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. (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，早安，歡迎參加 SuperCom 2024 年第二季財務業績和公司最新動態電話會議。 （操作員說明）本次電話會議的參與者請注意，本次電話會議的音訊正在透過網路進行現場直播，並且也被錄製用於回放。

Joining me from SuperCom's leadership team is Ordan Trabelsi, SuperCom's President and Chief Executive Officer. 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 involve risks, uncertainties and other factors that may cause SuperCom's actual results to differ materially from those statements.

與我一起加入 SuperCom 領導團隊的是 SuperCom 總裁兼執行長 Ordan Trabelsi。我想提醒您，在這次電話會議中，SuperCom 管理層可能會做出前瞻性聲明，包括涉及 SuperCom 對未來業績或營運結果的預期的聲明。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 最近提交的表格20-F 和表格6-K 定期報告中描述的風險因素，以及SuperCom 隨本次電話會議發布的新聞稿，特別是它。

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，也不應將其視為根據 GAAP 準備的結果的替代品。有關此非 GAAP 財務指標與淨虧損（可比較的 GAAP 財務指標）的調整表，請參閱本次電話會議隨附的 SuperCom 收益新聞稿中的調整表。其他非 GAAP 財務指標和可比較 GAAP 財務指標的調整表也可在此處找到。

The content of this call contains time-sensitive information that is accurate only as of today, August 15, 2024. 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. It is now my pleasure to turn the call over to SuperCom's President and CEO, Ordan Trabelsi.

本次電話會議的內容包含時效性信息，僅截至今天（2024 年8 月15 日）準確。的義務。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. Earlier, this morning, we issued a press release of our financial results for the second quarter of 2024. You can find a copy in the Investor Relations section of our website at www.supercom.com.

謝謝您，接線員，大家早安，謝謝您今天加入我們。今天早些時候，我們發布了 2024 年第二季財務業績的新聞稿。

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

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。第二季度對 SuperCom 來說是一個出色的季度，標誌著我們連續第二個季度實現淨利潤顯著增長，本次季度環比增長 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. This is the second quarter in a row, where we're breaking our record. 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. We are thrilled with this outstanding performance. We look forward to maintaining this momentum in the coming quarters.

我們實現了創紀錄的高年度季度淨利潤 220 萬美元，年增 330 萬美元。這是我們連續第二個季度打破記錄。此外，本季我們的經營活動現金流量年增 530 萬美元，達到正 200 萬美元，反映了我們經營業績的強勁表現。我們對這一出色的表現感到非常興奮。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.

在本季度，我們提前執行了投資組合中的各個項目，並利用營運槓桿和對我們專有技術的先前投資，實現了本季度 EBITDA 同比大幅增長 83% 至 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. This, along with other strategic initiatives, has positioned us to deliver sustained growth and profitability.

我們特別自豪的是在此期間成功地將 PureOne 解決方案整合到多個新市場，這反映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。這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. 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.

對於 SuperCom 的新手來說，我們的使命是透過我們專有的電子監控技術、數據智慧和配套服務套件徹底改變全球公共安全部門。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. Lead with innovative technology. 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.

我們的策略藍圖簡單而有力。以創新技術引領。我們的專有技術監控技術支援競爭激烈的政府招標，並支援軟禁、GPS監控、復健服務、家庭暴力預防等各種計畫。

Moreover, we have recently broadened our portfolio to include advanced AI-driven analytics, which are an integration in our electronic monitoring solutions. This addition enhanced our ability to provide predictive insights and improved outcomes for our clients. We're developing superior solutions. Since 2018, we secured over 50 new multiyear government projects with these solutions. We're expanding our global presence.

此外，我們最近擴大了我們的產品組合，包括先進的人工智慧驅動分析，這些分析整合在我們的電子監控解決方案中。這項補充增強了我們為客戶提供預測見解和改善結果的能力。我們正在開發卓越的解決方案。自 2018 年以來，我們利用這些解決方案贏得了 50 多個新的多年期政府專案。我們正在擴大我們的全球業務。

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. Our strategic focus on the IoT tracking business is developed -- in developed markets is where the opportunity is the greatest. With the electronic monitoring market projected to reach $2.3 billion by 2028, the US and Europe constitute about 95% of these markets.

