KORE Group Holdings, Inc.

Greetings and welcome to the Core Wireless Group second 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 during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to our host, Charlie Brady, Vice President, Investor Relations. Thank you. You may begin.

Thank you, operator. On today's call, we'll be referring to the second 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 second 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, 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 that 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 identifies 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 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 Romil Bail, the company's president and chief executive officer.

Thank you, Charlie. Good afternoon, everyone, and thank you for joining us today for our second quarter 2022 earnings call. With me is Paul Holtz, core's chief financial officer. The first objective of today's call is to provide an overview of our financial results for the second quarter of 2022. I will start with a summary of our results, and then Paul will take you through our performance in more detail. Second, we continue to help the market understand the significant long-term growth opportunity that Core is positioned to capture as the only public pure-play IoT company. Every call since we listed on the NYSE, we have leveraged our earnings calls to help educate the market and our business. We started with a company overview last year, and I followed that initial call with overviews of our world-class IP and technology moat. And then last quarter's deep dive topic was our connected health vertical. This quarter, we will discuss Core's fleet segment and the market trends driving our second largest industry practice. We will then hold a Q&A session to round out the call. Let's move on to slide four to look at our Q2 results. Second quarter revenue was $70.4 million, up 16% year over year. IoT solutions revenue was $25.7 million, up 47% year over year. DB and ER for the second quarter was 114% up from the second quarter of 2021. As a reminder, we have consistently communicated since going public over three quarters ago that we expected a decline in quarterly revenue after the LTE transition project that our largest customer ended. I am very proud that our team rallied to stave off said sequential decline another quarter with this strong Q2 performance. But we fully expect a sequential decline in Q3, and H222 will be down from H122 organically, as has been embedded in our 2022 guidance since it was first provided. On said guidance, we are maintaining the communicated range, despite an expected approximately $3 million revenue headwind from FX that was not previously embedded. As a result, we continue to expect to beat our two-year-ago public revenue forecast for 2021-2022 by more than $50 million. With that, I will present a couple of slides to provide some business context on core, and then we'll move on to a deep dive of our fleet industry segment. Slide five shows some IoT use cases on the left side of the page. These solutions are not particularly complicated to understand conceptually, but they are very complicated to implement, especially when the connected devices are in motion or are deployed across multiple technologies, multiple devices, and multiple connectivity protocols. the latter of which is a given in any deployment over a large geographic area, certainly across countries. The key message is simple. IoT is everywhere. Anything connected is an IoT use case, and hence a potential customer scenario for us at Core. And use cases do not have to be sophisticated to require our services, although we certainly have that capability if needed. Today, Core is helping to bring a very large, and rapidly growing set of use cases to life, which is driving our significant market opportunity. But now, on the right side of slide five, let's take a look at the key complicating factors that have kept IoT from meeting its hype over the last decade, starting with cybersecurity as the foundational issue and working our way around the significant challenges of IoT solution deployment in the corporate world. In particular, a lack of expertise and the ability to handle and leverage the massive amount of data coming off thousands and often tens of thousands of devices in many use cases. Standard IT experience, even digital transformation experience, is not enough to effectively deliver IoT. Given the complexity stemming from the use of different types of devices and networks across different countries, the regulatory and compliance issues driving almost every industry and one of the most fragmented ecosystems in the tech world, you have the issues that set up core strategy. This is what the core one-stop shop is all about, simplifying these complexities and making it easy for our customers to deploy IoT solutions. Slide six then is a simplified view of our growth strategy. What we do is help customers deploy, manage, and scale solutions. Based on the experience of working with over 10,000 use cases over the last 20 plus years, we can help our customers not just successfully deploy their solutions, but with our IoT managed services, manage those deployments seamlessly, which in turn enables our customers to scale confidently and securely. How we do this is with a combination of IoT connectivity solutions and analytics services. which is growing in scope and maturity with every year of our transformation. With our global connectivity services, we can help enable almost any use case in any industry. And as we have matured our IoT managed services, we have increasingly focused on going to market by industry where we become more of a trusted advisor with industry expertise. We have organized our company to build and take to market these world-class IP-driven IoT services, and slide seven illustrates the core organizational model at a contextual level. We build our capabilities to support the major steps in the deployment of an IoT solution. And while we are not at this point in time building a consulting organization to focus on the front end of a customer's IoT journey, we have been building the industry's leading IoT connectivity offering for over 20 years. And in addition to our connectivity offerings, We have added a comprehensive suite of IoT managed services and plan to add to our early start with analytics capabilities, which will create even greater opportunities for growth. The vast majority of our team is organized into these horizontal capability areas. We have historically