Q3 2022 ID Systems Inc Earnings Call
Good morning, welcome to power fleets third quarter 2022 conference call joined.
Joining us for today's presentation is the company's CEO , Steve toe and principal financial Officer Joaquin Fong following their remarks, we will open the call for questions.
Before we begin the call I would like to provide sleep powerfully the safe Harbor statement that includes questions regarding forward looking statements made during this call during the call. There will be forward looking statements made regarding future events, including power fleets future financial performance all statements.
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Offerings and other industry trends are considered forward looking statements.
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All such forward looking statements imply the presence of risks and uncertainties contingencies, many of which are beyond the company's control. The company's actual results performance or achievements may differ materially from those projected or assumed in any forward looking statements factors that could cause actual results.
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Amongst others SEC filings overall, economic and business conditions demand for the company's products and services competitive factors emergence of new technologies and the company's cash cash position. The company does not intend to undertake any duty to update any forward looking statements to be.
Reflect future events or circumstances.
Finally, I would like to remind everyone that this call will be made available for replay and the Investor Relations section of the company's website at Www Dot power fleet Dot Com now I would like to turn the call over to power Fleet C. E O. Mr. Steve tell Sir Please proceed.
Thank you operator, and good morning, everyone. Thank you for joining pathway third quarter conference call.
As you can see from our earnings release, the transformation of our business is being successfully executed as we delivered another quarter of very encouraging and healthy financial performance across the board.
We grew revenue, 17% year over year gross profit by 20% and generated strong adjusted EBITDA profitability.
In fact, Q3 marked the fourth consecutive quarter of year over year revenue growth for our company.
In addition to our topline growth.
Rationalization initiatives are enhancing our organization efficiency and profitability producing a 23% sequential improvement in loss from operations.
Putting a 68% positive shifts from Q1 Q3 in 2022.
I ahead of schedule success and unwavering determination for improvement in this area has positioned us well to cross over to profitability on an operating basis in the first half of next year and he's also supporting accelerated reinvestments in both go to market expertise and software development.
We have constantly communicated our goal of profitable growth.
<unk> is an improvement in product gross margin by 78% since Q1, despite very challenging ongoing supply chain conditions is a prime example of the scale and granted the updated organization to remove tough barriers in front of us and deliver outperformance against our competition and in turn exceeding market expectations.
As you can hear I'm extremely proud of the strides our team has made towards positioning pathway for predictable and profitable revenue growth in 2023 and beyond.
We've promised in January and throughout the subsequent Investor day presentation, a powerfully re imagined improved consistency.
Quality from our operations.
Dziedzic execution of our plans aiming to improve internal and external confidence frankly credibility surrounding our future plans and expectations for the business.
We are delivering at pharmacies and building very solid foundations for high velocity profitable growth on a global stage.
Before I go further I will now turn the call over to our principal Finance officer Joaquin phone to provide details on our financial results for Q3.
Afterwards, I will review, our operational highlights and outlook walking.
Thanks, Steve and good morning to everyone on the call turning to our financial results for the third quarter ended September 30 of 2022.
Total revenue was $34 3 million, which is up 17% compared to the same year ago period.
As Steve mentioned, we're encouraged by the progress we're making in shifting our revenue mix towards SaaS and high quality recurring revenue.
It is worth noting that in late September we were unable to ship approximately $430000.
Because we temporarily closed our Tampa facility during hurricane Dorian.
Our facility was not damaged from the hurricane It was back online and fully operational in early October .
High margin recurring service revenue was $20 3 million.
Or 59% of total revenue.
This was an improvement compared to $19 8 million or 57% of total revenue in the second quarter of 2022.
Product revenue, which drives future services revenue was $14 million or 41% of total revenue.
This compares to 10 8 million or 37% of total revenue in Q3 2021.
Gross profit was $17 2 million or 50% of total revenue compared to $14 3 million or 49% of total revenue in the same year ago period.
Service gross profit was $13 million or 64% of total service revenue, an improvement compared to $11.7 million or 63% of total service revenue in Q3 last year.
