CAMP4 Therapeutics Corp (CAMP) 2023 Q2 法說會逐字稿

Welcome to CalAmp's Second Quarter 2023 Financial Results Conference Call. My name is Tamia, and I will be your moderator for today. (Operator Instructions)

歡迎參加 CalAmp 的 2023 年第二季度財務業績電話會議。我的名字是 Tamia，今天我將擔任您的主持人。 （操作員說明）

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Joel Achramowicz, Managing Director of Shelton Group, CalAmp's Investor Relations firm. Joel, you may begin.

提醒一下，此通話正在錄音中。我現在想介紹一下今天電話會議的主持人，CalAmp 的投資者關係公司 Shelton Group 的董事總經理 Joel Achramowicz。喬爾，你可以開始了。

Good afternoon, and welcome to CalAmp's Fiscal Second Quarter 2023 Financial Results Conference Call. I'm Joel Achramowicz, Managing Director of Shelton Group, CalAmp's Investor Relations firm. With us today are CalAmp's President and Chief Executive Officer, Jeff Gardner; CFO, Kurt Binder; and also Cindy Yang, Senior Vice President of Financial Planning and Analysis.

下午好，歡迎參加 CalAmp 的 2023 財年第二季度財務業績電話會議。我是 CalAmp 的投資者關係公司 Shelton Group 的董事總經理 Joel Achramowicz。今天和我們在一起的是 CalAmp 的總裁兼首席執行官 Jeff Gardner；首席財務官，庫爾特·賓德；還有財務規劃和分析高級副總裁Cindy Yang。

Before we begin, I'd like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect CalAmp's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking projections.

在開始之前，我想提醒您，本次電話會議可能包含前瞻性陳述。雖然這些前瞻性陳述反映了 CalAmp 當前的最佳判斷，但它們受到風險和不確定性的影響，可能導致實際結果與這些前瞻性預測所暗示的結果存在重大差異。

These risk factors are discussed in our regular SEC filings and in the earnings release issued today, which are available on our website. We undertake no obligation to revise or update any forward-looking statements to reflect future events or circumstances.

這些風險因素在我們定期向美國證券交易委員會提交的文件和今天發布的收益報告中進行了討論，這些文件可在我們的網站上找到。我們不承擔修改或更新任何前瞻性陳述以反映未來事件或情況的義務。

Now Jeff will begin today's call with a review of the company's operational highlights. Then Kurt will provide a more detailed review of the financial results, followed by a question-and-answer session.

現在，傑夫將開始今天的電話會議，回顧公司的運營亮點。然後庫爾特將對財務結果進行更詳細的審查，然後是問答環節。

With that, it's my great pleasure to turn the call over to CalAmp's President and CEO, Jeff Gardner. Jeff, please go ahead.

有了這個，我很高興將電話轉給 CalAmp 的總裁兼首席執行官 Jeff Gardner。傑夫，請繼續。

Thank you, Joel, and thanks to all of you for joining us on the call today. Our second quarter results exceeded our expectations, reflecting approximately 13% sequential growth in consolidated revenue, driven primarily by Software and Subscription Services revenue growth that was also up 13% sequentially and 7% year-over-year.

謝謝你，喬爾，也感謝大家今天加入我們的電話會議。我們第二季度的業績超出了我們的預期，反映了合併收入連續增長約 13%，主要受軟件和訂閱服務收入增長的推動，該收入也連續增長 13%，同比增長 7%。

Software and Subscription Services revenue represented 61% of total revenue. This revenue growth resulted from improvements in the supply chain that allowed us to accelerate customer conversions to recurring software contracts and also to fulfill more orders for our telematics product customers than the prior quarter. As of today, more than 50% of our eligible customers have converted, including recent transitions by notable customers, Localiza and Trimble, among others.

軟件和訂閱服務收入佔總收入的 61%。這一收入增長源於供應鏈的改進，這使我們能夠加速客戶轉換為經常性軟件合同，並為我們的遠程信息處理產品客戶完成比上一季度更多的訂單。截至今天，超過 50% 的符合條件的客戶已經轉換，其中包括知名客戶 Localiza 和 Trimble 等最近的轉換。

We continue to gain traction in all geographies with total global subscribers increasing 9% sequentially and 32% year-over-year to $1.3 million at the end of the second quarter. We gained strong traction in the EMEA region from recent conversions, along with new logos, including BMW's Mini and Wabi/Santander. Additionally, along with North America SaaS conversions, we also added new subscribers from existing software customers such as the City of Dallas, which signed a contract extension with us during the quarter.

我們繼續在所有地區獲得牽引力，第二季度末全球用戶總數環比增長 9%，同比增長 32%，達到 130 萬美元。通過最近的轉換以及新的標誌，包括寶馬的 Mini 和 Wabi/Santander，我們在 EMEA 地區獲得了強大的吸引力。此外，隨著北美 SaaS 轉換，我們還增加了來自現有軟件客戶的新訂戶，例如達拉斯市，他們在本季度與我們簽訂了延期合同。

We remain on track to complete most of our eligible customer conversions to subscription contracts by the end of the current fiscal year, as we have stated in the past.

正如我們過去所說，我們仍有望在本財政年度結束前完成大部分符合條件的客戶轉換為訂閱合同的工作。

Brennen Carson, was appointed as CRO in June has been working hard not only to advance these conversions, but also to expand opportunities with existing subscription customers and to secure new logos.

Brennen Carson 於 6 月被任命為 CRO，他不僅一直在努力推進這些轉換，而且還努力擴大現有訂閱客戶的機會並確保新徽標的安全。

Also during the quarter, as we broaden and deepen our overall solutions offerings, we made great strides in the areas of our Smart Trailer and Video-Based safety solution offerings.

