CalAmp Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
July 10, 2023

There are 8 speakers on the call.

Operator

Welcome to CalAmp's First Quarter 20 24 Financial Results Conference Call. My name is Bethany, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Logan Lucas, Corporate Strategy an Investor Relations Manager at CalAmp.

Operator

Logan, you may begin.

Speaker 1

Good afternoon, and welcome to CalAmp's fiscal 1st Quarter 2024 Financial Results Conference Call. I'm Logan Lucas, Corporate Strategy and Investor Relations Manager at CalAmp. With us today are CalAmp's President and Chief Executive Officer, Jeff Gardner and Chief Financial Officer, Jie Kun Kim. During today's call, we will make certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933 In Section 21E of the Exchange Act of 1934. Forward looking statements are predictions, projections and other statements About future events that are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties.

Speaker 1

Many factors could cause actual future events to differ materially from the forward looking statements in this communication. You should listen to today's call with the understanding that our actual results may be materially different from the plans, Intentions and expectations disclosed in the forward looking statements we make. For more information about factors that may cause actual results To differ materially from forward looking statements, please refer to the earnings press release we issued today as well as the company's filings with Securities and Exchange Commission. Leaders are cautioned not to put undue reliance on forward looking statements, And the company specifically disclaims any obligation to update the forward looking statements that may be discussed on today's call. Now, Jeff will begin today's call with a review of the company's recent operational highlights, and then Jikun will provide A more detailed review of the financial results, followed by a question and answer session.

Speaker 1

With that, it's my great pleasure to Turn the call over to CalAmp's President and CEO, Jeff Gardner. Jeff, please go ahead.

Speaker 2

Thank you, Logan, And thanks to all of you joining us on the call today. Over the past few years, CalAmp has been executing its strategy to enhance shareholder value as an independent company. In the past weeks, we have received unsolicited Inbound Inquiries. As a result, the Board of Directors has engaged advisors and formed a special committee to help us explore all strategic alternatives available to the company. We will not be answering any questions on this topic today.

Speaker 2

Overall, the CalAmp team is more focused than ever on driving top line revenue With a leaner and more efficient cost structure to increase the profitability of the company. Strategically, We have converted the installed base to a subscription model, focused the sales organization on selling full stack solutions, stood up a customer success team to drive retention and upselling and restructured the business to improve cash flow and profitability. Regarding the Q1, we saw varying degrees of strength and weakness in demand across the customer base. Specifically, we had a particularly strong quarter with our large industrial customer, with the accounts generating around 16.6 $1,000,000 in revenue. We expect this performance to continue into the future as we are increasingly able to shift against their demand.

Speaker 2

On the other hand, demand from our telematics service providers or TSPs And channel customers demonstrated some softness in the quarter as they adjusted their order volumes in inventory strategies to better align with a more normalized shipping environment. Due to supply improvements, customers no longer need to order as far in advance to secure supply. So order volumes were lower as they sell existing inventory. We expect this to take a few quarters to correct, and we will continue to drive additional revenue from other areas of the business. Now to dive into our performance in the Q1 of fiscal year 2024.

Speaker 2

We recognized $70,900,000 in revenue. Despite missing the low end of guidance, the team's focus on cost efficiencies Produced gross margin growth of 280 basis points and generated over $6,000,000 of adjusted EBITDA. The gross margin expanded due to better revenue mix and decreased PPV costs as the supply chain continues to normalize. Further, the company continued to realize expense efficiencies From the recent cost management initiatives resulting in $5,400,000 in operating expense reductions year over year, Improvements in gross margin and cost structure culminated in a strong adjusted EBITDA performance, which fell within our guidance range. Overall, we are pleased with the progress we are making on the expense side of the business and feel that the profitability we achieved despite an unexpected top line shortfall demonstrates the effectiveness of our cost initiative.

Speaker 2

We will maintain an increasingly lean expense structure to continue enhancing the profitability of the company. To help accelerate revenue growth, the sales organization will be dedicating additional bandwidth to new logo generation. Since Q1 marked the completion of the team's efforts to actively convert the installed base of device In addition, the team gained traction selling CalAmp's software products, resulting in a modest Sequential growth in our recurring application subscription revenue of approximately $100,000 The sales team closed multiple deals with new enterprise fleet customers, including an opportunity with R and L Carriers That added around 18,000 subscribers following the Q1. In addition, the team continued to execute on renewals and upselling opportunities. New products such as our next generation vision solution We'll also help us drive new bookings into the Q2 and beyond.

