Q3 2023 Boxlight Corp Earnings Call
Speaker 1: Thank you for holding ladies and gentlemen and please remain on the line. The Box Light Conference call will begin momentarily. Thank you for your...
Thank you for holding ladies and gentlemen, and please remain on the line the box like conference call will begin momentarily. Thank you for your patience.
[music].
Speaker 2: you And
Speaker 1: Thank you and welcome to the BoxLite third quarter 2023 earnings conference call. By now everyone should have access to the press release issued this afternoon. This call is being webcast.
Thank you and welcome to the box late third quarter 2023 earnings conference call by now everyone should have access to the press release issued this afternoon.
This call is being webcast and is available for replay.
Speaker 1: The remarks today will include statements that are considered forward-looking within the meanings of securities laws, including forward-looking statements about future results of operations, business strategies and plans, customer relationships, market trends and potential growth opportunities.
The remarks today will include statements that are considered forward looking within the meanings of securities laws, including forward looking statements about future results of operations business strategies, and plans customer relationships market trends and potential growth opportunities.
Speaker 1: In addition, management may make additional forward-looking statements in response to your question.
In addition management may make additional forward looking statements in response to your questions.
Forward looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks and uncertainties and may cause the actual results to differ materially from the forward looking statements.
Speaker 1: Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks and uncertainties and may cause the actual results to differ materially from the forward-looking.
Speaker 1: A detailed discussion of such risks and uncertainties are contained in the company's most recent Form 10-K , Form 10-Q , and other reports filed with the S&P and S&P
A detailed discussion of such risks and uncertainties are contained in the company's most recent Form 10-K Form 10-Q, and other reports filed with the S. E C.
Speaker 1: The company undertakes no obligation to update any forward-looking...
The company undertakes no obligation to update any forward looking statements.
Speaker 1: On this call, management will refer to non-GAAP measures that when used in combination with GAAP results provide additional analytical tools to understand the company's operation.
On this call management will refer to non-GAAP measures that when used in combination with GAAP results provide additional analytical tools to understand the company's operations.
Speaker 1: The company has provided reconciliation to the most directly comparable GAAP financial measures in the earnings press release, which will be posted on the investor relations section of the company's website at boxlight.com.
The company has provided reconciliations to the most directly comparable GAAP financial measures in the earnings press release, which will be posted on the Investor Relations section of the company's website at box like dotcom and.
Speaker 1: And with that, I'll hand the call over to boxlights, chairman, and chief executive officer, Michael.
And with that I'll hand, the call over to <unk>, Chairman and Chief Executive Officer, Michael Pope.
Yeah.
Speaker 3: Hello everyone and thank you for joining our Q3 earnings call. Following my remarks, you will also hear from Mark Starricky, our president and Greg Wiggins, our chief financial officer.
Hello, everyone and thank you for joining our Q3 earnings call. Following my remarks, you will also hear from Mark <unk>, Our President and Greg Wiggins, Our Chief Financial Officer, Greg Greg is joining from our corporate office in Atlanta, Georgia, Mark and I are joining from Singapore, where were attending the largest education conference and exhibition in Asia.
Speaker 3: Greg is joining from our corporate office in Atlanta, Georgia. Mark and I are joining from Singapore, where we're attending the largest education conference and exhibition in Asia.
Speaker 3: As part of our company's growth strategy, we are evaluating geographic expansion in the Asia-Pacific region, particularly in Indonesia, Singapore, Taiwan, Thailand, the Philippines, and Vietnam. We are meeting with several distribution and retailer partners at the conference.
As part of our company's growth strategy, we are evaluating geographic expansion in the Asia Pacific region, particularly in Indonesia, Singapore, Taiwan, Thailand, the Philippines, and Vietnam were meeting with several distribution and reseller partners at the conference. This week.
Speaker 3: For the third quarter, we reported $50 million in revenue, $18 million in gross profit, and $4.9 million in adjusted EBITDA. Revenue declined by 28% for the quarter and by 23% for the nine months ended September 30th over the same periods last year. The revenue decline was largely a result of softer industry demand. However, we also didn't capture market shares anticipated specifically in key geographic markets and with certain product categories.
For the third quarter, we reported $50 million in revenue $18 million in gross profit at $4 $9 million and adjusted EBITDA revenue declined by 28% for the quarter and by 23% for the nine months ended September 30th over the same periods last year.
The revenue decline was largely the result of softer industry demand. However, we also didn't capture market shares anticipated specifically in key geographic markets and with certain product categories.
Speaker 3: We did maintain a stronger profit margin reporting 36% for the quarter and 37% for the nine months end of September 30th. Both an improvement over 31% and 28% for the respective periods last year.
We did maintain a strong gross profit margin reporting 36% for the quarter and 37% for the nine months ended September 30th.
Both an improvement over 31% and 28% with respective periods last year.
Speaker 3: In planning for the next several quarters, we have committed to be more financially conservative by reducing both our growth expectations and operating expense budget to ensure improved profitability.
In planning for the next several quarters, we are committed to be more financially conservative by reducing both our growth expectations and operating expense budget to ensure improved profitability.
Speaker 3: For the fourth quarter, we expect revenue and adjusted EBITDA to be in line with Q4 last year. For the four year 2024, we anticipate modest revenue growth driven by investments in one are enterprise vertical, two, certainty of graphic regions, and three are expanded products.
For the fourth quarter, we expect revenue and adjusted EBITDA to be in line with Q4 last year for the full year 2024, we anticipate modest revenue growth driven by investments in one our enterprise vertical to certain geographic regions and three our expanded product suite.
Speaker 3: To drive improved profit margins, we will be reducing certain DNA expenses that we expect will have minimal impact on short-term growth.
To drive improved profit margins, we will be reducing certain G&A expenses that we expect will have minimal impact on short term growth.
We ended the quarter with a strong balance.
Speaker 1: Please remain on the line while we reconnect Michael's line.
Please remain on the line, while we reconnect Michael fly.
Jim.
Speaker 1: Thank you for holding and please remain on the line while we reconnect the speaker.
Thank you for holding and please remain on the line, while we reconnect the speaker line.
Speaker 1: Thank you for holding and please remain on the line while we reconnect the speaker.
Thank you for holding and please remain on the line, while we reconnect the speaker line.
Speaker 3: Hello, sorry about the technical difficulties. I believe we're back now. Great.
Hello, sorry about the.
Technical difficulties I believe we're back now.
<unk>.