同樣在本季度，隨著我們擴大和深化我們的整體解決方案產品，我們在智能拖車和基於視頻的安全解決方案產品領域取得了長足的進步。

CalAmp's smart trailer technology empowers transportation operators to improve fleet performance, maximize asset utilization and comply with regulations, thereby transforming the way these businesses operate. Together with our Video-Based Safety solution, our transportation and logistics customers can also use video technology to train, assess, monitor and document asset operation in real time to improve safety, reduce cost and increase on-time performance.

CalAmp 的智能拖車技術使運輸運營商能夠提高車隊績效、最大限度地利用資產並遵守法規，從而改變這些企業的運營方式。連同我們的基於視頻的安全解決方案，我們的運輸和物流客戶還可以使用視頻技術來實時培訓、評估、監控和記錄資產操作，以提高安全性、降低成本並提高準時性能。

With roughly 90 million commercial fleet vehicles and 35 million heavy trucks in operation around the world today, these 2 CalAmp technology initiatives will not only help us expand our opportunities and customer base but also strengthen our current customer relationships by offering new best-in-class tools to help them gain even more from their telematics investments.

目前，全球約有 9000 萬輛商用車隊車輛和 3500 萬輛重型卡車在運營，這兩項 CalAmp 技術計劃不僅將幫助我們擴大機會和客戶群，而且通過提供新的一流產品來加強我們當前的客戶關係幫助他們從遠程信息處理投資中獲得更多收益的工具。

We completed a major update of our corporate website and branding, including more expanded information on our telematics solutions such as video webinars and testimonials, product brochures and other valuable resources for prospects, customers, investors and the press. Visits to our website have increased 30% since we deployed the upgrade.

我們完成了公司網站和品牌的重大更新，包括更多關於我們的遠程信息處理解決方案的擴展信息，例如視頻網絡研討會和推薦、產品手冊和其他面向潛在客戶、客戶、投資者和媒體的寶貴資源。自我們部署升級以來，我們網站的訪問量增加了 30%。

As you know, Kurt's last day will be tomorrow, and thereby, this will be his last earnings call with us. I want to thank him for his support and years of service as our CFO and wish him the best in his new endeavor. In terms of an update on our CFO search, we have been working with a leading executive search firm over the past several weeks. As mentioned in our press release, Cindy Yang, our current Senior VP of Financial Planning and Analysis, who has been with the company since 2017, will serve as interim CFO, effective tomorrow until a successor is named. She and her finance team are fully qualified to maintain the integrity and consistency of our financial operations under my close oversight.

如您所知，庫爾特的最後一天將是明天，因此，這將是他與我們的最後一次財報電話會議。我要感謝他作為我們的首席財務官多年來的支持和服務，並祝愿他在新的努力中一切順利。在我們的 CFO 搜索更新方面，過去幾週我們一直在與一家領先的獵頭公司合作。正如我們在新聞稿中提到的，自 2017 年以來一直在公司工作的現任財務規劃和分析高級副總裁 Cindy Yang 將擔任臨時首席財務官，從明天起生效，直到任命繼任者為止。她和她的財務團隊完全有資格在我的密切監督下保持我們財務運營的完整性和一致性。

With that, I'd like to now turn the call over to Kurt to discuss our financial results in more detail. Kurt?

有了這個，我現在想把電話轉給庫爾特，更詳細地討論我們的財務業績。庫爾特？

Thank you, Jeff. I appreciate your kind words and the time that I had to work with you and the entire CalAmp team. I believe the company is well positioned to continue its growth and transformation to a leading telematics SaaS-based competitor.

謝謝你，傑夫。感謝您的客氣話以及與您和整個 CalAmp 團隊一起工作的時間。我相信該公司處於有利地位，可以繼續增長並轉型為領先的基於遠程信息處理 SaaS 的競爭對手。

With that, let's dive into the second quarter numbers. Today, my commentary will include reference to the non-GAAP financial measures of adjusted basis net income, adjusted EBITDA and adjusted EBITDA margin. A full reconciliation of these non-GAAP measures with the closest corresponding GAAP basis measures is included in the press release announcing our fiscal year 2023 second quarter earnings that was issued this afternoon.

有了這個，讓我們深入研究第二季度的數字。今天，我的評論將包括參考調整後的基礎淨收入、調整後的 EBITDA 和調整後的 EBITDA 利潤率的非 GAAP 財務指標。今天下午發布的宣布我們 2023 財年第二季度收益的新聞稿中包含了這些非公認會計原則措施與最接近的相應公認會計原則基礎措施的完全核對。

Total revenue in the second quarter was $72.8 million, up approximately 13% from $64.7 million in the prior quarter though down approximately 8% from $79 million in the same quarter a year ago. The sequential increase in revenue was mainly attributable to the availability of product to support the acceleration of customer conversions to recurring subscription contracts as well as the fulfillment of customer demand for our Telematics Products.

第二季度總收入為 7280 萬美元，比上一季度的 6470 萬美元增長約 13%，但比去年同期的 7900 萬美元下降約 8%。收入的環比增長主要歸因於產品的可用性，以支持客戶加速轉換為定期訂閱合同以及滿足客戶對我們的遠程信息處理產品的需求。

International revenue in the quarter totaled $26.6 million or 37% of total revenues. Software and Subscription Services revenue was up approximately 13% sequentially and 7% from the prior year quarter to $44.5 million, representing 61% of consolidated revenue. It's instructive to mention that approximately $7.5 million of revenues in the prior year period was associated with 3G to 4G equipment upgrades for a large customer, which did not recur in the current year.

