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MiX Telematics (MIXT)

Participants
John Granara Chief Financial Officer
Stefan Joselowitz President & Chief Executive Officer
Mike Walkley Canaccord Genuity
Matt Pfau William Blair
Brian Peterson Raymond James
Call transcript
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Operator

Greetings, and welcome to the MiX Telematics Fiscal Fourth Quarter 2020 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to John Granara, Chief Financial Officer. Mr. Granara, please go ahead.

John Granara

morning, good and you everyone. Thank XX, joining We Telematics' XXXX to March MiX today results appreciate which for on year you earnings fiscal the review and us fourth XXXX. ended quarter the Today, we issued few ago. hours announced our press a results will release in discussing be MiX's Officer; I'm or joined Joselowitz and by John Granara, many Joss. of I'm Stefan as you Chief Financial know him Executive He of MiX and Chief Officer President is Telematics.

forward-looking and During subject statements that we today's make related are actual risks will business our materially. to our cause material differ uncertainties to could which to call results

and For section results, a today, all discussion X-K of other contained and of Relations important are to our which refer of filings that the in our Form on material current affect SEC was Form the on Investor XX-F risks our other that could filed those available our factors website. please included report

As results on previously XXXX, a now X, became basis. we report filer U.S. April of in domestic as announced, U.S. GAAP we our dollars financial and a and

information provided results. provides that historical the have earnings release in financial We GAAP the supplemental

be our also with SEC. is our these the turn And Joss. release, financial that, to in measures. located currently to reconciliation filed schedule will We detailing certain a results is which will I press website available referring and on non-GAAP There with the call over

Stefan Joselowitz

safe family unprecedented all you economic joining an call the and is hope healthy. pandemic for and to all John. situation. I would your thank health like Thanks, today. I The global you represents and COVID-XX

I'm workforce a work-from-home, continuing through regions. our and the able priority quickly safety as our and certain challenge this pleased to significant to employees, global we how our first in move company, were support was is customers to with which logistical health Our a challenging time. of

MiX, to our disruptions our to and work deliver to adapted which and our is has to will circumstances their and have the on for our our our high management I these business, use hard opportunity service teams update we fourth thank well. state our provide appreciate. have On key start, call proud I'm fiscal this I we on XXXX. the to globe today's any thinking some and very like you of a for seen dedication would changed that of to we team to truly commitments across performing and Our characteristics on quarter of expectations want not level remind team. To review to the business results, of customers. continued you

management through have experienced and team long-tenured led First, approach cycles who other to we have and situations. an challenging how understand these

legal great operations. we customers. with our as have Whether customers, significant many enables regulatory us their compliance we by their their business, essential driving enhancing drivers, to generate and out whom services of provide or our us an of for maintaining Second, value high ROI cost to of safety is it consider that the mandates, mission-critical technology and for

subscribers than fleet across Third, tracking, business a and in in we of healthy have of XXX wide verticals, more countries, a our vehicles premium highly a with diversified variety solutions. spread and clients asset light

strong total XXXX is environment fiscal of we bringing Fourth, target confident our ZARX.XX multiple medium our declared per to for dividend more provides in impacting currency recently the payments While have diversified long-term to of ZARX.XX. ordinary our cash. share, many our verticals, quarter business we external than million fourth headwinds, $XX Despite net dividend we are avenues a sheet of growth. with balance

business, a to to the provide company's our history. business months supply history spend reviewing the side, through moments as three in context few nature growth few some the stronger having March was strategic future on model telematics February a the environment the demand Such a we performed provide led on customer come market subscriber through our and from during majority in the impact recent plan our customer the generated us scalable challenging years. COVID-XX oil elongation -- clients. of XXXX product short-term. onset position the global in of one March negative reflect other the market. we shock a is COVID-XX only in highly on to enhanced with the the segments; like is of dividend discussed Our cycles in the over successfully give how have calls our market remains payments I'd further that challenges out business to in exacerbated that that depending The to decline a impact been we basis compounded subscription quarter-by-quarter pause oil and began on To decisions, seeing by segment, our fiscal The COVID-XX, most premium of will market sale and where reminder, making we economic to the to are of conditions and at company this evaluate periods today. of and earnings follows. least led is other success-driven That also customers contributor a our were many a through in on near March. rapid challenges we substantial agreements our challenging committed result of has as have have we into confidence at as most XX-year January, and have pressure has work gas intention the which that business few reliable revenue most prices. profitability examples our to are focus in the in early multi-year previous history, that to are Prior fleet business expect and our and finally, contracts a revenue above on manage revised tracking our shutdown our in the These historic largest on our is of we the And our and and buying attributes has market. the time. pre-existing number certainly in for

