In This Article:
-
Revenue: $38 million, up 12% from $34.1 million last year.
-
Adjusted EBITDA: Negative $2.8 million compared to positive $1.4 million last year.
-
Revenue Backlog: $475 million.
-
Gross Margin: 13% compared to 23% last year.
-
Operating Expenses: $11.3 million compared to $9.9 million last year.
-
Cash and Cash Equivalents: $23.1 million compared to $42.7 million at the end of 2023.
-
Adjusted Working Capital: $64.9 million compared to $78.9 million at the end of 2023.
-
Dividend Received: $3.8 million from ownership position in JPY.
-
Reserves Impact: $4 million impact on revenue and margins due to tolling projects.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Quarterhill Inc (QTRHF) reported a 12% increase in Q3 revenue, reaching $38 million compared to the previous year.
-
The company has a substantial revenue backlog of $475 million, providing good visibility into future revenue streams.
-
Quarterhill Inc (QTRHF) successfully expanded its global footprint with new contracts in Thailand, South Korea, and several U.S. states.
-
The company is focusing on enhancing its technical capabilities and has added key hires to strengthen its project bid and development teams.
-
Quarterhill Inc (QTRHF) expects to return to positive adjusted EBITDA in Q4 2024 and aims for revenue growth and margin expansion into 2025.
Negative Points
-
Quarterhill Inc (QTRHF) reported a negative adjusted EBITDA of $2.8 million for Q3 2024, impacted by reserves taken for two tolling projects.
-
The company's gross margin percentage decreased to 13% in Q3 2024 from 23% in the same period last year.
-
There were cost overruns on two tolling projects, resulting in a $4 million reserve impacting revenue and margins.
-
Quarterhill Inc (QTRHF) experienced a decline in cash and cash equivalents, ending Q3 with $23.1 million compared to $42.7 million at the end of 2023.
-
The company is undergoing strategic right-sizing and restructuring, which may involve further workforce reductions to optimize operations.
Q & A Highlights
Q: Can you provide more details on the challenges faced with the tolling implementations and what actions are being taken to address them? A: Chuck Myers, CEO, explained that the two contracts in question were established before his tenure. Both are now in revenue-collecting mode, but require further integration and renegotiation due to inflation impacts. The company has taken reserves to address potential costs, aiming to resolve these issues by year-end.