Core Insights - Conestoga Capital Advisors reported solid returns in US equities for 2025, with double-digit gains across major indices, despite underlying volatility and market leadership shifts [1] - The Small Cap Strategy returned -1.89% net-of-fees in Q4 2025, underperforming the Russell 2000 Growth Index's 1.22% return [1] Company Overview: Digi International Inc. (NASDAQ:DGII) - Digi International Inc. specializes in Internet of Things technology, focusing on connectivity products, services, and solutions [2][3] - As of February 18, 2026, Digi's stock closed at $49.64, with a one-month return of 13.59% and a 12-month increase of 41.67% [2] - The company has a market capitalization of $1.87 billion [2] Performance Highlights - Digi's stock performed well in Q4 2025, driven by faster-than-expected growth in recurring services revenue and improved margins due to a shift towards software and subscriptions [3] - Demand visibility in industrial and infrastructure markets, along with disciplined expense management, contributed to earnings upside [3] Investment Sentiment - Digi International Inc. was held by 16 hedge fund portfolios at the end of Q3 2025, an increase from 11 in the previous quarter [5] - Despite acknowledging Digi's potential, the company believes certain AI stocks present greater upside potential and lower downside risk [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $51.5 million, reflecting a sequential growth of 1.2% and a 2% decrease year-over-year on a like-for-like basis after excluding $6.4 million from the divested VoIP Supply [21] - Adjusted EBITDA was $8.3 million, maintaining a margin of 16%, with a strong conversion rate of adjusted EBITDA to operating cash flow at over 120% [6][18] - Free cash flow improved sequentially to $8 million, or $0.24 per diluted share, with a total debt reduction to $37.6 million from $60.4 million a year ago [19][20] Business Line Data and Key Metrics Changes - Service revenue, which constitutes 92% of total revenue, grew 1% sequentially, driven by higher cloud services revenue [21] - Monthly Recurring Revenue (MRR) bookings grew significantly, up 67% sequentially and 60% year-over-year, indicating strong momentum in the mid-market strategy [7][13] - The churn rate improved to just under 1%, reflecting stability in the recurring revenue base [7][21] Market Data and Key Metrics Changes - The starting backlog for Q3 is up approximately 125% compared to the start of Q2, providing strong visibility into the second half of the year [18] - The company is seeing increased engagement with larger, more complex mid-market opportunities, which is expected to lead to higher long-term value and stronger recurring revenue [8][10] Company Strategy and Development Direction - The company is focusing on scaling its go-to-market engine and investing in pipeline development, customer acquisitions, and partner enablement [9][10] - There is a strategic shift towards fewer vendors and more integrated solutions, with an emphasis on serving the mid-market [10][11] - The company is committed to maintaining a balanced approach to capital allocation, reducing debt, and pursuing selective M&A opportunities aligned with its strategy [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, highlighting the effectiveness of the go-to-market execution and the quality of the pipeline [13][18] - The company anticipates returning to year-over-year organic growth in Q3 and Q4, excluding the impact of the VoIP Supply divestiture [21][54] - Management is focused on reducing churn and enhancing customer retention as part of its revenue strategy [48] Other Important Information - The company has committed approximately $2 million in incremental SG&A to accelerate growth initiatives [9] - The gross margin improved to 74%, up from 72% in Q1 and 68% in the prior year, indicating a favorable revenue mix [21] Q&A Session Summary Question: What are the key drivers behind the 67% quarter-over-quarter growth in MRR bookings? - Management attributed the growth to larger strategic deals and a healthy partner program that is effectively targeting larger logos [24][25] Question: Is the 67% growth sustainable, or is it a special quarter? - Management indicated that the growth is part of a transition into a growth phase, with expectations for continued growth in the booking pipeline [26][28] Question: Can you elaborate on the wholesale activity and its potential for growth? - Management discussed the wholesale channel's role in monetizing large ecosystems, emphasizing the integration of services for larger clients [29][30] Question: How is the partner ecosystem performing in terms of bookings growth? - Management noted that the majority of revenue is partner-driven, with a focus on strategic partners and the effectiveness of bundled solutions [68] Question: What is the outlook for the on-prem component of the pipeline? - Management reported strong momentum in the on-prem business, particularly in small to medium-sized businesses, with expectations for continued growth [71][72] Question: How does the company plan to convert bookings to revenue? - Management explained that larger deals take time to roll out, but they have established a disciplined project management process to ensure timely revenue recognition [75][76]

Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $51.5 million, reflecting a sequential growth of 1.2% and a service revenue growth of 1% [5][23] - Adjusted EBITDA was $8.3 million with a margin of 16%, and free cash flow improved to $8 million, or $0.24 per diluted share [6][21] - Gross profit reached $38.2 million, with a gross margin improvement to 74% compared to 72% in Q1 and 68% in the prior year [23][24] Business Line Data and Key Metrics Changes - Monthly Recurring Revenue (MRR) bookings grew significantly, up 67% sequentially and 60% year-over-year, indicating strong momentum in the mid-market strategy [7][27] - The company saw a sequential improvement in churn rate, with blended churn holding just under 1%, reflecting stability in the recurring revenue base [8][50] Market Data and Key Metrics Changes - The starting backlog for Q3 is up approximately 125% compared to the start of Q2, providing strong visibility into the second half of the year [20] - The wholesale channel is gaining traction, with a notable contract for a nationwide cloud voice and messaging solution, contributing to a 10% increase in trunking solutions revenue [18][34] Company Strategy and Development Direction - The company is focusing on scaling its go-to-market engine, investing approximately $2 million in incremental SG&A to accelerate pipeline development and customer acquisitions [10][12] - The strategic priority is to pursue larger, integrated solutions for mid-market customers, reflecting a shift in customer buying behavior towards fewer vendors and more comprehensive solutions [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the go-to-market engine, emphasizing the importance of larger strategic deals and the effectiveness of the partner ecosystem [14][20] - The company anticipates continued growth in bookings and revenue, with a tightened guidance for fiscal 2026 expecting revenue between $205 million and $208 million [25][57] Other Important Information - The company repurchased approximately 196,000 shares during Q2, reflecting confidence in long-term business value [21] - Total debt was reduced to $37.6 million from $60.4 million in the previous year, indicating a commitment to deleveraging [22] Q&A Session Summary Question: What are the key drivers behind the 67% quarter-over-quarter growth in MRR bookings? - The growth is primarily tied to larger strategic deals and a healthy new partner program that has facilitated the acquisition of larger clients [27][28] Question: Is the 67% growth sustainable, or is it a special quarter? - The company expects continued growth as it has transitioned from a transformational phase to a growth phase, with a focus on larger deals [29][30] Question: Can you elaborate on the wholesale activity and its potential for growth? - The wholesale channel is being leveraged to monetize large ecosystems, with significant opportunities in healthcare and carrier partnerships [33][34] Question: How is the partner ecosystem performing in terms of bookings growth? - The majority of revenue is partner-driven, with new strategic partners contributing significantly to bookings growth [72][73] Question: What is the outlook for churn reduction? - Management aims to reduce churn further, targeting a rate of 0.85% through proactive customer engagement and upselling strategies [50][51]

Financial Results Announcement - Digi International Inc. will release its financial results for the first fiscal quarter of 2026 on February 4, after market close at approximately 4:00 p.m. ET [1] - A conference call will be hosted by CEO Ron Konezny and CFO Jamie Loch on the same day at 5:00 p.m. ET to discuss the results and answer questions [1] Conference Call Details - Participants are encouraged to pre-register for the conference call to obtain the dial-in number and passcode [2] - It is advised for participants to dial in 15 minutes prior to the start time [2] - A live webcast of the conference call will be available through the investor relations section of Digi's website [2] Replay Information - A replay of the conference call will be available approximately two hours after its completion [3] - The replay can be accessed via webcast through the investor relations section of Digi's website and will be available for approximately one year [3] Company Overview - Digi International has been a pioneer in wireless communication since 1985, focusing on connected devices and meeting the needs of users and enterprises [4] - The company has developed M2M and IoT devices, adapting to evolving network standards and optimizing data communications [5] - Digi's IoT offerings include sensor-based solutions and a platform for remotely monitoring device deployments, along with professional design and implementation services [6]

