RCAT - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Red Cat Holdings Fiscal First Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Instructions]. [Operator playback call being the Internet broadcast also recorded this conference of and advised being is call live for are of audio that this is Participants purposes. over the call A webcast after end the of be XXXX. approximately through XX, X the December will call replay hour available the of the now the firm. Relations company's turn to Gordon, call would I to President Scott Investor over like of IR, Core Please go ahead, sir.

Scott Gordon

and first Thank Red thank XXXX Good you, everyone you the corporate fiscal afternoon, us and Cat joining results Holdings call. quarter for financial for conference Ellie. update

today Joining Officer. Thompson, Holdings; of Red and us Executive Cat from Jeff Cat Holdings Red Financial Chief are Jeff Chief Hernon, Officer

call, address results. this including will expectations statements or forward-looking statements Red operational During that be for management making Cat's future performance

factors involve cause from and may materially differ statements actual statements. to risks those other that results Forward-looking

to For risk about Cat's XXXX. is with publicly after disclaims this as filed today, and that that ahead. or Except the this X-K the the particularly occur Please that please factors Cat’s go any It over events Red turn circumstances most call, this press CEO. accompany or refer of call Thompson, information reports time-sensitive Red information law, call. as now revise Form any in described September Form on more only to recently these by statements update XX, required to to pleasure call and my Red Cat's Jeff, context XX-K SEC accurate Cat obligation Jeff to is today of reflect cautionary The Form and contains periodic Red information it. release risks, XX-Q the the in filed

Jeffrey Thompson

first Teal The XXXX in compete Drones will respectfully. far, joining September call Enterprise at and all in of The infrastructure XXXX for fiscal quarter to marketplaces acquisitions and and to add CFO. outlook recent webcast. military are is Skypersonic May Red we for our joining Joseph of and Scott. early contribution thank Also effectively XXXX series of the both XXXX Good completed, the in both pivotal our considerable segment. afternoon, company Thank the today me to XXXX our acquisitions have and you, direction Hernon, Cat. And and inspection beginning you fiscal the thus position

Teal by the small the for UAVs. immediate we Drones reconnaissance public just acquisition, drone of the With safety Eagle Defense. of is gained Golden military Department markets drones access approved one Teal’s five and applications to

on. and We about the bid contract are now military invigorated we both optimistic can that

the Force drone United Eagle to currently to only Additionally, competitive to an continue this into drones Red is intend moving on forward. the Golden for States fly the on is approved this important the made and leverage drones Cat. is Air property. in and components effect, USA ban drone are advantage exclusivity even advantage China made in This coming competitive another we Teal and

the Additionally, of in we in we And forward program. tranche Short-Range SRR Reconnaissance, to second the move continue participating that the with are program. DoD

the attending COO; Teal weeks Evans, of This After are VTOL later. Red could as a speak. Allan autonomous CSO and our one, we and George product CEO Teal for be received program Dr. million Founder fact Cat. Matus, Drones win five approximately we advanced for $X notice In short-range attending and

demands. the aggressively working contracts, agency production scaling are Golden also we're meet securing government current levels government of we While Eagle on to

plan grow cash fully production fortunate we are to internal capabilities. our an and some We on investment funded, of as be reserve using to

involved. portion platform Dronebox. revenues substantial for these have we in as programs Europe where anticipate were GPS for tight with operators for programs drone opportunity outstanding with drones partners space award. for in that not of other if is that of or for on incredible to currently domestic selected, other as the Skypersonic We our General project patented allowed Motors orders we using artificial an in the Also, for And human intelligence We're risk there's small as already particularly purchase areas next allows approximately well Skypersonic and government part success building the integrity pilot would enterprise bids with allows have million. use we a the currently is where we to Skypersonic, Italy of on operators co-bidding evaluate assets these that structural $X the or get months. and/or received world locations government remote agencies. to Turning structures in technology is more in We've execution services XX available. material in in jobs anywhere flights inspections, of even the high

