Supercom Ltd (SPCB) 2024 Q2 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to SuperCom's Second Quarter 2024 Financial Results and Corporate Update Conference Call.

女士們、先生們，早安，歡迎參加 SuperCom 2024 年第二季財務表現和公司更新電話會議。

(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.

（操作員指示）請參加本次通話的人員注意，本次電話會議的音訊將透過網路現場直播，同時也會被錄音以供回放。

Joining me from SuperCom's leadership team is Ordan Trabelsi, SuperCom's President and Chief Executive Officer.

與我一起出席的還有 SuperCom 領導團隊的總裁兼執行長 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.

我想提醒您，在本次電話會議中，SuperCom 管理層可能會做出前瞻性陳述，包括涉及 SuperCom 對未來業績或營運結果的預期的陳述。

Forward-looking statements involve risks, uncertainties and other factors that may cause SuperCom's actual results to differ materially from those statements.

前瞻性陳述涉及風險、不確定性和其他因素，可能導致 SuperCom 的實際結果與這些陳述有重大差異。

For more information about these risks, uncertainties and factors, please refer to the risk factors described in SuperCom's most recently filed periodic reports 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 表定期報告中描述的風險因素，以及隨本次電話會議發布的 SuperCom 新聞稿，特別是其中的警告聲明。

Today's conference call includes EBITDA, a non-GAAP financial measure that SuperCom believes can be useful in evaluating its performance.

今天的電話會議包括 EBITDA，這是一項非 GAAP 財務指標，SuperCom 認為它有助於評估其業績。

You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

您不應孤立地考慮這些附加信息，也不應將其視為根據 GAAP 編制的結果的替代品。

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.

有關此非 GAAP 財務指標與淨虧損（可比較 GAAP 財務指標）的對帳表，請參閱隨本次電話會議發布的 SuperCom 收益新聞稿中的對帳表。

Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well.

其他非 GAAP 財務指標和可比較 GAAP 財務指標的對帳表也可在此查閱。

The content of this call contains time-sensitive information that is accurate only as of today, August 15, 2024.

本次通話內容包含時間敏感訊息，僅截至今天（2024 年 8 月 15 日）準確。

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.

除法律要求外，SuperCom 不承擔公開更新或修改任何資訊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.

現在我很高興將電話轉給 SuperCom 總裁兼執行長 Ordan Trabelsi。

Thank you, operator, and good morning, everyone, and thank you for joining us today.

謝謝接線員，大家早安，謝謝您今天加入我們。

Earlier, this morning, we issued a press release of our financial results for the second quarter of 2024.

今天早上，我們發布了 2024 年第二季財務業績新聞稿。

You can find a copy in the Investor Relations section of our website at www.supercom.com.

您可以在我們網站 www.supercom.com 的投資者關係部分找到一份副本。

Today, I'll start my comments with brief update on our recent business highlights, strategy and future results, followed by a Q&A session.

今天，我將首先簡要介紹我們最近的業務亮點、策略和未來業績，然後進行問答環節。

The second quarter was an outstanding quarter for SuperCom, marking our second consecutive period of remarkable net income growth with a 183% increase quarter-over-quarter this time.

第二季度對於 SuperCom 來說是一個出色的季度，這是我們連續第二個季度實現顯著的淨收入增長，本次環比增長了 183%。

We achieved a record-breaking high year, high quarterly net income of $2.2 million, reflecting a $3.3 million year-over-year improvement.

我們實現了創紀錄的年度最高水平，季度淨收入高達 220 萬美元，年增 330 萬美元。

This is the second quarter in a row, where we're breaking our record.

這是我們連續第二季打破紀錄。

Additionally, our cash flows from operating activities increased by $5.3 million to positive $2 million this quarter year over year, reflecting the strength of our operational performance.

此外，本季我們的營運活動現金流與去年同期相比增加了 530 萬美元，達到正 200 萬美元，反映了我們強勁的營運表現。

We are thrilled with this outstanding performance.

我們對這一出色的表現感到非常興奮。

We look forward to maintaining this momentum in the coming quarters.

我們期待在未來幾季保持這一勢頭。

During this quarter, we executed in advance of various projects in our portfolio and utilized operating leverage and prior investments in our proprietary technology to achieve a significant EBITDA increase of 83% year-over-year to $1.6 million this quarter.

本季度，我們提前執行了投資組合中的各個項目，並利用經營槓桿和對我們專有技術的先前投資，實現了本季度 EBITDA 同比增長 83%，達到 160 萬美元。

We're particularly proud to have successfully integrated the PureOne solution into multiple new markets during this period, reflecting our continued commitment to innovation and our ability to meet the evolving needs of our clients.

我們特別自豪在此期間成功將 PureOne 解決方案整合到多個新市場，這體現了我們對創新的持續承諾以及滿足客戶不斷變化的需求的能力。

This, along with other strategic initiatives, has positioned us to deliver sustained growth and profitability.

這項舉措與其他策略舉措一起，使我們能夠實現持續成長和獲利。

For those new to SuperCom, our mission is to revolutionize the public safety sector worldwide with our proprietary electronic monitoring technology, data intelligence and suite of complementary services.

對於 SuperCom 的新人來說，我們的使命是透過我們的專有電子監控技術、數據智慧和一系列補充服務徹底改變全球公共安全領域。

With over 36 years of experience since our founding in 1988, we've been a trusted partner with dozens of national governments worldwide, providing cutting-edge electronic and digital security solutions.

自 1988 年成立以來，我們擁有超過 36 年的經驗，一直是全球數十個國家政府值得信賴的合作夥伴，提供尖端的電子和數位安全解決方案。

Our strategic blueprint is straightforward yet powerful.

我們的策略藍圖簡單而有力。

Lead with innovative technology.

以創新技術引領。

Our proprietary technology, monitoring technology, which supports highly and competitive government tenders and support various programs such as house arrests, GPS monitoring, rehabilitation services, domestic violence prevention and more.