Financial Data and Key Metrics Changes - In Q1 2026, the company reported revenue of $50.8 million, adjusted EBITDA of $8.3 million with a margin of 16%, and free cash flow of $3.2 million [6][22][24] - Revenue decreased by $8.5 million from Q4, primarily due to the divestiture of the third-party hardware resale business, VoIP Supply [22] - Year-over-year revenue declined by $1.7 million, or 3%, excluding VoIP Supply revenue [22] - Gross profit was $36.8 million, with a gross margin of 72%, compared to 67% in Q4 [23][24] Business Line Data and Key Metrics Changes - Core revenue, which accounted for 74% of total revenue, decreased by 6% year-over-year, while adjacent revenue increased by 6% [23] - Services now account for 92% of total revenue, reinforcing the company's transformation to a predominantly MRR-driven model [23][25] - Monthly Recurring Revenue (MRR) bookings grew by 2.4% sequentially and 6.4% year-over-year [9] Market Data and Key Metrics Changes - The overall size of the pipeline remained steady, but new pipeline creation increased by 39% quarter-over-quarter [8][14] - The company saw a pickup in its higher-velocity volumetric business, which now represents 62% of the 90-day forward pipeline [8] - Retention remains strong, with blended churn holding near 1% [9] Company Strategy and Development Direction - The company is transitioning to a higher-margin recurring revenue model, which now represents over 90% of total revenue [6] - Investments of approximately $2 million in incremental SG&A are planned to accelerate customer acquisition and partner enablement [11][21] - The company is exploring selective AI-driven software acquisitions to strengthen its vertical focus in healthcare, hospitality, retail, and education [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting fiscal FY26 guidance, expecting sequential growth in Q2 and year-over-year growth in Q3 and Q4 [12][26] - The broader SMB market conditions may influence deal timing, but early Q2 activity is encouraging [12] - Management highlighted the importance of larger deal sizes and growing recurring revenue as indicators of entering a new phase of sustainable, profitable growth [12] Other Important Information - The company retired an additional $5.2 million in debt during Q1, ending with total debt of $42.8 million [20] - The capital allocation strategy focuses on leveraging strong cash generation to accelerate organic growth while maintaining flexibility for selective M&A [20][21] Q&A Session Summary Question: Growth investments and timelines for returns - Management indicated that the $2 million investment will focus on increasing field capacity and marketing to enhance brand coverage [30] Question: Pipeline tied to new partner relationships - Management noted a 6% increase in pipeline over the last six weeks and a 39% increase in new pipeline creation [33] Question: Decline in services and future expectations - Management acknowledged the decline in services but expects sequential growth starting in Q2 as older customer contracts complete [37] Question: Optimizations for targeting larger customers - Management highlighted improvements in product roadmap and a disciplined approach to pursuing large opportunities [45] Question: Average revenue per customer growth - Management attributed the 19% year-over-year increase in average revenue per customer to upselling and the effectiveness of the bundling strategy [58] Question: Gross margin expectations - Management indicated that gross margin was impacted by a higher mix of product revenue but expects improvement moving forward [61] Question: Backlog growth - Management stated that backlog was consistent quarter-over-quarter, with expectations for growth in upcoming quarters [69] Question: Large MRR opportunities - Management clarified that large MRR opportunities include both wholesale and bundled solutions, with significant deals already closed [74][75] Question: Total Addressable Market (TAM) expansion - Management confirmed that the new wholesale channel opens up significant TAM opportunities beyond traditional markets [80][81]

Financial Data and Key Metrics Changes - In Q1 2026, the company reported revenue of $50.8 million, adjusted EBITDA of $8.3 million with a margin of 16%, and free cash flow of $3.2 million [6][22][24] - Revenue decreased by $8.5 million from Q4, primarily due to the divestiture of the third-party hardware resale business, VoIP Supply [22] - Year-over-year revenue declined by $1.7 million, or 3%, excluding $7.6 million from VoIP Supply [22] - Gross profit was $36.8 million, with a gross margin of 72%, compared to 67% in the previous quarter [23][24] Business Line Data and Key Metrics Changes - Core revenue, which accounted for 74% of total revenue, decreased by 6% year-over-year, while adjacent revenue increased by 6% [23] - Monthly Recurring Revenue (MRR) bookings grew by 2.4% sequentially and 6.4% year-over-year [9] - Larger strategic opportunities saw a 39% sequential increase in deals over $10,000 of MRR, which are 72% above the FY25 quarterly average [9] Market Data and Key Metrics Changes - The overall size of the pipeline remained steady, but