Q4 2022 Allot Ltd Earnings Call
No.
Mhm.
Okay.
Please proceed.
Yeah.
We will be able to do that.
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Ladies and gentlemen, thank you for standing by the conference will begin shortly.
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Thank you.
Thank you.
Okay.
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Ladies and gentlemen, thank you for standing by.
Welcome to all those fourth quarter 2022 results conference call. All participants are at present in listen only mode. Following management's formal presentation instructions will be given for the question and answer session. As a reminder, this conference is being recorded.
You should have all received by now the Companys press release, if you have not received it please contact allots Investor Relations team at Ek Global Investor Relations at one to one to 3788040 or view it in the news section of the company's website at Www Dot a little dot com.
I'd like to hand over the call to Mr. Kenny Green of Global Investor Relations. Mr. Green would you like to begin please thank.
Thank you all right.
Welcome everyone.
Fourth quarter and full year 2022.
I'd like to welcome all.
Hello management.
Yeah.
It also on the line today Erez and Siggi.
Yeah.
Yes.
I want to provide an opening statement and somewhat.
Well open the call for the question at all.
Uh huh.
The available up to your questions.
The global and the financial highlights and metrics, including EBITDA.
In today's earnings press release.
Thought I'd like to point out.
Okay.
Oh.
Each of them.
Cool.
These statements are any prediction.
One.
Oh, that's not achieve any application.
All of that.
And they suggested including of yourself.
I would not be changing.
Thank you Mark.
And the launch strategy.
Reduced demand.
Great.
Well I.
I think part of it.
And then followed by Covid.
And Exchange Commission.
And with that I'd now like to hand.
Oh, that's right.
Alright.
Please go ahead.
Thank you Kenny.
I'd like to welcome all of you to our conference call and thank you for joining us today.
Our fourth quarter revenue reached $33 million, 20% lower than comparable revenues last year.
Our full year 2022 revenues were $142 $7 million, 16% lower than our comparable full year revenues in 2021.
In December 2022, our C. A R R.
$9 $2 million surgeries, 3% higher than ours.
In September 2022, and.
77% higher than our CCAR E. R. R. Ford December 2021.
Our total E R R.
Support and maintenance grew 10% year over year and reached $51 $7 million for December 2022.
2022 was a challenging year for us the transition of the business and to seek US recurring revenue model has proven to be slower than we originally anticipated.
In addition, we have some headwind on our core DPI business.
While we don't expect those challenges to disappear in 2023, we continue to make progress in this transition.
I remain optimistic on the fundamentals and the future drew.
During today's call I will discuss the challenges we are facing the opportunities, we see and why I am confident in the future.
As discussed in our previous earnings call.
We implemented cost cutting measures that also included reduction of our workforce.
We intend to continue with the policy of tight control of our expenses in order to reduce our loss in 2023 and.
And we reiterate what we stated previously that we remain committed to reach profitability for the full year 2024.
Now I would like to move to discuss our different product lines.
I would like to start by discussing our traffic management and analytics business addressed by our allot smart product line.
The main use cases, we see today and CSP continued to be a traffic management.
<unk> management quality of user experience, especially for video.
Policy of charging control and digital enforcement.
As governments look to fight crime and terrorism, we see a growing interest globally.
Are you able to block illegal activities, such as drug trafficking child pornography and terrorism.
<unk> solutions that address these issues and we are seeing growing interest in our products.
Many CSP today are reexamining the composition of their networks. This may be because they are moving to five G or because they need to replace to end of life products or other reasons.
As they do so well.
Multiple opportunities globally or CSP is currently using our competitor's product are considering a change.
We are working closely with quite a few such as CSP to win their trust and business, becoming their next choice for DPI.
Most of these processes.
Through a competitive bidding process and some are potentially negotiated deals.
In addition, we are working on expanding deals that we won before.
Specifically during the fourth quarter, we want to competitive bids.
<unk> now and one in APAC, where we will replace an existing DPI system provided by a competitor of ours.
In addition, we also won two projects in email to install a DPI system for new customers that did not have such a system before.
While we continue to see in our pipeline a similar combination of replacement opportunities that new deals and.
And while we remain excited about these opportunities.
We also recognize that we are facing several challenges to continue to make them more difficult for us to provide a definite for stocks.