本季度的國際收入總計 2660 萬美元，佔總收入的 37%。軟件和訂閱服務收入環比增長約 13%，比去年同期增長 7%，達到 4450 萬美元，佔合併收入的 61%。值得一提的是，去年大約 750 萬美元的收入與一個大客戶的 3G 到 4G 設備升級有關，而這在本年度沒有發生。

Both the sequential and year-over-year growth in our Software and Subscription Services business reflects the progress we're making converting eligible telematics device customers to recurring subscription contracts. As of the end of the second quarter, we've converted just over 50% of our total eligible telematics device customers and expect to convert the remaining customers by the end of our fiscal year.

我們的軟件和訂閱服務業務的連續和同比增長都反映了我們在將符合條件的遠程信息處理設備客戶轉換為定期訂閱合同方面取得的進展。截至第二季度末，我們已經轉換了超過 50% 的符合條件的遠程信息處理設備客戶，並預計在我們的財政年度結束前轉換剩餘的客戶。

In terms of performance metrics for our Software and Subscription Services business, Remaining Performance Obligations in the second quarter was approximately $210 million, a decline of 2% compared to $215 million in the prior quarter, but up 54% from $136 million in the same quarter a year ago. We expect to recognize over 27% or approximately $57 million of the performance obligations during the remainder of this fiscal year. During the quarter, our subscriber base increased 9% sequentially and 32% year-over-year to 1.3 million.

在我們的軟件和訂閱服務業務的績效指標方面，第二季度的剩餘績效義務約為 2.1 億美元，與上一季度的 2.15 億美元相比下降了 2%，但比同季度的 1.36 億美元增長了 54%一年前。我們預計在本財年剩餘時間內確認超過 27% 或約 5700 萬美元的履約義務。本季度，我們的用戶群環比增長 9%，同比增長 32%，達到 130 萬。

Telematics Products revenue in the second quarter was $28.3 million, which represented a 13% increase sequentially and a 25% decrease year-over-year. Within the Telematics Products reporting segment, OEM products revenue totaled $13.7 million in the second quarter compared to $10.5 million in the prior quarter, and $15.9 million in the same quarter a year ago.

第二季度遠程信息處理產品收入為 2830 萬美元，環比增長 13%，同比下降 25%。在遠程信息處理產品報告部分，第二季度 OEM 產品收入總計 1370 萬美元，上一季度為 1050 萬美元，去年同期為 1590 萬美元。

Our largest customer represented $12.4 million of revenue for the quarter, which was up from $9.7 million last quarter, but down from $14.0 million in the same quarter a year ago. Our backlog with this customer remains solid.

我們最大的客戶在本季度的收入為 1240 萬美元，高於上一季度的 970 萬美元，但低於去年同期的 1400 萬美元。我們與該客戶的積壓工作仍然穩定。

Consolidated gross margin in the second quarter was 39.8% compared to 39.6% last quarter and 42.2% in the same quarter a year ago. Contributing to the high gross margin in the prior year was an increase in revenue from one of our largest customers associated with the 3G to 4G upgrade cycle. Gross margin continues to be under pressure due to increasing product and logistics costs that have yet to be fully offset by the price increases we've implemented to date. We expect gross margin to improve slightly over the remainder of this fiscal year as a result of increased revenues and to a lesser extent, favorable product mix.

第二季度的綜合毛利率為 39.8%，上一季度為 39.6%，去年同期為 42.2%。去年毛利率高的原因是我們最大的客戶之一與 3G 到 4G 升級週期相關的收入增加。由於產品和物流成本的增加尚未完全被我們迄今為止實施的價格上漲所抵消，毛利率繼續承受壓力。由於收入增加以及在較小程度上有利的產品組合，我們預計毛利率將在本財年剩餘時間內略有改善。

Second quarter non-GAAP operating expenses on an absolute dollar basis increased by 3% sequentially, primarily due to increased compensation costs resulting from changes in the composition of our sales force to drive sales to our -- for our telematics subscription services.

第二季度非 GAAP 運營費用（按絕對美元計算）環比增長 3%，這主要是由於我們的銷售人員組成發生變化以推動我們的遠程信息處理訂閱服務的銷售導致薪酬成本增加。

Second quarter non-GAAP operating expenses on an absolute dollar basis decreased by 5% over the prior year, driven principally by a decrease in general administrative expenses, our focus remains on reducing G&A expenses in the quarters ahead.

第二季度非 GAAP 運營費用（按絕對美元計算）比上年下降 5%，主要是由於一般行政費用的減少，我們的重點仍然是減少未來幾個季度的 G&A 費用。

Adjusted EBITDA in the second quarter was $4.8 million with an adjusted EBITDA margin of 7% compared to $1.9 million and a margin of 3% in the prior quarter and $8.3 million or 11% in the same quarter last year. The sequential increase in adjusted EBITDA in the second quarter was attributable to higher revenue in the quarter.

第二季度調整後 EBITDA 為 480 萬美元，調整後 EBITDA 利潤率為 7%，上一季度為 190 萬美元，利潤率為 3%，去年同期為 830 萬美元或 11%。第二季度調整後 EBITDA 的環比增長歸因於該季度的收入增加。

In terms of our overall liquidity position, at the end of the second quarter, we had total cash and cash equivalents of approximately $48 million as compared to $59 million last quarter. The sequential decline in total cash and cash equivalents is attributable to a reduction in free cash flows due to the payment of the settlement for the Omega legal matter discussed last quarter as well as lower revenue levels resulting from some supply constraints coupled with consistent operating expenses and an increase in deferred billings (or unbilled receivables). The deferred billings are a result of the conversion of one half of our eligible telematics device customers to multi-year subscription arrangements. The provision of services under multiyear subscription arrangements extends the cash conversion cycle due to upfront cash outlays for devices combined with deferred billing over the subscription period.

