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PowerFleet, Inc. (PWFL) Q2 2022 Earnings Call Transcript

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PowerFleet, Inc. (NASDAQ: PWFL)
Q2 2022 Earnings Call
Aug 08, 2022, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good morning. Welcome to PowerFleet's second quarter 2022 conference call. Joining us for today's presentation is the company's CEO, Steve Towe; and Global Controller, Joaquin Fong. Following their remarks, we will open the call for questions.

Before we begin the call, I would like to provide PowerFleet's safe harbor statement that includes cautions regarding forward-looking statements made during this call. During the call, there will be forward-looking statements made regarding future events, including PowerFleet's future financial performance. All statements other than present and historical facts, which include any statements regarding the company's plans for future operations, anticipated future financial position, anticipated results of operation, business strategy, competitive position, company's expectations regarding opportunities for growth, demand for the company's product offering and other industry trends are considered forward-looking statements. Such statements include but are not limited to the company's financial expectations for 2022 and beyond.

All such forward-looking statements imply the presence of risks, uncertainties and contingencies many of which are beyond the company's control. The company's actual results, performance or achievements may differ materially from those projected or assumed in any forward-looking statement. Factors that could cause actual results to differ materially could include, among other SEC filings, overall economic and business conditions, demand for the company's products and services, competitive factors, emergence of new technologies and the company's cash position. The company does not intend to undertake any duty to update any forward-looking statements to reflect future events or circumstances.

Finally, I would like to remind everyone that this call will be made available for replay in the investor relations section of the company's website at www.powerfleet.com. Now, I would like to turn the call over to PowerFleet's CEO, Mr. Steve Towe. Sir, please proceed.

Steve Towe -- Chief Executive Officer

Thank you, operator, and good morning, everyone. We appreciate you taking the time during PowerFleet's second quarter 2022 earnings call. I'd firstly like to say thank you to those of you that joined our virtual investor day in mid-June. Your positive energy and feedback were very encouraging to us.

The leadership team and I appreciated the opportunity to share with you PowerFleet's enhanced vision, our growth drivers, go-to-market strategy, software NII roadmap, all of which we are executing on well as you'll hear a lot about it this morning. If you haven't had the chance to listen to our investor day, I encourage you to visit the investor relations section of our website to access the content. As you can see from our results, during the second quarter, we built on the momentum we established in Q1 and delivered solid sequential and year-over-year growth, the latter of which is quite impressive given the year-ago comparison includes significant one-off product revenue. Moreover, the $34.6 million in total revenue this quarter marked a 10-quarter high for PowerFleet and third successive quarter where we've overachieved external consensus estimates.

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The revenue mix is also encouraging as we embark on our journey for high-quality recurring SaaS revenues at the heartbeat to our company. Importantly, we were able to achieve these milestones despite the ongoing macro headwinds and supply chain issues affecting our industry, many of our competitors and companies globally. Our impressive topline performance in Q2 was driven by further commitment from notable customers like Ford, Volvo, Nestle and Macpac. While the improvement in our bottom line reveals the early benefits of our rationalization initiatives that are enhancing our organization's efficiency and our profitability.

Taken together, we realized very positive improvements in both operating expenses and our key profitability measures in the second quarter, all of which exceeded external consensus, estimates and expectations. Overall, the leadership team and I are very encouraged by the progress we're making, the execution we're delivering and the results we're seeing. Before I dive into our operational highlights and outlook, I'll turn it over to our principal finance officer, Joaquin Fong, to cover our financial results for the second quarter of 2022. Joaquin?

Joaquin Fong -- Global Controller

Thanks, Steve, and good morning to everyone on the call. Turning to our financial results for the second quarter ended June 30, 2022. Total revenue was a 10 quarter high of $34.6 million, which is up 4% from the first quarter of 2022. As Steve alluded to, we're really encouraged by the composition of revenue in the quarter, which is characterized by higher SaaS and high-quality recurring revenue compared to the prior quarter and Q2 of last year.

Along that line, high margin recurring and services revenue was $19.8 million or 57% of total revenue. This was an improvement on a dollar basis compared to $18.1 million or 54% of total revenue in Q2 of last year. Product revenue, which drives future services revenue, was $14.8 million or 43% of total revenue. This compares to $15.5 million or 46% of total revenue in Q2 2021.

