Loading...
Docoh

Sierra Wireless (SWIR)

Participants
David Climie Vice President-Investor Relations
Phil Brace President & Chief Executive Officer
Sam Cochrane Chief Financial Officer
Mike Walkley Canaccord Genuity
Anthony Stoss Craig-Hallum
Thanos Moschopoulos BMO Capital Markets
Scott Searle Roth Capital
Josh Nichols B. Riley
Derek Soderberg Colliers Securities
Paul Treiber RBC Capital Markets
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and thank you for standing by. Welcome to the Sierra Wireless Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to conference like speaker to now Mr. today would hand over the your I President Relations. of Vice Climie, David Investor Please go ahead.

David Climie

Thanks, and call conference for joining good afternoon, everybody. and Thank webcast. you today's

Sam Brace, On and the are CFO. Phil call CEO; today and Cochrane, our President

by detailed webcast quarter introductory As available will will comments Q&A. call. agenda and on a Phil results, follows: a the be is following Sam and as is review website will reminder, second presentation Today's today's followed of being our our provide provide his

started, forward-looking can get company's include statements These for the of securities the note on we now laws. strategy, the Before the commentary I'll of certain cautionary contains of our within is and that based information on constitute X regarding reference statements summary being meaning statements A objectives, not business. our outlook page presentation displayed. the regarding and are expectations forward-looking be statements. webcast goals, our cautionary and Today's note historical found and facts

are statements number of including listed which based a forward-looking significantly Our assumptions, could X webcast presentation, incorrect. on the to of those be page material prove on

or in now to statements, filings. release. forward-looking as and with we forward-looking our results on regulatory differ and call earnings risks current This cause update. statements for With by events management's and and which that could found are his MD&A, to discussion Phil statements. actual other the your SEDAR be implied corporate particularly expressed to should of quarterly that, forward-looking attention periods significantly expectations or those to also our AIF and to well as are can are our risk of I'll investors over Additionally, viewed unknown presentation factors the turn material time of conjunction in longer EDGAR be caution our based I from relate draw subject longer known on substantial uncertainties those that

Phil Brace

joining for today. you for Thanks, and us everyone call on David thank the

We Solutions $XXX.X to Revenue results Solutions XX% the year-over-year report by period compared second QX connectivity services XXXX. from $XX.X for to continued an was quarter of XX% XX.X% million, to success same pleased XX% $XX.X from Enterprise of and in software million million from XXXX. generating Non-GAAP flat grew XXXX. increased and the are increase of IoT reflecting Total revenue from $XX.X QX increased OpEx to to down Revenue sequentially million. revenue in and XX% recurring revenue. from QX was by our

last to EBITDA in Our adjusted QX year $X.X million positive the in second $X.X quarter. improved million from negative

the to in Sam some Before would driving I provide of helpful I the hand joined I actions that to background Sierra Wireless and it detail, why in financials to call QX some discuss over on be I'm the to the thought review more short-term.

in been than was more working private Field I XX recently, For software Most I've areas Operations all high-tech the of owned Veritas, a across in at services. company. equity Carlyle hardware, years and EVP

the Sierra IoT go-to-market the defined appliance of an leading significant Across I recurring Veritas, pandemic and that the streamlining leads Sierra worldwide While to broad activities and trends. solutions has these on I was unlocked. multiple And trusted accelerated range wide improvement to growth. significant the capitalize have a companies; our a operations coverage. has gateways changes; its and at be integrated is the and with and industries. of growing The to of as of reach partner finally for Sierra LSI, remotely connect a accelerating field. The was made range improvements. connectivity supplier manage is Western wireless business; global the to record well-positioned of Seagate leading including improving much customers are to apparent revenue portfolio devices as opportunity preferred me across and profitability software a IoT storage; Intel, global there a established in and is all Veritas, modules, strong performance and seen able track needs potential routers of macro Sierra that and Wireless rapidly it be XG in tens business of When to also business quickly presented to

money. the have As responsibility that steward capital new other as invest take myself CEO, places recognize shareholder I that I they President investors I and a see seriously. of can and their

customers, in me find many the with business. clear growing on meeting In a partners, spending to with on continue to immediate is the while and a You'll the of time Atlanta. both and profitably focus possible employees performance and I've And few been do that more building going of results-oriented short-term be suppliers, focus past operating as to Vancouver as my direct business. I weeks, expect forward,

