AMPG - Earnings call 2 2023 | AmpliTech Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to AmpliTech Group's quarterly investor update call, where the company will discuss its second quarter 2023 financial results. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to AmpliTech's Director of IR, Shan Sawant.

Unknown Executive

Thanks, everyone, for joining today's call to review the progress of AmpliTech's growth initiatives and to answer investor questions.

On the call today are AmpliTech's Founder and CEO, Fawad Maqbool; the company's COO, Jorge Flores; and the company's CFO, Louisa Sanfratello; following initial management comments, we will open the call to investor questions. today's AmpliTech's be corporate of IR to replay of section website. archived call posted will the An and this including call the Act XX, company XXXX. Remarks of is to meaning taking place follow believes Securities answers on of and XXXX. the to Litigation forward-looking questions, be statements Private the that that within Tuesday, Reform August These generally include expect similar of words forward-looking words believe, statements importance. or such as anticipate, or objectives Likewise, statements are forward-looking. future that goals also plans, describe actual company cause to to among releases various in with risks different filings forward-looking expected. Such be its the its These are than could materially statements subject others, that matters has press results risks include, SEC. in that and the described made described company filings, the date. in to disclaims as update these of which as today's obligation Except are any forward-looking statements, to me Fawad let turn CEO, over call the our that, Maqbool. With

Fawad Maqbool

a and Good Thanks we market performance XXXX review outlook company's our call on QX the growth Today joining and second XXXX for a our of second we'll to quarter, Sales quarter In of and translating the our reflect pressures. million the record facing in afternoon, noise today. ladies discuss gross increased low business grew despite of opportunities. gentlemen. and amplifier XX%. revenue core and XX% $X.X profit an $X.X gross from profit inflationary by margin reported of million

demand, is in the evident However, our sector semiconductor softening well. distribution sales saw a which the of broader dip primarily due international to as semiconductor

and sector are semi in nicely seeing to role. in this industrial rebound We expect the already excellence strength

new designs. new wireless $XXX,XXX. be development investments This research attributed including can to Our XG for ongoing QX in MMIC loss at our and infrastructure products, about stood products,

the products to XXXX. We're are X June market $XXX,XXX quarter $X.X will in They be Our company generate and R&D and most only XXXX. less for also our U.S.A. new system are returns we of automated here making investments position remains multifunction in the of million not source to when supported XX, new new for the implemented. expenses Light touch this designed labor months profitability the introduced by for that our the the which -- light but made been edge, they CRM labor. and touch the capabilities we've of the that other total higher in in means it nearly initiatives robust. and products cutting Financially, is ended labor not our intensive, quoting confident over the

gateways, growth the offerings noise systems, stations, unmatched products, of from in utilize enabling this achieve amplifiers, our enhance Most As confident their to necessary million securities performance quarter us including satellites, super low Working billion of to so SATCOM June that to levels. AmpliTech's SATCOM underscores our million, systems ensures earth. our signal support signal end. We're $X.X position receivables. a totaled the strong in overall to liquid earth balances market's and further, EIRP, growth. signals us continued efficiently. in capital demand initiatives. at competitive and marketable traveling sales clear bandwidth, the quarter growth more are performance our can differentiators strength these run systems will strategic more our in product $XX.X value L&A at of Considering satellite This is gauges isotropic transponders. for XX, effective stood connections transmit as cash was addition surge with which the provide and $X.X recognition capital power, that and the with to The advantage radiated and current dependable

require introduced [indiscernible]. For a noise, excessive connection, EIRP if steady the an amplifier

will especially system system new importantly, for broader critical is satellites energy MEOs in and that the if might size in and parameter sky. you noise cost services XX necessitate key This a are area. every to reception. Therefore, Internet satellite instance, use measure for weight a That's XX For voltage EIRP for transparent between dBW. LEOs launched of and the and minimize less direct-to-home are being power provide the the for all and and a coverage reliability most

device plummet of malfunction. reliability, A like every that temperature, amplifier an standard can centigrade electronic of junction temperature component result a by indicated in expectancy this XX%. Jet is terms amplifier In Exceeding rise life for in study pivotal. NASA's labs the temperature conducted of the Propulsion operating may by

