Q1 2025 Blaize Holdings Inc Earnings Call
Thank you for standing by and bucket two please inc's first quarter 2025 earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone if your question has been answered.
And you'd like to remove yourself from the queue simply press star one again.
Speaker Change: Under today's program is being recorded and now I'd like to introduce your host for today's program launch their Investor Relations. Please go ahead.
Speaker Change: Thank you and good afternoon, everyone.
Speaker Change: We appreciate you joining for Blaze is first quarter of 2025 earnings call. We are very pleased to be joined today by CEO, <unk>, <unk> and CFO permanent or semi.
Speaker Change: Before we start we would like to remind you that the following discussion contains forward looking statements within federal Securities laws. All statements other than statements of historical facts or statements that could be deemed forward looking including but not limited to statements regarding our competitive position anticipated industry terms, our business and strategic priorities.
Speaker Change: And our financial outlook for the second quarter of 2025, and the full fiscal year 2025.
Speaker Change: These statements are neither promises nor guarantees an undue reliance that should be placed on them.
Speaker Change: Such forward looking statements involve risks and uncertainties available in our SEC filings that may cause actual results to differ materially from those discussed here additional information that could cause actual results to differ from the forward looking statements can be found in the risk factors section of Blazers. Most recent annual.
Speaker Change: Short on Form 10-K for the year ended December 31, 2024 as updated by our periodic reports filed subsequently to that 10-K.
Speaker Change: Any forward looking statements on this conference call, including responses to your questions are based on management's reasonable current expectations and assumptions as of today and <unk> assumes no obligation to update or revise them, whether as a result of new information future events or otherwise except as required by law.
Speaker Change: The following discussion contains references to certain non-GAAP financial measures. The company believes that these non-GAAP financial measures are useful to investors as supplemental operational measures to evaluate the company's financial performance for.
Speaker Change: For a reconciliation of each of these non-GAAP financial measures to be most directly comparable to GAAP metrics. Please see our website at IR that blaze dotcom details of our results and additional management commentary are available in our earnings release, which can be found on the investor.
Speaker Change: Relations section of our website at IR Dot blades Dot Com. Finally, this call is being audio webcast on our Investor Relations website, and an audio replay will be available on our website IR dot plays dot com after the call and <unk>.
Speaker Change: Now, we'd like to turn the call over to dinner car winner.
Dinesh Wadhwani: <unk> Chief Executive officer of place.
Dinesh Wadhwani: Thank you for joining us for our second earnings report as a public company.
Dinesh Wadhwani: Since our last update.
Dinesh Wadhwani: We're now moving from pilots to deployment.
Dinesh Wadhwani: Our large pipeline includes active late stage programs with multiple contracts advancing from field validation into final negotiations.
Dinesh Wadhwani: We have begun shipping production <unk> chips and systems into real world deployments across across wants to be in different sectors.
Dinesh Wadhwani: With momentum fueled by new partnerships in Q1, and Q2, including C based in South Korea Tobey.
Dinesh Wadhwani: <unk> federal in the U S.
Dinesh Wadhwani: We've also been developing new turnkey vertical AI solution stack designed to combine our chip software and validated applications to help accelerate deployment in key sectors.
Dinesh Wadhwani: We look forward to announcing this offering soon.
Dinesh Wadhwani: We are operating with financial discipline, and a clear focus on execution supported by our balance sheet aligned with our near term and midterm priorities.
Dinesh Wadhwani: With feasibility to fund operations scale customer programs and support strategic growth through 2026.
Dinesh Wadhwani: For those who are new to blaze rebuild AI processes and software that bring real time influence to the physical world.
Dinesh Wadhwani: Starting with video and vision and expanding into true multi modal edge intelligence.
Dinesh Wadhwani: We do this with a unique combination of energy efficient chips and integrated software built specifically for environments, where speed and power and costs really matter.
Dinesh Wadhwani: From processing satellite imagery on operating platforms to fusing lidar and video streams for perimeter security at airports and smart cities.
