Good day, and welcome to the Iteris fiscal third quarter 2023 financial results conference call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. Please note this event is being recorded. I would now like to turn the conference over to Todd Kehrli of MKR Investor Relations. Please go ahead. Thank you, operator. Good afternoon, everyone, and thank you for participating in today's conference call to discuss Iteris' financial results for its fiscal 2023 third quarter ended December 31, 2022. Joining us today are Iteris' President and CEO, Mr. Joe Bergera, and the company's CFO, Mr. Doug Groves. Following their remarks, we'll open the call for questions from the company's covering sell-side analysts. Before we continue, we'd like to remind all participants that during the course of this call, we may make forward-looking statements regarding future events or the future performance of the company, which are statements based on current information are subject to change and are not guarantees of future performance. Iteris is not undertaking an obligation to provide updates to these forward-looking statements in the future. Actual results may differ materially from what is discussed today, and no one should assume that at a later date, the company's comments from today will still be valid. Iteris refers you to the documents the company files from time to time with the SEC, specifically the company's most recent Forms 10-K, 10-Q, and 8-K, which contain and identify important risk factors that could cause actual results to differ materially from those that are contained in any of the forward-looking statements. As always, you'll find a webcast replay of today's call on the investors section of the company's website at www.iteris.com. Now I'd like to turn the call over to Iteris' President and CEO, Mr. Joe Bergera. Joe, please proceed. Superb. Thank you, Todd, and a good afternoon to everyone. I appreciate you joining us today. Before we begin our regular earnings commentary, I wanna make some remarks about today's announcement that Kerry Shiba will be joining Iteris as SVP and Chief Financial Officer, effective February third, 2023. Kerry brings significant, highly relevant experience that we believe will be particularly valuable with Iteris having achieved a critical inflection point and now poised for its next stage of growth. I look forward to Kerry joining our team tomorrow and working with him to execute our business strategy and, of course, to increase shareholder value. Unfortunately, with Kerry's arrival, we'll be saying goodbye to Doug Groves. Doug has made a huge contribution to Iteris over the past three years, which have been extremely challenging due to unanticipated global events, largely outside our control. I cannot imagine a better partner than Doug to navigate the complexities of COVID-19 and the associated global supply chain crisis. To ensure an orderly transition, Doug is committed to serve as a senior advisor for four months, which will allow him to contribute to the preparation of our Form 10-K and other critical projects. I wish Doug the very best in his future endeavors. Let's turn our attention to our third quarter results. For the fiscal 2023 third quarter, Iteris reported record total revenue of $40.7 million, representing a 27% increase year-over-year. The growth was due to strong demand for our products and services and the progress of our supply chain improvement program, which began to normalize the underlying economics of our Vantage sensor product lines. More specifically, our product gross margins improved 2,640 basis points on a sequential basis as we began shipping products with the alternative circuit boards that were released to production in our second quarter. In a few minutes, I'll provide more color on our supply chain initiatives. Despite concerns about a potential slowdown in the broader economy, customer adoption of the ClearMobility platform remains very positive. In the third quarter, we reported strong total net bookings of $41.1 million, representing a slight increase over the prior year. We were pleased with the result, given the combination of an unusual prior period comparison and the impact of seasonal holidays, which tend to cause procurement delays. This is the fifth quarter in a row that we've reported bookings of more than $40 million. Although not included in our third quarter bookings results, I'm pleased to share that Iteris has received a notice of intent to award a multi-year, multi-element contract from a public agency in Southern California. We do not normally comment on notices to award. However, this award is unique for two reasons. First, it includes a healthy mix of both products and services, demonstrating the progress of our cross-sell and efforts. Second, we expect at least a portion of this project to be funded by the Infrastructure Investment and Jobs Act, making this our first notable award to include IIJA funding. It is likely to take a couple quarters before this opportunity progresses from notice of award to signed contract, at which time we'll provide additional information. Due to our sustained strong sales pipeline velocity and total net bookings, we ended the December 31 period with a record total ending backlog of $112.2 million, representing a 22% increase year-over-year. As always, our reported total net bookings and ending backlog figures reflect firm customer orders. The total value of customer contracts, which varies from quarter-to-quarter, averages on a historical basis about 200% of our total ending backlog. In the fiscal 2023 third quarter, product revenue increased 44% year-over-year to a record $22.9 million, demonstrating continued market share gains. We believe our sensor portfolio continues to take market share due to excellent sales execution and superior product performance. In the third quarter, we extended our product performance lead with further enhancements to our AI-based object classification, detection system scalability, and security framework. Due to our strong market position, we continue to win virtually every large competitively sourced detection sensor, fixed travel