我們作為電子監控解決方案和服務的優質供應商的聲譽不斷提高，隨著每位新客戶的贏得，我們的市場地位得到了增強，並且我們提供了出色的服務。我們的策略重點是物聯網追蹤業務——已開發市場是機會最大的地方。預計到 2028 年，電子監控市場將達到 23 億美元，其中美國和歐洲約佔這些市場的 95%。

We continue to amplify our technological leadership with significant R&D investments, leading to the launch of advanced solutions like PureProtect and PureOne. These offerings are already making headway in various markets, including the US and are pivotal in SuperCom's expansion. PureProtect is a life-saving domestic violence monitoring solution, providing preventive measures to families suffering from domestic violence or stalking, thereby increasing their safety.

我們透過大量的研發投資繼續擴大我們的技術領先地位，從而推出了 PureProtect 和 PureOne 等先進解決方案。這些產品已經在包括美國在內的各個市場取得了進展，並且對於 SuperCom 的擴張至關重要。 PureProtect 是一種挽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. Like many of our products, it offers top-notch features, placing it above the competition in most metrics.

PureOne 是一款一體式 GPS 追蹤腳環監控解決方案，將全面的監控功能整合到單一裝置中。與我們的許多產品一樣，它提供一流的功能，在大多數指標上都優於競爭對手。

Our cloud-based software enabled PureSecurity product line has been particularly effective in monitoring offenders and managing real-time information. This real-time advantage is a game changer, empowering authorities with actionable insights and timely intervention to mitigate potential risks and ensure public safety.

我們基於雲端的軟體 PureSecurity 產品線在監控違法者和管理即時資訊方面特別有效。這種即時優勢改變了遊戲規則，使當局能夠獲得可行的見解和及時幹預，以減輕潛在風險並確保公共安全。

These products have significantly expanded the company's addressable market. 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. We fortified our operational infrastructure to support our growth and have revamped our sales strategy with a proactive outreach approach. Our sales team with deep industry expertise has been instrumental in achieving new wins and driving growth.

這些產品顯著擴大了公司的目標市場。我們對我們的接待和關注感到非常滿意，並希望它們能夠幫助促進 SuperCom 加速擴張到美國市場並進一步進入歐洲國家。我們加強了營運基礎設施以支持我們的成長，並透過積極主動的外展方法改進了我們的銷售策略。我們的銷售團隊擁有深厚的行業專業知識，在實現新的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. SuperCom has continuously displaced the incumbent vendors and achieved over 65% win rates in European competitive tenders.

在過去的幾個月裡，我們宣佈在美國和歐洲贏得了許多新訂單和項目。 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. 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. As more European countries adopt these technologies, we anticipate a broader expansion of our solutions across the continent.

在歐洲市場，SuperCom 過去兩年在歐洲各地獲得了多個國家追蹤項目，投標和合約處於不同的執行階段。值得注意的是，該公司的大規模家庭暴力犯罪者追蹤計畫（例如在羅馬尼亞推出的計畫）有可能進一步促進現有歐洲客戶的採用。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擴展。

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

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流程授予的。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。就在大約四個星期前，我們宣布收到來自歐洲政府的價值超過 290 萬美元的新訂單，來自歐洲客戶的新訂單總計超過 1,100 萬美元。

Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution. The deployment of our PureSecurity suite consisting of PureProtect, PureTrack, PureTag and PureMonitor demonstrates the versatility and effectiveness of our solutions. It underscores our leadership in the electronic monitoring space. Our collaboration with Finland is a prime example of the confidence that clients have in SuperCom.

去年，我們與芬蘭政府達成了一項新的國家計劃，以部署我們的家庭暴力監測解決方案。由 PureProtect、PureTrack、PureTag 和 PureMonitor 組成的 PureSecurity 套件的部署展示了我們解決方案的多功能性和有效性。它強調了我們在電子監控領域的領導地位。我們與芬蘭的合作是客戶對 SuperCom 充滿信心的典型例子。

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

因為那些體驗我們服務的人通常會選擇擴大他們對我們多樣化解決方案的參與。值得注意的是，2022年底，該公司榮獲羅馬尼亞國家電子監控計畫年度最大產業獎項，價值3,300萬美元，其中每月監控多達1,5,000名違法者，持續時間長達六年。

The project has been progressing smoothly and demonstrates substantial advancements, further extending our engagement in the country's national EM project. This large-scale project reinforces the strength of our PureSecurity suite and cements our position as a trusted partner for governments worldwide. We've also launched our domestic violence solutions in other European regions and have recently launched them in the US.

