Q1 2025 Haivision Systems Inc Earnings Call
Robert Young, Daniel Rosenberg, Daniel Rosenberg, Dan Rabinowitz,
Robert Young, Daniel Rosenberg, Dan Rabinowitz,
Speaker Change: Dr. Paret, Robert Young, Daniel Rosenberg, Dan Rabinowitz,
Speaker Change: Ladies and gentlemen, this is the operator. Today's call is scheduled to begin momentarily until that time your lines will again be placed on music hold. Thank you for your patience.
Daniel Rosenberg, Daniel Rosenberg, Dan Rabinowitz,
Daniel Rosenberg, Robert Young, Daniel Rosenberg, [inaudible]
Thanks for watching!
Please wait, the conference will begin shortly.
Kate: Thank you for standing by. My name is Keith and I will be your conference operator today. At this time, I would like to welcome everyone to the Haivision first quarter 2025 earnings call.
Kate: All lines have been placed on mute to prevent any background noise.
Kate: After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question during this time, simply press start, follow up with number one on your telephone keypad. If you would like to withdraw your question, press start one again. Thank you. I would now like to turn the call over to Merkowika, President Haivision, please go ahead.
Thank you, Kate.
Mirko Wicha: And thank you everyone on the call for joining us today to discuss our first quarter of the fiscal year 2025 which ended back in January 31st.
Mirko Wicha: As mentioned in our last earnings call back in January , we have successfully completed our two-year strategic plan end of last year to deliver Ibadam profitability transformation
Mirko Wicha: Now, we are now well into our next two-year strategic initiative for Fiscal's 25 and 26, which will complete our overall business transformation and return Haivision to the double-digit revenue
We have seen in the past.
Mirko Wicha: It will also return us to a long-term cagger growth rate of approximately 20% per year.
Mirko Wicha: As I mentioned earlier, we have completed our operational efficiency model. I have a solid handle on the optics, the gross margins, EBIDA, cast generation. The focus now is all about high revenue growth.
Mirko Wicha: Now, the great news today is that we have seen the bottom of the Revenue Curve. We have been discussing for more than a year.
Mirko Wicha: We always said it was difficult to project exactly which quarter we would see the lowest level of revenue and this is during this Integrator to Manufacture Transformation.
Mirko Wicha: and we saw that after Q4, we were getting close. Make sure enough.
Q1 was the bottom.
Mirko Wicha: Now we see the continued increase in orders, pipeline and revenue building in the C360 business globally, not just in the U.S., which is all about high growth in the coming quarters and years.
Mirko Wicha: Let me share a few thoughts on what to expect from us during Fiscal 25 to prepare for this high growth in 26 and to demonstrate the business scalability we have always been talking about.
Mirko Wicha: And to repeat again, we are seeing a good, solid increase in our long-term pipeline. Our business forecast is compelling, and we are seeing strong order and revenue increase in the control room market.
Mirko Wicha: Now this is what we've been working on for the past 18 months and it's really great to see.
Mirko Wicha: We've always said that this transformation will be at the expense of our top line, which is very similar to when we decided to transition.
Mirko Wicha: and a couple of years ago out of the Haivision market. However, what had left...
Mirko Wicha: We'll be up for private tree, high margin business, which we all know is great long-term business.
Mirko Wicha: We expect to see the net revenue increase showing up during the second half of this fiscal year and increase during fiscal 2026.
Mirko Wicha: I remember that the control room sales in Pipeline is very different from our other book and ship the same quarter business which typically converts to revenue within two to four quarters.
Mirko Wicha: We are also investing on many product developments and introductions throughout this year. Some of which we discussed earlier, but here are some of those highlights.
Mirko Wicha: With this partnership, Shield AI's Kestrel can now be fully integrated with Haivision's real-time transcoding Kraken software system.
Mirko Wicha: and deployed across a wide range of air, land, and sea-based platforms.
Mirko Wicha: We are also increasing our investments into our next generation hardware AI technology.
Mirko Wicha: and we'll be launching this new AI-based platform and edge device to the defense and buy some markets later this year.
Mirko Wicha: We are the standard low latency edge transcoding delivery platform in a defense market and our market leader. We expect our Cracodai technology to drive many long-term defense projects and increase our footprint within the global defense space.
Mirko Wicha: This is an area that is expected to have a huge potential for the next five to ten years and we expect to be the leader.
