Ovzon AB (publ)

STO:OVZON

Earnings Call Transcript 2023-Q1

[Operator]

Welcome to the Ovzon Q1 report 2023. [Operator Instructions] Today, I'm pleased to present Ovzon CEO, Per Norén; and Ovzon CFO Noora Jayasekara. Please begin your meeting.

[Per Noren, executive]

Thank you, Sarah, and good afternoon. [Audio Gap] If we have someone from the U.S. joining us and so on. Thank you for showing continued interest in Ovzon and for joining our webcast regarding Ovzon's first quarter 2023.

My name is Per Noren. I'm the Chief Executive Officer of Ovzon and by my [Audio Gap] side here today, is Noora Jayasekara who is going to present our figures more in detail later in this presentation.

[Noora Jayasekara, executive]

Good afternoon.

[Per Noren, executive]

All right, for our new webcast participants. And for those of you that don't know of Ovzon as well as for those of you that want to refresh, let me start with giving you brief introduction to [Audio Gap] . Ovzon is a company with a technology know-how, capabilities and market position to really become the game changer in the SATCOM industry. While we're bullish about the future, we acknowledge that we've had our shared amount of challenges in the beginning of 2023, and I will get back [Audio Gap] -- after that during our presentation today, of course.

I also want to share the good news that we just a few hours ago, received a USD 4.8 million order from a European customer. The order is for us on SATCOM-as-a-service, which also includes so-called on-the-move mobile satellite terminals from a new supplier that we're working with called [ Sky Com ]. Timing is, of course, everything, and we would have loved to have this announced earlier. But as I will note later, sales cycles are relatively long, but we're really pleased, obviously, with this order.

Ovzon was founded in Sweden in 2006. At that time, the company was focused on design, development and sales of Ovzon's world-leading mobile satellite terminals. Fast forward, we've transformed and continue to transform the company. Today, we are the leading solutions provider of SATCOM-as-a-service, a fully integrated, high-performing truly mobile and truly resilient satellite communication solutions for customers with critical missions worldwide.

In 2021, we embarked on a very focused strategy to drive a step change in profitable growth. It's starting to pay off, as you may see in the graph in the upper right corner even though it's not a straight line due to the normally long sales cycles in the transition from product sales to solution sales, which is a necessity to shorter the lead time [Audio Gap] customer contracts.

We're also continuing to invest in the finalization and launch of our own first purpose-built satellite Ovzon 3. This satellite has unique patented technology, the Ovzon onboard processor and a -- and in conjunction with that, we're also developing a new mobile satellite terminal called Ovzon T7. Those 3 components in combination with an outstanding customer service and support and a few strategy -- strategic gateway solution providers will take the satellite communications and our customers' experience to a totally new level of performance when it comes to speed, mobility and resiliency.

On the slide here, you can actually see the key components that make up of Ovzon SATCOM-as-a-service and I'm happy to say that we are the only one that could provide both the mobile satellite terminals really designed for the highest performance with the networks that we set up, work with strategic gateway and backbone connectivity providers, and then we integrate that all into a global service and support model.

I think it's worth underlining again that, that sets us apart from [Audio Gap] provider. It is that we control the entire value chain that you just saw in the previous slide.

Now over to this. To whom do we actually sell and how do we sell? I think this will become also relevant later on when we talk about the numbers. [Audio Gap] extraordinary design, development and selection and choices of technology. Our products and services and solutions are uniquely positioned to serve any country, any organization and any mission that requires the highest throughput, the highest degree of mobility and resiliency in satellite communications, especially in areas which have weak, fractured or nonexisting communications infrastructure in today's world. And it is a rapidly increasing -- our solution is to be also a backup to other kinds of [Audio Gap] that might need a failover or needs to have something that kicks in when you need higher performance and mobility.

Our focus today is, of course, on government agencies, military and civil defense customers, emergency and rescue services, civil [Audio Gap]. And those are the end customers that actually we work with. You can see them on the slide. It's the United States Department of Defense, U.K. Ministry of Defense, Italian Fire Rescue Service, United Nations, Colombian government, Spanish National Police, and I can go on a little bit more than that, but it tells you who the end customer actually is.

We are very proud of our current and growing list of prestigious and highly demanding and important customers. For us, at Ovzon, it really starts with the customer and ends with the customer. Our go-to-market approach is disciplined and focused, [Audio Gap] that our success comes from always working with the end customer, but also working directly with specifically selected resellers, distributors and partners across the globe to have access to strong local stakeholders that understands culture, [Audio Gap] and influencers.

