Quarterhill Inc. (QTRH), a $126 million market cap technology company, reported a 6.5% increase in full-year revenue, reaching $153.3 million, as disclosed in its fourth-quarter 2024 earnings call. Despite positive financial indicators, the company’s stock experienced a 2.98% decline in immediate market reaction, closing at $1.63. According to InvestingPro data, the stock trades near its Fair Value, with a notably low beta of 0.6 indicating relatively stable price movements. The earnings call highlighted significant strides in software development and strategic acquisitions, positioning Quarterhill for future growth.
Key Takeaways
- Full-year revenue grew by 6.5% to $153.3 million.
- The company reported positive cash from operations of $6.5 million in Q4.
- A significant $495 million backlog provides revenue visibility.
- Quarterhill is increasing its focus on AI and software development.
- The stock saw a 2.98% drop following the earnings announcement.
Company Performance
Quarterhill’s overall performance in 2024 reflects strategic growth in its core areas, particularly in software development and AI-driven solutions. The company has made advancements in traffic monitoring systems and expanded its market presence in Europe. The sale of non-core assets and a unified branding strategy have streamlined operations, paving the way for continued growth.
Financial Highlights
- Revenue: $153.3 million for the full year, up 6.5% year-over-year.
- Q4 revenue: $38.9 million.
- Positive adjusted EBITDA of $200,000 for the full year.
- Cash on balance sheet increased to $31.9 million from $23.1 million in Q3.
- Gross margin: 18%, down from 21% in 2023.
- Adjusted working capital: $66.2 million, down from $78.9 million in 2023.
Market Reaction
Despite positive financial results, Quarterhill’s stock declined by 2.98% following the earnings release, closing at $1.63. The stock has fluctuated within a 52-week range of $1.46 to $2. InvestingPro analysis reveals weak gross profit margins of 18.07% and negative earnings over the last twelve months, though analysts project profitability this year. The market’s reaction may reflect investor concerns over the company’s reduced gross margin and adjusted working capital. Get access to 5 more exclusive InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
Outlook & Guidance
Quarterhill anticipates organic revenue growth in 2025, with an expected expansion in adjusted EBITDA margins. The company’s financial health score of 2.1 (Fair) on InvestingPro suggests stable fundamentals, with a healthy current ratio of 1.31. The company is actively pursuing mergers and acquisitions to bolster its market position and resolve challenging legacy contracts. Approximately 80% of the 2025 target revenue is supported by existing contracts, providing strong revenue visibility, while analyst consensus maintains a Buy rating on the stock.
Executive Commentary
CEO Chuck Myers emphasized the company’s strategic focus: "Our vision is to become the number one or number two player in the segments we operate in." He also highlighted the importance of positive cash flow, stating, "We are only bidding contracts with positive cash flow."
Risks and Challenges
- Decreased gross margin could impact profitability.
- Challenges in resolving legacy contracts may affect financial performance.
- Market competition in AI and software development is intense.
- Economic conditions and infrastructure spending trends could influence growth.
- The integration of recent acquisitions poses operational challenges.
Q&A
Analysts inquired about the composition of Quarterhill’s backlog, with 80% consisting of maintenance contracts. Discussions also covered ongoing contract negotiations and the potential for future acquisitions. The management addressed working capital management strategies and highlighted steady performance in the enforcement business.
Full transcript - Quarterhill Inc (QTRH) Q4 2024:
Conference Call Moderator: Good morning, and welcome to Quarterhill’s Q4 and Fiscal twenty twenty five Financial Results Conference Call. On this morning’s call, we have Chuck Myers, CEO and Morgan Dempke, Interim Chief Financial Officer. At this time, all participants are in a listen only mode. Following management’s presentation, we will conduct a question and answer session during which analysts are invited to ask questions. Earlier this morning, Quarterhill issued a news release announcing its financial results for the three and twelve months ended 12/31/2024.