of connectivity failures. of longer the leading a system and amplifiers our much transmission Our signals from temperatures, between also to over time. higher very differentiates performance signal mean us key a improved competitors. lifetime period a failure means parameter This at facilitate longer and cooler is identical that time Less

noised the differentiating low more that the the amplifiers more points system these illustrates energy efficient help we the whole, all proposition can Considering subsequently our and customers ourselves market are and a safer, on Our lowest value XXX cost-efficient. disciplining to as our this many power competitors. Fortune bring be from

go overall category is existing This that our progressing the is the and These As base technology, to XG This among and the we tower. are are that ongoing earlier, for are of note, expectations. for enabling with projects top well experience efficient invest densely support a [indiscernible], units urban have share to MIMO, track areas. very enhancing larger to addressing city, excited massive very I massive R&D centered base utilization populated sell for the mentioned around on we are we're others, end XG station facilitating ORAN future are our and user precise areas. limitations, solution on radio important when Through in growth. within B MIMO each a approach beam-forming of user continued performance coupled breakthrough true radios. These with

are that This advantage it require strong ORAN microwave XG these enable our XXX meaning amplifier will integrated require in developments. sorts important showcase technology we chips. coverage is XG increased MMIC The form. antenna Our gigabit best per arrays, proprietary providing Therefore, times an radio for to development MMIC MMICs X low-noise near characterized new set MMIC an are monolithic MIMOs radios figure have tiny also speed range a and noise our XG of amplifiers low currently. cutting-edge massive by to small as circuits. a competitive these technology second done while very exceptional capability. all provides That's in arrays

As in network, of investment of deployment AG year. every fourth requisite private networks. for a true by a this in this opportunity number TGSS the for on quarter fourth We initial year units result, prototype to division is radios important enhance very XG XG receipt return -- our anticipate innovation the an of leading MNOs and reduces to the the site. This

separate XXXX. XG introduced exist. We for we corporations reason is to advantages are technology provided now by poised company and from available does seeking with new made and to we solutions the fifth of currently now, heights As radios. key that are new a the such, XG the market to discussions when operators, way are in we private investment investments are which MNOs, future the compliant note to R&D exists this for believe robust the to particular novel that which and in new these the our they're XG solutions. endeavors paving a introduction mobile have not making ORAN the product This expect technological are in us bring the what we network -- many of is elevate The

We were already have in discussions. MNOs a lot of customers interest from and current

last a we're the and third to we result of add of As year for to special XG the into quarter efforts is engines, our continuing sales to our reports year AI implemented spectrum networks. to division NGK a request noise also packages which add surge quarters. We're end convert as to our we expect XXXX. and our fiscal through very in our This division. coming portion newly we amplifiers CRM We product these anticipate the our deal microwave by addressing made low to a and line move complete Spectrum in of the

top rate micro early NGK packages sales number expect also line our We Electronics' contributing to start XXXX. in to RF

we As stakeholders. new will for and a and out pivotal year, believe leading-edge roll year XXXX AmpliTech transformative products be that we next our

entire that call questions. remains Thank as $XX our to enhance potential shaping closing, Our systems CRM over open the commitment proud our We'll now indicates clients we're products communications. unwavering of future of our now million our the for clients' you. opportunities. In in aid

Operator

from will And Vander Instructions] first here [Operator Group. Aarde Maxim Jack with come question our

Jack Vander Aarde

the want to I sounds appreciate had and core Okay. to update I record Fawad, a for great up like. the year-over-year, by those L&A on the it and pipeline XX% gross see. about touching solid quarter strong hear you. Great. start was great to It's because It revenue business margins.

behind just your sustainable? the And driver what's core this is strength? So L&A

Fawad Maqbool

supplying and to a their are CPI are a cloud-based the Google, actually these, own all and many of they're companies guys also big systems. there's for and right like stations that ground need all demand more cloud let's Viastat they now, say, Well, systems all creating Amazon, or

the these do communicate systems, cloud from have station the So they satellite to to satellites. they when ground

the amplifiers requires all lowest most that figure in is is very this. these communications going data lots because So through of satellite critical because noise range