We resulting Overall, sector in business levels, gas their to reducing oil and have pressure revenue contraction. new under we to customers energy our experience market demand with oil been stabilizes. would who until with expect subscriber and declining customers fleets working address are the remain to

multiple we As cycles the sector energy been have a how them. reminder, through in through and manage know to

effect on We in bounce business evident previous sales eventually the part. world. seen back all in orders reductions drive with massive will in which limited are much and the customers to have bus public revenue demand, different a Due it in transport of confident this vertical. our phenomenon will near-term the coach shelter-in-place has in is in efforts as A our rebound COVID-XX cycles, shutdown, global our growth given

their We these quickly provide a the subscription during have world period. revenues customers worked This reopen. aide is economy once by expect fees some to phenomenon, with reducing this process begins rebound see and to from we temporary these customers to would

the the continue to implement some transportation we in these opportunities This logistics large need Of complexity customers record are partner strength in rapidly choice. continue and to are still and vertical. some wins. demand midst signs particularly quickly and Many experiencing and course, verticals to evolving notable In of the thriving, pockets, of telematics itself MiX to for strategic seeing crisis, great this react some market. of sign global are a establish as of we presents to

substantial MiX more double out generated savings, major to engagement entire by improved MiX fuel a service our postal European example, vehicle and through parcel premium delivery than it's it's the with this we will customer on X,XXX reduced The material risk for already standardizing fleet choice. safety, For and savings rolling solution made driver's logical fleet. have

In example different their across Based clear They businesses light in now they environment, our the multiple do and competing Trends service solution our on telematics levels more company, business, this are but customers solutions. are have largest Another point, given at on we one quality transportation business less a of the currently of using fleet the not standardize Africa have many to across our our medium due and provide in businesses. to divisions challenging small restrictions. is our of expect number some their of the intent data, sector signaled group. with information, operating and we customers government the in their sector.

a substantial in in improvement the opportunity States, light of the market, the see particularly but fleet to timing ascertain. United continue is We difficult to

given we current sizes to asset also challenges, facing travel. Our in fleets, in the near-term operator decline their demand tracking portion dramatic rental business, shrink business a are of the with meaningful tracking fleet are seeing align Car global is particular, trends. asset and

restrictions customers, travel have confident track renew this successful we to a recover starts record government most automatically, business as begin will of have long We and with are and that resume. and to ease contracts annually these whom

are how fiscal the market, and XXXX our renewal challenging of oil enter these and from buying outcomes of range a heightened for future potential how reopen impact dynamics quickly environment. economies patterns As market and restrictions, customer with already we and on depending both level gas the outlined, developments COVID in There the year of uncertainty a year rates.

limited of not time. will annual quarterly we the number Given our variables visibility, or providing guidance and this be at

guidance visibility reevaluate position we on providing As forward. going our improves, will

I year. providing aren't high would for expectations the give our level financial you context we guidance, like specific While to some for

First, revenue our are year we long-term profitability well and ensure positioned be preserving and this will medium core focus for growth.

by under the much assumption team, subscription Second, between as XX%. could XX% we as decline as management operating that a and potentially are revenue

reductions that new decline fleet ARPU in Third, faster, wins, a the premium in customer subscriber limited in fleet expect declining to the the challenges expansions ARPU churn an both market. both year-over-year due revenue fleets count will with increase with customer driven by Fourth, and shrink combination we and blended in expected contractions. will and be of existing

base, steps conditions subscriber to adjust align in to lower size our We take expectations. have with the our Fifth, revenue and and to as will near-term improve. most well-diversified necessary expect reductions reverse fleet structure market cost a the we we sticky of continue

