But we’re pleased. And while we’ve taken some medicine here in the fourth quarter, that Paul and I have talked about, we’ve largely left that team alone. In fact, one of the reasons to take the restructuring type actions was that we got all this talent in and we want to leave it largely intact, because it’s more relevant to the future of the next generation product and, and, and. So generally speaking, very good. Before I move on to your second question, anything more on Twilio or did I get that?
Jamie Reynolds : No, really appreciate the detail.
Romil Bahl: No worries. And then your second question was just our customers asking for lower price because of macro. First of all, customers are always asking for lower price, is there macro or not. But yeah, you could argue that the intensity of pricing conversation is up significantly. The — our carrier partners sometimes, they don’t quite understand why we keep coming back to them for more aggression. And those M&O partners that don’t get more aggressive won’t get our SIMs, won’t get the growth because that’s just the reality of what it takes right now. But equally, look, it’s a — it’s good — it’s a good thing to get discipline and get focused on your asks of IoT providers, because the — what’s happening right now is going to force the separation of the wheat from the chaff in terms of the providers, right?
More people are asking questions about quality and eSIM than ever before. And yeah, sure, price is a part of it. But it’s sort of secondary to the main value proposition you’re solving.
Paul Holtz : And the only thing I would add to that when, yes, when customers are coming to ask for price decrease a little more, but as part of that, we’re seeing more and more of customers where we don’t have 100% of their wallet share, they’re coming to us to say, well, if I move all of my share to you guys, what price can I get? And obviously, the more volume that they bring to us, we’ll give them that because we’re going to double our revenue with them or our base with them. So we’re seeing a lot more customers looking to consolidate, because they know they can save costs.
Jamie Reynolds : That’s all [indiscernible].
Romil Bahl: Thank you.
Operator: Thank you. Next question is coming from Avril Lasaro, it’s a private investor. Your line is now live.
Unidentified Analyst : Hi, guys, and thank you for taking my question. Romil, you continue to say that creating value for shareholders is a top priority, and KORE is well positioned to achieve this goal. That’s been going on for a number of quarters. Unfortunately, KORE has lost over 95% of its value in a little over two years. I’m glad you were able to refinance, although it appears to be very expensive, 10% dilution to shareholders, high interest rates and dividends on preferred equity. However, the real issue is management’s ability to manage the business. Cost cutting is long overdue. And I look forward to learning more about your reorganization plan in Q4. One of the things I don’t really understand is why you do not have pricing leverage.
You have great products, a great company, a growing market that spells out to me that you should have pricing leverage and you should be able to increase your prices. I remember back, I think it was in the fourth quarter of 2022, when you were talking about increased cost relative to your — the inability to get products to customers, and other people were raising prices, but you didn’t want to do that to your customers. And I don’t understand why, if you could explain that for me?
Romil Bahl: Okay, so I think after quite a few comments, there was only one question. So I’ll answer just that question.
Unidentified Analyst : Right.
Romil Bahl: The question at the end was about a conversation in fourth quarter ’22 about not increasing pricing on products. It was not — that was that was not the question. The question that had been asked of me at the time was by one of our sort of analysts who covers us was, hey, when hardware prices are up so much, right, are you just passing along those costs to your customers or are you further marking those up, right? So let’s say a widget is $100. It became $140 because of inflation, right, are you just passing that through or not? Because the comment — the question really came from a place where Paul and I talked about gross margins were down, because we were merely passing that through. And my response, which by the way, I would consistently respond and would always behave this way and this is why the fruits are there, because we haven’t lost any customers in this business in three plus years.
Gouging the customer when it’s, let’s say on the $100 product, I was getting whatever. On the hardware alone, let’s call it a 10% margin just for simplicity. If on $140, I would then also say I want 15% margin, right? That customer will never forget that set of actions. Okay? And so being opportunistic in that moment, is what I said, we were not interested in doing, we certainly were passing along the cost, of course we were. That’s just real costs. Hopefully that helps.
Unidentified Analyst : Yeah, but your SG&A costs are increasing. We’re in an environment where your margins are decreasing, overall at the bottom line. And you can’t just not increase prices and you have to at least address that issue. I have some other questions regarding your global sales pipeline. One of the other callers asked a question about how the opportunity revenue is distributed amongst the various stages. And I don’t believe I heard the answer to that. My specific question is what percent of the overall pipeline is qualification and technical evaluation stage?
Romil Bahl: Yeah. Okay. So one of the reasons I didn’t go there when Lance asked the question was because at any moment in time, this is a snapshot. There are deals that go through these things with velocity because they’re relatively quick decision timeframes. There’s other things that will sit in a contract time stage or a beta side stage for many months, because that’s how long it takes for the customer to really get through a beta test. So just sort of, I would say, looking at a number in a phase is by no stretch of the imagination, a direct line to, hey, what will your PCV be in the next quarter? And that said, I’m happy to answer the question, right? So there’s, of 740 million odd dollars, obviously as one would expect, the vast majority of it is in the qualification and technical evaluation stage.
