement value, increase where public some our variables, capital in decisions allocation to the currently our evaluating than have similar been various including liquidity liquidity shareholders. XX-month while more to Iteris are trailing number and affected private we at shareholder market XXx can our be adjusted of options by to Therefore, share businesses return outlook enhance EBITDA. excess intelligent a transactions to

in $XXX fiscal or we'll on XXXX, labor believe will remains million at Looking in would Vision adjusted acquisitions, revenue XX% annual significant a especially solutions the targets, fiscal -- further With XX% continue million result capacity road anticipate revenue progressive that to range map on benefits organic from $XXX or continue before and scale fiscal of XXXX our revenue, X-year which to EBITDA key XX%. midpoint. XXXX CAGR growth. the to margins of the estimate in given approximately beyond track XX.X% the of any Iteris achieve a to to also progress range more in we our represent Therefore, initiatives additional estimate we specifically XXXX increase support we substantial revenue to

Operator, questions that, to from do our So delighted prepared analysts? be the you comments. and any remarks questions to any or conclude with respond have would we'll

Operator

[Operator Sinderen Jeff B. Van Instructions] from Your coming first from Riley. question is

Jeff Van Sinderen

look and is -- mentioned, first too, know for and you Kerry, I know things compare I about more you thinking revenues. kind we color should more this I the of how the there any kind but quarter a mentioned, any give year? QX, us you on of said growth here for guess on revenue some tough could you about Joe, But color you're progression

Joseph Bergera

that please relative of you on to going to there's rate first know, keep in just year, and guidance that guidance, step-up we've full look a again, if the our if the prior the of period the we previously the we to at quarter of -- time. expect growth first was of that as backlog at to an year. XXXX you But one look that that continued obvious a unusually throughout had a providing in obviously, period. impacted services -- And of as milestone been experiencing. our And quarter quarter quarterly a a constraints or result had a mind you achievements, to be recognition been supply couple up revenue lot the chain guidance we the that it's then Yes. a amount fiscal revenue in which fact it at Well, of Jeff, we've due built year the strong ship led also, substantial

So that creates a difficult comparison.

We be which also products, I've of first be selling the clear I will quarter marketing year. have a very to new the couple into market. current releasing of to which that the discussed, those and want second in we're quarter fiscal be going and activities we

revenue early recognition growth and rates year. will the improved sequential won't that's we result into second sensors a year-over-year growth revenue the of the until for through rate And also and products, in we occur as those higher ship like late However, occur third quarter. which the quarter actually progress to going in

Jeff Van Sinderen

really how then you're a you can bit kind on investments helpful. Okay. the the mentioned and know you've I made new of and speak you you little introductions, sales that more maybe supporting product That's introductions? new R&D And can the product but team speak --

Joseph Bergera

we're incurring in to I'll some turn there third Sure. But you quarter. some and the costs Kerry, that is There it I'll then, specifics. of to say the to over -- is talk some external and broadly, development

those be of various occurring continue episodic. create similarly, of the incur so release external will we investments leveraged that in products. There's also, to some first new programs the launch when quarter that to these will assets it's the -- these Following for over costs, products, are the course launch-related not

episodic necessarily of so forward. going are And again, continue sort won't and those expenses

Kerry, in I know want if there's Jeff's additional to add that question. you don't anything to response

Kerry A. Shiba

involved good-sized Yes. market. Sales are it of Thanks, have marketing all of does things. to Joe. pretty and as we a because variable to commissions component Jeff, go a couple that

flat offered, So nominal for as that sales that last and keep Joe associated that perspective, as percent Joe through us. help a revenue of progressively we without expense to notwithstanding should bit of up year would more, and the a ramp outside R&D, you we've that continue although reasons from year line revenues of curve, hopefully should revenue, expenses the marketing been progress a reflect the would as I using a expense tell relatively mentioned from we investing perspective. I contractors percentage episodic our to expect more

continuing of to invest our in platform. R&D build-out to in continued We resources are support software

you So run the it fiscal in that should expect higher will 'XX. R&D year line has than

Jeff Van Sinderen

in That's about Okay. I helpful. in items more these we're all since could talking And different of the kind just line if squeeze one P&L.

give can gross as plays you lumpy, help on of are any as Just us progression things margin you these Realized the some year out. said.

