PowerFleet, Inc. (AIOT) Earnings Call Transcript & Summary

Good day, and welcome to PowerFleet's Investor Fireside Chat. [Operator Instructions] It is now my pleasure to turn the floor over to your host, David Wilson, Chief Financial Officer. The floor is yours.

Thank you. Welcome, everybody, to today's call. I'll start off with the safe harbor statement, and then we can dive into the content. This presentation contains forward-looking statements within the meaning of federal securities laws. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements. For example, forward-looking statements include, without limitation, statements regarding the integration of our MiX Telematics businesses and the ability to recognize the anticipated synergies and benefits of our business combination with MiX Telematics. These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees and are subject to risks, uncertainties and other factors described from time to time in our periodic filings with the SEC. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by those forward-looking statements. The forward-looking statements included in this presentation are made only as of the date of this presentation and unless otherwise required by applicable law, we assume no obligation to update any forward-looking statements and expressly disclaim any obligation to do so, whether as a result of new information, future events or otherwise. Now with the boilerplate disclosure shared, we thought it was important at the outset to share an update on the restatement process, which despite no change in the headline nature of the items, it's proven to be a more time-consuming process than I had initially expected. We previously announced the company is preparing a restatement of the financial statements for the 2021 and 2022 fiscal years for each of the interim players during 2021, 2022, and 2023 fiscal years, which has delayed the filing of its 10-K to the '23 fiscal year. As you may recall, the restatement arose from a technical issue related to the historical accounting treatment of the redemption premium associated with the company's Series A convertible preferred stock, which was fully redeemed upon the closing of the company's business combination with MiX Telematics on April 2, 2024. This is the central issue we are working through and there is no allegation of any accounting propriety or misconduct. Although we had initially targeted the end of April for the filing of the 10-K, the comprehensive review process we are undertaking with our accountants that occasioned a slight delay in our original plan table. The company continues to work diligently to finalize the restatement and anticipates filing the 10-K within the week. We want to make clear that the extensive review we have conducted has confirmed that the restatement will have no material adverse impact on previously reported revenue, cash flow or adjusted EBITDA. With all that said, I'd now like to formally kick off today's investor presentation and introduce Steve Towe to start the proceedings. Steve?

Thanks, David. Good day, everyone. I'm delighted to welcome you all to today's update. Firstly, I would like to give you visibility, if we could go to the next slide, of the highly talented and passionate team I'm grateful to have alongside me today, a highly experienced truly international set of professionals capable of driving high growth in a global business. They all share one common trait, a track record in delivering successful outcomes. I'm genuinely so impressed with the collaboration, the energy, and the focus of the new combined leadership group. Today, you will get to hear from the team members who are responsible for delivering each aspect of the operating plan. Also, while we discuss new team members, we are very excited to announce the appointment of Andrew Martin of Private Capital Management to the Board of Directors today, a significant shareholder who will add invaluable support and guidance as we steer the company through its next phase of evolution. Next slide, please. The purpose of the update is to give us all further insights into what we believe is a compelling value creation opportunity for our shareholders as a result of the combination. We will share why we believe there is a stunning opportunity to deliver value for both near and midterm for our shareholders. We will dig deep into the differentiated Unity platform and data ecosystem that underpins our ability to take a global market leadership position. We'll explore the growth story and the acceleration of that growth story as we scale out our capabilities further. And we will give a further granular update on the progress of the major EBITDA unlock that underpins our future investment and intrinsically support our path to Rule of 40 performance and beyond. Next slide, please. You may ask why we are starting the presentation with a slide on values. We want to articulate how we show up, what is our DNA, and we believe it is not only just highly relevant for our colleagues and customers, but also for our shareholders. For example, people have said to me recently, why not wait to do this update, give yourself some time? You're only 30 days in. Well, our DNA is to be brave and highly transparent in what we do. We break things down into deliverables within a 2-year period. We are bold and stretching in our objectives. We articulate clearly and simply what we're going to do, and we look to be measured against those objectives in the timelines with which we've set out. It can be difficult for shareholders to sometimes follow through underlying business performance on an individual quarterly basis in a high-velocity transformation phase of the business, where the leadership team is making significant change to underpin the future success of the strategy. It's critical, therefore, in our opinion, that we communicate well and regularly update our shareholders on what we're doing, why we're doing it and when things will normalize. We've successfully implemented a private equity-style transformation playbook in the last 2 years, and we will continue with a similar mantra for the combined business over the next 12 months in particular. We look to build incredible trust and confidence with our shareholders. When I first arrived in the public company arena, I was surprised by the high level of second-guessing that seems to take place on the true meaning of the messages we've articulated. That's exhausting, in my opinion, for all parties. Therefore, we look to minimize that through direct, transparent and highly consistent communication. We'll be explicit in telling you what we're going to do. We will tell you what's going well, but more importantly, we will tell you what we need to improve and how we will do it. In such a dynamic transformation, there is undoubtedly going to be bumps in the road as we go, and we will not hide from the challenges we face, and we'll be clear in how we will address them. We deliver with speed and with high standard. Our track record of delivery against our strategic objectives in the first 2 years of the PowerFleet transformation is undeniable, and that is driven by a high level of accountability and responsibility from the entire business. Having done 4 successful tours of duty in top-tier growth private equity environments, I know incredibly well the vectors needed for sustained and accelerated growth, and that starts with a growth mindset across the business. Being candid and reflecting on the conversations with analysts and shareholders over recent months, it feels like there's good buy-in from the investor community on the EBITDA expansion element of the plan. Why? The right behaviors and outcomes have been clearly demonstrated in both MiX and PowerFleet over a sustained period of time. Now there is a clear desire to understand how we will deliver consistent double-digit and beyond growth, something we have yet to show consistency in the performance of both businesses. Today, we will clearly lay out the plan we've embarked upon to achieve accelerated growth, which will start to flow through once the initial growth work from the integration has been successfully completed. Finally, for us, success always begins and ends with relationships with customers, colleagues and shareholders. Next slide, please. The combined business is a new and powerful beast in the industry. Coming to PowerFleet, I was acutely aware that in order to execute successfully the vision and strategy for the company, we needed scale and reach to compete at the very top table of the industry. The Heritage PowerFleet business could not achieve that on a stand-alone basis. Following the combination, we now have that: super strong recurring revenue base, solid gross margins, a wonderful customer base with rich opportunity. We have significant profitability expansion capabilities with an ability to accelerate underlying positive free cash flow generation. As I say, we now have a golden ticket to the race as the industry evolves at pace to be an AI-led mission-critical data insights arena. We have all the key ingredients we need, we can be aggressive, we can be brave, and we can punch hard. Next slide, please. What underpins our uniqueness and ability to win that race is our Unity data highway and the monetization opportunities it delivers. I grew up in the industry for 16 years, and I moved to what I refer to as high-growth SaaS finishing school for 6 years in the retail tech industry. On returning, I saw a similar great opportunity for consolidation that's seen in a lot of transformation taking place across the supply chain technology industry. This transformation is driven through the consolidation of data to drive customer acquisition through the ability to consolidate all of the millions of already installed devices and sensors, sending data to our customers today, then harmonizing that data into a single and consistent data set and then allowing customers to consume that data in whichever format they like, desktop apps, mobile apps or integrated into other business operating systems to allow for digital transformation and automation for our client base. The data we produce as a telemetry provider today is valuable, but often difficult to consume and understand and therefore, its value has become commoditized. The advancement of AI and data science is key for bringing simplicity and prediction to that data to allow an organization to make business-critical decisions with their change programs and ultimately achieve their strategic goals. This ultimately offers us a game-changing opportunity to realize the true value of the data we provide to our customers. We, therefore, can play a truly true and highly credible mission-critical role in unifying business operations and significantly improved wallet share from our customer base. This is the Unity strategy. Next slide. We have a laser focus in everything we do. We employ an eye-of-the-tiger approach to nonnegotiable deliverables throughout our business. We avoid the shiny lights of the next big thing to stay true to our North Star goals. We will be sharing with you in detail today the areas of absolute focus to hit our 2-year objectives and also support the next phase of scale and growth after that. Firstly, demand for Unity's data highway capabilities are high. Customers are wanting a the single pane of glass and visibility of their operation with harmonized data from all the device center and OEM data inputs available to them, both in the warehouse and over the road. Customers are keen to drive automation and enhance data through a more limited number of operating interfaces. There is a real thirst for combining data sets to make decisioning capability more intuitive and far more effective. So we need to continue to evolve our data integration capabilities. We must continue to invest to scale out in these fundamental piece parts of Unity to message -- manage and match rapidly growing demand. And we need to offer these capabilities to our MiX customer base as soon as we possibly can. Excitement and opportunity is high post the combination, and we need to capitalize on that really fast. Next is to rapidly enhance our go-to-market reach. Both MiX and PowerFleet have played, for different reasons, a defensive game for some considerable time. With the combination, it's now our opportunity to play offense and pivot existing costs into sales and customer success resources. It's also imperative we maximize the opportunity of the new Unity's capabilities with our loyal and tenured strategic partner channel inherited with the MiX combination. All of this is underpinned by the true market leader position we have today in being able to give visibility and seamless view of an operation, both in the warehouse and towards mobile resources. Finally, we need to be extremely results-focused to unlock the value creation. The first step is to expand our EBITDA by becoming a single, highly efficient global operation and drive gross margin through economies of scale and improve wallet share. Then at the forefront of the second year and beyond is to deliver the growth expectations from the enhanced go-to-market capabilities and drive incremental cash flow to support further investment decisions. Now I'll hand over to David to walk through what this all means as a spectacular low-risk, high upside value creation opportunity for our shareholders. Thank you. David?

