Q4 2019 Earnings Call
Dead dead dead.
Hello, and welcome to the fourth quarter and full-year 2019 Financial results conference call. Please note that today's event is being recorded. All participants will be in a listen-only mode. Should you need assistance, please signal a conference a specialist by pressing the star key followed by zero after today's presentation. There will be an opportunity for analysts to ask questions to ask a question. You may press star than one on your telephone keypad to withdraw your question, please press * then two.
And head of investor relations John Weldon senior vice president of Enterprise Solutions during this call non-gaap Financial measures will be discussed a Reconciliation. Thursday is directly comparable gaap. Financial measures is included in the earnings release, which is available on the investors section of the company's website and audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs took a discussion on factors that could cause actual results to differ materially from expectations. Please refer to the risk factors described in our form 10-K and 10-q, and other SEC filings wage are available on our website, please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. I would now like to turn the call over to Dan mondor chairman. Yep.
CEO, please. Go ahead.
Thank you for all other one is great to be with you today. 2019 was a year of historic progress for the seagull we moved 5G technology out of the lab and into commercial divorce and recognize nearly eleven million in 5G Revenue in 2019 Consolidated Revenue, exceeded 219 million despite foreign-exchange headwinds month and a change in subsidies for Flagship LTE hotspot, which significantly impacted the fourth quarter or I O T Mobile Solutions business generated a hundred fifty-four million in Revenue Office, 14% year-over-year and our enterprise-class business generated $65 million increase of 3% from 2009 to 2018 on a constant currency basis off on Tuesday. We announced a $25 billion dollar investment from model and capital and Abu dhabi-based Sovereign investor blue bottle and joins existing major investor.
Tavistock group and North Sound partners
this investment strengthens and seagulls balance sheet and provides the company additional liquidity to continue capitalizing on the unprecedented unprecedented Global opportunity that 5G presents off further actions have been taken to strengthen our balance sheet eliminate near term debt maturities and reduce cash Instant payments cash interest payments. Steve will cover the balance sheet of his remarks.
So let's start with some comments on r i o t and Mobile Solutions business. We launched our first generation 5G products last July and in the fourth quarter, and it's the February we prove you reviewed our second generation 5G portfolio in private briefings and these products which were enthusiastically received pleased to announce that in calendar your 2019. The seagull signed 5G product agreements with leading operators in North America Europe the Middle East and asia-pacific with these ingredients agreements include wins for our new fixed wireless access products and for our mobile broadband hotspot products, exceeding our Target for the year off laser focused on converting these 2019 wins and two successful commercial launches this year.
Seeing 5G Network roll of wrapping up must much faster than 14 at this stage of the respective employees. We have first half evidence of this with the volume of rfps. We responded back and those in process. We are engaged in 20 trials with mobile network operators in key regions worldwide.
For G was all about killer apps for smartphones 5G is about killer use cases with purpose-built devices, which is our Focus. We're working with Partners to create Innovative network box solutions for Enterprise applications, the six wireless access Market or fwa will see accelerating growth in the second half of 2020 as more Wireless operators introducing a high-speed 5G Broadband services for homes and businesses competing with cable providers about 60% of all 5G launches today to date are for fixed wireless access. This is Jeff Greenfield opportunity for wireless operators and CDE providers, like consigo the mobile broadband market for 5G hotspot Hotspot is expected to grow significantly due to the massive capacity of forwarded by 5G networks and spectrum and as evidenced by the demand. We're seeing from our customers.
