Q1 2024 Tigo Energy Inc Earnings Call
Good afternoon, welcome to <unk> Energy's fiscal first quarter 2044 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session joining us today from Tyco or Z alone C.
C E O and build a rush line C.
CFO as a reminder, this call is being recorded I would now like to turn the call over to Bill Russell Chief Financial Officer.
Thank you operator, we'd like to remind everyone that some of the matters, we'll discuss on this call, including our expected business outlook and ability to reach cash flow breakeven adjusted EBITDA breakeven and long term growth prospects expectations regarding a recovery in our industry statements about current and future inventory levels and their impact on future financial result.
<unk> inventory supply and its impact on our customer shipments in our revenue and adjusted EBITDA for the fiscal second quarter 2024 <unk>.
Our ability to penetrate new markets and expand our market share including expansion in international markets investments in our product portfolio are forward looking and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors.
Grabbed in today's press release and discussed in the risk factors section of our annual report on Form 10-K for the fiscal year ended December 31, 2023 and in the reports we may file with the SEC from time to time.
These risks and uncertainties that could cause actual results to differ materially from those expressed on this call. These forward looking statements are made only as of the date when made during our call today, we will reference certain non-GAAP financial measures. We include non-GAAP to GAAP reconciliations in our press release furnished as an exhibit to our form eight.
The non-GAAP financial measures provided should not be considered a substitute for or superior to the measures of financial performance prepared in accordance with GAAP.
Finally, I would like to remind everyone that this conference call is being webcast and a recording will be made available for replay on <unk> Investor Relations website at investors <unk> Tyco energy Dot com.
I would like to now turn the call over to Tiger C E O Z alone.
<unk>.
Thank you Bill.
To begin to to begin today's discussion.
I'll give some background on our company its recent performance and market trends before turning the call over to our CFO Bill Losch line.
He will discuss our financial results for the quarter and no debt as well as provide the outlook for the second quarter of 2024.
After that I will share some closing remarks.
Bill Losch: Remarks before opening the call for questions.
All right, let's begin.
For those of you who may be new to our journey.
Energy stance: Energy stance as a global leader in intelligent solar and energy storage solutions.
Founded in 2007, our mission is to deliver smart hardware and software solutions.
The enhanced safety increased energy use and lower operating costs for residential commercial and utility scale solar systems.
Hey, Tycho, we offer three primary categories one.
<unk>, our flagship product, which comprises a range of flexible design MLP solutions to meet diverse needs open stores worldwide.
The second one, though we assess energy and storage solutions is a line of energy storage solutions built on modular components designed to be intuitive and flexible during the installation.
I will go he assessed range includes the go in relative go battery go Ats and go EV charger.
And the third one energy intelligence, our AI software platform, which includes monitory fleet management, and our flagship predict plus software platform.
We believe that the opportunity for solar and energy storage solutions is large and yogurt, both in the United States as well as internationally.
Additionally, now to review our list of recent.
<unk> operational results and demand outlook.
Speaker Change: As discussed in our previous call our business faced significant challenges in the second half of 2023.
Speaker Change: Generally due to the elevated inventory levels in the channel how agile. We are pleased to report that we have seen revenue stabilized since the start of this year.
Speaker Change: We reported $9 $8 million in revenue and 249, thousands of Mlps or approximately 100 megawatt DC ethane assumes panel size of 400 watts.
Speaker Change: We also shipped three three megawatts DC in London, the hub megawatt hours megawatt hours of Inverters and batteries respectively.
Speaker Change: Additionally, we will continue to make headway.
Speaker Change: Software services.
Speaker Change: Zone, which with annual recurring revenue.
Speaker Change: Yeah.
Speaker Change: <unk> 1 million.
Speaker Change: Geographically.
Speaker Change: The Americas region, which comprise 28% of revenue.
Speaker Change: Peers to be stabilizing and we are cautiously optimistic the tiger will be able to grow its share in the region in the second half of 2024.
