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Tivo Inc (TIVO)
Q1Â 2019 Earnings Call
May. 9, 2019, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good afternoon. My name is Robert and I will be your conference operator today. At this time I would like to welcome everyone to the TiVo Corporation 2019 First Quarter Results Conference Call. All lines have been placed on mute, to prevent any background noise. At the end of the call, there will be a question-and-answer session. (Operator Instructions)
I would now like to turn the call over to Nicole Noutsios, TiVo Investor Relations.
Nicole Noutsios -- Investor Relations
I'm Nicole Noutsios, Investor Relations at TiVo. With me today are Raghu Rau, Interim CEO; and Peter Halt CFO. We just distributed a press release and filed an 8-K detailing our first quarter 2019 financial results. In addition we posted a downloadable model on our IR site showing our historical financial results and GAAP to non-GAAP reconciliation.
After this call you will be able to access a recording of this call on our website at tivo.com as well as the transcript of the Company's prepared remarks.
Our discussion includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to among other things TiVo's future business, operating results and growth and profitability strategies, our future product offerings and deployments, the success of the Company's plan to separate the Product and IP Licensing business into two independent companies, the realization of stockholder value resulting from separation of the businesses and stand-alone businesses, the future growth, market acceptance, business opportunities and operating results of the stand-alone businesses; and the tax-free nature, structure and anticipated timing of the separation.
We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from these forward-looking statements as described in our Risk factors and our reports filed with the SEC. Any forward-looking statements made on this call reflect our analysis as of today and we have no plans or duty to update them except as required by law.
With that I will turn the call over to our Interim CEO, Raghu Rau.
Raghavendra Rau -- Interim President and Chief Executive Officer
Thank you Nicole, and thank you for joining us for our first quarter earnings conference call. I'm pleased to announce that after a thoughtful and extensive process our Board decided that separating our Product and IP Licensing businesses is the best strategy to maximize shareholder value. Accordingly we intend to spin-out our Product business to stockholders.
We believe that the separation will increase flexibility in pursuing growing market opportunities. We expect to complete this transaction in the first half of 2020 through a spin-out of our Product business to stockholders as a separately traded public company. We intend the spin-off to be tax-free to our stockholders and are actively pursuing a ruling from the IRS on that front. We will provide greater details including the relationship between the Product and IP Licensing businesses, management teams, Boards and corporate brand identities for each business as we get closer to the separation date.
During this process, the Board of Directors will continue to be open to strategic transactions for each business that could create stockholder value and is actively engaged in discussions with parties interested in each of our businesses.
As as we pursue separating the Company into two stand-alone companies, management has and will continue driving both businesses forward by focusing on the previously announced five pillars of growth with profitability strategy. As a further background, for many years it was synergistic to have our Product and IP Licensing businesses combined. However, in today's rapidly evolving market landscape, we believe the two businesses as stand-alone separate entities unconstrained by each other will be better positioned to pursue growth opportunities.
It is apparent that these two businesses have different return profiles, capital allocation requirements and customer engagement cycles and now also represent distinct investment opportunities. Therefore we believe the separation of our Product and IP Licensing businesses is the best approach to unlocking the value in each of our business. We will do this by spinning off our Product segment which consist of our Platform, Solutions and Software and Services business.
The key to the success of the Product business, as a separate company is scale, trust and new neutrality. TiVo creates innovative products that provide for better entertainment experiences by enabling the connection between people and their personalized content. We provide our customers and consumers around the world with a unified discovery, delivery and display platform. We also provide content creators, service providers and consumers a trusted neutral platform to connect audiences and monetize transactions.
We believe that by separating from our IP licensing business, our Product business can pursue a customer-first strategy without the encumbrances of an IP Licensing model and this should increase receptivity for our next-generation products. As a stand-alone business, we believe we will see greater acceptance from service providers, content providers and device manufacturers to further scale our business.
Additionally TiVo constructed its operating model for scale and efficiency, delivering profitable growth for its stockholders. The Product business will include our comprehensive user experience technologies and a best-of-breed point such as search and recommendations, voice personalization, metadata, advertising and viewership data.