So the in way. demand increased has that

possible these L&A and have the for solution the So in looking and core best solution we all products. the they're best companies L&A

failed We're the not performance. So has who up and increased. that also that of have do business picking from competitors lot have a

we So there. increase see an

due potential is will which We that we've new new seeking an customers, continue to see customers out also our before. potential had increase to system, really CRM never

growth growth to business. to in lead to continue things these of all So and will this lead

Jack Vander Aarde

really maybe It's want Last into couple it's you It Great grown. it to like. one. Okay. more. by Most million bit now it just sounds of I'll And there, a kind provided I questions. the sounded go dig around one quarter, so color importantly, a was an of $XX update. million, $XX Fawad. like over pipeline just

trade that's last you seeing Just orders coming more that we contributing thought? increase the the you what's since changed What's that's shows? previously since really customer RFPs Are pipeline Are quarter than been that these difference from spoke? to growth? there prior driving last time larger

Fawad Maqbool

finding over gotten bit a RFQs, for of the our especially We CRM people are systems. we're that -- more have actually technical responsible key turning the It's because more a both. development from lot system. leads their of the of Exactly

the operators, need see they we that and performance the they the engineers So right the need see our to to of satellite they so connect have amplifiers, there. all

CRM of to So really part good right to system that AI finds is people having very system, need products. our the it connect just that a

And is getting then very we're one it. those some next So why activity. ARPU deals that's the reason closing increased part of of good

why us person need down takes they MMICs that those defense of number number next the contracts because at application year their have very private radio to to time be million. actual needs to of going getting in going closed, to that thousands time sales. from the digest of either It's So defense, base. all they're satellites, us. radios a takes their It need suppliers number to of our for to government are think It every because base to MMICs pivotal what kind it going start value get gives stations, and on trickles for is $XX the growing stations. Services, increase going to It's of there deals the that's second-tier this and discussion is we build or they that's us the of their or when be. that

all couple start leads So we of We we didn't to a as convert quarters to mentioned we're going ago. to started have before. convert implement and this, which these

Jack Vander Aarde

for altogether. million pipeline larger last Fantastic. I just mean yes, Xx relative And over a $XX revenue -- that's I year context, your mean, than potential of just

based near-term for rates given just So the the to in that of see for just to things relative mean, -- figure out? where half this Maybe and significant I out. just on kind estimates third playing But of sake first going I the the you year of quarter that conversion and it's near how term, increase year you're look expectations, sure. does this know fourth

Fawad Maqbool

be still million going be That's looks But $X conversion going we're our the looks $X at we're because previous quarter. per in and lot right to numbers middle a like fourth bookings of to revenues the to it so towards that will starting But million working would indicate deals like consistent the we're increase now. right to XXX% what see, in going obviously, 'XX year. really that growth be booked, it quarter now to or it's least but around be from of the an on

requirements it's that our with So an on actual but estimate, customers that's their given basically just requirements. have based

interested. we have, these numbers that numbers actual being a as these very result that all are we of So have customers

great be our That's It's So 'XX so it's to not just a see been you're raised converting. number see when we X-year to that trying never the for money. we've X-year us. we've that. -- going been When what had going of we when first you'll plan. going we the or best are We said that We've all is to fruition. This year doing. where beginning. say to start we're an and important to to done the year year from second the a really be the is that come going money, profitable laid or really really year to far But they plans raised

foundation. this we end year you'll complete of in We're the in it And part of this -- building are that We most as complete almost that, result. XXXX, year. the important is see that now

the together. that's X years. And continue going see of for coming start the everything You'll to next

Jack Vander Aarde

sounds ends to wherever number over assessment? a you're but you going there. you XXX% specific a Is than fair out sounds Okay. in like that's next that you're number, XXXX, confident a threw revenue it growth. like that double And don't more to great. it's a it That's hold I to up thinking -- want pretty year, fair

Fawad Maqbool

assessment. fair a That's

Jack Vander Aarde

Okay. maybe last Excellent. question. And then one just

upgrades million understand the Just of what out can maybe I or context over tower the it between are get help us just sense more outline just LNAs versus $XX between pipeline. pipeline, in opportunities those spectrum makes of the help -- that like how pipeline? and types Just What to maybe just what understand quantify kind us your quantify you versus parse your to of want business? core XG --

