PowerFleet, Inc.

Good morning and welcome to PowerFleet's second quarter 2021 conference call. Joining us for today's presentation is the company's CEO, Chris Wolfe, and CFO, Nev Mavromadis. Following their remarks, we will open the call for questions. Before we begin the call, I would like to provide PowerFleet's safe harbor statement that includes cautions regarding forward-looking statements made during this call. During the call, there will be forward-looking statements made regarding future events, including PowerFleet's future financial performance. All statements other than present and historical facts, which include any statements regarding the company's plans for future operations, anticipated future financial position, anticipated results of the operation, business strategy, competitive position, company's expectations regarding opportunities for growth, demand for the company's product offering, and other industry trends are considered forward-looking statements. Such statements included are but not limited to the company's financial expectations for 2021 and beyond. All such forward-looking statements imply the presence of risks, uncertainties, and contingencies, many of which are beyond the company's control. The company's actual results, performance, or achievements may differ materially from those projected or assumed in any forward-looking statement. Factors that could cause actual results to differ materially could include, amongst others, CEC filings, overall economic and business conditions, demand for the company's products and services, competitive factors, emergence of new technologies, and the company's cash position. The company does not intend to undertake any duty to update any forward-looking statements to reflect future events or circumstances. And finally, I'd like to remind everyone that this call will be made available for replay in the investor relations section of the company's website at www.powerfleet.com. Now I'd like to turn the call over to PowerFleet CEO, Mr. Chris Wolfe. Sir, please proceed.

Thank you, Matt. Good morning, everyone, and thank you for joining our call. And I hope everyone is doing well. The measurable pickup we experienced in new sales activity was a key driver of the robust revenue growth we generated in the second quarter. The acceleration we were seeing across our business units and end markets drove a 16% sequential increase and a 30% year-over-year increase in total revenue. In addition, our focus on building predictable revenue streams resulted in a 10% year-over-year increase in high-margin recurring and services revenue. Our quarterly financial performance also demonstrates the leverage in our business model. As well, we had a modest increase in marketing expenses that we previously discussed. We were able to greatly improve our profitability metrics. Our results also reflect the successful execution of our strategy to continually increase our high-margin recurring and services revenue by expanding our high-value solutions offerings and growing our businesses in our targeted verticals and geographic markets. Before I discuss our operational initiatives and traction, I'll turn it over to Ned to discuss our financial results for Q2 in more detail.

Thank you, Chris, and good morning, everyone. Turning to our results for the second quarter of 21, revenue increased 30% to $33.5 million from $25.8 million in Q2 of last year and increased 16% sequentially compared to the previous quarter. As Chris mentioned, high margin recurring and services revenue for the second quarter of 21 increased 10% year-over-year to $18.1 million compared to $16.4 million in Q2 last year. Product revenue, which drives future service revenue, increased 65% year-over-year to $15.5 million from $9.4 million in Q2 of last year. Gross profit dollars increased 14% year-over-year to $16 million or 48% of total revenue. This compares to $14 million or 55% of total revenue in Q2 of last year. Service gross margins for the second quarter remained strong at 63%, which was in line with the prior quarter. Product gross margin for the second quarter was 30%, an improvement from 29% in Q1 of this year. Now, turning to our expenses, total operating expenses were $16.2 million, a 10% increase compared to $14.7 million in Q2 of 2020, and a slight decrease from the $16.4 million in the previous quarter. Turning to our profitability measures, GAAP net loss attributable to common stockholders for the second quarter of 21 totaled $2.6 million or 8 cents per basic and diluted share. This is an improvement from a net loss of 3.8 million or 13 cents per basic and diluted share in Q2 of last year. Non-GAAP net income attributable to common stockholders for Q2 2021 totaled $1.4 million or $0.04 per basic and $0.03 per diluted share. This was an improvement compared to non-GAAP net income attributable to common stockholders of $789,000 or $0.03 per basic share and $0.02 per diluted share in Q2 of last year. Adjusted EBITDA and non-GAAP metric for Q2 2021 totaled $2.8 million, an improvement compared to our just repita of $2.1 million in Q2 of last year. During the six months of 2021, we generated $3.2 million in cash from operations. Our liquidity positions remain strong. At quarter end, we had $40 million in cash and cash equivalents and working capital of $53 million. This concludes my prepared remarks. Chris?