Inseego Corp (INSG) 2023 Q3 法說會逐字稿

Hello, and welcome to Inseego Corp's Third Quarter 2023 financial results conference call. Please note that today's event is being recorded. All participants will be in a listen only mode. (Operator Instructions) On the call today are Ashish Sharma, CEO, Steven Gatoff, Chief Financial Officer. During this call, non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company's website. An audio replay of this call will also be archived there.

您好，歡迎您參加 Inseego Corp 2023 年第三季財務業績電話會議。請注意，今天的活動正在錄製中。所有參與者將處於只聽模式。 （操作員指示）今天參加電話會議的是執行長 Ashish Sharma 和財務長 Steven Gatoff。在本次電話會議期間，將討論非公認會計準則財務指標。收益報告中包含了與最直接可比較的 GAAP 財務指標的調節，可在公司網站的投資者部分查看。這次通話的音訊重播也將存檔在那裡。

Please also be advised that today's discussion will contain forward looking statements. These forward-looking statements are not historical facts, but rather are based on the Company's current expectations and beliefs. For a discussion on factors that could cause actual results to differ materially from expectations, please refer to the risk factors described in our Forms 10K, 10Q and other SEC filings, which are available on our website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. I would now like to turn the call over to Ashish Sharma, CEO. Please go ahead.

另請注意，今天的討論將包含前瞻性陳述。這些前瞻性陳述並非歷史事實，而是基於公司目前的預期和信念。有關可能導致實際結果與預期存在重大差異的因素的討論，請參閱我們的 10K、10Q 表格和其他 SEC 文件中描述的風險因素，這些文件可在我們的網站上找到。另請參閱今天新聞稿中包含的有關前瞻性陳述部分的警告說明。我現在想將電話轉給執行長 Ashish Sharma。請繼續。

Thank you, operator. Hello, everyone. Thanks for joining us today. Q3 was a mixed quarter for us. We continue to see the effects of our supply chain challenges in addition to legacy product declines, which impacted our revenue in Q3 and will extend into Q4. As you will see in our results, we are managing our operations tightly. We will continue to be laser-focused on profitability and cash while continuing to invest in areas that will drive growth.

謝謝你，接線生。大家好。感謝您今天加入我們。第三季對我們來說是一個好壞參半的季度。除了傳統產品下降之外，我們繼續看到供應鏈挑戰的影響，這影響了我們第三季的營收並將延續到第四季。正如您將在我們的結果中看到的那樣，我們正在嚴格管理我們的營運。我們將繼續高度關注獲利能力和現金，同時繼續投資於能夠推動成長的領域。

During the past several weeks, we made three meaningful additions to the Inseego team. Philip Brace joined our Board of Directors and brings a terrific background as a seasoned CEO and wireless industry expert. Steven Gatoff joined us as CFO and brings a terrific profile and skill set of driving growth and managing operations. And Steve Harmon joined this week in our newly created role of Chief Revenue Officer. I'm excited about the incremental leadership around the table and what it's helping us do as we finish out 2023.

在過去的幾周里，我們對 Inseego 團隊進行了三項有意義的補充。 Philip Brace 加入了我們的董事會，並帶來了作為經驗豐富的執行長和無線行業專家的出色背景。史蒂文·加托夫 (Steven Gatoff) 加入我們，擔任首席財務官，他在推動成長和管理營運方面擁有出色的個人資料和技能。史蒂夫哈蒙 (Steve Harmon) 本週加入我們新設立的首席營收長職位。我對會議上逐漸形成的領導力以及它在 2023 年結束時幫助我們做的事情感到興奮。

With that I'd like to cover three topics with you today on the call. First, I'll give a quick summary of our Q3 business results. Second, I'd like to provide an update on the progress of our transformation to a full solution FWA company. And third, I'd like to provide some insights into the current Q4 as we close out the year.

因此，我想在今天的電話會議上與大家討論三個主題。首先，我將快速總結我們第三季的業務成果。其次，我想介紹我們向提供完整解決方案的 FWA 公司轉型的最新進展。第三，在今年結束之際，我想提供一些對目前第四季的見解。

First, let's talk about our Q3 results. We reported Q3 revenue of $48.6 million and adjusted EBITDA of $4 million. The results were below our expectations mainly due to supply chain challenges that impacted several large customers and the runoff of legacy 4G product revenues. This quarter, demand was better than expected for our new 5G products and worse than expected for our legacy products.

首先，我們來談談第三季的業績。我們報告第三季營收為 4,860 萬美元，調整後 EBITDA 為 400 萬美元。結果低於我們的預期，主要是由於影響了幾個大客戶的供應鏈挑戰以及傳統 4G 產品收入的流失。本季度，我們新 5G 產品的需求優於預期，但傳統產品的需求則差於預期。

Earlier in the year, we moved to a build to order model to be disciplined with our cash and the downside of this model is limited ability to respond to increases in demand that are shorter than our lead times. Given we underestimated the demand for our new 5G products, we could not fulfil several million dollars of sales. While we missed is perishable demand, a positive note is that we came back and delivered the product in the second half of the quarter to realize some of the missed revenue opportunity. Because we were late to respond to the demand we shipped more at the end of the quarter, which will be consumed in Q4, suppressing our results as customers digest that inventory.

今年早些時候，我們轉向了按訂單生產模式，以嚴格控制我們的現金，這種模式的缺點是應對需求增長的能力有限，而需求增長的時間短於我們的交貨時間。由於我們低估了 5G 新產品的需求，我們無法完成數百萬美元的銷售額。雖然我們錯過了易逝的需求，但積極的一面是，我們在本季下半年回來並交付了產品，以實現一些錯過的收入機會。由於我們對需求的反應較晚，我們在季度末發貨了更多，這些庫存將在第四季度消耗，隨著客戶消化庫存，我們的業績受到抑制。

In summary, the demand for both our 5G hotspots as well as 5G FWA products was good this quarter, but due to supply chain challenges and a delayed FWA launch with a large customer we couldn�t hit our targets this quarter.