scale you if introductions, introductions. margin for progression on just margin You've the as around got product to early Maybe products. continue on you product plan reach some new touch not more leverage new things gross Perhaps or those you the get new there's gross that are can year. -- don't that

Kerry A. Shiba

out And would only as process physical but shortages I thorough also count, be some that were were incurred margin surprise count. year. Yes. that the inventory the our quite improvement points the bit with by year-end a Jeff, result. was I candid you, little process was of throughout fact In of than we for that came go that to higher physical fundamentally some comment We with that that took gross there need charges it To to the -- caught quarter count, normal. a some points it fourth it very we

in basis as directionally certainly worth quarter, also number of were that I products higher those of little which was forth, to you to as QX quarter worth EBITDA charges got of that than almost looking number and expenses perspective, XXX tell I of area a some items, up item you is that we just we the this. charges And pad last wanted million basis was weren't the $X.X about is high of those And back point. EBITDA truth. That added roughly kind points fourth for And of going identified the noise other expected, the normal. And say were this they this during inventory point to an like obsolescence relate. talking that of So year year course, bit really starting took count. XXX hit launch that worth on margin profit, with gross physical where all affected to that, at margin. With that to a points

year, the throughout far we gross that profit quarter-by-quarter continue to As I year. would expect see I directional to progression next as improvement as the think in go

our to gross progress quarter-by-quarter we've overall driven be help. I in we rate to margins to terms. to relative think the the stable clearly contrast to gross mix in going some there. services especially improvement upwards. to start by of area I the But services throughout margins contribute second gross progression be leverage half you're half in area. In past, labor products the area, progress in a directionally, I the would as a products tick year, first looking small expect the upwards profits do going to software is The more area if the as going to to growth is couple it's in a of continue about talked And expect areas. to the in

improvement will mentioned, incremental gross there. the products of expect, introduction help I profit think that in the the Joe the we new has would provide

Operator

Northland is Capital next Latimore from from Your question Mike coming Markets.

Mike Latimore

profit All on great here, fiscal a nice right. Congrats 'XX improvement.

can it's there? you Just ticked really up continue sequentially. I on I grow that acquisition. And talent guess, think it gross to from the well know But margin, Kerry, service from

Kerry A. Shiba

Yes.

I fourth to quarter think I doubts about services no There's tick the small should to maybe march think And we from of the was the we point progression as it. the think year. be move a quarter. of we fourth into strong. to forward, as even that the would first I continue unusually rest strong see But expect the fiscal down margins gross I 'XX, compared very quarter through

quarter the would progressively. fourth So us quarter should mix fruit continue be I second first that. quarter, to then more out, on conservative improvement bear labor to But in for I on think

Mike Latimore

close million quarter, the deal. in pipeline? earnings said fourth is All might about Makes were right. Great. call, on sense. Or guess I be then quarter? talking for bookings you the the And that the potentially that a last you when in there still did $XX

Joseph Bergera

Yes.

Mike. So I'll that, answer

was the move magnitude just say we So of somewhat tracking million. a -- large of which will the That I They very so number other did in orders, is those are but do was close to them around yes, unpredictable, to again, future. And one contract. didn't. transaction, relatively OCTA expect kind $XX similar we track was under deal, that to close. that there another, to timing continue it we our the OCTA addition of opportunity close that obviously, the near possibility But that call in expect are on continuing have period. do near XX that as There be well we to future. March comments the closed the to others last as may earnings we the relatively there could which a in provided our when OCTA in

Kerry A. Shiba

-- had you I'm think lumpiness sorry. momentum about of it. year last lot momentum When think bookings, on business, about of a When you the in

an one to average or close million, quarter. the only $XXX that was per average. If of X that's like that you last of out $XX take about year year million total of about bookings $XXX quarter There was million our for

but was it lumpy. lower, either or higher quite So

of of deals, had perfect but affect occurred foresight is once, at So a last looking timing some larger when the which have But here some to these, we've to you something this at because year, year, on of quarter-to-quarter. Mike, it's than we again, against the mentioned of timing look of expected. us quarter some keep low amplitude and quarter these that comp of is be the we first more the first high as tough

Mike Latimore

sense. Makes Yes. among service? more the pipeline, or larger And they in makes with towards deals No, skew sense. those do product -- it

Joseph Bergera

mix of Mike. both, a actually It's

Mike Latimore

you get it. that expect this NDR XXX% you did be Got say to quite year? didn't I then that. And Okay.

