Inseego's (INSG) CEO Dan Mondor on Q3 2017 Results - Earnings Call Transcript

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About: Inseego Corp. (INSG)
by: SA Transcripts

Inseego Corp. (NASDAQ:INSG) Q3 2017 Earnings Conference Call November 2, 2017 5:00 PM ET

Executives

Dan Mondor – President and Chief Executive Officer

Steve Smith – Chief Financial Officer

Ashish Sharma – Chief Marketing Officer and Executive Vice President-IoT and Mobile Solutions

Chris Lytle – Chief Strategy Officer and Executive Vice President-Enterprise SaaS Solutions

Analysts

Mike Walkley – Canaccord

Mike Latimore – Northland Capital Markets

Operator

Hello, and welcome to Inseego Corp.’s Third Quarter 2017 Financial Results Conference Call. Please note that today’s event is being recorded. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity for analysts to ask questions. [Operator Instructions]

On the call today are Dan Mondor, President and Chief Executive Officer; Steve Smith, Chief Financial Officer; Chris Lytle, Chief Strategy Officer and Executive Vice President of Enterprise SaaS Solutions; and Ashish Sharma, Chief Marketing Officer and Executive Vice President of IoT and Mobile Solutions.

During this call, non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company’s website. An audio replay of this call will also be archived there.

Please also be advised that today’s discussion will contain forward-looking statements. These forward-looking statements are not historical facts but rather are based on the company’s current expectations and beliefs. For a discussion on factors that could cause actual results to differ materially from expectations, please refer to the risk factors described in our Form 10-K, 10-Q and other SEC filings which are available on our website. Please also refer to the cautionary note regarding forward-looking statements section contained in today’s press release.

I would now like to turn the call over to Dan Mondor, President and Chief Executive Officer of Inseego. Please go ahead.

Dan Mondor

Thank you. Good afternoon, everyone, and thank you for joining today’s call. I’ll start my remarks with the progress report on the transformation of Inseego. The goal is clear. We are increasing shareholder value by repositioning Inseego to become an innovative leader in IoT, mobile and enterprise SaaS solutions and driving efficiencies to deliver profitable growth.

In the third quarter, the new management team continued to implement corrective actions to address issues inherited from prior management. In June, we provided financial targets for expense reduction, adjusted EBITDA and free cash flow. I am pleased to report that we implemented expense reductions over the $15 million target we set. This has begun to strengthen our financials as seen by the reduction of over $21 million in annualized OpEx since the first quarter of 2017. The long-term benefit to our financials are obviously significant. Additionally, we’ve identified more expense reduction, with the largest expense reduction opportunity in G&A. To reduce G&A we have launched a company-wide business process improvement project led by Steve Smith, which he will discuss in his prepared remarks.

We have also focused on reducing cost of goods sold, with improving MiFi gross margins as the top priority. MiFi has great technology and is highly differentiated in the market. But to state the obvious, MiFi gross margins are completely unacceptable and reflect the lack of attention to margins previously. The 2018 target is a minimum adjusted EBITDA of 10% for the MiFi product portfolio.

We are underway implementing a detailed action plan to reach these objectives. But before I provide comments on the gross margin improvement plans, it’s important to note that we faced shortfalls due to supply issues we encountered with our contract manufacturer. This was a significant issue when I joined as CEO in late Q2 and immediate corrective actions were established. The Inseego team worked very hard to get supply chain back on track, and I’m pleased to report that we have the issues now behind us. However, the supply constraints hurt revenue in Q3 and the effect carries into Q4. It’s important to note that we worked closely with our key customers through the process and we remain supplier of choice with our largest MiFi customer.

We have established a supply chain strategy that addresses gross margin improvement by lowering cost of goods sold and achieves both security of supply and commercial flexibility. Through supply and product design cost reductions, we expect to see a steady improvement in MiFi gross margin percentages starting in the fourth quarter. So Q3 represents the low watermark.

As we discussed previously, we liquidated old inventory product at cost in the quarter. So there were several points of margin impact as a result.

We continue to believe in the potential for double-digit revenue growth at Ctrack. While lower upfront hardware sales and the deemphasis of consumer insurance vertical impacted reported year-over-year revenue comparisons, we will not accept growth rates below industry average. We expect to return to overall revenue growth at Ctrack in the first quarter of 2018 and accelerating growth throughout 2018 due to increase in sales investments in Europe and strong momentum in the worldwide aviation vertical and, very importantly, by entering the U.S. market.

