Camp4 Therapeutics Corp Q2 FY2023 earnings call

• Revenue growth: Second quarter results exceeded expectations with approximately 13% sequential growth in consolidated revenue, driven by Software and Subscription Services growth (up 13% sequentially and 7% year-over-year, representing 61% of total revenue). • Customer conversions: More than 50% of eligible customers have converted, including notable customers like Localiza and Trimble. Total global subscribers increased 9% sequentially and 32% year-over-year to $1.3 million. • New initiatives: Made strides in smart trailer and video-based safety solution offerings. Completed major update of corporate website and branding, with website visits increasing 30% since upgrade. • CFO update: Kurt Binder's last day is tomorrow, Cindy Zhang will serve as interim CFO effective tomorrow.

Software and Subscription Services revenue in the second quarter was $44.5 million, up approximately 13% sequentially and 7% year-over-year, representing 61% of total revenue. Telematics Products revenue in the second quarter was $28.3 million, a 13% sequential increase and a 25% year-over-year decrease. Within Telematics Products, OEM products revenue totaled $13.7 million in the second quarter, up from $10.5 million in the prior quarter but down from $15.9 million in the same quarter a year ago.

• The Company is maintaining its policy of not providing quarterly guidance as visibility into product shipments remains difficult. • Expect to achieve low- to mid-single-digit percentage sequential revenue growth in the third quarter, led by Software and Subscription Services.

Q: Can you update us on just the supply chain improvements that helped in the quarter? And how does supply look to support the conversions in future quarters?

A: Yes. We saw modest improvement in the quarter, with progressive improvement expected in the back half of the year. Made a few redesigns in products for better BOM improvement. Still working hard on supply chain to support conversions.

Q: Can you just help us parse out between the two segments the low- to mid-single-digit sequential revenue growth expectation for the third quarter?

A: Growth led by Software and Subscription Services revenue, with expectation of more conversions. Sales force to continue driving additional conversions and new logos, with all new sales focused on Software and Subscription Services.

Q: I just wanted to be clear on the conversions. So I heard that you had finished the conversion by, I think, year-end, and I also heard maybe you get to 70% converted. Can you just clarify which ones accurate?

A: Ultimately, Software and Subscription Services as a percent of revenue will increase to 70%, and by the end of the year, expect to get to 100% of base converted to a subscription model.

Q: On the supply constraint side, it sounds like things are getting better on that front. I'm wondering if you were still constrained in the quarter in terms of what you ended up leaving on the table. And as you're looking out to that mid-single-digit sequential growth what do you actually have visibility to in terms of what you can service?

A: Could have done more revenue with stronger supply chain, but did see significant increase in units shipped. Expect progress in third quarter. Backlog at all-time high, and Telematics Product segment could have done more than current quarter based on historical run rate.

Q: On the Software and Subscription Services front was a big sequential uptick in the quarter. Are there any one-time events that are kind of mixed in there to kind of calibrate us on that front? And also on that $1.3 million subscription figure that you have now, is it possible to give us an idea in the quarter the incremental net adds, how many of those were from conversions versus non-conversions?

A: No one-time items, benefited from new logos and conversions. Subscriber net adds split probably 80-20, 80% from conversions and 20% from new logos