Q3 2021 Inseego Corp Earnings Call

Hello, and welcome to in Sego corpse third quarter 2021 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 conference 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 then one on your telephone keypad to withdraw your question. Please press Star then too.

On the call today are Dan Mandara, Chairman and CEO Ashish.

As she Sharma president.

Bob Barbieri, Chief Financial Officer, and other members of the management team.

During this call non-GAAP financial measures will be discussed a reconciliation to the most directly comparable get financial measures is included in the earnings release, which is available on the investors section of the company's website.

An audio replay at this call will be also be all our cut 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.

Discussion on factors that could cause actual results to differ materially from expectations. Please refer to the risk factors described it in a Form 10-K 10-Q and other S. C C filings, which are available on our website.

Please also refer to the cautionary note regarding forward looking statements section contained in today's press release.

I would now like to turn the call over to Dan Mombaur, Chairman and CEO. Please go ahead.

Thank you operator, and Hello, everyone.

Thanks for joining this call today.

I'm pleased to report strong third quarter results with revenue coming in at 66.2 million.

This represents a sequential growth.

Over the last quarter of 9% after adjusting for the sale of Ctrack South Africa. The strong topline performance was driven by five G with key customers channel partners for enterprise offerings, and new international customers in both carrier and enterprise segments.

We are seeing traction to Crawford tire five you portfolio, including our fixed wireless access products, which will be a major contributor to our growth in 2022.

Recent large customer traction with both carriers and enterprises isn't important validation of our strategy to remake the company into the leader in five G edge connectivity solutions.

As you saw in our press release, we're thrilled to announce an expanded relationship with T. Mobile who is now launching our indoor five G fixed wireless access product as a stock product for its enterprise customers.

This is the most significant fix wireless deal in in Siegel's history and represents an exciting phase of our expanding relationship with T. Mobile is it aims to sign up seven to 8 million six wireless subscribers by 2025.

This indoor router called the F X 2000 is a perfect product for any carriers small office home office small medium business and enterprise customers, including companies with work from home employees.

The investments we have made in new product innovation over the past few years are paying off.

Five G revenue now comprises 42% of total revenue versus only 9% last year.

And our other significant investment priority or cloud software business now represents 20% of total revenue and is increasing impressive twenty-five percent year over year.

In aggregate our next generation products defined as five G. In cloud software continue to grow rapidly they are up 124% year over year.

These products now represents 62% of total revenue up from 43% in the first quarter. This marks a significant progress as the company pushes to free cash flow positive.

Are fixed wireless access products are also gaining traction outside North America. As we also signed deals with two international tier one wireless network operators with launches scheduled this quarter.

One with a mobile operator in the middle East and the other with Telstra in Australia.

As I've said in the past we believe the international addressable market is significant in our global platform approaches providing excellent product market fit and represents the largest addressable market expansion in our history.

Across every region, we see enterprises, taking a leadership role in developing and deploying five G use cases, an accelerated rate and this is a primary reason why we launched our direct enterprise sales initiative last year.

This quarter saw an increasing number of pilots and rfps entering the deployment phase.

Order flow for we're expanding value added resellers and distributed partners also continues to grow both domestically and abroad.

In the end our goal is to sell to the enterprise's through both are terrier customers and through our growing channel distributors and resellers.

Now she she will provide additional color on the diverse use cases in which is siegel secured edge connectivity and device management solutions are being leveraged.

Lastly, I'd like to touch on supply chain dynamics as you know this is a significant issue across many industries.

Doug Khan and his team are working tirelessly to secure key components in conjunction with our partner Fox Con.

They have done a fabulous job keeping products flowing.

We expect supply constraints to remain the norm for the foreseeable future, but we are working every day to minimize the impact on our business and to continue to deliver products to our customers on a timely basis.

That being said, we believe our supply chain capability is a source of competitive advantage.

While we have seen elevated freight costs, we have not seen the major disruptions experienced by many of our competitors.

In closing we are pleased with our continued strong growth in our five G in cloud software businesses across carrier and enterprise markets.

We are confident that 2022 will be the best year in in Siegel's long history.

And we have a high degree of confidence that we are well positioned to achieve approximately 25% revenue growth as our customers accelerate their commercial five G deployments in 2022 and beyond.

Now before I turn the call over to Sheesh I want to say how delighted we are to welcome Bob Barbieri as our permanent CFO.

