Q3 2024 Haivision Systems Inc Earnings Call

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Regina: Hello and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the High Vision Systems third quarter 2024 earnings conference call.

Regina: Hello, and thank you for standing by my name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the hydrogen systems third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would.

Regina: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Yoav Michaeli: To ask a question during this time simply press Star then the number one on your telephone keypad, if you'd like to withdraw your question Press Star One again I would now like to turn the conference over to you a miracle worker President and CEO. Please go ahead.

Regina: I would now like to turn the conference over to Amir Kowika, President and CEO. Please go ahead.

Amir Kowika: Thank you, Regina, and good afternoon. Thank you, everyone on the call, for joining us today to discuss our third quarter and our nine month year-to-date results for our fiscal year 2024, which ended on July 31st. As we get closer to the end of our fiscal 24, which is reminded everybody only six weeks away.

Speaker Change: Thank you and good afternoon.

Speaker Change: Thank you everyone on the call for joining us today to discuss our third quarter and nine months year to date results for fiscal year 2024, which ended in July 31st.

Speaker Change: Well, if we get closer to the end of our fiscal 'twenty four would you.

Speaker Change: Remind everybody only six weeks away.

Amir Kowika: We will have completed our two-year strategic plan as promised back in 2022 for a major EBITDA and profitability transformation. And the result we will deliver a significant increase in our adjusted EBITDA performance between 2022 and 2024. Our adjusted EBITDA performance back in 2022 was 6%. We are now delivering its promise in the adjusted EBITDA and the mid teens. We also promise that one quarter will be knocking on the door of 20%, which will obviously be our current Q4.

We will have completed our two year strategic plan that as promised back in 2022 for a major EBITDA and profitability transformation.

Speaker Change: And then as a result, we will deliver a significant increase in our adjusted EBITDA performance between 2022 and 2024.

Speaker Change: Our adjusted EBITDA percentage performance back in 2022 six.

Speaker Change: 6%.

Speaker Change: Not delivering as promised in adjusted EBITDA in the mid teens.

Speaker Change: We also promised that one quarter will be knocking on the door of 20%, which will obviously be a current Q4.

Amir Kowika: So all in all, an amazing two-year performance and a plan well executed. But we are not stopping there.

Speaker Change: So all in all an amazing two year performance and a plan well executed.

Speaker Change: But we're not stopping there.

Amir Kowika: We have already been working on our new two-year strategic plan for fiscal 25 and 26, which will complete our overall transformation of our business and return high vision to double-digit revenue growth. Now that we have the house in check, drop-backs and gross margins and EBITDA and cast generation, the main focus will be higher revenue growth. Let me share a few thoughts on what we have been doing and what to expect from us during fiscal 2025 to prepare for this growth and to demonstrate the business scalability we have been talking about. We have two major fundamental business models taking shape this year and that will continue to affect our revenue in 2025.

Speaker Change: We have already been working on a new two year strategic plan for fiscal 'twenty, five 'twenty, six which will complete our overall transformation of our business and return high image into double digit revenue growth.

Speaker Change: Now that we have the halston checks for Opex and gross margins EBITDA and cash generation. The main focus will be higher revenue growth.

Speaker Change: Well, let me share a few thoughts what we had been doing and what to expect from us during fiscal 2025 to prepare for this growth and to demonstrate the business scalability, we have been talking about now.

Speaker Change: We have two major fundamental business models taken shape this year and that will continue to affect our revenue in 2025.

Amir Kowika: Number one is the move away from being an integrator to a manufacturer in the control room market. Number two is a long-term rental or LTR, as we call it, business in a transmitter live market events. Now we are continuing our control room business transformation to a higher margin manufacturer, and I like to say scalable model from the bespoke hard to grow integrator model. As mentioned last quarter, this major business transition has exceeded our expectations, and it's progressing much quicker than previously planned. However, it's a long road to complete, and we are about halfway through until we can begin to see a net revenue increase in our overall business.

Speaker Change: Number one is the move away from being an integrator to a manufacturer in the control room market number two there's a long term rental or L T or as we call it business and a transmitter life market events.

Speaker Change: Well, we are continuing our control room business transformation to a higher margin manufacturer and I like to say scalable model from.

Speaker Change: The bulk hard to grow integrator model.

Speaker Change: I mentioned last quarter this major business transition.

Speaker Change: He did our expectations.

Speaker Change: Progressing much quicker than previously planned however, it's a long road to complete and we're about halfway through until we can begin to see a net revenue increase in our overall business.

Amir Kowika: Now we have always said that this transformation will be at the expense of our top line.

Speaker Change: Well, we have always said that this transformation will be at the expense of our topline.

Amir Kowika: Very similar to when we decided to transition out of the house of worship market. However, what is left is a proprietary, high-margin business, which is a great business. This is something we have been planning for and working towards all year. My good news is that we have already seen positive results within the first nine months of 2024. We always expected this to be an 18-to-24-month transition and looks like we will complete the full business transition during the second half of next fiscal year. Our partners and we saw this globally are very happy to see us embracing the partner model, to scale this business, and moving away from being an integrator, and basically seen as a competitor to the AV channel.

Very similar to when we decided to transition out of the house so what's your market.

Speaker Change: However, what is left is a proprietary high margin business, which is great businesses.

Speaker Change: We had been planning for and working towards all year, but good news is that we are already seeing positive results within the first nine months of 2024.

Speaker Change: We always expected this to be an 18 to 24 months transition it looks like we will complete the full business transition during the second half of next fiscal year.

Speaker Change: Our partners and resellers globally are very happy to see us embracing the partner model.

Speaker Change: Scale this business and moving away from being an integrator basically is seen as a competitor to the JV channel.

Amir Kowika: And Haivision is always supported and believes in a strong partner model to scale globally. Now, this time next year, our revenue growth in this important market segment will be more apparent, together with the solid and consistent, high-growth margins we have already been delivering. Now, we expect to be training and preparing many of our global AV partners on the new C360 fully-scale platform by the end of this calendar year, in preparation for a full-blown professional training we're all out during next year. As we have been saying all along, our control room, scalability, and the overall revenue will begin to show higher growth once we roll this out globally.

Speaker Change: Hi, Vishal has always supported and believed in a strong partner model to scale globally.

Speaker Change: At this time next year, our revenue growth in this important market segment will be more parent together with a solid and consistent high gross margins, we have already been delivering.

Speaker Change: And we expect to be training and preparing many of our global Avi partners on the new <unk> hundred 60 fully scalable platform by the end of this calendar year and preparations for a full blown professional training rollout during next year.

Speaker Change: As we have been saying all along I pulled volume scalability and the overall revenue will begin to show a higher growth once we roll this out globally.

Amir Kowika: Now, on the LTR, or as we call it, long-term rental program transformation, we are building a staff-like recurring revenue model for 5G transmitter business, which is a much better long-term profitable business. We are already seeing several large multi-million dollar opportunities and several competitive replacements with our Pro Series 5G transmitters. Our 5G technology has been very busy during the Paris Olympics, as I will discuss later. Now, these deals replace one-time revenue hits from a multi-year recurring revenue that will build over time and increase the profitability going forward.

Speaker Change: E L. P R or you can call a long term rental program of transformation we.

Speaker Change: We are building a SaaS like recurring revenue model for <unk> transmitter business, which is a much better long term profitable business.

Speaker Change: We're already seeing several large multimillion dollar opportunities and several competitive replacement with our pro series <unk> transmitters are.

<unk> technology has been very busy during the Paris Olympics as all of this stuff later.

Speaker Change: These deal, replacing onetime revenue hits were multiyear recurring revenue that will build over time and increase the profitability going forward.

Amir Kowika: Now, most of the initiatives will see net revenue growth in 2026 and beyond, and that's the kind of business we all want.

Speaker Change: This initiative will see net revenue growth in 2026 and beyond.

Speaker Change: And that's the kind of business, we all want.

Amir Kowika: Now, I would like to highlight the many exciting and noteworthy events and projects that we have been working on that will significantly and positively affect our long-term revenue growth as our new two-year revenue plan unfolds, and many of these you have seen in the previous couple of weeks through press releases. Let's start big. Our hydrogen MCS, our Mission Critical Systems Group, announced earlier last week that has been awarded a significant five-year production agreement by NAPSEA, the Naval Sea Systems Command, with an estimated total value of around $82.6 million to an 80. Now, this prestigious agreement's position high vision at the forefront of delivering cutting-edge combat visualization and video distribution systems to the U.S.

Speaker Change: Now I would like to highlight the many exciting and noteworthy events and projects that we had been working on.

That will significantly and positively affect our long term revenue growth as our new two year revenue plan unfolds and many of these you have seen in the previous couple of weeks through press releases, let's start baked.

Speaker Change: Our highways and Mcs I'd mission critical systems Group announced earlier last week that has been awarded a significant five year production agreement.

By Nazis the Naval Sea systems command with an estimated total value of around $82 $6 million Canadian.

Speaker Change: This prestigious agreement positioning hydrogen at the forefront of delivering cutting edge combat visualization and video distribution systems. The U S Navy surface combatants fleet.

Amir Kowika: Navy's surface combat and fleet. Under this new production agreement, Hydrogen MCS will provide to the U.S. Navy a comprehensive suite of ultra-high performance video processing hardware and software for mission critical display, along with video transcoding, storage, and distribution components. Now these systems will be integral to the Navy's combat information centers across various surface combat and vessels, enhancing situational awareness and mission planning capabilities. The advanced visualization technology is designed to support the Navy's future combat systems, including those planned for the age of disorders, the aircraft carriers, amphibious ships, frigates, literal combat ships, and the next-generation United States Coast Guard codders, among other critical applications.

Speaker Change: Under this new.

Speaker Change: Production agreement hydrogen Mcf will provide to the U S. Navy a comprehensive suite of Ultra high performance video processing hardware and software for mission critical display along with video transcoding storage and distribution components.

Speaker Change: These systems will.

Speaker Change: We will be integral to the Navy's combat information centers across various surface combatant vessels, enhancing situational awareness and mission planning capabilities.