Dinesh Wadhwani: So enabling object detection and license plate recognition on roadside cameras and drones.
Dinesh Wadhwani: Our platform delivers real time AI inference.
Dinesh Wadhwani: For example, today most cameras can see but they cannot understand.
Dinesh Wadhwani: Video systems capture enormous amount of data, but they rely on costly manual operation to make sense of what is happening.
Dinesh Wadhwani: This is where it lays leads.
Dinesh Wadhwani: We don't just talk about AI, we deliver real time deep influence for physical environments, enabling intelligence visually and contextually and reliably.
Dinesh Wadhwani: In the first half of 2025, we move from development to real World deployment.
Dinesh Wadhwani: In Q1, we began shipping production chips and accelerator cards into smart city programs.
Dinesh Wadhwani: We were selected by <unk> to lead the Chimp book Digital innovation hub in South Korea.
Delivering edge AI infrastructure for regional Smart city deployments.
That momentum carried forward and now in Q2 were executing across geographies with active engagements in key U S infrastructure initiatives expanding into South America Asia and Middle East.
Dinesh Wadhwani: At ISC West the largest physical security event in North America.
Dinesh Wadhwani: We showcased AI powered smart city solutions across critical applications.
Dinesh Wadhwani: Examples are perimeter defense.
Dinesh Wadhwani: Safety campus monitoring and public surveillance.
Dinesh Wadhwani: Adding further strength to the applications. Our technology is now integrated with our ion beam and Vcs delivering hybrid cloud model for smart surveillance.
Dinesh Wadhwani: Private logic for school safety solutions and Sylvia for pre trained.
Dinesh Wadhwani: Vision AI models.
Dinesh Wadhwani: This all demonstrates blazers ability to deliver deployable.
Dinesh Wadhwani: No validated solutions for smart infrastructure.
Dinesh Wadhwani: Our diversified global pipeline includes late stage engagements across smart infrastructure public safety defense and industrial automation.
Dinesh Wadhwani: Field deployments are underway and several programs are advancing into contract stage from field testing.
Dinesh Wadhwani: Our partnership with Turbo Federal has already yielded an opportunity for 2025 focused on delivering trusted AI powered entrance and perimeter security and defense critical environments.
Dinesh Wadhwani: Starting with video and expanding into situational awareness.
Dinesh Wadhwani: We are finalizing a purchase order for bleach power. So was bundled with AI studio, our orchestration software, bringing integrated compute and intelligence.
Dinesh Wadhwani: Two customer hands.
In parallel our engagement with the Ministry of Defense continues to advance towards proof of concept and field qualification phases.
Dinesh Wadhwani: This momentum reflects our efforts to build trusted relationships with high value customers.
Dinesh Wadhwani: Through targeted engagement strategic pilots and solution co development across the U S Asia and the Middle East.
Dinesh Wadhwani: Because we are finding faster procurement cycles and government led AI initiatives.
Dinesh Wadhwani: These efforts are driving deeper engagements strengthening our pipeline and converting into signed contracts and revenue.
Dinesh Wadhwani: This traction informed how we built our next step.
Dinesh Wadhwani: Today, if you want to smarter cameras, our systems. It usually means stitching together parts from different vendors, which takes time money and technical help customer.
Dinesh Wadhwani: Customers have made it clear that.
Speaker Change: Don just one truck components.
Dinesh Wadhwani: They need ready to deploy solutions tailored to their use case.
I am pleased to share that will soon be introducing a new pre integrated vertical AI solution platform.
Speaker Change: Like ready to deploy turnkey aia's tack in the box.
Combining our energy efficient chip architecture.
Speaker Change: Integrated software.
Speaker Change: And proven applications from best of breed ecosystem partners.
Speaker Change: It's designed to streamline deployment and deliver faster results in key sectors like defense smart infrastructure and public safety.
Think of it like what Apple did with the Macintosh.
Speaker Change: It wasn't just a computer it was a complete experience a comprehensive tool that made advanced technology accessible and usable.
Speaker Change: With this upcoming vertical AI platform.
