Good day, everyone and welcome to the Itron Inc. Year End and Q4 2019 Earnings Conference Call. Today's call is being recorded. For opening remarks, I would like to turn the call over to Ken Gianella. Please go ahead..

Thank you, operator. Good afternoon and welcome to Itron's fourth quarter 2019 earnings conference call. We issued a press release earlier today announcing our results. The press release includes replay information about today's call.

A presentation to accompany our remarks is on this call, is also available through the webcast and on our corporate website under the Investor Relations tab. On the call today, we have Tom Deitrich, Itron's President and Chief Executive Officer; and Joan Hooper, Senior Vice President and Chief Financial Officer.

Following our prepared remarks, we will open the call to take questions using the process the operator described. Before I turn the call over to Tom, please let remind you of our non-GAAP financial presentation and our Safe Harbor statement.

Our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website.

We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Actual results could differ materially from these expectations, because of factors discussed in today's earnings release and the comments made during this conference call and in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission.

We do not undertake any duty to update any forward-looking statements. Now, please turn to page four in the presentation and I'll turn the call over to our CEO, Tom Deitrich..

Thank you, Ken. Good afternoon and thank you for joining us. We ended 2019 with aggregate results in line with expectations. You will hear from Joan in a moment, but to summarize our fourth quarter performance, revenue was $628 million, adjusted EBITDA was $57 million, non-GAAP earnings per share was $0.72 and free cash flow was $29 million.

These results were primarily driven by continued strong demand in our Network Solutions segment. In the fourth quarter, we saw strong bookings, which brought our total backlog at the end of the quarter to a record $3.2 billion and our 12 month backlog increased to $1.5 billion.

Our bookings in the quarter were $767 million to achieve a full year book-to-bill ratio of over 1:1. We are pleased with our fourth quarter bookings performance, with approximately 75% of our new bookings coming from our Network Solutions and Outcomes segments.

We continue to anticipate a book-to-bill ratio of approximately 1:1 in 2020, with continued rotations in our bookings towards our Network Solutions and Outcomes segments. While our record high backlog gives us visibility into the year, we do expect an easing in our turns business, which predominantly impacts our Device Solutions segment.

We also see our customers increasingly investing in longer term project based solutions to enhance resiliency, reliability and safety, as evidenced in our recent announcement with Los Angeles Department of Water and Power. LADWP will deploy Itron's distribution automation solution to improve grid robustness and reduce operating costs.

Both of these trends are contemplated in our guidance for 2020. As I reflect on the past year, we've made meaningful progress in many of our areas of business.

By executing our strategy, we have expanded our footprint of network 10 points, increased our customer success through innovative --new offerings, continue to cultivate new partnerships and made solid strides in our operational performance.

During 2019, we shipped more than 16 million connected end points, which is an increase of 10% year-over-year, while our Network Solutions revenue increased 16% year-over-year, which outgrew the market projections by two times.

Our continued growth relies on investment in product innovation and partnerships that focused on delivering new solutions and outcomes for our customers' success.

From distributed intelligence throughout our networks to enhance data analytics, Itron is a leader in enabling utilities and cities to monitor and manage the communities they serve more environmentally soundly and efficiently. Our ecosystem of well over 250 partners continues to expand with numerous announcements made over the past month alone.

For example, we recently announced collaboration with Bidgely that unlocks value-driven business cases for electricity and dual-fuel utilities.

Bidgely is an artificial intelligence firm whose application will be pre integrated with secure access, to advanced metering infrastructure, data coming from Itron's global installed base of network, electricity and gas endpoints.

This partnership will enable global utilities and energy retailers with next-generation enterprise analytics that unlocks low disaggregation insights to improve efficiency programs, increase customer satisfaction and enhance their consumers experience.

Moving on to our operational performance, in our 2019 Investor Day presentation, we laid out a path to improve our business with a focus on increasing margins and free cash flow. As we continue on that journey, I would now like to give you a brief update. We have made significant progress on our committed projects.

This past year, we completed the integration of the former Silver Spring Networks and the restructuring project that was announced in 2016, which was primarily focused on our North American operations. On the global manufacturing front, we have centralized our procurement efforts and are beginning to drive leverage across our global factories.

We are active in both value engineering of existing products and the thoughtful outsourcing of products and subassemblies to contract manufacturing firms. Aligned to our prior announcements, we are still executing on our 2018 restructuring plan, which primarily focuses on our operations in Europe and Asia. This plan will continue into 2021.