Product gross profit was $4 2 million or 30% of total product revenue compared to $2 6 million.
Or 24% of total product revenue in the same year ago period.
The sequential improvement in product gross margin in Q3, 2022 reflects our successful reengineering efforts and management of PPV challenges.
We continue to work against the backdrop of macroeconomic headwinds affecting our ability to procure electronic components at an attractive price.
In order to deliver on our customer commitments were actively managing these constraints in short order.
Going forward into Q4, and 2023, we expect to realize sequential margin improvements through our product and reengineering initiatives.
Looking at our expenses.
Total operating expenses were $18 4 million.
<unk> to $17 8 million in the prior quarter and $17 million in Q3 last year.
Despite marginal increases in our operating expenses in Q3 due to FX charges and other onetime nonrecurring costs, we remain confident in our ability to reduce our annual operating expenses by approximately $5 million over the next 12 month period.
Looking at our profitability metrics loss from operation improved by 370000, or 23% to $1 2 million compared to a loss of $1.6 million in the second quarter of 2022.
It is worth noting that a significant portion of our loss in the quarter was once again related to PPV and foreign currency impact.
Looking at the progress we've made in trunk reading, our cash usage and rationalizing costs, which.
Still expect crossover into profitability on an operating basis in the first half of 2023.
GAAP net loss attributable to common stockholders totaled $3 5 million or 10 cents per basic and diluted share.
This compares to GAAP net loss attributable to common stockholders of $4 5 million or 13 cents per basic and diluted share in Q3 of last year.
non-GAAP net income a non-GAAP metric totaled $1 5 million or four cents per basic and four cents per diluted share.
Compared to non-GAAP net loss was 364000.
Or one cents per basic and one cent per diluted share in the same year ago period.
Adjusted EBITDA gain our non-GAAP metrics improved by 1.8 million to $2 8 million compared to adjusted EBITDA of $1 million in the same year ago period.
At quarter end, we had $17 million in cash and cash equivalents and $36 7 million of working capital.
That concludes my prepared remarks, Steve.
Thanks Joaquin following my appointment at the beginning of the year, we evolve the business strategy to position <unk> as a global leader of Iot SaaS solutions to optimize the performance of mobile assets and resources to unified business operations.
Growing this movie it was imperative that we aligned our branding with our new position emission. So during the third quarter, we unveiled a new brand identity centered around being the people power Iot company.
Born from the knowledgeable passionate empathetic and customer centric qualities and values of our global team.
As part of our brand evolution to point to operating Division and an innovation center in Israel assumes an increased importance as the technology incubation hub and proving ground for advanced Iot solutions, we'll be announcing later this week, a very exciting new partnership with a leading edge innovation technology partner in the past.
The safety space.
In terms of our key operating regions, we continued to deliver impressive and exciting double digit growth in the U S.
During the third quarter, we generated 33% year over year growth in our U S business, bringing our total growth in the region for the first nine months of 2022% to 18%.
More broadly the high growth. We've delivered this year is being driven by building demand from our industrial and logistics customers in the region, including Toyota Nissan, John Deer, Georgia Pacific and Walmart.
These enterprises are looking to have fleet solutions to drive improved safety and productivity across their business operations as.
As the industry changes in response to the continued challenges at technology plays a vital role in modernizing our customer software in support of their digital transformations.
We look forward to accelerating the innovation of our software and data solutions and ongoing success in the U S. Not only validates our go to market strategy that reflects the untapped potential in the area.
We're driving consistency and hadn't seen the profitability of our U S business and believe the region will be the key leading growth back to capacity in the years ahead.
'twenty two 'twenty three pipeline is looking strong and helped by the launch of our fleet and connected solutions in the region.
We're excited by the early works of the new go to market team. We've built for this market segment.
Israel also performed well in the quarter. Despite the 900000 foreign currency revenue hit we recorded due to the strong U S dollar.
On a constant currency basis revenue was up 22% compared to Q3 of last year. However.
