Earnings call transcript Q2 2023

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Operator

Good day and thank you for standing by. Welcome to the Q2 2023 Sarcos Technology and Robotics Corporation Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Shelton. conference like speaker to now Maria today, would hand over the your I

Maria Shelton

operator. afternoon XXXX you, and Thank Good Robotics Sarcos to Corporation Technology the second quarter earnings everyone, call. and welcome

Chief talk Laura quarter the business call then highlights discussion Drew more Chief are President Peterson; Joining us and the about and the Executive Drew call will this Laura Hamer. on Officer, Officer, of second recent start detail Sarcos’ events, from afternoon results questions in Interim the and will management before Financial from a and with analysts. financial takes

Before and usage, concerning today's including call future charges market cost expectations, customer trends, we and future our will statements and state and trends, production cash features including of size results, flows availability and statements begin, cash we and condition and commercial products, future liquidity. demand must markets contain financial costs target that revenues, restructuring product forward-looking capabilities, and

and regarding in with to and from We our today uncertainties earnings what uncertainties release described projected. beliefs filings actual described report actual those uncertainties and the review potential differ these in that the and and to uncertainties. management's XX-Q press mentioned and XX-Q our represent with encourage those for today's SEC the those Form release. risks risks results to risks press filed Among expectations on information could further you in risks in and and SEC this of statements future today, we there many as are These cause are but and events have

sarcos.com release XXXX afternoon in on which with the website. statements review regarding to the SEC the at of second posted SEC's and you quarter notes encourage filed forward-looking also for included we section website earnings in our XX-Q special our and Investors this in We the

financial otherwise In measures financial today. our GAAP, noted. will this unless be addition, certain be call on discussing call, we'll measures non-GAAP Throughout all

the our the XX, update also The website. included A on with to SEC and be well except limitations on information the as release website on subsequently that of measures, SEC's XXXX. any most call until on be are as this directly is law. description, comparable non-GAAP September this we're available rationale as this which A will in measures filed information the available earnings is no our of undertake and required by date measures reconciliation website to obligation of and giving recording such and as GAAP may afternoon call we today's the the for

Laura the point, like I'd turn CEO Peterson, this to over and call of At Laura? to Interim Sarcos. President

Laura Peterson

to Thank during the honored R&D you, organization today’s all to to the on am am my CEO Maria pleased first of and from interim and primarily this be Sarcos. on manufacturing us I you of transitional period to joining participating I as call. commercialization. afternoon call company being good serve an

along evaluate the company, direction I the member a decisions with As the the which past analyze knowledge, my applying months company. have of in public gain of the few to spent to into of since insight led Sarcos to had a I've the became business, turn business. of that breadth experience, has about Directors, and the opportunity Board

greatest on through for an need customer meet show our our focus sales that near strategic the have potential the business show that products solutions. market We most revenue refined opportunities and term traction realigned and strategy to and on tailored growth acute

usage in XX% second down of an usage per million As average expect XXXX. and through significantly of $X.X XXXX, lowered quarter of lowering this substantially the discretionary workforce the a our $Xmillion in to result cash our rate in have our month actions, we a from expenses. cash reduction by we quarter Ultimately, first of result

on of focused are we customers. our of steps, delivery and important execution operations these taken continued solutions our have optimization we that for Now

our revenue Robotic and commercializing Technologies our markets addition for end a to solar AI and strategic demand to to software named business aviation significant energy those opportunities. in drive You're we most subsea, businesses focus new are aviation and see where the immediate Advanced software Solutions forces, are four creating the These macroeconomic division the narrowing opportunity. platform through markets. customer opportunities Further, in industries experiencing

solution. look I'd these deficit was shipbuilding a end like Subsea, of for Sea threatened the beginning Class chains. to and each is global take the which in that with at repair robotic four areas, Currently, our a security supply market there

