Q1 2025 KORE Group Holdings Inc Earnings Call
Operator: Greetings and welcome Incorporated. At this time, all participants are in a listen.
Greetings and welcome to core group Holdings incorporated.
First quarter 2025 earnings call.
At this time all participants are in a listen only mode.
Operator: Q&A Session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded.
Question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note that this conference is being recorded.
Vik Vijayvergiya: I will now turn the conference over to your host, Vik Vijayvergiya, Vice President of Investor Relations and Corporate Development. Thank you. You may begin. Thank you, operator.
Speaker Change: I will now turn the conference over to your host Vik Vijay for Ghia, Vice President of Investor Relations and corporate development. Thank you you may begin.
Vik Vijay: Thank you operator on today's call, we will refer to the first quarter 2025 earnings presentation, which will be helpful to follow along with as well as the press release filed this afternoon that details the company's first quarter 2025 results.
Vik Vijayvergiya: On today's call, we will refer to the first quarter 2025 earnings presentation, which will be helpful to follow along with as well as the press release file this afternoon that details the company's first quarter 2025 results. Both of these can be found on our investor relations page at ir.corewireless.com. Finally, a recording of the call will be available in the investor section of the company's website later today.
Vik Vijay: Both of these can be found on our Investor Relations page at IR Dot core wireless dot com.
Vik Vijay: A recording of the call will be available in the investors section of the company's website later today the.
Vik Vijayvergiya: The company encourages you to review the Safe Harbor statements, risk factors, and other disclaimers contained on this slide and today's press release, as well as in the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this webcast.
Vik Vijay: The company encourages you to review the Safe Harbor statements risk factors and other disclaimers contained on this slide in todays press release as well as in the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to differ materially from those described in our forward looking.
Vik Vijay: Statements. The company does not undertake to publicly update or revise any forward looking statements. After this webcast.
Vik Vijayvergiya: The company also notes that it will be discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or U.S. GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation.
Vik Vijay: The company also notes that it will be discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or U S. GAAP you can find a reconciliation of these metrics to the <unk>.
Vik Vijay: Companies reported GAAP results in the reconciliation tables provided in today's earnings release and presentation.
Ronald Totton: I'll now turn the call over to Ron Totton, the company's president and chief executive officer. Thank you, Vik, and good afternoon, everyone. Thank you for joining us for our first quarter 2025 earnings call. With me today is Paul Holtz, CORE's Chief Financial Officer.
Ron: I'll now turn the call over to Ron <unk>, the company's President and Chief Executive Officer.
Thank you Vic and good afternoon, everyone. Thank you for joining us for our first quarter 2025 earnings call with me today is Paul cores Chief Financial Officer.
Ronald Totton: On today's call, I will provide an update on the company's business highlights for the first quarter and then turn the call over to Paul to go through the financial results, after which I will share our view on the financial guidance for 2025 before turning the call over to the operator for Q&A. Looking at the first quarter, you will see improvement in our operating performance across the business. We have delivered two consecutive quarters of positive free cash flow and our connections continue to grow as we approach 20 million total connections at the end of the first quarter.
Ron: On today's call I will provide an update on the company's business highlights for the first quarter and then turn the call over to Paul to go through the financial results after which I will share our view on the financial guidance for 2025 before turning the call over to the operator for Q&A.
Ron: Looking at the first quarter, you will see improvement in our operating performance across the business.
Ron: We have delivered two consecutive quarters of positive free cash flow and our connections continue to grow as we approached 20 million total connections at the end of the first quarter.
Ronald Totton: We can also show progress on our focus on profitable growth as our IoT solutions non-gap margin shows significant improvement. We are showing the full benefit of our restructuring efforts announced late summer 2024 with a $7.6 million decrease in operating expenses in the quarter as compared to the same period a year ago.
Ron: We can also show progress on our focus on profitable growth as our Iot solutions non-GAAP margin showed significant improvement.
Ron: We are showing the full benefit of our restructuring efforts announced late summer 2024, with a $7.6 million decrease in operating expenses in the quarter as compared to the same periods a year ago.
Ronald Totton: With our transformation successfully in the rearview mirror, our top priority is growth as part of our value creation plan, which I will share later in the presentation. On slide six, as we look at the headlines, our first quarter revenue was $72 million, which was $4 million lower and adjusted EBITDA of $14.5 million, a slight decline. This is a tough comparative quarter based on some one-time usage spikes with a handful of customers in Q1 2024. We also elected to exit low-margin products as we spoke about during our last call. That said, our adjusted EBITDA margin improved by 60 basis points to 20%, and we anticipate this to continue to improve.
Ron: With our transformation successfully in the rearview mirror, our top priority is growth as part of our value creation plan, which I will share later in the presentation.
Ron: On slide six as we look at the headlines our first quarter revenue was 72 million, which was $4 million lower and adjusted EBITDA of $14 5 million a slight decline.
Ron: This is a tough comparative quarter based on some one time usage spike with a handful of customers in Q1 2024.
Ron: We also elected to exit low margin products as we spoke about during our last call.
That said, our adjusted EBITDA margin improved by 60 basis points to 20%.
Ron: And we anticipate this to continue to improve.
Ronald Totton: Although we are only six weeks into Q2, we are encouraged by our financial results thus far, having had a strong April driven by connectivity revenue, with no impact of tariff policies on our performance thus far. In Q1, we generated $2.9 million in cash flow from operations, up $1 million from the same period last year. That resulted in free cash flow of $0.6 million for the first quarter of 2025. Generating cash is a top priority, and we are pleased to have a second consecutive quarter of positive free cash flow. We expect this trend to continue and improve as the year progresses.
Ron: Although we are only six weeks into Q2, we are encouraged by our financial results. Thus far having had a strong April driven by connectivity revenue with no impact of tariff policies on our performance thus far.
Ron: In Q1, we generated $2 9 million in cash flow from operations up $1 million from the same period last year that resulted in free cash flow.
Ron: 0.6 million for the first quarter of 2025 generating cash is a top priority and we're pleased to have a second consecutive quarter of positive free cash flow we.
We expect this trend to continue and improve as the year progresses.
Ronald Totton: Moving on to slide 7, let's delve into our IoT connectivity highlights for the first quarter. Total connections have increased by 8% nearing the $20 million mark. We are beginning to see the positive impact of connections ramping up from sales in 2024, which will lead to revenue growth and contribute positively to ARPIS.
Ron: Moving on to slide seven and let's delve into our Iot connectivity highlights for the first quarter.
Ron: Total connections have increased by 8% nearing the 20 million Mark we are beginning to see the positive impact of connections ramping up for sales in 2024.
Ron: Which will lead to revenue growth and contribute positively to RP.
Ronald Totton: On slide E. As we mentioned on our last call, we have shifted to Estimated Annual Recurring Revenue, or EARR, to share our expected growth of recurring revenue in place of the previous metric of TCV, or total contract value. EARR better illustrates our recurring revenue business model because it shows steady state recurring revenue as customers increase their device count or usage pattern. EARR multiplies the estimated monthly recurring revenue in the 12th month of the contract by 12 to estimate the annual recurring revenue. We believe that this key performance metric is useful to management and investors for forecasting purposes.
