Q4 2021 KORE Group Holdings Inc Earnings Call

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Welcome to the Core Wireless Group's fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Greetings and welcome to the core wireless group's fourth quarter and full year, 2020 one earnings call.

At this time all participants are in a listen only mode. A question and answer session will follow the final presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

If anyone should require operator assistance during the conference, please press star zero on your telephone.

Please note this conference is being recorded. I will now turn the conference over to your host, Vick Vijay Vigarya.

Please note. This conference is being recorded I will now turn the conference over to your host Vik D. J V got Ya.

Thank you you may begin.

Thank you operator. On today's call, we will be referring to the fourth quarter and full year 2021 earnings presentation that will be helpful to follow along as well as the press release filed this afternoon that details the company's fourth quarter and full year 2021 results, both of which can be downloaded from the investor relations page at ir.corewireless.com. Finally, a recording of the call will be available on the investor section of the company's website later today.

Thank you operator on today's call, we will be referring to the fourth quarter and full year 2021 earnings presentations that will be helpful to follow along as well as the press release filed this afternoon that details the company's fourth quarter and full year 2021 results both of which can be downloaded from the investor Relations page at IR <unk> <unk>.

Core wireless dot com finally, a recording of the call will be available on the investors section of the company's website later today.

Please note that this webcast includes forward-looking statements, statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions are forward-looking statements and are based on assumptions and beliefs as of today. The company encourages you to review the safe harbor statements, risk factors, and other disclaimers contained on this slide and today's press release, as well as in the company's filings with the Securities and Exchange Commission.

Note that this webcast includes forward looking statements statements about the company's beliefs and expectations containing words, such as May will could believe expect anticipate and similar expressions are forward looking statements and are based on assumptions and beliefs as of today. The company encourages you to review the Safe Harbor.

Risk factors and other disclaimers contained on this slide in todays press release as well as in the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to differ materially from those described in our forward looking statements. The company does not undertake to public.

which identifies specific risk factors that may cause actual results or events to differ materially from those described in our forward-looking

The company does not undertake to publicly update or revise any forward-looking statements after this webinar.

Update or revise any forward looking statements. After this webcast. The company also notes that on this call. It will be discussing non-GAAP financial information. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States are G. A a P GAAP.

The company also notes that on this call it will be discussing non- GAAP financial information. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States, or GAAP GAP. You can find a reconciliation of these metrics to the company's reported GAP results in the reconciliation tables provided in today's earnings release and presentation. I'll now turn the call over to Romo Vow, the company's President and Chief Executive of the United States.

You can find a reconciliation of these metrics to the Companys reported GAAP results in the reconciliation tables provided in today's earnings release and presentation I'll now turn the call over to Rommel Val the company's President and Chief Executive Officer.

Romo Val: Thank you Vic. Good afternoon everyone and thank you for joining us today for our fourth quarter and full year 2021 earnings call.

Thank you Vic and good afternoon, everyone and thank you for joining us today for our fourth quarter and full year 2021 earnings call My.

Romo Bell: My name is Ronald Bell, and with me is Paul Holtz. I am pleased to announce, in case you missed our press release last week, that Paul, who just celebrated his five-year anniversary at CORE and has been serving as interim CFO since November , has been named CORE's EVP chief financial officer and treasurer.

My name is Ronald Bell and with me is Paul hopes I am pleased to announce in case you missed our press release last week that Paul who just celebrated his five year anniversary at core and has been serving as interim CFO . Since November has been named cores EVP Chief Financial Officer.

Romo Bell: My congratulations to you, Paul, and I know our entire team looks forward to partnering with you on our exciting journey ahead.

And treasurer.

My congratulations to you Paul and I know our entire team looks forward to partnering with you on our exciting journey ahead.

Romo Bell: On to the objectives of our call today. First and foremost, we will provide an overview of our financial results for Q4 and full year 2021.

Onto the objectives of our call today first and foremost we will provide an overview of our financial results for Q4 and full year 2021.

Speaker Change: I will provide a brief summary of our results and then Paul will take you through additional detail later in the call.

I will provide a brief summary of our results and then Paul will take you through additional detail later in the call.

Paul Holtz: second, we want to continue to help the market understand what we have built here at

Second we want to continue to help the market understand what we have built here at core.

Paul Holtz: It is clear that as the first pure play IoT company in the public markets, we are not

It is clear that as the first pure play Iot company in the public markets, we are not well understood.

Paul Holtz: This is why, on our last earnings call, I spent some time introducing the company and providing an overview of our services, our market and growth dynamics, our strategy and competitive positioning, and even shared a customer use case example.

This is why on our last earnings call I spent some time, introducing the company and providing an overview of our services, our market and growth dynamics, our strategy and competitive positioning and even shared our customer use case example.

Paul Holtz: Today I will elaborate on how we are well positioned to take advantage of our tremendous opportunity over the course of the next decade and beyond with world-class intellectual property or IP.

Today I will elaborate on how we are well positioned to take advantage of all the tremendous opportunity over the course of the next decade and beyond with World class intellectual property or IP.

Paul Holtz: The deep dive topic for this quarter is hence our innovative technology stack and how we enable our customers to build the IoT building blocks that are fundamental to their success.

The deep dive topics of this quarter is hence our innovative technology stack and how we enable our customers to build the Iot building blocks that are fundamental to their success.

Paul Holtz: We will then hold a Q&A session to round out the call.

We will then hold a Q&A session to round out the call.

Paul Holtz: Now, let's look at our fourth quarter and full year 2021, and as summarized on slide four, we recorded strong revenue of $64.3 million.

Now, let's look at our fourth quarter and full year 2021, and as summarized on slide four we reported strong revenue of $64 3 million.

Paul Holtz: These results continue to be aided by a significant project with our largest customer, which will be substantially complete by the end of Q1 2022.

These results continued to be aided by a significant project with our largest customer which will be substantially complete by the end of Q1 'twenty two.

Paul Holtz: Our full-year revenue for 2021 was $248.2 million, up roughly 16% over 2020.

Our full year revenue for 2021 was $248 $2 million up roughly 16% over 2020.

Paul Holtz: Our adjusted EBITDA grew over $2 million, 2021 over 2020, despite significant public company costs and increased people costs, which Paul will discuss further.

Our adjusted EBITDA grew over $2 million 2021 over 2020, despite significant public company costs and increased people costs, which Paul will discuss further.

Paul Holtz: And now let's look at our outlook for 2022.

And now let's look at our outlook for 2022.

Paul Holtz: Adjusted EBITDA in the range of $63 to $64 million, and revenue in the range of $260 to $265 million is the guidance we are providing today.

Adjusted EBITDA in the range of $63 million to $64 million and revenue in the range of $260 million to $265 million is the guidance, we're providing today.

Paul Holtz: We now confidently expect to exceed $508 million in revenue for the 2021-22 two-year stack period compared to the $457 million we forecast in our Go Public model, which was comprised of $219 million in 2021 and $238 million in 2022.

We now confidently expect to exceed $508 million in revenue for the <unk> 2021 'twenty two two year stack period compared to the $457 million, we forecast in our go public model, which was comprised of $219 million in 2021.

And $238 million in 2022.

Paul Holtz: I should also note that this increased revenue expectation comes directly in the face of some of the strongest headwinds facing the industry.

I should also note that this increased revenue expectation comes directly in the face of some of the strongest headwinds facing the industry.

Paul Holtz: The sunsets of 2G and 3G networks are well documented and have impacted our business, as have supply chain constraints and some issues unique to CORE.

The sunsets of <unk> and <unk> networks are well documented and have impacted our business has to have supply chain constraints and some issues unique to core.

Paul Holtz: Despite these challenges, we continue to deliver good growth, even as 5G infrastructure is just beginning to take hold, further brightening our growth prospects over the decade of IoT ahead.

Despite these challenges we continue to deliver good growth even as <unk> infrastructure is just beginning to take hold further brightening our growth prospects over the decade of Iot ahead.

Paul Holtz: It is now time to move into the deep dive topic of our earnings call, a quick overview of our powerful IP story. But let me start with a quick reminder of Core's growth strategy.

It is now time to move into the deep dive topics of our earnings call a quick overview of our powerful IP story.

But let me start with a quick reminder of course cores growth strategy.

Paul Holtz: When we say we are the world's only pure play IoT enabler, that means something specific to us.

When we say we are the worlds only pure play Iot enabler.

That means something specific to US first we attacked the very complexities that have held back Iot.

Paul Holtz: First, we attack the very complexities that have held back IOT.

Paul Holtz: We help our customers deploy, manage, and scale their IoT solutions with a broad range of services spanning connectivity, solutions, and analytics.

We help our customers deploy manage and scale their Iot solutions with a broad range of services spanning connectivity solutions and analytics.

Paul Holtz: The enabler part refers to the fact that we do not deliver end solutions or applications to the end customer or end consumer or patient.

The enabler part refers to the fact that we do not deliver and the solutions or applications to the end customer oriented consumer or patient.

Paul Holtz: Rather, we are a pure B2B company and we enable these business and enterprise customers to provide end solutions.

We are a pure <unk> company and we enable these business and enterprise customers to provide end solutions.

Paul Holtz: So we are not asking our investors to make a particular bet on any one use case and how we will be the best at it against our competition. Instead, we grow with IoT in general and this is a huge growth market.

So we are not asking our investors to make a particular bet on any one use case and how we will be the best at it against our competition.

Stead, we grow with Iot in general and this is a huge growth market.

Paul Holtz: from 12 billion IOT devices at the end of 2020 to 75 billion by 2030. $9 trillion in value by 2030 is the midpoint of McKinsey's analysis on the IOT market, updated just recently in February .

From 12 billion Iot devices at the end of 2020 to 75 billion by 2030.

<unk> nine trillion dollars in value by 2030 is the midpoint of Mckinsey and analysis on the Iot market updated just recently in fact.

Paul Holtz: And as a reminder of why IoT deployments are so complicated, here on slide six is our seven-by-seven deployment frame.

And as a reminder of why Iot deployments are so complicated here on slide six is our seven by seven deployment framework.

Paul Holtz: The colors overlaid showcase how we function as the only pure play enabler of IoT. The.

The colors overlaid showcase how we function as the only pure play enabler of Iot the one stop shop.

Paul Holtz: I do not intend to take you through this chart in any detail, but just want to point out that what we are doing is taking every step of this deployment life cycle and making it more efficient.

I do not intend to take you through this chart in any detail, but just want to point out that what we are doing is taking every step of this deployment lifecycle and making it more efficient putting more intelligence into our software into our platforms, making Iot easy to adopt.

Paul Holtz: putting more intelligence into our software, into our platforms, making IoT easier.

Paul Holtz: Not so much the first two steps, which consulting firms might be involved with, but starting at step three, which is connectivity.

Not so much the first two steps, which consulting firms might be involved with but starting at step three which is connectivity steps for five six which has a set of Iot managed services, we have been building out more recently.

Paul Holtz: Steps four, five, six, which are the set of IoT managed services we have been building out more recently. And finally, step seven, which comprises analytics and represents a huge opportunity for our future.

And finally stepped seven which comprises analytics and represents a huge opportunity for our future.

Paul Holtz: Our technology, our IP, is at the very heart of our value proposition.

Our technology, our IP is at the very heart of our value proposition.

Paul Holtz: Without our IP, we cannot deliver our promise. For example, the multi-multi-multi-IoT CAS offering doesn't get off the ground without a multi-tenant, multi-carrier, device agnostic and technology agnostic IoT platform.

Without our IP, we cannot deliver our promise for example, the multi multi multi Iot kaz offering doesn't get off the ground without a multi tenant multi carrier device agnostic and technology agnostic Iot platform.

