Kaleyra Inc. Q1 2023 Earnings Call
Good afternoon, welcome to <unk> first quarter 2023 earnings conference call.
After the market close Calera released unaudited results for the first quarter ended on March 31st 2023, the press release as well as a replay of today's call can be found on the company's investor relations website at investors that Calera dotcom.
Please be able to release for additional information on what will be discussed today.
At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session.
Joining us today are <unk>, founder and Chief Executive Officer, Dario, Calogero, and Chief Financial Officer, Jakob model like the Lallier.
Following their remarks, we will open the call for your questions I would now like to turn the call over to Investor Relations Shannon Devine. Please go ahead.
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Sorry about the interruption just give me one moment.
Thank you before we begin we'd like to remind everyone that during today's call management will be making forward looking statements.
Please refer to the company's SEC filings, including the company's quarterly report on Form 10-Q for summary of the forward looking statements. The risks uncertainties and other factors that could cause actual results to differ materially from those forward looking statements.
Well air cautions investors not to place undue reliance on any forward looking statements. The company does not undertake and specifically disclaim any obligation to update or revise these statements to reflect new circumstances or unanticipated or button that occur except as required by law throughout todays press release and on the COO.
We'll refer to adjusted gross profit adjusted gross margin adjusted EBITDA and adjusted earnings per share. These metrics are not determined in accordance with GAAP.
A definition calculation and <unk>.
Reconciliation to the financial statements of these non-GAAP measures can be found in the tables included in our press release.
We believe these non-GAAP measures of Clarus financial results provide useful information regarding certain financial and business trends and the result of operations now I'd like to turn the call over to Daria for an overview of Clarus first quarter Daria.
Thank you Shannon and thank you to everyone for joining us here today.
Before we get into the quarterly results I want to take a minute and they thought where investment community with some very unfortunate news.
You likely noticed our vice President of Investor Relations is not with us on this call today.
Unfortunately, a few weeks ago, we locked Colin Gillis, who joined US last June is that what I had all investor relations.
Died off that I briefly.
And we ask that you keep his family in your thoughts and prayers.
Why only with the company for a brief period call. It was an important contributor to Colorado, and we will miss them deeply.
The first quarter, which has historically been softer due to seasonality.
This growth of 4%, resulting in revenue of $83.6 million exceeding the upper end of our previously stated guidance range of $81 million.
On a constant currency basis Q1, 'twenty two 'twenty three revenue was $85.7 million, an increase of 6% over Q1 'twenty to 'twenty two.
We continue to show that consistently growing our top line year over year with a focus on our high margin businesses, and importantly, generating positive EBITDA and adjusted they could do it.
As I stated during our fourth quarter earnings call. We are very focused on improving gross margin through reducing costs and driving efficiency and balancing our product mix towards the high margin delivery channels.
Gross margin grew 19% in the first quarter to a record 20, 552%.
We have emphasized in the past we are like communication platform as a service is our customers' needs change we change with them in the most cost effective manner.
Given our ability to be agile.
This is very much sharper augmented markets with only a few global players, which is why our partnership with all the 16 on the operators and direct connectivity in over 100 countries is an advantage to our enterprise customers that can use California as a single source to leverage their global needs.
To this point and notably during the quarter, we launched our global messaging service on Oracle cloud infrastructure OCI.
This launch accelerating innovation in our space and food better capitalize on our strong partnership with particle driving the future of business communications and customer engagement.
Together, we have powered billions of interactions serving thousands of customers that are being accretive without functional timely customer engagement.
We continue to grow and solidify our leadership role in this super cycle system, extending beyond traditional SMS messaging announcing our engagement with our customer base across values industry bad because creating value for all of our complete one.
For the third quarter, we delivered 11 7 billion billable messages connected over two 2 billion by schools and the dollar based net expansion rate was 99%, but looking at the top so if you've got the man who contribute almost 70% of our total revenue.
Based on that expansion rate was 158% in the quarter.
We are committed to providing high quality Trust and trust mindset with a focus on customer satisfaction.
This is evident in our low cost I'm not sure.
And understand where all of our customer base.
Finish this portion of the call I'm very proud of our first quarter performance our value creation projects that booked are producing solid results.
<unk> in the gross margin and EBITDA improvement in the quarter and we continue to grow our revenue in line with expectations.
Satisfaction remains high and we are proud of the trust and confidence our many existing and new customers, placing us for their communication needs.
I will now turn the call over to Jack I'm off to detail our financial results.
Thank you Daria I will now run through our financial results in greater detail as David noted that our total revenue in the fourth quarter was $83 6 million, an increase of $3 1 million or 85 million in the comparable year ago period, and again above the previous.
<unk> provided the guidance, we have our global operating footprint and a well balanced portfolio across yogurt I can say in the industry sectors.
Our customer base remains strong with reoccurring zero churn now with our top 10 customers.
Countered the Florida for approximately 45% of revenues during the fourth quarter.
Gross profit for the first quarter of 2021 'twenty $1 1 million.
I think pretty exciting crazy when compared to $70 7 million for the fourth quarter at all.
Mainly driven by improved product and geographic mix.
The first quarter of 2023, or 25, 2% compared to 22% over the fourth quarter of 2022, and you can use all of 19% and 23, 9% on a sequential quarterly basis Q1, net loss totaled 10 million or 76.
And does share based on 13 million weekday, but he just shared I'm staying competitive and it can also cause pinpoint 2 million or $1.09 per share based on 12 4 million weighted average shares outstanding in the comparable year ago period.