Our list of partners in the broad term range ranges from large multinational industry companies such as Airbus Defense and Space as an example to smaller, more agile and local partners in countries and regions where the [Audio Gap]. All of them are chosen to serve our customers best and deliver tangible and unique value from Ovzon.

Now let me turn to the first quarter. And I think this is probably what you've all been waiting for. The first quarter 2023 [Audio Gap] during and after the quarter. As I mentioned in the beginning of the broadcast, it has, in many ways, been a quarter filled with very dynamic events and work streams for us at Ovzon. As we started 2023 with new data and information that developed [Audio Gap] that we were compelled to address a number of the challenges during the quarter.

Let's take them in chronological order. It started with another delay of the finalization and manufacturing of the satellite Ovzon 3, from our satellite manufacturing partner in Maxar. That, in turn, led to a change of launch provider for Ovzon 3 from Arianespace to SpaceX which in turn also required need for additional financing as a result of the delay and the change of launch provider. I'll go more into detail regarding Ovzon 3 update on the next slide. But we also added some more capital with the directed share issue from current and other institutional investors.

Furthermore, shortly after we published our annual accounts for 2022 in February, new information emerged, and it's been clear to us that our Italian reseller and distributors did not follow through in fulfillment of its payment commitments to Ovzon. Regardless of whether we have a payment plan, which we do, we agreed upon and signed that with the reseller. And we also signed a pledge on the assets of the Italian retailer, which shows to set aside additional provision for bad debts owed to us.

A further SEK 34 million was charged to our income statement for the first quarter and full year 2022. On the positive side, in late '22, we signed contracts with new customers via first-time resellers and partners in Sweden, in France and in the United Kingdom. This was followed up in January by our first ever customer in Spain from our reseller Aicox Solutions for the National Police in Spain. And now as of a few hours, you have seen that we got a European custom [Audio Gap] order from a European customer worth USD 4.8 million [indiscernible] for Ovzon SATCOM-as-a-service and on-the-move focused SATCOM-as-a-service solution.

We continue to see that the market interest continues to be strong. Sales cycles are long -- but we're heavily engaged in the market through our partners and with end customers and the deal today is a good evidence that we continue to bring value to those customers with critical mission. I will end with the fact that we were recognized as one of the 10 hottest satellite companies in the satellite industry by the prominent industry-leading news and business analysis company via satellite. My hat goes off to our excellent people at Ovzon for all the [ paths, the turns ] and the continued hard work they do.

With that, I'm turning to Slide 8, and I'm going to talk a little bit about the Ovzon 3 program, which I'm sure is of great interest. Early in the year, as noted before, it became clear that our manufacturing partner, Maxar was experiencing further delays in the completion of our first proprietary satellite Ovzon 3, which in turn then we were compelled to postpone the satellite. Very disappointing, obviously, for us, for all of our shareholders and also for some of our customers that have a high interest in the satellite.

To ensure flexibility in an optimal launch date, we therefore negotiated and signed an agreement with a new launch provider and the decision was made to switch from Arianespace to SpaceX. The delay and change of launch provider added costs related to the Ovzon 3 program, and we, therefore, also concluded financing of about SEK 200 million during the quarter.

On the positive side, [Audio Gap] that our regulatory deadline for the use of the spectrum for orbital position 59.7 East had been extended, a position that is intended for use by Ovzon 3. The work on the satellite is now in an intensive final phase. Our assessment continues to be that the launch of Ovzon 3 will take place in the period July to September 2023 given that the final integration and test fall out as planned. However, as with all developments, final assembly and test is very, very crucial. And there is always [ uncertainty ] around the exact time of completion, which could potentially lead to some further delay. But again, our current assessment is the July to September time frame but we're not done with the satellite test, and therefore, risk remains.

The delay notwithstanding, we're having [Audio Gap] strong engagement from new and existing customers relating to Ovzon 3 and the unique new connectivity solution that this satellite enables.

As noted earlier, we're also in the final stages of developing a new mobile satellite terminal [ Ovzon T7 ] which will be the smallest and lightest in the industry. The development work is progressing very well. And the Ovzon T7 terminal includes an onboard processor modem, which is a proprietary modem developed by Ovzon that can communicate the[Audio Gap] on the satellite. Ovzon T7 will be launched in synchronization when the satellite is in orbit so that the solution can be utilized by our customers immediately.