VideoRay operated integrated Class on of with one Sea market the operates which the underwater Our system most advanced capabilities today. remote solution fully vehicle, a a is inspection

this coupled end steady pipeline on of market. next activity volumes market High passenger the been cargo aviation pressure Aviation are Summit shortages in has with in and Aviation. putting we're Pittsburgh potential is April, The the a of focused the Robotics validation industry. labor there of is a Since on which

for We major solutions to baggage carriers handling maintenance. airports exterior and in our are challenges with discussions air and in aircraft labor

Additional this in field expected anticipation are late commercial begin planned trials production of and XXXX. in early year next to year

procurement solar workflow simultaneously with were to efficiency safety gain and trials while experts of validated trials on capabilities solution we of the input more worker installation. Turning engineering pointed to workers in pressures the to to increase largest the valuable increasing climate two market the would which optimize job. promise seven will matter from have We Robotics XXX,XXX labor to of next for productivity of targets, used this panel over the XX% Solar our this solar than companies. meet and installations need hold field years meet the mitigate The require subject goal. end previously out, improving the market, as to completed new

milestone are proud requirements we in say exceeded trials. to We both

Blattner sites preparation across commercial for installer with on renewable the designed We projects. we leading the utility optimize of improve of estimated are to XXXX. and efficiency worker mobile Working industry autonomous developments collaborating our robotic focus launch scale an late Blattner for intend with Company provider and test system varying conditions through and to solar system panel energy the to safety refinement in of different of currently the installation environmental system and

platform Our fourth Technology goal revenue production division's Advanced area systems, machine will from artificial to to for Division, autonomy. learning platform The development Software of of AI across is and and designed our drones. drive progress a and intelligence which factory and The our AI usable software be is software the new autonomous robots solutions. focus be generalizable ML variety software of will including

are industry We knowledge and and their specific those of challenges. market leveraging with expertise address needs to partners collaborating

multiple dollar work multimillion bolstered Department contracts. of by multi-year Defense Our is

harness expanded Force Research development The Laboratory sensor government and type the the Air award control for are an vehicles. developing addition the of solutions autonomous contract with AI in driven power future. funding autonomous Just operations We a continued this few we to enable data weeks ago, methods in we the for announced to unstructured will methods of accurate for environments. of in dynamic, anticipate more commercial disparate of to AI software our opportunities technology techniques

tremendous builds by agnostic. robotic not with we AI a software, systems, opportunity the autonomy our technology but those on hardware manufactured are others. solution is only revenue is AI it to work years developing be a relevant SaaS across market that it strong of Meaning our Our opens and designing up also recurring This of beauty model.

in permanent you working from I to I I'm evaluate brought asked CEO. a a I business the solutions commercialization if the continually have and our move industry, the Coming enable of to In possibilities in toward become the am not. tough closing, our I some was of challenges of company forward make the products. candidate to strategic decisions many the know understand evolving landscape. aerospace and that

These short right progress encouraged involved role told over are this firmly the solutions we our we've years. foundational in intensive will execution to the and technology focus taking to built I'm board the most with many and that on on we the will I data-driven in a made serve past the I opportunities our continue knowledge leveraging path. weighing until months analysis commercialization. and time the have in have team and compelling by

on to financials. the now to the I'll call turn over report Drew

Drew Hamer

line, the everyone the performance be REX XXXX. today results XXth, from a Laura. on our transaction on of pleasure close is the you, To with speaking it financial note Thank that April of for include the year you. Please here to last

use the to comparisons results. turning financial All will year-over-year. are I Now

during second the and we quarter available revenue second quarter in sale. factors general For million for including XXXX. the of request beyond customers’ the the for XXXX potential of had QX The products customers million lower revenue $X customer constraints, compared factors additional impact was to on to $X.X various purpose of macroeconomic features budget due was

tailored specific term to our the exception potential customers pain have and use points of cases. for Class Sea indicated need system, their address solutions the a near With

