Good day, and welcome to the Tantalus Systems' second quarter 2024 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Deborah Honig with Investor Relations. Please go ahead. Thank you, Operator. Thank you for joining us to discuss Tantalus Systems' financial results and operating performance for the three and six months ended June 30th, 2024. Tantalus issued these results in a press release yesterday, which is posted on the company's website. Joining me today on the call from Tantalus Systems, here and referred to as Tantalus or the company, is Peter Londa, President and Chief Executive Officer. During the call, we will make forward-looking statements about Tantalus's business. These statements are subject to certain risks and uncertainties, which could cause actual results to differ materially. Tantalus refers conference call participants, either today or in the future, to the company's forward-looking statements contained in the presentation and on our website at www.tantalus.com. Statements made on this call reflect management's analysis as of today, August 7th, 2024. Management does not assume any responsibility or obligation to update forward-looking statements made during this conference call unless required by law. Please note that the financial information referenced on today's call is stated in U.S. dollars and in accordance with IFRS unless otherwise stated. The company is also presenting selected non-IFRS financial measures, including gross profit, gross profit margin, Adjusted EBITDA, recurring revenue, annual recurring revenue, referred to as ARR, and adjusted working capital. Tantalus believes that these non-IFRS measures provide meaningful information to investors. However, they do not have a standardized meaning and are not likely comparable to similar measures presented by other issuers. I will now turn the call over to Peter Londa, President and CEO. Please go ahead, Pete. Thanks, Deborah. On behalf of the entire team at Tantalus, I'm pleased to provide an update on our business through the second quarter of 2024. We'll aim to work through our presentation and provide ample questions towards the end. As you can see on slide three, we made good progress during the second quarter towards executing our 2024 plan, despite witnessing some additional timing delays that impacted our revenue profile. Revenue within the quarter was impacted by capacity allocations with our metering partners' factories, some supply chain logistics, and the timing of when we received orders from utilities. On a comparative basis, last year's Q2 results included the one-time software license of converting PG&E to our new C.IQ Connect software, now called TRUSync. So the numbers, as we look on a comparative basis, are a bit skewed. Digging deeper beyond the $10.7 million of revenue that we generated, with 35% from software and services, we were pleased to see that our annual recurring revenue increased to $12 million on a go-forward basis as of June 30th. The growth in our ARR translates into 14% year-over-year and represents the highest go-forward number in our company's history. With another strong quarter of gross profit margins at 55% and operating costs in alignment with our plan, we were able to offset an additional $1.5 million of further investment into the R&D and commercialization of the TRUSense Gateway to deliver near-neutral adjusted EBITDA at -$174,000. From management's perspective, delivering this level of adjusted EBITDA in the quarter is justified as we continue to accelerate towards the launch of the TRUSense Gateway. As many of you hopefully saw, we strengthened our cash position during Q2 by executing a CAD 10 million bought deal equity financing with the assistance of a syndicate of investment banks. We received significant support from some of our existing shareholders and were thrilled to welcome five new long-term-focused, high-quality institutional investors to our shareholder registry. We're proud to report that insider participation on the financing was high, which further demonstrates alignment between our management team, our board, and our shareholders. Thank you to all of the supporting investment banks and our shareholders who helped make this financing successful by providing us the financial flexibility that we need as we continue to execute our go-to-market strategy for the TRUSense Gateway. Beyond our financial results, from a commercial perspective, I'm extremely excited to report that our sales organization delivered record results through the first six months of the year. Our team converted just under $33 million in orders during the first six months of 2024. This result blows through our previous corporate record for orders converted during the first six months of any calendar year. On a comparative basis, year-over-year, 2023 to 2024, our orders for the first six months are up 46%. We believe the growth in orders ties to the progress we are making with the TRUSense Gateway, which underpins our broader Tantalus grid modernization platform. To that end, we have secured initial orders from 15 utilities for the TRUSense Gateway, which will have influence on our revenue in the second half of the year. In addition to the record number in orders, we also surpassed a major milestone