John targeting detail we committed of EBITDA in actions are XXXX. and We across least margin are adjusted company. remaining a mid-teens for the fiscal more to discuss the taking at cost profitable, some are will plus

cash XX% ensure expect grow free and XX% the challenging, can economic Whilst I team things flow positive a for success. to management as focus be and revenue long-term to on environment. those to is business we year. in a we continue control normalized our for responsibility believe we to is Finally, can subscription near-term outlook our clear fiscal well we medium that positioned to want are be

investments. customer Our portfolio we as key have focus strategic a part include success prioritizing partner, made to sharp product our adjustments long-term any priorities I our our reductions value go-to-market include are our in not and stress maintaining to reinforcing that organization structure do investments want our plan. and of year strategic strategic the on this that a cost in

with we proceeding still the to the COVID-XX key are that R&D identified We pandemic. projects prior have

have all our the marketing. opportunity sales to our our trend ratchet up fleets significant no be in our meaningful believe and continue customers operating We of to of new reality markets intelligence only to sizes by strengthened we long-term the value made of believe there connectivity clients. increased We cuts global organization, digital and facing We improve. many a of is as will enhance strategic to investments

necessary opportunities. making capitalize We investment are the to these committed on to

I it situation. have the reiterate just want we to Before plan John, turn to detailed manage a over I through that to current

business overtime. situation. strengthen XX can positioning I greater that beneficiary be community for sizes commitment all a this term. intelligence we still balance while properly primary for the long successfully of near-term to adjusting positive this in We a we of believe have than MiX safety greater and are the challenges, for to trends from driving will future. strongly required business powered believe years that were investments will the I as more the these emerge confident Fleets

over review to Now, our I'd results. the like John turn to call financial to

John Granara

Joss. Thanks,

results, Before by the of I I the model, steps strengths lower some financial highlighting near-term review taken adjust to of begin to quarter fourth our our we to have outlook. want

First, balance mentioned, sheet. we Joss strong have a as

to been cash have be flow positive. to continue and we we Second, expect free

business. our majority CapEx is to of Third, tied directly the the of our growth

So decline materially XXXX. expect device investments to in-vehicle in we would fiscal

adjustments internal have In To gross more expectations revenue position margin. some with company we CapEx as flexible Fourth, we've needed. a and non-essential we high cost investments. structure make margins allows end, deferred highly which us that quickly also taken the addition, profile align a fiscal to plus and in to have a mid-teens adjusted cost generate adjust steps to our initial for XXXX EBITDA to our closely

significant in and earlier and furlough domestic consulting reiterate in substantial spend government Joss's want steps; comment addition reductions geographies third-party headcount and I business, In due to have investing services, regarding travel discretionary a hiring in and/or taken restrictions, salary freeze including to increases, certain reductions travel reduction we in the professional business. non-essential deferred the to we have across international the a implemented program. following

care that and for making to true taken and XXXX view our and have great R&D growth prospects are will we marketing We fiscal beyond. ensure long-term sales essential investments growth and are taken that that business. long-term in a continue able in always We've to to remain targeted the

As as of forward, basis. domestic a U.S. U.S. going U.S. our we April and filer XXXX. a became a will dollars reminder, in we report GAAP on X, financials And

some As our discussed historical between differences on and are IFRS our last call, GAAP there results.

which interest lower. EBITDA liabilities, difference related higher under GAAP. margin The basis is both gross XX the on as product costs expenses operating X to and GAAP to points is and adjusted points are lease related operating Specifically, to is primarily treated about payments margin X development

these operations, our While cash remains generated the cash treatment our balance from reduces same. of two net the items

the have the as noted on of a impact in items of point revenue the there description and on release, all the impact P&L press A and rates. growth press GAAP flows, included final constant the We on related to GAAP the no was in adoption adopting the including detailed currency release. of cash reconciling