Gross profit was $16.2 million or 47% of total revenue compared to $16 million or 48% of total revenue in the same year-ago period. Service gross profit was $12.7 million or 65% of total service revenue, an improvement compared to $11.4 million or 63% of total service revenue in Q2 of last year. Product gross profit was $3.5 million or 23% of product revenue compared to $4.6 million or 30% of total product revenue in the same year-ago period. The sequential improvement in product gross margin in Q2 2022 reflects the initial success we're having managing PPV challenges as well as the reengineering of certain products to enhance our margins.

We continue to navigate through the global supply chain and electronic components issues and deliver on our customer commitments, supplying products and solutions that they rely on for their business operations. As we progress through the balance of 2022, we anticipate product gross profit to incrementally improve as we realize future benefits from our operational and product reengineering initiatives. Looking at our expenses. Total operating expenses were $17.8 million, down from $18.1 million in the prior quarter, but up from $16.2 million in Q2 of last year.

The sequential decrease reflects the initial impact of our ongoing radialization efforts, which will be reducing our annual operating expenses by approximately $5 million over the next 12-month period. Looking at our profitability metrics. Loss from operations improved by $2.2 million or 58% to $1.6 million compared to a loss of $3.7 million in the first quarter of 2022. It's worth noting that a significant portion of our loss in the quarter was related to PPV and foreign currency impact.

Based on our current visibility and success with our rationalization efforts, we expect to cross over to profitability on an operating basis in the first half of 2023. GAAP net loss attributable to common stockholders totaled $1.3 million or $0.04 per basic and diluted share. This compares to GAAP net loss attributable to common stockholders of $2.6 million or $0.08 per basic and diluted share in Q2 of last year. Non-GAAP net income, a non-GAAP metric, totaled $2 million or $0.06 per basic and $0.05 per diluted share compared to non-GAAP net income of $1.4 million or $0.04 per basic and $0.03 per diluted share in the same year-ago period.

Adjusted EBITDA gain, a non-GAAP metric, stayed consistent at $2.8 million compared to adjusted EBITDA of $2.8 million in the same year-ago period. At quarter end, we had $18 million in cash and cash equivalents and $38.5 million of working capital. That concludes my prepared remarks. Steve?

Steve Towe -- Chief Executive Officer

Thank you, Joaquin. Today, PowerFleet has more than 600,000 recurring subscribers, long-standing customer relationships with some of the largest companies in the world, tremendous industry experience and proven technology that we're actively deploying globally. We have a significant opportunity to gain further wallet share with our 8,000 enterprise customers and to increase the role we play within these organizations. And not only do we have a tremendous upsell opportunity in front of us, we have the capabilities to operate demanded market that is growing at north of 20% annually.

With our customer base along with the breadth of portfolio that we have across our geographies and the end markets we operate in, we are confident we can capture significant new logos, establish new recurring revenue streams and grow our driver base substantially in the years ahead. Now that I've highlighted the broader opportunity, let me dive into the increasing opportunity we're seeing currently today in our key regions and the traction that we're realizing. In the U.S., a market PowerFleet is operating for more than 20 years, we delivered a much improved 12% growth in the first half of the year, driven by building demand from our industrial customers. In addition to the robust double-digit growth, our Industrial fleet segment recently surpassed 3,000 customers, which is not only a testament to our commitment to innovation, but also a validation that the industry is seeking enterprise technology solutions to drive improved safety and productivity across business operations.

This milestone also represents tens of thousands of workers that we're working with to keep safe and help mitigate risk in the workplace. Warehouses and manufacturing facilities are crucial link in the supply chain and becoming increasingly complex workplaces where machines and people are working alongside each other in a fast-paced environment. As you heard during our investor day, our team has been focused on how data can help customers improve safety operations and lower risk in material handling facilities while balancing increased demand and workforce shortages. We're excited by the momentum and market acceptance of our latest products in our pedestrian safety air arena, further driving our success as a best-in-class solution provider, utilizing artificial intelligence and data science.

As the industry changes in response to continued challenges, our technology plays a crucial role in modernizing our customer software in support of their digital transformations. We look forward to further accelerating the innovation of our software and data solutions, and we remain fully on track to deliver our single acquired software interface and our new enterprise modular SaaS approach in Q4 of 2022. The growth we generated in the U.S. in the first half of 2022 is indicative of the untapped potential in the region.