I will now turn to order intake and the next slide. As noted earlier, we had an eventful first quarter. And if we look at order intake, Q2 is usually a slower quarter when it comes to order intake. If you note that in Q1 2022, we had 0 in order intake [Audio Gap]we had a small but yet USD 0.4 million in order intake. However we are not satisfied with this. Our goal is obviously to even out the quarters. But given our size as a company and having government contracts, it's quite a natural up [Audio Gap]. Our order book is at USD 13 million compared to USD 22 million in the previous year. But the previous year had just signed an order for the Italian fire and rescue services, which accounts for almost all that deviation.

Our run rate revenue is at [Audio Gap] mainly for the same reason. Overall, we continue to see a solid demand for SATCOM-as-a-service, even though the sales targets again remained fairly long. Our sales and customer account teams are hard at work, and I'm positive about the growth of the business despite a tough first quarter. I will now hand over to our CFO, Noora Jayasekara to take us through our detailed financials.

[Noora Jayasekara, executive]

Thank you, Per. I will now give you some details on the financial performance in the first quarter of 2023. Revenue totaled to SEK 57 million for the first quarter of 2023, corresponding to a decline of 43% on -- the downturn is largely explained by that the comparative period contains revenue of SEK 39 million related to delivery of a large number [Audio Gap] of mobile satellite terminals to U.S. DoD. Corresponding deliveries have not taken place this year. Adjusted for currency effects, the decline was 46%.

Due to current uncertainty regarding the Italian distributors payment ability, revenue has not been recognized related to the delivery of SATCOM-as-a-service to the Italian Fire and Rescue Services. The invoiced amount is USD 2.1 million, corresponding to SEK 21.8 million. EBITDA in the first quarter amounted to minus SEK 17 million and EBIT to minus SEK 23 million.

Profit for the period is lower compared to last year due to the lower delivery of services and mobile satellite terminals. Adjusted for a positive currency effect related to the repayment from our previous launch via Arianespace, EBITDA amounted to minus SEK 28 million and EBIT to SEK 34 million. EBITDA margin for the period was minus 29% and EBIT margin minus 41% and the decline driven by higher overhead costs related to sales and personnel.

Next slide, please. Decreased working capital is a primary driver for the improved operating cash flow that amounted to minus SEK 5 million. Investments in Ovzon 3, in this quarter, mainly related to the change in launch provider as well as the development of the mobile satellite terminal Ovzon T7, drive the cash flow from investing activities during the first quarter. Net debt amounted to SEK 126 million, an increase from the comparative period as a result of the mentioned investments in [Audio Gap] had a decrease compared to the fourth quarter driven by an increase in cash due to the completion of the directed share issue. And with that, back to you, Per for some final comments.

[Per Noren, executive]

Good -- thank you, Noora. Listen, it's been an eventful first quarter, right? The results are what the results are, and we don't take that lightly. First of all, I mean, what do we do going forward? Well, the USD 4.8 million order from a European customer is a good, good kick for us, of course, to have and start our second quarter with -- the rest of the year will be really, really focused on driving a step change in profitable growth and shortened lead times in concluding sales. As we say, a dealer a day keeps the doctor away. Number 2 is we will continue to double down in our work on the completion test and launch of Ovzon 3 with its unique onboard processor and finalizing the development and delivery of Ovzon T7, our latest mobile satellite terminal with a built-in proprietary developed onboard processor modem.

This will be in combination with continued close dialogue with our engagement with resellers and then customers generate business and utilize -- and this will solve the increased demand we actually do see in the market place. We have strengthened our organization during '22, and that's starting [Audio Gap] result now. We have new key competencies with increased focus on business development growth and delivery of our crucial technology projects.

Despite the eventful start of the year, I'm proud of the fact that in February Ovzon was named one of the 10 hottest companies in the industry. I know that doesn't mean much to shareholders, but it means much to the team here that we'll continue to have a laser focus on our main objectives to drive profitable growth and to accelerate the finalization and delivery and launch of Ovzon 3. I can also assure you [Audio Gap] sales of Ovzon 3 as well, and we have customer engagements going on around that as we speak.

