Inseego Corp. (INSG) Q3 2021 Earnings Report, Transcript and Summary

Hello, and welcome to Inseego Corp's Third Quarter 2021 Financial Results Conference Call. Please note, today's event is being recorded. [Operator Instructions] On the call today are Dan Mondor, Chairman and CEO; Ashish Sharma, President; Bob Barbieri, Interim Chief Financial Officer and other members of the management team. 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 are rather based on the Company's current expectations and beliefs. For a discussion on factors that could cause actual results to differ materially from the 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, Chairman and CEO. Please go ahead.

Thank you, operator, and hello, everyone. Thanks for joining the call today. I'm pleased to report a very strong third quarter results with revenue coming in at $66.2 million. This represents a sequential growth over last quarter of 9% after adjusting for the sale of Ctrack South Africa. The strong topline performance was driven by 5G with key customers, channel partners for our enterprise offerings and new international customers in both carrier and enterprise segments. We are seeing traction across our entire 5G portfolio, including our fixed wireless access products, which will be a major contributor to our growth in 2022. Recent large customer traction with both carriers and enterprises is an important validation of our strategy to remake the company into the leader in 5G edge connectivity solutions. As you saw on our press release, we are thrilled to announce an expanded relationship with T-Mobile, who is now launching our indoor 5G fixed wireless access product as a stock product for its enterprise customers. This is the most significant fixed wireless deal in Inseego's history and represents an exciting phase of our expanding relationship with T-Mobile as it aims to sign up seven to eight million fixed wireless subscribers by 2025. This indoor rotor called the FX2000 is a perfect product for any carriers, small office home office, small medium business and enterprise customers, including companies with work-from-home employees. The investments we have made in new product innovation over the past few years are paying off. 5G revenue now comprises 42% of total revenue versus only 9% last year. And our other significant investment priority, our cloud software business now represents 20% of total revenue and is increased in impressive 25% year-over-year. In aggregate our new next generation products defined as 5G and cloud software continue to grow rapidly. They are up 124% year-over-year. These products now represent 62% of total revenue up from 43% in the first quarter. This marks a significant progress as the company pushes to free cashflow positive. Our fixed wireless access products are also gaining traction outside North America as we also sign deals with two international Tier 1 wireless network operators, with launches scheduled this quarter, one with a mobile operator in the Middle East and the other with Telstra in Australia. As I've said in the past, we believe the international addressable market is significant. And our global platform approach is providing excellent product market fit and represents the largest addressable market expansion in our history. Across every region we see enterprises taking a leadership role in developing and deploying 5G use cases, an accelerated rate and it's the primary reason why we launched our direct enterprise sales initiative last year. This quarter saw an increasing number of pilots and RFPs entering the deployment phase. Order flow from our expanding value-added resellers and distributor partners also continues to grow both domestically and abroad. In the end, our goal is to sell to the enterprises through both our carrier customers and through our growing channel distributors and resellers. Now Ashish will provide additional color on the diverse use cases in which Inseego's secure edge connectivity and device management solutions are being leveraged. Lastly, I'd like to touch on supply chain dynamics. As you know, this is a significant issue across many industries. Doug Kahn and his team are working tirelessly to secure key components in conjunction with our partner Foxconn. They have done a fabulous job keeping products flowing. We expect supply constraints to remain the norm for the foreseeable future, but we are working every day to minimize the impact on our business and to continue to deliver products to our customers on a timely basis. That being said, we believe our supply chain capability is a source of competitive advantage. While we have seen elevated freight costs, we have not seen the major disruptions experienced by many of our competitors. In closing, we are pleased with our continued strong growth in our 5G and cloud software businesses across carrier and enterprise markets. We are confident that 2022 will be the best year in Inseego’s long history. And we have a high degree of confidence that we are well positioned to achieve approximately 25% revenue growth as our customers accelerate their commercial 5G deployments in 2022 and beyond. Now, before I turn the call over to Ashish, I want to say how delighted we are to welcome Bob Barbieri as our permanent CFO. Since Bob joined Inseego as Interim CFO in early April, he has demonstrated tremendous leadership and his extensive operating experience has proved invaluable. As we evaluated various CFO candidates it became obvious to us that Bob is the ideal CFO to help us successfully execute on our strategic priorities. With that, let me turn the call over to Ashish, who will share more details regarding deals that have progressed beyond the pilot phase to actual deployments and are rapidly moving forward towards revenue generation for Inseego.

