KORE Group Holdings, Inc.

Greetings, and welcome to the Core Group Holdings third quarter earnings conference call. At this time, all participants are in listen-only mode. A brief 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 introduce your host, Charlie Brady, Vice President, Investor Relations. Thank you, Charlie. You may begin.

Thank you, Operator. On today's call, we'll be referring to the third 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 third 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 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 Romo Val, the company's president and chief executive officer.

Thank you, Charlie. Good afternoon, everyone, and thank you for joining us today for our third quarter 2022 earnings call. With me is Paul Holtz, Core's Chief Financial Officer. Today, we will provide an overview of our financial results for the third quarter of 2022. I will start with a brief highlight of key events in the quarter, followed by a summary of our results. Paul will then take you through our financial performance in more detail, and we will finish with a Q&A session to answer your questions. In our third quarter, we once again delivered strong financial and operational results, and further advanced our strategy through new initiatives. In September, we announced a strategic alliance whereby Core will join Ericsson's IoT accelerator platform, which already has over 35 other MNO partners, most all of which are located in Europe and Asia. Via these channel partners, Core will have the opportunity to provide over 8,500 enterprise customers primarily headquartered in those 35 plus countries with seamless connectivity when they want to deploy IoT assets in the US. So this alliance has the potential to bring to core thousands of customers who are managing millions of connected devices. These are customers core would otherwise not have easy access to given that they are headquartered all over the world. However, They will still need to be won customer by customer, and these wins will likely ramp slowly. That said, this alliance is another milestone in the evolution of core, and I am excited by the prospect of partnering with a global leader in Ericsson and enhancing our growth engine for years to come. In the third quarter, we also announced the launch of the Core Connected Hub, a telemetry device peripheral that streamlines the integration of connected medical devices and sensors into CORE's connected health solutions. And finally, in July, we were honored to be named a 2022 competitive strategy leader for the global IoT industry by Frost and Sullivan. At CORE, we never stop innovating to simplify the complexities of IoT deployment for our customers. Let's move on to slide five to look at Q3. We again delivered strong results. Our third quarter revenue results were at the upper end of our internal estimates. This has prompted us to increase our 2022 revenue guidance despite the adverse impact from foreign exchange rates having almost doubled from our second quarter projection to an estimated $5 million for all of 2022. Since going public last year, we have consistently proven our ability to execute our strategy. As expected, third quarter revenue of $66.6 million declined 1.8% year-over-year due to a difficult comparison as the year-ago quarter included significant revenue from the LTE transition project at our largest customer. However, I am happy to report that gross margin increased 500 basis points despite this revenue decline as we continue to focus on improving our margin profile. We continue to expect our fourth quarter to decline sequentially from third quarter due to the usual seasonality of IoT solutions, where the fourth quarter is typically the lowest revenue quarter of the year. I will now take a minute to address some of the factors impacting our near-term revenue growth. As we have discussed previously, strength in core's underlying revenue growth has been masked by transitory one-time factors. To put this in perspective, If you cut away all the headwinds created by the 2G, 3G sunsets, the LTE transition project at our largest customer, and the foreign exchange headwinds this year, Core's 2022 revenue growth rate percentage is in the low 20s. Obviously, the BMP Simon acquisition has been a big help with this growth. But even putting that deal aside, we have delivered organic growth this year, net of the transitory factors I just mentioned. More importantly, and while we are not providing formal guidance today, we are excited about the future because these one-time effects are coming to an end, with the approximately $12 million in 2G, 3G revenue headwind next year being the last major impact. And despite this headwind, we expect revenue growth in 2023 to be in the mid to high single digits percentage range, including our belief that we will find replacement revenue at our largest customer to make up for the LTE transition project revenue we received in the first half of this year. In 2024, we believe we can double that organic growth rate given the absence of headwinds, and we continue to target a 20% growth rate by 2025. Given our strong performance through the first nine months of 2022, we are increasing our revenue guidance to a range of $265 to $267 million compared to our prior guidance, the 260 to 265. And as mentioned, this is despite the estimated $5 million headwind from foreign exchange rates, which have increased since the end of the second quarter. As a reminder, this was not previously embedded in our initial 2022 guidance that we provided in March. Our EBITDA guidance range of 63 to 64 million is unchanged to account for some increases in operating expenses that Paul will talk about in more detail. As a result, we anticipate exceeding our two-year go public revenue forecast for 2021-2022 by $56 to $58 million. With that, I will now hand the call over to Paul to cover the financials in more detail.