我們的專有技術—監控技術，支援高度競爭的政府招標，並支援各種計劃，如軟禁、GPS 監控、復健服務、家庭暴力預防等。

Moreover, we have recently broadened our portfolio to include advanced AI-driven analytics, which are an integration in our electronic monitoring solutions.

此外，我們最近擴大了產品組合，包括先進的人工智慧驅動的分析，這是我們電子監控解決方案的整合。

This addition enhanced our ability to provide predictive insights and improved outcomes for our clients.

這項新增功能增強了我們為客戶提供預測見解和改善結果的能力。

We're developing superior solutions.

我們正在開發更卓越的解決方案。

Since 2018, we secured over 50 new multiyear government projects with these solutions.

自 2018 年以來，我們利用這些解決方案獲得了 50 多個新的多年期政府專案。

We're expanding our global presence.

我們正在擴大我們的全球影響力。

Our strong growing reputation as a premium provider of electronic monitoring solutions and services enhances our market position with each new customer win, and we deliver outstanding service.

作為電子監控解決方案和服務的優質供應商，我們日益增長的良好聲譽隨著每個新客戶的贏得而增強了我們的市場地位，並且我們提供卓越的服務。

Our strategic focus on the IoT tracking business is developed -- in developed markets is where the opportunity is the greatest.

我們對物聯網追蹤業務的策略重點是發展已開發市場——那裡的機會最大。

With the electronic monitoring market projected to reach $2.3 billion by 2028, the US and Europe constitute about 95% of these markets.

預計到 2028 年電子監控市場規模將達到 23 億美元，其中美國和歐洲約佔 95% 的市場份額。

We continue to amplify our technological leadership with significant R&D investments, leading to the launch of advanced solutions like PureProtect and PureOne.

我們繼續透過大量研發投入來擴大我們的技術領先地位，從而推出了 PureProtect 和 PureOne 等先進的解決方案。

These offerings are already making headway in various markets, including the US and are pivotal in SuperCom's expansion.

這些產品已經在包括美國在內的各個市場取得進展，並且對 SuperCom 的擴張至關重要。

PureProtect is a life-saving domestic violence monitoring solution, providing preventive measures to families suffering from domestic violence or stalking, thereby increasing their safety.

PureProtect 是一種拯救生命的家庭暴力監控解決方案，為遭受家庭暴力或追蹤的家庭提供預防措施，從而提高他們的安全。

PureOne is an all-in-one GPS tracking ankle bracelet monitoring solution, integrating comprehensive monitoring capabilities into a single device.

PureOne 是一款一體式 GPS 追蹤腳踝手環監測解決方案，將全面的監控功能整合到單一裝置中。

Like many of our products, it offers top-notch features, placing it above the competition in most metrics.

就像我們的許多產品一樣，它提供了一流的功能，在大多數指標上都勝過競爭對手。

Our cloud-based software enabled PureSecurity product line has been particularly effective in monitoring offenders and managing real-time information.

我們的基於雲端的軟體支援的 PureSecurity 產品線在監控罪犯和管理即時資訊方面特別有效。

This real-time advantage is a game changer, empowering authorities with actionable insights and timely intervention to mitigate potential risks and ensure public safety.

這種即時優勢改變了遊戲規則，使當局能夠採取切實可行的見解並及時幹預，以減輕潛在風險並確保公共安全。

These products have significantly expanded the company's addressable market.

這些產品大大擴展了該公司的目標市場。

We've been very pleased with our reception and traction and expect them to help facilitate the accelerated expansion of SuperCom into the US market and further into European countries.

我們對我們的接受度和發展勢頭感到非常滿意，並希望它們能夠幫助 SuperCom 加速擴張到美國市場並進一步進入歐洲國家。

We fortified our operational infrastructure to support our growth and have revamped our sales strategy with a proactive outreach approach.

我們加強了營運基礎設施以支持我們的成長，並透過積極主動的拓展方式修改了我們的銷售策略。

Our sales team with deep industry expertise has been instrumental in achieving new wins and driving growth.

我們的銷售團隊擁有深厚的行業專業知識，在取得新勝利和推動成長方面發揮了重要作用。

Over the past months, we announced many new orders and projects wins in the US and Europe.

過去幾個月，我們在美國和歐洲宣布了許多新訂單和項目勝利。

SuperCom has continuously displaced the incumbent vendors and achieved over 65% win rates in European competitive tenders.

SuperCom 不斷取代現有供應商，並在歐洲競爭性招標中取得了超過 65% 的中標率。

In the European market, SuperCom has secured several national tracking programs across Europe over the past two years, with bids and contracts at various stages of execution.

在歐洲市場，SuperCom 在過去兩年中已經獲得了歐洲各地多個國家追蹤項目，其中的投標和合約處於不同執行階段。

Notably, the company's large-scale domestic violence offender tracking programs like the one launched in Romania, have the potential to catalyze further uptake from existing European customers.

值得注意的是，該公司在羅馬尼亞推出的大規模家庭暴力罪犯追蹤計劃，有可能進一步激發現有歐洲客戶的採用。

As more European countries adopt these technologies, we anticipate a broader expansion of our solutions across the continent.

隨著越來越多的歐洲國家採用這些技術，我們預計我們的解決方案將在整個歐洲大陸得到更廣泛的推廣。

In the European market, SuperCom expanded its business into over 10 countries and secured significant new contracts, which are typically awarded through a competitive tender process.

在歐洲市場，SuperCom 將業務擴展到 10 多個國家，並獲得了重要的新合同，這些合同通常是透過競爭性招標程序授予的。

Besides winning new projects, we continue to execute and receive ongoing orders from our partners.

除了贏得新項目外，我們還繼續執行並接收來自合作夥伴的持續訂單。

Just about four weeks ago, we announced a receipt of new orders valued at over $2.9 million from European governments, totaling over $11 million in new orders from European clients.