Thank you, Dan. Let me also join Dan in recognizing the Inseego team for delivering another solid quarter and achieving a major milestone in Q3. We had outstanding performance in the third quarter, driven by strength across our 5G and software portfolio. And as Dan mentioned, it now represents 62% of our overall business. Our product order growth was the highest we've seen in recent history and we are continuing to see strong customer deception of our 5G product innovations. Notably, our 5G revenue surpassed $25 million during this quarter representing triple digit growth year-over-year. Increased demand and accelerating digital transformation have increased the need for our 5G solutions. This great momentum is reaffirming our position as the worldwide leader in 5G technology that is enabling access to a new generation of broadband, now possible with legacy technologies. As Dan mentioned, let me spend a moment on the most important announcement so far in our 5G FWA efforts. I am thrilled that T-Mobile for business is launching our compact indoor 5G solution for their enterprise customers. This achievement is a testament to the diligent efforts by the Inseego team that has been working side by side with T-Mobile and its customers for many months. We have a number of additional 5G FWA products certified by T-Mobile. And we are incredibly excited about the pipeline of opportunities we with them. In addition to T-Mobile, we also signed up new service provider customers in Australia and the Middle East. We recently shipped 5G Middle East products to these customers to support launches in the fourth quarter. As I think about the transformation of Inseego over the past several quarters, three things give me confidence in our ability to achieve our financial goals. First is the validation of our significant FWA product investment over the past 24 months with important wins with multiple Tier 1 carriers and Fortune 500 enterprise accounts. Given these recent wins, both announced and UN announced, we expect to see material revenue contribution in 2022 with FWA driving a majority of our growth next year and beyond. I can see a time in the near future where FWA revenue exceeds our current hotspot revenue, given the significantly larger market these products address. Second, is the diversification of our revenue streams. There was a time in the not so distant past where majority of our revenue came from a single product the hotspot sold to a single carrier. Everything we have done over the last three years has been to change that dynamic. As of today, we have two technology lines in 4G LTE and 5G, which also includes our cloud technology for a complete solution. Today we sell to virtually every carrier in North America, including the two largest 5G providers in the U.S. We also sell directly to a growing list of large enterprises, who are integrating 5G into their business. We are doing this not only in North America, but also in Europe, the Middle East and Asia. This is no longer [indiscernible] old. Third is the important revenue mix shift underway. You've heard a stock in prior earning calls about the higher margins we are seeing with our 5G solutions. As the same engine that powers mobile hotspots is at the heart of all of our 5G solutions, including the 5G FWA solutions. The ability to use a common engine across all solutions allows for significant operating leverage. In addition, we are seeing a significant uptick of our cloud software alongside our FWA products. This adds both attractive, gross margins and an important recording revenue component to our business. On prior quarterly calls, I illustrated examples of customer pilots we've been conducting in order to give everyone a sense of the amazing opportunities ahead of us. This quarter I'm pleased to announce that we are beginning to see some of these trials go live and the momentum is accelerating across numerous verticals. To start, we are seeing some interesting industry 4.0 use cases. One large systems integrator in Europe that is a recognized global leader in the manufacturing vertical is testing our 5G FWA product line to enable high capacity, low latency data capabilities for the automotive manufacturing market. We are also working with a factory that manufactures telecom equipment. In this use case they're testing our industrial 5G CPE FW2000e to power automation and robotics with the goal to find new innovative ways to improve workplace safety and to create more agility on the production side. In the education market KIPP SoCal Public Schools is using our 5G indoor routers for in-classroom Wi-Fi, bringing high speed internet to charter public schools in underserved areas and connecting students to new AR/VR learning experiences. And in Utah, two school districts are using our outdoor FWA solution in a CBRS private network to provide long distance connectivity for students who live in the remote areas. As mentioned on prior earning calls, CBRS and private networks are key focus areas for us. In addition to the U.S. case in Utah, I just described a couple of other customers are using cloud managed 5G connectivity, including one of the Top 25 business schools in the U.S. That university is testing our 5G solutions to provide on campus connectivity for their dorms and a collection of hotels in a large U.S. city is testing our solution with the goal to improve the quality of internet services for their guests. In Kentucky, our new industrial gateway is being deployed on downtown light poles and city parks to connect public Wi-Fi access points. Similarly in Australia, a manufacturer of solar powered street lights is using our 5G CPE to provide public Wi-Fi and connect surveillance cameras in areas where wire connections are impractical or impossible. The utility sector is another interest vertical point for Inseego with needs to connect critical infrastructure in the remote areas. In Europe for example, we are working with a large global systems integrator to enable real time monitoring of wind turbines. Public safety is another market where we are seeing 5G use cases. A major city in Arizona is using our outdoor 5G millimeter Wave solution to provide high speed broadband for remote monitoring and high traffic areas. In the healthcare industry TRECS University in Tennessee is using our 5G solutions for low latency connections to enable virtual reality applications to help train medical professionals in operating procedures. And we are engaged in a trial with an integrated healthcare network to power their facilities across the U.S. These are just a few examples of the diverse and exciting use cases being powered by our 5G solutions. Lastly, we continue to make good progress with our cloud software business that is now 20% off our revenue. During this quarter, we signed large 5G FWA service provider customers who are attaching our cloud software solutions to their 5G offerings for multi-year terms. While these are still early days, it validates our strategy of investments and software to improve our value proposition, as well as improve our margins over the long-term. And now I would like to turn the call over to Bob.