time sensor, and cellular C-V2X sensor initiatives across the country. For example, in the third quarter, our sensors were selected for the following representative smart mobility initiatives. Full high definition AI-based detection for phase II of the Coachella Valley Smart Region Program with an order value of $4.5 million. This is likely the largest single deployment of this form of detection technology in the nation to date. Cellular- V2X or C-V2X sensors to extend coverage on the I-4 between Tampa and Orlando as part of the Florida's Regional Advanced Mobility Elements, or FRAME program. This is another in a series of Iteris sensor purchases related to the I-4 FRAME program. Travel time and C-V2X sensors will be deployed as part of an I-275 design build project near Tampa, Florida. Video-based sensors for intersection detection to replace in-ground wired loops throughout the city of Meridian, Mississippi. Video-based sensors for intersection detection to replace the prior implementation of a competitor's video sensors across a traffic corridor in Richmond, Virginia. These representative third quarter orders demonstrate Iteris' ability, as we've discussed previously, to successfully execute on the following five dimensions to expand our market footprint. First, we are executing on our strategy to maximize our win rate of large-scale modernization initiatives like CVAG that drive region-wide standardization of our sensor portfolio. Second, we are leveraging our leadership in intersection detection to penetrate adjacent categories, including the emerging C-V2X category, as we did with the I-4 FRAME and I-275 deals in Florida. Third, we're attaching annual recurring revenue to each new Vantage Apex system and sense Spectra CV sensor, as occurred with the CVAG and Florida orders. Fourth, we're capturing a disproportionate share of migration revenue as customers similar to Meridian continue to replace legacy in-ground detection with advanced sensors. Fifth, we continue to displace above ground detection vendors, such as we did in Richmond, due to our superior product performance, total cost of ownership, and customer success model. Since our last earnings call, we released to production four more alternative circuit boards that will enable further reductions in our aftermarket component purchases, better optimization of our component inventory, additional improvements in our manufacturing linearity, and enhanced purchasing power with traditional supply sources. This brings us to a total of six alternative circuit boards released to production from the inception of our supply chain improvement program. In a moment, Doug will comment on the implications of these new alternative circuit boards on our fourth quarter purchase price variance and product gross margins going forward. I want to review the performance of our service lines of business. Fiscal 2023 third quarter total service revenue was $17.8 million, representing a 10.5% increase year-over-year. In addition, we recorded $16.1 million in net service bookings, of which 41% will be recognized in the future as annual recurring revenue. Notable new customer agreements include a combined $1.8 million in orders to extend our managed services activities for the Virginia Department of Transportation, a $1.3 million subscription agreement for ClearData from the Utah Department of Transportation, a $1.3 million task order for the second phase of a project to develop and support a smart county plan for the San Bernardino County Transportation Authority, a $1 million task order from the Florida Department of Transportation District Seven for arterial performance monitoring and management activities, awards worth a combined $1 million for a subscription agreement for ClearGuide, including ClearGuide SPM from various agencies in the U.S. and Canada, and a ClearData subscription for a non-disclosed value from a confidential commercial customer. Additionally, we saw an acceleration in the attach rate of connected services or annual recurring revenue to our infrastructure sensors. At this time, we have over 3,000 intersections and 2,000 travel time and C-V2X sensors, which are either connected or in process of being connected to our ClearMobility Cloud. To sustain market share growth, we continued in the third quarter to enhance our software as a service, data as a service, and cloud-enabled managed service solutions. For example, we introduced a new safety-related data set that customers can access on a subscription basis through our ClearData application programming interface, and we integrated this new data set into our mobility intelligence software, ClearGuide, to address new Vision Zero and Safe Streets for All use cases. Given the strength of our value proposition, we also began to introduce strategic price increases on certain of our software-as-a-service offers. In summary, we are pleased with our third quarter record total revenue and record total ending backlog, as well as the progress we made on our supply chain improvement program and the associated sequential improvement in cost of goods sold and adjusted EBITDA. With various financial metrics trending in a favorable direction, we believe Iteris achieved an important financial inflection point in the third quarter, consistent with our prior expectations. On that note, I'd like to turn the call over to Doug to provide more color on our third quarter financials, after which I will further discuss our fourth quarter expectations. Thank you, Joe. Good afternoon, everyone. As a reminder, please see the company's 10-Q filing and press release, which are posted on our IR website for a further description of matters under discussion during the call today. As Joe mentioned, and as we expected, the third quarter was an inflection point in our hardware business as we began to see the benefits of our supply chain management improvement plan really take hold. We continued to face supply chain challenges on certain components again this quarter, but the impacts on the top and bottom line were not as severe as the last several quarters. To that point, we only spent approximately $970,000 