Supercom Ltd (SPCB) 2023 Q1 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to SuperCom's first-quarter 2023 financial results and corporate update conference call. (Operator Instructions) Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes.

女士們，先生們，早上好，歡迎來到 SuperCom 2023 年第一季度財務業績和公司更新電話會議。 （操作員說明）本次電話會議的參與者請注意，本次電話會議的音頻正在通過互聯網進行現場直播，同時也正在錄製以供播放。

I'd now like to turn the call over to Stephanie Prince of PCG Advisory.

我現在想把電話轉給 PCG Advisory 的 Stephanie Prince。

Thank you, Matthew, and thank you to everyone joining us. With me on the call today is Ordan Trabelsi, SuperCom's President and Chief Executive Officer.

謝謝你，Matthew，也感謝所有加入我們的人。今天與我通話的是 SuperCom 的總裁兼首席執行官 Ordan Trabelsi。

I'd like to remind you that during this call, SuperCom management may be making forward-looking statements, including statements that address SuperCom's expectations for future performance or operational results. Forward-looking statements may involve risks, uncertainties, and other factors that may cause SuperCom's actual results to differ materially from those statements.

我想提醒您，在本次電話會議期間，SuperCom 管理層可能會做出前瞻性陳述，包括針對 SuperCom 對未來業績或運營結果的預期的陳述。前瞻性陳述可能涉及風險、不確定性和其他因素，這些因素可能導致 SuperCom 的實際結果與這些陳述存在重大差異。

For more information about these risks, uncertainties, and factors, please refer to the risk factors described in SuperCom's most recently filed periodic report on Form 20-F and Form 6-K and SuperCom's press release that accompanies this call, particularly the cautionary statements in it.

有關這些風險、不確定性和因素的更多信息，請參閱 SuperCom 最近提交的 20-F 表和 6-K 表定期報告以及 SuperCom 隨本次電話會議發布的新聞稿中描述的風險因素，尤其是它。

Today's conference call includes EBITDA, a non-GAAP financial measure that SuperCom believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, a comparable GAAP financial measure, please see the reconciliation table located in SuperCom's earnings press release that accompanies this call. Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well.

今天的電話會議包括 EBITDA，這是 SuperCom 認為可用於評估其業績的非 GAAP 財務指標。您不應孤立地考慮此附加信息或將其作為根據 GAAP 編制的結果的替代。有關此非 GAAP 財務指標與淨虧損（可比的 GAAP 財務指標）的對賬，請參閱隨本次電話會議發布的 SuperCom 收益新聞稿中的對賬表。那裡也提供其他非 GAAP 財務措施和可比較的 GAAP 財務措施的調節。

The content of this call contains time-sensitive information that is accurate only as of today, May 15, 2023. Except as required by law, SuperCom disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

本次電話會議的內容包含時效性信息，截至今天，即 2023 年 5 月 15 日，這些信息都是準確的。除法律要求外，SuperCom 不承擔任何公開更新或修改任何信息以反映本次電話會議後發生的事件或情況的義務.

It is now my pleasure to turn the call over to SuperCom's President and CEO, Ordan Trabelsi. Ordan?

現在我很高興將電話轉給 SuperCom 的總裁兼首席執行官 Ordan Trabelsi。奧爾丹？

Thank you, Stephanie. Good morning, everyone. Thank you for joining us today.

謝謝你，斯蒂芬妮。大家，早安。感謝您今天加入我們。

Earlier this morning, we issued a press release with our financial results for the first quarter of 2023. You can find a copy in the Investor Relations section of our website at supercom.com. Today, I'll start my comments with a brief update on our recent business highlights, strategy, and Q1 results, followed by a Q&A session.

今天上午早些時候，我們發布了一份新聞稿，其中包含我們 2023 年第一季度的財務業績。您可以在我們網站 supercom.com 的投資者關係部分找到一份副本。今天，我將首先簡要介紹我們最近的業務亮點、戰略和第一季度業績，然後是問答環節。

SuperCom had a great start to the year with a strong first quarter. We achieved record-breaking revenue of $6.4 million, representing a 109% year-over-year growth in quarterly revenue, marking three consecutive quarters of very high year-over-year revenue growth. It's the highest revenue figure we achieved in a single quarter since 2018. And we're thrilled with this outstanding performance and look forward to maintaining this momentum in coming quarters.

SuperCom 以強勁的第一季度開局良好。我們實現了創紀錄的 640 萬美元收入，季度收入同比增長 109%，標誌著連續三個季度實現非常高的同比收入增長。這是自 2018 年以來我們在單個季度實現的最高收入數字。我們對這種出色的表現感到興奮，並期待在未來幾個季度保持這種勢頭。

During the quarter, we executed advance and various projects in our portfolio, such as the $33 million national EM project in Romania, utilized operating leverage and prior investments in our proprietary technology to achieve positive EBITDA for the third consecutive quarter. For those new to SuperCom, our mission is to revolutionize the public safety sector worldwide through proprietary electronic monitoring technology, data intelligence, and complementary services.