Additionally the Product business will include the following valuable assets. One of the world's largest independent user experience footprint, consisting of 15 million classic guide households and 7 million TiVo platform households. Our search and recommendations footprint, of greater than 30 million households Video entertainment metadata including almost 20 million TV shows and over 1 million movies covering 65 countries. Music metadata including 35 million tracks on 4 million albums and 3 million unique artist profiles. A TV viewership panel of approximately 3 million active households with matching rights and advertising impressions of 15 billion per month for monetization.
With these considerable assets, the Product business is at an exciting time in its transformation, particularly with several new products and business models launching later this year that will enable us to increase footprint, create a new content network and develop increased monetizable opportunities through advertising.
Additionally the Company is in the process of restructuring the product business infrastructure, required to drive operational efficiency and improve profitability to levels comparable to industry norms. As a reminder, for the full year 2018, our Product segment generated $401 million in revenue.
Following the spin-off of the Product business, the Company will an IP Licensing business consisting of Rovi and TiVo patent portfolios and other IP Licensing assets. The Company will license, our expensive and highly valuable patent portfolios aggregating over 5,500 issued patents and pending applications worldwide.
Today hundreds of millions of consumers have access to our innovations through our license agreements with leading video providers around the world. Our licensees include traditional and new media video providers across Pay-TV, OTT, mobile, consumer electronics and social media markets.
IP Licensing is a highly profitable business with revenue of $295 million in 2018 and a high percentage of this is a recurring revenue. We believe the separation will allow the IP Licensing business the operational freedom to pursue a broader horizontal licensing strategy.
Following the separation, this business will be able to pursue an independent strategy, innovating around the new frontiers of video entertainment, developing beyond a traditional product footprint and helping to assure in the next phase of the consumer's video and communications experience. The future of video is constantly evolving. And we believe it is of utmost importance, as video consumption continues its shift beyond traditional Pay-TV into Internet, social media and model domains that the IP Licensing business be able to diversify beyond traditional video content discovery and recording domains into new consumer applications and functionalities.
Through separation the IP business will be able to strategically invest in itself both to solidify its strong existing foundation and to appropriately pursue new long-term growth opportunities in new markets and geographies. We're now focused on optimizing both businesses to succeed on a stand-alone basis.
Additionally we remain committed to our five pillars of growth with profitability, transformation strategy. And I'm pleased to share of that employee base has been greatly energized by this focus on execution. In terms of our focus on execution, I would like to first highlight the progress we are making with our Product business. We now have 56 customers, signed up to deploy TiVo User Experience 4 and 55 of these customers have already begun deploying this platform. The last one to begin deploying starts later this month.
Among those deploying TiVo User Experience 4 are Mediacom, Cogeco, Atlantic Broadband, Service Electric and the NCTC. We also announced in the past couple of weeks, our first two IPTV deployments of TiVo User Experience 4. This was a long-awaited milestone for the company.
RCN and Armstrong will be the first operators to deploy our next-generation IPTV solution. RCN will roll out this new TiVo-powered video solution to its high-speed Internet, digital TV and home phone customers. RCN also plans to expand the TiVo offering across its properties including Grande Communication Networks and Wave Division Holdings.
Additionally Armstrong, which recently rolled out TiVo Experience 4 and voice-activated remote functionality to its entire subscriber base, will now utilize TiVo's next-generation platform to seamlessly transition to IPTV. This will allow Armstrong to deliver content consumers, when and where they want to watch it from managed set-top boxes powered by Android or Linux to unmanaged consumer owned devices such as Apple TV, Amazon Fire TV, Roku and Mobile. They will also be able to deploy TiVo's cloud-powered IPTV suite of solutions including IPVOD, IP Linear, Restart, Catch-Up and Network DVR across all of these clients.
In the quarter, we also expanded the footprint of the Sponsored Discovery advertising offering to include multiple MVPDs. This has been successful and campaigns continue to drive strong performance. For instance a major broadcast network ran a Sponsored Discovery campaign to promote a new series which resulted in increased tune-in of 436% by those who saw the campaign.
In terms of voice-enabled discovery, our natural language understanding entertainment discovery solutions continues its impressive traction. In Q1, TiVo's unique voice users grew 31% from 3.7 million at the end of Q4 to 4.9 million unique users at the end of Q1. Additionally quarterly queries grew by 36% from 238 million queries in Q4 to 324 million queries in Q1.