facing operating COVID-XX We chain. of impact tight global and supply are with the currently an unprecedented environment component a

located of facility has cellular our has our Vietnam, manufacture to cases and Our has impacting impacted to products. widespread COVID-XX and Tier last This the an manufacturer in majority months. who a across ability two significant been disruptions significantly gateways modules builds country X increase in in ship by led which our contract a the

contract as the actions We cost production of Number resuming two, their additional diversify up fulfill are for possible. goal us hotels and our enable our possible. ramping parts as taking situation Number fast manufacturing with investing to three, orders two including; of one manufacturer full workers resiliency. mitigate one, our to customers' in five subsidize manufacturing including as immediate as production geographic to working the isolation our to with the components in increase sites to soon and Mexico

Sam additional we initiatives. the are believe are and remain to need and help challenges CapEx implementing we the number have balance four, those to some do our And costs offset spend of We while Number strong our strategic already half play are are temporary. team balancing the are pricing of this controlling to we competitive often. working in control. market. our OpEx five, investments, the second can the significant on we that controlling QX sheet increases year we experiencing in using I are to and what in ensure We

demand remains believe them. don't XXXX, to fourth I that right taking to the in and in subject and actions some through cases resulting we the ship initiatives ship very in in Orders and the expect a of quarter Our we to QX, recovery COVID-XX externalities. strong navigate solid QX in are

I'm on qualified the Sierra Wireless. be to and I potential forward, a humbled will prudent unlock and along be of to execution alignment, Going capital. working and Directors of with focused highly of allocation such Board a excited experienced strategy,

over our work through and that, the chain. we employees, collectively our will Sam the his COVID-XX turn and With the tightness quarter of thrive. suppliers as in the Finally, I interruptions would will review second like for to supply thank our results. we to call I customers, Together

Sam Cochrane

results Thank our US and you, Phil. that on US basis. we GAAP Good financial a in afternoon dollars report everyone. Note

also to better non-GAAP and compared XX.X% provide was on is present second our We website. reconciliation Total non-GAAP $XXX.X available the or XXXX. understanding results our in operating GAAP revenue our of $XX.X and up a QX full performance. million results between A million, quarter

the parts gateway quarter revenue XX.X% million than software, costs We in are up higher-margin tight component achieve prior as quarter or services million higher secured QX, $X.X was and as $XX.X Connectivity, were during similar expected quarter. able to XX.X% additional higher chain the in supply we despite was QX revenue as year-over-year. well the revenue. software, services Non-GAAP to by in second as gross and our sales offset margin the connectivity,

last XX.X% million were expenses in the quarter. million, QX non-GAAP we've or months. XX remained that initiatives prior efficiency $X.X over OpEx $XX.X Our the flat year-over-year. undertaking down Sequentially, reflects cost operating This with been

OpEx tight software, revenue business. $X.X $X.X adjusted up a growth segment ago. EBITDA compared connectivity, an in reflects as increase and the improvement IoT XX.X% is revenue the margin hardware million in to in in our due to The Our EBITDA the Solutions our offerings adjusted IoT growth EBITDA of $XX.X was service in was positive negative gateway This and control. Revenue and year million connectivity higher well year-over-year. or increase primarily million as adjusted year-over-year

purchase the capacity delivery were year-over-year. Solutions increased the to in components. and due improved that to primarily $X.X our and able increase products The XX.X% As despite components dailies and or manufacturing million parts mentioned, us of allowed additional and Enterprise and sales we ship was our segment to in Revenue tightness to build quarter in customers. routers,

or Looking primarily due profit our services gross and XX.X% at The quarter gross million profit non-GAAP QX was in improved $XX.X compared growing dollars gross sales. in to the Total second connectivity XX.X% profit the revenue year software and XXXX. in gateway in compared is improvement to $XX to ago. or second quarter million a

receivables QX in $X.X in XXXX quarter of $XX sheet. was factoring software included from million ended the million, million quarter balance XG operations included equipment which was second flow We second the of cash. quarter. to during $XX.X CapEx Moving in of licenses. new which with test and approximately Cash purchases $XXX.X million, the the