However, financials. now weakening reported revenue had strengthening the which South XX% represents of our rand, approximately in our opposite IFRS U.S. will effect than dollars, our that report the the on total revenues have African we it on of or

due In from will the the has than this rand on on COVID. be the periods our reported a against where impacted rand the For recent in U.S. dollar have will weakened. has months XX% example, impact our to near-term, revenues as negative depreciated revenues reported more disruption average negatively in

rand rand the hedge profitability expense three expenses natural From average March, lower on reported operating years. and reduces a standpoint, or was from the four our Before relatively an over perspective. stable is the a last

above our tables and revenues constant subscription full say million, We I refer figures press fiscal have quarter currency growth this at turn currency comparisons revenue high reported the on otherwise. basis on QX are all range. mind the the to like preliminary end in Please basis with the all in that Of and upper results release. included in historical XXXX our I'd rates keep year-over-year P&L, changes, financial of the revenue well to as X.X% unless now Starting our and towards a for as constant X% to for million, year $XX.X of in total fourth up came our up guidance XXXX. constant $XX.X end currency total, a of and range. were guidance the

we the mentioned, expectations March Joss tracking volatility. impact were started of the of we over to COVID with the year our oil ended and We through As above before fiscal beginning up of price increase sequentially other see and year-over-year. X,XXX X.X% Hardware the an we XX% above as our over and subscribers, guidance, X% quarter. fourth added revenue year-over-year $X.X subscribers was million of up in XXX,XXX

XX.X%, gross from last Moving year. gross from operating expenses, was XX.X% to margin margin down and on

charges During to and related of would subscription in the with XX%, in expectations. in-vehicle the is segment. that due depreciation have Removing more which over line the the incurred quarter, accelerated fleets gross been to our certain gas effect, we oil contraction margin our in devices

compared to million to in included the year expenses for related our to Africa. categories. XX.X% revenue XX.X% of total debt, bad macroeconomic year-over-year in all quarter of allowance COVID-XX and increase conditions in the which South also We sequentially related and charges was expenses largely Operating revenue a obsolescence COVID-XX $X.X Operating down reducing last were inventory fourth demand. incurred of were in

Non-GAAP margin $X.XX diluted per the net forward. cost of million the structure going taken share. share, As X% primarily driven profit. million $XX.X for decreased XX.X% EBITDA compared by million quarter XX% Adjusted or per to was have or from The year. $X.XX or was steps decline discussed, lower million $X.X income down adjust or diluted gross revenue $XX.X $X.X last to to of our we revenue

foreign quarter. turn charge U.S. touch in effective rate, of was Before was I million sheet, tax related non-cash tax deferred I dollar upon XX.X% used the high deferred rate, the balance and compared want and fiscal the was which tax intercompany to to This loan. to charge determining income Ignoring losses, in the which in a the a impact to exchange tax abnormally non-GAAP net the was do of our $X.X XX.X% result the fourth of quarter gains XXXX.

global cash cash, to as shutdown. were XX, impacted were delay by compared some half the balance with the metrics the by of key second receivables Accounts the the restricted in XXXX. to global million $XX.X sheet; in Turning of collections the million cash, equivalents impacted We to of March. $XX.X ended and shutdown March year our due

investments quarter We accounted we we've the we to million our a in devices includes for plans today, on what have we $XX.X million. perspective, capital we investments to amount in activities larger subsequently expenditures we flow collected the flow QX. for generated before $XX.X a cash of from months impact Similar of cash cash in that full cash saw in leading with quarter. ahead uncollectible XXXX, recorded net $XX.X operating revenue, first Based know the The of free during $X.X the first March. as in of tracking two believe of year of allowance in were the and From hit we in amounts COVID use made appropriately million have any cash what million. the us of in-vehicle

you following with in would decided XXXX building provide the I keep for model, level uncertainty some time the fiscal the high you're of mind. to context the market. as provide guidance financial mentioned, to Joss not at due As this in To we've

the the of majority the expect the perspective, half we be we impact; currency the a revenue on same to rand financial in will From first follow the a feeling assumption the year significant expect greatest headwind are We be our that contraction operating with reported QX of results. to earnings would the foreign cadence. will

time year discussed decline the on is mentioned due cost I XX% year-over-year this down last As will operating in expenses. COVID-XX. in rand earlier, I compared to result previously average, to The actions

the anticipating internal by challenging non-essential the navigate to of fiscal CapEx, driven is be did roughly we invest summarize, of we positioned are terms MiX as facing. deferral device purchases as in-vehicle half market in we environment In will XXXX. will To This and less of combination much well a CapEx are investments. we