Speaker 3: So I'm gonna jump back a little bit in our talk script. So I believe we talked about the fourth quarter expectations. Great. Did we talk about fourth quarter expectations? For the fourth quarter, we expect revenue adjusted to be even thought of being aligned with Q4 last year. And then for the full year 2024, we anticipate modest revenue growth driven by investments in one or enterprise vertical, two certain geographic regions, and three art expanded products.
So I'm going to I'm going to jump back a little bit in our talk script.
So I believe we talked about the fourth quarter expectations, great to be talking about fourth quarter expectations. Okay. So for that for that for the fourth quarter. We expect revenue adjusted EBITDA to be in line with Q4 last year and then for the full year 2024, we anticipate modest revenue growth driven by investments in one of our enterprise vertical to certain.
Geographic regions as three our expanded product suite.
Speaker 3: To drive and prove profit margins, we will be reducing certain DNA expenses that we expect will have minimal impact on short term growth.
To drive improved profit margins, we will be reducing certain G&A expenses that we expect will have minimal impact on short term growth.
Speaker 3: We ended the quarter with a strong balance sheet, including $51 million in working capital, $18 million in cash, and $44 million in inventory. Our debt balance at quarter end was $48 million.
We ended the quarter with a strong balance sheet, including $61 million in working capital $18 million in cash and $44 million of inventory our balance at quarter end was 48, our debt balance at quarter end was $48 million subsequent to quarter end, we paid down our debt facility by an additional $4 million, resulting in a current.
Speaker 3: Subsequent to quarter-end, we paid down our debt facility by an additional $4 million, resulting in a current debt balance of approximately $44 million. Over the last 12 months, including the $4 million payment, we have reduced our debt facility by $15 million.
Balance of approximately $44 million over the last 12 months, including the 4 million payment, we have reduced our debt facility by $15 million.
Speaker 3: And in your term, we plan to refinance a debt with a lower cost totality, which will provide more favorable loan covenants and result in a substantial increase, or substantial interest expense savings.
In the near term, we plan to refinance our debt with a lower cost facility, which will provide more favorable loan covenants and result in a substantial increase.
Substantial interest expense savings.
During the third quarter, we officially introduced our Google E. L. A interactive panels clever touch impact Lux and Vimeo project.
Speaker 3: During the third quarter, we officially introduced our Google EVLA interactive panels, Clever Touch Impact Luxe and Mimio ProG.
Speaker 3: These new additions to our interactive panel line up are the first to feature direct access to the Google Play Store. They're equipped with 50 touch points, cutting edge micro antibacterial glass, and integrated NFC for quick user profile loading.
These new additions to our interactive panel lineup are the first to feature direct access to the Google play store. They are equipped with 50 touch points cutting edge micro anti bacterial glass and integrated NFC for quick user profile loading every.
Speaker 3: Every Google EDLA-certified Impact Lux and MIMEO Pro-G display also includes accelerated Level 1 and Level 2 Google-certified training.
Every Google E D. L. A certified impact locks in Vimeo approach display also include accelerated level, one and level two Google certified training.
Speaker 3: We also launched our new range of clever test commercial displays powered by award winning digital signage platform clever lives. We're proud to offer a complete digital signage portfolio that supports all types of screen deployment requirements for customer environments and both our education and enterprise verticals. Our clever touch CM series display range includes hybrid panels, Kiosk 16 by 7 and 24 by 7 displays, menu boards and LED video walls.
We also launched our new range of clever pest commercial displays powered by our award winning digital signage platform clever lives. We're proud to offer a complete visual signage portfolio supports all types of screen deployment requirements for customer environments in both our education and enterprise verticals are clever touched the M series display.
Our range includes hi, Brite panels kiosk 16 by 7% and 24 by seven displays menu boards and led video walls.
Speaker 3: During the third quarter, we were honored to win nine Best of Back-to-School awards from Tech & Learning. The awarded products span hardware, software, curriculum, and more, categorized by grade level.
During the third quarter, we were honored the window invest our back to school awards from Tech and learning the awarded products be it hardware software curriculum and more categorized by grade levels.
Speaker 3: We earned awards in both primer and secondary categories for our Mimeo wall LED displays, Mimeo DS digital signage series, Mimeo MyBot Recruit, CleverTouch Impact Lux interactive display, and FrontRow Teacher Action Mic powered by Elevate Wireless technology.
Weird awards in both primary and secondary categories for our menu, maybe a wall OLED displays many ods digital signage series Mimi on buyback recruit.
Clever touch impact Lux interactive display and front row teacher action, Mike powered by elevate wireless technology.
Speaker 3: The past Friday, clever log was also selected as the Digital Assigners Technology of the Year by the renowned AV Awards, a highly respected industry recognition, judged by experts from end user organizations, consultants, and industry leaders. This victory solidifies our position as a leading player in the Digital Assigners market.
This past Friday clever live was also selected as the digital scientists technology of the year by the renowned Avi awards, a highly respected industry recognition.
Judge by experts from end user organizations consultants and industry leaders. This victory solidifies our position as a leading player in the digital signage market.
Speaker 3: We published multiple success stories and cues, re including our success of teacher Daniel Thompson at Ronkart Academy and Atlanta, Georgia, inspiring student engagement with our lab disc, all in one science lab, and of Cameron Hefner, a STEM teacher at Liberty Local School District in Youngstown, Ohio, who has enriched them learning with our award winning my STEM kids STEM career.
We published multiple success stories in Q3, including our success a teacher Daniel Thompson at Ron Clark Academy in Atlanta, Georgia, inspiring student engagement with our lab. This all in one science labs and of Cameron Hefner of stem teacher at Liberty Local School district in Youngstown, Ohio, who is enriched stem learning with our award winning <unk>.
Tempted my stem kids stem curriculum.
Speaker 3: Collaborate Touch's success stories showcase comprehensive solutions for links, whiteboard, software, and clever live that enhance interactive learning, transforming classrooms into engaging hubs of education. We had two major rollouts with wordy down part of the defense services in the UK. The initial rollout was for 75 clever touch, impact lets touch panels with spell-on cards for collaboration and ad hoc signs.
Clever touches success story showcased comprehensive solutions for Lynx whiteboard software and clever live that enhanced interactive learning transforming classrooms into engaging hubs of education. We had two major rollouts with worthy down part of the defense services in the U K. The initial rollout was for 75 clever touch impact.
Touch panels with some on cards for collaboration and AD hoc signage.
Speaker 3: The second phase enhanced campus communication via cloud-based digital-hided system using a clever touch-EM series displays and clever live for easy content management.
The second phase enhanced campus communication V. A cloud based digital signage system using clever Techy M series displays and clever alive for easy content management.
