Q2 2023 Vislink Technologies Inc Earnings Call

Participants

Carleton M. Miller; CEO, President & Director; Vislink Technologies, Inc.

Paul Norridge; CFO & Treasurer; Vislink Technologies, Inc.

Brian David Kinstlinger; MD, Director of Research, Head of TMT Research & Senior Technology Analyst; Alliance Global Partners, Research Division

Presentation

Operator

Good morning. Welcome to Vislink's Second Quarter 2023 Earnings Conference Call. My name is Drew, and I will be your operator for today's call.
Joining us for today's presentation are the company's CEO, Mickey Miller; and CFO, Paul Norridge. Following their remarks, we will open the call to questions.
Earlier today, Vislink released results for the second quarter ended June 30, 2023. A copy of the press release is available on the company's website.
Before we begin the call, I would like to provide Vislink's safe harbor statement, which includes cautions regarding forward-looking statements made during this call. Management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements.
All forward-looking statements, including, without limitation, our examination of operating trends and financial expectations are based on the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to differ materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not rely on these statements.
For a list of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. Vislink disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events or otherwise.
This conference call contains time-sensitive information that is accurate only as of the live broadcast this morning, August 11, 2023. (Operator Instructions) Please note this event is being recorded.
Now I would like to turn the call over to Vislink's CEO, Mr. Mickey Miller. Sir, please proceed.

Carleton M. Miller

Thank you, operator, and thank you, everyone, for joining us today. This morning, we filed our 10-Q with the SEC and issued a press release that provided our financial results for the second quarter and 6 months ended June 30, 2023, along with highlighted business accomplishments.
As a brief overview for today's call, I'll begin by providing highlights for the second quarter of 2023 and summarizing some of our most recent updates before passing the call to Paul to discuss our financial results in more detail. I'll then come back to discuss progress on our go-to-market strategy, product developments and updates within our key markets before moving to Q&A. And with that, let's begin.
In Q2, we've made substantial operational progress as we continue transforming the business with a keen focus on the public safety growth market, our efforts in this area led to a 91% year-over-year revenue growth in our MilGov segment, reaching $1.2 million for Q2 and $2.1 million in the first half of 2023. Our progress in public safety is highlighted by 3 key deliverables in Q2; 2 in the Eastern U.S. with a large city and a large county and the other 1 with a major country in the APAC region. These successful deliveries are clear indicators of our progress in this growth segment and reflect our team's resilience throughout this organizational transformation.
We are swiftly adapting to the dynamics of the public safety industry. This includes navigating elongated sales cycles and dealing with budget cycles that heavily lean towards the second half of the fiscal year, along with decision-making patterns that follow a similar trend. While these factors present near-term challenges to our top line, we remain confident in the alignment of our solutions and the services within the public safety market.
As we move into the second half of 2023, we are encouraged by having the most $1 million plus opportunities in our sales funnel that we have had in several years. And behind our revamped sales and marketing efforts already in motion. We are confident that we will capitalize on many of these potential deals in the second half of the year in 2024.
During this transformative phase as revenue decreased 10% year-over-year in the first half of 2023, effective cost management has been paramount. In Q2, we reduced total expenses by 10% from the prior year. Continuing with our transformation, we plan to implement additional cost-saving measures in the second half, which will further rationalize our product set and position us to more cost-effectively serve our target markets. Taken together, these actions will contribute to saving over $1 million annually.
We have also augmented these measures through our pricing strategy as we have applied a 5% increase to all new quotes starting at the end of Q2. Additionally, we continue to drive increased efficiencies throughout the organization, including heightened workflow optimization and financial accountability, efforts we will extend into the second half of the year. A significant component of our transformation has been our ongoing progress in integrating our 3 ERP systems into a single, more modern system. This consolidation not only streamlines our operations, but also enhances reporting and control.
Our early efforts to boost operational efficiency across the organization have already begun to yield positive results. Later in the call, I'll elaborate on our product development and strategic initiatives in sales and marketing that are designed to complement and bolster the results of our operational improvements. But first, I'd like to turn the call over to Paul to discuss our financial results for the quarter in greater detail. Paul?