Speaker Change: What used to take three to six months of customer integration could soon be feel ready in half the time.
Speaker Change: And early adopters are seeing up to 60% lower total cost of ownership.
Speaker Change: As we move into Q3, we anticipate shedding formal proof points.
Speaker Change: And success stories from these deployments.
Speaker Change: To support this shift towards.
Speaker Change: Solutions first approach.
Speaker Change: We're executing our go to market strategy.
Speaker Change: On one side, we work directly with high value customers, especially in smart infrastructure, and defense, where trust integration and long cycle deployments motto.
Speaker Change: These include engagements with defense ministries.
Speaker Change: Smart infrastructure projects in Korea.
Speaker Change: And national initiatives in India.
Speaker Change: In each case Blaze provides the platform intelligence.
Speaker Change: Powering critical systems and cities transportation defense and public safety.
Speaker Change: On the other side, we scale through channel partners, leveraging our turnkey vertical AI platform as the foundation.
Speaker Change: These are full stack vertical really offerings built in collaboration with best of breed Agi application partners.
Speaker Change: For example video analytics and smart airports visibility in smart retail and defense.
Speaker Change: The CIA in mining.
Speaker Change: Drive logic and Sylvia in school safety.
Speaker Change: Each partner brings proven deployable applications.
Blaise provides the compute and orchestration to run them in the field.
Speaker Change: This combined approach gives us the flexibility to sell high touch accounts, while accelerating growth across broader commercial markets.
Speaker Change: So here's where we are heading.
Speaker Change: We bring together what system see the real time video and the sensor data at the edge.
Speaker Change: With what they understand.
Speaker Change: The language models running on the data.
Speaker Change: This is multimodal intelligence in action not just vision, not just language, but the fusion of book.
Speaker Change: Sensors speech and structured data to create context to make decisions and act in the physical world where it matters most.
Speaker Change: Think of it like this.
Speaker Change: Small efficient models tuned for real world tasks.
Speaker Change: Like the small language models, you've been reading about.
Speaker Change: The faster lighter more secure and they don't need a datacenter to make sense of what's right in front of them. That's.
And that's the future we're building towards.
Speaker Change: And it's already starting to take shape. This combination of edge processing scalable software and partner driven deployment is how we deliver value to date.
Speaker Change: Because what we are building ablaze isn't just about chips are cord, it's about enabling intelligence, where the world needs. It most.
Speaker Change: In the field in motion.
Speaker Change: And in the moments that matter.
Speaker Change: This quarter reflects that commitment in action from pilots to deployments from concept to customer, we're executing with clarity and building momentum across key verticals.
Speaker Change: Thank you for your continued support.
Speaker Change: Now I'll turn it over to <unk> for the financial update.
Speaker Change: Thank you didn't occur.
Good afternoon, everyone.
Speaker Change: In the first quarter of 2025 revenue was just over $1 million slightly ahead of expectations.
Speaker Change: <unk> represented shipments of our pcie cards to support Smart city customers.
Speaker Change: The prior year revenue of $549000 was largely from providing strategic consulting services to an automotive customer.
Speaker Change: The cost of revenue was $327000 in this quarter.
Speaker Change: <unk> to $306000 last year.
Speaker Change: Our company consummated a business combination and listing on NASDAQ earlier this year.
Speaker Change: Like others that have undertaken similar transactions and.
And our listing on a major exchange, we incurred nonrecurring cash transaction costs and noncash accounting adjustments to complete the merger in this quarter.
Speaker Change: These adjustments are significant in size and can obscure or overshadow the accounting of our underlying operations.
Speaker Change: I would identify and explain them to you first and laser focus on the underlying performance, which provides a better indicator of operations. During this year and as we scale the business.
Speaker Change: And this quarter, our GAAP net loss was $147 6 million.
Speaker Change: After charging $109 $6 million in other expenses.
Speaker Change: $39 million and operating expenses.
Speaker Change: This is compared to the GAAP net loss of $16 7 million in the prior year.