For too long, our management was focused on subscriber growth at any cost leading to investment in low ARPU, capital-intensive applications. Going forward, we will only invest capital in subscriber acquisition with high rates of return, and Ctrack’s success will be measured and incentivized on free cash flow generation and growth.

On a consolidated basis, we expect adjusted EBITDA to increase sequentially over the next several quarters despite an anticipated MiFi revenue decline in the fourth quarter due to the effect – the ongoing effect of prior supply issues as well as seasonality in the quarter.

On the second quarter call in August, we said that some of our restructuring initiatives are taking a little longer to implement than the original June projection due to their scope and complexity. Our medium- to long-term targets have not changed. We expect to achieve positive adjusted free cash flow in the first quarter of 2018 and $20 million to $25 million of annualized adjusted EBITDA run rate in the first half of 2018 and a minimum of $30 million annualized adjusted EBITDA run rate by year-end 2018. As a result, we expect a significant reduction of our total debt to adjusted EBITDA ratio to reach four times to five times by the end of 2018.

There has been tremendous progress in the short amount of time, and I want to thank the Inseego team. These accomplishments came from detailed planning, a company-wide focus and, most certainly, relentless execution.

Turning to some recent highlights. We announced the strategic collaboration with Qualcomm and Verizon on 5G NR, stands for new radio, trials and widescale commercial rollout. This is a game changer for Inseego, allowing us to address the massive broadband residential gateway market.

In the aviation market, Inseego was selected by a major U.S. airline for its aviation SaaS application, marking the first North American win for the Ctrack solution. I want to emphasize that this is a major milestone for Ctrack. Not only is it the first win in North America, we expect it to be the largest deal in Ctrack history at full deployment.

Additionally, we are currently shortlisted on a total of five RFPs and pilot projects with major owners of airline and airport ground support equipment. We announced a global strategic partnership with Undagrid to deliver a comprehensive airport connected asset solution. So now we can cover both motorized as well as non-motorized assets for a comprehensive airport solution.

Double-digit subscriber growth at Ctrack, SMB, small and medium business, markets in Europe and large fleet in South Africa, and adjusted EBITDA margins grew sequentially from 15% in the second quarter to 18% in the third quarter. We expect continued expansion to the mid 20% level in the fourth quarter due to the full impact of previously announced cost [Audio Dip].

We launched the MiFi 7000 hotspot for global markets, leveraging prior investment, and demonstrated 1.2 gigabit speed on next-generation MiFi hotspots at Mobile World Congress Americas. We are expanding the MiFi customer base by entering new markets and have won one new customer and are engaged in four more opportunities.

We were awarded a smart city IoT project in a major U.S. city with a global system integrator which continues the growth curve for our Skyus IoT device portfolio.

We closed a $48 million refinance maturing in August of 2020, which provides additional liquidity into the business of paying up previous term loan maturing in May of 2018 and distinguishing $14.9 million of convertible senior notes.

Lastly, we strengthened the management team with new appointments of the Chief Financial Officer, Chief Strategy Officer and Chief Marketing Officer.

Now turning to our growth strategy framework. First, we’ve established a long-term planning framework, which provides a company-wide focus on what matters most, and a road map to create value. It’s a proven methodology and consisted four parts and repeats on an annual cycle, so it’s a continuous process. Part one is a three-year strategic growth plan which we formally launched on September 21. Part two is technology strategy that defines the technology in long-term product investments we need to achieve – we need in order to achieve the three-year growth targets. Part three is sales and marketing strategy which defines our go-to-market based on target growth markets, industry verticals and geographies. And part four is the finance strategy ties it all together in a multi-year financial model, the top line and bottom line growth, cash generation and deleverage of the balance sheet. One aspect I want to highlight is our objective to significantly delever the balance sheet within the three-year plan period in which, by no coincidence, aligns with the recent three-year term loan refinance that matures in August 2020.