在本季度，我們執行了投資組合中的預付款和各種項目，例如羅馬尼亞價值 3300 萬美元的國家 EM 項目，利用運營槓桿和對我們專有技術的先前投資，連續第三個季度實現正 EBITDA。對於那些剛接觸 SuperCom 的人，我們的使命是通過專有電子監控技術、數據智能和補充服務徹底改變全球公共安全部門。

Over the past 35 years since our founding in 1988, we've been a trusted partner to dozens of governments worldwide, providing them with cutting-edge electronic and digital security solutions. Our strategy has been to deliver our technology, develop top-notch solutions, expand our presence, and deliver outstanding services.

自 1988 年成立以來的 35 年裡，我們一直是全球數十個政府值得信賴的合作夥伴，為他們提供尖端的電子和數字安全解決方案。我們的戰略一直是提供我們的技術、開發一流的解決方案、擴大我們的影響力並提供出色的服務。

We've successfully executed that strategy by focusing on the following key factors. Our proprietary electronic monitoring technology scores highly in competitive RFPs and supports various programs, such as house arrest, GPS monitoring, rehabilitation services, domestic violence prevention, and more.

我們通過關注以下關鍵因素成功地執行了該戰略。我們專有的電子監控技術在競爭激烈的 RFP 中得分很高，並支持各種項目，如軟禁、GPS 監控、康復服務、家庭暴力預防等。

SuperCom has won over 50 new multi-year government projects in 2018. And just in the past year alone, we announced launches of new projects valued over $40 million. Our strong reputation and recognition as a premium provider of electronic monitoring technology and services also contributes to our win rate. With each new customer win and project deployment, we further strengthen our reputation, technology offering, and competitive position.

SuperCom 在 2018 年贏得了 50 多個新的多年期政府項目。僅在過去一年，我們就宣布啟動價值超過 4000 萬美元的新項目。我們作為電子監控技術和服務的優質供應商的良好聲譽和認可度也有助於提高我們的贏單率。隨著每個新客戶的贏得和項目部署，我們進一步加強了我們的聲譽、技術產品和競爭地位。

Third is our strategic focus and attention to our IoT tracking business in developed countries, where the opportunity is the greatest. The electronic monitoring market is estimated to reach $2.1 billion in 2026, up from $1.2 billion in 2021. The US and Europe constitute about 95% of these markets.

第三是我們的戰略重點和關注我們在發達國家的物聯網跟踪業務，那裡的機會最大。電子監控市場預計將從 2021 年的 12 億美元增長到 2026 年的 21 億美元。美國和歐洲約佔這些市場的 95%。

In Europe, there's recently been an increase in our activity with numerous new project bid opportunities in the past 18 months. Altogether, these successes and opportunities have resulted in a growing pipeline of projects.

在歐洲，最近我們的活動有所增加，在過去 18 個月中有許多新項目投標機會。總而言之，這些成功和機遇促成了越來越多的項目。

Last year, we continued to invest in R&D to ensure our products remain the most competitive in the market and continuously introduced new features and technologies through our proprietary platforms. As a result, we successfully finalized the development and deployment of two new products.

去年，我們繼續投資於研發以確保我們的產品在市場上保持最具競爭力，並通過我們的專有平台不斷推出新功能和技術。因此，我們成功完成了兩個新產品的開發和部署。

One is the lifesaving PureProtect for domestic violence monitoring, which was successfully implemented in multiple projects, including a $33 million national EM project in Romania with a focus on protection for domestic violence. The other is an all-in-one ankle bracelet monitoring solution called PureOne. Both products have been well received and significantly expanded the company's addressable market. We are confident that both products will facilitate SuperCom's expansion into the US market.

一個是用於家庭暴力監測的拯救生命的 PureProtect，它已在多個項目中成功實施，包括羅馬尼亞耗資 3300 萬美元的國家 EM 項目，重點是保護家庭暴力。另一種是名為 PureOne 的一體式腳踝手環監測解決方案。這兩種產品都受到好評，並顯著擴大了公司的潛在市場。我們相信這兩款產品將有助於 SuperCom 進軍美國市場。

In recent quarters, we not only maintained our technological advantage but also invested in enhancing our operational infrastructure and expanding our workforce. Furthermore, we bolstered the company's global sales efforts by recruiting new sales team members with industry expertise to drive our shift from passive bidding to an active outreach sales strategy.

