Kaleyra, Inc.

Good afternoon. Welcome to Calera's third quarter 2022 earnings conference call. After the market closed, Calera released unaudited results for the third quarter ended on September 30th, 2022. The press release as well as a replay of today's call can be found on the company's investor relations website at investors.calera.com. Please view the release for additional information on what will be discussed today. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Joining us today are Calera's founder and chief executive officer, Dario Calero, chief financial officer, Giacomo Dallaglio, and VP of Investor Relations, Colin Gillis. Following their remarks, we will open the call for questions. I would now like to turn the call over to Calera's VP of Investor Relations, Colin Gillis. Please go ahead.

Thank you. Before we begin, we would like to remind everyone that during today's call, management will be making forward-looking statements. Please refer to the company's SEC filings, including the company's annual report on Form 10-K, for the summary of the forward-looking statements and the risks, uncertainties, and other factors that could cause actual results to differ materially from those forward-looking statements. Clara cautions investors not to place undue reliance on any forward-looking statements. The company does not undertake and specifically disclaims any obligation to update or revise the statements to reflect new circumstances or unanticipated events that occur, except as required by law. Throughout today's press release and on the call, we'll refer to adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted earnings per share. These metrics are not determined in accordance with generally accepted accounting principles and therefore are susceptible to varying calculations. A definition, calculation, and reconciliation to the financial statements of these non-GAAP measures can be found in the tables included in our press release. We believe these non-gap measures of Calera's financial results provide useful information regarding certain financial and business trends and the results of operations. Now, I would like to turn the call over to our founder and CEO, Dario, for an overview of Calera's third quarter.