該計畫進展順利，取得了實質進展，進一步擴大了我們對國家EM計畫的參與。這個大型專案增強了我們 PureSecurity 套件的實力，並鞏固了我們作為全球政府值得信賴的合作夥伴的地位。我們也在歐洲其他地區推出了家庭暴力解決方案，最近又在美國推出了這些解決方案。

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. 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.

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 至 4 倍。隨著我們在美國推出的 PureOne 電子監控產品以及家庭暴力追蹤解決方案的擴展，我們相信 SuperCom 已做好準備，能夠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. 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.

儘管 SuperCom 已經在美國多個州開展業務，但我們正在積極致力於進一步擴大我們在美國的業務。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，贏得現有客戶的再投標，並贏得新客戶的新項目。

The company strategically prioritizes PureOne's expansion to new markets and geographies. 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. Moreover, sales activities for PureOne have commenced in promising new markets outside Europe and North America.

該公司在策略上優先考慮 PureOne 向新市場和地區的擴張。但PureOne在引入美國各個地區時已經獲得了高度評價，並已在這些地區成功部署並積極用於監控現場罪犯。此外，PureOne 的銷售活動已在歐洲和北美以外的前景廣闊的新市場開始。

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

儘管我們在加州部分地區長期存在，但美國市場對我們來說仍然基本上尚未開發。自2022 年開始投資對外銷售工作以來，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PureOne，加上初始部署的積極反饋，使我們能夠加速佔領美國各地的市場，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. Launching our PureOne solution in US markets in late 2022 was a significant milestone in our US expansion strategy.

我們新的策略銷售團隊和新的勝利是執行公司美國市場擴張策略的第一步，並且已經推動了與現有客戶和多個新演示的活動增加，從而導致公司管道的顯著增加。 2022 年底在美國市場推出 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，我們已經宣布了在北美的三個新項目，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，重點是為成年囚犯提供重返社會服務。

The award was a result of winning a formal competitive process. Moreover, LCA secured a new contract in California with an established California services provider in the judicial sector. This contract is particularly notable for SuperCom's successful displacement of long-time incumbent competitor.

該獎項是在正式競爭過程中獲勝的結果。此外，LCA 在加州與一家成熟的加州司法部門服務提供者簽訂了一份新合約。這份合約對於 SuperCom 成功取代長期現有競爭對手而言尤其引人注目。

Finally, SuperCom won a new project in Canada with a renowned Canadian industry partner in the tracking solutions sector. This project expands an existing collaboration with its long-standing partner, transitioning from providing RF-based tracking technology to embracing new GPS technologies.

最終，SuperCom 贏得了加拿大追蹤解決方案領域知名產業合作夥伴在加拿大的新項目。該計畫擴大了與其長期合作夥伴的現有合作，從提供基於射頻的追蹤技術過渡到採用新的 GPS 技術。

As I mentioned earlier, introducing our PureOne solution is a game changer in securing these contracts. It underscores our competitive edge and commitment to delivering innovative and superior technology solutions. 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. By securing these contracts, we further reinforce our position as a market leader. We view our recent wins as indicators of our growing influence and expansion potential in North America and worldwide.

正如我之前提到的，引入我們的 PureOne 解決方案將改變這些合約的安全。它強調了我們的競爭優勢以及對提供創新和卓越技術解決方案的承諾。透過獲得這些合約和其他合同，我們利用我們的技術、服務以及我們的經驗記錄在競爭性招標中獲勝。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。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指標。

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

總而言之，儘管存在宏觀經濟不確定性和持續的全球挑戰（包括以色列的挑戰），SuperCom 解決方案的相關性越來越大。我們繼續看到，高再犯率、監禁成本不斷上升以及全球受害者保護解決方案的採用激增推動了成長。該公司的 PureSecurity 技術解決方案旨在應對這些趨勢，為機構提供新的有效方法來實施家庭監禁、緩解監獄過度擁擠並顯著降低成本。

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

例如，在家中或使用 GPS 監控罪犯的費用約為每天 10 至 35 美元，比懲教所每天 100 至 140 美元的費用低 90%。此外，家庭監禁有助於減少重複犯罪，突顯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所提到的，我們相信還有機會透過策略性地收購當地電子監控服務提供者來增強我們在美國的成長，這些服務提供者在當地市場擁有良好的聲譽和客戶群。

We constantly monitor the market for potential acquisitions that generate significant value by immediately expanding market presence and providing vertical integration synergies. Our acquisition of LCA in 2016 of $3 million is a great example. 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.