Now moving to an update on our Intellectual Property Licensing business, we continue to build on a solid base of customers. In 2018, we had 194 US patents granted, a Company record. This demonstrates our continuing ability to drive innovation. We're also very pleased to announce that we just signed a multi-year deal with a major social media company, our first in this growing space. This deal demonstrates the broader applicability of our patent portfolios to web-based social media and advertising technology companies and we believe this deal could serve as a springboard for future licensing activities in both of these segments.
We also had several multi-year international renewals this past quarter, including renewals with Humax, CJ E&M, TVStorm and Dwango. Once again demonstrating the relevance of our IP on the global stage.
Finally I would like to provide an update on our ongoing Comcast litigation. As I've said in the past, TiVo is fully committed to protecting its intellectual property from unauthorized use. And we expect Comcast will eventually pay a license for our innovations, just as its Pay-TV peer companies do and as Comcast itself has done in the past. On that front, we're pursuing cases in the ITC and the District Court system.
In the ITC, we anticipate a preliminary ruling from the Administrative Law Judge on our second ITC investigation toward the end of Q2. And we anticipate the final ruling in Q4. We also filed a new ITC complaint on April 26, which was preceded by a companion District Court case we filed in the Central District of California on April 22.
We're asserting that Comcast infringes six of our patents. Three of the patterns focus on various aspects of Comcast X1 DVR capabilities, including essential local DVR functionality, any room DVR and cloud DVR. Two patents focus on aspects of how network data and request for content are managed between set-top boxes within the user's home including aspects of how network data from and to remote service is managed. And Finally one patent focuses on the ability to provide real-time data in an interactive program guide such as Comcast real-time sports scores feature. We anticipate that the ITC case will start early in June 2019 with trial and decisions to occur in 2020.
We made a lot of progress this quarter both in our business and on our path to unlocking greater shareholder value. The Board and I strongly believe, that separating TiVo into two independent publicly traded companies is the best next step for the Company to unlock this value.
With that I would like to turn the call over to Peter, who will provide the financial overview. Peter?
Peter Halt -- Chief Financial Officer
Thank you Raghu. As Raghu just outlined, while we work on separating the two businesses we can either remain focused on improving the execution of our overall business to drive growth and profitability. I'll discuss how we did on that front this past quarter.
On a consolidated basis, first quarter revenues were $158.2 million with almost all of our revenue $155.8 million or 98.5% coming from our core business. This is our highest percentage contribution from core revenues since we closed the TiVo acquisition in Q3 2016.
Our Q1 non-core revenues consists of $2.1 million in hardware sales and $364,000 in sales of other products, primarily our legacy analog ACP product. As previously discussed, we no longer have revenue from the legacy TiVo Time Warp deals, which contributed $8.9 million in revenue in Q1 2018. And we are also transitioning away selling and hardware and products.
In terms of GAAP costs and results for Q1, GAAP total operating costs of $166.3 million were down $32.6 million or 16% from last year. Total operating costs decreased primarily as a result of lower amortization of intangible assets, the Company's continuing cost-reduction efforts and lower spend on legal cost due to the timing of IP litigation spend.
Q1 GAAP operating costs included $33.5 million of depreciation and amortization, $8.4 million in stock-based compensation and $3.5 million of other costs, primarily related to our ongoing restructuring actions and the cost of our ongoing strategic review, that are excluded from our calculation of adjusted EBITDA.
GAAP operating losses in Q1 was $8.0 million and our GAAP net loss, before taxes and continuing operations was $20.3 million. In terms of our non-GAAP results, non-GAAP total COGS and operating expenses were $120.8 million, down $10.1 million or 8% year-over-year. This quarter's non-GAAP total COGS and operating expenses benefited from our ongoing cost-reduction efforts, the timing of litigation spend and to a lesser extent reduced hardware cost due to planned transition of our MSO partners and retail customers to deploying the TiVo service on third-party hardware.
Adjusted EBITDA in Q1 was $37.4 million down $21.5 million year-over-year. Non-GAAP pre-tax income was $25.3 million down $20.9 million year-over-year. The decrease in adjusted EBITDA and non-GAAP pre-tax income, reflects a decline in revenue partially of set by our cost-saving initiatives and benefits from the aforementioned shift to deploying the TiVo service on third-party hardware.