Speaker Change: Specifically.
unknown: We are beginning to experience low sales traction in Brazil, where rapid shutdown capabilities for solar products such as ours.
Speaker Change: We becoming legally required.
Speaker Change: Within the EMEA region.
Speaker Change: Which generated 69% of revenue.
Speaker Change: We're beginning to see some inventory replenishment activity and pockets of growth.
Speaker Change: Notable regions of improvements through our <unk>.
EMEA: Germany, Italy, and Czech Republic.
APAC region: Within the APAC region, which comprised 13% of the total revenue results have been uneven due to the nature of the timing of the C&I projects.
EMEA: We are involved in.
EMEA: Still we see an upward trend in that region continuing into the later half of 2024.
EMEA: We are also very pleased to announce the introduction of our newest line of MLP.
Unknown Speaker: <unk> Pro X.
DSO X: The DSO X family represents the culmination of multiyear effort to provide the C&I and utility marketplace with leading edge <unk> that are designed to satisfy several key industry needs.
DSO: The DSO MLP products provide customers with higher power.
DSO X: Higher current solutions and maxion design flexibility, all while enabling a lower overall cost.
DSO: Alternatives.
DSO X: We also designed the PSV execute provide the highest available level of safety through its unique multi factor technology that activates a rapid shutdown capabilities.
Speaker Change: Particular use case include higher power panels, bifacial panels and system designed to support the mixture of optimization monitor monitoring and the rapid shutdown in a single installation.
Speaker Change: And the DSO ex family is especially useful for customers.
Celgene: Celgene solar product was selected deployment abilities that enables Mexico energy generation and safety.
Speaker Change: In summary, we believe that the DSO extra represents the safest most reliable and most cost effective.
Speaker Change: Most flexible at the higher power Mlp's solutions in the marketplace today.
Tesla: In addition, the Tesla X, we would like to highlight some other recent announcements we have made including.
Tesla: Introduction of go EV charger into the European market.
Tesla X: Complement of our two hour go up existing go product portfolio and the new markets for our EV charging.
Tesla X: And it's first installation and commissioning of the Tiger EIA residential solar solution with home backup as part of the solution introduction to the royalty or we can market.
Tiger: The Tiger <unk> residential solar solution consists of diagnosis for flex MLP products.
Tiger EIA: The target in <unk>.
Tiger EIA: <unk> D C capital.
Tiger EIA: Battery and everything else required for fast flexible dependable installation and is designed to protect the households.
Tiger EIA: Grid disruptions.
Tiger EIA: Turning to our demand outlook for the second quarter and the rest of the year. We will continue to focus on the following three tenets of our growth strategy, one promote the flexibility and cost effectiveness of our solution to Paris.
Speaker Change: Great new markets and expand existing markets three expand the suite of products we offer.
Speaker Change: We have discussed in prior quarters, we're still navigating through what we believe to be the tail end of the industry wide inventory oversupply problem.
Speaker Change: Our guidance reflects the expectation that the second quarter.
Adil: The transitional in nature as the industry reaches a new supply demand equilibrium Adil.
Adil: Additionally, we expect to see a sharper recovery in the second half of the year one.
Adil: The seeds of the recovery that we're currently experiencing take hold.
Bill Losch: With that I will turn the call over to Bill to discuss our first quarter 2024 financial results and 2024 outlook in greater details.
Bill: Thank you Jay.
Bill: Turning now to our financial results for the first quarter ended March 31, 2020 for revenue for the first quarter of 2024 decreased to 80% to $9 8 million from $50 1 million in the prior year period by geography, EMEA revenue was $5 8 million or <unk>, 59% of total revenue.
Speaker Change: Americas revenue was $2 7 million or 28% of total revenues in APAC with $1 3 million or 13% of total revenues for the quarter.
Bill: On a sequential basis revenues improved 6% compared to Q4 with improved results coming from many countries in the EMEA region, including Germany, Italy, and the Czech Republic.