總而言之，本季我們的 5G 熱點以及 5G FWA 產品的需求都很好，但由於供應鏈挑戰以及大客戶 FWA 推出的延遲，我們無法實現本季的目標。

For my second discussion topic, I'd like to update you on our progress towards migrating to become a full solution FWA company, both in terms of the market and our product portfolio. Today, Inseego has a comprehensive portfolio of 5G hotspots, 5G FWA and cloud solutions that enable several types of deployment use cases, including mobile, indoor and outdoor scenarios.

對於我的第二個討論主題，我想向您介紹我們在市場和產品組合方面向提供完整解決方案 FWA 公司轉型的最新進展。如今，Inseego 擁有全面的 5G 熱點、5G FWA 和雲端解決方案組合，可支援多種類型的部署用例，包括行動、室內和室外場景。

As 5G networks have evolved over last couple years with a lot more network capacity driven by new mid-band spectrum investments by the carriers, there is a new FWA market evolving for enterprises to adopt 5G as a primary broadband solution for distributed locations and on the Go use cases. While we have seen good fraction with early customers, the market is taking time to develop, mainly due to carriers' network coverage and capacity on the new spectrum. The most pronounced aspect of this dynamic is the anticipated, but rapid decline in legacy 4G and hotspot revenue.

隨著5G 網路在過去幾年中不斷發展，營運商新的中頻頻譜投資驅動了更多的網路容量，一個新的FWA 市場正在不斷發展，企業可以採用5G 作為分散式位置和網路的主要寬頻解決方案。去用例。雖然我們已經看到了早期客戶的大部分，但市場的發展還需要時間，這主要是由於營運商的網路覆蓋範圍和新頻譜上的容量。這種動態最明顯的方面是傳統 4G 和熱點收入的預期但快速下降。

To address the challenge of growing our new 5G FWA products and disruptive revenue streams against the backdrop of this declining legacy technology revenue streams, we have been working through a focused two-part plan for multiple quarters, and we have made good progress. First, we wanted to make sure our cost structure was sized appropriately. And so, we have worked diligently over the last 18 months to significantly reduce our spend.

在傳統技術收入流不斷下降的背景下，為了應對發展新的 5G FWA 產品和顛覆性收入流的挑戰，我們一直在多個季度製定一項由兩部分組成的重點計劃，並取得了良好進展。首先，我們希望確保我們的成本結構規模適當。因此，我們在過去 18 個月裡努力工作，大幅減少了支出。

We've removed over $50 million of annual run rate costs from the company. Our goal is to continue operating with increasing levels of efficiency with a cost structure that will enable us to stay profitable as measured by adjusted EBITDA and generate free cash flow. We are going to build on this progress by driving profitable growth with 5G FWA.

我們已經為公司節省了超過 5000 萬美元的年運行成本。我們的目標是繼續以不斷提高的效率水平運營，其成本結構將使我們能夠保持調整後 EBITDA 的盈利並產生自由現金流。我們將透過 5G FWA 推動獲利成長，在此基礎上再接再厲。

I'm very happy to have Steven join the team, as our new CFO to help drive our profitability and growth profile as we manage the transition. The second component of our transition plan is to maximize initial customer opportunities for 5G FWA, so we can stay ahead in the market. To accomplish this, we align ourselves with the leading carriers who are driving the initial 5G FWA market. We are able to leverage our long-standing carrier relationships to get to the end customers.

我很高興史蒂文加入我們的團隊，作為我們的新任財務官，在我們管理轉型的過程中幫助提高我們的獲利能力和成長狀況。我們過渡計畫的第二個組成部分是最大限度地增加 5G FWA 的初始客戶機會，以便我們能夠在市場上保持領先地位。為了實現這一目標，我們與推動 5G FWA 市場發展的領先營運商結盟。我們能夠利用我們與營運商的長期關係來接觸最終客戶。

As the enterprise, after FWA market is expanding, we are looking to strengthen our go-to-market approach so we can create scale. To that end, I'm very happy to have Steve Harmon join our team as the new CRO to drive a strategic change in our go-to-market and growth profile. He comes from a great sales and marketing background, most recently as the Global Head of Sales at Sierra Wireless and has helped companies ramp up sales in major markets. I'm looking forward to partnering with him to significantly evolve our go-to-market efforts so we can accelerate our business, especially in enterprise.

作為企業，在 FWA 市場擴大之後，我們希望加強我們的市場進入方式，以便我們能夠擴大規模。為此，我很高興史蒂夫·哈蒙（Steve Harmon）作為新的 CRO 加入我們的團隊，推動我們的市場進入和成長概況的策略變革。他擁有豐富的銷售和行銷背景，最近擔任 Sierra Wireless 全球銷售主管，幫助公司提高了主要市場的銷售額。我期待與他合作，顯著發展我們的市場推廣工作，以便我們能夠加速我們的業務，特別是在企業領域。

As a final thought on our evolution to a full stack 5G FWA provider, I'd like to share some positive news at what we are seeing in terms of early customer engagements and some of the deliverables of the business. Our 5G FWA customer base continues to build nicely within several enterprise and SMB market segments. We have onboarded over 56,000 new enterprise and SMB customers over the last four quarters on our primary 5G band solutions.

作為我們向全端 5G FWA 提供者發展的最後一個想法，我想分享一些我們在早期客戶參與和一些業務可交付成果方面所看到的積極消息。我們的 5G FWA 客戶群繼續在多個企業和中小企業細分市場中建立良好。在過去四個季度，我們的主要 5G 頻段解決方案已吸引了超過 56,000 名新企業和中小企業客戶。

The majority of these customers are also using our cloud to manage the 5G connections, which is part of our strategy and provides a high-margin, high-growth revenue stream to our portfolio. Some examples of the latest deployments include real estate companies, nationwide retailers, U.S. government agencies and insurance companies utilizing our indoor and outdoor FWA solutions to connect their distributed sites and employees to reduce costs and enhance productivity.

