LTRX - Earnings call 1 2024

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Operator

Good day, and welcome to the Lantronix Inc.

First Quarter 2024 Results Conference Call. [Operator Instructions] This conference is being recorded. And now I would like to turn the conference over to Robert Adams. Please go ahead.

Robert Adams

you the thank XXXX Quarter and Call. Conference afternoon, for First joining fiscal Good

the are website. Vice call CEO on available webcast us Joining today will call Financial A and be and of Marketing. today's and the Jeremy Officer; Jacques of Issa, company's President on live archived Chief Interim Whitaker,

replay earnings release. In addition, call the today's find in details in you can for the phone

risk differ cause release, and on XX-Qs. materially the our the to which in as call, management's involve company's factors available forward-looking well SEC as risks our such management contained results and that the uncertainties cautionary this We as the to which was During expectations. statements, XX-K website could from review is current encourage SEC earnings may and to today make and filings, you statements furnished its

or in to commentary. refer circumstances. any no additional information financial news revise statements undertakes will the of section details or to update Lantronix events that reflect management's Please website supplement our to the Relations publicly for Investor the future and obligation forward-looking release

the which during the reconciliations posted the Furthermore, between differences Relations non-GAAP discuss and describes the reporting our for Investor financial website, of the is section our in we non-GAAP earnings use. Today's non-GAAP company financial measures. presents that some GAAP call, release, will and measures

call Jeremy our Whitaker, the to Interim Chief over now turn Financial and With Officer. that, I'll CEO

Jeremy Whitaker

joining and us call. everyone this welcome Rob, to Thank you, for afternoon's

will all. to the leadership him service provided First, of team. Chairman, years for Paul I'd our thank Felino, the Paul to many be and like and of passing by acknowledge he missed Lantronix the

on of before results business for Now highlights I fiscal for our commenting first targets some fiscal quarter and financial full the provide year. financial will XXXX our the

of year Sequentially, X% which the period. revenue X% million, For higher was initial our for revenue ago reported up from $XX was the quarter. expectations than XXXX, down we F QX and

production from revenues sales driven and by for federal increased customers recognition Solutions our for record revenue to pilot strong out-of-band System significantly, units QED Gridspertise. deployments, remaining the

IoT contributions a driven shipments the by continuing see X asset out-of-band, to solutions telecom QED strength coming from our ramp We carrier. the system of tracking and Tier initial of production solutions, telematics from

experienced in that Embedded Systems large we shipments sequential a result the not quarter a couple expected, of As repeat a decline in quarter. this as prior did of

and improving results driven see we by multiple this across forward, group customers Looking hardware our product design from geographies for EV services. both

the that to production conferencing AI-powered meaningfully contribute also throughout begin fiscal XXXX. for should ramping an of remainder video enterprise large product We of customer expect a

Software similar increased and in was XX.X% F in up and the the quarter sequentially, In and QX quarter. XXXX, for a compared services activity we revenue, services to expect GAAP quarter. gross of upcoming in prior year revenues XX.X% XXXX the ago were XX.X% margin FQX design function

in in a a mix in QX improvement during from primarily XXXX. margin quarter sales the as out-of-band record product The gross change quarter of the was a result function prior of

expect as similar percentage a we margin XXXX of QX revenue. F For a product

million in compensation share-based $X.X year $X quarter. expense for prior in due were the million was XXXX. with in SG&A increase the $X.X to during expenses sequential million quarter XXXX SG&A ago QX GAAP lower-than-normal GAAP compared primarily FQX and The

$X.X quarter. and million million $X.XX were in XXXX quarter expenses $X.XX share $X.X $X.X with or loss was net of GAAP ago the in share year flat with XXXX QX to relatively a R&D GAAP for FQX GAAP during year million or per per F prior compared ago $X.X the net loss compared million quarter. the

of to year $X.X F in $X.XX during ago non-GAAP income income $X.XX Non-GAAP or million QX the net quarter. per $X.X net compared was or share million per XXXX share

were Net million, $XX.X XXXX prior of quarter. quarter. million as to and the $XX.X with with We prior QX equivalents sheet. an decrease increase from quarter. the QX F steady balance prior Working million remained the QX XXXX as was F of ended million capital and $X $X.X $XX.X turning from a of Now F of of inventories cash million the cash XXXX,

turning second year the quarter Now to fiscal upcoming and XXXX.

as that revenue expect will be up in second quarter We the volume QED production. ramps into sequentially the