我們不斷監控市場，尋找潛在的收購，透過立即擴大市場份額和提供垂直整合綜效來產生重大價值。我們在 2016 年以 300 萬美元收購 LCA 就是一個很好的例子。事實證明，此次成功收購具有巨大的戰略價值，自此以來僅在加州就贏得了超過 3500 萬美元的新項目。

I'll now turn to the financials. During our previous conference call, I mentioned that we anticipated contributing to our financial results in the subsequent orders as our ongoing projects mature. I'm delighted to share that we've substantially improved our financial and operating results. Our gross margin improved by 20.4 percentage points to 49.6% year-over-year. 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.

我現在轉向財務方面。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，我們預計會在後續訂單中為我們的財務表現做出貢獻。我很高興與大家分享，我們的財務和營運表現已顯著改善。毛利率年增20.4個百分點至49.6%。此外，我們的營業收入增加了 100 萬美元，達到 40 萬美元，較去年同期大幅扭轉了毛利大幅成長帶來的 70 萬美元營業虧損。

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. 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.

我們的非 GAAP 淨利潤年增 874% 至 330 萬美元，反映出與收入增加和物聯網專案持續進展相關的營運槓桿的好處。本季的業績突顯了我們透過成功執行和推進專案的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. The following is a comparison between the financial results of the second quarter of 2024 and the second quarter of 2023. 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.

經營活動現金流的改善也證明了我們的勢頭，本季經營活動現金流年增 530 萬美元，從去年第二季的負 330 萬美元增至 200 萬美元。以下是 2024 年第二季與 2023 年第二季的財務表現比較。隨著專案的成熟而增強。

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

通常，初始專案階段會產生較高的費用，而高級階段會產生較高的毛利率，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。隨著專案管道的成熟，基於我們不斷發展的專案組合，我們預計毛利率將呈上升趨勢。

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. We observed a slight increase in operating expenses this quarter, which balanced the increase in gross profit. These expenses are primarily aimed at supporting the future growth of our pipeline, retaining our technological edge and ensuring high levels of client satisfaction.

當我們在現有基礎設施上運行現有專案的地區部署額外的手鍊時，每個額外手鍊的邊際貢獻可能高達 70% 或更高。我們觀察到本季營運費用略有增加，平衡了毛利的成長。這些費用主要旨在支持我們管道的未來成長、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. 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.

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，以滿足新客戶和現有客戶的需求，確保他們保持在我們領域創新和技術領先地位的前沿。此外，我們的銷售和行銷費用增加了 13 萬美元，以支持在家庭暴力預防等新領域和領域贏得項目。

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

我們計劃繼續投資我們的銷售和行銷以及研發，以擴大我們的全球足跡並執行我們的業務計劃。每股收益提高了 0.27 美元，比上一年的負每股收益 0.21 美元增加了 0.06 美元。本季公司的EBITDA 成長了83%，達到160 萬美元，而本季為90 萬美元，反映出與收入增加、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營運槓桿帶來的好處。

This achievement underscores our focus on sustained growth and profitability. 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. And our non-GAAP net profit improved by $3 million to a $3.3 million profit this quarter from $0.3 million last year. Positive non-GAAP EPS improved to positive $0.09 compared to non-GAAP EPS of $0.07 last year. 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.

這項成就凸顯了我們對持續成長和獲利能力的關注。我們的淨利潤從去年 110 萬美元的淨虧損增加了 330 萬美元，達到 220 萬美元的新紀錄利潤。本季我們的非 GAAP 淨利潤從去年的 30 萬美元增加到 330 萬美元，增加了 300 萬美元。非 GAAP 每股收益從去年的 0.07 美元增加到 0.09 美元。此外，我們在長期負債方面取得了長足的進步，年比減少了 450 萬美元，其中包括與債權人就債務轉股進行多次交換，以及協商溢價高達市場價格 100% 的溢價。

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. This marks our highest reported cash position in the past few years. We remain focused on reducing our need for external funding as we continue to win and execute new projects. These improvements further strengthen our financial foundation to support our ongoing growth initiatives and strategic investments.

