Mike Latimore: Yes. Yes. Great. And then you talked about winning pretty much all large sensor deals. Is there sort of a consistent message from these customers as to why they’re choosing you? Is it the core center itself? Is this a software strategy to get attached to the sensor or something else? Any kind of consistent message?
Joe Bergera : I think it’s really all of the above. But the way that people express it is that the technology just works. It addresses their business priorities. And that’s a function of a lot of things. It’s the fact that — I think that we have unique domain expertise, and that’s because we benefit from the traffic engineering capability, it’s part of our DNA because of the — our leadership in the consulting sector. And so understanding how people operate these sensors and what kinds of information they need out of it has allowed us to build product that meets the needs of the customers. And then we supplement that with, we think, the best field support in the industry. So I think, again, I mean, just generally, people are like, wow, this does exactly what I need, whereas I don’t see this from other vendors. But there’s a lot that goes into that, right? I mean it sounds easy, but there’s a lot of work on the back end.
Mike Latimore: Yes. And then you talked about sort of the data providers to use. Are there a couple that are just clearly the largest data provider to your ecosystem?
Joe Bergera : Yes. Well, so we’ve put out some announcements about some of those relationships. For a long time, we’ve talked about our relationship with HERE Technologies. We’ve had a number of announcements with HERE. We both utilize hers map within ClearMobility Cloud because a lot of the data is presented in a map format, but we also ingest data from HERE. And then also, we recently put out announcements about agreements with Wejo and Otonomo. We do have agreements with various other parties. Some of them right now are confidential, so I can’t comment on those. But we receive — we get data from multiple third-party commercial suppliers. And then additionally, because of our relationships with agencies, we have unique access to a lot of agency data.
Like there are certain states where we have access to virtually all of the state’s IoT devices deployed across like State’s entire highway system and that’s a function of our relationship with the agencies. Now that’s not exclusive arrangement. Of course, like agencies aren’t going to enter into exclusive relationship with anybody about their data because they would view it as either proprietary or a public asset. But we’re — because of our relationships, we’re in a unique position. We have know-how known the relationships to understand how to get access to that data. So the answer is we get the data from multiple sources. It’s uniquely curated. But in terms of the commercial arrangements, I’m able to discuss publicly our primary ones at this point would be HERE, Wejo and Otonomo.
Mike Latimore: Yes, that’s good. Super. Thanks a lot.
Joe Bergera : Thank you.
Operator: Thank you. Your next question is coming from Ryan Sigdahl from Craig-Hallum Capital Group. Your line is live.
Ryan Sigdahl : Good afternoon guys. Just one for us. And you maybe alluded to this a little bit earlier, but I want to ask it more directly. So you raised the revenue guidance, qualitative commentary all seems quite positive. But yet you lowered the EBITDA for the year. So what, I guess, is causing the additional margin pressure relative to your expectations a couple of months ago?
Joe Bergera: I think it’s mostly that costs developing the alternative circuit boards, some of which we incurred in the third quarter and some in the fourth. And Doug, maybe you could explain that we have a dependency on some third parties to develop some of the prototypes and rights, some of the firmware. And there are a lot of other companies in the same position as we are and so we’re seeing the availability of those resources getting way scarce.
Doug Groves: Yeah. No, that’s exactly right, Joe. So it’s just really the cost to get those additional circuit boards into production, so we’re competing with a lot of other companies that are using the same resources. And it’s just — it’s costing us a little bit more than we had anticipated.
Joe Bergera: And so Ryan, that’s a temporary issue. As I said, we expect by the end of the fourth quarter, we will have delivered or released to production all of the alternative circuit boards that we originally identified as critical as part of the supply chain improvement program, so that will be behind us. It’s not to say that we won’t continue to develop alternative circuit boards, but we won’t be under the same time pressure. And that should change the pricing scenario, because especially when we’re asking people to do things quickly in order to meet our timeframe, we’re incurring various markups in this environment.
Ryan Sigdahl: Okay. Thanks guys.
Operator: Thank you. Your next question is coming from Tim Moore from EF Hutton. Your line is live.
Tim Moore: Thanks and congratulations on the strong sales growth in the quarter. I am curious when you compete for attached software services in a bid do those types of negotiations and bidding take a few extra months longer than less bundled services? I’m just trying to think of the training or a higher price point as a bundled package triggers a longer lead time to close the award.
Doug Groves: Yeah, Tim, that’s an extremely good observation. That’s an analysis that we do on virtually every opportunity, right? I mean, our desire is to attach annual recurring revenue or cloud revenue to every sensor sale, every professional services engagement that we have. But you’re exactly right. In some cases, you introduce complexity, and it can occasionally slow things down. There are certain actions that we’re taking, which we don’t want to discuss right now. So I think we’ve we think we have a pretty smart approach to try to thread-the-needle, which we don’t want to share with competitors at this point. But we think that there’s a way around that. I mean not to say that it’s going to go away, but that we can get better at that.
And we’re going to start implementing some of these sales techniques. Actually, we’re — in fact, we’re in the process of introducing some of those sales techniques right now. That does — isn’t going to completely eliminate the issue. But we do think that we have an interesting way to thread-the-needle. And I would say that the good news on the flip side is that when we’re able to attach that recurring revenue, right, then the outcome for us on so many levels is so much better than having just sold like a piece of hardware on a transactional basis. And then the next time we’re selling to that customer, it’s like another transaction sale, right? So to the extent that we’re able to attach recurring revenue to these units, it’s going to be great over the long-term, which obviously you know, but again, it can create complexity upfront, and we think we have a way to mitigate it.
Tim Moore: That’s very helpful. I appreciate the color on that. For your AI-powered Vantage Apex offering, are most of those features now available and activated for customers since December? I know it was launched a little over a year ago. I’m just trying to maybe wrap my head around the Vantage Apex acceleration, sales growth potential and all the other launches you mentioned earlier on the call, as they maybe gain more momentum, is that attracted more customers now that the features are more active
Joe Bergera: Yes. That’s another really astute question. So we have three, four generations actually of sensors, detection sensors in the market right now. We have our Edge product, which we’re in the middle of end of lighting. But for the — through the December 31 period, we were still selling it. We have our next product, which today represents by far the largest portion of our detection product sales. And then we have Apex and Fusion, which were — in our industry, which moves pretty slowly because it’s very risk-averse. They were introduced just very recently.
, : And that will be the largest — that will be the largest point in the nation of high-definition AI-based detection. But anyway, the point is it’s still €“ we’re still in the early innings with respect to that product. And then Fusion is we’ve sold even fewer units of that to date. I want to make sure that everybody understands that, that was our expectation because we found that this market moves very slowly. It took us about three years before our next product really became mainstream in the marketplace and so we’re right on track with both our Apex and our Fusion products. But to your point, Tim, we sold relatively few Apex units so far.
Tim Moore: No, that’s helpful. I’m sure as more features can activate it, customers like it more on word spreads. Just to my next question. I know, your fiscal year ends next month, and you’ll probably give guidance on the call for that call. But when I’m looking back on this fiscal year, I’m just trying to ballpark in my head, the headwinds that you’re going to be lapping on the cost project, it seems like you had not only the development costs of the circuit board and you have maybe at least 70 basis points of drag from the supplemental broker costs. Were there any other big one-off costs that you incurred this fiscal year that probably won’t repeat next year?
