Ladies and gentlemen, thank you for standing by. Welcome to the Ituran second quarter 2023 results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Ituran Investor Relations team at EK Global Investor Relations at 1-212-378-8040, or view it in the news section of the company's website at www.ituran.co.il. I will now hand the call over to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin? Thank you, operator. Good day to all of you, and welcome to Ituran's conference call to discuss the second quarter of 2023 results. I would like to thank Ituran's management for hosting this conference call. With me on the line today are Mr. Eyal Sheratzky, CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamer, CFO of Ituran. Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We will open the call for the question and answer session. I would like to remind everyone that the safe harbor statement in today's press release also covers the contents of this conference call. With that, Eyal, would you like to begin, please? Thank you, Kenny. I'd like to welcome all of you to our second quarter 2023 call. I would like to thank you for joining us today. We are clearly very pleased with our achievements in the second quarter. 2023 has so far been an excellent year for Ituran. Ituran's business is in strong growth phase, with the subscriber base growing twice as fast as we grew in the past years. This jump in growth rate is now clearly benefiting our financial results. For the past few quarters, our subscription fees have been constantly at new record levels each quarter, and our profits measured in either net income or EBITDA at four-year highs. As you can imagine, we are very pleased with our results and the progress we've made. Given the way our business is structured, with a core and stable subscriber base of well over 2 million paying a monthly retainer and the clear long-term visibility this provides, we have every reason to expect that the current positive trends will continue throughout 2023 and into 2024 and beyond. From a strategic perspective, we experienced strong growth in subscribers, adding a net total of 47,000 subscribers, of which 45,000 were from the aftermarket and 2,000 were from the OEM. As I mentioned, this strong subscriber growth is now being reflected in our record subscription revenue. This is even despite the currency headwind due to the dollar strength in 2023. Q2 subscription revenue grew at 13% year-over-year, or 17% growth when calculated in local currency, which naturalized the effects of the exchange rate on our growth. Over the past few years, we've entered into a few new verticals, such as the financing business, which are performing well and acting as growth engines. They are one of the main reasons that our business continued to grow well. During the quarter, we announced that the Brazilian subsidiary entered a partnership with Santander Bank, which firmly solidified our presence in the automotive financing market. This strategic alliance aimed to broaden the Brazilian car ownership market by facilitating the credit approval for automatic financing with Ituran's telematics services and Santander's financing at attractive rates and credit insurance. This new deal demonstrates that this finance vertical is performing well and supporting our overall subscriber growth. Furthermore, we see further potential, and we are looking to cover additional markets and geographies with existing and other finance customers. In terms of the Israeli market, due to the general macroeconomic climate, we have seen a strong increase in the theft rates. Due to our good performance over many years in this vertical of stolen vehicle recovery, it increases the need of the insurance companies to use our services. While this is very much the case in Israel, we also see similar trends throughout Latin America, with the general economic climate contributing to an increase in car theft rates. This is ultimately leading to an increase in demand for our services from insurance companies. This also provides our business with some defense in the face of an economic slowdown. Finally, we've launched a new product in Latin America focused on connectivity and stolen vehicle recovery for the motorcycle market, which is a new sector for us. In 2022 only, there were an estimated records of 5.4 million motorcycles sold in Latin America, and we believe our new solution presents a very attractive proposition for this sector. We are already seeing interest from manufacturers and insurance companies, and we are already in discussions. We see strong potential from this new product and service in the region for the coming years. In summary, we are very pleased with our results of the quarter, and 2023 is shaping up to be a record year for Ituran in all respects. Solid performance in our traditional aftermarket business, as well as recovery in the OEM business, and especially the growth engines we've seeded in the past years, are all driving our strong subscriber growth and record revenue. While we continue to monitor talk of a potential global economic slowdown ahead, historically, we found the theft rate tend to increase in economic downturns, increasing the demand for our services and beyond it. Our 2.2 million subscriber base, paying us on an ongoing monthly basis, gives us significant resilience in our economic environment. Looking ahead, we expect that our recent accelerated subscriber growth will continue to translate into increased revenues, with faster growing profitability due to the operating leverage inherent to our business. We're excited for the coming quarters and anticipate a positive trend will continue throughout 2023 and beyond. With that, I hand over to Eli. Eli, please go ahead. Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed results that we issued in the press release earlier today. Revenues for the second quarter of 2023 were $28.6 million, an 11% increase compared with revenues of $73.4 million last year. In local currency, the year-over-year growth was 15%. Second quarter revenues from subscription fees were $69.2 million, an increase of 13% over the second quarter of 2022 revenues. In local currency, the year-over-year growth was 17%. Subscriber base amounted to 2,162,000 as of June 30, 2023. This represents an increase of 47,000 net over that of the end of the period quarter, and an increase of 190,000 year-over-year. During the quarter, there was an increase of 45,000 in the aftermarket subscriber base and an increase of 2,000 in the OEM subscriber base. Second quarter product revenue were $22.5 million, an increase of 7% compared with that of the second quarter of 2022. The geographic breakdown of revenues in the second quarter was as follow: Israel, 48%; Brazil, 26%; rest of world, 26%. EBITDA for the quarter was $21.8 million, or 26.7% of revenue, an increase of 12% compared with EBITDA of $19.4 million, or 26.5% of revenue in the second quarter of last year. In local currencies, the year-over-year growth was 16%. Net income for the second quarter was $12.2 million, or 15% of revenue, or diluted earnings per share of $0.61, an increase of 40% compared to $8.7 million or 11.9% of revenues, or diluted earnings per share of $0.43 in the second quarter of last year. In local currency, the year-over-year growth was 44%. Cash flow from operations for the second quarter of 2023 was $17.5 million. On the balance sheet, as of June 30th, 2023, the company had cash, including marketable securities, of $34.5 million and a debt of $4.5 million, amounting to a net cash of $30 million. This is compared with cash, including marketable securities of $28.2 million and a debt of $12.2 million, amounting to a net cash of $16 million as of December 31, 2022. For the second quarter of 2023, a dividend of $3 million was declared. In the second quarter, under our share buyback program, Ituran purchased 165,138 shares, for a total of $3.5 million. Share repurchases were funded by available cash, repurchases of Ituran ordinary shares were made based on SEC Rule 10b-18. With that, I'd like to open the call for a question and answer session. Operator? Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be called in the order they are received. Please stand by while we call for your questions. The first question is from Chris Reimer of Barclays. Please go ahead. Yeah, hi. Thanks for taking my question, and congratulations on the strong results. You mentioned in the past, operational leverage, and I was wondering how much expansion is possible under the current, operational, conditions you have right now? Practically, when you look on the numbers today, so we actually increased from 20% - 20.4% in a very short period. We expect that this trend will continue. This is actually what the recurring revenue model allow us to do in the future. Okay. What, in your view, what is underpinning the consistent subscriber growth? Can you repeat it? Regarding subscriber growth? Chris, can you repeat the question, please? Yes, I'm sorry. In your view, what is underpinning the consistent subscriber growth? Actually, I think that generally, I said it. First of all, the traditional, the traditional segments, which are very, depend on, cost of freight. It's in the last quarters, and as we see, it's in a growth mode, which create a strong request from, I would say, insurance companies as well as the, the, the even the car owner, needs to secure the car more and more because, it's hurt them a lot. This is from, something that it depend on the economy, as well as the financing, market, which we, penetrate just recently. We see that after this penetration, other players in Brazil as well as in other countries in Latin America, are interesting in this solution. Of course, there's always the, the regular growth drivers, such our brand is the strongest one in the region. Very high credibility from B2B and B2C customers. We have a good feedback from the market, plus new segments that we entered recently. We believe that this is will demonstrate or will lead to continued of the growth of the subscribers base. Got it. Thanks a lot. That's really good color. The next question is from Josh Strauss of Pekin Hardy. Please go ahead. Josh, we don't hear you. You can go ahead and ask your question. Sorry, my bad. I was on mute. Good morning. Good to see this terrific quarter, guys. Thanks for taking my call. I wondered whether or not you could provide any color on what's happening with Bringg. I mean, I know it's a passive private investment, but I was curious if you had any color that you were to provide on what's going on with that, with that investment. Practically, Bringg is going quite well with its business plan and and let's call it internal and privately held projections. I think that we had we did the right move when we did the last round about a year, a year and a half ago, before the, let's