And finally, we successfully reorganized our business operations and increased the visibility in our Device Solutions, Networked Solutions and Outcomes segments to focus on the unique opportunities that each segment has for growing revenue, expanding margins and improving customer success.

In Device Solutions, we are disappointed with recent results and are continuing to transform this segment. We are working towards launching new global platform-based devices, continuing to drive down cost on existing products and strategically exiting unprofitable regions and products.

We continuously look for ways to accelerate these programs, while not sacrificing quality, nor our customer support in the process. Turning to our Networked Solutions and Outcomes segments, we continue to prioritize investments in customer-focused solutions that will drive growth and higher margins.

Gross margins in these segments can be lumpy quarter-to-quarter due to product mix and customer deployment schedules; however, they are accretive to total company margins.

In 2019, Networked Solutions and Outcomes segments combined for more than 65% of our revenue, up almost 500 basis points from the previous year and we anticipate the contribution of both Networked Solutions and Outcomes to continue to grow in 2020 and beyond.

While there is still work needed to hit our near-term operational targets and to accelerate value creation for all our stakeholders, as we look forward to 2020, I am confident we will continue to make progress towards our longer-term business potential and look forward to providing updates as we progress.

Now, I will hand it off to Joan to discuss Q4 results and 2020 outlook..

Thank you, Tom. A summary of consolidated GAAP results is shown on slide six and non-GAAP results are shown on slide seven. Fourth quarter revenue of $628 million increased 7% versus last year, driven by continued growth in the Networked Solutions segment.

Gross margin for the quarter was 28.2%, 190 basis points lower than last year and lower than our expectations. This was primarily due to product mix and higher software content from the prior year, as well as a one-time customer adjustment booked this year.

While our revenue performance in the fourth quarter was better than expected, it was primarily driven by customer demand that shifted in from Q1 of 2020. Moving to earnings per share. GAAP net income was $15 million or $0.36 per diluted share, compared with net income of $24 million or $0.60 per share in the prior year.

Regarding non-GAAP metrics, non-GAAP operating income was $46 million. Adjusted EBITDA was $57 million, or 9% of revenue. Non-GAAP net income for the quarter was $29 million or $0.72 per diluted share, compared with $35 million or $0.88 per share in 2018. Turning to the fourth quarter year-over-year revenue bridge on slide eight.

Total company revenue grew 7% or 8% on a constant currency basis. Device Solutions revenue decreased 9% as reported and 7% in constant currency. While we saw growth in the Water and Gas markets, this was more than offset by lower smart spec electric shipments in EMEA. Networked Solutions revenue increased 21% as reported and in constant currency.

The increase was primarily driven by continued growth in our footprint of North America connected endpoints. In addition, some customer demand shifted from the first quarter of 2020 into Q4, which resulted in very strong year-over-year growth. Outcomes revenue decreased 1%, as reported, and in constant currency.

The decrease was due to a one-time customer adjustment. Without that adjustment Outcomes revenue would have increased approximately 8% year-over-year. Moving to the non-GAAP EPS bridge on slide nine. Our Q4 non-GAAP EPS was $0.72 per diluted share, compared with $0.88 in the prior year.

Net operating performance had a negative $0.05 per share impact versus the prior year. This was driven by higher non-GAAP operating expenses, due to increased product development costs and higher variable compensation, partially offset by restructuring savings. Lower interest expense added $0.05 per share year-over-year.

The higher Q4 2019 tax rate decreased EPS by $0.14 per share versus last year. You may recall that the tax rate in Q4 of 2018 was negative due to a one-time benefit related to an audit settlement. And lastly, FX changes and the increased share count resulted in a $0.02 decrease from the prior year.

Turning to slides 10 through 12, I'll now discuss the Q4 results by business segment, compared with the prior year. Device Solutions revenue was $206 million, with gross margin of 15% and operating margin of 8%.

Gross margin decreased 230 basis points due to unfavorable product mix and operating margin decreased 330 basis points due to the fall-through of lower gross margin as well as higher operating expenses.

As Tom just mentioned, the performance of the Device business was below our expectations, due to both product mix and inefficiencies in our international operations. Improving the Device segment's profitability is a key strategic priority. Network Solutions revenue was $369 million with gross margin of 35%.

