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spk03: Greetings, ladies and gentlemen, and welcome to the CLSQ Fiscal Year 2023 Financial Results Earnings Conference Call. As a reminder, this conference call contains forward-looking statements. Such statements involve certain known and unknown risks, uncertainties, and other factors which could cause the actual results, financial condition, performance, or achievements of CLSQ to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. CLSQ is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events, or otherwise. These risks are also discussed in our filings made with the Securities and Exchange Commission. Please be advised that our fiscal year 2023 earnings release was issued on Thursday, March 21, 2024. Also, our fiscal year 2023 annual report, Form 20F, which was filed with the SEC on Thursday, March 21st, 2024, be found by visiting the investor section of CLSQ website, investors.clsq.com. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce Carlos Moreira, founder and chief executive officer of CLSQ. Please go ahead, sir.
spk00: Thank you very much, and good afternoon to all of you joining us today from Europe, and good morning to all of you joining us from the United States. I will start this call by discussing business highlights of the year 2023. Then John O'Hara, our CFO, will provide an overview of our financial performance Then I will close the prepared remark by discussing our outlook for 2024 and growth initiatives going forward. So as you've seen from the press release that we just released yesterday, our fiscal 2023 result demonstrated the strength of our business today and presents a solid foundation for future growth. Maybe just to illustrate the problem we are trying to solve is, as you know, three trillion objects are getting connected to the Internet. Those objects currently do not have any security, so that means that an object can compromise the cybersecurity of an entire perimeter where that object is being connected. Imagine a hospital, imagine a defense department, imagine an airport, or even your homes. So there is a new drive to provide high-end security to those devices, so CLSQ design and provides semiconductors, as you know, that are used to secure those objects. Now, before this was hard sale, as many customers do not necessarily appreciated the enhanced value of securing their object. And this is a reality reason why we have so many hacking activities going around. In the last year, and this is one of the areas that CLSQ is obviously using for its growth, There is new legislation forcing manufacturers of objects to secure their objects. So there are two important drivers there. One is the matter certification process, which I will develop later, which is a certification that basically protects home appliances objects, let's say your smoke detector at home, your Wi-Fi router. your alarm system, all those objects needs to be matter compliant, and CLSQ is a matter certification authority. And the other one, which is even more expanded, because this is not only at home, is the cyber trust mark, which is a federal government initiative to reduce the hacking and penetrations than they had been executed in the last year where hackers were able to enter into critical infrastructure. So those two standards are making our results strong. As mentioned before, there is now a much easier understanding on why companies need to secure their products before they can sell them. It also puts an advantage at the consumer level because consumer can now select products that they have that level of security as a way to avoid those objects to become dangerous in their own installation. So we will expect 2024, which is this year, and I know some of you, many of you are interested to see the evolution of this technology, to be a transitional year for us. which is due to the fact that the company is expanding into new areas. One is personalization centers, which are semiconductor centers, and they decentralize the design and production of our semiconductors at national level. And another one is the CL coin, which is a very unique piece of technology that has been developed during 2023 and is currently in the process of being regulatory accepted by different exchanges, which basically initiates the machine-to-machine generation process. So that means that in the future, machines, when they are certified and secured by or semiconductors, will also be able to communicate between themselves in a secure manner and will also be able to transact between themselves. And I will give you more information in a minute about that. So while John will discuss the financial resorts, I would like to emphasize a few metrics. For the full year 2023, as compared to the full year 2022, we were able to increase our revenue by 29% to $30 million, and a gross profit margin to 47%, which is 5% higher point than the 42% we reported in full year 2022. 