Our first American position in 2019 has given us valuable insights that were incorporating incorporating into the design and development of a second-generation 5G Palm this portfolio includes seven different products for fixed wireless access mobile broadband and Industrial applications all based on one powerful 5G technology platform. This platform approach is a universal 5G engine and accelerates. Our time to Market advertisers are already cost to drive operating efficiency and enables them in she goes on a reputation for highly reliable and secure products that are designed and developed in the USA in side-by-side comparison with your competition and single 5G products consistently produce Superior 5G throughput speeds in real world real world testing and we have achieved seamless interoperability job.
all five of the largest mobile infrastructure supplies
in addition to working closely with service providers. We're continuing to add strategic Partners in several key markets where we're targeting large Enterprise customers 2020 will usher in the First Nation for GM 5G private networks, maybe which will be deployed in deployed in CPR and first net Spectrum private Network growth to being sparked by the availability of New Jersey Spectrum licenses and markets Nationwide and we're collaborating with companies like rockets in this important Market. We're gaining Traction in the markets who are collaboration with several leaders, including Velo Cloud by VMware and our sales and marketing teams are now actively engaged or develop Cloud to jointly bring our solutions to Market.
Turning to our Enterprise business are focused last year was turning around the seat track business in key markets.
See track saw significant Improvement in your over your bookings in every geography the South Africa up 39% Australia New Zealand of 60% German a 63% UK up 36% and then locks up 4%
our new Microsoft Azure cloud-based platform called Pegasus and Innovative Innovative snd focused application name Clarity launched this month see tracks Pegasus and could benefit from our twenty-plus year of telematics experienced in combination with the latest generation of cloud technology, which will dramatically improve operating outcomes for connectivity commercial Fleet slowly.
In the fourth quarter. We also finalize an agreement with a major Logistics carrier to deploy seat track for the motorized ground assets world-wide and our DMS solution wage earner prize and government customers continues to be a strategic product that that realize year-over-year Revenue increase of 33%
I want to touch on to new initiatives that we feel are important to the future of the company as you've heard us say given our technology lead. We imagine a world with Millions perhaps billions of 16 devices all connected networks, whether it be a terrorist Network a corporate Network or a government networks. The first effort was the creation of an Advanced Technology Group, which is purchased on developing proof of Concepts to to create differentiated high-value solutions by providing intelligence at the Network's Edge. We want to see go to a college in the heart of every device connected to the 5G Network and this group is charged with developing the Partnerships use cases and go to market strategies to deliver on that promise moved here a few recent examples.
At the CES show. We worked with a New York Stock Exchange listed in automotive technology company called earlier to successfully demonstrate a 5G connected car that used our hygiene My Life by m1000 mobile hotspot to deliver real-time thermal imaging streaming for cars low visibility conditions such as dense fog. We're also enabling developers of old reality smart classes for the manufacturing industry to provide connected solutions that greatly improve productivity for workers in the factory and when performing complex off the field, we see mobile Computing as the foundation for a wide range of use cases and Enterprise applications will particularly benefit from real-time responses responsibility, which we recently showcased the video and December and seagulls.
5G MiFi hotspot provided high definition high definition video streaming live from the red carpet of the Star Wars movie premiere Premiere together with them in the air conditioning. We demonstrated how 5G can transform the way by the content is created distributed and consumed.
II
An important issue that we've embarked upon the deep in our relationships within the US government to increase the visibility of our 5G technology and highlight the importance of the seagull in the domestic and international 5G ecosystem. Clearly. The Administration has a policy priority to make the US leader in 5G technology and secure wireless networks not only at home, but abroad
Seagulls Technologies design and development and delivers Dillard's secure and reliable secure and high-reliability the engine that Network it is clear to us after our meeting in Washington DC then it's Eagle occupies a unique position not only to win government contracts with the help shape and develop a national strategy to keep the at the Forefront of this next generation of Technology.
I'm very pleased to congratulate that she's Sharma on his recent promotion to president of the Mobile Solutions business. In addition. We recently announced several key executive appointments to support expanding product portfolio and Global Market opportunities and 5G. These are proven Leaders with International experience in advanced technology engineering project management jobs, getting human resources and legal with this world-class team in place were exceptionally well positioned for growth now with that. I'll turn the call over to to see the discuss our financial results.