Paul Norridge

Thank you, Mickey, and good morning, everyone. Looking at our financial results for the second quarter. Our total revenue for the first half of 2023 was $12.2 million compared to $13.6 million in the prior year period. For the second quarter of 2023, revenue decreased to $5 million from $6.8 million in quarter 2 of 2022. The decline in revenue during the recent period is primarily due to our decision to discontinue several product lines in the third and fourth quarters of 2022. These products were phased out because they weren't in line with our evolving strategic direction.
Gross profit for the first half of 2023 was $6.6 million compared to $7 million in the first half of 2022. Our gross profit margin for the first half of 2023 was 54%, an improvement from 52% in the first half of 2022. The improvement in gross margin resulted from cost savings and components and personnel. In the second quarter of 2023, gross profit decreased to $2.7 million from $3.6 million in the prior year period. The gross profit margin for the second quarter of 2023 was 53%, consistent with the 53% margin in the prior year period.
Total expenses in the first half of 2023 were $18 million, a 7% decrease from $19.3 million for the same period in 2022. For the second quarter of 2023, total expenses decreased 10% to $8.4 million from $9.3 million in the prior year period. The improvement in total expenses was primarily driven by reductions in workforce related expenditures, including personnel expenses. Additionally, we transitioned away from our outsourced partner opting to integrate additional engineering capabilities in-house and further enhance our operational capabilities.
Turning to our profitability measures. For the first half of 2023, we recorded an operating loss of $5.7 million, consistent with the operating loss of $5.7 million in the prior year period. For the second quarter of 2023, we recorded an operating loss of $3.4 million compared to an operating loss of $2.6 million in the prior year period. The increase in operating loss was primarily due to the changes in revenue previously noted.
Net loss attributable to common shareholders for the first half of 2023 totaled $4.8 million, or $2.02 per share. This was $0.5 million improvement from the net loss of $5.3 million or $2.30 per share in the first half of 2022. Net loss for the second quarter of 2023 totaled $3 million or $1.27 per share compared to a net loss of $2.5 million or $1.10 per diluted share in the second quarter of 2022. EBITDA for the first half of 2023 was a loss of $4.9 million compared to a loss of $4.5 million in the first half of 2022. Adjusted EBITDA, a non-GAAP metric, for the first half was a loss of $3.2 million compared to a loss of $2.8 million in the same period a year ago.
EBITDA for the second quarter of 2023 was a loss of $3.1 million compared to a loss of $2.1 million in the prior year period. Adjusted EBITDA and non-GAAP metrics for the second quarter of 2023 was a loss of $2.8 million compared to a loss of $1.5 million in the second quarter of 2022. EBITDA results were primarily a result of the changes in revenue, partially offset by cost management. A reconciliation of EBITDA to GAAP measures is contained in our earnings release.
Finally, to our balance sheet. As of June 30, 2023, we had cash and cash equivalents of $11 million compared to $14 million at the end of the first quarter. In the second quarter, we increased inventory by 10% as we continue to enhance our capacity for immediate booking and shipping. We also have invested $10.8 million in federal bonds intended to be held to maturity. We've maintained a strong balance sheet. And from a working capital standpoint, we have $35.6 million in working capital at the end of the second quarter compared to $38.6 million at the end of Q1. We believe our strong debt-free balance sheet that only shields us from macroeconomic pressures, but also gives us the flexibility to invest in high return on investment opportunities that align with our long-term growth potential.
We intend to remain proactive in exploring enhancements to our video communications areas, especially within defense and public safety. That concludes my prepared remarks. I'll now turn it back to Mickey.