Bill: Gross profit in the first quarter of 2024 was $2 8 million or 28, 2% of revenue compared to $18 4 million or 36, 7% of revenue in the comparable year ago period.
Speaker Change: The euro year over year decline on a dollar basis was primarily due to lower sales volumes, while the decline in gross margin percentage was primarily due to a change in the product mix and lower asps on our battery products.
Speaker Change: On a sequential quarter basis gross margin decreased by 290 basis points due primarily to lower asps on batteries within our <unk> product lines.
Speaker Change: Total operating expenses for the first quarter were $11 9 million up from $10 6 million in the prior year period. The year over year increase was driven primarily by higher audit and legal fees that we incurred as a public company.
Speaker Change: Operating loss for the first quarter totaled $9 1 million compared to an operating profit of $7 8 million in the prior year comparable period.
Speaker Change: GAAP net loss for the first quarter totaled $11 5 million compared to net income of $6 9 million in the prior year period.
Speaker Change: Adjusted EBITDA loss in the first quarter totaled $6 3 million compared to adjusted EBITDA of $8 6 million in the prior year period. As a reminder, adjusted EBITDA represents operating profit as adjusted for depreciation amortization stock based compensation and M&A transaction expenses.
Speaker Change: Primary shares outstanding were $59 4 million for the first quarter of 2024.
Speaker Change: Turning to the balance sheet accounts receivable net decreased by <unk> 6 million in the first quarter to $6 3 million compared to $6 9 million last quarter and $32 4 million in the year ago comparable period.
Speaker Change: Inventories net decreased by $5 6 million or 9% compared to $61 4 million last quarter and $36 6 million in the year ago comparable period in.
Speaker Change: In the first quarter the vast majority of our cost of goods sold was comprised of inventory, which we expect will continue to decline and generate cash for us in future quarters.
Speaker Change: Cash cash equivalents and short and long term marketable securities totaled $21 9 million at March 31 2024.
Speaker Change: The sequential decline was primarily due to $9 $7 million decline in accounts payable and our adjusted EBITDA loss of $6 3 million, partially offset by inventory to cash conversion of $5 6 million in the quarter.
Speaker Change: As we mentioned on our last call. We continue to have discussions regarding credit facilities to enhance our balance sheet flexibility, which we believe will be available on more favorable terms at our at our financial performance continues to improve.
Speaker Change: In April we initiated cost reduction efforts that included personnel costs and other discretionary items to better align our business model with the current pace of the industry recovery and lowered the breakeven point for profitability and cash generation.
Speaker Change: As a result of these actions we expect that on a normalized basis for the remainder of 2024 GAAP operating expenses will be in the range of $12 $5 million per quarter with non-GAAP operating expenses expected to be in the range of $11 million per quarter.
Speaker Change: With these changes and considering our current supply of inventory on hand, we expect the cash breakeven point at a quarterly revenue level of approximately 17 million to $19 million and an adjusted EBITDA breakeven point at a quarterly revenue of approximately 33 million to $35 million on a normalized basis.
Speaker Change: Yes.
Zvi: Before I turn the call back over to Zvi I'll now take a few minutes to provide our financial outlook for our 2020 for second quarter.
Zvi Greenstein: As a reminder, Tiger provides quarterly guidance for revenue as well as adjusted EBITDA as we believe these metrics to be key indicators for the overall performance of our business.
Zvi Greenstein: For the second quarter of 2024, we expect revenues and adjusted EBITDA to be in the following range. We expect revenues in the second quarter ended June 32024 to range between $12 million and $16 million.
Speaker Change: We expect adjusted EBITDA loss to range between $5 5 million and $8 million.
S. Three: Finally, as we approach our one year anniversary as a public company. We will soon be S. Three eligible under under our current F. One under which our affiliates and certain other shareholders have registered their stock went stale on April 30th and we received our registration rights waiver from the.
S. Three: <unk> of these holders to register their holdings under an S. Three filing, which we will do as a post effective amendment to our S. One filing and expect it will be filed around May 31.