in inventory purchases from the secondary markets, i.e. brokers, which was down from $8.4 million in Q2. The impact from previously purchased broker parts in prior quarters was an increase in cost of goods sold of $3.9 million in this quarter, but was down significantly from $7.8 million in the prior quarter. From a revenue standpoint, the amount of unshipped backlog decreased from $900,000 at the end of Q2 to $100,000 in Q3. The orders that didn't ship in the current quarter are expected to ship in Q4. As Joe mentioned, our ongoing supply chain initiatives are improving the situation, which is why we expect the fourth quarter hardware gross margins to be back to the low 40% range compared to only 20.6% in the first three quarters of this year. Demand for our products and services continues to be strong, as evidenced by a record backlog of $112.2 million, which was up 22% over the prior year third quarter. I'll move on to the details of the third quarter results. Total revenue for the fiscal 2023 third quarter increased 27.1% to $40.7 million, compared to $32 million in the same quarter a year ago. Our gross margins in the third quarter decreased 560 basis points to 29.1%, compared to 34.7% from the same quarter last year. Adjusting for the net increase in component costs of approximately $2.4 million quarter-over-quarter, the gross margins would have been 35% or up 30 basis points compared to the same prior year quarter. Turning to our revenue mix, the product revenues increased 44% to $22.9 million, compared to $15.9 million in the same quarter last year. This strong demand underscores our market-leading position in the sensor market, and as Joe noted, we continue to win on all large sensor deals. Product gross margins decreased 440 basis points and were 30.1% compared to 34.5% for the same quarter last year. However, the product gross margins did increase 2,640 basis points over the second quarter as our supply chain improvement program continued to make great progress, and we continued to deplete the high cost inventory on our balance sheet from previous quarters. Our service revenues increased 10.5% to $17.8 million, compared to $16.1 million in the prior-year quarter, primarily driven by stronger software and managed services revenue. In the third quarter, 23% of total revenue was annual recurring revenue. This was down from prior quarters as the revenue mix changed, with product revenue outpacing the services revenue. As a reminder, our annual recurring revenues are comprised of our software and managed services revenues. Service gross margins decreased 700 basis points to 27.8%, compared to 34.8% from the same quarter last year. This was primarily due to a change in our licensing fee structure for third-party data providers on our SaaS platforms and more than usual subcontractor content on our professional services revenue, which tends to be at very low margins. Operating expenses in the third quarter were up $900,000 at $14 million in the current quarter. General and administrative expenses were down $400,000 or 7.4%, while R&D was up $100,000, driven primarily by the circuit board redesign efforts. Sales and marketing costs increased $1.2 million, which was related to increases in our sales and product support headcount to support the higher sales this year and going forward. We reported a GAAP operating loss in the third quarter of $2.2 million, compared with a GAAP operating loss of $2 million in the same quarter a year ago. The operating loss was solely attributable to the higher component costs, as previously mentioned. With progress being made on the circuit board redesigns, we're anticipating spending less than $600,000 in broker market components in Q4, which is down 38% when compared to Q3. The GAAP net loss from continuing operations in the third quarter was $2 million, or a loss of $0.05 per share, which compares to a net loss from continuing operations of $2.4 million, or $0.06 per share in the same quarter a year ago. Adjusted EBITDA for the third quarter was a loss of $400,000 or 1% of revenue, which compares to EBITDA of approximately $100,000 or 0.3% of revenue in the third quarter of last year. The GAAP operating loss, GAAP net loss, and adjusted EBITDA loss were driven by the supply chain issues, as previously noted. With the supply chain improvement plans outlined by Joe, we anticipate a continued improvement in our supply chain position in the coming quarters, since it will take additional time for the redesign of the key circuit boards to ship through to our customers. With six alternative circuit boards released to production inception to date, this has largely mitigated our need to procure components in the broker markets, as previously mentioned. These key redesign activities should return the product gross margins to about 40% in the fourth quarter of this year and improve progressively as the hardware sales volumes increase and additional new circuit boards are introduced. Turning to liquidity and capital resources, cash was $10.2 million at the end of the third quarter, and working capital was approximately $24.7 million. The $2.2 million increase in cash from the second quarter was a result of the improved profitability due to the lower component costs. With the expectation that fourth quarter parts purchased in the broker market will continue to decrease, this will further improve our working capital, and we would expect our ending cash balance this fiscal year to be in the range of $12 million-$14 million as the profitability continues to improve and our circuit board redesigns continue to progress. Lastly, we spent $134,000 in purchases of property and equipment in the third quarter, and we still expect the full year CapEx to be less than 1% of revenues, reflecting our asset-light business model. In summary, we continue to be laser-focused on our supply chain challenges, and our multipoint supply chain recovery plan is progressing well, which will return our Vantage sensor gross margins back to historical levels. Lastly, as Joe mentioned at the beginning of the call, this will be my last earnings call with Iteris. I wanna thank