Our agenda in the coming year is clear. Our commercial focus will continue to be a customer-first approach, meaning our engagement with defense, civil protection surveillance, rescue service and NGOs foremost in the U.S. and Europe will continue. It's a good feeling to know that we sit on the most valuable integrated solution to meet the world's rapidly increasing need for resilient and high-performing mobile satellite communication.

I will make one remark on the financial results and the revenue. If we had not -- if we had accounted for the revenue from Italy, it would have looked different because we've also taken the cost for the delivery as we have continued to deliver that service to the end customer, the Italian Fire and Rescue services. They run a very mission-critical and societal critical service, and we did not want to disturb that for them. They work on rescue missions with landslides, avalanches -- [Audio Gap] in Syria and Turkey. So they fulfill a very important role, not only for Italy but for Europe. So we've taken the continued cost of that, but we have been very prudent in our approach to -- our ability to get repaid for that, which means we've taken the cost, but we haven't recognized the revenue. So that would have actually looked very different for us. Had that been the case.

With that, I thank you for listening. Of course, there will be a Q&A session, and we're happy to answer any questions you might have. Sarah, back to you.

[Operator]

[Operator Instructions] And our first question comes from Mikael Laseen at Carnegie.

[Mikael Laséen, analyst]

Okay. Yes, I have a few questions. And I can maybe start with Italy. And if you can comment on what actions you have taken to ensure that you will get paid and comment maybe on what this means for a potential contract extension with the user.

[Per Noren, executive]

Yes, I'll be happy to. Thank you, Mikael, and welcome. I will start and I think Noora can complement with a few things.

First of all, the actions we have taken. Number one, we worked with our Italian reseller in good faith, obviously, to -- and we. On March 17, we signed a payment plan with them, part of that was also to ensure that there was -- yes, [Audio Gap] the payment plan that they could fulfill -- so we signed that in March and the first payments from that has actually come in, but those are fairly small in comparison to the entire debt that comes from this contract.

Secondly, we have also [Audio Gap] the same day, we've signed a pledge with the Italian distributor, a pledge of this reseller's and distributor's assets. That pledge is now -- that pledge has now been registered with the Italian authorities and kind of it says that the asset will go over to Ovzon should the resell -- Italian reseller not be able to fulfill its payments and obligations.

So those are the direct actions that we worked with the reseller to ensure that we have a payment plan that we believe in with them, and we have other types of assets as security. So I think that's pretty strong and collaborative approach that we've taken.

In parallel, we have also -- we're also working directly with [Audio Gap] the end customer, the Italian Fire and Rescue Services, around what type of service and solution they need and want to continue with. And those discussions are ongoing. The current contract that they have -- that we have, ends on [Audio Gap] this year, which is only a few weeks away. So there's been quite some intense discussions with the end customer [Audio Gap] the future. I should not probably say anything more about that at this time. But it's a good thing that we have that dialogue, and we know they are very satisfied with the service and the [Audio Gap] specifically when there are some specific events going on. So we've shared that statistics and data with them, and they've shared how they've used the service, and that discussion is onboard. Noora, anything to add?

[Noora Jayasekara, executive]

No, I think that sums it up.

[Mikael Laséen, analyst]

Okay. That's good color. And can you also say something about how we should -- how the revenue shortfall will be recognized and what could trigger that?

[Per Noren, executive]

Can I just ask a counter question, just so we understand your question? [Audio Gap] you mean in Q1? Or do you mean how will it have a ripple effect in the rest of the year?

[Mikael Laséen, analyst]

You didn't -- you delivered the service, and you have sent an invoice, I think, with invoices and you haven't recognized any revenue. Now how was that thinking if that could be recovered later in 2023, if and what could trigger that?

[Noora Jayasekara, executive]

That will be recovered when we receive full payment.

[Per Noren, executive]

Exactly. So we've taken a very prudent approach with the revenue recognition as the early payments in the payment plan are fairly small, and it's back-heavy, which means that we will, as Noora says, recognize -- the revenue we didn't recognize now will and can be recognized when we get full payment according to the payment plan.

[Mikael Laséen, analyst]

Okay. Yes. I just wanted to check that. And is that thought of your new guidance, I guess, it is?