Ron: On slide eight.
Ron: As we mentioned on our last call we have shifted the estimated annual recurring revenue or E. R. R.
Ron: There are expected growth of recurring revenue in place of the previous metric, a PCB or total contract value.
Ron: E R R better illustrates our recurring revenue business model because it shows steady state recurring revenue as customers increase their device count or usage pattern.
Ron: E. A R. R. Multiply the estimated monthly recurring revenue in the 12 months of the contract by 12 to estimate the annual recurring revenue.
Ron: We believe that this key performance metric is useful to management and investors for forecasting purposes.
Ronald Totton: and also for understanding the financial health of our subscription-based business. This change is part of our ongoing effort to simplify and improve our reported metrics.
Ron: And also for understanding the financial health of our subscription based business.
Ron: This change is hard.
Ron: <unk> of our ongoing effort to simplify and improve our reported metrics.
Ronald Totton: We are confident EAR will be more effective for predicting future earnings and demonstrating steady free cash flow. Turning to our pipeline, we have broken out our total connectivity pipeline into new opportunities which totaled nearly $52 million in EARR and opportunities with existing customers which totaled nearly $30 million in EARR for the quarter. We are seeing growth in this measurement, especially with new logos. On the right-hand side is the closed one, EARR, which totaled over $6 million for new and existing opportunities in the quarter. We expect these numbers to grow as we embark upon our multifaceted strategy for growth, which includes growing our existing customer base, which is nearing 20 million total connections, prioritizing our new business focus on key verticals and select geographies.
Ron: We are confident E. R will be more effective for predicting future earnings and demonstrating steady free cash flow.
Ron: Turning to our pipeline being broken out our total connectivity pipeline into new opportunities, which totaled nearly $52 million in E. R R and opportunities with existing customers, which totaled nearly $30 million for the quarter.
Ron: We are seeing growth in this measurement, especially with new logos on the right hand side is the closed one E R R, which totaled over $6 million for new and existing opportunities in the quarter.
Ron: We expect these numbers to grow as we embark upon our multifaceted strategy for growth, which includes growing our existing customer base, which is nearing 20 million total connections prioritizing our new business focus on key verticals in select geographies.
Ronald Totton: Leveraging Our Indirect Channels and Strategic Partnerships. and increasing our use of agentic AI tools to drive digital marketing growth initiatives.
Ron: Leveraging our indirect channels and strategic partnerships.
Ron: And increasing our use of a gentex AI tools to drive digital marketing growth initiatives.
Ronald Totton: Going to slide nine, we highlight several wins that continue to demonstrate our value proposition, which is resonating for customers in a variety of industries and use cases. First, in the cloud communication space, Core was chosen for its streamlined, all-in-one approach to hardware and connectivity, which simplified procurement and deployment. Competitive pricing on connected devices and data plans added further value, while the ability to scale quickly with additional units supported their growth plan.
Ron: Going to slide nine we highlight several wins that continue to demonstrate our value proposition.
Ron: She is resonating for customers in a variety of industries and use cases.
First in the cloud communications space core was chosen for its streamlined all in one approach to hardware and connectivity, which simplified procurement and deployment competitive pricing on connected devices and data plans added further value while the ability to scale quickly with additional units supported their growth plans.
Ronald Totton: in the global HVAC manufacturing space, core one due to its compelling commercial proposition, robust connectivity features, and proven track record within other divisions of that organization. The offering included ruggedized laptops with high bandwidth connectivity and multi-EMC capabilities to ensure reliable coverage across regions, enhanced by eSIM flexibility.
Ron: In the global HVAC manufacturing space core one due to its compelling commercial proposition.
Ron: Robust connectivity features and proven track record within the other divisions of that organization.
Ron: The offering included Ruggedized laptops with high bandwidth connectivity and multi MZ capabilities to ensure reliable coverage across region enhanced by E Sim flexibility.
Ronald Totton: Multinational IoT alliances is another area where CORE is making an impact. CORE was chosen for its ability to deliver reliable, high-performance global connectivity, an essential requirement for their international customer base. Supporting EV charging stations in local markets like Turkey, the solution leverages a strong local network to ensure stable connectivity for critical functions like remote monitoring and payment process.
Ron: Multinational Iot alliances is another area, where core is making an impact core.
Ron: Core was chosen for its ability to deliver reliable high performance global connectivity and essential requirement for their international customer base.
Ron: Supporting EV charging stations in local markets like Turkey. The solution Leverages the strong local network to ensure a stable connectivity for critical functions like remote monitoring and payment processing.
Ronald Totton: Lastly, we expanded our footprint in remote patient monitoring. The client selected CORE for its ability to deliver seamless multi-carrier connectivity combined with pre-configured tablets and mobile device management for its remote patient monitoring needs. A key differentiator was the integration with a strategic device partner, which reinforced the value of a unified end-to-end offering. These wins alone are expected to deliver a combined $2.1 million in estimated annual recurring revenue.
Ron: Lastly, we expanded our footprint in remote patient monitoring.
Ron: The client selected core for its ability to deliver seamless multi carrier connectivity combined with pre configured tablets and mobile device management for its remote patient monitoring needs a.
Ron: A key differentiator was the integration with the strategic device partner, which reinforced the value of a unified end to end offering.
Ron: These wins alone are expected to deliver a combined $2 1 million in estimated annual recurring revenue.
Ronald Totton: I would like to draw your attention to a press release that was issued earlier this week with Winnebago, in which we are a technology enabler for their next generation RV platform, Winnebago Connect. This is a market leader that is revolutionizing its industry and will support customers as they explore the world in a more connected, secure and user friendly manner.
Ron: I would like to draw your attention to a press release that was issued earlier this week with Winnebago in which we are a technology enabler for their next generation RV platform when do they build kinect.
Ron: This is a market leader that is revolutionizing its industry and will support customers as they explore the world in a more connected secure and user friendly manner.
Ronald Totton: On slide 10, prior to examining the financials, I'd like to present CORE's value creation plan I spoke about earlier. This is our strategic roadmap aimed at fostering sustainable long-term growth and enhancing shareholder value. This plan is built on the vision to be a trusted global leader in IoT connectivity solutions for over 100 million plus connected devices, enabling a smarter, more connected world for all. And with that vision in mind, our mission is to empower innovators to deliver transformative solutions that deliver impactful outcomes to the customers and communities they serve.
Ron: On slide 10 in prior to examining the financials I'd like to present quarters value creation plan I spoke about earlier.
Ron: This is our strategic roadmap aimed at fostering sustainable long term growth and enhancing shareholder value.
Ron: This plan is built on the vision to be a trusted global leader in Iot connectivity solutions for over 100 million plus connected devices.
Ron: Billing a smarter more connected world for all.
Ron: And with that vision in mind, our mission is to empower innovators to deliver transformative solutions that deliver impactful outcomes to the customers and communities they serve.
Ronald Totton: The plan to deliver on this vision and mission is focused on five key priorities. Customer intimacy, product innovation, profitable growth, operational excellence and a culture of winning.
Ron: The plan to deliver on this vision and mission is focused on five key priorities.
Customer intimacy and product innovation profitable growth operationalized.
Ron: Operational excellence and a culture of winning allow.
