Paul Holtz: Yeah. So, from — the split really on the increase in revenue IoT connectivity. So like we had said low to mid single digit growth on the IoT connectivity. And then on the solution side of things, again, because we have that hole of $12 million to fill, we’re looking at again, same kind of range for that also. So, if you’re looking at it, it’s pretty similar on both those line items. As Romil mentioned on the cash flow perspective, so we end this year around 35. For next year, I do see it going down when you include, like Romil said the integration cost — this is again assuming June 1st closing of the deal, including any of the integration costs with them — with the slightly dilutive that EBITDA that brings with Twilio.
And then like Romil said we have some additional here audit costs in Q1 and then go public costs that will now have a full year of in 2023 versus 2022. They were kind of ramping up as the year went on. We will see the cash flow probably — see about a negative $2 million, $3 million, $4 million next year.
Matthew Niknam: If I could just follow up, also safe to assume, I know the margin guide is about 20% for the year, but safe to assume 2H could be a little bit lower as you get some dampening effects from the Twilio revenues coming in at least early on.
Paul Holtz: Yeah. So, the margins from the Twilio side are less than ours, obviously. And that’s where we see a lot of our opportunity to gain here. But yeah, on the connectivity side, because all the revenue will be in the connectivity revenue. You will see from a percentage basis a little bit of a dilution from the Twilio margins in the second half.
Romil Bahl: But I would also, argue Matt, that, look, I mean, especially given this macro environment, just kind — it’s sort of smart to be a little bit conservative, sort at one point I’ll just throw out there in terms of characterizing our guidance. The other point I would throw out there is that we had investments building in our organic business in more in H2 after we sort of made sure things were not falling through the ground in terms of this recession and all these macro environments, which again, we’re not really seeing these signs of weakness and we feel really good about that. So — and we’re going to protect that, right? Because just in case the deal doesn’t close, we’re going to absolutely protect the ability to do those investments on our own.
Equally, if the deal does close, there may be a little bit of rationalization of whether all of those investments are required or not. And so, we’re very, very comfortable, let me say it that way, on the 20% EBITDA and yeah, there may be some impact in H2, but there may not be as big as your thinking, so.
Matthew Niknam: That’s great. That’s great. Appreciate the color. Congrats again. Thank you.
Romil Bahl: Thank you.
Operator: Thank you. And we have time for one more question, and that question comes from Meta Marshall with Morgan Stanley. Please state your question.
Meta Marshall: Great. Thanks. Maybe two for me. Just maybe more background on how this deal came around of how long this conversation had been happening. Did they approach you? Just anything that — any background that you could give there. And then the second question just being, now that Ericsson has kind of divested their IoT platform to Aeris, just any update on where that partnership stands? Thanks.
Romil Bahl: Okay. Good stuff, Meta. Let me see. I’m not sure exactly how much I am able to say/should say about the process with Twilio. It’s been a cycle. It’s been a longish cycle. They have been careful in how they’ve made this selection. Any more words on that should likely come from them, to be honest, as opposed to from me, in terms of what they might be willing to share in terms of the number of parties that were involved in the process and the ups and downs and so forth that go on. We are just delighted that at the end of it all, they chose to pick us, right? I mean, their bet was us. This was the place they said is the best place for their talent, for their customers, and for the go forward kind of journey of IoT, which obviously continues to be an important market for them, it’s just not where they are strategically focused for the future, right?
So in that sense, it’s sort of a marriage made in heaven. We’re just delighted that it’s worked out the way it’s worked out. What was the second part? Was the Ericsson question. Again, an excellent question. We were really bullish about that partnership. I at least haven’t seen a closing announcement yet of the deal. And as you might imagine, between the gun jumping rules and everything else, there’s not exactly a lot of conversation going on with either side right now about their plans and so forth. So, I suspect post close will start to get more insight into their plans. Let me say this. Let me show my hand a little bit in the sense that we’re definitely more cautious, right, about the situation. I mean, we were deliriously happy to take IoT accelerators inbound traffic, if you will, from their international customers on their international MNOs, right?
When it was part of Ericsson. When it’s part of arguably a competitor or sort of wannabe competitor, we’re going to be cautious. We have lots of opportunities in kind of how we develop our indirect sales channel. With between the AWSs and the Google Clouds, are we going to put more of our effort on some of those as opposed to an Ericsson, it all depends on what we hear and what their proposition comes back with. And we’re certainly going to be looking hard at what, if anything, may change. Now, last thing I’ll say on this, slightly long-winded answer, Meta, is that, as I said, when the Ericsson partnership announced, right, every deal had to be one at a time and there was going to be minimal revenue in 2023. And in fact, in the guidance we provided there is $0 in there, is I can say that confidently.
So, there’s no risk to the numbers because of what may end up on that partnership front.