就在大約四周前，我們宣布收到來自歐洲政府價值超過 290 萬美元的新訂單，來自歐洲客戶的新訂單總額超過 1,100 萬美元。

Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution.

去年，我們與芬蘭政府達成了一項新的國家計劃，部署我們的家庭暴力監控解決方案。

The deployment of our PureSecurity suite consisting of PureProtect, PureTrack, PureTag and PureMonitor demonstrates the versatility and effectiveness of our solutions.

我們的 PureSecurity 套件（由 PureProtect、PureTrack、PureTag 和 PureMonitor 組成）的部署證明了我們解決方案的多功能性和有效性。

It underscores our leadership in the electronic monitoring space.

它強調了我們在電子監控領域的領導地位。

Our collaboration with Finland is a prime example of the confidence that clients have in SuperCom.

我們與芬蘭的合作是客戶對 SuperCom 信任的典型例證。

As those who experience our services often choose to broaden their engagement with our diverse array of solutions.

因為體驗過我們服務的人經常選擇擴大對我們多樣化解決方案的參與。

Notably, at the end of 2022, the company won the largest industry award of the year for national electronic monitoring project in Romania, valued at $33 million, including up to 15,000 monitored offenders per month for up to six years.

值得注意的是，2022年底，該公司獲得了羅馬尼亞國家電子監控計畫年度最大行業獎項，價值3,300萬美元，其中包括每月監控最多15,000名罪犯，為期長達六年。

The project has been progressing smoothly and demonstrates substantial advancements, further extending our engagement in the country's national EM project.

計畫目前進展順利，取得了實質進展，進一步擴大了我們在國家電磁相容計畫中的參與。

This large-scale project reinforces the strength of our PureSecurity suite and cements our position as a trusted partner for governments worldwide.

這個大型專案增強了我們的 PureSecurity 套件的實力，鞏固了我們作為全球政府值得信賴的合作夥伴的地位。

We've also launched our domestic violence solutions in other European regions and have recently launched them in the US.

我們也在其他歐洲地區推出了家庭暴力解決方案，最近又在美國推出了這個解決方案。

While the European market continues to grow, it's important to know that the US market offers an even larger opportunity, bringing approximately 3 times to 4 times the size of the European market.

在歐洲市場持續成長的同時，重要的是要知道美國市場提供了更大的機會，其規模約為歐洲市場的 3 倍到 4 倍。

With the introduction of our PureOne electronic monitoring product now available in the US and the expansion of our domestic violence tracking solutions, we believe SuperCom is well positioned to unlock substantial growth potential in this untapped market.

隨著我們的 PureOne 電子監控產品在美國上市以及我們的家庭暴力追蹤解決方案的擴展，我們相信 SuperCom 已準備好在這個尚未開發的市場中釋放巨大的成長潛力。

Although SuperCom already does business in multiple US states, we are actively focused on further expanding our presence in the US.

儘管 SuperCom 已經在美國多個州開展業務，但我們仍積極致力於進一步擴大我們在美國的業務。

Our wholly-owned subsidiary, LCA, located in California is actively expanding the size and scope of existing programs, winning rebids with existing customers and winning new programs with new customers.

我們位於加州的全資子公司 LCA 正在積極擴大現有項目的規模和範圍，贏得現有客戶的重新競標並與新客戶贏得新項目。

The company strategically prioritizes PureOne's expansion to new markets and geographies.

該公司在策略上優先考慮 PureOne 向新市場和新地區的擴張。

But PureOne has already received high praise during its introduction into various regions of the USA, where it has been successfully deployed and actively utilized to monitor live offenders.

但PureOne在引入美國各個地區後已獲得高度讚譽，並被成功部署並積極用於監控活著的罪犯。

Moreover, sales activities for PureOne have commenced in promising new markets outside Europe and North America.

此外，PureOne 的銷售活動已在歐洲和北美以外有前景的新市場開始。

Despite our long-standing presence in parts of California, the US market remains largely untapped for us.

儘管我們長期在加州部分地區開展業務，但美國市場對我們來說仍然很大程度上尚未開發。

Since we began investing in outbound sales efforts in 2022, we have secured wins in California, Idaho, Texas, Kentucky, Wyoming, to name a few, the launch of PureOne in 2023, coupled with the positive feedback from initial deployments, positions us to accelerate market capture across the US, unlocking significant growth opportunities.

自 2022 年開始投資外向銷售工作以來，我們已在加利福尼亞州、愛達荷州、德克薩斯州、肯塔基州、懷俄明州等地取得了勝利，2023 年推出的 PureOne 加上初始部署的積極反饋，使我們能夠加速佔領美國市場，釋放巨大的成長機會。

Our new strategic sales team and new wins have been the first steps in executing the company's US market expansion strategy and have already driven increased activity with existing customers and multiple new demos, resulting in a significant increase in the company's pipeline.

我們的新策略銷售團隊和新勝利是執行公司美國市場擴張策略的第一步，並且已經推動了現有客戶的活動和多個新演示的增加，從而使公司的管道顯著增加。

Launching our PureOne solution in US markets in late 2022 was a significant milestone in our US expansion strategy.

2022 年底在美國市場推出我們的 PureOne 解決方案是我們美國擴張策略的一個重要里程碑。

Entering 2024, we've already announced three new projects in North America to provide the solution through LCA, who won a new project in California valued up to $2 million to provide a comprehensive jail-based program, focusing on reentry services for adult inmates.

進入2024年，我們已經宣佈在北美開展三個新項目，透過LCA提供解決方案，LCA在加州贏得了一個價值高達200萬美元的新項目，提供全面的監獄計劃，重點是成年囚犯的重返社會服務。

The award was a result of winning a formal competitive process.

