Earnings call transcript Q4 2022

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Jesper von Koch

Hi, and welcome to Neonode’s Q4 2022 Earnings Call hosted by Redeye.

We will today start with a company presentation and also a presentation of the Q4 results followed by a Q&A session by me and the companies of their analysts.

So with that said, I leave the word over to the CEO, Urban Forssell for the company presentation.

Urban Forssell

Thank you very much. Also, from my side, welcome to our Q4 and full year 2022 earnings call. our results. Nihlén is present he today financial the me CFO, and Fredrik will With we into the before screen take you And go it as a like I find minute to well. would to on read here legal and the disclaimer, the main presentation,

and This contains Inc. oral may contain statements of and presentation management written forward-looking related Neonode and its statements.

growth, the They financial potential financial market future events. also Forward-looking product include introduction, plan, opportunity, use development statements performance regulatory sales results, strategy, sales include of cash, matters current expectations, information efforts. about may about statements and or and

Forward-looking cause statements and any to involve assumptions, these company's of levels the other unknown or and management, the of by forward-looking number statements. information and known and actual to from results, are available different based performance be on materially a risks, expressed activity, its may company achievements implied that and or uncertainties expectations factors

forward-looking other has duty date. information presentation in and own prepared accurate and from herein advised or of that been the various from today's management Any The these its are to well obtained believes from statements. forward-looking revise information company is presentation update made reliable. by has information this no undertake factors. consider been investors other its it Prospective company or such the provided sources. carefully information, are uncertainties statements on to industry company risks, This and the as by may included Certain of based information public derived as contained be sources. which The sources

information. guarantee not and has independently information company cannot However, the such accuracy of such the verified

the some this results, here at After regarding Fredrik financing. year and stage up come update on November. have previous Nihlén let's Thank to I give and comments you in financial also followed and invite will business by look to With QX strategy will I present full brief quick very call earnings today's XXXX our a connect much. agenda. that will a this, first

and and our today comments an finish Samsung. When X, I right into With Apple return remarks. as forward. today's also outline point about concluding go for going some litigations presentation, for plans discuss current let's some the versus this patent And we it. I status with off will I just will give

followers new to business I For our brief give strategy. on a listeners to And combination is this and licensing this technology want presentation, update of product just sales. and a

technology today where work So in focus is One, the we areas. two licensing. business

with customers, X other our at call and customers. some Looking current slide. will I where suppliers with business the technology two side, Tier they examples and We Touch segments, printer include work products. of elevator we we Whereas and in our them the and interactive applications illustrate also the kiosk target here give Module next we Sensor automotive right our manufacturers in customers MultiSensing. zForce platforms on products

on our application and areas working on and And on something controls. MultiSensing platform we our obstruction our to zForce also today Key a use licensing platform. of interior This solutions the on base display monitoring head-up focus In driver it's in business, day-to-day operations. and and detection, lot is features. in-cabin we're work we what

other mainly displays we keypads, touchless on work touch. or contactless surfaces touch, buttons, touch on holographic business, and products our either and keyboards In and

is which can we you Modules, Sensor Touch our make quite think. display cool futuristic with and holographic So images interactive,

the and on with work also rugged sensing TSM gesture We touch products.

that's different strategy. fundamentally. website you reflects updated And and there Recently, our see and descriptions we underlying illustrations will our now what quite is

recently. So and to please the contents added nice out team website visit that check neonode.com marketing has our the

development several very, we a establish sales in marketing. in do at if we left, do strategy. we also focus the to our marketing you in look important to will And And product a this What And have markets. lot is sector-based here that very aimed especially growth the of and to everything this and today of support first you segments strong see step, in is and beachheads is supporting businesses our strategy.

different work segments, others, also have demo and of in to is and are beachheads. scaling demonstrate also show already very, up. is with technology. of kiosk really further of and focus beachheads, are we interactive types we break We still our We proof-of-concepts established admittedly value working some of But that that to we the later through breakthrough to elevators, very beachhead In have on and feel this one projects the market. and segments, in active. certain achieved also important follow the example we we can This we the the key segments strategy sub establish so

So is this it is been now strategy clear for we we refined that time, this really that have right have believe the some following and way us. forward we for the

marketing. regarding more And

Detroit, joined could all and head-up especially on we display, that start focus a travel the you we join November. quarter, that year, here China virtual obstruction see detection, live during And During during examples are monitoring. in also driver in the some automotive in-cabin last and second controls fourth They from half again events. physical will to of in events and interior glad event Munich that and we

different to Very, we Build is and that huge products. Japan our applications attention our this and focused offerings and together partners' us interactive with here interesting proptech for very event is showed of successful kiosk with We also different aspects which on attended partners.