Tyco: We wish to emphasize that there will be no new primary shares registered in our upcoming at three filing at this filing is being done only to comply with tyco's registration rights obligations to our affiliates.
<unk>: That completes my summary, I'd like to now turn the call back over to <unk> for final remarks.
Dale: Thanks Dale.
Dale: Overall, we are confident that we have started to turn the corner for our business.
Dale: And as our team can effectively manage the current macroeconomics environment wildlife industry recovers.
Dale: We believe firmly in the long term growth prospects of our business and look forward to providing additional updates in the coming quarters.
Dale: Who is that.
Dale: Operator, please open the call for Q&A.
Operator: Thank you at this time well open the line for questions from the company's publishing analysts the company requests that each participant limit their comments to one question and one follow up if you have a question at this time. Please press star one on your telephone one moment for our first question.
Operator: And our first question comes from the line of Philip Shen from Roth. Your question. Please.
Philip Shen: Hi, everyone. Thanks for taking my questions first one is on the adjusted EBITDA breakeven.
Philip Shen: Bill I think you were talking about 33% to $35 million of revenue.
Philip Shen: Wanted to get a sense for when you expect that revenue to be.
Philip Shen: Possible could it be Q4 this year.
Speaker Change: As Europe improves or do you think you might need to wait until <unk>.
Speaker Change: 2025.
Bill: So as you alluded to we see this the second half leading to a much sharper recovery as it relates to Tiger.
Speaker Change: So from our perspective, we see we do see a clear path to EBITDA breakeven this year.
Speaker Change: And.
Speaker Change: While we're not providing specific.
Speaker Change: Specific guidance there.
Speaker Change: See a strong probability of that occurring.
Speaker Change: Okay.
Bill: Thanks Bill.
Speaker Change: And then as it relates to channel inventory at one point.
Bill: Earlier this year I think you guys thought it might clear by Q2.
Bill: Do you still expect that.
Bill: Do you think Q3, we see a nice ramp.
Speaker Change: Then an even better Q4.
Speaker Change: These are a few questions in Europe, but if you can talk about when you think your channel inventory clears, maybe by geography, So Europe and then the U S. And then also what's that.
Speaker Change: Should we expect the revenue ramp you said back half, but do we have to wait more to Q4 or do you think actually Q3.
Speaker Change: Feel confident with that.
<unk>: So I'll jump in first and I'll, let <unk> add additional color.
Speaker Change: He'd like.
Speaker Change: But we are viewing the current quarter is very.
He: Transitional in nature, because we have customers, who have depleted now replenishing their stocks of inventory, but we still have some customers who are not quite through the destocking process, but in our view as we look into the second half of the year, we feel that destocking process will be.
He: Mostly complete.
He: So I don't think it necessarily has to be Q4, Q Q3 could be a particular not sure. If it's the end of the quarter or at the beginning of a quarter.
He: We're we're going to leave ourselves a little get a little bit of room, but.
Speaker Change: I don't think its a straight as straight line I do think it is a step function jump and in our view the second half of the year, it's going to be much more of a sharper recovery with a much more of a step function increase for tiger and by geography.
He: I think that we've said on multiple calls.
Speaker Change: We didn't have much of inventory issue or a destocking issue in the Americas and Asia Pacific It's been primarily in EMEA problem.
Speaker Change: This whole time.
Speaker Change: Great. Thanks can you share how much might be remaining in EMEA can you talk about some customers being.
Speaker Change: Dealing with the Destocking some not so on a blended average basis. When you think about how many weeks might be out there in the channel.
Speaker Change: Does it sound like it's still north of 10 weeks are in.
Speaker Change: In Europe, specifically, where do you think.
Speaker Change: Meaningfully lower thanks.
Speaker Change: I don't I don't think we can.
Speaker Change: Give you enough colog quantitative information I guess to address your question, but we're seeing it.
Speaker Change: <unk> from our customers in Germany are really strong bounce back that is continuing is that even up to today.