就我們的整體流動性狀況而言，在第二季度末，我們的現金和現金等價物總額約為 4800 萬美元，而上一季度為 5900 萬美元。現金和現金等價物總額的連續下降是由於支付了上季度討論的歐米茄法律問題的和解導致的自由現金流減少，以及由於一些供應限制以及一致的運營費用和一致的運營費用和遞延賬單（或未開票的應收賬款）增加。延期賬單是我們一半符合條件的遠程信息處理設備客戶轉換為多年訂閱安排的結果。由於設備的前期現金支出加上訂閱期內的延期計費，根據多年訂閱安排提供的服務延長了現金轉換週期。

During the quarter, we executed a new $50 million asset-based revolving line of credit with PNC Bank to give us added flexibility as it relates to working capital. At August 31, there were no borrowings outstanding under this facility and the total borrowing capacity based on eligible accounts receivable and inventory was $34 million.

在本季度，我們與 PNC 銀行執行了一項新的 5000 萬美元的基於資產的循環信貸額度，以增加與營運資金相關的靈活性。截至 8 月 31 日，該貸款下沒有未償借款，基於合格應收賬款和存貨的總借款能力為 3400 萬美元。

Additionally, we were in compliance with our covenants under this revolving credit facility. And we believe that our current cash and cash equivalents, coupled with the availability on our revolving line of credit, provide adequate liquidity to support our transformation and growth over the next 12 months. Our aggregate outstanding debt is approximately $232 million, including $230 million of the 2% convertible senior notes due August 2025. It should be noted that we are always evaluating ways to optimize our capital structure.

此外，我們遵守了我們在此循環信貸額度下的契約。我們相信，我們目前的現金和現金等價物，加上我們循環信貸額度的可用性，為我們未來 12 個月的轉型和增長提供了充足的流動性。我們的未償債務總額約為 2.32 億美元，其中 2.3 億美元的 2% 可轉換優先票據將於 2025 年 8 月到期。值得注意的是，我們一直在評估優化資本結構的方法。

In reference to our outlook for the third quarter of 2023, the Company is maintaining its policy of not providing quarterly guidance as visibility into product shipments remains difficult to accurately assess. However, we do expect to achieve low to mid-single-digit percentage sequential revenue growth in the third quarter.

參考我們對 2023 年第三季度的展望，公司維持其不提供季度指導的政策，因為產品出貨量的可見性仍然難以準確評估。然而，我們確實預計第三季度將實現中低個位數百分比的連續收入增長。

With that, I'll turn the call back over to Jeff to provide some final comments before we open the call up for your questions. Jeff?

有了這個，在我們打開電話詢問您的問題之前，我會將電話轉回給 Jeff，以提供一些最終評論。傑夫?

Thank you, Kurt. In summary, the CalAmp team achieved a solid quarter with revenue growing sequentially from an increasing rate of SaaS conversions fueled by incremental device inventory and resulting in a major increase in total global subscribers.

謝謝你，庫爾特。總而言之，CalAmp 團隊實現了一個穩健的季度，收入連續增長，原因是設備庫存增加推動了 SaaS 轉換率的提高，並導致全球用戶總數大幅增加。

With that, we will now open the call to your questions. Operator?

有了這個，我們現在將打開您的問題的電話。操作員？

(Operator Instructions) Our first question comes from Mike Walkley with Canaccord.

（操作員說明）我們的第一個問題來自 Canaccord 的 Mike Walkley。

Great. Well, Kurt, best wishes. It's great to work with you all these years. Best wishes to you on your new opportunity. And Jeff, congratulations on the conversion looking strong across that 50% mark. Can you update us on just the supply chain improvements that helped in the quarter? And how does supply look to support the conversions in future quarters?

偉大的。好吧，庫爾特，最好的祝愿。這些年能和你一起工作真是太好了。祝你有新的機會。傑夫，祝賀你的轉化率在 50% 的大關上看起來很強勁。您能否向我們介紹本季度有助於改善供應鏈的最新情況？供應如何支持未來幾個季度的轉換？

Yes. We were pleased. We saw some modest improvement, Mike, in the quarter that helped us in terms of, one, driving better revenue which you saw and assisting us with the conversions, which was equally important. We're able to grow software and subscription services as well.

是的。我們很高興。邁克，我們在本季度看到了一些適度的改進，這有助於我們推動更好的收入，您看到並協助我們進行轉換，這同樣重要。我們也能夠發展軟件和訂閱服務。

We're not totally out of the woods yet, but I do see progressive improvement throughout the back half of the year, and we're still working very hard on that in terms of doing everything we can. We've made a few redesigns in terms of our products that make us more -- give us better clarity in terms of future-looking BOM improvement and we are looking to see, as I said, steady improvement in the back half of the year.

我們還沒有完全走出困境，但我確實看到了整個下半年的進步，而且我們仍在盡我們所能努力實現這一目標。我們已經對我們的產品進行了一些重新設計，這讓我們變得更好——讓我們在未來的 BOM 改進方面更加清晰，正如我所說，我們希望看到今年下半年的穩步改進.

Okay. Good. Any update? I know you had a record backlog over $60 million, not too long ago. Is that coming down now as you're working through that backlog? Or is it still kind of similar levels?

好的。好的。任何更新？我知道不久前您的訂單積壓超過 6000 萬美元。當你正在處理積壓的工作時，現在會下降嗎？或者它仍然是類似的水平？

Yes. Mike, it's still pretty high, but it has come down a little bit. So we're still pretty pleased at the robust nature of the demand. Obviously, we're hoping that, that continues in the second half of the year. And as we ship on that backlog, we have constant inflow of orders. So we're pleased with the progress we've made with the supply chain, as Jeff had mentioned, and the backlog has come down a little bit, but still pretty robust.

