Texas BOOT II funded fiber-to-the-home project to bring symmetrical gigFAST INTERNET® to over 10,000 rural locations DALLAS, Feb. 26, 2025 (GLOBE NEWSWIRE) -- DZS (OTC: DZSI), a developer of Network Edge and Connectivity systems and Cloud Edge software solutions enabling broadband everywhere, today announced that Rural Telecommunications America (RTA), a leading provider of next-generation internet services to rural communities across the United States, has chosen leading-edge DZS Velocity fiber access sys ...

The George in Tel Aviv leverages cutting-edge fiber and Wi-Fi technology to deliver an enterprise-grade communications experience to members and guests of prestigious hospitality and entertainment venueDALLAS, Dec. 16, 2024 (GLOBE NEWSWIRE) -- DZS (OTC: DZSI), a developer of Network Edge and Connectivity systems and Cloud Edge software solutions enabling broadband everywhere, today announced that The George, a state-of-the-art hospitality venue in the heart of Tel Aviv, Israel, is leveraging DZS FiberLAN te ...

Financial Performance - Net revenue for Q3 2024 reached $38,149 million, a 67.8% increase from $22,737 million in Q3 2023 [126]. - Gross profit for Q3 2024 was $11,225 million, compared to a loss of $1,037 million in Q3 2023, marking a significant improvement of 1182.4% [126]. - Operating expenses totaled $33,227 million in Q3 2024, up 13.2% from $29,345 million in Q3 2023 [126]. - Total cost of revenue for Q3 2024 was $26,924 million, representing 71% of net revenue, down from 105% in Q3 2023 [126]. - For the nine months ended September 30, 2024, net revenue was $96,882 million, a slight decrease of 0.9% from $97,727 million in the same period of 2023 [127]. - Operating loss for the nine months ended September 30, 2024 was $50,060 million, a 27.3% improvement from a loss of $68,892 million in the same period of 2023 [127]. - The company reported a net loss of $25,646 million from continuing operations for Q3 2024, a 12.7% improvement from a loss of $29,385 million in Q3 2023 [126]. - Net loss from discontinued operations decreased by 42.5% to $6.1 million for the nine months ended September 30, 2024, compared to $10.6 million for the same period in 2023 [136]. Acquisitions and Divestitures - The company completed the divestiture of DASAN Network Solutions and related entities for $3.8 million in cash and the elimination of approximately $34.3 million in debt [121]. - The acquisition of NetComm Wireless Pty Ltd was finalized for approximately $8.1 million, with a potential contingent consideration of up to $3.0 million based on revenue thresholds [121]. - The company received a cash purchase price of $34.0 million from the sale of its Network Assurance and WiFi Management software portfolio, with $30.0 million received at closing [123]. - The company recognized a bargain purchase gain of approximately $41.5 million from the NetComm Acquisition, reflecting the excess of the fair value of net assets acquired over the purchase consideration [134]. Research and Development - The company is focused on increasing revenue while controlling costs and investing in strategic research and product development [120]. - Research and product development expenses increased by 28.0% to $10,656 million in Q3 2024, compared to $8,327 million in Q3 2023 [126]. - Research and product development expenses increased by 28.0% to $10.7 million for the three months ended September 30, 2024, compared to $8.3 million for the same period in 2023, primarily due to the NetComm Acquisition [134]. Operational Highlights - The company’s DZS Velocity portfolio enables rapid transition from GPON to XGSPON and future 50G PON technologies, enhancing service provider capabilities [114]. - The DZS Saber portfolio supports mobile operators with scalable solutions for 5G transport, capable of speeds up to 400 Gbps [115]. - The company’s DZS Helix optical network terminals and smart gateway solutions are designed for high bandwidth services in FTTx deployments [116]. - The company’s IIoT products provide ultra-fast connectivity for machines in harsh environments, utilizing 4G/5G technology [118]. - Access networking infrastructure revenue increased by 98.4% to $29.1 million for Q3 2024, primarily due to the NetComm Acquisition [130]. Financial Position and Cash Flow - The company has entered into a Loan Agreement for a three-year term loan of $15.0 million at a fixed interest rate of 13.0% per annum [121]. - Net cash used in operating activities from continuing operations decreased by $5.6 million to $28.1 million for the nine months ended September 30, 2024, from $33.7 million for the same period in 2023 [141]. - Net cash provided by financing activities totaled $23.9 million for the nine months ended September 30, 2024, compared to $4.9 million for the same period in 2023, primarily from private placement of shares and the Second EdgeCo Loan [143]. - As of September 30, 2024, the company had $24.1 million in working capital and $4.3 million in unrestricted cash and cash equivalents [138]. - Cash, cash equivalents, and restricted cash totaled $5.7 million at September 30, 2024, including $2.7 million held by international subsidiaries [145]. Debt and Interest Expenses - Interest expense, net for the three and nine months ended September 30, 2024, was $2.2 million and $4.8 million, respectively, compared to $0.8 million and $2.3 million for the same periods in 2023 [134]. - The company's contractual debt obligation under the EdgeCo Loan Agreements was $30.0 million as of September 30, 2024 [146]. Future Outlook - The company anticipates that future results may depend significantly on sales to a small number of large customers, indicating potential revenue volatility [131].