[Per Noren, executive]

Yes. Exactly. Thank you for asking that question. That's, of course, a very important one. Yes, it is absolutely quite a thought of that guidance because [Audio Gap] SEK 21.8 million in the quarter, not recognized in revenue, of course, has an effect for a company of our size as well. And it will have effect for the rest of the year as well, obviously. So we have to rely upon [Audio Gap] and sales of new -- to new customers and new contracts as we go forward. And of course, that changes the view on the revenue for the year, and that's why you could see that in the views on the future stipulation. [Audio Gap]

[Mikael Laséen, analyst]

So just checking here, to be clear. So that was the reason for the changes in the full year sales guidance. So it's not including any recovery of the revenues that you didn't recognize in Q1, just to be prudent, I guess.

[Per Noren, executive]

Correct. We have followed the same prudent approach and philosophy not to have any negative surprises for ourselves and our shareholders and others going forward. That's correct.

[Mikael Laséen, analyst]

Okay. So that's more upside when they pay and hopefully they will later on.

[Per Noren, executive]

Exactly.

[Mikael Laséen, analyst]

Okay. And what is the financial situation for the distributor right now?

[Per Noren, executive]

They will have to answer that question. There's been some news out from them that they're better than they say, but we can only work on facts. And the fact is we haven't gotten paid and we didn't get paid. And therefore, we had to take some specific measures here. As you know, [Audio Gap]. And therefore, we've taken a very prudent approach here with the revenue recognition as well. So I think that's up to the Italian distributor and reseller to actually answer that question. [Audio Gap] our answers on the fact that we have. We haven't gotten paid.

[Mikael Laséen, analyst]

So now from April, I guess that we should assume that we will not recognize any revenues given what we know today. But on the other hand, you have this new contract that you maybe can talk about a bit more how we should think about it if it starts right away or if it's a delay for the customer to start using the services for example.

[Per Noren, executive]

Yes. It's really difficult to answer that question. As we will, we will communicate to you and to the market when we have something to communicate about that. We have a very good dialogue with the customer. But the question is what type of service, what size of service and what type of usage do they expect and want to have going forward and have they set aside budget for those things going forward. So those are pretty intense discussions that we're having with the end customer at this point as well. I'm sorry, but I cannot say more than that. We will communicate [Audio Gap] about the going forward of that.

I think you can easily kind of understand that we've taken a prudent approach in Q1, not recognizing revenue, and we will communicate as soon as we know anything about an extension or a new type of service that we might deliver.

[Mikael Laséen, analyst]

And I also had a question, of course, about the added comment here that you have in the report about the Ovzon 3, the risk of further delays? And if you can say something what happened during Q1 that made you add this comment.

[Per Noren, executive]

Yes. I think there are some others probably that are very interested in that. And listen, number 1 is, this is very, very critical to Ovzon, obviously. It's very critical to our customers. It's very critical to our shareholders. Our shared #1 priority, I think, driving profitable growth, as I've mentioned, is also there.

So let's talk a little bit then about Ovzon 3 and the fact we have. We've continued to work on the finalization of the satellite with Maxar. Obviously, we have [Audio Gap]. We have the program. Total program is introduced 1 new thing -- and that new thing is that we've changed from Arianespace to SpaceX. So SpaceX then also needs to provide some of the data for the launch, so to speak, so that Maxar can build the right dynamic test bed for the final test, which is called dynamic testing, which is really vibration. And the Arianespace rocket and the [indiscernible] rockets operate slightly different. They fulfill the same job, they operate slightly different.

So my comment both in the CEO words in the quarterly announcement as well as on this webcast was no one should expect a major change in date or time, but we're just trying to be extraordinary prudent [Audio Gap] in our communications so that I think we have so negatively surprised ourselves and the market and others in the supply chain has surprised us, right? With delays -- with several delays. So we're just saying, listen, until it's not assembled and tested with a new launch provider and those data points -- you can't -- I can't guarantee that it's going to be July to September.

But the plans are still, as we say, July to September, but you cannot guarantee it because you're not through the [Audio Gap] -- but we're such -- we're in the last mile of what needs to be done here. So that's why we're trying to be, maybe overly cautious, but I would say it's important to understand that as finalization, assembly, test, [Audio Gap] and launch -- it's not -- all of it is not done yet. Therefore, there's still risk.

[Mikael Laséen, analyst]

Yes, I understand that. But on the other hand, just curious here if you have found anything new, if this dynamic testing phase could prove more complicated than you have thought earlier for some reason or something has really come up here during Q1 because I mean, the things -- we knew that there could be a delay because you had just to do the final testing. Yes. We knew that already.