這些客戶中的大多數還使用我們的雲端來管理 5G 連接，這是我們策略的一部分，並為我們的產品組合提供高利潤、高成長的收入來源。最新部署的一些例子包括房地產公司、全國零售商、美國政府機構和保險公司，利用我們的室內和室外 FWA 解決方案連接其分散式網站和員工，以降低成本並提高生產力。

We believe the market will continue to build as more and more mid-band network coverage and capacity comes online. However, until these early customer engagements turn into larger deployments, that revenue being generated from these customers will be modest.

我們相信，隨著越來越多的中頻網路覆蓋範圍和容量上線，市場將繼續發展。然而，在這些早期客戶參與轉變為更大規模的部署之前，從這些客戶產生的收入將是有限的。

With that I'd like to move on to my third topic on the call today and provide some insights on Q4 and some of the challenges that we're facing. We are seeing bullish signs on 5G FWA customer engagement. But in the near term, we are facing some headwinds in Q4 revenue driven by the following three factors. First, the 4G hotspot revenues declining meaningfully in Q4. We knew this was going to happen for quite some time now, and we have been working hard to backfill it with 5G revenue. However, the 5G revenue, while strong hasn't been able to fully cover the full dollar impact of the decline.

接下來，我想繼續討論今天電話會議的第三個主題，並提供有關第四季度和我們面臨的一些挑戰的一些見解。我們看到 5G FWA 客戶參與度的樂觀跡象。但短期內，由於以下三個因素，我們第四季的收入面臨一些阻力。首先，第四季4G熱點營收大幅下降。我們知道這將會發生很長一段時間，而且我們一直在努力用 5G 收入來填補它。然而，5G 收入雖然強勁，但未能完全抵消美元下跌的全部影響。

Second, there was a delay in launching a new 5G FWA product with a large customer in Q3 resulting in later revenue ramp than we expected. The delay is caused by new customer requirements that came in very late as we prepared for the launch. The product was soft, launched a couple of weeks ago after we got through the Apple iPhone for the launch window of latter part of September. So while this impacts our sales in Q4, we feel confident, we will be back on track in Q1 in terms of our 5G revenue as the initial feedback from the customers on the new product is quite positive.

其次，第三季與大客戶的新 5G FWA 產品延遲推出，導致營收成長晚於我們的預期。延遲的原因是，當我們準備發佈時，新的客戶需求才很晚才出現。該產品很軟，是在我們在 9 月下旬推出 Apple iPhone 後幾週前推出的。因此，雖然這影響了我們第四季度的銷售，但我們有信心，我們的 5G 收入將在第一季回到正軌，因為客戶對新產品的初步反饋非常積極。

The third friction point on Q4 is that due to shipments in late Q3, some large customers are starting Q4 with higher inventories that need to be sold before they will reorder. So, with these challenges, Q4 looks to be meaningfully below our expectations. This is obviously disappointing, but we continue to be responsive and have taken additional cost reduction actions this past month to ensure we keep the Company profitable while the business comes back up by early next year. Steven will provide some more insights on this in a moment.

第四季的第三個摩擦點是，由於第三季末的出貨，一些大客戶在第四季開始時庫存較高，需要在重新訂購之前將其出售。因此，面對這些挑戰，第四季的表現似乎大大低於我們的預期。這顯然令人失望，但我們繼續做出反應，並在上個月採取了額外的成本削減行動，以確保我們在明年初業務恢復的同時保持公司盈利。史蒂文稍後將對此提供更多見解。

Despite these near-term challenges, I'm optimistic about the growth of our 5G FWA solutions business, which we believe is still in the infancy. We have signed up a lot of enterprise and SMB customers over the last four quarters on our 5G, FWA and cloud platforms. We have gone through a lot of learning with our carrier customers to get 5G FWA prepare for primary WAN deployments in many enterprise segments as we are at the forefront of creating this market.

儘管近期面臨這些挑戰，但我對我們 5G FWA 解決方案業務的成長持樂觀態度，我們認為這項業務仍處於起步階段。過去四個季度，我們在 5G、FWA 和雲端平台上簽約了許多企業和中小企業客戶。我們與營運商客戶進行了大量學習，讓 5G FWA 為許多企業領域的主要 WAN 部署做好準備，因為我們處於創建這個市場的最前沿。

I will now turn it over to Steven.

我現在將把它交給史蒂文。

Thanks, Chief. Good afternoon, everyone. I'd like to cover four things with you today. I'd like to start by sharing a brief perspective on my positive view of the opportunity here at Inseego and what I'm focused on to help ensure that we capitalize on.

謝謝，酋長。大家下午好。今天我想跟大家講四件事。首先，我想簡要分享我對 Inseego 機會的積極看法，以及我將重點關注的內容，以幫助確保我們充分利用這一機會。

I'll then cover three core aspects of the business. First, the financial details and insights on our Q3 results. Second, share with you what we're doing right now to protect shareholder value. And third provide guidance on Q4. As the operator noted, we'll of course, wrap up by opening the call to your questions.

然後我將介紹業務的三個核心面向。首先，是我們第三季業績的財務細節和見解。其次，與您分享我們現在正在採取哪些措施來保護股東價值。第三，提供第四季的指引。正如接線員所指出的，我們當然會透過打開您的問題來結束通話。

First off, I'm really glad to have joined Ashish and the team here at Inseego. After six weeks or so on the job, I'm bullish on the opportunity that sits in front of us. I see a clear path and the ability to help make an impact in monetizing it.

首先，我很高興加入 Ashish 和 Inseego 的團隊。工作大約六週後，我對擺在我們面前的機會感到樂觀。我看到了一條清晰的道路以及幫助其貨幣化產生影響的能力。

Inseego has very strong technology prowess and unique product related capabilities. We have already seen industry leaders seek out our engineering input and advice. This is one of the assets that uniquely positions Inseego to penetrate a $50 billion TAM that's starting to unfold, and it should translate into meaningful stockholder value. As we move forward to execute on this, I'm focusing my time and efforts on three areas across the Company. One, our overall capital structure management in addressing our near-term stock price level and the reverse stock split working through our convert overhang and evaluating our portfolio of businesses.