Ronald Totton: Allow me to elaborate on each of these pillars. Firstly, customer intimacy. Central to our strategy is an unwavering commitment to our customers. We want to be loved by our customers. We are strengthening relationships by actively listening, anticipating needs, and providing solutions that drive value and impact to these tests. Our approach includes meticulous monitoring of customer operations and satisfaction metrics through customer health dashboards, investments in tools supporting customers, such as the ServiceNow AI tools we spoke about last earnings call. and Platform Enhancements for Resilience and Feature Improvement. Feedback from customers is very positive and they welcome our focus on customer intimacy and leveraging technology to improve the customer experience.
Ron: Allow me to elaborate on each of these pillars, firstly customer intimacy.
Ron: Central to our strategy is an unwavering commitment to our customers we wanted to be loved by our customers.
Ron: We are strengthening relationships by actively listening anticipating needs and providing solutions that drive value and impact to these customers.
Ron: Our approach includes meticulous monitoring of customer operation and satisfaction metrics through customer health dashboard investments in tools supporting customers such as the service now AI AI tools, we spoke about last earnings call.
Ron: And platform enhancements for resilience and feature improvements.
Ron: Feedback from customers is very positive and they welcome our focus on customer intimacy and leveraging technology to improve the customer experience.
Ronald Totton: Secondly, product innovation. We're committed to developing next generation products and solutions that will shape the future of our industry. Innovation encompasses not just technological advancement, but also addressing real world challenges in superior ways that will make a meaningful business impact for our customers. We are expediting our R&D cycles using AI development tools, expanding the use of cloud capabilities, hosting hackathons, and providing product and technology feedback from our Customer Advisory Board to ensure our innovations drive benefit to customers with commercial applicability. Our investments in SuperSIM, the Connectivity Pro platform, eSIM, dual profiles, advancing SGP.32 exemplify our dedication to product innovation.
Ron: Secondly product innovation.
Ron: We're committed to developing next generation products and solutions that will shape the future of our industry.
Ron: Innovation encompasses not just technological advancement, but also addressing real world challenges and superior ways that will make a meaningful business impact for our customers.
Ron: We are expediting, our R&D cycles, using AI development tools, expanding the use of cloud capabilities hosting hackathon, and providing product and technology feedback from our customer advisory board to ensure our innovations drive benefit to customers with commercial applicability or.
Our investments in supersede.
Ron: The connectivity probe platform E Sim dual product profile.
Ron: <unk> 32.
Ron: Exemplify our dedication to product innovation.
Ronald Totton: Thirdly, profitable growth. Our focus is on increasing revenue without compromising profitability. This entails pursuing intelligent, disciplined growth. venturing into high margin segments, scaling and priority markets, and meticulously managing our portfolio to ensure every initiative contributes to shareholder value. Early indicators of success are evident in our improving operating results and profitability measures, along with the initial positive trends in our sales pipeline and growth in total connection.
Ron: Thirdly profitable growth.
Ron: Our focus is on increasing revenue without compromising profitability.
Ron: This entails pursuing intelligent disciplined growth.
Ron: Venturing into high margin segments, scaling and priority markets and meticulously managing our portfolio to ensure every initiative contributes to shareholder value.
Ron: Early indicators of success are evident in our improving operating results and profitability measures along with the initial positive trends in our sales pipeline and growth in total connections.
Ronald Totton: Fourthly, operational excellence. Our scale and efficiency serve as a competitive edge, and we are intensifying our efforts in this area. By closely managing operating expenses, digitizing internal processes, leveraging AI and optimization tools and techniques, we are constructing a more agile and cost-effective organization. This enables reinvestment in innovation, compensation for our employees, and enhanced outcomes for our shareholders.
Ron: Fourthly operational excellence.
Ron: Our scale and efficiency serve as a competitive edge and we are intensifying our efforts in this area.
Ron: By closely managing operating expenses digitizing internal processes, leveraging AI and optimization tools and techniques, we are constructing a more agile and cost effective organization.
Ron: This enables reinvestment in innovation compensation for our employees and enhance outcomes for our shareholders.
Ronald Totton: Lastly, culture and building a winning team. This strategic vision is unattainable without the right talent and culture. We are dedicated to cultivating a high performance, inclusive environment where exceptionally talented, talented people flourish. We have aligned incentives, reinforcing accountability, and fostering a culture that emphasizes collaboration, ownership, and winning.
Ron: Lastly, culture and building a winning team.
Ron: This strategic vision is unattainable with the right talent and culture.
Ron: We are dedicated to cultivating a high performance inclusive environment, where exceptionally talented talented people flourish.
Ron: We have aligned incentives reinforcing accountability and fostering a culture that emphasizes collaboration ownership and winning we.
Ronald Totton: We believe by focusing on these areas, we can further unlock long-term value for CORE. We have already commenced making progress with a significant investment into learning and development and remain confident in our trajectory. I anticipate sharing further development in these five priority areas as we continue to execute on this plan and deliver impactful results to our customers, employees, and investors.
Ron: We believe by focusing on these areas. We can further unlock long term value for core.
Ron: We have already commenced making progress with a significant investment into learning and development and remain confident in our trajectory.
Ron: I anticipate sharing further development in these five priority areas as we continue to execute on this plan and deliver impactful result to our customers employees and investors and now let's turn the call over to Paul for the financial results.
Paul Holtz: And now let's turn the call over to Paul for the financial results. Thanks Ron, and thanks for those joining us this evening for our first quarter results. Looking at these results on slide 12, total revenue for the first quarter decreased $3.9 million, or approximately 5% year-over-year, to $72.1 million. Breaking that down by business lines, IoT connectivity revenue of $53.9 million decreased approximately 7% year-over-year and represented 75% of first quarter revenue. The decline in IoT connectivity is primarily due to a tough comparison quarter year over year as the company had some one-time usage revenue from a small number of customers, and the low RPC as business, which we had previously communicated with being migrated away from core also contributed to the decline.
Paul: Thanks, Ron and thanks for those joining us this evening for our first quarter results.
Paul: Looking at these results on slide 12 total revenue for the first quarter decreased $3 9 million or approximately 5% year over year to $72 1 million.
Paul: Breaking that down by business lines, Iot connectivity revenue of $53 9 million decreased approximately 7% year over year and represented 75% of first quarter revenue.
Paul: The decline in our Iot connectivity is primary due to a tough comparison quarter year over year as the company has some one time usage revenue from a small number of customers and although our <unk> business, which we had previously communicated was being migrated away from core also contributed to the decline.
Paul Holtz: IoT solutions revenue increased approximately 1% year-over-year to $18.2 million, or 25% of first quarter revenue. Overall non-GAAP margin in Q1 2025 was 54%, a decrease of 97 basis points compared to the first quarter in the prior year. By business line, non-GAAP IoT connectivity margin was down 200 basis points year-over-year to 58.8%. Again, this decrease in margin is mainly due to the higher usage revenue in the prior year quarter. Non-gap IoT solutions margin was up 370 basis points year over year to 39.9%. Total connections at the end of the first quarter were $19.8 million, an increase of $1.5 million year-over-year.
Paul: Iot solutions revenue increased approximately 1% year over year to $18 2 million or 25% of first quarter rate.