Thank you, Steve, and great to connect to everyone on the call. Again, [ it's ] David, and I appreciate there's some latency in terms of the slides. So whoever is moving the slides, could they move through 2 slides, and I'll do my best to fill in the dead air. So before I start with the content, I do acknowledge the vast majority of you dialing in today have a choice of where to put your money or buy ratings to work. I'm delighted to be able to share with you the case of why PowerFleet for your next buying or rating decision. Now on to the content, and I hope whoever is managing it has already passed to the next slide. Okay. So for those of you who were with us in November, this slide that will arrive soon, will look familiar. This is obviously a good thing as we are reaffirming guidance for the next 2 years and reiterating our long-term growth and EBITDA margin expectations. Key takeaway is we expect to comfortably be a Rule of 40 business within 2 years of transaction close with accelerating revenue growth thereafter. For the eagle-eyed among you, you'll notice there's a change in dates. In November, numbers were pro forma for the deal closing effective January 1, 2024, now refreshed for a close date of March 31, '24 and with the forward-looking numbers set now aligned to a changed fiscal year of March versus December, effective April 1. We've also added additional disclosure on net debt with a March number of $110 million tied to the numbers shared on our Q4 earnings call. Fiscal '25, we expect net debt to remain flat at $110 million with additional cash lending the first half of 2025 as we incur onetime costs to aggressively realize cost synergies, reversing in the second half. Fiscal '26, you can see a significant deleveraging with net debt declining from $110 million to $80 million as we get the full year benefit of prior year cost synergies and enjoy significant operating leverage from top line growth. Next slide, please. Now to the next slide, where I'll provide more color on EBITDA margin expanding from 15% to 30% over time, a major driver of achieving Rule of 40 by the end of fiscal 2026. A central tenet is EBITDA expansion from cost synergies. While this is undoubtedly important, I also want to put a spotlight on the underlying operating leverage within the business model across 4 vectors. Vector number one is the source of revenue growth, which is increasingly pure software as Unity gains traction in North America market specifically with revenue from third-party devices, APIs and value-added modules. Vector number two is gross margin. High margin recurring revenue will grow at a much faster rate, improving the mix to well north of 80% of total revenue over time. Vector number three speaks to go-to-market efficiency. Unity is a blueprint to best-in-class net dollar retention, a cornerstone of highly efficient and predictable revenue growth. Vector number 4 is growth within our cost base. Our G&A E:R is 32% of total revenue, providing a target-rich source for both cost synergies and also spend that can be redirected to building out our go-to-market capabilities over time. We also view our operations in South Africa as a strategic asset. We have a strong center of gravity and a rich talent pool there enabling us to support business growth in North America and Europe from an affordable geography, with all these factors leading to strong underlying cash generation. Next slide, please. So the next event comes up, I'll specifically focus on why PowerFleet. So where do you find great investment opportunities? A great place to start is to identify dislocation in the market. While markets may be efficient in the long run, we all know there are many instances where they're inefficient in the short run, providing a source of [ out ] for returns. A good way to screen for market dislocation is where there is major asymmetry between the upside opportunity and the downside risk. The content of this side specifically and material shared by the team generally puts a spotlight on why PowerFleet is compelling. Let me dive into the detailed slide content and the 4 attributes of a great investment. Firstly, a great market and a great strategy. Proofpoint for this is Samsara, a business growing at 40% on an ARR base of $1 billion, practically unheard of growth. We are thrilled to be part of this market. Not only is Samsara in a great market, it has a great go-to-market strategy, as do we. Unity is not a me-too play. It provides compelling differentiation with our device-agnostic capabilities specifically providing extremely effective competitive wedge. Secondly, you need a capable team that you can trust to deliver. A key reason I joined PowerFleet was the private equity pedigree, which is focused on excellence and aggressive execution. We also have a creative deal pedigree: Movingdots, both the engineers to do Unity plus EUR 8 million in the bank; MiX, scale, plus clearing Abry convertible overhang with no dilution. Thirdly, downside protection is always invaluable, especially despite with some upside opportunity. Modest top line growth and cost synergy realization provides line of sight to $70 million of EBITDA and a 10x multiple. This represents a 24% premium opportunity versus where we trade today. And finally, for true asymmetry, you need to have a clear and achievable pathway to multiply existing enterprise value. And next slide, please. So how is this achieved? It's achieved by graduating from being an EBITDA multiple investment to a revenue multiple one in the next 2 years. To bring this into focus, a slide will appear that be familiar to those of you who were with us in November, that shows the positive correlation between Rule of 40 performance and revenue multiples. You can see the spread between Samsara, which is at the very top of the chart and PowerFleet, which remains at the bottom, despite our enterprise value practically doubling since November. Our plan over the next 2 years is clear, meet the Rule of 40 benchmark by the end of fiscal '26 while increasingly providing metrics and insights so we can be comprehensively benchmarked as a SaaS business. Achieving this provides a clear pathway to expand our enterprise value by close to 5x. Next slide, please. Now while this concept of math will be very familiar to those who joined us in November, there is an incremental dimension of value creation above and beyond a rerate from EBITDA to revenue. This dimension is centered on the ability of PowerFleet to be a consolidation engine in a highly fragmented market, all centered on Unity. So why are we so well positioned to create significant shareholder value through highly accretive M&A? Firstly, the 2-tier market we play in, where legacy platform businesses are a major source of brownfield growth for next-generation providers. Many of these businesses originated in the '90s and are led by founders who are increasingly realizing future values are going down not up. They're looking to monetize sooner rather than later, creating a biased market for M&A. Secondly, Unity not only plays well for organic growth, it's a blueprint for inorganic growth, allowing you to seamlessly onboard books of business, thereby massively derisking M&A. Thirdly and fourthly, next slide, please, a rinse-and-repeat of the MiX deal. As we realize significant cost synergies, leverage the affordable cost base in South Africa, all while not missing a beat operationally and secure revenue synergies with low barriers to Unity value-added modules and cross-sell of warehouse solutions to large fleet customers. Now on to my final slide, which hopefully appears in a second, that puts a bow on my PowerFleet. From a timing perspective, there are numerous catalysts for stock appreciation. Immediate term, we now have significant liquidity in the stock, lowering the barriers for investors to get in and out. It's highly probable will be added to the Russell 2000 at the end of June, creating a meaningful source of steady incremental demand. In the near term, securing a rerate in valuation by hitting Rule of 40 performance. Next slide, please. And in the medium term, the prospect of additional outsized returns through highly accretive and derisked M&A. That covers it for me. Thank you for your time and attention. I'll now hand over to our Chief Product Officer, Jonathan Bates, for a deeper dive into all things Unity. Jonathan?

