Q4 2022 Airgain Inc Earnings Call
[music].
Good afternoon, welcome to air gains fourth quarter, and full year 2022 earnings conference call.
My name is <unk> and I will be a coordinator for today's call.
Joining us for todays call are art air gains as President and CEO , Jacob Suen, and CFO Michael L desk.
As a reminder, this call will be recorded and made available for replay via a link in the route Investor Relations section of Eric Games website at Www Dot <unk> Dot com.
Following management's prepared remarks, the call will be open for questions from air gains sell side analysts.
I caution listeners that during this call evergreen management will be making forward looking statements about future events and are games.
Business strategy and future financial and operating performance.
Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in today's earnings release and air gains S E SEC filings.
This conference call contains time sensitive information that is accurate only as of the date of this live broadcast March 9th 2023.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
In addition, this conference call May include a discussion of non-GAAP financial measures.
Please see today's earnings release for further details, including a reconciliation of the GAAP to non-GAAP results now I'd like to turn the call over to our CEO Jacob Suen Jacob.
You're up later.
Every one and thank you for joining us today.
Today's call I will first cover our operational highlights and achievements for Q4, and 'twenty 'twenty too thin.
And I will hand, it over to Michael to walk you through our financial performance for the fourth quarter and full year.
Afterwards, I will provide an update on our strategic product and marketing initiatives and then share our 2023 outlook before opening the call for questions.
As you saw from our earnings release.
Fourth quarter, well see another record sales quarter at $19 $9 million up 4% sequentially and 41% year over ear.
Blaine our fiscal year sales to $75 $9 million.
Annual sales milestone reflects an 18% year over year increase driven by solid contribution from our enterprise market.
Which accounted for $10 million in the quarter, our strong results in the enterprise vertical well, it's driven by higher Wi Fi access point, and industrial Iot sales well victors, but we expect to continue to 2020 three.
Overall, our financial performance in 2020 two.
And solid balance sheet, coupled with our expanding product offerings will enable us to successfully mitigate the near term headwinds we are experiencing in our current quarter.
While positioning our company for even greater success in 2020 three.
A key financial highlights for the fourth quarter was the liquor sales contribution from the enterprise market.
Yes, Ken as we kept up a light on our expanding backlog.
Radio surveillance, I'll say service offering and so cool somewhat connected EV charging market.
Market forces.
Adoption in these key industries Aegean has definitely kept it to lives by offering solutions and expertise to meet the strong demand so bringing products to market quickly.
In the quarter, we secure.
Opportunities in both new and existing markets.
Further supporting our strategic move into Iot.
Now that we have reorganized our sales team around vertical it's instead of product lines. Our teams are gaining traction in cross selling and up selling new and existing customers.
In addition, we recently partnered with one of the leading European Iot network providers. So connect.
Our asphalt trucking devices or a best in class solution.
This allows a game to bundled connectivity with our asset trucking customers across Europe .
Italy's in Africa, as well as within the U S. These strategic partnership gets again added global reach and capabilities for future Iot projects globally.
On the automotive front, our focus continues to be on the aftermarket and first responder segments.
But we saw significant interest in impulse coverage within the first responder market.
Perhaps the rate of our H P U E product was slower than anticipated.
The limitations of the total offering.
With that well.
Transitioning the EGEN connect platform toward the next generation product.
Taking key learnings from the previous product.
We are working with the customers.
Latest vehicle networking trials and look for to providing superior connectivity boy, a broadening set of customers. We find that the man well employ fleet connectivity to be stronger than ever influencing the speed of our transition.
Our consumer vertical experienced a slight step back quarter over quarter in Q4, a trend that we expect to continue in Q1 due to a combination of seasonality and demand softness from supply shortage in technology transitions.
Seasonality, it's a historical trend we have seen and communicated in the past and is typically made up for in the latter quarters of the year. However supply chain issues have caused many of our customers with the late development in order to transition directly.
So Wi Fi six Hawaii five seven.