Paul: Overall non-GAAP margin in Q1, 2025 was 54% a decrease of 97 basis points compared to the first quarter in the prior year.
Paul: By business line non-GAAP Iot connectivity margin was down 200 basis points year over year to 58, 8%.
Paul: Again this decrease in margin is mainly due to the higher usage revenue in the prior year quarter.
Paul: non-GAAP Iot solutions margin was up 370 basis points year over year to 39, 9%.
Paul: Total connections at the end of the first quarter were $19 8 million, an increase of $1 5 million year over year.
Paul Holtz: Average revenue per user per month, or ARPU, for the current quarter was $0.91 compared to $1.05 in Q1 2024. The decrease in ARPU year-over-year was due to the combination of higher usage in the previous year and the recent additions and connections in the previous quarter coming from lower ARPU use cases. DVAR for the 12 months ended March 31st, 2025 with 99% compared to 94% in the prior year. The increase in DVAR was mainly due to the stabilization of IoT solutions revenue over the past 12 months versus the previous year being impacted by decline in IoT solutions revenue due to our number one customers LTE transition project in 2023.
Paul: Average revenue per user per month or two for the current quarter was 91.
Paul: Compared to a $1 five in Q1 2020 for the decrease in our two year over year was due to the combination of higher usage in the previous year and the recent additions and connections in the previous quarter coming from lower <unk> use cases.
Paul: D var for the 12 months ended March 31, 2025 was 99% compared to 94% in the prior year the.
Paul: The increase in D. Var was mainly due to the stabilization of Iot solutions revenue over the past 12 months versus the previous year being impacted by a decline in Iot solutions revenue due to a number one customer's LTE transition project in 2023.
Paul Holtz: As a reminder, DB&ER is similar to same-source sales as it measures the growth of existing customers in the trailing 12 months compared to the same customer cohort in the year-ago period. Turning to slide 13, operating expenses in the first quarter were $41.6 million, a decrease of $7.5 million, or 15.3% compared to Q1 2024. The change in operating expenses is due to decreases in headcount-related costs, net of severance of approximately $6.5 million, a non-cash foreign exchange gain of $2.8 million, offset by approximately $1.5 million and less capitalization of internal software development costs. First quarter interest expense, including amortization of deferred financing fees, increased slightly year-over-year to $13 million versus $12.9 million in the first quarter of 2024.
Paul: As a reminder, <unk> is similar to same store sales as it measures the growth of existing customers and the trailing 12 months compared to the same customer cohorts in the year ago period.
Paul: Turning to slide 13 operating expenses in the first quarter were $41 6 million a decrease of $7 5 million or 15, 3% compared to Q1 2024.
Paul: The change in operating expenses is due to decreases in head count related costs net of severance of approximately $6 5 million in noncash foreign exchange gain of $2 8 million offset by approximately $1 5 million in less capitalization of internal software development costs.
Paul: First quarter interest expense, including amortization of deferred financing fees increased slightly year over year to $13 million versus $12 9 million in the first quarter of 2024.
Paul Holtz: Net loss in the first quarter was $14.9 million, compared to $17.6 million in the prior year. The decrease in our net loss of $2.7 million year-over-year was primarily attributable to the improvement in operating expenses described earlier, offset by an increase in tax expense and less margin from the decline in revenue year-over-year. Adjusted EBITDA in the first quarter was $14.5 million, a decrease of $0.3 million or 2% compared to the prior year. There's a $0.3 million decrease in adjusted EBITDA, which was attributable to three main reasons. One, a benefit from the decline in gross OPEX of approximately $3.5 million to a total of $27.1 million or $25 million net of capitalized internal software development costs.
Paul: Net loss in the first quarter was $14 9 million compared to $17 6 million in the prior year.
Paul: The decrease in our net loss of $2 7 million year over year was primarily attributable to the improvement in operating expenses described earlier offset by an increase in tax expense and less margin from the decline in revenue year over year.
Paul: Adjusted EBITDA in the first quarter was $14 5 million, a decrease of zero point $3 million or 2% compared to the prior year.
Paul: The 0.3 million decrease in adjusted EBITDA, which was attributable to three main reasons.
Paul: One a benefit from the decline in gross Opex of approximately $3 5 million to a total of $27 1 million or $25 million net of capitalized internal software development costs.
Paul Holtz: 2. A $1.5 million negative impact to adjustability year-over-year due to a reduction in capitalized internal software development costs.
Paul: Two a 1.5 million negative impact to adjusted EBITDA year over year due to a reduction in capitalized internal software development costs and three a decline in non-GAAP margin dollars are approximately $2 3 million due to the decline in revenue year over year.
Paul Holtz: 3. A decline in non-GAAP margin dollars of approximately $2.3 million due to the decline in revenue year-over-year. Finally, moving the cash flows, cash provided by operations in the first quarter was approximately $2.9 million. This compared to cash provided by operations of $1.9 million in Q1 2024. Pre-cash flow measured by cash provided by operations less cash used in investing activities was positive $0.6M in Q1 2025 compared to negative $2.8M in the prior year quarter. Pre-cash flow was positive for the second consecutive quarter and is expected to continue to be positive for the rest of 2025, ramping as the year progresses.
Paul: Finally, moving to cash flows cash provided by operations in the first quarter was approximately $2 9 million this compared to cash provided by operations of $1 9 million in Q1 2024.
Paul: Free cash flow measure by cash provided by operations less cash used in investing activities was positive <unk> 6 million in Q1, 2025 compared to negative $2 8 million in the prior year quarter.
Paul: Free cash flow was positive for the second consecutive quarter and is expected to continue to be positive for the rest of 2025 ramping as the year progresses.
Paul Holtz: As of March 31st, 2025, cash was $19.7 million compared to $23 million as of March 31st, 2024.
Paul: As of March 31, 2025, cash was $19 7 million compared to $23 million as of March 31 2024.
Ronald Totton: And with that, I'll pass it back to you, Ron.
Ron: And with that I'll pass it back to you Ron.
Ronald Totton: Thank you, Paul. On slide 14, this should not come as any surprise since we just spoke about it a few weeks ago, but we are maintaining our guidance in 2025 for revenue, adjusted EBITDA, and free cash flow. We expect revenue in the range of $288 million to $298 million, reflecting 2% year-over-year growth, which factors in the exit of unprofitable contracts and product lines, and positively contributes to overall profitability. Adjusted EBITDA on the range from $62 million to $67 million, representing a 19% increase year-over-year, and free cash flow in the range from $10 million to $14 million, a significant 443% year-over-year improvement.
Ron: Thank you Paul on Slide 14, this should not come as any surprise since we just spoke about a few weeks ago, but we are maintaining our guidance in 2025 for revenue adjusted EBITDA and free cash flow.
Ron: We expect revenue in the range of 288 million to $298 million, reflecting 2% year over year growth, which factors in the exit of unprofitable contracts and product lines and positively contribute to overall profitability.
Ron: Adjusted EBITDA in the range from $62 million to $67 million, representing a 19% increase year over year and free cash flow in the range from 10 to 14 million a significant 443% year over year improvement as we sit here today in the fifth month of the year I believe we're in a good position.
