Hi, everybody. Welcome for connecting. I am here today with the CEO, Stephan Zizala, CFO, Camila Japur, about this release that we had this morning. This is just a Q&A conference call, so there are no slides for today. I will hand over now to Stephan for some intro remarks. Go ahead, Stephan.
Hello, everyone, and welcome to this call. In January, we announced the phase-out of our cellular business. Considering all the alternative proposals, this was the best option for all stakeholders. Today, we have a different situation. We worked out an agreement with Trasna to take over our cellular module business and our legal entity in Italy. This brings continuity for customers and our employees and reduces restructuring costs and effort for u-blox. On top of this, we can concentrate on Locate even more, which is the core of our business. Overall, we achieved good solutions for our customers and shareholders. I'm especially happy for our talented cellular team in Italy. At Trasna, they can bring their full innovation power on the street again. With this, we can go, for the questions you might have. Operator, do we have any questions?
Yes. The first question comes from Harry Blaiklock from UBS. Please go ahead.
Hi, there. Thanks for taking my question. The first is just around whether you could give a bit more color just on how this deal materialized. Given a few months ago, the plan was to wind down cellular, and I assume a fair amount of work kind of was done last year to find a potential buyer, which was not found. What has changed since then? Is it just kind of opportunistic from Trasna's side, or, yeah, it would be great to get a bit more color on that front?
You are right. We had a process to divest this business. When in January, we reviewed all the options and compared it against phase-out, we came to the conclusion that the phase-out is the best option for all stakeholders. There were obviously, even after the announcement, discussions ongoing with several partners, and we are now happy today that we could conclude a discussion with Trasna in an agreement that they will take over this business, which is, again, if I compare it against all the other options, including the phase-out, the best option for all the stakeholders we have.
Got it. Thanks, Stephan. I got a few others. The first is, just on your Q1 revenue guide. Are you able to give a kind of any rough breakdown as to how much of that is Locate versus cellular and Short Range?
We provide the guidance on a company level, and we will continue to do so. What we also did in the guidance, or together with the guidance, we gave a clear indication that we expect double-digit growth both for Locate and for Short Range.
Got it. The target operating model that you provided for Locate at the start of the year was super helpful. I was wondering whether you could give any similar color, even if it's kind of high level, for the short-range business.
We provided this target operating model for Locate because this was the major focus, and this is the largest piece of the business, and this is where we felt there's the highest interest to have this clarity. On Short Range, we also made a statement, and I want to reiterate this. Short Range will break even in the second half of the year, and we work on improvement measures to get there.
Got it. One last quick one, if I may, leading on from that, is just, I think previously Short Range has been around 20% of the business in terms of revenues. Do you have a target level for Short Range going forward?
If you look on the financial model we provided for Locate, it comes at a very attractive margin profile. On Short Range, we have a very different starting point, and we have the clear target to break even in the second half. We will manage this business for profitability, in the midterm, so we do not have a very distinct target model on the revenue for this business.
Okay. Great. Thanks, Stephan.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rafael Duarte for any closing remarks.
Just to be sure if we don't have any questions. Okay. Perfect. That was a short one. Thank you very much for connecting. If you have any further questions, you know where to find us. Thank you.
Thank you.
Thank you.