However, given the continued strength of the U S. Dollar, we expect to be hit by approximately $1.1 million related to foreign currency translation in Q4.
Operationally at Israeli business is executing the plan and bringing to market some exciting solutions to the Iot arena.
In Mexico the region delivered another strong quarter also highlighted by a major win we secured with FEMSA and Mexican multinational beverage and retail company.
FEMSA is the second largest company in Mexico, and a good proof point tobacco to market and technology strategy as we were able to displace an established global competitor with the wind.
FEMSA are excited to develop a strategic relationship to see have pathway can provide further data insights and integrations across their business operations in other international markets, we're making steady progress introducing our Iot solutions in Dubai and the Arab governments.
Both of which are in markets that have expressed deep interest in that technology.
We're continuing to move upstream within the Iot ecosystem and cementing our position as a global mission critical technology solutions company.
Our fleet makes it real and tangible difference to the organizations, we serve being helping save lives, creating more operating time and increasing profitability through the business change management, we help to deliver.
Part of re imagining pass each brand is our new Iot platform called Powerplay Unity, which we will release on time later this month.
Hopefully unity brings people assets and data together on a single intelligent platform to transform business operations.
Lastly, unity cognitive data engine applies AI and ml to provide traditional operational benefits as well as new data applications to solve some of the industry's most intractable challenges such as safety and risk management advanced fuel management sustainability, the move to electric vehicles optimized fleet performed.
<unk> Creek compliance and maintenance.
And although the platform is just about to be released we're already receiving very positive feedback and interest from our beta customers and prospective customers.
We also remain on schedule to release, New AI and data science led value added modules throughout 2023.
With the first module for safety and security to be released at the end of Q1 2023.
We have high confidence the enriched solutions will be game changing in the industry.
None of our success today and in the future could be achieved with a dedicated and talented global team.
Our new tagline people powered Iot reflects the importance we place on our world class team that is committed to our customer success as well as advancing cutting edge technologies and solutions that perform as promised.
Aligned with our commitment to people powered Iot, we continuously building upon our existing tenured and talented team to drive towards sustained growth and profitability.
Along that line, we recently made several additions to our leadership team, including the appointments of Alpha Lehmann, our CFO just beds as SVP of enterprise sales and dry a heightened as SVP of marketing and Ron J Kumar as VP of data and artificial intelligence engineering.
Each of these leaders brings impressive track records of executing large scale initiatives for leading global SaaS technology companies.
I'm really confident their experiences will help to increase capacity to roll with customers and the broader Iot ecosystem.
To be sure we aim off the portion of the savings from our cost rationalization efforts to build out our senior team include.
Including the additions of Alpha, Josh Andrea and Ron J.
Even with these additions we continue to expect to realize $5 million cost savings annually.
Looking ahead, we entered the fourth quarter with solid operating momentum we.
We expect to complete the final stages of our rationalization efforts in Q4.
The control actions are focused on shedding low margin business and customers and placing even greater emphasis on our highest margin solutions customers and segments.
Talking in 2023, these actions will help to drive higher margin revenue profitability and greater business value over the long run.
In parallel a proactive go to market motions in south pipeline will continue to fuel growth with a new and existing territories.
We are executing according to plan and are confident our strategic roadmap will generate sustainable long term growth.
Overall, we are encouraged by the speed intangible delivery of our transformation strategy throughout 2022.
And they expect to deliver greater business success in 2023 and beyond.
The enhanced leadership team has built a strong execution focus, making accelerated and consistent headway enhancing organizational efficiencies and driving SaaS transformation.
Transformation is enabling us to refocus the company called go to market strategy realize the benefits from fully integrating acquired companies and.
And combining our extensive technology capabilities, all of which we believe will translate to sustainable high quality topline growth with expanding profitability and positive cash flow.
The outlook for power fleet is strong the board and executive team has a high degree of confidence we will be able to accomplish that goal of both obtaining and retaining a seat at the very top table of solution providers in the expanded global Iot market in the years ahead.