First as discussed on previous earnings calls it is taking us longer to close DPI deals than in the past.
I believe this has to do with the general economic environment.
Expense control by CSP.
Second.
The total number of DPI bids for CSP, we are seeing is not growing.
Serge.
In the enterprise market, we believe the growth we saw as a result of the Broadcom deal has peaked and we do not expect further growth in this market.
We have a strong pipeline of large deals for the year.
We believe that the DPI market remains solid although we can continue to gain market share.
However, the three dynamics I discussed previously and the potential lumpiness of large deals makes it challenging to predict the timing of wins and revenue recognition for our DPI business.
As a result, we do not expect to see growth in our DPI segment for 2023.
However, we also do not believe that the contraction will be more than 5% to 10% in 2023.
I would like to point out one item with respect to our account receivables.
As you might have noticed on our financial statements.
Our accounts receivables grew by $11 $6 million during 2022.
A majority of this growth came from sales to resellers in Africa, Latin America, who are late on their payments to us.
We learned that the cash flow of these resellers was impacted by a failure to receive payments from end customers, which in turn affected their ability to meet the payment terms to which they agreed with us.
We have assessed the late payments and determined that the payments remain collectible.
I want to turn your attention now to what we see in our cyber security business and how the market is developing.
As I've said in previous calls a lot of transforming into a cyber security company and this is where do we see most of our future growth coming from.
Yeah.
We are engaged worldwide with CSP that are looking to provide their customer customers with network based feed cost.
As we look at the market.
See that the direction and momentum of operators interested in launching network based security services.
To be very positive.
We see that in many markets. The various operators provide services that are on par on speed coverage and reliability.
As they look for differentiation network based security is emerging as an important element.
This is even more important since network security as a service native to the operator's network and its directly coupled to the access network itself.
There are several tier one operators, who have reached the conclusion that providing network based security to their customers is of significant importance to them and they are discussing with us how to do so.
It's the largest sign to see cost opportunity for a lot with a tier one operator is the contract we signed with Verizon business, which we discussed in the previous earning calls.
During the fourth quarter, we signed two additional seed cost vehicles, one in Latin America and the other in APAC.
Both will utilize our home secure product.
In addition, we are in contract negotiations with several other operators globally.
We were awarded deals, but have not yet signed the contracts.
On top of that we are in serious discussions with additional operators, where an award has yet to be provided.
Yeah.
As we discussed in previous calls and as I will address in more detail later in the call. We have changed our strategy for the allot secure business.
We are putting more emphasis on strategic accounts that can have high revenue impact.
While in small to medium deals we are looking for some customers assurance and steady minimum revenue thresholds.
While this approach might affect the number of deals we sign it will allow us to get to profitability sooner.
Yeah.
Our M. A R of all new deals signed in 2022 was $191 million.
As we mentioned several times in the past.
M. A R is proving to be not a good enough metric for predicting short term revenues.
And we have decided is not beneficial anymore as a metric for our future business.
We are no longer using it internally to measure new deals and as a result. This is the last time we are reporting.
Yes.
Yeah.
We recently reviewed some of the deals we previously signed and have not yet launched.
After reviewing these deals.
We decided to cancel some of the contracts because we no longer believe the investment in them is justified.
These project cancellations were six CSP totaled approximately $45 million of M. A R.
We are continuing to examine a few additional contracts to see if they can be turned into real revenues or if we should cancel the contracts there.
We remain excited about <unk> opportunity as we have a differentiated scalable solution for CSP.
During the fourth quarter, we launched three new CCAR services.
Who are using our DNS secure product and one far eastone and Taiwan is using our network secure product.
Our <unk> revenues for the third quarter were $2 $2 million and the free cash or are at the end of the third quarter of sorry.
Picked up back or seek us revenues for the fourth quarter were $2 $2 million and the <unk> at the end of the fourth quarter was $9 2 million a significant growth from the third quarter.
As of December 32022, we have 27 signed customers.
Unfortunately, only 14 have started to generate revenues and most of them are relatively small operators and most of them launched this service only to a portion of their subscriber base.
Okay.
As we have discussed previously our main challenge today in our <unk> business is to translate the contracts we sign into revenues.
First challenge is to launch the service.