applied a regional go-to-market approach with our sales teams organized by the broad geographic regions, Americas, Europe, and Asia Pacific. As we have expanded our portfolio of products and services, we are increasingly going to market in focused industry verticals, which allows us to get closer to our customers, better understand their pain points and IoT requirements. Last year, we launched Connected Health and Fleet, the first two of our five target industry verticals. Why these five verticals? Because these five industry sectors account for over 80% of IoT spend today. And the successes we have seen thus far, particularly with the BMP acquisition, tell us our vertical go-to-market strategy is working. This leads us to the overview of our fleet business. Fleet is a broad term that we use to describe objects that move people, cargo, or materials from one place to another, such as autos, buses, trailers, trucks, and construction equipment, as well as other transport methods, including rail and ships. As our business stands today, It is vehicle-centric and includes the telematics, video analytics, and usage-based insurance segments. All three of these segments are large and growing, and we are seeing continued adoption of more IoT-centric technology with multiple devices connected to the vehicle. McKinsey estimates the value pool for fleet management will grow to $750 billion by 2030. A significant portion of this expected growth is due to video analytics, which is forecast to grow at a CAGR of 17% over the next three years. Similarly, the usage-based insurance market surpassed $30 billion in 2020 and is projected to grow at a 20% CAGR through 2027. This growth in usage-based insurance is being driven by use cases targeting lower insurance premiums, driver safety, stolen vehicle recovery, and government regulations. Fleet management continues to lead the way in IoT market growth, with around 15% of vehicles now having telematics pre-installed, and there are estimated to be about 100 million telematics units in operation around the world. Technology adoption in the fleet management industry over the last several years has rapidly accelerated due to the speed and availability of networks, complemented by the capability of IoT devices. The industry was kick-started by the adoption of GPS devices in commercial vehicles, allowing for the birth of location-based services applications. At this point, the industry was primarily focused on information about the vehicle itself, location, status, and vehicle health. Next, with the growth of low-power networks and associated sensors, the industry moved the focus to information about the cargo. What is the vehicle carrying? What is the status of that cargo? How much of it is there? How hot or cold is it? When did it get loaded and where is it now? Today, organizations are acutely focused on safety, specifically around keeping drivers safe and reducing crashes. This has led to our customers leveraging video telematics with a specific focus on driver behavior, driver coaching, and data collected by IoT devices to reduce fraud and false insurance claims. All of this adds up to significant cost reductions and operational efficiencies. The data that we can now collect associated with these three aspects of fleet can be combined to support many use cases, and Core, through the management of connectivity, hardware, and SaaS solutions, is at the intersection of this technology and these industry use cases. Core's mission is to reduce the complexities of IoT, to make IoT easy. Easy to deploy, easy to manage, easy to scale, and easy to buy. Core makes IoT easy by providing bundled solutions that package just about everything an organization would need to deploy to address their fleet management use cases. Tracking solutions that combine hardware, connectivity, software, and managed services. Advanced video analytics solutions that combine hardware, connectivity, AI, and machine learning. Cargo management solutions. that track and provide environmental data for containers, trailers, and pallets, all the way down to a single item within a vast and often complex supply chain. Compared to our competition, who are mostly focused on a one-size-fits-all approach, Core provides our customers with the option of integrating different products from multiple OEMs, creating bundles that address specific industry needs without the fear of vendor lock-in. These bundled solutions and others that are shown here, plus many that are not, leverage CORE's expertise to help fleet organizations tackle a variety of use cases. And as IoT adoption accelerates, so too will demand for our bundled solutions for fleet. To emphasize the importance of video analytics and the role it plays in driver safety, let me give you a real-life example of one of our customers leveraging our technology to help save the most valuable cargo in a truck, the driver. A fleet customer had an incident where one of their drivers was kidnapped while driving in Mexico. The technology that they had in his car alerted emergency services leveraging artificial intelligence and in-cabin video. This allowed law enforcement to track the driver and return him safely the same day. So how does all of this translate into revenue for core? Today, the fleet vertical accounts for approximately $50 million in annual revenue. This revenue is a consistent and resilient recurring revenue stream driven primarily by a strong and broad base of customers. In our go public five year forecast, we projected fleet revenue would grow to $75 million by 2025. However, our internal stretch target is to achieve $150 million in revenue in this same timeframe. We believe this is achievable by focusing on three areas. First, we're making ongoing investments in developing our partner ecosystem. In fact, we now integrate with over 400 partners that are unlocking data into our platform. Second, we have released over 130 features with multiple bundled solutions addressing the highest demand industry use cases. And our platform now supports, as an example, in the video analytics area, the top three OEMs in the industry. And third, we are investing in IoT-managed services, addressing specific fleet needs around deployment and fulfillment, which is right in line with our vision to reduce the complexity of IoT. In conclusion, I will say that we are very proud of the progress our fleet team has made, and we believe the innovative approach outlined today will be a big contributor to Core's growth. With that, I will now hand the call over to Paul to cover the financials in more detail. Paul?