該獎項是透過正式競爭程序獲勝的結果。

Moreover, LCA secured a new contract in California with an established California services provider in the judicial sector.

此外，LCA 還與加州一家知名的司法領域服務提供者簽訂了一份新合約。

This contract is particularly notable for SuperCom's successful displacement of long-time incumbent competitor.

這份合約對於 SuperCom 成功取代長期的競爭對手尤其引人注目。

Finally, SuperCom won a new project in Canada with a renowned Canadian industry partner in the tracking solutions sector.

最終，SuperCom 與加拿大追蹤解決方案領域的知名產業合作夥伴合作贏得了加拿大的新項目。

This project expands an existing collaboration with its long-standing partner, transitioning from providing RF-based tracking technology to embracing new GPS technologies.

該專案擴大了與長期合作夥伴的現有合作，從提供基於 RF 的追蹤技術轉變為採用新的 GPS 技術。

As I mentioned earlier, introducing our PureOne solution is a game changer in securing these contracts.

正如我之前提到的，引入我們的 PureOne 解決方案對於確保這些合約的安全性具有重大影響。

It underscores our competitive edge and commitment to delivering innovative and superior technology solutions.

它強調了我們的競爭優勢和提供創新和卓越技術解決方案的承諾。

By securing these contracts and others, we leverage our technologies and our services and our track record of experience to win in our competitive tenders.

透過獲得這些合約和其他合同，我們利用我們的技術、服務和經驗在競爭性投標中獲勝。

By securing these contracts, we further reinforce our position as a market leader.

透過獲得這些合同，我們進一步鞏固了我們作為市場領導者的地位。

We view our recent wins as indicators of our growing influence and expansion potential in North America and worldwide.

我們將最近的勝利視為我們在北美和全球範圍內日益增長的影響力和擴張潛力的標誌。

In conclusion on strategy, despite macroeconomic uncertainties and ongoing global challenges, including those in Israel, SuperCom solution are being increasingly relevant.

總結策略，儘管宏觀經濟存在不確定性，包括以色列在內的全球挑戰持續存在，但 SuperCom 解決方案的重要性日益凸顯。

We continue to see growth driven by high recidivism rates, the escalating cost of incarceration and the surge in the adoption of victim protection solutions worldwide.

我們繼續看到，高再犯率、不斷上升的監禁成本以及全球範圍內採用受害者保護解決方案的激增推動著增長。

The company's PureSecurity technology solutions have been designed to address these trends, offering new effective ways for institutions to enforce home confinement, ease prison overcrowding and lower costs significantly.

該公司的 PureSecurity 技術解決方案旨在應對這些趨勢，為機構實施家庭監禁、緩解監獄過度擁擠狀況並大幅降低成本提供新的有效方法。

For example, monitoring an offender on home confinement or GPS costs about $10, $35 a day, which is 90% less than the $100 to $140 daily costs at a correctional facility.

例如，監控一名在家中或使用 GPS 監控的罪犯每天的費用約為 10 至 35 美元，比在懲教機構每天 100 至 140 美元的費用低 90%。

Moreover, home confinement helps to reduce repeat offenses, highlighting its effectiveness in helping offenders improve their lives and communities.

此外，居家監禁有助於減少重複犯罪，凸顯了其在幫助罪犯改善生活和社區方面的有效性。

As we've mentioned in previous calls, we believe there is also an opportunity to enhance our US growth through strategic acquisitions of local electronic monitoring service providers, with a strong reputation and customer base in those local markets.

正如我們在先前的電話會議中提到的，我們相信透過策略性地收購在當地市場擁有良好聲譽和客戶群的本地電子監控服務提供商，我們也有機會增強我們在美國市場的成長。

We constantly monitor the market for potential acquisitions that generate significant value by immediately expanding market presence and providing vertical integration synergies.

我們不斷監控市場以尋找潛在的收購，透過立即擴大市場佔有率和提供垂直整合綜效來創造重大價值。

Our acquisition of LCA in 2016 of $3 million is a great example.

我們在 2016 年以 300 萬美元收購 LCA 就是一個很好的例子。

The successful acquisition has proven to be a great strategic value throughout the over $35 million of new project wins that's generated since then in California alone.

事實證明，此次成功收購具有巨大的戰略價值，光在加州就創造了超過 3,500 萬美元的新專案收益。

I'll now turn to the financials.

我現在來談談財務問題。

During our previous conference call, I mentioned that we anticipated contributing to our financial results in the subsequent orders as our ongoing projects mature.

在我們之前的電話會議中，我提到，隨著我們正在進行的項目的成熟，我們預計後續訂單將為我們的財務表現做出貢獻。

I'm delighted to share that we've substantially improved our financial and operating results.

我很高興地告訴大家，我們的財務和營運績效大幅改善。

Our gross margin improved by 20.4 percentage points to 49.6% year-over-year.

我們的毛利率年增了20.4個百分點，達到49.6%。

Moreover, our operating income improved by $1 million, reaching $0.4 million, a significant year-to-year turnaround from an operating loss of $0.7 million driven by the substantial rise in our gross profit.

此外，我們的營業收入增加了 100 萬美元，達到 40 萬美元，與去年同期 70 萬美元的營業虧損相比實現了顯著扭轉，這得益於我們毛利的大幅增長。

Our non-GAAP net income surged by 874% year-over-year to $3.3 million, reflecting the benefit of operating leverage associated with higher revenues and continued progress in our IoT projects.

我們的非公認會計準則淨收入年增 874% 至 330 萬美元，反映了與更高收入和物聯網專案持續進展相關的營運槓桿的好處。

This quarter's results highlight our ability to seize the high margin potential of our project portfolio through successful execution and progression in different stages of these projects, showcasing our focus on sustained growth and profitability.