This process involves many stakeholders on the CSP site technical.
Technical operational marketing purchasing anymore.
We also have multiple other tasks and priorities.
After the integration of our products with different internal it systems is required.
During 2022, we increased our efforts to assist in those processes.
And in some cases, we manage to help expedite the process.
As we discussed in the previous earnings call. We Unfortunately concluded that while in some cases, we managed to speed up things overall, our ability to positively impact. The launch date is very limited.
As a result, we changed our approach and we will focus our future efforts of speeding up launches mainly on a few targeted larger opportunities that we believe can contribute significantly to revenues.
Okay.
Yeah.
Our major challenge we have is the marketing aggressiveness of the CSP when launching the <unk> service.
Aggressive go to market approaches can include among others <unk>.
Really offering the service in every customer interaction.
Bundling the security offering and the price plan for some or all of the customers et cetera.
The willingness of the CSP to commit to an aggressive go to market approach.
The contract is to a degree an indication of how strategic those services to them.
These discussions sometimes take time and further delayed the launch but I think they are very important to our long term success as well as to the CSP success in this field.
Bringing all of the above into account and in line with what we've discussed in the previous earnings call, we changed certain elements of our approach to the market.
One going forward, we are shifting our focus from.
Quote unquote land grab for market share.
Number of CSP to CSP with revenue potential over the next couple of years.
This means we will focus on CSP that have a significant revenue potential even at the expense of market share.
As a result, we are no longer could focusing our salespeople on our targets rather their time is being spent with specific accounts.
Two.
We are approaching the CSP partners not as customers, we will push very hard to have CSP is we engage with contractually commit to an aggressive go to market.
CSP is a medium size that will not commit to an aggressive go to market approach and small CSP regardless of their plan to go to market approach are offered commercial terms, where our revenues are not dependent on their marketing success.
We expect some of the CSP may agree to this.
Some will not.
I expect these changes will reduce the number of new Csp's, we eventually sign up.
However, it will allow us to focus our resources on a smaller number of CSP that we see more strategic value in the <unk> service and that will ultimately drive profitable revenue growth for a look.
Okay.
As I look at the deals we have done and those that are in the pipeline I am convinced that the size of the market remains huge.
While I am disappointed with the current pace at which our revenues are materializing.
I'm confident in our ability to achieve our long term goals.
Looking ahead I want to summarize our expectation for 2023.
As I stated we have already implemented some cost cutting measures and we will continue to implement more.
As a result, we believe our net cash reduction and our operating loss for the year will be between 15 million to $20 million.
We remain committed to reach profitability for the full year 2024.
This will be achieved by some revenue growth mainly on the <unk> business, but also through tight expense control.
We expect to seek us revenues for the whole of 2023 to be between $11 million and $13 million.
We expect to see Cas ALR for December 2023 to be between 15 million to $20 million.
And our total <unk>, including support maintenance to be between $56 million and $63 million.
We expect our total revenues for the full year 2023 to be between $110 million and $120 million.
Regarding Q1 recall that Q1 is seasonally a weak quarter for revenues and we expect the first quarter revenues to be approximately $20 million.
Given the Lumpiness of the DPI business that we mentioned earlier, we do expect notably higher quarterly revenues as we move through 2023, especially in the second half.
Our strategy remains the same.
Why do we believe that our DPI business has limited growth potential we think we can maintain a similar revenue.
Business through new use cases, and winning competitor accounts. However, the lumpiness of the business makes it difficult to forecast over short time frames.
Our <unk> business is where we see are significant future growth.
While our CCAR revenues are being recognized later than we would have liked and later than we expected I remain convinced of the large potential of this business and I'm confident that it will grow significantly in the coming years.
I have full faith in our company, our team and our products and I believe the actions we are taking make these goals are achievable.
And now I would like to open the call for questions and answers and myself will be available to take your questions operator.
Thank you.
Ladies and gentlemen at this time, we will begin the question and answer session. If you have a question. Please press star one if you wish to cancel your request. Please press star two.
Speaker equipment kind of lift the handset before pressing the numbers youre questions will be pulled in the order. They are received please standby while we poll for your questions.
The first question is from Eric Martin Martin Buzzi of Lake Street. Please go ahead.
Yeah.
Regarding the.
