Release Date: August 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue growth of 4% year-over-year, reaching $84.9 million.
- Subscriber base expanded by 38,000, reaching a total of 2,329,000.
- Strong net cash position of $63.1 million, up from $53 million at the end of 2023.
- EBITDA increased by 6% year-over-year, reaching $23.1 million.
- Dividend yield of over 6%, with a quarterly dividend of $8 million.
Negative Points
- Negative impact from currency devaluation against the US dollar, affecting local currency results.
- Volatility in product sales due to dependency on third-party customers and inventory decisions.
- Lower ARPU (Average Revenue Per User) due to currency depreciation and sales to OEMs.
- Pricing pressures in some geographies, although not significant.
- Uncertainty in achieving future financial goals due to currency fluctuations in emerging markets.
Q & A Highlights
Q: Can you discuss the turnover that contributed to the stronger product growth this quarter?
A: Our subsidiary, DRM, which is our main supplier and also serves many third-party customers, had a strong quarter. They focus mainly on hardware, and their sales can be volatile due to varying customer demands globally. - Eyal Sheratzky, Co-CEO
Q: Are you experiencing any pricing pressures or changes in the pricing environment in any of your geographies?
A: No, we are not seeing any pricing pressures. Our main revenue source is subscriber fees, with an average ARPU of about $10. The sensitivity among end users is quite low, and our hardware margins are very low to attract more subscribers. - Eyal Sheratzky, Co-CEO
Q: You previously provided an aftermarket and OEM breakout for subscribers. Is there a change in reporting this quarter?
A: We haven't consistently provided this breakdown, but we will try to do so in the future. The differences were more balanced this quarter. - Eyal Sheratzky, Co-CEO
Q: Could you provide your outlook for product sales growth for the foreseeable future?
A: Our product sales are mainly driven by our subsidiary and the Israeli company. Sales can be volatile due to inventory decisions by distributors. We do not expect specific growth and recommend judging on an annual basis. - Eyal Sheratzky, Co-CEO
Q: Can you provide more insights about the newly launched motorcycle product and its future outlook?
A: We launched our motorcycle solution in Brazil, targeting insurance companies and OEMs. The solution reduces risk, making insurance more viable. We are also in discussions with motorcycle manufacturers to integrate our technology. In Israel, we have already seen success with a simpler solution for motorcycles. - Eyal Sheratzky, Co-CEO
Q: How should investors view growth going forward, especially with the 2025 EBITDA target?
A: Focus on profit growth, particularly EBITDA. We aim for $100 million EBITDA in 2025, assuming current currency rates. Our operating leverage model supports this goal despite potential currency fluctuations. - Eyal Sheratzky, Co-CEO
Q: The ARPU declined this quarter compared to previous quarters. What factors contributed to this besides currency depreciation?
A: Excluding FX effects, ARPU would be higher. The decline is solely due to currency depreciation. In local currencies, ARPU has actually increased. - Eyal Sheratzky, Co-CEO
Q: How do you see the impact of your collaboration with Porsche and Microsoft on your business?
A: Our collaboration with Porsche and Microsoft showcases our technology under demanding conditions. We aim to leverage these capabilities to attract OEM players and enhance our offerings to subscribers. - Eyal Sheratzky, Co-CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