Ronald Totton: As we sit here today in the fifth month of the year, I believe we're in a good position, and as a team we are focused on the right areas to ensure we deliver on our commitments.
Ron: And as a team we are focused on the right areas to ensure we deliver on our commitments.
Ronald Totton: On slide 15, I want to step back and show you how far we've come and where we're headed. The charts on this slide illustrate our strong financial performance driven by effective execution. The bar charts depict our revenue growth, which is projected to rise from $277 million in 2023 to $293 million in 2025, showcasing our modest but steady growth as we transform the company. Adjusted EBITDA reflects a healthy and above market increase moving from $55.6 million to $64.5 million, indicating improved operational efficiency. and most notably, the Free Cash Flow Demonstrates. a positive turnaround from a negative $26.6 million in 2023 to a positive $12 million in 2025, highlighting our commitment to generating cash and enhancing shareholder value.
Ron: On slide 15, I wanted to step back and show you how far we've come and where we're headed.
Ron: The charts on this slide illustrate our strong financial performance driven by effective execution.
Ron: The bar charts depict our revenue growth, which is projected to rise from $277 million in 2000 $23 million to $293 million in 2025, showcasing our modest but steady growth as we transform the company.
Ron: Adjusted EBITDA reflects a healthy and above market increase moving from $55 6 million to $64 5 million, indicating.
Ron: Improved operational efficiency.
And most notably the free cash flow demonstrates.
Ron: A positive turnaround from a negative $26 6 million in 2023 to a positive $12 million in 2025, highlighting our commitment to generating cash and enhancing shareholder value.
Ronald Totton: The percentage increase is noted 6%. Sixteen percent. and 145% represent growth rates that emphasize our financial trajectory. Overall, these figures underscore that our strategic initiatives are working and give us a positive outlook for the coming year.
Ron: The percentage increases noted 6% <unk>.
Ron: 16%.
Ron: And 145% represent growth rates that emphasize our financial trajectory.
Ron: Overall these figures underscore that our strategic initiatives are working and give us a positive outlook for the coming years.
Ronald Totton: Before we open the call to Q&A, I want to thank the core team for their hard work and commitment to excellence. We have asked a lot of our team in the past year, and they have stepped up and delivered and are energized by our improved performance. Our results are only made possible by the grit and determination of our team that they have shown the past several quarters. With that, thank you, everyone, for listening, and I look forward to your question.
Ron: Before we open the call to Q&A I want to thank the core team for their hard work and commitment to excellence.
Ron: We have asked a lot of our team in the past year and they've stepped up and delivered and are energized by our improved performance.
Ron: Our results are only made possible by the grit and determination of our team.
Ron: They have shown in the past several quarters with that thank you everyone for listening and I look forward to your questions.
Operator: Thank you.
Ron: Thank you.
Operator: And at this time, we'll conduct our questions. If you would like to ask a question, please press star 1. Confirmation.
Speaker Change: At this time, we will conduct our question and answer session.
Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate that your line is in the question queue.
Operator: Press Start. may be necessary to pick up your handset.
Speaker Change: You May press Star two if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the starkey once again to ask a question press star one.
Operator: Fantastic question. Press star 1.
Scott Searle: And our first ques- Scott Searle with Roth Capital Partners. Thank you for taking my questions. Hey, Ron, maybe just to dive in quickly on the EARR, I'm not sure if I heard it, but are there historic numbers and comps here over the year to kind of give us an idea about how that pipeline has changed and shifted? And what are the sales cycles looking like in the current environment, you know, just given the current macroeconomic climate and provisioning timelines? And I had a couple of follow-ups. Sure. Thanks, Scott. In terms of comps for EAR, we don't have those.
Speaker Change: And our first question comes from Scott Searle with Roth Capital Partners. Please state your question.
Speaker Change: For taking my questions, Hey, Ron maybe just to dive in quickly on.
Speaker Change: E. R. R. I'm wondering I'm not sure if I heard it but are their historic numbers income comps year over year to kind of give us an idea about how that that pipeline has changed and shifted and what are the sales cycle is looking like in the current environment.
Speaker Change: Just given the current macroeconomic climate and provisioning timelines and I had a couple of follow ups.
Speaker Change: Sure. Thanks, Scott in terms of comps for E. R. We don't have those I think that's something we can follow up on a previously you would recall that T V.
Ronald Totton: I think that's something we can follow up on. Previously, you would recall that TCV used both connectivity and solutions as well as hardware. So it was a combined where with EAR is really only the connectivity, the recurring revenue. So it's not as straightforward as, you know, extrapolation from one to the other.
Speaker Change: Used both connectivity and solutions as well as hardware so as a combine wherewith E. R is really only the connectivity of the recurring revenue. So it's and it's not as straightforward as you know extrapolation from one to the other so that's probably something we can follow up on.
Ronald Totton: So that's probably something we can follow up on separately to give you a like for like comparison with just the connectivity piece. In terms of sales cycles, I know we spoke about tariffs. It was only a couple of weeks ago. I would say I'm really encouraged by the sales cycle. In fact, if you look at the results that we had in April that I commented on, but even some of the new sales and the growth in connections, you know, we saw probably two things. One is we saw for customers that had connected devices along with connectivity, we probably actually saw an acceleration of them buying because of the uncertainty of what tariffs might mean.
Speaker Change: Separately to give you a like for like comparison with just the connectivity piece.
Speaker Change: In terms of sales cycles.
Speaker Change: I know we spoke about tariffs.
Speaker Change: It was only a couple of weeks ago, and I would say I'm really encouraged by the sales cycle.
Speaker Change: In fact, if you look at the results that we had in April that I commented on but even some of the new sales and the growth in connections.
Speaker Change: You know we saw probably two things one is we saw for customers that had Ah connected devices, along with connectivity, we probably actually saw an acceleration of them buying because of the uncertainty of what terrorists might mean.
Ronald Totton: And then, of course, you know, the tariff situation's been sort of changing. You know, business that we've been projected to close has effectively kind of closed right on schedule. So we haven't seen elongated sales cycles. If anything, you know, we would have probably seen things compress a little bit with some of that tariff uncertainty, which, you know, it's a fluid situation.
Speaker Change: And then of course, you know the tariff situation has been sort of changing business that we have been projected to close has effectively kind of closed right on schedule. So we haven't seen elongated sales cycles, if anything we would have probably seen things.
Speaker Change: Compressed a little bit with some of that tariff uncertainty, which you know.
Speaker Change: That it's a fluid situation, but.
Scott Searle: But yeah, that's my answers on your first two questions. But it on the OPEX front, I just want to clarify, I think the number was around $27 million this quarter. But in some of the adjusted tables that you've got, there's some charges for integration, I think, of $4 million and otherwise. So what is the normalized OPEX number that we should be thinking about going forward? And from a product gross margin standpoint, I think three of the last four quarters, you've been in the 40% or so range. Is that the new norm now? I know you guys have been walking away from less profitable business, but just want to clarify that's how we should be thinking about things going forward.
Speaker Change: Yes, that's my my answers on your first two questions, but it sounds like maybe you've got a couple more.