We the have begin has and the approved to commissioned the customer production lines firmware manufacturing.

these begin factors, to next weeks. we the expect several Based volume in shipments upon

million double our quarter, with guidance in maintain XXXX. for our June prior that March in expecting remainder in we our QED $X fourth the of such, XXXX, ramp the revenue ending shipments quarter As falling approximately XXXX December the

environment, the and during us of provided non-GAAP our guidance In relatively We're, in $X.XX of share. of $XXX call. demand stable a reiterating cautious earnings EPS optimistic about to million range ahead to deliver $X.XX expect with XXXX in to the we previous that and therefore, million; we remain guidance revenue our range $XXX a but fiscal per year the fiscal

multifold mobile business for in company's company's company. that shareholders. the not Saleel in its report and has may instrumental GM unit and of enterprise to selected the within was Asware market where President comes and was seen I'm application SVP next IoT Saleel it, who markets Lantronix company's cap CEO. excited drove enterprise mobile pivot those largest the from division, Synaptics, and and he for Finally, have as increase the to in the a Lantronix from Saleel the

forward Lantronix earnings join officially on next our introducing you will November to XX, and call. on Saleel to him I look

to today, to I'll prepared That Q&A completes for our operator the so conduct our over it now session. turn remarks

Operator

Instructions] our from question Mike [Operator And Canaccord comes first from Walkley Genuity.

T. Michael Walkley

some business. your us Can is that growing. maybe its help macro. update And coming year Qualcomm question, on it could maybe like was guidance drive Solutions my your generation before, business, new how is seemed section IoT despite reiterating how the and it business. just down highlighted announcements exciting Snapdragon recent the quarter you had you that that on pipeline was as that for just but that of start wondering strong the tough the to on I guess Congratulations pipeline for

Jeremy Whitaker

Yes.

we the half number a that year, into design of do expected have are go wins to of second production. The

over And business because one the few to a as a have tend next so to potentially quarters. customers growth. expecting has we to lumpy business the be several improve driving tended compute goes bit little larger win design to that some And we That are see of embedded away.

We have always others the timing of like just we some overlap coming them. in, those but how don't

that of some delivering. on for to modules products are do We working expect have new As be the with Qualcomm. new some and we

as do we're in the So use then on typically successful And what wins to we'll typically, increase sales then design into design design as customer the if and that an market, services. products see kit in our services. come those translates

also So the also growth it continue the process. system as the compute which a to more specifically upon coming do Gridspertise business, solutions, to to we is based expect Qualcomm on side the teeth win, see and both embedded relates strong design on from

T. Michael Walkley

guess, I just $XXX And pipeline that on helpful. past the a shared That's holding deals you is Great. up with there? Jeremy, million. on given that over big picture, the How challenging building out XX-plus in macro

Jeremy Whitaker

Yes. pipeline We're progress opportunities. and still in seeing good

our update in. opportunities lot year-end ago any think change about on that seen do the pipeline. good a It outlook, But and of our see we're call provided was that. to I significant we continue haven't really X in playing on in weeks markets we an that

'XX upon based the optimistic pretty the of about fiscal 'XX fiscal and we're pipeline. remainder opportunity So

T. Michael Walkley

line. pass me, Last and Great. I'll for question the

Just Tier anything share opportunity on timing size the what doing can of you with on carrier? telematics deal the or the carrier, that you're or just ramp X for

Jeremy Whitaker

$X did towers carrier. opportunity quarters. on we've it been where dollar is will I'm shipped of it's them in working is a a We couple application an order. them million most them, to from be quarters. order several blinking this less believe monitor next with on generators This than of We receive it in bit over be the I And power first with at large something our or that do expect helping to towers. the monitor multimillion annual in application little

Operator

Jaeson And Street. Lake Schmidt comes from next our from question

Jaeson Schmidt

Mike's following eventually the question customer? on on any this orders do anticipate telematics Just deal, from potential follow-on up you

Jeremy Whitaker

Yes.

be to engagement. longer-term a We expecting are this

expectation our is And be and to rollout. this the them just from initial a multiyear so is order likely

Jaeson Schmidt

what distributor are the it. you as seeing in as levels then inventory Got channel? And far

Jeremy Whitaker

Yes.

remained they're quarter. I little say, distributor -- see, over inventories from don't we I last prior heard in as didn't a inventories the down the Our would have quarters bit indicate. several anything, distributor If I've consistent. our companies an relatively unusual increase other

and relatively So they're consistent bit. little if anything, remaining down a

Jaeson Schmidt

jump good then any to That's back in one me, the And update expectations us just Can Togg and I'll an and queue. give the there? change you last Okay. in on for just hear.

