KORE Group Holdings, Inc.

Greetings and welcome to the Core Group Holdings fourth 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 that this conference is being recorded. I will now turn the conference over to our host, Charlie Brady, Vice President of Investor Relations, to begin. Thank you.

Thank you, Operator. On today's call, we'll be referring to the fourth 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 fourth 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 Roland Bao, the company's president and chief executive officer.

Thank you, Charlie. Good afternoon, everyone, and thank you for joining us today for our fourth quarter 2022 earnings call. With me is Paul Holtz, Core's Chief Financial Officer. As always, we will start with an overview of our key announcements, including our separate announcement this morning that we are acquiring Twilio's IoT business, which we believe is a fantastic fit with our growth strategy. The Twilio business unit strengthens Core's eSIM leadership position and expands Core's existing deploy, manage, and scale value proposition by adding build services, thereby bolstering our competitive positioning as a one-stop shop for IoT connectivity and deployment. Following this, we will present an overview of our financial results for the fourth quarter and full year 2022, and provide financial guidance for 2023. We will finish with a Q&A session. This morning, we announced that Core has signed a definitive agreement to acquire Twilio's IoT business. In this transaction, as consideration for Core's acquisition of Twilio's IoT business, Twilio is taking an equity ownership position in Core of 10 million shares of common stock. Upon closing, Twilio will become one of Core's largest shareholders, representing a vote of confidence in Core's leading pure play IoT position. We expect the acquisition will be slightly dilutive to EBITDA in 2023 and accretive beginning in 2024. Our initial 2023 guidance, which I will discuss shortly, includes the addition of Twilio's IoT business from an assumed closing date of June 1st. We believe this transaction is a win-win-win for Core and Twilio, and customers of both companies. There are several dimensions to the overall strategic rationale of this deal. First, Core is a leader in the IoT connectivity market, and we intend to be one of the few large IoT hyperscalers following the inevitable and ongoing market consolidation. We believe adding the Twilio IoT business accelerates our journey to fulfill this vision And with Twilio taking an equity ownership interest in Core, it bodes well for potential future go-to-market collaboration and lead flow. Second, Twilio has pioneered the digital purchase and consumption of IoT connectivity, just like AWS and others did for compute and storage services. At Core, we believe this is the future of IoT connectivity. And with Twilio's IoT business, we believe we are adding the industry's strongest capability for the digital consumption of IoT. This will form a critical component of our future distribution strategy and profitable growth as it reduces customer acquisition costs. Third, the combination of core OmniSIM and Twilio SuperSIM represents the leading IoT connectivity product in the market combining the best of global connectivity with compliant local access, which is more important than ever for global IoT deployments. Fourth, Twilio has incubated their IoT business with significant investments, including attracting the developer persona by enabling the rapid design and build of devices that ease the adoption of IoT. Core gains the benefit of these investments, and we add build to our deploy manage scale story. Finally, outside the five largest global MNOs, the combination of Twilio's and Core's connections will position Core as the largest provider of IoT connectivity outside of China. I will add that the combination of Core's white glove customer experience and Twilio's digital experience provides a solid foundation for strong growth through the decade of IoT ahead. powered by a culturally aligned world-class pool of talent from both organizations. The diagram on slide five represents the power of bringing together Twilio IoT and Core. If you just work your way down those lines, the combination of Core's OmniSIM and Twilio's SuperSIM provides the leading global eSIM proposition. Core has invested in building out our deploy, manage, scale value proposition, and by adding Twilio's device builder capability, we broaden our value proposition to build, deploy, manage, and scale. A further step in our one-stop shop positioning. The new core has the ability to optimize our cellular core network from two best-in-breed solutions. Importantly, while Core has begun the implementation of a developer portal, Twilio is a recognized leader in digital experience and has established relationships with thousands of IoT developers whom we welcome to Core. The introduction of these developers to Core's offerings creates expansion opportunities into this rapidly growing segment of the market. We are already building a Twilio-like web console, which we will accelerate upon closing the acquisition. in combination with our white glove customer support, represents an important dimension of our growth strategy. To the Twilio IoT team, let me say we are very excited to add such great talent and expertise to core, and we cannot wait to start working together. Now let's move on to other highlights from the quarter, which demonstrate the continued execution of our strategy to help customers deploy, manage, and scale solutions and simplify the complexities of IoT. most notably our December announcement of a multi-year go-to-market alliance with Google Cloud Platform, wherein Core will provide Google Cloud customers with a one-stop shop for IoT services by leveraging Core's IoT solutions and Google Cloud's infrastructure. We also introduced OmniSIM Safe using AWS IoT Core, to mitigate security challenges associated with global massive IoT deployments, complete with device to cloud integration. The core OmniSIM safe connectivity solution is an innovative eSIM approach that uses the GSMA IoT safe standard and supports zero touch provisioning to allow pairing a device to the cloud with minimal physical intervention. And finally, We were excited to announce that CORE will be providing IoT connectivity and managed services for CareDaily, an in-home senior care SaaS company with an AI assistant IoT platform aimed at helping seniors age in place safely and autonomously, while also providing communication with healthcare providers and family. CORE's IoT managed services ensure that CareDaily's device and hardware needs are met seamlessly through procurement, configuration, kitting, shipping, and reverse logistics. Now let's look at our fourth quarter financial results on slide seven. Our fourth quarter revenue was stronger than expected, resulting in full year revenue coming in above the guidance range, which we had already increased following our third quarter results. For the full year 2022, our net activations overcame the forced churn of approximately 1.2 million 2G and 3G SIMs. Fourth quarter revenue of $62.4 million declined 3% year-over-year, primarily due to a difficult comparison as the year-ago quarter included significant revenue from the LTE transition project at our largest customer. Additionally, the 2G, 3G sunsets in the U.S. impacted our fourth quarter performance. These two factors have masked Core's underlying growth for the past several quarters. Excluding the impact of the LTE transition project, fourth quarter 2022 revenue increased 11% year over year, indicating the true organic growth masked by these transitory factors. From this, we believe the fourth quarter represented a near-term revenue trough, and we continue to expect revenue in the first quarter of 2023 to increase sequentially. Gross margin increased 600 basis points year-over-year to 54.1% due to continued optimization of our carrier costs and the absence of lower margin LTE transition project volumes with our largest customer. Fourth quarter adjusted EBITDA of $15.7 million increased 20% from the fourth quarter of 2021, and adjusted EBITDA margin was 25.1%, compared to 20.3% in the year-ago quarter. Turning to slide eight, we present an overview of our full-year 2022 results and our guidance for 2023. Total revenue of $268.4 million increased 8% year-over-year, and gross margin improved by 80 basis points to 51.9%. Adjusted EBITDA of $62.8 million increased 6% compared to 2021. Finally, cash provided by operating activities improved by more than $32 million year over year. Paul will discuss the full year results in more detail later in the call, but before I turn it over to him, I'd like to present our 2023 outlook. To provide context, on prior calls, we estimated the 2023 headwinds from the 2G and 3G sunsets and the LTE transition project at our largest customer to be approximately $12 million each. And despite this $24 million headwind, Core's 2023 revenue was forecast to grow in the mid to high single digits. With the acquisition of Twilio's IoT business and an assumed closing of June 1st, year over year revenue growth is now projected to be in the mid teens. As such, Our guidance for 2023 is revenue in the range of $300 million to $310 million and adjusted EBITDA in the range of $60 to $62 million, implying an adjusted EBITDA margin of approximately 20%. With that, I will now hand the call over to Paul to cover the financials in more detail. Paul?