Japan, great people of display. part from In were late a appreciation booth in different partners' and with of on products line of part lot and our and our we different solutions week taking visiting this, with as our as attendance Tokyo, last Tech Retail also

and terms where is and a do sales. of this marketing bit So, and little a are today what we business our we strategies in and of short overview summary

back to short CFO. to a our I word in come I Nihlén, but want while, the will now give Fredrik

Fredrik Nihlén

Urban. you, Thank

will just summarize I release and financing. visit highlights. on webpage key earnings XX-K our in find neonode.com. section presentation if Investor will few also our can on words this you the say a You I our

X% decrease is to which compared saw license million, industries, XXXX. of Total slight shortages XXXX customers to and is automotive to license And the XXXX that We due in this compared revenues and component for our affect in revenues revenues. decrease printer affecting was XXXX. a within $X.X a hence our

However, the recovery revenues. second license in we of saw a XXXX in half

compared of in For here an a XXXX. products XXXX. revenues, Also X% saw product is in we recovery revenues. QX That reached $XXX,XXX increase we to

long we our in Asia affected and launch lockdowns and affected are However, still customers. at in XXXX, also are of development cycles by we

a -- for obsolete which stock have obsolete Gross in write-down margin of is margin XX%, a of of for Adjusting $XX.X onetime XXXX QX. helped Swedish was was XX% That for think we XX% includes would to by that, XXXX. effect gross we that decrease XXXX. good weak million for but compared level. we is reason the is Main are control, of cost Operating a currency. have also that expenses we a

As I stated of in call, in majority costs krona. the earnings the our Swedish last are

receivable XXXX Net slides, decrease is approximately keeping P&L, net XX% XXst million and That the of in $X.X the of loss we same as is a operating previous balance to $X.X $XX.X XXXX. had cash as expenses, the million. compared XXXX. that operating We discussed a our in of That a in of but a revenue XXXX. I is less at Summarizing in cash the year. as million million last And was level burn year. compared of had to December $X.X activities of accounts decrease for million XXXX for balance $X.X

on now financing. just words a few say will I

position $XX.X January of million to price 'XX we October January, I've used that we $X.XX. the ATM in increased $X.X 'XX, to about additional share adding million an October part million to XXXX. we raised but on slides our average in We And the January our facility. During to proceeds we previous improved a also net execute net balance per the of will are of give think of talked stability selectively QX balance strategy. The raised by financial proceeds in $X.X cash that

more some to give color will Urban. word the this, to I back And to give

Urban Forssell

of we And very working growth. our opportunities And strong in about we business. created to we several current this revenues the on time with around of during are funnel interest want it's that we currently promising plan on. bad, indeed, year, and are and ability turn tie what say more but satisfied working here not of to our less spend that discuss in some XXXX. several optimistic were To rest very create in that I offer, to and we par have that solutions forward. we’re the in capitalize So grow those the have, last said, are really not Fredrik the must presentation, hard I improve we sales sales our our significant and some or and status also to going to

good strategy believe our they Plan also to that put and strong in and good forward, finances going a year significantly together business position years. this the coming we grow a have us

adding are resources growth to markets. sales sectors key in our team to We support global and

market partners We are other broader also a and of reach distributors, for value-added a network resellers penetration. and expanding our quicker

our marketing continue Regarding we marketing, to brand to build and on platform sales. drive

physical the quite demos, significantly. increase projects focus and also will POC events on We physical

some developed the leverage that to want have resource. this in But and our technology have use IP Of this draws that the given to course, we we cash again, position, now the we strong company.

of shown with to in in marketing digital have And continue very, and how is presentation previously value. the the base key of to lot We of support company. as this customers a value We key add technology will and and our capabilities also can issue campaigns. work good for an show our point the show very to a we believe technology. the technology IP base And the a team, us value we demonstrate and the

Moving over to engineering.