new pipeline creation increased by 39% quarter-over-quarter [8] - The volumetric business now represents 62% of the 90-day forward pipeline, up from 55% in Q4 [8] - The company’s prem business grew over 60% year-over-year, benefiting from larger players exiting the segment [10] Company Strategy and Development Direction - The company is transitioning to a higher-margin recurring revenue model, which now represents over 90% of total revenue [6] - A new segment structure has been introduced, dividing revenue into core and adjacent categories to provide greater transparency [10] - The company plans to invest approximately $2 million in incremental SG&A to accelerate customer acquisition and partner enablement [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting fiscal FY26 guidance, expecting sequential growth in Q2 and year-over-year growth in Q3 and Q4 [12][26] - The management highlighted the importance of larger deal sizes and growing recurring revenue as indicators of entering a new phase of sustainable, profitable growth [12] - The company is exploring selective AI-driven software acquisitions to strengthen its vertical focus in various sectors [10] Other Important Information - The company continues to generate strong cash flow while strategically reinvesting in growth initiatives [10] - The capital allocation strategy includes paying down debt, reducing leverage, and returning value to shareholders through share repurchases [20][21] Q&A Session Summary Question: Growth investments and timing - Management indicated that the $2 million incremental growth spending will focus on increasing field capacity and marketing efforts to enhance brand coverage [28][30] Question: Pipeline tied to new partner relationships - Management reported a 6% increase in pipeline over the last six weeks and a 39% increase in new pipeline creation, indicating significant growth from new paths to market [32][33] Question: Decline in services revenue - Management acknowledged the decline in services revenue due to longer sales cycles but expects sequential growth starting in Q2 as older contracts complete [36][37] Question: Targeting larger customers - Management highlighted improvements in sales cycles and implementation timelines due to a disciplined approach and enhanced product offerings [44][46] Question: Average revenue per customer growth - The increase in average revenue per customer by 19% year-over-year was attributed to upselling and the effectiveness of the bundling strategy [58] Question: Gross margin expectations - Management noted that gross margin was impacted by a higher mix of product revenue but expects improvements as the year progresses [61][62] Question: Backlog growth - Management indicated that backlog remained consistent quarter-over-quarter, with expectations for growth in upcoming quarters [69][70] Question: Large MRR opportunities - Management clarified that large MRR opportunities include both wholesale solutions and bundled offerings, with significant deals already closed [73][74]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $50.8 million, a decrease of $8.5 million from Q4 2025, primarily due to the divestiture of the third-party hardware resale business [19] - Adjusted EBITDA was $8.3 million, representing a margin of 16%, with a temporary negative impact on free cash flow of $3.2 million due to working capital changes [5][18] - Free cash flow for the quarter was $3.2 million, or $0.10 per diluted share, with a net cash from operating activities of $4.9 million [17][18] - Total debt decreased to $42.8 million from $69.1 million year-over-year, with $5.2 million in debt retired during the quarter [18] Business Line Data and Key Metrics Changes - Core revenue, which accounted for 74% of total revenue, decreased by 6% year-over-year, while adjacent revenue increased by 6% [20] - Monthly Recurring Revenue (MRR) bookings grew 2.4% sequentially and 6.4% year-over-year, with larger deals over $10,000 MRR increasing by 39% sequentially [7][8] - Average revenue per customer increased by 19% year-over-year, driven by the bundling strategy [15][52] Market Data and Key Metrics Changes - The overall size of the pipeline remained steady, with new pipeline creation increasing by 39% quarter-over-quarter [6][12] - The blended churn rate held near 1%, indicating stability in the recurring revenue base [8] Company Strategy and Development Direction - The company is transitioning to a higher-margin recurring revenue model, which now represents over 90% of total revenue [5] - Investments of approximately $2 million in SG&A are planned to accelerate customer acquisition and partner enablement [10][19] - The introduction of a clearer performance view through two segments: core and adjacent, aims to enhance transparency in revenue mix evolution [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting fiscal FY26 guidance of $200 million to $210 million in revenue, with expectations for sequential growth in Q2 and year-over-year growth in Q3 and Q4 [24] - The company is optimistic about the growth potential in