Thanks, David, and we can start going to the next slide. Hello, everyone, and thanks so much for setting aside your time today for us, and I'm really delighted and privileged to be here as PowerFleet's Chief Product Officer, to share with you how we're executing our next-generation Unity data highway and monetization strategy. So the market at large is paying for a whole load of technology whilst not currently getting the full benefit from it. But we're now at a key inflection point in the evolution of the market with the emergence of AIoT technology, the Artificial Intelligence of Things, which is yielding new capabilities to amalgamate the industry in a unified ecosystem. With our Unity play, we are providing mission-critical solutions from warehouse to trailer to vehicle, allowing customers to consolidate all of their data in one place, rationalize their suppliers and gain end-to-end visibility with our one-stop shop across all mobile asset types, a single source of truth, and this is a unique play in our industry. This approach does have shared winning DNA with leaders of other domains in the supply chain and the deployment of greater AI automation, integration and modularity in comprehensive ecosystems where we're consolidating our respective markets. Before we move on, I just want to demystify a couple of pieces of terminology that we'll use throughout this presentation. We're going to talk about in-warehouse and over-the-road. We're focusing on the whole of our customer supply chain, meaning that our customer commitment is to provide intelligence across their whole asset base. Concerning in-warehouse, we're talking about creating smarter and safer warehouse operations through greater visibility into sensors, equipment, operators and warehouse management metrics. Our customers utilize the predictable insights that we generate to make strategic decisions and save lives, from rightsizing their fleets to preventing fatalities and costly collisions and optimizing their labor forces. And when we refer to over-the-road, we're pulling back the veil on what happens in the supply chain on the road from cold chain to trailers to trucks to vans and sales fleets presenting total visibility throughout the entire operation. And if we move to the next slide, we're now going to look in more detail at our Unity ecosystem. So what we'll see now is a high-level view of our industry transformative end-to-end data highway. This strategy is actively driving real change in the market, unlocking previously unexploited customer value, and our laser focus here will generate significant and sustainable shareholder value. So working from left to right, starting with data ingestion, the first hook. And this is our first priority, customer acquisition delivered through consolidation. Whatever experience the customer is getting today, we can give them a better experience through our harmonized ecosystem, any device, any sensor, any data source. We're hooking customers in with our device-agnostic data ingestion capabilities. There are customers with big silos of third-party data, and we're switching them to Unity. We're also ingesting OEM data and other sensors. Whatever the customer needs, we're delivering end-to-end visibility in one place. And ultimately, this means a consolidation of devices' sensors and data across the market and crucially our first monetization opportunity. Then once ingested, we harmonize that data, giving total visibility across every asset type, and we use AI to simplify and create predictable intelligence that can then be consumed however the customer wants to. And one key consumption method is our data-powered applications. Our modules are enterprise-grade with AI differentiation, meaning that they look, work, operate and are experienced through AI and data science that adds value, driving customers to pay a premium for these apps. They're bigger and better than what is available elsewhere in our industry and they're modular, meaning that we can charge per app, and those modules are focused on delivering value to the key market drivers, such as compliance, safety and sustainability, for example. And this is another one of our key monetization drivers, enabling us to grow our ARPUs. Then if we move on to the next slide, what we're going to see is more about how we're unifying our customers' business performance through integration. And I want to share with you a few details on how and why we're doing this. Unified operations is really what makes our customers' worlds go around. And for PowerFleet, this is the stickiness and another hook for acquiring new customers and also for bringing the C-suite in our customer stakeholders into our world as well as another monetization opportunity that further grows our ARPUs. We're comprehensively improving the performance of the asset, the individual in charge of the asset and the business process. Integration with the fundamental systems that a diverse range of customer stakeholders, including the C-suite living every day in their operations improves end-to-end business performance through automation and ultimately, we're helping them on their digital transformation journey. Crucially for us, unifying our customers' operations creates compelling stickiness for PowerFleet and makes us mission-critical for the long run to their businesses. And if we can move on to the next slide, we can just visualize the sheer scale of what we've achieved to date in terms of our integration play. We've integrated over 230 systems to date and crucially, with a significant focus on the North American market. Each one of these that we monetize gives us an additional circa $3 per asset of recurring revenue, meaning that we're making our AI transform data go even further. Next slide, please. So what I'm going to show you now is our further scaling out of our Unity play to match our rapidly increasing customer demand. Since our business combination, we have hard-pivoted our development resources in the newly combined business on to Unity. We've scaled up from 80 to 270 developers since our combination. And tech resources are now dedicated to enhancing our consolidation and ingestion engines, the hooks and the stickiness of any device, any sensor, any system. We're past 550 devices to date and 350 protocols as well as adding more AI and data science-based apps so we can continue our modular monetization play. Next slide, please. So far, we've looked at how our unique data highway flows end to end. So now I'd like us to focus on how this AIoT ecosystem is operating for us today as a significant growth engine. Consolidating the industry through our unique ingestion strategy drives rapid volume into our ecosystem and acts both as a conquest leader and a greenfield differentiator. Our one-stop shop single pane of glass, all the way from warehouse to trailer to vehicle with enterprise SaaS solutions, delivering value across all those key market drivers is now further boosted by the new combined solutions that we're able to leverage into our customer base following our business combination, which is allowing us to not only expand our existing base, but also generating new customer multiproduct adoption. Then our strategy to allow customers to consume their data however they want to, provides a wealth of monetization and ARPU growth opportunities. For example, our AI-led data-powered applications in modular format, meaning that customers can now come on a journey with us, and we grow our net dollar retention as we phase through that customer experience, adding more modular recurring revenue as we go. And we can move on to the next slide. Finally, our unified operations play delivering those integrations to the wide range of customer stakeholders exponentially expands our addressable stakeholder play and creates an elevated set of higher order sales discussions. This approach is generating deeply rooted stickiness and net dollar retention uplift. And let's take a deeper dive into how our cross-sell machine is working right now. Ingestion is the initial acquisition and volume lever. Integration gets us the stickiness. And so the customer is now in 2 arm locks with PowerFleet. And now once they're locked in, we get higher and wider to harvest the broader end customer opportunities with our vast product portfolio of SaaS solutions in our one-stop shop. We monetize our modular solutions and target them at that array of customer stakeholders who are all interested in managing and maximizing the performance in their specific focus area in the business. As an example, ESG and CO2 reporting as part of the customers' sustainability charter. Let's go on to the next slide. This approach, this cross-sell approach is revolutionizing the expansion of our wallet share with our customers. Moving on to my final slide now. We wanted to share with you a practical case study of a large North American retailer. This demonstrates our Unity ARPU growth. This customer started with PowerFleet sensor data at $7 per asset per month, but they didn't have full coverage across all of their mobile assets. So we were able to consolidate all the missing pieces of those assets by ingesting their existing Volvo and Daimler OEM data, giving us an ARPU expansion. And after we harmonized and simplified that data, the customer had a specific focus on end-to-end visibility across all of their mobile assets. They needed predictive insights in that area, meaning we were able to monetize an extra $5 across their asset base. And finally, adding to our embedded stickiness. The customer had the need to embed data into their analytics and maintenance applications, and this gave us another incremental ARPU uplift. And overall, we were able to increase our wallet share and substantially embed ourselves deeply as a mission-critical partner into the customers' core operations. In conclusion, the strategy that we're rapidly executing sets us up superbly as a top-tier player from a competitive position and Unity's data highway is a point of differentiation from a customer standpoint, continuing to build significant pipeline for us. And furthermore, to tell you more about the trajectory of our growth story, I'm delighted to hand over to Charles and Josh.

Thank you, Jonathan. We can get to the next slide. Hello, I'm Charles Tasker, I'm PowerFleet's Chief Revenue Officer. And I'm joined today by Josh Betz, who is the GM of our North American business. I'm delighted to have Josh on the call today as our North American business is the market that we see the greatest potential for growth in and where we're making the biggest investments in sales, marketing, customer success and customer expansion. Josh and I will be taking you through our growth story, which sees us enabling, ramping and scaling our teams over the next 4 to 6 quarters and beyond. This will take us from where we are today to double-digit growth next fiscal year and into accelerated and sustained double-digit growth in the following years. Next slide, please. This is a large, fragmented and underpenetrated market, which positions us well for growth. This is a global market, and it's a market that's ready for device consolidation, automation, harmonization, digital transformation. In other words, it's right for Unity. Unity addresses a broad range of the challenges faced by enterprises today. Some of these challenges are disparate siloed data and systems that hamper business performance. Owner's regulations and duty of care that require compliance with health and safety and ESG standards, and increasing competitive pressure for digital transformation and business improvement. Unity addresses these challenges by its unique device and data source-agnostic ingestion engine and by applying AI and machine learning to harmonize, transform and simplify data into actionable insights, which we deliver through multiple mediums. Simply put, we save time, we save money. And very importantly and something we're very proud of, we save lives. Unity is also a strategic differentiator, positioning us in a place that our competitors either can't follow or won't because of conflicts with their business model. Importantly, many of Unity's customer benefits also benefit us in executing on our go-to-market strategy. Josh will cover this later in more detail. Next slide, please. On this slide, I'll walk you through our path to double-digit growth next year and accelerate to double-digit growth thereafter, leading us to become a Rule of 40 SaaS company. Our starting position is underpinned by the unique value proposition we offer our customers through our device and data source-agnostic ingestion engine, which leads very importantly to more frictionless customer acquisition. Over the customers' life span, our AI and data science-led modular SaaS applications lead to increased ARPUs, expanded share of wallet and increased customer stickiness. This year and into next, we're investing in ramping our sales, customer success and customer expansion engines. We're capitalizing on the significant opportunity in our business combination to cross-sell and upsell primarily our In-Warehouse solutions, but also our on-road solutions. Our unparalleled global reach also allows us to expand within our customers who have multi-region or a global footprint. That global reach also allows us to drive our in-warehouse solutions and Unity globally through our regions to over 130 partners worldwide. This is an initiative that is already well underway. We'll also see opportunities to expand our global partner network by attracting new in-warehouse partners. Then as we accelerate our double-digit growth through fiscal year 2026 and beyond, we'll further scale and amplify our sales and customer expansion engine, driving new logo -- new logo growth and accelerating becoming a single source of truth across the customers' enterprise and the data highway for all their mobile assets. We'll also grow ARPUs and accelerate the expansion of wallet share via AI and data science-led modular SaaS applications, APIs and Data-as-a-Service. As we scale out, we are continuously seeking to expand our indirect channel with more OEMs and strategic partners, including insurance, leasing technology partners as well as system integrators, many of whom will be attracted by our unified operations ecosystem. In closing, our focus and commitment to relentless execution will lead us over time to sustained double-digit growth. With that, I'll hand over to Josh to give us more color on the who and the how of our execution plans. Over to you, Josh.