Thank you, Ashish. Let me now review the results of our third quarter fiscal 2021. Before I start, let me tell everyone how proud I am to have been named Chief Financial Officer. I started this assignment as I would with any other client to enhance the financial function at Inseego. Additionally, I was very happy connecting with the financial and executive leadership team to improve and strengthen the processes that we have in running the business. I see this as critically important. As I spent the last several months with the team, I became impressed with the potential this organization holds, and I'm excited to stay on as the Chief Financial Officer of Inseego. With that let me get to the financials. As a reminder to everyone please note that year-over-year comparisons will include the pandemic driven surge in sales of 4G hotspots, which began in the June quarter of last year and continue through the remainder of fiscal 2020. In addition, remember we close the sale of our Ctrack South Africa unit on July 30th of this year. I will be providing comparisons that reflect Inseego's financial performance on a pro forma basis that excludes Ctrack South Africa. Q3 revenue with $66.2 million, up 1% from last quarter, but down from the prior year period because of the COVID related surge in demand for 4G products last year. Adjusted before the sale of Ctrack South Africa, revenue was up a robust 9% from the last quarter. The strong sequential result was driven by accelerating demand for 5G and cloud software solutions whose revenue was up 124% from the prior year. Third quarter IoT and mobile solutions revenue was approximately $57 million; up almost 10% quarter-over-quarter from what was a strong Q2. This quarter-over-quarter growth was a result of accelerating self through 5G hotspots at both Verizon and T-Mobile, our international service provider expansion and the initial selling of our 5G FWA devices into T-Mobile as a result of our expanded relationship. Enterprise SaaS Solutions revenue of $9.2 million, which included one-month of Ctrack South Africa revenue; after adjusting for the impact of the sale of Ctrack South Africa Enterprise SaaS Solutions revenue was up 9.9% year-over-year, driven by the growth in recurring subscription revenue and Ctrack across the world over the past 12 months and down 1% quarter-over-quarter due to unfavorable foreign exchange movements and a seasonal increase in hardware sales. Cash at the end of Q3 was $61.6 million and includes $36.6 million of cash we received as payment for the sale of Ctrack South Africa, which closed on July 30th. There will also be a favorable working capital adjustment of $2.6 million we expect to receive in Q4. From this point forward, I will focus on non-GAAP measures. A reconciliation from GAAP to non-GAAP is detailed in our earnings release and is available on our IR webpage. Gross margin for the IoT and mobile business was 24.4%, a slight improvement over the 24% last quarter and 30 basis points better than the 24.1% in Q3 of 2020. As Dan discussed earlier, gross margin in Q3 was impacted by approximately $1 million in higher freight costs, but we were still able to improve the margin sequentially in year-over-year due to a favorable mix of higher ASP devices, as well as our rapidly growing software business. Assuming similar trends in our product mix and absent any unforeseen factors we see potential for further improvement and gross margin going forward. Our Q3 operating expense was $25.8 million, down $2.2 million from Q2, but up $1.2 million from prior year quarter. The increase in operating expense year-over-year reflects the investments made to take advantage of the 5G opportunities we are pursuing. Q3 net loss was $8.2 million or $0.08 a share in line with the prior quarter, but down from the positive $1.4 million or $0.01 per share in the prior year. Again last year's performance benefited significantly for what was the high water mark of the COVID surge in demand for our 4G products. Our EBITDA loss of $773,000 was higher than the 51,000 loss in Q2 and was down from the positive $7.4 million last year. The sequential decline was largely due to the sale of Ctrack South Africa and the $1 million of higher freight costs I discussed earlier. For additional details on non-GAAP and adjusted EBITDA results please refer to the reconciliation tables in our press release. Finally, some thoughts on the rest of 2021 and 2022. We continue to execute on our 5G cloud solutions and we're encouraged by strong current demand in our increasing opportunity pipeline as Ashish and Dan mentioned, we see the company entering the new phase of growth in 2022, as we benefit from FWA accelerating both in the U.S. and internationally. The growth and higher margin enterprise sales and uptake in cloud software, alongside device sales. Given this, we are confident in our ability to achieve approximately 25% revenue growth in 2022 pro forma after taking into the account Ctrack South Africa business. We also plan on moderating operating expenses on a growth basis. On an as reported basis however, please note that fluctuations in our capitalized R&D costs may result in higher net operating expenses in any given quarter. From my analysis of the operating model, I believe there is significant capacity, and as we return to growth in 2022 we should begin to see improved operating leverage. This in turn should support adjusted EBIDA growth in excessive our revenue growth rate. In terms of our view of next year, the management team is comfortable with the current street consensus of $310 million of revenue. We will begin providing more detail guidance as we enter 2022. Lastly, given our revenue growth and margin improvement expectations, we're currently targeting the second half of 2022 to turn free cash positive. Again, I want to thank Dan and the Board for giving me the opportunity to become Inseego's new Chief Financial Officer. I look forward to meeting all of our existing and prospective shareholders in the coming months. With that let turn it back to Dan for his closing comments.