call it, before the changes in the, in the stock market and the financial markets. The company did the right adjustment to use those proceeds for more years than we thought at the beginning, because we have to adjust the company to the, again, to the financial markets. From the operational side of view, the company is really provide the results as it's. Well, of course, I want to remind all of you that it's, it's something that it's only on our balance sheet, and it's a zero, zero value in our balance sheet. It's not influencing anything in our PNL. I would say that it's a it's a hiding assets, which we count, that it's in the future, of course, will provide profits. Got it. Got it. Okay. Thank you. Well, I'm looking forward to seeing that thing getting monetized at some point in the future. The other, the second question I had was, you know, a couple of years back, you had levered up the balance sheet slightly, which is unlike you, you guys historically, because you've been pretty conservative management team, in order to buy Road Track. Over the years, you've been paying back your, your debt down, and your debt is your growth debt is almost zero. Your net debt is, has been positive for some time. You know, I'm very thankful for the buybacks and the dividends. I'm curious on how the plans may or may not change, going forward, given the war chest of cash that you have. Is it going to be just more of the same and, and, you know, occasional small, early stage VC investment in Israeli companies that are related to your business? Or, you know, can you just give us a color on what your plans are, you know, over the next couple years? First of all, the investment in the small, as you said, VCs or startups, which is linked to potential systems for mobility market, is something that has nothing with the loan that we took because we do it, you know, it's. Let's say it on an arrogant way, it's not the material cash that we use. The main cash needs that we did was to, as you said, to acquire Road Track. Now it's the last payments of our loan after these five years. Simultaneously, of course, we increase our cash flow position and cash flow generation. Actually, as we did in the past, we have no any intent to keep money, to keep the money for nothing in the bank. First of all, we will do our best to find to use the money that we generate for growth. It's mean most of the time, for acquisition, for partnerships and things like this. If we'll find it, this is the first priority, but this is not something easy. We are conservative. We don't want just to spend money and say that we did. By the way, regard Road Track, today we are very happy that we did it. The, the contribution of, of Road Track today is called Ituran. It's fully merged to the business and integrated, and we create a synergy, and everything now is ex- as we sought to do. Since we did it on a conservative way, it succeeded. If we find something that will be good for our inorganic growth, we will do it first. If not, or meanwhile, as long as we generate cash, of course, we will let all our shareholders, of course, to benefit from this cash flow. As by the way, we did simultaneously with the debt, because, if you can, for example, take this quarter, you see that almost $7 million went back to the shareholders, all by dividends, all by buyback. Of course, if we will generate more cash and we will not need it for growth, we will, or at least I will recommend our board, to increase this dividends or buyback, of course, depend on the situation. We will not keep the money. We always think how to grow with this money. Right. Right. Okay. Well, thank you very much. Good luck, guys. Thank you very much. I repeat, if there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we call for more questions. The next question is from Abba Horwitz, from Old School Partners. Please go ahead. Thank you. Hi, Eyal, congratulations on a real milestone. This is quite an amazing quarter relative to the last couple years. I want to really drill down on the motorcycle opportunity. If I may ask, are you selling anything to the motorcycle market? Where, how, how rapidly do you see this being implemented, and how meaningful can it be to the overall business? Okay. I will divide it for the two different market. One is the Israeli market, where we, for few years already, sell a product and service for motorcycles. We have to understand that in Israel, which is different than in Latin America, the motorcycle trend is quite low. Meaning, most of the people buy cars than expensive motorcycles. The market here in Israel for us is a niche. I mean, we do it with the insurance companies sometimes or with some, some dealers. What we realized after we covered the car environment in Latin America, we looked for additional growth segments, we understood that, for example, in Brazil, cars and motorcycle ratio is very, not similar, but almost similar. Millions of motorcycle being sold every year in Brazil only in Brazil. The situation is that, and this is all around the world, it's very difficult to insure motorcycles. It's more risky to the insurance companies, and it's the nature of motorcycle, so the prices of insurance are very high. On the other end, it's a segment which insurance company don't want to delete. They don't want to leave, and on the other end, the motorcycle dealers and producers want to find a solution for their customers. We start, of course, reach