This news release, along with the company’s MD and A and financial statements are available on Quarterhill’s website and on SEDAR Plus. Certain matters discussed during today’s conference call or answers that may be given to questions could constitute forward looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company’s annual information form and other public filings that are available on SEDAR Plus. During the conference call, Quarterhill will refer to adjusted EBITDA.
Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Please refer to the company’s Q4 and fiscal twenty twenty four MD and A for full cautionary notes regarding the use of forward looking statements in non IFRS measures. Finally, please note that all financial information provided as in U. S. Are in U.
S. Dollars unless otherwise specified. I will now turn the call over to Mr. Myers. Please go ahead, sir.
Chuck Myers, CEO, Quarterhill: Thank you, and good morning, everybody. Thank you for joining us on today’s call. In terms of the agenda today, I’ll discuss the highlights for the quarter and the year, after which, Morgan will take a look at the key financial results. And following Morgan, we’ll open it up for questions. Overall, we’re pleased with the 2024 performance, which included significant progress on the turnaround efforts that we began a little over a year ago.
For the full year, revenue grew 6.5% and we generated positive adjusted EBITDA of $200,000 including $1,200,000 in Q4. While our adjusted EBITDA margins were impacted in 2024 by primarily three legacy tolling contracts, we made progress resolving these issues. One was resolved in 2024 and we are advanced discussions on the other two. Resolving these issues should have a positive impact on our margins. Another important milestone was achieving $6,500,000 in positive cash from operations in Q4.
We had also achieved positive cash from operations in Q2, which was the first time in two years we had done so. We’re very pleased with the recent progress on cash flow front. While there still will be some fluctuations from quarter to quarter, especially during the seasonal quarters like Q1, we think that our recent progress reflects the early stages of reversing our historical trend of quarterly and annual cash burns. Due in part to improve cash from operations, cash on the balance sheet grew to $31,900,000 at the end of the year, up from $23,100,000 at the end of Q3. Finally, our contracted revenue backlog stood at $495,000,000 at the year’s end.
I joined the company eighteen months ago and after a period of time in the chair, it became evident that we are effectively faced a turnaround situation. While we had solid operating assets, personnel, customer relationships, the business required integration, leadership changes, strategic planning, a new technology roadmap and the renegotiation of certain tolling contracts. I’ll now spend a few minutes discussing our progress on these initiatives. During the year, we established and executed on a comprehensive three year strategic plan with several key focus areas. First, we focused on growing our coal tolling and safety and enforcement business units through improved operational efficiency and enhanced customer relationships.
By strengthening our project management capabilities and integrating our operations more effectively, we’ve been able to deliver better results for customers, while laying the foundation to improve our financial performance. Second, we took steps to expand in Europe, leveraging our existing footprint and expertise in that region. We participated in the inner traffic show in Amsterdam, which gave us valuable opportunities to advance discussions with potential customers, prospects and partners on entering the European towing market. Our acquisition of Red Fox has further enhanced our capabilities and potential in this geography. Third, we substantially increased our focus on software development to support our tolling enforcement business and to penetrate into other verticals.
This shift from being primarily an integrator to becoming more of a software focused company is designed to drive higher margins and create more defensible proprietary offerings. We’re developing a new architecture that will expand our revenue opportunities from software applications and should significantly improve our ability to maintain software. With AI already a part of our business and we are poised to become a much it’s poised to become a
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: much greater component moving forward.
Chuck Myers, CEO, Quarterhill: Fourth, we began our entry into niche markets in the logistics industry, focusing initially on intermodal terminals, ports, borders and asset management. We launched a pilot project in the rail logistics sector, which has provided valuable insights and a foundation for expanding our mandate with that customer. It has also provided a basis for replicating our approach with other businesses in that large market. A significant portion of our effort throughout 2024 was dedicated to integrating and optimizing the business. We launched the unified branding effort that brings together our entire portfolio under the Quarterhill brand and we sold certain non core assets to focus on our higher growth opportunities.