Inseego擁有非常強大的技術實力和獨特的產品相關能力。我們已經看到行業領導者尋求我們的工程投入和建議。這是 Inseego 獨特的資產之一，能夠滲透到正在開始展開的 500 億美元 TAM，並且它應該轉化為有意義的股東價值。當我們繼續執行這項計劃時，我將把時間和精力集中在公司的三個領域。第一，我們的整體資本結構管理，旨在解決我們的近期股價水準和反向股票分割，透過我們的轉換懸而未決並評估我們的業務組合。

Second and focus on our business strategy and driving our profitable growth profile roadmap from our Q4 execution to our 2024 and intermediate term plan. And third, I'm focused on our operational execution and driving metrics and performance management construct for results. I'm particularly looking forward to working with Steve Harmon and having him as a strong partner to now drive the evolution of our sales execution. It's a metrics and inspection cadence that we're fiercely focusing on together as we look to drive improvements in our FWA ramp and that I think will make a big difference going forward.

其次，專注於我們的業務策略，推動我們的獲利成長路線圖從第四季度的執行到 2024 年和中期計劃。第三，我專注於我們的營運執行以及驅動指標和績效管理建構的結果。我特別期待與 Steve Harmon 合作，並讓他作為強有力的合作夥伴來推動我們銷售執行的發展。這是我們在尋求推動 FWA 提升時共同密切關注的指標和檢查節奏，我認為這將在未來產生巨大的影響。

With that, let's look at Q3 results. Q3 total revenue came in at $48.6 million with two-thirds of the year-over-year decline from 2022 being driven by the legacy 4G runoff. While there were some positive dynamics on the top line with our 5G products increasing to 54% of total revenue in the quarter, and 5G FWA growing 29% year over year, Q3 was a challenging quarter for the bulk of our revenue portfolio.

接下來，讓我們看看第三季的結果。第三季總收入為 4,860 萬美元，自 2022 年以來同比下降的三分之二是由傳統 4G 流失造成的。儘管我們的5G 產品在本季度佔總收入的比例增加到54%，並且5G FWA 同比增長29%，收入出現了一些積極的動態，但對於我們大部分收入組合來說，第三季度是一個充滿挑戰的季度。

A positive is that other than the record FWA revenue in the prior Q2 quarter, our FWA business generated the most revenue in Q3 since its inception nearly two years ago. Unfortunately, it was just not enough to offset the supply chain and inventory issues and the impact of the declines in 4G. Beyond the core mobile hotspot and FWA business, our telematics business delivered steady revenue growth and gross margin in Q3, up 11% year over year and coming in at a non-GAAP gross margin of 46% on an organic basis, respectively.

積極的一面是，除了上一季創紀錄的 FWA 收入外，我們的 FWA 業務在第三季創造了自近兩年前成立以來最多的收入。不幸的是，這還不足以抵消供應鏈和庫存問題以及 4G 下滑的影響。除了核心行動熱點和 FWA 業務外，我們的遠端資訊處理業務在第三季度實現了穩定的收入成長和毛利率，年增 11%，非 GAAP 有機毛利率為 46%。

Our mobile solutions software revenue was down modestly in Q3 as one of our carrier partners had a customer loss that reduced the number of subscriptions for us. This had a small revenue effect, but a larger impact on gross margin that I'll get to in a moment.

我們的行動解決方案軟體收入在第三季小幅下降，因為我們的營運商合作夥伴之一的客戶流失導致我們的訂閱數量減少。這對收入影響很小，但對毛利率影響較大，我稍後會談到。

Our bar channel business, unfortunately continued at a tepid level in Q3 and has not scaled this year. As Ashish discussed, this intended growth driver will benefit meaningfully from a rebalancing of resources and from Steve Harmon's leadership. We believe our VAR business should be multiples of what it is now from a revenue perspective and in relatively short order.

不幸的是，我們的酒吧通路業務在第三季繼續保持不溫不火的水平，今年尚未擴大規模。正如阿什什所討論的，這一預期的成長動力將從資源的重新平衡和史蒂夫·哈蒙的領導中受益匪淺。我們相信，從收入角度來看，我們的 VAR 業務應該會在相對較短的時間內實現目前的數倍。

Moving onto gross margin and prior earnings calls, we've highlighted that gross margin percentage may move around from quarter to quarter, but at the low to mid 30% area on a non-GAAP basis should be the new higher baseline in 2023 versus 2022. The trajectory is expected to be higher longer term.

談到毛利率和先前的財報電話會議，我們強調毛利率百分比可能會隨著季度的變化而變化，但在非GAAP 基礎上的低至中30% 區域應該是2023 年與2022 年相比新的更高基線. 長期來看，預計該軌跡將會更高。

For Q3, while there was a decline sequentially from the mid-30s in the first half of the year due to Q3 product mix, the Q3 33% non- GAAP gross margin was a respectable improvement from the prior year's 26%. At a macro level as a result of the reduced low margin 4G revenue, we see non-GAAP gross margin percentage lifting again in the current Q4 quarter.

對於第三季度，雖然由於第三季度的產品組合，與上半年的30 多歲左右相比有所下降，但第三季度的非GAAP 毛利率為33%，較上一年的26% 有了顯著改善。從宏觀層面來看，由於低利潤率的 4G 收入減少，我們預計非 GAAP 毛利率百分比在當前第四季再次上升。

Spending a moment on GAAP gross margin, we wanted to talk to the large inventory reserve that we booked in Q3. In total, we recorded a $14.9 million reserve in Q3 as a result of updated estimates and sales forecast for some of the older products in our portfolio and related to the Q4 2023 end-of-life of our 4G mobile hotspot product by our largest carrier customer.

花點時間討論一下公認會計準則毛利率，我們想談談我們在第三季預訂的大量庫存儲備。總的來說，我們在第三季度記錄了1,490 萬美元的儲備金，這是由於我們對產品組合中的一些舊產品進行了更新的估計和銷售預測，並且與我們最大的運營商將於2023年第四季終止我們的4G 行動熱點產品相關顧客。

The reserve was based on a combination of the carrying values of inventories and capitalized costs on finished goods, raw materials on hand and materials that our contract manufacturer partners. The dollar amounts of these elements are discussed in our 10Q that's been filed tonight, and these charges are excluded from the calculation of Q3 adjusted EBITDA.