Traffic management and analytics are the DPI side of the business last quarter, we talked about a capex deal slow down and you gave us some additional color in the prepared remarks.
The.
It's taking longer to close because of the economic environment.
Yeah.
The number of deals in the pipeline is not growing.
And then.
The Broadcom deal flow, having peaked at just curious to know what our people.
If the overall industry contraction or is it just.
A temporary macro because it seems like the service that carriers would need to provide we have to provide them with either upgrade overtime.
And I don't I don't believe that the overall market contraction.
It's very hard for me to measure this.
On a quarter by quarter basis, but I don't believe so I think it's mainly the it's mainly really the timing of how long it takes to close the deals and then recognize the revenue and that's delaying our.
Our revenues, but I don't think it's an overall contraction in the market size.
Okay, and then for the.
The support main maintenance.
Forecast I noticed that at the midpoint of your 2023 expectation that as a potential step down versus 2022, what's behind that contraction.
It's not a linear reduction in the number.
Hmm.
For December of 'twenty, two it was 40 215.
No. Thank you then between 41 to 40 suite no there could be some currency fluctuation and other fluctuation.
When the timing and customer renew the corn crop.
So generally speaking.
Stable market.
Alright.
And then the.
Regarding the <unk> that was actually that came in about where you expected for Q4 I know you said you expect it to.
The $9 million or better and you came in at $9 2 million or 38.
A particular carrier that came through for you or was it the strength across the installed base.
I think it was I don't think there is a specific carrier that came through there that may be different source basically across the installed base I would say.
Okay, and I understand you're.
Trying to put more wood behind fewer arrows on the penetration here in 2023, but have you changed the sales compensation plan in 2023 on the <unk> side of the house.
And like I mentioned, we have to an extent for example, where we're no longer giving the salespeople are.
Our targets.
But rather we're just and we're focusing them on a smaller number of accounts. So.
So basically salespeople that are going after new accounts.
Or given name to targeted accounts to go after them.
The compensation plan is built around whether they win.
Hopefully we went right. These are kind of these specific accounts.
It's not an MBR metric anymore. So it makes a difference.
I understand and then.
Last question for me can you remind me of the terms on the convertible debt that you have is there any interest associated with that.
Israel input.
Yeah.
Zero inches got it alright, thanks for taking my questions.
The next question is from Niihau shell Chi of Northland Capital markets. Please go ahead.
Yeah. Thank you.
During our prepared remarks or as he decided that in the fourth quarter you want to compare that against the competitor that's likely standpoint for Sarah and I presume. The point of that statement is that you don't believe of lockers, losing market share in the GP line market is that correct.
That is correct.
Okay.
Just to be clear I mean isn't.
Isn't there typically within the course of every quarter deal wins against these competitors and also usually some losses I mean, it's not par for the course of the quarter.
I'm, sorry, I'm, sorry, I missed the first part of your question could you repeat that please.
Yeah.
Their deal wins against these competitors pretty much every quarter.
Isn't that kind of what sort of course there.
Not every quarter or no.
Of course every year, yes, but not every quarter.
I can tell you that too.
And sometimes we sometimes there is a competitive bid where are.
Without our competitors DPI system is installed and we are unsuccessful in unseating them.
So big issue to unseat a competitor from the existing operator, but I don't remember I don't remember them on seating to us or any of our competitors on seeding us for quite a long time so.
I think you all I think that demonstrates.
How well we are performing in the competitive environment.
Got it that's very helpful. Okay.
And then moving to the CCAR.
Mmm sure with that.
I think it depends very much on the <unk> on the operator itself.
What or go to market is.
And once they've launched.
Start working with them obviously.
Before the launch, but but even though I.
Even after the launch we continue to work with them to try and get two new plans of how to go about the market which channels they use.
What sort of pricing plans, they have what sort of incentives they give their salespeople and in the event that that's relevant et cetera et cetera.
And based on that we we measured together with them if they're if the new ads that they are able to bring to the.
To the network sorry are reasonable are satisfactory in our opinion or not good enough and we need to change further now we're never happy we always want it to be higher.
But eh, but working with the operators in this way it gives us the ability to to to measure not only what they did.
What they've achieved so far but where they show what they should be able to achieve in the coming six nine months or whatever and what they should do potentially in order to increase that that's part of our day in day out work with with these operators.