We have much hard work in front of us, but our laser focused tremendous desire and world class Global team gives us every chance of success.
That concludes our prepared remarks, now I'll turn it back over to the operator for Q&A.
Thank you if he would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue and for participants using speaker equipment may be necessary to pick up the handset before pressing the star key. Our first question is from Scott Searle with Roth Capital. Please proceed.
Hey, good morning, Thanks for taking the questions Steve Nice to see you guys building momentum as we go into the end of 2022.
First just a quick clarification on the operating income comments for breakeven in 2023, I just want to clarify that's on a GAAP basis correct and.
And then on the supply chain front. It seems like things are getting better, but there's still some constraints. There you had a really nice step up in terms of the product gross margin. It sounds like from a combination of reengineering, but also supply chain.
Thank you said you were expecting gross margins to sequentially tick up in the fourth quarter I Wonder if you could.
Clarify that on the product side as we go into the fourth quarter what are the targets here for the gross margins on the product side over the intermediate term.
Sure. So thanks, Scott Good morning, I'll ask Mark will take the first part of the question and then I'll take the second yes.
To answer your first part of the question yes.
It's on our U S.
Basis.
The improvements that we're seeing in the margins is our ability to manage the supply chain issues right now and you know just analyzing all our deals and making decisions and just good and you know were starting a window in the middle of the reengineering process on our prime existing product line and Thats all contributing right now.
Improvements in the.
Project and the product margin. So I mean look we've made tremendous progress in two quarters.
A lot of hard work has gone into that we were ahead of schedule to be at 30%.
I think it will be a slight improvement in Q4, but you know I think longer term, we'll be looking back into the mid to higher third Ts in terms of the product gross margin, but we still face the challenges, but I think due to the hard work and scale and it's not just about the cost side, but also improving our pricing with custom.
We're starting to see some some good fruit platform.
Got you and if I could just staying a little bit on some of the costs and the accounting side currency has been a bit of a headwinds I'm wondering if you could take us through quickly just your high level policies in terms of what's your hedging or not hedging.
I got a lot of different regional exposure. So in that service generated so I assume that's all in local currency I just want to clarify that and then I had one follow up.
So it's a it's all in local currency were not doing any kind of a financial hedging.
And so it's just the currency fluctuations that would feed that were facing obviously, there's some natural offsets with you now.
With even though were in local currency were doing the transaction in local currency. So there is.
And where we have transaction yourselves, so there's a little bit, but we're not doing any kind of financial hedging. If that's what you mean, yeah perfect and then Steve from a high level looks you've done a tremendous amount in <unk>.
What about 10 months I guess 10 months into it at the current time.
In terms of platform go to market.
It sounds like Theres, a pipeline building you've got some new modules come in you're talking about data science module is kind of starting to filter into the mix as we get into 2023 I'm wondering if you could help us understand or quantify from a high level, what the magnitude and the size of the pipeline looks like maybe what the opportunity set is within the existing customers as you grow the wallet.
The addressable opportunity within the customer base.
And then the metrics, we should be thinking about going forward. How are you going to be reporting the business, we got services and products, but now you start to break down and a lot of different categories with logistics.
Our logistics fleet industrial different modules within that so how should we be thinking about the business and how are you thinking about the business that we should be measuring you against those milestones going forward and then and I apologize for the lengthy question, but just to kind of throw in early thoughts on 2023, and I think you've talked about the longer term targets of $200 million and 25%.
<unk> margins, if that's still on track it sounds like it is but just to clarify that thanks. So much.
Thank you and forgive me if I don't answer all of those are missed anything in the market and I'll do my best.
In terms of our pipeline growth.
I think we are very encouraged by.
The coverage ratios that were starting to obtained for the business. If you think about it this year that growth has come from existing solutions through some pretty hard times in a lot of business transformation and that to me is a key indicator on the business you know how do you do through those difficult periods in 2023.
We have a lot of excitement for the new technologies that we will bring to bear a lot of excitement in the go to market teams that we are putting on the page that happened yet.