We're driving consistency and enhancing the profitability of our U.S. business and has been well positioned to be the leading growth vector for PowerFleet in the years ahead. From a market synergy perspective, there's lots of capability today that live and exists with our customers and verticals in our global markets, which we haven't yet bought to the North American market with advanced solutions in car leasing, insurance, electric vehicles and connected car. The team is actively working to bring these products and relationships to the U.S.

and are highly energized by the productive conversations we're having with customers and partners alike. We allocated some of our cost savings from the rationalization efforts and have now put in place a dedicated sales team to attack the U.S. market with the point of base solutions. We're seeing great early traction and expect to meaningfully penetrate the U.S.

market with the point of solutions in 2023. To that end, this initiative is part of a broader reinvigorated renewals and upsell program that we launched last month across our global customer base. Our Israeli operation is an incredibly important piece of our go-forward strategy. With a 20-year history, tens of thousands of subscribers and a 40% market share in the region, we're bringing to market new technology solutions that are not yet released anywhere else in the world.

Our Israeli Innovation Center, we use the creative and innovative part of the operational part we drive in all the key geographies. Despite the foreign currency hit we reported in Q2 due to the strengthening U.S. dollar, our Pointer of Israel operation is performing exceptionally well. We've seen IoT solutions continue to gain momentum particularly with IoT-enabled defibrillators and core train solutions for pharma products.

Last week, we announced that we expanded our IoT technological services to MDA, Israel's only national blood and medical emergency service, for more than 800 IoT-enabled defibrillators countrywide throughout Israel. After a successful initial deployment in 2021, the solution will be applied at additional municipalities throughout Israel. MDA plans to install its IoT-enabled defibrillators with Pointer by PowerFleet Technology in more public and commercial spaces such as parks and high-rise buildings to save more lives. This additional order signifies the value and results MDA has received since implementing our technology, not only to ensure life-saving equipment is available to more locations, but also to help organizations manage time-critical emergencies most effectively.

We see significant opportunity to bring these solutions at pace to all of our key geographies very soon. In addition to the leading edge solutions, we have already brought to market in the expanded IoT arena. We expect to announce some very exciting strategic innovation partnerships in Q3 and for the next-generation IoT ecosystem. In other international markets, we're actively working to introduce the IoT solutions to Dubai and the United Arab Emirates, relatively untapped markets that have expressed deep interest for our solutions.

In parallel, we're seeing strong growth in Mexico and Argentina, and the team is focused on driving even more growth out of these regions. More broadly, we're finalizing strategic plans to establish a larger footprint in Europe in 2023. As you've heard, we're gaining momentum in our key regions and go-to-market strategy execution. In summary, PowerFleet's transformation is well underway.

Our initiatives over the last six months are already yielding visible returns. The $5 million annualized cost reduction and efficiency program we articulated in detail at the investor day is being executed to time with high levels of precision. Our business is starting to optimize and now we're starting to hit our stride. Our plan is supported by a solid cash position and available resources that provide sufficient runway to execute our growth strategy.

We entered the third quarter with a record pipeline of opportunities that we are converting at an escalating pace. We also entered Q3 in the second half of the year in a strong position supported by building customer engagement and that growing pipeline as well as several strategic opportunities, which are moving forward nicely. We anticipate that the second half of 2022 will bring more momentum, building on the very solid first half of the year and position us for higher growth inflection in 2023. As we look ahead, the team remains very focused and is executing well on driving our own transformation and accelerating our vision.

The successful evolution of the strategic value-creating roadmap we introduced at our investor day will create a highly scalable, repeatable and profitable global organization. That concludes our prepared remarks. Now, I'll turn it back to the operator for Q&A.

Questions & Answers:


Operator

Thank you. [Operator instructions] Our first questions come from the line of Mike Walkley with Canaccord Genuity. Please proceed with your questions.

Mike Walkley -- Canaccord Genuity -- Analyst

Great. Steve, congrats on the solid Q2 results and the recovery in the hardware gross margins. Could you just delve into the hardware gross margin a little more? Was this some favorable mix maybe improving supply input costs or other factors? I know you're working on the reengineering, but I assume that would be more later in the year.

Steve Towe -- Chief Executive Officer

Yeah. Thanks, Mike. Good question. And we've started to get some of the reengineering quicker than we expected, which was great.