offering. in customer and can to to also value continue our we to added with We improve broaden the invest bring solutions our products product and development

investing this and earnings firms our To these and We general will are we to after internally the but in we on more manufacturing engineering are development shorten with details calls, increase staff support only and spring other and our bandwidth. some summer. this our also market external not efforts, own partners time share engaging with later to

are All and for again, to the the hope repeat customers, currently illustrate Licensing X only just what the we in where focus Very, are to of basically such driver discussions main and some and is encouraged upwards very automotive, customers working practice, aiming MultiSensing different that indeed forwards. focus capitalize Solution, on with interesting. and to Tier a and And we couple monitoring in in-cabin near work and future. are on in and involved OEM detailed promising on we we

on objects company manufacturers. we good, And acceptable, have display detection. display by lot several neither that here different customers the solution and attention not draws very to safety detect by obstruction robust Another and foreign effective image hazard. head-up also legislators cause from our area is a And head-up which nor and vehicle a in of cost projectors obstruct may is this

we therefore, of And customers. modern this ready from of this is systems also in solution vehicles, we very for lot drawing technical a need disturbances. means a have that here of type of type good, So, several detecting attention

mentioned EPICNPOC, selling based how who solutions. And are Sensor out. playing in an and work launching example on features other example them, we that just is studio we previous Modules, And French design together offerings. slide I with developing on work our And cooperation controls. and we also developing our are Touch with and prototyping one called is the a rapid also interior company this different

in and to their So we also a exhibited Vegas year, was of contribution our attention lot in there and co CES at successful, solution EPICNPOC January with very significant. Las this

So Europe very in customers cooperation proud new we is of regions. that one this reach think but very, for this way to also other in mainly us and are

customers, for common service, OEMs, it's to do elevator elevators. both elevator upgrades work the aftermarket We continue companies services that selling the elevator developing with products and both and control and in And business work panels. the also in selling simply companies OEM, and meaning in maintenance our selling the elevator equipment new and industry, retrofits

types they developed by kiosks nice different is solution company clips the visitors of illustration of long to nice we of a there medical come kiosk a Related video charts Swiss many and information graphical small for are It's Maxell This animals that of different But Elix for called Sensor other our Park example. a business with also holographic in launched have in types business, have a Touch is Aqua where Module very sea. and related our Park a a in Tokyo. and Systems that Sensor medtech we many at to is and Products. still interactive Touch Maxell information developed kiosk This the Aqua other course can that fish this themselves forms. actually Module imaging Interactive kiosks cooperation shapes with where many, a example support systems. particular browse see very

Here adds functionality OEM that big very with quite their a leading that system. equipped touch value very, in an here feature high particular, to performance system with otherwise ultrasound program and medtech have our adds

So device do studies, typically and doing for and their now, use. you having on of like using do they the nurses when click doctors ease gloves fingers the handling and can point and and quick to to prefer these zoom using and then ultrasound examinations they gels screen

robust the existing very that these and and could feature. So both then we manufacturer value, fast system, users, touch nurses doctors systems, end and add the for a lot a the touch of have to of to very, who their accurate add the

be And so and encouraged medtech that includes forward. success anything taken for increase it our will three more sale and self-checkout cases And that by point are going focus focus the control entry patients of are and we buying of this lot users could to These examples hospitals, we we similar. to to everything we the for the terminals this will use proptech will we terminals, also retail see a offerings sectors one Other elevators, forward. in have of fact, focus on retail simply on with sectors much systems value panels we customers from going visitors brings several outstanding systems, proptech. and be and and And could and both have where and medtech that on steps In that the more alarm in buildings. of the other hospitals. program are examples as end

we we customers. And meet some there's also that are overlap here and particular with we can are also different will share to that there here calls back a that more now kiosks working some but we strong in earnings later So interactive come see requirements show to updates.

