Q4 2021 Airgain Inc Earnings Call
Three years ago in our fiscal year end 2018 results against consumer market revenue generated almost 80% of total revenue in 2021 consumer market revenue was only 40% of total revenue.
Looking ahead into 2022, we believe consumer market revenue will grow but the growth from our enterprise and automotive markets will outpace that growth.
And we expect the consumer market revenue will decrease to a smaller percent of total revenue as a result of the rapid growth in the other two markets.
All in all we finished 2021 with over $64 million in revenue the highest revenue in the company's history.
Our non-GAAP gross margin was just under 40%.
Even with significant pressure from higher costs associated with global supply shortages.
We saw significant discipline in controlling our operating expenses.
Which finished at $27 8 million on a non-GAAP basis and included incremental expenses from the nimble and acquisition, which closed on January seven of 2021.
With 2021 behind US, let's look into what will drive growth in 2022.
First in our enterprise market, we expect our industrial Iot or nimble, Inc. Branded products to grow as we continue to benefit from a fast growing market in the U S with additional growth expected internationally.
We expect asset truckers, which is one of our newer product.
Lines to begin to show material revenue contribution.
Sky wire cellular modems should continue to generate the majority of revenue for <unk> in the industrial Iot market.
Second we expect our Aegean connect platforms first product to begin to grow in 2022, as we partner with AT&T on a renewed focus on growing its nickel range service.
Third we expect our consumer revenue specifically from our end customer service providers to rebound as the stringent tolerate supply shortage issues begin to resolve themselves.
Fourth we expect our aftermarket revenue.
Our antenna plus branded products to recover from the main reductions related to Covid and resolution of supply shortages, especially as we have refreshed our product portfolio to <unk> and revitalize our sales strategy.
Yes.
We expect our traditional enterprise Wi Fi revenues to see some growth as we launched our first major Wi Fi system products into a global enterprise Wi Fi customer for large venues like stadiums and arenas.
Before I hand, it over to date I think it's important to note that we are continue to be very focused on improving the gross margin profile for our company.
We've made great progress on setting into motion product cost reductions on several of our lower gross margin products. So that over the longer term, we can improve margins on products with high growth prospects like aftermarket fleet in the price Wi Fi.
Aegean connect and industrial Iot.
One of the many focuses for US is to move our in house manufacturing to external contract manufacturers in order to lower costs through efficiencies in manufacturing as well as lower RIN costs for parts by allowing scale concept, meaning front.
<unk> to manage that procurement.
This will also allow us to lower our inventory significantly.
In that vein, we're in the process of shutting down our Arizona manufacturing facility.
Where aftermarket fleet and Aegean connect products are mostly <unk>.
And moving them to new contract manufacturers here in North America.
We expect that process to be complete in Q2 of this year.
Following these action Egging will have no internal manufacturing facility.
All manufacturing will be in the hands of highly experienced contract manufacturers.
All in all we are very pleased how well we fare during the supply shortages as well as COVID-19 impacts in 2021 and are very excited about our prospects for considerable year over year growth in 2022, we're especially encouraged by the momentum.
In our integrated wireless systems growth as we transition from a.
A component supplier to a system solution provider. We have spent the last few years developing new innovative integrated wireless system products.
Most of which just began to ship or are about to ramp. So 2022 will be a year laser focused on execution and growth.
Now I would like to turn the call back over to David who will walk us through financial highlights.
<unk>.
Thank you Jacob.
Fourth quarter 2021 revenue was $14 1 million beginning with our consumer revenue Q4 finished at $2 $5 million down from $4 6 million in Q3, primarily due to weakness from the global supply shortage.
Enterprise revenue was down from $8 7 million in Q3 to $8 1 million in Q4 due also to weakness from the global supply shortage or industrial Iot products grew sequentially and our traditional enterprise Wi Fi products declined.
Automotive revenue grew sequentially from $2 2 million in Q3 to $3 $5 million in Q4, as we saw revenue growth from both Aragon connect as well as our aftermarket fleet revenue.
Yes.
Q4, non-GAAP gross margin of 35, 1% was just above the top end of our previous guidance range, primarily due to favorable product mix changes.
Excluded from non-GAAP gross margin was $93000 for amortization of purchased intangibles.
non-GAAP operating expense in Q4 of $7 2 million was just above our previous guidance range.
Excluded from non-GAAP operating expense was about $1 million in stock based compensation expense about $663000 in amortization of intangible assets, mostly related to the NIM link acquisition.