Thanks, Dan and good afternoon. Everyone is down highlighted. We made tremendous progress over the past twelve months. We went new business with existing and many new domestic and international service and we distinguished ourselves as a key player in the 5G ecosystem. 5G products will be the top growth drivers for legal in the future before getting into long details of the quarter and the full year. I'm going to draw your attention to some very important recent achievements specifically around the balance sheet, you take advantage of the opportunities that are presented to us, but often by 5G we significantly strengthened our balance sheet. There are four major components to this.
First has been to reduce our overall debt level of debt these accomplishments by converting approximately sixty million is a hundred and five million of our convertible debt to equity in addition. We have eliminated a number of restrictive covenant that limited or flexibility seconds. We have amended are 47 and 1/2 million dollar Term Loan so that the interest payments will no longer be made a cash but through shares of preferred stock. Thirdly also related to the the term loan. We agreed with the lender to extend the term loan from immaturity of August 2020 to March of two thousand as a result of the above actions. Both debt instruments have been reclassified to long-term on the balance sheet and we've eliminated the cash interest payments by approximately 7 and 1/2 million dollars annually 7.8 million dollars. Annually sorry and lastly we announced yesterday that $25 billion dollar investment by the bottle of capital this substantial.
We both here sir bolsters our cats.
Exposition and we expect that this gives us the runway positive cash flow 2019 total year. Revenue was $219 8.5% better than 2018 Q4 Revenue was 52.3 million dollars broken down by business units as follows.
Total year I O T Mobile Solutions. Revenue was just over $154 million dollars up 14% from 2018 illustrating the underlying strength of the business as they grow drive them a decline from Q3 to Q4 was expected. It was a result of the promotional change by Verizon on our MiFi 8800 that we highlighted last quarter. We noticed several times during the year that the bookings growth leading indicator was pointing to successful turn around and key regions such as South Africa and Australia in queue for Enterprise Solutions. Total revenue was 65.3 Million about 3% less than 2018 expressed in local currencies Enterprise SAS revenues grew in aggregate 3% year-over-year wage, and we've seen improvements in this business with a quarter up about a half a percent sequentially and almost 6% year-over-year despite a challenging for an exchange environment.
From this point forward I'll focus on non-gaap measures a Reconciliation from gaap to non-gaap as detailed in our earnings release last order. We stated that we expected wage increase the growth mortgage this quarter compared to Q3 mobile gross margins decreased 2.4% from 17.1% to 14.7% while we are seeing the benefits from the cost reductions. We expect it from Foxconn which contributed about two points of gross margin improvements in Q4. This is more than offset by unfavorable the unfavorable impact lower-margin product mix as we sold larger volumes of 4G devices than expected expedited freight cost to deliver on Lake water demand and write-downs of excess image of components.
We still expect gross margins to prove in the coming quarters as we execute on our cost-reduction this objective and we see a mix shift to higher-margin 5G products that will ship later in 2028. We're in price as business growth margins gross margin was 62% for the quarter full year gross margin was essentially flat to 2018 off at 63% The total company gross margin in the fourth quarter was 30.1% down about seven tenths of a percent sequentially told a year gross margin was 13.6% down 5.7 points from 2018 due to the increase sales of the lower-margin mobile products.
Full-year fax was 72.4 Million compared to sixty three point eight million dollars for 2018 substantially all of the increase for the what's for the investments in a new product development which includes engineering testing and certification and sales and marketing efforts. Globally. We remain focused on profitable growth targeting top load carriers as well as developing our Advanced Technology Group and US Government initiatives to provide growth outside of the carrier segment.
Thanks was 21.8 million dollars an increase of approximately two point six million from last quarter and an increase of approximately 5.4 million as compared to keep 418 a function of the great initiatives. We are pursuing across the board versus last quarter GNA GNA dropped approximately $200,000 sales and marketing increased a million dollars and R&D expenses increased 1.8 million last quarter. We highlighted the Pegasus in ER PC platform roll out. The news Pegasus platform was launched as in dog to begin implementing the platform along with the new seat track Clarity application earlier this week. The systems were allowed is already underway in the the global rollout and the CRM targeted for completion in Q2. We expect the consolidation to replace them Legacy systems will greatly improve the speed and efficiency of information flow throughout and see go allowing each of our business lines to correct to gain.