The softness in market wide chipsets and excessive inventory played a role in Q4 on a year over year basis, we reported a 160% increase from the $2 $5 million in 2020, one so the $6 $5 million in 2022.
<unk>.
Recently, we announced the arrogance embedded antennas were selected to power the Wi Fi six space via our airports by D Link Corporation, which allows PC gamers will use their VR headset without the hassle of a cable or Wi.
Hi, Walter.
Higgins custom design testing and optimization services.
Simplifying the delivery of enhanced signal in challenging environments as we showcase our Wi Fi six capabilities in the data rich sitting like gaming.
Continuing with consumer our increased focus on the development of new products and solutions over the last few years, it's beginning to bear fruit, we have built relationships over the years with service providers that now even greater reason to tend to AG.
Aim for solutions to their needs.
Exciting developments in Pi G connectivity of open the door for most of the looseness based offerings and we have commenced trials on major U S up later networks.
In a sense our step into new markets. It's all sure Ann by established long term relationships.
Our commitment to being a systems company in our emerging leadership in Pi G. As open market avenues in high growth verticals.
With the recent introduction of our lighthouse smart repeaters, we are streamlining our end to end by G. Development that includes fixed wireless access repeaters and enterprise software management solutions.
This transition from exclusively components designed to full systems targeted as service providers increases our serviceable available market.
Him by $7.2 billion.
As we mentioned last quarter, we have identified three key differentiators Aegean has in relation to the market and our competition.
First our core competency has always been simplifying wireless connectivity.
Can we pull by a breadth of product line that spans across the entire value chain.
Whether a customer is trying to solve a connectivity issue in a product design well in an operating environment.
The third is arrogance focus on high growth technologies.
Lilly in reference to our expertise.
These three differentiators.
Turning to shape, our approach to addressing the market and developing solutions that meet our customers' needs.
Moving floor, we're laser focused on executing the roadmap, we have put into motion and I look forward to providing updates on our programs in future quarters.
With that I'll turn the call over to Michael Michael.
Thank you Jacob.
Before diving into the numbers. Please note that my review of our financial results and guidance refers to non-GAAP figures.
Information about the non-GAAP financial measures, including GAAP to non-GAAP reconciliations.
I have found in our earnings release.
Now, let's turn to this quarter's results.
Yeah, again delivered a quarter of strong sales and cash flows.
As Jacob mentioned Q4 sales were $19 $9 million.
Within our guidance range.
19, 7% to 21 $1 million.
Our sales grew 4% sequentially.
Driven by strong performance in our enterprise market.
Enterprise sales were $10 million, which increased sequentially by $3 $2 million on.
On higher shipments of our industrial Iot and Wi Fi access products.
Automotive sales were $3 $4 million, reflecting a sequential decrease of $1 $7 million.
Consumer sales totaled $6 $5 million, reflecting a sequential decrease of $8 million.
Q4 gross margin was 35% as we recorded a one time $1 $1 million inventory charge related to our E. C. H P U E product.
This noncash charge was primarily due to excess inventory as.
As we transition our focus to our next generation of.
Eric can connect product.
In addition, we recognized.
Here than expected purchase price variances during the quarter.
This purchase price variances or P. P V S J.
It generated from prior chorus purchases of enterprise components.
Hydro market costs due to supply chain shortages.
As we had higher than expected enterprise product shipments. These.
These ppvs negatively impacted our gross margin.
Net of the E C S E inventory charge and the PPV releases or.
Our gross margin would have been 39%.
In line with the midpoint of our guidance range.
Q4, operating expenses totaled $7 $2 million.
Lower than our guidance of $74 million.
Primarily due to tight expense management, while we prioritize our focus on our engineering programs.
As a result, our Q4 adjusted EBITDA was negative $9 million.
And non-GAAP EPS was negative <unk> 11 cents.
Excluding the AC SBU inventory charge of $1 $1 million adjusted EBITDA and non-GAAP EPS would have been positive.
Yeah.