Speaker Change: The advanced visualization technology is designed to support the Navy's future combat systems, including those planned for the age of the store or the aircraft carriers and Fabius ships frigates littoral combat ships and a next generation United States Coast Guard cutters.

Speaker Change: Other critical obligations.

Amir Kowika: Haivision's next-generation systems will play a pivotal role in supporting mission critical applications by delivering these superior situational awareness out the ships. Now, interesting enough, this award builds upon Haivision's ongoing success with the Load Network and Enterprise Services program that has passed seven years, which already leverages Haivision's state-of-the-art real-time video encoding, transcoding, recording, and playback technologies for ship-wide video distribution. The award also highlights the strength and reliability of Haivision's core technologies, a demonstration of valuable synergies achieved through the acquisition of a set of masks in 2021. In the integration of Command 360 collaborative visualization platform into Haivision's technology offerings has significantly enhanced the company's capability to deliver these innovative solutions for complex defense applications.

Speaker Change: Hi Vision next generation systems will play a pivotal role in supporting mission critical applications.

Speaker Change: Delivering these superior situational awareness about the ships.

Speaker Change: Now Interestingly This award builds upon high visions ongoing success with the U S. Navy canes consolidated flowed network and enterprise services program the past seven years.

Speaker Change: Which already Leverages high vision state of the art real time video encoding transcoding recording and playback technology for ship wide video distribution.

The award also highlight the strength and reliability of high visions core technologies.

Speaker Change: It demonstrates the valuable synergies achieved through the acquisition and set them outfit in 2021 and the integration of command through 60 collaborative visualization platform into high vision technology offerings and significantly enhance the company's capability to deliver innovative solutions for complex.

Speaker Change: Fence applications.

Amir Kowika: Talk about another area, the Airbus Defense and Space, next-generation 5G development. We also announced that Haivision joined a multi-company consortium led by Airbus Defense and Space to develop new technologies for rapid, secure, reliable communications, representing a multi-year and multi-million dollar development contract. As part of the Air 5G project, Haivision will develop 5G transmitters that provide connectivity in mission-critical situations where normal communication lines are disrupted or unavailable. This consortium is building land and sea-based tactical 5G communication systems that support mission-critical operations during emergencies when network infrastructure is compromised or absent. The Air 5G project aims to develop a deployable 5G private network for fixed deployments in a command center on land or in naval flagship, providing 5G network access to supporting teams or fleets over a wide radius.

Speaker Change: Talk about another area, the Airbus Defence and space.

Speaker Change: Next generation <unk> development, well last week, we also announced that high vision joined a multi company consortium.

Speaker Change: Led by Airbus Defence and space to develop new technologies for rapid secure reliable communications, representing a multi year and.

Speaker Change: And multimillion dollar development contract.

Speaker Change: That's part of the Air five G project hydrogen will develop five G transmitters that provide connectivity and mission critical situations, where normal communication lines are disrupted or aren't available.

Speaker Change: Well. This consortium is building land and sea based tactical five G communication systems.

Speaker Change: To support mission critical operations during emergencies, when network infrastructures compromised or absence.

Speaker Change: The air five G project aims to develop a deployable by G private network for fixed deployment and a command center on land or.

Speaker Change: And the name of flagship providing five G network access to supporting teams our fleets over wide radius.

Amir Kowika: Teams in the field, such as first responders, military units, and naval assets, can connect to the network and send received voice, video, and data, ensuring priority performance and security. The project is built on a five-year timeline to achieve volume deployments of the solutions. The important note is that Haivision was selected as a sole technology provider, past with developing the wireless, video, and audio streaming technology at the heart of the project. And we should see some groundbreaking products begin to be delivered from this initiative in late 2025.

Speaker Change: Teams in the field such as first responders military units naval assets can connect to the network and sudden received voice video data ensuring priority performance and security.

Speaker Change: Project is built on a five year timeline to achieve volume deployment of the solution.

Speaker Change: One important note is the high vision was selected as the sole technology provider path.

Speaker Change: We're developing the wireless.

Speaker Change: Video and audio streaming technology at the heart of the project.

Speaker Change: And we should see some groundbreaking products begin to be delivered from this initiative in late 2025.

Speaker Change: Yeah.

Amir Kowika: Now, on August 26th, we also announced that Haivision's partnering was Shield AI, a leading defense technology company whose mission is to protect service members and civilians within intelligence systems. We actually showcased the AI integrated technology at the AUVSI Pathfinder Symposium in Huntsville, Alabama, a couple of weeks ago. Now, this partnership brings together trusted ISR solutions for full motion video with AI object detection for defense and ISR applications. The Haivision's Kraken is a video processing solution for mission critical defense and ISR applications. In software-based, the Kraken and Coase transcodes streams full motion video alongside metadata in real-time across all types of communication links.

Speaker Change: Now on August 26, we also know that hydrogen is partnering with shield AI.

Speaker Change: Leaving the technology company, whose mission is to protect service members and civilians with intelligence systems.

Speaker Change: We showcase the integrated technology at the ESI.

Speaker Change: Pathfinding symposium in Huntsville, Alabama, a couple of weeks ago.

Speaker Change: This partnership brings together blasted ISR solutions, a full motion video with AI object detection for defense applications.

Speaker Change: Hi, visions Kraken as a video processing solutions for mission critical defense and ISR applications.

Speaker Change: Software base, the Kraken and coast Trans Cold streams full motion video alongside meta data in real time across all types of communication links.

Amir Kowika: Shield AI, sentient tracker software, automatically detects and tracks objects within full motion video streams using a field-proven artificial intelligence technology. Now, with this partnership, Shield AI Kestrel can now fully be integrated with Haivision's Kraken and deployed across a wide range of air, lab, and sea-based platforms. By integrating Shield AI Kestrel object detection technology within our Kraken video processing platform, our customers are now able to apply full artificial intelligence to where the video is being captured in process, enabling quick and life-saving decision making. We are the standard low latency edge transcoding delivery platform in the defense market and a market leader in this AI-driven approach.

Shield AI: Shield AI 19 tracker software automatically detects and tracks objects.

Shield AI: Within full motion video streams, using a field proven artificial intelligence technology now with this partnership.

Speaker Change: Yield AI kestrel cannot fully be integrated with hydrogen as kraken and deployed across a wide range of air land and sea based platforms by integrating Sheila asked cats for object detection technology within our crack and video processing platform. Our customers are now able to apply.

Speaker Change: Full artificial intelligence towards the video is being captured in process, enabling quick and lifesaving decision, making.

Speaker Change: We are the standard low latency edge transcoding delivery platform in the defense market and a market leader in this AI driven approach and.

Amir Kowika: We expect Kraken AI to drive many long-term defense projects and increase our footprint within the global defense space.

Speaker Change: And we expect Croc and AI to drive many long term defense projects and increase our footprint within the global defense space.

Speaker Change: Yes.

Amir Kowika: The Haivision at the Olympics, let's talk about a serious excitement here. The Haivision was extremely busy at the Paris Olympics, and once again, Haivision technology was widely used across many events, and our broadcast partners used well over a thousand high-vision Makido encoders and decoders, SRT gateways, and our Pro Series 5G transmitters in all the main events and venues during the Paris Games, including some really cool areas. This was a surfing competition at Tahiti, right? We had the Haivision Pro 460 transmitters that were used by France Television to provide engaging behind-the-scenes video with maximum freedom of camera movement and the Paris Games venues, including Stade de France and the Bercy Arena. Haivision Pro 460 mobile video transmitters were used to capture live video from events including the gymnastics and athletics, providing unmatched glass-to-glass 80-millisecond latency for seamless production with other sources.

Speaker Change: Hi, This is at the Olympics, so let's talk about serious excitement here.

Speaker Change: Hi vision was extremely busy at the Paris Olympics.

Speaker Change: Once again I vision technology was widely used across many events and our broadcast partners used well over a thousand hydrogen makita, encoders and decoders SRT gateways and our pro series five G transmitters and all the main events and venues during the Paris games.

Speaker Change: So I'm really cool area. This is a surfing competition at the heating the high vision from a 460 transmitters that were used by France television to provide engaging behind the scenes video with maximum freedom of camera movement.

Speaker Change: On the Paris venues, including that the France, and a bursty Arena high vision for 60 mobile video translate as we used to capture live video from events, including the gymnastics athletics, providing unmatched glass to glass 80 milliseconds latency for the seamless production with other sources.

Amir Kowika: The extensive use of Haivision Makido X4 video encoders and decoders, as well as the SRT gateways, to facilitate distribution of content to European and other rights holders around the world, ensuring that audiences across Europe could experience the excitement and watch the Games live. Including some of these cool stuff is the many firsts that were ever at any Olympics, or just I'll list them a few of them, the first ever private side G-Wish. The largest ever, temporary, private 5G deployment, the lowest latency ever delivered over Bonnet Cellular, the first ever, G-Base, private 5G network, the first ever, HDR 422 10-bit streaming for mobile devices, the first ever use of remote mobile device camera management, and finally, which is the coolest, the largest ever mobile device life contribution for the opening ceremony.

Speaker Change: There was extensive use of hydrogen mosquito X for video Encoders and decoders as well as the SRT gateways to facilitate distribution of content to European and other rights holders around the world.

Speaker Change: Ensuring that audiences across Europe could experience the excitement and watched the games lives.

Speaker Change: Including some of these cool stuff is the many first.

Speaker Change: Ever at any Olympics I'll, just I'll list them, a few of them the first ever private by G was used.

Speaker Change: The largest ever temporary private <unk> deployment, the lowest latency ever delivered over bonded cellular the first ever T based private <unk> network. The first ever H D. R. <unk> debit streaming for mobile devices. The first ever use of remote mobile device camera management.

Speaker Change: And finally.

Speaker Change: The cooler the largest ever mobile device life contribution for the opening ceremony.

Amir Kowika: We saw 90 boats configured with over 200 Samsung phones running our Mojo Pro software. The high dynamic range, the HDR live HD video feeds from Mojo Pro were transmitted to Haivision Stream Hub receivers using a private 5G network, which was set up with 12 5G cells mounted on the historic bridges that traverse the river. The Stream Hub software provided multi-view monitoring and master control for the incoming mobile camera feeds. These live feeds were then used to distribute the live content to the specific country content holders; simply amazing and a first.