Thank you, Charles. I'm excited to be with all of you today and double-click on how we're going to be executing to achieve the growth that Charles just mentioned. So as Charles mentioned, our growth is underpinned by increasing wallet share with our current customers. Of our 7,500 customers, many of these are Fortune 500 companies, they operate globally and they are market leaders in their respective industries. There's a significant opportunity here as the majority of these customers are underpenetrated today, both regionally and globally, and currently leverage only 1 or 2 PowerFleet solutions today. We are aggressively attacking that whitespace today with a targeted cross-sell and upsell effort and continuing to accelerate those efforts, which we'll describe in more detail as we move on. To put it in context, if you go to the next slide, let's take a look at the opportunity we have with a customer example. And what you'll see depicted on this slide is a supply chain for a food and beverage company, but it's generally representative of many of our customers and prospective customers' supply chains. What you can see is they have multiple plants, warehouses and mobile asset types such as tractors, trailers, and other vehicles from factory to last-mile delivery. Their current environment is typically fragmented with a multitude of third-party vendors across their mobile asset types, which makes gaining end-to-end visibility nearly impossible to achieve. Now this provides us with a unique opportunity to ingest that third-party device data for both in-warehouse and over-the-road assets and couple it with PowerFleet devices and sensors to provide complete end-to-end visibility across enterprise. This need for end-to-end visibility also applies to customers with cold chain requirements such as this produce customer example because we provide temperature and humidity monitoring in the warehouse and over the road along with full refrigerated trailer control, we enable our customers and their customers to meet their regulatory and compliance requirements. In addition to visibility, our rich library of modular applications that sits on top of all of this harmonized data gives our customers a one-stop shop to meet their requirements for needs around safety, compliance and sustainability, both in the warehouse and over the road, which is truly differentiating. All of that harmonized data that can then be sent to a TMS, a WMS, and ERP or any other business system where we can provide additional operational improvement. And if you go to the next slide, please. Our ability to ingest that data, provide modular applications and integrate to the business systems for both in-warehouse and over-the-road, again, truly differentiates us and also result in increased recurring SaaS revenue over time. And we have an advantage here in that selling these solutions across the enterprise because there's often the same stakeholder that's responsible for areas such as safety and compliance of human beings, both in the warehouse and over the road or cold chain compliance, both over the road and in the warehouse. We have one buyer where we can provide a one-stop shop. But we also provide value for stakeholders across functional areas. We help bridge that gap because we aren't just affecting the mobile assets and human beings operating those assets, we also integrate with the customers' business systems, providing data to help improve their business operations, as illustrated in the ecosystem slide that Jonathan showed earlier. For example, we're actively providing data for our in-warehouse solution to our customers' warehouse management and labor management systems in a warehouse, which helps give them the actuals they need to drive better planning and performance. So what this does is it bridges the gap between the traditional buyer in safety and compliance and the operations team as we're now providing the operations team with the data that they need to drive better performance in the warehouse. And as we start to bridge the gap between stakeholders, for our customers, this has now elevated up to the C-suite because we are a single source of truth and become the data highway across the customer's enterprise, which is helping to provide -- helping to drive corporate-wide metrics that the C-suite cares about, such as risk and liability, capital expenditure and helping to achieve ESG goals. When we're providing that data highway, we're not only monetizing those data integrations, but we become extremely sticky and now have the entry point to layer on the next integration, the next modular application on top. This allows us to efficiently land and expand within these accounts. If you'll go to the next slide, please. Lastly, because we're higher and wider in the account, we are now differentiated from our prior competitors and have experienced an increase in win rates as a result of that. And we have the team and are executing on the growth plan we've described today across 3 core areas. From a sales and business development perspective, we have a purpose-built new logo engine and a sales team with the enterprise SaaS experience to have the conversations around unified operations, to sit in front of a customer at a whiteboard and truly map out their integration, map out all the integration touchpoints that we've discussed thus far. And we're continuing to scale those teams to step up our go-to-market capacity and meet the double-digit growth targets that we've discussed today. Our indirect channel is truly a sales multiplier that we're continuing to grow. For example, we have forklift OEMs that are white-labeling our solution today, and we have the opportunity to continue to expand those relationships. We also have an interest from additional OEMs that are looking for agnostic solutions that can provide value for their customers as the solutions that they have today typically only work well within this respective OEM, they want to provide additional value to their customers, which is where PowerFleet comes in with our agnostic solution. Lastly, we're continuing to grow our strategic partners, both with a new portfolio of products that's grown through the combination of MiX and with a formal partner program that we're running globally that's incentivizing growth. Lastly, as we've talked about our customers, we have a relentless focus on customer excellence, which underpins our cross-sell and upsell growth. We have a team that's focused on customer success and expansion globally that's led by our Chief Customer Officer, Catherine Lewis, who is driving a standardized best practice approach globally in how we achieve customer excellence. So by having dedicated teams focused on customer success and expansion, we're efficiently executing cross-sells and upsells with a much lower cost model, where this team now sells the next integration and the next modular application based on the customer's desired outcomes. If you can go to the next slide, please. And what all of this really means is advantages both for our customers as well as the PowerFleet go-to-market model. So when we think about our customers, what we've described really provides unique advantages in terms of providing that single source of the truth across their physical assets, bringing in all that data to provide a single unified view that they've never had before. As we've stated, the majority of these customers have multiple vendors, they're logging into multiple portals or they're creating their own version of Unity. They're creating multiple data integrations. The Unity platform truly eliminates that pain and the total cost of ownership. It also future-proofs them from the inevitable M&A that happens with a lot of the customers that I mentioned in the Fortune 500 slide, which would bring yet another vendor into the mix, more portals, more integration touch points. So as we combine that data from the physical assets and the human beings operating them with their business systems, our customers are now gaining new insights and they're improving their current business systems with additional data, which is unlocking business value that they haven't realized before. And again, because we offer modular applications that sit on top, our customers are able to consume the applications based on their business objectives and the speed in which they want to go. All of this leads to our customers achieving ROI faster and meeting their digital transformation goals. Now from a PowerFleet go-to-market perspective, what we've described today provides a clear go-to-market advantage for PowerFleet. Instead of a customer waiting for a contract to end, they're taking advantage of Unity to consolidate data from their existing vendors and begin realizing value immediately. Now as you can imagine, this is a much lower point of entry than attempting to sell a full replacement of all devices and implement an entire platform from day 1, which is where the market currently stands today. We can then land and expand with modular applications, PowerFleet devices and unified operations through data to the customers' business systems. So this leads to then incremental SaaS through a customer life cycle and we're able to increase ARPU as a result of that. By leveraging our customer expansion team and not high-cost sellers to continually cross-sell and upsell, we've dramatically decreased our cost of sale. And as I described earlier, Unity platform with AI-like technology allows us to get higher and wider in the account. So now we're not just dealing in an operational level, we're truly spanning the entire organization all the way up to the C-suite, which as you can imagine, increases win rates and eventual stickiness with customers. So I'm now going to turn it over to Melissa Ingram, who's going to discuss our integration execution and EBITDA expansion.