Since Bob joined Sego as interim CFO in early April he has demonstrated tremendous leadership and has extensive operating experience has proved invaluable.

As we evaluated various CFO candidates it became obvious to us that Bob is the ideal CFO to help us successfully execute on our strategic priorities.

With that let me turn the call over to Ashish will share more details regarding deals that have progressed beyond the pilot phase two actual deployments and a rapidly moving forward towards revenue generation four in Segal.

Thank you Dan Let me also joined Dan and recognizing the C O team, but delivering another solid quota and achieving a major milestone in Q3, we had outstanding performance in the third quarter given merchant across our five G in software portfolio and as Dan mentioned.

It now represents 62% off our overall business.

Our product order growth was the highest we've seen in recent history and the continuing to see strong customer deception off our five G product innovations, notably our five G devaney surpassed $25 million during this quarter, representing triple digit growth year over year increase demand.

An excellent anything digital transformation have increased the need for our five G solutions.

This great momentum is D. A farming of a position as the worldwide leader in five G technology that is enabling access to a new generation of broadband not possible with legacy technologies.

As Dan mentioned, let me spend a moment on the most important announcement, so far and our five G. At the Blue efforts iron thread that T. Mobile for business is launching a complex <unk> solution for their enterprise customers. This achievement is a testament to the diligent efforts by.

<unk> team that has been working side by side with T mobile and its customers for many months.

You have a number of additional five gfwl products certified by T mobile and via incredibly excited about the pipeline of opportunities building with them.

In addition to T. Mobile you also signed up new service provider customers in Australia in the Middle East <unk>.

We recently shipped five gfwl products. These customers do support launches in the fourth quarter.

As I think about the transformation of <unk> over the past several quarters three things give me confidence in the ability to achieve our financial goals.

Posted the validation of a significant <unk> product investment over the past 24 months is important wins with multiple <unk> and fortune 500 enterprise accounts.

<unk> <unk> Lance both announced and unannounced, we expect to see material revenue contribution in 2022 with FWS driving a majority of our growth next year and beyond I.

I can see a dime in the near future thereafter fluid Avenue exceeds our current hotspot revenue given the significantly larger market these products address.

Second is the diversification of our revenue streams. There was a time in the not so distant past we had a majority of our revenue came from a single product the hotspot solid blessing okay.

Everything we've done over the last few years has been to change that dynamic.

As of today, we have two technology nines in full Geordie and five G, which also includes a cloud technology for computers solution.

Today, we started to virtually every carry it in North America, including the two largest five G providers in the U S B.

We also sent directly to a growing list of not enterprises will integrating <unk> into their business.

We are doing this not only in North America, but also in Europe, the Middle East and Asia. This is no longer D&C will forward.

Third is the important revenue mix shift underway, you've heard us talk and prior earnings cause Bob the higher margins, we're seeing with our five G solutions at.

Has the same engine that powers of mobile hotspot is at the heart of autopilot <unk> solutions, including the five G SWA solutions.

The ability to use a common engine across on solutions allow us for significant operating leverage.

In addition, we are seeing a significant uptake off on a cloud software alongside our after blue a products. This adds both attractive gross margins and an important reckoning revenue component blower business.

On prior partly cause I illustrated examples of customer pilots, we've been connected in order to give everyone. A sense of the amazing opportunities ahead of us this quarter I'm pleased to announce that the are beginning to see some of these ties go live in the momentum is accelerating across numerous verticals.

To start we are seeing some interesting industry pulled auto use cases.

One large systems integrated in Europe that is a recognized global leader in the manufacturing loaded gun. This testing our five gfwl product line to enable high capacity low latency data capabilities for the automotive manufacturing market.

Also working with a factory that manufactures telecom equipment.

And this use case, they're testing our industrial five GCB D. S 2000 E two Colorado nation, and robotics with the goal to find new innovative ways to improve workplace safety and to create more agility on the production side.

And the education market Kip Socal public schools is using a <unk> in classroom Wi Fi, bringing high speed Internet through charter public schools and under sub Daddy is and connecting students to new <unk>.

Learning experiences and in Utah through school districts are using Ah outdoor after bluish solution and a Cvs private network to provide long distance connectivity for students who live in remote areas.

As mentioned on prior earning calls Cbr's and private networks, a key focus areas for us.

In addition to the use scares in Utah just described a couple of other customers are using cloud managed five G connectivity, including one of the top 25 business schools in the U S.