Speaker Change: Included in the other expenses of $109 6 million was a charge of $226 million.
Speaker Change: Reflecting the change in the fair value of convertible notes and warrants.
Speaker Change: This was offset by a $116 5 million credit related to the fair value of the earn out liability. These.
Speaker Change: These two items largely net to the $109 $6 million adjustment.
Speaker Change: In the prior year other expenses of $8 4 million were primarily related to the change in fair value of the convertible notes and warrants both were noncash adjustments.
Speaker Change: Our first quarter total operating expense of $39 million included nonrecurring transaction costs of $12 million and a noncash share based compensation charge of $11 million.
Speaker Change: The growth in the stock based compensation charge in the first quarter of this year of $10 $7 million was predominantly due to the completion of our merger that triggered certain our issue vesting conditions.
Speaker Change: The resulting underlying operating expense of $15 9 million in.
Speaker Change: In the first quarter was up $7 6 million from the prior year.
Speaker Change: I will now discuss in more detail now.
Speaker Change: This increase of $7 $6 million related to three primary areas.
Speaker Change: Higher employee costs as we invested in our go to market and customer support capabilities during the year.
Speaker Change: Investment in software tools, and third party IP and preparation of our next generation chip.
Speaker Change: And costs associated with preparing the company to operate in public markets.
Speaker Change: The underlying research and development costs were $7 1 million in the first quarter up from $3 9 million in the prior year.
Speaker Change: This increase of $3 2 million is primarily attributed to software tools third party IP and higher employee costs to remain competitive.
Speaker Change: Our underlying selling general and administrative expenses for this quarter, excluding depreciation and amortization were $8 3 million.
Speaker Change: An increase of $4 $5 million over the prior year quarter.
Speaker Change: This increase was due to several factors.
Speaker Change: And expansion of our sales teams globally.
Speaker Change: Higher marketing costs in connection with our listing on NASDAQ.
Speaker Change: Higher support function costs, including audit and legal fees.
Speaker Change: And increased insurance costs.
Speaker Change: Overall, the underlying operating performance this year.
Speaker Change: The foundation to support our future revenue growth prospects.
Speaker Change: As a result, our adjusted EBITDA loss for the first quarter of 2025 was $15 4 million.
Speaker Change: Compared to a loss of $7 5 million in Q1 last year.
Speaker Change: I anticipate the adjusted EBITA to improve each quarter as we progress through 2025.
Speaker Change: Our cash and cash equivalents totaled $45 million as of 31 March this year down from $50 2 million on December 31 2024.
Speaker Change: Upon closing of the business combination the company received additional equity of $15 $3 million.
Speaker Change: And settled for $5 million of one time transaction costs.
Speaker Change: Allowing for annually paid insurance and software licenses of $3 million in the quarter.
Speaker Change: The underlying cash used for operations, including four inventory was $13 1 million.
Speaker Change: Earlier clinical spoke to the scale and momentum within our current revenue pipeline.
Speaker Change: Shipments of product have commenced in the first quarter and we expect that revenue should accelerate as we move through the year and into 2026.
Speaker Change: We plan to add to the growing list of new partnerships forged with selected ecosystem partners already announced.
Speaker Change: We further expect our revenue pipeline to be enhanced as we deepened collaborations with these partners and they begin to expose their end customer opportunities to us.
Speaker Change: We continue to undertake pilots and proof of concept with customers to enable their AI workloads onto place hardware.
Speaker Change: This is an essential first step in demonstrating the inherent advantages of our programmable architecture.
Speaker Change: We anticipate a faster path to production.
Speaker Change: As follow on customers and our selected verticals are quicker to adopt our solutions.
Speaker Change: Recent market developments around tariffs have prompted many companies to accelerate inventory procurement.
Speaker Change: Whilst that surge in demand constrained the supply chain for chips and finished products, we maintained close collaboration with our key vendors.
Speaker Change: Our inventory on hand, plus the projected deliveries from orders already placed is currently expected to meet the immediate demands for the next two quarters.