Mirko Wicha: Talk a little about the next generation, 5-2 transmitters. Now in another, we are made to develop a project.
Mirko Wicha: We'll actually be showcasing our next-generation transmitter platform and NAB.
Mirko Wicha: Next month in Vegas. This will be the basis for the next three years of transitioning on entire line of transmitters to advanced 5G private networking.
Mirko Wicha: This will be very exciting as we also venture into an adjacent, quote, lower cost market with a small lightweight to antenna a private 5G solution that we can now take advantage to go after.
Mirko Wicha: So very exciting new market for us. That's a new revenue stream for Haivision.
Mirko Wicha: We will be announcing more systems within this platform throughout the next two years.
Thank you very much.
Mirko Wicha: We have some pretty cool advancements to 5G technology and tenels.
Mirko Wicha: Well, last year we again announced the Haivision joint, the multi-company consortium led by Airbus Defense and Space to develop new technologies for rapid, secure and reliable communications representing a multi-year multi-million dollar development contract.
Mirko Wicha: Now 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.
Mirko Wicha: This consortium is building land and sea-based tactical 5G communication systems.
Mirko Wicha: that support mission-critical operations during emergencies when network infrastructure is compromised or absent.
Mirko Wicha: Now these technologies will begin appearing at the end of 2026 and promise to be very exciting.
Mirko Wicha: I'd like to talk about a next-gen Makido strategy. Now, later this year, we also plan to introduce a new Makido product.
specifically for the broadcast and sports market.
Now it will open additional revenue streams for Haivision.
Mirko Wicha: will be delivering full jet-lock synchronization capability, including JPEG access technologies.
Sarah McKee, the clients have been asking for this.
and we will deliver with our signature capabilities.
Mirko Wicha: of High Quality, Reliability, Low Latency, and Security. This will enable all our largest Bobcat clients to use Haivision for their full end-to-end workflow. This will be very exciting.
Mirko Wicha: All of these developments and strategic investments are key during 2025 and will mostly affect revenue starting in our physical 26, and now the reason why we are so excited about a 2026 and beyond.
Mirko Wicha: We couldn't be happier with our performance and now we move our focus in attention to revenue growth.
Mirko Wicha: So I'll pass this on to Dan, please, to continue the detailed financials of Q1.
Thank you Miroko, so let's get into the numbers.
Dan: Revenue for this first quarter of fiscal 2025 with 28.2 million.
Dan: A decline of 6.4 million or 18% from the same period in the prior year.
Dan: This quarter's revenues were impacted, as was the case last quarter, by changes in procurement processes and the transition away from the integrator model in the control room space.
with respect to changing buying behaviors.
Dan: As was communicated last quarter, we just didn't see the fourth quarter bounce in the pipeline that we typically experienced.
Dan: That change in buying behavior in turn impacted this quarter's revenue as well.
Dan: Pauli need not have to say but there's still some ambiguity in the US administration's priorities.
Dan: And not sure anyone knows what the impact is of the U.S. Congress's increasing reliance on continuing resolutions to fund the government versus a complete appropriation bill.
Dan: On the other hand, the transition to manufacture in the control room space is largely complete.
Dan: Sales from third-party components and the professional services related to those opportunities as a percentage of total sales fell in past when compared to the same period last year.
Dan: which bodes well for second quarter revenue and for that matter revenue for the remainder of the year.
Dan: I should mention that aside from the revenue implications of our migration from Integrator to Manufacturer,
which may still have a role in explaining year-over-year differences.
All other year-over-year revenue comparisons should be cleaned.
That's despite the year-over-year decrease in revenue.
Dan: Recurring revenue is defined as our maintenance and support revenues and cloud service revenues and the nature of our agreements with our customers is like an annuity with auto renewal features.
Dan: and it represents a higher percentage of total revenue when compared to last year.
Dan: Gross margins for the quarter were 72% compared to 72.9% in the prior year compared to period. That's a 90 basis point declined.
Dan: The decrease in gross margin is largely the result of six costs of our production, like certain technology licenses, reserves for obsolescence, production supplies, and depreciation, all of those being amortized over lower levels of revenue.
Dan: Our fixed production costs were 1.9 million in both this year's first quarter and last year's first quarter.
Dan: Direct product costs, on the other hand, as a percentage of product revenue actually improved by 190 basis points in this first quarter compared to last year.
Dan: We saw a similar dynamic glass quarter when comparing the results of gross margin, the resulting gross margin to gross margins in earlier quarters.