That universities testing of our five G solutions to provide on campus connectivity for their dorms and.

And a collection of hotels and the large with city is testing of a solution with the goal to improve the quantity of Internet services for their guests.

In Kentucky of a new industrial Gateway is being deployed on downtown light Poles and city parks to connect public Wi Fi access points.

Similarly in Australia and manufacturer of solar powered teeth lights is using a five GCB to provide public Wi Fi and connect surveillance cameras in areas, they're wired connections I impractical or impossible.

The utility sector is another interesting vertical points ego with needs to connect critical infrastructure and in the military is.

In Europe. For example, we are working with a large global systems integrator enabled realtime monitoring of vent turbines.

Public safety is another market, where we are seeing five you use cases.

A major city in Arizona is using our outdoor five millimeter wave solution to provide high speed broadband for remote monitoring in high traffic gave us and.

In the healthcare industry.

Excuse me and what city in Tennessee is using our five G solutions for no latency connections to enable virtual reality applications to help trained medical professionals and operating procedures.

And get engaged in there crying and then integrated healthcare network two followed their facilities across the U S.

These are just a few examples of the diverse and exciting use cases being powered by our five G solutions.

Lastly, we continue to make good progress made on a cloud software business that is now 20% off all of their revenue.

During this quarter resigned lodge five G active lose service provider customers slow attaching a cloud software solutions, who they are five G offerings from multiyear terms.

<unk>. These are still early days it validates our strategy of investments in software and improve our value proposition as well as improve our margins over the long term.

And now I would like to turn the call over to Bob.

Thank you Ashish, let me now review the results of our third quarter for school 20, when we want.

For a start let me tell everyone. How proud of you to the Big Chief Financial Officer.

Ah started for some time as I would with any other client to enhance the financial function.

Additionally, I was pretty happy connect me with the financial an executive leadership teeth.

To improve and strengthen the processes that we have been running the business.

See this as critically important.

As I spent the last several months with the T. I became impressed with the potential. This organization holds and I'm excited to stay on as the Chief financial Officer of <unk>.

With that let me get through the financials as a reminder to everyone.

Please note that year over year comparisons will include the pandemic driven surge in sales <unk> hot spots, which began in the June quarter of literature and continued through the remainder of fiscal 2020.

In addition, remember we close the sale of more <unk> on July 30th of this year.

I will be providing comparisons that reflected siegel's financial performance on a pro forma basis.

Excludes <unk> South Africa.

Two three revenue was $66 $2 million up 1% from last quarter, but down from the prior year period because of the COVID-19 related surge in demand for four G products last year.

Just before the sale of Sweet Trexall Africa revenue was off a robust 9% from the last quarter. The strong sequential result was driven by accelerating demand for five G. In cloud software solutions, whose revenue was up 124% on the prior year.

Third quarter Iot mobile solutions revenue was approximately $57 million up almost 10% quarter over quarter from what was a strong future. This.

This quarter over quarter growth was the result of accelerating salt through a five G hop sponsor, both Verizon and T mobile.

International service provider expansion and the initial stolen of our five G. After viewing devices to T mobile as a result of our spammed that relationship.

Enterprise fast solutions revenue of $9.2 million, which included one month of <unk> South Africa.

After adjusting for the impact of the sale a few tricks off Africa Enterprise solutions revenue was up 9.9% year over year, driven by the growth and recurring subscription revenue and Ctrack rest of the world over the past 12 months and beyond 1% quarter over quarter due to unfavorable foreign exchange movements and a seasonal decrease in hardware.

Six.

Cash should be you'll know Q3 was $61.6 million and includes $36.6 million cash we received a payment for the sale of <unk>, South Africa, which closed on July 3rd.

There will also be a favorable working capital adjustment of $2.6 million, we expect to receive two four.

From this point forward I will focus on non-GAAP measures a reconciliation from gap to non-GAAP is detailed in our earnings release and is available on our IR web page.

Gross margin for the I O T. A mobile business was $24, 4%, a slight improvement over the 24% when it's quarter and 30 basis points better than the 24.1% in Q3 of 2020.

I was banned discussed earlier gross margin in Q3 was impacted by approximately 1 million higher free calls, but we were still able to improve the margin sequentially and year over year due to a favorable mix of higher ISP devices as well as our rapidly growing software business.

Looming similar trends in our product mix and opposite any unforeseen factors, we see potential for further improvement gross margin going forward.