Speaker Change: Together with our partners and end customers, we will continue to monitor signs of any impact of pipeline conversion from the increased macro challenges over the remaining seven months of this fiscal year.
Speaker Change: We exercised strong discipline on managing our resources and will continue to take steps to reduce our cash burn if the environment remains uncertain.
Speaker Change: In our larger revenue opportunities. Our aim is to secure advanced payment commitments from customers to minimize cash tied up in working capital.
Speaker Change: I anticipate these measures taken together plus the cash projected from revenue this year should enable us to extend our cash runway into the first half of 2026.
Speaker Change: Our guidance for the next quarter ending 30 June 2025 is as follows.
Speaker Change: Revenue is projected to be in the range of one five to $1 7 million.
Speaker Change: The adjusted EBITDA loss is expected to be between $13 million $14 million.
Speaker Change: The stock based compensation charge is expected to be approximately $10 million.
Speaker Change: And the weighted average shares outstanding should be approximately $90 million.
Speaker Change: We are reaffirming our revenue guidance for the full fiscal year, ending December 31, 2025, and the 19 million to $50 million range.
Speaker Change: Operator can you hear me.
Speaker Change: Yeah.
Speaker Change: Operator can you hear me.
Yes.
Speaker Change: Ladies and gentlemen, if your question has been answered.
Speaker Change: Your line is open from D. A davidson.
Speaker Change: Yes. Thank you good afternoon.
Speaker Change: First question is about some of these new wins.
Speaker Change: And how those are a little bit more on sizing and timing of the winds at sea based in turbo federal in terms of.
When do you expect those to come in and how how can you help us quantify the size of those events. Please.
Speaker Change: So these are.
Bill: Thank you for the question Bill.
Speaker Change: These are the strategic engagements for us in our chosen markets.
Speaker Change: <unk> for example, specifically around smart cities.
Speaker Change: And double barrel is around defense primarily.
Speaker Change: So it is a standard product that they would use.
Speaker Change: Into these verticals and combining our hardware as well as software and as we start announcing.
Speaker Change: We of course are negotiating as had been mentioned renegotiating.
Speaker Change: Contracts as.
Speaker Change: We will start announcing them as we can start finding them yeah. The only thing I would add is that they range in size from the low millions to tens of millions over a period of time. So the start point is towards the end of this year for some of them, but they extend our pipeline into 2026.
Speaker Change: Got it and then to continue on that path can you remind us what the revenue cycle is so.
Speaker Change: What point do you recognize the revenue.
Speaker Change: From these different types of customers is it only when <unk>.
Speaker Change: They turn on.
Speaker Change: The new capabilities is it when they receive shipment.
Speaker Change: How that relates to both these customers as well as your golf Ministry of defense customer.
Speaker Change: So generally we sell hardware.
Speaker Change: We sell.
Speaker Change: Solutions with our partners, which is a combination of hardware software and professional services. So each of those have their own revenue recognition when we're shipping product into the customer we recognize that revenue straight away.
Speaker Change: When it is a software license it depends whether it's a perpetual license as soon as that license becomes operator, then we recognize the revenue then if it's an annual license of course, it's spread over the period.
Speaker Change: Professional services is recognized as and when we deliver those services.
Speaker Change: Got it and then the last one for me is a little bit of a longer term one.
Speaker Change: What's the update on the next generation of chips that you're planning and how has the very rapid development in the quality and.
Speaker Change: The efficiency of the AI models impact what capabilities that next generation is going to have.
Speaker Change: Right. So first of all we are very excited that.
Speaker Change: The kind of workloads that we see.
And the changes that are coming about in the shrinking of AI models are a perfect fit for the existing products in the market.
Speaker Change: In addition to this of course this is all proving to be.
Speaker Change: Exactly the direction, we set out.
Speaker Change: We define our next generation products as we launch our next edition products, we will of course update them.
Speaker Change: We provide an update but all in all the key aspects of efficient inference at the edge.
Speaker Change: Having complete programmability.
Speaker Change: Supporting these shrinking multimodal AI. These are the key facets.