Carleton M. Miller

Thanks, Paul. Looking at our go-to-market efforts, our push to secure more predictable recurring revenue by bolstering our software and services sales demonstrated strong progress. The service level agreements or SLAs attachment rate to hardware sales has improved substantially. We are tracking toward our goal of a 90-10 split between hardware and software by the end of 2023.
Our software and services attachment strategy will diversify our revenue stream and deepen our relationship with clients, thus fostering a healthier sales pipeline over time. This is an important aspect of our sales funnel strategy. As I mentioned earlier, we remain confident in our sales pipeline with strong contributions in that funnel from the growing public safety and the sports and entertainment areas. In the second quarter, we prioritized our efforts further enhancing this funnel and building our bookings. We have laid out additional sales initiatives under the new Americas sales leadership of Steven Teese.
Steven is an accomplished sales leader with a demonstrated history of building high-performance teams and driving growth in the technology sector. With an extensive experience in solution sales and leadership development, Steven has successfully led sales for companies like WatchGuard Video, driving its growth to $150 million in sales from the startup. As the newly appointed VP of sales for Americas at Vislink, Steven will leverage his expertise in the public safety market to accelerate the penetration of Vislink's market-leading video communication solutions. His presence will play a key role in identifying and seizing new opportunities, solidifying Vislink's position as the premier supplier of reliable, scalable, video-centric networks in the region.
I would now like to dive a bit deeper and provide additional insight into the central priorities that will fuel our sales growth in the United States. Beginning with the U.S. public safety market, focusing specifically on state and local agencies, we are already rolling out communications with each of the 250 aviation units in the United States. Nurturing consistent and ongoing relationships with these units will enable us to gain valuable insights into their needs, deliver tailor-made solutions and ultimately increased product adoption. In the future, we will leverage Steven's valuable connections to major players in the public safety (inaudible) to grow our partnerships.
Looking at U.S. federal agencies, though we view these opportunities as longer term in scope, we believe that assessing key federal organizations is a pivotal aspect of our growth strategy in MilGov. As a launching point, we are actively identifying opportunities within the federal domain. Our goal is to understand its intricacies and forge meaningful partnerships in this area. Additionally, we are actively engaging with OEMs to cultivate relationships that will lead to mutually beneficial opportunities. These efforts have been accelerated as we introduced the Aero5, the 5G product, which leverages the existing 4G LTE and 5G infrastructure.
Internationally, there are several opportunities for enhancement that we are pursuing in the second half. Our first aim is to strengthen our indirect selling channels through the Americas by enhancing training programs, providing additional tools and ramping up the marketing support, we aim to maximize the potential of our strategic partnerships. We are also actively developing partnerships with our value-added resellers across North and South America.
We have identified and valued an initial opportunity at approximately $1 million that sets the stage for further expansion in South America. These well-defined priorities align our overreaching growth strategy and underscore the immense potential we envision for each region. By successfully executing these initiatives, we will bolster our market position and unlock new avenues for growth.
Also in Q2, we began revamping our marketing efforts, including leveraging our vast database of 15,000-plus customer inputs to identify additional opportunities. We are actively working on launching marketing campaigns in the back half of the year. Over the next several quarters, we will begin to see our marketing function to substantially increase their contributions to total sales, and we are prioritizing this in the near term.
On top of these initiatives, we continue to drive business through industry conferences and trade shows. Last month, we attended APSCON in Orlando, where we met with various leaders in the aviation field and displayed our products. We attended PAvCon in May, the police aviation conference, where we demonstrated the various air-to-ground solutions we provide to law enforcement agencies worldwide. While we primarily showcase our AVDS products at these conferences, we also attended CABSAT in Dubai, where we met with many decision-makers in the broadcast world, and showcased the various systems we have in place. All 3 of these conferences generated hundreds of leads, and we believe we are now positioned to capitalize on these opportunities and drive sales.
In conclusion, our go-to-market efforts are varied in focus, spanning different areas, including strengthening partnerships, enhancing marketing strategies and expanding our presence at industry events. Fueled by our strong leadership and well-defined growth strategies, these tactics position us to drive our sales growth effectively. As we look forward to the second half of the year and beyond, we are excited about the immense potential of these initiatives offered to increase our market presence, drive revenue and shape the future of Vislink.
Now let's move on to updates about our product development. Over the past few quarters, we have been strategically refining our product line to spur growth in new markets while emphasizing cost efficiency. This approach bolstered by our decision to bring engineering capabilities in-house has led to the successful rollout of several products in the public safety and sports and entertainment markets.
Concurrently, it has driven enhanced efficiency in our R&D expenditure, achieving over 25% improvement in the first half of 2023 compared to the same period in 2022. Our product innovation journey has been rigorous and sharply targeted, aligning precisely with the market's evolving demands. Take, for instance, our Aero5, the most advanced 5G LTE bonded cellular solution crafted especially for airborne video downlink applications.
Not only does it boast superior technical specs, but its efficient SIM card management ensures optimal and uninterrupted connectivity by seamlessly switching or combining different network providers. This capability is pivotal in aerial context where stable connection is nonnegotiable. The introduction of Aero5 complements our existing airborne video downlink systems, which continues to resonate strongly in the market. It provides many customers with an ideal gateway into the world of downlink systems. And we anticipate it will both expand the market and boost conversions to our cost and proprietary AVDS systems.
