Release Date: April 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you help us size the follow-on opportunity with the grid expertise and confirm if you're still sole-sourced here?
A: Saleel Awsare, President and CEO of Lantronix, explained that they expect around $20 million of product shipments in the fourth quarter of the fiscal year from their smart grid customer. Although $20 million per quarter is not the immediate run rate, the first follow-on order is approximately $11 million, indicating a strong commitment from the customer. He confirmed that to his knowledge, Lantronix is still sole-sourced.
Q: Could you update us on what you're seeing from customer inventory or channel inventory standpoint?
A: Saleel Awsare noted that the broad-based channel business is normalizing and poised for growth, with inventory levels returning to historical averages. He mentioned specific delays in embedded compute designs, expected to ramp up in fiscal '25, aligning with customer success.
Q: On the three targeted segments, are there some areas you're pruning that could impact fiscal '25 growth on a run rate basis?
A: Saleel Awsare highlighted that Lantronix is focusing more on products that promise outsized growth, such as embedded compute and out-of-band management, integrating these with their Percepxion IoT software for a holistic solution approach.
Q: How should we think about a baseline run rate for modeling fiscal '25 given potential declines from initial strong shipments to Gridspertise?
A: Saleel Awsare emphasized the company's transition to providing quarterly guidance and expressed confidence in the long-term growth prospects based on a significant SAM and a robust product portfolio.
Q: Can you provide insights into the opportunity set and timeline for Gridspertise's expansion in the US and European markets?
A: Saleel Awsare shared that Gridspertise's largest customer, Enel, presents an opportunity in the hundreds of thousands of units. Although it's early days for their U.S. expansion, Lantronix is engaged in multiple areas and anticipates future growth as deployments progress.
Q: How is the integration of AI in discussions with customers, particularly regarding edge compute and connect opportunities?
A: Saleel Awsare described how Lantronix is integrating edge compute devices with their Percepxion IoT software to streamline edge AI applications, focusing on accelerating the transition from prototype to production, enhancing efficiency and product reliability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