This included selling our position in the China joint venture in the fourth quarter and our Chilean enforcement business, which was sold at the end of twenty twenty three. We also substantially enhanced and integrated our tech leadership and development capabilities. Our technological advancements are centered around new architecture design and expanded revenue opportunities from software applications. In recognition of this growing importance, we’ve formed a technical advisory committee with two renowned AI software leaders, Bobby Parikh and Vinit Khosla, who have extensive experience in developing transportation related technologies at companies such as Uber, Google and Apple. This committee is guiding our efforts as we further integrate AI capabilities throughout our offerings and develop next generation solutions.
In our tolling business unit, we made significant progress resolving some of the inherited contracts that had challenging implementations and economics. We had positive developments with E-four seventy, CTRMA and ACTC, generating expansion opportunities and or moving the projects into the operations phase. As I mentioned earlier, while a couple of challenging contracts remain in negotiation, we’re still in active discussions to resolve them. On the new business front, we secured a significant win with the ACTC Alameda contract expansion to start this year, which further expands our footprint in California. That contract is valued at $40,000,000 with options to extend it another four years for an additional $15,000,000 Implementation on that project will begin shortly.
The acquisition of Red Fox has further enhanced our value proposition and technical capabilities in the tolling space. Their quantum software platform offers unique capabilities and vehicle detection and classification and was recognized for excellence with two Kings Awards for enterprise in The UK, One for innovation and another for excellence in international trade. We’re actively integrating their Quantum software into our bids and solutions. Our Safety and Enforcement unit had another strong year with steady top line growth and reliable margins. Throughout 2024, we secured multiple wins in multiple jurisdictions with new contracts in Washington, D.
C, New Jersey, our first in Tennessee, South Dakota, California and several others. We also expanded internationally with new agreements in Thailand and South Korea. A particularly exciting development has been growing adoption of our AI vehicle classification system for traffic monitoring. This system uses AI video automatic traffic recorders to count and classify vehicles, which is essentially essential for highway planning, design, maintenance and management. We secured multiple contracts for this technology, including in North Dakota and Minnesota and have now deployed over 50 systems.
This success demonstrates our leadership in applying AI to the transportation challenges and creates a foundation for further AI driven innovations across our business units. Our vision is to become the number one or number two player in the segments we operate in. Underpinning this, our goal is to achieve growth while generating reliable cash flows. This will help us build a healthy and sustainable balance sheet capable of supporting both organic and acquisitive growth strategies. We believe our industry is ripe for consolidation, which provides opportunities to accelerate growth through M and A.
For 2025, we expect to drive organic growth revenue with adjusted EBITDA margin expansion. Of note, Q1 is traditionally our seasonally slower quarter, which means we expect to see a sequential dip in revenue and adjusted EBITDA and then resume growth during the remainder of the year. Much of that by the way is occurs due to weather issues. Regarding the broader economic environment at this time, we believe our business is not likely to significantly impact by tariffs. We expect the underlying activity in our industry to remain strong.
Nonetheless, we are actively monitoring the situation and proactively exploring options to mitigate any potential impacts. Finally, in the past few months, we’ve added two new board members, Pat Dion Sr. And Robin Saunders. Pat and Robin strengthen our leadership capabilities with complementary expertise critical to our growth. Robin brings over three decades of financial innovation, M and A experience and infrastructure investment experience, having led transactions exceeding $30,000,000,000 across 15 countries.
Pat brings specific industry knowledge from his leadership roles at SEPTA and the Pennsylvania Turnpike Commission along with his multiple entrepreneurial successes. Their combined experience in transportation, infrastructure financing and business development enhances our ability to capitalize on growth opportunities in the IPS industry. In closing, 2024 was a year of continued transformation and progress for Quarterhill. We’ve established a solid foundation for growth, improved our operational efficiency, enhanced our technological capabilities and strengthened our financial outlook. While we still have work to do in our turnaround, we’re confident in our strategy and our ability to execute our growth plans.