Our cash balance as of December 31st was $11 $9 million.
30% higher sequentially driven by working capital improvements.
Day sales outstanding or Dsos for the quarter was 40.
The lowest DSO results, we experienced in the past two years.
Net inventory was $4 $2 million.
Five $1 million lower sequentially.
Net of the E C S E X that excess inventory charge, our inventory balance declined.
All of our product lines.
On a fiscal year basis, our sales totaled $75 $9 million.
11, $6 million or 18% higher year over year.
Enterprise sales increased $7 $1 million.
Driven by higher sales of industrial Iot and Wi Fi access project product.
Automotive sales grew $5 million on higher aftermarket sales.
Consumer sales declined by $5 million.
Resulting from the global supply shortage, we experienced last year.
Fiscal year 'twenty, two gross margin was 37, 6%.
180 basis points lower than the prior year driven by the E. C. S E inventory charge in Q2 of 2022.
And an unfavorable sales mix and lower your view your consumer sales.
Fiscal year 'twenty, two operating expenses totaled $29 1 million, 5% higher year over year on conservative expense management.
Adjusted EBITDA at both $1 million was slightly positive for fiscal year 'twenty to.
Compared to a negative $2 million in the prior year.
Now <unk>.
Moving to our outlook for the first quarter ending March 31st 2023.
We expect sales to be in the range of 15, seven and $17 $3 million.
Or $65 million at the midpoint of the range.
We expect gross margin for the first quarter to be in the range of 37, 5% to 45%.
We project our expenses to be approximately $7 million.
Adjusted EBITDA is expected to be negative $4 million at the midpoint of our guidance range.
non-GAAP EPS is expected to be negative six cents at the midpoint of our guidance range.
Now I would like to turn the call back over to Jacob who will walk us through our product and marketing initiatives Jacob.
Thanks, Michael.
With our transition to solution based selling we have deeper into markets, where we found a well suited niche.
Electric vehicle or EV charging and video surveillance as a service of defects the common threat between these industries.
They built products that need to be brought to market quickly.
On the E V thought there is a convergence of government investment automakers increased emphasis on building E D in consumers' increasing demand for buying this dia Kohl's.
Bottleneck in this case is the charging networks, which in turn created a need for our products and services.
Our nimble and embedded modems used by several top manufacturers, who require reliable connectivity for building maintenance.
Trucking usage monitoring in the mall.
They can provide an elegant solution a shortened time to market and eliminates the need for in house expertise.
On the visa spots, where end customers similarly need to roll out new technology quickly, we'll pull a return on investment our design capabilities support in future flu products of help a multitude of customers in this market get connect it quickly.
Our partners in this space up late on subscription based models minimizing the focus from proprietary hardware design and manufacturing and opening the door for third party collaboration during the design process.
Most of the leaders in this space focus on differentiating through software and partner with a gain on the hardware to deliver complete solutions to their customers. This has resulted in a growing revenue stream for again from this market.
We also continue to find success in bundling, our aftermarket antennas with leak and first responder solutions.
We work with key players in each industry to provide a reliable signal with which to operate their technology.
With the longest limited warranty in the industry. If five years Hagen antenna are designed to enhance performance in challenging conditions.
In addition, we feel strongly about the initiatives we have put in place thus far on the Iot front.
We have finalized a master supply agreement with one of the largest railroad companies in the U S to provide a unique solution to it to there.
Railcar trucking needs.
We look for to share more about these developments at our analyst day next week.
In addition to growing our existing product lines, we have announced several new offerings that will help again well its leadership in <unk> connectivity.
We recently announced the release of our fully integrated outdoor <unk> fixed wireless access reference design.
One that comes with an optimized antenna system.
I G N a modem and enterprise software management system, and an easy installation kit.
This latest Watson's design expense our position as a leader in fixed wireless access antenna design by simplifying the process of playing a fool if W. A device to market. Overall. These hubs are game hustle a greater share.
The rapidly expanding <unk> market on both the enterprise and private networks.
The equation.