by expanding our user community to 302 utilities. Through the first six months of the year, we've added 14 new utilities and continue to see good progress in building market share. In terms of progress on the R&D front, we were very excited to announce not only the UL certification of the TRUSense Fiber Gateway during Q2, but then additionally the UL certification of the TRUSense Ethernet Gateway in July. Both devices have been manufactured, and the first commercial units have been shipped and received as of today's earnings call. Those devices are being deployed as we speak today, and we'll look forward to continuing to track the progress we're making at the early adopters of our TRUSense Gateway. We're working to finalize certain certifications and tests for the cellular version, and we'll continue to provide updates as we finalize those key milestones and bring the third and final version of the TRUSense Gateway into the market through this year. Shifting our focus to the financial results, as reflected on slide four, we delivered $10.7 million in revenue for the second quarter. This represents a slight decline of 4% on a comparative basis. As mentioned, our results last year were favorably impacted by the one-time license of a Congruent software tool called C.IQ Connect, which we now call TRUSync Grid Data Management. Our revenue was also somewhat impacted in the quarter by lead times and capacity allocations with our metering partners. While revenue was slightly down, our gross profit margin remained strong at 55%. We continue to maintain solid gross profit margins in excess of our long-term goal of 50% despite the inflationary environment. The company's operating expenses during Q2 were impacted by our users' conference held in April and an additional investment of approximately $1.5 million in the TRUSense Gateway development and commercialization. Despite the $1.5 million of additional investment in the TRUSense Gateway, as mentioned, our Adjusted EBITDA was negative $174,000. The net loss of $1 million includes approximately $400,000 of non-cash-related items such as depreciation and amortization, share-based compensation, and foreign exchange, the details of which are available in our financial statements. As we dig deeper into both revenue profile and gross profit margin on slide five, you'll note that revenue from our connected devices represented 65% of revenue, while revenue from our software and services represented 35% of revenue. The slight decline in software and services year- over- year is tied to the conversion of the software license secured with PG&E that we recognized in Q2 of last year. While we're working on several pilots of our C.IQ Connect or TRUSync Grid Data Management, we have not yet witnessed a similar license in 2024 to the one we secured with PG&E last year. But we do remain optimistic regarding the value and the opportunity of the software, particularly given the results of our 2024 Utility of the Future survey, where managing grid data was the top area of concern for utilities that we surveyed. Within the software and services revenue segment, we include recognized recurring revenue in each period. As a reminder, our recurring revenue is comprised of software as a service or SaaS, term-based software licenses, software maintenance, technical support, and hosting services. Recurring revenue continues to become a material part of our revenue stream and was 24% of total revenue in the quarter. We believe this reflects the value of our overall platform and the ability to activate software and analytics licenses across our user community. Please note that the recurring revenue recognized during the second quarter of 2024 was slightly down on a comparative basis to the prior year as a direct result of migrating recurring licenses for certain utilities to a new annual term license that will commence on July 1st of each year moving forward. This is solely based on timing, and these changes will be picked up in Q3 revenue accordingly. Shifting to our focus on the gross profit margin, we can recognize favorable results for the connected devices at 44%, which is really a reflection of our team's prudent management of our supply chain and our favorable product mix of shipments in the quarter. The gross profit margin for software and services continues to remain strong at 74%. Within the quarter, we did recognize some revenue from installation services, which we generate at a lower gross profit margin but are offered to certain utilities that are in need of external installation support. Overall, delivering approximately 54% gross profit margin for the first six months of the year from our perspective is a solid indicator of our ability to drive operating leverage through the business as we drive revenue growth and begin to witness the benefits of commercializing the TRUSense Gateway. On a trailing 12-month basis, which is reflected on slide six, we believe the company remains on a favorable trajectory. Beyond the aforementioned impact to software and services on shifting things with PG&E, as well as some of the impact of capacity allocations with our metering partners, we do see some revenue continue to shift at the very end of each quarter and into future periods. Our view