Okay very good and then give.
Given to arrange a incremental <unk> counter $23 million to $6 million 11 million.
How do you expect that profile of incremental <unk> calendar 23 E. As it can be when you're when it hasn't really per quarter horse is going to be more back end loaded or some of the profile can can you give me <unk> first thought that went through.
Most of the increase is expected.
Check them out.
Depends on the timing of new loan to install.
So most of <unk>.
<unk>.
Okay Alright.
And did I hear correctly that you're trying to one to 23 to.
20 million Brittany did I hear that correctly.
<unk>.
Two zero.
Mhm.
Okay, Alright, and are there any season, all the elements that we should be.
Mindful of when I think about our stole your model here.
Uhm.
Mhm.
Okay Alright.
That's 20 million I mean, that's.
Year over year drop.
And so it sounds like.
Macro pressures are increasing it that first statement.
I think that's a fair statement.
Okay, but again I think they are contributing more to delays and anything else.
Yep I understood. Okay. Thank you.
The next question is from <unk>.
<unk>. Please go ahead.
Hi, guys.
For Alex I guess, just falling on that last question can you.
Talk a little bit more about the cancel contracts.
We should expect further reductions in the future and how.
Okay.
Several contracts.
Signed up.
A while ago.
Uhm the operators have launched the service for a variety of different reasons. So.
One by one.
Major necessity.
On our own.
Talk to senior management was the operators to figure out okay are they motivated enough to do this.
And what do we expect and Uhm. These specific ones, we came to the conclusion that.
We would have to spend too much energy and pushed too hard and at the end of the day, probably going to learn the revenue for this to be worthwhile.
So we decided basically to walk away from these deals.
Yeah.
Like I said, we're we're examining.
A few other details and a small number of other <unk> mmm.
From my perspective, the jury is still out whether or not we can turn them around into a.
Revenue producing profitable worthwhile.
Service or not.
So as we examine them and if we come to a conclusion.
But we've decided that we will need to.
To cancel.
One or two additional once we will let you know like we did this get here.
Great and then just going back to unwinding of the calculation could you just talk about pop Crawford.
Shifting purpose on sales reps and any friction are offered.
You may have seen so far for that.
Not.
I'm not sure I fully understood. The question you mean, why did we decided to stop using it as a metric for salespeople.
Oh, yeah, both internally and externally my understanding of it.
<unk> yeah.
How 'bout sales reps that no longer okay.
We.
We invented if you like the metric.
Metric few.
A few years ago, because we thought it would it would present.
With present, a good metrics to measure the the longterm.
Revenues with revenues at all that could be achieved from a certain mainly from certain upgraded it turned out that we discussed several times in previous earnings call the while it could.
Could be a good indication for longterm for long term potential for the first.
For the first few years, it's not a good indication for the short term directly to you because it doesn't bring into account the timing of the launch it does not bringing into account.
Eh, how aggressively launched.
Will be in terms of go to the market does not bring into account, how a two into which segments of the.
Day of the operator's customer base.
Service is being launched et cetera.
So so when we looked at it again this year and figure it out Okay, where do we want our our salespeople to focus on.
We came to the conclusion irrespective of them all right. We came to the conclusion that we want them to focus on a relatively smaller number of opportunities that have a higher probability of generating significant revenues.
Once you do that and there is no point in just giving them a number two meal like an emmy or number or like.
Selling DPI system Capex number a certain day booking number.
But rather we want to pinpoint them in solving okay. Your salesperson in country X.
These are the tourist reveals that we expect you to go after and we expect you to one of them.
Go after whichever off operator, you want and signing on contract were telling you which operators. We want you to go after.
That that means that the <unk> no longer a relative a reasonable metrics to measure the salespeople by <unk>.
Because we're giving them much more concrete instructions on which operators to go after.
And since we're not going to measure it and primarily when there's no point in measuring it externally as well.
Hello.
Mmm.
And the next question is from <unk>, a self investment advisors. Please go ahead.
Thanks for taking my questions you mentioned some some cast deals that were signed at the end of the air and into this year. Some of those recent deals part of the new strategy or as far as you know.
Talking about.