In order for our customers to effectively manage our growing portfolio of connected devices. We also announced a partnership with arrow goal to develop a simplify end to end platform that provides wireless networking monitoring management too.
While both network infrastructure and client devices.
Simplifying the deployment and management of our solutions.
Collaboration aims to combine a against innovations in wireless systems and <unk> expertise in software development and cloud management services to allow users to manage network worldwide, yeah, and easy to use digital interface.
Finally, we recently announced a partnership to develop a law French design for a 60 40 60 for our antenna array to pair with the partners massive Mimo radio units tipping.
Typically used in <unk> infrastructure, such as base stations Marcia.
Massive mimo and offer a significant improvement over traditional mimo systems combined with EGEN lighthouse smart leave heaters outdoor SWA and enterprise network management Mam.
Massive mimo, it's another product line to against growing portfolio of <unk> connectivity systems well.
Walk up later is intended to simplify <unk> deployment.
Operational costs and improve the customer experience.
In closing, while we are facing near term headwinds we are optimistic about our long term prospects and remain focused on growth in our three markets.
We expect strong growth from our enterprise market as well.
We continue to expand our product portfolio and international footprint with our Iot solutions we.
We anticipate meaningful with our aftermarket automotive vertical upon the introductions of our latest offerings from the egg and connect product family as well as expanded distribution for our aftermarket in tennis.
Well, our consumer vertical we expect continue long term consumer growth will be driven by our integrated product launches with a major global service providers customers that we have built great partnerships with throughout the years.
Hello roadmap its paved with ambitious product initiatives.
Given the products, we have and the breadth of system space solutions. We have introduced our same as more than double from $7.6 billion to $16 $5 billion.
These new products are designed to address coverage issues on the service provider side.
These deployment costs.
And improve the customer experience.
The changes so are against executive team over the past year have set the company in a position to better support sustainable growth in the coming years, the leadership team and I feel strongly about the position. The company is in with its steady sales space in finance.
<unk> discipline.
I am confident.
Initiatives will generate positive top and bottom line results as well as better position a gain for key customer wins in new markets.
I want to thank all of our team members for their dedication to our mission and ongoing commitment to our customers.
Our analyst day next week will provide us with the opportunity to share. The progress we have made in a greater fashion showcase our latest innovative technology and better introduce our management team to the market and with that we.
We are ready to open the call for your questions. Operator, please provide the appropriate instructions.
Thank you we will now take questions from Eric gains sell side analysts.
If you'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.
You May press Star two if you would like to remove your question from the queue.
Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Our first question comes from the line of Scott <unk> with <unk>.
Roth and Cam.
Please proceed with your question.
Hey, good afternoon, Thanks for taking my question.
Jacob maybe just to dive in on the enterprise front it was a great great quarter.
Could you talk a little bit about the visibility that you have on that front in terms of linearity and otherwise it sounds like theres. Some large EV charging opportunities how long does that last what else is filling in the pipeline and how should we think about that $10 million over the next couple of quarters.
Is that a sustainable number do we grow from that is there seasonality involved and then I've got a couple of follow ups.
Yeah sure. Thanks, Scott Yeah, so on the enterprise side, especially puts them into Iot certainly we do anticipate.
The charter market to continue at school.
We actually met.
As shown in previous firstly about couple significant design wins.
Expect that to continue throughout the years as I indicated in the press release, it's absolutely in a growing market with government.
And then what.
More customers wanting to buy electrical vehicles I think.
It's really creating a great opportunity.
So it's just not a one time thing, but we do see that the kind of continue to grow.
Now as far as the mix.
A couple of quarters or is this sustainable I think.
As I indicated we have some headwinds that we have to deal with and.
Certainly.
So seasonality that we have to encounter but overall, we do see that.
The Iot as to how we do see that throughout the year.
Great very helpful and maybe if I could just sit on <unk> coming back from mobile World Congress.
Wondering if you could provide a little bit of color in terms of interest level from customers I know, it's very early.