Speaker 2

This new solution is a standalone dash camera powered by advanced AI software that will help fleets optimize driver behavior And significantly decreased operating and liability related costs. Since the full release, the team has qualified more than 65 different opportunities and the pipeline continues to grow. Sales of this product will have a substantial positive impact On ARPU as we sell to both new logos and deep existing customer base. Finally, to organizationally align behind our growth goals for recurring revenue, we rolled out new sales compensation programs. Built and implemented by Brennan Carson, our Chief Revenue Officer, the new compensation plans reward sales personnel Based on the bookings value of new logo acquisitions and reward customer success personnel according to the net revenue retention targets.

Speaker 2

This will help to drive our operating model towards the revenue growth, Gross Margins and Free Cash Flow, we are aiming for. Internationally, the consumer automotive business Continues to perform well, demonstrating profitable growth in the quarter. The company expects to continue ramping up revenues from the BMW relationship for the remainder of the year and into fiscal year 2025. The relationships with BMW and several other of the world's top automotive brands will drive consolidated and recurring revenue growth well into the future for this segment. Further, the operating models across the various geographies Have been aligned under a single leader to maximize cost efficiency and operating effectiveness.

Speaker 2

We have already begun to see significant benefits to this new organizational structure and expect this trend to continue. The modest growth in our recurring application subscription line, which occurred despite declines in overall revenue And software and subscription services revenue demonstrates the value and strength of the recurring software revenue we are focused on growing. We look forward to accelerating execution in this area of the business, which is positioned to grow as we execute on a robust Pipeline of Opportunities. These deals with Direct Fleet customers will continue to drive up ARPU as the mix of recurring revenue Shifts away from the low ARPU device management solutions purchased by converted telematics service providers and channel customers And towards high ARPU cloud API and application solutions purchased directly by fleet. Finally, we will continue to work with our TSP and channel customers to return to normalized order volumes over the coming quarters.

Speaker 2

With that, I'll turn the call over to Gicon to discuss our Q1 financial results in more detail. Gicon?

Speaker 3

Thank you, Jeff. My commentary will include reference to non GAAP financial measures. A full reconciliation of these non GAAP measures with the corresponding GAAP measures included in the Q1 FY 'twenty four earnings release. Total revenue in the Q1 was 70,900,000 Revenues grew 10% year over year, but we realized a 10% sequential decline from $78,500,000 last quarter. The sequential decline in revenue was driven by telematic devices and rental income revenues.

Speaker 3

As Jeff mentioned in his remarks, Our TSP and channel customers are working through their excess inventories as well as our K-twelve business We're seeing a temporary slowdown in hardware installations. We expect this inventory corrections to take a few quarters to work through. Excluding the effect of the auto leasing, recurring application subscription revenue was $19,200,000 $100,000 sequential increase. Net subscribers increased 6% sequentially to 1,690,000 subscribers. SNSS RPO and hardware backlog ended the quarter at $217,000,000 $20,000,000 respectively.

Speaker 3

Our PO declined $17,000,000 and hardware backlog declined $9,000,000 sequentially. Our PO decline was Driven by customer contract modifications and hardware backlog decline was driven by TSP and channel customers working through their inventory corrections. Consolidated gross margin in the Q1 was 38% compared to 35% last quarter. Gross margin continues to recover from the Q3 FY2023 Nader, driven by better mix of offerings as well as significant reductions in purchase price variance. 1st quarter GAAP operating expenses, Excluding restructuring charges, increased $100,000 sequentially, driven by increased R and D and sales and marketing activities offset by lower G and A.

Speaker 3

The sequential OpEx increase was driven by annual incentive and commission resets For FY 'twenty four, along with recruiting activities related to our CEO and CTO transitions. GAAP operating expenses declined $5,400,000 year over year. The cost reductions that we implemented in late 2023 And early 2024 are starting to take impact not only in their OpEx, but our cost of goods sold and capital expenditures. Q1 FY2024 adjusted EBITDA was $6,000,000 or 9 percent of revenue, Compared to $6,800,000 in the prior quarter. Year over year adjusted EBITDA increased by 4,100,000 At the end of Q1 FY 2024, we had total cash and cash equivalents of approximately 35,000,000 as compared to $42,000,000 last quarter.