2013 was a year of operational excellency marked by revenue growth, geographic expansion, new customer, and new product. It was also a year on where, because we listed CLSQ in May last year, it was also a year that we introduced the brand. I mean, CLSQ is a new brand. It's still not very well known in some territories. It's increasingly been known. But it's a new company that has started in Europe. And as you know, by many other examples of semiconductor companies that started in Europe and then they got mature in the United States, such as ARM, or nxp arm was it is a uk company nxp is a dutch company now when they manage to enter into the united states territory they become very big company which is a characterization of what happens in europe europe market is very fragmented you have to go country by country language by language and that complicates the sale expansion and generation of new customers that will be accelerated by 2024-2025, a strategy which is to have a localization of our technology in the United States and other high-growth territories like in Asia and the Middle East. It is important to know also that, and I'm sure you're aware of this, semiconductor is becoming like a national security issue. Many countries are concerned to the fact that if something happens geopolitically or one of the manufacturing countries or semiconductor gets disrupted or gets attacked in a war, that will totally destroy the supply chain process, as it happened during the time of COVID, where many companies were not able to have their semiconductors embedded into their products because basically the supply chain stopped. So in order to mitigate that risk, we are developing this decentralization strategy, which is to bring semiconductors on national level. I mean, we are a small company yet for that big endeavor. So we are getting cooperation from the ECHIP Act. There's two very big ECHIP Acts, one in the United States with over $100 billion, and another one in Europe with $45 billion. that basically they are designed to, as I mentioned before, decentralize semiconductor production from the major hubs and basically allow the country to be autonomous. So this funding is just started last year. It has a very long process to candidate yourself to those funding resources. And the good news is that WiseKey announced together with CLSQ progress two weeks ago of the first win in a semiconductor center than the company is building in Spain with the help from the Spanish government. And those centers are direct revenue generation for CLSQ as we basically sell to those centers the machines, we sell to those centers the chips, we sell to those centers the professional services, and we license or IP in order to make those centers operational. Another important during the year, we introduce new products and make continuing investment in technology. We are very much technology-focused. If you really look at our technology portfolio, you will see an interception between traditional PKI projects, public infrastructure, which are basically the legacy of the Web 2.0 generation. Then we have... blockchain tokenization projects, which are the core of Web 3.0. And then we have the capability as well to design and manufacture our own semiconductors. So that interception of these three know-hows is actually made us very unique in the market. Maybe the market did not understood yet that interrelation between the three layers, but this is basically what are the three pillars of what we call the Web 3.0 decentralization strategy that we announced a few months ago. So evidence that this is working is that a large number of mature device maker like EV chargers and smart meter companies are selecting, have already selected CLSQ mature certificate IPKI offer. So just to give you what that is, is that we provide a digital identity to every object. It's like a passport or a birth certificate of the objects. The digital identity is then ratified by an international standard, which is Matter, where all the IoT industry are now deploying Matter-certified products. And Samsung, Qualcomm, all that industry is already supporting Matter. And we, as a cryptographic rootkey provider, we are able as well to deliver Matter certificates through our own certification authority process, which is a software with the name INS, So that can scale to very large numbers. The way it works is that companies might come to us and say, we would like to buy one million chips and one million certificates because we want to test them in one or two products. Let's say a company like Dyson or a company like Medtronic will be testing water on how can they secure all their objects. But obviously, this is a very big infrastructure development for them. So, they start with a small amount of chips and certificates and matter certification processes, but then they scale very fast when they see the advantages of having those objects secure. Because obviously, as I mentioned before, consumers will buy those products in priority to any other product and could basically endanger their integrity. So we're also continuing the development of Quasar. So Quasar is the code name of an ambitious project on where we are only five companies in the world developing what we call a post-quantum chip. So this is a radically innovative solution based on RISC-V. platform, and it's basically, it is the platform that is paving the way to post-quantum cryptography. If you go to the NIST website and you Google HOSS or CLSQN NIST, which is the National Informatics Technology Center of the U.S. government, you will see that we are being shortlisted as one of the 10 companies in the world, and they are working on the post-quantum semiconductor roadmap. So that means that by the end of Next year, we will be able to commercialize what is going to be one of the first post-quantum semiconductors that will be able to resist a quantum attack. So as you know, quantum is