Adding to this lineup, we've made significant strides in our AeroLink transmitters. Our technology will be used to execute law-enforcement duties, provide aerial surveillance and add situational awareness with the goal of bolstering public safety agencies' operational proficiencies and ensuring safer communities. Recently, we deployed a complete AVDS system in a major city in the Mid-Atlantic region in the United States. This installation is complete and the customers have experienced excellent improvements in its crime prevention and intercepting capabilities.
The robust demand for these solutions, coupled with our award-winning Cliq OFDM transmitter has notably amplified our bookings for the quarter and laid a strong foundation for growth in the latter half of the year. Throughout the first half of the year, customers across various markets have been demoing the Cliq and have expressed a considerable positive expression for this award-winning product. We anticipate these demos to convert into orders as the year progresses.
Cliq continues to revolutionize the market with its dual feed, dual audio OFDM transmission capability in capacity for 4K transmission. This technological feat is significantly enhancing content capture for our customers. And due to the early success of Cliq, we're developing even more innovative features.
Lastly, we've enhanced our software solutions. Recently, we integrated LinkMatrix with AWS, simplifying the adoption for service level agreements in enabling remote management access. This integration offers users enhanced control, flexibility and speed, thereby transforming production workflows and fostering innovation in live broadcast and performance in the public safety field.
In tandem with these software advancements, we have made deliberate shift to prioritize service and customer satisfaction. Recognizing the pivotal role of timely assistance in our target markets, we have begun offering 24/7 customer support. Additionally, our commitment to warranty repairs ensures that our clients experience minimal disruption and maintain trust in our brand. By grounding our efforts in these fundamental aspects, we aim to deliver an unmatched customer experience that sets Vislink apart.
What truly sets our product range apart is its universal applicability across diverse markets, be it sports and entertainment or public safety. This standardization not only lends us flexibility in sales and marketing, but also instills efficiency in production. As a result, we've observed market improvements in order fulfillment underpinned by refined supply chain management. We are proud to be the sole provider in the market with capabilities spanning bonded cellular, private 5G and proprietary COFDM. Such product advancements place us uniquely and competitively in the market. With continuous enhancements to our software platform, we've created a compelling and comprehensive product offering that's hard to beat.
Now I'd like to shift focus and discuss updates with each of our targeted end markets. First, I'd like to highlight our core MilGov end market. In the first half, MilGov revenue improved 74% for the first half of 2022. MilGov made up 17% of revenue in the first 6 months as compared to 9% in the prior year period. This quarter, in addition to our success with 1 public safety agency in the Mid-Atlantic region, we had key AeroLink system installations with another public safety agency also in the Mid-Atlantic region.
These systems equip law enforcement agencies with the advanced AVDS technology to improve their air-to-ground operations. There is strong traction domestically in this area. And as I mentioned previously, our sales efforts will focus on the benefits of these systems to operations. This installation with prominent law enforcement agencies is a key proof point of the efficacy of our solution.
We also installed a system with a government agency in a large country in the APAC region for over $1 million. We have seen strong traction in this region in 2023 as we have increased revenue in the APAC region by nearly 50% year-over-year in the first half. We are also building a solid pipeline of opportunities for this product line in Western Europe, Asia and the Middle East. Domestically, we believe the company is benefiting and will continue to benefit from the increased federal funding particularly in the public safety market as it provides agencies with increased buying power.
With continued growth in public safety markets, we are actively exploring tangential markets where we can expand our offering, and we are optimistic about the number of use cases for our products in this area.
Moving to live broadcast end market, I want to provide further color about the sales initiatives in this area. Our focus here is to foster strong relationships with the top 3 integrators in the industry in the Americas. Collaborating with these key players will grant us access to a broader customer base and drive sales of our products.
To extend our market reach further, we plan to onboard an additional sales channel for our bonded cellular product. This strategic decision will augment our market share and open new avenues for revenue growth. Live production driven by continued growth in sports, media and entertainment will remain a key part of our top line performance. We continue to hear from our sports media and entertainment customers that demand is still strong, but we are closely watching this given the state of the macro environment.
In summary, our Q2 performance and ongoing activities demonstrates our commitment to growth and transformation. Our solid multimillion-dollar sales pipeline underpinned by our revamped go-to-market strategy and well-defined initiatives presents promising growth prospects, bolstered by cost management, our ongoing product development have empowered us to effectively cater to our target markets, offering ground-breaking solutions while upholding cost efficiency.
We believe we are on the cusp of significant expansion. As we secure more contracts with renowned law enforcement agencies, we expect our enhanced visibility to further enrich our pipeline across the Americas and globally. Looking ahead to the latter half of 2023 and beyond, we see immense potential in our initiatives to amplify market presence, escalate revenue and sculpt Vislink's future.
With our unique positioning, strategic direction, promising pipeline and dedicated team, we are confidently on course for sustained success. Operator, please provide the appropriate instructions.