Really kind of got going in anger in terms of creating deals you know we bought some new folks in as we talked about in the U S. In the connected car sooner.
Scenario for them.
In.
Two quarters NASA those guys are building that pipeline. So we would expect you know we've got a lot of anticipation that also as well with the new team in place having.
Having six to 12 months under their belt that we're going to have a strong 2022 2023 in terms of both so both our short term expectations I think 23 and our longer term we remain confident that we're on track and ahead of schedule and to your point in 10 months, we've made significant progress and I think in terms of how we measure the business you know we will be.
Looking to I'll, just give you a couple of indicators I think that we should be looking at one is the improvement in service and SaaS gross margins I think that's something that we've got are ideal for the future subscriber both new subscriber growth new logos. So we will be putting more emphasis on that those new logos and as you've talked about in terms of wallet share.
We think the new added value solutions will increase our overall office and our overall <unk> impact.
Impact from our existing clients today so.
As we start to formalize that as we get a bit more.
Visibility over.
It comes about we'll kind of give more information on them, but that's kind of where we see that we can really it grows because ultimately we want to quite high profitable SaaS revenue that ACI in the company.
You'll have seen from our shift in terms of moving towards profitability that doing that with a very whether die on high quality deals.
Good pricing and good margin is you know what they are.
The epicentre of what we do so we will continue to be judged.
By that by that kind of trajectory as well, but.
Overall, I think you know the as I said, we believe the future's very strong wheatstone, an awful lot in a short space of time to improve the strength of the business and we're excited by seeing some of the fruits of that work really come to market in 2023 and beyond.
Great. Thanks, so much nice to see you getting the new team out on the pitch I'll get I'll get back in the queue.
Thanks Scott.
Our next question is from Mike Walkley with Canaccord Genuity. Please proceed.
Great. Thanks.
My Congratulations also on the strong results and progress on the transformation.
I guess the follow up question to some of Scott's line of questioning just just on unity <unk> can you remind us how this might be priced differently.
The go to market differently, and what kind of <unk> uplift might this.
To give to your installed base such as you upsell this new.
Platform.
Yeah. So great question, Mike and good morning, So in terms of unity and first of all we're combining all our different platforms into one user interface. So whichever vehicles segment as Scott alluded to we have industrial we have vehicles, where fleet logistics, we have Iot so having all of the spewed through one one.
Platform and given the usability of that it can be key to multinational and multi asset type customers to be able to utilize the data from one place. So we're excited about that secondly, Dan in terms of the modular ization of that that will be a base platform fee and then depending on the business issue that you have.
Looking to.
To work on that will be different modular charges for those different modules as we lose two advanced fuel management sustainability safety and security compliance business effectiveness business efficiency. So we'll start to see the ability for us to grow our <unk> I think a good range.
In the mid term near to mid term is a 10% to 15% improvement on the <unk> that we get.
But we think the overall lead on the strip.
Two of our go to market will allow us to be allowed people to to take a while module at a time take the whole suite at the time grow with our solutions. We can turn on some of the functionality to give people a taste of what those are the modules can gabe and that just brings a whole different upsell and cross sell opportunity in.
<unk> sales teams opportunities that the companies just don't have today so.
It will be a key part of our strategy moving forward.
Great. That's helpful and then just on the <unk>.
Solutions or services or high higher area of gross margin you said your goal is to.
Get those higher on you talked about hardware gross margins, maybe you get into the higher 30 as long term, but you know where it could be a software services gross margins trying to you over time that if you're successful.
Yeah, we will be very disappointed if we don't get it above 70%.
Trending toward mid Seventy's is where our ambition lies.
And what what would that timeframe be.
I'm not going to be I'm, not going to put that in place yet I think we got too much work to do.
All I would say is you know when we do say, we're going to do something and hopefully.
<unk> seen over the past year that we do it so we need a little bit more time to kind of get that moving.
And we'll update that as we as we feel more confident in being able to get delivery day.
Alright, and last question for me and I'll jump in the queue. Just how is the hiring environment to to get the right people in place.