The second part of our growth strategy is restructuring the company, which we’re calling Inseego 2.0. Inseego 2.0 is focused on unifying the company into common areas of expertise and core competencies. Inseego will now have two businesses and corporate services. We will be able to apply more resources in the definition of new product opportunities to shorten time-to-market and adopt best practices in all organizations. The sales team can sell across a broader product portfolio with more resources to drive deeper customer engagement, in current accounts to serve those customers better and to win new accounts. Inseego 2.0 will maximize our efficiency, effectiveness and establishes very clear accountability. The expression you will now hear frequently in Inseego has three initials: P, A, I, which stands for personally accountable individual. The two businesses will align common technologies around common market segments and industry verticals as follows.

Enterprise SaaS solutions is the first business. This is comprised of the Ctrack brand and Inseego North America DMS brand. The second business is IoT and mobile solutions, and this business is comprised of the MiFi brand and Inseego North America IoT and Crossroads brands. This business has dedicated sales product development and product management. Ashish Sharma has the dual role of EVP, IoT and Mobile Solutions and CMO. Chris Lytle has the dual role of EVP, Enterprise SaaS Solutions and CSO.

The business units have broad market segment names and purposely so. This aligns Inseego with markets we serve today and, importantly, understands – underscores our growth strategy, which is to pursue new market segments, new enterprise verticals, new geographies and bringing innovative new products to market.

The organization of our current brands accordingly demonstrates that we occupy these markets today with strong brands and establishes our credibility from which to build upon, so we can now explain who Inseego is, what we do and why we matter in a 30-second soundbite. This was previously missing.

We believe Inseego 2.0 is good for all stakeholders in the company. I can tell you employees are energized and there is now clarity for the industry and the investment community. We’ve tested this reorganization, and the overall response to the – to it has been unanimous, two thumbs up. We’ve also heard another comment, which was it’s about time.

Now turning to specifics on growth opportunities going forward. In enterprise SaaS solutions, at Ctrack, we continue to shift our subscriber acquisition investment to large fleet worldwide and SMB in Europe and away from capital-intensive consumer applications with inadequate returns. Large fleet SMB subscriber recurring revenue grew approximately 10% in the quarter led by strong growth in Germany, Benelux and South Africa. We believe there are significant opportunities to cut capital spending on low ARPU applications which will accelerate free cash flow generation at Ctrack.

Building on our seven international airport deployments, the Ctrack aviation SaaS solution continues to gain momentum with many of the largest worldwide owners of airport motorized assets. We expect the aviation vertical to lead our North American growth strategy and accelerate our 2018 growth rate internationally and in North America.

In IoT and mobile solutions, we are making progress in growing our mobile broadband business in new markets with new customer wins. We’re also bringing our strategy on 5G into focus together with strong partners such as Verizon and Qualcomm. With this initiative, we are looking to create a paradigm shift in the market and substantially increase our addressable market.

Continuing to our IoT business. We are seeing many new enterprise opportunities for our Skyus portfolio for LTE connectivity applications. We have won IoT projects at smart city wide area network backup and booked monitoring applications with large enterprise customers. We’re investing in our Skyus portfolio road map as it continues to be a preferred solution for many IoT opportunities. This includes leveraging technologies and platforms we are developing for our mobile broadband portfolio.

I’ll now turn the call over to Steve Smith, who will discuss our Q3 financial results and provide Q4 guidance. Steve?

Steve Smith

Thanks, Dan. Before I get into the results, I want to elaborate on a couple of the things Dan said in his remarks. First, the new management team. Dan joined the company in late second quarter. Chris, Ashish and I joined during the third quarter. Our restructuring actions and charges and recent inventory reserves that you’ll see in these financial statements are a result of decisions made by prior management.

Second, business process improvements. Dan points out that the G&A spend relative to revenue is higher than the norm. Inseego is a combination of multiple companies brought together to form a multi-disciplined entity. There was no integration of Inseego’s acquisitions. The goal of the BPI project Dan alluded to is to complete the integration of business systems into an effective platform, eliminating the waste and inefficiencies associated with multiple and disparate systems and processes. I won’t try to hide the fact that we have a lot of hard work ahead of us. This work will take multiple quarters.

Now on with the results of the quarter. As noted last quarter, Q2 was a transitional quarter for Inseego; Q3 was as well. Consistent with the remarks made during the second quarter conference call, in the third quarter, we began to see real reductions in operating expenses from our restructuring efforts. By the first quarter of 2018, we should see the full benefits of previously announced cost initiatives – cost-savings initiatives, I should say.

