Greetings, and welcome to the KORE Group second quarter 2022 earnings call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to our host,Charley Brady Vice President, Investor Relations. Thank you. You may begin. Thank you, operator. On today's call, we'll be referring to the second quarter 2022 earnings presentation that will be helpful to follow along with, as well as the press release filed this afternoon, the details of the company's second quarter 2022 results, both of which can be found on the investor relations page at ir.korewireless.com. Finally, a recording of the call will be available on the investors section of the company's website later today. Please note that this webcast includes forward-looking statements. Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions are forward-looking statements that are based on assumptions and beliefs as of today. The company encourages you to review the safe harbor statements, risk factors, and other disclaimers contained on this slide and today's press release, as well as in the company's filings with the Securities and Exchange Commission, which identifies specific risk factors that may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this webcast. The company also notes that it will be discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation. I'll now turn the call over to Romil Bahl, the company's President and Chief Executive Officer. Thank you, Charley. Good afternoon, everyone, and thank you for joining us today for our second quarter 2022 earnings call. With me is Paul Holtz, KORE's Chief Financial Officer. The first objective of today's call is to provide an overview of our financial results for the second quarter of 2022. I will start with a summary of our results, and then Paul will take you through our performance in more detail. Second, we continue to help the market understand the significant long-term growth opportunity that KORE is positioned to capture as the only public pure play IoT company. Every call since we listed on the NYSE, we have leveraged our earnings calls to help educate the market on our business. We started with a company overview last year, and I followed that initial call with overviews of our world-class IP and technology moat. Last quarter's deep dive topic was our Connected Health vertical. This quarter, we will discuss KORE's Fleet segment and the market trends driving our second-largest industry practice. We will then hold a Q&A session to round out the call. Let's move on to slide four to look at our Q2 results. Second quarter revenue was $70.4 million, up 16% year-over-year. IoT solutions revenue was $25.7 million, up 47% year-over-year. DBNER for the second quarter was 114% up from the second quarter of 2021. As a reminder, we have consistently communicated since going public over three quarters ago that we expected a decline in quarterly revenue after the LTE transition project at our largest customer ended. I am very proud that our team rallied to stave off said sequential decline another quarter with this strong Q2 performance. We fully expect a sequential decline in Q3, and H2 2022 will be down from H1 2022 organically, as has been embedded in our 2022 guidance since it was first provided. On said guidance, we are maintaining the communicated range despite an expected approximately $3 million revenue headwind from FX that was not previously embedded. As a result, we continue to expect to beat our two-year ago public revenue forecast for 2021, 2022 by more than $50 million. With that, I will present a couple of slides to provide some business context on KORE, and then we'll move on to a deep dive of our Fleet industry segment. Slide 5 shows some IoT use cases on the left side of the page. These solutions are not particularly complicated to understand conceptually, but they are very complicated to implement, especially when the connected devices are in motion or are deployed across multiple technologies, multiple devices, and multiple connectivity protocols, the latter of which is a given in any deployment over a large geographic area, certainly across countries. The key message is simple: IoT is everywhere. Anything connected is an IoT use case and hence a potential customer scenario for us at KORE. Use cases do not have to be sophisticated to require our services, although we certainly have that capability if needed. Today, KORE is helping to bring a very large and rapidly growing set of use cases to life, which is driving our significant market opportunity. Now on the right side of slide five, let's take a look at the key complicating factors that have kept IoT from meeting its hype over the last decade, starting with cybersecurity as the foundational issue and working our way around the significant challenges of IoT solution deployment in the corporate world. In particular, a lack of expertise and the ability to handle and leverage the massive amount of data coming off thousands and often tens of thousands of devices in many use cases. Standard IT experience, even digital transformation experience, is not enough to effectively deliver IoT. Given the complexity stemming from the use of different types of devices and networks across different countries, the regulatory and compliance issues driving almost every industry, and one of the most fragmented ecosystems in the tech world, you have the issues that set up KORE's strategy. This is what the KORE one-stop shop is all about, simplifying these complexities and making it easy for our customers to deploy IoT solutions. Slide 6 is a simplified view of our growth strategy. What we do is help customers deploy, manage, and scale solutions. Based on the experience of working with over 10,000 use cases over the last 20+ years, we can help our customers not just successfully deploy their solutions, but with our IoT managed services, manage those deployments seamlessly, which in turn enables our customers to scale confidently and securely. How we do this is with a combination of IoT connectivity solutions and analytics services, which is growing in scope and maturity with every year of our transformation. With our global connectivity services, we can help enable almost any use case in any industry. As we have matured our IoT managed services, we have increasingly focused on going to market by industry where we become more of a trusted advisor with industry