Question and Answer Session

Operator

(Operator Instructions)
The first question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Brian David Kinstlinger

First, you highlighted discontinuing some products. First, how much revenue do these products generate in 2022? And also in the first quarter of 2023. I assume nothing in the second quarter.

Carleton M. Miller

Brian. Thanks for joining. This is Mickey. The exact number, Paul can gather that, but these products were products that have been in the portfolio for quite some time. So it had an impact, but I wouldn't say a material impact. Part of those products, as we've mentioned over time, we've been migrating to new HEVC to H.265 with 4K capability, both for our encoders and decoders, so we're seeing over time some of our legacy products that we phase those out. And so we didn't see -- I would say, most of the fallout that we saw in Q2 in the live production area, an element of that in Q1 was the obsolescence of those products. However, it was largely due to we saw live production reduced in second quarter.
As we mentioned in the first quarter, we were watching that carefully. We continue to watch that. We're still optimistic. We had projects that slipped into Q3, and we are seeing those bookings move forward. And so we're happy to see that. But it's an area that we still stay focused on. I know you have a concern about that of how live production will grow, and we're closely watching that, as you know, because historically, that's been a large piece of our business.

Brian David Kinstlinger

So they had nominal revenue in 2022 in the first quarter. Is that right?

Carleton M. Miller

In 2022, I'd say they probably -- yes, less than $0.5 million.

Brian David Kinstlinger

Yes. So look, I mean, in the prepared remarks, you hardly touched on live production and what's happening there. What are customers saying? Are they not upgrading equipment? Are they extending the useful life of their older equipment and then do you think it's going to get worse before it gets better?