We were very pleased with the 21% year-over-year revenue growth in this segment. Gross margin was down 500 basis points from the prior year due to product and customer mix. Operating margin was 27%, 440 basis points below last year due to the fall-through of lower gross margin which was partially offset by improved operating leverage.

Growing our footprint of Networked endpoints remains a key strategic priority. By continuing to outpace the market and gain share in our Networked Solutions segment, we are establishing a strong foundation for our Outcomes segment for decades to come. Outcomes revenue was $54 million with gross margin of 32%.

Gross margin increased 370 basis points year-over-year. Without the one-time customer adjustment booked in Q4, gross margin in the Outcomes segment would have been approximately 38%. Operating margin was 15%, 300 basis points higher than last year driven by the fall-through of gross margin partially offset by higher operating expenses.

We continue to improve the operating scale of this segment and are working on ways to accelerate our revenue growth. We do not see this quarter's performance as indicative of the Outcomes business model and we do anticipate lumpy performance until we reach scale. Turning to slide 13, free cash flow was $29 million in the fourth quarter.

Cash and equivalents at the end of the fourth quarter were $150 million. Total debt decreased to $932 million after $37 million of debt payments were made of which $30 million was ahead of schedule. This reduced our net leverage to 3.0 times. Now to quickly recap the entire year on slide 14.

Total revenue of $2.5 billion increased 5% year-over-year driven by 16% growth in Networked Solutions and 4% growth in Outcomes. This growth was partially offset by an 8% decline in Device Solutions due to changes in foreign currency exchange rates and lower smart spec demand.

At a total company level, revenue increased 8% year-over-year on a constant currency basis. Gross margin for the full year was 30.1%. Adjusted EBITDA of $270 million increased 15% year-over-year. Non-GAAP earnings per share of $3.32 was 25% higher than 2018. And free cash flow was $112 million for the full year more than double 2018's performance.

Now, moving on to the full year 2020 guidance on slide 15. We anticipate full year 2020 revenue to be in the range of $2.475 billion to $2.575 billion and non-GAAP earnings per share to be between $3.35 to $3.85 per share. To provide some color on our 2020 guidance. The midpoint of the 2020 revenue guidance range represents slight growth from 2019.

The growth rate is dampened by the higher-than-expected 2019 revenue performance. We anticipate our Networked Solutions segment to grow at or above the market in 2020 and Outcomes revenue to grow in the low single-digits.

We expect this growth to be partially offset by a mid-single-digit decline in our Device Solutions business driven by continued lower smart spec shipments and the easing of our turns business. Turning to our non-GAAP earnings per share guidance. The midpoint is 8% year-over-year growth.

We continue to see benefits from our operating initiatives and expect full year gross margin will improve between 75 to 175 basis points from 2019 performance. We anticipate this improvement to be weighted more towards the second half of the year. Other guidance assumptions are a euro to U.S.

dollar foreign currency exchange rate of $1.12, a non-GAAP effective tax rate between 25% to 27% and average shares outstanding for the full year of approximately $40.7 million. In summary, we were pleased with our overall financial performance in 2019.

We grew our Networked Solutions business 16% improved non-GAAP earnings per share over 25% and we more than doubled free cash flow from the previous year. Despite a strong 2019 we still have a lot of work to do to achieve our full potential.

As we enter 2020, we continue to assess each segment's performance to accelerate growth, improve margins, and generate higher free cash flow. Now, I'll turn the call back to Tom..

Thank you, Joan. As Joan mentioned, while we have made progress we still have more to do. We have the road map to achieve our long-term business potential and will continue to actively drive the performance in each of our segments.

Before I hand it over to Q&A, I would like to take a moment to highlight some of the environmental, social and governance initiatives that we have completed in 2019 or are currently underway with in 2020.

In our prior corporate sustainability report, we discussed several initiatives to improve the reporting of our ESG efforts and are making strides on multiple fronts. Over the past year, we have refined our approach to better align our strategic, operational and ESG efforts.

In 2020, we look forward to continuing to work with our key stakeholders to identify and improve where Itron can have the greatest impact on our planet by expanding our reach of solutions and working with our customers to ensure their success.

Itron is dedicated to creating a more resourceful world and with partnering with our key stakeholders to improve the quality of life, enhance safety and promote the well-being of people around the globe. There will be more to come in our 2019 corporate sustainability report due out in June. Thank you for joining our call.

Operator, please open the line for some questions..