of this market, as we did with the finance, as we did with the fleet management in the past, we were the first to build or to develop internally, a unit, which is very, very customized for a motorcycle driver and a motorcycle, which include a application, include the SVR, includes other sensors, which will create benefit to the drivers. We went with this to the market, and we see a lot of attraction. As every segment, when we start, I'm not saying that tomorrow it will be material, because we have already 2.2 million subscribers. It takes time to show something which will be more material for, let's say, to announce it and to see it in the results. Since we believe that this can be something material, something substantive in the coming future, this is the reason why I decide to share it today, to understand that we found in other segments, we do our best to penetrate and to lead this segment, specifically in Brazil and in Latin America. Really, I can't now talk about numbers or, or who are the potential customers in terms of for manufacturer or insurance company, but we really feel that it will happen, and there is a traction, and this is, I believe, will be more substance in the coming or in the future years. Okay. Would, w this mean that using this product now, an insurance company will be more willing to provide a cheaper, insurance alternative, and that's what this product is doing? Would it even, would someone get this product without the insurance even? Okay, so, some of the, some of the. This segment, I will divide it to, to, in one hand, it's insurance companies that, of course, with the right solution, they will be able to join, let's call it, our ICS, in Ituran Con Seguro process, also for motorcycles. Also in Brazil especially, it's very, very common to rent motorcycles. Rental companies and the manufacturers actually spread motorcycles around the country for renting, whether it's a hourly renting, like a ride, kind of, ride-sharing, or rent it for, like a leasing. In that case, those dealers and manufacturers also interesting in a solution to, I would say, to secure their assets, their assets they rented. They want a solution because a financial, a high financial damage is when those motorcycle being steal. Okay. Okay, would it be safe to assume that you'll be able to leverage the monitoring part of the business from the same infrastructure that you have currently? Of course. Everything we do, by the way. In the end of the day, I would say that Ituran today, it's a black box first. This black box can get any firmware we want. When we find a segment, we take the same black box, give it to our R&D people, and then they develop the firmware, which will allow this black box to be offered to other segments. It's like a modules. In terms of technology, we use always the same technology. That's why we can leverage it. This is why we can create operating leverage for those technology. On the other end, in the service side, when we talk about SVR, this is our specialty. When we talk about other services, of course, that we do on the job train, and we learn what is the needs of the market. We are a service company, so for us, it's something that we must be excellent. In the end of the day, of course, we use, we use and integrate always our current infrastructure. Okay. Is it the same price as a car would be, or is it cheaper than a car? It will be, or it's already a cheaper product. The installation, which is part of the cost, it's also cheaper because the nature of the nature of the motorcycles for installation is easier than when you are cutting a car to install the unit. In terms of the service side, it depend what type of services. It's the same as the car. If it's only SVR, whether it's include application, whether you want, for example, as you know, Ituran has. You don't know, I will remind. three years ago, we acquired a company in Brazil, which is a company that developed a car sharing and riding billing and and a solution. After that, we now operate as a part of our black box. In that case, when we talk about renting motorcycles or renting cars, for example, with this technology, we charge more. Depend what is the service that the customer needs. Okay. Well, thank you very much, Eyal. Good luck. Thank you. Thank you very much. The next question is from Josh Strauss of Pekin Hardy. Please, go ahead. Hi, thanks again for my call. You talked in the past, and I don't know if you talked about it on this call, about reestablishing, maybe not reestablishing long term, re-accelerating the business you're doing with OEMs in Brazil, and I wondered if there was any additional progress worth noting? Actually, OEM and manufacturer is something that the cycle is usually much longer. Because of all the validation that we have to do. Every country, by the way, has to approve from any validation. I just can say that we are working or we believe that we will succeed to exceed, to expand our relationship with the current car manufacturers to other geographies. Of course, mainly at the near future in Latin America, to other countries. I don't know yet to say which country, what will be the specific contract and quantities, but I know and to tell that we see attraction, we see and we discuss it. I believe, or at least I want to believe, that we will be able to extend it to other countries based on the OEM segment. Okay. What about, what about the progress you're making with financial