Speaker 3: These examples highlight box-lights commitment to innovators and effective solutions and powering all use.
These examples highlight box likes commitment to innovative and effective solutions and powering all users.
Speaker 3: Lastly, I'd like to thank our shareholders and employees, reseller partners and customers for your continued support. With our dedicated employees and industry best solutions, we expect a return to revenue growth in 2024 and with stronger profit margins. With that, I will now turn the time over to our president, Mars Garth.
Lastly, I'd like to thank our shareholders employees reseller partners and customers for your continued support with our dedicated employees and industry Best solutions. We expect a return to revenue growth in 2024, and with stronger profit margins with that I will now turn the time over to our president Mark Stockard.
Speaker 4: Thank you Michael and good morning, good afternoon and good evening to everyone on the call. Q3 was a tougher quarter than we had expected and we continue to face challenging market conditions in both the US and the MIA. Despite this, we managed to book 48.5 million dollars of orders in the quarter which represents an 11% increase on Q3 last year.
Thank you Michael and good morning, good afternoon, and good evening to everyone on the call.
Q3 was a tougher quarter than we had expected and we continue to face challenging market conditions in both the U S and EMEA.
By this we managed to book 48 with $5 billion of orders in the quarter, which represents an 11% increase from Q3 last year.
Speaker 4: The return to growth order intake is key because it is an early indicator of revenue growth and our expectations are that the business should start to return to moderate revenue growth in 2024.
The return to growth order intake is key because it as an early indicator of revenue growth and our expectations are in the business should start to return to moderate rather than revenue growth in 'twenty 'twenty four.
The U S accounted for 48% of our total order intake during Q3 with 51% coming from EMEA or 1% compared to the rest of the world.
Speaker 4: The US accounted for 48% of our total order intake during Q3, with 51% coming from EMEA and 1% coming from the rest of the world.
Speaker 4: Our market share for interactive flat panels increased marginally in EMEA in Q3, from 6.6% to 6.7%, but decreased in the US from 8.4% to 6.3%, due, in the main, to some large one-off deals with other vendors.
Market share for interactive flat panels increased marginally in EMEA in Q3 from six 6% six 7% with decreases in the U S. 8.4% six 3% viewed in the main to some large one off deals with other vendors.
Speaker 4: On a year-to-date basis, our market share in the US has declined only marginally from 6.9% to 6.2% and in EMEA it is broadly the same at 6% versus 6.1% last year.
On a year to date basis, our market share in the U S has declined only marginally from $6, 9% six 2% and in EMEA. It is broadly the same at 6% plus six 1% last year.
Speaker 4: One of the main things that we are focused on is maintaining higher gross profit margins, and we have deliberately avoided some very low margin tender business, especially in southern Europe , which is part of the reason for the marginal decline in market share.
One of the main things that we are focused on is maintaining higher gross profit margins and we have deliberately avoided some very low margin tend to business, especially in southern Europe, which is part of the reason for the modest decline in market share.
Speaker 4: In other markets we have made some strong gains such as Australia where we have increased our market share from 14.9% to 18.8% over the past year. In Finland we grew our market share from 36.9% to 40.1% and in Switzerland we grew from 14.4% to 19.9% compared with last year according to data from FutureSource.
In other markets, we have made some strong gains such as Australia, where we've increased our market share from 14, 9% to 18.8% over the past year.
In Finland, we grab market share and stretch of six 9% to 44, 1% and in Switzerland. We grew from 14.4% to 19, 9% compared with last year. According to data from Piyush source.
Speaker 4: We have very high market share in some other European countries such as Austria where we have 36.7%, Ireland where we have 34.7%, Belgium with 28.1% and Denmark with 22.7%.
We have very high market share in some other European countries, such as Austria, where we have 36.7%, Ireland, where we have such spoke with 7%, Belgium with 28, 1% and Denmark with 22, 7%.
Speaker 4: The most important market in EMEA remains Germany and this is where we have the largest opportunity as our market share is relatively low at 5.2%.
The most important market in EMEA remains Germany, and this is where we have the largest opportunity as our market share is relatively low at five 2%.
Speaker 4: Over the past 12 months we have doubled the size of the German sales series and our expectation is that we can achieve double digit market share within the next two years.
Over the past 12 months, we have doubled the size of the German sales team and our expectation he said, which achieved double digit market share within the next two years.
Speaker 4: Some of our key orders in the U.S. included $7 million from ELB, currently our fastest-growing partner.
Some of our key orders in the U S included $7 million of E. L. B.
The fast growing partner.
Speaker 4: $5 million from Bloom, $2.6 million from Cameramundi based in Puerto Rico, and $1.2 million from GDI, a U.S. distribution partner.
5 million adults from Blue Chip went 6 million adults can mcguinty, basically Costa Rica, and $1.2 million from <unk>, Our U S distribution partner.
Speaker 4: Overseas, we had some excellent orders, including $2.3 million from IDNS in the UK, $1.2 million from CanCom in Germany, and $1 million from Charmex International in Spain, to name a
Overseas, we have some excellent orders, including $2.3 million largeness in the UK $1.2 million from shrink calm in Germany of $1 million and Xiaomi ex international in Spain to name a few.
Speaker 4: Our new generation of Google-accredited CleverTouch screens started shipping during Q3, and customer feedback has been
Our new generation of Gila credits at <unk> screen started shipping during Q3 and customer feedback has been excellent.
Speaker 4: Our Google-accredited Mimeo screens will start shipping during Q4 in the U.S. We believe these fully integrated Google screens will prove very popular with school districts.
At Giga critic Mimea screens, we stopped shipping June Q4 in the U S. We believe these fully integrated digital screens will proved very popular with school districts.
Speaker 4: In the U.S., we had some fantastic wins, including over 3,000 panels and stands shipped to El Paso School District in Texas by our partner, ELB. We also continue to supply more than $1.2 million of panels to Las Cruces in New Mexico, again by ELB. We had some great wins in Michigan with over $1 million of screens and audio solutions delivered by our partner, DAT.
In the U S. We have some fantastic wins, including over 3000 panels and stands shipped to El Paso School District in Texas by Rob Hoffman E. L. B. We also continued to supply more than $1.2 million panels, Las Cruces, New Mexico gained by LP, we have some great wins, Michigan with everyone.
$1 billion of screens and audio solutions delivered by our partner <unk>.
T.
Speaker 4: In Dayton, Ohio, we won a very large order to supply a front row audio solutions across the district, worth over $1.5 billion via our partner Bloom.