Paul Holtz: And many of our customers' applications and use cases don't get off the ground without our connectivity as a service. It is just too complicated.

And many of our customers as applications and use cases don't get off the ground without our connectivity as a service. It is just too complicated.

Paul Holtz: So in summary, across connectivity solutions and analytics, we continue to simplify IoT adoption by putting more intelligence into our software and platforms, and that is what I will showcase.

So in summary across connectivity solutions and analytics, we continue to simplify Iot adoption by putting more intelligence into our software and platforms and that is what I will showcase today.

Paul Holtz: Our technology stack enables our customers with an easy way to assemble and configure the IoT building blocks they need to deploy their end solutions.

Our technology stack enables our customers with an easy way to assemble and configure the Iot building blocks they need to deploy their end solutions.

Paul Holtz: IoT building blocks start with edge devices depicted at the bottom of this slide and end with the data being delivered to the IoT applications depicted at the top.

Iot building blocks start with edge devices depicted at the bottom of this slide and end with the data being delivered to the Iot applications depicted at the top.

Paul Holtz: Each device needs one or multiple SIM cards. We believe these will increasingly be eSIMs and then iSIMs as companies understand the power of the EUICC standards.

Each device needs, one or multiple Sim cards. We believe these will increasingly be E. Sims and then items as companies understand the power of the <unk> standards.

Paul Holtz: And our eSIM offering is branded Core Omnisphere.

And our ECM offering is branded core omni Sim.

Paul Holtz: In multiple versions, example omnisim reach and omnisim rush.

In multiple versions example, omni some reach and omni some rush.

Paul Holtz: These connectivity management services are delivered through the combination of three key technologies.

These connectivity management services are delivered through the combination of three key technology stacks.

Paul Holtz: First, our Core One platform which has seven open modular and scalable engines.

First our core one platform, which has seven open modular and scalable engines.

Paul Holtz: The seven engines uniquely address the biggest IoT challenges, example data aggregation, data streaming and analytics, rating and billing, network intelligence using metadata, north and southbound integrations, and a robust API UI interface.

The seven engines uniquely address the biggest Iot challenges example, data aggregation data streaming and analytics rating and billing network intelligence, using metadata, north and south bound integrations and a robust API UI interface.

Paul Holtz: Importantly, the Core One platform enables us to create services for our customers, but also enables our customers to build their own applications and services.

Importantly, the core one platform enables us to create services for our customers, but also enables our customers to build their own applications and services.

Paul Holtz: These Core One engines help deliver the world's leading multi-multi-multi connectivity proposition.

These core one engines helped deliver the world's leading multi multi multi connectivity proposition mulch.

Paul Holtz: multiple devices and technologies in multiple regions and countries in the world with multiple protocols.

Multiple devices and technologies in multiple regions and countries in the world with multiple protocols.

Paul Holtz: Second, our HyperCore and eSim text stack.

Second our hyper core and Esim Tech stack.

Paul Holtz: provides the cellular core network capabilities that enable us and our customers to drive connectivity off.

<unk>, the cellular core network capabilities that enable us and our customers to drive connectivity offerings.

Paul Holtz: Without our own core network, we would not be able to offer our creative, multi-imzi and eSim global offer.

Without our own core network, we would not be able to offer our creative multi MZ and E. Sim global offerings and further with our core deployed on a licensed basis, our customers can take control of their own networks and global connectivity needs.

Paul Holtz: And further, with our core deployed on a licensed basis, our customers can take control of their own networks and global connectivity.

Paul Holtz: And finally, our pre-configured solutions offer customers the ability to jump-start their IoT journeys and reduce their time to market from an average of 18 to 24 months to 18 to 24 weeks, or even less, if they choose to use the core one-stop shop.

And finally, our pre configured solutions offer customers the ability to jumpstart their Iot journeys and reduce their time to market from an average of 18 to 24 months to 18 to 24 weeks or even less if they choose to use the core one stop shop.

Paul Holtz: These technology stacks are designed to comprehensively deliver world-class IoT technology services to our customers so they can create their own IoT solutions.

These technology stacks are designed to comprehensively deliver world class Iot technology services to our customers. So they can create their own Iot Iot solutions.

Paul Holtz: The key IoT services we provide with our IP are depicted on the right side of the page.

The key Iot services, we provide with our IP are depicted on the right side of the page our core Iot Kaz offering, including our omni same offer security and network intelligence services, which provide unprecedented visibility to edge devices date.

Paul Holtz: Our core IoT CAS offering, including our Omnisim offer, security and network intelligence services, which provide unprecedented visibility to edge devices.

Paul Holtz: data management services that range from ensuring that data is coming off each customer device to transporting said data safely and securely and in some instances cleansing and transforming said data.

Data management services that range from ensuring that data is coming off each customer device to transporting said data safely and securely and in some instances cleansing and transforming set of data.

Paul Holtz: And finally, industry-specific tech services for our connected health and fleet management customers, but also in the form of location-based services, which are becoming ubiquitous in their usage across industries.

And finally industry specific tech services for our connected health and fleet management customers, but also in the form of location based services, which are becoming ubiquitous and their usage across industries.

Paul Holtz: As shown on slide 8, Core simplifies the complexities involved in harnessing the IoT building blocks that enable customer IoT solutions.

As shown on slide eight core simplifies the complexities involved in harnessing the Iot building blocks that enable customer Iot solutions in.

Paul Holtz: indicated first on this slide are the four key IOT building blocks.

Indicated first on this slide are the four key Iot building blocks hardware connectivity data processing and support and managed services.

Paul Holtz: hardware, connectivity, data processing, and support and manage service.

Paul Holtz: So how do we help our customers harness these IoT building blocks into solutions?

So how do we help our customers harness these Iot building blocks into solutions first with the five services I just reviewed on the last slide.

Paul Holtz: first with the five services I just reviewed on the last slide.

Paul Holtz: But then we go one step beyond in terms of helping our customers consume these services.

But then we go one step beyond in terms of helping our customers consume. These services, we provide a developer ecosystem complete with a developer portal a P eyes and analytics.

Paul Holtz: We provide a developer ecosystem complete with a developer portal, APIs, and analytics.

Paul Holtz: This self-service mode of consumption is critical to building our enterprise customer base of the future.

This self service mode of consumption is critical to building our enterprise customer base of the future.

Paul Holtz: And that leads to the real purpose of the journey, getting data to the customer applications and driving customer outcomes.

And that leads to the real purpose of the journey getting data to the customer applications and driving customer outcomes as a part of enabling customer outcomes, we facilitate easy integration into other ecosystems, such as AWS and Azure.

Paul Holtz: As a part of enabling customer outcomes, we facilitate easy integration into other ecosystems such as AWS and Azure.

Paul Holtz: We have and are investing in unique integration technologies that we jointly build with these hyperscaler partners.

We have and are investing in unique integration technologies that we jointly build with these hyperscale or partners.

Paul Holtz: In a nutshell, our focus has been to build an ecosystem for enterprises and their developers to build their IoT solutions, which lead to meaningful business outcomes, whether it is building a cloud-based patient monitoring service or a mobile app for PetTrack.

In a nutshell, our focus has been to build an ecosystem for enterprises and their developers to build their Iot solutions, which lead to meaningful business outcomes, whether it is building a cloud based patient monitoring service or a mobile app for pet tracking.

Paul Holtz: or it could be integrating the data into an ERP or other back office system to drive operational efficiency.

Or it could be integrating the data into an ERP or other back office system to drive operational efficiencies.

Paul Holtz: Bottom line, our IP simplifies the process at the edge so that our customers get to outcomes quickly and easily.

Bottom line, our IP simplifies the process at the edge, so that our customers get the outcomes quickly and easily.

Paul Holtz: When our partners at AWS say edge to outcome, this is what they mean.

When our partners at AWS say edge to outcome. This is what they mean.

Paul Holtz: Slide nine brings our deep dive to an end today. By connecting the dots back to the different ways we enable our customers IOT

Slide nine brings our deep dive to an end today by connecting the dots back to the different ways, we enable our customers Iot solutions.

Paul Holtz: with all of our IP focused on making it easy to deploy IoT building blocks.

With all of our IP focused on making it easy to deploy Iot building blocks chorus positioned to drive growth through the decade of Iot.

Paul Holtz: Core is positioned to drive growth through the decade of IoT.

Paul Holtz: in core, our customers have a flexible, experienced part.

In core our customers have a flexible experienced partner.

Paul Holtz: A company that has been involved in over 10,000 use cases over 20 years. A one-stop-shop partner that can help with many parts of an IoT deployment.

A company that has been involved in over 10000 to use cases over 20 years, a one stop shop partner that can help with many parts of an Iot deployment.

Paul Holtz: And now we are investing in pre-configured solutions.

And now we are investing in pre configured solutions.

Paul Holtz: So not only can our customers get help from us across the seven steps we saw earlier, but in some use cases now, they can leverage pre-configured solutions, built to solve the most difficult and most common challenges in those deployment journey.

So not only can our customers get help from us across the seven steps we saw earlier.

But in some use cases now they can leverage pre configured solutions built to solve the most difficult and most common challenges in those deployment journeys.

Paul Holtz: Our industry-oriented approach to pre-configured solutions will continue to focus on the highest growth use cases in our focus verticals.

Our industry oriented approach to pre configured solutions, we will continue to focus on the highest growth use cases in our focused verticals.

Paul Holtz: Healthcare providers, for example, will be able to quickly deploy powerful connected health systems.

Health care providers for example, we will be able to quickly deploy a powerful connected health solutions.

Paul Holtz: Companies in need of fleet management solutions can quickly harness the capabilities of our core fleet of

Companies in need of fleet management solutions can quickly harnessed the capabilities of our core fleet offerings.

Paul Holtz: Final comment here, we believe that as we deploy pre-configured solutions at scale, we will improve the profitability of our IoT solutions business.

Final comment here, we believe that as we deploy pre configured solutions at scale, we will improve the profitability of our Iot solutions business line.

Paul Holtz: With that, I will now hand the call over to Paul to cover the financials in more detail.

With that I will now hand, the call over to Paul to cover the financials in more detail.

Thank you Rommel and good afternoon, everyone.

Paul Holtz: Per slide 10, we finished a great year with a strong fourth quarter that again exceeded our internal projections and guidance. I'm extremely proud of our results and

Slide 10, we finished a great year with a strong fourth quarter that again exceeded our internal projections and guidance.

I'm extremely proud of our results and the hard work from our team.

Paul Holtz: Total revenue for the fourth quarter of 2021 was 64.3 million, an increase of 6.8 million or 12% compared to the same period last year.

Total revenue for the fourth quarter 2021 was $64 3 million, an increase of $6 8 million or 12% compared to the same period last year.

Paul Holtz: Revenue for the quarter was comprised of the following, IOT connectivity revenue of $43.2 million, representing 67% of total revenue, decreased $0.4 million or 1% compared to the same period last year.

Revenue for the quarter was comprised of the following.

Iot connectivity revenue of $43 2 million, representing 67% of total revenue decreased zero point $4 million or 1% compared to the same period last year.

Paul Holtz: The fourth quarter of IOT connectivity revenue in 2020 was aided by an abnormally strong quarter for SIM revenue and benefited from revenue provision releases that were taken earlier in 2020 when the effects of COVID-19 on our business and customers was undone.

The fourth quarter of Iot connectivity revenue in 2020 was aided by an abnormally strong quarter for some revenue and benefited from revenue provision releases that were taken earlier in 2020, when the effects of COVID-19 on our business and customers with unknown.

Paul Holtz: Removing these two factors, IOT connectivity revenue would have increased 0.6 million or 1% year over year.

Removing these two factors Iot connectivity revenue would have increased zero point $6 million or 1% year over year.