我們的營運現金流量年增了 520 萬美元，現金部位環比成長了 410 萬美元，達到 570 萬美元，這得益於成功完成 290 萬美元的公開發行以及 200 萬美元的正營運現金本季流量。這標誌著我們過去幾年報告的最高現金狀況。隨著我們繼續贏得和執行新項目，我們仍然專注於減少對外部資金的需求。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. 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. With research showing an approximately 75% recidivism rate in the USA, there is significant room for improvement when effective programs and technology are deployed.

最後，我要感謝我們的全球團隊的辛勤、不懈努力，使我們公司再次創下了創紀錄的表現。我們開發了合適的技術和產品，幫助刑事司法系統客戶克服挑戰，並更好地利用他們在美國每年用於營運康復中心和監獄的超過 800 億美元的資金。研究顯示美國的再犯率約為 75%，如果部署有效的計畫和技術，還有很大的進步空間。

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

我們對我們正在經歷的成長以及對我們產品不斷增長的需求感到興奮。經過幾年的時間，我們從傳統業務轉型為犯罪者物聯網追蹤業務，我們很高興向大家展示收入和利潤的良好成長。

We believe that we're well positioned for continued expansion by capitalizing on the many new opportunities that lay before us. 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. We anticipate sustained growth by expanding our market share in the US and Europe.

我們相信，透過利用擺在我們面前的許多新機遇，我們已經做好了持續擴張的準備。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、聲譽、電子監控行業的反週期性質、公共政策日益轉向監控而不是監禁，以及家庭暴力預防解決方案的日益採用。我們預計透過擴大在美國和歐洲的市場份額來實現持續成長。

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

隨著我們繼續投資，我們對保持技術優勢和強勁成長基礎的承諾依然堅定，而投資將支持向更多地區擴張。這樣，我會將電話轉給接線生以供提問。操作員？

(Operator Instructions)

（操作員說明）

Matthew Galinko, Maxim Group.

馬修·加林科，Maxim 集團。

Hey. Good morning. Thanks for taking my questions. Maybe if we could -- so I guess, congrats on the strong quarter. What -- in terms of the -- I think you mentioned adding to sales and marketing. And I think we see that in this quarter's operating expenses. Do you expect to add more like quota-carrying sales reps for the US market? Or what sorts of investments are you making, or do you plan to make in the US?

嘿。早安.感謝您回答我的問題。也許如果我們可以的話——所以我想，恭喜這個強勁的季度。我認為您提到了增加銷售和行銷。我認為我們在本季度的營運支出中看到了這一點。您是否期望為美國市場增加更多類似配額銷售代表？或您正在或計劃在美國進行哪些類型的投資？

What was the first part of the question? Before the quota. I think it was just before the quota carrying part on salesperson.

問題的第一部分是什麼？配額之前。我想那是在銷售人員的配額分配之前。

Yeah. Really just focused on what the investments are that you'll plan today. I think you mentioned that there's like $150,000 increase sequentially of spend in sales and marketing. So I guess between that you --

是的。實際上只是專注於您今天計劃的投資。我想您提到銷售和行銷支出連續增加了大約 150,000 美元。所以我猜你——

Year over year. Some of that -- sorry, go ahead.

年復一年。其中一些——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，我想問題的焦點實際上是您下半年的計劃，特別是您是否要增加銷售團隊或進行哪些投資。

In general, we're seeing the traction in the US. In Europe, we've been running a lot of projects just by bidding remotely. We haven't had much of a quota-carrying sales team in the European market. We bid on a national level. In the US, it's more fragmented. 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.

總的來說，我們看到了美國的吸引力。在歐洲，我們已經透過遠端投標的方式運行了許多專案。我們在歐洲市場沒有太多有配額的銷售團隊。我們在國家層級進行投標。在美國，情況更加分散。雖然可以透過州招標和其他方式贏得與 RFP 相關的勝利，但其中許多是透過經銷商或縣機構獲得的。

For that, we also leverage quota-carrying salespeople. 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.

為此，我們也利用有配額的銷售人員。我們從擴大團隊開始，這意味著實際的配額銷售人員以及人員背後的支援、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. 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.

我們預計，我們將繼續對此進行投資，隨著銷售額的成長，我們預計將繼續引進更多人員。我們以漸進的方式進行，這樣我們就可以看到事情正在有效地進行，人們正在正確地利用他們的資源並增加他們的銷售。

Got it. Very good.

知道了。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. And together with that, more salespeople, but step by step.

我們也在第三季為美國的銷售團隊增加了更多人員，他們足以在年底前增加一些人員，這應該會支持我們未來幾年的成長。同時，更多的銷售人員也逐漸增加。

Hello?

