Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Huddly AS (OSL:HDLY, Financial) reported a 27% increase in sales to channels compared to the first quarter of the year.
- The establishment of a New York sales hub led to a 25% increase in channel revenue in the Americas year-on-year.
- A US patent was granted for Huddly Crew as an autonomous video conferencing system, highlighting the company's innovation capabilities.
- The company maintains a strong cash balance of NOK105 million as of June 30, 2024.
- Huddly AS is focusing on innovation and technology leadership, with plans to scale its sales model to Austin, Texas, in the second half of the year.
Negative Points
- Strategic sales remain challenging, with a significant decline compared to the same quarter last year.
- Gross margin declined to 39% in Q2, partly due to a one-off expense related to price protection for distributors.
- The company experienced a 15% year-on-year reduction in total cost base, indicating potential financial strain.
- There is a high degree of volatility and unpredictability in the market, leading to the withdrawal of financial guidance.
- Cash flow statements show a decrease in cash balance from NOK154 million at the end of March 2024 to NOK105 million at the end of June 2024.
Q & A Highlights
Q: Why is Huddly planning to establish a hub in Austin, Texas, instead of the West Coast?
A: Rosa Stensen, CEO: The US market is stabilizing, and our New York hub has increased sales in the Americas by 25% year-on-year. Austin, Texas, is strategically chosen due to the trend of large corporations moving their campuses to the South and Southeast. Its central location in the US offers great reach, and we will maintain a sales presence on the West Coast.
Q: Can you elaborate on the strategic review development?
A: Rosa Stensen, CEO: The strategic review is progressing well, and the Board expects to conclude it within a few months. The review aims to explore opportunities for growth and strategic partnerships.
Q: Why not focus more on sales rather than engineering, given the decline in sales?
A: Rosa Stensen, CEO: Our engineering team is crucial for long-term strategic value. We are refocusing our go-to-market efforts to support channel sales and enhance market presence, while maintaining a strong R&D foundation.
Q: What is the significance of the newly granted US patent for Huddly Crew?
A: Rosa Stensen, CEO: The US patent confirms Huddly's innovative technology and strategic value. It protects our assets and supports our IP strategy, which is integral to our product development and market positioning.
Q: Can you explain the decline in strategic sales?
A: Abhijit Banik, CFO: The decline is due to inventory build-up and component shortages during the pandemic, affecting our strategic partners. We are working to reduce inventories and expect improvements as these issues are resolved.
Q: When can we expect new strategic partners or revenue growth from current clients?
A: Rosa Stensen, CEO: We are actively working with current strategic partners and restructuring internally to enhance collaboration. While it's early, we are seeing some momentum in these efforts.
Q: Who are Huddly's typical customers?
A: Rosa Stensen, CEO: Our technology is used by many large corporations due to its exceptional video quality. However, our products are scalable and also cater to small businesses, covering a wide range of room types.
Q: How significant are Huddly Crew sales to overall revenue?
A: Abhijit Banik, CFO: While we don't provide a product-by-product revenue breakdown, Huddly Crew is expected to be a long-term growth driver, and we are focused on increasing its sales.
Q: Are there multiple companies interested in Huddly's strategic review?
A: Abhijit Banik, CFO: Yes, the Board of Directors has indicated that there are several interested parties in the strategic review process.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