Proved business insights rq-4 net loss is eight million dollars or ten cents per share again on a non-gaap basis compared to the loss of 3.1 million cents per share last quarter and they decrease at nine point four million for twelve cents per share from the same period last year on a full year basis 2019 net loss was 16.1 million dollars or $21 per share versus a loss of 2.7 million or 4 cents per share in 2018.
Our adjusted ebitda for Q4 with a loss of one point seven million dollars as compared to positive four point four million for Q3 19 at 5.8 million dollars a month for Q4 2018 iot in Mobile Solutions had a pro forma adjusted even a loss of 3.2 million dollars and Enterprise SAS had a positive wage adjusted ebitda a 4.2 million dollars on a full year basis adjusted ebitda was positive 7.7 million as compared to 17.6 million and 2018.
Now moving to the 2020 Outlook. Our twenty-twenty grows in 2020 are grown mainly in the second half will be driven by recent 5G wins in a previously said that the first half of 2020 would be reasonably flat to Q4 and we are reaffirming that growth will come in the second half the only variance we see right now is the recent increase demand driven by the new work-at-home Tres given this we are not providing where we guidance thank you with that. I'll turn the call back over to Dan.
Steve 2019 was a year of tremendous achievement building the foundation for profitable growth and increasing shareholder value in 2012 or beyond our entry into multiple new geographies and our expanded product portfolio requires Relentless, execution and improvements. We made to the balance sheet a reduction in cash interest payments strengthens our ability to capitalize on these Global 5G Market opportunities. I want to say a few words about the impacts of the coronavirus. We had played a major Presence at Mobile World Congress last month. However, we appreciate the decision by the gsma organizing body to cancel the show for the right reason.
we immediately got to
Work in other ways to conduct the schedule meetings our customers and partners including extensive use of online meeting systems.
We've seen it very gradual recovery of our supply chain and Asia from the coronavirus Factory employees returned to work and production lines ramp up output. Thus far in life has experienced minimal supply chain disruptions, and we've taken numerous actions to mitigate possible impacts. We've described how we transfer it manufactured out of China avoiding exposure of terrorists, and I'm pleased to report are 1 million products shipped this quarter out of Taiwan with our partner Foxconn lastly. I want to mention one other aspect of the Cronenberg situation.
We've seen a sudden increase in demand from several of our terrier and shall customers for our products.
This increase is driven by many businesses mandating work from home policies as a result of the outbreak and they want my fire secure and reliable connectivity with remote employees.
We are working with our contract manufacturer Foxconn to fulfill this upside demand. I want to thank all stakeholders in the company and particularly in Sigel employees are working around the clock to bring groundbreaking 5G solutions to our customers.
That concludes my prepared remarks and I will turn it back to the operator for Q&A.
We will now begin the question-and-answer session to ask a question. You may press * then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the key to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.
And our first question comes from Mike Walkley of canaccord. Genuity, please go ahead.
Great. Thanks for taking my question. Just just on the the end they are with with the increased demands with the work from home how quickly could you ramp up the products and how long this impact the model in terms of both sales and gross margins. Just just kind of help us think about this upside demand. Thank you. Yeah, it's it's an incoming that's occurred quite recently. We are still getting our arms around it. We have an understanding of you know, the drivers behind it should have an understanding of the magnitudes and we are literally working in real time. Now with Foxconn to understand the quantities we can supply and at what time frame we can supply them but it's it's a very interesting development development. I think ever understand the reason for it obviously my FiOS
Is the ultimate secure?