expertise. We have organized our company to build and take to market these world-class IP-driven IoT services, and slide 7 illustrates the KORE organizational model at a contextual level. We build our capabilities to support the major steps in the deployment of an IoT solution. While we are not at this point in time building a consulting organization to focus on the front end of a customer's IoT journey, we have been building the industry's leading IoT connectivity offering for over 20 years. In addition to our connectivity offerings, we have added a comprehensive suite of IoT managed services and plan to add to our early start with analytics capabilities, which will create even greater opportunities for growth. The vast majority of our team is organized into these horizontal capability areas. We have historically applied a regional go-to-market approach with our sales teams organized by the broad geographic regions, Americas, Europe, and Asia Pacific. As we have expanded our portfolio of products and services, we are increasingly going to market in focused industry verticals, which allows us to get closer to our customers, better understand their pain points and IoT requirements. Last year, we launched Connected Health and Fleet, the first two of our five target industry verticals. Why these five verticals? Because these five industry sectors account for over 80% of IoT spend today. The successes we have seen thus far, particularly with the BMP acquisition, tell us our vertical go-to-market strategy is working. This leads us to the overview of our fleet business. Fleet is a broad term that we use to describe objects that move people, cargo, or materials from one place to another, such as autos, buses, trailers, trucks, and construction equipment, as well as other transport methods, including rail and ships. As our business stands today, it is vehicle-centric and includes the telematics, video analytics, and usage-based insurance segments. All three of these segments are large and growing, and we are seeing continued adoption of more IoT-centric technology with multiple devices connected to the vehicle. McKinsey estimates the value pool for fleet management will grow to $750 billion by 2030. A significant portion of this expected growth is due to video analytics, which is forecast to grow at a CAGR of 17% over the next three years. Similarly, the usage-based insurance market surpassed $30 billion in 2020 and is projected to grow at a 20% CAGR through 2027. This growth in usage-based insurance is being driven by use cases targeting lower insurance premiums, driver safety, stolen vehicle recovery, and government regulations. Fleet management continues to lead the way in IoT market growth, with around 15% of vehicles now having telematics pre-installed, and there are estimated to be about 100 million telematics units in operation around the world. Technology adoption in the fleet management industry over the last several years has rapidly accelerated due to the speed and availability of networks, complemented by the capability of IoT devices. The industry was kickstarted by the adoption of GPS devices in commercial vehicles, allowing for the birth of location-based services applications. At this point, the industry was primarily focused on information about the vehicle itself, location, status, and vehicle health. Next, with the growth of low-power networks and associated sensors, the industry moved the focus to information about the cargo. What is the vehicle carrying? What is the status of that cargo? How much of it is there? How hot or cold is it? When did it get loaded? Where is it now? Today, organizations are acutely focused on safety, specifically around keeping drivers safe and reducing crashes. This has led to our customers leveraging video telematics with a specific focus on driver behavior, driver coaching, and data collected by IoT devices to reduce fraud and false insurance claims. All of this adds up to significant cost reductions and operational efficiencies. The data that we can now collect associated with these three aspects of Fleet can be combined to support many use cases, and KORE, through the management of connectivity, hardware, and SaaS solutions, is at the intersection of this technology and these industry use cases. KORE's mission is to reduce the complexities of IoT, to make IoT easy. Easy to deploy, easy to manage, easy to scale, and easy to buy. KORE makes IoT easy by providing bundled solutions that package just about everything an organization would need to deploy to address their Fleet management use cases. Tracking solutions that combine hardware, connectivity, software, and managed services. Advanced video analytics solutions that combine hardware, connectivity, AI, and machine learning. Cargo management solutions that track and provide environmental data for containers, trailers, and pallets all the way down to a single item within a vast and often complex supply chain. Compared to our competition, who are mostly focused on a one-size-fits-all approach, KORE provides our customers with the option of integrating different products from multiple OEMs, creating bundles that address specific industry needs without the fear of vendor lock-in. These bundled solutions, and others that are shown here, plus many that are not, leverage KORE's expertise to help fleet organizations tackle a variety of use cases. IoT adoption accelerates, so too will demand for our bundled solutions for fleet. To emphasize the importance of video analytics and the role it plays in driver safety, let me give you a real-life example of one of our customers leveraging our technology to help save the most valuable cargo in a truck, the driver. A fleet customer had an incident where one of their drivers was kidnapped while driving in Mexico. The technology that they had in his car alerted emergency services leveraging artificial intelligence and in-cabin video. This allowed law enforcement to track the driver and return him safely the same day. How does all of this translate into revenue for KORE? Today, the fleet vertical accounts for approximately $50 million in annual revenue. This revenue is a consistent and resilient recurring revenue stream driven primarily by a strong and broad base of customers. In our go public five-year forecast, we projected Fleet revenue would grow to $75 million by 2025. However, our