KORE Group Holdings, Inc.

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 Ronald Weil, company's president and chief executive officer.

Thank you, Charlie. Good afternoon, everyone, and thank you for joining us today for our second quarter 2023 earnings call. With me is Paul Holtz, Core's Chief Financial Officer. Before we get started, a warm welcome to our newest IoTers, many of whom joined Core with the acquisition of Twilio's IoT business. And now, let's get to the meat of our earnings call. As always, I'll start with a brief overview of the key events and announcements from the second quarter, and I will be followed by Paul, who will discuss our financial results. We will finish with a Q&A session. Slide four presents some key announcements from the second quarter. On June 1st, we closed the acquisition of Twilio's IoT business, marking a key milestone in accelerating our journey to being the world's first IoT hyperscaler. This acquisition, apart from providing us a world-class IoT connectivity product in SuperSim, expands Core's one-stop shop position by adding build to our deploy, manage, and scale value proposition. Needless to say, we remain excited about the additional growth opportunities created by the combination of core and the Twilio IoT business. In May, we announced the launch of our pre-configured managed solution to offer retailers, restaurants, and other multi-site companies high bandwidth 5G cellular connectivity through fixed wireless access, or FWA. Core's FWA solution will allow customers to access high-speed internet that has traditionally been available only through wireline applications. Retailers, restaurants, and other consumer-facing companies are increasingly seeing the benefits of 5G solutions to support point-of-sale devices, digital ordering, and integrating with third-party delivery services across multiple locations. This FWA solution positions Core to attack a growing high bandwidth use case and further expand our addressable market. As I'm sure you are all aware, ESG and sustainability have become important topics for companies and investors. With IoT increasingly playing a role in supporting ESG initiatives, We are seeing more opportunities where CORE can play a part, aligning with our purpose statement, IoT for good. Along these lines, in the second quarter, CORE announced its participation and support of two sustainability initiatives. We will provide scalable global IoT connectivity to a biodiversity sensor project conducted by ag tech company Syngenta. Syngenta's biodiversity project is digitally connecting farmlands across the globe to provide farmers with analytics to aid them in adapting to climate change and improving biodiversity to protect crops. Last year, Syngenta connected over 200 hectares of land and has a goal to connect 1 billion hectares over the next three years. To further support sustainability and waste reduction, CORE has launched an initiative to reduce the amount of plastic used in SIM card bodies by 50%. In addition to cutting SIM card plastic waste by half, this initiative will lower SIM card shipping costs by 50% and reduce core's carbon footprint related to SIM cards by 16%. Now, let's turn to our second quarter financial results and 2023 guidance on slide five. Our second quarter results continued the momentum established in the first quarter with Q2 revenue of $69.5 million, increasing sequentially from the first quarter by approximately 5%. On a year-over-year basis, revenue declined slightly by 2%, primarily due to a difficult comparison to the second quarter of 22, which had revenue from 2G, 3G customers and the LTE transition project at our largest customer. Absent the 2G, 3G, and LTE transition project revenue in 2022, second quarter 2023 revenue increased over 2% year over year. Our 2023 second quarter was the last quarterly year over year comparison impacted by the LTE transition project revenue, and the true organic growth of the company will be more evident going forward. While we have experienced some delays in IoT solutions revenue at a few customers, we continue to expect sequential quarterly revenue growth for the remainder of 2023 and year-over-year growth beginning in the third quarter. Gross margin increased 180 basis points year-over-year to 54.4% and benefited from continuing carrier cost optimization and a lower mix of hardware revenue. Second quarter 2023, adjusted EBITDA of $14.2 million increased approximately 7% sequentially from the first quarter, and adjusted EBITDA margin improved 30 basis points to 20.5% from 20.2%. Compared to the second quarter of 2022, adjusted EBITDA declined approximately 15%. We are reiterating our 2023 revenue and adjusted EBITDA guidance. We expect revenue to grow in the low to mid teens, resulting in revenue in a range of $300 to $310 million. This guidance includes absorbing the $24 million in year-over-year headwinds from the 2G and 3G sunsets in the U.S. and the LTE transition project at our largest customer, somewhat offset by the partial year contribution of the Twilio IoT business acquisition. Our reiterated guidance assumes that much of the IoT solutions revenue pushback that we started to see in the second quarter and will see in the third quarter will be made up in Q4. We remain confident in our adjusted EBITDA guidance range of $60 to $62 million and margin of approximately 20% as margins in the Twilio IoT business are improving slightly faster than we initially projected, which should offset any potential impact from the revenue delays I mentioned. With that, I will now hand the call over to Paul to cover the financials in more detail. Paul?