We track demonstrated have of for economic their and value businesses throughout a delivering record our customers cycles. supporting

We and against strong invest continue targeting. will financial we position, precautionary maintain have taken the to opportunity while to steps take long-term substantial continuing to our are

Operator? confident meet economic and as are subsides. of pandemic positioned and now impact With the slowdown to COVID-XX we We growth to your like MiX long-term questions. our the is take associated well profitability objectives that, would

Operator

you. Thank

We be Walkley Instructions] conducting Mike is will Our Canaccord Genuity. from today question-and-answer a now [Operator coming first from session. question

Q my also. at staying Your I Great. Mike question. line for healthy is now everybody live. MiX hope taking Thank - Walkley you is

Stefan Joselowitz

Thanks, you. Thank that. Mike. appreciate And I also

Mike Walkley

so starting would Are months maybe can half fleets so the starting up for Joss, any Your stabilize of Yes, of sounds we seen terms the April first that a the anything Any first how quarter? you've in maybe into maybe the things you be are share And on two you question; of trended lower we're likely kind or to what share; just some guidance, things see far and QX continue. here you. contracting people things your us, there May? May signs Is starting kind with Thank that open to quarter, year. to you're June the to qualitatively with like can to seeing from trends? helpful. color, at acceleration of QX level I those with it downside in bottom, imagine

Stefan Joselowitz

Thanks, Mike.

have -- We can have global steps where guess, and we parts, view, appreciate, taken decide directionally around And hand, context there feedback play, some least is that position many guess, one the we we our actually guidance, this couple we're can of at of or with at significant you have guesswork is base I verticals, we've variables is the a that's moving the some a of how couple many, in we with guess, on I of provided, appropriately. As on at and the the but and a lots certainly certainly -- withdrew but information some taken. it's business, amount uncertainty we've play. we've taken and various a there -- manage -- there going situation customers in cost I impacts based

what's whilst and dynamic. a specific The that's the shutdown, first -- is happening, very

have a large do continues. we subscription certainly part, and remember, that revenue a So to base large

are geographies did have that once clearly various We have this in customers some had got and very this remarks in shutdown an in distress period bounce refer morning. that my quickly in -- ends, back to example the we will shutdown I

the car you expect is it refer rental And take So it to tourist longer activity, guess, coach, quickly go-to-work certain to industry that's some bus to, in to very in industry. once in repeat geographies, back up. but clearly to certainly went Bus the happen, to things of let's starting already and bounce to track going to resumes. we related and on, coach can example, I it, another call one, referred when the I normal

to ease to But situation will return and Then We've gradually ultimately this that a shutdown we've improve guesses; and guess, as sort a is there -- to the growth And into is how take. to -- I the So, clear guess, our our the long has do given taken we've I it's the guidance that baked guidance. begins and of that trajectory, guess, minds, formed thinking. it's made nobody view recovery that some front-loaded; got the again internally will time pain is going position our is I expect the so in and recovery on going situation how phase. in we've we that's last very long our tell. knows

helps. that hope I So

Mike Walkley

a the of us some the short-term then as for things maybe about you some maybe little for capitalized end-markets with the P&L; through John, with the to think margin in normal, and some how reporting, And temporarily return getting shift how short-term should of the in we could just GAAP your to helpful. in some costs the update gross question a due That's in-vehicle run accelerated things contracted, targets. ongoing longer-term margin follow-up customers amortization tough And gross devices? so for

So I just there? first, should gross as a be a guess, you're to March full it's versus kind margin, quarter even of just impact and have then, short-term the lower of going from slowly recovers

John Granara

Sure. Yes.