Thank you, Josh, and hi, everyone. If we could go to the next slide, please. Hi, all. My name is Melissa Ingram, and I'm Chief Corporate Development Officer here in PowerFleet. And I'm delighted to be with you today to share some of the updates on our progress with our implementation of our EBITDA expansion plan. In the last several months, as we planned this combination, we've had shareholder value creation at the forefront of our minds. We recognized early that our opportunity for EBITDA expansion is both significant and readily accessible. And even before the transaction closed, we've created a detailed and thoughtful plan on how we'll grow EBITDA and deliver within a 24-month period of time. This slide here is how -- essentially summarizes our plan, which is now in full execution mode, and we've started to implement the strategies that will underpin our EBITDA expansion by $27 million within 2 years. We're looking at implementing this plan in 2 ways. The first area we're focused on is growing our overall gross margins in the business. We're looking to drive expansion in our product gross margins on a pathway towards 35%, and we're executing on our plans to grow services gross margins, putting us on a pathway towards 70%. Secondly, we're executing on a set of initiatives that will address our heavily bloated G&A and reduce our OpEx spend. The goal here is to drive scale and efficiency through our operations and ultimately, set ourselves up to be a stronger, more agile business that's ready to sustain that accelerated double-digit growth that you just heard Charles and Josh talk about earlier. We're thinking about the execution of our plan in 3 discrete phases. In the first phase, which we're in now, we have $13 million of annualized savings already underpinned with actionable plans that we're in the process of executing right now. For this first $13 million, we expect to complete our implementation within 6 months, and we're forecasting $8 million of EBITDA improvement within fiscal '25. There will be 2 additional phases for the remaining programs, which we expect to deliver a further $14 million of annualized savings, and I'll talk more about how we're intending to tackle those as we go through this session. Finally, I spoke in our last Investor Day about my confidence in the leadership team that's in place in the combined business, many of whom have executed very similar strategies in other growing global SaaS companies. Having now had the time to get to know the broader management team across the combined company, I'm very pleased with the depth and the extent of the talent across that group. And I'm confident that we've got the right management group in place to execute the playbook and deliver our results. Let's go on to the next slide, where we'll look at product and service gross margin expansion in a bit more detail. Looking at product gross margin first. Our first key area of focus is streamlining our supply chain by looking at all the buckets of costs in this area. To give you some detail here, we're consolidating our manufacturing operations into fewer, more strategic partners. We're rationalizing our network of distribution centers. We're reducing the cycle time it takes to handle and ship product, and we're also consolidating our freight spend. By leveraging the scale and the purchasing power of the combined company, we're also amalgamating our components vendors to reduce our builder material costs from our products. On our hardware consolidation, we've identified overlapping products in our combined portfolio, and we're rationalizing down to the core SKUs, giving us the opportunity to position a better cost product that still addresses the needs of our customers. We're also looking at all opportunities to decrease installation costs by optimizing our in-house versus our outsourced installation relationships in each of our geographies. And the team are assessing automation and streamlining of processes, so that we can reduce the time we spend on each installation. Finally, we're looking at price strategy for hardware in each of our markets and to the indirect channel, and we're implementing pricing programs specific to the regions. Turning now to services gross margin expansion. Our technology and product teams have made a full assessment of our platforms, and they're identifying outdated or legacy platforms it makes sense to retire with our combination. We're also consolidating hosting providers where it makes sense to do this for economies of scale, and we're consolidating tooling and reporting for our various solutions, which means we can retire certain tools or certain reports that we or our customers no longer use. We're also looking at our data storage requirements across the business, and we're reducing our overall infrastructure costs by optimizing our data storage solutions or eliminating underused capacity in our service. Communication costs are a significant opportunity for us, and we're looking at proving our users and data consumption onto common plans because we know this is a significant area where we can achieve some reductions. We're also working through all our third-party vendors that are embedded in our cost-to-serve model, and we're running through a systematic program to rationalize and to streamline across all of those relationships. Finally, with our recurring services fees, we're assessing our pricing in each market and each channel, and we're looking at the opportunities to test our price elasticity in some of these regions or in certain channels. Moving now to the OpEx side of it on the next slide. The third leg of the stool, as I like to call it, in delivering our EBITDA expansion is to address that bloated G&A that I spoke about earlier and reduce our OpEx to drive scale and efficiency through the business. Key priorities for us here are, firstly, public company costs. This is a very quick win for the combined business as we consolidate all of the spend associated with now being one combined public company and categories here would include listing costs, insurance and audit costs. We've been planning for some months to combine our marketing costs in the areas of brand events, trade shows, subscriptions and communications. And the team has already done a great job executing the majority of this program, and we're seeing OpEx reductions already flowing through in this category. An absolute critical area for reducing our OpEx is truly unlocking that power of the combined organization design and operating model. Our model is centered on having globalized central functions with local or regional execution and a key element of our plan is to centralize certain parts of our operations at scale in more affordable geographies, such as South Africa, where we already have substantial presence and talented teams in place. A major synergy unlock in our OpEx lines comes from implementing one common set of scalable platforms across all our geographies, and this would be anchored by a common ERP. This doesn't just reduce costs, but it will help us drive visibility and accountability through the business as well as help us execute on some of that centralization of operations that I spoke about earlier. Finally, we're well underway rationalizing our facilities footprint across the world, particularly focused on areas where we have multiple offices in similar locations. So that gives you a further level of detail on the 3 legs of the stool, the product margin expansion, the services margin expansion and the OpEx efficiency, all of which will help us execute on that EBITDA expansion plan. So if we go through to the next slide, please. I showed this slide in our last Investor Day, but I will stop very briefly on it. I did spend a lot of time previously talking through these pillars in a lot of detail, but I wanted to show them here again as a reminder of how we approached that EBITDA expansion planning. Our plan is built on these 4 pillars, which are: duplicate costs, ways of working, economies of scale, and portfolio and experience evolution. You'll see many of the areas that I've already spoken about in some of these earlier slides across these pillars. By unlocking EBITDA expansion through this blueprint, we're driving a systematic process in each of these areas that's focused on creating efficiency through our combination as well as unlocking that gross margin expansion pathway that I spoke about. Each pillar is underpinned by a series of initiatives and plans that the teams are executing on right now to deliver against our targets. So if we go now to my next and final slide, I'll go a little bit more now into our execution plan. As you can see on this slide, we've got 3 phases of activity that we're currently executing on. In this first phase, we have $30 million of EBITDA expansion that, as I said, is already underpinned with actionable plans and we'll complete the delivery within the next 6 months. The biggest synergy unlock in this category comes from duplicate costs, where we're executing on our savings across those combined public company costs, so the insurance, the audit, the compliance expenses, et cetera. Secondly, in this category, we're also significantly reducing our marketing spend. And finally, we brought the business together under one leadership team and merged into a single structure, which has helped us underpin the vast majority of our duplicate cost targets with plans to deliver within the next 6 months. In ways of working, the big unlock is the consolidation of subscale businesses in regions where we both previously operated independently. While we're changing how we work, we're also implementing the reduction of our unused office space, which we will also close out in that 6-month period. In portfolio and experience evolution, we'll start to see the benefit in that first 6 months of combining our hardware portfolio and taking some targeted action in R&D spend outside of software development. Now I do want to be clear here. In this first 6 to 9 months, we'll be taking the team through a deep and a complex integration. We're looking to change how we operate, where we focus, what we stop doing whilst also driving consistency and alignment across all of our regions and department. I do expect us to come out the other side a stronger business, but the organization will need to go through that transformation and that integration period to set us up to execute on that 2-year strategy. Moving then to that second phase of the $5 million in EBITDA improvement. This is where we'll really start to see the benefit of our supply chain rationalization, reduced bond costs, and the synergy unlock which comes from some of those infrastructure cost reduction programs. We'll also address here some low-hanging fruit in our vendor spend as well as some consolidation within our internal systems. This is our preparing-for-delivery phase, and we're doing that right now with strong plans being put in place around the various areas of activity. The final third phase in our EBITDA expansion plan is being scoped and planned right now. And this is where we expect to see the benefits from that broader synergy unlock. So this will be driven from having one set of business platforms operating across the business and true economies of scale from completing the consolidation of our partner relationships. We'll also have completed some of the retirement of legacy systems and platforms. And at this stage, we will truly be taking advantage of that affordable geographies strategy where we will have centered our operations. So in summary, our plan is well thought through. It's truly in execution mode with the first phase delivering within the first 6 months. I'm confident that we're on track to deliver the planned $27 million EBITDA and gross margin expansion within that 24-month period of time. Thanks for your time. And I'll now hand over to Brendan for closing comments. Brendan?

Thank you, Melissa. We can go to my slide. I'm Brendan Horan, GM for Africa, and thank you for attending our call. My closing comments will summarize and contextualize the post-merger PowerFleet and how the plans have unfolded since our Investor Day in November last year. We spent the last few months scaling and ramping up our global sales team to deliver the Unity message and drive the vision, objectives and very importantly, be in greater control of the results. Very intentionally, we focused this investment significantly towards growing our customer acquisition sales talent in North America, our largest operating territory by revenue and the greatest opportunity to drive our growth plans. Since close, after the deal became a reality, we are all highly motivated and energized and are now armed with a broader product portfolio, giving us a unique cross-sell and revenue expansion opportunity into our loyal client base of blue-chip logos. For those who we service on the road, we are now focused on broadening our service and going into the warehouse with our AIoT in-warehouse technology. And in turn, we are driving our vast experience and expertise in land transportation to our in-warehouse customers by targeting the trucks and commercial vehicles at the warehouse store. Unity's advanced AI capability is garnering significant interest as we introduce the ability to simplify our customers' processes and drive tangible efficiency as we unify their operations and give them a single view of their business. Once deployed, Unity offers a seamless and simple upsell process on -- excuse me, Unity offers a seamless and simple upsell process of value-added applications, giving our enterprise customers the ability to go on a digital transformation journey by integrating and embedding our data services and third-party data into their business systems and processes. We call it joining our data highway. The pipeline build is very much underway, and our sales execution plans are gathering momentum daily as we drive new logo acquisition and strong net dollar retention. And as a business, we are now one PowerFleet, culturally aligned and in control of our execution plan. Our management and senior leadership have a proven track record in transactions of this nature. Simply put, they've done this before. We are also well positioned to further consolidate the industry and the Unity platform is the ideal consolidation enabler. And our plan to achieve a Rule of 40 performance is precise, meticulously planned and most importantly, achievable. And our revenue growth and EBITDA profitability expansion plans are logical and proven. This remains a low-risk opportunity with an exciting upside potential. And as David clearly detailed, we traded an industry low revenue multiple, and as we drive growth and profitability expansion, we expect to transform the recognition to that of a pure enterprise SaaS play and see that revenue multiple and valuation growth. We are looking for long-term investors who are keen to join us and reap the benefits of a high-velocity transformation. We're all energized and excited to be part of this team and this journey. And with that, back to Steve. Thank you.