Financial Data and Key Metrics Changes - The company reported Q3 2024 revenue of $38.1 million, a 23% increase quarter-over-quarter and a 67.8% increase year-over-year [4][17] - Non-GAAP adjusted gross margin was 36.7%, up 6.5% from the previous quarter [4][17] - Adjusted EBITDA for Q3 was a loss of $9.3 million, an improvement of $8.2 million or 46.8% compared to Q3 2023 [19] - Cash and cash equivalents at the end of the quarter were $5.7 million, with a significant cash inflow from the divestiture of the network assurance and in-home WiFi management portfolio [19][21] Business Line Data and Key Metrics Changes - The company divested its network assurance and in-home WiFi management portfolio for $34 million, which improved the balance sheet by reducing debt by $15 million and increasing cash by $15 million [6][19] - Adjusted operating expenses increased by $1.9 million or 8.9% in Q3 compared to the same period in 2023, primarily due to the NetComm acquisition [18] Market Data and Key Metrics Changes - The company anticipates improved revenue and profitability in Q4 2024, driven by a growing sales pipeline and scheduled backlog [8][25] - The company expects service providers to return to pre-COVID spending levels and normalized deployment patterns in 2025 [8] Company Strategy and Development Direction - The company has established four key performance initiatives focused on growth, profitability, balance sheet improvement, and cost savings [7][23] - The strategic divestiture aims to create software independence and recalibrate technology focus on core broadband access and connectivity systems [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the first half of 2025, citing improvements in customer inventory management and a positive sales pipeline [29] - The company expects to achieve breakeven on an adjusted EBITDA basis and positive cash results in 2025 [21] Other Important Information - The company has made significant improvements in internal controls, corporate governance, and supply chain management over the past year [16] - The broadband access portfolio was certified as Build America, Buy America compliant, aligning with the $42 billion broadband equity access and deployment program [13] Q&A Session Summary Question: Current visibility into the first half of '25 in the U.S. market - Management noted that they are cautiously optimistic based on scheduled backlog, pipeline analysis, and synergies from the NetComm acquisition [28][29] Question: Large opportunities in the European and Middle Eastern markets - Management highlighted ongoing business with incumbent operators in the Middle East and a significant design win in Europe expected to generate revenue in 2025 [30][32] Question: Competitive landscape for fixed wireless products - Management indicated that the competitive landscape includes traditional incumbents like Nokia, with emerging players like Tarana also present [33] Question: Commentary on gross margin trajectory - Management stated that margins would have been higher without taking inventory reserves, and they aim to sustain margins close to 40% moving forward [34][35]