For the first quarter, estimated cash taxes were approximately $4.9 million. GAAP diluted weighted average shares outstanding were $124.4 million and non-GAAP diluted weighted average shares outstanding were $125.1 million. For those interested in calculating our non-GAAP EPS, take our non-GAAP pre-tax income subtract our cash taxes and divide by non-GAAP weighted average shares outstanding.
Turning to segment results. In Q1 core product revenues were $88.9 million, down 20% year-on-year. The revenue decline was primarily due to $23.9 million of revenue recognized from an international MSO customer exercising a contractual option last year to purchase a fully paid license to its then current version of the TiVo software. Under ASC 606 this revenue was recognized in Q1 2018, as opposed to being spread over time including in Q1 2019. This decline was partially offset by a new perpetual passport license arrangement with an international MSO customer.
We exited Q1 with approximately $75 million in contracted quarterly product run rate revenues, excluding ACP, NRE, advertising and hardware revenues. Product adjusted operating expenses were $82.9 million in Q1, down 7% from last year. This was attributable to our cost-savings initiatives and lower hardware COGS, resulting from the shift to deploying the TiVo service on third-party hardware.
Moving on to the IP Licensing business. Core IP Licensing revenues were $66.9 million up 4% year-on-year, due to higher revenue from existing customers. As a reminder, the last of the TiVo Time Warp agreements expired in July 2018. We recognized $8.9 million of Time Warp revenues in Q1 last year. We exited Q1 with approximately $65 million in contracted quarterly IP Licensing run rate revenues, excluding catch-up revenues intended to make us whole for the pre-license period of use.
IP Licensing adjusted operating expenses of $21.8 million in Q1 were down 14% from last year. This is attributable to lower year-on-year IP litigation expenses. We have a very strong balance sheet with cash and investments at the end of the first quarter of $327 million. The largest use of cash in Q1 was our required Term Loan B payment of $46.6 million. We also have $1 billion in Federal NOLs and remaining stock repurchase program authorization of $150 million.
Finally, our Board declared a quarterly dividend of $0.08 per share which is to be paid on June 19, to stockholders of record on a June 5.
In preparation for the separation, the Board and management are focused on determining the optimal strategy, operating structure and capital allocation policy for each business. Accordingly, the Board felt it prudent to adjust the current dividend in order to optimize our two balance sheets in advance of the separation. While this is a lower dividend than in previous quarters, it still provides a meaningfully higher yield than the S&P 500 average dividend yield.
Now turning to guidance. For fiscal 2019, the Company expects revenue of $640 million to $654 million. And a GAAP loss before taxes of $75 million to $87 million. Additionally, the Company expects adjusted EBITDA of $172 million to $178 million and non-GAAP pre-tax income of $120 million to $126 million. TiVo anticipates it will incur $28 million to $29 million in cash taxes based on its operating expectations. Additionally TiVo expects its GAAP diluted weighted average shares outstanding to be approximately $126 million and non-GAAP diluted weighted average shares outstanding to be approximately 127 million.
With that, I will now turn the call over to the operator to open the line for questions. Operator?
Questions and Answers:
Operator
(Operator Instructions) First question will come from the line of Mr. Eric Wold of B. Riley. Your line is open.
Eric Wold -- B. Riley -- Analyst
Thank you and good afternoon. Couple of questions I guess, first of Peter just to clarify the or confirm the non-GAAP diluted EPS calculations, for the first quarter I'm getting $0.16 and then for the guidance I'm getting $0.72 to $0.76, is that correct?
Peter Halt -- Chief Financial Officer
That is correct Eric.
Eric Wold -- B. Riley -- Analyst
Okay. And then a question on the plant separation, I guess you made a comment that you're still currently engaged with interested parties on both sides of the business. Why pursue the strategy of separation, -- extra cost and effort if one of those may come to fruition? Or does this involve kind of separation activity that you'd have to do regardless of whether one of the sold or the separation goes through?
Raghavendra Rau -- Interim President and Chief Executive Officer
Eric, we have decided on this path as best way to create value for our shareholders. We think talking to potential interested parties does not innovate our ability to be able to go over that strategic direction. It actually enhances the potential outcomes for our shareholders. We don't think, we lose any flexibility by taking the steps we announced today, regardless of where those discussions end up.
Eric Wold -- B. Riley -- Analyst
Okay. And having a chance to, truly fair it out -- what was in the press release and kind of historical. But how different is the planned spin business from the Product business from what it's historical event characterized as the Product category in your financials?