此儲備是基於存貨帳面價值和製成品、現有原材料以及我們的合約製造商合作夥伴的材料的資本化成本的組合。這些要素的美元金額將在今晚提交的 10 季報告中討論，這些費用不包括在第三季調整後 EBITDA 的計算中。

As we continue to manage revenue dynamics of the business, we're also taking a disciplined approach to managing our spend. With that perspective, looking at our Q3 non-GAAP operating expenses, total spend in Q3 was at the lowest aggregate dollar amount in more than two years. The actions that the company took in the first part of 2023 drove lower aggregate and relative spend across all cost areas in Q3 from COGS to sales and marketing to R&D. That helped us deliver another quarter of positive adjusted EBITDA coming in at $4 million.

在我們繼續管理業務收入動態的同時，我們也採取嚴格的方法來管理我們的支出。從這個角度來看，從我們第三季的非公認會計原則營運支出來看，第三季的總支出達到了兩年多來的最低總美元金額。該公司在 2023 年上半年採取的行動降低了第三季從銷貨成本到銷售和行銷再到研發的所有成本領域的總支出和相對支出。這幫助我們又實現了一個季度的正向調整 EBITDA，達到 400 萬美元。

With that, I'd like to move on to my second topic today. And so far as what we're doing now to protect stockholder value. As we're addressing our go to market and growth needs, we're continuing to take costs out of the business to make sure we head into 2024 from a position of strength so that we continue to delivering profitability in the form of adjusted EBITDA and free cash flow.

說到這裡，我想繼續今天的第二個話題。就我們現在為保護股東價值所做的事情而言。在我們滿足進入市場和成長需求的同時，我們將繼續降低業務成本，以確保我們在 2024 年保持強勢地位，從而繼續以調整後的 EBITDA 和 EBITDA 的形式提供獲利能力自由現金流。

In addition to the previous cost structure actions that the Company made in 2022 and the first part of 2023, in the last 30 days, we further reduced spend and have further aligned investments with near term customer focus and revenue generation. You'll see this going forward across the board of predominantly and improved efficiencies in R&D spend, where we have a strong team and production capability and we were able to trim a combination of outside program and internal costs.

除了公司在 2022 年和 2023 年上半年採取的成本結構行動之外，在過去 30 天內，我們進一步減少了支出，並進一步使投資與近期客戶關注和創收保持一致。您將看到這一趨勢全面發展，主要是研發支出效率的提高，我們擁有強大的團隊和生產能力，並且能夠削減外部計劃和內部成本。

In total, we just removed about $2 million of quarterly spend. While this will be only marginally helpful in the current Q4, given the timing of the implementation, it will very much shore up our profitability and cash generation profile going into 2024.

總的來說，我們剛剛削減了約 200 萬美元的季度支出。雖然這對當前第四季的幫助微乎其微，但考慮到實施時間，它將極大地提高我們進入 2024 年的獲利能力和現金產生狀況。

With that, let's turn to our third topic and so far as the current path in Q4, it is presenting its financial challenges. As we talked about today, one of our largest carrier customers transitioned off buying 4G mobile hotspots effective this quarter. And so that product line is now essentially end-of-life. While we know I've known about the legacy 4G decline, I've been planning around it. Our new 5G FWA product revenue has been growing nicely the past few quarters, but it's just not large enough dollars yet to offset the legacy 4G decline in aggregate.

接下來，讓我們轉向第三個主題，就第四季目前的路徑而言，它正在面臨財務挑戰。正如我們今天所討論的，我們最大的營運商客戶之一從本季起不再購買 4G 行動熱點。因此該產品線現在基本上已經結束了。雖然我們知道我已經知道傳統 4G 的衰落，但我一直在圍繞它進行計劃。我們新的 5G FWA 產品收入在過去幾季一直在快速成長，但不足以抵消傳統 4G 整體下降的影響。

This is seen squarely in the mobile hotspot portfolio where our revenue in the not-so-distant past was in excess of $40 million per quarter, it is now a fraction of that in Q4. And so, considering all this, Q4 looks to be meaningfully below our internal expectations. As such and wanting to drive transparency with our investors around what we're seeing, we'd like to provide some guidance for the current fourth quarter. Starting with the top line, Q4 2023 total revenue as anticipated to be in the range of $40 million to $42 million. With this being the first quarter of no 4G hotspot revenue and managing through inventory restocking issues.

這在行動熱點產品組合中體現得淋漓盡致，不久前我們的營收每季超過 4,000 萬美元，而現在只是第四季的一小部分。因此，考慮到所有這些，第四季看起來都明顯低於我們的內部預期。因此，為了提高投資者對我們所看到的情況的透明度，我們希望為當前第四季度提供一些指導。從營收開始，預計 2023 年第四季的總營收將在 4,000 萬美元至 4,200 萬美元之間。這是第一個沒有 4G 熱點收入的季度，並透過庫存補貨問題進行管理。

For Q4 2023 adjusted EBITDA, we see our recent cost savings initiative, helping alleviate some of the revenue pressure so that we can maintain profitability, albeit in the $1.5 million to $2 million range for the quarter.

對於2023 年第四季調整後的EBITDA，我們看到我們最近的成本節約舉措有助於緩解一些收入壓力，以便我們能夠保持盈利能力，儘管該季度的盈利能力在150 萬美元至200 萬美元之間。

In closing, we're focused on addressing our to market execution performance quickly and effectively as we plan for 2024. We're oriented around driving the business and managing our spend responsibly to deliver profitability and we continue to have confidence in monetizing the 5G opportunity and promise.

最後，我們的重點是在2024 年計劃中快速有效地解決我們的市場執行績效問題。我們的目標是推動業務發展並負責任地管理我們的支出以實現盈利，並且我們繼續對利用5G 機會獲利充滿信心並承諾。

With that, we appreciate your time and support, and we're glad to open the call for any questions. Operator?

在此，我們感謝您的時間和支持，我們很高興撥打電話詢問您的任何問題。操作員？

We will now begin the question-and-answer session. (Operator Instructions).

