- Revenue: $42 million for Q4 FY2023, up 32% from $31.7 million in the year-ago quarter.
- Grid Business Revenue: $34.2 million for Q4 FY2023, up 21% from the year-ago quarter.
- Wind Business Revenue: $7.8 million for Q4 FY2023, more than doubled from the year-ago quarter.
- Total Revenue for FY2023: $145.6 million.
- Gross Margin: 25% for Q4 FY2023, up from 12% in the year-ago quarter; 24% for FY2023, up from 8% in FY2022.
- Operating Expenses (R&D and SG&A): $10.3 million for Q4 FY2023, up from $8.5 million in the year-ago quarter; $39.6 million for FY2023, up from $37.7 million in FY2022.
- Net Loss: $1.6 million or $0.05 per share for Q4 FY2023, compared to $6.9 million or $0.25 per share in the year-ago quarter; $11.1 million or $0.37 per share for FY2023, compared to $35 million or $1.26 per share in FY2022.
- Non-GAAP Net Income: $1.9 million or $0.06 per share for Q4 FY2023, compared to a non-GAAP net loss of $7.8 million or $0.28 per share in the year-ago quarter; $600,000 or $0.02 per share for FY2023, compared to a non-GAAP net loss of $28.8 million or $1.3 per share in FY2022.
- Cash, Cash Equivalents, and Restricted Cash: $92.3 million at the end of FY2023, compared to $25.7 million on March 31, 2023.
- Operating Cash Flow: $2.2 million for Q4 FY2023; $2.1 million for FY2023.
- Guidance for Q1 FY2024: Revenue expected to be in the range of $38 million to $42 million; net loss expected to be no more than $2.2 million or $0.05 per share; non-GAAP net loss expected to be no more than $500,000 or $0.01 per share; operating cash flow expected to be in the range of breakeven to positive $2 million.
Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fourth quarter results exceeded forecasts with significant revenue growth in both Grid and Wind segments.
- Revenue grew by more than 30% year-over-year, reaching a record level of over $40 million.
- Gross margins doubled compared to the year-ago quarter, indicating improved operational efficiency.
- The company achieved a third consecutive quarter of non-GAAP net income.
- Strong backlog of $140 million and robust order bookings, averaging over $37 million per quarter.
Negative Points
- Operating expenses increased, with R&D and SG&A expenses totaling $10.3 million for the fourth quarter, up from $8.5 million in the year-ago quarter.
- Net loss for the full fiscal year was $11.1 million, although this was an improvement from the previous year's loss.
- The Wind segment, while showing growth, may experience variability in order flow and revenue recognition.
- Dependence on large orders and customer timing of milestones can lead to revenue fluctuations.
- Potential challenges in scaling operations and maintaining supply chain responsiveness to meet accelerated shipment demands.
Q & A Highlights
Q: Can you provide details on the growth in the semiconductor-focused part of the Grid business? Is it broad-based or concentrated with a few customers?
A: (Daniel Mcgahn, CEO) The growth is broad-based, involving multiple chip fab makers. We have a significant pipeline of potential projects, driven by the large investment in the US semiconductor industry. Our solutions are economical, quick to deliver, and fit easily into small substations, making us a preferred choice for many chip makers.
Q: Do you expect to be the preferred solution for all future build-outs with your main semiconductor customers?
A: (Daniel Mcgahn, CEO) Yes, we have identified hundreds of millions of dollars in potential business from multiple chip fabs. We are already specified by some and aim to expand this. The semiconductor market presents a tremendous opportunity for us.
Q: Regarding the Wind segment, should we expect a softer first half of the fiscal year due to working through current orders?
A: (Daniel Mcgahn, CEO) While the first half may not see significant growth, it remains strong compared to past years. We expect further improvement later in the fiscal year, driven by increasing demand from our key customer in India.
Q: Are you seeing any interest from data centers for your substation solutions?
A: (Daniel Mcgahn, CEO) Data centers are on our radar, and we see potential projects in our pipeline. We are figuring out how we fit and differentiate in this market. We hope to provide proof points in the coming quarters or years.
Q: How much of your sales are book-and-ship within the quarter or within a nine to twelve-month period?
A: (Daniel Mcgahn, CEO) We see some book-and-ship within the quarter, but most orders are for nine months plus. Our supply chain and manufacturing capabilities allow us to shorten lead times, potentially accelerating business further.
Q: Are there more opportunities for value-based pricing, or are you primarily driving volume?
A: (Daniel Mcgahn, CEO) Primarily, we are driving volume. However, for certain projects with combined offerings, we may command higher prices. The main driver will be volume, with some potential for improved pricing on larger orders.
Q: Is the $50 million quarterly revenue target achievable in fiscal '24 or '25? How should we think about operating leverage at higher revenue levels?
A: (Daniel Mcgahn, CEO) Achieving $50 million per quarter in the next four quarters is unlikely, but we aim to deliver timely on our current order book. We don't need significant CapEx investments to grow, and our OpEx is highly scalable, supporting higher revenue levels without proportional increases in expenses.
Q: Are you seeing signs of an acceleration in Wind project deployments in the US?
A: (Daniel Mcgahn, CEO) We see potential growth in Wind and Solar investments globally, including the US. Our product lineup supports both sectors, and we are positioned to take advantage of the growing investment in renewables.
Q: What's driving the larger order sizes? Is it increased content per order or larger project sizes?
A: (Daniel Mcgahn, CEO) Both factors are driving larger order sizes. We see larger projects from customers and are able to offer more content per project. Our balance sheet supports these larger orders, and we aim to continue growing through both organic and inorganic means.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