Work-from-home product and it's it's a result of that. So I can't really comment further. It is a very recent development and the magnitude of which is really something that we're not prepared to discuss at this time. So as we have concrete news to report we will certainly do so
In coming on on the incremental demand and as I said, we're very recent or modeling it for working with our supply chain Partners to determine how much we can fulfill I'm frankly now before the end of this quarter as well as in the second quarter. So it's it's a situation that we're studying in real time really can't comment any comment any further because of combination of quite frankly how much we can fulfill and how fast got you but the Baseline is still flattish and that's upside to them. Right, correct? Okay, then just look into the second half and the 5G ramp. You did eleven million with 5G in 2019. I'm sorry. I missed the actual number of sign deal with operators at the end of the year. If you could repeat that and then just maybe help us understand how many operators you would expect to be shipping to giving your current visibility into the second half of this year. It sounds like from Mike's. Yep.
Question the s55 remains on track. I'm wondering if you're seeing any issues related to that ramp there and then kind of how the x60 is going to factor into the design development going forward. Thanks.
Yeah, well Scott, we what we said was we signed by G product agreements for both are fixed wireless home and are mobile broadband hotspot, and these were basically reaches all around the world domestically Europe Middle East Pacific, and we exceeded our Target from last year. We've not made further comments on the quantity. We've made the comments previously on our Target, but we just basically are saying and stating we exceeded our targets were very happy about that and we're moving now on Thursday ensuring we convert these into successful commercial launches. That's our focus. Is there a number that you would put at a bare minimum for 5G wage twenty. Thanks.
Well, we're not going to be able to comment on the the 5G revenue for 2020 per se Scott. So it's not a number where I am at this time. It will be something will be reporting upon obviously subsequently as we move through the quarters, but this point in time we're not we're not putting other number for 5G revenues wage.
Thank you.
Thanks. Thank you, Scott.
Our next question comes from Lance vitanza of please go ahead. Hi guys. Thanks for taking the questions. I wanted to go to the the twenty the twenty leading mobile operators in trial. Could you could you talk a little bit first about how that breaks out between the Wireless in home broadband products versus mobile Wi-Fi spot hotspots and consumer versus Enterprise and so forth that work or is it typically the case that when you say you're tryling with a mobile operator that you're tryling multiple projects applications?
Yeah, well, sir great. Thanks Lance question. It is a combination of our our fixed Wireless products and our Office Products. I made a comment earlier about seeing the macro but 60% of the 5G deployments last month. I fixed wireless access so it's kind of a sixteen forty. So we're seeing a combination of those two. Some carriers are trialling one product some travelling home. So so it's it's a blend but you know as we as we work through and I think last time we reported think it was sixteen fifteen or sixteen trials should have gone up from that point twenty and you know, the metric that we look at is number of mobile subscribers that that these operators represent and that dead
figures moving up nicely correspondence
just imagine
Well, in fact that was going to be my next question. Can you talk about like on average or in the aggregate how many subscribers these twenty carriers represent?
We're in the 650 to 700 million range.
Okay, and then and how long did these trials tend to run and and what kind of hit rate, you know, should we be thinking about in terms of getting the product agreements and then ultimately the commercial law and you know, if you don't feel comfortable putting another out there can at least maybe talk about last go around when you rolled out for Jeep products. You know, how many how many Global carriers did you trial to get to the relatively limited number of commercial launches that you had ten years ago? Well, I guess I can I comment, you know on that kind of succinctly the company really was squarely focused on Verizon. So the breasts and the depth of the boss is not that really that why
And so it was really, you know, the situation we're trying to change which is about a customer concentration to broader range of customers product concentration to a broader range of products and certainly North American Century Century to to broader range in geography is a completely different Dynamic but you know on the 20 trials off typically when an operator is investing engaged in the trial providing that you improve your products performance and blessings and reliability and quality. Successfully. It generally came to a deal does it always happens or doesn't always happen but it's really dependent on how we perform and we're certainly focused on performing well are the robustness of our own first generation 5G product. The m1000 has really given us a leg-up. It's basically saying we know what it'd make a robust multi-gigabit product reliable birth.
High quality and it's really helped us help our health our credibility frankly in our second generation. So that's a factor frankly is go into these trials. There is a proof point.