是的。邁克，它仍然很高，但已經下降了一點。因此，我們仍然對需求的強勁性質感到非常滿意。顯然，我們希望這種情況在下半年繼續。當我們在積壓的訂單上發貨時，我們有不斷的訂單流入。因此，正如 Jeff 所提到的，我們對我們在供應鏈方面取得的進展感到滿意，並且積壓的訂單有所下降，但仍然相當強勁。

Great. Last question for me, and I'll pass the line. Kurt, I know you indicated gross margins would slightly improve over the next couple of quarters. But now that your transition is going well, you're over halfway through it. Once the costs improve on the hardware side and the price increases go through? Any thoughts just longer term where gross margins can trend from current levels?

偉大的。我的最後一個問題，我會通過這條線。庫爾特，我知道你表示未來幾個季度毛利率會略有改善。但現在你的過渡進展順利，你已經完成了一半。一旦硬件方面的成本提高並且價格上漲會經歷嗎？毛利率可以從當前水平趨於長遠的任何想法？

So yes, as Mike we've discussed in the past, I mean, the great thing about this business model is that as we expand on that installed base, and that installed base becomes monetizable, that increased revenue base helps us with expanding our gross margins. So we're super excited about proceeding this fiscal year through the conversions, getting close to 70% of all of our customers over to the subscription model, that will be a major accomplishment.

所以是的，正如我們過去討論過的那樣，我的意思是，這種商業模式的偉大之處在於，隨著我們擴大安裝基礎，並且安裝基礎變得可貨幣化，增加的收入基礎有助於我們擴大總收入邊距。因此，我們對在本財年繼續進行轉換感到非常興奮，讓我們近 70% 的客戶轉向訂閱模式，這將是一項重大成就。

Once that's done and things stabilize in the supply chain, and that installed base starts to monetize, it will have a pretty meaningful impact on our gross margin. As we've indicated before, our medium- to long-term financial model suggests that we target 50% gross margin. So that's still our goal across the entire enterprise.

一旦完成並且供應鏈中的事情穩定下來，並且安裝基礎開始貨幣化，它將對我們的毛利率產生非常有意義的影響。正如我們之前所指出的，我們的中長期財務模型表明我們的目標是 50% 的毛利率。所以這仍然是我們在整個企業中的目標。

The next question comes from Jerry Revich with Goldman Sachs.

下一個問題來自高盛的 Jerry Revich。

This is Adam Bubes on for Jerry Revich today. You talked about expectations to achieve low to mid-single-digit sequential revenue growth in the third quarter. Can you just help us parse that out between the 2 segments?

這是今天為 Jerry Revich 做的 Adam Bubes。您談到了第三季度實現中低個位數連續收入增長的預期。你能幫我們在這兩個部分之間解析出來嗎？

Well, I think, Adam, we'll continue to see growth led by our software and subscription services revenue that's been performing well all along. We expect to do more conversions. If you've looked at our conversion numbers for the quarter, we're actually a little ahead of where I thought we would be. And so I think we'll continue at that pace. When we look at -- the fact that we've gotten a lot of our big customers over the finish line there, we're going to be very specific in terms of driving additional conversions in the third quarter.

好吧，我認為，亞當，我們將繼續看到我們的軟件和訂閱服務收入一直表現良好的增長。我們希望進行更多的轉換。如果您查看了我們本季度的轉化率，我們實際上比我想像的要領先一點。所以我認為我們將繼續保持這種速度。當我們看到 - 我們已經在終點線獲得了很多大客戶這一事實時，我們將在第三季度推動額外的轉換方面非常具體。

And again, as we get through the customer base, which to me is really exciting, our sales force is going to continue to turn more towards new logos, which will help us grow across the base. And in particular, all of our new sales will be focused on software and subscription services.

再一次，當我們打通客戶群時，這對我來說真的很令人興奮，我們的銷售人員將繼續更多地轉向新徽標，這將幫助我們在整個基礎上成長。特別是，我們所有的新銷售都將集中在軟件和訂閱服務上。

Great. And then in telematics, what was EBITDA margin in this quarter? And what does the path to profitability look like from here?

偉大的。然後在遠程信息處理方面，本季度的 EBITDA 利潤率是多少？從這裡開始，盈利之路會是什麼樣子？

Right. So Adam, in the 10-Q that we filed this afternoon, we did lay out for you EBITDA margin by reportable segment. So you can reference that in that filed document. But to answer your question, we -- it's a bit of a journey here. Obviously, the first part of the journey we've been focused on is moving those telematics customers over to a subscription model as they evolve or move over to the software and subscription services business. The gross margin and EBITDA margin associated with that roll over to that reportable segment.

正確的。所以亞當，在我們今天下午提交的 10-Q 中，我們確實為您按可報告部分列出了 EBITDA 利潤率。因此，您可以在該歸檔文件中引用它。但是為了回答你的問題，我們 - 這裡有點像旅程。顯然，我們一直關注的旅程的第一部分是將這些遠程信息處理客戶轉移到訂閱模式，因為他們發展或轉移到軟件和訂閱服務業務。與該報告分部相關的毛利率和 EBITDA 利潤率。

So right now, the EBITDA margin is actually negative for the Telematics Products reporting segment. Over time, as we finalize the conversion and we focus on essentially the customers within our OEM segment. We believe that, that reportable segment can be profitable or EBITDA positive, but it's going to take a little bit of time, and it certainly will take probably the balance of this year to even that all out.

所以現在，遠程信息處理產品報告部門的 EBITDA 利潤率實際上是負數。隨著時間的推移，隨著我們最終完成轉換，我們主要關注我們 OEM 部門中的客戶。我們相信，可報告的部分可以盈利或 EBITDA 為正，但這需要一點時間，而且肯定需要今年的餘額才能達到平衡。

Our next question comes from Mike Latimore with Northland Capital Markets.