Dario? Thank you, Colin. Welcome, everyone, and thank you for joining us today. As usual, for those of you who may be new to our story, I will begin with a brief overview of our business. Calera is a communication platform as a service or CPaaS provider. At a high level, we provide our global partner base with an omnichannel suite of powerful APIs and visual tools to bridge the communication divide between brands and their customers. Companies, especially those that require security and must prioritize reliability, such as financial institutions and healthcare providers, often face coverage gaps when trying to communicate with their customers. Our mission is to help build lasting business-to-customers relationships for our partners' plans across channels, and to do so while providing a service that our clients can trust. To reiterate, our growth strategy relies on three main pillars. One, we are focused on expanding our geographical footprint. Calera's revenue comes from global customer, and it's a priority for us to both expand to new geographies and maintain our diverse global revenue footprint. Specifically, tier one mobile network providers represent important partnerships for our business. as they are often the key to new geographies and expansion opportunities. It is our view that the CPAS market as a whole remains very fragmented and under-penetrated in many parts of the world, and that we are well-positioned to meet CPAS demand in underserved areas. After last year's expansion into American markets through engaged infrastructure, We continue to have around a third of our revenue from each of the Americas, around 44%, Europe, around 28%, and Asia, around 28%. A favorable balance that makes Calera one of the most prominent and geographically diverse CPAS companies in the world. Two, we will continue to judiciously invest in our omni-channel suite of services. It's our goal to meet our partners on whichever channels they require to best connect with their customers. Video and voice communication continues to expand globally, and we believe that building our platform to accommodate new communication streams remains an important area of investment for our team. And lastly, we remain committed to secure, reliable, and trusted service. Our business thrives in industries that have the highest standards of security for their communications with their consumers. Banks, financial institutions, healthcare, etc. all need to be able to trust that their interactions with consumers are handled with the utmost security and consistency. Calera delivers on that in a way that no other industry player does. While others strive for partner volume, we know that our expertise in trusted SIPAs influences customers' retention and that with the right partners, this is an area in which we can excel. Through our diverse geographical mix of Tier 1 mobile providers, concentrated investments in our omni-channel platform and secure service, we believe we have a real opportunity to scale and realize our long-term vision of being the trusted, global CPAS provider for our partners. Our chief financial officer, Giacomo Dallaglio, will discuss our financial results for the quarter shortly. But before I end over the call, I'd like to recap a few recent highlights from our third quarter. Financially, this quarter, we continue to manage our business with profitability in mind, including a strong increase in our cash positions. Overall, our third quarter revenue was $83.9 million, in line with our previously provided outlook, despite the adverse effect of foreign exchange rates. Largely due to short-term headwinds driven by heightened connectivity costs, our gross profit decreased slightly, impacting our adjusted gross margin of 21.5% for the third quarter. Our net loss for the quarter was $11.7 million, compared to $11.9 million in the comparable year-ago period. Most importantly, our balance sheet remains strong, with $87.6 million in cash and cash equivalents, restricted cash and short-term investments at the end of the quarter, or up 17% from the prior quarter. We believe, as the industry environment continues to normalize in the coming quarters, our effort to prioritize profitability will serve our business well. Even with these considerations, our team's diligence and perseverance has allowed us to continue investing in our growth strategy, as evidenced by our KPI and partnership success in the third quarter. Moving to some of our key operating metrics, this quarter we delivered 11.6 billion billable messages, a reflection of our ability to leverage the benefit of scale within our SMS segment. Additionally, we connected 2.4 billion voice calls in the third quarter, showing expansion in our voice segment and the sign of the opportunity available within this channel moving forward. In Q3, our dollar-based net expansion rate was 94%, calculated based upon revenue from the same customer base in the comparable year-ago period. Also, building on its first million-dollar month last quarter, the campaign registry continued to perform in our third quarter, showing sequential quarterly growth in revenue with sustained high profitability. The campaign registry continues to be a part of our trusted C++ offering as well as a margin driver for our business. Moving to our operational highlights, in the third quarter, we announced several partnerships. First, as Amazon Pay India preferred service provider, our API solution already integrated into the Amazon Pay platform. will trigger messages for highly critical one-time password and confirm payment details for vendors and users. These integrations are expected to enhance customer experience and increase customer satisfaction. Also, we partnered with Truecaller, an industry leading caller ID service provider, to enhance our ability to provide trusted and safe business communication services through Truecaller's proprietary verified business caller ID solution. Partnerships like these help to expand both our brand and our customer footprint, and we expect to continue pushing similar opportunities in the future. In addition, we reached a key milestone with one of our existing partners in the third quarter, Google Verified Calls. We crossed 20 million Google verified calls managed through Calera Voice API in 2022, with 10 million of those calls managed in August alone. Part of our operational success over the last year has been thanks to the hard work of Chief Business Officer Mauro Carabane, who celebrated his one-year anniversary with the company this quarter. Mauro's effort, especially towards developing relationships with Tier 1 providers and with large enterprise customers, has been exceptionally helpful in our mission to expand Calera's bridge and partner groups. Across our business, we were able to achieve this result despite persistent headwinds faced during the quarter. Global economic uncertainty driven by overlapping geopolitical and macroeconomic factors, including a slowing global economy, recent market volatility, and uncommonly high inflation. However, two main factors stand out to us. First, we continue to face significant exchange advance. We saw increased volatility within the foreign exchange rate market in the past few months, Enough that when compared to last year Q3 exchange rate, this year revenue was reduced by nearly $4.7 million in the third quarter. Second, broader economic downturn continues to shift enterprise purchase in the area. Due to our commitment to secure service, our enterprise partner relationships require significantly more upfront diligence than for other areas of our industry. While this adds time to our sales cycle, the trust we build with our partners through this process helps us maintain our strong net retention and 0% churn rate within our top 10 customers. Unfortunately, in periods of more careful enterprise spending, this creates an even more elongated sales cycle and backs up our customer acquisition pipeline as a result. The typical seasonality in Calera's business include positive catalysts in the fourth quarter, including the 2022 U.S. election cycle, Diwali, Black Friday and Cyber Monday, and the December holiday season. We don't expect this global external impact to last forever, and we are confident that our SAIS pipeline reflects the diligent work that our SAIS team has put in over the past few quarters. However, given the macro environment, we are mindful and diligent of these headwinds and believe our fourth quarter and full year outlook should be reflective of this. Colleen will be discussing our outlook shortly. Moving forward, our focus will remain on maintaining consistent profitability metrics and driving healthy growth across our bid. The fundamentals of our business are top of mind, and we understand that high-quality product and service development and implementation will continue to reap increased economy benefits in the long term. We are proud of our team's perseverance and their unwavering commitment to building a sustainable and valuable business moving forward. And with that, I now turn the call over to our Chief Financial Officer, Giacomo Dallaglio, to discuss our financial results for the quarter in greater detail. Giacomo?