I want to thank our talented team for their hard work and dedication during this phase. We’re excited about the opportunities ahead and remain committed to delivering value to our shareholders, customers and employees. With that, I’ll turn it over to Morgan to discuss our financial results in more detail. Morgan?
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: Thank you, Chuck, and good morning, everyone. Before we get into the financials, please note that discussion pertaining to the 2023 financials reflect only the results of our ITS business. Skyline’s financial results for the three and twelve months ended 12/31/2023, are reflected in the discontinued operations line items on our P and L and cash flow statement as that business was sold in June 2023. With that, I’ll start with a look at revenue in the quarter. Q4 revenue was $38,900,000 and $153,300,000 for the year.
The increase for the full year revenue was due to growth in both our enforcement and towing business. The decrease for the quarter was primarily due to the timing of revenue received from certain ongoing projects, which in general lead to some quarterly fluctuation. Of note, the Chilean business was sold at the end of Q4 twenty twenty three, so there’s no revenue from that business in 2024. As Chuck touched on in his section, at the end of the year, we had a significant backlog of U. S.
$495,000,000 providing good visibility into revenue for 2025 in the next several years. More specifically, we have visibility into approximately 80% of our target 2025 revenue from our backlog. Also of note, a large portion of the backlog is higher margin contracted maintenance revenue versus implementation revenue, which we expect will drive better margins in 2025 and beyond. Gross margin percentage in Q4 was 20% compared to 20% in Q4 last year and 18% for the full year compared to 21% in 2023. The full year decrease was primarily due to the reserves taken for certain towing projects in Q3 twenty twenty four, which were partially offset by continued strong margin performance from our enforcement unit.
Total operating expenses for Q4 twenty twenty four were $11,200,000 compared to $15,800,000 in Q4 twenty twenty three. ’20 ’20 ’4 OpEx was $43,700,000 compared to $47,900,000 in 2023. The year over year decreases were primarily due to lower R and D expenses and other costs. As previously mentioned, SG and A increased in 2024, driven by investments in leadership and resources for our project, bid and development teams, which were offset in part by steps we took to further optimize our workforce during the year. Q4 adjusted EBITDA was $1,200,000 and for the full year was $200,000 This compares to $2,300,000 in Q4 last year and $2,900,000 for 2023.
Adjusted EBITDA for 2024 was impacted by the $4,000,000 due to reserves taken in Q3, which was discussed on our last call. Excluding the impact of those reserves, adjusted EBITDA for 2024 would have increased over 2023. As Chuck mentioned, driven by continued steady results from the enforcement unit and stronger revenue performance from the tolling unit, we expect adjusted EBITDA to grow in 2025. We expect a seasonal impact in Q1 as mentioned earlier and then for margins to be stronger and growing in subsequent quarters. Turning now to the balance sheet.
At year end, we had adjusted working capital of $66,200,000 compared to $78,900,000 at the end of twenty twenty three. As stated previously, we use adjusted working capital, a non IFRS measure to highlight the strong working capital position that we have. Adjusted working capital is defined as working capital adjusted for convertible debentures with a derivative liability. We ended the year with cash and cash equivalents of $31,900,000 which was a significant increase from $23,100,000 at the end of Q3 twenty twenty four. The $8,800,000 increase in cash from Q3 was primarily due to stronger margin and operating performance, as well as the collection of proceeds from the sale of our share of our Chinese joint venture.
The sale of that non core asset generated net proceeds of $4,400,000 dollars Improving our cash position remains a top priority. One of our main focuses has been the progress billing and collecting on some of our longer standing unbilled revenue balances with work still to be done on this front that should help our cash balances in the future periods. In 2025, we expect positive cash from operations for the year. Due to the nature of our business, operating cash flows may vary significantly between periods due to changes in timing and working capital balances, namely with collections and payments. This concludes my review of the financial results.