Thanks, Brendan, and thanks to all the presenters. I'm very proud of the level of detail and instrumentation that we have in the business in such a short space of time. With that, that's the end of our prepared presentation. I'll hand back to the moderator. We're going to take some questions. How we'll do this is the moderator will ask each individual for their question. I will then dish out the answer to that question to who I feel is best placed in order to answer the individual question. So with that, over to you, moderator.

[Operator Instructions] Your first question is coming from Scott Searle with Roth MKM.

Thanks so much for hosting the call and providing all the details and taking the questions. Maybe, Steve, I'm not sure if I heard it in the prepared remarks, but when will Unity be fully available to the installed MiX base? And I'm wondering what the current thoughts are in terms of bundled hardware that has historically been part of the MiX sales platform. Do you continue to do that? Or are you starting to shift that focus? And then I have a couple of follow-ups.

Okay. Thanks, Scott. So in terms of the MiX capabilities, they will be fully available within the first 6 months to all MiX clients. So all of the Unity solution and data highway capabilities will be available, some of them in advance of that 6-month period. In terms of your second question around the kind of structure of deals, we will look to throttle back a little bit in terms -- in order to manage our cash generation for the go-forward business. Obviously, some of that is specific in terms of the landscape by geography. But we do think there is an opportunity for us to get some more cash up front, which will help us drive growth and investment. You have some follow-ups?

Yes. And Steve, in terms of ARPUs, I know we've discussed this in the past. And I think historically, you've talked about the upsell, cross-sell opportunity of being 10% to 15%. But you continue to cite examples where you're doing much better than that. And each module adds $3-plus in terms of recurring ARPU. So I'm wondering what your updated thoughts are on that front in terms of how much growth you can drive just through ARPU expansion. And I've also heard a lot of warehouse comments throughout the presentation today. Is that the real anchor opportunity and cross-sell that you're seeing in the early going with the combined entity?

So to answer your ARPU question, and thank you for every call where everyone asking me the same question, I appreciate that. And there's a big smile on my face as I respond to you. So look, I mean, we're proving it out with higher ARPUs. Now what we have to be careful is when we talk about total ARPU growth, there are commoditized ARPUs in there [ that state that ] B2C revenue. So that kind of 15% range is what we've looked at across the overall base. But you can see in more and more examples, we are delivering improved ARPUs over time of north of 20%. And if you think about -- I think Jonathan used the word armlock -- so where we're kind of taking in multiple data sources in order to ingest and harmonize. And then when we're integrating into those third-party systems, that allows us then to harvest far more ARPU expansion with our customers. And when you got the value chain from being a point-solutions provider to a missions-critical provider, the value of the services and therefore, the opportunity to drive ARPU is higher. But that takes time. What we lay out for you today are the piece parts and overall, then once we get to as many customers as we can with the full Unity play, then I'll be more expansive in my presenting upgrades, I'm sure.

And lastly, and then I'll hop back in the queue, but starting to hear more about the indirect channel and white-label opportunities. When does that start to really impact the P&L? And consolidation is starting to crop up in terms of your language as well, which is a new high-class issue to be dealing with at this point in time. So how should we be thinking about that in the financial parameters that you would be putting around the types of opportunities you'd be pursuing?

Yes. So in terms of the first part, I realize I didn't answer your question on the warehouse side as well. So what we see is we have a lot of heritage MiX territories who haven't had the benefit of the warehouse solutions. We are growing very well in terms of those solutions on the PowerFleet side, particularly around safety and compliance. So it's a no-brainer for us to launch those solutions worldwide, and that is our first kind of choice to be able to do that. That's both directly in the regions and then ultimately, indirectly through the partner channel that we have. It takes time for education. We have to also make sure we have the customer success and implementation resources. And it is a slightly different solution set to the over-the-road elements of the overall solution. So we -- all of this drives towards that double-digit and acceleration to double-digit growth. I don't think we're in any place right now to add any expansiveness or to actually nail down any further specifics around the growth opportunities, but it is significant. We can see that the partner base is definitely seeing that, the reaction that we've had from our regions and particularly the customer success folks within our region who serve our enterprise customers saying, look, we've been looking for this, we've been needing this for a long time. So that will grow out in scale. And in terms of consolidation, organically and inorganically, there are significant opportunities and Unity is built in order to maximize both. So whether that is ingesting third-party devices, ultimate data feeds or from an M&A perspective, being able to bring in customer devices that already exist and maybe with the current incumbents, the level of sophistication of the platform is becoming outdated. If we look to acquire companies, it would be a very fast integration. Everyone will get onto the Unity pretty quickly, and then we'd have the same wallet and ARPU expansion opportunities on that next space.

Your next question is coming from Mike Walkley with Canaccord.

Thank you for all the details and nice to see the reiterated financial targets. I guess my question is just how have initial discussions gone with the MiX customer base to date? And what might be embedded in your guidance in terms of potential churn from the MiX base in the near term? Or do you feel pretty good about the stickiness of this space and more of the upsell opportunity longer term?

I mean I think MiX have highlighted a couple of customers over recent quarters where the churn has impacted. And I think this new capabilities and reinvigoration in the business and the ability to focus more sales and customer success resources into the MiX estate can only shore up that base. And I think it was a great time for this transaction for the MiX customer base as it was and is for the PowerFleet base as well. So we've got a good handle on the customer base. The opportunity, we believe, and I'll ask a couple of my colleagues to join in terms of customer reaction, but it's very, very strong. And I think what people see now is a true path of evolution and innovation from the company that allows us to be seen as a longer-term partner. I think as a stand-alone basis, both companies were in a commoditized spot, PowerFleet 2 years ago and MiX until more recent times. We're now able to take them to a whole different league. And I think that is very welcomed by our customers. And there is a lot of problems that are existing in those customer bases today, which we can tackle and we can drive effective change for those businesses. But maybe if I ask Brendan and I ask Charles in relation to the U.S. customer base and Brendan for the African base, just a couple of examples of how the Unity play and the combination is kind of being received. So let's start with Charles first.

Thanks, Steve. Yes, I see customers warming to the idea. They -- I think the idea of being hardware- and data source-agnostic is the first real big appeal. I think of one customer that I interacted with a week or so ago, they had made an acquisition of a company. And that company is already equipped with a competitor's solution. And so that would normally pose a big challenge. They were excited to hear how we're able to ingest data from multiple sources. So certainly excitement there. I think some of the other things are around the ingestion of this data, our broader can capabilities, the in-warehouse side, certainly sparking interest and attention amongst the customers as we interact with them.

Brendan?

I think -- it's Brendan here. Just following on from Charles. I think I guess we've had a similar experience and since the closure of the merger, I've been asking customers. We have a number of customers who rudimentary ingest data and have kind of predominant bases that are with us, but really are looking for a professional outlet to kind of make their life a lot easier. So we've had a lot of very, very positive discussions. And equally, we've got an opportunity into our African network with our reseller channels who may have multiple products in their suite who are looking for that single pane of glass and again, an efficient way to kind of manage their businesses in a much easier way. Similar to an example Charles mentioned, I was at a client this morning, who's recently kind of, I think, taken over the financing of a fleet, which has a competitive product. And really, the immediate need is to kind of see that fleet in a single view, whilst maybe the longer-term intention is to have our product there. This certainly solves the short-term need and offers them some additional kind of pieces that they didn't have. So very, very well received. And then equally, I think, on the in-warehouse side, which is something that we've done in Africa in a very small way. I think we're seeing a lot of interest in terms of combining the two. And again, providing that single source and single paying to the client, one point of contact and certainly expanding our business into the warehouse. So very, very well received on this side. Thank you, Steve.