在最近幾個季度，我們不僅保持了技術優勢，還投資於加強我們的運營基礎設施和擴大我們的員工隊伍。此外，我們通過招募具有行業專業知識的新銷售團隊成員來加強公司的全球銷售工作，以推動我們從被動投標轉變為主動外展銷售策略。

Throughout the year, we announced many new project wins in the US and Europe. For SuperCom, we've been continuously displacing incumbent vendors with an over 65% win rate in European competitive RFPs. We're proud to have won so many new contracts in such a short period of time, especially during (technical difficulty)

全年，我們宣佈在美國和歐洲贏得了許多新項目。對於 SuperCom，我們一直在不斷取代現有供應商，在歐洲競爭性 RFP 中的勝率超過 65%。我們很自豪能在這麼短的時間內贏得這麼多新合同，尤其是在（技術困難）期間

(Operator Instructions)

（操作員說明）

[I wonder that's all].

[我不知道這就是全部]。

Your line is now reconnected.

您的線路現已重新連接。

Well, I'm not going to resume the problem or anything.

好吧，我不會繼續這個問題或任何事情。

(inaudible)

（聽不清）

All speaker lines are now reconnected.

現在已重新連接所有揚聲器線路。

Hey, everyone. Sorry, there was a technical error and the call fell. Continue to where I left off. Sorry about that.

嘿大家。抱歉，出現技術錯誤，通話中斷。繼續我離開的地方。對於那個很抱歉。

Throughout the year, we announced many new project wins in the US and Europe, where SuperCom has been continuously displacing incumbent vendors in over 65% win rate in European competitive RFP. We're proud to have won so many new contracts in a short period, especially during economic uncertainty and market volatility due to the looming threat of recession and unstable geopolitics.

全年，我們在美國和歐洲宣布了許多新的項目中標，SuperCom 在歐洲競爭性 RFP 中以超過 65% 的中標率不斷取代現有供應商。我們很自豪能夠在短時間內贏得如此多的新合同，尤其是在經濟不確定性和市場波動期間，因為經濟衰退和不穩定的地緣政治威脅迫在眉睫。

Our business is recession resilient in nature. And as the possibility of potential recession increases, we have multiple tailwinds to support our growth.

我們的業務本質上具有抗衰退能力。隨著潛在衰退的可能性增加，我們有多種順風來支持我們的增長。

As many of you have heard me describe before, these global factors include high recidivism rates of roughly 75%, prison overcrowding of over 100%, and high incarceration costs. In 2020, the US alone spent over $80 billion to keep approximately 2.3 million people incarcerated, which equates to nearly 1% of the US population. For these reasons, among others, we see a glowing and growing global trend of the government turning to innovative solutions and alternatives to incarceration to ensure public safety.

正如你們中的許多人之前聽我描述過的那樣，這些全球性因素包括大約 75% 的高累犯率、超過 100% 的監獄人滿為患以及高昂的監禁成本。 2020 年，僅美國就花費了超過 800 億美元來監禁大約 230 萬人，這相當於美國人口的近 1%。由於這些原因，除其他外，我們看到政府轉向創新解決方案和監禁替代方案以確保公共安全的全球趨勢正在蓬勃發展。

And our PureSecurity technology solutions have been designed to address those trends. PureSecurity provides an effective way for institutions to enforce home confinement while easing prison overcrowding and significantly lowering costs.

我們的 PureSecurity 技術解決方案旨在應對這些趨勢。 PureSecurity 為機構提供了一種有效的方式來執行家庭限制，同時緩解監獄過度擁擠並顯著降低成本。

For example, the total daily cost for monitoring an offender on home confinement or GPS monitoring is approximately $10 to $35 compared to the much higher cost of $100 to $140 at a correctional facility. Most importantly, home confinement has been shown to reduce recidivism, highlighting its effectiveness in helping offenders improve their lives and communities. On top of these growth drivers, we witnessed a surge in adoption of victim protection solutions worldwide, which aligns perfectly with our strategic plan and launch of our new product, PureProtect.

例如，在家庭監禁或 GPS 監控中監控罪犯的每日總成本約為 10 至 35 美元，而在懲教機構的成本要高得多，為 100 至 140 美元。最重要的是，家庭監禁已被證明可以減少累犯，這凸顯了其在幫助罪犯改善他們的生活和社區方面的有效性。除了這些增長動力之外，我們還見證了全球範圍內受害者保護解決方案的採用激增，這與我們的戰略計劃和新產品 PureProtect 的推出完全一致。

During the past year, we expanded our business across Europe by winning significant new contracts which, as I mentioned, are typically awarded through a competitive RFP process. As a result, SuperCom now does business in over 10 countries across Europe, and we look forward to increasing the number in the years ahead.