Speaker Change: Yes, that's okay Yep, one for Paul on the on the Opex front I just want to clarify I think the number was around 27 million this quarter, but in some of the adjusted tables that you've got there is a there's some charges for integration I think a $4 million and otherwise. So what is the normalized opex number that we should be thinking about going forward and from a product gross margin.
Speaker Change: Standpoint, I think three of the last four quarters, you've been in the 40% or so range is that the new norm now I know you guys had been work walking away from less profitable business, but just want to clarify if that's how we should be thinking about things going forward.
Paul Holtz: Yeah, thanks, Scott. Yeah, so on the first one, the 27.1 was just was prior to the reduction for capitalized software for the for the quarter. So that was another 2 million that gets you down to a net of 25. So that's your number on a kind of go forward basis. Now that could fluctuate up or down depending on variable compensation, and then payroll taxes and all reduced as the year goes on. But 25 is the net number that you should be looking at the integration costs that are in there, those are adjusted out. So those aren't included in those numbers, as those are one the one time items that come out.
Speaker Change: Yeah. Thanks, Scott Yeah. So on the first one on the 27.1 was just was prior to.
Speaker Change: The reduction for capitalized software for the for the quarter. So that was another 2 million that gets you down to a net of 25. So that's your number on a go forward basis, now that could fluctuate up or down depending on variable.
Speaker Change: Variable compensation, and then payroll taxes, and all that sort of separate reduced as the year goes on but 25 is the net number that you should be looking at the integration costs that are in there those are adjusted out. So those aren't included in those numbers as those are one the onetime items that come out but so 25 is your is the is your number that should be using for.
Paul Holtz: But so 25 is your is the is your number that you should be using for forecasting. And then on the gross margin for solutions, yeah, where 40% is, is our, our target and what we're looking like to continue on for the rest of the year. Yeah, we have, as indicated, had gotten rid of a lot of the lower hardware margin business that came out of that. So that's driving, obviously, the solutions margin up. And we continue, we're going to continue to see that for the rest of the year, as that business, we're not planning on bringing that business back.
Speaker Change: Forecasting and then on the.
Speaker Change: Gross margin for solutions, Yeah. We're 40% is is our our targeting and what were looking like to continue on for the rest of the year. Yes. We are as indicated it had gotten rid of a lot of the lower hardware margin business that came out of that so that's driving obviously the the <unk>.
Speaker Change: <unk> margin up and we continue to we're going to continue to see that for the rest of the year as that business, we're not planning on bringing that business back.
Scott Searle: Perfect. Thanks so much. And if I could then, just lastly, ARPUs, you know, came down as you guys have been talking about a couple of weeks ago, just in terms of the mix of some of the new business. When you're looking at that pipeline, is that where a majority of the ARPUs are going to be going? So we're going to continue to see that pressure? Or I thought there were a couple of large contracts in your term that had skewed that number. So just some thoughts on that front.
Speaker Change: Perfect. Thanks, so much and if I could then just lastly, <unk> came.
Speaker Change: Came down as you guys had been talking about a couple of weeks ago. Just in terms of the mix of some of the new business. When Youre looking at that pipeline is that where a majority of the <unk> are going to be going so we're going to continue to see that pressure or I thought there were a couple of large contracts near term that had skewed that number. So just some thoughts on that front and since you've had.
Ronald Totton: And since you've had, you know, two nice quarters in a row here starting to move forward with positive free cash flow, looking out to 2026, Ron, I know it's still early, but how are you feeling about, you know, getting back to double-digit growth on the services and the connectivity front? Thank you. So on the first one, so ARPU, like we indicated from a comp perspective, Q1 over Q1 is a really tough comparison. We had a really good spike in usage in Q1, which drove the ARPU up artificially there. But as we indicated last quarter, we had a bunch of devices that were added in Q4 that were at the lower end of the ARPU range.
Speaker Change: No two nice quarters in a row here starting to move forward with positive free cash flow.
Speaker Change: Looking out to 2026, Ron I know, it's still early but how are you feeling about getting back to double digit growth on the on the services and the connectivity front. Thank you.
To take the first yes, so on the first one so <unk> like we indicated from a comp perspective Q1 over Q1.
Speaker Change: Is it is a really tough comparison, we had.
Speaker Change: Really good spike in usage in Q1.
Speaker Change: Which drove the <unk> up artificially there.
Speaker Change: But as we indicated last quarter, we had a bunch of AR devices that were added in Q4 that were at the lower end of the <unk> range. So.
Ronald Totton: So $0.91 in the current quarter, and we're expected to hopefully stay around that. But if we do add, obviously, some more lower ARPU, which we're seeing an uptick on, it could drive down a little bit. But it's really tough to compare to last year, where we had a really high usage quarter that drove it up. If you look at Q2 from last year, you see that our revenue did drop because of that one-time revenue that would happen in there from usage. So you can see that it is kind of anomaly there.
Speaker Change: 91 cents in the current quarter and we're expected to hopefully stay around that but if we do add obviously, some more lower <unk>, which we're seeing uptake on that.
Speaker Change: It could drive down a little bit, but it's really tough to compare to last year, where we add them.
Speaker Change: A really high usage quarter that drove it up if you look at Q2.
Speaker Change: Last year, you you see that our revenue did drop because of that onetime revenue revenue that would have been in there from usage. So you can see that it is.
Speaker Change: Kind of anomaly there.
Ronald Totton: Yeah, I'll take the second part of that.
Speaker Change: Yes, I'll take the second part of that and maybe if I could before I do that Scott I would say that as far as the pipeline work.
Ronald Totton: And maybe if I could, before I do that, Scott, I would say that as far as the pipeline, we're seeing a more of a balance with, you know, the the low and the more higher ARPU use cases. I think, you know, some of those lower ARPU use cases are existing customers expanding their footprint with us. And again, you know, we, you know, that's still, you know, very profitable. So, you know, an existing customer that's on a lower ARPU wanting to buy more, you know, we don't want to discourage that, you know, we make good margins on that.
Speaker Change: We're seeing a more of a balance.
Speaker Change: With you know the the low and the more higher arb, who use cases.
Speaker Change: You know some of those lower <unk> use cases or existing customers expanding their footprint with us and again is that still very profitable. So an existing customer that's on a lower ARP, who wanting to buy more we don't want to discourage that we make good margins on that in terms of the pipeline.
Ronald Totton: In terms of the pipeline, though, I think it's much more balanced between, you know, different use cases and, you know, ARPU that is, you know, high in some cases, I think that Winnebago press release that we issued, again, that would be very much on a high ARPU basis. So I think that's a good example that would maybe counter some of the lower ARPU cases we spoke about.
And though I think it's much more balanced between.
Speaker Change: Uh huh.
Speaker Change: Use cases and and.
Speaker Change: <unk> that is high in some cases I think that Winnebago.
Speaker Change: The press release that we issued again that would be very much on a higher <unk>.
Speaker Change: Basis. So I think that's a good example that would maybe counter some of the the lower arm, who cases, we spoke about.
Ronald Totton: In terms of, yeah, 26, yeah, we spoke two weeks ago, about last year, we're talking about Q1, and you're asking about 26. I, I'm optimistic looking into 26 in terms of our growth rate. And, you know, we would like to do better than the, you know, kind of the current guidance that we've been given even in 25. But if you look at just the kind of fundamentals, you look at connections growing, you look at the EAR business, contributing, you look at the recurring nature of our business. Yeah, I mean, I don't want to forecast double digit growth.