internal stretch target is to achieve $150 million in revenue in this same time frame. We believe this is achievable by focusing on three areas. First, we're making ongoing investments in developing our partner ecosystem. In fact, we now integrate with over 400 partners that are unlocking data into our platform. Second, we have released over 130 features with multiple bundled solutions addressing the highest demand industry use cases, and our platform now supports, as an example, in the video analytics area, the top 3 OEMs in the industry. Third, we are investing in IoT managed services, addressing specific fleet needs around deployment and fulfillment, which is right in line with our vision to reduce the complexity of IoT. In conclusion, I will say that we are very proud of the progress our fleet team has made, and we believe the innovative approach outlined today will be a big contributor to KORE's growth. With that, I will now hand the call over to Paul to cover the financials in more detail. Paul? Thanks, Romil, and good afternoon, everyone. Moving to slide 12, we had another strong quarter of total revenue increase 16% to $70.4 million compared to $60.7 million in the second quarter of 2021. As Romil mentioned earlier, since going public in Q3 2021, we have consistently communicated that revenue in the second half of 2022 would be lower than the revenue in the first half. The decline in revenue is attributable to the completion of the LTE transition project with our largest customer and the various carrier network sunsets in the United States concluding by the end of 2022. Despite the expected headwinds just mentioned and the new estimated $2.5 million-$3 million FX headwind that emerged in Q2 2022, we are maintaining our previously disclosed revenue and adjusted EBITDA guidance. Turning to our service lines, IoT connectivity continued to be resilient throughout Q2 despite the revenue pressures from FX, LTE pricing transitions, and U.S. carrier sunsets. These headwinds, along with the new revenue from the BMP acquisition, resulted in a 3% year-over-year increase in IoT connectivity revenue to $44.7 million. IoT solutions revenue year-over-year increased 47% to $25.7 million. The growth was primarily driven by new customers acquired as a result of the BMP acquisition, partially offset by FX and the expected decline from our largest customer due to the conclusion of their LTE transition project at the beginning of the second quarter. Please note that even with the continued new revenue from BMP customers in Q3 and Q4 of this year, we do expect IoT solutions quarterly revenue to decline in both quarters on a year-over-year comparison basis. The decline is attributable to the significant LTE transition volumes with our largest customer in Q3 and Q4 of the prior year. Total gross margin was 52%, which was flat year-over-year. IoT connectivity gross margin increased 6% points year-over-year to 65%, driven by the leverage from lower carrier costs on higher revenue and volume. As expected, however, we experienced a decline in IoT solutions gross margin year-over-year, which was down 6% points to 28%. The decline was primarily due to the increased mix of hardware revenue during the current quarter. Total connections at the end of the second quarter were 15.2 million, an increase of 2 million or 15% compared to the second quarter of 2021. Dollar-based net expansion rate or DBNER for the twelve months ended June 30, 2022 was 114% compared to 113% in the prior year. As expected, DBNER was also down when compared to the prior quarter and is likely to decline over the next couple of quarters as the LTE transition revenue from our largest customer declined over the trailing twelve-month period in the calculation. We do, however, continue to expect DBNER to be above 100% for the rest of 2022. Operating expenses in the second quarter were $43.2 million, increasing $7.8 million or 22% compared to the same period last year. Increased salary benefit costs, higher stock-based compensation, higher travel expenses, operating expenses related to the BMP acquisition and go-public company costs, including insurance and professional services, all drove the increase in operating expenses year-over-year. Note that approximately 45% of the increase in operating expenses year-over-year came from non-cash items like amortization and stock-based compensation. Net loss in the second quarter was $11.1 million compared to $6.9 million in the same period in the prior year. Adjusted EBITDA in the second quarter was $15.9 million, an increase of $1.2 million or 8% to the same period last year. Our adjusted EBITDA margin in the current quarter was 22.6% compared to 24.1% in the same period in the prior year. Moving to cash flow, KORE generated $14.7 million from operations in the three months ended June 30, 2022. This compared to a use of cash of $2 million in the same period in the prior year. Q2 2022 was a strong quarter from cash flow from operations due to increased collections from our largest customer related to billings from their LTE transition project, positive cash flows from the BMP acquisition, and lower requirements for prepaid inventory. Cash and cash equivalents at the end of the second quarter were $40.8 million compared to $86 million as of December 31, 2021. This change was primarily related to the financing of the BMP and Simon acquisition. With that, I'll pass it back to you, Romil. Thanks, Paul. As you heard, we had another strong quarter. KORE continues to grow our connected devices count and win new opportunities. In fact, our current sales pipeline includes over 1,500 opportunities, and we expect our pipeline to continue to grow. Today, you heard us talk about our fleet vertical, where we have opportunities for high-bandwidth applications for video monitoring and telematics, which carry very healthy ARPU, and also low-bandwidth applications which add hundreds of thousands of SIMs. These opportunities are not limited to fleet. As IoT adoption increases and we build out our other targeted verticals of industrial assets and communication services providers, our opportunity set increases exponentially. When KORE went public less than a year ago, we committed to generating $457 million of revenue in 2021 and 2022 combined. We expect to exceed that figure by over $50 million and continue to deliver on our commitment