Speaker Change: We're also seeing strong results from UK, Italy.
Speaker Change: That also.
Speaker Change: Exist.
Speaker Change: We're strong in our first quarter and we're seeing some continued strength ads were.
Speaker Change: Coming into the second quarter.
Speaker Change: The thing about the what we're seeing currently is that.
Speaker Change: We're a little bit more than one month into the second quarter and the amount of.
Speaker Change: Pipeline activity booking activity is just a lot stronger than it was during the same period of the last quarter. So.
Speaker Change: So we're seeing the return definitely turned the corner and we are seeing strength.
Speaker Change: That we.
Speaker Change: We expect to continue as we as we go through the year.
Speaker Change: Great sorry, I have one last question sorry, if you guys talked about it earlier as well, but no enphase.
Speaker Change: <unk> and solar just talk about how much sell through is each quarter versus your sell in and the degree of under shipment in terms of millions of dollars.
Speaker Change: Could you can you speak to that at all for Q1, and maybe even Q2.
Speaker Change: So.
Speaker Change: We don't get sell through data from our distributors specifically to be able to.
Speaker Change: Provide that kind of metric with any degree of confidence.
Speaker Change: But.
Speaker Change: We are we do see the pipeline booking activity and in talking with customers.
Speaker Change: Getting an understanding as to where the inventory levels are.
Speaker Change: And the amount of replenishment that.
Speaker Change: Has occurred in Q1 and that is.
Speaker Change: Steadily progressing upward for us.
Speaker Change: As we move forward through the current period here in the second quarter.
Speaker Change: Hi.
Speaker Change: We did say on the last call.
Speaker Change: We were at least 50% lower than where we should be.
Speaker Change: And I think we also just told you that.
Speaker Change: That we see us being.
Speaker Change: EBITDA EBITDA breakeven or better in the current year. So I mean, I think all of that kind of serves as a guidepost to tell you, where we think normalized recovery would put us.
Speaker Change: Great.
Speaker Change: Yes.
Speaker Change: Finally, I would just add one clarification just.
Speaker Change: No that is required but in the countries.
Bill: As Bill mentioned like Germany in.
Bill: The U K.
Bill: And we talked about the fact that the replenishment is appealing those are our main markets and thats, where it is happening.
Bill: Great Okay.
Bill: Best of luck with the ramp and I'll pass it on thanks.
Speaker Change: Thank you thank.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Eric Stine from Craig Hallum. Your question. Please.
Eric Stine: Hi, Bill.
Bill: Hi.
Bill: Hey.
Eric Stine: So I just wanted to focus on the balance sheet, a little bit I think last quarter. You were hopeful that you would get some working capital benefit and you did get some on the inventory line gist.
Eric Stine: Just curious what your expectation is here for the remainder of the year you did talk about inventory that you expect to work down, but maybe just what <unk> seen early in Q2, and how you expect that to play out.
Bill: Okay.
Speaker Change: We've lowered our.
Bill: <unk>.
Bill: Current liabilities by more than $11 million and.
Speaker Change: The current amount of AP as much.
Speaker Change: Much lower the previous quarter had.
Speaker Change: Some inventory payable that had to be settled.
Speaker Change: And we've worked through that and we don't have that.
Speaker Change: That's something that's going to continue.
Speaker Change: And in the future quarters.
Speaker Change: So.
Speaker Change: We expect to again, we guided 12 to 16 and we have also.
Speaker Change: Giving you guidance at 17% to 19 is our cash breakeven point. So you can see that we're quite close to.
Speaker Change: Our cash burn rate is would be very minimal.
Speaker Change: Or at least within a predictable range.
Speaker Change: Given what we've provided on those two fronts with the bulk of the the cash generation coming from our inventory conversion, which is upwards of 90% of our cost of goods sold so.
Speaker Change: Okay. That's helpful.
Speaker Change: Alright, so that is expected to continue.
Speaker Change: In Q2 and going forward and that's helpful.