all of our investors and sell side analysts for all the support I've received over the last three years. I certainly hope I cross paths with many of you in the future in my yet to be finalized next endeavor. With that, I'll turn the call back over to Joe. Joe? Great. Thank you, Doug. The smart mobility infrastructure management market represents significant long-term opportunities due to favorable secular trends and historic new investment from the IIJA. Despite the challenges of COVID and the subsequent supply chain constraints, we've continued to strengthen Iteris' position in this dynamic market over the last several quarters. Given the strength of our position in this large dynamic market, we remain extremely optimistic about the growth opportunity in front of Iteris, despite potential challenges in the broader economy. To realize this opportunity, Iteris will continue to deliver on an aggressive solutions roadmap that includes the following fourth quarter planned releases: a new connected vehicle safety alert for our Spectra CV sensor that is targeted at both public and private sector markets, new safety features for our Vantage Apex sensors will further enhance our Safe Streets for All value proposition, new scalability features for Vantage Apex that will enable us to better price differentiate based on certain intersection characteristics, new safety analytics and connected vehicle reporting features for ClearGuide, our mobility intelligence application, and new features to enhance the connected vehicle-based transit signal priority solution that we are scheduled to pilot in Florida this spring. We believe these new releases will drive the further adoption of our ClearMobility platform, enhance the cross-sell of our ClearMobility offerings, and improve the monetization of our mobility datasets. In addition, we'll continue to execute against our supply chain improvement program with the release to production of 4 more alternative circuit boards in the fourth quarter. Upon the release of those boards, we will have achieved all of the objectives of the fiscal 2023 supply chain improvement program that we reviewed on our June 1, 2022 earnings call. More importantly, the release of these boards will further reduce our dependence on broker purchase parts, which, as Doug mentioned, we estimate will be less than $600,000 in our fourth quarter. Given these dynamics for the fiscal 2023 fourth quarter, we anticipate revenue to increase approximately 18% year-over-year, EBITDA margins to improve more than 900 basis points on a sequential basis, and net cash flow to be in the range of $1.5 million-$3.5 million. As a result, we're raising the low end of our full year fiscal 2023 revenue guidance, with the new range being $152 million-$155 million. We're lowering the high end of our full year adjusted EBITDA guidance, with the new range being -2% to -3% of full year fiscal 2023 revenue, reflecting the impact of global supply chain constraints on our fiscal 2023 year to date results. In closing, the last several quarters have been difficult due to COVID and subsequent global supply chain constraints. However, we continue to execute against our platform-centric business strategy and extended our leadership position in the smart mobility infrastructure management market. Our global supply chain improvement program is not only generating significant near-term benefits but lasting value for the company. Therefore, we believe Iteris remains poised to create significant shareholder value, as outlined by our Vision 2027 operating plan. With that, we'll, we'd be delighted to respond to any questions or comments. Operator, are there any questions from our covering analysts? Absolutely. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Jeff Van Sinderen from B. Riley. Your line is live. Hi, everyone. Let me first say, Doug, we'll miss you and wish you the best in whatever you're doing going forward. Thank you, Jeff. I appreciate it. You know, my first question for you guys is really sort of around the service revenue growth. I think it came in around 10%. Just wondering what your expectations are for growth in that segment of the business over the next few quarters. What do you think that should be? Maybe just talk about some of the drivers that could potentially accelerate that growth rate. Apologize, this is kind of a multi-part question here, but I know you said service was down, I think you said service was down 700 basis points in terms of margin, and then you had the change in the license fee structure, I think on SaaS and more sub-content included. Maybe you can touch a little bit on that. I think you did say how much was recurring in Q3, but wondering how much of that was actual SaaS. What are your thoughts on, getting kind of the, I guess, going forward, what the level of concentration of recurring, is that you expect over the next few quarters? Apologize, there's a lot in there, but. It is kind of all on the. Jeff, I think I've got. I'll help you sift through it. Feel free to, you know, pipe in if we miss anything. I'll start off and then let Doug add to it. Yeah, I think that the first thing you noted is that service revenue at 10.5% was not the same rate of growth that we saw with the hardware coming in at 44%. To provide some context there's obviously just a ton of market demand for our traditional detection sensors as well as the new forms of sensors that we've introduced over the last few quarters. You know, that is what drove the tremendous growth, and we expect very strong continued sensor growth, you know, going forward. With respect to the service revenue, remember that's made up of a couple different components, both professional services and then annual recurring revenue. To your point, Jeff, annual recurring revenue is further made up of two parts: managed services and SaaS. During the third quarter, our professional services revenue came in, you know, relatively soft, not due to a lack of demand, but this is historically a difficult quarter for us. Most of our professional services revenue is directly tied to the number of billable hours that we have in the quarter. Due