Fawad Maqbool

various Sure. they're I from over touch Basically, sources. these can numbers. coming different

business business, and revenue our of have L&A in -- coming we core So L&A lot Basically, business. right? or going the to 'XX about core we're so a have from

an we're of that because going product to new it microwave of we're couple to the said have be going this good packages from which By to we're the of this contribution and very NGK, to the of to spectrum line, that -- 'XX, a and has feeds That's continue And about spectrum -- market up -- about international scale directly for the source. up. NGK we RF that we're Some be grow, increase year Microwave XX% up into to semiconductor That's going packages ago make because The that going demand. We although then also packages business. microwave going materials. expect adding in is go world's quarters right their business adding a to because MMICs. it. growing for still our XX% to we declined

So spectrum. of working XX% hand. We'll hand it's in a have contribution revenue in from 'XX

about in Our going to the or now, locations. should we well, but division 'XX need AGTSS start MNOs, names our need were need with of sites, is because core mostly particular the because the revenue the advantages year in discussions discussions large customers, the XXXX, really some of radios, following we're year, growth offers. maybe almost XX supplying, showing now. I or for conserving they year a But the the We're X first these XG new XX can't on different be year. grow to grow sites, we'll as there's saying them right these next it say and we're in sites number based in that sites companies X that radio that we have the radios. And And [indiscernible] the so then third right will sites XXX in we'll in

Jack Vander Aarde

does Just that there kind opportunity? and ask sites. you, mean? jump that just of XX in right is What What

Fawad Maqbool

Sure.

XXX they So So would setup. The all towers radios X see there. you've have radios you'll triangular X those site our have each in cover degrees. -- of seen where Right?

X or That's will so. with hardware. along radio charges. the is then each So approximately radios and you go And from $XX,XXX for site the just that revenue radios about have each where also site, up, new installation

revenue, then So we 'XX. million up for so we revenue $X basically That's estimate. From the we in total of adding these monthly entire radios, that have revenue, charge site, from our are the comes revenue of around installing all that maintenance just these have or all the so AGTSS. all sites

Just XG.

Jack Vander Aarde

too pace, say, color. speed maybe or just just can execute to helpful Fantastic. achieve or you And That's the pace And tell, of Like, color. that take? would for sites. XX it's very Yes. That's the upgrades? which let's early What helpful the helpful. that's those but

Fawad Maqbool

X roughly the parallel. book But that do more in to each conservative a sites several than why installation So time sites. and doing also to X,XXX to may we of And X That's site achieve is it to service building site, around but maybe require we've we more by They can months. force here, than teams relationships take our because we to booked to building able although do much XX all lot thing very we we're that want may eventually, have be the us that. collaborations those our we're radios. that, set doing help cover sites ourselves. not some and will sometimes all this. We're up all all But whole have we're this

integrators the partners the and the that that go actually do up put have the hardware, in. system We software, there radios

actually the one very labor our really our themselves. figures amplifiers into lower it's It's we our have our happen it we new has cost. We've of the noise of projected R&D taken And because cost no but that start making that gone our with we low planned But labor do, lots revenue has So products we happening but also that's in and MMICs from that effort. MMICs, a can why have products taken new all while we've out, lower next per advanced a not are that unit, year. team simple. will to that that use all all reduced it's

one amplifiers. translates more the into and profit. into that reduces our of That each also we more labor that So put

per all these we and will our have strategy increase margins line, turn is more costs, And entire time our it that goal, will line. give profit in to numbers our lower and our margins, higher every gross our will bottom increase products be top that gross after us the show higher product. go So which

Jack Vander Aarde

then hop the respect potential I And and ask great want back Again, That's one kept there to I in the just you and just I'll Okay. to the I some how that customers XX? in Just total XX? customers the obviously, can be color. it about more question, know, pipeline. a if orders sense. in it can queue. many how sense Is it of give actually But us Is give confidential. individual a a pipeline? Is like XX? customers, many it's Is handful? represents it maybe that

Fawad Maqbool

Well, all large are these customers.

So going consumers right after we're not now.

So they're basically MNOs private large networks. that want XG large and corporations

XX retrofits. XX begin So to global I States. between roughly? is or would We're this with. not doing And limited say To United

Jack Vander Aarde

That it. Got Well, for I look sense. lot to congrats and execute. the makes guys on That's strong momentum, of watching it forward a you me.