Speaker Change: We saw 90 bullets configured with over 200, and Samsung phones running our Mojo Pro software.

Speaker Change: The high dynamic range. The HDR live HD video feeds for module pro were transmitted to hydrogen stream hub receivers using a private <unk> network.

Speaker Change: Which will setup with 12 five G cells mounted on the historic bridges that traverse the river.

Speaker Change: The stream of software provided multi view monitoring a master control the incoming mobile camera feeds measly fees are then used to distribute the live content to the specific country content holders simply amazing and at first.

Amir Kowika: And this kind of the first of its kind live contribution has also made a finalist, the prestigious IBC Innovation Award to be presented end of this week. Interestingly enough, we happened to win last year's IBC Innovation Award for the private 5G streaming of the King's Coronation in London in conjunction with the BBC, so being listed as a finalist this year is an amazing acknowledgment of it and testament to our continued innovation and technology. And I will just add, finally, we also want a multi-million dollar deal by one of the largest broadcasters in the world, who chose Haivision for their global IPVU distribution delivery.

Speaker Change: And this kind.

Speaker Change: Of the first of its kind life contribution is also made up a finalist for the prestigious <unk> Innovation award to be presented end of this week.

Speaker Change: We're seeing enough we happen to have one last year's ABC Innovation award for the private <unk> streaming of the Kinks coordination in London in conjunction with the BBC.

Speaker Change: So being lifted the violent this year's an amazing knowledge Mint and Testament to our continued innovation and technology.

Speaker Change: And I would just add finally, we also won a multimillion dollar deal.

Speaker Change: By one of the largest broadcasters in the World, who chose high vision for their global IP video distribution and delivery.

Amir Kowika: As a result, they will deploy hundreds of our SRT gateways to replace the entire global satellite network. Very exciting project, which was also highly competitive, but one by Haivision based on our innovative and groundbreaking technology.

Speaker Change: As a result, they will deploy hundreds of our SRT gateways to replace the entire global satellite network very exciting project, which was also highly competitive but one by high vision based on our innovative and groundbreaking technology.

Amir Kowika: Now let's get back a little bit to the numbers. You know, it was demonstrated by the results we announced today. Our business fundamentals just keep getting stronger. You know, we have been telling you and everybody that will significantly increase our operational efficiency and adjusted EBITDA through the throughout the past 18 months, and our Q3 performance continues in that direction to somewhat with the highlights. Our Q3 growth margins were significantly higher than last year's already impressive Q3, which went from 72.3% to 75%. We've been saying all along that we would deliver increased growth margins, and once again we continue to deliver what we said we would.

Speaker Change: Now, let's get back to a little bit to the numbers you know as demonstrated by the results we announced today.

Speaker Change: Business fundamentals, just keeps getting stronger and we have been telling you and everybody that we will significantly increase our operational efficiency and adjusted EBITDA through the throughout the past 18 months and our Q3 performance continues in that direction.

Speaker Change: Some noteworthy highlights.

Speaker Change: Our.

Speaker Change: Q3, gross margins were significantly higher than last year's already impressive Q3, which led from $72 three.

Speaker Change: 75%.

Speaker Change: We've been saying all along that we would deliver increased gross margins and once again, we continue to deliver what we said we would.

Amir Kowika: Now this Q3 enjoys very high growth margins, mainly boosted by the major sale of the large broadcaster I mentioned, our software-based SRT gateways, meaning we don't need to provide the Dell servers, resulting in pure margin. This is another example where we give up the higher revenue in exchange for a higher margin business. Now additionally, our Kraken Ultra-Lolacy Transcoded Use Emission Critical Defense Applications has also been successfully deployed on virtual machines within the US military. Further enhancing our growth margins. It's also worthy to mention that our Q3 performance, despite the lower revenue of last year, maintains our 12-month trailing adjusted EBITDA at a strategic $20.1 million level; another impressive metric.

Speaker Change: Now this Q3 enjoys very high gross margins, mainly boosted by the major sales of large broadcaster I mentioned, our software based SRT gateways, meaning we don't need to provide the Dell servers, resulting in pure margin. This is another example, where we give up the higher revenue in exchange for a higher margin.

Speaker Change: Additionally, our kraken ultra low latency transco to use the mission critical defense applications has also been successfully deployed on virtual machines within the U S. Military further enhancing our gross margins.

Speaker Change: It's also noteworthy to mention that our Q3 performance. Despite the lower revenue of last year maintains our 12 months trailing adjusted EBITDA at a strategic $21 million level another impressive metrics.

Amir Kowika: I can safely say that we're well in our path and delivering on our promise of a two-year adjusted EBITDA performance, growing dramatically from the 8 million derived in fiscal 22 to over 20 million that will be derived in 2024. Not many tech companies can say that these days. But just to finish quickly, our nine-month year-to-date operating margin now stands at 14.5 percent, compared to last year's nine-month operating margin of 8.7 percent. And a nine-month year-to-date adjusted EBITDA is already at 14.4 million, which is 58.2 percent higher than last year's nine-month adjusted EBITDA performance of 9.1 million.

Speaker Change: I can safely say that we are well on our path of delivering on our promise of a two year adjusted EBITDA performance growing dramatically from the $8 million derived in fiscal 'twenty two.

Speaker Change: Over 20 million that will be derived in 2024 and not many tech companies can say that these days.

Speaker Change: But just to finish quickly our nine month year to date operating margin now stands at 14, 5% compared to last year's nine month operating margin of eight 7%.

Speaker Change: And our nine months year to date adjusted EBITDA is already at $14 4 million, which is 58.2% higher than last year's nine month, adjusted EBITDA performance of $9 1 million.

Amir Kowika: As we have been saying over and over, we are delivering on our promise to significantly increase the profitability and operational efficiency of Haivision. It should not be obvious that we will deliver the promise mid-teens adjusted EBITDA performance for the entire year and finish fiscal 24 with a higher than 20 million trailing 12 months of adjusted EBITDA for the full year. We couldn't be happier with our performance thus far.

Speaker Change: As we have been saying over and over we are delivering on our promise to significantly increase the profitability and operational efficiency of our vision.

Speaker Change: It should not be obvious that we will deliver the promised mid teens adjusted EBITDA performance for the entire year.

And finished fiscal 'twenty, four with a higher than $20 million trailing 12 months of adjusted EBITDA for the full year.

It couldn't be happier with our performance thus far.

Amir Kowika: But Daniel will go through the financials in detail, but let me reiterate our annual guidance we gave back in January, delivering adjusted EBITDA in the mid-teens as well on target, while delivering higher margins and growth in operational performance, as also well on target. Now, considering our planned transformation of the control room business a little bit quickly, together with the delays and federal spending, our top lines will be lower than we anticipated a year ago. But all of our profit of the metrics are significantly higher than well on track. This has been our main focus and the most important metric for this fiscal year.

Speaker Change: Dan will go through the financials in detail, but let me reiterate our annual guidance. We gave back in January delivering adjusted EBITDA in the mid teens as well on target, while delivering higher margins and growth and operational performance is also well on target.

Dan: Considering our planned transformation under control room business is moving quickly together with the delays in federal spending our topline will be lower than we anticipated a year ago.

Speaker Change: But all of our profit metrics are significantly higher and well on track and this has been our main focus and the most important metric for this fiscal year.

Amir Kowika: The better than expected transformation of our control room business will set us up for a much healthier and profitable business in the future.

Speaker Change: The better than expected transformation of our controlling business will set us up for a much healthier and profitable business in the future.

Amir Kowika: And finally, we believe that Halivision has a much brighter future ahead as we have now delivered, not just promise but delivered at trailing 12 months, adjusted EBITDA of 20 million for two cores in a row, and we'll soon deliver a third. That cannot be taken away from us. It is no longer a promise. It's our actual running performance. We are committed to maximizing long-term value for all of our shareholders. We are confident in our ability to execute on our strategic plan and deliver continued growth.

Speaker Change: Finally, we believe that hydrogen has a much brighter future ahead as we have now delivered not just province, but delivered a trailing 12 months adjusted EBITDA of $20 million for two quarters in rural and will soon deliver a third.

That cannot be taken away from us it is no longer a promise.

Speaker Change: Actual running performance commit.

Speaker Change: Committed to maximizing long term value for all of our shareholders.

Speaker Change: Confident in our ability to execute on our strategic plan and deliver continued growth.

Amir Kowika: Now, if I trust that the investment committee will agree that we are still undervalued despite the recent run-up of our shares in terms of both revenue multiples and on our EBITDA multiples. Not to mention the exciting future ahead of us.

Speaker Change: That's a trust that the investment community will agree that we are still undervalued. Despite the recent run up of our shares in terms of both revenue multiples and on the EBITDA multiples not dimensions, the exciting future ahead of us.

Daniel Rosenberg: After all this, Dan, please continue with the detailed financial. Thank you, Mirko.

Speaker Change: After all this data please continue with the detailed finance.

Speaker Change: Thank you America, let me see if I can bridge the discussion of our financial performance to date with the opportunities that are in front of us So let's start.

Daniel Rosenberg: Let me see if I can bridge the discussion of our financial performance to date with the opportunities that are in front of us.

Daniel Rosenberg: So let's start. Revenue for the third quarter of fiscal 2024 was $30.6 million. That was a decrease of 4.3 million from the previous year comparative period. And revenue for that nine months that ended July 31st was 99.4 million. A modest 4.7 million decrease from the prior year competitive comparative period. Again, there's quite a bit more about this revenue story. As an example, year-over-year comparisons are impacted by our decision to exit the House of Worship vertical in April of 2023. And last year's an example, year-to-date revenue included House of Worship revenues of 3.5 million. There were no such revenues this year.

Speaker Change: Revenue for the second quarter for the third quarter of fiscal 2024 was $30 6 million.

Speaker Change: That was a decrease of $4 3 million from the previous year comparative period and revenue for that nine months that ended July 31 was $99 4 million.