the wholesale channel and AI-driven software acquisitions to strengthen vertical focus [9][10] Other Important Information - The company continues to generate strong cash flow while strategically reinvesting in growth initiatives and expanding partner ecosystems [9] - R&D investment remained consistent at $11.3 million, with 90% of R&D spend directed towards new product capabilities [23] Q&A Session Summary Question: Update on growth investments and timelines for returns - The $2 million investment will focus on increasing field capacity and marketing efforts to enhance brand coverage and partner recruitment [26][27] Question: Pipeline generation from new partner relationships - The pipeline has increased by 6% in the last six weeks, with significant growth in bookings and a balanced mix of business types [29][30] Question: Decline in services and expectations for sequential growth - The decline was anticipated due to the completion of contracts with smaller customers, with expectations for sequential growth starting in Q2 [33][35] Question: Optimizations for targeting larger customers - The company has improved its product roadmap and established a disciplined approach to pursuing larger opportunities, enhancing efficiency in deal execution [40][41] Question: Changes in the partner ecosystem and ongoing success metrics - The partner program has been realigned to focus on strategic partners, with ongoing training and support to drive growth [46][47]

Core Viewpoint - Dell Technologies Inc. is poised to report strong fiscal third-quarter earnings, with expectations of significant year-over-year profit growth and continued stock performance above market averages [1][2][4]. Financial Performance - Analysts anticipate Dell will report a profit of $2.25 per share for the upcoming quarter, reflecting a 17.2% increase from $1.92 per share in the same quarter last year [2]. - For the full fiscal year, Dell's expected EPS is $8.66, marking a 15.8% increase from $7.48 in fiscal 2025, with projections of $10.44 EPS in fiscal 2027, representing a 20.6% year-over-year growth [3]. Stock Performance - Dell's stock has outperformed the S&P 500 Index, which gained 18.4% over the past 52 weeks, with Dell shares rising 32.4% during the same period [4]. - The stock also surpassed the Technology Select Sector SPDR Fund's 29.8% gains in the same timeframe [4]. Product Innovation - Dell's recent announcement of the PowerEdge XR8720t server is expected to transform the tech landscape by efficiently managing telecom and edge workloads, leading to a significant share price increase of over 9% ahead of its global release in Q1 2026 [5]. Analyst Ratings - The consensus among analysts is bullish, with a "Strong Buy" rating for Dell stock. Out of 22 analysts, 15 recommend a "Strong Buy," 2 suggest a "Moderate Buy," and 5 give a "Hold" rating [7]. - The average analyst price target for Dell is $164.95, indicating a potential upside of 1.7% from current levels [7].

Financial Data and Key Metrics Changes - Second quarter revenue was $97.9 million, up 32% sequentially from $74.3 million in Q1 2025, but down 4% year-over-year from $102.5 million in Q2 2024 [17] - Adjusted EBITDA for Q2 was $27.6 million, compared to $6.5 million in Q1 2025 and $26.8 million in Q2 2024, with a new quarterly record adjusted EBITDA margin of 28.2% [20] - GAAP net income for Q2 was $11.6 million, while non-GAAP net income was $24.5 million, or $0.80 per share on a fully diluted basis [20] Business Line Data and Key Metrics Changes - Endpoint IC revenue for Q2 was $84.6 million, up 38% sequentially from $61.2 million in Q1 2025, but down 5% year-over-year from $89.4 million in Q2 2024 [17] - Systems revenue for Q2 was $13.3 million, up 2% sequentially from $13.1 million in Q1 2025 and up 1% year-over-year from $13.1 million in Q2 2024 [18] - Reader IC revenue declined sequentially due to significantly lower Indy shipment volumes as that product line concludes its end of life [13] Market Data and Key Metrics Changes - The company noted strong demand in the food sector, particularly for product freshness and supply chain efficiencies, driving pallet and case level deployments [16] - The company is experiencing a shift in market dynamics, with a noted slowdown in apparel and general retail growth, while food and logistics sectors are showing solid growth [37] Company Strategy and Development Direction - The company’s solution strategy focuses on using its platform to solve enterprise challenges, which has been central to its strong results and outlook [9] - The introduction of Gen2X is expected to be a key component of the industry's future, improving read range and inventory management [11][12] - The company aims to extend its technology lead, market share, and platform adoption while delighting enterprise customers [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market position despite macro headwinds and tariff-related uncertainties, highlighting ongoing engagement with enterprise customers [41] - The company anticipates third quarter revenue between $91 million