本季的業績凸顯了我們透過成功執行和推進專案不同階段來抓住專案組合的高利潤潛力的能力，展現了我們對持續成長和獲利能力的關注。

Our momentum is also evidenced by our improved cash flows from operating activities, which increased by $5.3 million year-over-year to $2 million in operating cash this quarter from negative $3.3 million in Q2 of last year.

我們的動能也體現在我們經營活動現金流的改善上，本季經營現金流從去年第二季的負 330 萬美元增加到 200 萬美元，比去年同期成長 530 萬美元。

The following is a comparison between the financial results of the second quarter of 2024 and the second quarter of 2023.

以下是 2024 年第二季與 2023 年第二季的財務結果比較。

Gross profit increased by 65.2% to $3.7 million compared to $2.3 million, reflecting the progress we've maintained across our projects, where margins typically enhance as projects mature.

毛利從 230 萬美元增加 65.2% 至 370 萬美元，反映了我們在各個專案中保持的進展，利潤率通常會隨著專案的成熟而提高。

Typically, initial project stages incur higher expenses, while advanced stages yield higher gross margins, causing fluctuations in our gross profit depending on project and revenue composition and deployment stages.

通常，專案初始階段的費用較高，而後期階段的毛利率較高，導致我們的毛利根據專案和收入組成以及部署階段而波動。

As the project pipeline matures, we expect an upward trend in gross margin based on our evolving project portfolio.

隨著專案管道的成熟，我們預計基於不斷發展的專案組合，毛利率將呈現上升趨勢。

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.

當我們在現有基礎設施上運行現有專案的地區部署更多手環時，每個額外手環的貢獻利潤率可能高達 70％ 甚至更高。

We observed a slight increase in operating expenses this quarter, which balanced the increase in gross profit.

我們觀察到本季營業費用略有增加，平衡了毛利的成長。

These expenses are primarily aimed at supporting the future growth of our pipeline, retaining our technological edge and ensuring high levels of client satisfaction.

這些費用主要用於支持我們產品線的未來成長、維持我們的技術優勢並確保高水準的客戶滿意度。

We increased R&D expenses by $150,000 as we continued to develop and launch new features and improve existing products to meet the needs of new and existing clients, ensuring they remain at the forefront of innovation and technology leadership in our space.

我們將研發費用增加了 15 萬美元，因為我們繼續開發和推出新功能並改進現有產品以滿足新舊客戶的需求，確保他們始終處於我們領域的創新和技術領導地位。

In addition, our sales and marketing expenses increased by $130,000 to support project wins in new territories and fields such as domestic violence prevention.

此外，我們的銷售和行銷費用增加了13萬美元，以支持在新地區和家庭暴力預防等領域的計畫勝利。

We plan to continue to invest in our sales and marketing as well as R&D to expand our global footprint and execute our business plan.

我們計劃繼續投資於銷售和行銷以及研發，以擴大我們的全球影響力並執行我們的業務計劃。

EPS improved by $0.27, a positive $0.06 from a negative EPS of negative $0.21 in the former year.

每股收益改善了 0.27 美元，從去年的負 0.21 美元變為正 0.06 美元。

Company's EBITDA improved by 83% to $1.6 million this quarter compared to $0.9 million, reflecting the benefits of operating leverage associated with higher revenues, deploying new IoT projects and continued progress in the phases of our ongoing projects.

本季公司的 EBITDA 成長了 83%，達到 160 萬美元，而去年同期為 90 萬美元，這反映了與更高收入、部署新的物聯網專案以及我們正在進行的專案階段的持續進展相關的經營槓桿的好處。

This achievement underscores our focus on sustained growth and profitability.

這項成就凸顯了我們對持續成長和獲利能力的關注。

Our net income improved by $3.3 million to a new record profit of $2.2 million from a net loss of $1.1 million last year.

我們的淨收入從去年的淨虧損 110 萬美元增加到創紀錄的 220 萬美元的淨利潤，增加了 330 萬美元。

And our non-GAAP net profit improved by $3 million to a $3.3 million profit this quarter from $0.3 million last year.

我們的非 GAAP 淨利潤從去年的 30 萬美元增加到本季的 330 萬美元，增加了 300 萬美元。

Positive non-GAAP EPS improved to positive $0.09 compared to non-GAAP EPS of $0.07 last year.

非公認會計準則每股收益從去年的 0.07 美元非公認會計準則每股收益改善至 0.09 美元。

Additionally, we've made considerable strides in reducing our long-term liabilities by $4.5 million year-over-year, which includes multiple exchanges with our creditors on debt to equity and negotiated premium prices of up to 100% premium to market price.

此外，我們在減少長期負債方面取得了長足進步，與去年同期相比減少了 450 萬美元，其中包括與我們的債權人進行多次債轉股以及協商後的溢價，最高可達市場價格的 100%。

Our operating cash flows improved by $5.2 million year-over-year, and our cash position grew by $4.1 million to $5.7 million quarter-over-quarter supported by a successful close of a $2.9 million public offering as well as $2 million in positive operating cash flows this quarter.

我們的經營現金流較上年同期增加了 520 萬美元，現金狀況較上一季度增加了 410 萬美元，達到 570 萬美元，這得益於 290 萬美元的公開發行成功完成以及本季度 200 萬美元的正經營現金流。

This marks our highest reported cash position in the past few years.

這是我們過去幾年來報告的最高現金狀況。

We remain focused on reducing our need for external funding as we continue to win and execute new projects.

在繼續贏得和執行新專案的同時，我們仍將致力於減少對外部資金的需求。

These improvements further strengthen our financial foundation to support our ongoing growth initiatives and strategic investments.

這些改進進一步加強了我們的財務基礎，以支持我們持續的成長計畫和策略投資。

In closing, I'd like to thank our global teams for the hard, tireless work to achieve our company's record-setting performance once again.

最後，我要感謝我們全球團隊的辛勤、不懈的工作，使我們公司再次創造了創紀錄的表現。

We've developed the right technology and products to help criminal justice system clients overcome challenges and make better use of their over $80 billion spent annually in the USA on operating rehabilitation centers and prisons.