我們的下一個問題來自 Northland Capital Markets 的 Mike Latimore。

Great. So I just wanted to be clear on the conversions. So I heard that you had finished the conversion by, I think, year-end, and I also heard maybe you get to 70% converted. Can you just clarify which one's accurate?

偉大的。所以我只是想弄清楚轉換。所以我聽說你在年底之前完成了轉換，我還聽說你可能會達到 70% 的轉換。你能澄清一下哪個是準確的嗎？

Yes. Yes, just I think there's a little confusion. We think that ultimately, our software and subscription services as a percent of revenue will increase to 70%, Mike. But we think that by the end of the year, we believe we'll get to 100% of our base converted to a subscription model.

是的。是的，只是我覺得有點混亂。我們認為最終，我們的軟件和訂閱服務佔收入的百分比將增加到 70%，邁克。但我們認為，到今年年底，我們相信我們將 100% 的基礎轉換為訂閱模式。

Got it. And then for those conversions through year-end, what kind of ARR does that represent or what revenue level would that represent in terms of software and subscription?

知道了。然後對於到年底的這些轉換，這代表什麼樣的 ARR 或在軟件和訂閱方面代表什麼收入水平？

Yes. As you know, we reported that we're about 50% through our customer base today. We're not providing guidance in terms of what the ARR for the remaining customers are. Obviously, we've got a couple of -- it's a little bit of a mix. We got some big customers out there. And again, our strategy has been when we do these conversions, not only do we convert our customers to a subscription model. But generally, we get a 3-year commitment on volume. So we expect to continue to execute on that. The only change that we've made and is relative to our desire to realize cash faster is to change our terms on the front end. So starting last quarter and into the next 2 quarters, you'll see our arrangement fee slightly different than it was in the first 6 months of the year or first 4 months of the year as we focus on getting more cash upfront, which I think will benefit the balance sheet and put it as a better position from a cash perspective.

是的。如您所知，我們報告說我們今天的客戶群約有 50%。我們沒有就剩餘客戶的 ARR 提供指導。顯然，我們有幾個 - 它有點混合。我們有一些大客戶在那裡。同樣，我們的策略是在進行這些轉換時，不僅將客戶轉換為訂閱模式。但一般來說，我們會在數量上獲得 3 年的承諾。因此，我們希望繼續執行此操作。我們所做的唯一改變是與我們更快實現現金的願望相關的改變是在前端改變我們的條款。因此，從上個季度開始到接下來的 2 個季度，您會看到我們的安排費用與今年前 6 個月或今年前 4 個月略有不同，因為我們專注於獲得更多的前期現金，我認為將使資產負債表受益，並從現金角度將其置於更好的位置。

Would that also change rev rec? Or is it really just on the cash side?

這也會改變rev rec嗎？還是真的只是在現金方面？

No. It has no impact on rev rec whatsoever.

不，它對 rev rec 沒有任何影響。

Okay. And then kind of once you're through this conversion, as you look into next year, would you expect most of the growth to come from new logos or from kind of current customers expanding?

好的。然後，一旦您完成了這種轉換，當您展望明年時，您會期望大部分增長來自新徽標還是來自現有客戶的擴展？

Yes. Well, the whole reason we hired Brennen Carson and the rest of the sales team, which has been upgraded substantially this year, is to focus on those areas. One, we've got a major focus on our existing customers through our customer success program.

是的。好吧，我們聘請 Brennen Carson 和今年已大幅升級的銷售團隊的其他成員的全部原因是專注於這些領域。一，通過我們的客戶成功計劃，我們主要關注現有客戶。

But the big change for us going forward after the base is converted is a clear focus on -- and working with our marketing team on new logos. And I think that will be the biggest difference. When you look at CalAmp year-over-year and in the next 6 months is that new logo focus, specifically in the key areas of transportation and logistics, not only in the U.S. but in EMEA and LatAm and an enterprise fleet in those same geographies.

但是，在轉換基地後，我們前進的重大變化是明確關注 - 並與我們的營銷團隊合作開發新徽標。我認為這將是最大的不同。當您查看 CalAmp 的年復一年和未來 6 個月時，新徽標的重點，特別是在運輸和物流的關鍵領域，不僅在美國，而且在 EMEA 和 LatAm 以及相同地區的企業車隊.

The next question comes from Scott Searle with ROTH Capital.

下一個問題來自 ROTH Capital 的 Scott Searle。

Kurt, I want to wish you the best of luck going forward. It's always been a pleasure working with you. Just quickly, to dive in on the supply constraint side, it sounds like things are getting better on that front. I'm wondering if you were still constrained in the quarter in terms of what you ended up leaving on the table.

庫爾特，我想祝你一切順利。與您合作一直很愉快。很快，為了深入探討供應限制方面，聽起來這方面的情況正在好轉。我想知道你是否仍然在本季度受到限制，因為你最終留在了桌面上。

And as you're looking out to that mid-single-digit sequential growth what do you actually have visibility to in terms of what you can service? Is that what you already have in terms of visibility or parts be able to service that?

當您期待中個位數的連續增長時，您實際上對您可以提供的服務有什麼了解？那是您在可見性方面已經擁有的，還是可以為它提供服務的零件？

Yes. No, that's a complicated question. But absolutely, we could have done more in terms of revenue with a stronger supply chain. Having said that, we did see a significant increase in units shipped. So as I mentioned in my remarks, it did get better. We expect to see that progress even more in the third quarter. We're finally back to a point where customers can order and receive goods on certain of our solutions in the same quarter, which is a nice feeling.

