Revenue and Financial Performance - The Company generated $0.2 million and $0.9 million in revenue from international customers during the three and six months ended June 30, 2023, respectively, indicating a strong reliance on U.S. customers[74]. - Revenue for the three months ended June 30, 2024, increased by $1.4 million, or 112%, to $2.7 million compared to $1.3 million for the same period in 2023[95]. - Revenue for the six months ended June 30, 2024, increased by $2.6 million, or 72%, to $6.2 million compared to $3.6 million for the same period in 2023[107]. - Product revenue for the six months ended June 30, 2024, increased significantly by $2.6 million, or 85,200%, from $3 in 2023[109]. - Other income decreased by $2.4 million to $588,000 for the six months ended June 30, 2024, primarily due to a 64% decline in interest income from investments in marketable securities[117]. Operating Expenses and Cost Management - Total operating expenses decreased by $22.7 million, or 73%, from $31.2 million in Q2 2023 to $8.5 million in Q2 2024[99]. - Research and development expenses dropped by $9.4 million, or 80%, from $11.7 million in Q2 2023 to $2.3 million in Q2 2024, primarily due to reduced labor costs[101]. - General and administrative expenses decreased by $4.0 million, or 48%, from $8.3 million in Q2 2023 to $4.3 million in Q2 2024[102]. - Sales and marketing expenses fell by $3.0 million, or 69%, from $4.4 million in Q2 2023 to $1.4 million in Q2 2024[103]. - Total operating expenses for the six months ended June 30, 2024, decreased by $37.4 million, or 66%, from $56.7 million in 2023 to $19.3 million[110]. - Cost of revenue for the six months ended June 30, 2024, decreased by $0.3 million, or 10%, from $2.7 million in 2023 to $2.5 million[111]. Product Development and Market Strategy - The Company is developing two products: Palladyne IQ for stationary industrial robots and Palladyne Pilot for mobile robotic platforms, with expected commercial launches in the second half of 2024 and first quarter of 2025, respectively[83][84]. - Customer trials for Palladyne IQ began in June 2024, with ongoing trials expected to continue throughout the second half of 2024, aiming to generate revenue from commercial customers in 2025[83]. - The Company expects to derive commercial licensing revenues from its products starting in 2025, with ongoing commercialization efforts and customer trials throughout 2024[89]. - The market demand for AI/ML platforms remains unproven, and the Company is dependent on customer adoption and implementation of new technologies[92]. - The AI/ML Software Platform is expected to enable robotic systems to perform tasks in dynamic environments, enhancing productivity and reducing downtime[80]. Liquidity and Financing - The Company believes it has sufficient liquidity to operate for at least the next twelve months without raising additional capital, but may seek financing to bolster cash reserves[91]. - Cash, cash equivalents, and marketable securities totaled $25.8 million as of June 30, 2024, expected to support operations for at least the next 12 months[120]. - The company may need to seek additional financing if cash reserves are insufficient to support working capital or acquisitions[122]. - The company plans to monitor liquidity and may opportunistically raise capital when market conditions are favorable[123]. Government Contracts and Development Milestones - The Company has met all development milestones for U.S. government contracts related to its AI/ML Software Platform and products, recognizing revenue based on completed work[85]. Tax and Accounting - The effective tax rate for the six months ended June 30, 2024, was impacted by net losses and a full valuation allowance on deferred tax assets[118]. - The company is classified as an emerging growth company and has elected to take advantage of the extended transition period for new accounting standards[130]. Other Financial Metrics - Net cash used in operating activities decreased by 67% to $13.0 million for the six months ended June 30, 2024, driven by a $37.6 million decrease in net loss[126]. - Net cash provided by investing activities decreased by $14.7 million, primarily due to a reduction in maturities of marketable securities[127]. - The backlog as of June 30, 2024, was $1.5 million, with $0.4 million funded and $1.1 million unfunded, while the total estimated contract value was $11.4 million[119]. - The company recorded a 4,500% loss on warrant liability, resulting in a loss of $132,000 for the six months ended June 30, 2024[117].
Palladyne AI Corp.(PDYN) - 2024 Q2 - Quarterly Report