free flow a million. As cash QX was in result, $X.X

X.X secure in During the to open of of quarter, we inventory the strategy components. of the RAC investing worth supply our our in program. million And we market continued purchased shares under

gross $XXX.X the absorption end reduction million, the the due related recovery is unit has a quarter strategic expected million interruptions turn, impact from the inventory been manufacturing to result profit second Vietnam. and margin million of gross result, due volumes to in our of sales. to of Vietnam. gross percentage, fixed our $XX lower on investment factory interruption as sequentially. balance was expected have ensure cash AR In to for In significantly QX, program, margin cash strong COVID-XX production reduced dollars, across reduced a arising The spread our an a revenue, and to less interruption in the the reduced a of percentage quarter expected significant factoring increase impact The production from due having approximately As in in is costs, at capacity is to margin cash. $X.X

impact as cash The minimize impact uncertain. canceled over has business pandemic noncritical production. We later profit, expenditures, freeze on to expenses, noncritical marketing our COVID-XX remain operating capital the working hiring capital in global spend. reduced expect on the onetime Vietnam a company travel production reduced the recover delayed of increase impact to implemented and quarters, normalizes canceled QX to significantly coming expect the this interruptions continues we and as to or related its to expenses, a and be the To the we

to strong. remain cannot we and experience overall COVID-XX cash to time. flows on impacts reasonably effects be estimated for business, and the business, XXXX condition, financial adverse our duration beyond products our related on results and of very While this for our Demand the at severity operating continue evaluate and

modules embedded mentioned in our our contract cellular a is ability we at the are XXXX. and COVID-XX cases quarter build customers to facility of as to interruptions gateways impacting manufacturing third due in This we and However, to experiencing production Vietnam. ship

While building resumed limited Vietnam site our New Mexico impact multiple production these the locations routers, currently has of ongoing up and highly our resiliency at our interruptions for gateways the ramping are and we is facility including by operations, including This of dollars, negative cash uncertain. to condition production a gross and XXXX. margin capacity, is material results third percentage, profit of impact financial margin expected quarter in have gross and the on revenue,

will be conditions, XXXX. the Given believe navigate quarter. through of third steps guidance this we not We these appropriate quarter taking of the we for impact to providing COVID-XX are uncertain

from products IoT and for the accelerating. trends XG demand our are benefiting solutions and of and are very macro backlog We strong believe customer and

to now, coming questions. invest capacity will also the With open QX Operator, balance strategically are in COVID-XX the over to our We production Vietnam. secure interruptions components of a related recovery call please now lines. the and using I that, strong turn out ensure to sheet strong

Operator

Mike our from of have line question first We Canaccord Instructions] Walkley the Genuity. [Operator from

now line Your open. is

Mike Walkley

strong Great. friends. Phil, my tough heard good as from supply things CEO. results, Congratulations over on about to the given And environment. the you take I've congratulations industry

Phil Brace

you. Thank

Mike Walkley

importantly, most surge. dealing to partners Vietnam with wishes the best Phil, in your COVID But,

the industry But the just While to you us this what's week. obviously impact all, the impact given tough the is pandemic growing is But us think, to your think predict, it's can can to the help on each meet while to QX, impacting going struggling demand. awful to demand, ability just QX? and at you entire about meet help

Phil Brace

the we primary QX. Yes. related around provide of question. to will the and Thanks COVID-XX in reason really the the for impact thanks continued disruptions in significant us for the pandemic disruptions. opening be The guidance can't and The for is uncertainty Vietnam potential remarks

to output facility availability going you a there's other really early as the that -- how disruptions in with manufacturing side industries the the July. we manufacturing the To is products. very QX little ability And in them color, more a our been and in Minh in in and disruptions companies little shipping out addition revenue on and get Our minimal of actually and majority started highly and to products mix can output, of there. then disruptions, result, important country the that And give components of a dependent the many and substantial build, be is where manufacturing The our the along are to the note capacity to located in Chi also it's customs. from logistics, City, products. other seen things of affected like produces that we've Ho the

soon COVID-XX possible, So further and ramp we're of manufacturer up soon can. as to production very normal their closely outbreaks bit subject as color. with And availability. aiming you little contract levels to that component a to we working obviously, gives get We're back as production as our