But what sort of level of engagements you have and when would we expect to see some of the first revenues on this front and maybe if you could as well.
Geographies frequencies that we should be paying attention to that will be the first areas of deployment for you guys.
Yes, <unk> I just got back.
Have a nice boost there in demonstrating our latest.
LNG and I think that people were pleasantly surprised actually to see us having a nice demo in a busy environment such as MW C and I think that was very well received.
High quality meetings, we met with.
Some existing customers and several potential customers.
It also allows us.
Later, even in Europe , the middle East.
And next question today is to really Werent evaluate some of our upcoming products such as the smart meters on the network side.
Si in the fixed wireless access so I think that we have loading a 100.
Meetings throughout those three four days.
In some really high quality leases as a result.
So that's not really give us optimism about where we are heading as a company.
And so Jacob to does that mean 'twenty 'twenty four is when we should expect the first revenue contribution from the <unk> portfolio.
I would like to ask.
Oh, not one although I do not want to make that guidance.
Given what we see and we actually have.
Technology product for them to try along that would be the flying that we hope that in 2020, we can see material revenue contribution from the new numerous products we're launching.
This quarter right.
Very helpful and lastly, if I could just to follow up on the Nextgen HBU UE product.
There's a lot of excitement around the initial launch of the first product to AT&T, but it was a difficult process I think being controlled through one carrier.
What's different this time around as you start to move into the next generation solution either across carriers geographies or otherwise that gives you a little bit more diversity and opportunity for better success than you had being controlled through AT&T and first that Nick.
Yeah, Great questions Scott, Yes, we would.
Yes.
We are disappointed about the.
Ah patient.
The total the total offering right and the things we learned is that it's important that the service provider agnostic I cannot stress them all about the fact that it's just difficult to B b.
The hydro a particular service provider and Thats, what we learn we also understanding some of the.
The sensitivity to performance versus cost well people appreciate.
Some of the consumers benefit.
So we'll have to evaluate the cost factor. So we are picking all of that into the next generation product within a gateway product.
It's going to be hitting the sweet spot so to speak.
And certainly also main umbrella.
Improvement on how we're going to launch.
We launched the product we also learned working very closely with viable.
Install those are critical to the success of the deployment right because to get it right. The first time, it's critical and when I say get it right. The first nine months of <unk>.
Building the device properly.
So all of the.
Lessons, we learned and again going back to the demand outlook all of these things that we see a pretty good.
A clear.
Not yet.
The right product the right price point.
Based on some of the demand pickup in peso and and you know with our unique design is something that we have the IP on each.
It's a it's a really especially with the newer product we actually are adding other features sequentially into it.
And I think that's been very helpful.
Okay.
The rollout is our next generation product okay.
Yes.
Great. Thanks, I'll get back in the queue.
Okay.
Our next question comes from the line of Anthony Stoss with Craig Hallum. Please proceed with your question.
Hey, Jacob Michael Jacobs I wanted to focus on a comment you made on the weakness on the consumer Wi Fi side did you say your carrier customers wanted to skip Wifi six and now they are waiting for Wi Fi Shannon also can you give us a sense of what you expect that business to be this year as it can be down year over year or how do you view for the full year.
Yes.
Speak a little bit and then we look for.
Mindful of the timing as well.
And a lot of the things I think I want to caution that it's more about.
The forecast, we're seeing it fall, but some of the recently, we still wanted to split more time decide into it but clearly we also know that.
A few years.
That's interesting and drilling technology and typically last about three to four years.
And in this case due to the pandemic.
Some of the.
The supply shortage issue the rollout of the <unk>.
Eli.
And now that the next cycle, which is Wi Fi signal, even Wi Fi succeed it's already here.
How are they going to assume Jason and that's what.
We also monitor closely I think that.
Thanks for taking a consol ourself to accumulate lots.
Lastly, the basic general counsel.
Within our control is by stream that we have not lost any skew to our competition.
And it's more of a demand issue a reservoir issue by the kgs, which are monitored closely.