Made a lot of hires that you're also trying to reduce cost. So how should we balance those two in particular, if you have the team in place now to execute on your go to market strategy.
So first of all I'm humbled by the level of talent that we've been able to hire them.
I think that's a real testament to the existing team. It's a testament to the strategy of the board and the support and the plan moving forward.
You know we are when we came into this I think it might be being you Mike very early on said to me look it's very difficult to grow and also take cost out at the same time you know we are really reengineering, yes, basically fast we're taking a lot of costs that we are living within the envelope that we have and we've been able to hire the talent into the bid.
<unk> and make improvements in all off season, as we alluded to we will continue to do that through 2023, So we feel very comfortable with.
With where we're at we can.
We feel very good about the new talent, we brought to bear and I think the mixed in there with the existing tenured experience that we have and then some new perspective. Some people who've got proven track records of growing high value SAS companies is really truly exciting and then you can probably hear it in my voice that.
We just we just can't wait to see what the team can achieve in the coming years.
Great well congrats on that.
<unk> accomplished today and best wishes for future success I'll jump in the queue.
Okay.
Our next question is from Jason Smith with Lake Street Capital markets. Please proceed.
Hey, guys. He got Max on here with the Lake Street, just come on first talking about the supply chain.
Want to know or you're going to see any improvement in the supply chain in Q4, and then currently what are lead times looking like.
And so we've seen slight improvement and we've seen big improvements in product gross margins since.
Since Q1.
In terms of supply and Timescales theyre still elongated.
And I, it's hard work for us we wish scrapping around to ensure we get the components.
But I still think we're kind up you know that 30% along with a night. They were traditionally but I think we are still seeing slight light at the end of that tunnel and but we were very much making sure that we invest now to make sure that as we grow and as that pipeline comes to fruition that we're talking about we can fulfill customer orders. So it's a constant balance.
But you know we've got a very whether die on the on the component lead times.
And then just along that along those lines with inflationary pressures and have you guys instituted any price increases.
Yes, we have we started to them that's that's never easy obviously easy around new business.
And but we are actively going out to our customer base and having conversations in.
And having a very pragmatic conversations and I think that's been very well received we are as we said in Q4 going to get a little bit tougher in certain areas.
And actually you know, we do focus on some unprofitable things that we have going on and make movements there but.
Overall I think this is new for power fleet I think it's a confidence that we now have in our technology and our value.
And you know I think we're applying that to go to market team led by Patrick valleys applying that really well.
And I think we'll Punjab white in the market in terms of the value that we gave in the what we get per hour for a price.
Okay.
And then just my last one and I'll jump back in the queue, given we're about a month and a half into Q4, how are order patterns trended so far in October and early November .
So I would say similar to Q3.
Still early in the quarter, but similar to Q3, nothing nothing dramatic either way.
Okay. Thank you guys.
And our final question is from Gary pressed the piano with Barrington Research. Please proceed.
Good morning, Steve Clean How're you doing.
Doing good thank you Sir.
Great. Thanks couple of questions here just to clarify Wahid you you.
You said that youre still going to be looking for gross margin improvement on the product side going into Q4.
From where you were in Q3, I just want to make sure I got that.
Correct.
You got that correct, yes, we said, we said that and I think I answered that one of the other questions that we will see we will see a slight improvement again momentum continuing.
And longer term mid thirties is the range and maybe a little better overtime.
Okay, and then are you starting to see.
See any benefit from what you said as far as the $5 million of.
Expenses, you've been able to take out of the equation from what you've done.
Yes, we are and obviously, we have invested significantly in R&D data science and AI capabilities and we've also put more sales and go to market folks on the page we've done the rebranding exercise.
And bought in a much I would say improved marketing and communications function getting people to really understand what power fleet.
<unk> is all about and the broadest scope that we have you know we described ourselves as the best kept secret in Iot at one stage and now we're starting to articulate that the improved message externally. So we've reinvested.