R Q3, operating expense was $25.8 million down $2 $2 million from two to.

1.2 million from prior year quarter.

The increase in operating expense year over year reflects the investments made to take advantage of the five G opportunities we are pursuing.

Q3, net loss was eight 2 million or eight cents a share in line with the prior quarter, but down from the positive at 1.4 million or one cent per share in the prior year again last year's performance benefit significantly from what was the high water Mark of Covid surge in demand for four G products.

Our EBITDA loss of 773000 was higher than the 51 salesman loss of two two and was down from a positive seven four new last year. The sequential decline was largely due to the sale C Trexall Africa, and the $1 million or higher pretty cause I discussed earlier.

For additional details on non-GAAP and adjusted EBITDA results. Please refer to the reconciliation tables car press release.

Finally, some thoughts from the rest of 2021 and 2022.

We continue to execute on our five G cloud solutions and were encouraged by strong current demand and are increasing opportunities.

As Ashish and Dan mentioned, we see the company entering a new phase of growth in 2022, as we benefit from SWA accelerating both in the U S and internationally.

The growth and higher margin underprice sales and uptake cloud software alongside Goodbye sales.

Given this we're confident in our ability to achieve approximately 25% revenue growth in 2022 pro forma after taking you to the count C track South Africa business.

We also plan on moderating operating expenses on a gross basis on them as reported basis. However, please note that fluctuations in our capitalized R&D cost may result in higher net operating expenses in any given quarter.

From my amount will assist there'll be operating model I believe there are significant capacity and as we return to growth in 2022, we should begin to see improved operating leverage this in turn should support adjusted EBITDA growth inaccessible our revenue growth rate.

In terms of our view of next year. The management team is comparable with the current street consensus of $310 million of revenue.

We will begin providing more detailed guidance as we enter 2022 lastly, do on our revenue growth and margin improvement expectations. We're currently targeting the second half of 2022 to turn free cash flow positive.

Again, I want to thank Dan and the board for giving me the opportunity to be common C goes new Chief Financial Officer, I look forward to meeting all of our existing and prospective shareholders in the coming months with that let me turn it back to Dan for is closing comments.

Thank you Bob and welcome again to the <unk>.

I have some final comments before return it over to Q&A.

When we made the decision to accelerate our investments Nexgen five gn cloud our primary goals were to check three boxes.

First to ensure we would be first to market with highly differentiated five G products second to create a common RF engine that could be used across all of our products sold the both carriers and enterprise markets that not only improves our time to market, but create significant operating leverage.

And third to build a scalable cloud software platform that in combination with our five G products creates a complete solution for our customers.

As we near the end of the year I couldn't be more proud of all that we have accomplished.

And our performance in the third quarter is clear evidence of that.

As we look ahead I'm also optimistic that we will see significant growth driven by an acceleration in both carrier and enterprise deployments of our cloud managed five G portfolio.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone faster, if you're using a speaker phone. Please pick up your handset before pressing the case if.

And anytime you question, that's been addressed and you'd like to withdraw your question. Please press Star then too.

At this time, we will pause momentarily to assemble Iowa.

Our first question will come from Lance Tanta with Cowen and company. Please go ahead.

Hi, Thanks, Thanks for taking the questions and Gratulation down a quarter.

Let me start actually maybe Ashish could you talk a little bit more towards that could you talk a little bit more about how the sales funnel for cloud software has developed over the past few months I don't know that's discussed in terms of the number of channel partners or the number of.

Active engagement, but if there is any any.

Any details that you could provide there that would be helpful and then.

And follow up with respect to revenue as well, but I'll stop there for that.

Let's hope you are doing well.

So the pilot developing Lily, though we just so.

Said another step today that if side now light the bun large carriers would now attaching a cloud software to buy the product to ship it to them.

The carrier channel and then two.

To the law in this channel is pretty much most all of the products here pushing now that five G. As a cloud component to it so it's looking really solid.

It is still early days that even though the devotion upsetting to the distribution of this new inflatable readers, but other pipelines <unk> solid.

And I'll have flushed projects pretty much and all of these focus.

Where we are shipping product to the channel.

Okay, and then actually with respect to SWA, obviously, that's central to the story and we've seen a lot of carriers loca.

Locally, making a lot of news about say pace at which they expect to be rolling out.

Their cakes wireless and obviously that's beneficial for Chico is it is it safe to say that the carrier action a reflection of.

