Hanover Insurance Group Inc

quarter and fiscal year 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. I will now turn the conference over to Mirko Wicca, Chairman, CEO, and President. Please go ahead.

Thank you, Valerie, and good afternoon, everyone. I'd like to thank everybody for joining us today to discuss our fourth quarter results and the fourth fiscal year 2023 results, which ended back in October 31st of last year. As demonstrated by the results we announced earlier today, demand for our products continues to be strong, and our business fundamentals have never been better. Now, we achieved a strong Q4 revenue of $35.7 million as we continue to deliver top-line growth. Now, this, let's not forget, is inclusive of the revenue reduction we took because of exiting the House of Worship vertical. And as a reminder, from our previous quarter earnings call, we pulled in a $2.5 million U.S. government programmatic deal from Q4 into Q3. But given those two events, delivering $35.7 million in Q4 was a pretty good performance. Now, gross margins for Q4 were also extremely strong at 74.4, and Dan will talk more about that. And last year's Q4 level was 68%. And it's also the first quarter showing our operational performance potential since the last two acquisitions. And we delivered an adjusted EBITDA of $5.7 million for Q4, which represents a 15.9 operating margin, which is important. And this is compared to last year's Q4 adjusted EBITDA of $4.9 million, or 13% operating margins. Now, on an annualized basis, I'm happy to report we achieved a record annual revenue of approximately $140 million, which represents an 11.3% growth over the previous year. Again, this is inclusive of the revenue reduction of the House of Worship vertical that we have now completely exited from. Now, if we normalize for the reduction of the House of Worship revenue, our growth was actually 16.1% year-over-year, so pretty, pretty good. As a result, our adjusted EBITDA margins for the full year grew to 10.6% from 6.4% in the previous year. It should be noted but we still had several quarters in 2023 that included costs in our P&L that will not appear in 2024. It really shows that we have turned the corner of our acquisition strategies and are demonstrating our potential . And I can finally say, for the full year 2023, our adjusted EBITDA was $14.8 million, representing an increase of 83%. from last year's performance. Again, demonstrating what we have been saying all along, that we will show a much higher increase in our profitability going forward, and we expect this trend to continue for 2024. As we have been saying over and over and over, we are moving quickly toward achieving our goal of delivering 20% EBITDA performance. I would think that given our previous Q3, now our Q4 performance, everyone should have more comfort that this is going to happen sooner than later. In 2023, we have also seen a more balanced and consistent quality performance. In fact, remember, Q1, we did $34 million. Q2, we did $35 million. Q3, we did $35 million. And Q4, we delivered $35.7 million. Pretty consistent. I expect this to continue into 2024. And we are finding that our Three main verticals in our defense broadcast enterprise balance each other out globally and give us better business predictability. And we've also seen the U.S. government slowly moving through the multi-quarter purchasing cycle and not only depending on the year-end September-October time frame, which always falls in our Q4. The only unknown is, of course, the U.S. budget approval, the continuing resolution process, all bundled in. with an unpredictable election year. But we'll be monitoring these very closely, although an election year has typically always been very positive for business. Now, we have also been very successful in our SRT partnership and seen an increase in industry standardization around the SRT protocol we open sourced almost seven years ago. And a great example was when iVision hosted the Agile SRT Interop Plot Set with a new entrance, YouTube, who executed 2,257 individual device-to-device compatibility tests, really proving widespread industry adoption, so something to be very, very proud of. Now, we continue to see strong demands for our global security operational centers within the global financial and banking industry, cybersecurity, police centers, federal installations, public safety, and all defense sectors. Now, the need to have real-time mission-critical and secure access to all the video sources and assets for real-time analysis or situational awareness is becoming even more paramount. And we are clearly the leading vendor delivering the entire contribution distributional visualization ecosystem in these critical areas. We believe that our company has a bright future ahead, and we are committed to maximizing long-term value for all. We are confident in our ability to execute on our strategic plan and deliver continued growth and operational performance. Finally, I'd like to say we're also excited to announce the TSX approval for NCIB, a normal course issuer bid, and we clearly believe our common shares are undervalued, even with the recent 30% run-up. Our decision to initiate NCIB demonstrates confidence in a strategic plan and future direction of hydrogen, and Dan will discuss this in more detail shortly. I would like to say in closing that despite the economic headwinds and continued supply chain challenges we keep hearing about from other companies, I believe that hydrogen has weathered the storm better than most. We expect our 2024 to be strong and consistent with our strategic plan, expecting to demonstrate good revenue growth with even a higher level of profitability than in 2023. And Dan will share our 24 projections and guidance during his remarks.

With this, I'll pass it on to Dan. Lee, go on. Thank you, Mirko. Let's get into the numbers.