to all of our stakeholders. We have achieved this despite a continuing pandemic, disruptions in our customers' supply chains, significant forced churn from the 2G and 3G sunsets in the U.S., which finally comes to an end this year, a rising cost environment, and now FX headwinds and uncertainty around the economy and broader geopolitical events, all of which demonstrate the quality and resilience of our business model. As you can see on our final slide, KORE has transformed from simply providing connectivity to offering a broad array of products and services that help deliver IoT end solutions. No one competitor can offer the breadth of products and services KORE is bringing to market today, and we are continuing to build out and expand our capabilities as we execute on our clear transformation plan. We will continue to invest in our IP and take leadership in 5G and AIoT, just as we have done over the last few years in eSIM, for example. In closing, KORE has just delivered the best quarter in the company's history, and we continue to exceed expectations. I am confident that as we move past the second half headwinds of 2G, 3G sunsets and a tough comparison from our largest customer's LTE transition project, the stage is set for KORE to continue delivering on its strategic growth plan. I wanna thank our global IoTers, as we call them, for their hard work, dedication, and commitment to KORE. With that, let's start the Q&A. Thank you. Ladies and gentlemen, at this time we will conduct our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Lance Vitanza with TD Cowen. Please go ahead with your question. Hi, guys. Thanks. Hey, Lance, we're not hearing you. Yeah, we lost you, Lance. Sir, sounds like you're cut off a little bit. All right, we're gonna go on to the next question. Go ahead, Mr. Vitanza. All right. Can you hear me? Go ahead. Yes. The $50 revenue beat on the two-year stack, could you break that down for us in terms of contributing factors? I mean, how much of that is volume versus price? Better execution? Obviously M&A played a role. Then I have a couple of follow-ups if the line holds out. Yeah. You know, I think we sort of expected mid-high twenties from our acquisition, which was obviously done during the first quarter, Lance. You know, look, I mean, they may even do better than that, certainly given the red-hot start they've had with us as they've taken advantage of some of the low-hanging fruit and sort of, you know, demand that the rest of KORE was able to generate and send in their direction, but also some pull forward from some of their large customers and some really significant orders. I might even modify the contribution from them to be higher than that. The rest of it is largely execution right now, you know, organic execution right now. You know, a little bit harder, I think, to start to break it down on volume versus ARPU. I think it's a little bit of both. The number of connections, you know, in the face of obviously these sunsets this year has held up pretty well. You know, we're more acutely aware of some of the, you know, supply chain issues that we felt them a little bit last year, but we're feeling them more this year, certainly through the six-month mark. I guess if I had to weigh it in one direction, Lance, I'd weigh it in a little bit more in the ARPU stability we've seen. You know, good execution by the team. Okay. Yeah. Lance, I would. The only thing I would add is when we modeled the sunsets, we thought they would turn off on a regular basis throughout the months, but we are seeing a lot of those, when whether it was AT&T or now it's and we expect now for T-Mobile, that a lot of the customers are just waiting right to the very end, whereas we modeled it a more conservatively that was over time. We're getting a little bump there. Let me turn to the fleet opportunity that you talked about. The first question, I guess, is the 100 million, I think you said 100 million telematics units around the world. Could you repeat when is that? Is that now or the future? And then more importantly, how well does the geographic distribution of those 100 million units, how does that line up for KORE? Are you well positioned to go after all of that? Or should we be thinking about a smaller subset that really is attackable for you? Yeah. No, certainly those 100 million telematics units are out there today. In fact, almost 15% of them are pre-configured, right? They're rolling off assembly lines with the connectivity embedded and not just reliant on aftermarket type solutions. Look, I mean, outside of some of the very large Asian markets, right? China, India, et cetera, I would say these are mostly accessible markets to us, right? I mean, certainly North America, certainly Europe, Australia, getting better, you know, in Latin America. You know, I wouldn't stretch it and say it's all of it is accessible. But, you know, given our tiny market share today, significant opportunity. Whether it's, you know, slide 9 or 10 or 11, those three slides I found very interesting. Could you point us to where you see the bigger versus smaller contributors to this $75 million-$150 million of incremental revenue? Whether you wanna do that by the verticals or by the anchor accounts, et cetera. Thanks. Yeah, Look, I think we're I mean, I talked about the first three for a reason. Those are certainly the ones that we believe will be the, you know, the three stronger horsemen, if you will, from our solution bundles. If I had to pick one out of those three, I'd say that the very innovative work we're doing in the video telematics area, which is red hot, you know, we believe that has a lot of potential, and it's a very differentiated strategy. We're not coming out there like some of these other players with a, you know, one camera, one size fits all. Here's what you get, and it's proprietary closed environment technology made by them kind of, you know, sort of solution, right? We're bringing the top three already are integrated and others will be integrated over time. A myriad choices of cameras based on different use cases that our customers can deploy. I'd say the left three on page ten, Lance, are my top three and certainly my personal favorite is video in the middle of those three. That's really helpful, guys. Thanks. I apologize for the bad connection. I'm gonna get back in queue. Thank you. No