[Operator Instructions] I'll take our first question from Noah Kaye at Oppenheimer. Please go ahead..

Thanks, good afternoon. Appreciate taking the questions. So looking at the 2020 guide anything to think about from a revenue cadence perspective? Anything to call out you would say, Joan? And then related how to think about free cash flow? You did a nice job in more than doubling free cash flow in 2019.

Maybe moving past some restructuring cash payments in 2020, how should we be thinking about that?.

Yes. From a revenue perspective, the linearity right now looks pretty even. So first half, second half is roughly the same and even Q1, Q2 roughly the same. So pretty linear based on the timing of customer deployments.

In terms of free cash flow, the estimate I'd have is somewhere in the range of $125 million to $140 million, so still nice growth from 2019 actuals..

Okay. That's very helpful. And then if you could just comment on supply chain. You've seen a lot in the trade press recently on tightening supply chain for passes in part because of what's happening over in China with coronavirus.

Is that -- have any impact anticipated or baked into your guidance? And if not could you talk about why you're somewhat insulated from that?.

Sure, Noah, Tom here. I can take that one. From an overall perspective I would say that we have seen a couple of minor moves on lead times but nothing terribly significant thus far in terms of the supply chain. On the coronavirus outlook, we've tried to be as mindful as we can about the overall macroeconomic situation.

But that virus situation is developing day-by-day and it's very, very difficult to predict what will happen. So we don't necessarily have a perfect purview as to where the macro environment will go as a result. There certainly is a fair amount of the supply base that is in China and it's something that we'll have to watch out for..

Okay. I appreciate that. And if I could sneak one more in. You mentioned in the prepared remarks, more of the bookings are rotating towards networks and outcomes just more complete solutions being procured by your customers.

You've announced some significant program wins for new deployments in the past quarter or so, but just wondering how much of that is potential second-gen or refresh business? And are you starting to see the benefits there?.

Yes we definitely see continued robust pipeline of opportunities coming through. Certainly the North American market continues to be quite strong in terms of new tenders that are out all the time.

There are some I'll say first-generation AMI types of deals that are likely to close during 2020 but by and large people are onto the second-generation or maybe a little further in terms of where the meat of the market is. We definitely see a lot of investment in resiliency, reliability, safety types of solutions.

So I think beyond just building an AMI kind of situation what else can you do with the data to enhance the value for operating leverage on the part of the customer or even engaging with the consumer itself..

Very helpful. Thank you..

We'll now take your next question from Robert McCarthy at Stephens. Please go ahead..

Good afternoon, everyone.

How are you today?.

Good. Thank you..

Good. I guess the first question since I'd rather light a candle than curse the darkness. Maybe you could talk a little bit about just kind of the strength you saw in Networked Solutions the timing amplify your comments around that.

And why that gives you a lot of confidence and conviction around that kind of above average above-market growth rate that you're expecting in 2020?.

Yes. So I mentioned a couple of the steps in the script itself. So for the full year the growth rate was about 16% so clearly much stronger than the overall market. I also mentioned some shifting of revenue from Q1 into Q4. The range of that is somewhere between $10 million to $20 million.

So again, just deployments we expected would be in Q1 that were in Q4. As we look at 2020, we continue to expect the Networked Solutions business to grow at or above the market. And so again, if you look at the 2019 numbers clearly, we're taking share in that market and we feel very good about our offerings and our ability to continue to grow..

Yes. If I may Rob maybe add a thought or two from my side. The backlog that we have coming into this year meaning that the 12-month backlog is $1.5 billion and that's up pretty significantly from what you saw in Q3.

So, good sequential progress quarter-to-quarter there and remember that, let's say about three-quarters of that backlog plus or minus is related to the Networks business. So it is a big portion and we've got pretty good visibility and we see customers doing a lot of deployment on the AMI side and beyond.

For distribution automation types of applications to strengthen the reliability of the grid is also an area that we see pretty good growth..

Great. And then I guess as a follow-up maybe you could -- and you may not want to go down this path, but it's fine if you do or you don't. But maybe just talk about your kind of 2021 targets and what's looking like a tougher putt or some nuance around it.

Help us kind of ring-fence, how you're thinking about kind of these -- those audacious goals around that are out there.

And how we square the circle with the guide and the recent results and how you're going to get there?.