Speaker Change: And then just sticking with the liquidity side of it you mentioned and you have for some time <unk> been in some negotiations for line of credits.
Speaker Change: And just for more flexibility and it sounds like hopeful waiting for maybe better rates is it fair to say that you have line of sight to facilities right now just not at rates that you think are are acceptable.
Speaker Change: Yes that would be helpful to know.
Speaker Change: Yes.
Speaker Change: That's correct.
Speaker Change: At the current moment, there is still some projection rich.
Speaker Change: Over the shape of the recovery in the market and.
Speaker Change: And once we add the industry.
Speaker Change: Get a little bit more clarity and consensus on what that looks like it just creates a better environment to borrow money essentially.
Speaker Change: Negotiate rates.
Speaker Change: So we want to be.
Speaker Change: Prudent.
Speaker Change: And how we do that.
Speaker Change: Okay. Thanks.
Speaker Change: Yes.
Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone. Our next question comes from the line of Gus Richard from Northland. Your question. Please.
Gus Richard: Yes, thanks for taking the questions.
Gus Richard: Just wondering how are you doing.
Gus Richard: Getting on more approved vendor list, how is that process going.
Gus Richard: Sure.
Speaker Change: We are actually making good progress.
Speaker Change: The major.
Speaker Change: Suppliers.
Speaker Change: Customers here in the U S.
Speaker Change: And.
Speaker Change: I don't want to provide any predictions, but I think that we will have a different conversation next quarter.
Speaker Change: Got it.
Gus Richard: And then.
Speaker Change: While back you all talked about.
Speaker Change: Some opportunities in utility scale for the Optimizer is and I was just wondering.
Speaker Change: Now that we're sort of getting our feedback on the ground.
Speaker Change: Has that reemerge tour is that.
Speaker Change: Something that's new.
Speaker Change #100: Not materialized.
Speaker Change #100: Hi.
Speaker Change: We actually have.
Speaker Change: Very promising.
Speaker Change: Promising pipeline with respect to that.
Speaker Change: And we feel really good.
Speaker Change: But obviously we have to wait.
Speaker Change: You have to wait until the ink dry to announce anything.
Speaker Change #102: Any other color you can provide just to.
Speaker Change: I'll give a little bit better flavor.
Speaker Change: So the.
Speaker Change: The utility market.
Speaker Change: As.
Speaker Change #105: It has had pretty good velocity.
Speaker Change: But on the activity around the world.
Speaker Change: Not.
Speaker Change: Affected by government.
Speaker Change: Subsidies and.
Speaker Change: <unk> <unk> type of situations.
Speaker Change: There are there continues to be.
Speaker Change: A.
Speaker Change: A good amount of projects from which to.
Speaker Change: Better.
Speaker Change: While we're getting RFP requests.
Speaker Change: And we're working through those with.
Speaker Change #101: Several very promising opportunities in our pipeline currently.
Speaker Change: Okay.
Speaker Change #110: Just one follow up follow on and I'll start.
Speaker Change #107: Can you give them relative to the <unk> market sort of the size of the opportunity for you all just and what youre seeing in the pipeline.
Speaker Change #103: I mean there.
Speaker Change #104: The $1.
Speaker Change #104: Yes.
Speaker Change #106: So they tend to be in.
Speaker Change #106: Three five.
Ken: Ken I mean, they're they're sizable.
Speaker Change #106: So.
Speaker Change #106: Yes.
Speaker Change #106: Yes.
Speaker Change #108: It sort of frame that up for me. Thank you so much.
Speaker Change #104: Yeah.
Speaker Change #111: Thank you one moment for our next question.
Speaker Change #115: And our next question comes from the line of Sameer Joshi from H C. Wainwright Your question. Please.
Sameer Joshi: Hey, Thanks, Bill Thanks for taking my questions.
Sameer Joshi: Looking at the new products.
Speaker Change #114: And so this is I guess.
Sameer Joshi: Our software products.