worries. Thanks, Lance. Thanks, Lance. Thank you. Just a reminder, to ask a question at this time, press star one on your telephone keypad. To remove your question from the queue, press star two. Our next question comes from Walter Piecyk with LightShed Partners. Please state your question. Thanks. Can you start with just the M&A environment? Given kind of what's going on in the market, do you see any more greater willingness of some companies to sell out to you guys? Or is it the opposite where, you know, somebody wants to hold on, wait till things stabilize, wait till rates are maybe lower or stabilized, in order to get a higher takeout price? Yeah. I think it's a little bit more of the latter, Walt, and you know, you combine that with, you know, what some would say is a head-scratchingly hard to explain how we're getting ourselves. It's not like there's, you know, currency I can use in terms of our public stock. You know, it's a tough environment. I mean, you generate free cash flows, just the willingness to lever up further to make smaller tuck-in acquisitions is not part of your contemplation. You know, look, I mean, you know, certainly tuck-ins remain an important part of what we're contemplating, and it's gonna be something we're gonna look at doing with, you know, putting our free cash flow to work on for sure, right? The lever up part's harder to contemplate, Wilter. I mean, I've spoken to many public company investors now who even at 4x start to get nervous, certainly at 5x start to get nervous. If you were to add our convertible, you know, at a $120 million type facility there, we're at a smidge over 6x, right? You know, we don't want to lightly go in that direction and kinda, you know, make ourselves uninvestable just loading up on leverage. I think one has to be, you know, cautious as we go through that. If you go to the original presentation for the SPAC, obviously you've significantly, at least from what I can tell, unless my model screwed up, outperformed in 2022. You have this kinda second half drop off, which you've talked about before, despite kind of beating in the first and second quarter. It doesn't, you know, it's, you know, I guess the incremental thing is FX, but it's not enabled you to kind of push that guidance up further again higher than what the original plan was. If we just go out to 2023, though, and you think about the kind of the incremental things that you face over the next couple of quarters, you know, how are you feeling about the 2023 growth, either in the context of the original presentation or some of the headwinds that are gonna bring, you know, is gonna deliver this second half, which is gonna be lower than the first half performance that you've had to get to the guidance? Yeah. No, look, I understand the spirit of the question, and I have a number in my head. I think it was 276 or something, but let me, you know, Paul's gonna pull it up here in a minute, and we'll figure out what we said in the model. It was exactly 226, page 31 of the April Yeah. Of the April document. Yeah. Perfect. You know, so I would tell you that we're very confident against that, right? I mean. Of course. Again, you know, I'm not taking full credit for that organically because there's obviously the one inorganic thing we did. Yeah, we're certainly very confident against that. Now, you know, I mean, so let's just talk through the factors that are driving H2 down from H1. Yeah, FX is not our friend right now, which otherwise we might have been tempted to, you know, to flirt with that, you know, bringing the guidance up a smidge. So Mm-hmm. It's largely an IoT solutions story in terms of reduction in H2 over H1, just because there's this massive sort of upfront, you know. I don't like the term pull forward myself, but the one time sort of large engagement, the LTE transition project, which is such a unique thing for us. It's not like we have many of these running through us, right? It's just this one thing, and that's why we have spent time trying to explain it to the market. You know, that going away puts a dent on the second half. Actually, you know, as the customer correctly so was conservative in asking for very high amounts of volume over the last three or four quarters, you know, there's a good chunk of what the business as usual part, not just the one-time transition part that's, you know, in our opinion, has been pulled forward a little bit. That's obviously gonna then affect our H2, but it will come back next year, right? Then the question- Right. Sorry to interrupt you. Yeah. Even if you strip out that $11 million, I mean, the growth rate, obviously the implied growth rate is certainly very robust. If you can maintain that type of growth rate or even if it moderates, you know, into 2023, just the organic growth rate, pulling out that $11 million, you know, it would seem like when we look at 2023, you know, your organic growth rate should still be pretty good and certainly an acceleration over what's happening in 2022, as far as I can tell. Yeah. Look, again, It's clouded by this one-time thing, right? Q1 and now Q2 are gonna be these really high comp quarters when we get to Q1 and Q2 next year, and somebody will say, "Oh Gosh, why are you not growing?" To your point, those that know us and understand the numbers, understand that one-time transition will see that there is progress. On the connectivity side, I would just say we're actually, you know, excited, right? Because, you know, we started the year with close to 1 million 2G, 3G SIMs. We're gonna end the year with close to zero, or if they do hang along, it'll be for a few weeks next year kind of thing, you know. Largely, you know, the holes that we had to fill every year before we could grow will go away. Now, we still have some next year, right? That 1 million SIMs of revenue at an average $1 ARPU, that was $1 million in January, right? And so, you know, that's not really 12 million over the year, right? Because it's obviously a number that's going down. Call it 8 million or 10 million. There's an $8 million-$10 million hole we fill next year, and then we're off to the races, 'cause now I've got no holes going. All our non-core customers are out. All our 2G, 3G SIMs are out. ARPU is showing stabilization. You know, we're far more bullish about IoT connectivity growth going forward than we have been these last three, four years. Yes, to your