In Dayton, Ohio, We won a very large order to supply us front row audio solutions Cross district West over one point $500 for apartment Blue.
In the U K.
Speaker 4: In the UK, we supplied a first shipment of 1,100 screens to the Welsh schools, via our partner IDNS worth approximately $1.7 million. We'd also had some great wins in Germany shipping 600 screens under the Kid Tender via our partner Cancom worth approximately $1.2 million.
In the UK, we supplied our first shipment of 1100 screens the wealth schools by Rob Partlow Idms worth approximately $1.7 million. We also had some great wins in Germany shipping 600 screens under the kit tender by Republic, Henkel was approximately $1.2 million.
Speaker 4: We also won the Dusseldorf tender for 400 screens, which shipped in the quarter worth approximately 800k.
Also while dusseldorf tender for 400 screens with shifting towards.
With approximately 800 K.
Speaker 4: In summary, despite QCE revenues being down, we booked the first increase in order intake in five quarters and we believe this marks the turning point in the cycle with a steady return to revenue and EBITDA growth.
In summary, despite QC revenues being down we booked the first increase in order intake in five quarters and we believe this marks a turning point in the cycle with a steady return to revenue and EBITDA growth with that I will now turn the call over to our CFO Rick begins.
Speaker 4: With that, I will now turn the call over to our CFO , Greg Wiggins.
Speaker 5: Thanks, Mark, and good afternoon, everyone. I will now review our third quarter results.
Thanks, Mark and good afternoon, everyone I will now review our third quarter results.
Speaker 5: revenues for the three months ended September 30, 2023 were $49.7 million as compared to $68.7 million for the three months ended September 30, 2022, resulting in a 27.7 percent decrease and was due to lower sales volumes across all markets.
Revenues for the three months ended September 32023 were $49 7 million as compared to $68 7 million for the three months ended September 32022, resulting in a 27, 7% decrease and was due to lower sales volumes across all markets.
Speaker 5: Gross profit for the three months ended September 30, 2023 was $18 million as compared to $21 million for the three months ended September 30, 2022.
Gross profit for the three months ended September 32023 was $18 million as compared to 21 million for the three months ended September 32022.
Speaker 5: Gross profit margin for Q3 2023 was 36.3%, which is an increase of 570 basis points over the comparable 2022 quarter.
Gross profit margin for Q3, 2023 was 36, 3%, which is an increase of 570 basis points over the comparable 2022 quarter.
Speaker 5: Gross profit margin adjusted for the net effect of acquisition-related purchase accounting was 37.2% as compared to 31.6% as adjusted for the three months ended September 30, 2022. The improvement in gross profit margin in Q3 2023 compared to Q3 2022 is primarily due to lower manufacturing costs and continued reductions in freight costs over the prior year period.
Gross profit margin adjusted for the net effect of acquisition related purchase accounting was 37, 2% as compared to 31, 6% as adjusted for the three months ended September 32022.
The improvement in gross profit margin in Q3 2023 compared to Q3 2022 is primarily due to lower manufacturing costs and continued reductions in freight cost over the prior year period.
Speaker 5: total operating expenses for Q3 2023 were $29.6 million and included a goodwill impairment charge of approximately $13.2 million due primarily to lower sales volume stemming from the industry downturn and a change in the company's reporting segments in 2023, which resulted in a change in the company's reporting unit.
Total operating expenses for Q3, 2023 were $29 6 million and included a goodwill impairment charge of approximately $13 2 million due primary to primarily to lower sales volume stemming from the industry downturn and a change in the Companys reporting segments in 2023, which resulted in a change in the companies.
Reporting units other expense for the three months ended September 32023 was a net expense of $3 1 million as compared to net expense of $2 8 million for the three months ended September 32022.
Speaker 5: Other expense for the three months ended September 30, 2023 was a net expense of $3.1 million, as compared to net expense of $2.8 million for the three months ended September 30, 2022.
Speaker 5: The increase in expense was primarily due to an increase in interest expense of approximately $400,000 partially offset by gains recognized from the change in fair value of derivative liabilities of approximately $200,000 in Q3 2023.
The increase in the increase in expense was primarily due to an increase in interest expense of approximately 400000, partially offset by gains recognized from the change in fair value of derivative liabilities of approximately 200000 in Q3 2023.
Speaker 5: The company reported a net loss of $17.8 million for the three months ended September 30, 2023, as compared to net income of $3.1 million for the three months ended September 30, 2022.
The company reported a net loss of $17 8 million for the three months ended September 32023, as compared to net income of $3 1 million for the three months ended September 32022.
Speaker 5: Net loss attributable to common shareholders was approximately $18.1 million for Q3 2023 compared with a net income attributable to common shareholders of $2.8 million for Q3 2022 after deducting the fixed dividends to Series B preferred shareholders of $317,000 in both 2023 and 2022.
Net loss attributable to common shareholders was approximately $18 1 million for Q3 2023, compared with net income attributable to common shareholders of $2 8 million for Q3 2022. After deducting the fixed dividends two series B preferred shareholders of 317000 in both 2023 and 2022.
Speaker 5: Total comprehensive loss for the three months ended September 30, 2023 was $20.6 million compared to total comprehensive loss of $1.9 million for the three months ended September 30, 2022. Reflecting the effect of foreign currency translation adjustments on consolidation with the net effect in the quarter of approximately $2.9 million loss and $5 million loss for the three months ended September 30, 2023 and 2022, respectively.
Total comprehensive loss for the three months ended September 32023 was $20 6 million compared to total comprehensive loss of $1 9 million for the three months ended September 32022.
Collecting the effect of foreign currency translation adjustments on consolidation with the net effect in the quarter of approximately $2 9 million loss and 5 million loss for the three months ended September 32023, and 2022, respectively.
Speaker 5: EPS loss per basic and diluted share was $1.90 for Q3 2023. EPS per basic and diluted share for Q3 2022 was $0.31 and $0.28, respectively.
EPS loss per basic and diluted share was $1 90 for Q3 2023.
<unk> per basic and diluted share for Q3, 2022 was 31 cents and 28, respectively.
Speaker 5: EBITDA loss for the quarter ended September 30, 2023 was $9.4 million, which included the goodwill impairment charge of $13.2 million.
EBITDA loss for the quarter ended September 32023 was $9 4 million, which included the goodwill impairment charge of $13 2 million.
Speaker 5: as compared to 8.5 million EBITDA for the quarter ended September 30, 2022.
As compared to $8 5 million EBITDA for the quarter ended September 32022 <unk>.
