Iteris, Inc.

Good day and welcome to the Taras Fiscal First Quarter 2025 Conference Call. At this time, all participants have been placed on the listen-only mode, and we will open the floor for your questions and comments after the presentation. Please note this event is being recorded. I would now like to turn the conference over to Jim Byers of MKR Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for participating in today's conference call to discuss Iteris' financial results for its fiscal 2025 first quarter, ended June 30, 2024. Joining us today are Iteris' President and CEO, Mr. Joe Bergera, and the company's CFO, Mr. Kerry Sheba. Following their remarks, we'll open the call for questions from the company's covering sell-side analysts. Then we will answer investor questions, if any, that were submitted to the company in advance of the call, per the instructions in our press release dated July 29, 2024. Before we continue, we would like to remind all participants that during this call, we may make forward-looking statements regarding future events or the future performance of the company. These statements are based on current information, are subject to change, and are not guarantees of future performance. Iteris is not undertaking an obligation to provide updates to these forward-looking statements in the future. Actual results may differ substantially from what is discussed today, and no one should assume that at a later date the company's comments from today will still be valid. Iteris refers you to the documents that the company files from time to time with the SEC, specifically the company's most recent forms 10-K, 10-Q, and 8-K, which contain and identify important risk factors that could cause actual results to differ materially from those that are contained in any forward-looking statements. As always, you'll find a webcast replay of today's call on the investor section of the company's website at www.iteris.com. Now, with that said, I'd like to turn the call over to ITERIS's president and CEO, Mr. Joe Bergera.

Great. Thank you, Jim, and good afternoon to everyone. I appreciate all of you joining us today. ITERIS reported record total revenue of $45.8 million in our fiscal 2025 first quarter, representing an increase of 5% year-over-year. As a reminder, we had an unusually strong prior year comparison due to the combination of two events that were related to post-COVID recovery. These events were, first, the release of a large number of sensor shipments that were delayed as a result of previous supply chain constraints, and second, the achievement of certain milestones for some very large long-term consulting projects in our fiscal 2024 first quarter. Given this unusual prior year comparison, we were particularly pleased with our fiscal 2025 first quarter revenue growth comparison. Customer adoption of the Clear Mobility Platform remains very strong. In our fiscal 2025 first quarter, we reported total net bookings of 48.8 million, resulting in record trailing six-month total net bookings of 102.1 million, which compares favorably to the $100 million target we set for the first six months of calendar year 2024. On a year-over-year basis, fiscal 2025 first quarter bookings decreased 8% compared to our second quarter highest quarterly bookings period on record, which included a $15 million four-year SAS order in our fiscal 2024 first quarter. As noted on prior calls, we expect some degree of bookings lumpiness for the next several quarters due to the timing of various large sales opportunities, such as the one recorded in our fiscal 2024 first quarter. Reflective of our sustained strong bookings results We ended the June 30, 2024 period with a record total ending backlog of 126.8 million, representing a 2% increase year-over-year. As always, our ending backlog and net bookings figures reflect firm customer orders rather than total contract value. The total value of customer contracts, which varies from quarter to quarter, averages on a historical basis about 200% of our total ending backlog. Also keep in mind that our backlog excludes a portion, which of course varies from period to period of our sensor bookings, since those orders typically convert to shipments within a single quarter. At this point, I'd like to share some details about the performance of our product portfolio. For our sensors and third-party hardware, which we refer to collectively as products, we reported fiscal 2025 first quarter revenue of $24.4 million, representing a 3% increase year over year. As a reminder, the year over year comparison was very challenging due to the release of sensor backlog, which had accumulated over prior periods as a result of global supply chain constraints that we experienced in the prior year. During the first quarter, our teams continued to meet critical commercial and product milestones that will drive future growth. These milestones included the launch of our new VANTAGE PedSafe sensor, which is the product resulting from a technical collaboration with Sumitomo Electric Industries that we discussed on our May earnings call. The release to production of our new VANTAGE Next and VANTAGE Radius advanced connectivity solutions that will enhance our VANTAGE care offer and accelerate our annual recurring revenue attach rate, and the initiation of field testing for our new Vantage Apex rack mount sensors that are scheduled to start shipping in October 2024. Now I'd like to review the performance of our services portfolio, which includes our various consulting services, managed services, software as a service, and data as a service offerings. We reported record service revenue of $21.4 million in our fiscal 2025 first quarter, representing an 8% increase year-over-year, and that's despite the challenging comparison I mentioned earlier. This growth is attributable to continued strong demand, particularly for our software-as-a-service solution, ClearGuide. We also benefited from further improvements in our internal labor capacity, reflecting the progress of the various initiatives we've discussed on prior calls. To sustain strong customer adoption of our services portfolio, we continue to introduce important new enhancements to our clear mobility platform. For example, in the first quarter, we introduced a traffic flow data fusion engine, new intersection risk and work zone impact models using applied AI, and web services and database systems enhancements. We expect to improve the user experience, increase our cross-sell rate, and lower our cost of goods sold. In summary, we're very pleased with our fiscal 2025 first quarter record revenue, our record trailing six-month net bookings, and record ending backlog. Additionally, we believe Iteris continues to demonstrate significant progress in evolving to a platform-based business model that will produce significant strategic and financial benefits for the company. As a result, we remain very confident ITERIS is positioned to realize progressive improvements in our financial profile over the next several quarters. And on that note, I'm going to pass the mic to Kerry to provide more color on our fiscal 2025 first quarter financial results. And then after that, as I typically do, I'll come back to further discuss our expectations for the second quarter and the full year.