coming very strong to the market. Quantum computers, they are getting there, especially with the acceleration now of secure hardware used on AI. Quantum will be the next big thing coming. And quantum can break all existing chips and ciphers. So having chips that they have already the technology required to defend a quantum attack will be together with the cyber trust mark of the U.S. government and match the new requirements that buyers will want their products to be secure with. So that although revenue will not be in 24 and maybe very little in 25, the entire company roadmap is to be there, right? Because the numbers will be totally different in terms of revenue once we are able to deploy this post-quantum microchip into the market. So in that roadmap in December 2023, CL delivered an FPGA emulation chip, which is a major milestone. We are on the track to complete our new secure microcontroller design and we are working with the first engineering sample suspected by Q4 2024. Actually, in order to show that those chips are ultra-secure, we're also organizing penetration tests with leading companies. I cannot tell you which one because it has not been announced yet, but there are leading companies in the world that they will try to attack those chips as a way to ensure that the level of security corresponds to the standards that we are trying to achieve. Furthermore, our team introduced two new secure elements to the market. So those are the chips that we are selling now, and those chips are the Volt IC 2092 and the Volt IC 408. Then they are made significant product development on the size of certificate and key management SaaS platform in S, you know, which is the one I described earlier. So Ines is becoming like the software platform where all those identities and all those certificates get validated. So imagine it's like a credit card and you swap the credit card and then goes to a centralized node and the centralized node says, yes, you have credit or not. That works in the same way. Every microchip is connected to the validation authority. The validation authority returns back the credentials and say, yes, this product is secure. So that is another area of revenue for us because not only we are able to sell the chip, but we also make money on the certificate and the validation of the certificate, which is a recurrent revenue that allows us to increment exponentially the revenue because more chips you sell, more of those transactions are going to be generated, which generates a recurrent revenue for the company. Least but not least, we have identified and established numerous new user cases and market opportunity for our product in several large growing markets. So, we are looking always to see who is going to be the early adopters of this secure chip because it is essential in their functioning. So, one of them, because that is related to safety, personal safety, is the electric cars. Electric cars need to be charged with electric plugs. And when you charge a car with a compromised electrical plug, which is not secure, you are sending malware to the car, which infects the operating system of the car. They can manipulate the car and they can kill the person because that hacker might just break the car in the middle of the highway or uncontrolled return the car and sink the car in a lake as an incident just happened a few weeks ago. from somebody we know in the United States. So this ensuring that your car cannot be manipulated by somebody that will go through the operating system and manipulate your car, you have to make sure that everything that connects to your car, whether your mobile phone or your electrical plug or you're charging your mobile with your car or you are connecting your car with an electrical vehicle charging have a digital identity has a semiconductor on both ends, so it creates a peer-to-peer secure connection. So we won several projects. It has been announced at the Nasdaq Tower with several manufacturers, and this is a huge market because we are talking about millions of EV charging now being deployed globally. Obviously, in the United States, it's a very mature country for that because Tesla created that demand, and those EV charging is one of the core businesses revenue generator for us. Another one is in the medical field. We have been providing technology to companies like Medtronic, Medtronic uses or microchips as a way to secure and encrypt the communication between the device and the hospital and by providing than the identity of the patient that is sending that data is not being compromised. So we have a lot of wins on that area too. And securing big equipment like Cisco, and this is public information, we have been securing Cisco routers and Cisco Wi-Fi routers for many years with something like 100 million chips already sold to Cisco in that life cycle of the product. And Cisco, together with many of our customers, they are helping us to develop this new generation semiconductor because for them it's essential to have a chip that will be at the level of the security that is required when, as I mentioned before, quantum computers arrive. All of this should generate new revenue stream in the medium term and also long term. And I will describe a bit more in detail during the second part of my presentation after I give the floor to John O'Hara, our CFO, who will provide details on the fiscal year 2023 financial results. So, John, please go ahead.