在過去的一年裡，我們通過贏得重要的新合同將我們的業務擴展到整個歐洲，正如我提到的，這些合同通常是通過競爭性 RFP 流程授予的。因此，SuperCom 現在在歐洲 10 多個國家/地區開展業務，我們期待在未來幾年增加這一數字。

Last year, we won the largest industry award of the year for a national electronic monitoring project in Romania valued at $33 million, which included up to 15,000 monitored offenders per month. Our domestic violence solution with PureProtect is expected to enhance security of families and, as part of the project -- for up to six years.

去年，我們在羅馬尼亞的一項價值 3300 萬美元的國家電子監控項目贏得了年度最大的行業獎項，其中每月監控多達 15,000 名違規者。我們使用 PureProtect 的家庭暴力解決方案有望加強家庭的安全，並且作為該項目的一部分 - 長達六年。

Just a few weeks ago, we announced that we have received a $7.1 million follow-on order for this project, the second order under this existing contract, which follows the initial order of over $8.1 million. We've also launched a domestic violence solution in other European regions and are planning to launch them in the US, too.

就在幾週前，我們宣布我們已經收到了該項目的 710 萬美元後續訂單，這是現有合同下的第二份訂單，之前的初始訂單價值超過 810 萬美元。我們還在其他歐洲地區推出了家庭暴力解決方案，併計劃在美國推出。

In Israel, there's potential for a new domestic violence project. The government is trying to pass a law requiring domestic violence offenders to be monitored with technologies like ours. Finland was the most recent project we launched in the [fourth] quarter of last year. The $3.6 million national electronic monitoring project was awarded by the national government to deploy the SuperCom PureSecurity electronic suite.

在以色列，有可能開展一項新的家庭暴力項目。政府正試圖通過一項法律，要求使用像我們這樣的技術來監控家庭暴力犯罪者。芬蘭是我們在去年 [第四] 季度推出的最新項目。國家政府授予 360 萬美元的國家電子監控項目，用於部署 SuperCom PureSecurity 電子套件。

We also are working to increase our US business. We're proud to have made good progress towards our goal of multiple projects in California, Idaho, Texas, and Wyoming in 2022. In the fourth quarter, our subsidiary, our wholly owned subsidiary in California called Leaders in Community Alternatives, won a new project valued at $4.25 million.

我們也在努力增加我們在美國的業務。我們很自豪能夠在 2022 年實現我們在加利福尼亞州、愛達荷州、德克薩斯州和懷俄明州的多個項目的目標方面取得良好進展。在第四季度，我們的子公司，我們在加利福尼亞州的全資子公司 Leaders in Community Alternatives，贏得了新的項目價值425萬美元。

LCA has provided services of these counties for many years, including adult reporting services and electronic monitoring. Their new program extends the scope of the contracted reentry services to include jail-based sites and several community-based sites. They also focus on reentry services, including case management, substance abuse education, job preparedness, and criminogenic risk reduction. The program was already launched in Q1 of 2023.

LCA 多年來一直為這些縣提供服務，包括成人報告服務和電子監控。他們的新計劃擴展了合同再入服務的範圍，以包括基於監獄的站點和幾個基於社區的站點。他們還專注於重返社會服務，包括案件管理、藥物濫用教育、工作準備和降低犯罪風險。該計劃已於 2023 年第一季度啟動。

Our new strategic sales team wins have been the first step in executing the company's US market expansion strategy and have already driven increased activity with existing customers and numerous new demos and evaluations of potential new ones. And as we've talked about before, we believe there's also an opportunity to enhance our US growth with strategic acquisitions of local electronic monitoring service providers with a strong reputation and customer base in their respective local markets.

我們新的戰略銷售團隊的勝利是執行公司美國市場擴張戰略的第一步，並且已經推動了與現有客戶的更多活動以及對潛在新客戶的大量新演示和評估。正如我們之前談到的那樣，我們相信還有機會通過戰略收購在各自當地市場享有良好聲譽和客戶群的當地電子監控服務提供商來促進我們在美國的增長。

We constantly monitor the market for potential acquisitions that can generate significant value by immediately expanding market presence and providing vertical integration synergies. Our acquisition of LCA in 2016 of $3 million, less than one-times revenue, is a great example. The successful acquisition has proven to be a great strategic value for us with over $30 million of new project wins which has been generated in California.