And about $380000 for fair value of contingent consideration related to the NIM link acquisition adjusted EBITDA was negative $2 1 million in Q4 right at the midpoint of our previous guidance range.
non-GAAP net loss in Q4 was $2 3 million in Q4, GAAP net loss was $4 6 million.
Moving to earnings per share our Q4 non-GAAP loss per share was 23.
GAAP loss per share was <unk> 46.
Finally, our Q4 cash cash equivalents and restricted cash totaled approximately $14 $7 million about $4 4 million lower than in Q3 due to negative $1 6 million and working capital changes, mostly associated with the timing of inventory purchases as <unk>.
Well as the timing of order shipments heavily toward the back half of the quarter, but also related to the $2 3 million and non-GAAP loss from operations.
While on the topic of cash last week, we put a $4 million working capital line in place with Silicon Valley Bank to enable us to adequately address potential incremental working capital needs associated with the ongoing global supply shortage issue.
Now I'd like to provide a preliminary outlook for the first quarter of 2022.
In Q1, we expect revenue to grow materially and to be in the range of $16, five and $18 million or $17 $25 million at the midpoint of the range with most of the growth coming from the recovery of our consumer product revenue as we are seeing less impact from <unk>.
Fly shortages.
We expect non-GAAP gross margin in the first quarter to be 37% plus or minus 100 basis points as we see recovery from our higher margin consumer product revenue.
Excluded from non-GAAP gross margin is $89000 in acquisition related amortization of purchased intangibles and about $16000 in stock based compensation expense.
We expect Q1, non-GAAP operating expense will be about $7 $5 million plus or minus $100000.
Higher sequential operating expense is related to the reset of the annual management bonus program timing of engineering development costs.
As well as from the acquisition of talent, mostly in our marketing and sales organization to ensure we execute on our growth prospects.
Excluded from our non-GAAP operating expense estimate is about $1 3 million in stock based compensation expense and about $668000 in acquisition related amortization of purchased intangibles.
At the midpoint of guidance adjusted EBITDA in Q1 would be negative by about $1 million at.
At the midpoint of guidance, we expect Q1 non-GAAP loss per share to be about <unk> 11.
And on a GAAP basis, we expect a loss per share of 33.
With regard to cash we expect our total cash cash equivalents and restricted cash balance to increase from Q4 2021 to Q1 2022, as we expect to benefit from positive working capital changes.
Now I'll turn it back over to Jacob Jacob.
Thanks, Dave.
I would like to reiterate that we have confidence in our long term strategy and that we are pleased.
Pleased with the progress we have made in becoming a high performance integrated wireless system provider. We believe the successful transition from an antenna component supplier to remain integrated system company.
As well as our expansion into the lucrative enterprise and automotive markets puts <unk> in a position to sustain long term profitable growth.
While we are still managing through some remaining supply shortage issues, we're seeing a recovery already taking place this quarter and expect that positive trend to continue into 2022.
With rising demand for our new and innovative industrial Iot.
<unk> connect and after market products, we are optimistic about our growth prospects in 2022 and beyond.
With continuing focus on customer satisfaction operational efficiency and product innovation, we are keen on delivering on our mission to connect the world through <unk>.
<unk> optimized integrated wireless systems.
And with that we're ready to open the call for your questions.
Operator, please provide the appropriate instructions.
Okay.
Thank you very much and if you would like to ask a question. Please press star followed by one <unk>. Thank you Pat and if you change your mind. Please press star followed by case.
Our first question on the line comes from Michael <unk> of B Riley Securities. Please go ahead with your question Michael.
Thank you.
Hey, guys. This is Michael on for Greg. Thanks for letting US ask a couple of questions. My first question is concerning gross margins so nice to see.
<unk> of 37% for next quarter.
I was just wondering if you could walk us through how you see the gross margin structure, you're playing out throughout the year just a year ago, we were.
Back in the low 40% levels and I was just wondering if you could walk us through the relative contribution.
Mix benefits and maybe easing supply headwinds and also argue outsourced manufacturing.
Potentially get back to that 40% level.
Yes, I'll take that one Michael this is Dave.
On the gross margin front.
Going into Q1, we're getting some beneficial product mix with the consumer revenue starting to grow.
We've said historically to consumer revenues had a higher gross margin profile than an enterprise and automotive, especially as we ramp new products for automotive and enterprise.
We think.
We will continue to see growth as we get through the final issues related to the <unk>.
Supply global supply shortage on the consumer front.
Which should help us.
Bit more going into Q2 and beyond.
The gross margin front.