spk02: Thank you, Carlos. So, as Carlos has already announced, the CLSQ revenue for FY 2023 was $30 million, which was a 29% increase on the FY 2022 revenues. The increase in this revenue is driven by robust demand for secure elements, matter-related products, and the integration of semiconductors with cutting-edge technologies, including IoT security, identity protection, and cloud services. Off the back of that increase in revenue, our gross profit was $14.0 million in 2023, which was $4.2 million higher than the gross profit of $9.8 million in FY 2022. We also saw an improvement in our gross margin, which reached 47% for the year, and that's five percentage points higher than the gross margin of 42% in FY 2022. This improvement was mainly due to operating leverage resulting from higher revenues and better product mix. Additionally, after the global shortage in 2021 and 2022, which saw rising prices in the semiconductor market in wafers and production costs, our strong pricing Relationships with our clients enabled us to implement a progressive pricing structure that limited the impact of the price increases on us. And then in the current year, as the supply chain has returned to a more normal state and prices have dropped down from our suppliers, there was a brief short-term upside where we were still selling products based on orders at the increased prices but were being produced at lower costs. So that was very much a one-off, and most of these Most of these savings have also been passed on to our suppliers now, so we don't expect that to recur in the future. In 2023, we reported an operating loss of $4.1 million, which was as a result of higher operating expenses. Firstly, our sales and marketing costs were higher in the year, which reflects the expansion of our sales forces in key markets. Most notably, we expanded and invested in Taiwan, and we have our ongoing strategic expansion in the U.S., We see these as crucial investments, which aims to take CLSQ to the next level of growth, and we believe will enhance our pipe and generate further revenue growth in the future. In 2023, we also recorded higher G&A costs, and this was principally as a result of one-time fees relating to our listing on the NASDAQ. In particular, we incurred quite significant legal and auditing fees relating to this process. And finally, as Carlos has already mentioned, We increased our research and development costs by $1.6 million during the year as we ramped up our investment in the development of our next generation product and our post-quantum resistant chip project Quasar. We expect our R&D costs to remain at a similar level as we continue investing heavily in this area to help support the future revenue growth of the company and to ensure we remain at the cutting edge with our products. Moving on from the operating results, We also invested $3 million in new equipment to support the manufacturing process and to allow for us to support the expansion of our production capacities to ensure that we can continue to produce additional products to meet the demand of our clients. Regardless of this, we ended the year with a strong cash and cash equivalents position of $6.9 million. This balance keeps us well-positioned to support our growth initiatives, and we've strengthened our cash position in Q1 2024 and believe that we have sufficient funds available to allow us to continue investing in the development of our next-generation products and also to cover our expansion plans. Before I turn back to Carlos, I just want to comment quickly on our general expectations for 2024. As we are expecting a temporary slowdown in traditional semiconductor revenues, we have taken measured steps to tap into new revenue streams Carlos has already covered some of these and we'll go into more details after myself. These developments, which we will continue to announce throughout the coming year, aim to help us bridge the expected gap in 2024 revenues, as well as open up new products, services, and markets that will contribute to SEAL's short and long-term growth. On that note, I'll now turn it back to Carlos, who will provide additional details on our outlook and growth strategy. Carlos, go ahead.