presentation, to we and of comment here. this slide will only Drawing give end litigations And the the our I closer regarding Samsung. about I Apple with patent And comments the to have promised ongoing Aequitas. agreement basically one versus on facts some

our proceeds through and patents. fees. of net on proceeds the website succeeds The So families technology can Aequitas underline monetizing net Aequitas legal licensing of in option LLC. I the related patent smartphone know, states as American have that understood call signed with in we we Aequitas Technologies an associated XX% many with Neonode expenses gross should Aequitas agreement is of less you Aequitas be is technology available to will website. as pocket And as here and embedded find SEC's that XXXX it what if patent out proceeds, also is an And you the old get based for call with agreements it two agreement company. to monetization. to And want we our

the all look in can filing XXXX, conditions. there from and the and at X-K find full you you will May read agreement our terms If

case this In link Aequitas Samsung us, one of June XXXX, and of been than is against Smartphone Neonode and litigations The a they direct the District Apple the Western to and Northern California first are filed two still Texas. in infringement the name, to other is the And LLC, having two patent of lawsuits, has of part Apple moved District these case ongoing. one against subsidiary Samsung. no still

underline want our this. finally to in I also role

owner this to in transferred to XXXX the we that of is patterns Aequitas. the Our regular role in be

Aequitas against events in and or find Apple with whole communicate we these that to speculate thing the appreciate patent we not Good can very involved ongoing this about will any this in with We in facts operations. we idea around that Aequitas. And influence any here lawsuits And And whole particular, litigations. costs not bear many no descriptions exposed this, XXXX Samsung. But behind the the not discuss Neonode's and risks arrangement the arrangement that this Board to into the associated because litigations and up we of today. agreement them. are is are entered have is have over insight is what and these into interesting very, both therefore is place taken and this. these basically we till stay about we actual will study with Still XXXX that from and and of

slide. me remarks very our you to And much. brings concluding this Thank final

revenues was for US$X.X and down exchange And used activities cash tight presented, that's As control very this $X.X very, in also our And net sales operation as and and is in was rates. due XXXX. decreased were million, Fredrik million. million cost in loss to similar Net XXXX $X.X XXXX. has from favorable $X.X mainly results million

interest to strong our in our into to strong our product zForce see marketing growth MultiSensing development. And and and continue TSM and investments we We products use drive platforms. new technology sales, through cash position will

of very the will grow years. believe the this to significantly. So positive we And rest and we also year business look our through that be able we strongly coming

Thank you Q&A. now invite up And much. very Jesper I for

Jesper von Koch

Thank right. that. you much very for All

with let's previous quarter, times strong many the behind was sales this? as product quarter's. just the Could as explain high reasons start of which you So

Urban Forssell

But it's that if many of QX a the did push we And as efforts. drive work sales. and in cases, some combination different really serious look we had in strong can to you what QX we in course, our Of effects both at favor. control,

to many orders the by step place that's for that. our team good work to happy are So we influence really and take to customers

normalize last I to to a also some gave and half started businesses that for business. help in the And were got and and Asian the of for new think China with instance that have the partners to and also because year helped. that able year during situation, very good customers we countries other together positive We we products in end get Europe, second

second could say brought QX invoice several licensing business and NRE for also and We some new quarter customers then services. non-recurring in which so contributed. third revenues, that would half that in our fourth during also projects I was positive the and engineering

Jesper von Koch

Good. was from retrofit the was from business sales? sales new it product stop more And there, it or we if at the

Urban Forssell

healthy have customers that we they say would orders new of I the but of several smaller, be bigger smaller. sort that a to us but -- orders were also retrofit equipment, of with the businesses for tend some but placed portion

So balance, the were indeed of my the equipment. a new from we from and But equipment. between head bigger they I orders, know have applications retrofit I don't believe have majority exact top of the that new balance I

Jesper von Koch

Okay.

new from contributing? specific should the that orders? large So it anticipate it like make that one equipment, like we was a ones or was two few Or

Urban Forssell

numbers. that in But No, several huge even present would actually decent different several then customers volumes still was we because customers. stronger not placing, orders have came from

glad we that So were for.

Jesper von Koch

the side, especially could regarding are it you from, is those NRE And fair license it's Good. the to there, say or…? automotive segments like and assume what revenue

Urban Forssell

in some we A side licensing And both America. very manufacturers couple main with fact, with customers a has of meaning regions, have in We focus work Tier automotive our customers, Europe X North today and for all three been suppliers. and our in on in focus sector. Asia, business directly OEM from clear vehicle customers to years

driver, topics two in on display presentation here there. contributions stressed hand, the there. previous in that have head-up in-cabin these detection we it's also for this presentations, obstruction monitoring one main and So And I've and

most see today, we and So interest. mostly activity

Jesper von Koch

on the how you able like the lot there activity been anything results being like you -- I side Can driver about to some has are side, close there. a mean RFQs? on the say to of And present there, RFQ monitoring of anything