Yes. The first thing I'd say is obviously, we have not provided any updated numbers on 2021. And so the current numbers we have are still from the Investor Day. We were very careful in that Investor Day to describe the fact that it wasn't going to be a linear line between 2018 and 2021.

And in fact, we talked about that we expected the 2020 versus 2019 growth to be somewhat muted and then accelerate in 2021 versus 2020. And that's again just based on the deployment schedules that are in our backlog and knowing where our customers are going.

So from the perspective of Networked systems, which is by far the biggest piece of our business nothing fundamentally has changed versus Investor Day. Outcomes again, we still expect them to grow.

As we mentioned in the script Devices is a little bit behind on the profitability improvement plan, but we still see a plan for improving the margins in that business..

I will leave it there for now. Thanks for your time..

We'll now take the next question from Joseph Osha at JMP Securities. Please go ahead..

Hello, hello. Thanks for taking the question. Just to look at the Device business for a minute and the trajectory there.

I'm wondering, are you all more aggressively walking away from business or perhaps lower-margin business than you were as part of what we're seeing maybe just reflective of a tighter filter that you're putting on that? And I do have a follow-up. Thanks..

Thanks, Joe. On the Device side of things, I think what you see in those results is a combination of factors. Certainly, the European market which is the lion's share of that business for us is definitely easing back some of the really big deployments in certain countries are kind of coming to an end.

The new markets that are expected to fuel a little bit of growth in the years to come are still a bit sluggish to get started. So I think the bigger factor is more around the market timing. That said, certainly, we have been disappointed in our progress on that front, and we'll continue to look for ways to improve the results.

Value engineering to reduce the cost of products, outsourcing of products, pruning the portfolio and stepping back from certain geographies are certainly on the menu and things that we'll continue to look at as you referenced..

Okay. So then I was going to ask another question, but I guess I want to follow-up then.

It sounds to me like you are saying given some of the opportunities you see elsewhere that selected portfolio pruning is part of what we're seeing here?.

Without a doubt, yes. The same as we talked about back in the Investor Day time frame. We do expect that business to shrink a bit over the years ahead based on exactly the types of activities that I talked about. We're really after profitability more so than top line growth out of that business..

Okay. And then just one more if I may and I've asked this question before I want to see if the answer has changed. There are some really interesting companies out there doing devices, hardware devices that aid in this task of addressing grid resiliency line sensors and whatnot. You're -- previously you said you didn't want to get into that.

But as we see more and more emphasis on that, I'm wondering could we see you out there looking at other sort of non-meter hardware devices that do you see to come after this grid resilience? And that's it for me. Thank you..

Sure. From our standpoint, we definitely see a tremendous value in the data and being able to pull insights out of it. So as we're looking at our portfolio, we're definitely interested in things that goes towards our Outcomes business as that is our target for growth. That said, we are very mindful that we need to have a complete solution.

Today we tend to partner quite a bit more and that is likely to continue to be the case. But we'll look for the opportunities to make sure we can provide that full solution top to bottom really leveraging the data that comes through the network..

Thank you..

[Operator Instructions] We'll now take our next question from Pavel Molchanov at Raymond James. Please go ahead..

Thanks for taking the question. I mean, clearly the software ramp has not been especially bullish I suppose.

Why do you think that is? Why is the utility adoption of SaaS solutions running below expectations?.

Yes. I would say that certainly our results in the fourth quarter were impacted by the onetime customer adjustment that I did talk about. So that's one factor to look at. That said certainly we want to continue to invest to drive for more growth on the Outcomes portion of our business.

We do see that the precursor for that is growth in the Networked space, but after that is really when we would expect to see some growth on the Outcomes side of the business. It certainly takes a bit of time for customers to digest a new piece of their solution and the advanced services tend to grow on top of that.

So it does lag a bit and it tends to be slightly lumpy based on exact customer timing. There is a regulatory component to this. We definitely continue to see favorable tailwinds in the regulatory environment relative to performance-based rates or being able to capitalize SaaS in a couple of the states in North America right now.

And I think that one will be a key leading indicator to watch, which will continue to fuel the growth for the Outcomes business in the future..

And in the context of software, you've signed three software partnerships year-to-date Grid4C, Innowatts and Bidgely, I couldn't help noticing three deals in barely 30 days.

Can you explain what capabilities those alliances will bring to the table?.

Sure. We talked about this a bit before, but I'll back up and then be directly responsive to your question.