Joseph Bergera

Yes. Correct.

Our software expect NDR was we improve XXX% in to fiscal 'XX, and about 'XX. fiscal XXX% in to that

Mike Latimore

then highlight the good. And you Very on differentiation won Great. announcement. deal the Okay. sort of why you Can that what Telenav and curious just just is?

Joseph Bergera

think that's unlike our data evaluation, single and we that truth variety ground on validate sets up then largely source. us sources And And always a end we put we Yes, a with -- vendors because a detailed entity, vendors curated extensive mobility lot that data down again, draw quality. talked And and really are of they about, And test upon data a unique, very do out on data it. through to have as are effort very lot other data we sure. a transaction It to almost different a mobility top. other coming providers. when other go came And comparisons data of through data always, we to a set. relying set, we've whenever that we data valuable, they highly commercial do really of

certainly day, out not won we're -- we It But the data price. top. do It quality. that so end on deal. the side-by-side due come why was that at surprised, of to And anyway, not on was we like comparison, whenever that's we

Operator

question Moore EF from is from Tim next Hutton. Your coming

Timothy Moore

And enhanced Electric Joe I maybe the new nice about has news Can more impressive, And Sumitomo was the what twice. from I was on it success? this kind safety orders just detection see bit Japan to wondering and touched maybe the little you XX%. addressable Kerry. That talk of up Sumitomo -- coming know Industries was pedestrian a double Tuesday features announcement over are market? to Joe

Joseph Bergera

Yes, sure.

the actually of we're in particularly detection. pedestrian not States, terms United in advanced So

just that personal with the outdated lot you guys, for alert -- that you'll standing signal probably which There when if very your of button it's think lot are at controller a you're intersection, you I to lives, you'll own of at presence. that intersection, press unusual in of push a an not your approach. see there's you're a problems

that fact, is having pedestrian just recognize have In the there's than They for Japan traffic any more high known device. pedestrian in -- just unbelievably -- Japanese level traffic not button other it's -- market push an just they country. adequate is an of where

and distinguish standing to when I you to the and it's course group intent which able difficult of want you need a the be thing of got to at so understand radar Sumitomo pedestrian but people can for unique because precise you've very all like like a over need details, large years speed and individuals intersection. invested movement, an trajectory has to be And also pedestrian sensor, of into used very very, very a don't of very, detection. a in number go And advanced

class, it's be very, sensor to discussions pedestrian detection very worldwide the which this we introducing So the ClearMobility in Sumitomo sensor. intersection been we in what about integrating at complex. Anyway, I with that mean, developed We've intersections. time dramatically detection improve believe market. in basis, think into best Sumitomo on systems, has a with signalized really pedestrian for We're platform and into -- at detection our deployed U.S. additional be detection will sensor, will our which intersections that some

mid-block of But including personal more like that will own same your that more which you device mid-block other nonsignalized are can also -- I'm up there which a someone lot be lives at get intersections, -- see present. they're lights going are crossings, like sure the again, deployed in to pushes are when actually activated lit and button. at those being only crossings, indicators today, when And pedestrians these various and are

does our today well. that addressable may intersections, the market, this sold which new in device and the why people detection activate lights, at United sensor, with is that intersections not also is without are only But other way this products really intersection so to sensor, the going we'll signals. the into -- -- traffic with increase have new States. And detection requiring to which occurs have applicable able do it's to that to at revolutionize And pedestrian respect our be as mid-block

and can increase technology, enhances so we in what the market. of the results significant total in addressable significantly our And deploy our where that's number intersections

Timothy Moore

That nice to paint great and picture. was color, it that was

that was think states wondering next in what the the like are I that maybe good. Arizona you I you over addressed enter more to mentioned pretty win. just U.S., expecting year? You

Joseph Bergera

of again, on the like specific kind offer. depends Well, it sure. Yes,

products throughout the share have So West Belt. Sun Coast and significant the on our detection market

And about and lots to us of so are the Northeast penetration for expand previously, talked regions. into our Central opportunities as we've there the

that's for a focus big So us.