Carleton M. Miller

On the first part, our customers that are providing outside broadcast services to the large networks are busier than they've ever been, and they've seen that. And that's, we're in a year where there's not major events. We had the World Cup, the women's World Cup in Australia, but beyond that, not a lot of major global events, we'll see more of that in the years to come. But even with that, they're seeing the drive for live content and sporting events and entertainment events is still -- we're seeing still strong.
And so the feedback that we're getting, only in a couple of cases that we've seen both that and on the enterprise side, where we're seeing people pull back and say, due to budget constraints, we're only going to buy 20% of the systems that we intended to buy. But for the most part, the feedback that we're getting globally is there's still a large demand for live content, and they need to have our technology to be able to produce that and produce it in an innovative and infinite way.
So we're watching it carefully. Given the macroeconomic elements as well as there are private equity-backed companies in our space, the largest OBS provider is a private equity-backed company. So we're just seeing how that impacts what they're spending on CapEx is. But so far, we're still encouraged by what we're seeing in terms of the opportunities and the discussions around those opportunities about deployment.

Brian David Kinstlinger

Great. But again, as I think about the second half of the year, I think you did about -- if I just back out MilGov, you did about $4.4 million in live production in the quarter-ish. Is that what without some live events, some big live events are we going to be in a similar type of revenue situation for the next few quarters?

Carleton M. Miller

I don't think so. I think, we've historically in the line of production side have been around the $5 million range. We saw that in Q1 and in Q2, it was well off that. And I think that we're seeing it as an aberration, not as a trend. And from what we're seeing around the discussions around opportunities and new orders coming in, we think that gets back in that range.

Brian David Kinstlinger

Okay. And then the MilGov side, you talked about some exciting growth opportunities. I guess I'm curious how lumpy is this. Did you already recognize the revenue from the 7 AeroLinks that were delivered or do we expect that you can build each quarter off what you produced in the second quarter?

Carleton M. Miller

Well, what we'll do, we have, as part of that, there's about 15% or so that will be recurring revenue related to those opportunities for the SLAs that are put in place. And so that will be deferred revenue. But both those commissions are complete on the county opportunity and the city opportunity in the Mid-Atlantic region. So we're really encouraged about that.
The second thing is the APAC opportunity was a bonded cellular backhaul of surveillance on borders, and we think that's a very interesting use case that can be applied in other areas. That was a very large opportunity for the APAC region as we see the APAC region finally opening up. We've struggled in APAC through COVID because of all the closures among the different countries borders. But we're seeing that open up with that large order there.
So we're really encouraged about, a, growth in APAC and b, a new use case that we think has applicability elsewhere. And I think the third thing that we're really encouraged about we introduced the Aero5. The Aero5 is a 5G, 4G LTE product that can go either in the aircraft with our AeroLink or by itself. And what that brings, right now, if you want to procure an AeroLink, you need to buy receive stations that receive those links. And that's where the cost of the deployment is.
If you leverage the 4G/5G architecture, you no longer need an infrastructure. And we think that broadens the opportunity for downlinks from aircraft and allows us to get a recurring revenue and managing those SIMs and supporting those products in the air. And then secondly, it allows those customers who (inaudible) may have not purchased a downlink to experience what a downlink does and see what that does for either their newsgathering operations or for their crime activity operations -- crime stopping and avoidance operations, and they may then migrate to the full investment for our proprietary solution.
I think the big difference there is, again, where these aircrafts are located and what elevation they typically operate at. We're really encouraged by what we're seeing, not only here in the Americas, but globally for the Aero5 product.

Brian David Kinstlinger

Okay. Lastly, you've got over $20 million of cash. I'm curious where M&A is in your priority list as a tie, if it is, if you can provide some detail on your strategy and whether you have any serious discussions or with the burn being much higher in the second quarter than typical, is the priority conserve cash right now?

