Good afternoon. Welcome to Kaleyra's Q1 2023 earnings conference call. After the market closed, Kaleyra released unaudited results for the Q1 ended on March 31, 2023. The press release, as well as a replay of today's call, can be found on the company's investor relations website at investors.kaleyra.com. Please view the release for additional information on what will be discussed today. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Joining us today are Kaleyra's Founder and Chief Executive Officer, Dario Calogero, and Chief Financial Officer, Giacomo Dall'Aglio. Following their remarks, we will open the call for your questions. I would now like to turn the call over to Investor Relations, Shannon Devine. Please go ahead. Sorry about the interruption. Just give me one moment. Thank you. Before we begin, we'd like to remind everyone that during today's call, management will be making forward-looking statements. Please refer to the company's SEC filings, including the company's quarterly report on Form 10-Q, for a summary of the forward-looking statements, the risks, uncertainties, and other factors that could cause actual results to differ materially from those forward-looking statements. Kaleyra cautions investors not to place undue reliance on any forward-looking statements. The company does not undertake and specifically disclaims any obligation to update or revise the statements to reflect new circumstances or unanticipated events that occur, except as required by law. Throughout today's press release and on the call, we'll refer to adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted earnings per share. These metrics are not determined in accordance with GAAP. A definition, calculation, and reconciliation to the financial statements of these non-GAAP measures can be found in the tables included in our press release. We believe these non-GAAP measures of Kaleyra's financial results provide useful information regarding certain financial and business trends and the results of operations. I'd like to turn the call over to Dario for an overview of Kaleyra's Q1. Dario? Thank you, Shannon. Thank you to everyone for joining us here today. Before we get into the quarterly results, I want to take a minute and update our investment community with some very unfortunate news. You likely noticed our Vice President of Investor Relations is not with us on this call today. Unfortunately, a few weeks ago, we lost Colin Gillis, who joined us last June as our Head of Investor Relations. He died after a brief illness, and we ask that you keep his family in your thoughts and prayers. While only with the company for a brief period, Colin was an impactful contributor to Kaleyra, and we will miss him deeply. The Q1, which has historically been softer due to seasonality, produced growth of 4%, resulting in revenue of $83.6 million, exceeding the upper end of our previously stated guidance range of $81 million. On a constant currency basis, Q1 2023 revenue was $85.7 million, an increase of 6% over Q1 2022. We continue to show resilience, consistently growing our top line year-over-year with a focus on our higher margin businesses and importantly generating positive EBITDA and adjusted EBITDA. As I stated during our Q4 earnings call, we are very focused on improving gross margin through reducing costs, driving efficiency, and balancing our product mix toward higher margin delivery channels. As a result, gross margin grew 19% in the Q1 to a record 25.2%. As we have emphasized in the past, we are a Communications Platform as a Service. As our customers' needs change, we change with them in the most cost-effective manner, given our ability to be agile. This is very much a fragmented market with only a few global players, which is why our partnership with over 1,600 operators and direct connectivity in over 100 countries is an advantage to our enterprise customers that can use Kaleyra as a single source to leverage their global needs. To this point, and notably during the quarter, we launched our global messaging service on Oracle Cloud Infrastructure, OCI. This launch accelerates innovation in our space and further capitalize on our strong partnership with Oracle, driving the future of business communications and customer engagement. Together, we have powered billions of interactions serving thousands of customers, serving a critical function of timely customer engagement. We continue to grow and solidify our leadership role in the CPaaS ecosystem, extending beyond traditional SMS messaging, enhancing our engagement with our customer base across various industry verticals, creating value for all of our constituents. For the Q1, we delivered 11.7 billion billable messages, connected over 2.2 billion voice calls, and the Dollar-Based Net Expansion Rate was 99%. Looking at the Kaleyra top 30 customer who contribute almost 70% of our total revenue, the Dollar-Based Net Expansion Rate was 138% in the quarter. At Kaleyra, we are committed to providing high quality, trusted, and transparent service with a focus on customer satisfaction. This is evident in our low customer churn and long average tenure of our customer base. To finish this portion of the call, I'm very proud of our Q1 performance. Our value creation project efforts are producing solid results, as reflected in the gross margin and the EBITDA improvement in the quarter. We continue to grow our revenue in line with expectations. Customer satisfaction remains high. We are proud of the trust and confidence our many existing new customers place in us for their communication needs. I will now turn the call over to Giacomo to detail our financial results. Thank you, Dario. I will now run through our financial results in greater detail. As Dario noted, our total revenue in the Q1 was $83.6 million, an increase of $3.1 million versus $80.5 million in the comparable year-ago period, and again, above the previous provided guidance. We have a global revenue footprint and a well-balanced portfolio across geographies and industry sectors. Our customer base remains strong with virtually zero churn with our top 10 customers, which accounted for approximately 45% of revenues during the Q1. Gross profit for the Q1 of 2023 was $21.1 million, an 18% increase when compared to $17.7 million for the Q1 of 2022, mainly driven by the improved product and geographic mix. Gross margin of the Q1 of 2023 was 25.2% compared to 22% of the Q1 of 2022, an increase of 19% and up 23.9% on a sequential quarterly basis. Q1 net loss totaled $10 million or $0.76 per share based on 13 million weighted-average share outstanding compared to a net loss of $13.2 million or $1.09 per share based on 12.1 