So quarter, if take with which been items acceleration would of second to XX% had would will part gross the we talked the were have out ended forward, I charges obsolescence line; the any middle recall the to and would going in largely impact half moment. year, that normalized, guided, the But in the tracking what the were so, to we be that thinking we where were were the quantify on XX% if that's may It's of we in to margin you and we to and Mike, about expect the tough, XX% which you XX% have have where COVID-related; those of I at actually that right say range the that. would in we uncertainty.

obviously, I potential margin we environment XX%, achieve that's the now, related right and to is over that. gross say, impacting -- up in items the when XX% margin would visibility again we as of probably But normalized, right goals we're timing this just would which COVID, long-term same before don't to at be and get subscription time, the gross the any and have we into that. about remain revenue well. consolidated like But XX% Our over that XX% that eventually as would

Mike Walkley

for Thanks questions. taking my

Stefan Joselowitz

Thanks, Mike.

Operator

you. Thank

coming question Matt Pfau today Blair. next from is William from Our

Your line live. is now

Matt Pfau

biggest guess, Hey different your to my called relatively you've seeing bunch relative seeing, within just and about taking Joss, the I of speaking, Maybe you business. thinking that for helpful hope guess, be well. those are expecting if be think size would -- ones how can out? kind I doing of that and fleet headwinds to are headwinds I mentioned questions guys, or if but which it you size thanks us would were you're all contraction to you're of most a the you're see you the that meaningful would I the different help headwind wanted

Stefan Joselowitz

I think primary the is headwinds -- headwind. the is COVID-XX headwind as I -- the guess, is

In challenges been we're the fact, developing and exacerbated. certainly COVID before fairness, there have energy think in I is

challenge. and impacted right appropriately. continue it I become manage but issues. it verticals from guess, It's and It's that a and contraction it we've will thing before, we dealing times two will back now, particular which -- there our will it's that's That's certainly will know in manage a has don't do global perspective, certainly And ultimately, that of that and a current have a one So -- tailwind, cycle a which vertical how just some energy expect. the -- we know COVID, and shutdown, we headwind long primary then, we're through -- to couple been and is is bounce one business the a with we the to know that how going is to something And take, stabilize what we being to there major our so issue. it positively. know

So the managing many fleet moment. goods, our experiencing short-term some and are it. foodstuffs, around moving logistics referenced fact, example boom customers at again, times some in sector, assist had I one are very They customers of of our etc. supplies, in etc., expansions transportation And of we've medical to in essential the

some well. So are doing verticals

the to, our customers manner, are applies to to -- we But in that the The process that the on I most shutdown business, apply of the think, those certainly instances, most it's businesses are with this others doing as but have the we extremely current that work in just during challenged see intensity and -- headwind it easing of And -- we doesn't being intensity ease. the planet. a manage effectively. that, it reasonably to and methodical restrictions course,

from outside global process we another returning ease. those Clearly, -- whole So to long take going as recover going to the to world expect for how debate. whole the normal, to that verticals it's starts is business start to to is see economies

speed I to and to pre-COVID take But very taken some on quickly, planning So, from that normality is a to and perspective. are we've going a to appropriately. just expect levels of position various guess we we matter internally components growth of some just verticals it have returning recover the the manage longer guesswork a and

Matt Pfau

think change and sort strategy. expect curious the that or Any how may Got geographies fleet make allocate of of terms of that sort to in you about as you various sort your of you And investment post of your various segments rethink to areas? sort you sizes, attractiveness you those thought investments dollars pandemic of your change just it. in how allocate

Stefan Joselowitz

Yes, we and around. resources moving certainly adapting are

currently better So sector self-resource clearly, in our the somewhere energy is deployed else.

we short-term reiterate So sales made deploying that will and that there are force. we global again, but we enhanced our see to it verticals I opportunities there, is other meaningful haven't cuts any

we've in about I'm and months, fact, recent talking increased months. In investment some post-COVID made

I on of be think there's guess we various potentially assistance post-COVID, beneficiaries of doing I quite verticals going to that other important based local a lot be there's And stimulus. infrastructure that's rollouts an governments So and differential. investment think will

kind those we're into putting well. So, some focus as certainly areas of

on shuffling the absolutely, to back speak. So, pieces our are board, so that investments on we the not cutting are strategic

Matt Pfau

taking questions. it lot a That's my Thanks guys. from Great. me for

Stefan Joselowitz

you. Thank appreciate I it.