我們開發了合適的技術和產品來幫助刑事司法系統客戶克服挑戰，並更好地利用美國每年在營運康復中心和監獄上花費的超過 800 億美元。

With research showing an approximately 75% recidivism rate in the USA, there is significant room for improvement when effective programs and technology are deployed.

研究表明，美國的再犯率約為 75%，如果採用有效的計劃和技術，還有很大的改善空間。

We're excited about the growth we are experiencing and about the growing demand for our products.

我們對我們正在經歷的成長以及我們產品日益增長的需求感到非常興奮。

After several years through which we transitioned from a legacy business to the IoT tracking of offenders business, we're happy to show the shift to nice growth in revenue and profit.

經過幾年的時間，我們從傳統業務轉型到物聯網罪犯追蹤業務，我們很高興地看到收入和利潤實現了良好的成長。

We believe that we're well positioned for continued expansion by capitalizing on the many new opportunities that lay before us.

我們相信，透過利用我們面前的眾多新機遇，我們已準備好繼續擴張。

These are being driven by multiple factors, including our strong presence, reputation in the US and European markets, the countercyclical nature of the electronic monitoring industry, the growing public policy shift to monitoring instead of incarceration, and the growing adoption of domestic violence prevention solutions.

這些都是由多種因素推動的，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、公共政策逐漸轉向監控而非監禁，以及越來越多地採用家庭暴力預防解決方案。

We anticipate sustained growth by expanding our market share in the US and Europe.

我們預計透過擴大在美國和歐洲的市場份額實現持續成長。

Our commitment to preserving our technology advantages and robust growth foundations remains steadfast as we continue to invest, and the investment will support the expansion into more locations.

我們將繼續投資，堅定不移地保持我們的技術優勢和強勁的成長基礎，而這些投資將支持我們向更多地區擴張。

With that, I'll turn the call over to the operator to open for questions.

說完這些，我將把電話轉給接線員，以便回答問題。

Operator?

操作員？

(Operator Instructions)

（操作員指令）

Matthew Galinko, Maxim Group.

馬修·加林科（Matthew Galinko），馬克西姆集團（Maxim Group）。

Hey.

嘿。

Good morning.

早安.

Thanks for taking my questions.

感謝您回答我的問題。

Maybe if we could -- so I guess, congrats on the strong quarter.

也許如果我們可以的話 - 所以我想，祝賀這個季度表現強勁。

What -- in terms of the -- I think you mentioned adding to sales and marketing.

就此而言——我想您提到了增加銷售和行銷。

And I think we see that in this quarter's operating expenses.

我認為我們在本季度的營運費用中看到了這一點。

Do you expect to add more like quota-carrying sales reps for the US market?

您是否希望為美國市場增加更多承擔配額的銷售代表？

Or what sorts of investments are you making, or do you plan to make in the US?

或您在美國正在進行或計劃進行哪些投資？

What was the first part of the question?

問題的第一部分是什麼？

Before the quota.

達到配額前。

I think it was just before the quota carrying part on salesperson.

我認為那是在銷售人員承擔配額部分之前。

Yeah.

是的。

Really just focused on what the investments are that you'll plan today.

真正只專注於您今天計劃的投資。

I think you mentioned that there's like $150,000 increase sequentially of spend in sales and marketing.

我記得您提到過，銷售和行銷支出連續增加了 15 萬美元。

So I guess between that you

所以我猜你

--

--

Year over year.

年復一年。

Some of that -- sorry, go ahead.

有些——抱歉，請繼續。

No, I guess really the focus of the question is about what your plans are there for the second half of the year and particularly if you're adding to the sales force or what the investments are.

不，我猜問題的重點實際上是你今年下半年的計劃是什麼，特別是你是否會擴大銷售團隊或進行哪些投資。

In general, we're seeing the traction in the US.

總體而言，我們看到了美國的發展動能。

In Europe, we've been running a lot of projects just by bidding remotely.

在歐洲，我們僅透過遠端競標就開展了許多專案。

We haven't had much of a quota-carrying sales team in the European market.

我們在歐洲市場還沒有太多承擔配額的銷售團隊。

We bid on a national level.

我們在全國範圍內進行競標。

In the US, it's more fragmented.

在美國，情況更加分散。

And while there is RFP-related wins that are possible through state tenders and others, a lot of it is going through the resellers or through the county agencies.

儘管透過州招標和其他方式有可能獲得與 RFP 相關的勝利，但許多勝利都是透過經銷商或縣級機構進行的。

For that, we also leverage quota-carrying salespeople.

為此，我們也利用了配額銷售人員。

We started with expanding the team and that means the actual quota-carrying salesperson and the support behind the person and the tech support, call center and monitoring support and everything that is related to deploying these services to fragmented markets.

我們從擴大團隊開始，這意味著實際承擔配額的銷售人員和人員背後的支援、技術支援、呼叫中心和監控支援以及與將這些服務部署到分散市場相關的一切。

We expect -- we continue to invest in that, and we expect as sales grow to continue to bring on more personnel.

我們預計—我們將繼續對此進行投資，並且我們預計隨著銷售額的成長，將繼續引進更多的員工。

We did it in a gradual fashion so that we could see that things are going effectively, and people are utilizing their resources properly and growing their sales.

我們採取循序漸進的方式，以便我們能夠看到事情進展有效，人們正在合理地利用他們的資源並增加銷售。

Got it.

知道了。

Very good.

非常好。

We've also added in Q3 more people to the sales team in the US, and they're sufficient for a little more addition by the end of the year, and that should support our growth for the coming years.

我們也在第三季為美國銷售團隊增加了更多人員，到今年年底還會再增加一些人員，這應該可以支持我們未來幾年的成長。

And together with that, more salespeople, but step by step.