point, as solutions will baseline out in the fourth quarter and then start to grow back up again. I think we continue to outperform what we said we would in our five-year model. Got it. Just one last one. Just on the IoT solutions, when I look at that type of, again, growth rate, which to me again, yes, the first half of the year is tough comps, but if you're putting up, if you're continuing with this type of growth rate, then it's still gonna look. I mean, I would think that it would still have to grow just in IoT solutions. Can you talk about like some of the IoT solution customers that are out there? I mean, I looked at Iridium. Like Iridium's business, IoT seems to be doing extremely well. Can you talk about some of the new business that you're signing up there to give us some sense on kind of where that growth is gonna come from and or where that revenue is gonna come from in 2023 as you add more recurring revenue in here? Yeah. There's early signs of success. Mm-hmm. Certainly in our two key verticals that again we you know as you know we launched early last year. You know, we're now sort of you know 18 months of maturity into building out these pre-configured solutions or bundled solutions. You know, there's dozens of customer opportunities in the funnel now. You know, we obviously would feel more confident once we see real dollars starting to flow against these pre-configured solutions and so forth. We remain confident excited about you know both the revenue opportunity but also the gross margin uplift opportunity from getting more pre-configured solutions out there in Connected Health and Fleet specifically, but then also some of our cross-industry solutions like failover, leveraging fixed wireless access, that sort of thing. That's where the solutions growth is going to come from, for the next few years, really, Walt. Got it. Thank you. Appreciate it. Thank you. Thank you. Our next question comes from Mike Latimore with Northland Capital Markets. Please go ahead. Hey, Mike. Hi, this is Aditya. Yeah, it's Aditya on behalf of Mike here. Yeah. Okay. Could you tell me, how much did the Fleet vertical contribute as a percentage of revenue? Is it like over 10% of revenue? Aditya, we said it's about $50 million, right? On a base of whatever end of our guidance you wanna take or midpoint of our guidance you wanna take, it's obviously not 20%, right? It's a little bit less than that, you know, call it 17-ish, 18-ish, depending on where the year ends up. All right. Could you give some color on if the inflation, recession, or the higher gas prices does it have any impact on the Fleet vertical? You know, it's interesting. I guess the knee-jerk reaction is, "Oh my God, there's higher gas prices, so trucks are gonna stop rolling or something." It's obviously not, you know, that's obviously not really gonna happen, right? Products and goods still have to flow and food has to get into our supermarkets and on and on and on. In an interesting kind of way, we have actually seen an uptick in our fuel optimization, fuel management kinds of solution areas. You know, those fleet customers that have not yet implemented those solutions are much more seriously, you know, kicking the tires, at least, if not spending dollars or launching RFPs in those areas. I would largely say, I mean, look, I mean, recession-proof is a big word, and you don't wanna use those words lightly. You know, we've proven, right, that we're pretty darn good at enabling solutions that help both the profit side of a customer and the revenue side of a customer. In some cases, it's both because these are solution providers who are reliant on our connectivity and on our solutions to be in business themselves, right? It's a pretty sort of mission-critical and sorta, you know, resilient business model. Got it. Lastly, you spoke about the revenue being a little lower in the second half. Could you also give some color on the gross margins? Would we expect the gross margins to be stable or increase a bit in the second half? I'll let Paul take that. Yeah, yeah, I'll take that one. We had a really good quarter for gross margins on connectivity around the 65% mark. We don't expect much change from there. Hopefully, we can continue to optimize and even make it better. But we'll say those will stay pretty stable. On the IoT solution side, again, each quarter is different depending on the amount of hardware in there, but we do expect those to also go up. We hit the bottom in Q4 with a bunch of hardware there. We've seen two quarters now in a row that it inched up a couple points, and we expect that to continue into Q3 and Q4. All right. Thank you. Thanks, Aditya. Our next question comes from Meta Marshall with Morgan Stanley. Please go ahead. Great. Thanks. Maybe you can help us on, you know, the total number of connections, or period-end connections. Clearly, you know, those stepped up pretty meaningfully, year-over-year, yet stepped down quarter-over-quarter. I know some of that is from kind of the sunsetting of the 2G, 3G networks. If you could just kind of help us determine what the headwind from that was, to overall connections. Maybe second question, you know, it sounds as if kind of the Simon BMP businesses are doing quite well. Has there been any chance for cross-sell yet? Just kind of when do you expect that there could be kind of more cross-sell across customers? Thanks. Thanks, Meta. Maybe Paul should take the Yeah, I'll take. The connections question first. The connections one. You, yeah, you're right. When you're looking at year-over-year, the 2 million increase, that's our typical growth. We expected Q1 to be more of the down quarter when AT&T's sunset was originally supposed to happen, and it got pushed a couple quarters or so. We saw more of that happen in Q2. We said at the end of Q4, we had about 1 million devices left on 2G, 3G that we would lose or would transfer to LTE throughout this year. We're ending Q2 at around 500,000. There's about 500,000 left for the rest of the year. But that. It was more rounding. We were pretty much flat quarter-over-quarter. We had growth, but it was offset by the additional AT&T devices that went away. Did that get to the question, Meta, before we go to the other one? Yeah. Yeah. No, no, that works. Thank you. Excellent. Yeah, look, as I was saying, there was some. I hate to call it low-hanging fruit because