decreased Cost million QX development as sale product for into budget charged customer’s QX to to $XXX,XXX expecting one XXXX in labor pushed in year. Mainly we QX contracts. decreased revenue out $X.X next to was expenses product impacting Also and to material that due were of XXXX. compared

quarter total XXXX million. the a of second from quarter expenses Second decrease including slight operating were $XX.X of XXXX cost expenses, revenues $XX.X million, operating

increased the of inventory second the detail. quarter. direct In in in the impairment expenses announced million operating with of discuss the from headcount of increased to increased and $X.X second acquisition was connection REX. by of fixed $XXX,XXX reduction now I'll in million assets. by to incur $X.X Research the more write charges. quarter, This was Part certain We million development due $X.X the this million charges materials to including primarily increase workforce. related related expenses also in and July XXth to increase driven $XX.X of the down

$X.X an platform down million to $X.X based expenses Sales XXXX stock due quarter. $X.X quarter decreased were million General to of costs million, the event marketing increased from administrative increased of Primarily second expenses. compared were due expense. increase and expenses a and party management to data and second $X.X third the to compensation promotional million in

per net loss per or loss the net prior a XXXX quarter loss the quarter $X.XX second of $XX.X loss a year. of in share or $X.XX million, to of million was a of compared $XX.X share Second

periods of one net stock million amounts share or stock in affected adjusted with Please or quarter non-GAAP compared the and six of $XX.X presented all XXXX. stock. of loss split for in Second equivalents All on quarter a been share We marketable have to share July loss $XX.X cash, reverse a the of non-GAAP non-GAAP securities. retroactively for per the reflect split. to unrestricted ended outstanding loss $XX.X share million loss and of per million was reverse cash shares non-GAAP Xth, company's per $X.XX $X.XX common we note

now am turn to to guidance. going our I financial

$X.X reduction non-cash the which primarily by of $X.X is to approximately expenses For headcount expect to The million. expected million third related approximately includes We Balance related XXXX. items. we cash anticipate million million and in between benefit revenue $X.X annually cash severance total of and personnel quarter net, approximately usage the reduce range incurring restructuring restructuring million $X.X $XX.X in is payments. to beginning XXXX

our expect robotic general also by Reflecting second the result and we the quarter quarterly are approximately solutions of trending administrative business expenses for the implementation focus, of quarter when narrowing approximately basis in the will compensation the XXXX. expense, quarter adjusting of quarter in and a quarterly the XX% our of realignment decrease to of in XXXX one stock first third until on second of to being After XXXX. down based development research compared third expected expenses

of way by strategy and We will month be $X.X cash that XXXX quarter marketing Our the sales usage quarter. in decreasing in the expected refined the is to third remaining and approximately the rest result approximately third of per million year. estimate for XX% in sales

operational full unconditional the June to We an As had of commitment related we amount paid purchase expenses. $X XXXX, of in XX, July. million

significantly manage balance to at We usage Looking runway usage have us financing. our monthly $X demand. and reducing sheet, provide additional sufficient our we products continue XXXX. XXXX believe on to capitalize cash average developing without We operate cash to in to our approximately anticipated to are the we our in million intend liquidity

wanted with touch I manufacturing our to close, I agreement services upon Before Jabil.

will with relationship the Jabil capacity future to Salt the we is expect our to believe Lake work of the need. products needs. with continue of customers near deliver adequate term, to in anticipation our We City them facility our and maintain In

Now, a to the over I'd the turn instructions question? operator. to kindly the you to call like ask repeat Would

Operator

you. Thank Absolutely.

we and conduct roster. while by now question will answer We [Operator Please Q&A stand session. Instructions] compile the the

Our of question Rob comes first Mason Baird. from

Rob Mason

afternoon. Yes, good Drew. Hi, hi, Laura,

Drew Hamer

Robbie. Hi,

Laura Peterson

Hello.