And then also, I think we've done a better job of choosing the business that we've taken from a profitability perspective. And also, we've been quite robust internally around making sure that we get a fair price for the costs that we are entertaining today. So the team is always looking out for the components of the best possible price. Even last week, we we were quoted a 50x price on a component, so the madness continues.

But I think overall, we set it as a key KPI to get that balance back going and we're very, very pleased that we've moved from 16%, 17% up to 24%. So not one factor, quite a few that adding to it together.

Mike Walkley -- Canaccord Genuity -- Analyst

Great. And just speaking on that supply, how is that? Does it impact any sales this quarter? And how is it looking maybe easing in the second half of the year?

Steve Towe -- Chief Executive Officer

So I get asked this question, is it getting better anytime soon? And I think the answer is, we can't give a solid answer that it's going to get better. I think from our perspective, we haven't lost any revenue or have not taken any revenue that we wanted to take in the quarter. We have looked at some deals that we didn't feel were the right deals to do from a high-quality revenue perspective. And to all of that effort we talked about, again, that will continue.

And I think from our perspective, we look to improve again next quarter off the back of malls that reengineering coming to play, but I don't think we're particularly seeing market conditions calm down. And I think if you look at the industry and some of the notes that competitors have sent out, we seem to have fared very well in comparison to some of those challenges. So we'll keep on doing what we're doing, and hopefully, we can continue that trajectory back to historic levels. But I'm not going to say, it's going to kind of all get better within the next three to six-month period.

Mike Walkley -- Canaccord Genuity -- Analyst

Great. Thanks. And then one last question from me, and I'll jump back in the queue. Just on the pace of this $5 million savings, can you kind of remind us how that's focused and where it hits the P&L spread in gross margin and opex? Or is it more just opex focused in terms of that $5 million savings? Thank you.

Steve Towe -- Chief Executive Officer

It's a bit of both. And some of them are quicker wins in terms of what we can do with freight and some of the efficiency savings. And then some of it is a bit longer term in terms of systems being introduced into the business, which is why we're saying it was a 12-month plan to get to that full operational run rate of the five-year reduction. So there's some in product gross margin, there's some in service gross margin in terms of the way that we're kind of managing our relationship with our suppliers and some of the synergies of bringing Pointer and PowerFleet together from a kind of economy of scale perspective, and then there's some opex savings as well.

But we've, as you've heard, we've reinvested some of that, living within the envelope that we had in terms of putting more people on the street from a go-to-market perspective and some more kind of data science software folks as well in the development.

Mike Walkley -- Canaccord Genuity -- Analyst

Great. Thanks for taking my question, and look forward to some of those new products coming out in Q4.

Steve Towe -- Chief Executive Officer

It's exciting.

Operator

Thank you. Our next questions come from the line of Scott Searle with ROTH Capital. Please proceed with your questions.

Scott Searle -- ROTH Capital Partners -- Analyst

Hey. Good morning. Thanks for taking my question. Steve, nice job.

First full quarter out of the gate here, starting to see some of those improvements, particularly on the gross margin front. Maybe looking into the back half of this year, it sounds like they were far from perfect visibility, but I'm wondering if you could give us some idea in terms of how you're seeing sequential visibility to product ramping into the second half of this year from a sales perspective? And also what you would think the exit rate for the product gross margins would be this year? And kind of what you're targeting for next year?

Steve Towe -- Chief Executive Officer

So I think if you look at the last three sequential quarters, we've delivered solid growth. As we said, this is a 10 Q high, which is important to us as a business that we're doing better than we've done before. We expect momentum to continue. So I think Q3 was quite challenging for the business in terms of revenue last year, but we're hopeful that the rhythm that we're now in.

We'll continue in the back half. And we've brought in a new go-to-market team. We brought in Patrick, our CRO, and a lot of what's going on in terms of lead generation. So the pipeline is getting stronger.

We're not kind of so reliant on one individual large deal or one customer that makes or breaks the quarter. That was the other kind of, I think, interesting dynamic within this quarter. Plus on top of that, the services move. So the subscription revenue is coming through really strong.

So we expect it to continue. As I've said, I think 2023 is going to look a super year, but we expect this momentum to continue through the second half. In terms of product gross margin, then I'd want to get north of 25% in this year. And then I would expect we get back to the 30% plus margins in 2023 that we've experienced in the past.