Speaker Change: The growth drivers and we are seeing this live action right now as we engage with customers and also driving our pipeline.
Speaker Change: Great. Thank you.
Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you do have a question. Please press star one on your telephone. Our next question comes from the line of Richard Shannon from Craig Hallum. Your question. Please.
Richard Shannon: Hi, guys. Thanks for taking my questions.
Richard Shannon: And just a heads up my line went blank for about three or four minutes. So I don't know if I am what I missed then most of our vendors remarks here, but if I overlap with something my apologies.
Richard Shannon: My first question is in the large contract that you have there was announced even before the start of your ears back closing early this year here and you've got a bullet in your press release here about progress progressing through the proof of concept in field qualification stages.
Richard Shannon: I know in the original announcement around this year, hoping to have proof of concept done by last month in April.
Richard Shannon: I'm wondering if maybe you can kind of clarify what's going on there should we view this as some sort of delay because you sound like Theres, a deepening engagement here, so I'd love to get a more clarity on what's going on here.
Speaker Change: Sure. Thank you for that.
Speaker Change: The Modi of course, we are in constant communication with them and we have done various proof of concept. The exact field trial is being discussed as we speak.
Speaker Change: And we're still.
Speaker Change: Everything that we've said in terms of revenue towards the end of the year that is still good.
Speaker Change: I mean the red.
Speaker Change: You've addressed it so do we.
We always signaled that revenue from this contract is a multi year contract. It has several use cases and we're going to start deploying towards the end of this year again, it's one of those classic combinations of hardware shipments, it's got software licenses and some professional services.
And we expect that to extend beyond 'twenty six and into early 'twenty seven.
Speaker Change: Okay perfect. Thanks for that.
Speaker Change: Maybe I'll touch on on the pipeline here, maybe if there's any way that you can quantify or characterize how that's improved here since the last earnings call and frankly at the beginning of the year that'd be also helpful. Thank you.
Speaker Change: Sure.
Speaker Change: So when we started off beginning of this year.
Speaker Change: Based on all of the customer engagement that we have.
Speaker Change: We signaled that.
Speaker Change: Pipeline of 100 million in the guidance.
Speaker Change: The pipeline is actually.
Speaker Change: Growing.
Speaker Change: Rapidly.
Speaker Change: In two ways.
Speaker Change: First of all once we go ahead and land, a particular ISP and deliver to certain use case.
Speaker Change: Isps pipeline also becomes ours.
Speaker Change: They want to get it into other deals so we're actually seeing a pipeline amplification.
Speaker Change: This way.
Speaker Change: The other part will fitness witnessing solid momentum is true multimodal AI the merging of computer vision and small language models. The combination of that creates new and interesting use cases and value to end customers. So we're seeing growth based on that.
Speaker Change: Well.
Speaker Change: Yes.
Speaker Change: One thing I'll add to that is all of Richard all of this pipeline is based on our currently shipping generation of product.
Speaker Change: Okay that is helpful.
Speaker Change: I'm, sorry, my being cut off by the model.
Speaker Change: No.
Speaker Change: Okay, great well I'll ask one more and then I'll step out of line here.
Speaker Change: Your announcement of this partner see best in South Korea seems very interesting and I guess I'd love to understand both the.
Speaker Change: Canada development strategic development cycle, leading up to that announcement and then over what time period should we would expect to see some tangible financial results from this it sounds like if I caught your comments correctly towards the end of the year, which I guess certainly it makes sense, but I guess I'd love to help.
Speaker Change: Can you describe how that progressed to this point, where you expect it to go forward.
Speaker Change: Sure. So we have been engaged with them for almost a year now so theres been work behind the scenes that went then leading up to this initial announcement.
Speaker Change: But they are active.
Speaker Change: Deployment cycles that we are discussing with them.
Speaker Change: And as has been the signal it is revenue towards the end of the year as we began announcing specific projects of course, we will.
Speaker Change: Setup time with you and go through specific.
Speaker Change: Things as well.