to the holidays, we have a lot of employees that are taking PTO, and therefore they're not billing to our various consulting projects. That's always throttled our professional services in the December 31 period, and it continued to have an impact in the current quarter. Our annual recurring revenue, and specifically our SaaS revenue, grew at substantially higher rates than our professional services revenue. With respect to Q4, I would expect that our services revenue growth will rebound and will come in at a higher rate than the 10.5 that we had in the third quarter. With respect to the decrease in the gross margins on the services revenue and Doug's reference to the new contracts that we have in place with some of our data providers, over the long term, the new agreements are actually a good thing, but in the short term, it did have a negative impact on our gross margins. Essentially, the prior structure that we had with our various suppliers was that we were paying essentially like an incremental fee on each customer deployment for the associated data that we were processing for that particular customer. Our costs, you know, for the data were continuing to grow, you know, in relation to the amount of SaaS and data as a service revenue from our various customers. We've renegotiated those contracts, so we basically have an all you can eat type of licensing arrangement with our various data providers. As you would expect, you know, in order to get that all you can eat agreement, we needed to raise the floor. We now currently have a higher floor than we had, but as our revenue continues to increase, we won't have to pay any incremental royalty, you know, for that data going forward. Over the long term, this is gonna actually benefit our gross margins, but until we reach that threshold, you will see a little bit of a impact on our gross margin line. The bigger impact was actually due to the high percent of subcontract revenue. Like, of the professional services revenue that we did recognize in the period, a substantial portion of it was subcontractor-based, and we don't get the same kind of gross margin on subcontractor revenue that we do on direct labor revenue. Let me stop there and see if, Doug, you have anything you wanna add to any of those points. No, I think you hit them all. I was writing them down as Jeff was rattling them off. Jeff, did we get them all? Yeah. No, no, you did. You guys did great. Okay. Appreciate that. Just had sort of a follow-up along those, and I know you said long-term benefit, short-term. Pain. Yeah. ... you know, a little bit of pain in the margin. I guess sort of any color you can give us on where that threshold is that will have you inflect to, you know, getting that long-term benefit. Do you think that's a quarter out, three quarters out? Any, any color or metrics you can give us around that and quantification? I think it's hard for us to give you that. We have multiple data suppliers. That's because different data suppliers are better at different things than others. As a result of that, there's kind of an implication for this, the attach rate that we see on certain software products and certain data as a service products, which will impact, you know, our ability to hit that critical threshold for, you know, these various contracts, each of which have different terms. The actual makeup of the orders that we see over the next couple quarters will impact, you know, how quickly, you know, we reach that inflection point. It's, like, it's a very complicated optimization problem, and it's difficult at this point for us to give you know, a lot of guidance. I would generally say that this is not, like, gonna take years to get there. I think that it is probably, you know, on balance a matter of quarters, at which point we should start to hit that inflection point. Okay. Got it. Thank you, Again, the several hundred basis point decrease, you know, again, was in, I believe, more attributable to the subcontractor content and the professional services revenue than these new agreements. I, again, I just wanna make sure that you understand that. Okay, that's helpful. If we could shift for a minute. I know you mentioned the SoCal project that is soon to be a contract. Any sense you can give us kind of the size of that project for you in dollars and the timeframe when you can realize that? Yeah. We don't wanna negotiate against ourselves by making any sort of, you know, like, specific comments about any of the financial aspects of the contract. I would say that this is a relatively large contract for us. Okay. I think other than that, I probably need to leave it at that. Okay. Further, with respect to the timeline, as I said, we were anticipating that it would probably be a couple quarters, like, probably about 6 months before this progresses from award to contract. I have to... You know, I always get in trouble when I put out a timeline because it's amazing how long it can take. Mm-hmm. You know, for this, you know, in certain circumstances for awards to convert to contract. We actually have seen it, you know, be in excess of a year. Mm-h You know, this seems to be moving along pretty quickly, and I would anticipate approximately six months. Okay, that's helpful. I guess I'll also say welcome aboard to Kerry, and I guess he's joining tomorrow, so it'll take a while for him to get up to speed. Yes, but I know he'll be interested in meeting all of our analysts and, you know, and any interested investors as well. You know, I'd encourage you and any investors who would like, you know, the opportunity to speak with him to just reach out to Todd or me, and, you know, we'll make sure that we, you know, make those introductions happen. Okay, terrific. Just one more, if you don't mind. I think you've got a couple more months here to your fiscal year. You got a pretty solid backlog. Backlog continues to grow. I'm not asking you to guide here, but any early thoughts on. Yes, you are, Jeff. ... New fiscal year? You're totally asking us to guide. Well, I guess what I'm trying to get at, and, no, this really-. Yeah. ... isn't quantitative guidance. I'm just trying