KORE Group Holdings, Inc.

Greetings, and welcome to the Core Wireless Group First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A 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 turn the call over to Vijay Birgia, Investor Relations. Please go ahead.

Thank you, Operator. On today's call, we will be referring to the first quarter 2022 earnings presentation that will be helpful to follow along with, as well as the press release filed this afternoon that details the company's first quarter 2022 results, both of which can be found on the investor relations page at ir.corewireless.com. Finally, a recording of the call will be available on the investor section of the company's website later today. Please note that this webcast includes forward-looking statements Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions are forward-looking statements and are based on assumptions and beliefs as of today. The company encourages you to review the Safe Harbor statements, risk factors, and other disclaimers contained on this slide and today's press release, as well as in the company's filings with the Securities and Exchange Commission, which identify specific risk factors that may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this webcast. The company also notes that it will be discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with the accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation. I'll now turn the call over to Romal Baal, the company's president and chief executive officer. Thank you, Vic.

Good afternoon, everyone, and thank you for joining us today for our first quarter 2022 earnings call. With me is Paul Holtz, CORE's chief financial officer. The first and key objective of today's call is to provide an overview of our financial results for the first quarter 2022. I will start with a summary of our results and then Paul will take you through our performance in more detail. Second, we want to help the market understand the massive opportunity ahead of Core as the first publicly traded IoT pure play company. Last quarter's deep dive focused on our world-class IP. And this quarter, we will discuss CORE's connected health segment and the market trends driving our largest industry practice. We will then hold a Q&A session to round out the call. So let's move on to slide four to look at our Q1 results. First quarter revenue was $68.9 million, up 25% year over year. IoT solutions revenue was $24.8 million, up 70% year over year. DBNER for the first quarter was 122% up from the first quarter of 2021. But please keep in mind that this metric continues to benefit from the LTE transition project at our largest customer, which was nearly complete at the end of this first quarter. Additionally, we are reiterating our guidance which will result in Core beating our combined two-year revenue forecast from our GoPublic model by at least $50 million. Before discussing Core's connected health business, I want to take a step back and note that we delivered these strong quarterly results despite ongoing supply chain disruptions, the 2G and 3G sunsets, and geopolitical uncertainties. As IoT adoption accelerates, it will unlock massive value for Core and customers across our five focus verticals. With that, I will present a couple of slides to provide some business context, and then we will move on to the deep dive topic of this earnings call, which is our exciting connected health segment. Many of you have seen Core's seven by seven chart on slide five before. For those of you new to our story, I will say that this is one of my favorite charts because it represents the customer's IoT journey. No matter the use case, how simple or sophisticated, every one of these seven major steps has to be taken to deploy an end-to-end solution. This slide clearly showcases why IoT deployments are so complicated and how Core is making IoT easier to adopt with our one-stop shop approach to enabling end use cases and IoT applications. It should then come as no surprise that we build our capabilities along these steps. And we continuously think about how to embed more intelligence into our software and platforms so we can drive more efficiencies for our customers who need to adopt IoT to stay competitive in what they do. Slide six takes those same steps from the seven by seven chart and aligns them down the side of this page. And then we have prioritized how we are building out the horizontal or cross industry capabilities that we take to market. These capabilities include IoT strategy and technology selection, IoT connectivity, which is really a combination of connectivity management, device management, and data management. The series of managed services around device logistics and configuration represented by steps four, five, and six. And finally, analytics. For 20 years now, we have been building the world's leading IoT connectivity capability. More recently, we have introduced a comprehensive set of IoT managed services. Our analytics capabilities are in the early stages, but represent a significant opportunity for the future. We would classify our capabilities across steps 3, 4, 5, and 6 as advanced. And while the others are advancing, we are excited to further our capabilities in step 7, or analytics, because of the SaaS nature of these services. As should be clear, most of Core's global team members, or IoTers as we call them, are organized in teams that build and deliver these capabilities. We take these capabilities to market in two ways. The first is our regional go-to-market approach. Historically, this was the only way Core went to market, and we have organized our sales teams in this area by the Americas and Europe and Asia Pacific. However, with the expansion of our offering portfolio, it is critical to understand our customer use cases and become more of a trusted advisor. So we are increasingly going to market by industry. We started this just last year by launching two of our five target industries where we expect IoT to have a meaningful impact. In fact, over 80% of the IoT spent today is across these five sectors. We are already seeing a lot of traction with these initial industry practices, and this has strengthened our resolve to increase our go-to-market