Speaker 5: Adjusted EBITDA for Q3 2023 was $4.9 million, as compared to $9.9 million for Q3 2022. Adjustments to EBITDA include stock-based compensation expense, impairment of goodwill, gains losses from the remeasurement of derivative liabilities, gains losses recognized upon the settlement of certain debt instruments, and the effects of purchase accounting adjustments in connection with recent acquisitions.
Adjusted EBITDA for Q3, 2023 was $4 9 million as compared to $9 9 million for Q3 2022.
Adjustments to EBITDA include stock based compensation expense impairment of goodwill gains losses from the re measurement of derivative liabilities gains losses recognized upon the settlement of certain debt instruments and the effects of purchase accounting adjustments in connection with recent acquisitions.
Speaker 5: EBITDA lost for the nine months in its September 30, 2023 was 3 million as compared to 12.9 million for the nine months in its September 30, 2022. Adjusted EBITDA for Q3 2023 was 13.7 million as compared to 16.3 million for Q3 2022.
EBITDA loss for the nine months ended September 32023 was $3 million as compared to $12 9 million for the nine months ended September 32022.
Adjusted EBITDA for Q3, 2023 was $13 7 million as compared to $16 3 million for Q for Q3 2022.
Speaker 5: Turning to the balance sheet, at September 30, 2023, BoxLite had $18.4 million in cash, $61.4 million in working capital, $44.1 million in inventory, $180.3 million in total assets, $44.4 million in debt, net of debt issuance cost of $3.6 million, and $30.6 million in stockholders' equity.
Turning to the balance sheet at September 32023 box light had $18 4 million in cash $61 4 million and working capital $44 1 million in inventory $183 million in total assets $44 4 billion and debt net of debt issuance cost of $3 6 million and $36 million in <unk>.
Stockholders equity.
Speaker 5: As September 30, 2023, Box Flight had 9.6 million common shares issued in outstanding and 3.1 million preferred shares issued in outstanding.
At September 32023 box light had $9 6 million common shares issued and outstanding and $3 1 million preferred shares issued in outstanding.
Speaker 5: As September 30, 2023, the company was not in compliance with the senior leverage ratio under its credit agreement. The company's noncompliance was cured by the company paying 4 million principle in November , which would have resulted in the company being in compliance with the senior leverage ratio at September 30, 2023. The company is actively seeking to refinance its debt with new lenders, that the company believes will be on terms more favorable to the company. Following the 4 million principle repayment, the company's debt balance is approximately 44 million.
At September 32023, the company was not in compliance with the senior leverage ratio under its credit agreement. The company's noncompliance was cured by the company paying 4 million principal in November which would have resulted in the company being in compliance with the senior leverage ratio at September 32023.
The company is actively seeking to refinance this debt with new lenders to the company believes will be on terms more favorable to the company.
Following the 4 million principal repayment the company's debt balance is approximately 44 million include.
Speaker 5: including the $4 million paid in November , since Q3 2022, the company has repaid principal on its credit facility of approximately $15 million.
Including the 4 million paid in November since Q3 2022. The company has repaid principal on its credit facility of approximately $15 million.
Speaker 5: We continue to strategically review our capital structure and use of free cash, including but not limited to paying down debt, executing on our share repurchase program, and finding more attractive financing agreements arrangements to replace our current facilities. We believe that cash flow from operations will continue to support our ongoing operations without the need for additional equity or debt financing. With that, we'll...
We continue to strategically review, our capital structure and use of free cash, including but not limited to paying down debt executing on our share repurchase program and finding more attractive financing agreement arrangements to replace our current facilities. We believe the cash flow from operations will continue to support our ongoing operations without the need for additional.
Equity or debt financing.
With that we'll open up the call for questions.
Yes.
Speaker 1: Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question
Certainly at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment.
Speaker 1: You may press star 2 if you would like to remove your question from the...
Speaker 1: for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please.
And may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Speaker 1: Your first question for today is coming from Brian Kinslinger with Alliance Global.
Your first question for today is coming from Brian can Slinger with Alliance Global partners.
Speaker 6: Great, thanks for taking my questions. Can you help reconcile the stronger orders you were seeing in July through the first few weeks of August and even for the quarter?
Great. Thanks for taking my questions.
Can you help reconcile.
The stronger orders you were seeing in July through the first few weeks of August and even for the quarter and you talked about that at the end of the second quarter.
Speaker 6: You talked about that at the end of the second quarter, sorry, in the second quarter conference call. Can you reconcile that with the lower than expected revenue? I think we were looking for a lot more than was delivered. Did you see oral cancellations that may have made order stronger? Did some of the demand disappear? Just trying to understand what changed so quickly versus what we said. I think we made all this.
Sorry in the second quarter conference call can you reconcile that with the lower than expected revenue I think we were looking for a lot more than we have delivered did you see order cancellations that may have made order stronger.
Did some of the demand disappear just trying to understand what changed so quickly versus what we said I think it was mid August.
Speaker 4: Yeah, hi Brian . Look, I think, you know, basically it was softer demand. We didn't have any canceled orders. We expected, and I think the industry was expecting much stronger demand in Q3. We started to see that, but it just didn't really take off. And the second half of Q3 was a lot slower than we expected. So, you know, the bottom line is, it was just softer demand across the board, both in the US and EMEA during Q3. And so, you're at a.
Yes, Hi, Brian.
Look I think.
Basically it was soft demand we didn't have any canceled orders.
We expected and I think the industry was expecting much stronger demand in Q3, we started to see that but it just didn't really take off in the second half of Q3 was a lot slower than we expected.
So the bottom line is it was just softer demand across the board both in the U S and EMEA during Q3.
So youre right its Tom.
Yes.
Speaker 3: Go on. Yeah, we just had, you know, we ended the quarter with an increase in customer wears up 11%. Just, you know, which we expected.
Glenn I would just add.
We ended the quarter with an increase in customer orders up 11%, which we expected we expected greater than that but but we did see a nice increase but not nearly to the extent, we thought and then leading into Q4 I'll just mention you've probably heard that we're guiding really revenue to be flat adjusted EBITDA would be flat with last year.
Speaker 3: You know, we expected greater than that, but we did see a nice increase, but not nearly to the extent we felt.
Speaker 3: And then, you know, leading into Q4, I'll just mention, you've probably heard that we're guiding really revenue to be flat, adjusted to be flat with last year. And that's really as a result of Q3 being a little bit slower than we expected rolling into Q4. But we are still quite optimistic for next year. You know, looking at our pipeline, other indicators, we do believe we'll start to see growth again next year.
And that's really as a result, our Q3 being our lowest a little bit slower than we expected rolling into Q4, but we are still quite optimistic for next year.