to get a sense if you think that, you can sustain sort of an above-market revenue growth rate in fiscal 2024 or, you know, we have a little bit of a kind of rebound or pent-up effect, I guess you would say, at this moment. How are you thinking about that? How are you sort of thinking about revenue growth normalizing, over the next several quarters? In other words, what's your guide? you know, as you know, we've really tried to make a practice. We're pretty small. We're a small public company for sure, right? you know, so, like, small variances make, like in percentage terms, you know, can be, you know, pretty sizable, right? you know, we really don't wanna get ahead of ourselves, and as a normal practice, you know, when we do our fourth quarter earnings, we'll provide, you know, full year guidance. Just to... I think you're basically saying, like, you know, "Joe, like, how strong does the market seem? You know, what kind of... You know, how does your pipeline velocity look? Do you think that, you know, overall are sort of demand signals, are they like, you know, like, strong or? Mm-hmm. ... Are weak? Are you seeing, like, a change one way or the other?" To try to answer that kind of a qualitative question, you know, the environment still seems very positive. I think that that's true, really across the broader sector. I do feel that, you know, our product strategy is really resonating well in the marketplace. You know, it's our sense that, you know, we're gonna continue to take market share, you know, I can't say exactly for how long, but obviously, you know, we're gonna continue to move the ball forward, take a leadership position, try to define the competitive landscape. As I said in my remarks on today's call and I've said in the past, I think that we've got, you know, the most productive, you know, channel in, you know, in the industry, and we'll continue to invest in that and improve on it. Okay, great. thanks so much for taking my questions, and best of luck. Thanks. Thank you. Thank you. The next question is coming from Mike Latimore from Northland Capital Markets. Your line is live. All right, great. Thanks. again, Doug, nice working with you. Best of luck in your new ventures. Thank you. I guess, just a basic question here. From an OpEx standpoint, should we think about OpEx as sort of remaining stable here from this point for a while? Absolutely. I mean, you know, if you look particularly at the G&A line, we've done a pretty good job of keeping that really flat for quite some time. The sales and marketing was up a little bit this year, but that was a conscious decision to invest in, you know, that part of the organization, bringing on new salespeople and product support people. R&D, you know, I think will continue to probably hover around that sort of 5% to 5.5% of revenue. I think, you know, with the increase in the revenue, we will start to really see some leverage in the P&L with the hardware business now, you know, getting back on its feet. Okay, great. On, in terms of the roadside unit product category, do you have a rough range of what that contributed to the quarter? That's a great question. Doug, I would guess because we don't actually break it out that way, but I would guess it'd be, let's say in the range of even $2 million-$4 million. Yeah. You think? Yeah. Exactly. Okay. Yeah. About 10%-20% of our sensor revenue. All right, got it. Remember, we only started talking about that like that segment, that whole product strategy a year ago December. Mm-hmm. And this is a very early-stage market. you know, we think that the total addressable market in North America right now is probably $30 million-$50 million, you know, our expectation, I think most people's expectation is that over probably a five-year timeframe, you know, that could look like, you know, potential billion-dollar TAM. Yeah. Yeah. Great. Then you talk about winning pretty much all large sensor deals. Is there, sort of a consistent message from these customers as to why they're choosing you? Is it the, you know, core sensor itself? Is it the software strategy they can attach to the sensor or something else? Any kind of consistent message? I think it's really all of the above, but the way that people express it is that, you know, the technology just works. You know, it addresses, you know, their business priorities, and that's a function of a lot of things. You know, it's the fact that I think that we have unique domain expertise, and that's 'cause we benefit from, you know, the traffic engineering capability. You know, it's just part of our DNA because of the, you know, our leadership in the consulting sector. So understanding, you know, how people operate, you know, the, these sensors and what kinds of information they need out of it, has allowed us to, you know, build product that, you know, meets the needs of the customers. Then, you know, we supplement that with, you know, we think the best field support in the industry. I think again, I mean, just generally people are like, "Wow, this does exactly what I need, whereas I don't see this from, you know, other vendors." There's a lot that goes into that, right? I mean, it sounds easy, but there's a lot of work on the back end. Mm-hmm. Yeah. Yeah. You talked about sort of the data providers you use. Are there a couple that are just clearly the largest data provider to your ecosystem? Well, so we've put out some announcements about some of those relationships. You know, for a long time we've talked about our relationship with HERE Technologies. We've had a number of, you know, announcements with HERE. We both utilize HERE's map in, you know, within Clear Mobility Cloud 'cause a lot of the data is presented, you know, in a map format. But we also ingest data from HERE. Then also we recently put out announcements about agreements with Wejo and Otonomo. We do have agreements with various other parties. Some of them right now are confidential, so I can't, you know, comment on those. You know, we get data from multiple, you know-Third party commercial suppliers. Additionally, because of our relationships with agencies, we have unique access to a lot