Speaker Change: Modest $4 7 million decrease from the prior year competitive comparative period.

Speaker Change: Again, there's quite a bit more about this revenue story.

Speaker Change: As an example year over year comparisons are impacted by.

Speaker Change: By our decision to exit the house of worship vertical in April of 2023.

Speaker Change: And last year as an example year to date revenue included house of worship revenues of $3 5 million.

Speaker Change: There were no such revenues this year.

Daniel Rosenberg: Further, on a last call, we discussed two significant initiatives that Mirko highlighted in his discussion, and that they will impact our short-term revenues, but enhance our profitability and enable us to scale the business more quickly. The first is our transition from systems integrator in the control room space to that of a manufacturer, as is the case with the rest of our products. The second is the introduction of the long-term rental program, initially focused in the transmitter market. So let's focus a few minutes on this control room transition from the spoke systems integrator to manufacturer proprietary products.

melco: Further on our last call we discussed the two significant initiatives that melco highlighted in his discussion.

Speaker Change: And that they will impact our short term revenues, but enhance our profitability and enable us to scale the business more quickly.

Speaker Change: The first is our transition from systems integrator in the control room space to that of a manufacturer.

Speaker Change: As is the case with the rest of our products the.

Speaker Change: The second is the introduction of the long term rental program initially focused in the transmitter market.

So let's focus a few minutes on this control room transition from bespoke systems integrator to manufacturer of proprietary products.

Daniel Rosenberg: At the risk of being redundant, historically, MCS provided the spoke solutions to customers that included low margin, third-party components like displays, third-party electronic components, and even ancillary items like cables, racks, mounts, and the like. This approach certainly created additional complexity in managing inventory and resulted in delays from the initial sale to the conversion of cash, as we were not only responsible for the procurement of such components, but the eventual delivery of individual items and the resulting implementation. Just to give you a small sense of the complexity, we have already identified well over 250 inventory items that are better suited for our channel partners to provide and are no longer part of our offering.

Speaker Change: At the risk of being redundant here.

Historically MTS provided bespoke solutions to customers that included low margin third party components like displays third party electronic components, and even ancillary items like cables racks mounts and alike.

Speaker Change: This approach certainly created additional complexity in managing inventory and resulted in delays from the initial sale to the conversion of cash as we were not only responsible for the procurement of such components, but the eventual delivery of individual items and the resulting implementation.

Speaker Change: Just to give you a small sense of the complexity, we have already identified well over 250 inventory items that are better suited for our channel partners to provide and are no longer part of our offering.

Daniel Rosenberg: There's also Mountain's site of the fact that certain those SKUs may have been in support of a single customer, or may be subject to quick obsolescence as new models are generally announced annually for screens and the like. Because of this custom approach to serving customers, this integrator approach made scaling the business much more complicated, particularly in the public safety enterprise and international markets. It also created a bit of conflict with our channel partners in that same public safety and enterprise verticals that sold high-vision legacy products and desired to represent High-vision in the control room space.

Speaker Change: It's also not lose sight of the fact that certain those skus may have been in support of a single customer.

Speaker Change: Well it may be subject to quick obsolescence as new models are generally announced annually for screens and the like.

Speaker Change: Because of this custom approach to serving customers. This integrated approach made scaling the business.

Speaker Change: Much more complicated, particularly within the public safety enterprise and international markets.

Speaker Change: It also created a bit of conflict with our channel partners and that same public safety and enterprise verticals. That's sold high vision legacy products and desired to represent high vision in the control room space.

Daniel Rosenberg: This transition has already attracted the attention of channel partners wanting to partner with high-vision, and we expect to see more opportunities as these channel partners have added and have the added incentive by the enhanced margin dollars they can derive from providing the third-party components.

Speaker Change: This transition has already attracted the attention of channel partners wanting to partner with high vision and we expect to see more opportunities as these channel partners have added and have the added incentive by the enhanced margin dollars. They can derive from providing those third party components.

Daniel Rosenberg: But what does this really mean in terms of top-line revenues? Certainly a difficult question, as all our product families are offered to solve our customer workflow challenges, but here are a couple of observations that illustrate the point. In fiscal 22, as an example, these third-party components represented about 40% of a customer's bill of materials, and in some cases, these third-party components can represent as much as 75% of the bill of materials. In fiscal 2023, we saw those percentages decline modestly about 20%, and then on a year-to-date basis, we have seen that same percentage fall again by another 50%.

Speaker Change: But what does this really mean in terms of topline revenue.

A difficult question as all our product families are offered to solve our customer workflow challenges, but are here are a couple of observations that illustrate the point.

In fiscal 'twenty two as an example, these third party components represented about 40% of our customer's bill of materials and in some cases. These third party components could represent as much as 75% of the bill of materials.

Speaker Change: In fiscal 2023, we saw those percentages declined modestly about 20%.

Speaker Change: And then on a year to date basis, we have seen that same percentage fall again by another 50%.

Daniel Rosenberg: Thus, our earlier statements that the transition to a manufacturing model is happening even faster than we expected.

Speaker Change: Thus our earlier statements that the transition to a manufacturing model is happening even faster than we expected.

Daniel Rosenberg: Now let's turn our attention to the transmitter business in the long-term rental program. When we acquired AVI West, our objective was to grow the transmitter market by bringing the product family to North America. To that end, we introduced a competitive long-term rental program to the market. This initiative enables our customers to recognize an ongoing operating expense rather than a capital expense, and it also enables them to future-proof their purchases as they would have access to the newest technologies one available. The fact of the matter is that our competitors offer such a program in the transmitter space, and those sales may not be otherwise available to us if we didn't offer a program that is very competitive to those of our competitors.

Speaker Change: Now, let's turn our attention to the transmitter business in the long term rental program.

Speaker Change: When we acquired Abbvie West our objective was to grow the transmitter market by bringing the product family that North America.

Speaker Change: To that end, we introduced a competitive long term rental program to the market.

Speaker Change: This initiative enables our customers to recognize an ongoing operating expense rather than a capital expense and then it also enable them to future proof proof their purchases as they would have access to the newest technologies when available.

Speaker Change: The fact of the matter is that our competitors offer such a program in the transmitter space and those sales may not be otherwise available to us. If we didn't offer program that is very competitive to those of our competitors.

Daniel Rosenberg: However, for Haivision, there are additional benefits. First, it enables us to increase our reoccurring revenue posture, which has always been a key focus for us, and it enables us to derive higher gross margins over the life of these agreements. We have seen our global direct rental business increased 87% quarter over quarter, and 76% year over year, and almost two-thirds of that growth is the result of successes in North America. We know that our offering is compelling, and we know you've gotten the attention of our competitors. Although still in its agency, the rental business increased year over year by about 700,000, but revenue will trail as revenue is being recognized over the entire rental period.

Speaker Change: However for high vision there are additional benefits.

Speaker Change: First it enables us to increase our recurring revenue posture, which has always been a key focus for us.

Speaker Change: And enables us to drive higher gross margins over the life of these agreements.

Speaker Change: We have seen our global direct rental business increased 87% quarter over quarter.

Speaker Change: And 76% year over year.

Speaker Change: And almost two thirds of that growth is the result of successes in North America.

Speaker Change: We know that our offering is compelling and we know you have gotten the attention of our competitors.

Speaker Change: Although still in its infancy, the rental business increased year over year by about 700000, but revenue will trail as revenue is being recognized over the entire rental period.

Daniel Rosenberg: For this quarter, gross margins were 75%, a significant improvement from the 72% realized the prior year, a 300 basis point improvement, and gross margins on the year-to-date basis has 73.1%. Compared to 69.1% in the prior year compared to period, that's a 400 basis point improvement. We may continue to see some core variations of gross margins related to the seed finality of certain product families, although the gross margin differences between our product families are dissipating. There is a component of COGS that is relatively fixed in nature that can be leveraged across higher revenues, and we are seeing steady increases in the uptake of software-only options or virtual machine deployments, which, as Mirko mentioned, have a higher gross margin than our typical software offerings that have traditionally been installed on service and sold as an appliance.

Speaker Change: For this quarter gross margins were 75% of <unk>.

Speaker Change: Significant improvement from the 72% realized the prior year.

Speaker Change: 300 basis point improvement in gross margins on a year to date basis at 73, 1% compared to 69, 1% in the prior year comparative period, that's a 400 basis points improvement.

Speaker Change: We may continue to see some quarterly variations of gross margins related to the seasonality of certain product families. Although the gross margin differences between our product families are dissipating.

Michael: There is a component of Cogs that is relatively fixed in nature that can be leveraged across higher revenue and we are seeing steady increases in the uptake of software only options or virtual machine deployments, which as Michael mentioned have a higher gross margin than our typical software offerings that have traditionally been instead.

Michael: All in service and sold as an appliance.

Daniel Rosenberg: On a year-to-date basis, we've seen a 55% increase in these types of sales, and for the last quarter, we actually saw a 98% increase in the sales of software-only options.

Michael: On a year to date basis, we've seen a 55% increase in these types of sales and for the last quarter, we actually saw at 98% increase in the sales of software only options.

Daniel Rosenberg: Total expenses for this quarter were 21.9 million; that's a decrease of 3.8 million when compared to the same period in the prior year. Last year, we did incur a restructuring cost of 1.5 million, which represents about 40% of the year-over-year decrease. Approximately half of the remaining decrease can be attributed to compensation-related expenses, which was the focus of our recent restructuring efforts. The remaining year-over-year differences can be attributed to decreases in amortization and depreciation expenses, professional services, and technology and communications. As a back office continues to become more efficient, we did have increased reimbursements for shred credits and R&D credits, much of which were related to our participation in the Airbus Consortium.

Speaker Change: Total expenses for this quarter were $21 9 million, that's a decrease of $3 8 million when compared to the same period in the prior year.

Speaker Change: Last year, we did incur a restructuring cost of one point film 5 million.

Speaker Change: Which represent about 40% of that of the year over year decrease.

Speaker Change: Approximately half of the remaining decrease can be attributed to compensation related expenses, which was the focus of our recent restructuring efforts.