A supply chain that is.

More than ample too to support that growth that made.

Just.

I'm, just trying to sort of get a sense for what risk we could see from this point forward with respect to parts shortages and so forth.

Yeah, Hey labs stance good the stupid again, thanks for the question.

We talked about our supply chain dynamics and.

A lot of credit goes to up to our team and what we are able to do.

It cuts across both fixed wireless and mobile hotspot no real fundamental difference given the commonality of the parts as we mentioned platform but.

Where we can only speak for a single we're not constrained in our supply.

We have significant orders for fixed wireless.

Towards the end of this quarter part of the as part of the team all getting ready for launch so we're very bullish on and how that looks going forward.

In Q4 and extremely bullish.

We see six wireless.

Accelerating in 2022.

Okay, if I could squeeze one more question about the margin improvement is is the way to think about that you had roughly into this just did Iot mobility services, you had about 220 basis point improvement and gross margin gear over here.

If we adjust for the $1 million higher freight costs I don't know if that was all it Iot, but then we'd be looking at more like a 420 basis point year over year equipment, and that's despite 20 million of lower revenues from popping off of the sort of the Covid surge. If you will so whether we're talking 220 or 40 heck is that.

All just the benefit that you talked about earlier with respect to the mix shift to enterprise and software or are there other where there are other factors or influence in gross margin, especially to the extent that some of those might be reversed in fourth quarter of 2022.

Yeah go ahead, Bob assurance.

Hi, yes.

Yes sure correctly.

The Milky approximately $1 billion of costs associated with.

Freight charges that was about 160 basis points.

Looking forward, which is your question, we don't see anything kind of unusual happening. So I think you should think about.

In terms of kind of a steady.

Type of outlook.

As we go forward that's helpful to you.

And together.

Thing to think about origin as as more of art mix moves to five G. Five G brings with it software software is writable over 36 months. So you don't get an immediate impact in period, but when you are is building up increasing layers of grew.

Gross margin overtime, which will bode well for the future.

That's really helpful. Thanks, guys I'll pass the baton.

Thank you Lance.

Again, if you have a question. Please press Star then one.

Our next question will come from Scott Zero with Roth Capital. Please go ahead.

Hey, guys. Thanks for taking my questions I apologize I got on the call a little bit late so I apologize again, if this is redundant, but I'm wondering what what sort of color you provided in terms of the five G mix in the quarter.

In terms of more consumer fixed wireless access versus enterprise or hot spot applications. And then also just to clarify the I think the 6% figure in the release talking about five G in cloud.

I'm kind of I want to make sure I understand what's going into cloud does that is that just the C track business, that's remaining or there's some other components to that as well just to calibrate me and then I had a couple of follow ups.

Yeah, Hey, Scott I think yes, we can run this through those pretty quickly.

Remarks, we we made earlier so why don't you just.

Recap, yes, Scott good talking to you.

Yeah. So a couple of the questions. She asked on the east side pretty much most of the product is going into enterprise, both the mother bought their product and the enterprise product.

So the carriers at two different.

<unk> channel. So there are some segments of consumer supplied by their but majority of it is ocularist the enterprise.

<unk> particular is all enterprise and we are seen as I described in my script, we've seen some really good and call you to escape it across the board from multiple different verticals within the enterprises. So that's on the five G. And then your second question about cloud software we've got.

Different cloud software issue now attaching to these devices so.

You've got the <unk> software you talked about that's one piece to the second one is a cloud management software and the third one is it.

<unk> subscribe wishes.

Subscription management software that the attached to.

Certain customers. So it's a mixed up multiple layers and we're building more and more or less as we move forward to create better value prop and better module cellular structure Gotcha and Ashish, maybe just to follow up on the five G enterprise front coming out of mobile World Congress Americans last week, a lot of interest in terms of what's going on.

From a private network standpoint, et cetera, and you guys certainly play into that I'm wondering how aggressively you're seeing the adoption cycles here because it seems like there's there's an interest but the implementations and the trial period. So I'm wondering if you could provide some color on that in terms of.

The magnitude of the sides of the deals that are starting to fill up in the pipeline.

The timing and the pilot phase, if you will and how big the the.

The magnitude of those deployments actually look like.

Yeah. Good question has got our first dog just tremendous progress there like get a quarter over quarter, we see locked productivity and it's not just talk anymore. It's we're seeing that project.

Being sucked in.