that makes it sound easy or something, but I think our team, we had customers that needed that kinda low touch, you know, BMP solution. We've been able to funnel. I mean, part of their outperformance obviously is being part of KORE, I guess is what I'll say. But also they've done just fantastic work. You know, we certainly are continuing to look very closely, as the integration continues to go well, add customers that we can move from our KORE kinda Rochester operation that is a more complex and, you know, built for larger volume, built for high regulatory environments like Connected Health, and move the lighter touch things to Westbury, and the operation there. Certainly bullish that the low touch solutions will continue to help our cross-sell efforts in general. Great. Thanks so much. Thanks, Meta. Our next question comes from Scott Searle with Roth Capital. Please state your question. Afternoon. Thanks for taking the questions. I got on the call late, so I apologize if some of this is redundant. To just follow up on the legacy subscriber question, sounds like there's still about 500,000 left. Will that go to zero then by the end of the year? Does that still kinda hang around for a little bit longer than expected, just kinda given the end of life cycle here? Paul, from a normalized OpEx standpoint, it looked a little higher this quarter. I know there were some one-time charges in that. If we net out and adjust for that, is that the normalized number going forward, or is there still some more adjustments as we should expect in the third quarter? All right. I'll go first and the first thing I'll say is I thought you loved us best, so I can't believe you were on some other call or something. Yeah Late for ours, Scott. My apologies, Romil Bahl. I'll make it up to you. I think largely the answer is yes. The 500,000 2G, 3G to your question, you know, largely goes to zero. Now, again, is there a couple of weeks of delay or something if the sunset takes a little bit longer than just one day? You know, they may spill over some amount into January. The way we're looking at it is it's gone at the end of the year. As I was saying just a little while ago, you know, the only sort of headwind left going into next year is what these 1 million SIMs represented in terms of revenue this year, right? Once we're done with that, then we're sorta, you know, off to the races. Again, if ARPU continues to do what it's doing and supply chain opens up. Supply chain's actually been more disappointing on the volume front for us this year than we thought it would be six months ago. If customers get back to deploying, we get back to anywhere near, you know, 20% volume growth in a stable, ARPU environment, I think certainly in 2024, you'll see very exciting growth, and hopefully we'll start proving it, you know, next year or so. Yeah. Another thing I add to that, Scott, like Romil's right. We model it to go to zero, but again, we're working these guys trying to win them back and hopefully can convert them and make them stay. Like Romil said, some of them may trickle on into Q1, again, depending if there's any delays in T-Mobile or Verizon sunsets at the end of the year. Right now, yeah, we've modeled it that they would get to zero by the end of the year. Hey, hey, Romil Bahl, just to follow up on the supply chain issue, you know, did you talk about a number in terms of what was left on the opportunity you couldn't ship this quarter in terms of the immediate demand pipeline that's just hard getting cellular modules? What's that number look like? Yeah, no, that's not. Certainly I haven't addressed that. Let me maybe try a slightly different tack, right? One of the strengths of our business is the stickiness of our customers, of course, to our platform, and the fact that existing customers, on average, certainly the larger customers that matter, have been growing on average about 20% a year these last few years, right? Coming into this year, we felt a downdraft on that set of demand signals into us. We signaled, I forget exactly when it was. I think it was after the fourth quarter call when we were giving guidance. We signaled that we were thinking, volume growth would be more like half of what we've normally seen. We said, "Hey, roughly half of that is the 1 million SIMs that are being, you know, kinda force churned out." The other half of that impact was supply chain. I would just say that rather than seeing that 10% type expected half of normal 20% volume growth, we may even come a few percentage points short of that. Obviously, we're gonna try. The sales team is hammering away, and we're gonna try to ship more and activate more and so forth. But if our customers cannot get their devices because their orders are getting delayed 6 months, 12 months, we've heard horror stories in certain parts of the module and device supply chain, you know, they don't need our SIMs, and we don't get our devices going, right? That's what we're seeing. Sorry, Scott, can you then repeat your last question? Was on the OpEx front, Paul, just in terms of if we adjust out the one-time charges for the acquisition and otherwise, is that the normalized number or you guys still tightening things up a little bit more on that front? No This quarter, what depends which adjustment you're talking about. Like, we would have adjusted out one-time stuff related to the acquisition in the prior quarter. This quarter, the BMP expenses are their regular ongoing expenses, and they had higher than usual because of the revenue they brought on this quarter. Part of their OpEx is the channel commission side of things. Obviously, the higher revenue they sell, the more commissions there are. That will fluctuate depending on how well or how much revenue they sell in that particular quarter. Other than that, from a one-time perspective in OpEx, there wasn't anything more significant other than ongoing increased cost from headcounts. Travel has picked up now that COVID is kinda behind us. We're traveling more, and stuff like that. Gotcha. If I could, on the ARPU front and kind of back of the napkin kind of math, you know, it looks like the ARPUs have stabilized over the past couple of quarters here. Part of that's legacy rolling out. You also have some larger opportunities with more video content, more traffic that's attached to that. Is this the bottom? Should we be expecting ARPUs