我們不斷監控市場，尋找可以通過立即擴大市場佔有率和提供垂直整合協同效應產生巨大價值的潛在收購。我們在 2016 年以 300 萬美元收購 LCA，不到一倍的收入，就是一個很好的例子。事實證明，這次成功的收購對我們來說具有巨大的戰略價值，在加利福尼亞州贏得了超過 3000 萬美元的新項目。

I'll now turn to the financials. In our previous conference call, I mentioned that we anticipated a contribution to our financial results in Q1 from projects we discussed. I'm delighted to share that revenue has recorded a remarkable year-over-year growth of 109%, amounting to $6.4 million in the first quarter. This follows 102% and 59% year-over-year revenue growth in the two previous quarters, Q3 and Q4 of 2022.

我現在將轉向財務。在我們之前的電話會議中，我提到我們預計我們討論的項目將對第一季度的財務業績做出貢獻。我很高興與大家分享，第一季度收入同比增長 109%，達到 640 萬美元。此前兩個季度，即 2022 年第三季度和第四季度，收入分別同比增長 102% 和 59%。

To put things into perspective, while the global electronic monitoring market grew at approximately 10% in 2022, SuperCom IoT revenues achieved a staggering 76% growth during the same period in 2022. This growth is a testament to the fact that our market prefers our solution over alternative. Furthermore, in 2022, we successfully returned to positive EBITDA and are proud to have maintained this achievement.

換個角度來看，雖然全球電子監控市場在 2022 年增長了約 10%，但 SuperCom 物聯網收入在 2022 年同期實現了驚人的 76% 增長。這一增長證明了我們的市場更喜歡我們的解決方案超過替代品。此外，在 2022 年，我們成功地恢復了正的 EBITDA，並為保持這一成就感到自豪。

For the third consecutive quarter, we achieved positive EBITDA and, more specifically, we achieved an EBITDA of $0.4 million for Q1 2023, which resulted from targeted spending, operating leverage, and significant year-over-year increase in revenue. Gross profit increased by 19% to $1.6 million compared to $1.3 million. This increase is concurrent with the increase in the cost of goods, which resulted from supporting the launch phase of the mentioned new projects.

我們連續第三個季度實現正 EBITDA，更具體地說，我們在 2023 年第一季度實現了 40 萬美元的 EBITDA，這得益於目標支出、經營槓桿和收入同比大幅增長。毛利潤從 130 萬美元增長 19% 至 160 萬美元。這一增長與商品成本的增加同時發生，這是由於支持上述新項目的啟動階段而導致的。

Typically, the initial project stages usually incur higher expenses, while advanced stages yield higher gross margins, causing fluctuations in our gross profit depending on price composition and deployment stages. The short-term decrease in gross profit was an income increase to indicate long-term growth potential depending on project portfolio changes.

通常，初始項目階段通常會產生較高的費用，而後期階段會產生較高的毛利率，導致我們的毛利波動取決於價格構成和部署階段。毛利的短期下降是收入的增加，表明長期增長潛力取決於項目組合的變化。

Despite significant increases of revenue from Q1 2022 to Q1 2023 by $3.3 million, we managed to maintain our operating expenses at roughly $2.6 million per quarter. So while revenues grew at $3.3 million, our operating expenses stayed roughly the same, reflecting, once again, the strong operating leverage opportunities inherent in our business. As we deploy additional bracelets in regions where we run existing projects, on our existing infrastructure, the contribution margins for each additional bracelet can be as high as 70% or more.

儘管從 2022 年第一季度到 2023 年第一季度的收入顯著增加了 330 萬美元，但我們設法將運營費用維持在每季度約 260 萬美元。因此，雖然收入增長了 330 萬美元，但我們的運營費用大致保持不變，再次反映了我們業務中固有的強大運營槓桿機會。當我們在運行現有項目的地區部署額外的手環時，在我們現有的基礎設施上，每個額外手環的邊際收益可高達 70% 或更多。

Our net income in Q1 2023 improved to a $1.5 million loss compared to a $2.3 million loss in Q1 of 2022. Our cash, cash equivalents, and restricted cash balance at the end of Q1 2023 was $3.9 million. We have credit facilities in place that reduce our need for cash. As we continue to launch new projects and progress on existing ones, we will continue to invest in our sales and marketing as well as in R&D to drive revenue growth, expand our global footprint, and execute our business plan.

與 2022 年第一季度的 230 萬美元虧損相比，我們 2023 年第一季度的淨收入改善為虧損 150 萬美元。2023 年第一季度末，我們的現金、現金等價物和受限制現金餘額為 390 萬美元。我們有適當的信貸安排，可以減少我們對現金的需求。隨著我們繼續啟動新項目並在現有項目上取得進展，我們將繼續投資於我們的銷售和營銷以及研發，以推動收入增長、擴大我們的全球足跡並執行我們的業務計劃。

In closing, we're excited about the growth we are experiencing and about the growing demand for our products. We are seeing very high year-over-year growth in revenues for the third consecutive quarter and believe that we're well-positioned for our continued growth by capitalizing on the many opportunities before us. These are being driven by multiple factors, including our strong presence and reputation in the US and European markets, the countercyclical nature of electronic monitoring industry, the growing public policy shift to monitoring instead of incarceration.