As far as this year I think that given some of the softness on the demand we're already done what we wanted to be cautious, especially with the first half of the year.
And Tony just to Echo what.
Jacob mentioned this is Michael.
Yes, we don't have a whole lot of visibility currently the feedback that we're getting from our partners or our customers.
He then service providers is that there is a lot to be sorted out.
Demand standpoint, but we do expect some recovery in the second half of the year.
As to the overall full year guidance. It is just too early to talk about that.
Got it and then I guess my question and maybe you've already kind of already answered it.
The Iot group has done phenomenally well.
Our math close to 30% growth in calendar 2022 year over year, clearly youre expecting that to grow again year over year. The rest of the business, though it seems like it's going to be down pretty pretty.
A large amount year over year, what can you do to try to offset some of the caution that legacy business that that's been weak right now.
Yeah, I think that we also expect the automotive market that we're going to see some growth.
Well I think that consumer.
We have a lot better control on the automotive in the enterprise market, but that's where we actually have our own product and that's what we transition some of the concern that comes down into a system that we have a lot more control with our own destiny. If you want to call. It consumer is small amount with new skus in gist.
The rollout is going to come right versus.
Automotive.
The enterprise Iot, we actually selling our own product most of the time and we feel strongly that we're going to be able to grow the Iot and automotive.
Business in this coming year this year 2023.
And then my last question for Michael on the gross margin side of things the purchase price variance.
Do you think you guys have your arms around on the gross margin kind of call. It 39% do you think it will remain at that level for the rest of the year or is there anything else that you could see that would have a negative impact.
So thank you Tony that's a very good question actually because it really speaks to the PPV item as we speak to the broader inventory management and also the gross margin improvement objectives that we have and just to clarify on the ppvs are those are.
Material cost is that we are purchasing basically since the beginning of 2021 and those are basically apply to specific products and.
And being released at the time of shipments and at this point, we have had quite a bit of.
A large increase in demand and shipments in Q4 poorer for specific products that really carry quite a bit of ppvs, which was a bit of a surprise to us but the civil lining is that we have.
Pretty much done with all of the P. P vs on our inventory.
This was one of the drivers of the inventory decrease our inventory decreased by 55% $5 million a $1 million of that was that S E inventory reserves.
The rest was really the laser focus on inventory management and so once we have now our inventory down to that level. We can take advantage of the driving gross margin improvement that will result in Tucson in noticeable improvements in the second half of the year. So this is.
Still being worked on right now to your point.
39% is where we are guiding Q1, it's been a run rate or even a normalized number for the Q4 corner.
We expect to see the same level in Q2, but.
Some improvement taking place and that improvement is coming from the the.
The leverage of the CMS contract manufacturing model.
Even with the demand softness that we're seeing right now there's quite a bit of activity going on among the CMS specific either regional CMS, which are looking to capture a higher share and therefore, becoming a whole lot more competitive on the cost and quality standpoint. So those are the advantages and the opportunities that we're going to be looking at.
And leveraging throughout the year.
Got it thanks, Charlie do you feel Michael and good job on the cash management by the way.
Thank you. Thank you.
[laughter].
Our next question comes from the line of Craig Ellis with B Riley Securities. Please proceed with your question here.
Yeah. Thanks for taking the question and Michael welcome aboard and look forward to working with you. So I just wanted to start with a clarifying question as we look at the first quarter. So in the first quarter revenue guide, we're clearly are down a meaningful quarter on quarter, and we would always expect there to be seasonality in the quarter, but.
Could you provide a little bit more color around what's at play because it. It seems like we're we wouldn't have any era game connect in the quarter, although it's not clear if we have in the fourth quarter. So maybe you can clarify about then and is it just declines in each segment or.
Is that a more pronounced declines in.
Auto and and enterprise given the fact that our gross margins are staying very resilient. Despite the significant revenue decrease.
Yes.
Hi, Craig Thank you very much for the welcome.