is that will continue through the second half of this year and potentially into 2025. While we witnessed a decline in revenue on a comparative basis, we continue to remain optimistic about driving revenue growth year- over- year in 2024, particularly as we plan, excuse me, for revenue contribution from the TRUSense Gateway and make further progress with our TRUGrid analytics capabilities. The slight decline in revenue year-over-year, or I should say period-over-period on a trailing 12-month basis, was offset by strong gross profit margins at 53%. That helped us make further improvement in Adjusted EBITDA, which effectively is neutral despite investing approximately $5.6 million over the trailing 12 months in the TRUSense Gateway. Within that $5.6 million of R&D investment, we include $1.7 million of external costs. Extrapolating things a bit further, had we not made the investments in these external costs to support the development of the TRUSense Gateway, it's fair to assume that we would be a dollar-for-dollar improvement in our Adjusted EBITDA. As all three versions of the TRUSense Gateway become available for sale, we do anticipate a reduction in those external costs and a migration of the R&D investment that's being made. That will have a direct and immediate impact on improving Adjusted EBITDA longer term. In terms of the net loss for the trailing 12 months, we've also made good progress and continue to include non-cash items. As our revenue profile begins to accelerate and we maintain strong gross profit margins and see a decline in the R&D investment in the TRUSense Gateway, we do anticipate delivering both positive Adjusted EBITDA and improving net income performance in the foreseeable future. Looking in the trailing 12 months, both revenue and gross profit margins in a little bit more detail on slide seven, you'll see revenue from connected devices of $26 million, reflecting 64% of total revenue over that timeframe. Revenue from software and services was $14.7 million, representing 36% of total revenue. Recognized recurring revenue over the trailing 12 months similarly increased to $10.2 million, representing 25% of total revenue. With continued strong gross profit margins as well, we remain optimistic about the team's performance and the trajectory of the business. Shifting our focus to the balance sheet, I draw your attention on slide eight to the bridge analysis for our cash position. We were pleased to execute a CAD 10 million Canadian offering or Canadian CAD 10 million bought deal equity financing during Q2. Coupled with normal course working capital fluctuations and other items during the quarter, we ended the second quarter with over $11 million in cash on the balance sheet, representing a significant increase from the prior quarter. We believe the current cash balance provides the company with ample flexibility to support the business moving forward. Drilling into the financing in a bit more detail, we issued 6.3 million common shares from the treasury of the company at a price of CAD 1.60, $1.60 per share, pursuant to the terms of the underwriting agreement between the company and a group of underwriters inclusive of Cormark Securities and Canaccord Genuity. As a result of the financing, the company now has 50.8 million common shares outstanding as of June 30th, 2024. Net cash proceeds from the financing were approximately CAD 9.1 million or $6.7 million after closing costs. We witnessed favorable changes to our working capital and experienced strong collections from our customers throughout the quarter. We also continued to reduce our inventory balances from prior levels in 2023. Overall, strong improvement in the cash position of the company. Further to the balance sheet summary on slide nine, our Adjusted Working Capital increased to $7.1 million as of June 30th, 2024. We continue to normalize inventory, our accounts receivable, and accounts payable metrics to enhance our cash conversion cycle. Beyond working capital, we ended the quarter with $39.4 million in total assets and an outstanding total debt balance of $10.7 million. Within the quarter, our outstanding debt decreased by approximately $820,000 due to a principal repayment to our line of credit with Comerica during Q2. It should be noted that we continue to have $4.8 million of total availability under our debt facilities to the extent any additional liquidity is required to support the growth of the business. Additionally, as noted in our financial statements, we entered into an amendment to our loan agreement with Comerica effective May 31, 2024. The favorable amendment to the company was made after the completion of our bought deal equity financing transaction and is intended to provide additional flexibility within our borrowing-based calculation covenant moving forward. We believe the balance sheet is as strong as it has been since going public and that our team has adequate flexibility to scale the business going forward. In terms of the outlook for our business moving forward, we continue to find Tantalus at a compelling time in our industry given the ongoing push towards the electrification of everything and the corresponding increase in the amount of electricity that utilities must deliver. Despite witnessing