同時，我們也需要逐步增加銷售人員。

Hello?

你好？

[Ken Wyner, Alton Capital]

[Alton Capital 的 Ken Wyner]

Good morning.

早安.

I've been a stockholder in the company for a long time.

我長期以來一直是這家公司的股東。

And I don't really understand a couple of things.

我確實不明白有幾件事。

First of all, what is the long-term debt to -- I mean you have about $29 million in long-term debt.

首先，長期債務是多少——我的意思是你有大約 2900 萬美元的長期債務。

What are the dates of that or the due dates on that?

那個的日期或截止日期是什麼？

Sorry, do you -- about which part of debt?

抱歉，您知道──哪部分債務嗎？

The long-term debt.

長期債務。

Yes.

是的。

So our -- in our latest filings, we announced the senior debt from Fortress is due at the end of 2025, and we've extended that maturity date several times.

因此，我們在最新的文件中宣布，Fortress 的優先債務將於 2025 年底到期，並且我們已多次延長該到期日。

We expect to extend it more towards later years.

我們希望在未來幾年能夠進一步擴大這一範圍。

And the sub debt is subordinate to Fortress, it's required to be paid after that is paid.

而次級債務是從屬於Fortress的，需要在Fortress償付後才能償還。

What is the amount of the debt with Fortress?

Fortress 的債務總額是多少？

The Fortress is roughly $18 million, and the rest is the sub debt.

堡壘大約有1800萬美元，其餘的是次級債務。

And that is expected probably going to be amended to '28 or '29 based on our expectations and our negotiations with them.

根據我們的預期和與他們的談判，預計該期限可能會修改為 28 年或 29 年。

It's been amended a few times.

它已被修改過幾次。

It's a debt that we've had for a long time.

這是我們長期以來的債務。

We have a good relationship with them, and they seem to believe in the prospects of the growth of the company to allow us to pay that in the future.

我們與他們的關係很好，而且他們似乎相信公司的成長前景，允許我們在未來支付這筆費用。

And what interest rate do you pay on that?

您支付的利率是多少？

It fluctuates based on the EBITDA levels, but the normal is LIBOR plus certain percentage points.

它根據 EBITDA 水平而波動，但正常情況下是 LIBOR 加上一定百分點。

Matthew Galinko, Maxim Group.

馬修·加林科（Matthew Galinko），馬克西姆集團（Maxim Group）。

Hey.

嘿。

Thanks for taking my follow up.

感謝您關注我的後續問題。

Maybe as a follow-up on the debt.

或許作為債務的後續行動。

It sounds like -- I think you mentioned you were able to exchange a portion of the long-term debt into a good swap for equity.

聽起來——我想你提到過你可以將一部分長期債務兌換成良好的股權。

Is there a potential to do more of that?

是否有潛力做更多這樣的事？

Or can you just talk about your strategy for managing the debt balance?

或者您能談談管理債務餘額的策略嗎？

Yes.

是的。

So our debt -- we've had a good relationships our lenders over the years.

因此，我們的債務—多年來，我們與貸方一直保持著良好的關係。

Fortress debt is from 2018.

堡壘債務來自 2018 年。

And as I said, we amended it several times and also with the sub debt.

正如我所說的，我們對它進行了多次修改，包括對次級債務的修改。

We were able to, over the past year, negotiate some exchanges at premium prices, some up to 100% premium to market, which we think is beneficial for our shareholders, of course, with such kind of premium.

在過去的一年裡，我們能夠以溢價協商一些交易，有些甚至比市場溢價 100%，我們認為，當然，這樣的溢價對我們的股東是有利的。

They allow us to reduce our debt balance and without using our actual operating cash.

它們使我們能夠減少債務餘額，而無需使用實際營運現金。

So there is opportunity for more of that in the coming years.

因此，未來幾年還會有更多這樣的機會。

And together with that, we expect the maturity to be pushed to 2028.

同時，我們預計到期日將延至 2028 年。

Got you.

明白了。

Okay.

好的。

And I guess another question on the cash flow.

我想另一個問題是關於現金流的。

I think it was -- you were from $1.6 million or $2 million inflow from operations.

我認為是 - 您的營運收入來自 160 萬美元或 200 萬美元。

Just curious if you expect to be able to generate operating cash flow for the full year 2024.

只是好奇您是否預計能夠在 2024 年全年產生經營現金流。

If you expect what?

如果您期望什麼？

Sorry.

對不起。

If we expect the operating cash flow for the full year?

那我們預計全年的經營現金流是多少呢？

Yeah.

是的。

Operating -- yeah, do you expect to be positive on operating cash flow this year?

營運—是的，您預計今年的營運現金流為正嗎？

So as you saw, we had a great quarter with $2 million of cash generated.

正如您所看到的，我們度過了一個非常棒的季度，創造了 200 萬美元的現金。

There are some fluctuations that depend on the deployments to the customer.

有一些波動取決於對客戶的部署。

So it's hard for us to know for certain.

所以我們很難確定。

But so far, things are going good.

但迄今為止，一切進展順利。

We certainly have seen improvements in operating cash flow over the past three years.

過去三年我們確實看到了經營現金流的改善。

From '21, I think it was negative $9 million and then it went down to $4 million and continued to go down in 2023, and now we're seeing strong positive cash flow in Q2.

從21年開始，我認為是負900萬美元，然後下降到400萬美元，並在2023年繼續下降，現在我們看到第二季度強勁的正現金流。

But things sometimes fall differently between the quarters and it's hard to tell how the whole year will fall.

但有時不同季度的情況會有所不同，很難預測全年的情況會如何。

But as you can see, the trend is certainly very positive.

但正如你所看到的，趨勢確實非常積極。

Got it.

知道了。

Great.

偉大的。

And then as we think about the second half of the year, obviously, it was a very strong first half and last year was a very strong second half.