The Q1 number as you pointed out that the midpoint is about a 17% down two sequentially, which would have expected to drop because of seasonality.
Compared to last year, it's about 6% down and that is speaking about the demand softness that Jacob was mentioning on some of the inventory level that we currently are seeing and the market is trying to sort through over the next few months.
The aftermarket business on the automotive aftermarket business remains a bright spot we do expect some continued improvement on that.
To your question on the connect we did have some shipments of direct connect SPE in the Q4 corner and.
Overall, it's basically speaks mostly from the demand softness that we're seeing right now for the Q1 quarter.
Got it and then Jacob wanted to cycle back to an issue that was brought up by a few of the others that and quite earlier and just focus on calendar 'twenty, three and where you think that business can grow year on year as she looked down to your three primary segments and sub segments. So so clearly.
In consumer carriers are trying to sort out what they do with Wi Fi six feet and six versus just hopping straight to seven but can you talk about you know what your sense is for whether or not that business can grow where and when you look at enterprise and auto are what the potential is for those businesses to grow as we.
About kind of the exit velocity of the business overall as we work through the back half of the year.
Yes sure Greg.
As I indicated in the press release with the new products.
You know that we've just recently announced.
We have to see how expanding our sandwiches.
Essentially all of our addressable market right.
Almost all of its more than double.
But what we have in.
One of the reason is the new product that we know how.
With the service provider market is under consumer right now and it's it's really now we're executing on the strategy that we are.
Lay out to you.
You guys you know.
Actually a couple of years ago is the how do we up sell to the service providers that we have.
A strong relationship we have earned their trust throughout the years, so instead of selling them.
Two of the $3.
You cannot count on the components side, we're now able to sell them a system product.
Haynes has at times more than we were able to do.
As a result of that.
And the trials already alluding to that we actually already have commenced trial with one of the.
Our largest operator in the U S.
Today, and I expect them all to Tom indicated earlier human and in WC, We received quite a few inquiries to do trials and these are major operators globally.
Strongly about the prospect.
We've got some really really highly depreciable plant.
Product.
I really appreciate where we are in as a company and then <unk> fixed wireless access there is also the networking equipment.
We're going to be launching so overall I feel good about where we're heading as a company now specifically about 2023, I think we're going to focusing on hitting.
The milestones right, how do we get more customers trials, how do we get the trust to be successful and they can get us there.
Of the patients and then ultimately winning the SKU. So that's what we're going to be focusing a lot on but Meanwhile, we still have a steady stream of revenue that's going to support the country's school.
The bigger growth is going to be 2024 and beyond.
So if the NGL crowd as quick.
Yeah, and we can we can follow up with more detail offline, Michael I did want to cycle back on the cash point really nice to see it pop by $3 million in the fourth quarter, what's your expectation for what can happen in the first quarter can we get another $3 million increase in and bring it to 15 million or.
Would it be flatter thank you.
So Q1 quarter is a bit challenging because it tends to be operationally.
The cash outflow for the quarter net.
We are definitely very laser focused on our cash balance and really optimizing that and through.
Really our working capital management. So in Q1, I do not expect it to be growing or to be flat I'm, hoping to be above the $10 million mark on that.
Over the next two quarters as we strive to be EBITDA positive is really a question of.
Optimizing this overall cash balance.
Got it thanks, Michael Thanks Jacob.
Thank you.
Yeah.
And as a reminder, if anyone has any questions you May press star one on your telephone keypad to join the question and answer queue.
Okay.
And.
And at this time.
This concludes our question and answer session.
Your question was not taken you may contact <unk> Investor relations at <unk>.
A IRG gateway IR dot com.
Now I'd like to turn the call back over to Mr. <unk> for his closing remarks.
Thank you for joining us on today's call. We look forward to updating you on our next call operator.
Thank you for joining us today for <unk> fourth quarter and full year of 2022 earnings call you may now disconnect.
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Yeah.
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Okay.
Yeah.
Okay.
Hum.
Yeah.
Yeah.