And and when you talk to I heard you talk about the factors that are sort of driving your success there and you mentioned the technology solution that you have you mentioned reliability. You mentioned your, you know, establish ourselves as the sort of the non China vendor, you didn't mention price or or costs and I'm wondering if that you know was a you know intentional Omission or is that just one that you know was wage is also part of the equation, but that maybe you know matters a little bit less or or to some extent.
Well, it wasn't Omission because we don't discuss the size of contracts with the particular customer nor do we discuss the price is the commercial terms and price points for the customer. We don't disclose that information for lots of obvious reasons. So it's just not something that we will come in on we haven't commented in the past. We're not going to we're not going to discuss commercial terms because that's that's a confidentiality between us and our customers know. I understand that. I'm just saying, you know, as you as you enter into trials, you know is the eventual price point part of the conversation and how competitive are those or you know, how how competitive or non-competitive is that as a factor?
Those are part of the Congress.
Station to to move forward kind of in the in the onboarding process that they do. Of course. He has pricing is a conversation. It's of course it competitive market, We do not try to compete on price. We are a premium supplier and the other element of I will I will say right now relative to some of the comments I made in our meetings in Washington DC May slash secure 5G Edge is becoming increasingly important and you know, the Legacy the history of putting all the security measures that we do offer our products and it's it's a it's a 45-minute conversation about encryption security. Uh, no hard-coded password. No backdoors, you know, all this sort of stuff. So that's becoming extremely important and the conversation on secure 5G core is now moved to secure 5gh.
So it doesn't help to have a secure Highway if you don't have secure on rents and that's really a conversation that we've taken forward quite recently to various parts of the administration and agencies in Washington. And of course is what they are communicating to the international our International Partners. So what I'm trying to get at there is a security is extremely important and we're not competing on consumer-grade because we don't have consumer rate. We have highly secure robust products. So that is a that is a high off the market.
That that's great that answers my question. Thank you so much.
Our next question comes from Mike lot more of Northland Capital markets, please. Go ahead.
Great. Thanks. Yeah, I guess I'm just kind of recent demand around teleworkers is the conversation about you know, we need more of your products now or is it, you know, we need you know for G now and we also are probably going to be increasing or 5G orders later. Like how how are those conversations going?
Yeah, well the incoming is in the here-and-now context like she might imagine so it is the current generation of products. We obviously have a first-generation product you. But it is it is it is in that that category currently it would be speculative on my part to to know whether that will carry over to the 5G products. I could only imagine if the work-at-home movement were to continue it would but there again, I would be speculated okay off and then it seems in certain verticals, you know, there's a lot of her cuz there's there's less travel going on, you know, maybe less like you said conferences. Does that have any impact on your sales tax or can you kind of overcome that with these online meetings?
you know, it really has it because
I think everyone's coming to grips with kind of the new way to work. And so we immediately shifted shifted course of actions to not necessarily just them meetings. But then a combination of on-site customers is naturally a a collections point of these at these conferences that everyone comes so it's a it's a convenience factor. So we did travel to see if a customer's our locations and we are and they are together with us, you know using online meeting media. So we really beat up our it capabilities recently with a number of like meeting vehicles and they're working great. So I think who knows that mean the new the new way of the world, but that's what we immediately shifted to.
And then just on operating expense. Can you give some color on how we think about Optics progressing through the year relative to the the fourth quarter levels like this page Mike. How are you doing? How are you? Like I pointed out, you know, we're going to continue to invest in 5G specifically our engineering for a new product development. You know that new product development is going to be split about fifty-fifty between certifications and actual development of product and then sales and marketing will be increasing that as well. Put out a a larger Global footprint.
I guess just last one of the 5G wins last year are there like, you know one or two that really drives an incremental Revenue in the second half of this month. Will it be pretty diverse among the the winds?
Yeah, I can comment without getting into specifics. It's actually fairly diverse, which is for us relative. Our mission is mission accomplished, you know, so it's fairly diverse. There's a mixture of tier-one and tier-two is in there. I'm not going to get into more specifics but it's a nice it's a nice mixture of life is really the path forward to to diversifying and customer base and diversifying the product base is to mix of fixed Wireless and mobile. It's it's it is what we were trying to do.