Adjusted gross profit and don't get me wrong, but it is all about increased $2 4 million in the first quarter to $21 8 million when compared to $19 3 million in the first quarter the prior year.
Adjusted gross margin in the fourth quarter of 23, or 26% compared to 24% in the comparable year ago period, and compared to 23% in the fourth quarter of 2022.
Notably the most importantly, the first quarter of 2023 produced a first quarter. That's all part D. Since fourth quarter of 2021, a clear demand out of the company for social determinant of the cost reduction will answer in the fourth quarter of 'twenty.
Yes.
And finally just to be sure.
Operating performance was $5 3 million in the first quarter compared to 612 million in the first quarter of 2022 and compared to $2 5 million in the fourth quarter.
Cool.
Turning to the balance sheet at the end of the first quarter cash and cash equivalents.
Cash short term investments were $75 5 million compared to $78 6 million as of December 31st 2022.
Now turning to our previous announced a restructuring and cost reduction program. The value creation program is of course your continued during the first quarter 'twenty.
And as we as our previous statement is designed to position <unk> to serve the demand from global businesses to interact with our customer base using existing and emerging communication channels, while driving labor and cost efficiency by leveraging our global.
Global scale.
The program seeks to achieve in that part of your goals, one adjusted EBITDA to exceed the 20% growth.
Full year 2020, compared to fiscal year, 2020 two with the addition of growing to be a.
2024.
Organizations to rely even through the use of monthly cash payroll costs by more than 15 per same thing it can be a 2020.
Great.
Net cash provided by operating activities by fiscal year, 'twenty, three and compared it to just kind of you front end too.
Core continues to focus on R&D investment to always provide I'll call. It certainly stand them and offer new products to all water customers.
Now turning to our second quarter expectation, we remain focused on delivering on our promises with our value creation initiatives throughout the year.
We expect the company to continue to grow revenue in 2023, when compared to 2022, we remain committed to providing specific guidance one quarter a time.
The near future.
Exactly we expect second quarter revenue to be in the range of 80 to 84 million compared to $81 1 million in the second quarter of 'twenty, two and in line with the seasonality trends.
This completes my financial summary.
I'd like to turn the call back over to Gary to closing remarks.
Thank you Jack and one in summary, we had a very good quarter and we are pleased with our top line results our record margins and adjusted gross profit as we continue to focus on investing in ways to layer in our high growth channels to existing customers maintaining success, winning new customers.
And consistently expanding our operating footprint, we can expect to keep our momentum.
And with that we're ready to open the call for your questions. Operator, please provide the instructions.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request is here.
Youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
They will pause a moment as callers join the queue.
The first question comes from George Sutton with Craig Hallum. Please go ahead.
Hey, guys. This is James on for George I'm, sorry to hear about calling the very unfortunate I.
Really nice quarter here I guess can you you mentioned product mix sort of drove the higher gross margin. This quarter could you talk about what the revenue mix is between the license and the higher value revenue.
Yeah. So we are increasing our non messaging revenue from them.
Voice and from video and the TCR and they would stop so the mix is more favorable than in the past.
And then as we say we have the target to abroad 80, 20% and we are approaching that target.
Yeah.
Okay.
Yeah.
Gotcha, and then was there anything in particular that drove the strength in Q1.
I noticed the guide for Q2, the midpoint reflects a quarter over quarter decline I know typically Q1 is the low point and we sort of scale throughout the year.
Can you just touch on that.
Okay.
Yes.
In general our seasonality is more favorable in the second half.
So.
If toric Kelly, we add the 55% of the revenues at least 55% of the revenues coming in the second half. So Q1, and Q2 are low seasonality for us compared to Q3 and Q4.
Gotcha, I guess, maybe just asked a different way like why would Q2 be down from Q1.
If you consider that last year, we are up a.
Because last year Joanna unless you do you want in Q2 were flat. So we can see the.
They may be buying.
To be prudent thing, we wanted to keep a straight a tough environment to have a prudent guidance.
Gotcha.
That's it for me.
Thank you James My Best and Josh.
Next question comes from Vivek <unk> with Northland Capital. Please go ahead.
Hi, This is David on for Mike Latimore I have a couple of questions with me. The first one is how much revenue did the gap and to seek wanted within this quarter.
Yes.
Vivek look we don't disclose exactly how much revenues are coming from each segment of the business are all each piece of product, it's still increasing it keeps on growing and it's been a.
Satisfactory I would say, but we don't disclose exactly the amount of revenues coming from the campaign registrant.
Yeah.
Alright and.
How about the sizes are getting more aggressive or less ambitious.
But on the pricing on the pricing the pricing dynamic dynamics are.
Pretty much in line with the previous quarters.
Kelly is a pause senior policy to expand the gross profit in the garage and expand the gross margin. So we might be tighter in in selecting which countries, which they are route in which operators we want them.
Work with when we come to messaging, which is typically the part that is under a higher.
Hi, good pressure in terms of pricing.
If you focus on the expansion of the gross margin.
Our wishes, reaching a sizable 26% in this quarter. This is a I would say witnessing the effectiveness of our policy.
Alright.
At this time I say thank you.
Thank you Rebecca again, my best Mike.
This concludes the question and answer session I would like to turn the conference back over to Mr. Cola Jr. For any closing remarks. Please go ahead.
Thank you operator, thank you for joining us on today's call and as always we would like to thank our extensive worldwide network of partners and investors as well as our employees for their continuous support.
It either.
I would like to remind everyone that a recording of today's call will be available for replay via a link available in the investors section of the company's website. Thank you for joining us today for <unk> first quarter 2023 earnings conference call you may disconnect your lines.
Have a great day.
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