Ituran Location and Control Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the Ituran fourth quarter 2022 results conference call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Eturan's investor relations team at ekglobalinvestorrelations at 1-212-378-8040 or view it in the news section of the company's website, www.eturan.co.il. I will now hand the call over to Mr. Ehud Helft of EK Global Investor Relations. Mr. Helft, would you like to begin?

Thank you, Operator. Good day to all of you, and welcome to this conference call to discuss the fourth quarter and full year 2022 results. I would like to thank you to our management for hosting this call. With me on the call today are Mr. Eyal Sharadki, the co-CEO, Mr. Rudi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamar, the CFO. Eyal will begin with a summary of the quarter results, followed by Eli with a summary of the financials. We will then open the call for the questions and answers session. I would like to remind everyone that the safe harbor in the press release also covers the content of this conference call. And now Eli, would you like to begin, please?

Thank you, Ehud. I'd like to welcome all of you to our full-year and fourth quarter 2022 call, and I would like to thank you for joining us today. We are clearly very pleased with our achievements throughout 2022. From a financial perspective, we showed continued growth with record full-year revenue of $293 million, record-full EBITDA of $79 million. From a strategic perspective, we surpassed the 2 million subscriber mark, and our subscriber growth strongly accelerated in 2022, adding 185,000 net subscribers versus 113,000 in 2021, representing a 64% acceleration. We believe that this new much higher subscriber net ads will continue into 2023. As we shared with you last quarter, our expectations for the growth rate in our global aftermarket subscriber base stand at between 180,000 to 200,000 net new subscriber ads annually. I want to add that it is harder to forecast the OEM subscriber base growth rate as this depends on our OEM customer sales and doesn't depend on us. The strong subscriber growth we have experienced in 2022 is starting to be reflected in the subscription revenue growth, even despite the currency headwind due to the dollar strength compared with last year. Q4 subscription revenue grow at 10% year-over-year or 14% growth when calculating in local currencies. We have every reason to expect that this growth trend will continue well into 2023. The growth margin on subscription fees continue to improve and we have seen sequential improvements throughout each quarter of 2022. We started Q1 2022 with a subscription fee growth margins of 55.9%, which increased through 2022 by 200 basis points to 57.9% in Q4. It demonstrates that the operating leverage in our model is becoming more apparent, whereby we can add each new subscriber without a corresponding significant increase in our costs. This increase in subscribers came primarily from the growth in our traditional aftermarket business. In summary, we are very pleased with our performance in the fourth quarter, which culminated an excellent 2022 for it to run. Both ongoing solid performance in our traditional aftermarket business and especially the growth engines we have seeded in the past years are driving this subscriber growth. We expect that this accelerated subscriber growth will translate into increased subscriber revenue growth in 2023 and faster growing profitability as the operating leverage continues to work in our favor. We've already seen the initial fruits of this in 2022. Looking ahead, we believe the improvements we have made to our business in the past few years, especially the strongest subscriber growth, are here to stay for the foreseeable future. We're excited for the year ahead and expect the positive trend that started in 2022 will continue into 2023 and beyond. And with that, I hand over to Eli. Eli, please go ahead.