Jeremy Whitaker

the was quarter the Yes. We're purchase order that to quarter Togg to we last under before. or ship received. It continuing

million $XX the order As call, previous from an on about we for them. received I mentioned

that most from So doing fiscal run year, we what that was at Xx within of a about before. and were the rate

So already progress And no into that the continues and current the it we're we previously to change call, on to provided against to baked shipping last everybody contract. well. was That our the forecast. numbers

Operator

to [Operator Christian Schwab Hallum question Craig a we going are take from now Instructions] And Capital. from

Unknown Analyst

behalf on Christian. Tyler of is This

to the conversations guess. as there this expected, quarter was guess, Any customer? I So shipments I update from and that hear on and Gridspertise, orders on with that follow-on negotiations great production ramping are

Jeremy Whitaker

We've contract months a Yes. been, follow-on last several Gridspertise. with the over negotiating

is progress. still in So that

of ours remain and years. that We customer will expecting are Gridspertise a partner for several

begin their But as soon the they customer their production we remain start good that going will those begin to probably delivering can volume with probably continuing and a shipments actually think rollout we fiscal still them I feel stalled significant forward. about they as 'XX as somewhat and -- can -- until negotiations customers.

Unknown Analyst

rest I the have think been questions all answered. of really my

on. pass I'll So

Operator

And a from we'll MKM. from Searle Scott question take ROTH

Scott Searle

up in-mail follow on prior to just question. the Jeremy,

see about relatively looks implies what to Or your that a it's in otherwise like, you're sizable. do being growth As you that still -- as so starting comment contemplate magnitude? similar fiscal follow-on it 'XX

we you of the magnitude wondering size get deployments? these kind I'm beyond So initial and about as think how of

Jeremy Whitaker

as much fiscal they And 'XX. at them the dual there what then going it there as will greater the well. grows, than business From delivery us They for more have indicated of a is pressure on price with forward. that's what want relates business magnitude business total Yes. this to the may we're to source business will be the to the them, as they've indicated size in -- that be doing

be and what 'XX, fiscal greater potential it negotiated. has entire get we than think still to being we've I portion that that is in seen business, of the what So discussed

Scott Searle

that market? Got up beyond is Is there correct? applicable design Mel Is believe geographies markets, just maybe interest building that. done with I the Italian Gridspertise other customers. follow to and in that And you. the a you've into

Jeremy Whitaker

markets ability specific we're -- in. that in solutions and other So the design this there is This design. for is have Gridspertise other play of solution opportunity type to

we're unless not of within be a other it. is markets with big other So work number still us designs a can do that into taking and working said, them products this that market, and allowable. we That would have

Scott Searle

you. lot that comment up, quickly. a how we And start design of progress headwinds wondering $XXX And that there's on course some been fiscal a on you other EV plus of pipeline the the margins, thinking things EV contract in to your terms think Gross I just And in that Mel wondering see visibility ramping market on wins if as couple over could as front. year, the progressed. million quickly have in design was there. activity. Got I the of now we about well, trajectory? just some as the should I'm be There general. or we know I has how of

Jeremy Whitaker

Yes.

And we're So consistent seeing slightly we've on -- average margin the with what with last still over on quarters. expecting even in been several the margins mid-XXs gross front, the below model. do in, more than pick that's a the we of operations is lower in our up corporate we although that leverage do coming Gridspertise slightly at average, -- some margin get

up for of fixed by some costs. more absorbing make that overhead do of we So our

commercialize then number of in then to shared contracts the as Expectation we've the On also that agreements. the that those currently work of we play. will that design service market into work around EV in IP -- take we're various a that EV Togg, contracts of are we're opportunities. all and front, some do some into services well. we have stages. we're is and that, for And we different those roll how of done looking continuing design working production are few They're some did A at

we're contracts see service that And likely 'XX. as also and And a to have it it fiscal to from of -- then different the we fiscal as this the So couple we Togg. areas most extent current are become in relates of growth contracts, year, contracts, a would good or then progressing I other expect would they benefit us that on continued And growth production service continued EV. some those in relates play. to we'll

Operator

our much. very conference. much well And as attending you for Thank We this thank the as you question-and-answer will today's conclude very session presentation.

You may disconnect. now

Lantronix (LTRX) 8 Nov 232024 Q1 Earnings call transcript