I would say that one of them is one of them has been in the pipeline for a very long time, so I can't I can't attribute a new strategy to it it just finally closed.
That's the one in the pipeline and you're Gonna basically say you know is it just going to be like the whole thing or is it gonna be like you know this is we.
We need a commitment to guard.
That's kind of my point.
Mmm Mmm I think we have we haven't.
Even though we don't in this case, we don't have the a contractual commitments on the <unk> I think we have a very good understanding how's. It go to the market is going to happen. We spent a lot of time on the negotiating that I'm getting in getting that down.
To to a very good understanding that we're satisfied with.
Okay.
So I'm trying to figure out how you get the profitability in 2024, and I know you mentioned continued cost cutting.
You know he talked about C cast expectations, but I think the investors who were on the sidelines and myself as well need more concrete.
David points and in 2023. So my question is what should we be looking for this year.
<unk> 23 that.
Late to revenue of 24.
You know as far as the D. P I N C cast.
Okay, I think what what what what.
We should be looking for in 23, as we should be looking for.
Especially in terms of seek as one as a new deal signed but more importantly, new launches of deals that we have already signed or about to sign and it will start showing some revenue in twenty-three should so significant revenue in 24.
So I think that's that's the main one I would look for of course, we'd look for for the four DPI deals and to suit and.
Measure, whether or not we're able to increase our basketball by the end of the year or not.
To add to that.
Nope just the.
Speaking.
We will <unk> ooh.
Forget to profitability.
Said one.
<unk> the other one.
<unk>.
The third one.
The topics the topic.
We can expect.
Maybe an increase of course you percentages.
Hopefully, we'll be able to bring more business.
Three.
People will be recognized.
Three.
The sources for them.
Our plan to be profitable.
Wonderful.
Okay.
So on the traffic management, which is gonna be flat or down five or 10% and you have a lot of it has to do with the late et cetera.
So it sounds like a bag of opportunities and five G or you know Ah replacing incumbent.
I know, it's hard to say now, but Ah you're expecting acceleration in 2024.
In that area.
Yeah, I think you're right that it's hard to say now.
A.
I I would hope I don't I can't even say expect I am at this point in time, hoping.
The five G stand alone networks start getting deployed at a much larger scale than they have so far.
Do these networks have been talked about and these new core networks for five G. You've been delayed and delayed in many places.
When they start when they finally started being deployed I think it will generate.
Significant new opportunities for DPI.
Now will that happen in 2024, I'm hopeful that it will but I am I at this point I cannot say that if that died Noah estimate that it will.
Hoping it will.
Alright, So a general question. So what did you say, there's more potential D. P. I know then that might've been you know four or five years ago, mostly because of the five G opportunity.
Hey, I would say not yet the five G opportunities still.
Not materialized.
Once it will materialize it will created.
It should create.
A growth in the marketing opportunity yes.
Some point it will end up getting so I don't know if the timing of it.
Okay, but the point I'm Gonna go it's frustrating when one of your competitors got bought out several years ago. It almost three times for Avenue.
It's just that they mentioned alone getcha stock price about seven but you know a piece of the parts.
You know maybe people don't believe you gotta get the profitability, but let's hope he can do it and good luck.
Thank you.
The next question is from Orange Wallace.
Please go ahead.
Alright.
And sort of a tale of two divergent businesses here on this call I'm wondering if we start with the DPI businessperson unique.
He made comments that you don't think that this market isn't contraction and you're not losing market share but.
This was about 140 million two years ago, and it's going to be around 100 million based on the guidance. He put out this year so I.
I Wonder if you can just sort of help us think through what could be going on I think you've provided some.
Some decent explanation already but just to give us comfort that.
The reason Mr <unk>.
Mine's happening isn't because there's some sort of you know really secular issue with the DPI space.
So when you compare the number.
<unk> ago.
Your reasons.
Why now.
Lola.
The first one.
<unk> five G network.
And that's <unk> <unk> conference call.
This product is irrelevant.
Oh five G network.
Yeah.
Five G network.
You're going to have so many of them.
We said the only in the future.
So this is number one.
The second reason.
<unk>, we have the <unk>.
Catholic Bill.
Which is not <unk>.
<unk> like all the.
Uh-huh.
This moment.
Two years ago.
Mhm.
The second reason.