The remaining year over year differences can be attributed to decreases in amortization and depreciation expenses professional services and technology and communications as our back office continues to become more efficient we did have increased reimbursements.

Speaker Change: Shred credits and R&D credits much of which were related to our participation in the Airbus consortium.

Daniel Rosenberg: We are now using foreign currency derivatives contracts to mitigate the impact of changes in the Canadian dollars' impact on US dollars' denominated assets and liabilities. And you'll note that just the impact on our facts relates to exchange rates had a difference of about $300,000 in the quarter. On a year-to-date basis, total expenses were $67.4 million, a decrease of $7 million when compared to the prior year, compared to periods. The reasons for the year-to-date decreases are similar. Compensation-related expenses decreased by $3 million, $3.1 million actually, while the remaining decreases were related to non-recurring restructuring costs, amortization and depreciation, technology and telecommunication, and other development costs like prototyping and alike.

Speaker Change: We are now using foreign currency derivatives contracts to mitigate the impact of changes in the Canadian dollar impact on U S dollar denominated assets and liabilities.

Speaker Change: And you'll note that.

Just the impact on Opex related to exchange rates had a difference of about $300000 in the quarter.

Speaker Change: On a year to date basis total expenses were $67 4 million.

Speaker Change: A decrease of 7 million when compared to the prior year comparative period.

Speaker Change: The reason for the year to date decreases are similar.

Speaker Change: Compensation related expenses decreased by 3 million $3 1 million actually.

Speaker Change: While the remaining decreases were related to nonrecurring restructuring costs amortization, and depreciation technology, and telecommunications and other development costs like prototyping and alike.

Daniel Rosenberg: The results of higher gross margins and lower expenses was an adjusted EBITDA for the quarter of $4.1 million, and for the nine months into July 31, our adjusted EBITDA was $14.4 million, again, a $5.3 million or 58% improvement from the same prior-year period. The adjusted EBITDA margins for the quarter was 13.5%. A notable improvement when compared to the 12.4% is the last prior-year comparative period. And on a year-to-date basis, our adjusted EBITDA margin was 14.5%, and even more impressive improvement from the 8.7% experience in the same prior-year period. Our adjusted EBITDA margins have been securely in the mid-teens for the last quarter, as we promised over a year ago.

Speaker Change: The result of higher gross margins and lower expenses with an adjusted EBITDA for the quarter of $4 1 million and for the nine months ended July 31, our adjusted EBITDA was $14 4 million again, a $5 3 million or 58% improvement.

Speaker Change: From the same prior year period.

Speaker Change: The adjusted EBITDA margin for the quarter was 13, 5% a notable improvement when compared to the 12, 4% in the last prior year comparative period and on a year to date basis. Our adjusted EBITDA margin was 14, 5% even more impressive improvement from the eight.

Speaker Change: 7% experienced in the same prior year period.

Speaker Change: Our adjusted EBITDA margins have been securely in the mid teens for the last four quarters as we promised over a year ago.

Daniel Rosenberg: And as Merrick mentioned, our Crayling 12-month adjusted EBITDA is $20.1 million. It should become evident that there is consistency in gross margins and adjusted EBITDA margins, and that should be what we see by the investment community. And given our profitability, we are building a valuable business that still may not be fully reflected in today's stock price.

Speaker Change: And as Mark mentioned, our trailing 12 months adjusted EBITDA is $21 million.

Speaker Change: It should become evident that there is consistency in gross margins and adjusted EBITDA margins and that should be well received by the investment community.

And given our profitability we are building a valuable business that still may not be fully reflected in today's stock price.

Daniel Rosenberg: Operating profit for this quarter was $1.1 million. That's a $1.6 million improvement from the same prior-year period. And on a year-to-date basis, operating profit was $5.3 million, and even more impressive, a 7.7 million improvement over the same prior-year comparative period. And just to finish up the P&L bit, the net income for the quarter was 400,000; that was a 1.3 million when compared to the net loss of 900,000 in the prior year period. And on a year-to-date basis, net income was 2.6 million, a 6.4 million dollar improvement when compared to the net loss of 3.8 million in the prior year period.

Speaker Change: Operating profit for this quarter was $1 1 million, that's a $1 $6 million improvement from the same prior year period.

Speaker Change: And on a year to date basis operating profit was $5 3 million and even more impressive seven 7 million improvement over the same prior year comparative period.

Speaker Change: And just to finish up the P&L a bit the net income for the quarter was 400000 that was a $1 3 million when compared to the net loss of 900000 in the prior year period and on a year to date basis net income was $2 6 million, a $6 $4 million improvement when compared to the net loss of $3 eight.

Speaker Change: In the prior year period.

Speaker Change: This is our fourth consecutive quarter with positive net income and positive earnings per share and it's our seventh since being a public company for those of you who are counting.

Daniel Rosenberg: And it's our seventh since being a public company, for those of you who are counting.

Daniel Rosenberg: With respect to the balance sheets, we entered the quarter with cash balances of 13.9 million. That represents an increase of 5.6 million from the end of fiscal 2023 and an increase of 2.9 million from prior quarter end. We also still have a revolving credit facility in place for 35 million, of which only 3.4 million remains outstanding. And the revolving facility may still be increased by another 25 million. Total assets at July 31st were 140.2 million. That's a decrease of 3.9 million from the end of last fiscal year. And the decrease could be attributed to a reduction in our net intangible assets, the result of ongoing amortization expense.

Speaker Change: With respect to the balance sheet.

Speaker Change: We ended the quarter with cash balances of $13 9 million.

Speaker Change: That represents an increase of $5 6 million from the end of fiscal 2023, and an increase of $2 9 million from prior quarter end.

Speaker Change: We also still have a revolving credit facility in place for 35 million of which only $3 4 million remains outstanding and.

Speaker Change: The revolving facility may still be increased by another $25 million.

Speaker Change: Total assets at July 31 were $140 2 million, that's a decrease of $3 9 million from the end of last fiscal year.

Speaker Change: And the decrease can be attributed to a reduction in our net intangible assets. The result of ongoing amortization expense, we have been working on reducing our inventories and we have reduced our inventories by $3 3 million from the end of last fiscal year and on a side note. It.

Daniel Rosenberg: We have been working on reducing our inventories, and we have reduced our inventories by 3.3 million from the end of last fiscal year. And on a side note, inventories have declined by 6 million dollars since peaking in the second quarter of fiscal 2023. We saw reductions in trade and other receivables. And we've seen reductions in the right-of-use assets, the result of ongoing rent payments. Now these decreases were obviously offset by the increase in cash and increase in investment tax credit receivables related to R&D activities in Canada, France, and the United States. Total liabilities were 45.1 million.

Speaker Change: Inventories have declined by $6 million since peaking in the second quarter of fiscal 2023.

Speaker Change: We saw reductions in trade and other receivables and we've seen reductions in a right of use assets. The result of ongoing rent payments.

Speaker Change: These decreases were obviously offset by the increase in cash and increase in investment tax credit receivables related to R&D activities in Canada, France, and the United States.

Speaker Change: Yeah.

Speaker Change: Total liabilities were $45 1 million that was a decrease of 4.8 million from five from prior fiscal year end.

Daniel Rosenberg: That was a decrease of 4.8 million from prior fiscal year end. We saw decreases of 3.5 million in trade payables and other accruals. We saw 1.6 million decrease in lease liabilities and principal payments on term loans. Those were loans that we acquired as part of the ABS transaction. We also saw a decrease in the line of credit. Now these decreases were offset by a 1.1 million dollar increase of income taxes payable.

Speaker Change: We saw decreases of $3 5 million in trade payables and other accruals, we saw $1 6 million decrease in lease liabilities and principal payments on term loans those were loans that we acquired as part of the <unk> transaction.

Speaker Change: We also saw a decrease from our line of credit.

Speaker Change: Now these decreases were offset by a one point well $1 million increase of income taxes payable.

Daniel Rosenberg: So let's talk a little bit about guidance for fiscal 2024 and beyond. But before, let's touch on a couple of key announcements that were recently made and how they made impact financial performance. First, the $61 million purchasing agreement with the U.S. Navy. That purchasing agreement translates to over 82 million Canadian at current exchange rates. High Vision has supplied products to the US Navy in the past, particularly the Cain's program to a fulfillment partner. This purchase agreement covers combat visualization and video distribution systems that are adjacent to our existing work. It does not cannibalize our existing relationships.

Speaker Change: So, let's talk a little bit about guidance for fiscal 2024 and beyond but before let's touch on a couple of key announcements that were recently made how they may impact financial performance.

Speaker Change: First the $61 million purchasing agreement with the U S Navy.

Speaker Change: That purchase agreement translates to over $82 million Canadian at current exchange rates.

Hi vision has supplied products to the U S. Navy in the past, particularly the canes program to a fulfillment partner.

Speaker Change: This purchase agreement covers combat visualization and video distribution systems that are adjacent to our existing work it does not cannibalize our existing relationship.

Daniel Rosenberg: It is a direct contract with a Naval C System Command, a contract we would otherwise not be able to enter into if it weren't for our high-vision MCF security posture. We are now in the base here of the contract, a ramp-up year for which revenue recognized for fiscal 2025 will be more modest than the run rate and largely focused in the second half of fiscal 2025. The exact delivery schedule for the remaining implementation is still to be finalized, but we expect the real impact of this purchasing agreement to be in fiscal 2026 and beyond.

Speaker Change: It is a direct contract with the Naval Sea systems command a contract we would otherwise not be able to enter into if we if it werent for our high vision Mcf security posture.

Speaker Change: We are now in the base year of the contract a ramp up year for which revenue recognized for fiscal 2025 will be more modest than the run rate and largely focused in the second half of fiscal 2025.

Speaker Change: The exact delivery scheduled for the remaining implementation is still to be finalized, but we expect the real impact of this purchasing agreement to be in fiscal 2026 and beyond.

Daniel Rosenberg: Whereas our public safety enterprise and international markets for command centers are really conducive to this manufacturer model in the command center space, sales to the government may likely include the integrator model. This purchasing agreement, which has been worked on for years, is such an example, and given the scale, margins, although still sound, will not be as frothy as for the rest of the business. I do want to mention that although purchasing agreement governance five years, there is an opportunity for significant follow-on business with the existing customer and with customers in other family countries.