Dan: We should see our gross margins revert back to our average as revenues increase.
Dan: With that said, 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 have been dissipating.
Dan: and we hope to see modest increases in the sales of software-only options.
Dan: or virtual machine deployments which have a higher gross margin than our typical software sales when pre-installed on servers and sold as a complete appliance.
Dan: Total expenses for this first quarter were 22.5 million, a decrease of 500,000 when compared to the same period last year.
Dan: The year over your decrease is largely related to the decline in amortization expenses of about 400,000 as certain tangible assets required in 2021.
Has since been fully amortized.
Dan: We've also had a decline in professional services expenses by about 300,000 year over year.
Dan: These two reductions were offset by a modest increase in compensation related expenses by about $200,000.
Dan: We ended the quarter with 379 employees compared to about 358 employees last year.
on and aside.
Dan: Total expenses did increase by about 600,000 in this first quarter when we compare it to the prior two quarters.
Dan: As approximately 40% of our affects is within Canada, the weaker Canadian dollar had its impact.
Otherwise...
Expenses continue to be very stable.
Dan: But that said, the National Association of Broadcasters show, commonly referred to as NAB, will be held in Las Vegas in April , and as in years past we will have a big presence as an
Dan: This is the first of two large shows that we exhibit at and the cost of that trade show will be reflected in our second quarter results.
The second large show is the International Broadcasting Convention, Convention commonly referred to as IBC in Amsterdam.
Dan: and Matt will be held in September , which is our fourth quarter.
Dan: The $500,000 reduction in total expenses was only partially able to offset.
Dan: The $6.4 million decline in revenue and the resulting $4.9 million reduction in gross profit.
The Adjusted EPA Story isn't much different.
Dan: Adjusted EVDA for the quarter was 400,000 compared to 5.2 million in the same period last year.
Dan: Again, the decline in year-over-year gross profit explains the resulting decline in adjusted
Dan: If any consolation, our cost rupture has provided us the flexibility to weather certain market dynamics.
Dan: With respect to the balance sheet, we ended the quarter with a cash balance of about 16.6 million And that was an increase of about 200,000 from the end of last quarter.
Dan: However, that amount, the amount of standing on the credit facility, was 4.9 million, an increase of 2.7 million in the quarter.
Dan: and we continue to make payments on term loans and lease liabilities, amounting to another 800,000 during the quarter.
Dan: I should mention that in January we did announce the approval from the TFX through the renewal of our normal course issue a bit.
Dan: We intend to continue to make purchases for cancellation when the share price doesn't reflect
Dan: Also, I want to remind our investors we still maintain the $35 million credit facility with the opportunity to expand the size of that facility if a strategic opportunity arises.
Dan: and there's only 4.9 million extended on the line of credit at the moment.
Dan: Total assets at quarter-end were 143.9 million. That's an increase of 2.6 million from the end of fiscal year 2024.
Dan: The increase in assets is largely the result of an increase in inventory by 1.4 million.
Dan: To invest incrementally, we invested incrementally an inventory to support a buoyant second quarter forecast.
Dan: and we invested incrementally in inventory to mitigate the possible impacts of tariffs on our second quarter results.
Dan: The increase in acids is also the result of an increase in the value of right of use assets, which increased by about 900,000.
Dan: As conveyed last quarter, we had a one-time opportunity to downsize our Atlanta office facility and exit one of our more expensive leases before the end of its term.
Dan: The former facility was vacated last quarter and we realized a $1.2 million decrease in right-of-use assets.
Dan: and I just want to mention on the side the Atlanta production facility with not impacted.
by the move of the Atlanta office location.
Dan: Total liabilities at quarter-end were 46.8 million. That's an increase of 2.3 million from the end of fiscal 2024.
Dan: The obvious increase in liability is the increase in, by 2.7 million in the amount extended on the line of credit, but we also increased
The
Least liabilities related to that office move by about 800,000
Dan: Now, those two increases were offset by a decrease in total payables of 1.1 million.
Speaker Change: So let's talk about the 600 pound gorilla in the room, Tarris.
Speaker Change: I suppose to suggest that things that fluid might be a massive understatement.
to illustrate some of the complexities we are facing.
Speaker Change: In anticipation of possible tariffs, we ship finished goods to our Lanta production facility.
Apparently, other Canadian companies have similar ideas and are trucks.