然後當我們思考今年下半年時，顯然，上半年非常強勁，去年下半年也非常強勁。

You mentioned the $11 million or $12 million or so that you have in orders already for the back half of the year.

您提到今年下半年已經收到的訂單量約為 1,100 萬美元或 1,200 萬美元。

But I'm just curious how investors should be thinking about the trajectory here in the back half of the year?

但我只是好奇投資人該如何看待今年下半年的發展軌跡？

Do you think you could kind of match the first half of revenue?

您認為您的收入能達到上半年的水準嗎？

Is there enough in the pipeline to sort of have a flat first half to second half comparison?

是否有足夠的計劃可以讓上半年和下半年的業績持平？

Or just generally, how should we be thinking about second half revenue?

或者整體來說，我們該如何看待下半年的收入？

I love your questions.

我喜歡你的問題。

We're currently not giving guidance, and we haven't for the last few years because of the somewhat variable nature of the project deployments, which are not only in our control.

我們目前沒有提供指導，而且過去幾年也沒有提供指導，因為專案部署的性質有些多變，這不僅在我們的控制範圍內。

So far, things have been going well.

到目前為止，一切進展順利。

Over the past few years, we've had nice growth, in '21 it was 11.7% to 12.5% to '22 to -- 12.5% in '21 to '22, $16 million or $17 million to $26 million, and things have been falling in nicely.

在過去的幾年裡，我們實現了良好的成長，21年成長了11.7%，22年成長了12.5%，21年至22年成長了12.5%，從1600萬美元或1700萬美元成長到了2600萬美元，而且情況一直在順利下降。

If things continue with our existing customers and new ones, of course, there's room for more growth.

如果我們現有客戶和新客戶的情況繼續良好發展，那麼當然還有更多的成長空間。

But at this point, we're still not giving guidance, particularly for which quarters and how things will fall.

但目前，我們仍未給予指引，特別是對於哪些季度以及情況將如何發展。

All right.

好的。

Thank you.

謝謝。

And one final question for me is on the expansion of your US sales operation.

我的最後一個問題是關於你們美國銷售業務的擴張。

How long does it take for a new person to be productive and sell there and start capturing sales?

新人需要多長時間才能開始投入生產、銷售並獲得銷售？

It's a great question.

這是一個很好的問題。

Typically, if it's a new salesperson into the company, and they don't have the infrastructure, it could take them sux months to nine months to start to get going.

通常情況下，如果公司新增加了一名銷售人員，而他們又沒有基礎設施，那麼可能需要六個月到九個月的時間才能開始運作。

But for us, a lot of these salespeople are veterans, and they have a good experience in the industry.

但對我們來說，很多銷售人員都是老手，他們在這個行業有豐富的經驗。

They already know -- they already understand the market and the players and technologies.

他們已經知道——他們已經了解市場、參與者和技術。

And so they actually get into things really quickly.

所以他們實際上很快就進入了狀態。

And we see some of them within a few months already start to make a good impact.

我們看到其中一些措施在幾個月內就已經開始產生良好影響。

That being said, some of the projects, as you know, the big RFPs, the government competitive processes, sometimes takes 6 months to 18 months.

話雖如此，正如你所知，一些項目，大型的RFP，政府競爭流程，有時需要6個月到18個月的時間。

So for those large projects, regardless of first sources, they are not, it's going to take a little bit of time.

因此對於那些大型專案來說，無論最初的來源為何，都需要花費一點時間。

But in the US, what's nice is you have the large ones, but also the small, fragmented ones and you also have resellers.

但在美國，好處在於不僅有大型的經銷商，還有小型、分散的經銷商，還有經銷商。

Sometimes someone just goes to a reseller that they know and offer our technology, they'll take it in to try it, compare it to what they have.

有時，有人只是去他們熟悉的經銷商那裡購買我們的技術，他們會嘗試，並將其與他們所擁有的技術進行比較。

And if they like it, they'll buy it.

如果他們喜歡，他們就會購買。

So the PureOne is a great solution for the US market, tailored and designed for the US market, it boasts some of the best features around in terms of weight, battery usage, battery life, capabilities and communication abilities and antennas.

因此，PureOne 是美國市場的絕佳解決方案，它是為美國市場量身定制和設計的，它在重量、電池使用、電池壽命、功能和通訊能力以及天線方面擁有一些最好的功能。

And right now, we're seeing people like it a lot, and we hope and expect to be announcing more and more wins in the US market based off of that solution.

現在，我們看到人們非常喜歡它，我們希望並期待基於該解決方案在美國市場取得越來越多的成功。

They'll start with small to medium sized [and if it's alike] like Europe that will grow from medium to large, just like the ladder that we saw in Europe, where we started with projects that are $100,000 in revenues over five years and one of the recent projects that we won was $33 million in revenues in Romania.

他們會從小型到中型開始（如果相似的話），就像歐洲一樣，會從中型發展到大型，就像我們在歐洲看到的階梯一樣，我們在歐洲開始的項目是五年內收入 10 萬美元，我們最近贏得的一個項目是羅馬尼亞的收入為 3,300 萬美元。

Great.

偉大的。

Thank you.

謝謝。

(Operator Instructions)

（操作員指令）

At this time, I will pass the call back to Ordan for closing remarks.

現在，我將把電話轉回給奧爾丹，請他作結束語。

I want to thank you all for participating in today's call and for the interest in SuperCom.

我要感謝大家參加今天的電話會議並關注 SuperCom。

Please contact us directly if you have any additional questions.

如果您還有其他問題，請直接與我們聯絡。

We look forward to sharing our progress with you on the next conference calls, filings and press releases.

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。

Thank you, and have a good day.

謝謝您，祝您有美好的一天。

This concludes today's conference, and you may disconnect your lines at this time.

今天的會議到此結束，各位現在可以掛斷電話了。

Thank you for your participation.

感謝您的參與。