最後，我們對我們正在經歷的增長以及對我們產品不斷增長的需求感到興奮。我們的收入連續第三個季度實現了非常高的同比增長，並且相信我們通過利用擺在我們面前的許多機會為我們的持續增長做好了準備。這些是由多種因素驅動的，包括我們在美國和歐洲市場的強大影響力和聲譽、電子監控行業的反週期性質、越來越多的公共政策轉向監控而不是監禁。

We anticipate sustained growth by further expanding our market share in the US and Europe. Our commitment to preserving our technological advantage and our both robust growth foundation remains steadfast, as we continue to invest in these areas.

我們預計通過進一步擴大我們在美國和歐洲的市場份額來實現持續增長。隨著我們繼續投資於這些領域，我們對保持技術優勢和強勁增長基礎的承諾始終堅定不移。

And with that, I'll turn the call over to the operator for questions. Operator?

有了這個，我會把電話轉給接線員提問。操作員？

Certainly. (Operator Instructions) Matthew Galinko, Maxim Group.

當然。 （操作員說明）Maxim Group 的 Matthew Galinko。

Good morning. This is Allen Klee for Matthew Galinko. The first question I had was, can you talk about your strategy towards expanding the domestic violence solutions into the US market, and the timing, and then also potential opportunity in the US with homeland security? Thank you.

早上好。我是馬修·加林科的艾倫·克利。我的第一個問題是，您能否談談將家庭暴力解決方案擴展到美國市場的戰略、時機，以及在美國國土安全方面的潛在機會？謝謝。

Great. Thanks for the questions. We started with the European market in recent years, also because of the proximity to Israel and a lot of our experience. But also because we developed very sophisticated products which had a good reception in the European market.

偉大的。感謝您的提問。近年來，我們從歐洲市場開始，也是因為靠近以色列和我們的很多經驗。還因為我們開發了非常先進的產品，在歐洲市場上受到了很好的歡迎。

Now, as we developed additional products such as the domestic violence solution, which is new in the industry, and other players cannot provide or offer anything similar, we're able to expand into new projects in Sweden, in other countries in Europe, and also in Romania, which we just won the largest projects in the field at $33 million last year.

現在，隨著我們開發出更多的產品，例如業內新的家庭暴力解決方案，而其他參與者無法提供或提供類似的產品，我們能夠擴展到瑞典、歐洲其他國家和地區的新項目，以及同樣在羅馬尼亞，去年我們剛剛以 3300 萬美元的價格贏得了該領域最大的項目。

In the US, we've had a lot of demand from various retailers and counties and states for similar solutions. And using our domestic violence solution, PureProtect, we think we can get great traction in the US. We're currently in stages -- both the PureProtect and the PureOne were in stages in the US where various potential customers and retailers were trying out the solution.

在美國，我們收到了來自不同零售商、縣和州的大量類似解決方案的需求。使用我們的家庭暴力解決方案 PureProtect，我們認為我們可以在美國獲得巨大的吸引力。我們目前處於分階段——PureProtect 和 PureOne 都在美國分階段進行，各種潛在客戶和零售商正在嘗試該解決方案。

As we get closer to a full deployment, we expect to have potential expansion, of course, into California, where we have a strong presence; but also into many other states which we've been working before; and new ones as well. We think that there'll be great reception into the product. And as we make the full adaption to the US market with these products, we expect good traction and good progress. That was the first question.

隨著我們接近全面部署，我們當然希望有可能擴展到我們擁有強大影響力的加利福尼亞州；但也進入我們之前一直在努力的許多其他州；還有新的。我們認為該產品會受到很好的歡迎。隨著我們用這些產品全面適應美國市場，我們期待良好的牽引力和良好的進展。這是第一個問題。

In terms of homeland security, if you're talking about identification and biometrics, like we've done in the past -- our traditional business, our legacy business, identification, we've done projects for passports, drivers licenses, visas, and others. And in the US also, the company has won a project back in early 2000 around passport creation. But currently, our focus is on electronic monitoring.

在國土安全方面，如果你談論的是身份識別和生物識別技術，就像我們過去所做的那樣——我們的傳統業務、我們的遺留業務、身份識別，我們已經完成了護照、駕照、簽證等項目其他的。在美國，該公司也在 2000 年初贏得了一個護照製作項目。但目前，我們的重點是電子監控。

There are several projects in electronic monitoring as well, such as ICE, where they look at the border with Mexico. And there's also very large state projects in the US. And you see the numbers of the amount of offenders being tracked, either at home or GPS monitoring, or domestic violence growth every year.