divisions Let's we anticipated of stock of month. and we Christmas move our goggle The expect issue inventory a I'm Riot Rotor the supply especially for adversity had Shark. segment. almost excited the impact, with the given in performance Riot very XXX with Fat robust along fly ahead minimized at Rotor we fiscal the because out Fat Luckily, resulted pleased are and the to Rotor sales quarter of on seen gotten global second the over for crisis on Consumer the for and to popular from in have a drones. Riot ready digital chain backlog growing quarter. being Shark items most

that and resolved. to and QX building products up caught have with rebound started is we poised are chain Shark expected Fat quickly now in inventory. proper to new supply be the also have issues We

perform to leadership position out strongly the our carving in market acquisitions through continue We industry the performance. in and

comes and the market revenue company, the our performance. on overall continue an we As execute with it of to of expansion expansion

call our in in little XXX% the over XX. our our hand XXXX. thanks as July we to our revenues in roadmap, to quarter Joseph, first our And equivalents I'm extremely build position on Joseph. going July and execute of later, ending recognized the a to sheet million fiscal and on that, year-over-year balance contracts, $XX cash talk to XX, with large we will strong increase And are CFO As in a

Joseph Hernon

Thank you, today. and everyone for to joining Jeff,

Our first XXXX in fiscal and of quarter eventful respects. a was exciting, of number

first to margin move the Fat as the the QX driven challenges and availability meet higher for our despite signed in costs, we May, and Revenues, described, July our quarter many in inventory 'XX, impacted and of forward, completed to QX to on related and Letter closed Teal COVID-XX synergistic companies, pandemic. of in end acquisition Skypersonic on continued Shark, strategy platforms that Shark. demand grew of Our shipping by our that full strongly fulfillment Fat a compared close primarily Jeff still then acquire August. acquire of during Intent in 'XX at drone gross adversely quarter by to operations of to technologies was acquisition to the Like part the

categories Shark The the expense fiscal the as a general of same NASDAQ in in incurred category and engaging in to coverage fiscal All uplifting acquisition. impacted securing associated listing and were well our higher the we administrative quarter PR firm. expenses of integrated 'XX additional reflecting D&O Skypersonic market, heavily the were 'XX, the including by as to fees, to NASDAQ members, as Board the company formally our compared largest the IR Fat growth functional qualified in which of increase attract

'XX efficiently QX continue While we higher compared QX in 'XX, our enterprise to the net loss grow cash while to was burn. controlling

stock-based Shark excludes quarter ‘XX Fat We were expenses considering million we non-cash an employees integrating and both and totaled first busy 'XX. providers, the -- only $X.X impressive QX in which loss and excuse derivative me, net in this that quarter. of is XXXX, liabilities related to during to the comp, service adjusted think accomplishment, Skypersonic Our

an our slightly of In completed of million of we note and the is enables As most million of include generated In dilution. we million. shares of quarter gross approximately us million. is than of typical to of financial important strengthen in were size. an were avoid closed equivalent. quarter. stock, generated without the summary, closed, shares having with very performance is of company more us ended the ability expensive. In for offering second position July, our our integrating during know, with proceeds common which which operating X to equally we proceeds that, the million to offerings offering warrants, $XX It future with these of a cash pleased This $XX overhang we gross often acquisitions our We pleased which $XX quarter. We May, common stock, XX to during

and you would like our turn questions. quickly confident first position compare you strongly amount the our about adjusted we that, the time. million to If to that net call of With for Operator? over for financial XXXX, this loss I at quarter so understand feel why fiscal $X.X can of

Operator

Instructions]. [Operator

question first today ThinkEquity. comes Our Ashok Kumar from with

Ashok Kumar

much. the and run short-term you Could long Jeff very Thank Jeff. afternoon, review revenue and please Good opportunities? the you