Speaker Change: Whereas our public safety enterprise and international market for command centers are really conducive to this manufacturer model in.

In the command center space sales to the government may likely include the integrator model.

Speaker Change: This purchasing agreement, which has been worked on for years is such an example, and given the scale margins, although still sound will not be as frothy as for the rest of the business.

Speaker Change: I do want to mention that all those purchasing agreement governs five years. There is an opportunity for significant follow on business with the existing customer and with customers and other friendly countries.

Daniel Rosenberg: Second, AI innovations in our partnership with Shieldi AI. This initiative will enable our defense customers to benefit from improved situational awareness to detect or to crack objects more efficiently than is possible by the human eye. This in turn will allow our customers to monitor our video feeds and enable quicker life-saving decisions. Our advanced three processing capabilities will be demonstrable in our cracking release scheduled for October, which will be generally available in early calendar 2025. And we have a significant install base that could benefit from this enhanced functionality.

Speaker Change: Second.

Speaker Change: AI innovations in our partnership with shield by AI.

Speaker Change: This initiative initiatives will make our defense customers to benefit from improved situational awareness to detect or to track objects more efficiently than is possible by the human eye.

Speaker Change: This in turn will allow our customers to monitor our video feeds and enable quicker lifesaving decisions.

Speaker Change: Our advanced Dream processing capabilities will be demands demonstratable in a cracking release schedule for October which will be generally available in early calendar 2025.

Speaker Change: And we have a significant install base that could benefit from this enhanced functionality.

Speaker Change: Okay.

Daniel Rosenberg: Lastly, the Air 5G Consortium Agreement with Airbus Defense and Space. It is a development agreement approved by what they call the important project of common European interest, IPCEI, which aims at enabling research and development of innovative and resource-efficient technologies and components. This consortium, which is being managed by Airbus Defense and Space, includes six entities in the areas of private 5G solutions, beam forming antenna solutions, mobile private networks, communication terminals, compute solutions, and, of course, high vision as a provider of private 5G transmitters. High Vision will benefit from being one of just a few participants on the leading edge of the next generation of secure and reliable communications.

Speaker Change: Lastly, the <unk> consortium agreement with Airbus Defence and space.

Speaker Change: It is a development agreement approved by the what they call the important project of common European interest IPC EI.

Speaker Change: Which it aims at enabling research and development of innovative and resource efficient technologies and components.

Speaker Change: This consortium, which is being managed by air fun Airbus Defence and space includes six entities in the areas of private <unk> solutions beam, forming antenna solutions mobile private networks communication terminals compute solutions and of course high vision as the provider.

Speaker Change: <unk>, a private <unk> transmitters.

Vishal: Hi, Vishal will benefit from being one of just a few participants on the leading edge of the next generation of secure and reliable communications.

Daniel Rosenberg: This development initiative has always been very consistent with our own development roadmap, and to put an exclamation point on that statement, although the formal consortium agreement was executed fairly recently, work against this initiative began well over a year ago. And we expect to see our first derivative product resulting from this development effort. Lastly, we will also be the recipient of certain enhanced R&G grants and favorably priced development loans as a participant in this initiative.

Speaker Change: This development initiative has always been very consistent with our own development roadmap and to put an exclamation point on that statement. Although the formal consortium agreement was executed fairly recently worked against this initiative began well over a year ago, and we expect to see our first derivative products, resulting from this development effort.

Vishal: In fiscal 2025.

Vishal: Lastly, we will also be the recipient of certain enhanced R&D grants and favorably priced development loans as a participant in this initiative.

Daniel Rosenberg: In terms of expectations for fiscal 2024, we did revise our guidance for the full year based on the transition to a manufacturing model. But the delay in the approval of the U.S. Federal Budget, the long-term rental program and this transition that is happening much faster than had otherwise has adjusted our thinking. So we are now projecting revenues for this fiscal year to be between 134 and 136 million. For the reasons we have already discussed, we still anticipate adjusted EBA margins in the mid-teens, as has been our guidance the entire year. And we are still anticipating seeing our fourth quarter to be knocking on the door of our long-term adjusted EBA margin goal of 20 percent, as our cost structure is well in place.

Speaker Change: In terms of expectations for fiscal 'twenty 'twenty four we did revise our guidance for the full year based on the transition to a manufacturing model.

Vishal: But the delay in there.

Vishal: And the approval of the U S. Federal budget, the long term rental program and this transition that is happening much faster than it had had otherwise has.

Vishal: Adjusted our thinking.

Vishal: So we are now projecting revenues for this fiscal year to be between $1 34, and $136 million for the reasons, we have already discussed.

Vishal: We still anticipate adjusted EBITDA margins in the mid teens as has been our guidance the entire year.

Vishal: And we are still anticipating seeing our fourth quarter to be knocking on the door of a long term adjusted EBITDA margin goal of 20% as our cost structure is well in place.

Daniel Rosenberg: With our operational restructuring behind us, our focus going forward is on revenue growth. Today, we discuss a number of significant growth initiatives that should translate to double-digit revenue growth for fiscal 2026 and beyond. However, we will still be dealing with some of the revenue growth headwinds cited earlier during this call. Don't get me wrong, these recent revenue decisions are ultimately setting the stage for a more efficient, more profitable operation, but we may not see the full benefit until late in fiscal 2025 and beyond. Thus, we are projecting revenue for fiscal 2025 to be 140 million or better, with an adjusted EBA margin between 100 and 200 basis points higher than what we are seeing today.

Vishal: With our operational restructuring behind us our focus going forward is on revenue growth.

Today, we discuss a number of significant of growth initiatives that should translate to double digit revenue growth for fiscal 2026 and beyond.

Speaker Change: However, we will still be dealing with some of the revenue growth headwinds cited earlier during this call.

Speaker Change: Don't get me wrong. These recent revenue decisions are ultimately setting the stage for a more efficient more profitable operation, but we may not see the full benefit that until late in fiscal 2025 and beyond.

Speaker Change: For for we are projecting revenue for fiscal 2025 to be.

Speaker Change: $140 million or better.

Speaker Change: With an adjusted EBITDA margin between 100 200 basis points higher than where we are seeing to date.

Daniel Rosenberg: And with some of our recent announcements of our technology advances and, of course, the Navy production contract, we expect to be seeing double-digit revenue growth for fiscal 2026 and beyond.

Speaker Change: And with some of our recent announcements of our technology advances and of course, the Navy production contract.

Speaker Change: We expect to be seeing double digit revenue growth for fiscal 2026 and beyond.

Daniel Rosenberg: We will be providing more specific guidance at our next earnings call in January, when we announce our full-year results. So that's the end of my prepared remarks.

Speaker Change: We will be providing more specific guidance at our next earnings call in January January when we announce our full year results.

Speaker Change: So that's the end of my prepared remarks, I'm going to pass the microphone back to you Marco.

Regina: I'm going to pass the microphone back to you, Mirko. Mirko, are you still there? Mirko's line is still connected. Mirko, you may have muted. Yep, no, I didn't need.

Speaker Change: Mark are you still there.

Marco: Miracles line is still connected Miracle you may have muted.

Marco: Yeah, No I didn't I.

Regina: Let's open up for questions. Thank you.

Speaker Change: Now, let's open up for questions. Thank you.

Nick Corcoran: And at this time, I'd like to remind everyone that in order to ask a question, simply press star followed by the number one on your telephone keypad. Our first question will come from the line of Nick Corcoran with a human. Please go ahead. I'm going to go ahead and take my questions. And Nick, just my first question is, you mentioned a couple of headwinds to revenue in the quarter. Can you maybe rank them in order of what's causing the biggest headwind?

Speaker Change: And at this time I'd like to remind everyone in order to ask a question simply press star followed by the number one on your telephone keypad and our first question will come from the line of Nick Corcoran with acumen. Please go ahead.

Speaker Change: Good morning, guys. Thanks for taking my questions.

Nick Corcoran: And Nick.

Nick Corcoran: Just my first question is you mentioned a couple of headwinds to revenue in the quarter can you maybe rank them in order.

Speaker Change: Whats, causing the biggest headwind.

Amir Kowika: Well, okay, that's a fairly complicated question because there are interdependencies between the two, but I would say that delays in the procurement process in the defense market, based on the delays in the federal costs, and that as our transformation, they probably went rank about equal how they impacted our financial results. And then I would say the long-term rental program will and the significant contract order with the U.S.

Speaker Change: Oh, well, okay. That's a it's a fairly complicated question because there are interdependencies between the two but I would say that.

Speaker Change: Delays in the procurement process in the defense market.

Speaker Change: Based on the delays in the federal budget and that as our transformation, they probably weren't rank about equal how they impacted our financial results and then I would say the long term rental program.

Speaker Change: Second.

Speaker Change: Okay.

Speaker Change: That's helpful.

Speaker Change: A significant contract with the U S. Navy can you maybe give a little bit of color on how long the sales cycle for a contract like that as well.

Amir Kowika: Navy, can you give a little bit of color on how long the field cycle for a contract like that is? Well, we knew of the deal when we acquired Cinemasis, or we knew that it was a possibility, but I think we may have put a discount on it, whether we're going to feed or not. And what we've been led to believe is that they had been working on that contract for a couple of years prior to our acquisition of Cinemasis.

Well, we knew of the we knew of the deal when we acquired center massive or are we knew that it was a it was a possibility but I think we are we.

Speaker Change: We may have put a discount on it or whether we're going to see it or not and what we have been led to believe is that they had been working on that contract for a couple of years prior to our acquisition of a set of massive so we're really talking about more than three years, probably less than six.

Amir Kowika: So we're really talking about more than three years, probably less than six.

Amir Kowika: And was one of the materials to get that contract, the security clearance? Well, certainly because of the nature of what we were doing, that was the Navy would prefer a vendor that had a security clearance. And a security facility.

Speaker Change: And was one of the.

Speaker Change: To get that contract the security clearance.