Paul Holtz: The remaining $21.1 million of our total revenue came from IOT solutions, representing 33% of total revenue and increased $7.2 million or 52% compared to the same period last year.

The remaining $21 1 million of our total revenue came from Iot solutions, representing 33% of total revenue and increased $7 2 million or 52% compared to the same period last year.

Paul Holtz: As mentioned earlier, the increase in IoT solutions revenue was aided by the timing acceleration of a significant LTE transition project from our largest

As mentioned earlier the increase in Iot solutions revenue was aided by the timing acceleration of a significant LTE transition project from our largest customers.

Paul Holtz: For the full year, we delivered $248.2 million in total revenue, an increase of $34.5 million or 16 percent compared to the prior year.

For the full year, we delivered $248 2 million in total revenue, an increase of $34 5 million or 16% compared to the prior year.

Paul Holtz: IOT connectivity revenue was 168.8 million, representing 68% of total revenue and increased 10.1 million or 6% compared to the prior year.

Iot connectivity revenue was $168 8 million, representing 68% of total revenue and increased $10 1 million or 6% compared to the prior year.

Paul Holtz: IoT solutions revenue was 79.4 million, representing 32 percent of total revenue and increased 24.4 million or 44 percent compared to the prior.

Iot solutions revenue was $79 4 million, representing 32% of total revenue and increased $24 4 million or 44% compared to the prior year.

Paul Holtz: Overall, gross margin percentage in the fourth quarter was 48% compared to 52% in the same period of time.

Overall gross margin percentage in the fourth quarter was 48% compared to 52% in the same period last year.

Paul Holtz: This percentage decrease was primarily due to the accelerated growth from IoT solutions revenue which comes at a lower gross margin compared to IoT connectivity.

This percentage decrease was primarily due to the accelerated growth from Iot solutions revenue, which comes at a lower gross margin compared to Iot connectivity revenue.

Paul Holtz: Note that IoT solutions gross margins will also fluctuate from quarter to quarter depending on the mix of hardware and services in that particular.

Note that Iot solutions gross margins will also fluctuate from quarter to quarter, depending on the mix of hardware and services in that particular quarter.

Paul Holtz: We also continue to see margin pressure within IoT solutions due to a variety of reasons, which included growth at our largest customer, which has lower than average gross margin.

We also continue to see margin pressure within Iot solutions due to a variety of reasons, which included.

Growth at our largest customer which has lower than average gross margin.

Paul Holtz: Increase hardware costs due to supply chain constraints and higher shipping and labor

Increased hardware costs due to supply chain constraints and higher shipping and labor costs.

Paul Holtz: IoT connectivity growth margins remain relatively stable in the fourth quarter year over year at 59% in 2021 and 61% in 2020.

Iot connectivity gross margins remained relatively stable in the fourth quarter year over year at 59% in 2021 and 61% in 2020.

Paul Holtz: For the full year, gross margin percentage was 51% compared to 54% in the prior year.

For the full year gross margin percentage was 51% compared to 54% in the prior year.

Paul Holtz: The percentage decrease year-over-year was due to the same reasons that led to the decrease in gross margin percentage in the fourth quarter. Again, IOT connectivity margins year-over-year were stable at approximately 60%.

The percentage decrease year over year was due to the same reasons that led to the decrease in gross margin percentage in the fourth quarter again, Iot connectivity margins year over year were stable at approximately 60%.

Paul Holtz: Total connections at the end of fourth quarter was $14.6 million, an increase of $2.8 million or 24% compared to the same period last.

Total connections at the end of fourth quarter was $14 6 million, an increase of $2 8 million or 24% compared to the same period last year.

Paul Holtz: Dollar-based net expansion rate, or DBNER, for the 12 months ended December 31, 2021, was 122% compared to 106% in the prior year.

Dollar based net expansion rate or D. B N E. R. For the 12 months ended December 31, 2021 was 122% compared to 106% in the prior year.

Paul Holtz: We are pleased with this result, which indicates our continued success in customer retention.

We are pleased with this result, which indicates our continued success in customer retention and growth as a reminder, we do not expect the growth of this ratio to be linear in fact, the past two quarters results have been aided by the significant LTE transition project with our largest customer.

Paul Holtz: As a reminder, we do not expect the growth of this ratio to be linear. In fact, the past two quarters results have been aided by the significant LTE transition project with our largest LTE.

Paul Holtz: As this project concludes in early 2022, we do expect dBNER to be.

As this project concludes in early 2022, we do expect <unk> to decrease our goal and expectation. However is to maintain this ratio above 100% and to continue to grow this metric over the long term.

Paul Holtz: Our goal and expectation, however, is to maintain this ratio above 100 percent and to continue to grow this metric over the long run.

Paul Holtz: Moving to slide 11, operating expenses in the fourth quarter were $37.7 million, an increase of $1.1 million or 3% compared to the same period last year. The increase was driven

Moving to slide 11 operating expenses in the fourth quarter were $37 7 million, an increase of $1 1 million or 3% compared to the same period last year.

The increase was driven by go public company costs.

Paul Holtz: For the full year, operating expenses were $142.1 million, an increase of $16.8 million, or 13% compared to the prior year.

For the full year operating expenses were $142 1 million, an increase of $16 8 million or 13% compared to the prior year.

Paul Holtz: The key factors in the increase of operating expenses were higher sales commissions and bonuses due to exceeding internal targets.

The key factors in the increase of operating expenses were higher sales commissions and bonuses due to exceeding internal targets increase.

Paul Holtz: Increase in salary and benefit related items due to the constrained job market and materially higher than expected go public company costs.

The increase in salary and benefit related items due to the constraint job market and materially higher than expected go public company costs.

Paul Holtz: Finally, as reported, operating expense was also affected by adverse foreign currency movements with certain countries where we have global or regional shared services experiencing currency appreciation.

Finally as reported operating expense was also affected by adverse foreign currency movement movements with certain countries, where we have global or regional shared services experiencing a currency appreciation.

Paul Holtz: Net loss in the fourth quarter was $12.0 million, an improvement compared to the $15.7 million net loss in the prior year.

Net loss in the fourth quarter was 12.0 million.

An improvement compared to the $15 7 million net loss in the prior year.

Paul Holtz: For the full year, our net loss was $24.5 million compared to $35.2 million in the past.

For the full year, our net loss was $24 5 million compared to $35 2 million in the prior year.

Paul Holtz: adjusted EBITDA in the fourth quarter was $12.9 million, a decrease of $0.4 million, or 3% compared to the same period last year.

Adjusted EBITDA in the fourth quarter was $12 9 million, a decrease of zero point $4 million or 3% compared to the same period last year.

Paul Holtz: The decrease was primarily due to the increase in operating costs from going

The decrease was primarily due to the increase in operating costs from going public.

Paul Holtz: For the full year, we delivered a adjusted EBITDA of $59.9 million, an increase of $2.0 million or 4% compared to the prior year.

For the full year, we delivered adjusted EBITDA of $59 9 million, an increase of 2.1 million or 4% compared to the prior year.

Paul Holtz: Our adjusted EBITDA margin profile is 24%, which is in line with the 27% in the prior year after taking into account the material increases and operating costs from going public in 2021.

Our adjusted EBITDA margin profile is 24%, which is in line with the 27% in the prior year after taking into account the material increases in operating costs from going public in 2021.

Paul Holtz: The business used $14.8 million from operations in the 12 months ending December 31, 2021.

Moving to cash flow.

The business use $14 8 million from operations in the 12 months ending December 31 2021.

Paul Holtz: This compared to the business generating 26.5 million of cash for the same period in the prior year.

This compared to the business generating $26 5 million of cash for the same period in the prior year.

Paul Holtz: Cash flow from operations will vary quarter-to-quarter based on the timing of payments, receipts of accounts receivable, as well as prepayment of inventory.

Cash flow from operations will vary quarter to quarter based on the timing of payments receipts of accounts receivable as well as prepayment of inventory in 2021 cash flow from operations was negatively affected primarily due to the large amount of inventory that required prepayment for the previously mentioned significant LTE.

Paul Holtz: In 2021, cash flow from operations was negatively affected primarily due to the large amount of inventory that required prepayment for the previously mentioned significant LTE transition project at our largest.

Transition project at our largest customer.

Paul Holtz: In 2022 and beyond, we expect to return to generating positive cash flow.

In 2022, and beyond we expect to return to generating positive cash flow from operations.

Paul Holtz: At the end of fiscal 2021, cash and cash equivalents stood at $86.3 million compared to $10.7 million at the end of fiscal 2020.

At the end of fiscal 2021 cash and cash equivalents stood at $86 3 million compared to $10 7 million at the end of fiscal 2020.

Paul Holtz: This change is primarily a result of the net proceeds from the business combination and backstop financing offset by cash flow from operations and capital.

This change is primarily a result of the net proceeds from the business combination and backstop financing offset by cash flow from operations and capital expenditure.

Paul Holtz: Lastly, on slide 12, we are reaffirming our financial policy going forward. We are targeting to delever from a total senior net leverage of 3.7 times as of December 31, 2021, to approximately three times within the next 24 months.

Lastly on slide 12, we are reaffirming our financial policy going forward, we are targeting to de lever from a total senior net leverage of three seven times as of December 31, 2021 to approximately three times within the next 24 months, we will do this with the free cash flow.

Paul Holtz: We will do this with the free cash flow the business is expected to generate as it grows and with no shareholder distributions expected in the near future.

The business is expected to generate as it grows and with no shareholder distributions expected in the near term.

Paul Holtz: M&A, like the recent Business Mobility Partners and Simon IoT Acquisition, is targeted to be accretive.

M&A like the recent business mobility partners and so I mean, the Iot acquisition.

Is targeted to be accretive and deleveraging.

Paul Holtz: We continue to look at potential targets with an emphasis on tuck-in opportunities to expand geographically, build out capabilities and use cases in industry verticals, and enhance our technical and analytical know-how. Thank you. And with that, I'll pass it back to Romo. Thank you, Paul.

We continue to look at potential targets with an emphasis on tuck in opportunities to expand geographically build out capabilities and use cases in industry verticals and enhance our technical and analytical knowhow. Thanks.

And with that I'll pass it back to Ron.

Thank you, Paul and Thats, an impressive set of results.

R: Let me wrap up our prepared comments with a reminder on slide 13 that we have crystal clarity on our five-year strategic plan.

Let me wrap up our prepared comments with a reminder, on slide 13 that we have crystal clarity on our five year strategic plan.

R: We are executing to a three-phase transformation plan overall, and as we move forward in 2022, we feel confident in bringing phase one to an end.

We are executing to a three phased transformation plan overall and as we move forward in 2022, we feel confident in bringing phase one to an end.

R: I described successes earlier in the call related to Omnisim and the core developer portal as just a couple of examples. But we now have a tremendous technical foundation from which to launch our industry go-to-market and eSIM leadership objectives and then lead with 5G and analytics which are effectively phases two and three of our overall transformation.

I described successes earlier in the call related to omni Sim and the core developer portal as just a couple of examples but we now have a tremendous technical foundation from which to launch our industry go to market and Esim leadership objectives, and then lead with five G and analytics, which are effectively phases two.

And three of our overall transformation.

R: Phase two kicked off last year with the launch of our first two industry practices, connected health and fleet management. And we have started to see encouraging results from these two launches already in terms of attracting and serving large enterprise customers and identifying opportunities to build pre-configured solutions. As an example, we launched CHTS, our connected health telemetry solution at Mobile World Congress Americas 2021.

Phase II kicked off last year with the launch of our first two industry practices connected health and fleet management and we have started to see encouraging results from these two launches already in terms of attracting and serving large enterprise customers and identifying opportunities to build pre configured solutions as an example, we.