還有幾個電子監控項目，例如 ICE，他們在那裡查看與墨西哥的邊界。美國也有非常大的國家項目。你會看到被跟踪的犯罪者數量，無論是在家裡還是 GPS 監控，或者家庭暴力每年都在增長。

So we do expect great opportunities in the US. The market there is much larger than in Europe. And as we expand from small counties to larger states and then potential federal projects, we believe our technology will be a key factor in this expansion.

所以我們確實期待在美國有巨大的機會。那裡的市場比歐洲大得多。隨著我們從小縣擴展到更大的州，然後是潛在的聯邦項目，我們相信我們的技術將成為這種擴展的關鍵因素。

Thank you. Can you comment on the pipeline of large opportunities in Europe and potential timing?

謝謝。您能否評論歐洲的大量機會和潛在時機？

Can you repeat that? You mean what in Europe? Sorry.

你可以再說一遍嗎？你是說歐洲的什麼？對不起。

Pipeline of large opportunities in Europe and potential timing for them.

歐洲的大量機會及其潛在時機。

So Europe, as we mentioned, there has been increased activity recently, and we've been bidding on various opportunities. There are some very large ones that are still out and we're waiting to hear answers for. It could be any week, it could be in the coming months. Sometimes, these are out of our control, and they're basically tied under the government.

因此，正如我們提到的，歐洲最近的活動有所增加，我們一直在競標各種機會。有一些非常大的仍然沒有出來，我們正在等待聽到答案。可能是任何一周，也可能是未來幾個月。有時，這些是我們無法控制的，它們基本上受政府約束。

Last year, in the third quarter, we were awarded the $33 million national project in Romania. It's the largest project -- it's the first project in Romania done in electronic monitoring, the largest one in the industry awarded in Europe. We also had the first project for Croatia last year awarded. And there's some other ones in Europe that we're waiting to hear from and we're excited about as well.

去年第三季度，我們獲得了羅馬尼亞 3300 萬美元的國家項目。這是最大的項目——這是羅馬尼亞在電子監控領域完成的第一個項目，也是歐洲業內最大的項目。去年，我們還獲得了克羅地亞的第一個項目。在歐洲還有其他一些我們正在等待聽到的消息，我們也很興奮。

All right. Can you help us understand the revenue recognition of the follow-on order from Romania?

好的。您能否幫助我們了解羅馬尼亞後續訂單的收入確認？

Yeah. So the initial order was over $8.1 million, and that was last year. And we deployed it already. And we received, in Q1, a follow-on order of $7.1 million. And that is expected to be delivered within the first two quarters of 2023. And accordingly, the revenue recognition as well for that order within that timeline.

是的。所以最初的訂單超過 810 萬美元，那是去年的事情。我們已經部署了它。我們在第一季度收到了 710 萬美元的後續訂單。預計將在 2023 年前兩個季度內交付。因此，該訂單的收入確認也將在該時間表內進行。

So I'm sorry. Was the revenue recognized already or it gets recognized in the first two quarters of 2020? or how does that work again?

所以我很抱歉。收入是否已經確認或在 2020 年前兩個季度確認？或者這又是如何工作的？

The first $8.1 million were recognized. And now the additional order of $7.1 million additional, which we received in Q1, is to be delivered within the first half of 2023. And accordingly, the revenue recognition will be tied to the same timeline if the deployment is done as expected.

確認了首筆 810 萬美元。現在，我們在第一季度收到的額外 710 萬美元訂單將在 2023 年上半年交付。因此，如果部署按預期完成，收入確認將與同一時間表掛鉤。

Thank you. What is your recurring revenue level?

謝謝。您的經常性收入水平是多少？

A good question. In the past, it has been a little above 80%. In some of the recent quarters, this has been closer to 70% because of the remaining project, which has some large deployment components. But that's seen to fluctuate 70%, 80%. It depends on the project mix and revenue mix that's being incurred at the exact moment.

一個好問題。過去，它略高於 80%。在最近幾個季度中，由於剩餘的項目具有一些大型部署組件，這一比例接近 70%。但這波動幅度為 70%、80%。這取決於在確切時刻發生的項目組合和收入組合。

Thank you. So you made a comment of your expenses have been much slower growing than revenues. Is that something that you think you can continue as hopefully revenue continues?

謝謝。所以你評論說你的支出增長比收入增長慢得多。隨著希望收入繼續增長，您認為您可以繼續這樣做嗎？

Yes, certainly. Our operating structure here in Israel and the US, it's pretty stable. With the same structure, we could support more projects, and we can certainly support more units per project. So once we deploy at Sweden or Denmark and Romania, the amount of additional units is very little additional work for us because it all runs in the same infrastructure.