respect With sort a they're different still yet services, to our of footprint. consulting

those are products like are are products don't like our software do. our boots different, require the on that basis. national sometimes a consultants -- detection consulting Our easy They to on services and sell have we a and actually ground on sold

anyway, or underpenetrated distributed but for us; the I'd growth But evenly more kind market, the that's Florida and on across to it's presence, say Southwest, market; to country. But then again, continue that the where underserved today, in the should areas very would substantial the focused Northeast. central substantial and a that a where depends develop specific be So still we're products. geographic of trying and it where the general, significant markets there's opportunity massive be we have region we're on

but our of variety firms and on channels, feet a arrangements presence a that to increase pursuing have with have. then we're our or the to entering including distribution markets, continuing And those actions into like putting local street also breadth of capabilities marketing in co-marketing local that various presence the lack optimize arrangements we

see through that developing. local those we that partnerships access for so an these And markets we're us unique to as opportunity

Timothy Moore

Are there into can modernization question the That's quarters? that any And last that U.S. Philippines over jump ITS in next TDA-funded the win is project last terrific. regarding you maybe international to part deployment month. you announced few more of the my countries cities or

Joseph Bergera

various Development would these foreign Agency continue originally our for from, more to talked entities, effectively contract seeing standard, to more Iteris this That leading announce services. it for planning yes, become to continue contracts with we're global result inbound Iteris would it's connected similar and lot that interest, we've international in And Cooperative is result, various or way, as standard. vendor we a is as Yes, we've and great the of delivering -- about, developed procure a therefore, Trade absolutely, from in now ITS ITS has as We Architecture U.S. services expect working as consulting interest the then countries U.S. some which foreign and ARC-IT, Intelligent really inbound create only worldwide interest standard And national here countries a of expect like by that. the a the to a what to time. been And Transportation. recognition a vehicle to international not make Reference we reputation but mechanism of those architecture, us providing markets a see we've for capabilities. And yes. nation's became to question. as And from easy been to information architecture stems all reference the and

Operator

Klee is from question [Operator Allen Instructions] coming Maxim from Group. Your next

Allen Klee

Yes.

offerings, your as-a-service driver increased attach for point For to what of as the rates? would you kind

Joseph Bergera

Yes.

say, depends. But general, better of cross-selling. all, getting just first it I'd in at So we're

been and to value trying -- super bundling frankly, increasingly increase integrated has historically capabilities. compelling disrupt pretty like buying like market overcoming Our of where and various allowed gotten has model also, proposition most sell fragmented. been larger that these model. we're this offering think effective just a to at solutions objections, And solutions, which us agencies we're have we've point I in And

sector, thing We expect public about sector agency continue with great market, one another. that. The project our market to to to suppose, going don't public do our our I customers is -- our compete

than more And so one with practices to happy another. best they're share

great we're value references And as to so this and then in become demonstrating customer agencies, successful for executing on those agencies us. model those

suit. follow agencies And so we see other

to stages just proposition the the a we've So at better the gotten of fact we it think articulating value kind Allen, that really comes the in of of end model. early terms the the procurement customers. to we're development lot the really day, at of alternative down at But this

customers benefit. responding snowball Our it's and to beginning are that, to to our

Allen Klee

understand to that's was you long to things you if negative positive that during said How the fiscal you then had you impact impact? to the that the adjusting or for? older I the you think about then a said quarter. just how going lawsuit. related will costs of going lower to that costs And better thing, do second year why X to last And trying small Well, from an but related the things -- just be a a if forward. contracts, data adjusted them was it little but to negative question, one past about during contracts litigation

Joseph Bergera

Yes, sure.

bankruptcy, with background one we had another cost, get those Both and were entered Otonomo And access de-SPACs. that of is vehicle data the earliest customers went to both into very them Wejo They to this there data. Ultimately, agreement. into some the had called of entered companies we their company businesses with connected with they an So interesting marquee pricing of probably models. and XX those We're in provide data. business to those called agreement been one bankrupt. agreements they months. But continue both connected vehicle for have Because entered were XX would negotiate for we at their relatively the businesses unable Over kind first price escalations time, original customer, to were out, of early-stage us. least were sort data able them, as and preferential to contracts. first there to were turns it mobility of we to generally

the in we into we these we with into market, favorable Arity. we're to negotiate So went other the agreement pricing. where pricing multiyear entered was including Because of agreements able But with circumstances, and all-you-can-eat, upfront with able as alternative weren't providers, to an lock entities. it