Fawad Maqbool

waiting we're that's we're is the all the results. building we as milestones so it's bit provider. of be appreciate bigger I a good year This company, part down. be working broader-based said of so that face this be fantastic going for can planned. I everybody much of have was as but changing and to little But it. have company a a downturn, exactly expected up Well, to solution we know building the But the and we doing

Operator

[Operator Instructions] go Shan call to sir. Please turn I'd over like Sawant. ahead, the to

Unknown Executive

reading I'll Kobylarz question, questions. off Jeff Capital. the Diamond for be Bridge Thanks from your

Okay.

X-part here. a it's one. start with first I'll So the

maybe to revenue at -- one? materiality NGK distribution revenue that or contribute when best the you the might in did agreement to agreement, all or result what Jeff distribution is will answer of is be that Jorge, and when this So asking,

Jorge Flores

the we point, Okay. full earlier ink with Yes. this in this no, after Up deal them preparation are year. to we

NGK, of in a team studies doing items [indiscernible] are are modifications marketing of close updates, their coordination housings. lot we in Developing training as Also on with this have customer lot for a with their is campaigns, and staff directly to doing also be website we So feasibility well. sales working so

going So these of end believe all the be in to XXXX. we're closing we of by preparations,

year purchase to to occur So to able the and release to orders we deliveries first NGK are by XXXX. we end expect early definitely the of going the be in

believe we definitely, to occur So meaningful have that we educated will sales XXXX. in

Unknown Executive

Okay.

the Following up pre-perspective see MMICs were that beta of company customers mentioned were tests? you on also these what results in questions, the those past I testing

Jorge Flores

have doing but smaller of well, as us visibility to we quantities that companies at factors their own we many are you though projects into own a system design and takes the cycle. many approached their have that had of in-process still MMICs long Well, design and few though, programs, a bought the qualification do some that have they their of actually at know, like their

need. we So them ready any for we are once and to then designing definitely orders will we be efforts. Like their patiently win, will they that finish waiting to be fill they

Unknown Executive

application. includes base This

Jorge Flores

base yes. includes It applications,

Unknown Executive

And to Great. pipeline, the opportunity of we one million. then on the $XX this sales on can move

has Of be changed course, since When to contracts winning the awarded then. this these will bidder?

Jorge Flores

win Well, of so what we them. was have we today, that win, mentioned many conversations in we And a will if with well. do lot cases, in they know as too,

them need some of but are them they near the of it's beta own to to their see in that pushing products. testing right, we'll term, though do qualification because also themselves Some the with out of the

we by that start end sales It's do believe that closing the do expect we the have, and very deals So it's a year. to though. but some very of dynamic able we to funnel dynamic, be

Unknown Executive

we one question here. And have last

as semis, year-over-year given half market division investors to the weaker spectrum the So well. for the second should for decline expect sales

Jorge Flores

Yes.

in if this Shan, the though, at XX% semiconductor industry, far, So down market you've least seen the is year.

has division affected itself. our Spectrum So definitely this

going this though, though is do believe to industry semiconductor about the XX% that XXXX. economies nicely be bouncing However, at industry by in they

going in recover the [indiscernible] to due with the opportunity. lost of softer demand, the sales able to is some we also and So Spectrum we be that believe our do division NGK to are

Unknown Executive

Thanks on for those. clarifying

turn Q&A I So will concludes my in you. Joe that back you. over e-mail. Thank had it to

Operator

to back remarks. now Fawad any turn closing Q&A today's conclude I also will call will call. over Maqbool live And the the for that for portion

Fawad Maqbool

further and look questions wish results to Until the you schedule plans management. or today's call Thank call of to to hear updating systems you we've communication about call who should the our mission further to on in you. our joined made then, to please progress providing contact today. have us tomorrow thanks the company's have we And with QX everyone a We any forward financial directly of mid-November.

Our reached team Investor of listed Relations release. at be press well. you, our bottom can the the at be Thank and contact information

Operator

The now very concluded. much for conference has Thank attending presentation. today's you

now disconnect may your You lines.

AmpliTech (AMPG) 15 Aug 232023 Q2 Earnings call transcript