And I’ll now turn the call over to the operator for Q and A.
Conference Call Moderator: Thank you, sir. First, we will hear from Gavin Fairweather at Cormark Securities. Please go ahead, Gavin.
Gavin Fairweather, Analyst, Cormark Securities: Hey, good morning. Thanks for taking my questions. Maybe just to start out, Chuck, on the backlog, it looked like it was up about $20,000,000 sequentially, which implied bookings about $60,000,000 So can you just discuss the mix of bookings that you saw in Q4, where these new contracts versus renewals and how does it shake out in tolling versus enforcement?
Chuck Myers, CEO, Quarterhill: Okay. And then, yes, I’ll split out the enforcement because those businesses run a little bit differently. The tolling contracts are reliant and by the way, good morning, Gavin. Those businesses rely the tolling one relies on these big long term contracts. So that was significantly boosted.
The total one is primarily by the $40,000,000 base contract of ACTC, which was a negotiated add on to our existing contract. And I’d like to say that recognizes a very good relationship with that customer and a good solid performing system. And that will continue to grow. We continue to see good progress on our other contracts. And we want to all of our contracts we look for those long term relationships.
I mean, these contracts typically don’t quote me on this, but I would say the average contracts at least ten years and they usually come with significant add ons. As you know, I had held back the company from bidding a lot of contracts last year until we got a better handle on where we were going in the future. But at this point, we’re bidding a significant number of contracts. And so we see a lot of potential going into 2025. And we think we should have a pretty decent year going into this year.
I hope that answers the question.
Gavin Fairweather, Analyst, Cormark Securities: Yes, that’s very helpful and it kind of led into my next question, which is just kind of the level of bidding activity and tolling. And I’m curious if you’ve seen any kind of positive or negative change from the change in U. S. Federal administration, like I’m curious if states which are partly reliant on government funding might be more interested in pulling projects as a new revenue source given that some of their funding.
Chuck Myers, CEO, Quarterhill: Yes, I haven’t seen that at all. And I think that there’s still a lot of I mean, there’s still a lot of pent up dollars from the previous administration to be spent on infrastructure. We don’t see this administration taking any different approach on infrastructure. To the contrary, maybe more. So we don’t view that as a significant impact at all and nor have we heard any such from any customer that I’ve talked to.
So we think that’s going to continue to be a big positive. And I don’t think it’s really had any impact state by state either.
Gavin Fairweather, Analyst, Cormark Securities: Okay. That’s good to hear. And then just on the existing kind of tooling projects, the couple of the ones that have had some challenges. It sounds like you’re still working to get kind of final acceptance and then also working on renegotiating those contracts with the clients. So maybe you can provide a bit more of a fulsome update on
Chuck Myers, CEO, Quarterhill: about them. But it’s really all about making sure that we a lot of it’s we have to make sure we deliver. And the other one is making sure that the a lot of these those contracts or a lot of them really there’s two, they were also impacted by the cost of living increase, which across the board has been higher than 20%. And so a lot of those contracts when they were negotiated long before I got here, they didn’t have the necessarily escalators and things in those contracts. So that also significantly impacted those.
So part of the negotiations is renegotiating those, and it just takes time and patience. We’re dealing with government contracts that require a lot of approvals. And I know I’ve been here, I think this is my I think my last quarter, I think this is my fourth quarter giving this talk. They just take time and but we feel like we’re making progress and I think we should have more to report next quarter.
Gavin Fairweather, Analyst, Cormark Securities: Okay, good to hear. And then maybe shifting gears, I don’t think we talked about enforcement enough. I mean, it sounds like they had a steady year in 2024 in terms of solid growth and profitability. Maybe you can just discuss kind of the outlook for that business into 2025 and how you’re thinking about how that business will progress over the course of the year?