As noted in our release this afternoon, Q3 revenues of $57.5 million were down sequentially from the second quarter by 4% or from $59.9 million. On a year-over-year basis, total revenues were down by 6% from $60.9 million. Hardware revenues of $42.8 million in Q3 were down $2.2 million from $45 million last quarter. Year-over-year, hardware revenues were down 7% from $46.1 million in Q3 2016. The MiFi supply issues highlighted by Dan affected both the sequential and year-over-year comparisons.

We generated $14.7 million in SaaS, software and service revenues in Q3, down 2% sequentially from $14.9 million in the first – and 1% year-over-year from $14.8 million. Growth in Europe SMB and South African large fleet was offset by lower consumer and insurance applications as well as contract price reductions for the DMS platform.

Ctrack total revenues, which include a mix of hardware and software, were $15.2 million for the quarter, down slightly from the second quarter of $15.3 million and down 8% compared to a year ago of $16.6 million. The decrease was largely due to a shift in our customer preference towards a rental model away from the upfront sale of hardware.

GAAP gross profit was 28% for the third quarter, slightly lower than the second quarter and 10% below the same quarter last year. As previously announced, we sold approximately $7 million of older-generation MiFi product at a cost during the third quarter to improve liquidity.

Our Q3 GAAP operating expenses of $22.7 million includes a $3.4 million restructuring and charge, which included $1.3 million of severance costs as well as a reserve for ongoing lease obligations of unused facilities, which we will be unlikely to recover any benefit, and certain unused assets authorized by prior management. Excluding the restructuring expenses, operating expenses associated with R&D, sales and marketing and G&A decreased sequentially $2.1 million to $18.4 million, showing some of the results of the cost reduction efforts.

On the same basis, spending is down year-over-year by 40% from $30.4 million in Q3 of 2016. Our GAAP net loss and net loss per share for the quarter was $13.8 million and $0.23, respectively, compared to a net loss of $12 million or $0.21 per share in Q2 and a net loss of $18.6 million or $0.34 per share in Q3 2016.

Now turning on to our non-GAAP metrics. Consolidated non-GAAP gross margin for the current quarter was 29.6%, down sequentially from 32.1% in Q2 2017 and down from 38.7% a year ago, largely resulting from the sale of older MiFi products mentioned earlier. It should be noted that as a result of the – of this one-time sale and it’s favorable approximately $700,000 taken in the quarter for excess and obsolete inventory, gross margin percent was impacted by about 5.5 percentage points. Non-GAAP gross margins for SaaS, software and services increased sequentially to 76.7% from 75.9% in Q2 and year-over-year from 67.3% in Q3 2016.

On the hardware side, our non-GAAP gross margin declined sequentially to 13.5% from 17.5% in Q2 and year-over-year from 29.5%. The MiFi products are driving this near-term margin compression.

Our non-GAAP gross margins for overall Ctrack product was 68.3% in the third quarter of 2017 compared to 68.7% in Q2 2017 and 63.3% in the third quarter of 2016.

With respect to operating expenses. Our non-GAAP operating expenses decreased to $17.5 million for the quarter, an improvement of 13% sequentially and 25% year-over-year. As Dan stated earlier, relative to our commitments in the June call, we have reduced annualized expenses by greater than $21 million to date. We expect the continued improvement in our operating expenses as a result of cost-cutting actions we’ve recently undertaken. This can be partially offset by unpredictable legal expenses.

Our adjusted EBITDA for the third quarter of 2017 was $5.1 million as compared to $1.1 million for the second quarter of 2017 and $2.3 million in Q3 2016. Ctrack generated $2.7 million of adjusted EBITDA in the third quarter of 2017, up $400,000 from the second quarter and unchanged from the same period last year.

Our subscriber base grew by more than 5% during the third quarter, up to 700,000 compared to our June quarter subscriber count of 664,000.

On a year-over-year basis, we’ve added 110,000 subscribers, an increase of 19%. This includes Ctrack and Inseego North America subscribers combined.

Our non-GAAP net loss per share in the third quarter was $0.05 per share, an improvement of $0.03 versus last quarter due to improved operating expenses and $0.02 lower than the same period last year due to lower revenue and gross margins offset by the operating expense reductions. A reconciliation of our GAAP to non-GAAP financials is contained in the press release.