Speaker Change: We're still in queue at the border at the time of the deadline.
Speaker Change: Fortunately, the tariffs were postponed and we were able to direct the trucks to return to our facility in Montreal. I'm telling you the story to suggest that this is just a very complicated issue.
Speaker Change: But let me try to box the impact for everyone here.
Yes, we are a Canadian company.
Speaker Change: But only certain of our product families would be impacted in the short term.
Speaker Change: and even then, tariffs will only impact the portion of that product family that is shipped to the US.
Speaker Change: Further, we have several tactics that our disposal to mitigate the impact of tariffs.
Speaker Change: and each of these tactics can be accelerated or delayed depending on the actions of the data, I should say the day-to-day actions of the U.S. administration.
I'm not trying to suggest that the impact is insignificant.
But it certainly shouldn't be viewed as fatal.
Nevertheless, these tear-up discussions are challenging.
Speaker Change: and there may be a cost incurred to implement certain of these tactics.
Speaker Change: I'm going to talk about the the the the the the the the the the the the the the
Speaker Change: As the above story suggests, just moving Finnish goods across the border and anticipation of the tariffs resulted in some incremental costs.
Speaker Change: But I would put this challenge in the same category as the challenge we faced.
during Covid.
Speaker Change: Both on the sales side and the production side, or the challenge we face during the worldwide component shortage.
Speaker Change: I guess the sum of it is, I'm hoping that people far smarter than us are on this issue.
Speaker Change: and that cooler hedge will prevail and ultimately we will have a more clarity on how we will be treated going forward.
Speaker Change: Last earnings call we suggested that providing guidance has become increasingly challenging in the threat of terrorists as yet a new dynamic to the equation.
Speaker Change: There's a new Canadian Prime Minister who's reacting differently to the terror threats.
The timing and scope of the U.S. Navy production agreement.
and Option Years may present additional opportunities.
There are continued opportunities in our U.S. Transmitter business.
Speaker Change: We have needs for strategic incremental investments to capitalize on certain emerging opportunities.
and the precise timing of our upcoming product launches.
Speaker Change: and their projected impact to revenue has yet to be uncovered.
Speaker Change: Nevertheless, we remain highly optimistic about our growth prospects, and we look forward to our next earnings call to discuss our financial performance as we continue to execute
Mirko Wicha: So that really concludes my prepared remarks. I'm going to pass the microphone back to you, Mirko, and then we'll open the Florida questions.
Mirko Wicha: Yeah, thank you, Dan. I think we'll actually open the questions and I'll do a closing session after the question. So operator, Kate, maybe we can start with the questions.
Kate: At this time, I would like to remind everyone in order to have a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Nick Corcoran. Please go ahead.
Speaker Change: A couple questions for me. The first is the Trump administration's being focused on cutting government expenditures through dosion and other means. Have you seen any sales being delayed or canceled?
You talk about the administration for federal government deals.
Yeah, we'll do it.
Speaker Change: Since Q1, we've actually seen an increase or movement of funding, believe it or not, in a positive way within our federal government space, defense especially. So it was actually quite the opposite, but we had not seen any slowdown or any changes because of a dodge.
Speaker Change: As helpful and the related question is, does the delivery timeline for the US Navy contract change in all in the last two months?
Speaker Change: No, absolutely not. In fact, the goodness of the Navy is actually trying to accelerate and pushing us.
Speaker Change: We've already got the schedule already for the next almost two years and it's already a tough one and in fact they're actually trying to exploit that so I would say at this point even keeping our schedule is already going to be a challenge for us but we don't see them at all pushing back.
Speaker Change: Thank you reminding when you expect her stat deliveries that to be.
Dan, do you have a name for my deal or not?
Speaker Change: Well, we have been making deliveries. The real question is when do we get into sort of a production cycle here? I don't think that happens until a fourth quarter, our fourth, our fiscal fourth quarter.
Speaker Change: That's when we're sort of getting to scale and that's when we're sort of having a consistent cadence.
Speaker Change: A telephone, maybe one last question from me, we're halfway through the second quarter. Any indication of the sales piece is being relative to the first quarter.
Not true, what can we say?
Speaker Change: I think we kind of set in our prepared remarks.
Speaker Change: We are extremely optimistic on the future of quarters going forward and we've seen the bottom in Q1.
Thank you. Thank you.
Speaker Change: So at this point, I think it just wouldn't be appropriate to try to try to guess if we're not giving any guidance quarterly.