Speaker 3

The decline in cash was driven by working capital pay downs and CapEx in the quarter. Excluding working capital pay downs, cash generated from operations would have resulted in a positive $4,100,000 cash flow, A $3,500,000 improvement from the prior quarter. At the end of the quarter, we have $35,600,000 And undrawn asset back line availability. As customary, this availability is subject to various covenant tests. The 230,000,000 2 percent convertible senior notes are due on August 1, 2025.

Speaker 3

Our objective is to generate a high quality strong EBITDA run rate by the end of the fiscal year to provide financing options to resolve this continuing overhang on our shares. As demonstrated over the past few quarters, EBITDA quality and quantity continues to improve over time. Our future EBITDA run rate increases will be driven by several factors and initiatives. First, the normalization of telematic device revenues in the second half of FY twenty twenty four. Our TSP and channel customer inventory corrections should be behind us.

Speaker 3

Recurring revenue growth driven by new solutions like Vision 2.0, our video dash camera, which will drive significant ARPU growth, upsell opportunities across our installed base of K-twelve customers And new subscribers in our Commercial Fleet market segment. 3, continued improvements in gross margins, trending back towards our historical 40% levels. And lastly, aggressive cost reductions implemented in 2023 2024 Costs are cost of goods sold, operating expenditures and capital expenditures. In addition, we will have to continue our vigilance to cash flows and cash generation over the next 25 months. Executing on these EBITDA run rate improvements could provide the following financing options.

Speaker 3

Organic positive cash flows gives the opportunity to pay off a portion of the convertible loan as it matures. 2% coupon is very valuable financing during these times of high interest rates. Refinancing a portion of the convert with term loan structure, which will come with higher interest rates and expenses. Refinancing a portion of the convertible loan and pushing out the maturity, which will come with higher interest rates and lower conversion prices, As well as other financing options. There is no single solution that will address the convertible note.

Speaker 3

We will take a combination of these and other solutions to resolve over time. As for Q2 FY 'twenty four guidance, We expect revenue to range between $67,000,000 $73,000,000 with adjusted EBITDA expected between $5,000,000 $9,000,000 With that, I will turn the call back over to Jeff for some final thoughts and comments.

Speaker 2

Thank you, Jikan. I am proud of our team for the continued progress we have made in driving these transformational efforts. I am confident in our ability to execute on growing both revenues and profitability into the future, both of which will ultimately manifest and value creation for our shareholders. With that, we will now open the call to your questions. As a reminder, we will not be answering questions on our Board's decision to explore all strategic alternatives for the company.

Speaker 2

Operator?

Operator

Thank you. We will now begin the Q Our first question comes from the line of Scott Searle with Roth MKM. Please go ahead.

Speaker 4

Hey, good afternoon. Thanks for taking the questions. Hey, Jeff, I apologize to ask about The strategic process, but I just wanted a quick clarification. Was it a single inquiry or was multiple inquiries? I thought it was plural in the release.

Speaker 4

I just wanted to clarify that. And then I had several follow ups.

Speaker 2

Yes. Yes. It was plural in the release.

Speaker 4

Okay. Thank you. Thanks. Scott, go ahead with the other question. Yes.

Speaker 4

Just looking towards normalization On the product side of the equation, I'm wondering if you could give us some idea of what the level of channel inventories and customer inventory levels are on that front. And I guess kind of bundled into that question, how are you feeling about the gross margin profile? And to clarify, Jikun, did you say the second half or did you say the 4th quarter when you expect more normalization on that front? Yeah.

Speaker 3

On both volumes as well as yeah. Can you hear me?

Speaker 4

Yes. Yes, fine. Thank you.

Speaker 3

Okay. Yes. But on both the volume as well as the gross margin, we're discussing the second half of the year, Q3 and Q4.

Speaker 4

Got you. And just looking sequentially in terms of your guidance.

Speaker 2

Scott, on the inventory levels with our TSPs, it really is quite a unique situation. And very quickly, they went from an environment Whether they're having to place their orders 6 months out to now, companies like us are able to give them precise times in terms of delivery. So and we completed a lot of the filling much of the backlog. So they're just adjusting to that. As G Khan said, we expect their inventory levels to normalize in the 3rd Q4, but that's what we're seeing.