Now turning to the balance sheet. Cash and cash equivalents, inclusive of restricted cash, was $20 million at the end of the third quarter, increasing some $11.4 million at the end of the second quarter. During Q3, we paid down approximately $5.2 million of payables and paid $1.6 million of severance.

In late August, we completed the refinance of a $40 million term loan facility. These funds allow us – allowed us to pay off the previous $20 million term loan that was due to mature in May of 2018. We extinguished approximately $14.9 million of convertible senior notes and generated approximately $14.5 million of additional liquidity.

Finally, on our share count. Our weighted average shares outstanding for Q3 were 59 million, an increase of about 1 million shares from 58 million – from the 58 million share count average outstanding in the second quarter due mainly to the shares issued in connection with the financing just mentioned. In Q3 last year, our weighted average shares outstanding was around 53.9 million.

Now moving on to guidance. We’re pleased that the company met the Q3 guidance provided three months ago. As for fourth quarter guidance, Q4 revenues will reflect the seasonality of the MiFi business and the effect of the earlier supply issues referenced by Dan combined with the benefits of the cost reductions already put in place. We expect total revenues to be in the range of $45 million to $50 million for the fourth quarter and our consolidated adjusted EBITDA to be in the range of $2 million to $3 million. Our Ctrack revenues over the same period are expected to be in the range of $15.5 million to $16 million and adjusted EBITDA from Ctrack in the range of $3 million to $3.3 million over the same period.

That ends my prepared remarks. At this point, we’ll turn the call over to the operator and start the Q&A session.

Dan Mondor

Just before we turn it over to Q&A, just a correction, our adjusted EBITDA for the third quarter of 2017 was $1.5 million. I think there was just a slight misspeak on that.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Mike Walkley of Canaccord. Please go ahead.

Mike Walkley

Thank you. Just looking at your MiFi hardware business, can you walk us through how you see it recovering after Q4? And to hit your targets, your intermediate-term targets, what kind of revenue and gross margin do you need to achieve in MiFi to hit maybe that $30 million run rate and some of the other targets you talked about? Thank you.

Dan Mondor

Yes. Well, it’s Dan here. Let me start – and by the way, I should mention that we have Ashish Sharma here and Chris Lytle, who can assist in some of the questions. So the model that we have does not rely on revenue growth, it’s a flat year-over-year model. And so there is really – there isn’t really an absorption factor, if you will, in terms of cost to achieve higher margins. So a couple of things. Firstly, we are moving contract manufacturers and have negotiated quite heavily several there through a selection process. And quite frankly, we just have better commercial terms actually both in transfer price as well as our payment terms.

So there is a fairly significant contribution in terms of basis points from that alone. Secondly, there’s been a lot of work now on the product side to look at the cost of components, the overall cost of the product as far as the housings, et cetera. So going forward, there is a new approach to essentially have a lower design floor, a cost floor, if you will, on the products. So those in combination give us the confidence that we can run the MiFi portfolio going forward at a 10% EBITDA margin. I don’t know, Ashish, if you have anything to add.

Ashish Sharma

Thanks, Dan. The only thing I would add is that’s the strategy based on the current MiFi product, on the hotspot product that we do have strategies to take that technology and move that into a more comprehensive mobile and IoT portfolio that then would allow us to grow our margins significantly in the future.

Mike Walkley

Okay. And then just maybe your visibility in growing channels. Do you think Q1 starts to grow off the implied guidance for Q4? Or just how do you think it kind of trends in terms of your pipeline that you’re working on to expand channels?

Dan Mondor

Well, it’s Dan here again, I’ll start. We are – to create a comprehensive channel strategy and principally centered around our IoT and mobile solutions. If that was your reference in terms of both stocking distributors as well as value-added resellers, we have a handful today. There’s a big opportunity as far as just expanding that channel to market. Naturally, there’s a push-pull effect, and the other is broadening of our customer base which, of course, creates the pull effect. So we’re working on both directly with the end customer, and I’m speaking on IoT and mobile solutions here, to create the pull as well as a push to a new – a channel partner strategy.

Mike Walkley

Okay, great. And then just on the SaaS, your sequential revenue is a little lower than expected. I know there’s a lot of changes going on. Can you kind of just walk us through the SaaS revenue, kind of what’s going on there and how you see the Ctrack business returning to growth from that area?

Dan Mondor

Sure. Great question. Chris, do you want to cover that?