Carleton M. Miller

Yes. So as we mentioned on previous calls, we're looking at a lot of different opportunities, opportunities around where we can leverage our capabilities or augment our capabilities, either to bring us into new markets, for instance, defense or leverage our capabilities in the existing markets of public safety and sports media and entertainment. We're talking to a lot of folks. We haven't seen something yet that we're ready to close at the valuation that's being requested.
However, as you mentioned, Q2 with the softness that we saw for that period in live production, we do want to make sure that we get our operations where we're breakeven or producing cash. And then prior to that, potentially making an acquisition that augments that. But we always want to have cash on hand in the event that there may be some macroeconomic event that impacts our top line.

Operator

(Operator Instructions). I'd now like to turn the call back over to management for additional questions the company received from investors.

Carleton M. Miller

Thank you. We've received several pertinent inquiries from our investors over the past quarter, which I'd like to address now. We'll start with 1 relating to our pipeline. In which segment or markets are the prospective deals in your sales funnel primarily located.
Historically, over the years, it's been 1/3 public safety, 1/3 defense and 1/3 sports media and entertainment and broadcast. In the last 2 years, given the exit out of Afghanistan, we saw our defense business go away and the majority of our business being in the sports media and entertainment. Now when you look at our funnel, we're seeing much more public safety activity globally. Historically, we've been strong in the U.S., not strong in Europe, the Middle East or APAC.
We're starting to see a lot of opportunities there given the introduction of our AeroLink product and our Aero5 product, which we're very encouraged by. And so I think over time, we will see the public safety market be an increased amount. Now those deals are larger and have a larger -- a longer sales cycle. But in the next 12 to 18 months, we expect to see a large increase in those public safety deals, particularly with the well-defined strategy that we have now.
We brought on Steven Teese, who's been in the public safety area for many years. He led the WatchGuard sales team growing it from a startup to $150 million, at which time they sold to Motorola. So we're really encouraged to have Steven on board. We bring in additional team members to help hone that strategy in the Americas as well as we continue to focus outside the U.S. to bring on both federal agencies and local agencies that see the opportunity for AVDS solutions.
We've also had a question of which international markets will be seeing the most opportunities in and what will drive growth in these areas?
We see a large opportunity in international markets for our products. I mentioned APAC. We're really pleased to see that large opportunity in a major country for border security application. We continue to focus on that and expect to see good growth there in the APAC region. But again, that region has been struggling over the last few years, given COVID and the shutdowns there. As I've mentioned on our previous call, the Middle East has been a strong growth area for us. We continue to see growth there. That's predominantly in the broadcast media and entertainment area. We expect over time, as we focus for additional AVDS opportunities there that we'll see more MilGov type opportunities appear there. We're in the process now of developing the channel there to support that.
So overall, I'm encouraged by what we have when you look at what we're doing around the sales teams, what we're doing to support our VARs and channels and then our marketing efforts to be able to support this focus. And we've got a unique position where we can take the same products, either repackage them or keep them the same and sell them into these quite diverse markets. And now we're putting together the sales approach to be able to do that in a more effective way, and we're encouraged by the results that we're seeing so far.

Operator

I understand that will conclude the Q&A session. I'd like to turn the call back to Mr. Miller for any concluding remarks.

Carleton M. Miller

Thank you, operator. We appreciate your interest in our company and to our investors, thank you for your continued support. We're dedicated more than ever before to building shareholder value in making Vislink the premier provider of technology solutions for the collection, delivery, management and distribution of high-quality live video and data. We remain committed to enabling creators to capture, stream and monetize our contract content and ensuring that military and first responders have real-time intelligence to fulfill their missions, serve and protect.
With our collective efforts and shared vision, I believe that the best days ahead -- the best days of Vislink are ahead of us. Thank you for your continued support of our mission and thank you for being with us today.

Operator

Thank you for joining us today for Vislink's Second Quarter 2023 Conference Call. You may now disconnect.