spk00: Thank you, John. So as John just mentioned, we are poised for 2024 to be a transitional year, but maybe let's define what transitional year means, because there are three factors that the company includes in that transitional process. One is transitional on our business model. So we are moving from a centralized, selling chips from one location to the world and being able to deploy very large sales organizations around the world, which is the current model, to a decentralized model on where main countries like the United States, like Europe, because we are operational in Europe, in France, but also in Switzerland, and Asia and Middle East will also be decentralized or sale structure at national level so that means that they will be able to sell or microchips and actually personalize those microchips with their required cyber security demand so cyber security is vertical that means that each country might have their own requirements and what they inject in those chips and we we have now the capability of providing that a national level which was not the case last year so so that means that In one side, we reduce or centralize selling chip from one location to a decentralized process of selling chip from this and decentralized location. Obviously, that takes time because you need to build the infrastructure on national level before you are able to sell the chip. And that's what we call a transitional year, which basically reduces maybe a bit the revenue on direct selling the chips from where we are doing now. to decentralized and selling. And that will have a bit of consequences in the revenue projections of this year. We have something like $60 million already of visibility now, and we are only in Q1. So we obviously will be able to complement the $60 million of the traditional centralized selling chips with decentralized selling. Now, the interesting thing there is that we have signed already one of the OSATs is already signed in Spain. And CLSQ sells to, there's going to be a joint venture that has been announced. And basically what CLSQ sells to that joint venture is naked chips. So we sell chips, continue selling chips. But then we also sell the machines. We also sell the infrastructure, the lab infrastructure, and the services and the licenses that allows that center to manufacture and produce their own chips designed for the local market. So this is one of the important wins. We are also negotiating with the United States. As I mentioned, each impact in the United States is a $100 billion federal grant that they just provided to Intel three days ago when they built their fab in Arizona. We are in contact with Arizona authorities. Already several Swiss companies have established presence in Arizona, and we are negotiating with Arizona, but also other states, in onboarding CLSQ into that territory with the objective to create a personalization center in the country. The same thing in Saudi Arabia, where we have also a strong presence, and Saudi Arabia is creating basically an intelligent country by the year 2030, several smart cities, and only one smart city needs one billion chips just to secure one smart city. So this is an aggressive strategy, I will recognize, but at the same time it's a unique one available to us because it allows us to decentralize our sales operation and make sales more fluid and can be anticipated much better. Another thing is that we are developing things with the semiconductor. Before, we only sell the semiconductor. Now, we also able to provide sensor technology. So, those are sensors that you put into trucks, into containers, and those sensors track and trace the container. through a satellite constellation that we share with our mother company, Wysat. So those are low-orbit satellites. We have 17 satellites. There are more satellites that are going to be sent this year. And those satellites basically provide a very low cost way of track and trace the objects, and they have already a pre-installed sensor with the chips on it. And the communication between the satellite and the sensor is encrypted. And imagine a use case for that will be containers in the middle of the sea that can be tracked and traced by satellites as a way to ensure that the container integrity has not been compromised. So this is a transport logistic. It's a very big market, and it is a market where We have already signed last year an MOU with Dubai port authorities, and we are progressing during this year on that. And another one which has been a lot of postings and information is what we call the sealed coins. So CL coin is a revolutionary method, what we call machine to machine. So I'm sure many of you are investors in blockchain or cryptocurrencies, and you realize that the entire industry is becoming decentralized. So we are in the process of decentralizing what was a centralized industry, which was the machine industry. So machines of the future, when I say the future are three to five years, will be totally autonomous. They will, with artificial intelligence, being able to perform tasks by themselves. And those tasks can be acquired by another machine that will buy the knowledge or the data or the services from that machine. So again, going back again to the example of the EV car and charger, imagine at the beginning what we are selling is the chip only to verify that there's no malware, but in the future you will be able to buy the electricity that is being sent from the EV charger to the car. So that transactional IoT, TIoT, it's where big revenue is because that machine-to-machine economy is endless. I mean, imagine the potential interactions of trillions of devices sending data between themselves and acquiring that data. So we have created a roadmap, and this is going to be more information about this project is going to be given in the 1st of April event that we're organizing in New York at the NASDAQ where all of you are invited. we will be disclosing more information about not only the technology, but also the regulatory environment, which will allow us to deploy the technology. I mean, deploying the CL coin is an easy thing. We can do it today if we wanted, but obviously we