growth in the demand for electricity, we continue to witness the vulnerability of the distribution grid and the corresponding impact from aging infrastructure, the variability of distributed resources that come online, and the increasing number of extreme weather events. We've seen unfortunate storms, large fires, and rolling blackouts surface across Canada and the U.S. this summer, all of which are creating additional urgency for utilities to modernize their distribution grids. We believe our grid modernization platform is in the market at the right time to help utilities both prepare and solve immediate problems. As we turn our attention to helping utilities solve those problems, we are ramping production and sales of the initial TRUSense Gateway products. We continue to anticipate revenue contributions during the second half of this year from the TRUSense Gateway, particularly given the growing number of utilities that have placed initial orders. As the TRUSense Gateway underpins the Tantalus grid modernization platform, we believe it's important to expand awareness and get initial devices in the hands of as many utilities as possible. Given the response we are witnessing through our sales process and quickly securing initial orders from 15 utilities, we are evaluating an allocation of additional capital to accelerate our sales and marketing efforts to capitalize on the opportunity in front of the company and take full advantage of being the first mover with this type of offering. While we remain optimistic about the growth trajectory of the company, we are mindful of managing through additional capacity allocations and increasing lead times with our existing metering partners. As we've seen certain delays impact quarterly revenue through the last few quarters, we do anticipate seeing these trends continue through the balance of the year. Not to lose sight of what we're seeing with our metering partners, an important element of the TRUSense Gateway and our broader grid modernization platform through our TRUSync software and our quick advancements with TRUGrid analytics, all of those efforts are being made to de-risk our business from capacity allocations and lead time constraints unfolding in our metering partners' factories. The TRUSense Gateway, the TRUSync software, the TRUGrid analytics capabilities are not dependent on metering themselves and provide ample opportunity for us to gain a little more visibility and a little more control over the timing of revenue and cash flow each quarter. To that end, we thought it would be helpful to share a few additional details with respect to some of the initial deployments of the TRUSense Gateway and our broader grid modernization platform. As we shared earlier in the year, we secured our first project with an investor-owned utility for our grid modernization platform with a utility in Connecticut called United Illuminating. United Illuminating is an IOU that supports over 400,000 homes in the state of Connecticut. What we're working to demonstrate with United Illuminating and the use cases that we're validating in this deployment are both tied to helping the utility gain much more control behind the meter in an effort to shift both winter and summer peak loads and take pressure off of antiquated and old substations that are in need of significant investment and upgrade. Coupling the behind-the-meter control through hot water electric load and air conditioning, we're also going to enable United Illuminating to benefit from our advanced power quality measurement capabilities. From that advanced power quality measurement, the utility will be able to much more granularly manage and track the performance of both pole-top and broader distribution transformers and pinpoint which of those devices are at risk of failure that could lead to outages and/or fires. As we commence the deployment with United Illuminating later this year with the cellular gateway, and we fully expect to maintain our schedule to do that, we believe the project with United Illuminating will be tracked by several other large investor-owned utilities, thereby increasing the total addressable market opportunity for Tantalus to scale. It's an exciting one for us and one that will continue to provide update as we progress through 2024. Shifting gears, we also wanted to highlight the City of Bolivar as, while it's much smaller as a public power utility, it's still noteworthy. In the case of City of Bolivar, the TRUSense Gateway was selected in conjunction with a broader grid modernization upgrade for the utility, which includes our advancements in metering infrastructure and load control. At the City of Bolivar, we found that the TRUSense Gateway was the reason for the utility selecting Tantalus as the TRUSense Gateway was the first and only solution in the market that could help them leverage their fiber deployment while simultaneously making very quick advancements around power quality measurement and broader grid modernization. We see that increasingly unfold through our sales and marketing processes and believe the TRUSense Gateway will pull our broader solutions into an increasing number of public power utilities and electric co-ops as we continue to build awareness in the market of what we're