Great question on incoming demand sales cycle has been zero so literally the phenomenal created this work at home environment and you know, and we have the ideal vehicle in the MiFi Hotspots for a work-at-home, but the secure a job performance connectivity the name of your name is sold. This is really been frankly in the last couple of weeks and even as of yesterday incoming demand that's coming to us to determine how much we can supply so from that point of view. I found in Chief sales cycle has zero that makes sense.
Thanks.
Our next question comes from Matthew of national Securities, please go ahead.
Hey, good afternoon, everybody. Thanks for taking my questions. I think it's been a few months since you launched initially on first met. So I was wondering if you could comment on you know, how that launched went and and your thoughts on that as a channel going forward.
Thanks for the question. She she's here. So maybe you could you could take that one. Yeah, so so yeah, I mean look with you know, they've been in the market now and and and it's you know, it's it's ramping up. There's a there's a fair amount of Education that goes on with you know, with launching into a particular particular New Vertical like first net. So we're going through that registration right now whenever carrier partner in in that market so so far so good. It just it does look like a very nice market for us in our backyard here. But you know, we will continue to grow the future.
Got it. Thank you. And then you touched on work from home driving some opportunities. I think in the first half of the year off us to questions around that before I had it off one being did the issues around device subsidization that we talked about last quarter change at all sort of organically long as you moved through the end of the year and into q1 and I guess whether it did or didn't did the pandemic and and sort of demand as a demand driver, you know for some odd carrier hand to become more accommodative in substitution.
Okay. Yeah, thanks man. I'm not going to comment on on the subsidization since it's not really it's not not our commercial action. It's a decision by the carrier to summarize on devices and how much they do and what are the terms of you know, the wireless agreements. So all I can say is that what we announced previously and carried forward slash. I think the information that's come in very recently possibly can change that Dynamic. We are right now focused on quantity of supply how much and how fast I thought that's what our focus is how this incremental demand might change the subsidization equation. That's not really hard decision off. We we Supply the product and the carrier says the commercial terms of civilization. Got it. Thank you and one just a quick follow-up to that being dead.
I guess I'm hoping hoping to get your thoughts on you know, I guess why why is the end-user going with with your devices for you know secure mode access versus you know, traditional VPN or something along those lines. You know, why why wouldn't they be using their traditional? You know Last Mile connection. Thanks God. Yeah.
So high performance High reliability secure connections and sustain connectivity as well as the robustness of the Wi-Fi part of the productivity whole combination of reasons, but it it is a premium Home Office Products. And naturally you can these are not people that are these are doing their work from home. So insecure secure connection is very important depending on the type of work that they're doing. So this is really moving their office to their home and they want to apply their criteria to that environment our life since that criteria, and actually you do the process of elimination is very very few companies that make that level of of a hotspot type of product you see us that's been our roots of History. She should I guess you could maybe comment on some of the facets of the why and wherefore of the security capabilities and wide enough using us. Yeah, they took them off.
I'm trying to hook onto public Wi-Fi networks to do, you know these workflows in a our Solutions are fully secured and on the carrier frequency and and and you know with with Paul BPM capabilities and then in addition to all the reasons that then gave, you know, also, please keep in keep in mind, you know working from home. Also, you know means for multiple verticals, you know, it's it's it's taking connectivity not just for saying your home. It's it's remotely like working remotely and a lot of these remote locations in I'm not going to get specific on the verticals because you know that for customers to talk about a lot of those verticals, you know, the there is no other option of connectivity other than hooking to a carrier Network.
Accounted. Thank you.
This concludes our question-and-answer session. I would like to turn the conference back over to Dan for any closing remarks.
Thank you. Well in summary, we've had a tremendous year in 2019, and we're carrying that momentum in the twenty20 very confident in our position to May 2020 best year in Seacoast history. Thanks again, everyone.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.