你好？

[Ken Wyner, Alton Capital]

[肯·懷納，奧爾頓資本]

Good morning. I've been a stockholder in the company for a long time. And I don't really understand a couple of things. First of all, what is the long-term debt to -- I mean you have about $29 million in long-term debt. What are the dates of that or the due dates on that?

早安.我長期以來一直是該公司的股東。我真的不明白一些事。首先，什麼是長期債務——我的意思是你有大約 2900 萬美元的長期債務。該日期或截止日期是哪一天？

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. 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. We expect to extend it more towards later years. And the sub debt is subordinate to Fortress, it's required to be paid after that is paid.

是的。因此，在我們最新的文件中，我們宣布 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。我們期望在以後的幾年中將其進一步擴展。而子債是從屬於Fortress的，需要先付清再付。

What is the amount of the debt with Fortress?

豐澤的債務金額是多少？

The Fortress is roughly $18 million, and the rest is the sub debt. And that is expected probably going to be amended to '28 or '29 based on our expectations and our negotiations with them. It's been amended a few times. It's a debt that we've had for a long time. 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.

Fortress 約為 1800 萬美元，其餘為次級債務。根據我們的期望以及與他們的談判，預計可能會修改為“28”或“29”。已經修改過幾次了。這是我們長期以來欠下的債。我們與他們有著良好的關係，他們似乎相信公司的發展前景，讓我們在未來支付這筆費用。

And what interest rate do you pay on that?

您為此支付的利率是多少？

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

它根據 EBITDA 水平波動，但正常情況是 LIBOR 加一定百分點。

Matthew Galinko, Maxim Group.

馬修·加林科，Maxim 集團。

Hey. Thanks for taking my follow up. Maybe as a follow-up on the debt. 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. Is there a potential to do more of that? Or can you just talk about your strategy for managing the debt balance?

嘿。感謝您接受我的跟進。也許作為債務的後續行動。聽起來像是——我想你提到過你能夠將一部分長期債務轉換成良好的股權交換。有潛力做更多這樣的事嗎？或者您能談談您管理債務餘額的策略嗎？

Yes. So our debt -- we've had a good relationships our lenders over the years. Fortress debt is from 2018. And as I said, we amended it several times and also with the sub debt. 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. They allow us to reduce our debt balance and without using our actual operating cash. So there is opportunity for more of that in the coming years. And together with that, we expect the maturity to be pushed to 2028.

是的。所以我們的債務——多年來我們與貸方保持著良好的關係。 Fortress 債務是從 2018 年開始的。在過去的一年裡，我們能夠以溢價談判一些交易所，有些交易所的溢價高達100%，我們認為這對我們的股東有利，當然，有這樣的溢價。它們使我們能夠減少債務餘額，而無需使用我們的實際營運現金。因此，未來幾年還有更多這樣的機會。同時，我們預計成熟度將推遲到 2028 年。

Got you. Okay. And I guess another question on the cash flow. I think it was -- you were from $1.6 million or $2 million inflow from operations. Just curious if you expect to be able to generate operating cash flow for the full year 2024.

明白你了。好的。我猜還有一個關於現金流的問題。我認為是——你從營運中獲得了 160 萬美元或 200 萬美元的流入。只是好奇您是否預計能夠在 2024 年全年產生營運現金流。

If you expect what? Sorry. If we expect the operating cash flow for the full year?

如果你期待什麼？對不起。如果我們預計全年的經營現金流量是多少？

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

是的。營運—是的，您預計今年的營運現金流會是正數嗎？

So as you saw, we had a great quarter with $2 million of cash generated. There are some fluctuations that depend on the deployments to the customer. So it's hard for us to know for certain. But so far, things are going good. We certainly have seen improvements in operating cash flow over the past three years.

正如您所看到的，我們度過了一個出色的季度，產生了 200 萬美元的現金。根據客戶的部署情況，會有一些波動。所以我們很難確定。但到目前為止，一切進展順利。在過去的三年裡，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. But things sometimes fall differently between the quarters and it's hard to tell how the whole year will fall. But as you can see, the trend is certainly very positive.