of agency data. Like, there are certain states where we have access to virtually all of the state's IoT devices, you know, deployed, you know, across, like, you know, the state's entire highway system. That's a function of our relationship with the agencies. Now, that's not exclusive arrangement, of course. Like, you know, the agencies aren't gonna enter into exclusive relationship with anybody about their data 'cause they would view it as, you know, either proprietary or a public asset. you know, Because of our relationships, we're in a unique position. We have know-how, you know, in the relationships to understand how to get access to that data. The answer is, we get the data from multiple sources. It's uniquely curated. In terms of the commercial arrangements, I'm able to discuss publicly, our primary ones at this point, would be HERE, Wejo and Otonomo. Yeah. No. Okay. Great. Super. Thanks a lot. Thank you. Thank you. Your next question is coming from Ryan Sigdahl from Craig-Hallum Capital Group. Your line is live. Good afternoon, guys. Just one for us, you maybe alluded to this a little bit earlier, but wanna ask it more directly. You raised the revenue guidance, qualitative commentary all seems quite positive, but yet you lowered the EBITDA for the year. What, I guess, is causing the additional margin pressure relative to your expectations a couple months ago? I think it's mostly the costs of developing the alternative circuit board, some of which we incurred in the third quarter and some in the fourth. Doug, maybe you could explain, but we have a dependency on some third parties to develop some of the prototypes and write some of the firmware, there are a lot of other companies in the same position as we are. We're seeing the availability of those resources getting really scarce. Yeah. No, that's exactly right, Joe. you know, it's just really the cost to get those additional circuit boards into production. you know, we're competing with a lot of other companies that are using the same resources. It's just, you know, it's costing us a little bit more than we had anticipated. Ryan, that's a temporary issue. you know, as I said, we expect by the end of the fourth quarter, we will have delivered or released to production all of the alternative circuit boards that we originally identified as critical as part of the supply chain improvement program. That'll be behind us. It's not to say that we won't, you know, continue to develop alternative circuit boards, but we won't be under the same time pressure, and that should change the, you know, the pricing, scenario. 'Cause especially when we're asking people to do things quickly in order to meet our timeframe, you know, we're incurring, you know, various markups in this environment. Okay. Thanks, guys. Thank you. Your next question is coming from Tim Moore from EF Hutton. Your line is live. Thanks. Congratulations on the strong sales growth in the quarter. I am curious, when you compete for attached software services in a bid, do those type of negotiations and bidding take a few extra months longer than less bundled services? I'm just trying to think if, you know, the training or a higher price point as a bundle package, you know, triggers a longer lead time to close the award. Yeah. Tim, that's an extremely good observation. That's an analysis that we do on virtually every opportunity, right? I mean, our desire is to attach, you know, annual recurring revenue or cloud revenue to, you know, every sensor sale, every professional services engagement that we have. You're exactly right. In some cases, you introduce complexity, and it can occasionally slow things down. There are certain actions that we're taking, which we don't wanna discuss right now, 'cause I think we've, you know, we think we have a pretty smart approach to try to, you know, thread this needle, which, you know, we don't wanna share, you know, with competitors at this point. We think that there's a way around that. I mean, not to say that it's gonna go away, but that, you know, we can get better at that. We're gonna start implementing some of these sales techniques. Actually, we're in fact, we're in the process of introducing some of those sales techniques right now. That isn't gonna completely eliminate, you know, the issue, but we do think that we have an interesting way to thread the needle. I would say that, you know, the good news on the flip side is that, you know, when we're able to attach that recurring revenue, right, then, you know, it, the, it, the outcome for us on so many levels is so much better than having just, you know, sold, you know, like a piece of hardware on a transactional basis. The next time we're selling to that customer, it's like another transaction sale, right? To the extent that we're able to, you know, attach recurring revenue to these units, it's gonna be great over the long term, which obviously you know. Again, it can create complexity upfront, and we think we have a way to mitigate it. That's very helpful. I appreciate the color on that. You know, for your AI-powered Vantage Apex offering. Are most of those features now available and activated for customers since December? You know, I know it was launched a little over a year ago. I'm just trying to maybe wrap my head around, you know, the Vantage Apex acceleration sales growth potential and all the other launches you mentioned earlier in the call, you know, as they maybe gain more momentum. Is that- Yeah. Attracting more customers now that the features are more activated now? Yeah, that's another really astute question. We have four generations actually of sensors, detection sensors in the market right now. We have our Edge product, which we're in the middle of end of lifing, through the December 31 period, you know, we were still selling it. We have our next product, which today represents by far the largest portion of our detection product sales. We have Apex and Fusion, which were, you know, in our industry, which moves pretty slowly because it's very risk-averse, you know, they were introduced just very recently. At this point, I think that we have like our bookings, our