Speaker Change: Okay.

Speaker Change: Well certainly that because of the nature of what we're doing.

Speaker Change: That was that.

Speaker Change: And the Navy would prefer a vendor that had a security clearance.

Speaker Change: And our secured facilities.

Speaker Change: Yeah.

Amir Kowika: And maybe last question for me, you mentioned there's a significant broadcast deal with the customers for switching from satellite to SRT. Is that a one-time purchaser? Is it a recurring sale? Yeah, that's a one-time purchase. Pure software running on their own instances or end-or servers. And so we would benefit from recurring support revenue on that, which would be significant going forward.

Speaker Change: And maybe last question for me you mentioned there is a significant broadcast deal with the customers switching from satellite to SRT is that a one time purchase or is it a.

Speaker Change: Recurring sale.

Speaker Change: Yes, I don't know that that's the one time purchase a pure software running on their own.

Speaker Change: Instances or <unk> servers.

Speaker Change: And so we would benefit from.

Speaker Change: Recurring support revenue on that which could be significant going forward.

Amir Kowika: Maybe one following question. Is there a shift from service satellite to SRT? Absolutely. I mean, there's a massive shift just getting off a satellite period. I think SRT is, by far, the de facto standard being used everywhere on the planet. So it has created that ability for compatibility by ease of transition. So pretty much used by all companies, cloud companies, video guys, broadcasters, you name it. So SRT is, by far, the most adopted protocol for IP delivery and streaming. Thanks. That was good color. I'll pass it on. Right? Thanks.

Speaker Change: And maybe one follow up question is there a shift from <unk>.

Speaker Change: From a satellite to SRT.

Speaker Change: Oh, absolutely I mean, there's there's a massive shifts.

Speaker Change: Just getting off a satellite period Ah.

Speaker Change: I think SRT is by far the de facto standard being used everywhere on the planet.

Speaker Change: So it has created that ability for compatibility, but ease of transition so pretty much used by.

Speaker Change: All companies are.

Speaker Change: Cloud companies video guys broadcasters.

Speaker Change: Name it so.

Speaker Change: <unk> T is bye.

Speaker Change: By far the most adopted the protocol for IP delivery.

Speaker Change: And streaming.

Speaker Change: Thanks, Liz good color I'll pass along.

Speaker Change: Great. Thanks.

Daniel Rosenberg: Our next question will come from the line of Daniel Rosenberg with Paradigm. Please go ahead. Good morning, Mirko and Dan. Thanks for taking my question. The first one comes around the guidance. Again, when you guys say 100 to 200 basis points higher than today, the 24 guidance suggests a step up in margin profile for Q4. So I'll have to say, should we read that language to mean mid to high teams or just a debate that next year, or again, knocking on that 20% door. If you can provide any detail there, it would be appreciated. We do expect to see higher EBDA margins in our fourth quarter, and that's going to result in an EBDA margin in the mid-teens for 2024, and we expect for all of 2025 we should be able to see a 100 to 200 basis point improvement from the run rate where we are today.

Speaker Change: Our next question will come from the line of Daniel Rosenberg with paradigms. Please go ahead.

Speaker Change: Good morning, there can and Dan and thanks for taking my question.

The first one comes around the guidance when you guys say 100 to 200 basis points higher than today.

Speaker Change: The 24 guidance suggests a step up in margin profile for Q4.

Speaker Change: So all that to say should we read that language to mean mid to high teens or adjusted EBIT next year or again, knocking on that 20% door.

Speaker Change: Provide any detail there would be appreciated.

Speaker Change: Okay, we do expect to see higher EBITDA margins in in our fourth quarter and that's going to result in an EBITDA margin in the mid teens for 2024, and we expect for all of 2025, we should be able to see a 100 to 200 basis point improvement from the run rate where we are.

Speaker Change: Our today.

Daniel Rosenberg: Because there's seasonality in our business, and because we see fourth quarter having higher revenues, we are not suggesting that every quarter is going to have that 100 or 200 basis point improvement to the quarter of the prior quarter. Overall, for the entire year, we expect to see that benefits.

Speaker Change: Because there is seasonality in our business and because we see fourth quarter, having higher revenues.

Speaker Change: We're not suggesting that every quarter is going to have that 100, or 200 basis point improvement to the quarter.

Speaker Change: Prior quarter overall for the entire year, we expect to see that benefit.

Daniel Rosenberg: Okay, I appreciate that.

Speaker Change: Okay. Appreciate that and then I went to speak to the U S. Navy contract Ah Congrats on Yeah Unimpressive Lynn I was just wondering how that when might affect you securing additional contracts like that are there any synergies to be had and any color on the pipeline.

Amir Kowika: Then I want to speak to the US Navy contract. Congrats on an impressive win. I was wondering how that win might affect you, securing additional contracts like that. Are there any synergies to be had, and any color on a pipeline that you have in delivering that kind of solution? Well, let me take that one. I think that's a great question. Let me just say it is; the first one is always the most difficult one, right? So this has been with the acquisition of sentiment and setting up the whole security facility with a US-based posture. We are actually investing heavily in MCS, which we call High Vision Emission Critical Systems. I would expect that we would see further contracts in the future.

Speaker Change: You have in delivering that kind of solution.

Speaker Change: Well, let me take that one I mean, I think that's a great question.

Speaker Change: Let me just say it is the the first one is always the most difficult one.

Ben: This is Ben.

Speaker Change: With the acquisition of <unk>.

Speaker Change #100: The massive and setting up obviously the whole secured facility without with a U S. Based posture, we are actually investing heavily in Mcs, which we call high vision and mission critical systems.

Speaker Change #100: I would expect that our that we would see further contracts in the future. None that we can talk about nothing that I would say is in the pipeline in the short term, but this was all of our focus this took a lot of efforts are quite a few years.

Amir Kowika: None that we can talk about. Nothing that I would say is in the pipeline in the short term, but this was all of our focus. This took a lot of efforts, quite a few years, and I'm glad we finally made it, but it's going to be a lot easier now that we've won, and we're going to start delivering for us to go after a lot of other projects. So definitely a much easier road to success going forward.

Speaker Change #100: And I'm glad we finally made it.

Speaker Change #100: But it's gonna be a lot easier now that we've won and we're deliberate we're going to start delivering to for us to go after a lot of other projects. So definitely much easier road to success going forward.

Speaker Change #100: Yeah.

Amir Kowika: Okay, good to hear.

Speaker Change #101: Okay. Good to hear and then talking about growth.

Amir Kowika: And then talking about growth, could you speak to just the visibility you have today? And then when you talk about double-digit growth in the longer term, does that relate around the initiatives you just mentioned around the MCS solution? Well, I was just going to mention that I think the things that we kind of started off, and I spent a lot of time explaining to that will help our double-digit growth going forward. It really is the control room space, which I think is a very exciting market and a growth market. Our defense posture, given the Navy deal, absolutely.

Speaker Change #102: Can you speak to just the visibility you have today and then when you're talking about double digit growth in the longer term.

Speaker Change #103: Does that relate around the initiatives you just mentioned around the M. C. S a solution.

Speaker Change #102: Okay.

Speaker Change #102: Well the double does that definitely go ahead Michael.

Michael: Yeah, No I was going to mentioned that I think the things that we kind of start off and I spent a lot of time explaining.

Speaker Change #104: So that will help our double digit growth going forward really is the control room space, which I think.

Speaker Change #104: It is a very exciting market and a growth market.

Speaker Change #104: Our defense posture, given the the Navy deal absolutely that's going to be a significant piece.

Amir Kowika: That's going to be a significant piece, mainly starting out with take 2026. And of course, a lot of our AI, Kraken AI initiatives, which is open up a whole new market for us. So those three alone are pretty significant areas that are going to increase our revenue. And then, of course, I believe the true 5G, you know, so your bonded wireless, the use in live sports, we're just scratching a surface, and I believe us leading in that area is going to help grow that market for us because, you know, we deal in live broadcast, live events, live sports.

Speaker Change #104: Mainly starting I would say 2026.

And of course, a lot of our AI.

Speaker Change #104: Cracking AI initiatives, which is a whole open up a whole new market for us.

Speaker Change #104: Those three alone are a pretty significant.

Speaker Change #104: Areas that that are going to increase our revenue and then of course I believe the the true five G.

Speaker Change #104: Healthier bonded wireless.

Speaker Change #105: The use in live sports, we're just scratching the surface and I believe as leading in that area is going to help grow that market for us because we deal in live broadcast live events live sports. So what we just did at the Olympics and honestly never been done before.

Daniel Rosenberg: So what we just did at the Olympics has honestly never been done before. We're going to be seeing at the next one pick, it's going to go whole different level and we're seeing it all other major world sporting events, just like FIFA World Cup is going to be better. So everybody's getting excited about 5G cellular bonded, private 5G networks. So I believe us leading in that is going to be a growth factor in 26, 27, 28, and beyond. So, those in the nutshell, Dan, you got something else to add? Well, I just want to mention that even the work with the consortium where we're helping to build the next generation of secure, robust communication systems in the public safety space is going is a huge initiative as well.

Speaker Change #106: We're going to be seeing an excellent bank, it's going to go to a whole different level.

Speaker Change #106: And we're seeing it all other major world Sporting events, just like FIFA World Cup is gonna be better. So everybody is getting excited about five G. Kelly.

Speaker Change #106: Failure of bonded private <unk> networks.

Speaker Change #107: So I believe us, leaving and that is gonna be a growth factor in 'twenty, six 'twenty 728 and beyond so.

Speaker Change #108: Those and then that's all I have done you got something else right.

Speaker Change #109: Well I just want to mention that even though even work with the consortium, where we're hoping to build the next generation of secure robust communications systems in the public safety space is going is a huge initiative as well again, we will see start seeing that benefit in 2026 and beyond so all of those initiatives are demonstrating our.

Daniel Rosenberg: Again, we'll see, start seeing that benefits in 2026 and beyond. So all of those initiatives are demonstrating our technology prowess, demonstrating the potential of what we can be doing, and we'll eventually contribute to the top line growth.