Speaker Change #116: The bike.
Sameer Joshi: These forex.
Sameer Joshi: You already marketing it and.
Speaker Change #118: What is the level of interest you're seeing it from there.
Sameer Joshi: Different geographies and then when do we expect.
Sameer Joshi: See any.
Sameer Joshi: Initial revenues or any explained.
Speaker Change #113: <unk> for the product.
Sameer Joshi: Product.
Sameer Joshi: So.
Speaker Change #117: The quick answer to the DS four X.
Sameer Joshi: It is aimed specifically at the markets will bifacial high colleagues in high power at least require re rated at the highest.
Sameer Joshi: Certification for MLP in the market nobody is even close to us among the competition.
Sameer Joshi: So most of the projects C&I and utility scale into.
Speaker Change #119: And so the question have we shipped it already the answer is no, but we have all of this which we have received and we will be shipping shortly.
Speaker Change #119: And we have shipped first installations.
Sameer Joshi: So.
Sameer Joshi: <unk>.
Sameer Joshi: The reproduction and whatnot. So we are exceptionally confident with that technology and the solution and market. It is covered.
Speaker Change #120: And for the verdict plus with too early to talk about it or should we expect 2025 initial revenues from the plus.
Sameer Joshi: So this class is continuing to grow.
Sameer Joshi: As we expected.
Sameer Joshi: And.
Sameer Joshi: We are seeing.
Sameer Joshi: Extended activity from both new customers.
Sameer Joshi: And existing customers, who are expanding the footprint of the product.
Sameer Joshi: Each.
Sameer Joshi: We started as we've discussed before we started the effort.
Sameer Joshi: The sales efforts of <unk>.
Sameer Joshi: Product in Europe, and in the U S late.
Sameer Joshi: Late last year and were seeing some fairly interesting opportunities, which we believe we will be able to share.
Sameer Joshi: And the next.
Sameer Joshi: A couple of quarters or so.
Sameer Joshi: All of them, 100% of them are very sizable companies.
Speaker Change #123: Good to hear.
Sameer Joshi: And just maybe a clarification on the cash breakeven was aside just did EBITDA breakeven revenues.
Speaker Change #125: We just try to prevent this.
Speaker Change #122: Correct me if I'm wrong.
Speaker Change #122: The 17% to 19 was 33% to 35 implies like a $14 million to $16 million of.
Speaker Change #122: Cash from.
Speaker Change #122: Tied up working capital inventory those kind of things.
Ivan: And Ivan.
Ivan: Looking at it right.
Ivan: The cash flow breakeven is based on the reality that.
Andre: $85, 90% of the cost of goods sold has already been paid for Andre So.
Speaker Change #127: So you're only paying 10% on that revenue.
Andre So: And then you have to make some adjustments for working capital.
Andre So: May be paying some AP et cetera, but you get two you get to a cash breakeven.
Andre So: At a very.
Andre So: Adam.
Andre So: Rate in the high teens as we guided to.
Andre So: And the EBITDA model is.
Andre So: Based on the new Opex guidance, we provided and.
Andre So: Gross margins that are in the clear.
Andre So: 33% to 35% range so.
Andre So: You get there sooner obviously at a higher gross margin, but at 30 to 35 years in the low thirties.
Speaker Change #130: Great great. Thanks, a lot for clarifying that.
Speaker Change #129: Thats all I have pumps.
Andre So: Yes.
Speaker Change #128: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Zvi alone for any further remarks.
Zvi Greenstein: Thanks again, everyone for joining us today.
Zvi Greenstein: I, especially want to thank to the dedicated.
Zvi Greenstein: Employees for their ongoing contribution as well as our customers and partners for their continued hard work.
Zvi Greenstein: I also want to thank our investors for their continued support.
Zvi Greenstein: So.
Speaker Change #131: Thank you for joining us today for <unk> first quarter 2024 earnings Conference call you may now disconnect.
Zvi Greenstein: Okay.
Zvi Greenstein: [music].