In This Article:
Shares of CSP Inc. CSPI have declined 9.6% since reporting fourth-quarter fiscal 2024 earnings, whereas the S&P 500 index has grown 1% over the same period. Over the past month, CSPI shares have lost 19.3%, underperforming the broader market’s 0.3% decline.
Earnings & Revenue Performance
CSP reported a diluted loss per share of 18 cents in the fourth quarter of fiscal 2024 against earnings of 15 cents in the year-ago quarter.
The company reported total quarterly revenues of $13 million, a 14.9% decline from $15.3 million in the prior-year quarter.
The quarterly results were partly influenced by reduced revenues and higher SG&A expenses, driven by increased legal, audit, tax and recruitment costs.
CSP Inc. Price, Consensus and EPS Surprise
CSP Inc. price-consensus-eps-surprise-chart | CSP Inc. Quote
Segmental Performance
Technology Solutions (TS): The TS segment, which includes managed IT services and cloud-based offerings, generated $12.7 million in revenues in the fourth quarter of fiscal 2024. The segment showed significant momentum in recurring revenues that increased to approximately 17% of total revenues, up from less than 5% two years ago, signaling the company’s successful transition toward a more predictable revenue model.
High-Performance Products (HPP): Revenues from the HPP segment were $0.4 million in the fourth quarter of fiscal 2024. The segment primarily serves ARIA cybersecurity customers, and management highlighted ongoing progress with its AZT PROTECT solution, including a recent deal with a Fortune 500 energy company. While HPP’s contribution remains small, the company anticipates higher sales in fiscal 2025 as the segment’s market adoption grows through partnerships and distributor agreements.
Key Business Metrics
Gross profit for the fourth quarter of fiscal 2024 was $3.7 million (representing 28.4% of sales), down from $5.2 million (33.8% of sales) in the prior-year period. The contraction in the gross margin reflects a higher proportion of lower-margin product sales.
Service revenues contributed $4 million to total sales, down from $4.3 million in the prior-year quarter.
Cash & Debt Position
As of Sept. 30, 2024, CSP had a robust cash and cash equivalent balance of $30.6 million, up 21.3% from $25.2 million as of Sept. 30, 2023. This strong cash position provides the company with ample resources to fund its ongoing investments, including expanding its AZT PROTECT solution and other growth initiatives.
The company maintained a solid balance sheet, with total liabilities of $22.17 million, up from $19.76 million in the prior year. Importantly, CSP has no long-term debt, ensuring financial flexibility to execute its priorities while navigating a challenging macroeconomic environment.