In terms of the rest of the year I think it will really depend on how fast and how big we grow both automotive and enterprise, which have lower gross margin profiles.
And so.
I think if we grow much more rapidly we're going to see more pressure on gross margin, but obviously more dollars falling to the bottom line in that case.
In any case I do think we can get back into this year that 40%.
Range from a gross margin perspective.
Sure.
Sure.
Got it that's helpful. Thank you and my next question. Please.
Please please certain or again connect I was wondering if there were any updates to your promotional activity with AT&T.
Any updates you can get on the opportunity funnel in sell through customer dynamics et cetera.
Yes. Good afternoon. This is Laura so I can I'll take that one.
So the premise of the promotional activity that we started last year with AT&T that's continuing.
<unk> two.
To be.
And in effect for this quarter and it's the same model where we provide.
$400.
Cost savings and an AT&T contain 800 bucks, which means that the customer lines on page $320.
Really very very.
Has been very beneficial for us so like I said in the last earnings call.
What that promotion has done for us is it not only increase the funnel.
In a substantial way, but also the color of those customers has changed and what I mean by that is that we are starting to see more and more urban customers.
Showing interest in <unk> and connect.
These are the kind of customers that that.
That really are going to fuel that growth that we've been waiting for for Andy and connect and so the.
You are talking about rural customers that are ordering let's say.
Tens of units or low hundred these are the kind of customers that order.
One hundreds to over 1000 units so it's really really.
Very healthy for us. So we're really excited about that and that trend continues. It started like I said, the second half of last year and its continuing this year and we expect it to go on for the rest of 2022.
Great. Thank you.
Our second question today comes from Karl Ackerman of Cowen and company. Please go ahead Carl Thank you.
Yes. Thank you.
Dave.
You had working with you and best of luck in your future endeavors.
Two questions for me if I may.
I understand you're pivoting your manufacturing strategy I think for nimble linked products from internal to external contract manufacturers.
But.
I guess first why has inventory been creeping higher throughout the year when sales have moderated.
And then second.
I guess as you address that question, you've you've faced supply shortages over the last couple of quarters. So have you been able to lock in volume commitments that give you confidence you can achieve the backlog in billings you have today.
I'll start and Jacob you can fight and first of all thank you Carl it's been great working with you.
I'm sure, we'll bump into each other again.
Related to the contract manufacturing that's actually we view contract manufacturers for nimble link historically in that model is not going to change. This is more related to some.
Some of our antenna plus branded products.
As well as area and connect products.
Which we've done in our Arizona facility, that's facility that were shutting down and moving to contract manufacturers that should help us in a variety of ways, including inventory reduction.
To your question about inventory and seeing higher levels right now that was a conscious decision on our part to.
Go ahead and buy ahead on parts that we thought would have more problems related to the global supply shortage there more of the risky.
Items in terms of procurement.
And so I would say if you characterize that total inventory number a large portion of it is as Eric and connect and nimble Inc.
<unk>, which we have high confidence in.
In.
And demand so we feel pretty good there I do think though.
That we're going to see a pretty significant reduction.
And that inventory number over the next couple of quarters, especially as we move to contract manufacturers on <unk> connect in the antenna plus branded products.
That's helpful. I appreciate that.
I guess.
Alright, and then just to follow up on the last question I had I mean, if you could just speak to the level of volume commitments you have.
That allow you to work down that backlog and billings. It sounds like you have some of the inventory today.
But I guess as you think about the growth opportunities throughout 2022, which you spoke about earlier in your prepared remarks, how do you think about.
The ability or willingness to engage on.
Longer term.
Contracts with your <unk>.
Suppliers, so that you can fulfill the.
Customer demand both across consumer but also in automotive.
Horizon networks. Thank you.
Yes, it finishes in question.
Yeah on the nimble Inc side, where we have a lot of inventory we care a lot of inventory, we actually had pretty significant backlog for all of 2022.
Which gives us some pretty high confidence again like I said historically, our biggest issue has been.
Trying to grow through the global supply shortage issues.
I think our growth would be even bigger with nimble link if there was no supply shortage, but youre seeing us continue continue to grow that business. So we have pretty high confidence in terms of.
Just hard backlog for the year, which gives us a lot of confidence there on the other part of the kind of inventory equation on the Aragon connect side Thats still.
I would call it in its early stages. So we're still trying to grow that business.
The demand the end demand is obvious.
Our sales pipeline <unk> talked about is pretty big.
Got to close deals and get it get it sold through.
Understood. Thank you.