Jeffrey Thompson

have million. from in million remarks. drones, we we in now of call, the kind on revenue. jumping about add then, the exciting if what's But drone chipsets there's in lot right weeks, pretty in is -- ordered that be if would six second this being generate be right awarded winning about XXX,XXX have mentioned over delivered that possibility could already team which million drones for right XXX additional or it direct, months. $X.X five Yes, Thanks prepared revenue of Drones, $X constructed Teal we the to would on And now that I about to if that six week, an attending a Yes. And actually that if construct get those Ashok. our as in tranche, my would Depending next now. use generate the have $X.X they we in next we distributors, we able about sell the is,

discussed things So be all $X.X to I there has, to just eight could anywhere is just up the say, $XX.X from -- next with months I million the from the short-term six million. would Teal

So to of get per amount breakeven. month goal start to certain -- Teal and gets going is stride that in to its to is the we us drones a that think to

is we they going artificial they in to feel basically orders start we're remarks into smaller also now starting the now getting then the ready think that units we’re We we then see get that on is customers a the world, few Skypersonic out excited to what -- its received to and grow for make that mentioned to. they'll So it sure intelligence some like as Skypersonic just were we pretty contracts. very purchase large it And We we in And wanted platform scaling. really if expect, product that companies. great order. do we way working out have we was to

revenue in So spot ramp over we're next six I months to quickly. pretty think a the really good

Operator

question H.C. Wainwright. comes from next Our Dede Kevin with

Spencer Kirschman

quarter. potential and brand thinking branding This curious consolidation is you how on about the for Congrats are subsidiaries? was I just great given Kirschman Kevin. in a Spencer various guys

Jeffrey Thompson

have goggle bigger Riot brands is it than Yes. the with standalone of -- well-known keep so as we'll Fat gets others. Shark. is That's some actually that leaders Rotor space Fat appeal that in same where the the years. interesting -- the X Shark and for pretty of a one brand, brand

brands also have with They So the touch. would to In those a relatively are not want Teal government the and military, brand. capabilities. fortunate contracting who great

well-known, Riot who they Red Cat if get we'll backdrop. leave So people thing is. starting knew same Teal heck And is. probably military they the it the with traction, is, to is And Rotor but the -- brand know in as know the who is the Drones it barely

rebrand So we acquire them. brand or we how on selective we as will be companies

Spencer Kirschman

software, Can trying you're strategy that what in you in terms be. whatever or of And provide M&A of potential that just terms drone to I consolidation? color going continue manufacturers may it to of any with see that more space, the on in you acquire other believe

Jeffrey Thompson

Yes.

by at, are looking the there's specifically four, So we're longer for in after we're down to is we no participate Altavian five that’s pursuing Drone]. that these big able at, a pop looking contracts programs, DoD companies going as -- which to that since [Terra

which four, have X. to spot. want in really make hopefully contracts good tranche sure a of us best to one the we win that puts we’re large features in So We these

in don't there's the we software go those any think world. have, in we there, that would we pieces mostly of after So if puzzle that probably

not we've platform probably basically, as actually all our six vicious is now squared acquisitions, at that working We with have and simulation work We'd like in the in we needed with which continue on to a last go divisions away LuGus great already months. to such Teal that of our LuGus. got will rate gives a the deal

probably is we've you be pace we the still won't the -- done which So last will at same in acquisitions will months. six doing be that

Spencer Kirschman

you And may kinds provide last you question, on that to any activities, color be are different at? able additional projects looking like of DoD different

Jeffrey Thompson

hearing And we're out going adding actually I've we're Navy to the the enlarge found week, that that the the army. now of for this next used specifically it some to that awards Yes, for things contract and right the that could heard pitch which the program, specifically they're be just this year. we’ve DoD, Marines recently, to this

have So we basically already -- and in there. Teal are entity Drones but every government almost

Operator

like This closing concludes turn I'd Thompson call to for our to question-and-answer over back session. any remarks. Jeff the

Jeffrey Thompson

crazy survived [indiscernible] wish want and and be employees to Yes. day. the to But pretty an team Thanks, to from going I Thank everybody. and you just it's quarter. -- excited all this I Red thank all you. the exciting Cat Hopefully, the different divisions want we're

Operator

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

You may now disconnect.

Red Cat (RCAT) 21 Sep 212022 Q1 Earnings call transcript