Urban Forssell

very are we close. think We very,

it's But some course, winning we have NDA here the very, that new Of and it's businesses good we in future. under sensitive. very think of chances near

I that to for talk by are share strong OEM the But there We customers encouraged get competitors, that we first can then but many in field. and we we maybe this other certain feedback least also appreciate when know different entertaining. a different, supplier competitors chosen interesting we still, wave, many not that are And are their we then prospects now you for some better reasons alternative. have already for they're have that looking a found

Jesper von Koch

is say? Okay, for this region And good. would specific you any

Urban Forssell

That would too much. to be disclose

Jesper von Koch

And of like, -- if compare also head-up monitoring Okay, like for okay. driver the that you systems? is for that timing there, the it, compared right. All yes, the display, what's RFQs to like status

Urban Forssell

the with the design as these cluster, to if to for need this that of then on looking head-up you are windshield. EU It's a are maybe and OEMs of field are and they're all few working instrument the type of big and traditional types the -- future. less in driven but they bottom having having China going and and and cockpit of issues, to fulfill passenger feature both I displays, similar vehicle, save remove inside the traditional displays planning in will remove, arrangements, clusters hard premium legislations some compartment manufacturers believe safety different all And in and regulation, the change at some vehicle some that the information windshield the to by cost, the to regulations instrument U.S. in -- onto reasons And more the space also the project the more of free we safety instead projected general third, view, but in of of betting

Jesper von Koch

And you average for right. price All per say anything the prospective, vehicle like solution? of selling about can kind that

Urban Forssell

have we from zForce automotive revenues significant case, indeed, with technology today be we application about And zForce. our will talk of customers this licensing. our And another In platform.

in very So per often And that's automotive, because interesting, very, talk very very, volumes. about run the programs we dollars some in high vehicle.

are type projects. years our have of of we of And to future long through. license from that sales should a there development and is additional until fairly revenues. now to work revenues course, cycle we to we launch So aware X.X be significantly X.X we these license this that will hope get contribute this everyone But talking perhaps that about

Jesper von Koch

optimism I months. XXXX, conference XXXX, like XX around next a mean on. for our inventory XXXX, that. in also good. you that you quite And so ramping use the had possible anticipated like to about right, All then something high generally speak you like that revenues your revenues you will calls So up late with and like last XX

Urban Forssell

talked components We about inventory.

Jesper von Koch

exactly. Yes,

how wise? So, you sales see do XXXX rolling out like

Urban Forssell

business, than do think indeed products previous which much we our that before. certainly better quite the the can we In year year, was to similar

are see optimistic confident we steps we we forward. to So, and are that start can some

to some We have to we the decided via can additional also partners. new good because sometimes broaden the efforts sell use some portfolio, direct now think same products we product that develop sales variants sales different that we markets or established have in through to channels our channels,

try different doing to steps of are both new. to sales, basically every of the products we and here drive existing So week

a So have the improve, company. digit to single really make difference break and week we out have very together have because last And years. we with -- the say, we had million have targets set work that of to here for type to every and turnover to Board dollar my and team hard we of we ambitious this, the Neonode, of

deserves is on driving more technology, this capable the think higher much I company of sales. much certainly

is really achieve. to fighting this are on and what we working So

Jesper von Koch

sales I a onboard I revenue guess get arrangement Good. like into the mean before license new And you for typical you is would license sales, that program. NRE

that is fair So significantly revenue see will the up before NRE to you it we there? ramp assume

Urban Forssell

repeat works. the of I industry know well but that you and can explain I automotive we've how as tried that are Yes, aware to

the X are validate only this ramp certain with for manufacturing you're our this we lot expect to we successful product, manufacturer breakeven always whatever up do the new our the both So all meaning then to maybe a realize is to year, RFQs NRE new that next when the And vehicle to and can platforms. And years. two suppliers both if But the vehicle revenues a have get platform production, of significant or test, from goes mass development support there start NRE phase, to from supplier when and to efforts it's can ideas develop, platform. ambition be Tier part draws consuming royalties and And of the because have very vehicle we at launch licensing. they we into is the time least new underlying this vehicle help. and for and effort using to during course, that

Jesper von Koch

mean about you've about and the you regarding only Sounds say like anything customer the sales, the in potential good. Can segment talked military And then, large for licensing a you now I status automotive instance. talk about basically previously there?