No problem.
Yeah.
Anthony Stoss from Craig Hallum.
Sure.
One is now open. Please go ahead.
Thank you.
Brexit guide all things considered up 22% at the midpoint sequentially, guys, especially supply chain, so kudos to pull that up.
Along those lines with the growth rate heading up into Q1 do you expect all of the business segments to grow and maybe a generic question for Jacob what do you expect or what's the ballpark range of how much you think that.
Business can grow and David was talking about with get backlog I'm curious what you think the growth rate might be for Iot This year and maybe next.
Hey, good having you joining us Tony.
Jacob here.
Questions by the way and I appreciate that the fact that you will recognize that the team has done a phenomenal job.
Are we able to overcome the supply shortage issue and we're looking really good about.
The only Q1, but the rest of the year so regarding the three markets.
Well I can tell you is that we do.
<unk> named from the customers, thus with consumer thoughts with the enterprise and Thats with automotive now on the consumer side as I indicated.
We are in the recovery mode.
And the fact that the supply shortage issue is resolved.
<unk> South that's going to be it would be helpful for the not only for Q1, but the rest of the year in regarding enterprise. That's a lot of it's with our industrial Iot product with our nimble.
<unk>.
The demand is high but we are.
Certainly also dealing with some.
Plus shortage issue.
But we got those still got to overcome.
And then on the automotive side the Aegean connect.
It's certainly also seeing a much greater demand and then aftermarket fleet was seeing.
A high growth as well.
Would not be able to tell you that.
All three are going to.
We are going to be able to see sequential quarter to quarter, but we do feel strongly about the overall growth.
Across all three market segments.
So what I can say.
Yes go ahead.
Just going to add something to what Jacobs said in that.
The direction that we set for the company to become more of a system integrator all of those products that we are offering we're seeing that those business lines are growing that's where the trend is heading and consumer is more or less a return to normal with our supplier or are customers finding or gaining access to supply. So that's what's kind of driving really.
What's happening in 2022.
Okay, and then maybe as a follow up this transition for a couple of product lines.
Contract manufacturing side.
Have you done extensive qualifications with this contract manufacturer do you expect it to be.
<unk> are you building up internal inventory those parts in case, it's not smooth and theres any hiccups on the contract manufacturer side any any color would be helpful. Just to make sure that the handoff is smooth.
Yes.
Good questions again.
So we are actually not only have one but we actually have a couple.
For our new North American.
Manufacturing contract manufacturers and we have created some redundancy as well.
And so all of that we do feel strongly that one can serve as a backup as the other.
We are training them and we actually have a much easier access to them.
And they are working very closely with our operations team as well.
Which is located in Arizona, So we feel pretty good about.
About being able to make sure that they deliver and just so you know we actually started to work with them.
Q4 last year really closely and they've been able to deliver that type of product and the type of quality that we expect it.
So it's something that we already done enough.
Trial once you want to call it.
To get to what we have that's why we have made a decision that we feel comfortable to shutting down our Arizona facility, Yes, we kind of used Tony a phased approach where we.
Put our.
One larger product line from the antenna plus branded products first and then we put another one on <unk>.
Did it slowly over the like Jacobs said since the beginning of Q4. So we have very high confidence that they can deliver pretty high quality. We're also pretty excited about the fact that they can improve.
Just through scale on buying parts and <unk>.
I'm carrying parts.
More cheaply for us to improve our gross margin. So I think we're going to benefit on two sides there.
Great. Thanks for all the detail guys best of luck.
Thanks, a lot Tony.
Our next question on the line comes from Kim Saturday.
Of Northland Capital markets. Please go ahead, Ken Thank you.
Yeah.
Thanks, and good afternoon.
I wanted to follow up on kind of the.
The segment dynamics going into Q1.
I'm going to assume that.
The majority if not the vast majority of the sequential growth you're forecasting is coming from.
Consumer is that supply situation recovers.
Luckily Hauser.
Positive impact on.
On gross margins as well.
Is that a fair assumption in your estimation are there any other segments driving.
Sequential growth in a meaningful way.
No I think in a meaningful way consumer is driving the majority of the growth there is contribution across some of the other product lines, but nothing like the consumer recovery.
Okay great.
And then.
Just to follow with consumer and then I have one more.
I think there was an earlier comment about getting back to normal.
Which likely represents something in the $10 million a quarter range, where you started.
Calendar 'twenty, one and ended Cal.
Calendar 'twenty.
At this point does that seem like a reasonable target to get back to those levels by the end of the year.