Scott Searle -- ROTH Capital Partners -- Analyst

Great. Very helpful. If I could follow up, Steve, just on the pipeline. I don't know if you want to give a quantitative metric, but could you qualify at least in terms of what you're seeing, how strong it is relative to recent history? And a quick question on the opex front.

R&D was down quite a bit sequentially. I'm wondering -- I know that there are some bodies getting moved around in terms of how you're allocating resources, but I'm wondering what a more normalized number should be? Was there software capitalization or anything unusual that was in the second quarter results?

Steve Towe -- Chief Executive Officer

Yeah. So in terms of that one, I'll let Joaquin give you some detail, but we were able to capitalize some software on some new products that came to market. So we pretty much where we want to get to, relatively keeping opex flat, but revenue obviously growing at pace, which gives us the expanded EBITDA. So Joaquin, do you want to add anything on the development side?

Joaquin Fong -- Global Controller

I think, as we invest in product development, you can continue to see the capitalization of the software. But as we kind of develop the products and you'll see that start to tail off in the future.

Steve Towe -- Chief Executive Officer

Working within the envelope, but as you can see, we're moving things around to get the right people and the right cost into the future areas that we want to invest in.

Scott Searle -- ROTH Capital Partners -- Analyst

Steve, and then just on the pipeline front and if I could throw in there as well, right, in terms of the evolution to analytics and AI and the monetization on that front. Any color you could provide on the front? It sounds like, look, we've got the new single pane of glass in the fourth quarter, but in terms of some of those opportunities, I don't know if you're willing to start to quantify that opportunity as we get out into late '23. Thanks.

Steve Towe -- Chief Executive Officer

I think it's too early to quantify that. I think once we talk through our 2023 plans, we'll be able to quantify a little bit more. I mean in terms of pipeline, we're north of 15% higher in, what I call, qualified pipeline from this time last year. And in terms of the kind of monetization, so we'll be launching the modular first new module, and by that time, we have already carved out the solutions into the modular categorization.

So what that means is people will be able to buy the solutions based on that business need that we talked about earlier in the investor day with the first updated kind of true, I think, AI-led module being available in Q1 next year. And as we start to kind of ramp that up and we were able to sit down and work through that upsell program that we talked about, the renewal program that we've already started to put in place, then I think another quarter out and we can give you some more concrete views on what went and how from a volume perspective.

Scott Searle -- ROTH Capital Partners -- Analyst

Great. Thanks so much. Nice job.

Steve Towe -- Chief Executive Officer

Thank you.

Operator

Thank you. [Operator instructions] Our next questions come from the line of Gary Prestopino with Barrington Research. Please proceed with your questions.

Gary Prestopino -- Barrington Research -- Analyst

Hey. Good morning, everyone. Steve, when you talk about trying to reengineer these products, could you maybe dwell into that a little bit in terms of getting the gross margin up exactly to the extent you can talk about it. What are you doing on the reengineering side?

Steve Towe -- Chief Executive Officer

Yeah. So in very simple terms, there's a number of components that obviously have been engineered into our hardware solutions over the years, and some of those are older than others. And where some of those have started to become end of life and that end of life has been accelerated. The cost of those components in the build has gone up astronomically.

So what we've looked to do is to take our volume solutions and understand where there's optimization efforts in terms of the functionality, in terms of those components where there are new more advanced components that are more in screen, and it's obviously a cheaper price. And the team has just doing an actually bang-up job in terms of driving that change. And it was -- we're kind of six months into that change. We've got another probably six months to go.

But ultimately, what it will lead is to a more cost effective, from our perspective, units to put out in the market, which obviously helps the gross margin and bring it back and maybe exceed where it was previously.

Gary Prestopino -- Barrington Research -- Analyst

OK. And then in terms of your subscriber base, could you give us some idea of the growth sequentially?

Steve Towe -- Chief Executive Officer

Joaquin, do you have that available? About 10%?

Joaquin Fong -- Global Controller

Yeah, it's about 10% from where we were sequentially.

Gary Prestopino -- Barrington Research -- Analyst

Yeah. OK. And you're over 600,000 now, right?

Steve Towe -- Chief Executive Officer

Correct.

Joaquin Fong -- Global Controller

Yes.