從 21 年開始，我認為它是負 900 萬美元，然後下降到 400 萬美元，並在 2023 年繼續下降，現在我們在第二季度看到強勁的正現金流。但有時各季度的情況會有所不同，很難判斷全年的情況會如何。但正如您所看到的，趨勢肯定是非常積極的。

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

知道了。偉大的。然後，當我們思考下半年時，顯然，上半年非常強勁，去年下半年也非常強勁。您提到今年下半年您已經有 1100 萬美元或 1200 萬美元左右的訂單。

But I'm just curious how investors should be thinking about the trajectory here in the back half of the year? Do you think you could kind of match the first half of revenue? Is there enough in the pipeline to sort of have a flat first half to second half comparison? Or just generally, how should we be thinking about second half revenue?

但我只是好奇投資人該如何思考今年下半年的走勢？您認為您能達到上半年的收入水準嗎？是否有足夠的準備工作來進行上半場和下半場的平局比較？或者一般來說，我們該如何考慮下半年的收入？

I love your questions. 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. So far, things have been going well. 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. If things continue with our existing customers and new ones, of course, there's room for more growth. But at this point, we're still not giving guidance, particularly for which quarters and how things will fall.

我喜歡你的問題。我們目前沒有提供指導，過去幾年我們也沒有提供指導，因為專案部署的性質有些變化，而這不僅在我們的控制範圍內。到目前為止，一切進展順利。在過去的幾年裡，我們取得了不錯的成長，21 年成長了11.7%，22 年成長了12.5%，21 年成長了12.5%，22 年成長了1600 萬美元，或1700 萬美元到2600 萬美元，而且事情已經發生了。如果我們的現有客戶和新客戶的情況持續下去，當然還有更大的成長空間。但目前，我們仍然沒有提供指導，特別是哪些季度以及情況將如何下降。

All right. Thank you. And one final question for me is on the expansion of your US sales operation. How long does it take for a new person to be productive and sell there and start capturing sales?

好的。謝謝。我的最後一個問題是關於你們美國銷售業務的擴張。新員工需要多長時間才能提高工作效率並在那裡進行銷售並開始獲得銷售？

It's a great question. 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. But for us, a lot of these salespeople are veterans, and they have a good experience in the industry. They already know -- they already understand the market and the players and technologies. And so they actually get into things really quickly.

這是一個很好的問題。通常，如果是公司的新銷售人員，並且他們沒有基礎設施，可能需要六月到九個月的時間才能開始工作。但對我們來說，這些銷售人員很多都是退伍軍人，他們在業界有很好的經驗。他們已經知道了——他們已經了解市場、參與者和技術。所以他們實際上很快就開始做事情。

And we see some of them within a few months already start to make a good impact. That being said, some of the projects, as you know, the big RFPs, the government competitive processes, sometimes takes 6 months to 18 months. So for those large projects, regardless of first sources, they are not, it's going to take a little bit of time. But in the US, what's nice is you have the large ones, but also the small, fragmented ones and you also have resellers. 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.

我們看到其中一些在幾個月內就已經開始產生良好的影響。話雖如此，正如您所知，一些專案、大型 RFP、政府競爭流程有時需要 6 個月到 18 個月的時間。因此，對於那些大型項目，無論最初的來源如何，它們都不是，這將需要一點時間。但在美國，好處是既有大型企業，也有小型、分散的企業，而且還有經銷商。有時，有人會去他們認識的經銷商那裡提供我們的技術，他們會嘗試一下，與他們擁有的技術進行比較。

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

如果他們喜歡，他們就會購買。因此，PureOne 是針對美國市場的絕佳解決方案，專為美國市場量身定制和設計，它在重量、電池使用量、電池壽命、功能和通訊能力以及天線方面擁有一些最佳功能。現在，我們看到人們非常喜歡它，我們希望並期望在美國市場上宣布基於該解決方案的越來越多的勝利。

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.

他們將從小型到中型（如果相似的話）開始，就像歐洲一樣，從中型發展到大型，就像我們在歐洲看到的階梯一樣，我們從五年內收入為 100,000 美元的項目開始，一年內我們在最近贏得的項目中，羅馬尼亞的收入為3,300 萬美元。

Great. Thank you.

偉大的。謝謝。

(Operator Instructions)

（操作員說明）

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

此時，我會將電話轉回 Ordan 進行結束語。

I want to thank you all for participating in today's call and for the interest in SuperCom. Please contact us directly if you have any additional questions. We look forward to sharing our progress with you on the 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 的興趣。如果您還有任何其他問題，請直接與我們聯繫。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，祝你有美好的一天。

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

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。