我們現在開始問答環節。 （操作員說明）。

Lance Vitanza, Cowen. Please go ahead.

蘭斯·維坦扎，考恩。請繼續。

Thank you. Thanks, gentlemen. Let me start with I guess I just wanted to understand a couple of things, Steven, that I think you said, did you say that you expect zero 4G hotspot revenue in the fourth quarter?

謝謝。謝謝，先生們。首先，我想我只是想了解一些事情，史蒂文，我想你說過，你是否說過你預計第四季度 4G 熱點收入為零？

A very diminimus amount.

數量非常微乎其微。

For a diminimus amount. Yeah. Okay. So, then the I guess, the so the runoff that's been ongoing, I guess is that suggest that's we've come to an end? Or is there -- was there sort of like a glitch and then maybe we get, you know, a couple of more quarters in 2024 of additional 4G hotspot contribution?

對於一個微不足道的金額。是的。好的。那麼，我想，所以持續的決選，我想這表明我們已經結束了？或者是否存在——是否存在某種故障，然後我們可能會在 2024 年獲得額外幾季的 4G 熱點貢獻？

No Lan, this is it for the project.

不，Lan，這就是專案的目的。

Okay. So, then we could just focus on the 5G business. So, I guess the question there is, you know, and I don't know, Steven, if you I know you've I think you've only been there six weeks, so I get it. But do you have a sense yet for really kind of like what the fixed costs are associated with the 5G kind of platform? And then as you get beyond those fixed costs, what kind of variable cost contribution, contribution margin from the incremental revenues do you expect? I'm just trying to get a sense for the basic kind of economic proposition as we look ahead.

好的。那我們就可以專注於5G業務。所以，我想問題是，你知道，但我不知道，史蒂文，如果你我知道你，我想你只在那裡待了六個星期，所以我明白了。但您是否真正了解與 5G 類型平台相關的固定成本是多少？然後，當您超出這些固定成本時，您期望增量收入帶來什麼樣的變動成本貢獻和邊際貢獻？我只是想了解我們展望未來時的基本經濟主張。

Yes. It's a great question, and it is one of the exact things that we've been spending time on and I have as I've been onboarding. The good news is that the crux of what you're saying should pan out. In other words, there's a decent amount of variable costs and controllable costs that we have in that part of the business.

是的。這是一個很好的問題，也是我們一直在花時間研究的事情之一，也是我在入職時所做的事情之一。好消息是你所說的核心內容應該會成功。換句話說，我們在這部分業務中有相當多的變動成本和可控成本。

So that, for example, when we were facing revenue pressure now we can reduce spend on fairly immediately. So, there's labour costs that are variable. There's outside contractor and programmatic costs that we have such that we can control the near term profitability of that product a; and b, to your second point, from a long-term perspective, it should be more of a step function in cost structure so that as you start to scale out and grow revenues more exponentially, you'll see a steeper curve in revenue than you will in cost structure. So, you should get an expansion and profitability.

因此，例如，當我們現在面臨收入壓力時，我們可以立即減少支出。因此，勞動成本是可變的。我們有外部承包商和程序成本，這樣我們就可以控制該產品的短期獲利能力； b，對於你的第二點，從長遠來看，它應該更像是成本結構的階躍函數，這樣當你開始擴大規模並以指數方式增加收入時，你會看到收入曲線比您將在成本結構中。因此，您應該獲得擴張和盈利。

And then I guess for Ashish. Thank you, Steven. And I guess for Ashish -- do the delays is one of the things that we routinely hear is that the product technology is very high and very good. But I guess, the product delays that you discussed, the unfortunate as they are today sort of create a situation where your customers are it kind of forced to make other plans or, you know, or how does that sort of, I guess just from a competitive standpoint, how stable would you see? And what kind of relationships, how would you describe the level of the relationships you have with some of your key, your key customers?

然後我猜是阿希什。謝謝你，史蒂文。我想對 Ashish 來說，延遲是我們經常聽到的事情之一，那就是產品技術非常高而且非常好。但我想，您所討論的產品延遲，不幸的是，就像今天一樣，造成了一種情況，您的客戶被迫制定其他計劃，或者，您知道，或者我想，這種情況是如何發生的從競爭的角度來看，您認為有多穩定？什麼樣的關係，您如何描述您與一些關鍵客戶的關係程度？

Yes, good question Lance. So, I would say that our product is really preferred and the slots we are in. During this quarter, I would say we are facing two different dynamics. One was the inability to supply the product due to supply chain challenges because the demand went up very quickly in late June. So, we could supply a lot of products in the first half of the quarter. And then we shipped a lot of products between from mid to late in the quarter, and that's creating some headwinds for the next quarter, which is Q4 so that's one dynamic. There's some perishable demand there because especially on hotspots when we could ship the product. I mean are other products that the customers have.

是的，蘭斯，問得好。所以，我想說我們的產品確實是首選，而且我們所處的位置。在本季度，我想說我們面臨兩種不同的動態。一是由於6月下旬需求成長很快，供應鏈面臨挑戰，導致產品無法供應。因此，我們可以在本季的上半季供應大量產品。然後我們在本季度中後期發貨了很多產品，這給下一個季度（即第四季度）帶來了一些阻力，所以這是一個動態。那裡有一些不穩定的需求，因為特別是在我們可以運送產品的熱點地區。我的意思是客戶擁有的其他產品。

The second dynamic is the delayed launch with one customer, and that again is impacting Q4 and that got delayed because some new departments came in at the 11 hour. So, we're working to diligently with the customer. And in fact, we have soft launched it. I mean, the additional feedback from the end customers is very positive. So, I would say to sum it up, we are the preferred product in the slots we are in, but like the demand is perishable.

第二個動態是一位客戶的延遲發布，這再次影響了第四季度，並且由於一些新部門在 11 點加入而被延遲。因此，我們正在努力與客戶合作。事實上，我們已經軟啟動了它。我的意思是，最終客戶的額外回饋非常正面。所以，我想說，總而言之，我們是我們所在領域的首選產品，但需求是容易消失的。

But I guess really what I'm trying to get at is it doesn't sound like you are losing market share as a result of this? It sounds like some of the delays are actually driven by the customers and then the other ones, the customers are -- they are hanging with either they're not saying like, oh, you're three weeks late. So, we're going to another supplier?

