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Novatel Wireless, Inc. (NVTL)
Q1 2013 Earnings Call
May, 07, 2013, 05:00 pm ET
Matthew Hunt - IR, The Blueshirt Group
Peter Leparulo - Chairman & CEO
Ken Leddon - SVP & CFO
Mathew Hoffman - Cowen & Co.
Matt Ramsey - Canaccord Genuity
Cobb Sadler - Catamount Advisors
Previous Statements by NVTL
» Novatel Wireless' CEO Discusses Q4 2012 Results - Earnings Call Transcript
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» Novatel Wireless' CEO Discusses Q2 2012 Results - Earnings Call Transcript
» Novatel Wireless CEO Discusses Q3 2010 Results - Earnings Call Transcript
I would now like to turn the conference over to Mr. Matthew Hunt, of The Blueshirt Group for Investor Relations. Mr. Hunt, the floor is yours sir.
Good afternoon and thank you for joining us on our first quarter 2013 conference call. We’ll begin with business overview and outlook from Chairman and CEO, Peter Leparulo followed by a financial overview and guidance from Chief Financial Officer, Ken Leddon. We’ll then open the call for questions.
As a reminder, this conference call is being broadcast on Tuesday, May 07, 2013 over the phone and internet to all interested parties. The information shared in this call is effective as of today’s date and will not be updated.
During this call, non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release which is available on the Investors Relations section of our website. An audio replay of this call will also be archived there.
Please also be advised that today’s discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company’s current expectations and beliefs. For a discussion of factors that could cause actual results to differ materially from expectations, please refer to the risk factors described in our Forms 10-K, 10-Q and other SEC filings which are available on our website.
Now, I would like to introduce Peter Leparulo, Chairman and Chief Executive Officer of Novatel Wireless.
Thanks Matt, good afternoon and thank you for joining our call today. During the first quarter we made good progress advancing our business model. We grew revenue by double digit sequentially and improved our bottomline driven by solid demand for the next-generation products in Mobile Computing and M2M.
In Mobile Computing, we have experienced healthy sales growing the MiFi segment over 30% sequentially. To provide a wider context for the market dynamic we are experiencing, we are seeing operators place heavy emphasis on wireless data now more than ever with the proliferation of 4G networks which are incredibly efficient in transferring data. The speed and availability of these networks shared data plans from operators and promotional efforts continue to drive the mobile broadband market. These trends play directly into the value proposition of our modified devices. Simple, ubiquitous broadband connectivity that allows multiple WiFi enabled devices to seamlessly access wireless networks.
With that as backdrop, we are seeing a very healthy order pipeline and customer forecast for Q2 across our Mobile Computing portfolio. During the first quarter, we had a very successful product introduction of Verizon with our MiFi 5510. This device is our fifth-generation 4G LTE mobile hotspot and is positioned as the value product at the carrier. Additionally, we had a strong quarter performance from our extended battery modified 4620LE, the premium product with Verizon. Between these two products we have held a dominant position at Verizon and see increased order trends for the second quarter.
Turning to progress with our MiFi 2 at AT&T, as many of you know this product, the first mobile hotspot with a touch screen and new levels of user interactivity has received very favorable product reviews in the media and from users. In the second quarter, we expect to see even greater traction and a more solid channel position. Again, we are seeing a stronger order trend from MiFi 2 for the second quarter and have orders of more than 50% over the first quarter revenue generated by this iconic product.
To that end, we were pleased last month to announce the commercial availability of the MiFi 2 at Bell Mobility, the provider of Canada’s largest 4G LTE mobile network. The launch with Bell is a great example of how we have been able to leverage our development work into additional channels.
One of our objectives for the year of Mobile Computing was to have a targeted strategy with key North American operators. We are looking forward to launching our first 4G LTE MiFi at Sprint in the second half of this year. At that point, we will have launched best in class 4G LTE MiFi mobile hotspots at all three major North American carriers. But we are not stopping there; up until now, the MiFi technology platform has enabled Consumer Mobility by bringing WiFi enabled consumer products to the cellular network.
Looking ahead in Mobile Computing, as we discussed on our last call, we continue to see the operators expanding into new markets that 4G network infrastructure enables. These include markets such as fixed mobile convergence or in-home connectivity and in-vehicle connectivity which bring new categories of new used cases and services through new categories of peripheral devices, all over the 4G network. These markets will readdress by more integrated hardware and software solutions with customized extensions that enable additional used cases and solve broad system level issues rather than device centric issues.