accomplishing. While we certainly are spending a significant amount of time through these calls and outreaches with investors and in our marketing materials around the TRUSense Gateway, it'd be a mistake to not also spend a few minutes on the progress we're making with our TRUSync for data management software and our TRUGrid transformer analytics capabilities. We'll continue to provide updates on both, but we are making advancements in pilots, important pilots for the TRUSync software, and are seeing several utilities across the United States evaluate the capabilities as the basis of normalizing and accessing data across an increasing number of devices and ensuring that that data can securely be brought into mission-critical systems such as SCADA, advanced distribution management systems, or outage management systems. In terms of the transformer analytics, which we've recently announced, we are seeing very quick adoption within our existing customer base, and we are engaged with a number of utilities that have never purchased anything from Tantalus where the transformer analytics may be our first path to building relationships and supporting an increasing number of utilities. Both capabilities not only drive software and services revenue for the organization, but really begin to diversify the revenue profile and de-risk some of the quarterly impact we're seeing with our metering partners. Before wrapping up today's call and opening up for questions, I would like to formally thank the entire team at Tantalus for their continued hard work and dedication to the company. We are extremely appreciative of the ongoing support of the existing shareholders who participated in the financing and the new institutional investors that supported our organization in the financing we completed earlier in the quarter. To that end, I appreciate everybody's time and attention today. Operator will open it up for questions. Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from the queue, please press star then two. Today's first question comes from Nick Boychuk with Cormark Securities. Please go ahead. Thanks. Good morning, Pete. Hey. Good morning, Nick. I'm wondering if you can - hey. I'm wondering if you can expand on the initial 15 utilities that have secured orders. Maybe just walk us through how many of them have received demo units. For those that have, can you share any feedback on their experience and how that might impact the rollouts from other groups? Yeah. So a couple of items on it, Nick, and thanks for the question. Really interesting, actually. Of the 15 utilities that have placed initial orders, two are from our advisory committee where we're still finalizing our field trials of the latest firmware that'll be on that device. So we expect the balance of our advisory committees to place orders through the balance of August and into September as we really declare that the firmware release that's in the market or in the field right now is final. Beyond the two advisory committee members, we received orders from nine existing utilities who were not a part of the advisory committee and four new utilities that never purchased anything from Tantalus prior to submitting the order. So it's a pretty good mix, and I think an indication from that sort of block of 30+ utilities we've been talking about outside the advisory committee actually moving as we completed and achieved the UL certifications. To give you some sense of order of magnitude, the vast majority of those orders are relatively small. They range from a handful of devices to a few hundred devices. We're actually activating, we've referenced this utility previously, so we actually have members of the team in Chattanooga this week deploying the first batch of Ethernet gateways that EPB has received from the City of Bolivar. They'll be deploying their first TRUSense Fiber Gateways in the next couple of weeks. So Nick, it's a little premature to actually speak to the expanding number of devices in the field as of today's call, but I'd say that those that are in the field that were part of our field trial continue to report favorably, continue to help us identify and quantify some use cases, and also, I think, help us fine-tune and have much more confidence in the design and the integrity of the device to really start to ramp production with our contract manufacturer. Okay. Got it. That's interesting. Have the utilities that weren't part of the advisory committee given any indication on the pace or scale of how fast they'd want to make their deployments? I think, Nick, it's in alignment with what we have continued to and previously communicated. I would think of the 15 utilities that have placed the initial orders, I think we'll see those utilities sort of run either, well, in the case of the City of Bolivar or, for example, the City of Henderson, they're activating their full deployments of our system, inclusive of TRUSense gateways. And those deployments have normal course deployment plans. As it relates to, for example, the City of Chattanooga and EPB, no changes to what we expect. I still think we'll see advancements and acceleration over the next three, five, and seven years with those utilities. Okay. Thanks. And then the last one for me, you mentioned that