Chuck Myers, CEO, Quarterhill: I think that business has progressed nicely. Morgan will be able to correct me on this one, but I think that we actually disposed of about $4,000,000 or $5,000,000 of revenue once when we disposed of the Chilean contract in that business. So where we finished the year, we were pretty happy about. And if you’ll notice our you could determine that, but the gross margins increased quite nicely in that business. As people may or may not know, Morgan was who’s now acting as our interim CFO is running that business as well and has done quite a nice job.
It’s an interesting business that approximately 50% of it at the beginning of the year is essentially reoccurring business. And so as we go through the year, we’re able and we have a pretty good handle going forward and have over the years and Morgan’s done a good job the last couple of years on that of understanding where we are in the market. So we continue to see steady growth in it and we hope to see continued gross margins. I mean, Morgan, do you want to make a quick comment on where we are in gross margins on that business, but they’re getting quite nice.
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: Yes, Chuck and thank you. Your comments on Chile are accurate. It was approximately $3,500,000 to $4,500,000 depending on the year with Chilean operations per revenue. And part of our success has been we’ve been out in the field more, Gavin, as far as business development during COVID. It was a little bit harder for everyone to travel, but part of our growth in the last couple of years has been being back in front of the customer.
And we have seen great margin improvements over the past couple of years as well just from managing efficiencies in the business as best as we can. And we continue to see a pathway forward for those to continue.
Gavin Fairweather, Analyst, Cormark Securities: Great. And maybe I’ll sneak in one more, maybe also for Morgan. Just on the working capital, nice to see the inflow this quarter. It looks like that mostly came out of accounts receivable, still sitting with kind of $36,000,000 of unbilled revenue. How do you think about maybe the surplus working capital in the business in terms of the levels which are above normal?
And how do you think about that flowing in over the course?
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: As far as I think we Kevin, we see some seasonality happening in Q1 as far as cash improves. But as we look to the rest of the year as far as cash improvements and working capital improvements, as we as Chuck had mentioned, the two contracts we’re renegotiating will drive a lot of progress as far as the improvements to working capital to the balance of the year as those contracts are renegotiated. Chuck, is there anything else you want to add to working capital or does that summarize most of it?
Chuck Myers, CEO, Quarterhill: No, I think that
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: As we get through.
Chuck Myers, CEO, Quarterhill: Yes. I think that that affects the unbilled AR quite a bit when those contracts get the situation they are. I would like to say the other thing, before I got here, these contracts were almost all of the tolling contracts anyway were bid with negative cash flow with big implementation. One of the things I implemented right here is we are only bidding contracts with positive cash flow And that was not the habit of the company in the last few years. So when we bid them, we’re very focused on making sure we don’t get in the situation again where we get upside down on these contracts.
And so you do not only do you see a reduction in unbilled ARR as these things recover, you should see a positive impact on EBITDA as well. Great.
Gavin Fairweather, Analyst, Cormark Securities: I’ll pass
Stephen Lee, Analyst, Raymond James: the line.
Gavin Fairweather, Analyst, Cormark Securities: Thank you.
Chuck Myers, CEO, Quarterhill: Thanks, Kevin.
Conference Call Moderator: Thank you. Next, we will hear from Stephen Lee at Raymond James. Please go ahead, Stephen.
Stephen Lee, Analyst, Raymond James: Thank you. Hey Chuck, the couple of challenging contracts projects that you’re currently working to resolve, would you expect you’ll need to take some reserves on those?
Chuck Myers, CEO, Quarterhill: It’s a good question. I sure as heck hope not. I said we’ll I think we’ll have a very good indication early in the quarter. But I would I think whether we message that or not, but I think we as you know, we took reserves in the third quarter based on where we were. So provided that things go as we see, I don’t want to over speculate, but maybe Morgan will have a thought on that.
But I’d say right now, we’re looking at getting these things settled down. So that’s my plan and that’s the strategy.
Stephen Lee, Analyst, Raymond James: Okay. Or maybe
Gavin Fairweather, Analyst, Cormark Securities: you have time in
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: No, I think Chuck, you nailed that. We’re digging in deep into the contracts and working through them day by day to make sure that we don’t have any further impact. So I think you’ve summed it up.