但我想我真正想表達的是，聽起來你並沒有因此而失去市場份額？聽起來有些延誤實際上是由客戶造成的，而另一些延誤是由客戶造成的——他們要么不說，哦，你遲到了三週。那麼，我們要去找另一家供應商嗎？

That's correct.

這是正確的。

Okay. And then just maybe my last question before I'll hand over to Baton here, but just to touch on the balance sheet, and I don't know if the 10Q is out yet, but I'm wondering, I guess a couple of things. Number one, you know, will there be any sort of warning around, possible liquidity shortfalls over the coming 12 months, either in the liquidity section of the MD&A or do we have to worry about anything along those lines?

好的。然後也許是我在移交給 Baton 之前的最後一個問題，但只是觸及資產負債表，我不知道 10Q 是否已經出來，但我想知道，我猜有幾個事物。第一，你知道，未來 12 個月可能出現流動性短缺的警告，無論是在 MD&A 的流動性部分，還是我們必須擔心類似的事情？

And then just sort of thinking about the debt obligations, the ABL, it doesn't expire until next December but that does mean that you'll have to start recording the balances as current liabilities, early next year unless you extend that maturity? I'm wondering if you have a prognosis for that.

然後想想債務義務，ABL，它要到明年 12 月才會到期，但這確實意味著你必須在明年初開始將餘額記錄為流動負債，除非你延長期限？我想知道你是否對此有預測。

And then I know you mentioned this briefly, Steven, but then the converts obviously mature, you know, not until May of 2025, which gives you at least some time. So, is the plan with respect to the converts to kind of wait until spring when presumably, you know the momentum -- the operating momentum is a little bit better or how should we think about that? Thanks.

然後我知道你簡短地提到了這一點，史蒂文，但後來皈依者顯然已經成熟了，你知道，直到 2025 年 5 月，這至少給了你一些時間。那麼，關於轉換者的計劃是否要等到春天，大概你知道勢頭——營運勢頭好一點，或者我們應該如何考慮這一點？謝謝。

Yes, really good questions. And we're glad you asked because it�s obviously meaningfully important and material to our equity value. So, thank you. The short answer on your last question, as we are not waiting till spring to manage the situation. We are on the convert. We have a relatively small group of holders on the convert. Some of them are on our Board. Some have been, and that's a group with whom we're engaged and we're actively looking to manage that through. So, we are not waiting. We're taking care of that now and it is an important aspect of the cap structure.

是的，確實是很好的問題。我們很高興您提出這個問題，因為這顯然對我們的股權價值非常重要且重要。所以謝謝。對你最後一個問題的簡短回答，因為我們不會等到春天來處理這種情況。我們正在轉變。我們的轉換持有者人數相對較少。其中一些是我們的董事會成員。有些是這樣的，我們正在與他們合作，我們正在積極尋求解決這個問題。所以，我們不等待。我們現在正在處理這個問題，這是上限結構的一個重要方面。

To your earlier points, which are really good around liquidity and the short-term facility we -- I guess the nutshell is we have ample capacity. So, we do not feel a constraint on our ability to borrow. It really is a true working capital facility or a very large carrier customers that sometimes they pay really awesome like they did this quarter with lots of cash, sometimes they take longer. And so that's where that working capital facility comes in place really well. I think our view is that facility is not really an issue for the company either short term or long longer term, the bigger not to focus on is the convert, which we are focused on and we are not waiting for that.

對於您先前的觀點，我們在流動性和短期融資方面確實做得很好，我想簡而言之，我們有充足的產能。因此，我們的借貸能力並未受到限制。這確實是一個真正的營運資金設施或非常大的營運商客戶，有時他們支付的費用非常可觀，就像他們本季支付的大量現金一樣，有時他們需要更長的時間。這就是營運資金設施真正到位的地方。我認為我們的觀點是，無論是短期還是長期，設施對公司來說都不是真正的問題，更不值得關注的是轉換，我們正在關注它，我們不會等待它。

Thank you so much. Yes, it does. And thanks very much and best of luck.

太感謝了。是的，它確實。非常感謝，祝你好運。

Okay, thanks Lance.

好的，謝謝蘭斯。

(Operator Instructions)

（操作員說明）

Tore Svanberg, Stifel. Please go ahead.

托雷‧思文凱 (Tore Svanberg)、史蒂菲爾 (Stifel)。請繼續。

Hi, yes, good afternoon. This is Jeremy calling for Tore. I guess maybe the first question, digging in a little bit more deeply into the delay on the fixed wireless access side. The new requirements for the product are there-- Is there any indication that it's a change in strategy on the behalf of the carrier, whether the upside to the -- maybe smaller or larger potential SAM for you guys? Are there any -- just trying to get a clear picture and few any shift in possible SAM because of this delay?

嗨，是的，下午好。這是傑里米打電話給托雷。我想也許是第一個問題，更深入研究固定無線接入端的延遲。對產品的新要求已經存在——是否有任何跡象表明這是代表運營商的策略變化，無論是對你們來說可能更小還是更大的潛在 SAM 的好處？是否有任何——只是想了解清楚的情況，並且由於這種延遲而導致 SAM 幾乎沒有任何變化？

Yes, Jeremy, it�s not the case. I mean, it's have a specific requirement as it relates to the network of this particular customer. So, it's very pointed in that fashion. It doesn't really change the broader market for us.

是的，傑里米，事實並非如此。我的意思是，它有特定的要求，因為它與該特定客戶的網路相關。所以，這種方式非常有針對性。它並沒有真正改變我們更廣闊的市場。

Great. And I guess maybe moving to the just the financials. I know you mentioned non- GAAP gross margins of 33%. But so, this is the inventory adjustment that you mentioned and the $1 million write off of inventory order fees. And so if we take that out and get the 33% non-GAAP. Is there any reason why this isn't, this won't show up in the non-GAAP net income because it looks like the costs are excluded from -- they're not added back, I guess on when you show the non-GAAP net income?