是的。不，這是一個複雜的問題。但絕對可以，我們可以通過更強大的供應鏈在收入方面做得更多。話雖如此，我們確實看到出貨量顯著增加。所以正如我在評論中提到的，它確實變得更好了。我們預計在第三季度會看到更多進展。我們終於回到了客戶可以在同一季度通過我們的某些解決方案訂購和接收商品的地步，這是一種很好的感覺。

That's been some time since we've been able to do that. And I think we will progress steadily over the rest of the year. Now -- when we think about CalAmp, we're a little bit different than most out there because of the sophistication of our solutions, and we have pretty high-end devices. And so our supply chain is a little bit different than, say, some of the more generic device players out there.

自從我們能夠做到這一點以來已經有一段時間了。我認為我們將在今年剩下的時間裡穩步前進。現在 - 當我們想到 CalAmp 時，由於我們的解決方案的複雜性，我們與大多數人有點不同，而且我們擁有相當高端的設備。因此，我們的供應鏈與一些更通用的設備播放器有些不同。

But nonetheless, it's good. We do see better visibility, especially in the third quarter. We're trying to really get ahead and work with everybody in the supply chain all the way to the semiconductor players, even though their relationships are more with our contract manufacturers. Our team, including me, have been in direct contact with everybody across the chain and in working very, very hard to improve the situation and improve the visibility. But it does feel good. It feels good to have the ability to meet our customers' demand to fulfill some of our backlog in the quarter.

但不管怎樣，這很好。我們確實看到了更好的知名度，尤其是在第三季度。我們正在努力真正取得領先，並與供應鏈中的每個人合作，一直到半導體廠商，儘管他們與我們的合同製造商的關係更多。我們的團隊，包括我在內，一直與整個鏈條中的每個人直接接觸，並且非常非常努力地改善情況並提高知名度。但是感覺確實不錯。能夠滿足客戶的需求以完成我們在本季度的一些積壓工作，感覺很好。

And Scott, we look at is the historical run rate, especially within the Telematics Products. And with our backlog at an all-time high, I don't think it would be unusual to have expected that the -- at least the Telematics Product segment could have done maybe 20% more than where it was for this particular quarter. That's just going off of what we've done historically when you look at the quarterly run rate from the last 2 fiscal years.

斯科特，我們看的是歷史運行率，尤其是在遠程信息處理產品中。由於我們的積壓量創歷史新高，我認為預期至少遠程信息處理產品部門的業績可能比本季度多出 20%，這並不奇怪。當您查看過去 2 個財政年度的季度運行率時，這與我們在歷史上所做的事情相去甚遠。

Great. And Kurt, maybe to follow up on that point though, given the push to more of a recurring revenue stream, right? The expectation was that MRM would continue to come down on the Telematics side, right? But it seems like we're running above, I think, those longer-term levels that you thought it would get down to $10 million or so a quarter. So, is there a new higher sustained level of Telematics Product once you strip out the OEM business that you expect the company to be running at going forward?

偉大的。考慮到推動更多經常性收入流，庫爾特也許會跟進這一點，對吧？期望是 MRM 將繼續在遠程信息處理方面下降，對嗎？但我認為，我們似乎正在超越那些你認為每季度會降至 1000 萬美元左右的長期水平。那麼，一旦您剝離了您期望公司未來運行的 OEM 業務，是否有新的更高水平的遠程信息處理產品？

No. I mean, I think as we've communicated in the past, our objective is to move a 100% of those MRM telematics device customers over to multiyear subscription arrangements. It only makes sense considering the post-sales support services that we tend to provide to those customers and really with the business use to what they're doing with our devices and our services. So I think ultimately, we will get all of those customers moved over.

不。我的意思是，我認為正如我們過去所傳達的那樣，我們的目標是將 100% 的 MRM 遠程信息處理設備客戶轉移到多年訂閱安排。只有考慮到我們傾向於向這些客戶提供的售後支持服務，並且真正考慮到他們對我們的設備和服務所做的業務使用，這才有意義。所以我認為最終，我們會讓所有這些客戶都搬過來。

And that then will represent 70% of our consolidated revenue, as Jeff mentioned. But I think that it's still going to happen over the course of this year. And there's still -- with the existing customers that are within the Telematics Product category, healthy demand that's sitting in that backlog. So it will come down, but it will come down gradually over an extended period of time.

正如傑夫所說，這將占我們合併收入的 70%。但我認為它仍然會在今年發生。並且仍然存在 - 對於遠程信息處理產品類別中的現有客戶，該積壓中的健康需求。所以它會下降，但它會在很長一段時間內逐漸下降。

Great. And lastly, if I could, on the subscription -- software and subscription services front was a big sequential uptick in the quarter. Are there any onetime events that are kind of mixed in there to kind of calibrate us on that front?

偉大的。最後，如果可以的話，在訂閱方面——軟件和訂閱服務方面在本季度連續大幅增長。是否有任何一次性事件混合在一起以在這方面校准我們？

And also on that 1.3 million subscription figure that you have now, is it possible to give us an idea in the quarter the incremental net adds, how many of those were from conversions versus non-conversions?

此外，根據您現在擁有的 130 萬訂閱數字，是否有可能在本季度給我們一個想法，增量淨增加，其中有多少來自轉換與非轉換？

Yes. I'll take the first part. Kurt will answer the second part regarding the subscriber growth. In respect to -- there weren't really any onetime items. I think that we benefited both from new logos selling full stack solutions to our customers as well as a pretty healthy success in terms of moving up our conversions. I think we're moving from something in the 30s to 50% in the quarter. So those were 2 things. No big onetime events there.