Slight get our school districts trying to adopt network for their use cases, and so deployments are happening right now they are starting small that some of these school districts and private enterprise. It is they tend to have my site deployments and different.

Places, which we're starting to see that eventually it all over the next few quarters, there's gotta be some scared to this and this is a real nice new tab at Sam developing for not just us but for the five G market.

Okay, and lastly could maybe two more the.

Twenty-five percent growth as you look out to next year I'm kind of wondering what you see as the biggest driver in terms of pushing it forward over the next several quarters and then also on the Ctrack front now that you sold off the South African portion of its a much smaller business doesn't have as much scale, there, but I think it is an overall attractive offering.

Strategically how does that fit into the portfolio is is that an asset that you look to keep and build upon or is it possible that you look to monetize that going forward. Thanks guys.

Hey, Scott. Thanks, So let me just start off at all staff Ashish too.

China in.

In terms of.

2022, we certainly shape fixed wireless barging fixed wireless as a major driver of that.

That.

There's obviously layers of the cake, we're adding more cared enterprise customers are enterprise.

Business is.

Relatively small it's on a high growth curve.

We built a very impressive and growing.

Pipeline and it just kind of indicative with those various use cases Ashish ran through those are real life instances out of that enterprise pipeline.

Continuing to detach rates of cloud.

That's continuing to grow and that's a layer. So there's a combination of our international business or growth and carriers.

Extra slots will carriers seawalls taken our mobile hotspot wells fixed wireless.

Cloud, there's a whole combination of things that are really strong tailwinds.

Scott as we go into 2022.

And that gives us confidence in.

Providing guidance and I realized we have not done that for a long time. So we wanted to start now provide guidance and talk about for the year 2022. So that's what we've done on this call Hey, Dan if I could just follow up on the front have you disclose the number of carriers Thatcher commercially shipping too now for SWA solutions, and what you would expect.

That to look like towards the middle of 22.

Yes, Thanks, Scott no no we have not.

Will will continue to make announcements we obviously.

One yesterday.

Yesterday, it was T mobile fixed wireless for their enterprise business, but.

More to come in and then just.

The market can add them up from the announcements, but we're not really break and reporting them per se.

Thank you.

Thanks.

Thanks.

Again, if you have a question. Please press Star then one our next question will come from Mike Lattimore Northland Capital. Please go ahead.

Hi, this is that still on behalf of Michael that demand could.

Could you tell me how much did international revenue contribute as opposed to dig a hole, but all revenue.

Hey.

Yeah, let me read to not break bell external so sorry about that but I can go forward certainly will consider more and more color around smaller.

Breaks in our revenue cycle right now, we do not break that al.

All right all right could you tell me. Please how many 10 percentage customers to do have in this quarter.

It will be reported in the queue.

Okay.

The answers to.

Alright, alright.

And.

Could you give some color on when could we start expecting the <unk> sales to exceed before <unk> could we start seeing that from default cute.

Well.

Let's start off as the sheets to comment I mean, we are seeing rapid growth in five years.

Talked about it was 42% of our revenue.

This quarter as we reported a year ago, 9%. So clearly it's going now having said that.

<unk> business is a steady business.

And so what we're seeing as an additive effect, we eventually would see naturally through technology transition.

Overtaken <unk>, so I would say.

It's going to happen in the relatively near future just as a function of.

40 stay steady and five G growing rapidly of course.

Sheesh, if you exactly what dad said I think some time some time next year.

What happened.

Not not too distant future.

Alright, alright, thank you.

Thanks.

This concludes our question and answer session I would like to turn the conference back over to Dan Mandara for closing remarks.

Okay, well. Thank you operator, so thanks again, everyone for joining in for the great questions.

As you heard we are executing against our strategic plan expanding our customer base. It certainly is.

Rapidly expanding our.

Our product line and also I think it's important to note, we're creating complete solutions by bundling are clouds software with our devices. So what does that mean that means improved margins in greater stickiness.

The other comment I think you've heard fixed wireless for enterprise is taking off.

And we absolutely believe we are seeing the the point of inflection and fixed wireless and that will continue to ramp up and be a major part of 2022. So that's why we see 2022 to be real breakdown ear for an segal.

I'll just close by.

Giving a huge shout out to our great great employees, you folks absolutely rock.

So I'll close by saying I look forward to speaking with you again on the fourth quarter call. Thanks again, everyone.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

[music].

[music].

[music].