偉大的。我想也許會轉向財務方面。我知道您提到非 GAAP 毛利率為 33%。但這就是您提到的庫存調整和 100 萬美元的庫存訂單費用沖銷。因此，如果我們去掉這個，就得到 33% 的非公認會計原則。有什麼原因嗎？這不會出現在非 GAAP 淨利潤中，因為看起來成本被排除在外——它們沒有加回來，我猜當你顯示非 GAAP 淨利潤時，它們不會被添加回來。公認會計準則淨利？

Yes, we made a point of pulling it out of EBITDA for that purpose. And as you said it will come out of the COGS line, specifically the mobile solutions to get to the 34.6, and that's where that's how we recorded it.

是的，出於這個目的，我們特意將其從 EBITDA 中剔除。正如您所說，它將來自 COGS 系列，特別是到達 34.6 的行動解決方案，這就是我們記錄它的方式。

Got it. Okay. And is there -- there's -- is there going to be any, I guess, impact going forward from these charges? Or is there a potential for any kind of, I guess, benefit on the back end of it?

知道了。好的。我想，這些指控是否會產生任何影響？或者我猜它的後端是否有可能帶來任何好處？

I couldn't hear the first part. Is there any benefit on board? Is that -- what was the.

我聽不到第一部分。船上有什麼福利嗎？那是——那是什麼。

Sorry, on the back end, I guess, you know if you can take a charge now, is there some chance that some of this could be to cover?

抱歉，在後端，我想，您知道如果您現在可以收費，是否有可能彌補其中的一些內容？

Yes, yes, absolutely. I mean, the charge is a P&L charge. It's not a disposition of inventory. It's not a destruction of inventory. It's just based on how much inventory and raw materials we have today.

是的，是的，絕對是的。我的意思是，該費用是損益費用。這不是庫存的處置。這不是庫存的銷毀。這只是基於我們今天擁有的庫存和原材料的數量。

And what we've sold in the last 12 months? And what the sales forecast is now going forward. And so, you say, okay, it looks like we will not be able to clear that amount, so you take a reserve.

過去 12 個月我們賣了什麼？以及現在的銷售預測。所以，你說，好吧，看來我們無法清算這筆金額，所以你採取了儲備金。

And to your good point, if something happens and as a Blue Bird or things break really well and positively, then we'll see some upside. But we're obviously not planning on making things with a Bluebird or upside, and that's essentially why there's a reserve.

就你的觀點而言，如果發生了什麼事，並且作為藍鳥，或者事情進展得非常好和積極，那麼我們會看到一些好處。但我們顯然不打算製作具有藍鳥或優勢的產品，這就是為什麼要有儲備。

Got it. Great. And maybe two more quick questions, one would be on the on the $2 million OpEx that's coming out. Can we see that fully realized in Q1 of next year? And maybe would it be fair to say something like just a fraction of that in Q4?

知道了。偉大的。也許還有兩個簡單的問題，其中一個是關於即將推出的 200 萬美元營運支出。我們能在明年第一季看到這一點完全實現嗎？也許只說第四季的一小部分是否公平？

Yes, that's exactly right. And part of it will be in Q4, just based on the fact that it's early November and then the full benefit in Q1 spot on.

是的，完全正確。其中一部分將在第四季度實現，因為現在是 11 月初，然後第一季的全部收益就會出現。

Got it. And the last question would be on just looking at the -- your working capital went down quite a bit, which is nice on the cash flow side. I was surprised to see accounts receivable dropped $8 million and how we reconcile that with late shipments in the quarter? Were you able to collect really quickly on those shipments? Is that that kind of what happened there?

知道了。最後一個問題是——你的營運資金下降了很多，這在現金流方面很好。我很驚訝地發現應收帳款減少了 800 萬美元，我們如何將其與本季延遲出貨相協調？您能夠快速收集這些貨物嗎？那裡發生的事情是這樣嗎？

That's exactly what happened. We -- as we said before, was on the other side of the table, we have large carrier customers that we sell to and through. And this quarter, we had one or two that paid very quickly on a lot of stuff. And so, our DSOs improved tremendously. We had very large cash collections.

這正是發生的事情。正如我們之前所說，我們在桌子的另一邊，我們有大型營運商客戶，我們向他們銷售產品並透過他們進行銷售。這個季度，我們有一兩個人很快就支付了很多東西。因此，我們的 DSO 得到了極大的改進。我們有大量現金收集。

Awesome, right? We'd much rather have cash earlier. It's a nice dynamic to have, but it's obviously not -- it�s a bit of an anomaly to have that improvement in a short period of time. And so, you see a huge pop in cash.

太棒了，對吧？我們寧願早點有現金。這是一個很好的動力，但顯然不是——在短時間內取得這種進步有點反常。因此，你會看到現金大量增加。

Got it. And sorry, one last question. If I could squeeze it in. Do you have new breakeven targets, whether for adjusted EBITDA or on a free cash flow basis?

知道了。抱歉，最後一個問題。如果我能把它擠出來的話。你們有新的損益平衡目標嗎？無論是調整後的 EBITDA 還是自由現金流？

Well, our commitment and our focus is on maintaining profitability in the form of adjusted EBITDA. So that's an important metric for us. The EBITDA -- adjusted EBITDA positive. We're also focused on the cash burn and particularly as we exit this quarter and head into next year of generating free cash flow. So that's a target for us as we plan out and set ourselves up for Q1.

嗯，我們的承諾和重點是以調整後 EBITDA 的形式保持盈利能力。所以這對我們來說是一個重要的指標。 EBITDA－調整後的 EBITDA 為正值。我們也關注現金消耗，特別是當我們結束本季並進入明年產生自由現金流時。因此，這是我們為第一季制定計劃和設定的目標。

Very good. Thank you very much.

非常好。非常感謝。

Yeah, good questions. Thank you.

是的，好問題。謝謝。

Thank you, Jeremy.

謝謝你，傑瑞米。

This concludes our question-and-answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

我們的問答環節和電話會議到此結束。感謝您參加今天的演講。您現在可以斷開連線。