是的。我將採取第一部分。 Kurt 將回答有關訂戶增長的第二部分。關於 - 真的沒有任何一次性物品。我認為我們既受益於向客戶銷售全棧解決方案的新標識，也受益於提高轉化率方面的相當健康的成功。我認為我們正在從 30 年代的某個東西到本季度的 50%。所以這是兩件事。那裡沒有大型的一次性活動。

Okay. And just the subscriber net addition mix in the quarter?

好的。只是本季度的訂戶淨增加組合？

Sure. Yes, Scott. So I would say it was split probably maybe like 80-20, where we have 80% coming from conversion 20% from new logos.

當然。是的，斯科特。所以我會說它可能被分成了 80-20，其中 80% 來自轉換，20% 來自新徽標。

(Operator Instructions) The next question comes from George Notter with Jefferies.

（操作員說明）下一個問題來自 George Notter 和 Jefferies。

This is Blake Mielke on for George Notter. First, I just wanted to congratulate -- or rather wish you good luck, Kurt, moving forward. From what you're saying, it sounds like the remaining 50% of Telematics customers to be converted tilts towards larger customers. So should we expect the total opportunity remaining with these customers to be larger than 50%? And then I have a follow-up.

這是布萊克米爾克為喬治諾特效力。首先，我只是想祝賀——或者更確切地說，祝你好運，Kurt，繼續前進。從你所說的來看，剩下的 50% 的 Telematics 客戶將被轉換為更大的客戶。那麼我們是否應該期望這些客戶剩餘的總機會大於 50%？然後我有一個跟進。

Well, I think maybe you misheard me a little bit, but there's a couple of large customers in there. But there's also the tail of our smaller customers that will kind of bring over in one fell swoop. So we brought over -- as we said in our script this quarter, we brought over Localiza and Trimble, which are 2 of our larger customers. So it's a little bit of mix in terms of what we have in front of us.

好吧，我想也許你聽錯了，但那裡有幾個大客戶。但也有一些小客戶的尾巴會一舉帶來。所以我們帶來了——正如我們在本季度的劇本中所說，我們帶來了 Localiza 和 Trimble，它們是我們的兩個大客戶。因此，就我們面前的情況而言，這有點混合。

There are a couple of large ones, but we also have that tail that I mentioned earlier, which tend to be smaller -- but the important thing is that we've really got this down to a science now, both in terms of how we work with our customers. They're seeing tremendous benefit to switching to the subscription model because the software that they utilize is giving them much improved capability. Our sales and technical teams are now that it's old hat to drive these versions.

有幾個大的，但我們也有我之前提到的那條尾巴，它往往更小——但重要的是，我們現在真的把它歸結為一門科學，無論是在我們如何與我們的客戶合作。他們看到了切換到訂閱模式的巨大好處，因為他們使用的軟件為他們提供了大大改進的功能。我們的銷售和技術團隊現在已經過時了驅動這些版本。

Okay. And then in terms of price increases, when should we expect those to fully work into the model? And is there any evaluation for additional rounds of price increases at this point?

好的。然後在價格上漲方面，我們應該在什麼時候期望這些價格完全融入模型？目前是否有對額外輪次漲價的評估？

Well, we've steadily used something we term internally PPV or purchase price variance to offset, especially when we go out and do spot buys to opportunistically access low -- some products that are in high demand. We've done that steadily so that we -- and we've been able to pass those costs on to our customers. Now the PPV does lag a little bit behind some of the price increases that we see. So I think throughout the rest of the year, you'll see us both continue to use PPV as a tool. And that is as we see inflation and other cost increase in our in our BOMs look to opportunities to strategically use price increases to help offset some of that pressure.

好吧，我們一直在穩定地使用我們內部稱為 PPV 或購買價格差異的東西來抵消，特別是當我們出去進行現貨購買以機會主義地獲得低價時——一些需求量很大的產品。我們一直在穩步地做到這一點，因此我們 - 我們已經能夠將這些成本轉嫁給我們的客戶。現在，PPV 確實落後於我們看到的一些價格上漲。所以我認為在今年剩下的時間裡，你會看到我們都繼續使用 PPV 作為工具。這就是因為我們在 BOM 中看到通貨膨脹和其他成本增加，尋找機會戰略性地利用價格上漲來幫助抵消部分壓力。

There are currently no questions waiting in the queue at this time. So I'll pass it back to the management team for any closing remarks. Excuse me.

目前隊列中沒有任何問題在等待。因此，我會將其傳回給管理團隊，以供結束髮言。打擾一下。

Thank you for joining us on the -- okay. you're teasing us. Okay. Go ahead, please.

感謝您加入我們——好的。你在取笑我們。好的。請繼續。

Apologies. It seems they've removed their question, you may proceed with the closing remarks.

道歉。看來他們已經刪除了他們的問題，您可以繼續結束語。

No worries. Thank you for joining us on the call today and for your continued interest in CalAmp. As we look into the second half of our fiscal year, we remain focused on further expanding our SaaS transition program and securing new global customer logos to drive a higher level of future recurring revenue. We look forward to sharing our progress with you during our third quarter 2023 earnings call in December. Operator, you may now disconnect the call. Thank you.

不用擔心。感謝您今天加入我們的電話會議，並感謝您對 CalAmp 的持續關注。展望本財年的下半年，我們將繼續專注於進一步擴展我們的 SaaS 過渡計劃並確保新的全球客戶徽標，以推動更高水平的未來經常性收入。我們期待在 12 月的 2023 年第三季度財報電話會議上與您分享我們的進展。接線員，您現在可以斷開通話了。謝謝你。

This concludes the CalAmp Q2 Fiscal Year 2023 Earnings Conference Call. Thank you for your participation. You may now disconnect your lines.

CalAmp 2023 財年第二季度收益電話會議到此結束。感謝您的參與。您現在可以斷開線路。