you could be investing some marketing dollars to help scale the TRUSense with the phenomenal response so far from these 15 utilities. That's a little surprising. Can you kind of walk us through how that's going to be implemented, what you think the outcome's going to be, and what the potential return on investment or financial boost it would be to the TRUSense pipeline? Yeah. So Nick, we're not talking significant dollars. Probably over the next 12+ months, $a few 100,000. So it's not significant, but it probably is an increase as we look at comparative results moving forward. We're working on a few things. In addition to really taking a very targeted marketing approach with some additional research, we're engaging with an increasing number of industry analysts to gather as much information as possible and to pinpoint where we think both the cellular, fiber, and Ethernet gateways are most applicable. One thing that, as you're aware of the business, we have not really pursued investor-owned utilities in our history. So the approach, the types of resources on the sales side that are going to be necessary, and the influence of industry analysts is going to be important. So I think that's where it's nothing that's really going to be, I'd say, disruptive to our trajectory on EBITDA or net income. But I think it makes a lot of sense to put a few extra dollars behind our marketing and enhance the sales organization over the next 12 months. It's hard to quantify when we look at it in a modeling perspective. As you know, we're chasing over $500 million of opportunity right now, well in excess of $100 million, $150 million from the advisory committee, and a much larger number from the subset of utilities, some of whom have already placed initial orders. So I think for some upgrades on the sales team or enhancements to the sales team, and certainly an expansion of our marketing literature and marketing outreach, I think the return on investment for $ a few hundred thousand is going to be fairly substantial for our shareholders. It's really about making sure as many utilities across Canada and the United States are aware of what we are doing, that TRUSense Gateway and the broader platform are available for sale as we clear through not only fiber Ethernet but cellular for the TRUSense Gateway, and then from there, really try to follow up on a very targeted basis. Got it. Okay. That makes a lot of sense. Thanks for the color, Pete. Thank you. And our next question today comes from Gianluca Tucci with Haywood Securities. Please go ahead. Hi there. It's Haywood Securities, actually. But Pete, good morning. I just want to expand on the advisory committee opportunity. Are you able to disaggregate this by fiber, Ethernet, and cellular? And I think you mentioned at 3-7 your deployment cycles. Is this on average linear, or is it more exponential in nature, on average, the deployment cycles that you're going to see? So the first portion of your question, first off, good morning. Good to hear your voice. The first portion of your question is a little bit easier to answer. We've seen a mix, actually, and have a few utilities, United Illuminating as an example, place orders for the cellular gateway in advance of finalizing the FCC and other spectrum tests that we need to finalize, all of which have started, or most of which have been started at this point without any expected significant issues. So I'd say it's a blend on the first 15 utilities. Just looking at the list in front of me, Gianluca, I think it's probably three or four of the 15 are cellular. The balance are fiber. There are two or three Ethernet orders. As you may recall, the Ethernet gateway, it's a device that provides a lot of flexibility. It is the device of choice for EPB Chattanooga, which is one of our larger customers on the public power side. And so it's interesting as we see things unfold, the choice between fiber and Ethernet. I don't think we have a strong opinion one way or the other. It's really what's the better fit for the utility relative to what they're trying to achieve. As the cellular gateway clears through the FCC certifications and what's called PTCRB testing for emissions and/or radiated emissions, I think we'll see an increasing number of utilities place orders for the cellular gateway, just more applicable to the utilities across Canada and the United States, given that there are only about 220 utilities deploying fiber all the way to the home today. So I think the cellular gateway will surpass over the next few years. The second aspect to your question is a little bit harder to answer. I'd say it's really dependent on the utility. I find through my history of selling solutions, especially new capabilities, Gianluca, utilities are very deliberate, but they're also conservative in nature. And more often than not, what we see is the sort of adoption, the initial adoption moves a little slower than we'd like to see. Utilities will put out the tens, the hundreds, maybe a few thousand devices over a 6- to 12-month timeframe. And then once their organization is really comfortable with the technology, what it does and how it helps, and as it enhances their own use cases and solves more problems, all of which we think the TRUSense Gateway is going