Rob Mason

retracted third you guidance know the I -- quarter. question my guess, I calendar and XX your gave you

you So question I or is there guess product expectation fourth quarter? my this commercialized is, in any the would that year ship

Drew Hamer

there. couple things a are there So,

that markets greatest acute revenue have focusing on meeting do now we potential and all, -- the strategic of that we're near-term showing customer believe us opportunities have traction market we needs. for are the most First in right the growth

we deliveries we're expect of that's that second product year. will we So, that market over for now do in that half the sale a have offering the this ramp for

are However, or more launch the to for those based XXXX. other products specific expected solution which in we needs, late

be we just focus. going not in we're previously So to second there that half, here some products sales the is but level narrowing at the because the anticipated of

Rob Mason

And be product just is in will referencing, to what Drew, the you're that clear, market that is ramp?

Drew Hamer

of we'll some We're the here Yes. in half anticipating year. opportunities see Class the Sea second

Rob Mason

that have And forward? timing, are the that kind definition that you redesigning accounting the product of inventory just applicable components thought write or you question the, is that a then around going triggered in not a the process the timing such that down,

Drew Hamer

Yes.

we based to we've as prior products a operations. the Army that of greater that higher or opportunities. specialized of customers’ their on analysis additional that offer of originally plan value this of for impact near on solutions take feedback is our other The to after really prefer to of Swiss collaboration focus customers think I these that kind knife development is and and term require multiple customer jobs. incremental provide I the And and determined narrowing think interest a So, could them the ROI needs, adoption these

products theoretic off market. to inventory advisable into -- accounting sheet have result, move it's that we're literature a balance the we as So ready effectively should an be really until we writing the under

building we're of. right customers that products they market Army that versus anticipated So our and more immediate focused on giving the need Swiss specialized are opportunities tools a now the that -- the we lot knife had

Rob Mason

$X just I'll view continue? a cash question, or baked quarter. paid hop I for And that's rate the burn the was that in into see. item monthly your Should million you I mentioned that that repeat third rate, queue, for the expense your back in -- expectations one-time around cash wouldn't July. burn last does and as They but

Drew Hamer

accurate. that company. of in the reorganization It are the That's included as was charges the associated were with you X.X

what that through cash of then in the ramp And the rest we then we're it's X.X. So all further down. going everything pretty QX will business and But we'll approximately as the year, which maintaining to could million be million upon and $X on $X happens that what business. up down usage go QX in to in in even the or at with be we're focused expecting get the managing depending

So, the change of great that's $X opportunities pocket we have to cash right usage in stay present themselves, XXXX our a averaging direction, month. for but focus to a may now million is

Rob Mason

you. Understood. Thank

Operator

you. Thank

Drew Hamer

you. Thank

Operator

Hold next on our for question.

Patel Okay, our Chirag next of from comes Jefferies. question

Chirag Patel

Thanks the a book, for wanted taking to question. hit if is the kind on one. I of there bit existing little just order

three touch what just we and we're put Are market focused actually that have trajectory and comfortable can seen in some there us map and markets there orders here have. haven't there, get we you the any see framework little for that to out at out can point. we bit have currently already customers what what there? Just a these about we that kind that little of more of us Are each product the we out there a visibility of the -- sort can from give what out

Drew Hamer

question, great Yes, very fair question.

Sea the just So comment with follow I I start on let's will with shared Class. just Rob. up

subsea in with We and negotiations are stages final potential customers.

there's have second of year. here the very at in half where a doing are is aviation and announced we activity Changi, we them. with there you When released that releases work of press as space us around have lot with units been the on these there, to work what about additional there opportunities for sold the So we're real discussions the continuing as that to well expanding already look we've on

have that do we So in place. contracts these are

discussions. she chance in an trade Pittsburgh, review a having commented to out Pittsburgh think and to in I get a you prepared pipeline here in have remarks those, we of had sorry today, how when enormous show we Laura's be [indiscernible]

audience cuff. airlines know as was that didn't them demonstrated interesting both you the of airports products we from we part a them various show, Going just trade off of I mean one was on broad had of and to the the comments of that that with it had this. one why about