Speaker 4

Got you. And just lastly, if I could, looking to the guidance in the Q2, how are you expecting gross margins To trend on that front, both as I look at it from an SS and S standpoint as well as on the product front. And then coupling that into, I think, the long term model you've talked about 18 months out, EBITDA margins getting into the mid teens. Is that still the track and the path that you're on even with some headwinds in The Q1 and the Q2, the Q2? Yes.

Speaker 2

Yes, Scott. It definitely is driving those kind of EBITDA margins. GKON mentioned some of the things that we're focused on. The expense improvements are real, and there's more to come in that regard. We've seen only a portion of the savings to date.

Speaker 2

On gross margin is incredibly important. I'll let GKON talk about it. There are 2 things going on there. 1, The product mix where we're focusing more on full stack solutions and 2, the environment the supply chain environment. So, GKON, would you elaborate on that, please?

Speaker 3

Yes. So, if you remember, we kind of got into a gross margin percentage problem in Q3 FY 2022 I'm sorry, 2023, and we've been building our way out of it. Last Quarter was 35%. This quarter was 38%. If you go back a few quarters before the COVID crisis and the supply chain issues, You'll see it normalizing in 40%.

Speaker 3

That's the current business model as is. But as Jeff mentioned, as We shift more to a recurring application subscription revenue model. We do anticipate that gross margin to go above the 40% historical numbers. Obviously, this is much further out from a timeframe standpoint.

Speaker 4

Great. Thanks so much. I'll get back in the queue.

Speaker 2

Yes. One other thing I'd like to add to that. Given that we're focusing on these full stack customers going forward, that's going to really drive the more margin profile And higher ARPUs. Today, in the first stage of our transformation, those conversions were moving our TSPs to a device management solution, which had lower ARPU. So we had good ARPU growth there.

Speaker 2

We expect we had good subscriber growth there, but now I think we're searching and focusing on higher ARPU customers.

Operator

Thank you. Our next question Comes from the line of Jerry Revich with Goldman Sachs. Please go ahead.

Speaker 5

Hi, good afternoon, everyone. I'm wondering if you folks can just talk about when do you expect to turn Free cash flow positive. And if you wouldn't mind just bridging through the drivers of the working capital Headwind to cash flow this quarter and how that resolves itself sequentially In the back half. Thanks.

Speaker 3

Sure. So, let me just take a look at the data here. If you, based on the prepared remarks, hold on a second. My apologies. Just give me a moment.

Speaker 3

I'm looking up some information.

Speaker 4

Okay.

Speaker 3

Yes, if you look at the current Free cash flow, you will see that it was a negative $3,000,000 in the quarter. But if you look at the working capital Charges that attributed almost $7,000,000 to it. So core operations was positive $4,000,000 So Operationally, we are generating cash. If you subtract out CapEx Without working capital adjustments, you'll see that it was a positive $2,000,000 in the quarter. So good strong turnaround.

Speaker 3

Now having said that, we've got some working capital challenges. You'll see that our accounts receivable, if you go back 2 years has increased $20,000,000 A lot of this has to do with the conversion. And then if you look at our accounts Payable, you will see that that has also increased roughly $20,000,000 over the last few quarters. We need to, address both of these. We made some headway on accounts payable in the last quarter.

Speaker 3

We dropped it from 52 to 47. We'll obviously continue to need to do that over the next few quarters. In terms of when we've turned free cash So positive, obviously, it's going to take quite a few quarters.

Speaker 5

And can you Expand on that last point. If you don't mind, is it the issue of until the receivables profile Stabilizes with the new business model, is that what's driving that comment? It would take quite a few quarters, if you don't mind, just More context on that point, please.

Speaker 3

Yes. I mean, basically, accounts receivable increases were funded by AP increases. So you can address The cash flow in 2 ways, pay down the payables and hold your receivables flat, or you can reduce the receivables And hold your payables flat. We're trying to go the payables route.

Speaker 5

Okay. And separately, can I ask deferred revenue came down sequentially in the quarter? What was the driver? Is that normal seasonality or any other factors that are driving the sequential deferred revenue decline?

Speaker 3

Yes. I think we discussed our K-twelve revenues declining a bit, and that's the primary driver. It should come back. It's a seasonal thing. Sure.

Speaker 3

Thank you.

Speaker 2

And Hey, Jerry. Thanks for joining. I did want to point out that we did after the quarter end, we did convert our largest TSP to a subscription model by signing an MSA later in the quarter. So, really happy about that, turning all of our attention for our growth segments and serving our TSP customers with a new device management solution.