industries over time. which leads us to connected health. Core connected health includes both key industry sectors, healthcare and life sciences. Use cases in healthcare include cardiac rhythm monitoring, chronic disease management, and medical equipment diagnostics. Key use cases in life sciences include clinical trials with electronic data capture and digital biomarker telemetry. I will go into more detail about both our segments and use cases in just a moment, but first I want to set the stage by talking about the broad trends we see in connected health overall. As you can see on slide seven, connected devices in both healthcare and life sciences are growing rapidly. Industry analysts estimate that the connected health market will exceed $500 billion in 2025. Organizations that successfully deployed IoT devices delivered better outcomes, improved their patient experience, and realized significant cost savings. Given IoT's success in improving both patient outcomes and cost efficiency outcomes, it is not a surprise that IoT adoption and spending are expected to grow for the next several years. So what is the challenge? What is hindering IoT adoption? As you have heard us say before, launching an IoT end solution that can scale effectively and securely is incredibly difficult. And it is no different in healthcare where the connectivity needs to work while meeting stringent data privacy and security regulations like HIPAA. Slide nine shows the complexity that healthcare organizations must manage and overcome if they want to launch a device that leverages the full capabilities IOT this complexity requires considerable time and resources that even large blue chip organizations do not have certainly not with IOT experience and real expertise what core fundamentally does for our connected health customers is bridge that gap we have done this with scores of customers helping with different parts of our 7x7 services and now consistent with what you have heard us say before we are focusing on pre-configured enablement solutions, which focus on key problems that almost all companies deal with in these use cases. Across Connected Health, we have launched just such a pre-configured solution that, with relatively minor tweaks, can address several use cases across healthcare and life sciences. Our Connected Health Telemetry Solution, or CHTS, massively simplifies the complexities of IoT. overcoming significant barriers to entry, and shortening adoption times. Course capabilities enable superior coverage, reliability, and regulatory experience to provide real-time data insights to unlock significant value for customers and their patients. As IoT adoption accelerates, so too will demand for our connected health solutions, especially with IoT's rapid growth, We are confident that IoT adoption will continue to accelerate in both healthcare and life sciences, and we will show you why we think that in the next several slides. Slide 11 covers trends for chronic disease treatments. Chronic diseases include diabetes, hypertension, chronic kidney disease, and the other conditions listed on the left side of the page. The CDC estimates that 60% of Americans have at least one chronic condition. and forty percent of all Americans have at least two chronic conditions the cost of treating these conditions is broken out on the left as you can see treatment costs are already well into the billions of dollars with diabetes costs alone reaching a whopping 327 billion dollars these costs are a burden to patients and providers alike IOT has emerged as a critical tool to help contain these costs while improving patient outcomes. However, enabling IoT for medical devices can be difficult due to medical device regulations. Current regulations consider anything integrated into the wireless module firmware, including cellular modules, to be a fundamental aspect of the medical device. Because of that, any change or update to the firmware requires regulatory submission and approval even if it does not impact the core function of that device. This is a significant challenge in launching an IoT device. Many medical device OEMs and integrated therapy providers are looking for ways to enable IoT solutions using existing technology to overcome this regulatory challenge and improve their time to market. Core addresses this opportunity by adapting existing wireless technologies that are not integrated with the medical device. and therefore do not require regulatory approval for every update. Additionally, CORE leverages common gateway architectures that IoT enables within a variety of devices, including dialysis cyclers, oxygen concentrators, and infusion pumps. For example, CORE's sensor technology and scalable gateway architecture help enable an innovative congestive heart failure treatment that incorporates IoT solutions. Congestive heart failure has two traditional crisis indicators, weight gain and blood pressure. Unfortunately, a congestive heart failure crisis may have already begun by the time the two crisis indicators manifest. Core's healthcare solutions help address this issue. Core enables our customers to launch a pulmonary artery pressure sensor, which is a remote patient monitoring device. The pulmonary artery pressure sensor incorporates a Bluetooth sensor, which is inserted into the pulmonary artery. Once the device is running and connected, it provides real-time analytics to healthcare organizations without the need for a patient to show up at a healthcare facility. This device provides life-saving medical alerts 10 to 14 days ahead of traditional crisis indicators. This IoT-enabled medical device is an incredibly powerful tool that can prevent a potentially fatal health crisis and the associated treatment costs. In parallel to these trends in chronic disease treatments, there have been three trends driving IoT adoption in life sciences. The first is the movement towards electronic data capture from patients who are otherwise manually inputting data. In the past, clinical trial data was captured by having patients physically fill out a form. After that data was painstakingly collected, it had to be sent to the clinics for analysis. This whole process could take between 12 weeks to more than