In This Article:
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Consolidated Revenue: $13.7 million, exceeding guidance of $13.3 million.
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OSS Segment Revenue Growth: 17.5% year-over-year.
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Gross Margin (OSS Segment): 43.2% excluding a $6.1 million inventory charge.
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Inventory Charge: $6.1 million, impacting gross margin, net income, and adjusted EBITDA.
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Operating Cash Flow: Over $900,000 for the quarter.
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Customer Funded Development Revenue: $2.8 million year-to-date, up from $877,000 last year.
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Consolidated Gross Margin: Negative 12.5%, impacted by inventory charge; 32% excluding the charge.
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Operating Expenses: Decreased 34.3% to $5 million.
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GAAP Net Loss: $6.8 million or 32 per share.
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Non-GAAP Net Loss: $6.4 million or 30 per share.
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Adjusted EBITDA: Loss of $6 million, including inventory charge.
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Cash and Short-term Investments: $12.6 million as of September 30, 2024.
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Fourth Quarter Revenue Guidance: Approximately $15 million.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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OSS segment revenue grew by 17.5% year-over-year, indicating strong performance in this area.
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The company reported a gross margin of 43.2% in the OSS segment, excluding a significant inventory charge.
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OSS achieved positive operating cash flow of over $900,000, demonstrating financial stability.
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The company has a robust $1 billion pipeline, with 70% comprising multi-year opportunities, suggesting future revenue stability.
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Customer funded development revenue increased significantly to $2.8 million year-to-date, up from $877,000 the previous year, indicating successful strategic initiatives.
Negative Points
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The company took a $6.1 million inventory charge, negatively impacting gross margin and net income.
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Consolidated gross margin was negative 12.5% due to the inventory charge, compared to 26.6% a year prior.
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The Bressner segment experienced a $1 million revenue reduction due to sluggish economic activity in Europe.
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The company reported a GAAP net loss of $6.8 million, a significant increase from the previous year's loss.
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There is continued economic uncertainty in European markets, which may impact future performance.
Q & A Highlights
Q: What is driving the strengthening trends in bookings and book-to-bill ratios in the core OSS segment, and how much of this is government versus commercial? A: Brian Kinstlinger, Alliance Global Partners - Analyst, explained that the strengthening trends are driven by both defense and commercial markets. The broadening of the company's scope and reach, particularly in defense markets, has contributed to this growth. The adoption of technologies like autonomy, artificial intelligence, and machine learning is also driving demand. Approximately 55% to 60% of bookings are from defense markets.