to do, then we start to see accelerated adoption. And I'd say more often than not, in my personal history of selling complex solutions to utilities over the last 15 years, I find that after sort of year one, sort of call it 12 months, you start to see material ramps. Utilities tend to move faster once they're very comfortable. So I think they're deliberate in nature. It's just hard to extrapolate and tell you, "Is this going to be hockey stick versus just a good slope that continues to increase?" And I think we're planning for a steady slope that's consistent as opposed to hockey stick, but it's all relative given the size of where we are and trying to scale the business by 2x and 3x over the next several years. Thanks for that color, Peter. Just secondly, gross margin in the quarter continued to be a strong point. Are you getting better pricing from your hardware vendors, or are there other dynamics at play here? It seems like the hardware margins were a tad better than historically. Yeah. I was saying it's so relative to what we're seeing. A couple of things. I'd say our manufacturing supply chain team have been masters of navigating the dynamics in the market for the past 12, 18 months and working very closely with our contract manufacturer to really be very prudent in when we're buying components or when we're coordinating with the supply chain. We've also been extremely fortunate to manage well with logistics providers where we're seeing fluctuations in pricing throughout the course of the year. And I'd say our team is just really dialed in, and it's hats off to Harold Hankel and his entire team on our side for managing that prudently. Incremental to that, as you may recall, we did implement some price increases previously. Those price increases have held. And so I think that's helping us navigate the inflationary pressures that we continue to see across the board. And then last but not least, there's reference in our materials. The product mix for the first half of the year has been pretty favorable. On the connected devices side, we get pretty healthy gross profit margin on our communications infrastructure and commercial and industrial meters. We've seen a higher percentage of CNI meters being shipped from our metering partners' factories. And so that's bolstered our gross profit margin as well a little bit. So I think the trajectory will continue. The TRUSense Gateway is expected to be a fairly strong profit margin for us as well. So I think we could see some fluctuations, a few percentage points on either end of what we've reported here. But I think we'll see this trend continue for some time. Thanks, Peter. Thank you. And our next question today comes from Yuri Lynk with Canaccord. Please go ahead. Hey, good morning, Pete. Morning. How are you, Yuri? Yeah, good. Good. Just wondering, I mean, given the $33 million in conversions from the sales pipeline and, I guess, tied to that, the good progress with TRUSense Gateway in terms of orders, how have your expectations for revenue in the back half of the year kind of evolved, say, over the last three months or so? Yeah. Fair question, Yuri. I'd say we're optimistic that we'll see growth year-over-year. I think we're expecting a fairly favorable and strong second half. We'll see the benefits of some initial contributions from the TRUSense Gateway this quarter and certainly Q4 as we ramp that production. What we're trying to get our arms around is capacity allocations, certainly for Q4, above and beyond what's already in backlog and with orders placed with our meter partners and trying to squeeze some additional capacity. That'll probably heavily influence sort of end of Q4 revenue and year-end results, Yuri. I think where consensus sits today is still a very achievable bogey for the company. I think certainly from an orders perspective, we'll be able to, we're in a position to deliver. As you know, some of the elements with our metering partners are a little bit out of our control in terms of timing and when product gets shipped out of those factories. So that's what we're really focused in on right now as we start to plan for December and year-end. Okay. And as you begin kind of converting some of these initial TRUSense Gateway orders into revenue, are you happy with the pricing you're receiving and the margin profile of those revenues? Yeah. Absolutely. No surprises there, Yuri. And I think certainly with the initial 15 utilities, I think the value and the use cases that the utilities are seeking to demonstrate will speak volumes to the pricing of what we've gotten to market with. So yeah, no surprises there whatsoever. And so tongue in cheek, yeah. Careful that I'm recorded, but tongue in cheek, right? It begs the question, should we be charging more for it? But first things first, we got to get into the market. Yeah. Last one, just additional clarity. You mentioned of the 15 utilities that have placed orders, four are new utilities. Would any of those four be IOUs? Yeah. United Illuminating is in that list. Okay. Okay. I'll turn it over. Thanks. Thanks, Yuri. Thank you. And as a reminder to ask a question, please press star then one. Our next question comes from Pavel Molchanov with Raymond James. Please go ahead. Thanks for taking the