five-point talking again; talked isolating strategic possible, two these build working up as and we about implement our some we experiencing; to about demand expenses, feel and we our is: help products to to can the additional can fast price allocating to to in component can controlling where our we're solve facilities of to manufacturing And we're including manufacturing can bring we're start ramping workers incredibly as back as great sure resilience; is, supply Our can, we make make constraints. remains including them we our helping continuing with so that invest plan, we sure production increase manufacturer as and plan thing strong. possible; cost issues the the think, along contract our of I some increases absorb production-related dollar every increases about, David pass geographic

are I to of be many we to certainly orders a able fulfilled And as anticipating be important it's in component know, do after fairly of front the to have that. quarters and seeing think well. are supply in still subsequent we We the next in that us tight the chain quarter

So, gives a hopefully, are. where color little you we that terms in of

Mike Walkley

It think to very That's follow-up. you're do a by the you sounds just QX. helpful. for risk resolve? are under it's of any know, like losing I be I know customers issue having to the whole feedback hard willing to could And other customers to risk your predict. industry think Any share? maybe control But or you is supply areas, had to constrained. they any in the you've go wait the disruption from

Phil Brace

think, I We've everybody industry had things. the dealing with these is in --

they've situations, been of other go with problem to as well. sort of In but any many to can. us, the satisfying as all of make into own they understanding, very fact, their as many been don't are possible, we course, of get them working and And We've and critical vendors their they've of sure to as own. needs just we supply from sure customers I've make talked continuity been parts them have to, of anxious most been try as many supply dealing their not

hard moving multiple from going But And extent customers obviously, understanding. to think, trying -- kind they're supply, look general, replace. with trying and the customers transparent customers. in to been sources in so us had of feedback to very They're had working that But, they're anything to I've were We're if we've long work customers of straightforward have that. see a away. collaboratively. I is, don't we so, the time, collaborate for Many they've to to manner do hard with a really

we're do just out, any day -- just the not working customers. in along day with continuing we're that we're now. So movement right But to area seeing something and

Mike Walkley

I'll pass me for question it last And on. Okay.

router on of their leadership has a of business They their the for A business. and veteran cellular this new gateway CEO. operation look you at that now just hired earnings the business is change point big part been in within within while. you're as try a Digi environment a and Sierra competitive they've the lot in gateway change the a and Ericsson call. leader cellular Just industry to last announced router to Greater new

through So issues and maybe growth Sierra's at supply in drivers? how position the get do and you eventually the business that look longer-term

Phil Brace

three it's Yes great question. full three three or it's even not weeks weeks yet. Obviously, whatever quite a weeks

me, still the portion for early it's I've days been think I particular of business. with really that but So impressed

private attractive are great to it's continue some that's to higher on tens think happening of going market I the like grow. to got I'm there, the a radio that in very subsegments encouraged safety I by the software public focus be attach rates. the And like. and bands of

that. I continued So and be going business generally to on the focus select

reviews got when product we great. to and We've Of reception very well. the that XG our there drivers customer think product strong been have as for XG I has course, the

with I'm initially So, that. very positively inclined

Mike Walkley

best line your Great. pass in Vietnam. I'll wishes the and to partners

Phil Brace

you. Thank

Operator

next We Craig-Hallum. from Stoss have Anthony question our from

open. now is line Your

Anthony Stoss

Thank XX% bring if produced up these is a I before, you. of that then of the your had couple our or saying give also, questions facility. you. is ever I long us aboard another Mexico approximation, three more facilities of Phil, large after couple higher? part trying also. how Can have they're welcome in before it a A for know production you're live? And that. you you're portion to done follow-ups facility, in Vietnam the of majority And

Phil Brace

significant of We're manufacturing majority to move question, base on In not giving disruptions. of started we've our answer some seen were built base the But of was before numbers specific actually suffice it's the our say, your Yes. our orders. to diversify the to there. latest out geographic parts

well transition underway. So some of this is

have able than quite to been which fact, time, built might call think. before. why bring the the working up it of are us faster you we're for And on in is one, and the one, new some second for has that facilities products now One undergoing we

Anthony Stoss

up be going QX make if number combined, revenues much ship you us could. or impact, I'm Okay. in $XX QX additive sense that QX of to to you're kind would getting a and in of impacted if QX. How hit you'd of -- Hypothetically, probably million a and able of or give maybe just