Speaker Change: We feel very comfortable about saying what we said for the year, being similar to last year.
Speaker Change: We know that our second half of the year is going to be much stronger in our first half of the year.
Speaker Change: and we're seeing all those trends like we predicted that's going to help the double digits growth for 2026. So everything's pointing the right direction. We feel actually pretty pumped and pretty optimistic that we've turned the corner, the transition of the business model is done.
Speaker Change: and it's like full cylinders ahead, and the good news is that, you know, the US Navy will kick in the gear in our Q4, which is another bonus.
Thanks, sir, for all the passports.
Thank you. Thank you.
Mariko: I will now turn the call back to Mirko for closing remarks.
Speaker Change: I don't know if there's another question. Just pop up. I think I see one from Robert. Your next question comes from the line of Robert Young.
Please go ahead.
Speaker Change: There, I joined a bit late. I was hoping that you could, if you haven't already addressed it, and I missed it, but if you could help maybe delineate or separate how much of that.
Speaker Change: The your over your decline is driven by the business model changes. I know you said that third party was down by half.
Speaker Change: and how much would be macro headwind? If you could just in some way help break that down a little bit so we understand how much is macro and how much is temporary.
Speaker Change: Well, I'm not exactly sure what your definition of macro is going to be, but I would tell you that the decline in year over year is a lesser factor in the 6.4 million dollar difference in revenue than it would be the macro factors that we're speaking of.
Speaker Change: Okay, and then so when you say that you expect to return to growth in the second half in [inaudible]
Speaker Change: When you're speaking of revenue growth, are you speaking against where we were first quarter? Are you speaking against year-over-year comparisons?
A year of year.
Speaker Change: We are trying to be as flexible as possible with the shifting priorities of the US administration. We haven't made any firm moves that we can't reverse out of, and we're going to continue to have that posture until we have a little bit more clarity on...
Speaker Change: How to move, but these plans are fully vetted and we're willing to enable to pull the trigger and very short order if we have to.
Speaker Change: And I think you said that you're going to use facilities in Atlanta, but you're also using a third-party outsource manufacturer has footprint in the U.S. as well. Is this a combined high-vision and outsource solution? Let you.
Speaker Change: Can we give us a little more detail there and the flexibility? No, it's kind of difficult. I guess what I could suggest to you is that our contract manufacturer has multiple facilities in multiple countries with capacity. [inaudible]
Speaker Change: So we could move to any one of those other facilities in short order. They have all of our, they have all of our componentry, they have all of our diagrams. So we could move to any one of those other facilities in short order.
Speaker Change: It would take a little bit of an initiative to actually transfer the manufacturing to one of those other facilities, but that's just one of a number of different mechanisms available to us if we choose to go down that path.
Speaker Change: Okay, so some of you could react to within the quarter, I guess, if I put a finer point out. I would say that, I would say that, that would, that tactic.
Speaker Change: is probably the extreme tactic and it would take us about three months.
Wicha.
Speaker Change: And in the last question for me, you're foreshadowing some of the 5G
Transmitter.
Speaker Change: I don't know that I've seen that yet, maybe an update on that business and the share and your ability to drive that business in the North American market, maybe just an update on where that is going into NAB and then I'll pass the line.
with some key key North American partners.
Speaker Change: for 5G transmission and private to 5G transmission. So, we've got, we're fostering partnerships with our technology. You're going to see a very big focus on that from us. We're going to be launching this next generation product, which is really...
Speaker Change: Very unique within the MIMO technology, so it's all state-of-the-art, new antenna technology. It excels at private 5G networks which is exactly where the future is, and we've been working on this for quite a while. So we're pretty excited. We're going to see a massive...
Bush in the U.S.
and, you know, I'd say-
Speaker Change: Can't really talk about it too much, but we've got some pretty big wins coming our way in the next two, three months that you're going to see us chomping at this so
Speaker Change: The new product is just the beginning. It's a whole next generation. I think next year, we're going to take it to a different defense ISR blue light level with the Airbus project. And then we're also going to be doing some more higher level 5G products based on this new architecture.
Speaker Change: We know it's going to be an important market, we're going to know no question be the leader and we're using also a lot of the Olympics. The Olympics.
with the FIFA.
Speaker Change: and all of that stuff that we're involved with heavily pushing the envelope again with 5G. So yeah, go to our booth, check it out, look at our partners, speak with our folks, but there's going to be a lot of activity in this space for us.