Looking at our pipeline of other indicators, we do believe we'll start to see growth again next year.
Speaker 6: I guess with the industry and even box light, expecting stronger demand, what are customers saying to the conference now? You're seeing customers, is it alacabudgets? They already adopted enough new technology. They're trying to digest in the classroom. What do you think has changed in terms of market dynamic? Or what are you hearing that's changed?
Okay, I guess with the industry and even bauxite expecting stronger demand what are customers, saying you were at a conference now youre seeing customers is it a lack of budgets they already adopted enough new technology. They are trying to digest in that.
Classroom.
What do you think has changed in terms of the market dynamic.
Or what are you hearing that's changed.
I think generally Brian is just it.
Say.
Speaker 4: The customers just like not maybe as urgent as they want. I mean, definitely after their pandemic and the stresses on the global supply chain.
The customers just like not maybe as Jim because I mean definitely off the pandemic and stresses on the global supply chains. There was a law urgency and a huge amount of orders being placed.
Speaker 4: There was a lot of urgency and a huge amount of orders being placed and maybe some end users spent a lot of budgets and now we're looking at big projects which are all expensive cuter and now I've just played a few months, it's now happening to you for other's been pushed into the new year. That's kind of what we're seeing. It's not a one big thing, it's just a general, people are not urgent to place large orders and kind of just slowing down slightly.
Maybe some end uses.
<unk> spent a lot of it budgets and now.
The big projects, which are expected in Q3 now not just a few months now happened in Q4, that's been pushed into the new year, that's kind of what we're seeing is no. There's.
There's not one big thing is just a general.
If people are not as urgent to place large orders and kind of just slowing down slightly.
No.
Speaker 6: Assuming revenue is flat, you're over year. I get that G&A cuts take some time, but you have much better shipping rates. You've talked about much higher gross margin.
Assuming revenue is flat year over year.
I get the G&A cuts take some time, but you have much.
Better.
Shipping rates, you've talked about much higher gross margin.
Speaker 6: If revenue was flatish, why wouldn't EBIDA be higher?
If revenue wise flattish why wouldnt EBITDA be higher.
Speaker 6: marginal looking at the next year yet i'm still at the fourth quarter because the rates of the rates recovered to be in the year i'm just looking at you over here in the fourth quarter i uh... i get the uh... next year's a different story
Even margins looking into next year.
I'm not sure what the fourth quarter because the rates are the rates recovered to begin the year I am just looking at year over year in the fourth quarter I get the next year is a different story.
I mean <unk>.
Speaker 4: I mean, gross profit in two four last year, I think it was just on the 34% and I think we were running it, you know, a bit higher than that in two three. So it's gonna start to get marginal. You did start the gross profit in creeper the end of last year. So I think it would be in a marginal difference.
Gross profit in Q4 last year I think was just under 34%.
And I think we were running it.
They are higher than that in Q3.
It's going to start getting module you did stop.
Gross profit increase of the end of last year. So I think it would be in a module differences.
Speaker 6: Okay and then the competitive land ATE driver.
Okay, and then on the competitive landscape driver.
Speaker 3: If Brian is just real quick comment and that is, I think that's really been, you know, for this year for 2023, we started the year with a bit lower growth problem margin in Q, really on the year and kind of ramped.
Hey, Brian just real quick comment on that and I think thats really been.
For this year for <unk> for 2023, we started the year with a bit lower gross profit margin in Q.
On a year to kind of ramp.
I guess really.
Speaker 3: I guess beginning of last year we had a Q1 especially with stuff, but we also ran a little bit this year and we have kind of higher growth proper margins. We've guided last quarter we mentioned, we didn't know that we could sustain 37, 38% type margins, that may come down some. So I think an event to be conservative, Q4 going in the next year, I don't know that you had to expect 36, 37, 38% growth proper margin, but we ought to be maybe closer to 35 or something like that. So if that's the case, then we're not going to be real far off from Q4 last year. Last.
I guess beginning of last year, we had we had in Q1, especially with staff, but we also ramped a little bit kind of this year, we have kind of higher gross profit margin. We guided last quarter. We mentioned, we didn't know that we could sustain 37, 38% type margins that that may come down. Some so I think any event to be conservative in your Q4 going into next year I don't know that yet.
Correct.
Yes.
637, 38% gross profit margin, but we ought to be kind of you know, maybe maybe closer to 35% or so something like that and so if thats. The case and we're not going to be real far off of Q4 last last yourself.
Speaker 6: Yeah, more questions. The first one is.
Yes more questions. The first one is.
Sorry, Brian I was good.
Speaker 5: Okay, sorry. The margin for Q4 last year, just a reminder was close to 34%. So as Michael said, it was actually taking upward toward the end of last year. And so while that's held and actually.
I'm, sorry, the margin or the margin for Q4 last year, just as a reminder was.
Close to 34% so as Mike was saying it was actually ticking upward toward the end of last year and so while that's held in actually increased.
Speaker 5: you know, for a good portion of the 2023 year, you know, we'll probably see that start to decline just a little bit. So the pickup from the margin increase, you know, when we're looking at Q4 won't necessarily be at drastic as not as great.
For a good portion of the 2023 year.
We will still probably see that start to decline just a little bit so the pickup from the margin increase when we're looking at Q4.
Necessarily be as drastic as it is not as great Yep Yep.
Speaker 6: And then, on the gaining market share, you've been gaining market share for several quarters. Has anything changed from a competitive perspective? Number one, and then in Germany, you're talking about the biggest opportunity to gain share. What do you think makes that market right for market share gains? And then I have one last question.
And then on the gaining market share you've been gaining market share for several quarters is there anything changed from a competitive perspective number one and then in Germany, you were talking about the biggest opportunity to gain share. What do you think makes that market right for market share gains and then I have one last question.
Speaker 3: Maybe I'll take a couple things Mark, and you can jump in kind of more specifically. Yes, so if you look at this year, year to day, we have not gained kind of cross the board on our major market, US and the media. If you look at those blended as Mark shared in his portion of the talk track.
Yes, maybe I'll say a couple of companies Mark you can jump ecommerce specifically, yes. So so if you look if you look at this year year to date, we have not gained kind of across the board in our major markets U S and EMEA. If you look at those blended as Mark shared in his portion of the contract.
Speaker 3: We didn't really gain much market share. So that was a little bit disappointing that that didn't happen. You know, this year we were relatively flat with a market. Now we did in certain geographies, we did have upticks and other ones, we were down a little bit, but we're pretty optimistic that that can turn next year and that we will start to gain market share. Now, when we talk about market share data too, we're only really talking about interactive flat panel displays because that's the market share data that we subscribe to when we receive. We don't see a lot of market data around our other solutions.