Thank you, Bob. And welcome again to the Inseego Team. I have some final comments before we turn it over to Q&A. When we made the decision to accelerate our investments in NextGen, 5G and Cloud, our primary goals were to check three boxes. First to ensure we would be first to market with highly differentiated 5G products. Second, to create a common RF engine that could be used across all of our products sold to both carriers and enterprise markets that not only improves our time to market, but creates significant operating leverage. And third to build a scalable cloud software platform that in combination with our 5G products creates a complete solution for our customers. As we near the end of the year, I couldn't be more proud of all that we have accomplished. And our performance in the third quarter is clear evidence of that. As we look ahead, I am also optimistic that we will see significant growth driven by an acceleration in both carrier and enterprise deployments of our cloud managed 5G portfolio.

[Operator Instructions] Our first question will come from Lance Vitanza with Cowen & Co. Please go ahead.

Hi. Thanks guys. Thanks for taking the questions and congratulations on the quarter. Let me start actually, maybe if Ashish, could you talk a little bit more or Dan, could you talk a little bit more about how the sales funnel for cloud software has developed over the past few months? I don't know if that's best discussed in terms of the number of channel partners or the number of active engagements, but if there's any details that you could provide there, that would be helpful? And then I have a follow up with respect to revenue as well, but I'll stop there for now.

Lance, hope you're doing well. So the funnel is developing really well. We just also said in our script today that we've signed now multiple large carriers who are now attaching our cloud software to the 5G products. We are shipping to them. So that's through the carrier channel and then through the [indiscernible] channel pretty much most all the products we are pushing now with 5G has a cloud component to it. So it's looking really solid. It is still early days as you know, the motion of selling through the distribution is new in multiple regions, but our pipeline is extremely solid. And we now have first projects pretty much in all of these focus use where we are shipping product through the channel.

Okay. And then actually with respect to FWA, obviously that's sort of central to the story and we've seen a lot of carriers locally making a lot of news about the pace at which they expect to be rolling out their fixed wireless. And obviously that's beneficial for Inseego. Is it safe to say that the carrier actions are reflection of a supply chain that is more than ample to support that growth? I mean, just – I'm just trying to sort of get a sense for what risk we could see from this point forward with respect to part shortages and so forth?

