CalAmp Corp (NASDAQ:CAMP) Q3 2023 Earnings Conference Call December 20, 2022 5:00 PM ET

Company Participants

Joel Achramowicz - Managing Director of Shelton Group, Investor Relations

Jeff Gardner - President and Chief Executive Officer

Cindy Zhang - Acting Chief Financial Officer

Conference Call Participants

Mike Latimore - Northland Capital Markets

George Notter - Jefferies

Clay Williams - Goldman Sachs

Scott Searle - Roth Capital Partners

Operator

Welcome to CalAmp's Third Quarter 2023 Financial Results Conference Call. My name is Heena and I’ll be your moderator for today’s call. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference call, Joel Achramowicz, Managing Director of Shelton Group, CalAmp Investor Relation firm. Joel, you may begin.

Joel Achramowicz

Good afternoon, and welcome to CalAmp's fiscal third quarter 2022 financial results conference call. I'm Joel Achramowicz, Managing Director of Shelton Group, CalAmp's Investor Relations firm. With us today are CalAmp's President and Chief Executive Officer, Jeff Gardner; and Acting CFO, Cindy Zhang.

Before we begin, I'd like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect CalAmp's best current judgment, they're subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking projections. These risk factors are discussed in our regular SEC filings and in the earnings release issued today, which are available on our website. We undertake no obligation to revise or update any forward-looking statements to reflect future events or circumstances. Jeff will begin today's call with a review of the company's recent operational highlights, and then Cindy will provide details review of the financial results followed by a question-and-answer session.

With that, it's my great pleasure to turn the call over to CalAmp's President and CEO, Jeff Gardner. Jeff, please go ahead.

Jeff Gardner

Thank you, Joel. And thanks to all of you for joining us on the call. Our third quarter revenue grew 8% sequentially to $78.9 million, which exceeded the high end of our expectations. This higher-than-expected revenue resulted from additional components which we secured in the spot market to meet our customer commitments. This created significant margin pressure in the quarter. But the fulfillment of these orders accomplished several objectives for both CalAmp and our customers including the avoidance of business disruption for customers affected by Verizon 3G network shut down, and it allowed the fulfillment of aged order demand for other customers. Given the unpredictable nature of component availability and pricing in the spot market, as well as the strategic importance of the conversions, the team felt it necessary to absorb the margin pressure in order to fulfill these orders. We view this situation as transitory with some continued impact in Q4, but to a much lesser extent, and then return to a more normalized level of gross margin in early next fiscal year.