We didn't really gain much market share so that that was a little bit disappointing that that didn't happen. This year, we were relatively flat with a market that we did in certain geographies. We did have upticks in other ones, we were down a little bit, but but we're pretty optimistic that that can turn next year that we will start to gain market share now when we talk about market share data to where we're only really talking about.
Interactive flat panel displays disaster market share data that we subscribed to only receive we don't see a lot of market data around our other solution suites.
Speaker 3: But speaking to growth in the next year, I'll talk a little bit more broadly, and then Mark, you can talk maybe specifically at Germany or the markets, but talking more broadly looking in next year, the reason that we think we can see some growth.
But speaking to growth into next year I'll talk a little bit more broadly and then Mark you can talk maybe maybe specifically in Germany other markets, but but talking more broader look into next year. The reason that we think we can see some growth is because we've invested in the enterprise vertical we're going to we know we're going to bring in some new business in enterprise. So that's one.
Speaker 3: is because we've invested in the enterprise vertical, we know we're gonna bring in some new business in enterprise, so that's one. Secondly, we invested in certain geographies. You mentioned Germany, which Mark will talk more about, but that's an example of a geography where we're gonna see some brokerage rapidly based on people investments we've made in those areas. And the third is growth in our products week, because we've launched a lot of products. If you look over the last 12 months, we launched our new line of non-interactive displays. Those are new in the US. We didn't have those before. Our new LED video walls, newly launched this year, our new media hub, newly launched this year.
Secondly, we invested in certain geographies, you mentioned, Germany, which market Mark will talk more about but that's an example of a geography, where we're going to see some growth geographically based on people investments. We've made in those areas and then third is growth in our product suite, because we've lost some adding products. If you look over the last 12 months, we launched a new line of non interactive displays those are new.
New in the U S. We didn't have those before our new LTE video walls, new newly launched this year, our new media newly launched this year.
Speaker 3: Our EDLA interactive flat panel displays new this year. A lot of new integrations between our audio solution and our interactive flat panels, including our attention, solution, newly launched this year. Large investments in our software and links whiteboard and maybe you'll connect.
Our <unk> interactive flat panel displays new this year a lot of integrations between our audio solution and our interactive flat panels, including our attention exclusion neulasta each year large investments in our software and links LIBOR and maybe I'll connect clever alive and other other SaaS software solutions and so a lot of these products.
Speaker 3: other other software solutions. And so a lot of these product investments that's at 30 area where we expect to see growth. So even if the interactive flat panel display market is relatively flat next year, which we expected to be in the US and in the media, we are going to see some growth.
Investments that's at 30 area, where we expect to see growth. So even if the interactive flat panel display market is relatively flat next year, which we expect it to be in the U S and in EMEA, we are going to see some growth because of those investments in those various areas and we think that because of that will take a little bit of market share as well within <unk>.
Speaker 3: because of those investments in those various areas. And we think that because of that, we'll take a little bit of market sure as well with the knife.
Speaker 4: I just quit one of Germany's grinds, who asked me about Germany. So look, it is now the biggest market for IPD in Europe . It wasn't until that's changed in the last 15 months because the biggest market. And across Europe , in many countries, we actually have really high market share. Germany, if you want to stand out as being in the significant low, last year we were at 4.5% in Germany. We're now at the 5.2, but we hired and significantly, like we double the size of our German sales team from like 5 to 10.
Yes, sorry, I'll, just just equivalent of Germany, Brian you're asking about Germany.
Is now the biggest market properties in Europe again, it wasn't until that has changed at all since amongst the biggest market and across Europe. In many countries, we actually have really high market share and Germany dwell it stands out as being significant law. We last year, we were at four 5% in Germany without the five week too, but we harness and significantly lower.
With the size of our sales team from like five to 10 and.
Speaker 4: And that's only really, you know, that happened over the last 12 months. Those guys are now starting to kick in and they're really winning some big deals.
And Thats only released that happened over the last 12 months those guys now stance ticket in terms of really with big deals.
Speaker 4: The other thing is we've just, next week, where she flats Germany and we're opening our first showroom in Germany. So again, it kind of gives us more presence in Germany. And that will be a key key market for us to grow. I think we've got the right team now to grow market share.
Other thing is we've just next week last jeopardy.
We're opening a showroom in Germany, So again economy gives us more presence in Germany.
That will be a key market for us.
We think we've got the ROTC meant to grow market share.
Speaker 7: My last question on the debt covenant. Sounds like you're back in compliance after paying four million if I have that right.
Great. My last question on the debt covenants. It sounds like you are back in compliance after paying 4 million if I have that right.
Speaker 7: What is a required covenant for the net leverage ratio or whatever covenant you missed so we can gauge where you are or going to be in the future?
What is the required covenant for the net debt the net leverage ratio or whatever covenant you missed.
So we can gauge where you are going to be in the future.
Speaker 5: Sure, so for Q4, it will be two and a half times. And that's in accordance with the original debt agreement that we entered into. Obviously, as we've said, we're actively looking to seek refinancing on our credit facility and we're optimistic that we'll be able to.
Sure. So for Q4, its a it will be two five times.
And that's in accordance with the original debt agreement that we entered into.
Obviously as we've said you know we're actively looking to <unk>.
<unk>.
Seek refinancing on our credit facility and we're optimistic that we'll be able to.
Speaker 5: you know, find a solution that, you know, will give us more favorable terms in the, in the not to just in the future. So we're, you know, we're optimistic about that. I would say that, you know, in terms of just overall leverage ratio, you know, even despite the, even despite the four quarter, you know, downturn, you know, the industry's experienced, you know, again, which we've started to.
Find out and find a solution that will give us more favorable terms in the in the not too distant future. So we're we're optimistic about that I would say that in terms of just overall leverage ratio even despite the even despite the four quarter downturn. The industry has experienced again, which we've started to.
Speaker 7: you know see some early signs you know turn around you know that even with the last four quarters being downturn our leverage ratios been maintained under under three times which you know I think is you know speaks to the you know positive we've been able to generate you know through our improved margins so you know it was down to two and a half but you have to get into and a half or that's where you're going to be.
You see some early signs of turnaround that even with the last four quarters being downturn, our leverage ratio has been maintained under under three times, which I think is.
It speaks to the positive EBITDA, we've been able to generate through our improved margins.
Uh huh.
That down to two and a half, but you have to get two and a half or that's where youre going to be.