Then the currency preparation.
Which.
<unk>.
Some other currencies.
On the grilled ago.
Great.
Because.
Because of the war renewal.
<unk>.
We'll.
Hopefully just <unk>.
And the billing.
The number.
Okay ma'am.
And in addition.
Discuss before the Emperor five business.
But for now.
The revenues Lola.
Mhm.
Thousand 121.
It's Sharon and on that note.
Hello together.
Seven reason.
Oh the revenue reduction.
Just give me one reason.
Got it and with with the enterprise business I think that's been running around five or $6 million a quarter.
Are you expecting that to be dramatically lower this year I know you said the broadcom impact is Pete, but I'm trying to understand it, especially if it's 20 million dollar guidance for Q1, because if I take the maintenance run rate that you have which is around 10 million a quarter and then.
You know kind of layer and some enterprising see cats.
Looks like the C. S P.
This sort of lumpy CSP deal business is being guarded basically zero for Q1, and I I want to understand if a bind methodology is correct and be that reflective of.
You're trying to provide us an outlook that that is going to be appropriate in conservative or is this really bad but there's no CSP business. That's gonna ship this corner.
Basically the largest is incorrect.
<unk>, which is expected to one.
Hello.
Got it and your backlog in bookings were flat for the year.
I think.
Roughly unchanged, maybe plus or minus one or two per cent.
Yeah.
You'll be able to walk around one.
The book the Bill was one.
Q1 revenue being guided down 33 per cent.
So I'm just I'm just trying to understand.
You know a little bit better sort of what because there was a call back in Q3, where there was a preliminary outlook that was given for 10% growth give or take.
And you know obviously the DPI business is now being guided down 10%.
Which is impacting the outlook I I just wanted to get something changed dramatically in the last 90 days.
Or maybe are you any anything you can add to kind of give us more power.
<unk>.
Right.
I would say mainly related to the general <unk>.
Oh Man <unk>.
And the mountain.
It's not because we see.
Marketing.
Moving market here I'll spell it for me now.
Jenna.
Environment.
Everything takes more time.
Mmm.
August .
The main the main reason.
We think between two one.
The amount of <unk> Avenue.
Willow.
<unk>.
Okay and in terms of the resellers in the accounts receivable.
That you call that being up $10 million does that's something that's with.
Relatively large and Sullivan customers. You know are you expecting that you'll be able to collect those down in the first half of the year and.
Start to bring that working capital back in wine.
We are expecting to connect.
Mmm Mmm.
As a model.
Okay.
Switching to more you know.
Positive subject matter, but with the the sea Cass business. It was encouraging to see to 30% sequential growth and I was wondering how much of that came from.
Taiwan far East town launch pretty late in the quarters, who did it.
Pack that run late materially or was that really I'm not in this quarter.
I don't know what to do significant.
The the all the mailbox.
Okay.
But it's not the reason holding fire.
Got it and and with sort of the large deals that you've won.
The 10th Pole projects, you know from Verizon to the Vodafone home security.
Some of the other tier ones that you've announced.
You have good confidence.
Some of these deals are launching this year.
And that you know.
We'll we'll be able to actually see.
These networks running in and use the products ourselves in some cases, if we're in the U S or Canada.
Want it want it actually.
Try these products I think it would be you.
You know very positive for shareholders and for the broader company to actually get some exposure.
Obviously, providing watching or somebody better tier ones watching so do you think that's something we can actually expect in 2023.
Mhm.
You know, we would like them to launch everything Tomorrow morning, obviously.
But they have their own plans.
Because it's a competitive environment and this is a new service that they plan to launch Unfortunately, we can't share a.
What other plans for launch Orange.
Good timing more pricing orange.
Seemed like that.
Okay. Thanks, a lot.
Yes, Sarah any additional questions. Please press star one.
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Please stand by Lollipop for more questions.
There are no further questions at this time.
<unk> would you like to make your concluding statement.
Yes, thank you operator.
I wanted to thank everyone.
For joining us a call and they wanted to thank you for your support.
And I look forward to seeing you in the next conference call or before.
Perhaps meet you someplace, thank you very much.
Well thank you.
It's the fourth quarter 2022 ourselves conference call. Thank you for your participation you May go ahead and disconnect.
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