[Per Noren, executive]

We negotiated the contract with SpaceX based on the time line and time plans we have. Therefore, we chose -- and we were very, very careful and selective on the July to September time window for launch, right? As with all new development programs, yes, there are a few anomalies that are non-confirmatives that pop up. They're solved, some of them very quickly and others take a little bit more time. In general, it's going according to plan, in general. There are some non-confirmatives. Again, as I said, I think the biggest unknown to us, and we're not the launch provider and we're not the manufacturer, is the switch from Arianespace to SpaceX. I'm not saying it is an issue, but it's an unknown. And therefore, we have to be prudent and say it is unknown. And Maxar and SpaceX are working well together, and we're working on finalizing all those data points and tests and engineering to get it ready. I am [Audio Gap] very, very transparent and very clear about -- there's always risk. Until it's done, it's not done basically.

[Mikael Laséen, analyst]

Yes. I appreciate the clarity there. I'll get back in line. And I will have a final 1 here, but I can take them after...

[Per Noren, executive]

Yes. No, thank you very much, Mikael. Thank you for your questions. I think they were very helpful for others as well.

[Operator]

[Operator Instructions] We currently do not have any audio questions registered, so I hand over to our speakers.

[Per Noren, executive]

Okay. There are a few questions that have come. Thank you so much, Sarah, and thank you, Mikael, for your questions. And if there are no further questions, I would like to honor those that have asked questions on the Q&A as well. And I think I'll answer. They are [Audio Gap] there are questions around Ovzon 3. Hopefully, I've answered them.

Yes, you can be very critical and say that we've been finalizing the satellite for a long time now, do you have control?

As a matter of fact, yes. I think we have control over what we can control. I cannot [Audio Gap] professional satellite manufacturer, what they do, how they do it, when they do it, and I cannot control professional launch provider, what they do, how they do it, when they do it.

Do I trust that they're doing everything they can? Do I trust that they have us as a priority at this point in time?

Yes. I do. I do. And yes, for those of you that have been here for a long time, the satellite is severely delayed. I think there's one comment I would make on that, and this is no excuse by no means. We control the program [Audio Gap] we control in the master program of all of this. We are reliant on professional manufacturing and suppliers and launch providers in doing their job and collaborating, and we are integrating the schedules and so on from our standpoint. I will say, though, that for Ovzon, I think a delay -- that this delay -- the delay is a delay is actually -- has a huge effect given the size of our company, given the prominence of our investments in the satellite and give the prominent future that it shows to have for us. So it has a significant effect on us.

I can assure you that myself, our CFO, Noora here and the rest of our leadership team and the project office and our [Audio Gap] are fully aware of where we are, what's going on, how we work together and engaged in this. We're doing everything in our power to push and finalize towards a successful launch of the satellite and then implementation of the satellite [Audio Gap] our service portfolio and therefore, gaining the advantage of both revenue and profitability from that. We have started sales. We have engagements on that. So while yes, it is disappointing with delays, we're continuing to push. And I believe this year will be [Audio Gap] having also first satellite in space.

There's also a question about Gomedia. How long will you continue to deliver to them without securing payments?

As I said, we have a payment plan. We have a pledge agreement and [Audio Gap] I promise to the end customer, the Italian Fire and Rescue Service that we would keep the service up until the end of that contract. That contract ends at the end of April, so just a few more weeks. What comes after that will be something that we will announce when we have something to announce in terms of a continuation or any other type of arrangements for that. So just wanted to clarify that again, I think Mikael asked the similar question. I hope that helps explain it.

Obviously, the situation here with the Italian distributor and the nonpayments has caused some severe events for us during the quarter. But I believe wholeheartedly, we have handled it in the best possible way and in a very prudent way this quarter as well.

We take a hit on revenue. But we believe that if we continue to drive a step change in profitable growth, continue to deliver value to our customers, we will renew contracts, and we will find ways to find new customers and sign -- get new orders and sign new contracts that will -- when we look back, this will have a significant [indiscernible] on the radar screen.

So I'm very positive about the future and in solidifying Ovzon's SATCOM-as-a-service position as the premium solution in the marketplace which will even be better when Ovzon 3 in space. So with that, I think, Sarah, we would like to thank [Audio Gap] and we wish you a good afternoon and rest good of your day for those that are in the U.S. And we look forward to hosting you on the next webcast for our second quarter in 2023.

Thank you for participating, and have a good afternoon.

[Operator]

Thank you. This now concludes our event. You can now disconnect your lines.