Phil Brace

to to That's back for us a when that. to capacity. probably it's It's the early mean difficult we're and predict just do good up question. is get going to I reason full --

if our to be our to where of going probably back quarter the component frankly, you as by a capacity goal fourth I burning could close will, think is through start snow of and back in can in up some be, think then really I plows constrained to we we then orders. our supply again. And the situation

a many situation right trying now. it's So and at fulfill situation just to as orders can. time try We're lockable a as we with deal one and

Anthony Stoss

Okay. inventory, going in of curious still of or goods that able you I'm in -- in the much in some you're finished QX materials into turn how have to to guys raw terms be you for will not QX? to hand, use are be able do missing that you

Phil Brace

Well are into But the I'll balance accumulating, most That's We Sam majority would Vietnam. we in raw supply. of sheet mean of of most the I to that. let in we're the details. production going terms inventory, suggest obviously, inventory that materials in go component with on – see to I the you're respect specific of it is vast

through the vast we it. So be to continuing the majority of are build inventory will But components. burn

Sam Cochrane

Tony, question. for here. the Thanks Hi. Sam it's

working inventory shutdowns of the down. interruption. related up the produced and coming normalize will our because that capacity capital build some that COVID-XX is and over that quarters So bring we'll yes because But

not products So so Well to there's the cash that new quarters. purchases cetera our ready three customers. go or over will control to converted for to next two et the be

Anthony Stoss

for voice. guess both question me Got it. guys. your I the for Good last to you probably hear

know is your Your XXXX. I order into period. or this a book tough visibility

you guys customers reached in You a for are more XXXX? giving your to of of to everything get your because XXXX? you visibility that out thoughts this ability curious orders on into sense give I'm produce

Phil Brace

lead general have would good times. Yes seen increased we in question. that's a I say

orders giving are us time. customers out Our farther in

quarters the we other before. than seen backlog for have So, increased seen more we've

lead So, are They're orders. to give time us say longer customers I would that. starting recognizing

yes I that. of we're starting say to would more answer question the to see So is your

Anthony Stoss

a back. I Thanks lot. Okay. will get

Phil Brace

Thank you.

Operator

next from have Markets. We from Moschopoulos question our BMO Thanos Capital

is line Your now open.

Thanos Moschopoulos

Hi Sam and as Phil welcome well.

as the the of to, there ramping of would so -- the associated does I a with revenues up forth? line facilities happen or there when margins might of recovery lag be issues expect guess in revenues with you some gross recover pick in and some the kind so Regarding up kind

Phil Brace

we impact as that's good ramp would I unit to margin a Yes, see volume. in to are see smaller fixed we have I offers cost do expect we question. mean a a I think that result mentioned up. Sam margins of do as a gross amortization a recovery gross going

your the help Whether some early of But I And in I that the to question of that the offset some is are question furthermore, pursuing price to see strategic are answer particular tell. probably to to short seeing. we think there's general benefit So yes. to of too is the that I answer comment yes. QX it's increases timing should We your period. costs we think incremental

Thanos Moschopoulos

as far or there gateways gateways prioritizing be at dynamic? the dynamic if disruption, QX but versus there similar issuance module of you the recognizing some is as look are the And that goes or you should modules sort impact the

Phil Brace

No.

right of we build have need the build product customers our supply. for -- we every some to now to I own been with who've not gateways we us some we strategic that long trying are time just trying And we're to think as a module well. certainly, can. We're

So there's provide on we're going additional color, no to that.

I -- supply it's and that our the line. think uniform product disruptions say across been to have I would fair

Thanos Moschopoulos

over component But worse? components has or you and Would has on past constraints And as relatively better evolved? guess then I the have the of not that's maybe since situation any or a is say relevant much how Okay. the it quarter for less the constraint. QX consistent

Phil Brace

the we'll but and I it's say than even tight probably consistent seeing to of there it's Well, tight Sometimes of go I history, seen. mean here up experience subcomponents when prior. right? I others. are it in space. more XX on parts hard across we I even seen I tight material in say or board I tightness is current worse packages you And seeing changes anything the what would And a are me lots the supply have mean to range we're I some wide right benefit memory mean go the do you tightness. whether components. don't availability would have certainly tight for so into of There through, I've otherwise. haven't spot just worse are our XX-nanometer on a planning supply supply as across chain down nanometer or relatively now. dramatically horizon the wafer I we're think wafer substrates be from benefit pick planning now, certain probably mid-XXXX as right supply are