So this really a us. is important event for

those Blattner So, cases When really or that around over a we're space, shared had with technologies good very is important previously think with we active in share kind going of had a space. example, revenue, well we're really conversations this I aviation but to previously to solar the airlines and Blattner as around able of other contract to contracts with on as market. talked the use we've of and not more about everybody announce is you deal is that done a have with how product that a other ago. the closer that we for aviation get development But it mature. just other weeks space then other DOE little couple to we've our I activities become from move products investments happy we'll product there's investments

now. We if it have on because contract lead It's busy interesting a opportunities the ECG, more number to opened know Blattner should because the else for on it, that an pipeline one gets wants with even they of there now other is broadly so the have with one. up that working space with that us everybody is to going very us conversations right

So there opportunity reason well. there we is why great some activity the which good as that is selected

of our in of and stage those advanced each products As spaces. well technologies the as are

two us. really the in software here things important and platform, that ML, lastly are there are AI And for

company would a the were a allow old style and platform they of in on with is where each all, the investing customer. being we monitoring service it what's effectively understanding going deliver had be First the a a SaaS computers model, that to used robot would by business while them of

running. perpetual purchase license up so more the in a be of paying of so are able model robots, get Now that it term more and a perpetual used the can that a system customers it and that can make have SaaS model, of interested stand license for and that we kind up buying broadly we been that to

is be ago, part that impact The that generalizeably customers. be It that as two that to be so it'll other also the we robots that will won't it'll And could government, that that of platform. just other And be weeks work it'll of other designed agnostic announced Sarcos computers is which the be well contracted so be being designed to it'll with something the available devices. it, the can use it's computer. as be it

I'm So, technologies sorry, it kinds not other, all UAV HOV like system. an could could the. it HOV. will that be be connecting into and be that or of the other

So you. come are of made to there. And will I we're will are sharing those AI when the the the there can the going are we're share believe various it opportunities opportunities share forward to that the around be related government doing now. that deal. each that from to interesting, We of areas we're around are looking we're four we focus with is something very of confident were announcement those And contracts other work the right on focused behind presenting that themselves decisions the that that

hoping Chirag, are answer if looking captured but for of and it long that bunch there I'm a really So any. follow-ups certainly

Chirag Patel

of various the that No, great have able been going to definitely it's be in happening. you again various super that helpful to contracts and conversations have kind highlight that's

ability thing my the of move kind we're have depending The changes just kind had still and potential the opportunity think idea units other we of XXX the at to to looking still here, to capacity, unit to are there's that to type from longer things at XXX term I here? just are it whatnot, I Pittsburgh once, on looking being that fully to Lake, list with manufactured one the Salt highlights the the the ramp on at. was of any that

Drew Hamer

Yes.

are actually City confident the capacity that we'll out have in Lake we So, our Salt very facility. of

if believe still to If narrower the the of demands they're the get beyond With up focus Jabil the it if as we we with customers’ in a product what that demands of our can really appropriate the scale we have we our be will larger comfortable contract, get meet kind happen and have look. relationship to we customers we meeting factory.

have of we cover all the So, demands to we do believe going capacity the customers that forward. manufacturing

Chirag Patel

appreciate you. that. Thank I

Operator

All back Peterson moment I questions, [Operator please. right. more Thank One one it to for now for Instructions] questions. conference Facing turn give would remarks. We'll your you like Laura closing no to moment. the further

Laura Peterson

you, Steven. Thank

I reduce go, structure, Before business have usage. us refine great and we evening. am we that you have our I steps want cost to Thank revenue work to important commercialization our for our in reemphasize execute a realign taken joining plan confident cash and toward as to our ability we and realization.

Drew Hamer

you Thank very much.

Operator

Okay. concludes call. This for Thank you conference participating. today's

now disconnect. may You

Palladyne AI (PDYN) 9 Aug 232023 Q2 Earnings call transcript