是的，當然了。我們在以色列和美國的運營結構非常穩定。同樣的結構，我們可以支持更多的項目，當然每個項目我們也可以支持更多的單位。因此，一旦我們在瑞典或丹麥和羅馬尼亞部署，額外的單位數量對我們來說是非常少的額外工作，因為它們都在相同的基礎設施中運行。

And we have the ability to manufacture thousands of units really quickly, and that runs on our existing cost structure. So as revenues continue to grow, as we hope and they will, our operating structure will grow much slower. Our operating costs will go much slower than the potential revenues. And the gross margins could expand a (inaudible), especially when we add additional units in existing locations where we have deployments.

而且我們有能力真正快速地製造數千個單位，並且在我們現有的成本結構上運行。因此，隨著收入繼續增長，正如我們所希望的那樣，他們也會這樣做，我們的運營結構增長將慢得多。我們的運營成本將遠低於潛在收入。毛利率可能會擴大（聽不清），尤其是當我們在現有部署地點添加更多設備時。

Thank you. Last question. You mentioned that you've been displacing incumbents in contracts. What is the reason why you've been winning from incumbents?

謝謝。最後一個問題。你提到你一直在取代合同中的現任者。您從現任者那裡獲勝的原因是什麼？

Great question. And in Europe, we've had over 65% win rate in much of the recent years. Typically, these projects are scored on various factors, one being the technology score, whether -- not just how good technology is, but innovation. Are you bringing something new to the table versus others? And we've done that consistently. We usually score very highly on technology and innovation.

很好的問題。在歐洲，近年來的大部分時間我們的勝率都超過 65%。通常，這些項目根據各種因素進行評分，其中之一是技術評分，是否 - 不僅僅是技術有多好，而是創新。與其他人相比，您是否帶來了新的東西？我們一直在這樣做。我們通常在技術和創新方面得分很高。

Furthermore, they want to see a track record, and we have a very large portfolio of experience in deployment, over 50 projects in the last years, and a lot of them are recent projects, which are very relevant, and that gives us a very good score on there. Then, of course, there's pricing, timelines, and other things which we're on par with other vendors. So we're on par in many of that requested items. And then with technology score innovation, we do much better.

此外，他們希望看到業績記錄，我們在部署方面擁有非常豐富的經驗組合，過去幾年的 50 多個項目，其中很多是最近的項目，非常相關，這給了我們一個非常那裡的分數很高。當然，還有定價、時間表和其他我們與其他供應商不相上下的事情。因此，我們在許多要求的項目上都處於同等水平。然後通過技術得分創新，我們做得更好。

We also have a smartphone model. We also have the smartphone resolution. Because our bracelet has the longest battery life in the industry, it seamlessly works with the smartphone as well. We're able to offer a plethora of features through the smartphone, video calls, and authentication, and tracking under the ground, and a variety of things that others cannot be for.

我們也有智能手機型號。我們還有智能手機分辨率。因為我們的手環擁有業內最長的電池壽命，所以它也可以與智能手機無縫配合。我們能夠通過智能手機、視頻通話、身份驗證、地下跟踪以及其他人無法提供的各種功能提供過多的功能。

And that helps also with domestic violence, where the offender is wearing the ankle bracelet and the victim, through the smartphone, knows when they're coming close. So that's how we win most of the time. And we continue to enhance our solution and our proprietary offering.

這也有助於解決家庭暴力問題，犯罪者戴著腳踝手鐲，受害者通過智能手機知道他們何時接近。所以這就是我們大部分時間獲勝的方式。我們將繼續增強我們的解決方案和專有產品。

With every new project, we add more capabilities. And then we offer that going forward to new projects and new opportunities that we maintain an advantage, one step ahead of the rest in terms of our competitive position.

對於每個新項目，我們都會添加更多功能。然後我們將繼續推進我們保持優勢的新項目和新機會，在我們的競爭地位方面領先其他人一步。

Thank you very much.

非常感謝。

Thank you.

謝謝。

Thank you. At this time, we will pass the call back to Ordan for closing remarks.

謝謝。此時，我們會將電話轉回 Ordan 以進行結束髮言。

I want to thank all of you for participating in today's call and for your interest in SuperCom. Please contact us directly if you have any additional questions. We look forward to sharing our progress with you on our next conference calls, filings, and press releases. Thank you and have a good day.

我要感謝大家參加今天的電話會議以及對 SuperCom 的關注。如果您有任何其他問題，請直接聯繫我們。我們期待在下次電話會議、文件和新聞稿中與您分享我們的進展。謝謝你，有一個美好的一天。