Sam Cochrane

investment thing the that QX that really one QX. very to and helped on remember to in and strong And part in QX us big we and made improve a QX generate

plan converting related in COVID thing with now to making that investment quarter well. a on interruptions as the same and and that doing that some QX For stronger

So constraints but as not are the to supply best to our get it can of we're we ahead getting consistent customers. products

Thanos Moschopoulos

I a So I think way. pass will

Operator

line Capital. our Searle have next from the of Scott question Roth We from

now open. is line Your

Scott Searle

pandemic. good congratulations middle questions. in welcome Hey role Thanks taking and like a of for aboard. starting afternoon. the my new Phil Nothing

the in the modules feed revenue you the near board. it's to engine as Just assume recurring extends couple term? to I forward able business able -- modules. It sounds I like growth disruption at grow that like supply being of in It being it a in terms across this of you've the gateways. cloud least and sounds sounds is ways. well like it's But into that it's the will think of if going answered uniform, Vietnam

Phil Brace

I clearly there's -- to. stuff correct. the less to units less ship mean as that's Yes we attach

assumption revenue I a it's on corresponding think effect have recurring growth. So we'll the that a fair

Scott Searle

And competitive able the or any Got in you not some to terms landscape loss share supply you being loss near shares of of of environment your in this in quickly to do you. follow-up seeing the of to -- of key customers product term? are terms

Phil Brace

we're and think we're conversation of with every working demand Obviously, very supply, they've don't to been that. going through however, is work the we're sources have if multiple minimum they their fulfill seeing -- in I they're we're seeing to not trying customer bare that. to had exercise I supportive

try can with with We that we working are, to we to where date. where much them their best to And give as to get we sure yet do necessary haven't our to as share everything them our them customers to make possible. that seen we're just help supply

Scott Searle

expected. And of year as it the through means? than a like process. by at lot The this some we of point second Got you. results expecting maybe you're end normalization clarify normalization I work kind to sounds this what better want quarter But were just

supply I XX% In the there fact, an the to results on think first being left table when plus upside. because of the quarter reported, were inability expectation was that was some demand

done from at module and June a in the And the standpoint be normalized that that? a unprecedented gateway second quarter. both that and have about as forward level industry kind in there has number, in or to really to and are going build something this on some onetime end-of-life should a Is events able we demand like good the what that thinking I a charts guys You throughout being service sales of or been there the job that quarter and point. base the off think

Phil Brace

demand all Sam that of was our I'll we what -- strong you saw of think supply I -- were No. product across QX specifically. There constrained was reflection let I were at a in and there by mean, lines point. no comment our component

of stuff continue. any that kind There of that time. of wasn't trend that time expect buys, purchases would last I any happened So I'm that to in onetime that aware

a we'll up tight -- would to capacity of situation as component through end much probably the as probably or be I XXXX. getting bringing or component So balance manufacturing shorter in trying will first we're can. we again, half back this obviously But up right we're carefully on side

Scott Searle

XX was But of in. unfair I at is margin Okay. profile, if margins XX% kind probably module where if impacted looking us in you're be you in of you the And you recurring given -- there? a this question, goals? environment probably give somewhere the certainly mid-teens, What it business, could. targets? you. an are look fair lastly, it's where normalized looks into the some Thank weeks like could embedded three but could it gross are the terms question out understand What back think being I And wondering more on high-level the we range. chain a historic whether costs. gross months? incremental about the figuring was the in not side the out supply business, I'm that thoughts Similarly by are margins as or in that gross of Again, out

Phil Brace

appreciate to I say the it improve No, our didn't that there's OpEx the at come I'm question to the going model with me cost give whether a not better. going to what spending, that to it asking the business appreciate specific things But you for to room say of respect say performance. a to lot we're comes overall to think for you and that answer too it's I'd and you're I is suffice probably lots might to be. same. probably looking premature keep I efficacy, this business pricing improvement performance, here of be there