want to be full compliant globally worldwide, So this CL coin is accepted as the preferred method of creating machine-to-machine interaction. So that will be a major booster for the sale of semiconductors because companies that they want to benefit from the transactions between both machines and the data those machines generate, which is an essential asset for AI, remember that AI is can only work if the data then goes into the AI learning process is a high quality data. If not, the AI algorithm will basically provide a very fake answer because the data is going to be programmed, it's going to be low quality. So here the data is highest potential value because the data is generated from the object itself without no manipulation, and that creates a new revenue model for companies and they are securing their objects, which will incentivize them to put the security on the object, right? We will drive that not only as a secure element, but also as a revenue generation, not only for hosts, but also for our clients. So these are the, together with what I mentioned about matter, the CL coin and the OSAT centers become the three major drivers for our growth. I mean, or as I mentioned before, the window opportunity for company like CLSQ to become very big companies two to three years. This is the opportunity because we have pretty unique technology. Obviously, being European-based alone is a handicap, and we are trying to solve that handicap by bringing it to the United States. Our share price has also collapsed since May, which makes absolutely no sense technically because the company is growing with the results that you have seen. And we are trading one-time revenue. Now, where do you find a company with this technology position in the market that is trading a one-time revenue? I mean, normally, if you are a U.S., Focus Corporation, you'll usually be trading 8 to 10 times revenue on the same semiconductor business. So there is obviously a huge potential projection. The risks are always the same, is that we are arriving too late, and somebody before us arrived with an amazing post-quantum technology that would make us difficult to penetrate into the market. Reason why we are moving into this personalization center as soon as possible. Another risk is that because we are small, you know, we don't have enough resources to implement the new generation of chip. This is an expensive technology, expensive expert. So that's another potential risk. And the third risk is the fact that we – or technology gets compromised, which will not be the case in the short term because we know very well how secure this technology is and the fact that the company for 25 years has been doing this. So this is not like a newcomer trying to impose a technology model that could eventually compromise technology. So before opening the call to question, I would like to note that we are holding, as I mentioned, an inaugural Analyst Investors Day on April 24 at the NASDAQ market site in New York City. And during this event, we will reveal our new business plan, focus on the new generation of semiconductors I mentioned, the U.S. expansion, and we will give a comprehensive presentation on Sealcoin and the progress on the Quasar platform. post-quantum resistance chips. So additionally, John will provide during that event investors with an overview of recent financial and operational results and expectation for 2024 and beyond. And we welcome you to join us. With that, I am finalizing my prepared remarks. I would like to open now the call for Q&A. And at the same time, I would like to thank you very much for your attention.
spk03: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. Once again, that's star 1 to be placed into question queue. Our first question today is coming from Matthew Grudenko from Maxim Group. Your line is now live.
spk01: Hey, good morning, good afternoon. Thanks for taking my question. I guess with referring to the engineering samples for the new RISC-V architecture, can you help us understand the timeline between maybe that Q3, Q4 timeline to get the engineering samples to getting them into end products and generating revenue? What is What does the timeline look like from those two points in the cycle?
spk00: Yeah. Hi, Matt. Yeah, so the current timeline is actually that the chip itself with a post-quantum capability will be available by the end of the year. That means that by the end of the year, we should be able to start the certification process. You know, the chips needs to pass certification processes like any other chip. It's a totally different architecture. And that will last, I mean, you know, it's a bit unpredictable because that does not depend on us, obviously. So that will last three to four months, I think. During that process, actually, we're going to be testing the chip internally in many processes. For instance, as you know, we launched several satellites already. The next generation of satellites that we're going to be launching already in October this year and maybe continuation in May next year will benefit from the capability of this post-quantum chip. I mean, our objective for the second launch, which will be sometime of April, May next year, will be to have a satellite that is able to embark already the post-quantum chip. And then we believe, in terms of revenue, direct revenue from the new chip, it's end of 2025, but mainly 2026. And this is why we say this temporary transitional year is because some customers, basically, when they are sitting on large inventories, they are saying, okay, maybe rather for keeping buy, buy more of your current chips, we actually want to wait to get the new chip. This is like when you buy an iPhone 14 and then the 15 comes, right? People will rather wait for having the new version of the iPhone. So we are in that kind of process as well.
spk01: Got it. Thank you. And then I guess as a follow-up to that question, Can you maybe frame the impetus for the early purchasing of the next generation chip? Is it access to post-quantum security algorithms? Is it entering the TPM space? Where do you see the earliest pull, or will it all sort of come when it becomes available?