Launched C. H T S. Our connected health telemetry solution at mobile World Congress Americas 2021.

R: After we build out our focus industries, and even as we continue to build on our leadership position with ESIM and ISIM, we will focus on 5G leadership and leading with analytics.

After we build out our focus industries and even as we continue to build on our leadership position with ECM and I assume we will focus on five G leadership and leading with analytics.

R: As 5G matures, the promise of edge computing and AIoT, where artificial intelligence meets IoT, will come alive. And we are well positioned at core to help our customers unlock this promise.

As <unk> matures, the promise of edge computing, and AI, Iot, where artificial intelligence meets Iot will come alive, and we are well positioned at core to help our customers unlock this promise.

R: We are focused on executing our growth strategy. We have ambitious goals in place and many headwinds are coming to an end as we get the technology sunsets behind us and the supply chain opens up.

We are focused on executing our growth strategy, we have ambitious goals in place and many headwinds are coming to an end as we get the technology sunsets behind us and the supply chain opens up.

R: I am confident that we are well-positioned for future growth and value creation, and as slide 14 shows, we are starting to show what we can do. You heard our guidance already for 2022, and I know there were many questions about the impact of the timing acceleration of our largest customers' LTE transition project.

I am confident that we are well positioned for future growth and value creation and as slide 14 shows we are starting to show what we can do.

You heard our guidance already for 2022, and I know there were many questions about the impact of the timing and acceleration of our largest customers LTE transition project. Despite that approximately $15 million pull forward. We are confident we will organically meet our original forecast of $238 million.

R: Despite that approximately $15 million pull forward, we are confident we will organically meet our original forecast of $238 million.

R: and we have pulled off our first tuck-in acquisition since our public listing. In BMP Simon, we found a great strategic fit representing a double-down in connected health, specifically in life sciences, and with this new team part of core, our total guidance is 260 to 265 million in revenue.

Yeah.

And we have pulled off our first tuck in acquisition since our public listing in BMP Simon we found a great strategic fit representing a double down in connected health specifically in life Sciences and with this new team part of core our total guidance is 260 to 265 million.

R: Importantly, given we listed on October 1, and given the moving pieces of timing, acceleration, et cetera, we talked about the 2021-2022 two-year revenues.

In revenue.

Importantly, given we listed on October one and given the moving pieces of timing acceleration et cetera, We talk about the 2021 2022, two year revenue stack.

R: And it is with delight that I sum up our call today by saying again that we will beat our go public two-year forecast by over $50 million.

And it is with delight that I sum up our call today by saying again that we will beat our go public two year forecast by over $50 million.

R: I want to take a moment to thank our entire global team of IOTers, as we call them, for their hard work and commitment to CORE. And with that, we'll take your questions.

I want to take a moment to thank our entire global team of Io tiers, as we call them for their hard work and commitment to core and with that we'll take your questions.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session.

Thank you at this time, we will be conducting a question and answer session.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from your phone.

I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star team.

Speaker Change: using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please note, we ask that you limit yourselves to two questions each. If you have

Please note we ask that you limit yourselves to two questions. Each if you have further questions you may rejoin the question queue. One moment, please while we poll for questions.

Speaker Change: Our first question is from Matt Nicknam of Deutsche

Our first question is from not nickname of Deutsche Bank. Please proceed with your question.

Matt Nicknam: Hey, guys, thanks for taking the question. So I have two. I'm going to start with one on the CAS business, and then I have one on the margin outlook. So on the CAS side, obviously, I know beginning of this year, we've seen or will see some shutdowns of legacy 2G-3G networks. I'm just wondering how we should think about the revenue trajectory for connectivity in 1Q and 2Q as some of these revenues.

Hey, guys. Thanks for taking the question so I have to I'm going to start with one on the Kaz business and then I have one on the margin outlook.

So on the Cat side, obviously I know beginning of this year, we have seen or will see some shutdowns of legacy <unk> networks I'm just wondering how we should think about the revenue trajectory for.

Connectivity in <unk> and <unk> with some of these revenues begin to roll off with these shutdowns.

Matt Nicknam: begin to roll off with these shutdowns and then secondly on margins so the guide for next year calls for 24 percent margins which would be flat year on year yet obviously exiting last in 2021 we've seen margins decline to about 20 percent in 4Q so I'm just wondering you know what gives you the confidence that you know the annual outlook for next year of 24 percent is sort of achievable given the lower exit rate in 21 thanks

And then secondly on margins. So the guide for next year calls for 24% margins, which would be flat year on year, yet obviously exiting.

Last in 2021, we've seen margins declined about 20% in <unk>. So I'm. Just wondering you know what gives you the confidence that the annual outlook for next year of 24%.

Is sort of achievable given the lower exit rate in 'twenty one.

Speaker Change: Yeah, thanks, Matt. Look on the second question on margins, I'm going to let Paul take the lead on that one. But I'll just say, I mean, our confidence stems from the fact that there's a bunch of one time things, including this one time large engagement at our largest customer that is the least profitable part of our portfolio customers. So, you know, it's Yeah, it's with reasonable confidence that we say what we say. But let me let me spend some time on the cast. The first question myself. Look, so

Yeah. Thanks, Matt look on the second question on margins I'm going to let Paul take the lead on that one, but I'll just say I mean, our confidence stems from the fact that there's a bunch of onetime things, including this one time large engagement.

At our largest customer that has the least profitable part of our portfolio of customers. So you know it.

It's yeah, it's with reasonable confidence that we say, what we say but.

But let me let me spend some time on the Kaz. The first question myself look so.

Speaker Change: You know, I understand the concern about these sunsets coming up, but, you know, I would really continue to reiterate what I've been saying for a while. We have been dealing with these technology sunsets for four, five, six years.

You know I understand the concern.

About the sunsets coming up but you know I I would I would really continue to reiterate what I've been saying for a while we have been dealing with these technologies sunsets.

Speaker Change: Right? From the time I got here, one of the first NRAs, as we call them at CORE, no-regret actions that we took even before we had a strategy for what CORE 3.0 would look like.

For four five years right from the time I got here one of the first areas as we call them. Our core no regret actions that we took even before we had a strategy for what core three data would look like was to get after these transitions to get our customers moving on their migration plans, because even though there was a negative <unk> effect to us in our business. It was the right thing for them to do.

Speaker Change: was to get after these transitions, to get our customers moving on their migration plans, because even though there was a negative ARPU effect to us and our business, it was the right thing for them to do and so on. And so we have been dealing with these, we have been you know, dealing with those headwinds coming from 2G and 3G devices being shut off and 4G devices coming on in their place that significantly lower ARPUs literally for four and five years.

And so on and so we have been dealing with these we have been.

Dealing with those headwinds coming from.

<unk> and <unk> devices being shut off and <unk> devices coming on in their place at significantly lower arpus literally for four and five years. So even as the market sits back and says Oh, My gosh, what's going to happen when the sunset happen, we're celebrating because we're almost through list right. So that's sort of overall comment number one.

Speaker Change: So even as the market sits back and says, oh my gosh, what's going to happen when these sunsets happen? We're celebrating, because we're almost through this. So that's sort of overall comment number one.

Speaker Change: Overall, comment number two is, for the very first time in 2022, in the four plus years I've been with the company, in the five years Paul's been with the company.

Overall comment number two is for the very first time in 2022, and the four plus years I've been with the company in the five years, Paul has been with the company we have seen a rather different set of dynamics around let's say P times, Q, which is how our cash business runs right the price tag.

Speaker Change: We have seen a rather different set of dynamics around, let's say, P times Q, which is how our CAS business runs, right? The price times the volume.

Speaker Change: Every year we have been growing on average over 20% on volume and then we've been given up most all of that.

The volume right.

Every year, we have been growing on average over 20% on volume and then we've been given up most all of that.

Speaker Change: in price. In fact, if you look at our average ARPU, Q420 over Q421, it's almost exactly a 20% decline.

In in price in fact, if you looked at our average our pool.

Q4, 'twenty over Q4, 'twenty, one it's almost exactly a 20% decline right the average <unk> for the month.

Speaker Change: However, going into 2022, we're going to see something closer to the 10 or 12 percent range in terms of volume increases.

However, going into 2022, we're going to see something closer to the 10 or 12% range in terms of volume increases and the primary reason for that is the supply chain constraints that have hit our customers and therefore indirectly, but in a very real fashion hit us right now.

Speaker Change: And the primary reason for that is the supply chain constraints that have hit our customers and therefore indirectly but in a very real fashion hit us, right?

Speaker Change: Now what's saving us this year is what I've long been predicting in this business, which is that our poos will finally start to stabilize and maybe just maybe even start to grow as higher bandwidth plans, higher prices come out and certainly with 5G we're going to see more of that. It's just that 5G is a particularly real and mature yet for our CAS business today.

Now what saving US this year is what I've long been predicting in this business, which is that <unk> will finally start to stabilize and maybe just maybe even start to grow as higher bandwidth plans higher prices come out and certainly with <unk>. We're gonna see more of that it's just a <unk>, a particularly railroad mature yet for our for our.

Speaker Change: And so those are some of the things I would talk about in answering your, the CAS part of your question. Let me stop there for a second and before Paul hits margin, just make sure we've hit question one.

<unk> business today, and so those are some of the things I would talk about.

In answering your the cash as part of your question.

Let me stop there for a second and before Paul hits margin just to make sure. We hit question one.

Paul Holtz: Yep. No, you did. You did. And any commentary on margins would be great.

Yes, No you did you did.

Any commentary on margins would be great as well.

Paul Holtz: Yeah, sorry, so I'll take that one. So on the margin side and where we are from a timing perspective already in March.

Yeah, Yeah, yeah, so I'll take that one so on the on the margin side and where we are from a timing perspective already in March here in 2022, we're already seeing.

Paul Holtz: here in 2022, we're already seeing the increase or improvement in margins on both the connectivity and IoT solution side. So, firstly, on the IoT solution side, as Rommel mentioned, the one-time LTE transition project with our largest customer had pretty significantly lower margins that is now going to be trailing off at the end of Q1. So, we'll see a lot more of the healthier business come in for the rest of the year, and we're already seeing that.

The increase or improvement in margins on both the connectivity and Iot solution side. So firstly on the Iot solutions side as normal mentioned.

One.

One time LTE transition project with our largest customer had pretty lower significantly lower margins that is now going to be trailing off at the end of Q1. So we'll see a lot more of the healthier business come in for the rest of the year and we're already seeing that in Q1, then on the connectivity side of things same thing where we're optimizing.

Paul Holtz: Then on the connectivity side of things, same thing, we're optimizing better, we're getting better pricing from our carriers. Overage is increasing, more usage that has higher margins. So we are seeing margins already improve in Q1 and we expect that to continue throughout 2022.

Better were getting better pricing from our carriers.

Overage is increasing more and more usage that has higher margins. So we are seeing margins already improved in Q1, and we expect that to continue through 2022, So I'd say what I'm sorry.

Paul Holtz: No, go ahead Paul. No, I was going to say Q4 was basically kind of a low point just because of the volume of the LTE transition project and then just with year end and doing final cruels and everything on the connectivity side that it just ended up being a lower margin.

No go ahead, Paul I have to say that Q4 was basically kind of a low point just because of the volume of the LTE transition project and then just with year end and doing final accruals and everything on the connectivity side.

It just ended up being a lower margin quarter.

Speaker Change: Yeah, my follow-up is just going to be if your comments of improvement in 1Q were sequential or year-on-year, but it sounds like it's off of the lower 4Q base, so I appreciate it. Yeah. Off Q4.

Got it yeah. My follow up was just going to be your comments are in Canadian <unk>, where sequential or year on year, but it sounds like it's off of the lower <unk>. So yeah, let me try it again.

Q4, yes.