Sure.
Yes, I think I think it's possible I don't think we're planning at something a little more conservative, especially.
Some of the east.
Supply shortage issues out there still remaining.
But even if we improve off.
Our Q1 number which we expect to it's going to be.
Tribute both not only in top line growth, but on gross margin.
Right and then.
Last one for me you had a nice uptick.
In the quarter for automotive.
I think you attributed to <unk>.
<unk> connect.
And I guess, given how sharp that increase was I wonder if you could give us a little more color as to whether.
We could look at that.
It was kind of a maybe a stocking situation that needs to be digested.
Or whether you're seeing that sharp of an uptick in demand that you feel like you can continue to build on throughout.
'twenty two.
Yes.
Yes.
We saw growth out of both air gain connect and aftermarket fleet.
Q3 to Q4.
We're also.
Suffering a little bit on the supply shortage issue on the automotive after aftermarket.
<unk> revenue over the past couple of quarters too. So I think we're starting to see a little bit of a return there.
Again, we've got to keep an eye out on what the supply shortage will do to that business going forward in 2022, but we do think we can grow through it mostly because we.
<unk>.
And kind of re redone, our sales strategy on the antenna plus branded products.
And we've upgraded some of the key products to <unk> and.
I think that should drive growth for us.
And I think we are in terms of Aragon connect.
We are saying we've got this really.
Marge.
Opportunity funnel that we've been chasing it's taking some time to close those deals.
I think we should see really more of an inflection point, which I think is where youre trying to get to starting in the second half.
It's possible. This happened I think it is going to be more in the second half.
Okay. Thanks very much.
No problem.
As a reminder, if you would like to ask a question. Please press star followed by one in attendance. Thank you Pat.
We have a question from Scott Searle of Roth Capital. Please go ahead Scott. Thank you.
Hey, guys. Thanks for taking my questions nice job on seeing the consumer starting to recovery and Dave want to wish you all the best I'll, Miss or asking you on a regular basis.
Thanks, guys.
Hey.
Then on the consumer it sounds like you answered part of it with Tim's question. It doesn't sound like you're seeing any sort of immediate snapback to the levels. We exited 20 in and enter 2021 and at the $10 billion level. It seems like it's going to kind of build after the first quarter, but youre not building in that type of expectation I'm just want to clarify Thats correct and then just.
Part of it there is a big transformation going on from Wi Fi six Wi Fi six year I'm wondering how important Wi Fi six is what that's doing to the dialogue the opportunity and are you seeing opportunities not only traditional indoor.
But are you starting to see some outdoor opportunities as well as it relates to <unk>.
Yes.
Talk to you Scott Jacob here.
Questions first any or having more annual day to chime in.
Regarding the consumer you are.
Correct.
Recovering, but now it's going to take some time to get back to where it was although based on what we're seeing as I indicated Q1, whether it is seeing a substantial improvement over Q <unk> of last year, and we do see even in our backlog right now give you some even visibility into Q2, we are seeing.
Also numbers in our backlog.
It's much higher than what we used to get at this point during the quarter. So those are positive indication that consumer is on his recovery path, how fast and when.
It's.
Feel good that it's going to be happening this year and also want to mention that.
Consumer it used to be like I say, 80% of our overall revenue just two or three years ago is now largely is 40% and I would expect this year to be even taking on a smaller percent.
The overall revenue in the region in Florida is that even though it's growing what we are doing with.
The system product with automotive with enterprise is really outpacing that and other expect that the number of consumer revenue will be better than last year, but it is actually going to become a smaller percentage of our overall revenue.
That's why we we we made a decision to go with the system product approach and it's really paying dividends the product, we now have with enterprise with automotive.
And with the amount that we're seeing.
As I indicated.
Evidence of our successful transition from a antenna company completing the company now to a system integrator now you had mentioned about Wi Fi 660, yes, absolutely one carrier that I spoke to.
All major North American carrier that I spoke to basically told me that starting 2022, they are not going to ship anything.
Not Wifi six okay.
Okay. So that.
So what they have in the illuminate standalone going to ship any of those and Thats one of the reason.
It should help.
To help with the recovery on the consumer side and I'm sure other carriers that thinking the same thing about all of them are going to quickly move into the illuminate a Wi Fi 660.
Okay.
Alright helpful. Thanks Jacob.
Yes, let me commenting on the outdoor versus indoor yes.
I was just going to say Scott.
A lot of the growth.