spk00: It's actually TPM is what you say on TPM because the entire architecture is moving to RISC-V, right, on which TPM sits. So that is an industry move. And the big opportunity here that currently you have four or five TPM companies, right? There's not many. And none of them, they have the cryptographic root key capabilities that we have. And there is a very big differentiator. But it's a race. I mean, the companies are raising to be the first one to have TPM capabilities with post-quantum enhanced features. Got it.
spk01: And last question for me, I think you touched on this in your script, but maybe just a little bit more on what you expect from demand for matter on the chip side and on the certificate side in 2024.
spk00: So MATER certification actually started last year, right? And this is not us. MATER is an association, right? Because the regulatory aspect that you cannot sell new products anymore if you are not MATER certified. So matcher certified doesn't mean that you have to buy a chip. Actually, there are other processes to be matcher certified. But the real value on the matcher certification is to apply the secure element as a way to be able to create a digital identity which is impossible to counterfeit or duplicate so that every object is different. It's like an object birth certificate kind of. This is what we have, you know, on the identity aspect. So we have this year – I don't think – did we break matcher revenue per se?
spk02: In 2023, no, matcher revenue was not material enough to break out. But, yeah, we do have quite a significant increase. In 2024. Yeah. The nature of matcher is that even the biggest clients, the revenues are still –
spk00: Yeah, for the reason we mentioned before, because what happened, I know Samsung is a matter, is a matter client, right? I mean, Samsung, the moment decides to all the Samsung appliances needs to be matter compliant. they will substantially increment their revenue on matter. But this is an ongoing process. I mean, this is new. And as you know, companies, when they are sitting on stock, they are still selling the products non-matter compliant. That is taking up time also even to the market to understand what matter is. I remember last year, Cole, when we talked about matter, nobody knew what matter was. So it's an ongoing process, but this is a good process for us because, as I mentioned before, in the future, which is where we always target, I mean, I always target a 12-month, 24-month growth process. Matter is going to be a massive revenue generation for us because it's going to be compulsory. I mean, you're not, and there are not many companies that can issue a Matter certificate. Actually, the cryptographic root key of CLSQ is one of the root keys of than they had been entrusted by Matter. So we can issue certification authorities on Matter. We can have a B2B and a B2C approach to Matter. And by the way, on that, which I forgot even to say, we also, we managed to get the CLSQ embedded into the GSMA cryptographic key. So this is the mobile phone, right? GSMA is the standard organization from SIMS. And last March, no, February in Barcelona, the World Mobile Congress, we announced the CLSQ be embedded into cryptographic root, be embedded on the GSM process. So that means that we are compliant with any mobile phone or IoT device, and they will be using eSIMs, you know, the new generation of mobile. You do not need a SIM, you don't need a chip, but you need a certificate. So those are the new things happening in this industry, which is very exciting for companies like us. But it's a lot of moving parts. I mean, I think what is important to understand here is that this is a very dynamic market where everybody needs to be aligned on one very clear strategy. And before it was industry-driven, so it was hard to create something like an international standard. But the good news now is that both the European Union and in the United States They are passing legislation now that they are forcing companies to have this level of security like the cyber trust mark, which is another dimension because this is not only matter. This is more than matter because matter is only in home appliances. The cyber trust mark applies to airports. Apply imaging access control in airports, imaging access control in hospital, connected devices like insulin pump that then gets connected to the engine. All that will need to have a level of security that is only guaranteed by that cyber trust mark. So the drivers are there. The adoption is slow, and this is normal because, you know, it's a paradigm shift in the industry. But the destination is very powerful.
spk01: All right, thank you.
spk03: Thank you. As a reminder, that's star one to be placed into question queue. One moment, please, while we poll for further questions. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments.
spk00: Just to thank you, everybody, for your time to get on this call. Just to remind you about the Investors Day, April 1, in New York at the NASDAQ. This event starts at 10.30 a.m., and the registration form is available on our website, clsq.com. You can always contact also our investor relations representative, Lina Kati, at 212-836-9600. and she will help you to register to attend the event. So thank you again for your support to our company, and I wish you all a great day.
spk03: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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