Thanks, Ronald, and good afternoon, everyone. Turning to our results on slide six, second quarter revenue declined 2% year-over-year to $69.5 million. compared to 70.9 million in the second quarter of 2022, and did increase 5% sequentially in the first quarter of 2023. By segment, IoT connectivity revenue of 48.3 million, including one month of revenue from the Twilio IoT acquisition, increased 8% year-over-year. Q2 2023 marked the first quarter sequentially in many years, that IoT connectivity revenue was not affected by the 2G, 3G sunsets in the U.S. IoT connectivity revenue is forecast to grow year-over-year and sequentially for the rest of 2023. Moving to IoT solutions, revenue declined 19% year-over-year to 21.3 million. The decline was again driven by the difficult year-over-year comparison due to the LTE transition project revenue at our largest customer in the prior year. The LTE transition project concluded in the second quarter of 2022, so going forward, this will not impact the year-over-year quarterly comparison. Total gross margin in Q2 2023 was 54.4%, an increase of 180 basis points year-over-year. The second quarter marks the highest gross margin since CORE went public in the third quarter of 2021. IoT connectivity gross margin of 65.2%, was down slightly year over year. IoT connectivity gross margins for the last four quarters have remained stable in the 65% range, but will decline overall in the second half of 2023 with the addition of the lower margin IoT connectivity revenue from the Twilio IoT acquisition. The good news is that, as Romo mentioned, margins from the Twilio IoT business are expected to improve slightly quicker than we thought throughout the rest of 2023. IoT solutions gross margins declined approximately 90 basis points year-over-year. The decline was mainly just due to the mix of hardware versus service risk. Total connections at the end of the second quarter were 18.5 million, including approximately 2.9 million connections from the acquisition of the Twilio IoT business. Excluding the Twilio IoT connections, Core's organic connections increased by 400,000 in the second quarter of 2022. Dollar-based net expansion rate, or DBNER, for the 12 months ended June 30, 2023, was 99% compared to 114% in the prior year. As a reminder, DBNER measures the growth from existing customers in the trailing 12 months compared to the same customer cohort in the year-ago period, much like same-store sales growth rate. As I said on our last quarterly call, with the anniversary of the BNP Simon acquisition in the first quarter of this year, These customers are now included in the calculation. The new customers from the Twilio IoT acquisition are not included. CBNER year-over-year continues to be impacted by the LTE transition project revenue from our largest customer that began in June 2021 and ended in June 2022. During this time period, our largest customer's revenue more than doubled from this one-time project. IF WE EXCLUDE TOTAL REVENUE FROM OUR LARGEST CUSTOMER BECAUSE OF THIS SIGNIFICANT NON-RECURRING EVENT, DBNER AT THE END OF THE QUARTER WOULD HAVE BEEN 115% COMPARED TO 109% AT THE END OF THE SECOND QUARTER OF 2022. OPERATING EXPENSES INCLUDING DEPRECIATION AND AMortIZATION IN THE SECOND QUARTER WERE 47.4 MILLION, AN INCREASE OF 4.2 MILLION OR 10% COMPARED TO THE SAME PERIOD LAST YEAR. THE INCREASE IS ATTRIBUTED to an increase in headcount-related costs, the inclusion of the TwilioILT business, stock-based compensation, and higher depreciation and amortization expense compared to Q2 2022 due to the BNP acquisition in the prior year. Second quarter interest expense, including amortization of deferred financing fees, increased year-over-year to $10.4 million versus $7.3 million in Q2 2022. due to the increased borrowing costs on our senior secured term loan. Net loss in the second quarter was $19.5 million compared to $10.8 million in the same period in the prior year. The year-over-year increase in net loss was due to increased operating expenses, which were partially attributed to the inclusion of the Twilio IoT headcount, higher depreciation and amortization expense, increased interest expense, and a lower income tax benefit compared to the year-ago. Adjusted EBITDA in the second quarter was 14.2 million, a decline of 2.6 million, or approximately 15% compared to the same period last year. Our adjusted EBITDA margin in the second quarter was 20.5%, down 320 basis points compared to the same period in the prior year. However, we did experience a 7% sequential improvement in adjusted EBITDA and a 30 basis point improvement in adjusted EBITDA margin from the first quarter of this year. The year-over-year decline in adjusted EBITDA and adjusted EBITDA margin were impacted by increased costs for headcount to invest in the company's growth, the additional Twilio IoT headcount, and costs to enhance public company processes and systems, including SOX compliance. Moving to cash flow. Cash used in operations for the three months ended June 30th, 2023 was approximately 0.7 million compared to cash provided by operations of 14.7 million for the same period in the prior year. The change was mainly due to abnormally high collections from our largest customer in Q2 2022 related to their LTE transition project. This compares to incremental cash outflows in Q2 2023 related to the Twilio IOT acquisition plus their incremental headcount costs paid in the quarter. These incremental cash outflows from the Twilio acquisition were not offset by any Twilio revenue collections as these won't begin until Q3 2023. At the end of the second quarter, cash excluding restricted cash was $22.9 million compared to $34.7 million as of December 31st, 2022. This change was primarily related to cash outflows from the Twilio IT acquisition, annual bonus payments, and increase in interest and income tax payments. Before passing it back to Romo, I would like to make a couple of comments on our 2023 annual guidance that we are maintaining for both revenue and adjusted EBITDA. For revenue, we had a strong first half of the year with no headwinds from the 2G, 3G sunsets in the US. positive organic growth in IoT connectivity, and the completion of the Twilio IoT acquisition. In the second half of the year, IoT connectivity revenue is expected to continue its positive momentum, and we will have a full six months of revenue from the Twilio IoT business. We are, however, more cautious regarding the IoT solutions revenue, as some of these customers have indicated they are pushing orders to the fourth quarter, which increases the risk that these orders could slip even further, meaning into 2024. At this point, we see Q4 being the largest quarter of the year for IoT solutions, when it has typically been our lowest quarter. We are much more confident about adjusting EBITDA because of the strong momentum in IoT connectivity and the faster improving Twilio IoT margins. On the OpEx side, we had built in incremental sales headcount into our guidance, in the second half of 2023, which we could delay if needed. And with that, I'll pass it back to Roman.