Scott Searle

Great. Board. Thanks so much welcome and

Phil Brace

you. Thank

Operator

from is Riley. question Nichols Josh from of B. Next the line

Your now open. line is

Josh Nichols

the you the that able at facility the until has school long touched my impact? been And like in were you're asked was say quarter Sorry, least Thanks to great. two up and percentage that until new how if ones at? operating at facility taking connection that is currently at Vietnam XQ before But something line on Yeah. question you're the I for COVID where what back before, my in

Phil Brace

Well, output our we're improved I somewhat mean, we earlier we're variable. July. have not -- -- it's since in

So facilities, progress that we're I've up manufacturing what sometime. includes making that is I'll front. we're facilities the seeing current And fourth good talked about. new in on kind we'll back be And to call quarter normal of our the ramping expectation output new

So…

Josh Nichols

you if the to on of like And initiatives these right get you're kind in the frame front, quarter five speed could then that? expecting that for things back the to cash impact up help help third manufacturing

Phil Brace

Yeah.

$XX in is, I cash think about million. to the be what Sam we QX impact expect mentioned

And like I is really inability that some receivables accounts And purchase to inventory do being is that to goods the then normalize think you obviously that. expect factor that and of think continued as some we that turn due our finished less shipped. things what Sam. it. of to that's said component due I sell of product to We to into it inventory

So…

Josh Nichols

the seeing Thanks. far just that curious as products, typically you've then me. being I'm -- are margin. some where more how about you that product anything a little for the think been just constraints Is legacy we have? What that'd people question that are demand? cycle bit or we should products focused XG And or out right about higher not the getting supply pushed whether on be are as current given last XG introduced

Phil Brace

our we products see demand redesigning. It's the the products demand the -- good say have enough we people our and feedback give real question, whether can what I to we've including that positioning that be our stuff we legacy that frankly know for of where strong getting We're know to of you from of that continues from strong. competitive don't not got very all to on relative sit because in that. would very strong XG they're customers But products on some particular I data

be continues module gateway to in router that the side the as both as So side. well good

XXXX-XXXX in before the where timeframe of you're major I So deployments I we really kind that's ramp. don't some But start delay are. there. still the see to think in you XG any And probably see

Josh Nichols

queue. back hop I’ll Thanks. in

Phil Brace

Thank you.

Operator

Derek from of is question Soderberg the Next Securities. Colliers from line

now line Your open. is

Derek Soderberg

wins is And well or Hey for quarter you prioritizing with you color that connectivity as and I are based Can of are planning It on Just attached? to team. for joining both? allocating areas the How environment of attach at quantify supply in provide My good like looks have? are software, quarter-over-quarter. the congrats Phil how questions. my that the hardware you on guys. any trending? Thanks the you MRR that kind Phil, services or rates in you on all you shipments can guys those taking on supposed flat

Phil Brace

Yeah.

bit it really and MR happened lumpy recurring think the little first had We've year-over-year from timing when the actually what's that monthly stuff was that. a grown sold It's side. with -- of expect shipped and do continue the to nicely and I'd having kind the on product So really still like that. revenue of growth I and gets with to you question that

So obviously, to worried mostly our I'm I in attached is, that devices. there not do think I'm about connectivity particularly -- that it. there's thing no very our particular

less get. the ship, to going to devices you're attach less So

QX there's I with lumpy. reported to was a grew what there. But really It some little So think respect it's year-over-year. just in bit nicely factor

we So And what trying -- customers higher just on -- a that we algorithm think that and designed are of design question then sure stuff. them supplier to we is profile. what make an in they're margin have trusted to prioritization whether have can't get as were best other they we responsibility lower selling some of we there modules And do re-biasing neuro fine. our have we're we're own was or that I your a to our that them. that Really making are regardless our in need help certainly our everyone and can of

about And really this customer trying to oriented situations just and so through balancing. we're I to we very a work take think trying are where view

we in an don't more lens on think basis. think through goes customer-by-customer customer-oriented a a and trying we're a not. share can to such to I the particularly frankly or take we're just perspective right to I situation. here just work apply okay trying So a going on back it revenue We're view that if we unusual taking we're And