ChrisLytle

Yes. Thanks, Dan. Chris Lytle here. The sequential and year-over-year growth was heavily affected by the decline in hardware sales at Ctrack which was basically driven by a shift in our customer demand in terms of wanting a rental option on the hardware versus the cash upfront sale. We anticipate that those year-over-year comparisons will diminish in the fourth quarter, and then we expect reported Ctrack revenue to be growing again in the first quarter of ‘18. I think it’s important to note recurring revenue growth at Ctrack was up in the quarter year-over-year and sequentially. And then back to the guidance for ‘18, we do expect reported growth in the first quarter and that should accelerate throughout the year as increased investment in the European vertical and also momentum in the aviation solution accelerates growth throughout the rest of ‘18.

Mike Walkley

Great. Thank you very much.

Operator

[Operator Instructions] Our next question comes from Mike Latimore of Northland Capital Markets.

Mike Latimore

Great. Thanks. Yes, on the – just on the supply issue surrounding the hardware business, MiFi business. Should that supply issue be sort of out of the mix in the first quarter? And then, if so, would that suggest that hardware should grow sequentially in the first quarter?

Dan Mondor

Yes. So Mike, Dan here. Yes, long story short, yes. We made reference to it hurt us in Q3, and it has a lingering effect into Q4, predominantly the first half of Q4, but there is a carryforward effect. We are turning up a second contract manufacturer that we’re – that I referenced, and production is already coming online. So essentially, that then fills the gap. We are caught up in terms of – if you look at week-to-week supply-demand, it’s the lingering effect that is the impact. But long story short, we’re going to be fully transitioned and fully caught up by the end of the quarter on the MiFi. And as a matter of fact, it is extending to all of Inseego products. So we have a much more robust, I would say, supply chain going forward, Mike. So yes, Q1 will be, if you will, business as usual.

Mike Latimore

Got it. And then did you say the gross margin on hardware would be into the mid-20% range in the fourth quarter? Or did I not hear it correctly?

Ashish Sharma

What we talked about was the – this is Ashish Sharma, was the adjusted EBITDA for MiFi to be above 10 percentage in 2018.

Mike Latimore

What about just the gross margin on hardware? Did you guide on that in the fourth quarter? Or did I not hear that correctly?

Steve Smith

We guided on total company and Ctrack only.

Dan Mondor

We did not guide on hardware per se. Obviously, we don’t guide, but you can see what we’re doing on the supply side as well as the design side. And the 10% EBITDA margin on MiFi is the plan going forward. And so as we look at some of those products, there’s an ability to underwrite some of the R&D cost with NRE. There certainly is going to be pure gross margin improvement. But in general, we felt the better figure of merit is talking about EBITDA margin.

Mike Latimore

Got it. And then the airport win, very interesting. You said that could be your largest SaaS deal, I believe. What is your largest SaaS deal apparently?

Dan Mondor

At full deployment, it will be the largest SaaS Ctrack deal in history. We haven’t made reference to the sizing of prior deals. All I can say is that it’s a significantly lower number.

Chris Lytle

This is Chris. Just to give a little context on the airport opportunity. We believe the North American market represents 250,000 asset type market where we immediately have the opportunity to get material market share both in North America and worldwide. So the first win in the U.S. is obviously important, then it adds momentum where we have seven deployments internationally in airports and really think of ourselves as a leader of IoT platforms for connected assets at airports. So it’s very exciting, a lot of work to do going forward but definitely represents a very large market opportunity for Ctrack.

Mike Latimore

Great. Thanks.

Operator

[Operator Instructions] There appear to be no further questions at this time, and the question-and-answer session has concluded. I would like to turn the conference back over to Dan Mondor for any closing remarks.

Dan Mondor

Yes. Thanks again, everyone, for joining today’s call and for your ongoing support of Inseego. The strategy and the purpose behind what I refer to as Inseego 2.0 is to relaunch the company and focus on increasing shareholder return by growing the value of our largest and most important assets. We are certainly creating a more efficient and effective company, and we’re beginning to record important wins which translate to long-term traffic profitable growth. I look forward to providing you progress reports on future earnings calls and meeting you in person. Lastly, I would want to thank every employee of Inseego for your tireless efforts and commitment to achieve success. So with that, we’ll conclude today’s call.

Steve Smith

Thanks, Andrea. I think we’re – let’s conclude the call at this point.

Operator

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.