Speaker 5

And Jeff, how much was that contract? How much did that add to deferred revenue?

Speaker 2

We just that happened after the quarter end. So we're not going to provide details on the individual contracts, But it was our biggest TSP, Jerry, and very important, in terms of where our focus was. So, It's good to have that step behind us. I know it was painful, but we're in a position now where everything that we sell has A recurring revenue component, with the exception of the cat business. So I think where we wanted to be Took a little longer, but I think the focus of our sales force on higher ARPU is going to make a big difference.

Speaker 3

Thank you.

Speaker 2

You're welcome.

Operator

Thank you. Our next question comes from the line of George Notter with Jefferies. Please go ahead.

Speaker 6

Hi guys. Thanks very much. I guess I wanted to ask about your recurring application subscriptions metric. I saw that it was up, I guess, dollars 100,000 sequentially, It was down year on year. The SaaS subscriber metrics you gave us were up pretty substantially year on year.

Speaker 6

So I guess I'm wondering about that dichotomy, the revenue down, the subscriptions, subscribers up. Can you just kind of talk to That's phenomenal.

Speaker 3

Sure. So I think Jeff alluded to this. Our subscriber count, The big growth that was really tied to our TSP conversions, right? So we have very heavy Subscribers, based on our, you know, telematics service provider business, very large chunk of the business, And we converted them to a subscription model, very low ARPUs. Right?

Speaker 3

Extremely low ARPUs. They only buy our device management capabilities. And so while the subscriber base increased, our ARPU did not increase a lot, and hence, it was relatively flat. Last year compared to this year, we did see some FX headwinds that we had last year and that we are not seeing this year.

Speaker 4

Got it. Okay. Okay.

Speaker 6

Thank you. And then the other one I wanted to ask was

Speaker 3

just If you look at the yes, just one more commentary. We did bottom out from a recurring revenue standpoint in Q3 FY2023, and so we've been making sequential improvements over time the last two quarters on that metric.

Speaker 4

Okay. Got it. Fair enough.

Speaker 2

And George, that's really the metric that As we focus on our full stack solutions, that's the metric that we believe and investors believe for our Discussion. That's the right thing to look at in terms of how we're growing this business. That recurring revenue business is what you guys would refer to as More pure SaaS business.

Speaker 6

Got it. And then The K-twelve business was a bit softer. Could you talk about why that was? I think you mentioned seasonality, but Yes. I get it's the summertime.

Speaker 2

Yes. George, very simply, we installed fewer units in the quarter. It was a little bit of pressure, but we expect that will bounce back over the next couple of quarters. We're still in a really good position in that business with a go to market process that is driven by Our sales expertise and familiarity with the customers in that business and adding the Camera solution is going to really help our sales reps. We're already in a leadership position in the market.

Speaker 2

But going forward, we've got The cameras are I think are seeing getting a really good reception in the K-twelve business as well as sleep.

Speaker 6

Got it. Okay. And then any thoughts on metrics?

Speaker 2

I'll let Jukan take that. George, I just wanted to also point out that, when we talk about the vision solution Over time, this is a much this is a very high ARPU add on for customers. So it can really do a lot in terms of growing that incremental margin that we talked about earlier. So, Chi Kuan, would you take the second part there?

Speaker 3

I'm sorry. I didn't hear the question. If you could repeat the question.

Speaker 6

Yes. I mean, I guess, like I get that the telematics Transition, you've moved customers, on to the lower ARPU capability. But I know The story here is to migrate the company to more of a full stack solutions provider. I know the K-twelve business is obviously an element of that. But Yes.

Speaker 6

As I kind of look at all these metrics, I'm just curious like how are you doing in terms of retention of existing customers? Do you have retention rates you can share with Any thoughts there?

Speaker 3

Yeah. No. We haven't disclosed that, but I can share with you the subscriber base For k-twelve, it's been relatively flat the last few quarters. We are a very large Market shareholder in that market. And obviously, as an incumbent large shareholder, We get attacked quite a bit by some of our competitors, but we are holding our own.

Speaker 3

But it's time to go on the offensive, obviously, to make sure that we increase ARPUs, meaning upsell existing customers with this vision solution as well as gain share.

Speaker 6

Okay, great. Thanks very much guys.