Derek Soderberg

the like your in might thoughts worry all then It that that moves forward quick. of share great. US. vehicle EV they've stations it. this build looks got at Got you How this be on customer quick. would And pretty are that pretty opportunity electric lose charging are charging the here conversations your Any customer? Any now moving part with infrastructure going your

Phil Brace

Yeah.

was that the that look think infrastructure -- bill I passed.

we I think mean it EV was electric really A really, do lot charging has you a there number of areas the well. that in of are I play think well. really there benefit the I grid that in as segments us the noted some long-term.

the respect supply we're have. with parts just working trying loss, every of don't again loss can. any obviously we're all share aware not with and So we we own customer to -- to their situation. we But particular can on We're share I ship that's dependent

Derek Soderberg

Thanks. Great.

Operator

We Capital line our from have of the question Paul Treiber Markets. from next RBC

Your line open. now is

Paul Treiber

afternoon. and very much Thanks good

say Just Phil. aboard welcome

is quarters? in the what demand of disruption at Like, subsequent production other look subsequent of production words, You the fill mean, when do shortfall demand portion you terms quarters? to I in can demand perishable? expect In in you make-up that in

Phil Brace

the Yeah. seeing perishable. We're of demand any not being

from as We haven't any working side. can, been as order cancellations. seen much reschedule to We've that we

believe right? We suppliers, base, we're talking wakame the needs other work this to Every working playing try in terms their, don't they point. to customer playing their So our that they're with think of only to one like out their critical frankly, figure I with think supply situations situations, So right? in and own are supply we its even are that customers at suppliers. And customer do. -- certainly been we it through talked has with are game we we've own not what person our the I absolute And just working perishable their I -- to has reschedule that about and they're own. one and not our

we time and that. at is point. give are visibility customers And That they giving will to see longer on the So being lead what for it longer help compensate us don't orders our expect. this short perishable of us it

Paul Treiber

point, good a It's Phil.

you you timing, million, the change impact a we as in that is normalize? should expect or a is just the of should On that's or the there all of that cash cash permanently lost? that really impact of normalize, it is do $XX see mentioned Like, timing to some this --

Sam Cochrane

it's Sam here. Hey,

a me Let on that. of give bit detail

overtime. factory So inventory volume, said where We're $XX reverse a the to investment normalize have Part especially we did quarter. we it we've that and less going is with talked about geographies of million maintaining part to recovery trouble the be to AR going in strong that's the a U.S. I will of factor unwinding. Those unit can for mainly. in about. things strategic two which this

in but will Now the will is that majority working it to be decrease the capital a operating the overtime. normalize of cash performance and balance, onetime

Paul Treiber

two-third we should about think is it one-third? So

Sam Cochrane

to situation. you And model get your going. too but, fluid to estimate. a get exact going not I it's XX/XX, an I'm It's two-thirds, information But enough one-third. think have

Paul Treiber

a leasing, said on at maybe synergies mentioned, looking then what's services And I you're At helpful. when synergies Phil your company's on thought has not you you you last the the That's didn't that view high-level the the the one join where And business your said lines operations think areas the strategy? you them? there view Okay. just unchanged. the between product what's What be between company them. may one,

Phil Brace

major think that Yeah. I IoT Its think macro those like above XG in about, powerful Obviously, enterprise right right services are cellular you. think we I I frankly area, so to right? in Modules things. I'm the the other trends for would some of now good a have on some in and am that a that drivers of other front not position look, there have an early excited I see. with us. we and days I, what focused honest Obviously, businesses. from on go I right that, the lot say, businesses where just now, and look are I on take situation time particular very time-to-time all that, also I'm smaller mean, be I me. the of mean spending

it we've have. forward focused we'll the of we elements different I looking think that, as of strategic on grow we I And all options. what with business main how of be hand. just so I'm shareholder at think got goes lots kind And value at But

Paul Treiber

questions. my taking for Thanks great. Okay,

Operator

to back over No further you questions turn call at presenters. this the time. I

Phil Brace

May, and call. conference coming for our website quarter additional second on for our thanks you Thank earnings the everybody Certainly, us check materials. and all joining

and our presentation e-mail we're at please our us and release PowerPoint, Our earnings or anytime. available, call

So And you the call. terminate can thank now you. operator, Thanks.

Operator

This concludes today's conference call.

disconnect. now may You