Some of that savings you've seen some expansion in the gross margin lines as well and you know we have some bigger wood to chop in terms of system integrations and efficiencies in the business, but we're very comfortable that on an annualized basis that $5 million will be a net improvement overtime.
So for next year, we shouldn't be expecting a step down.
<unk> 5 million in expenses overall, because you are you are doing things to add to your team.
Spending money on branding et cetera, or is that kind of a correct assumption.
Yeah. So so look I mean, we we are looking to maximize the opportunity to work with others in the market reengineering of the company there'll be a little bit of a hump in terms of.
Getting that that momentum that that engine really going at the level of topline growth that we're looking to do and we were investing that fundamentally you know that will reduce over time will become far more efficient will have operating systems.
Best practice, when we improving our business processes, where you're cutting out a lot of the spend that you know we don't think he is relevant for the future of the business and we want to be farfetched.
And I think we're proving that out you know in the progress that we're making and we'll stand by that and continue to do so.
And then just a couple of more questions here a couple of questions on unity and say what are you going to combine your platform into one user interface or assume this.
Real benefit here is ease of use.
But you also mentioned that it can give you a 10% to 15% lifting our pool.
Is that.
Based on the client's taking some of the newer modules.
That youre going to be offering.
Through unity.
Or is that just based on the fact that youre going to be charging more for you overall.
No I think first of all be usability is to your point will be far stronger.
I think we and then much better place to be a multi asset type provider.
Which I think will improve business you know for larger enterprises in we've modernized and the user interfaces as well. So it will it will look and feel like a.
2020 for 2025.
Looking platform the real ARPA growth will come from the modularity could come from the improvements in the functionality and ultimately the value that we're able to provide by the data insights that we gave and that's where you know if we look at they says.
Well first of all putting everything in one place, we're making it easy to use we become Oh, we have the ability to to work across multiple asset types of stage one of the real value comes from the data insights and the depth of functionality and driving business change that we'll be able to provide that customer base in the future.
Okay, and then just lastly on the deal with the Mexican entity was a stem. So you said, there's a beverage company.
Yeah, I've heard them before could you could you could you maybe just help us.
With some possible metrics or just the size of this agreement because I do believe they're one of the larger companies.
Down there in the beverage area yeah.
Well, we're not allowed to to give out those metrics yet on behalf of the customer, but they are the second largest revenue company in Mexico.
So very large enterprise.
With a huge distribution network. So it's a deal that we're proud of and I think it's a deal that kind of you know they've had multiple suppliers in the past and they are focusing very much on power fleet and very much want to grow that strategic relationship. He ran their operating platform the data within their business and driving that change.
We are very visible.
Is this more or less.
This is a logistics or is this on the industrial side, where you got this business or both.
This is on the logistics side at the moment.
But they are very excited about the other solutions that we have in our portfolio across the different asset.
Okay. Thank you Steve.
Thank you.
We will now take a follow up question from Scott Searle with Roth Capital. Please proceed.
Just to follow up on the competitive landscape, particularly looking at deals like like Samsung and otherwise.
You know what are you seeing on the competitive Shortlists and how are you guys firm. There what is the win rate look like and why you guys wanted thanks.
Yeah. So.
I think I'm not going to mention names, but I think youll see a consolidation really are what I would call global enterprise players. So a few larger entities that are doing well in the market.
And I think our win rates in those scenarios at the moment is around about 30% to 50%.
I want that to be higher in the future, it's higher than it was a year ago.
But this is all about people understanding the.
The size scale.
Experience and credibility of power fleet, whereas an organization plus.
The huge range of solutions that we have on offer to our customers and I think.
Our go to market approach is transformed a lot and you're seeing that and been borne out in the numbers and I look forward to Slovenia Act with our main competitors in the years to come.
Great. Thanks, so much.
This does conclude our question and answer session I would like to turn the conference back over to Steve for closing remarks.
Thank you everyone for the insightful questions and thanks again to joining us. This morning, I look forward to speaking to you again soon have a great day take care Bye bye.
Thank you for joining us for our presentation you may now disconnect.
Yeah.
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