Operator

Our from Instructions] Brian question [Operator Peterson coming you. next is James. Raymond from Thank

live. now is line Your

Brian Peterson

to Hi, and you're Great the taking from safe, for thanks you. hear Glad questions. gentlemen.

make I that in this revenue potential how to wanted about guys of that what headwinds the on or understood just wanted should we off XX% range. and it, was So, -- that decline subscription and the potential XX% what recovery think if line? given. the a sort we comment have to I Joss, I I see just were context to that Is scenarios for you in the the year headwind thought sure potential could bracing a revenue subscription maybe, heard start revenue you about that's

Stefan Joselowitz

of Again, I levels reiterate uncertainty the are significant. want you. Thank that to

is a or to, had on through that effectively we lot our leadership that a focus cost big other got know. us. completely no early position to crisis control. could we base planet. initial we whatever I comment So there -- estimate your make and this fit action do Yes, withstand from our positioned I reasonably sure base well business our that been of to is base. was we that's around expect to that's our is cost cost your is be for That of choose at action to going in stuff that that is what's out on don't the the had because -- on down a is out a to me are to of position guess, we we us appropriate What guess, to different, subscription And There thrown get our revenue reading any position the control is you're enough year-on-year. manage team previous being focus

think a position. reasonable I that's

a prophecy. self-fulfilling we do And think I to any be this of expect that. want don't I

with that new approaching months a we facing of -- happening, we on could three no what's much are positive know fleets be in and we sales the think course, almost In possible and that are difficult between as I statement year guess, we have number That's terms. one, of base. reality, us down started only made and operating focused now doing cost makes contraction pretty XX%. and way operating very but a in I already number our we're territory. activity better what's getting if the for two, XX% heavily energy relative than what's into that our significantly business But as We far as

we base on that to absorber. a I enough are significant be just guess, And powerful have we've that an to, revenue what extremely inside has and business. crisis in give a prior picture, and our recurring tried proven we not investors analysts our thinking about sense this withdrawn reasonable shock proves have our having Let's forget call guidance

Brian Peterson

I Joss. Thanks, appreciate that.

stock valued. was unfair some me, I in ambitions. been do but a have back question attractively get It's investors. we've pulled at so, from M&A And I'm from but stock, we it potentially creation here. are a value that Thanks, your that you how Joss. about think understanding we curious just is uncertain M&A either there an probably in know own always times, or for bit looking that question the advance, I little so thought apologize

Stefan Joselowitz

enhanced going environment. that to Absolutely. sure. probably be Yes, And -- we certainly opportunities this are we in believe have

John healthy We a on net have sitting have and we I a We're cash. -- both reiterated, sheet. have balance

We cash, a same position are profitable our our is We much will John, fact, are -- know to are M&A space have potentially overgeared not some continuing will -- us enhanced. can particularly focus going focus. the which there got business not that profitability, pipeline with on Again, of path myself be we to businesses opportunities a do as significant and current we don't that building opportunities. clear of a think significant people there in a comfortable anything in our continuing team; there to that in current Internally, that in times out and assisting we're to as these profitability in and generate that that are going potentially be to are we've and accelerate silly. a preserving

So we strong than that our in is will approach we but unlock more we there these think that sitting are disciplined We as -- on certainly not maintain hands. focus opportunity times these things, fact potentially to will before. our continue

Brian Peterson

Thanks, Joss.

Operator

to reached the We've you. to over our for session. Joss closing end question-and-answer further Thank I'd floor like or back of any comments. turn

Stefan Joselowitz

today. conference this of we're presented us tech a my during I'd world you Thanks of morning, will remain look I and with William then. of John at in it's We be thanks and for couple and healthy the everybody virtual a everybody just joining like day. wish our I safe families in, all again world, to call do new Thank and extend Blair's to you you. this virtual speaking hope your the I forward for challenging to great time. joining many weeks.

Operator

That you. today's concludes does teleconference. Thank

thank your time this a you disconnect day. wonderful your have lines may and for at participation today. We You