Just one follow-up question, and I'll pass the line. I guess, maybe more for Steve and David, just on the reiterated guidance now that you've had more time, a couple of questions embedded here. One, it did a really good job, I think, in explaining how you're going to take cost out of the business. So it seems like you got a good line of sight on how the costs have come out. But just on the reiterated top line guidance now that you've had it, I think when you first gave this guidance, there wasn't the conflict in Israel. So that might be a little bit of a headwind. But maybe you could just walk through how you feel about that revenue guidance in terms of the growth trends accelerating over the next couple of years? And then last question, maybe for David. Just on cash conversion from adjusted EBITDA, what should that look like once you get through some of these upfront restructuring payments?

David, do you want to take both? And then I'll layer in if need be.

Yes, absolutely. So from a revenue standpoint, at the Investor Day, it obviously happened in November. So it was a few weeks after October 7, but obviously, the size and scale of that event, I think we're still all getting our heads wrapped around, but I would say that's largely embedded. So if you look at the growth over time from 5 to 10 to 20, so much of it is centered on building out Unity. And the real benefit, and Jonathan sort of mentioned it in his slide is how we've been able to scale the number of engineers that we have to really accelerate the build-out of that product road map. So just over a year ago, we had 40 to 50 engineers in PowerFleet. We effectively got to 80 with the Movingdots transaction, and now we sort of trebled that, at 270. So the growth that you see from 5 to 10 to 20, Unity is central to that. You have accelerated the product road map is a catalyst to make that happen. And from a product strategy, it is a blueprint for best-in-class net dollar retention of 120%. So we feel good about it, but Unity and building that out is one of the key aspects in terms of just really building out all the capabilities within Unity, that's going to be the major driver of growth over time. So that comes up on the growth side of things. And in terms of the conversion of EBITDA to cash, there's obviously 3 major elements that sort of chew into the EBITDA. One would be underlying CapEx. So to the point earlier, there is a degree of embedding hardware with subscriptions in the traditional MiX business. There's also obviously the investment just recurring CapEx and also investing in Unity. So think about CapEx as a percentage of revenue in the sort of 8% to 9% range. So that would be a piece part of it. In terms of the debt, obviously, the cash interest cost there. So the coupon is sort of in the 9 to 10 percentage range. We have $125 million of debt, gross debt at close. And obviously, we talked about there being an increase in terms of gross add and obviously a reduction in terms of -- and net debt during the first 6 months. So sort of 9% to 10% of that number would be a cash charge. And then the final one would be cash taxes. So there are cash taxes, both on the MiX side and our side, increasingly in Israel. So think about cash taxes as a percentage of EBITDA around about 15%. So they would be the major charges against EBITDA to get to the recurring cash generation. The other piece is just the upfront cost of synergy realization. So the rule of thumb that we have in terms of all the numbers that Melissa is generating, we assume there's a onetime cost of $0.50 on the dollar to realize that. So that would be the other charge against cash generation over the next couple of years.

And just to layer in on the growth in Israel. So I mean our Israeli team has been phenomenally resilient throughout the process. We've pivoted to more, I would say, of the fleet side of the business rather than the B2B2C, which naturally has taken a hit during the crisis. And from a leadership perspective, obviously, every day, we can get surprises like we had a couple of weeks ago with the return of the -- not return, but the enhanced geopolitical challenges that came out in the region. What I would say is having the broader company and having 6 continents, we've derisked significantly the overall revenue growth because as a stand-alone business, Israel was a far greater piece part of the individual business. But what I would say is they're holding up very well in terms of maintaining revenue for sure. What I would also say is, this isn't rocket science. From the MiX perspective, in particular, I think we've been under-resourced in terms of salespeople, and we have the ability to invest more in the channel and put more customer success and inside salespeople on to the pitch by reducing significantly this heavily bloated G&A that both companies have. So I think we're going to get that charge. That takes time. It's not just recruitment, it's education and scaling out a pipeline. But by being able to do that, we feel very good about the spread bet and the risks that we have for the growth numbers we've provided.

Your next question is coming from Gary Prestopino with Barrington Research.

Real quick first question. Are you changing your year-end to a March year-end now? That's kind of how you set your guidance. So I just want to make sure how we're going to approach this going forward.

Correct.

Okay. All right. Good answer there, Steve. And then I guess what I'd like to get a handle on is -- well, first of all, are you still just have 6 modules that are part of Unity right now, safety, security, fuel, maintenance, regulatory, you haven't added a module. Have you?

No. And we don't need to. So if you remember the Unity strategies, all of our existing solutions work together and all the functionality and feature sets we have work together within Unity today. And within 6 months, all of the MiX capability will be there. So from a functionality perspective, we have more than enough to offer a very comprehensive solution. Then secondly, where we're seeing real demand is this piece for data ingestion and harmonization. So that's the simplification of all the different data sources and then the third-party integrations. And that's where we're spending our time to scale that out because that demand is growing. And to our conversation earlier, that gives you the 2 armlocks from the customer to it. We will then continue to mature the individual modularity as we've got those customers locked in because then that will increase ARPU from that perspective.

Okay. And then my next question really revolves around integrating the sales forces, which I think that's important. And I want you to talk a little bit about how you're doing that. Did you have a lot of customer overlap? Or because MiX was operating in areas where legacy PowerFleet wasn't, that hasn't been altogether too much of an issue? As well as how long does it take you to get the MiX legacy sales force ingrained with the capabilities of Unity to sell Unity?

So Josh, why don't you take that one?

Yes. Thanks for the question. So in terms of integrating the sales forces, this is already in flight. So obviously, there's work, as Steve mentioned, in terms of kind of training and enablement. We've already to date, had a number of sessions with the sales team in terms of enabling them to be able to sell across the suite. And as we kind of mentioned, our strategy is that we have an account-based vertical strategy where we have account owners who are selling everything into these accounts, which is much more efficient rather than kind of a product-focused strategy. So the short answer is that it's in flight, and we'll continue to accelerate those efforts in terms of getting everybody up to speed. But we have a firm and well-thought-out sales enablement model, which is going to allow that to happen quickly.

Did you have a lot of overlap or not?

There's -- yes, I mean, there's some overlap, but we've, I think, primarily, if we think about the legacy MiX business in North America, for instance, a lot of oil and gas, a lot of construction. And then on the legacy PowerFleet side, a lot of transportation, manufacturing, food and beverage, et cetera. So there's been a little bit of overlap, but it's actually quite complementary in terms of the customer bases.

And if you think of it more broader than PowerFleet had a dominant force in the U.S. Both of us were underpenetrated in Europe. MiX is obviously strong in Africa and Australasia, which PowerFleet wasn't. We have Israel. So it's very, very complementary. And just in terms of getting everybody to sell the whole solution, it takes, for somebody to be competent, I think, a 6-month period, pipeline has to be built, which is why we're being very sensible, we believe, in paging the double-digit growth for the following financial year.

[Operator Instructions] Your next question is coming from Dylan Becker with William Blair.

Appreciate all the color today. Thanks for putting this presentation together. Steve, maybe I wanted to double-click on Unity. And I think we kind of touched on it, but how that agnosticism really unlocks kind of the incremental willingness from customers not only for adoption, but again, driving that greater intelligence from the factory to last mile in time with the integrated -- or the existing system. It seems like there's a lot of value there for future expansion opportunities, but also kind of easing the data burden, which I think would be a key incentive from a business perspective. So maybe how those combine to drive, again, incremental opportunities and really what seems like a pretty healthy growth runway for the business?

Great. So Josh, wondering you can take that one and maybe give a couple of more generic examples from the U.S. base?

Yes. So great question. So when we think about the data agnosticism that you just mentioned, so I mentioned during my section that we have, especially some of these large Fortune 500 companies, they have multiple divisions. They typically buy it at a regional level or at a division level. And what we're seeing is this need to pull that data together. So oftentimes, these folks are going into multiple portals. They're building their own integrations. So -- and even as Brendan and Charles mentioned, we're starting to see some traction from some legacy MiX customers. So there's definitely a desire to kind of get that single source of truth, that single view of their mobile assets across the enterprise. And then what we're also seeing is that the data that we are then able to extract from those multiple data sources is very meaningful to the business system. So I mentioned the example of the warehouse system that can provide actuals to the warehouse management system or the labor management system. Same thing for over the road in terms of once you have visibility across all of your mobile assets, let's say it's trucks or trailers, that data is very meaningful to a transportation management system, both in terms of overall visibility as well as being able to plan routes better, as an example. So we're -- we've had some recent wins, and we've had some implementation of this, but that's where we're seeing really the market go, and that's where we're seeing a lot of demand from our customers today.

Okay. Great. That's really helpful. And maybe as a function of that kind of switching it over to David, too. We walked through a lot of kind of like where the immediate synergies in the business sits. But given kind of the opportunity here ties to data gravity and data scale, how we should think about kind of that maybe steady-state balances as the go-to-market teams ramp and things of the like and kind of doubling down to capture that opportunity versus some of the incremental margin initiatives as well?