Urban Forssell

Yes, so team during we more automotive of our higher the more focused we step-by-step and simply in high interesting year, in sort potentials have volumes. find still the of because last Indeed, we from those quite on from we to strong interest are we companies exploit a we and that these team, are trying honestly, small And But military different explore and avionics and medtech. also small interests directions. get a company. have

clear include interesting underline where in automotive. that medtech proptech, very focus I segments based. main our I travel about business, restaurants. we very, and more is And and talk the that can like the our business, that products sector products communication we maybe can in on in and together you hotels more Again, as retail, very focus will repeat are we hospitality, think -- that's we why three also So will in now

based to also each in Neonode specific for So the to sector both extent sales, business and the our that's based marketing, adjusting business. forward think and technical needs. going sector our in the model We products sector licensing some also offerings

Jesper von Koch

where or ATM used all some financially, in extent, the like I Fredrik? about you stated XXX,XXX All something that that I QX. both also you've shares XXX,XXX in like think state right. but Could in new QX the and you January just in mean was report to then it you see And yourself in January,

Fredrik Nihlén

will as we presentation, We're on I in in we said of as the in that the our now later ability on strategy And and have end this do, strong said, to execute presentation. Urban position now. my

Jesper von Koch

reach regarding is that statement to the able expect you position like it of as now, -- to fair that money? that, with to have that And amount thing you breakeven with the with yourself assume or cash same that, is the be

Urban Forssell

really then interesting one that run scenario, we That a are have But maybe more. start scenario, can could another could very and to traction we business, one be and invest we But to trajectory to breakeven. as And in is that scenario be good decide the now yes. way similar we today. a indeed, in in operate

we want how checking Together with a spending worry be constantly quick compared are to things little see. more and increase accelerator. year a right running to not on Board, give and cash. about developing. we then So tighten make to out we very of I, and our do aggressive Fredrik little Indeed, bit more are the last adjustments the now, to can bit or we gas we'll And

how good this is are doing And very the we day, to business. we we and on I we freedom every really are driving a can developing So But think, what us and now growth that and in focus what position it it. us keeps busy gives promise. this really use is

Jesper von Koch

wouldn't TSMs, I the accelerates imagine. assume a follow-up of product that does to would lot, if sales can I license invest more that But would area. product it's you ramp is much. But it to not mean of -- you kind have sales invest that of if in as have sales fair if to that, as on that, like a the then up does, more but if mean

Urban Forssell

have also Yes will cycles customers. we and automotive, we year, development first engineering-intensive. launch but about a lot of long medtech that be the business and no. talk will always cycles The military and Typically for licensing

on it model. to But manage good engineering that then would scales leverage you're And after it's we production. royalty growth programs, mass very So need can there. nicely, you give high you then right, focus volume if classic because a resources

complex, then more investments expenses. and it's operating we components expenses, business, CapEx also will operating and products investments traditional some into the have In

external tie will can sure. up way invest that through for So a also burn. balance our through question and drive account we we their a more we more in if of also this capital But own sales. and channels on work to cash It's If how it's the or sales with partners, marketing partners? is more it's our the

to also and think in we alone today more hand, Neonode. that going other the have our where either our with results to will we we products, have cash And better use for can together promoting position or try I the arenas also the On results different forward, strengthen if presence partners. are we direct ability,

key and in you markets see Neonode more So, will segments. these

we was need travel more physical sales will with will be do additional headcount marketing, directly hire I so why flag will we to more our join about team. talking we some interacting we to that's And will then again, and events, more -- we the Neonode And customers. waving more,

some hire last Some already internationally. Sweden, here more three, will we Stockholm, and in also hired actually, weeks

Jesper von Koch

And then and you, then have Urban. see Alright, from remarks that's analysts. question leave any we will other additional all final over to we if No. some I'll for us

Urban Forssell

log to there. attention read you think website your there. Have and a you Please interesting continue I us. See, everything follow will for very much. find day. Thank nice into of and content neonode.com our a Thank lot you

Neonode (NEON) 9 Mar 232022 Q4 Earnings call transcript