Thanks, a lot.

Thank you.

Speaker Change: Our next question is from Metta Marshall of Morgan Stanley . Please proceed with your question.

Our next question is from meta Marshall of Morgan Stanley . Please proceed with your question.

Meta Marshall: Great, thanks, a couple for me. Maybe first, if you could just kind of walk us through maybe the seasonality of the year and just anything we should be mindful of, whether it be supply chain or just project-based network turnoff base that we should just be mindful of as we look at the year. And then maybe the second question is just, is there any,

Great. Thanks, a couple for me maybe first if you could just kind of walk us through maybe the seasonality of the year and just anything we should be mindful of whether it be supply chain or a dress project based network turn off base that we should just be mindful of as we look at the year and then maybe.

The second question is just you know is there any.

Meta Marshall: of material revenue contribution we should be thinking of from Simon IoT or business mobility partner acquisitions throughout 22. Thanks.

Kind of material revenue contribution we should be thinking about from assignment Iot or a business mobility partner acquisitions throughout 'twenty two thanks.

Speaker Change: Thanks, but let me take a crack at those two questions and then I'll glance over at Paul and see if he wants to clean up my act any but so the first one is look the

Thanks, Matt Let me take a crack at those two questions and then I'll gloss over Paul and see if he wants to clean up My act any but so the first one is look the.

Speaker Change: The seasonality question, so we have relatively little seasonality in our business, right? I mean, relatively speaking, the first quarter, because it's a shorter quarter with fewer weeks in February and the like, you know, tends to be a little bit lighter on kind of

You know the seasonality question. So we have relatively little seasonality in our business right I mean relatively speaking the first quarter because its a shorter quarter with fewer weeks in February in the lake tends to be a little bit later on connectivity.

Speaker Change: And relatively, again, to the other quarters, the fourth quarter tends to be a little bit light on the IoT solutions business, largely because between the Thanksgiving and Christmas holidays and warehouses being closed and the like, there's less shipments coming.

And relatively again to the other quarters, the fourth quarter tends to be a little bit light in the Iot solutions business, largely because between the Thanksgiving and Christmas holidays, and warehouses are being closed and they're like theres less shipments going up.

Speaker Change: Both of those relatively minor seasonality points are sort of

Now.

Both of those relatively minor seasonality points are sort of being.

Speaker Change: overcome, if you will, by these larger movements that are happening, including the timing acceleration of our customers' largest project, right? And so that's going to have more effect here, right? So what we should be looking at for this, let me talk about what we should be looking at for this year, right? For this year...

All overcome if you will abide by these larger movements that are happening, including the timing acceleration of our customers' largest project right and so that's going to have more effect here right. So you know so.

So what we should be looking at for this let me talk about what we should be looking at for this year for this year. Obviously is as we've said clearly now the the one time pull forward of our of our.

Speaker Change: Obviously, as we've said, you know, clearly now.

Speaker Change: The one-time pull forward of our largest customers LTE transition project largely comes to an end by Q2, sorry, by the end of Q1, and there might be a smidge of revenue in Q2, but much less.

Largest customers LTE transition project largely comes to an end by Q2. So I started by the end of Q1 and there might be a smidge of revenue in Q2, but much much less equally the little bit of contribution coming out of B M. P. Simon will have a full quarter in Q2, while.

Speaker Change: The little bit of contribution coming out of BMP Simon will have a full quarter in Q2.

Speaker Change: uh... while it was obviously a partial quarter in Q1 and so

While it was obviously a partial quarter in Q1, and so you know Q1, and Q2 will look sort of similar ish and there shouldnt be any surprises. The big question. Then is the second half of the year does the supply chain start to open up do we beat our 10% to 12% estimates of volume and can we get more revenue from.

Speaker Change: You know, Q1 and Q2 will look sort of similar-ish, and there shouldn't be any surprises. The big question, then, is the second half of the year.

Speaker Change: Does the supply chain start to open up? Do we beat our 10% to 12% estimates of volume? And can we get more revenue from there as the rest of the business grows and as the one-time thing comes, the one-time noise, if you will, comes out of our system? Those are the questions we're looking at. We'd certainly like to think of, like to think that our business.

There is the rest of the business grows and as the one time thing comes come the onetime noise. If you will comes out of our system. Those are the questions. We're looking at we'd certainly like to think of you know.

Speaker Change: uh... is strong and and uh... growth in the business organically will will fill these uh... these holes from from the one-time project coming up off and that age two will be equivalent or maybe even a smidge stronger than h one but that's if there's any uncertainty in the year that's where uh... you know i would

I like to think that our business is strong and the growth in the business organically will will fill leaves these holes from from the onetime project coming off and that <unk> will be equivalent or maybe even a bit stronger than <unk>, but that's if there's any uncertainty in the year, that's where I would point.

Speaker Change: Okay, and then, I'm sorry, I've forgotten what your second question was, it was revenue from, yeah, so look, so we're obviously not disclosing, you know, specifically the revenue from Simon and BMP, but equivalently you can see it, you know, I mean, we're saying we're confidently going to beat the 238 original forecast, so you want to put a number on that, and you know, I'm not, these are not my numbers, but if your number was 240, 245, whatever that number was, you know, the rest of that 260, 265 guidance is obviously Simon BMP.

Okay and then.

I'm, sorry, I forgot what your second question was it was revenue from so yeah. So it looks so we're obviously not disclosing.

Specifically the revenue from Simon and BMP, but.

Equivalent Lee you can see it you know I mean, what we're saying we're constantly going to beat the 238 original forecast. So you want to put a number on that than I am.

These are not my numbers, but if your number was 240% to 45 whatever that number was.

Rest of that $2 62 to 65 guidance is obviously silent BMP.

Speaker Change: Great. Thank you so much. And then the only thing I, sorry, would add to Romo's comments on the seasonality part, and it's not really seasonality, but from quarter to quarter, obviously, depending on the supply constraints and things like that, or the mix of hardware shipments versus services and IoT solutions can have an effect on the revenue and, in particular, on the margins that quarter for IoT solutions. So again, depending on how the supply chain reacts for the rest of the year, you could have some lumpy quarters in solutions.

Great. Thank you so much and then the only thing I would ask everyone will comment on the seasonality part and it's not really seasonality, but from quarter to quarter, obviously, depending on the supply constraints and things like that or the mix of hardware shipments versus services and Iot solutions can have an effect on the revenue and in particular on the <unk>.

At quarter for Iot solutions, so again, depending on how the supply chain reacts for the rest of the year you could have some lumpy quarters in solutions.

Got it thank you.

Thanks, Matt Thank you.

Speaker Change: Our next question is from Lance Vitanza of Cowan. Please proceed with your question.

Our next question is from Lance Vitanza of Cowen. Please proceed with your question.

Lance: Hi guys, I think you may have just answered this question, but

Hi, guys I think you may have just.

Answered this question, but.

Lance: The first question I have is on the revenue guide and the increase in the two-year revenue stack, 11 to 12% higher than at the time of your SEC filing is when you were going public last year. Could you bridge that delta for us? I mean, it sounds like if I heard you right, that it's almost entirely just the acquisition of Simon BMP, but maybe I misheard that. And if there are other factors, I'm wondering if you could...

The first question I have is on the revenue guide and maybe increase in the two year revenue stack of 11% to 12% higher than at the time of your SEC filings. When you were going public last year and could you bridge that delta for us I mean, it sounded like if I heard you right that it's almost entirely just the <unk>.

Acquisition of Simon BNP, but maybe I misheard that and if there are other factors I'm wondering if you could just sort of discuss that in terms of connectivity versus Iot services or.

Lance: Just sort of discuss that in terms of connectivity versus IoT services or, you know, how concentrated the upside is between verticals or amongst customers and any negative impact from the supply chain that maybe you're offsetting with other growth, et cetera. If you could maybe help me think through that, that would be helpful.

Concentrated the upside is between verticals are amongst customers and any negative impact from the supply chain that maybe you're offsetting with other growth et cetera.

Speaker Change: Gotcha. And I'm rapidly going to forget all of the factors you mentioned there, lads, so I appreciate you confuzzling me here on this call. But let me let me let me let me get going. It's an interesting way to think about it. You know, I hadn't thought about it this way, about the 50 million dollar beat, hopefully more than 50 by the time we're done.

That would be helpful.

Gotcha, and I'm I'm rapidly going to forget all of the factors you mentioned there are labs. So I. Appreciate your consulting me here on this call, but let me let me let me, let me get going and it's an interesting way to think about it you know I hadn't thought about it this way about the $50 million beat hopefully more than 50 by the time, we're done on the.

Speaker Change: on on the original sort of forecast when we were coming public to the first thing is that is it's mostly bmp seven and i would say that's not

Original sort of forecast when we were coming public. So the first thing you said is it's mostly BMP Simon and I would say that's not true right.

Speaker Change: Right, so let's just, for example, look at 2021. 2021 ended up at a little over $248 million. We had set $219 million. Rapid math would say that's about $29 million of worth of beef.

So let's just for example look at 2020 , one 2021 ended up at a little over $248 million. We had said 219 rapid math would say that's about $29 million of worth of beat we said about half of that roughly 15 was from the one time timing acceleration.

Speaker Change: We said about half of that, roughly 15, was from the one-time timing acceleration. Obviously, the rest of it, because this was 21, BMP7 wasn't even done, was our business just performing better and the UPOD model that Paul and I believe in, right? And so that's sort of, you know, an example of where it is. Obviously, I can't do that math for 22, it's all ahead of us yet.

Obviously, the rest of it because this was 21 seven wasn't even done was our business is just performing better than the U pod model that Paul and I believe it right and and so that's sort of.

An example of where there's obviously I can't do that math for 'twenty. Two that's all it's all ahead of us yet.

Speaker Change: But I would just again reiterate that we believe that organically we will beat the original 238 by how much remains to be seen, and so I think that starts to bridge that gap for you. Now, the next level question you asked was...

But I would just again reiterate that we believe that organically we will beat.

The original 238 by how much remains to be seen and so I think that starts to bridge that gap for you know the next level question you asked was.

Speaker Change: you know, where is it sort of, where is the beat coming from? I will just say that in 2021, just to keep it in terms of what we've already talked about and put numbers out there on, most of the beat came from connectivity, right? Because really, while we grew in solutions, I think we would largely attribute that to the one time LTE transition engagement with our largest customer. And so I think that provides some level of insight.

You know where is that sort of where is the beat coming from I will just say that in the in 2021 just to keep it in terms of what we've already talked about and put numbers out there on most of the beat came from connectivity right because really while we grew in solutions I think we would largely attribute that to the.

The one time LTE transition engagement.

With our largest customer and so I think I think that provides.

Some level of insight and then I.

Speaker Change: I don't know if Paul wants to add anything, or... Yeah, I think just going forward from a split, like this year we were 68-32 on the connectivity versus solutions. Next year... Okay.

I don't know if Paul wants to add anything or yeah, I think just going forward from a split like this year. We were 68 32 on the connectivity versus solutions next year.

Paul Holtz: looking closer to 67, 33, and so it goes down a little bit, but because of that LTE transition project being such a big part of this year, we are growing there to make up for that amount, but connectivity, as Rommel said, is also

Looking closer to 67 33 and ever so.

It goes down a little bit, but because of that LTE transition project being such a big part of this year, we are growing there to make up for that amount but.

Connectivity is where almost all of it is also growing so hopefully that.

Speaker Change: Hopefully. Okay, thanks. And that's super helpful, guys. My second question is just, could you talk a little bit more about the Simon BNP Act?

That's Super helpful. Guys. My second question is just could you talk a little bit more about the Simon BNP acquisition.