Stephen Lee, Analyst, Raymond James: And maybe I can ask, Morgan, when you look at the backlog, when you think maintenance versus implementation, is it split fifty-fifty when you look at that backlog?
Morgan Dempke, Interim Chief Financial Officer, Quarterhill: No, I think it’s more 80% maintenance or maybe that might be a little high, but it is more predominantly maintenance as they are long term contracts in the backlog.
Stephen Lee, Analyst, Raymond James: Got it. That’s great. And Chuck, maybe back to you. You touched on Europe a little bit. Any color on how the European pipeline is building?
Can we expect to see some conversion this year? Thanks.
Chuck Myers, CEO, Quarterhill: I would say, yes, we are actively pursuing a couple of bids right now. They’re still in the early stages. We’ve done some pre work and some pre bid work for qualifications and things on bids. But we expect to see those RFPs being issued and awarded before the end of the year. I think one of the other things that both Morgan and I have worked on, the company owned three or four small businesses in Europe and we worked very hard through 2024 to get those they were negative and we worked hard to get those companies profitable and cash flow positive.
So we’ve seen some better impact there and we’re really using that as a baseline to give us a beachhead to gain the credibility with the European customers. So we are able to present ourselves with a pretty strong European presence, even those are small businesses. I think between the businesses that we own over there, the customers are they like the fact that we come across as a European company when we’re over there.
Stephen Lee, Analyst, Raymond James: Got it. That’s helpful. Thanks guys.
Chuck Myers, CEO, Quarterhill: Thanks, Stephen.
Conference Call Moderator: Next question will be from Valerie Heckel at CIBC World Markets. Please go ahead, Valerie.
Valerie Heckel, Analyst, CIBC World Markets: Hi, good morning. This is Valerie on for Todd Copeland. Thank you for taking my question. Chuck, in your prepared remarks, you discussed the potential of inorganic growth. And I’m wondering if you can elaborate on that strategy a little bit more, particularly as your cash position improved markedly over the last year.
Are there any technologies or geographies you’re eyeing and is M and A something you expect to pursue in the near term or is it more of a longer term opportunity?
Chuck Myers, CEO, Quarterhill: Yes. Hey, thanks, Valerie. Sorry, Todd couldn’t make it. I think that we’re really we’re actively looking at deals right now. We said it’s part of our strategy.
We feel like we’re getting the business settled down. Obviously, we still got a couple of these things working out there. But the reality is if you set aside really those two contracts, the strength in the business looks pretty good right now. So we think that timing just because of the length of time it takes for acquisitions and inorganic activity, whatever it may be, it’s important to start pursuing that. We have a very active pipeline in potential targets and we actively talk to companies all the time without getting too much into it, but it is definitely on the radar screen.
Valerie Heckel, Analyst, CIBC World Markets: Okay. That’s very helpful. Thanks very much. And I’ll pass the line.
Chuck Myers, CEO, Quarterhill: Thank you, Valerie.
Conference Call Moderator: As we have no further questions at this time, I will turn the call over to Mr. Myers for closing comments.
Chuck Myers, CEO, Quarterhill: Thank you, operator. With that, I always like to close our quarterly call. I want to give particular thanks out to Morgan who stepped in when Kyle stepped down to go to another opportunity. And I want to thank Kyle, by the way. Kyle stayed and helped us finish out the year end and that was much appreciated.
Morgan’s done a great job. He’s wearing two hats at the time. We’re actively interviewing for CFO candidates now. And I want to thank all of the hard work that’s been put in by our management and our employees and our board and I’m thrilled that we have two new board members and hopefully we’ll be building out the board as we go into the year. So, and as always, I have to thank our investors.
You guys have been great. You always have good advice. And so look forward to working with you in the New Year and look forward to a strong 2025.
Conference Call Moderator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.
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