a year. With electronic data capture, this process can be done in real time. With the data ready for analytics, as soon as the data collection stage of the trial is complete. The second trend is incorporating digital biomarker data into clinical trials. This is a growth area that is just getting started. Historically, the lack of an off-the-shelf plug-and-play solution was a roadblock to IoT deployment in clinical trials. However, Core's recently launched CHTS solution, which allows devices to easily and reliably connect and transmit biometric data, bridges that gap. These two trends are resulting in trend three, which is an explosion in DCT, or decentralized clinical trials. While the industry was cautiously evaluating DCT technology before the pandemic, COVID-19 forced rapid industry adoption. As you can see on the chart on the right, approximately 28% of CROs ran DCTs before the pandemic. That figure increased substantially during COVID and is expected to continue growing with 95% of CROs planning to increase the use of DCTs within the next 12 months. However, the exponential growth in sensors used in clinical trials is not limited to DCT. Industry analysts estimate that up to 70% of all clinical trials will require sensors by 2025, which means that 70% of all clinical trials will utilize IoT by 2025. This is a massive opportunity for CORE, and we have positioned ourselves accordingly. In summary, these three powerful industry trends are driving IoT adoption in both our connected health sectors, and we are confident that these trends will drive growth in that business for the next several years. Based on these trends and market insights, slide 14 summarizes CORE's go-to-market strategy for the two key industry sectors that comprise connected health. In healthcare, we have remote patient monitoring, medical equipment diagnostics, and medical alert monitoring, and within life sciences is clinical trials. I will not spend time detailing each use case, but as you look across those 12 boxes, you should recognize some use cases we just talked about, including chronic disease management and DCT. And I want to highlight a critical point. While there are 12 different use cases on this page, CORE is not building 12 different solutions. Rather, we can build once and deploy many times because of the commonality across these use cases in the areas we serve. On slide 15 is another view with some of our top priority use cases. As you can see, we can serve customers deploying end solutions in these areas with a variety of our seven by seven services as showcased by the green check marks. We are actively recruiting and developing our sales team to have the ability to sell multiple services to each customer. And then, we overlay our innovative pre-configured solutions. As discussed and as we have solved the problem for one use case, we can integrate that solution architecture into a common base. Then with slight tweaks to that base, we can go to market in several ways targeting multiple use cases. So our investments in our technology are extendable and scalable across different use cases. For example, the only thing we must alter between our chronic disease management our cardiac rhythm monitoring, and medical equipment diagnostic solutions is the sensor interface on our gateway. So now let's look at our CHT solution, which is outlined at a very high level on slide 16. On the far left, you can see Core's cellular gateway, which can interact and receive data from various medical sensors and devices. That data is transmitted to Core's connected health data telemetry platform, Core's role in the process includes medical device and sensor integration, gateway device management, global connectivity management, and data telemetry to the customer endpoint to ensure that data is delivered quickly and securely. However, it is important to note that core's role ends with data telemetry to the customer, as represented by the vertical dotted line on the slide. Once our customers acknowledge and accept the data, We purge it from our platform. Core is an IoT enabler. It is our customers who use and apply that data we help collect. Moreover, as you can see on the right side of the slide, data telemetry is helpful across a wide array of use cases. A simple way to think about our CHTS solution is that essentially everything in orange on the left side of the dotted line enables all five use cases on the right including chronic disease management, medical equipment diagnostics, and clinical trials. With CHTS, CORE has created a product where 80% of the solution is standard across use cases and only 20% must be tweaked. So in summary, the beauty of CHTS is that it is simple to install, cost effective, and allows us to target a variety of use cases. Slide 17 provides an overview of our connected health practice as it stands today. and what we think the business can do longer term. Healthcare costs are rising, and IoT is one of the best equipped technologies to reduce healthcare costs while improving outcomes and patient experiences. Those trends drive massive adoption and spending in IoT and create a massive opportunity for core. We are allocating our time and capital in proportion to that opportunity. These investments are already paying off. We have a large and growing customer count and a large customer pipeline with numerous cross-selling opportunities. We are confident in our connected health business and expect it to grow more rapidly than what we included in our GoPublic forecast through 2025. That forecast is represented on the left side of the page. On the right side of the page is our stretch goal of growing at more than 30% CAGR in connected health. In conclusion, I will say that we are very proud of our connected health team, and further, we believe that this innovative and strategic approach to helping our customers adopt IoT is extendable across industries. As 5G matures and IoT progresses, we expect additional use cases to open up, and we will launch new industry practices to attack them. and work to ensure that CORE is the best positioned service provider to unlock value for those use cases. With that, I will now hand the call over to Paul to cover the financials in more detail. Paul?