institutions in Brazil for the subprime customer? I'm trying to get my arms around, you know, how material that opportunity is in years ahead. You know, we're, we're still in, in the early part of developing that market, but I'm just trying to understand how big that, that market really can be, both in Brazil and, and, and elsewhere, for trying to monitor the, you know, the subprime customer for insurance companies and what have you. Currently, or a month ago, we report about, I think, a very luxury contract that we did with one of the largest banks in the world, Santander, in Brazil. Santander, on exclusive basis, will finance cars, and we talk about very important customer base potential through Santander. This is regard the Brazilian market currently. Of course, as we know, Santander has has offices all around Latin America, so I believe or I want to use this contract to leverage out of Brazil, but for the time now, only this contract is very much mutual, very immaterial for us. Of course, when. What we see when I say attraction, when other banks or other finance companies see or learn about the contract that we did with Santander, we see that they, of course, want to find a way to copy it. Regard the Brazilian market, the contract with the commercial bank is under exclusivity from both sides, so we will have, or we will, regard Brazil in the coming years, we will have to, of course, find other kind of finance companies, but not a commercial bank. Just to mention that Santander in Brazil is the largest for this segment anyway. This is why we decide to go on exclusive basis. Of course, it's open. I think it's open segments for other banks and other places in the world. Yeah, sorry. I just lost you for a second. I heard I heard almost all of it. Great. Thank you very much. I appreciate it. Thanks. Thank you. The next question is from Fred Foulkes of Boston University. Please go ahead. Good morning. Congratulations on an outstanding quarter and this very informative call. I just was curious, given all the challenges and troubles in your country right now, is that having any impact on worker productivity, recruiting, retention, et cetera? Actually, no. Actually, no. I think that the situation here in Israel is mainly from the political side. I would say the, it's not, it's not influenced directly yet. As I said, Ituran also historically, when the economy is in a bad shape, unfortunately, the violence and the car theft rates increasing, and in this situation, the request for our solutions is increasing, and the needs become much more strong. Currently, it's not influenced, but I'm not expecting that it will influence. If you come to Tel Aviv, you will feel that nothing happened, by the way, but, you know, the press is different than the, the life. Yes, we have a challenge now here. Thank you, and congratulations on your leadership. Thank you very much. The next question is from Charles Elliott of IPI. Please go ahead. Hi. I'd like to ask about a deal that you announced in July, with 99, a ride-share company acquired by DiDi Chuxing, where you will provide SVR on their BYD models. It, it sounds like a small deal in itself, but I wondered if it could be pretty significant because this would be your, Ituran's first step into being a platform for car sharing. Just for, for material point, what did you mean? Where did we report it? It was in a Brazilian newspaper. I think it was on- You're right. 28th of July. Okay. We didn't. Of course, we didn't report it from, you know, for the NASDAQ and SEC aspects because it's not a material deal currently. You're right. BYD launched their brand in Brazil together with us. What they did is was a kind of mutual, I would say a mutual marketing way. As I said, BYD spread cars around São Paulo in order to rent it on an hourly or daily rent. They need our units in order to control it, to bill it, and of course, to secure it. We are their partners for Brazil. At this stage, it was, I would say, a BYD marketing or BYD penetration program. It's not yet something that we can say that it will lead, for example, to a OEM deal in Brazil, but we've been chosen as their partners for this specific campaign. For the future, let's see. Of course, it's very luxury, again, very luxury, transaction, very luxury relationship, because we know that BYD is now in a very strong penetration also to Latin America, but it's just started. As I said, OEM deals is something which has a long cycles. We also think for the long way and for the marathon and for the long future, so we started with this. We have nothing to announce now, but for the future, we will see what happens. Great. Thank you. There are no further questions at this time. Before I ask Mr. Sheratzky to go ahead with his closing statement, I would like to remind all participants that a replay of this call will be available tomorrow on Ituran's website at www.ituran.co.il. Mr. Sheratzky, would you like to make your concluding statement? Yes. On behalf of our management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. We hope to be speaking with some of you over the coming quarter, and if you are interested in meeting or speaking with us, please feel free to reach out to our investor relation team. With that, we end our call. Thank you, and have a good day. Thank you. This concludes Ituran's second quarter, 2023 results conference call. Thank you for your participation. You may now go ahead and disconnect.