The current generation of products and solutions that we are deploying in the marketplace today is based on a distributed intelligence, an edge computing approach where you can download an application into the meter and be able to pull out the insights that you're looking for from an operational or from a consumer engagement point of view.

Making sure that we have a full catalog of capabilities as that system solution starts to roll out, I think is incredibly important. There's significant interest in load disaggregation kind of solutions. There's interest in theft detection in revenue assurance types of things.

And overall, the types of partnerships that we're signing up today tend to lead down that path. Ability to better match supply and demand through a demand response or an energy efficiency program is another place that we see some pretty significant interest on the part of the electricity utilities.

All of those types of things are really what is the base of that downloadable app kind of environment that we're moving into as we step into the future..

Appreciate it..

Next question from Jeff Osborne at Cowen & Co. Please go ahead..

Hi. Good afternoon guys.

Most of the questions have been asked, but I might have missed it Tom, but can you or Joan give us an update on the 2018 restructuring? I think you said Silver Spring and the 2016 round are done, but I wasn't sure how much is still up from the 2018 tranche and what the mix is between gross margins and OpEx?.

Yes. So you're correct. We basically are done with the 2016 Silver Spring acquisition. Regarding the 2018 plan, we had talked about $50 million of annualized savings. We're about two-thirds of the way through that in terms of savings.

And so we would expect a little shy of $10 million incrementally in 2020 over 2019 and that's split roughly 50-50 COGS and growth -- sorry, gross margin and OpEx..

Got it. And then is there any way you could flesh out you talked about Water and Gas on a relative basis being a bit better.

Can you just talk about what you're seeing regionally? Or any quantification within devices of the different technologies that you serve?.

And are you asking specifically on devices or more macro? Make sure I understand your question..

Yes. I was thinking more devices, but macro would be helpful as well if you can layer that into the answer..

Sure. Sure. Okay. Thank you. Just to be clear, Joan's comment in the script was really around devices specifically. So make sure that that was clear. But let me take a step back and parse out the macro environment. We definitely see strong business in North America. The pipeline of new tenders it tends to be strong.

We see a lot of investment in things that are beyond an AMI kind of environment. So resiliency, reliability, safety kinds of applications and increasing interest in consumer engagement types of programs on the part of the North American utilities. Europe tends to be slowing a bit. Some of that is program related. Some of it seems to be macro related.

We definitely saw a bit more activity in 2019 in the Water segment in Europe towards the end of the year that tended to slow down a bit and that was contained in our comments earlier about the slow -- slowing of the turns business in our outlook for 2020.

In Asia-Pacific, it's a pretty small piece of our business where we tend to be fairly selective about which markets we play in and the markets that we are participating in. Again, we see tremendous interest in AMI kinds of applications and also safety-related applications as there's some big markets there.

Australia being an obvious one where wildfires and finding ways to better detect and manage those from a utility standpoint is high on people's minds. And that's an area that we think we have some technology that certainly can help. So mixed bag as you go across the globe, but I tried to give you some flavor of the puts and takes..

That's helpful. And then the last question I had Tom is just on Riva itself and as you gear up for the Xcel launch.

Is that full ASIC done? Or is that -- I think the last update I had it was still an FPGA format, but I wasn't sure where we are in the technology development of Riva itself?.

No, no. It's ASIC-based today in terms of some of the underlying protocol that's in the endpoint itself. That is indeed the case. Over the past year some of the announcements that maybe were a little bit below the covers.

We have taken that same hardware platform and brought it across from the legacy Itron side to the Silver Spring side so that we have the same capabilities on a Gen X as well as on Riva capability as we've started to broaden that out as we do the technology convergence. So ASIC-based today not FPGA-based..

Okay. Thank you..

It appears there are no further questions at this time. Mr. Tom Deitrich, I'd like to turn the conference back to you for any additional or closing remarks..

Very good. Thank you, Eduardo. So thank you everyone for joining our call. To summarize, we took away expectations in 2019 that were -- our results that were largely in line with what we had set some pluses and minuses inside of there.

We're excited about the leverage that we have and the visibility we have into 2020 and look forward to updating you as we make progress along the way. Thank you all..

There will be an audio replay of today's conference available this afternoon. You can access the audio replay by dialing 1-888-203-1112 or 1-719-457-0820 with a passcode of 1233599 or go to the company's website www.itron.com. This concludes today's call. Thank you for your participation. You may now disconnect..