and $94 million, reflecting a quarter-over-quarter increase of 13% at the midpoint [23] - Management expects product gross margin to increase in Q3 driven by a higher mix of M800 and lower-cost wafers [22][64] Other Important Information - The company ended Q2 with cash, cash equivalents, and investments totaling $260.5 million, up from $232.5 million in Q1 2025 [21] - The company is participating in several upcoming industry conferences to connect with investors and stakeholders [6] Q&A Session Summary Question: How much of the Q2 beat was related to turns? - Management noted that there was more turns than expected in Q2, but adjustments to delivery timing and location were also factors [29] Question: What is driving the increase in margins? - The increase in margins is attributed to the ramping of M800 and the benefits from lower wafer costs [32][34] Question: Are there more opportunities in the logistics vertical? - Management confirmed that there are more opportunities in logistics and emphasized the importance of supply chain resiliency across various sectors [60] Question: What is the outlook for food item-level deployments? - Management indicated that while there are ongoing pilots, meaningful volumes are expected to ramp up in 2026 [86] Question: What is the status of channel inventory? - Channel inventory decreased in Q2, but remains healthy compared to inlay partner demand [52]

Financial Data and Key Metrics Changes - Second quarter revenue was $97.9 million, up 32% sequentially from $74.3 million in Q1 2025, but down 4% year over year from $102.5 million in Q2 2024 [16] - Adjusted EBITDA for Q2 was $27.6 million, compared to $6.5 million in Q1 2025 and $26.8 million in Q2 2024, with a new quarterly record adjusted EBITDA margin of 28.2% [19] - GAAP net income for Q2 was $11.6 million, while non-GAAP net income was $24.5 million, or $0.80 per share on a fully diluted basis [19] Business Line Data and Key Metrics Changes - Endpoint IC revenue for Q2 was $84.6 million, up 38% sequentially from $61.2 million in Q1 2025, but down 5% year over year from $89.4 million in Q2 2024 [16] - Systems revenue for Q2 was $13.3 million, up 2% sequentially from $13.1 million in Q1 2025 and up 1% year over year from $13.1 million in Q2 2024 [17] - Gross margin for Q2 was 60.4%, compared to 52.7% in Q1 2025 and 58.2% in Q2 2024, driven by a richer mix of M800 and licensing revenue [18] Market Data and Key Metrics Changes - The company noted strong demand in the food sector, particularly for product freshness and supply chain efficiencies, which are driving pallet and case level deployments [15] - The company is experiencing a shift in market dynamics, with logistics and food sectors showing solid growth despite slower apparel and general retail growth [33][34] Company Strategy and Development Direction - The company’s solution strategy focuses on using its platform to solve enterprise challenges, which has been central to its strong results and outlook [8] - The introduction of Gen2X is expected to be a key component of the industry's future, improving read range and inventory management [10][11] - The company aims to extend its technology lead and market share while delighting enterprise customers [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market position and noted that enterprise customers are actively engaged in extending their RAIN deployments despite macro headwinds [14] - The company anticipates third quarter revenue between $91 million and $94 million, reflecting a quarter-over-quarter increase of 13% at the midpoint [22] - Management highlighted that both gross margin and adjusted EBITDA margin set new quarterly records, indicating progress towards long-term financial targets [20][21] Other Important Information - The company ended Q2 with cash, cash equivalents, and investments of $260.5 million, up from $232.5 million in Q1 2025 [20] - Inventory totaled $96.2 million, down $2.3 million from the prior quarter, indicating effective inventory management [20] Q&A Session Summary Question: How much of the Q2 beat was related to turns? - Management noted that there were more turns than expected in Q2, but adjustments to delivery timing and location also contributed to the results [26] Question: Can you elaborate on the margin improvements? - Management indicated that the M800 ramp and lower wafer costs are driving margin improvements, with expectations for continued benefits in Q3 [30][61] Question: What is the outlook for logistics and food sectors? - Management confirmed that there are more opportunities in logistics and emphasized the importance of supply chain resiliency across various sectors [56][57] Question: What is the status of channel inventory? - Management stated that channel inventory is healthy and expected to remain stable, despite a modest build anticipated in Q2 [49] Question: What are the expectations for food item-level deployments? - Management expressed optimism about food opportunities, particularly in bakery and proteins, but noted that significant adoption will take time [68][80]