Speaker Change: In terms of Yeah, 26, and yes, we spoke two weeks ago and both last year, we're talking about Q1 and you asked me about 26.
Speaker Change: I.
Speaker Change: I'm optimistic looking into 2006 in terms of our growth rate.
Speaker Change: We would like to do better than.
Speaker Change: And then the kind of the current.
Speaker Change: Guidance that we've been given even in 'twenty five but if you look at just the kind of fundamentals you look at connections growing you look at the EHR business.
Speaker Change: Contributing you look at the recurring nature of our business, Yeah, I mean, I don't want to forecast double digit growth, but certainly we should be heading in that direction being a little too early for me in may here to be telling you that that's what 26 looks like but now we're we're feeling good April results were strong.
Ronald Totton: But, you know, certainly we should be heading in that direction, be a little too early for me in May here to be telling you that that's what 26 looks like. But no, we're, we're feeling good. April results were strong. I think Paul's highlighted, yeah, tough comparative quarter.
Speaker Change: I think Paul's highlighted yeah tough comparative quarter.
Scott Searle: But in terms of just the, you know, the Great, thanks so much. I'll get back in the queue.
Speaker Change: But in terms of just the fundamentals connections growing closing business.
Speaker Change: Yes, we're feeling good where we are and yeah, just got to stay disciplined and stay focused.
Speaker Change: Great. Thanks, so much ill get back in the queue.
Operator: Thank you and just a reminder to ask a question, press star 1 to remove your question.
Thank you and just sort of minor to ask a question press star one to remove your question Press Star two.
Lance Vitanza: Our next question comes from Lance Vitanza with TD Cowen. Thanks for taking the questions, guys. I wanted to start with the Winnebago win. Could you talk more about how you came to win that business? Was it competitive? How long was that sales process? Were you already doing business with them, perhaps in another capacity?
Speaker Change: Our next question comes from Lance Vitanza with T D. Cowen. Please state your question.
Lance Vitanza: Thanks for taking the questions guys.
Lance Vitanza: I wanted to start with the Winnebago win could you talk more about how you came to win that business. It wasn't competitive how long was that sales process, where you're already doing business with them, perhaps in another capacity and.
Ronald Totton: And then, I guess, for a run-of-the-mill situation like this, if there is such a thing, what would be a reasonable expectation for when this would turn into revenue, either on the solution side or the connectivity side? Yeah, sure. Thanks. So Winnebago was a new logo for us. It was a competitive process. They evaluated, you know, several other companies. This came to us through a partner. And just trying to think through your questions. What's nice about Winnebago is it does have a minimum revenue commit to it. So we have, you know, guaranteed revenue. And then of course, as, you know, as usage increases, you know, they start selling more of these new next generation vehicles, and those vehicles are then out on the road.
Lance Vitanza: And then I guess for you know for a run of the mill situation like this if there is such a thing what would be a reasonable expectation for when this would turn into revenue either on the solution side or the connectivity side.
Lance Vitanza: Yeah sure. Thanks.
Speaker Change: So winnebago is a new logo for us it was a competitive process.
Speaker Change: Process they evaluated several other companies.
Speaker Change: Companies and this came to us through a partner.
Speaker Change: And are you just trying to think through your questions.
Speaker Change: And what's nice about Winnebago is it does have a minimum revenue commit to.
Speaker Change: To it so we have guaranteed revenue.
Speaker Change: And then of course as as you know.
Speaker Change: As usage increases.
Speaker Change: They started selling more of these new next generation vehicles and those vehicles are then out on the road and.
Ronald Totton: And, you know, then of course, the monthly revenue stream that you're all too familiar with starts kicking in. But you know, what's nice about that particular opportunity is new logo, highly competitive opportunity. And yeah, has a minimum revenue commitment, which is which is great for us. But of course, the real growth is going to be as they kind of roll that out. Cool, nice job on that.
Speaker Change: And then of course, the monthly revenue stream that you're all too familiar with starts kicking in but you know what's nice about that particular opportunity is new logo highly competitive opportunity.
Speaker Change: And yeah. It has a minimum revenue commitment, which is which is great for us but of course the.
Speaker Change: The real growth is going to be as they kind of roll that out.
Speaker Change: Well nice job on that.
Ronald Totton: Turning to healthcare, could you talk about the demand environment there as you see it? I mean, and I guess the genesis of the question is there's a lot going on with, you know, Medicare, Medicaid funding, Medicare Advantage in particular, and I'm just wondering if that has any impact on your business or is that sort of someone else's problem? And just more generally, regardless of what's going on with the funding, how would you just describe the environment for healthcare for CORE these days? Yeah, yeah, so thanks for the question again. Yeah, it doesn't affect us, would be the short answer.
Speaker Change: Turning to health care could you talk about the demand environment. There as you see it I mean, and I guess the Genesis of the question is Theres a lot going on with Medicare and Medicaid funding Medicare advantage in particular and I'm. Just wondering if that has any impact on your business or is that sort of someone else's problem.
Speaker Change: And just more generally regardless of what's going on with that with the funding how would you just describe the environment for health care for our core these days.
Speaker Change: Yeah, Yeah. So year. So thanks for the question again and yeah. It doesn't affect us would be the short answer in terms of connected health and you know.
Ronald Totton: In terms of connected health, you know, this business is, yeah, great business for us. You know, I think that we see growth in the sector. We've closed some new, you know, some of these logos that we talked about, obviously, remote patient monitoring. One that we featured here with the connected health customer. So, you know, obviously, this is a very large TAM. It's growing, you know, north of 25%. You know, we feel good about, you know, our retention within the customer base that we have there. And, you know, we have several customers that have multiple divisions that we've now, you know, penetrated in and closed deals and now get, you know, getting revenue from within those particular customers, which is great for us.
Speaker Change: This business is is is is.
Speaker Change: Yeah, great business for us.
Speaker Change: Think that we see growth in the sector. We we've closed the new some of these logos that we talked about obviously remote patient monitoring one that we featured here was the connected health customers.
Speaker Change: Customers. So you know obviously this is a very large tam is growing.
Speaker Change: North of 25%.
Speaker Change: We feel.
Speaker Change: Good about you know our retention within the customer base that we have there are and you know we have several customers that have multiple divisions that we've now penetrated in and closed deals and now getting revenue.
Speaker Change: From within those those those.
Particular customers, which is which is great for us. So I think the you know looking ahead Ah I would see and think about connected health being you know even a larger percentage of revenues and margin are and maybe what it was in the second half of last year.
Ronald Totton: So, you know, I think the, you know, looking ahead, I would see and think about connected health being, you know, even a larger percentage of revenues and margin than maybe what it was in the second half of last year. You know, we're definitely seeing some great results in that area. And it's obviously been an area where we've been focused on in the past. And yeah, we're seeing good, you know, strong results there. It definitely feels that even with the, you know, the tariff and some of the macro environment challenges is, you know, there's new trials being awarded, you know, the innovative nature of that sector works really well for us that, you know, even through some of the, you know, the tariff situation that's been uncertain, we haven't seen a blip at all.