Peter Halt -- Chief Financial Officer
The Product business is basically the same as our products segment. What you have is that our combination of the legacy Rovi and legacy TiVo businesses combined. And IP, the business is the same basic business as you see in our IP business footnote, licensing the combination as Raghu said in the prepared remarks, the patent portfolio is from Rovi and TiVo along with our other IP assets.
Eric Wold -- B. Riley -- Analyst
Okay. And then the spin is pursued, and while it's being pursued if it is goes through how do you address the convertible note to next year? Does that need to be addressable? How does that cannot be put in the one or the other? Maybe if you can give us some options around that?
Peter Halt -- Chief Financial Officer
So that the convertible note it's still outstanding when the separation occurs, the conversion rate would be adjusted for the terms of the indenture.
Eric Wold -- B. Riley -- Analyst
Okay, thanks Peter. Appreciate it.
Peter Halt -- Chief Financial Officer
You're welcome.
Operator
And our next question will come from the line of Mr. Sterling Auty from J.P. Morgan. Your line is open.
Sterling Auty -- J.P. Morgan -- Analyst
Yes, thanks. Hi guys. So following on, I thought saw in the press release, are you guys are actually going to actively search and name a CEO for each business as well as the complete executive team?
Raghavendra Rau -- Interim President and Chief Executive Officer
Yes, the commitment Sterling that I made to our Board employees and shareholders was to lead the business through this time of uncertainty and ensure a smooth transition. I'm pleased that we've agreed on a strategic direction that will have, we believe good outcomes for all of our stakeholders. the nominating and governance committee has already been booking with a leading international research firm in case there was need for any new leaders and leaders of the new businesses and we will announce those leaders at the appropriate time.
Sterling Auty -- J.P. Morgan -- Analyst
Okay. And then in terms of the litigation with and process with Comcast, will all that reside with the IP business? Or do you have to remain to pointless?
Raghavendra Rau -- Interim President and Chief Executive Officer
Yes it will. However there is going to be -- the separation will have no impact on the litigation with Comcast or our results to ensure that Comcast is eventually licensed.
Sterling Auty -- J.P. Morgan -- Analyst
And I know you, you mentioned that you still have to go through some of the past structured decisions, but any early read on the $1 billion of NOL? How that would allocate among the two companies?
Peter Halt -- Chief Financial Officer
The NOL would stay at the parent company which is IP Co and we'll provide updates down the road in terms of what the separation might mean in terms of impact to the NOLs. But NOL would fully reside with intellectual property company.
Sterling Auty -- J.P. Morgan -- Analyst
Okay and I do think you mentioned that you still had interested parties. Is there an actual process, discussions or where does that stand to the distance that you can comment?
Peter Halt -- Chief Financial Officer
So Sterling as as mentioned in the prepared remarks, there are parties interested and we continue conversations and there isn't much more we can add on that.
Sterling Auty -- J.P. Morgan -- Analyst
Okay. And then I believe you had one international hardware CE manufacturer that was out of contract. Can you give us an update on that one? As well as I think it's been a couple of quarters, what was the, if there was a resolution with Hulu, which I think went to arbitration. Is there any update you can give us on that front?
Peter Halt -- Chief Financial Officer
No update on Hulu, in that. And no update on the CE manufacturer that's out of license either.
Sterling Auty -- J.P. Morgan -- Analyst
And lastly the growth in IP revenue, the year-on-year. Can you give us a sense on when you're going through renewals, what was the kind of average uplift that you experienced in those renewals?
Peter Halt -- Chief Financial Officer
In terms of our IP business, once you remove the headwinds from Time Warp the increase is really related to some catch-up revenue. If you look at our run rate that we gave for Q4 for IP Co and you look at the run rate we gave for Q1 you will notice it's the same.
Sterling Auty -- J.P. Morgan -- Analyst
All right, great. Thank you.
Operator
Next question comes from the line of Mr. Hamed Khorsand from BWS Financial.
Hamed Khorsand -- BWS Financial -- Analyst
Hi. So, first off I want to ask you, the expense rate, what are you're expecting as far as operating expenses as you go through the separation process? Is it going to become elevated as you come toward the finalization of this process?