Speaker 5: Q and a half is our requirement for Q4. Got it. Okay. Thank you.
Two and a half is a requirement for Q4 got it okay. Thank you.
Yes.
Thanks, Brian.
Speaker 1: Your next question is coming from Jack Vander Van Arty at Maximum.
Your next question is coming from Jack Vander Van Rd at Maxim Group.
Speaker 8: Okay, great. Thanks for the update guys. Many of my questions have been asked, but maybe I'll just circle back to kind of...
Okay, great. Thanks for the update guys and many of my questions have been asked but maybe.
Maybe I'll just circle back to kind of the guidance.
Speaker 8: the guidance. So, so last quarter, the overall tone and just kind of verbal body language felt like you're pretty confident in the third quarter outlook and obviously you had a slower back hat than expected. But just looking at the fourth quarter guidance, envelopes in kind of the tone and body language and last quarter, how confident are you in hitting those targets for the fourth quarter?
So so last quarter, the overall tone and just kind of verbal body language felt like youre pretty confident in the third quarter outlook and obviously you had a slower back half unexpected, but just looking at the fourth quarter guidance.
And golf and just kind of the <unk>.
Tone and body language last quarter, how confident are you in hitting those targets for the fourth quarter.
Speaker 4: Yeah, hi Jack, it's my start here. Listen to that. Look, we're pretty talking, we think we, we try to be more conservative on the Q4 call. We basically say look flat with 2022.
Yeah, Hi, Jack it's Mark documentation.
Look we're pretty cold.
I think we try to be more conservative on the Q4 call. We basically said look flat with 2022.
<unk>.
Speaker 4: Q3 was disappointing, right? And the second half, especially, right? You know, when we did our call three months ago, we did, you know, we could see we're gonna definitely grow an order intake. We actually saw the growth in order to be hard and what it ended up with. We ended up with 11, we could be tensing north and 20%. So it was definitely slower on the second half of Q3. We have been more conservative and our guidance for Q4 as well.
G III, what disappoints a great week.
The second half, especially right.
When we did our call.
Three months ago, we did.
You can see we're going to definitely grow and order intake, we actually fueled the growth in orders it would be hard what it ended up with we ended up with 11 week or it could be potentially 20%. So he is definitely slower in the second half of Q3.
We have been more conservative in our guidance for Q4 was one site.
Okay, No that makes sense that's helpful and then maybe just.
Speaker 8: Okay, now that makes sense, that's helpful. And then maybe just, Michael, you opened up the comments about Asia and everyone's different geographical positions or locations. Can you have just talked a little bit more about your expansion opportunity planned in Asia? And it sounds like you're someone early in maybe devaluation phases, but when might you see some tangible results from any new potential Asia market opportunity?
Michael you opened up with comments about Asia, I know everyone's different geographical positions are locate locations can you maybe just talk a little bit more about your expansion opportunity planned in Asia and it sounds like Youre somewhat early and maybe devaluation phases, but.
When might you see some tangible results from any new potential Asia market opportunities.
Speaker 3: Yes, so right now clearly the biggest opportunities for growth for us are in the US. And then I would say Western Europe , particularly Germany.
Yes, so right now clearly the biggest opportunity for growth for us are in the U S. And then I would say western Europe, particularly Germany.
Speaker 3: We're also seeing a lot more opportunities from Europe . We also haven't employed now in the Middle East and are seeing more opportunities in Middle East, but I think, again, the US and the US region are by far the largest growth opportunities for us over the next 12 months.
We're also seeing a lot more opportunity in eastern Europe. We also have an employee now in the middle East and are seeing more opportunities in middle east, but so I think again the U S. EMEA region are by far the largest growth opportunities for us over the next 12 months.
Speaker 3: But but we're just starting to and we sell some in the APEC region and particularly Australia do quite well And we have sold in other other countries throughout Southeast Asia not large quantities But but I would say we're optimistic we can start to see some meaningful growth even over the next 12 months in that region But I would say if you're looking at you know again over the next 12 months in particular it's it's a substantial growth It's really going to come from our kind of our existing territories over the next you know next next to quarter
But we're just starting to and we sell some in the APAC region, and particularly Australia doing quite well and we have sold and other other countries throughout southeast Asia, not large quantities, but I would say that we're optimistic we can start to see some meaningful growth even over the next 12 months in that region, but I would say if youre looking at Canada.
The next 12 months in particular, it's substantial growth, it's really going to come from our kind of our existing territories over the next next next few quarters.
Okay.
Speaker 8: Okay, okay. And then maybe just in terms of some of the orders that were slow, you know, and the slowdown kind of happened in the back half of the quarter. Can you talk about maybe, was there any new once trend to a bigger slowdown in corporate enterprise versus your KTU-12 education market? So it was only sort of distinct trends there or was it pretty much just, was it really indeed general overall saw?
Okay, and then maybe just in terms of.
Some of the orders that were slower.
Slowdown can happen in the back half of the quarter.
Can you can you talk about maybe it was there was there any nuance trends a bigger slowdown in in in corporate enterprise versus your K 12 education market was there any sort of distinct trends there or was it pretty much just was it really indeed general overall softness.
Speaker 3: Well, if you look at overall business, enterprise is less than 10% or total business. I mean, we are largely, really large at K-12 education company today. Now, we're looking to grow that enterprise vertical. And that's happening. Actually, we saw growth in enterprise. And we think we're going to see substantial growth enterprise next year. And so it wasn't enterprise vertical. It was purely education vertical that was slower than expected.
Well if you look at overall business enterprise is less than 10% of our total business. I mean, we are largely really large K 12 education company today now we're looking to grow that enterprise.
Vertical and that's happening as we saw growth in enterprise and we think we're going to see substantial growth enterprise next year.
And so it wasn't it wasn't enterprise vertical it was it was purely education vertical that was slower than expected.
Speaker 8: Okay, understood. I think that's it for me guys. I appreciate the update and good luck going forward. Thank you.
Okay understood.
I think thats. It for me guys I appreciate the update and good.
Good luck going forward. Thank you.
Thanks Jay.
Speaker 1: We have reached the end of the question and answer session and I will now turn a call over to Michael for closing remarks.
We have reached the end of the question and answer session and I will now turn the call over to Michael for closing remarks.
Speaker 3: Thank you everybody for joining the call today. We appreciate your support. We look forward to speaking again in March when we report our 2023 full year zone.
Thank you everybody for joining the call today.
And we appreciate your support.
We look forward to speaking again in March when we report our 2023 full year results.
Speaker 1: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.