Speaker Change: We're definitely seeing some some great results in that area.
Speaker Change: And it's obviously been.
Speaker Change: An area, where we've been focused on in the past.
Speaker Change: And yes, we're seeing good strong results there it definitely feels that even with the tariffs and some of the macro environment.
Speaker Change: The challenge is is you know, there's new trials being awarded a you know the very nature of the innovative nature of that sector.
Speaker Change: It works really well for us are that even through some of the you know the tariff situation. That's been uncertain, we havent seen a blip at all if anything we've seen an increase in our in connected health.
Ronald Totton: If anything, we've seen an increase in connected health.
Lance Vitanza: Thanks for that.
Speaker Change: Thanks for that and then if I can squeeze one more in actually just back on slide nine and you probably mentioned this so bear with me, but are those four wins are they all new logos or could some of that represents new projects with existing customers.
Ronald Totton: And then if I could squeeze one more in, actually, just back on slide nine. And you probably mentioned this, so bear with me, but are those four wins, are they all new logos, or could some of that represent new projects with existing customers? Yeah, I think three are new and one is existing. In fact, we mentioned it being a new division within an existing customer. So again, some people might consider that a new logo and for us, we don't. That's an existing one.
Speaker Change: Yeah, I think I think one is I think three or yeah. Three are new and one is existing in fact, we mentioned it being a new division within an existing customer. So again, some people might consider that a new logo and for US we don't that's a that's an existing one.
Ronald Totton: And then I'm also reminded here by Paul that I didn't answer one of your other parts of your question and the Winnebago, I want to say the sales cycle was around nine months was the time frame there. Thanks for circling back on that. But sticking with this, this idea of new versus existing customers, just as you sort of take a step back and think more broadly about the opportunity, obviously, you're going to, you're going to get customers, you know, you're going to get more business from both channels. But do you see like, where should we be thinking that the bulk of the demand is coming from, as we think about the current pipeline, or what you think is doable over the next year?
Speaker Change: And then I'm also reminded hereby call that I didn't answer one of your other parts of your question in the Winnebago I wouldn't say the sales cycle was around nine months I'm always split the timeframe there.
Thanks for circling back on that but sticking with this this idea of new versus existing customers. Just as you sort of take a step back and think more broadly about the opportunity, obviously youre getting youre going to get customers youre going to get more business from both channels, but do you see like where should we be thinking that the.
Speaker Change: The bulk of the demand is coming from as we think about the current pipeline or what you think is doable over the next year is it is it mostly new logos or is it existing guys and to the extent that it's existing customers is it them just seeing broader deployment.
Ronald Totton: Is it mostly new logos? Or is it existing guys? And to the extent that it's existing customers, is it them just seeing broader deployment on existing use cases, just shipping out more units under the existing uses? Or are they coming back to you, existing customers coming back to you and saying, hey, we want to launch a new application. And so there's a whole new, you know, set, a whole new setup that's involved. Yeah, no, good, good, well thought out question. You know, I will want to get back to you with this specific percentage, but based on, you know, based on, you know, thinking about Salesforce, I would say that, you know, certainly we're more weighted towards, and I'll just use a number to be validated later, 75% new, 25% existing, and part of that is, with existing customers, it's in some cases harder to forecast where that demand is going to come from.
Speaker Change: <unk> existing use cases, just shipping out more units under the existing uses or are they coming back to your existing customers coming back to you and saying Hey, we want to launch a new.
Speaker Change: A new application and so there's a whole new.
Speaker Change: Set a whole new set up that's involved.
Speaker Change: Yeah, no good good well thought out question.
Speaker Change: I will want to get back to you with this specific percentage but are.
Speaker Change: Based on you know based on you know thinking about sales.
Speaker Change: Salesforce I would say that certainly we're more weighted.
Speaker Change: Towards and I'll, just use a number to be validated later 70, 75%, new 25% existing and part of that is with existing customers. It's it's in some cases harder to forecast where that demand is going to come from you know like they are an existing customer.
Ronald Totton: You know, like they're an existing customer, and yeah, if they have a new division, if they have a new deployment, yeah, then those are what would represent in the, kind of in the pipeline, but yeah, I would probably think about it in those terms, and, you know, we'll come back and validate those numbers. You know, for us, you know, and I've touched on it, you know, multiple times, you know, having, you know, now approaching 20 million connections, you know, working those existing customers is, it's a real asset for us, and then obviously the goal is to find and add the new logos in addition to that, so that's, you know, where we, you know, from, you know, the last few questions related to, you know, growth, and then the earlier question related to 26.
Speaker Change: And and if they have a new division if they have a new deployment. Yeah. Then those are what would represent in the kind of in the pipeline.
Speaker Change: But yeah, I would probably think about it in those terms and we will come back in and validate those those numbers.
Speaker Change: You know for us.
I've touched on it multiple times having.
Speaker Change: Now approaching 20 million connections.
Speaker Change: Working those existing customers is there is it's a real asset for US and then obviously the goal is defined and add the new logos. In addition to that so that's where we you know from the last few questions related to growth in and then the earlier question related to 2006, I mean, that's where we start to see.
Paul Holtz: I mean, that's where we start to see, you know, growth really starting to accelerate from, you know, last year and this year being relatively conservative in terms of the growth rate, so I don't know, Paul, if you have anything to add to that. No, I think on the existing side of things, right now, the growth that we would see from there would be as Ron mentioned, from new departments that are looking to consolidate vendors and basically bring all connectivity to one versus having multiple vendors. So we're being opened up to other parts of the organizations.
The growth really starting to accelerate from last year and this year being relatively conservative in terms of the growth rate. So I don't know policy you have anything to add to that.
Speaker Change: No I think on the existing side of things.
Speaker Change: Right now the growth that we would see from there would be as Ron mentioned from new departments that are looking to consolidate vendors and basically bring all connectivity two to one versus having multiple vendors. So we're being open up to other parts of the organizations.
Paul Holtz: I think that will be where majority of existing customer growth will come from.
Speaker Change: I think that will.
We will be where majority of the existing customer growth to come from.
Lance Vitanza: Thanks very much, guys.
Speaker Change: Thanks, very much guys.
Yeah.
Ronald Totton: Thank you, and ladies and gentlemen, we have reached the end of the Q&A session. I'll now hand the floor back to Ron Totton for questions. Yeah, thank you, everyone, for joining us for today's earnings call. We spoke only a few weeks ago, but it was great to be here today.
Ron I: Thank you and ladies and gentlemen, we have reached the end of the Q&A session I'll now hand, the floor back to Ron <unk> for closing remarks.
Ron I: Yeah. Thank you everyone for joining us for today's earnings call. We spoke only a few weeks ago, but it was great to be here today, and we look forward to updating on our progress next quarter.
Operator: And we look forward to updating you on our progress next quarter with our second quarter results in the August time frame. Thank you and have a good evening. Thank you.
Ron I: With our second quarter results in August timeframe. Thank you and have a good evening. Thank.
Operator: This concludes today's call. All parties may disconnect. Have a.
Ron I: Thank you. This concludes today's call all parties may disconnect have a good day.