Yes. So if you look at our long-term guidance, you can see there's significant operating leverage over the next couple of years, getting to sort of 30% EBITDA margins by the end of 2026 fiscal. But if you look at our long-term guidance, we also talk about sort of holding EBITDA margins steady at 30%. So in essence, we're still growing the top line, we're accelerating growth of the top line. But what we're able to do is really sort of invest more in terms of go to market to really boost that growth rate because that's really where you create value. So we do view this as a means to get more cash generation, get the feet under us, really get built Unity coming, but then really aggressively invest in go to market, so we can sort of up that growth rate to north of 20%.

Your next question is coming from Alex Sklar with Raymond James.

Steve or Charles, can you just put some more context around the ramping sales and success organization commentary? Is that a quantity of kind of reps and support staff or are there some new enablement resources that you're putting in the hands of the team? And then just to follow up on that, is that process already underway? Or is there a certain milestone of the integration or level of pipeline growth you're hoping to get to before putting more dollars behind that?

I think Steve might have dropped off the call. I'll take the question. Steve, are you still there? I just got a message from a listener that they appear to have dropped. Yes, if we look at that, we are doing a number of things. The first thing is sales enablement. So obviously, we've got to enable our direct sales teams, our customer success people and our partners. So there's an enablement process underway, and it is already underway. And then there is the scaling out of those sales teams as well and customer success teams. And we see customer success primarily as customer success, but also playing a very strong part in the expansion within the customer base. And so we'll be using some of the cost savings that we're getting out of other areas of the business to reinvest that into our sales growth engine, which we see holistically is not only the salespeople but customer success and customer expansion. Does that cover the question? Was there another part to it? Sorry.

No. No, that's helpful. I guess just one more follow-up on that, Charles. Just in terms of sales enablement, I'm just curious kind of what that actually looks like in practice. Is that putting more technology in the hands to kind of help them kind of get more coverage? Is that training? What exactly kind of are some of the processes you're doing on the enablement side?

So on the enablement side, we've got, obviously, there's -- as a salesperson wants to get our customer success person they need to understand the product itself, the offering, they need to understand who is the market, what are the benefits and so on and so forth. That's typical kind of enablement, but there's also the technological side. And so we've got the combination of our sales force system. So we've got to have that all ready so that they can produce quotations and get that from order to cash. And so that is all underway already. We've got those programs going. We've got it well defined as to how we're going to do that. And we've got it pretty well defined as to how we're going to handle it in the interim. And there, we've been very insistent on our people applying speed to this, not seeking to perfect the imperfect but rather get on and implement the imperfect as it comes to some of these systems. We don't want that to be a barrier. And each business has their own well-functioning systems already. And so there's no need to hold back on that. So keeping that forward motion, both on the marketing lead gen and sales side of it whilst following through on the implementation and training of both sales, customer success and expansion.

And just to add to the -- so I'm back after a brief technical interlude. In terms of scaling out the team, we're pressing the button now. So we are in -- we'll be in a phase where we'll be ramping up the sales team as we take cost out. But obviously, there is a lead time to productivity. So we're getting going now, particularly in North America and in Europe.

All right. That's super helpful color. And then, David, just in terms of kind of the rule of and some of the targets, I just want to make sure we're interpreting correctly, those -- the 10% growth, the Rule of 40, those are exit run rate at the end of year 2, not intended to be kind of full year fiscal 2026 targets? Is that the right way to interpret that?

In large part. I think the nuance is, obviously, a lot of the EBITDA expansion is coming from realizing cost synergies and you don't get the full value of that, and I should do it at the very beginning of the year. So the way we've talked about our EBITDA performance in terms of the numbers that we shared is that's the exit run rate. So in essence, if you had a $10 million synergy happen halfway through the year, you get 5 in year, you'd have another 5 in terms of where exit run rate is. So that's a big part of it in terms of where we would be. But yes, that's the thought.

Okay. And then just a last one for me back on the kind of go-to-market side. But can you just help frame what percentage of kind of the existing opportunities the customers are really looking for that full supply chain visibility today versus kind of maybe just one piece of it, either if it's around kind of the asset tracking or some specific part of the supply chain? I'm curious how much you kind of have to elevate the conversation from the sales side versus this is what the customer is already starting to ask for, if that makes sense.

So I think we're already at 30-70 in terms of 30% to the customers wanting the full suite. And that is shifting dramatically. And that's shifting for a number of resources, labor shortages, people feeling paralyzed in terms of the amount of data that they're trying to consume. CIOs and CTOs not giving fit-for-purpose systems in order to be able to drive operations and just the need for profitability, more effectiveness, more efficiency, more safety and that to do that across one holistic site. So it's changing dramatically. There's still some work to do. I think we're building a force that is able to have that broader C-suite capability. A lot of the time in the pure telematics arena, people are in the operations and transportation part of an organization, and we're really getting good traction outside of that with the safety directors, the CTOs, the CIOs and most recently, CFOs, and if you think about the budgetary holders of those from those perspective, it opens and unlocks new opportunity. And ultimately, we are a provider of business change, and there is a huge thirst. So when you do get to those right people and you do have that right conversation, then you are shifting mindset very dramatically.

[Operator Instructions] Your next question is coming from Greg Gibas with Northland Securities.

Thanks for the color and the update today. I was wondering, just given that you're maintaining your projections, maintaining kind of the expected cost synergies, wondering if anything has kind of surprised you either positively or negatively now that you're roughly a month into the combination?

No. In a simple word, no. I think from Josh, the CEO of MiX and my perspective, the cultural alignment that we had very quickly, the understanding that we needed to hit the ground running, the way that we work together in transparency and openness and with an element of bravery on both sides, I think we very quickly got to know of the opportunities and also have the challenges within the business. I think standing back what this cooperation has built for MiX is a real future strategy for its customer base. And I think what we've been able to do post combination is just to understand where those risks and opportunities are in that customer base and get to a granular level. Flying the plane post April 2 feels very similar to being on the plane pre April 2. So there's been no great surprises. And that's what is what we want because we're now really focused in execution mode. We're not trying to uncover things and find answers to problems that we didn't know existed 3 or 4 weeks ago. So it's a great place for us to be. It really is.

Got it. That's helpful. And maybe a question for Dave. But if we could just dive into the projections a little more for top line growth, what are the assumptions there for cross and upsell contributions versus maybe new logo growth? And should we think about the majority of growth coming from that anticipated adoption of Unity?

Yes. So as we said earlier, I think really -- I think Charles covered this in the prepared remarks. The expectation is the majority of growth is going to come from sales to existing customers. And the joy of Unity is in terms of the tool set you have to go sell is massively expanded. So that's really where the opportunity is. We would be thoughtful about where we spend money and the most efficient, most effective and the most assured way to sort of grow revenue is to actually sell to people that you're working with already. So obviously, you have to bring something new to the table. And certainly, the signal is very clear that Unity meets their evolving needs.

Got it. And I guess just last one for me. I think on Slide 28, is kind of nice in your penetration across multiple industries. Wondering -- and I apologize if I missed this, but can you kind of address maybe where you're seeing industry outperformance and maybe what industries have been more challenging of late?

So Josh, do you want to take that one?

Yes. Sorry, just I understood the question. So you said which industries are outperforming versus where we're seeing challenges?

Exactly, yes.

Yes. So I would say in terms of industries outperforming and obviously, I think this just follows the economic cycles of those industries, right, in terms of typical ebbs and flows. But we're seeing a lot of traction with our manufacturing customers, particularly around safety whether that's over the road and in the warehouse. So some of the market drivers that really have led to a lot of opportunity and growth for us have been around where it's really a shift towards safety, whether it's pedestrian safety or over-the-road safety. So we're seeing a lot of demand for our -- for instance, our in-warehouse pedestrian safety solutions as an example. And that's really in the warehouse that's manufacturing plants, et cetera. So I think along some of the segments around whether it's food and beverage, whether it's manufacturing is where we've seen a lot of growth. In terms of challenges, I think none of the industries necessarily come to mind, but I think those just really follow kind of the cyclical nature of those industries from an economic standpoint.

This does conclude the question-and-answer session. I would now like to turn the floor back over to the CEO, Steve Towe to for closing remarks.

So look, I just hope to say thank you to everyone for their attention. It's been 1.75 hours, and 1.75 hours we really enjoyed to give everybody a progress update. We will continue to update in a similar way in the future. We plan to have a full Investor Day in the fall, a live event again. So we'll be measuring our progress at that point. I think Brendan's takeaway slide is one that I will ask you to take a look at. All of the materials are live on our website now. But we think this is a truly spectacular value-creation opportunity for our shareholders. We're excited about it. We feel it's in our own hands. It will take some time to ramp. We've been very specific in terms of the complexity of the next 6 to 9 months. The work that we're doing to underpin the growth story for the future. And I think there's a lot of credibility and hopefully, that's been confidence-building for everybody today. We thank you for your attention. We'll be in touch again soon. So thank you very much. Have a great day.

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.