Financial Performance - Q3 2024 orders totaled $27.2 million, a decrease of 5.8% compared to $28.9 million in Q3 2023, and $94.2 million for the first nine months of 2024, down 6.7% from $101.0 million in the same period last year[3]. - Net revenue for Q3 2024 was $38.1 million, representing a 22.8% increase from $31.1 million in Q2 2024[3]. - Net revenue for Q3 2024 reached $38,149 million, a 22.5% increase from $31,066 million in Q2 2024 and a 67.5% increase from $22,737 million in Q3 2023[16]. - Gross profit for Q3 2024 was $11,225 million, compared to $10,439 million in Q2 2024, marking an increase of 7.5%[16]. - Operating loss for Q3 2024 was $(22,002) million, worsening from $(17,166) million in Q2 2024 but improving from $(30,382) million in Q3 2023[16]. - Net loss for Q3 2024 was $(25,646) million, compared to a net income of $23,073 million in Q2 2024, reflecting significant operational challenges[16]. - Adjusted EBITDA for Q3 2024 was $(9,323) million, compared to $(7,267) million in Q2 2024, indicating ongoing financial strain[19]. Margins and Income - GAAP gross margin improved to 29.4% in Q3 2024, compared to (4.6%) in Q3 2023, and 35.4% for the first nine months of 2024, up from 26.8% in the same period last year[3]. - Non-GAAP gross margin for Q3 2024 was 36.7%, compared to 17.4% in Q3 2023, and 38.6% for the first nine months of 2024, up from 33.3% year-over-year[3]. - Net income for Q3 2024 was $(25.7) million GAAP, an improvement from $(29.4) million in Q3 2023, and adjusted non-GAAP net income was $(11.7) million, compared to $(15.3) million in Q3 2023[3]. - Gross profit loss of $1,037 million, leading to a gross margin percentage of -4.6% for the three months ended September 30, 2023[22]. - Non-GAAP adjusted amount of $18,773 million, with a gross margin percentage of 17.4%[22]. Expenses and Liabilities - Total operating expenses increased to $33,227 million in Q3 2024, up from $27,605 million in Q2 2024, primarily driven by higher research and development costs of $10,656 million[16]. - Long-term debt increased to $16,424 million in September 2024, up from $7,308 million in December 2023, suggesting increased leverage[17]. - Total current liabilities decreased to $110,081 million in September 2024 from $165,811 million in December 2023, indicating improved short-term financial health[17]. - Operating income loss of $50,060 million, with operating expenses totaling $84,337 million[23]. - Restructuring and other charges amounted to $5,230 million, representing 5.4% of total revenue[24]. - Stock-based compensation expenses of $10,934 million, accounting for 0.9% of total revenue[24]. - Litigation and restatement costs of $4,117 million, contributing to the overall net income loss[24]. Cash and Inventory - Cash balance at the end of Q3 2024 was $5.7 million, with inventory standing at $79 million[3]. - Cash and cash equivalents decreased to $5,736 million as of September 2024, down from $15,102 million at the end of December 2023[17]. - DZS is focused on converting $79 million of inventory into cash and delivering to customers as part of its ongoing operational strategy[5]. Strategic Goals - The company aims to achieve break-even Adjusted EBITDA by 2025, leveraging cost savings and synergies from the NetComm acquisition[5]. - The company has made progress on key performance initiatives, including strengthening its balance sheet and optimizing its cost structure[2].

DALLAS, Texas, Nov. 06, 2024 (GLOBE NEWSWIRE) -- DZS (OTC: DZSI), a developer of Networking and Connectivity systems and Cloud Edge software solutions enabling broadband everywhere, today announced its Q3 2024 financial results. “The third quarter of 2024 delivered a fourth sequential quarter of topline growth for DZS,” said Charlie Vogt, President and CEO, DZS. “With our restatement now behind us, our filings current, the sale of our in-home WiFi software and service assurance portfolio closed, and with in ...

NEW YORK, Oct. 28, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against DZS Inc. (OTC: DZSI) on behalf of longterm stockholders following a class action complaint that was filed against DZS on June 14, 2023 with a Class Period from March 10, 2023 to May 31, 2023. Our investigation concerns whether the board of directors of DZS have breached their fiduciary duties to the company. According to the lawsuit, defendan ...

DALLAS, Oct. 25, 2024 (GLOBE NEWSWIRE) -- DZS (OTC: DZSI), a global leader of Networking, Connectivity and Cloud Edge software solutions enabling broadband everywhere, today announced it has completed the sale of its service assurance and WiFi management software portfolio to AXON Networks (AXON). "The closing of the sale of our Expresse, CloudCheck, and TruSpeed assets and IP patents to AXON Networks represents a win for DZS, AXON and customers," said Charlie Vogt, President and CEO, DZS. "DZS will focus i ...

Core Viewpoint - DZS Inc. will host an earnings call on November 6, 2024, to discuss its financial results for the third quarter of 2024 [1]. Company Overview - DZS Inc. is recognized as a global leader in Networking, Connectivity, and Cloud Edge software solutions, focusing on enabling broadband access globally [1]. Conference Call Details - The earnings call is scheduled for November 6, 2024, at 11:00 a.m. EDT, with a toll-free participant number of (800) 715-9871 and a conference ID of 5468431 [1]. - A webcast of the call will be available at the provided link [1].

DZS among five NTIA certified compliant U.S. telecom electronics equipment manufacturers, offers a wide range of future-ready fiber access solutions DZS and manufacturing partner Fabrinet are building BEAD-ready fiber optic equipment in the U.S. todayDZS has an extensive portfolio of fiber access, optical transport and cloud-software solutions that provide end-to-end support for BEAD deploymentsDZS has decades-long U.S. manufacturing history featuring proven, environmentally hardened solutions ideally suite ...