Speaker Change: Sounds great. Is there anything on business model as far as the leasing solution? Is that going to be a bigger part of?
Speaker Change: The Goat Board, or is that still a small piece to the offering? It's still a small piece but you know we're actually bidding and winning some pretty interesting long-term rental deals which is cool.
Speaker Change: It's kind of, you know, again, this is all new business for us, this whole long-term rental, but it's interesting, you know, we've had a lot of very large opportunities and the customers last measure is like, you know what, I'm just going to buy everything, so.
is looking
Speaker Change: So, you know, as we find to in our offerings, I don't see that stopping, but it's still a small piece of our business.
When you talk about, I'm sorry, Dan.
Speaker Change: I would just add that because we have both, capacity to both, we have flexibility and our customers appreciate it and we can have conversations about each of them and they can make a decision.
Speaker Change: The MCS business and then also this new 5G product rollout. And then of course the Navy contracts all at the same time. This is all happening at the same time. It's giving you the confidence in the revenue growth in the second half. I guess. Am I missing an element there?
Speaker Change: No, you're not, you're hitting him right on. In fact, we're seeing this really, really non-growing at the second half. Well, Dad mentioned you'll see this comparison year over year. We're pretty cool, but it's really going to drive our double, heavy, double digit
That's when we're seeing it's going to significantly take off.
Speaker Change: because in 2026 the U.S. Navy deal was turning the turbo mode, went to our option year again, you know, in that minute it's going to start multiplying, so...
Speaker Change: Yeah, you're going to see pretty strong transmitter stuff, you're going to see we're seeing it rebound on a defense business and we're definitely seeing it rebound on the control room space. So right now it's a huge optimism for our 2026 business.
Speaker Change: Okay, I'll pass the line. Thanks for taking the questions. All right. Thanks. Thanks, Robert.
Speaker Change: Your next question comes from the line of Daniel Rosenberg, please go ahead.
Daniel Rosenberg: I just was curious around just getting the state of affairs with the turbulence around.
Fred Worsen, what have you?
Daniel Rosenberg: Just any changes to competitive pricing that you're seeing from some other guys out there and the pricing power that you're able to have given the value you provide. Just any commentary around any changes that you've seen on the front line.
No, surprisingly we haven't really seen any major changes.
and even given the tariffs.
or a tear of threats, I would say?
Daniel Rosenberg: We have not this who reacted, we are not planning to change anything at the moment.
Daniel Rosenberg: with our pricing, but the only place that we might have seen is there is some play in the spy G transmitter space because it's only, you know, I'd say three.
Daniel Rosenberg: I would say maybe four vendors and we've seen some opportunities where people are as we say drop in their pants on their pricing. But I haven't seen anything unusual. I mean that's just massive competitive.
Daniel Rosenberg: You know, it's getting nasty out there all the time but nothing different from any other year.
Speaker Change: and then just one other one from me. I thought I heard in your marks that the headcount had increased. So I was just curious on plans around hiring.
Speaker Change: Any resources needed to deliver on the 5G products, MCS initiatives, etc., or are you going to you know, good with the roster you have right now.
Speaker Change: Well, I mean, we increased our head count from last year this time, but a lot of those additions have already addressed.
All of our development efforts.
including MCS and we double down on MCS.
Speaker Change: So we're still filling a few other slots, but we're pretty much done for this year. I expect for next fiscal year we're going to be preparing an increase, so I think there'll be a slight increase in the head count for next year, absolutely. But we're going to try 25, we're pretty
Mirko Wicha: Daniel, I would suggest this. Yes, the absolute number and head count.
Has gone up from a year ago.
Mirko Wicha: Production, professional services, those people that are actually touching the customer and not trying to be demeaning here, but they're not the high priced.
Okay, appreciate that. Thanks for taking my questions.
I will now turn the call back to Merkel for closing remarks.
Great, thank you, Kate. I guess just in closing, let's go.
Speaker Change: Now that we've absolutely established the bottom, we're pretty pumped as you can see about the remaining of the year and not the mention of 2026 and beyond, so.
Speaker Change: So I just want to thank again all our shareholders and analysts on the line today for their continued support of Haivision and I look forward to speaking with you in mid-June when we will discuss our fiscal second quarter results. Thank you everybody.
Thank you.
Speaker Change: Ladies and gentlemen, that concludes today's call. Thank you and have a great day.