CalAmp Corp. (CAMP) Earnings Call Transcript: 2015 Q3 Results

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Elsewhere in our wireless networks business, we enjoyed ongoing healthy demand for automotive after-market vehicle recovery solutions as well as consistent subscriber growth for municipal government mobile workforce management software services.

Overall recurring revenues from our fleet management, automotive aftermarket, vehicle finance applications, and communication services comprised 16% of consolidated revenue for our third quarter.

At the end of our latest quarter, we had approximately 495,000 unique software application subscriptions; up from 485,000 subscribers at the end of the previous quarter.Highlights in the quarter included two significant contract wins with large enterprise customers for our Software-as-a-Service solutions. These new customer applications include the field service fleet of a large US investor owned utility as well as a major US automotive OEM vehicle testing operation.

Upon full deployment, which is expected early next year, these two new customers together could add over 5,000 unique software application subscriptions to drive growth and high margin recurring revenues.

Within our MRM products business, we continue to see strong demand for our products from fleet management, asset tracking and stolen vehicle recovery customers, both domestically and with key customers outside the US.

As the case in point, we recently signed a strategic supply agreement with one of Brazil’s largest fleet management and freight security companies. Under the agreement, CalAmp is supplying this customer with innovative telematics products that are integrated with applications for use in trucks, trailers, and passenger vehicles. With the agreement in place, CalAmp has commenced shipments of the LMU-4200 communications gateway and the MDT-7 Android based mobile data terminal, both of which have been tightly integrated into our customers’ core telematics offering.

In addition to this opportunity, we are seeing broad demand for the MDT-7 and are hopeful that this new product category will drive incremental revenue growth over the coming quarters.

To support the commercial rollout of the MDT-7, we are on-track for the launch of the CalAmp Corp. (NASDAQ:CAMP) private Appstore later in our fourth quarter. We believe that the Appstore along with embedded core applications on the MDT-7 will enable us to layer on additional value elements resulting in higher margins than our traditional fleet management hardware products.

In the auto insurance telematics market, third quarter demand for hardware devices rebounded moderately after a slow second quarter. We expect demand will continue to improve in the fourth quarter and into next fiscal year for existing programs as well as through expanding basis of business with international customers.

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