Jacobs said a lot of the growth that youre seeing are a lot of the traction that youre seeing in the business in 2022, six <unk> six that we had one let's say a year ago or maybe a little bit earlier than that.
Where the opportunities are.
Typically in the back part of 'twenty, one is mostly.
And what we're seeing it's mostly indoor by the way, we do some outdoor mostly indoor but theres a lot of traction right now in fixed wireless access right as you start to see what the C band deployment, you've got a lot of the operators that want to go out there and then compete with the wired guys and here's an opportunity for them to provide these platforms like for.
For instance, with T. Mobile is doing any other guys are doing and that provides an opportunity for <unk> to work with Oems.
In that.
Gain has the capabilities to solve these complex wireless wireless problems until you already have that traction in the Wi Fi area, but now you add the uplink being.
Also wireless and let's call it cellular.
That gives us the capability to not only be able to solve these even more complex problems, but also increase the <unk> per box, so that's where you're going to see some of the traction going forward then in design wins for.
For consumer for us.
Got it very helpful and if I could follow up on the nimble in front. It sounds like business continues to be strong. There I was wondering if you can give us an indication of.
The size of the business in the fourth quarter at least if it was up sequentially from the third quarter and it sounds like you not only have a good visibility to backlog, but also visibility to supply. So I was wondering if you could kind of frame the growth rates at the low end and the high end of what you see or at least the baseline level of expectation for nimble link in 2022.
Yes, I'll take a shot at that Scott.
In Q3 Q3 to Q4, we grew sequentially.
I don't want to talk specifically about Q1, we.
We do I think in terms of demand, we should be growing but we still haven't solved resolved all of the supply shortage issues. So that's putting a little pressure on us on the nimble branded products right now so.
The jury is still out on that but I think for the entire year even with.
Supply shortages, we're going to grow.
'twenty one to 'twenty two.
Okay, and then lastly, if I could.
Dig in on the auto front and are going generic.
I'm not sure if you provided any numbers.
On this call in the past you've talked about the number of pilots and we are engaged kind of helping to frame. The opportunity. You did mentioned an inflection is teeing up maybe for the second half of this year, but did hurricane connect cross the $1 billion threshold in the fourth quarter are there any is there any other color you could kind of put around the level of activity that's going on for Eric and connect and then I guess.
In terms of other product extensions right, you've talked about evolution with other carriers and other commercial markets I'm kind of wondering what your updated thoughts are on that front. Thanks.
Yeah in terms of the revenue breakout for Aerie and connect we're trying to.
Not to disclose that at this point and just accumulate that with our automotive number.
But.
In terms of like Youre talking about on the opportunity and the potential demand that we're seeing here is.
Pretty material so I'll let.
Jacob <unk>.
I can't share with you Scott that we are seeing.
Al.
It's really a much stronger opportunity size and the orders that we anticipated to receive its also in our in much larger volume loss model indicated earlier with the new approach that AT&T and <unk> been working on since really.
Second half of last year, we are now seeing a lot of these major urban opportunities now come to fruition. So they expect that to really pick it up.
Even already it's already happening we expect that to continue.
The year and I also want to share that.
More of that wasn't seen in D. C earlier this week to receive in an innovation our I mean, the 10 years anniversary of first net and <unk>.
The AT&T <unk>.
Really.
Focusing on the Merrill Lynch service.
The flagship product for the offering its Aegean connect so.
A.
Consider the effort by AT&T first Nate and 13 are gain to make visa a British SaaS product for.
For all of the first responders out there.
And the other thing I would add to that Scott is that what I noticed from that event is that and I'm not speaking for AT&T, but what I can tell you that the general theme that came out of areas that person that is becoming a reality and there are more and more towers being deployed more towers better coverage better opportunities for area in connect and we see that we actually see it.
On the other side not only in urban but also in rural just to kind of address your point about the another question that you had in terms of roadmap I mentioned this last time in the call in that area and connect HBU. The unit that we have today. That's just the first product in this product line SKU.
You can expect this year that we will have derivatives that will address other operators not only here in North America, but also.
Overseas, but we do want to be disciplined we do want to be for because there's so much out there that needs to be taken care of and we need to do things in a carefully. So that we can we can we can we can be successful we have at hand, and also not lose sight of what this could provide to us in terms of opportunity on the global scale.
Great. Thanks very much.
Thank you we have no further questions registered so I'll hand back over to Jacob for closing remarks. Thank you very much.
Thank you for joining us on today's call. We look forward to updating you on our next call operator.
Yeah.
Thank you very much that concludes today's call you may now disconnect your lines have a lovely evening.