Speaker Change: I'm wondering if you could walk us through a little bit more exactly what you acquired, the strategic rationale for doing so, and I think in the slide deck you kind of explained this, but it looks like that is indicative of the kind of deals we should expect going forward. I'm wondering if we could also perhaps see something a bit more dramatic in terms of size and or scope going forward.

I'm wondering if you could walk us through a little bit more exactly what you acquired the strategic rationale for doing so and I think in the slide deck, you kind of explain this but it looks like that that is indicative of the kind of deals. We should expect going forward I'm wondering if we could also perhaps see something a bit more.

In terms of size and scope going forward. Thanks.

Speaker Change: Thanks, Lance. I think you should say dramatic a few more times for Paul to hear, but look, let me just say a couple of things about BNP Simon. The way you should think, first of all, these are sister companies that kind of joined ownership and that sort of thing. There was a third investor slash founder that came in when they started Simon IoT, but it's really, it's one acquisition. I know it looks confusing because legally we had to put an end in between those two units. Think of it as one company.

Yes.

Thanks, Lance I think you should say dramatic a few more times for Paul to here, but.

Look let me just say a couple of things I'd be MP Simon right Joe.

The way you should think of first of all these our sister company that kind of a joint ownership and that sort of thing. There was a there was a third investors slashed foundry that came in when they when they started Simon Iot, but it's really it's one acquisition I know it looks confusing because legally we had to put a and in between those two units okay, but it's think of it as one company with now the BMP.

Speaker Change: Now, the BMP part of that company, Business Mobility Partners, does exactly what we would call IOT solutions.

Part of that company business mobility partners does exactly what we would call Iot solutions and.

Speaker Change: and Simon IoT is their connectivity business, right? So if you think about our business from a horizontal capability perspective,

And Simon Iot connectivity business right. So if you think about our business from a horizontal capability perspective.

Speaker Change: Salmon IoT goes right into our CAS, right into IoT connectivity, BMP goes right into IoT solutions.

Some Iot goes right into our cash right in right into Iot connectivity BMP goes right into Iot solutions.

So a we're buying.

Speaker Change: more of what we know how to do, we're learning from them already in some respects. They're obviously adopting some of our best practices, certainly all of our eSIM and great technologies that they did not have access to, etc. We expect some synergies out of that. But here's where it gets really quite exciting. As you know, and we have said to the market, we see enough growth in connected health and fleet.

You know.

More of what we know how to do we're learning from them already in some respects, they're obviously adopting some of our best practices certainly all of our ECM and great technologies that they did not have access to et cetera, we expect some synergies out of that but here's where it gets really quite exciting right. As you know and we have said to the to the market.

We see enough growth in connected health and fleet and we have enough investments and work to do across our you know dramatic transformation and broadening of our portfolio of services that we did not want to organically invest.

Speaker Change: And we have enough investments and work to do across our dramatic transformation and broadening of our portfolio of services.

Speaker Change: that we did not want to organically invest a bunch of dollars, OPEX dollars, EBITDA dollars into launching the three new industries that we already are targeting and maybe there'll be others over time. So we're doubling down in that sense and to connect

Invest a bunch of dollars opex dollars EBITDA dollars into launching the three new industries that we already are targeting and maybe there'll be others overtime. So we're doubling down in that sense into connected health and fleet and this particular acquisition represents a specific double down in connected health and even more specifically than that into.

Speaker Change: And this particular acquisition represents a specific double down in connected health and even more specifically than that into life sciences, right?

Speaker Change: where this explosion in decentralized clinical trials, right, remote clinical trials, not just drug trials, by the way, all kinds of clinical trials.

The life Sciences right.

Where this explosion in decentralized clinical trials right remote clinical trials, not just drug trials by the way all kinds of clinical trials.

Speaker Change: is absolutely exploding. And a very, very big part of the BMP Simons, I mean, oh, you know, overall small revenue, but a big part of that comes from the life sciences sector, specifically

Is absolutely exploding and a very very big part of the BNP Simons I mean, all you know overall small revenue, but a big part of that comes from.

The life Sciences sector specifically.

Speaker Change: To give you a sense, about 85% to 90% of their business is from Connected Health and 90% of that is from Life Sciences and so this really filled a gap, brought some capabilities there, brought some anchor customers there, brought some great talent. And so anyway, we're very excited about it and as I have said to everybody who would care to listen, I couldn't think of a better first acquisition after going public.

Yeah.

To give you a sense of about 85% to 90% of their businesses from connected health and 90% of that is from life Sciences and so this really filled a gap brought some capabilities. There brought some anchor customers theyre brought some great talent.

And so anyway, we're very excited about it and as I have said to everybody who would care to listen I Couldnt think of a better first acquisition after going public.

Speaker Change: Oh, and then the last part of your question was, should we expect more of the same?

And then the last part of your question was should we expect more of the same.

Speaker Change: You know, in keeping with what I just said about how happy we are with this acquisition.

In keeping with what I, just said about how happy we are with this acquisition. If we could find five more of these we should just do them. We should just close our eyes and just do it but.

Speaker Change: if we could find five more of these, we should just do it. We should just close our eyes and just do it. But, but that's unlikely, number one. And you are correct that that one should be bolder. And, and, and, you know, but a lot of things go into that, right? I mean, you got to find the opportunity, you got to, you got to win that opportunity.

But that's unlikely number one.

And you are correct that that one should be bolder and but a lot of things go into that right. I mean, you got to find the opportunity you've got a you've got to win that opportunity.

Speaker Change: uh... the private equity markets are so much more aggressive in terms of how they value businesses like ours then this public market is right now it's it's not even funny and so you know so we have to deal with all of these dynamics

The private equity markets are so much more aggressive in terms of how they value businesses like ours. Then there's public market is right now it's not even funny and so you know so we have to deal with all of these dynamics.

Speaker Change: But hopefully, we're going to start building our way out of all of that with this call today and get a better multiple so we can put better multiples to work out there in our M&A strategy.

But hopefully, we'll we're going to start building our way out of all of that with this call today and and and.

Get a better multiples. So we can put better multiples to work out there in our M&A strategy.

Speaker Change: Well, thanks and congratulations on a great quarter, really a great culmination of the year. Thank you.

Well, thanks, and congratulations on a great quarter and really a great combination of the year. So thank you.

Appreciate that thank you. Thank you Lance.

Speaker Change: Our next question is from Scott Searle of Roth Capital. Please proceed with your question. Hey, good afternoon. Thanks for taking the question. Nice job on the quarter, and Paul, congratulations on the official appointment.

Our next question is from Scott Searle of Roth Capital. Please proceed with your question Hey, Good afternoon. Thanks for taking the questions nice job on the quarter and Paul Congratulations on the official appointment.

Scot Ross: Hey, maybe quickly to follow up on some of the earlier questions, you know, as it relates to the legacy contribution, I know that's been winding down with 3G end of life and we had some of those milestones hit in the second quarter. I'm wondering if you could frame where we are today. I think we're getting close to a million connections probably as of year end out of, you know, 14.6 million connections. So becoming more de minimis in terms of its impact, could you just kind of frame how we exited the year, how you're thinking about that winds down over the next couple of quarters? And is part of that with the supply chain?

Hey, maybe quickly to follow up on some of the earlier questions.

As it relates to the legacy contribution I know that's been winding down with three G end of life and we had some of those milestones hit in the second quarter I'm wondering if you could frame where we are today I think we're getting close to a million connections probably as of year end out of $14 6 million connections, so becoming more de minimis in terms of its impact could you just kind of frame, how we exited the year how.

You're thinking about that winds down over the next couple of quarters and as part of that with the supply chain right you're still constrained in this environment, you're talking about 10% to 12% growth in terms of unit volume. This year I'm wondering what's the demand profile looks like right now in an unconstrained environment, what could you guys ship against what is the pipeline looking like.

Scot Ross: You're still constrained in this environment. You're talking about 10 to 12% growth in terms of unit volume this year. I'm wondering what the demand profile looks like right now. In an unconstrained environment, what could you guys ship against? What is that pipeline?

Speaker Change: Yes, so the, you know, so that's actually, yeah, remarkably accurate depiction of where we ended the year, or the beginning of this year, on the number of sims to sort of absorb through this chase.

Yes.

So that's actually a remarkably accurate depiction of where we ended the year or the beginning of this year on the on the number of Sims.

To sort of absorb through this change obviously since two years 'twenty to 'twenty two right.

Speaker Change: Obviously, since 2-22-22, that was AT&T's 3G sunset date, we're starting to wean that off.

So that was At&t's <unk> Sunset date, you know, where we're starting to win that off.

Speaker Change: uh... it hasn't been a dramatic all of them going off one time uh... you know obviously it it is one of our largest carriers i think it's a relatively well-known fact that uh... a large number of that million-dollar uh... sims that you just talked about are are there but then there are some with uh... you know sort of the old sprint uh... team on that work in verizon that after that have to come through i would just say you know uh... you know scott largely that's going as planned uh...

It hasnt been a dramatic all of them going off one time.

AT&T was one of our largest carriers I think that's a relatively well known fact that AR.

Large number of that.

That you just talked about or are there, but then there are some with.

The old Sprint T Mo network, and Verizon that have to that have to come through I would just say you know Scott largely that's going as planned.

Speaker Change: no real major surprises, you know, it really helps that.

No real major surprises.

It really helps that core as you know experienced at these transitions are one of the few companies that are actually handle this stuff before when AT&T transitioned its two gene at work a few years ago, we took our customers through that we applied a lot of learnings from that we've been helping our customers transition as I said earlier today over the last.

Speaker Change: cores, you know, experienced that these transitions are one of the few companies that have actually handled this stuff before. When AT&T transitioned its 2G network a few years ago, you know, we took our customers through that. We applied a lot of learnings from that. We've been helping our customers transition, as I said earlier today, over the last four years now. So it's been a relatively smooth process and no customers kind of pulling their hair out and that sort of thing. Right? So that's that part of it.

For years now so it's been it's been a relatively smooth process and no customers kind of pulling their hair out in that sort of thing right. So that's that's that part of it.

Speaker Change: Net of that, we're still saying 10 and 12 percent, right? If we didn't have that drag on us, you know, we'd be saying a bigger number, and certainly if the supply chain was more open, we'd be saying an even bigger number, right?

Net of that we're still saying 10, and 12% right. If we didn't have that drag on us we'd be saying a bigger number and certainly of the supply chain was more open would be saying, an even bigger number right now I can't really put a number out there.

Speaker Change: I can't really put a number out there of what that looks like because remember our, you know, the majority of our...

What that looks like because remember our.

The majority of our impacts are sort of indirect right because it's the customer who can't get their device. They can deploy it and therefore you know.

Speaker Change: impact are sort of indirect, right? Because it's the customer who can't get their device, they can't deploy it, and therefore, you know, we aren't getting the orders or we aren't getting the shipments and that sort of stuff.

We are getting the orders are we aren't getting the shipments and that sort of stuff, what we can control largely.

Speaker Change: What we can control largely, we have controlled relatively well. And again, I'm not in the prediction game of.

We have controlled relatively well and again I'm not in the prediction game of.

Speaker Change: of uh... of when supply chains open up and the like uh...

Of when supply chains open up and the like.

Speaker Change: In fact, you guys are in some ways as familiar about this because you're covering public companies and the device manufacturing space that are telling you about what they expect there, them to open up.

In fact, you guys are in some ways is familiar about this because youre covering public companies in the device manufacturing space that are telling you about you know what.

Expect them to open up but.

Speaker Change: So, you know, we're thinking things look better towards the end of this year, and certainly we're hoping that 2023 and 2024 is open and maybe even has some pent-up demand to get caught up on. So, that's kind of where we are. Okay. Very helpful. Thanks. Oh, sorry. Go ahead, Paul. Yeah. Scott, I was just going to add to kind of your numbers there. So, you're correct around a million.

