Financial Data and Key Metrics Changes - The company's first quarter revenue was $72 million, a decrease of $4 million year over year, with adjusted EBITDA of $14.5 million, reflecting a slight decline [5][20] - Adjusted EBITDA margin improved by 60 basis points to 20%, and free cash flow was positive at $600,000 for the first quarter, marking the second consecutive quarter of positive free cash flow [6][24] - Operating expenses decreased by $7.5 million or 15.3% compared to the same period last year, primarily due to reductions in headcount-related costs [24] Business Line Data and Key Metrics Changes - IoT Connectivity revenue decreased approximately 7% year over year to $53.9 million, representing 75% of total revenue, while IoT Solutions revenue increased by approximately 1% to $18.2 million, accounting for 25% of total revenue [20] - Non-GAAP IoT Connectivity margin was down 200 basis points year over year to 58.8%, while IoT Solutions margin increased by 370 basis points to 39.9% [21][22] Market Data and Key Metrics Changes - Total connections at the end of the first quarter reached 19.8 million, an increase of 1.5 million year over year, with average revenue per user (ARPU) decreasing to $0.91 from CAD1.05 in Q1 2024 [22] - The company reported a 99% dollar-based net retention rate (DBNER), up from 94% in the prior year, indicating stabilization in IoT Solutions revenue [23] Company Strategy and Development Direction - The company aims to be a trusted global leader in IoT connectivity solutions, focusing on customer intimacy, product innovation, profitable growth, operational excellence, and building a winning culture [13][18] - The strategic roadmap includes leveraging AI tools for digital marketing growth initiatives and expanding into high-margin segments and priority markets [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales cycle, noting that the uncertainty around tariffs has led to accelerated purchasing from customers [36] - The company maintains its guidance for 2025, expecting revenue between $288 million and $298 million, adjusted EBITDA between $62 million and $67 million, and free cash flow between $10 million and $14 million [27][28] Other Important Information - The company has shifted to using estimated annual recurring revenue (eARR) as a key performance metric to better illustrate its recurring revenue business model [8] - The company reported significant wins in various sectors, including cloud communication and healthcare, which are expected to contribute to future revenue growth [10][12] Q&A Session Summary Question: Inquiry about eARR historical numbers and sales cycles - Management indicated that they do not have historical eARR numbers for comparison but will follow up on that [34] - Sales cycles have not elongated; instead, there has been some compression due to tariff uncertainties [36] Question: Clarification on operating expenses and product gross margins - The normalized operating expense number for forecasting should be around $25 million, excluding one-time integration costs [42] - The target gross margin for solutions is expected to remain around 40% for the rest of the year [43] Question: Future ARPU trends and growth outlook for 2026 - ARPU is expected to remain around $0.91, but could decrease slightly if more lower ARPU use cases are added [46] - Management is optimistic about growth in 2026, with connections growing and the eARR business contributing positively [51] Question: Demand environment in healthcare and specifics about new versus existing customers - The healthcare sector is experiencing growth, and the company is seeing strong results in connected health [60] - Approximately 70-75% of demand is expected to come from new logos, with the remainder from existing customers expanding their deployments [66]

Financial Data and Key Metrics Changes - The company's first quarter revenue was $72 million, a decrease of $4 million year over year, with adjusted EBITDA of $14.5 million, showing a slight decline [5][22] - Adjusted EBITDA margin improved by 60 basis points to 20%, and cash flow from operations increased to $2.9 million, up $1 million from the same period last year [6][26] - Free cash flow for the first quarter was $600,000, marking the second consecutive quarter of positive free cash flow [6][27] - The net loss for the first quarter was $14.9 million, an improvement from $17.6 million in the prior year [26] Business Line Data and Key Metrics Changes - IoT Connectivity revenue decreased approximately 7% year over year to $53.9 million, representing 75% of total revenue [22] - IoT Solutions revenue increased approximately 1% year over year to $18.2 million, accounting for 25% of total revenue [22] - Non-GAAP IoT Connectivity margin decreased by 200 basis points to 58.8%, while IoT Solutions margin increased by 370 basis points to 39.9% [23] Market Data and Key Metrics Changes - Total connections at the end of the first quarter reached 19.8 million, an increase of 1.5 million year over year [23] - Average revenue per user (ARPU) decreased to $0.91 from CAD 1.05 in Q1 2024, attributed to a mix of lower ARPU use cases [23][46] Company Strategy and Development Direction - The company aims to be a trusted global leader in IoT connectivity solutions, focusing on customer intimacy, product innovation, profitable growth, operational excellence, and building a winning culture [14][20] - The strategic roadmap includes growing the existing customer base, prioritizing new business in key verticals, and leveraging AI tools for digital marketing growth [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the financial results in Q2, driven by strong connectivity revenue and no impact from tariff policies thus far [6][29] - The company maintains its guidance for 2025, expecting revenue between $288 million and $298 million, adjusted EBITDA between $62 million and $67 million, and free cash flow between $10 million and $14 million [29][30] Other Important Information - The company has shifted to using estimated annual recurring revenue (eARR) to better illustrate its recurring revenue business model [8][9] - The total connectivity pipeline includes nearly $52 million in eARR from new opportunities and nearly $30 million from existing customers [10] Q&A Session Summary Question: Can you provide historical numbers for eARR and insights on current sales cycles? - Management indicated that historical comparisons for eARR are not available but will follow up on this. Sales cycles have not elongated and may have even compressed due to tariff uncertainties [34][36][38] Question: What is the normalized OpEx number going forward? - The normalized operating expenses are expected to be around $25 million, excluding integration costs [40][42] Question: Will ARPU continue to be pressured by new business? - ARPU is expected to remain around $0.91, but could decrease if more lower ARPU use cases are added. The previous year had a spike in usage that inflated ARPU [44][46] Question: What is the demand environment in healthcare? - The healthcare sector is experiencing growth, with connected health being a significant area of focus for the company [59][61] Question: How did the Winnebago deal come about? - The Winnebago deal was competitive, with a sales cycle of around nine months, and includes a minimum revenue commitment [56][58][66] Question: What is the balance of demand from new versus existing customers? - Approximately 70-75% of demand is expected to come from new logos, with the remainder from existing customers expanding their deployments [67][70]