Technology prowess, demonstrating the potential of what we can be doing and we will eventually contribute to the topline growth.

Speaker Change #110: Okay and.

Daniel Rosenberg: Okay, thank you for taking my questions. I'll pass the line.

Speaker Change #110: Thank you for taking my questions I'll pass the line.

Speaker Change #110: Okay.

Robert Young: Our next question comes from the line of Robert Young with Ken Accordianuity. Please go ahead. I've been told Robert drops off the line. Oh, I'm here. I'm here. Sorry for like that. No, no, I've got a couple of quick ones. Most of my questions are covered in the prepared merchant. The reduction in the guidance and the, you've supushed out in the US, you're recovered a bit of this.

Speaker Change #110: Our next question comes from the line of Robert Young with Canaccord Genuity. Please go ahead.

Robert: Hello, Robert.

Robert Young: The drop off the line so I'm here I'm here.

Robert Young: I'm here.

Speaker Change #113: Good morning.

Speaker Change #114: Sorry about that and.

Speaker Change #115: I've got a couple of quick ones. Most of my questions were covered in the prepared remarks that the.

Speaker Change #115: That's right.

Speaker Change #115: The reduction in the guidance and the.

Speaker Change #117: Push out in the U S already covered interest like how comfortable are you there.

Amir Kowika: Like, how comfortable are you that the programs are on, are durable through the election cycle. Like the other side of, you know, presidential elections are any of these subject to cancellation or change or anything like that, but maybe just talking about how durable you feel about businesses with Keynes and with the additional Navy contract. Well, it's a very good question. I mean, from the new Navy contract, I mean, what we're told, I mean, it's obviously not only you've been approved, but the budgeting has been secured by Congress and it's committed. It is not subject to change of administration.

Speaker Change #118: Programs, you're on or durable through the election cycle on the other side of Sunshine.

General elections or any of these subject to cancellation or change or anything like that but maybe just talk about how durable you can feel that businesses with changed and with the additional navy contract.

Speaker Change #119: Well, it's a very good question I.

Speaker Change #120: I mean from the New Navy contract I mean, what we're told me, it's all of us and not only been approved but the budgeting has been secured by Congress and is committed.

Speaker Change #120: It is not.

Subject to change.

Speaker Change #122: Change of administrations, so from that because it's a high priority project. That's been fully funded and approved so we don't see any disruption that and that specific project that we're told.

Amir Kowika: So, from that, it's a high-priority project that's been fully funded and approved. So we don't see any disruptions that, and that specific project that we're told. From a Keynes perspective, that's, you know, that's been going on for seven plus years. It is starting to wind down. We have seen budget discussions and problems that have moved deals left to right. So that one would be affected potentially by an administration change elections, but it's too much lesser extent because we're kind of near in the end of that program. So I'm not as concerned. But, you know, the big deal, and let's not forget that the base year for this new contract, which we thought would have been this year because we actually thought that this was going to close back in January, February, March.

Speaker Change #120: From a cadence perspective.

Speaker Change #120: That's been going on for seven plus years. It is starting to wind down we have seen budget.

Speaker Change #123: Gotcha and problems that have moved deals left to right.

So that one.

Speaker Change #123: Would be affected potentially by by an administration change elections.

Speaker Change #124: But it's it's too much lesser extent, because it's we're kind of nearing the end of that program. So I am not as concerned.

Speaker Change #124: But the big deal there.

Let's not forget that the our base year.

Speaker Change #125: Toward this new contract, which we thought would have been next year because she has taken us we actually thought that this was going to close back in January February March.

Amir Kowika: It's just in closed, so just took a long time for the close. The base year is actually in 2025. So, and that's what it's already planning; that that's going to be a small amount. You know, the real intent is really where it really ramps up is 26 and 27, 28. So I would expect that no matter what happens with the elections, it's not going to be much of an effect on this deal.

Speaker Change #125: And close so it just took a long time for the close.

Speaker Change #125: The base year is actually in 2025 so.

Speaker Change #125: And that's what we're already planning that that's going to be a small amount.

Speaker Change #125: Real intent is really where it really ramps up is 26 and 27 28.

So I would expect that no matter what happens with the elections is not going to be much of an effect on this deal.

Amir Kowika: I guess I would be more concerned if God knows what happens with the elections, and if there's a government shutdown, that could be a whole different discussion. But at this point, none of these programs seem to be affected.

Speaker Change #125: I guess I would be more concerned.

Speaker Change #125: God knows what happens with the elections and if there's a government shutdown that could be a whole different discussion right.

Speaker Change #125: But at this point now these programs seem to be seem to be affected.

Daniel Rosenberg: Yeah, Robert, I think that if we look at both the Cain's project and, for that matter, the Navy project, both of them represent technology refreshes. In the Cain's project, this is their third; the middle of our third technology refresh with a Navy, and that will continue. That's not a contentious kind of issue. And even the technology refresh related to this US Navy is a technology refresh. Again, it's not contentious. It's not a new program. It's not a large program. It's part of the ongoing refurbishment of these votes that happen all the time. Okay, that's great to hear.

Robert Young: Yes, Robert I think that if we were look at both the <unk> project and for that matter. The Navy project both of them represent technology refreshes in the canes project. This is their third we're in the middle of the third technology refresh with the Navy and that will continue that's not that's not a.

Speaker Change #125: Yeah.

Speaker Change #125: Contentious kind of issue and even our detect.

Speaker Change #125: The technology refresh related to this U S. Navy deal is the technology refresh again, it's not contentious it's not a <unk>.

Speaker Change #126: New program, it's not a large program it's part of the ongoing refurbishment of these boats that happen all the time.

Okay, that's great to hear last middle of them.

Daniel Rosenberg: Last little one is just the new Navy contract. Is that an IDIQ or maximum authorization? Is that actual revenue they expect to receive over the last of the contract? Then I'll pass on. Thanks. That is actual revenue over the life of the project. Thank you very much. Thanks.

Speaker Change #127: The new Navy contract is that an idea IQ or maximum authorization or is that actual revenue do you expect to receive over the life of the contract and then I'll.

Speaker Change #127: Pipeline. Thanks.

Speaker Change #129: That is our actual revenue over the life of the project.

Speaker Change #129: Okay. Thank you very much.

Speaker Change #129: Thanks.

Regina: Do we have no further questions at this time? I'll hand the call back to Mirko for any final remarks. Oh, wait a minute.

Speaker Change #130: We have no further questions at this time I'll hand, the call back to Marco for any final remarks.

Speaker Change #131: Well, we haven't even got a question yeah.

Venkata Velagapudi: Then I've got a question. Yeah, we do not have a question from. Yeah, we do have now have a question from Vincotta.

Speaker Change #131: Now how the losses from that yeah. We do have now have a question from Carter. Please go ahead with your question.

Venkata Velagapudi: Please go ahead with your question. Thanks, Dan and Mirko, for taking my questions. Yeah, I just have one question.

Speaker Change #132: Yes, Thanks, Dan.

Copel, taking my questions.

Speaker Change #133: Just have one question.

Venkata Velagapudi: As questions related to most of I mean operations have been covered. This is about your share buybacks. You have been doing over the course of last quarter. So just want to know like the timeline. Do you have plans to continue, or what criteria do you have in mind before pursuing this program? Thanks a lot.

Speaker Change #133: Questions related to most or.

Speaker Change #133: Operations have been covered.

Speaker Change #134: This is about.

Speaker Change #135: Share buybacks are you have been doing over the course of.

Speaker Change #135: Last quarter.

Speaker Change #136: Just wanted to know.

Speaker Change #136: Like the timeline do you have plans to continue.

Speaker Change #137: Walk us what criteria do you have in mind before pursuing this program. Thanks a lot.

Amir Kowika: Very good. Well, we the NCID is in place for a year. I don't see why we wouldn't want to renew the program. I believe the basis for the decision to go down this path is that we believe that stock was not reflective of the value. And as long as the stock was cheap, we are going to support it. We'll continue to support the stock at what level we have to, we have yet to determine. But we do have this automatic share purchase plan in place during our blackout periods. And so that is in place and will continue to operate for the remainder of the year, and we will make adjustments as necessary.

Speaker Change #138: Very good well.

Speaker Change #139: The MTI V is in place for a year.

Speaker Change #140: I don't see why we wouldn't want to renew the program I believe the basis for the decision to go down. This path is that we believe that stock was not not a reflective of the value.

And as long as the stock was cheap we were going to support it we.

Speaker Change #140: We will continue to support the stock and what level, we have to we have yet to determined but we do have this automatic share purchase plan in place during our blackout periods and so that is in place and we will continue to operate for the remainder of the year and we will make adjustments as necessary.

Okay perfect sounds good thanks.

Amir Kowika: Perfect sounds good. Thanks.

Speaker Change #140: Okay.

Amir Kowika: And with that, I'll hand the call back over to me.

Speaker Change #141: And with that I'll hand, the call back over to mere com.

Speaker Change #140: Hum.

Speaker Change #142: I just want to thank you.

Amir Kowika: Thank you all of our shareholders and analysts on the link today, and for the continued support of Haivision. We look forward to speaking with everyone in mid-January when we're going to discuss our full 2024 results and give a little more color to our guidance for 2025 at that time. So thank you again, and speak to everybody in January.

Speaker Change #143: All of our shareholders and analysts on the line today and for the continued support of high vision and look forward to speaking with everyone. In mid January when we're going to discuss our full 2024 results and give a little more color to our guidance for 2025 at that time, well. Thank you again and speak to everybody in <unk>.

Speaker Change #142: Annually.

Operator: That will conclude today's call. Thank you all for joining. You may now disconnect. Please wait.

Speaker Change #144: That will conclude today's call. Thank you all for joining you may now disconnect.

Speaker Change #145: Please wait the conference will begin shortly.

Operator: The conference will begin shortly.

Speaker Change #144: [music].

Speaker Change #144: Yes.

Speaker Change #144: [music].

Yeah.

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Speaker Change #144: Yeah.

Speaker Change #144: Yeah.

Speaker Change #144: [music].

Speaker Change #144: Yeah.

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Speaker Change #144: Yeah.