'XX, impact of in sold all-you-can-eat, agreement but fiscal benefit providers. to cost So goods fixed in negative a there with alternative license got from that fiscal we've this 'XX, the was we'll fact our

so maybe cost, litigation Allen's fixed if that's don't multiyear us we you had. And was the to and Kerry, to going that with these continue that the see benefit will dynamic to that I'm because prior with unlike And agreements And referring -- going are that punt agreements question. was then could you Kerry to. you answering respect mind forward the cost, to which again if

Kerry A. Shiba

our we the of of fall of next part is thing spike expenses the a everything can based going So as our incurred the and expect be year, occurs. favorably year the there year probably going result And the The hope Allen, QX and put question. as I'm sorry be on cadence we all if we trial expectation else trial, pretrial would into mirror $X.X missed this of next million. current rearview filings us. in of sort roughly certainly that going for a cost in into we this to in preparation the would was date, I to which The

Joseph Bergera

We following Unfortunately, and litigation, trial. it increasing it of things would of our which September. can people that for create calendar of the And the lawyers Kerry, for I'd to was when new who this the cost. been just sort occur because actually other trial full, push you of prior in pushed to have like comments benefit up very regarding some being And do, April. court's add like anticipated had find to ends the motions out they opportunities seems that previously

trial anyone in date But prior is the So to trial obviously, now us. as case that our made, quickly is April current remembers possible we September. from any behind comments move the to this said, trial anyway, date as to as Kerry desire estimated put get did and just

Operator

Bergera, your you address analysts. are more like covering remarks? no providing Thank questions to you. questions Mr. there any Would closing from investor before

Joseph Bergera

is, you, how collaboration actually opportunities did Green you initiative. positioned with Thank productively because would on is we operator. to question. I Iteris to comment investor one Light Google, with can like And Google's and Yes. great work that And question which any strategic question. also, a receive position is

who don't been know, regarding and recent those reports there's For Green stories of Google media you guys some Light.

with of Signal knows, our the of based on intersection we've research but signal is say within thousands referenced do would lab -- we ongoing ready. signal product you Google I'd Google look of agencies. Based I at Light, reporting It going our procurement. is or timing it's clear, been feel Alphabet, signal is and that to benefits timing purposes on that across just studies production never want a Light of mainstream. most on in with also say anyway, signal in that constructive operations, especially Google characterize Green them, some dialogue various complementary. with handful And study Light detection actually Green with very that very, in we at agencies, collaboration you're very and only just is we occasionally actual have if So do concept associated so for is project that it's Trend of commercial collaboration all see Google reporting a I intersections. to from deployed are note them by our Green Green Green a different very are I it's Light including it, different our including And collaboration signal just research on And the want is of and not any ClearGuide understand used And really solution. a Google. the It's be a production-ready Google. international. To that stakeholders of and Trend Light most a that is commercial validate activity. particular, Signal but any -- control. we everybody That planning does said, from Google competitive solution to the that being the encountered software, not Google

actual that recent Google signals, concepts, about while I those want conflate replacing titillating, of note they to represent operations. misunderstanding kind stories basic operational they're Light the technical like signal stories and Green of traffic Additionally, a and

in opportunities engaged not we Light collaboration Alphabet, my believe we're as want including -- therefore, we make Green not Google highly that companies competitive. understands competitive threat. So again, various the here to is line complementary, I And bottom sure are everybody across that Google, do see a and the

addressed just our So question, Investor anyways, about that having to briefly also talk wanted I of Relations program. kind

in on XX, Just the Northland XXXX. so Investor be knows, participating we'll June Conference everybody Virtual

your guys please Northland like you speak And would so if to to us, Securities representative. contact

that. we're And us. for questions investors Additionally, and other any happy investor activities course, should then, always of you planning speak this be to engaged coming be outreach we're various any more there'll communication about of summer, have in with to

us. Anyway, weeks. please our first on forward with when don't actually of our look So results if contact you progress to all hesitate just in XXXX we report we updating to quarter speak don't beforehand, few we you a again fiscal

we'll Thank everyone. So anyway, with call. today's that, conclude you,

Operator

Thank concludes you, event. today's everyone. This

disconnect participation. you your for and have time, wonderful day. may at this Thank a You

Iteris (ITI) 13 Jun 242024 Q4 Earnings call transcript