Gary Prestopino -- Barrington Research -- Analyst

OK. And then just a couple of more questions here. I'm now realizing it's early in the game here, but with the new sales team and the new philosophy and all that, but of the 3% total revenue growth that you had in the quarter or really from products, I suppose that, that would be where you would do some upsells and cross-sells. Could you give us some idea of how that's going or is it too early to say right now?

Steve Towe -- Chief Executive Officer

No. I think in terms of the new solutions, I mean the good news about the growth in the first half, it hasn't come from introducing new solutions to new geographies. And that's where we're very excited about that growth opportunity, particularly in the U.S. So the 12% half one growth was -- a lot of that was in the industrial segment of the market, the traditional segments where we've launched the pedestrian warning system.

And I think we're getting a better level of sales execution across in the U.S. across the board, basically in industrial and logistics. We're also seeing some strong growth in subscription revenues in our other territories. So the U.S.

is the only territory that we have where we sell on a hardware plus services model, everything else is on services based. So the fleet management solutions that were on the Pointer side of the house, I think most of the geographies are growing very, very nicely, and that is all subscription based. So it doesn't give you the volume, but it gives you the quality in terms of that high margin recurring revenue. And as we kind of look at the U.S.

market and the demands of that subscription versus the hardware model, we'll continue to evolve that over time. And where we're now really putting our foot on the accelerator for half two is those conversations where we have logistics customers or industrial customers in the U.S., all of which have, they have connected car opportunities. They have light commercial vehicle opportunities. There a lot of fleets are looking at the move to electric in the buses and all that kind of stuff.

So there's just a huge opportunity for us. And I think what's really energized us is, we brought in some sales folks that have industry experience, and without any kind of incentive from us, they've all come and said, your solutions are as good as it gets out in the market. And they're very pumped up about what we can do against the competition in those spaces. So it's a bit early in terms of the quantification of that.

These guys need to get productive. That will take three to six months. But if you look at 2023, and we should be able to take a very dominant position in the U.S. market across the board.

Gary Prestopino -- Barrington Research -- Analyst

OK. And then just a couple of questions on the balance sheet. Looks like from year-end, your cash is down almost $10 million, maybe let's call it $9 million. It looks like you paid down some debt about $5 million.

Are there any more debt maturities coming up? And then the other question I would have is, it looks like the inventories are up about 27%, 28% from December. And I would assume that's just because of that strong pipeline that you've talked about and the back half of the year should be pretty strong on a product basis.

Steve Towe -- Chief Executive Officer

I'll answer the second part and I'll ask Joaquin to answer the first part for you. So yes, you're right. It's in terms of the strong pipeline, but also, we're making sure that we invest in some inventory with the inflation being so crazy as those prices are still continuing to rise. So we believe it's prudent in order to maintain and grow gross margins to get enough stock through the door and that was a conscious decision.

And yeah -- but as we look into 2022 second half, as we look into the first half of 2023, which we're getting more visibility on longer-term pipeline, which is great, then we felt that was the right thing to do. Joaquin, do you want to take the last part?

Joaquin Fong -- Global Controller

Sure. We do have the quarterly maturities on the long-term debt.

Gary Prestopino -- Barrington Research -- Analyst

Yes. What are those quarterly maturities then? I mean, I'm trying to get idea. Cash in, cash out?

Joaquin Fong -- Global Controller

Yes, approximately around $1.5 million.

Gary Prestopino -- Barrington Research -- Analyst

OK. So quarterly maturities of $1.5 million. OK. All right.

Thank you very much.

Operator

Thank you. There are no further questions at this time. I would now like to turn the call back over to Steve Towe for any closing comments.

Steve Towe -- Chief Executive Officer

OK, everybody, thank you for the insightful questions and thanks again for everybody for joining us today. We are very excited about the future. We're a work in progress, but I think we're making very good progress in the six, first six months of this year, especially with the change that's taking place in the organization, and we see strong momentum on all of our metrics and vectors. So we're very encouraged and we'll continue to work hard.

We look forward to speaking to you again soon. Take care. Thank you. Bye bye.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Steve Towe -- Chief Executive Officer

Joaquin Fong -- Global Controller

Mike Walkley -- Canaccord Genuity -- Analyst

Scott Searle -- ROTH Capital Partners -- Analyst

Gary Prestopino -- Barrington Research -- Analyst

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