Hey Lance, it's Dan. So good to speak with you again. Thanks for question. Well, we talked about our supply chain dynamics and a lot of credit goes to our team and what we're able to do. It cuts across both fixed wireless and mobile hotspots, no real fundamental difference given the commonality of the parts as we mentioned in our platform. But we are not – we can only speak for Inseego. We're not constrained in our supply. We had significant orders for fixed wireless towards the end of this quarter as part of the T-Mobile getting ready for their launch. So, we're very bullish on how that looks going forward in Q4 and extremely bullish how we see fixed wireless accelerating in 2022.

Okay. If I could squeeze one more question in about the margin improvement, is the way to think about that you had roughly, and this is just at IoT mobility services, you had about 220 basis point improvement in gross margin year-over-year. If we adjust for the $1 million of higher freight costs, I don't know if that was all in IoT, but then we'd be looking at more like a 420-basis point year-over-year improvement. And that's despite $20 million of lower revenues from camping off of the, sort of the COVID surge if you will. So, whether we're talking 220 or 420, is that all just the benefit that you talked about earlier with respect to the mix shift to enterprise and software, or were there other factors that were influencing gross margin, especially to the extent that some of those might be reversing in fourth quarter of 2022?

Yes, go ahead, Bob.

Yes, sure. Lance hi. Yes, you are correct the approximate million dollars of costs associated with some of the freight charges that was about 160 basis points. Looking forward, which is your question, we don't see anything kind of unusual happening. So, I think you should think about that in terms of kind of a steady type of outlook as we go forward if that's helpful to you. And again, the other thing to think about margin is as more of our mix moves to 5G, 5G brings with it software. Now the software is ratable over 36 months, so you don't get an immediate impact in the period, but when you are as building up increasing layers of gross margin over time, which will bode well for the future.

That's really helpful. Thanks guys. I'll pass the baton.

Thank you, Lance.

[Operator Instructions] Our next question will come from Scott Searle with Roth Capital. Please go ahead.

Hey guys thanks for taking my questions. I apologize, I got a on the call a little bit late, so I apologize again if this is redundant. But I'm wondering what sort of call you provided in terms of the 5G mix in the quarter in terms of more consumer fixed wireless access versus enterprise or hotspot applications? And then also just to clarify, I think, the 60% figure in the release talking about 5G and cloud, I want to make sure I understand what's going into cloud. Is that just the Ctrack business that's remaining or there are some other components to that as well? Just to calibrate me, then I had a couple of follows.

Yes. Hey Scott, I think, yes, we can run through those pretty quickly out of the remarks we made earlier. So, Ashish, why don't you just recap?

Yes. Hey Scott, good talking to you.

Hey Ashish.

Yes, hey, so a couple of the questions you asked on the 5G side, pretty much most of the product is going into enterprise, both the mobile broadband product and the enterprise product through the carriers and through other different digital and large channels. So, there's some segments of consumers who might buy here and there, but majority of it is all towards the enterprise. FWA in particular, it is all enterprise. And we are seeing, as I described in my script, we are seeing some really good and cool use cases across the board from multiple different verticals within the enterprises. So that's on the 5G. And then your second question about cloud software, we've got multiple different cloud software we are now attaching to these devices. So, we've got the Ctrack software, you talked about, that's one piece to it. Second one is our cloud management software. And the third one is Inseego Subscribe which is a subscription management software that we attached to certain customers. So, it's a mix of multiple layers and we're building more and more layers as we move forward to create better value prop and better margins in our structure.

Got you. And Ashish maybe just to follow-up on the 5G enterprise front, coming out of Mobile World Congress Americas last week, a lot of in terms of what's going on from a private network standpoint, et cetera. You guys certainly play into that. I'm wondering how aggressively are you seeing the adoption cycles there, because it seems like there's an interest, but the implementations and the trial periods, I'm wondering if you could provide some color on that in terms of the magnitude of the size of the deals that are starting to fill up in that pipeline, the timing and the pilot phase, if you will, and how big the magnitude of those deployments actually look like?

Yes, good question, Scott, first off, just tremendous progress there. Like quarter-over-quarter, we see lot more activity and it's not just talk anymore, we are seeing new projects. We are seeing certain verticals, like school districts trying to adopt a private network for their use cases. And so, deployments are happening right now. They are starting small, but some of these school districts and private enterprises, they tend to have multisite in different places, which we are starting to see that eventually over next few quarters, there's got to be some scale to this. And this is a real, nice, new TAM and SAM developing for not just us, but for the 5G market.