million weighted average shares outstanding in the comparable year-ago period. The decrease in net loss period over period is mainly driven by higher gross margins and cost savings generated through our value creation projects initiative outlined in last quarter. Adjusted gross profit and non-GAAP measure of operating performance increased $2.4 million in the Q1 to $21.8 million when compared to $19.3 million in the Q1 prior year. Adjusted gross margin in the Q1 of 2023 was 26% compared to 24% in the comparable year ago period and compared to 20.3% in the Q1 of 2022. Notably, most importantly, the Q1 of 2023 produced the Q1 of positive EBITDA since Q1 of 2021, a clear testimonial of the company's successful deployment of the cost reduction we launched in the Q4 of 2022. Finally, adjusted EBITDA and non-GAAP measure of operating performance was $5.3 million in the Q1 compared to $6.2 million in the Q1 of 2022, compared to $2.5 million in the Q4 of 2022. Turning to the balance sheet at the end of the Q1, cash and cash equivalent, restricted cash, short-term investment were $75.5 million compared to $78.6 million as of December 31st, 2022. Turning to our previous announced restructuring and cost reduction program. The value creation program execution continued during the Q1 of 2023. As we have previously stated, is designed to position Kaleyra to serve the demand from global businesses to interact with their customer base using existing and emerging communication channels while driving labor and cost efficiency by leveraging our global scale. The program seeks to achieve the following goals. One, adjust EBITDA to exceed the 20% growth in fiscal year 2023 compared to fiscal year 2022, with additional growth in fiscal year 2024. Two, organization streamline aim to reduce monthly cash payroll cost by more than 15% in fiscal year 2023. Three, increase in net cash provided by operating activities by fiscal year 2023 year-end compared to fiscal year 2022. Four, continue to focus on R&D investment to always provide high-quality service standard and offer new products to our customers. Turning to our Q2 expectation. We remain focused on delivering on our promises with our value creation initiative throughout the year. We expect the company to continue to grow revenue in 2023 when compared to 2022. We remain committed to provide specific guidance one quarter at a time for the near future. With that, we expect Q2 revenue to be in the range of $80 -$84 million, compared to $81.1 million in the Q2 of 2022, and in line with the seasonality trend. This completes my financial summary. I'd now like to turn the call back over to Dario to closing remarks. Thank you, Giacomo. In summary, we had a very good quarter. We are pleased with our top-line results, our record margins, and adjusted gross profit. As we continue to focus on investing in ways to layer in our high-growth channels to existing customers, maintaining success winning new customers, and consistently expanding our operating footprint, we can expect to keep our new momentum. With that, we are ready to open the call for your questions. Operator, please provide the appropriate instructions. We will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your questions, please press star then two. We will pause a moment as callers join the queue. The first question comes from George Sutton with Craig-Hallum. Please go ahead. Hey, guys. This is James on for George. Sorry to hear about Colin. It's very unfortunate. I guess really nice quarter here. You mentioned product mix sort of drove the higher gross margin this quarter. Could you talk about what the revenue mix is between SMS and some of the higher value revenue? Yes. We are increasing non-messaging revenue from voice, from video and TCR and WhatsApp. The mix is more favorable than in the past. As we say, we have the target to approach 80/20%, and we are approaching the target. Gotcha. Was there anything in particular that drove the strength in Q1? I noticed the guide for Q2, the midpoint reflects a quarter-over-quarter decline. I don't know if typically Q1 is the low point, and we sort of scale throughout the year. Can you just touch on that? Yes. In general, our seasonality is more favorable in the H2. Historically, we had 55% of the revenues, at least 55% of the revenues coming in the H2. Q1 and Q2 are low seasonality for us compared to Q3 and Q4. Gotcha. I guess maybe just asked a different way, like why would Q2 be down from Q1? If you consider last year, we are up. Consider last year, Q1, and last year, Q1 and Q2 were flat. We consider the midpoint to be prudent, and wanna keep in a tough environment to have a prudent guidance. Gotcha. Thanks, guys. That's it for me. Thank you, James. My best to George. Next question comes from Vivek Palani with Northland Capital. Please go ahead. Hi, this is Vivek on for Mike Latimore. I have a couple of questions with me here. The first one is how much revenue did the campaign registry contribute to this quarter? Vivek, look, we don't disclose exactly how much revenues are coming from each segment of the business or each piece of product. It's still increasing. It keeps on growing, and it's very satisfactory, I would say. We don't disclose exactly the amount of revenues coming from the campaign registry. All right. How about the prices? Are they getting more aggressive or less aggressive? Well, on the pricing, the pricing dynamics are pretty much in line with the previous quarters. Kaleyra is pushing a policy to expand the gross profit and expand the gross margin. We might be tighter in in selecting which countries, which routes and which operators we wanna work with when we come to messaging, which is typically the part that is under higher pressure in terms of pricing. If you focus on the expansion of the gross margin, which is reaching a sizable 26% in this quarter, this is I would say witnessing the effectiveness of our policy. All right. That's it from my side. Thank you. Thank you, Vivek. Again, my best to Mike. This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Calogero for any closing remarks. Please go ahead. Thank you, operator. Thank you for joining us on today's call. As always, we would like to thank our extensive worldwide network of partners and investors, as well as our employees for their continuous support. Operator? I would like to remind everyone that a recording of today's call will be available for replay via a link available in the investor section of the company's website. Thank you for joining us today for Kaleyra's Q1 2023 earnings conference call. You may disconnect your lines. Have a great day.
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