Apex bookings probably represent maybe 1,000-2,000 units. Remember, there could be multiple units. Like, if you talk about in terms of systems, it'd be hundreds of systems, thousand, a couple of thousand sensors. Yeah, and then our biggest deal to date is actually that CVAG deal, the Coachella Valley deal that I mentioned on today's call. That represents, I think about 125-150 intersections. That'll be the largest- Mm-hmm. That'll be the largest deployment in the nation of high definition AI-based detection. Anyway, the point is, we're still in the early innings with respect to that product. Then, Fusion is, you know, we've sold even fewer units of that to date. I want to make sure that everybody understands that that was our expectation, you know, because we found that this market moves very slowly. It took us about three years before our next product really became mainstream in the marketplace. We're right on track with both our Apex and our Fusion products. To your point, Tim, we've sold relatively few Apex units so far. No, no, that's helpful. I'm sure as more features get activated, customers like it more and word spreads. You know, just for my next question, you know, I know your fiscal year ends next month, and you'll probably give guidance on the call for that call. You know, when I'm looking, you know, back on this fiscal year, you know, I'm just trying to ballpark in my head the headwinds that you're gonna be lapping on the cost front. You know, it seems like you had not only the development costs of the circuit boards, and, you know, you had maybe at least 70 basis points of drag from the supplemental broker costs. Were there any other big, one-off costs that you incurred this fiscal year that probably won't repeat next year? No, I think those are the big ones. I mean, if you look at the, just the purchase price variance numbers we've been talking about, I mean, the full impact, you know, this year is almost $15 million. You know, that's a big number for a company our size. The development costs, you know, as we work through this will come down because as Joe mentioned, the majority of the ones that are really gonna drive continued cost improvement will be done this year. I mean, there'll always be circuit board redesigns as part of just evolution of the supply chain and availability. I think those are the two biggest like one-off that wouldn't be recurring next year items. No, thanks. That's really helpful. My last question is around your acquisition appetite, and I'm just wondering, you know, has there been an improved seller's willingness to founder-owned or family-owned businesses lately, you know, maybe as the market turns south between the summer and December? Have you guys just been so busy with organic growth that you really haven't spent much time recently on acquisitions? Well, yeah, I mean, it's, you know, unfortunately, it's, you know, we've been so busy trying to resolve our own supply chain issues. We've been very internally focused on getting that right. You know, not only has it taken management attention to, you know, work through those issues, but, you know, we've also consumed a lot of cash. Because of the impact on our profitability, we've seen, you know, negative impact on our share price. You know, for all those reasons, it wasn't a, you know, practical time for us to be focused on acquisitions. You know, we do feel like we've achieved critical inflection point and, you know, our circumstances are gonna change and, you know, I think we'll be in a much better position to, you know, pursue acquisitions, you know, at, you know, as we progress through our new fiscal year, FY 2024 starts on April 1. In terms of the overall market conditions, I would say that, you know, we probably don't wanna buy a business that is like, you know, financially non-viable, so we probably, you know, wouldn't be looking at anything that's a distressed asset anyway. With respect to the businesses that are more viable, I don't. It's a very fragmented market made up of a lot of really small companies, which are not necessarily that sophisticated, so they're not a ton of formal processes that are going on. I would say that the few processes that have occurred and then some of the people that have, like, kind of, you know, sniffers out to see if there's a potential buyer, I think that they've experienced a lot of reticence, you know, given the current market conditions. I think that people have decided to just kinda keep their heads down and sort of work through their problems the same way that we have. I don't think we've lost a lot of deals. I would expect that the activity will pick up. You know, I'm not sure exactly when, but I think generally in the next six to 12 months, which I think aligns pretty well with our own timeline. Great. Well, thanks for that color. Doug, best wishes with your next endeavor. Oh, thank you very much, Tim. Thank you. Once again, if you have any questions or comments, please press star then one on your phone at this time. Please hold while we poll for questions. Thank you. That concludes our Q&A session. I will now hand the conference back to Joe Bergera for closing remarks. Please go ahead. Super. Thanks, Matt. I appreciate it. As always, I appreciate everybody's support and your thoughtful questions. On the investor relations front, I wanted to reiterate, we plan to host the first in a series of short investor updates this quarter. Specifically, we're looking at March. The first update will focus on various aspects of the IIJA, such as a breakdown of budget line items and the status of new programs that will be created as a result of the legislation. Additionally, we'll be participating in various investor outreach events. As always, we're always available to speak with investors should you have any follow-up questions. Please feel free to reach out to us. In the meantime, we look forward to updating you again on our continued progress when we report on our fiscal 2023 fourth quarter and our full year results. With that concludes today's call. Thank you, everyone. Thank you. That concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.