Okay. And, and less of a good, maybe two more the 25% growth, as you look out to next year, I'm kind of wondering what you see as the biggest driver in terms of pushing that forward over the next several quarters? And then also on the Ctrack front, now that you've sold off the South African portion, it's a much smaller business, doesn't have as much scale there, but I think it's an overall attractive offering. Strategically how does that fit into to the portfolio? Is that an asset that you look to keep and build upon, or is that possible that you look to monetize that going forward? Thanks guys.

Yes, hey Scott, thanks. Let me just start off and I'll ask Ashish to chime in. In terms of 2022, we certainly see fixed wireless, 5G fixed wireless as a major driver of that. There's obviously layers on the cake we're adding more carrier and enterprise customers. Our enterprise business is relatively small, but it's on a high growth curve. We built a very impressive and growing pipeline, and it's kind of indicative with those, the various use cases that Ashish ran through. Those are real-life instances out of that enterprise pipeline. Continuing the attach rates of cloud, that's continuing to grow and that's a layer. So, there's a combination of our international business, our growth in carriers, extra slots with carriers, now, T-Mobile has taken our mobile hotspot as well as fixed wireless. Cloud is a whole combination of things that are really our strong tailwinds, Scott, as we go into 2022. And that gives us confidence in providing guidance. And I realize we've not done that for a long time. So, we wanted to start, now provide guidance and talk about full year 2022. So that's what we've done on this call.

Hey Dan, if I could just follow-up on that front, have you disclosed the number of carriers that you are coming virtually shipping to now for FWA solutions and what you would expect that to look like towards the middle of 2022? Thanks.

Yes. Thanks Scott. No, we have not. We'll continue to make announcements. We obviously did a major one yesterday with T-Mobile, fixed wireless for their enterprise business. But more to come and just the market can add now from the announcements, but we're not really breaking them out and reporting them per se. Thanks you.

Thanks.

Thanks.

[Operator Instructions] Our next question will come from Mike Latimore with Northland Capital. Pease go ahead.

Hi, this is Aditya [ph] the on behalf of Mike Latimore. Could you tell me how much did international revenue contribute as a percentage of overall revenue?

We do not break that out externally. So sorry about that. But as we go forward, certainly, we'll consider more and more color around some other breaks in our revenue stride, but right now we do not break that out.

All right. Could you tell me at least how many, ten percentage customers did you have in this quarter?

It would be reported in the queue.

The two.

Yes.

Yes. The answer is two.

Two. All right. All right, fine. And could we give some color on when could we start expecting the 5G sales to exceed the 4G sales? Could we start seeing that from the 4Q?

Well, I'll start off ask Ashish to comment. I mean, we're seeing rapid growth in 5G, as we talked about, it was 42% of our revenue this quarter as we reported a year ago, 9%. So clearly, it's growing. Now having said that 4G business is a steady business and so what we're seeing is an additive effect. We eventually would see naturally through technology transition, 5G, overtake 4G. So, I would say, it's going to happen in the relatively near future, just as a function of 4G staying steady and 5G growing rapidly, of course. Ashish if you want to…

Yes, it’s exactly what Dan said. I think sometime next year that will happen. So, in not-too-distant future.

All right. All right, fine. Thank you.

Thanks.

This concludes our question-and-answer session. I would like to turn the conference back over to Dan Mondor for closing remarks.

Okay. Well, thank you operator. So, thanks again, everyone for joining and for the great questions. As you heard, we are executing against our strategic plan and expanding our customer base and certainly rapidly expanding our product line. And also, I think it's important to note we're creating complete solutions by bundling our cloud software with our devices. So, what does that mean? That means improved margins and where you are sticking this. The other comment I think you’ve heard fixed wireless, or enterprise is taking off. And we absolutely believe we are seeing the point of inflection in fixed wireless, and that will continue to ramp up and be a major part of 2022. So that's why we see 2022 to be a real breakout year for Inseego. I'll just close by giving a huge shout out to our great, great employees, you folks absolutely rock. So, I'll close by saying I look forward to speaking with you again on the fourth quarter call. Thanks again, everyone.

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