now to start to slowly move in the other direction, Romil Bahl, or is it a little early to make that call? From your lips to God's ears, baby. Look, you know, I sure hope so, right? You know, you know, I'm a great believer in the notion that tech costs always head in one direction, which is down, and Moore's Law and this and that. I am not sitting here pretending that on a per megabyte basis, costs aren't gonna go down, right? It is, to your point, the higher bandwidth consumption, right, the more use of video and this is all largely pre 5G, right? As 5G actually matures for IoT over the next couple of years, you know, the bandwidth usage is only gonna go in one direction. Look, I will just continue to say for now, we're too early to make any predictions, but we feel good about our predictions on stabilization so far coming through. The next 4-6 quarters will be very interesting. Yeah. We continue to see many high bandwidth opportunities, like you said, right? It's a big change from 12 months ago or 18 months ago, the number of opportunities we are seeing in that area. Gotcha. Lastly, if I could, from a high level, and maybe on that last point, Paul, is like the opportunity pipeline. You know, is there a way to quantify it? Have you talked about any numbers in terms of the number of connections that are in there? Then, I guess, kinda putting that together with the backdrop of the supply chain, on the margin, seems like things are improving while there are still horror stories out there. Are we getting to an environment where you think in 2020 we're starting to get back to, I'll call it that quote unquote, normalized 20%, you know, connection growth? Is that what we should be thinking about at some point in 2023, and how big is that pipeline? Thanks, guys. Yeah. On the opportunities front, Scott, I just think we need a couple more, maybe even a couple more years, certainly a few more quarters of maturity on selling these more pre-configured solutions, bundled solutions, types of engagements to customers in this industry, go-to-market kinda model that's really only 5, 6 quarters old for us. Before there's meaningful numbers I can throw out there on TCV that have meaningful then, you know, year-over-year types of comparisons, right? It's too early, otherwise, I feel like, and it's just it'll throw off data points and noise that isn't worth it. So we really are resisting to put out, you know, TCV kinds of metrics. Maybe we'll start next year. We'll, you know, certainly it's on our mind. We understand you guys would like to see more in the way of momentum and so forth, and we should work towards providing that transparency, and we will. But yeah, we feel really good about the number of opportunities, and in general, the TCV of those opportunities being on an uptick is what I'll say in general. On supply chain, I wish I was as optimistic about 2023 being back to normal. I mean, I'm not seeing it, but you know, again, you know, the way we think and the way we behave and the way we act when we're out with customers is it sort of doesn't matter, right? We aspire to being a company that can grow 15%-20% volume every year, and that's the company we wanna be, and we're gonna, you know. That's sort of the attitude I want my team to have is break through walls and find a way to get it done for your customers. Great. Thanks so much. Thank you. Thanks. You bet. Our next question comes from Matt Niknam with Deutsche Bank. Please go ahead. Hey, guys. Thank you for taking the question. Maybe take a step back, more of a macro question, and maybe beyond the question around fleet that was brought up before, but more broadly, what's the latest you're hearing from your customers just in terms of their approach to a seemingly slowing macro backdrop? Any sort of changes you're seeing in terms of tone or pullback in their plans? I have a one follow-up. Yeah. Hey, Matt, and thanks for the question. You know, really, again, not hearing a lot of sort of knee-jerking or changes in planned projects and approaches. I mean, that doesn't mean there isn't one or two here and there with a company that might have, you know, some specific circumstances surrounding them, that of course there's always gonna be that. But those, the fact that there are so few of those, you know, exception proves the rule that most seem to be wanting to proceed, in some cases where it's cost efficiency drivers with IoT, there's actually an acceleration, that one feels. So the larger constraint seems to be supply chain. We remain relatively, you know, sort of business as usual in that sense, relatively bullish on our own in terms of how we're thinking about our investments, et cetera. We're not really massively changing. Now, look, if something next 2, 3, 4 quarters or something, you know, macro, China, Taiwan, who knows what, you know, we'll have a different conversation, but today we're not really feeling significant changes from the macro. Got it. The follow-up, more maybe for Paul. In your Adjusted EBITDA calc, so I know you guys typically will adjust transformation expenses and then acquisition and integration-related restructuring costs as well. I'm just wondering, you know, acquisition and M&A maybe aside because those are tied to specific deals, but transformation expense typically has been $7 million-$9 million the last two years, and you're already at about $4 million year to date. Any color in terms of what inning you're in in terms of these initiatives, how long we could anticipate these costs occurring over the next couple quarters? Thanks. Yeah. Yeah. I would say we're getting into the later innings of this ballgame. We do expect these to start to level out or even start to decline, and then into next year would be the likely last year you'll see these. I don't wanna say which quarter that will be. It could be trailing to the end of the year, but for the most part, you can expect 2023 we like to be done in this ballgame. Okay, great. Thank you. Thanks, Matt Niknam. Thanks. Thank you. There are no further questions at this time. I'll hand the floor back to Romil Bahl for closing remarks. All right. Thank you very much. We appreciate your interest in our investor call, our earnings call here. We will speak to you on the next one. Thank you very much. Bye-bye. Thank you. Thank you. This concludes today's call. All parties may disconnect. Have a great day.