We're we're thinking things look better towards the end of this year and and certainly we're hoping that 2023 and 2024 is open and maybe even have some pent up demand to get caught up on so that's kind of where we are okay. Very very helpful. Thanks, Oh, sorry go ahead, Paul Yes, Scott I was just going to add to your kind of your numbers there. So.

Speaker Change: 2G, 3G at the end of 2021, then at the end of Q1 with the AT&T shutdown at the end of February and then spring.

You are correct around a million two D through G by the at the end of 2021.

Then at the end of Q1 with the AT&T shut down at the end of February and then sprint shutting off there.

Speaker Change: shutting off their CDMA at the end of Q1. A rough estimate or so, you can say half of those, a million, then are gone. So we're left with another 500,000 that will trail off or convert for the rest of 2020.

CDMA at the end of Q1.

A rough estimate or so you can say half of those 1 million that are gone. So we're left with another 500000 that will trail off or convert for the rest of 2022.

Speaker Change: Very good. Very helpful. And lastly, if I could, could you frame some of the end market demand in terms of verticals that you're seeing. Obviously, you're strong in connected health and have a strong presence there, but how the demand is shaping up there and then also in the fleet market, particularly in an environment where you start to see

Very good very helpful and lastly, if I could Rama could you frame some of the end market demand in terms of the verticals that you're seeing obviously, you're youre strong in connected health and have a strong presence there, but you know how the demand is shaping up there and then also in the fleet market.

Particularly in an environment, where you start to see.

Speaker Change: cost constraints as it relates to gas and thinking about fuel optimization, et cetera. Is that market starting to accelerate now? And let's try to throw one in at the end there as well, the developer portal that you're talking about. I wonder if you could kind of give us a better idea about, you know, how many applications and otherwise how developed that is, how big that is, how important that is as we start to go forward.

Cost constraints as it relates to gas and thinking about fuel optimization et cetera is that market is starting to accelerate now unless if I could throw one in at the end there as well the developer portal that you're talking about I Wonder if you could kind of give us a better idea about how.

How many applications in other words, how developed that is how big that is how important that is as we start to go for it. Thanks so much.

Speaker Change: So, yeah, look, I'll talk about demand signals. I mean, certainly, you know, the impacts now of gas pricing and so forth are going to hit, and we should see an increase in fuel optimization. I know we've received some requests in that neighborhood, but let me try.

Yeah. So yeah look I'll talk about demand signals I mean, certainly.

The impact now of gas pricing and so forth are going to hit and we should see an increase in fuel optimization I know we've received some requests in that neighborhood, but let me try and keep that conversation to 2021 the year, we're talking about the quarter, we're talking about.

Speaker Change: the conversation to 2021, the year we're talking about, the quarter we're talking about.

Speaker Change: You know, as opposed to getting all the way caught up on Q1 data, I would point to relatively healthy demand. Again, you know, from a CAS, more horizontal service business, which goes across industries more naturally, we're very pleased with the progress we made in our sales and marketing effort in 2021. And then, of course, in connected health and fleet, again, those two industries we've built out, we feel really good about it.

You know as opposed to getting all the way caught up on Q1 data.

I would point to relatively healthy demand again from a cash more horizontal service business, which goes across industries more naturally.

We're very pleased with the progress we made in our sales and marketing effort in 2021.

And then of course in connected health and fleet again, those two industries, we've built out we feel really good about.

Speaker Change: at least the conversations that are beginning around doing more for our larger connectivity only customers and kind of that cross-sell conversation beginning, and certainly some cross-sell wins and so forth as well. Let me put some metrics to the...

At least the conversations that are beginning around doing more for our larger connectivity only customers and kind of that cross sell conversation beginning and certainly some cross sell wins and so forth as well, let me put some metrics to the.

Speaker Change: to the total picture to just give us a feel for it, right? But our total created opportunities, right? This is when a lead, if you will, is qualified and accepted and becomes an opportunity in our Salesforce CRM system. Those created opportunities up about 26% 2021 over 2020.

The total picture to just give us a feel for it but our total created opportunities right. This is when.

Our lead if you will is qualified and accepted and it becomes an opportunity in our sales force CRM system those created opportunities up about 26% in 2021 over 'twenty 'twenty.

Speaker Change: I could give you an actual number, it wouldn't be less meaningful, but I think in the sense of momentum, 26% increase gives you that in inbound demand.

I could give you an actual number would be less meaningful but I think in the sense of momentum you know, 26% increase gives you that an inbound demand is up 43% and this was largely before we went public. Although you could argue we announced the intent et cetera in 'twenty, one, but you know I think as visibility increases from going public we should see more of that in.

Speaker Change: is up 43 percent. And this was largely before we went public, although you could argue we announced the intent, et cetera, in 21. But, you know, I think as visibility increases from going public, we should see more of that inbound demand. And then finally, I'll point to our one opportunities in 2021, where just in terms of deal count.

Bound demand and then finally I'll point to a one opportunities in 2021, where just in terms of deal count we were up almost 30% about 29% 2021 over 'twenty 'twenty so the.

Speaker Change: We were up almost 30%, about 29% 2021 over 2020. So...

Speaker Change: You know, the demand there, our wind rates are staying steady, well, demand's there. Demand's getting better, actually, and our funnel's getting bigger, our wind rates are staying steady, you know, always improvement to be had, you know, five years from now I'll be sitting here talking to you about improvements to be had on all this, but good progress.

The demand is there.

Our win rates are staying steady wealth to match their demand is getting better actually in our funnel is getting bigger our win rates are staying steady.

Yeah always improvement to be had you know five years from now I'll be sitting here talking to you about improvements to be had on all of this but but good progress and if these customers can be successful with their Iot solutions deployments can can get their devices through their supply chains.

Speaker Change: And if these customers can be successful with their IoT solutions deployments, can get their devices through their supply chains, you know, we should see this revenue coming out and helping us beat what the street thinks we can do in 23 and 24 as well. Okay, great. Thanks so much.

We should see this revenue coming out and helping us beat what.

What the street thinks we can do in 'twenty three 'twenty four as well.

Hey, great. Thanks, so much nice job thank.

Thank you.

Speaker Change: Our next question is from Mike Lattimore of Northland Capital Markets.

Our next question is from Mike Latimore of Northland Capital markets. Please proceed with your question.

Mike Vatimir: Great, thanks, yeah. Congratulations on the year here.

Great. Thanks, Yeah, congratulations on the end of the year here.

Mike Vatimir: terms of the solutions gross margin how should we think about that kind of

In terms of the solutions gross margin how.

How should we think about that Kevin.

Trending this year.

Speaker Change: Yeah, so I'll take that one, Paul. So as we mentioned earlier that at the end of the year, we probably hit a low point there. And mainly in 2021, the large

Yes, so I'll take that one Paul so as we mentioned earlier that at the end of the year.

We probably hit a low point, there and mainly in 2021.

Speaker Change: Project with our largest customer that has lower gross margins kind of drag that down So as we go into Q1, which we've already seen and for the rest of the year we should see improvement on that as

The large project with our largest customer that has lower gross margins kind of drag that down. So as we go into Q1, which we've already seen and for the rest of the year, we should see improvement on that as that large customer gets back to business as usual back to their regular margins and then we see.

Speaker Change: that large customer gets back to business as usual, back to their regular margins, and then we see more solutions-based revenue, which comes at a higher margin going forward. But again, we mentioned that quarters could be choppy, depending on how much hardware is actually delivered or shipped in that particular quarter, but we do, and we are already seeing margin improvements.

A more solutions based revenue, which comes at a higher margin going forward, but again, we mentioned that quarters can be choppy, depending on how much hardware. It is actually delivered ore shipped in that particular quarter, but we do and we are already seeing margin improvements in Q1.

Speaker Change: And then just on the transition to LTE and also you've called out sort of legacy acquisition churn in the past, I mean are we basically through both of those elements exiting us here? Is that the way to think?

Great and then just on the.

Transition to LTE and also that you called out sort of legacy acquisition churn in the past.

I mean are you basically through both of those elements exiting this year, that's the way to think about it.

Speaker Change: Yes, absolutely. So by the end of this year 100% those will both be done and going forward that cohort will be zero. Great. All right. Thank you.

Yes, absolutely so by the end of this year, 100% those will both be done.

Going forward that core will be zero.

Okay alright, thank you.

Thank you awesome. Thanks, Mike.

Our next question is from Walter.

Speaker Change: check of light shed. I love the dramatic pause before the botch job. I want to go back to the I think was the first question or maybe was in your comments where you were talking about

Check of light shed.

Yeah.

Yes.

A lot of the dramatic pause before the bus job.

[laughter].

I want to go back to I think it was the first question or maybe it was in your comments, where you were talking about.

Speaker Change: 20% volume increases and then kind of matching the 20% declines. And then this year, because of the supply chain, obviously the volumes were decreasing. Was the lack of 20% price declines a function of the lack of supply, meaning that you were basically going back to the customers and leaning on them?

20% volume increases and then you know kind of matching the 20% declines in them this year.

Because of the supply chain, obviously volumes were decreasing was it was there was the lack of 20% price declines a function of the lack of supply meaning that that you are basically going back to the customers and leaning on them.

Speaker Change: saying like, look, supply is tight, pay a little bit more, or was it just kind of a fortuitous coincidence that as the supply chain was limiting your volume growth at the same time, you weren't seeing as much price pressure?

Like look supply is tight pay them a little bit more or was it just kind of a fortuitous coincidence that as the supply chain was eliminate your volume growth at the same time, you werent seeing as much price pressure.

Speaker Change: Yeah, so it's certainly less of the former, right? Because

Yes, so its certainly less of the former right because.

Speaker Change: Any price dynamics, I'll say on the hardware type side, would be

Any price dynamics I'll say on the hardware type side would would kind of go into solutions anyway, not really into the connectivity our pool right Walt.

Speaker Change: would kinda go into solutions anyway, not really into the connectivity, Arpu, right, Walt?

Speaker Change: But I think the, but to your point, I mean, I'll take the fortuitous, right? I mean, every now and then, you know, you need a break, but, but, but, but I'd say more than just fortuitous, it's been.

But I think the but to your point, David I'll take the fortuitous right. I mean every now and then you know you need a break.

But I'd say more than just fortuitous it's been.

Speaker Change: It's it's been something we've been calling for now for several years, right, which is this notion that

It's it's been something we've been calling for now for several years right, which is this notion that once you're in the LTE. The long term evolution for <unk> to $5 <unk> sure you'll see some reduction on the per megabyte price of connectivity itself on the raw connectivity, we get but.

Speaker Change: Once you're in LTE, the long term evolution, 4G to 5G to 6G, sure you'll see some reduction on the per megabyte price

Speaker Change: of connectivity itself and the raw connectivity we get.

Speaker Change: But largely we should start to see that getting made up by the fact that people are using more bandwidth. And so the total price, you know, the total revenue per unit per month kind of thing really

Largely we should start to see that getting made up by the fact that people are using more bandwidth and so the total price. The total revenue per unit per month kind of thing really should.

Speaker Change: start to stabilize. And I think in 2022, we're starting to see that now. I want to stress, I'm saying I think

Hard to stabilize and I think in 2022, we're starting to see that now.

Speaker Change: It's early, and I'm not ready to trump it from the roof yet that ARPUs are going to go up now in 23 and 24, but I for one wouldn't be surprised if we start to see ARPU actually helping us in our revenue growth going forward.

I want to stress I am saying I think it's early and I'm not ready to you know trumpet from from the roof. Yet that you know our puds are going to go up now in 'twenty three 'twenty four but.

I for one wouldnt be surprised if we start to see ARPA actually helping us in our revenue growth going forward.