Speaker Change: Okay, great well look forward to hear more about that I will jump out of line. Thank you.
Speaker Change: Sure.
Speaker Change: Thank you and our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Your question. Please.
Kevin Cassidy: Yes, thanks for taking my question.
Speaker Change: Yes, My line cut out also.
Our vendor was giving me.
Speaker Change: Guidance.
Speaker Change: We got the revenue guidance, but I just wanted to I saw in your press release.
Speaker Change: You're bringing your.
Speaker Change: Adjusted EBITDA loss down to 40%.
Speaker Change: 55 million from 70 to 75 million, but your stock based compensation is going up I wonder.
You had discussed that maybe if you could repeat it.
Speaker Change: Understand what the moving parts on it.
Speaker Change: Yes. So the 42 to 55 range is just reflecting a revenue range. So it depends on which side of the.
Speaker Change: I forget the correctly.
Speaker Change: Hello.
Speaker Change: Gets up the mute please.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: In the current EBITDA rates that I've guided on just reflects that revenue range. The difference between last time at this time is essentially the external costs of our next generation chip and whilst all the work is still continuing we are negotiating payment terms with our key vendors right now.
Speaker Change: And we expect that some of these costs will be deferred towards the end of 2025 to 26 onwards. So that's the big change.
Speaker Change: Yeah.
Speaker Change: The new vertical AI solution platform.
Speaker Change: That seems very interesting.
Speaker Change: Is this you know you have mentioned a few times that you do have software contracts, but with this accelerate maybe shipping everything with.
Speaker Change: Blaise software on it and with it.
Speaker Change: It turned into a recurring revenue stream.
Speaker Change: Excellent and we actually are quite excited about this.
Speaker Change: <unk>.
Speaker Change: The whole vertical AI stack in a box what it brings to the end customer.
Speaker Change: I would say three main aspects the.
Speaker Change: First thing is it's it's a hardware plus software everything including Ourself, Venezuela partner software specific use cases.
Speaker Change: <unk> and ready to go just like a Macintosh budget you put it out of the box and it just works.
Speaker Change: The second aspect that helps customers.
Speaker Change: Especially in the edge enterprise.
Speaker Change: We're not as many.
Hi, Savi. So this actually helps them from an IP spend point of view right. They don't need a VIP to deploy AI into their workflows.
Speaker Change: The third part is continuous change management and improvement right as they want to get new use cases added it becomes seamless and easy.
Speaker Change: And to answer your question, Yes. This does give us an opportunity to monetize our software.
Speaker Change: Okay.
Speaker Change: At recruiting.
Speaker Change: Yeah.
Speaker Change: Did my audio come through I think there was some cross talk but I hope you got my audio.
Speaker Change: It sounded loud and clear that was just someone in the background of Kevin's line.
Speaker Change: Okay.
Speaker Change: And this does conclude the question and answer session of today's program I'd like to hand, the program back to Datacom lunar Galli for any further remarks.
Speaker Change: Yes.
Speaker Change: Thank you everyone to wrap up Q1 was about execution and we made real progress.
Speaker Change: We've cleared the noncash onetime accounting items tied to the merger so.
Speaker Change: So what youre seeing now reflects our actual operating performance.
Speaker Change: We've moved from pilots to live deployments and smart cities defense National infrastructure.
Speaker Change: We were selected by <unk> in South Korea.
Speaker Change: <unk>.
Speaker Change: With double federal and we are advancing with our anchor customers.
Speaker Change: Our commercial traction Israel.
Speaker Change: Our solutions are being deployed and our strategy is working.
Speaker Change: Looking ahead, we will continue to update on revenue and bookings.
Speaker Change: You've been part of our journey and we truly appreciate your support thanks again.
Speaker Change: We're building momentum and we're just getting started.
Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
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Speaker Change: Yes.
Speaker Change: Sure.
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Speaker Change: Thanks.
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Speaker Change: Yeah.
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Speaker Change: Thank you.
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Speaker Change: Great.
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Speaker Change: Yes.
Speaker Change: Hi.
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