Peter Halt -- Chief Financial Officer
That will absolutely operating, the separation cost that will incur, those separation costs will call-out separately. They will not be part of our non-GAAP results, but you'll be able to track them in the reconciliation we provide between our GAAP and non-GAAP results.
Hamed Khorsand -- BWS Financial -- Analyst
Okay. And then what are your plans here with some of the free cash flow this year? You're still carrying a lot of debt. Is there any decision to reduce some of the debt load before the separation?
Peter Halt -- Chief Financial Officer
We have a convertible debt due in Q1 of next year. So we need to make sure that we have the cash ready for that.
Hamed Khorsand -- BWS Financial -- Analyst
Okay. And then lastly, are you able to provide us some regional aspect of who this major social media customer is?
Peter Halt -- Chief Financial Officer
No, we're not.
Raghavendra Rau -- Interim President and Chief Executive Officer
Yes, unfortunately we can't name the customer, but as we've mentioned it is a major one. And we believe that this will become a springboard for us to be able to license other players in this space.
Hamed Khorsand -- BWS Financial -- Analyst
Okay, thank you.
Operator
We have a follow-up question, it comes from the line of Sterling Auty from J.P. Morgan.
Sterling Auty -- J.P. Morgan -- Analyst
Yes, thanks. Just on a social media idea, can you -- you gave a little bit of detail, but any additional clarity as to what they needed to have covered -- patent coverage for?
Raghavendra Rau -- Interim President and Chief Executive Officer
A number of days web-based ad platforms have video as a form of communication. And as you know, Rovi and TiVo have significant number of patents that cover those areas, all aspects of video implementation.
Sterling Auty -- J.P. Morgan -- Analyst
Okay. And then separately on the Armstrong and RCN, what kind of uplift is experienced when you go from kind of that gen 4 up to the next generation platform?
Peter Halt -- Chief Financial Officer
So we have to kind of bifurcate that question, Sterling. If the customer has TiVo Experience 3 deployed and is moving up to TiVo Experience 4, we're not getting increase in the ARPU from that customer. But as we talked about over the last couple of quarters and we'll be talking about going forward, what we have is a much more robust platform that allows us to monetize opportunities for both ourselves and our service provider and that's going to be upside there. If they're converting over from a legacy Rovi or TiVo guide it's about a doubling of the ARPU and if we're converting them off of a home that wasn't either Rovi or TiVo, clearly its a 100% upside.
Sterling Auty -- J.P. Morgan -- Analyst
And how many subscribers are still on those legacy guides at this point?
Peter Halt -- Chief Financial Officer
15 million as Raghu mentioned in his prepared remarks. And yet -- bringing the question up about those two deals and what's really exciting and hopefully people caught in Raghu's prepared remarks. But we're looking at our first IPTV deployment. And that is a much less or much lower cost of deployment. So we look at this is finally opening up the opportunity for us to accelerate moving our next-generation product.
Raghavendra Rau -- Interim President and Chief Executive Officer
And also our bet on Android along came with IPTV, I think is really compelling one for the operators, because it does give you a lower entry point, a cost entry point for devices. And again that would increase adoption and make it much easier as the cost of acquisition of new subscribers would be much lower.
Sterling Auty -- J.P. Morgan -- Analyst
Got it. Thank you.
Operator
All right. There is no further questions at this time. I now would like to turn the call over back to Mr. Raghu Rau, CEO.
Raghavendra Rau -- Interim President and Chief Executive Officer
Okay. Thank you everyone. Before we and today, I would like to emphasize three key messages. First we're really excited by the decision that the Board has made on a strategic direction for the Company, that we believe is the best path to create value for all of our shareholders.
Second the entire team is focused on execution of our operating plan and we expect to launch several new products and business models later this year. Lastly, our decision to separate the businesses does not change our willingness or our ability to continue our litigation against Comcast and we fully expect that they will eventually be licensed. Thank you again for your time.
Operator
And this concludes today's conference call. You may now disconnect. And thank you for your participation.
Duration: 36 minutes
Call participants:
Nicole Noutsios -- Investor Relations
Raghavendra Rau -- Interim President and Chief Executive Officer
Peter Halt -- Chief Financial Officer
Eric Wold -- B. Riley -- Analyst
Sterling Auty -- J.P. Morgan -- Analyst
Hamed Khorsand -- BWS Financial -- Analyst