Speaker Change: But I suppose that if it's the latter, and it's, you know, again, maybe not a fortuitous coincidence, but a function of where we are in kind of the curve, then as the supply chain frees up, which it ultimately will, that it's going to have the double benefit of accelerated unit growth as well as lower, at a minimum, lower ARPU pressure if not stabilization or growth. Is that a fair way of looking at it?

But I suppose that if it's the latter and its you know again, maybe not a fortuitous coincidence, but a function of where we are.

And kind of the curve then.

As the supply chain frees up which it ultimately will.

That if you're going to have a double benefit of accelerated unit growth as well as lower at a minimum lower ARPA pressure, if not stabilization or growth is that a fair way of looking at it.

Speaker Change: You just earned your paycheck, just to use that term that was just used, but... No, look, I think that's absolutely the right way to think about it. Well, that's why we've been saying that the 14% type pager we put out there for IoT connectivity...

Youre just starting to a pay check just to just to use that term that was used but.

Look I mean, I think that's another way to pay check.

Yeah.

That's absolutely the right way to think about it that's why we've been saying that the 14% type CAGR, we put out there for Iot connectivity.

Speaker Change: was if anything a little bit conservative because we feel like we can grow volumes higher than that and we feel like

What is if anything a little bit conservative because we feel like we can grow volumes higher than that and we feel like connectivity. It doesn't have to be this sort of negative 6% drag which is how we model that again back to the you party of under promise over deliver so yes. So look I mean, I I think with a little bit of luck. Tony you know, what we're gonna start to show better than what.

Speaker Change: connectivity doesn't have to be this sort of negative six percent drag which is how we model that again back to the you party on the promise of a delivered sense so yes i look i i i i i i i i

Speaker Change: With a little bit of luck, we're going to start to show better than what we put out there in the GoPublic documentation.

You know, what we put out there in the public documentation.

My second question is.

Speaker Change: I guess it'll be my third, but my second topic is eSIMs. I believe that in the release, you mentioned shipping a million eSIMs in 2021. Where are we, A, in terms of the industry and kind of that evolution? Do we need, and I realize that, you know, an iPhone is not necessarily.

Yes, it will be by a third but my second topic is E. Samsung I believe that in the release you mentioned shipping.

He sends in 2021.

Where are we.

Hey in terms of the industry and kind of that evolution do we need and I realize that you know.

On iPhone is not necessarily.

Speaker Change: you know, the products that you're shipping to customers, but certainly in terms of developing the ecosystem, that could be a big turning point for Ethan. So A, where are we in the industry? And then B, where are you in being ready for that transition with your customers and benefiting from that?

The products that you're shipping to customers, but certainly in terms of developing the ecosystem.

That could be a big turning point for E. Sims, So a where are we in the industry and that would be where are you and being ready for that transition with your customers and benefiting from that.

Speaker Change: Yes, on the one hand, you know, we feel really good about eSIM. We launched OmniSim Reach, which literally connects you in 190 countries with over 600 carriers.

Yeah. So on the one hand, we.

Feel really good about esim.

We launched omni some reach which literally connect you in the 190 countries with over 600 carriers.

Speaker Change: And then OmniSim Rush, which is our high-bandwidth offer formally in October at Mobile World Congress Americas. And so we continue to feel...

And then obviously, some rush, which is our high bandwidth offer.

Formerly in October at Mobile World Congress Americas.

Speaker Change: good about our leadership stance in e-SIM and driving it, right?

And so we continue to feel good about our leadership stance in ECM and driving it right.

Speaker Change: The market continues to be a little bit sluggish in its adoption, not healthy.

The market continues to be a little bit sluggish in its adoption not helped by all of their supply chain and other distractions that otherwise we might have used this time to you know to be moving our customers more aggressively towards ECM and that just hasn't happened and that's reflected also frankly in.

Speaker Change: by all of this supply chain and other distractions that otherwise we might have used this time to be moving our customers more aggressively towards eSIM, and that just hasn't happened. And that's reflected also, frankly, in the fact that we didn't grow our eSIM shipments.

Speaker Change: that much, 21 over 20, as we would have liked. And then the last thing I'll just point to is that the facts are.

The fact that we didn't grow our ECM shipments that much 'twenty one over 'twenty as we would've liked and then the last thing I'll just point to is that the facts. The facts are that it's sort of OK that our larger customers are still warming up if you will with each of them are still doing proof of concepts in test.

Speaker Change: that, you know, it's sort of okay that our larger customers are still warming up, if you will, with eSIM, are still doing proof of concepts and tests and that kind of thing with eSIM because, frankly, our more recent eSIM deployments or configurations

So that kind of thing with Esim, because frankly, our more recent ECM deployments or configurations, I mean, that's kind of up in the supply chain now Ive got wait times right I mean, the stuff I could get a head off because I could order a bunch of <unk> and be ahead, often be prepared we did but the newer stuff that we're ordering now has some wait times associated with it and so.

Speaker Change: I mean, that's caught up in the supply chain. Now, I've got wait times, right? I mean, the stuff I could get ahead of, because I could order a bunch of USIMs and be ahead of and be prepared, we did. But the newer stuff that we're ordering now has some wait times associated with it. And so, again, it's one of these things where...

Again, it's you know it's one of these things, where we know he's Sims coming we it just makes too much industrial logic and sense to for a customer to not deploy on ECM.

Speaker Change: We know E-SIM's coming. It just makes too much industrial logic and sense for a customer to not deploy on E-SIM. It's delayed, and COVID and supply chain has.

It's delayed and Covid and supply chain hasn't helped.

Speaker Change: So do you think 2022 can be the inflection point? And if so, like what, what other specific, what would the seminal moment look like in terms of the inflection point where ESEM is like just takes off?

So do you think 2022 can be the inflection point and if so like what what are the specific what would the seminal moment look like in terms of the inflection point, where ethane is like just takes off.

Speaker Change: Yeah, look, I don't know that there's a, you know, one seminal external moment.

Yeah look I I don't know that there is a.

You know one seminal external moment.

Speaker Change: uh... you know we think in terms of uh... fifty percent of our total sim shipments being a sims is kind of a seminal moment and i don't think that's twenty twenty two because of all these supply chain type issues and so on and uh... anyway to look at it and i i think we're over time and i i know we've got at least one analyst that haven't had a chance to have no problem thanks ronald i'll look up to uh... yeah i look forward to catching up with you on our one-to-one debrief yep ok

We think in terms of a 50% of our total some shipments being E. Sims as kind of a seminal moment and I actually don't think that's 2022 because of all these supply chain type issues and so on in.

Anyway, So look I mean, I think we're over time and I know, we've got at least one analyst that hasnt had a chance to idle products. Thanks, Robert So I'll look up a yellow photo catching up with you on a one to one debrief yet okay.

Speaker Change: Hillary, are we going to do the last person who was in queue? Yes. Yes. Our next question is from Aman Gulani of B. Riley Securities.

Henry we're going to do the last person who was the Q. Yes. Our next question is from Ana <unk> of B Riley Securities. Please proceed with your question.

Speaker Change: Hey gentlemen, thanks for taking my question here. I'll be quick. Can you talk about integration timeline for your acquisition of business mobility partners and Simon IOT? What does that sort of look like? You expect that to largely be complete over the next two or three quarters?

Hey, gentlemen, thanks for taking my question here I'll be quick.

Can you just talk about integration timeline for your acquisition of business mobility partners and Simon Iot, what does that sort of looks like you expect that to largely be complete.

Over the next two or three quarters.

Speaker Change: Yeah, no, thanks. Look, you know, we, you know, we take slightly different approaches to.

Yes, no. Thanks, John look.

We are we you know.

We take slightly different approaches to integrations depending on the.

Speaker Change: integrations depending on you know the kind of business and and and and and a number of factors you know cultural fit and and and that kind of thing uh... in this instance we're actually relatively comfortable because they're pretty much you know along the lines of what we do uh... and have you know we're going with an aggressive integration plan uh... that said we will hold the BMP entity

The kind of business in a number of factors you know cultural fit and that kind of thing.

In this instance, we're actually relatively comfortable because they're pretty much along the lines of what we do.

And have you know.

We're going with an aggressive integration plan.

That said, we will hold the BMP entity.

Speaker Change: separate, sort of, you know, at least I think through the end of this year, for a myriad of reasons, from customer and supplier relationships and all these kinds of things, it's just the sensible and right thing to do. But the leader of BMP, Jared, for example, sits already on my executive leadership team. He's on...

Separate sort of at least I think through the end of this year for a myriad of reasons from customer and supplier relationships and all these kinds of things. It's just that the sensible and right thing to do but the leader of BMP. Jared for example sits already on my executive leadership team. He's on two calls a week with me, which is at least one more than he really wants to.

Speaker Change: two calls a week with me, which is at least one more than he really wants to be on. And, uh, you know, we're integrating away fast. Now, you know, it'll take Paul and the finance team, uh, you know, a couple of three quarters, you know, to get to get to the point of integration from a financials type perspective. But

Beyond them.

We're integrating away fast now.

It'll take Pall and the finance team.

Three quarters to get to get to the point of integration from our financials type perspective, but this just feels sort of like integral and was very comfortable great cultural fit great people and they do what we do and so it makes for a great conversation.

Speaker Change: This just feels sort of like Integran was, very comfortable, great cultural fit, great people, and they do what we do, and so it makes for a great conversation.

Speaker Change: This is one more for me, so I mean, it looks like you're doubling down on.

Got it and just one more for me so I mean, it looks like you're doubling down on connected health. So how should we think about the cadence of connected health revenue as a percentage of total revenue as we progress through 2022.

Speaker Change: health. So how should we think about the cadence of, you know, connected health revenue as a percentage of total revenue as we progress through 2022?

Speaker Change: Yeah, so look, so I mean, obviously, it got close to 40% in 2021, given that that one time engagement.

Yeah. So look so I mean, obviously it got close to 40% in 2021 given.

That one time engage bond.

Speaker Change: you know, that engagement petering off here, certainly in Q2, will will will have a, you know, reducing effect to it. But on the other hand, you know, we expect we expect, you know, other parts of our business to grow, right. But I mean, I do not expect it to be 40% of our revenue in 2022. I also don't expect it to go back to being a third of our business like it was in 2020. You know, somewhere, you know, split the difference in there. And I think you're in the ballpark.

That engagement petering off here certainly in Q2 will will will have a reducing effect to it.

But on the other hand, we expect we expect other parts of our business to grow right, but I mean, I do not expect it to be 40% of our revenue in 2022 I also don't expect it to go back to being a third of our business like it was in 2020 somewhere you split the difference in there and I think you're in the ballpark.

Speaker Change: got it thank you gentlemen and congratulations on a strong year thanks so much I'm unappreciated

Got it thank you gentlemen, and congratulations on a strong year.

Thanks, So much I appreciate it I appreciate the interest.

Speaker Change: We have reached the end of the question and answer session. I will now turn the call back over to Rommel Bail for closing remarks.

We have reached the end of the question and answer session I will now turn the call back over to Ronald <unk> for closing remarks.

Ronald Bae: Hey, thank you, Hillary, and I appreciate everyone taking the time to listen in to our earnings call. We hope we hope you're all staying safe, enjoying the beginning of spring. We look forward to speaking with you really just in a few weeks, I guess, when we report Q1 results. Have a great evening and take care. Thank you.

Hey, Thank you Hillary and I appreciate everyone, taking the time to listen into our earnings call. We hope we hope you're all staying safe enjoying the beginning of spring. We look forward to speaking with you are really just in a few weeks I guess when we report Q1 results have a great evening and.

Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

Take care. Thank you.

Sure.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.

Speaker Change: I.

Okay.

Okay.

Yeah.

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Okay.

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