question. Pleasure to be on your call for the first time. If we zoom out for a moment, at a time when utility conversations are a lot more focused about load growth versus probably any time in the last 20 years, which of your solutions are most directly situated to address that particular use case? Well, Pavel, first off, welcome. Great to have you on the call. Thanks for allocating the time. Yeah, I think probably for the first time in 50 years, utilities are planning for growth in electricity demand. We see things like the electrification of transportation, certainly the rise of data centers, and just the broader electrification of and incremental devices that we all use every day. Funny to think electricity is becoming part of the clean energy trend here. To your question, there are a couple of things that we offer today. I'll break them down as follows. The TRUSense Gateway, as a new device for us, enables utilities to go behind the meter and gain very granular control down to the circuit breaker, the water heater, the charger, the inverter, other appliances. And while the connectivity through the TRUSense Gateway is paramount, we have a suite of software capabilities we refer to as TRUFlex load management capabilities that will leverage and help utilities really not only track load at a device level behind the meter, but then actually be able to control, plan, and automate load management strategies, whether that's shifting peak load, whether it's shedding load in an emergency circumstance, or tying to some form of time of use rate. That's the physical device, the TRUSense Gateway, and then coupled with TRUFlex software. You know, Pavel, last week we issued a press release on something called our TRUGrid Protect. It's a really interesting capability that actually enables load shedding through traditional advanced metering with remote disconnect meters. And we've worked with a utility in Texas that lived through the deep freeze two winters ago and had to respond to calls from ERCOT to reduce their load profile by 50% very quickly as the grid was crumbling in Texas because of the weather and things freezing up. And what that utility did is instead of the traditional approach of just rolling blackouts and going down at the transformer level, they started to automate the use of their remote disconnect meters and turn on and turn off remote disconnect meters for defined periods of time at defined locations to shed load by 50%. So we've taken their good work and we've turned that into a software application that is now available for any of the utilities using our AMI system with remote disconnect meters where that software application, it sits on the device. It is at the edge of the grid on our ASIC, and it can be used for emergency circumstances to shed load in anticipation of either calls from the service territory operator or the likes of an ERCOT or in anticipation of storm. So I'd say there are a couple of different aspects of it, but we think from a physical device perspective, the TRUSense Gateway would be the most granular. Then the software capabilities through our TRUFlex load management offering is where we'll really be able to provide very granular control to the utilities. I hope that I don't have a picture to bring up in this earnings deck, but I can send you some images of it and some additional detail after the call, Pavel. Appreciate the color. If we go back one year, 18 months ago, there were a lot of component shortages that had to contend with. Is it fair to say that those are completely in the rearview mirror, or are there still some issues in the supply chain? Speaking specifically for Tantalus, we see certain components that still have extended lead times. What I'd say is those lead times aren't fluctuating the way they were 12, 18 months ago, but they're still extended. We see that with capacitors. We still see it with that we see that across the board, anything tied to silicon and just the increased demand for microchips globally, that is leading to longer than usual lead times, certainly with our fabricator. But I'd say they're normalized in that they haven't gotten back to where they were, but we're not seeing too many surprises, I'd say. Or 18 months ago, you'd have a vendor that just didn't deliver. You had no visibility into it, and you had to scramble. We haven't really seen that too much. But I'd say that's at least for us. We work with three metering partners. We've seen in all three circumstances extended lead times for devices out of their factories. I can't really speak to why, but we're certainly seeing that on the metering side of lead times expanding again. Got it. Thank you very much. Yeah. Thanks for allocating the time and asking the questions. Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Peter Londa for closing remarks. Appreciate everybody's time and attention and continued support of the organization. Certainly, I'd like to thank our team for the continued hard work and dedication to the organization. We'll look forward to continuing to provide updates on the organization and our progress towards our 2024 plan. And I hope everybody has a good day and a good balance of the summer. Thank you all for your time. Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.