Speaker 2

Sure. You're welcome.

Operator

Thank you. Our next question comes from the line of Anthony Stoss with Craig Hallum. Please go ahead.

Speaker 5

Thanks. Hey, Jeff, I just wanted to

Speaker 7

ask a question, more big picture competitive landscape wise. You've been having issues Clearly on component sourcing, etcetera, and pricing over the last several years. It seems now though that a lot of your competitors are actually growing where you guys aren't. Can you give us any kind of confidence that you're not losing share that the fact that your telematics devices are probably abnormally high versus your competitors and they're using Right to take share,

Speaker 5

which is what

Speaker 7

it seems like to me.

Speaker 2

Yes. On the TSP side, there's it's really It's important, Tony, as you know, that the TSC business is pretty unique to us. So when you look at us Compared to Geotab or Samtera, they don't really have this big TSP business. That's where we started. It was necessary to convert that base to a subscription model, so we could manage it.

Speaker 2

I think that will be more stable over time. We are still winning business from our customers because our configurability, we are priced a little higher, but our customers really need that They place a lot of value on it. It allows them to it's not as simple as you would think to switch providers. So I really think on the TSP side, this inventory correction that they're making with the change in the supply chain is having a biggest impact At least in the first and second quarter. But when I think about share and what we're trying to do with the business now, Really turning towards those Fullstack customers and the sales force can really focus there now.

Speaker 2

And that's where I think you'll see us growing that recurring revenue line item. And it makes us look more like pure play like Samsara and Geotab over time, which, yes, they are growing, and we think we are a very good competitor, especially at the high end of the market with big fleets, long haul customers where we can leverage our engineering and Transportation Logistics Expertise. So we do very well there. We tend to compete up market. So we've seen a couple of wins, as we said, at the end of the Q1 there.

Speaker 2

Those are a little bit longer sales cycle, But higher ARPU.

Speaker 7

And then just to mention, that you expect this to continue on for a couple of quarters. Do you expect kind of this $70,000,000 run rate that you're at for both May and your guide for August to be largely similar for November February?

Speaker 2

No, I think, GKON said that we'd recover in the back half of the year. So we expect The TSPs to be back to more normalized levels in the second half. So the Q1, Jikon, would you just review the guidance Once more and why we went with that guidance range?

Speaker 3

Yes. So I mean, it's basically relatively flat guidance relative The Q1 actual slightly down, but again, this reflects our TSP situation. But second half of the year, we do expect the TSPs to

Speaker 7

But would you expect it to be up year over year versus what you did in fiscal 2023 for both November February?

Speaker 3

Well, if you look at fiscal 2023, right, Q3 and Q4, we're up at 79.79. I think those ordering is kind of what caused some of the TSP problems. And so normalization would Yes, put you somewhere between current levels in Q3 and Q4. All right. Thank you.

Speaker 2

You're welcome. Thanks, Tony.

Operator

Thank you. That concludes the question and answer session. I would now like to pass the conference back to Jeff Gardner for any closing remarks.

Speaker 2

Yes. Thank you very much, and thank you all for joining us on the call today for your continued interest in CalAmp. We look forward to sharing our progress with you during our Q2 2024 earnings call later this year. Operator, you may now disconnect the call.

Operator

That concludes today's conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines.

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Key Takeaways

  • CalAmp’s board has engaged advisors and formed a special committee to explore all strategic alternatives after receiving multiple unsolicited inquiries, though management declined to discuss the process on the call.
  • In Q1 fiscal 2024, CalAmp reported revenue of $70.9 million—missing the low end of guidance—but achieved a 280 basis-point expansion in gross margin and $6 million of adjusted EBITDA through cost-efficiency measures.
  • Demand from telematics service providers (TSPs) and channel partners softened as they worked through excess inventory amid improved supply chain visibility; management expects this correction to normalize in Q3–Q4.
  • Recurring application subscription revenue grew modestly by $0.1 million sequentially, driven by key wins including an R&L Carriers deal adding 18,000 subscribers and a pipeline of 65 opportunities for the Vision 2.0 AI dash camera solution.
  • The international automotive aftermarket business delivered profitable growth—particularly ramping the BMW relationship—while a new global organizational structure aims to drive further cost efficiencies and recurring revenue expansion.
AI Generated. May Contain Errors.
Earnings Conference Call
CalAmp Q1 2024
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