Management attributed the total revenue decline to a difficult year-over-year comparison involving a non-recurring $4.5 million product deal in the prior-year period. The company is intentionally prioritizing service revenue and growing its Monthly Recurring Revenue (MRR) base to improve overall margin profiles. Service revenue growth of 14.6% was driven by momentum in technology solutions and managed cloud practices, specifically benefiting from complex enterprise migrations to Azure. The Managed S ...

Financial Data and Key Metrics Changes - Overall fourth quarter revenue increased by 11% to $14.5 million compared to $13 million in the same quarter last year [5][13] - Gross margins improved by over 800 basis points to 37% in the fourth quarter, driven by significant growth in service revenue [5][13] - For the full fiscal year, revenue grew by 6%, with gross profit at $18.5 million, representing 32% of sales [15][16] Business Line Data and Key Metrics Changes - Service revenue grew by 63% in the fourth quarter, accounting for approximately 44% of total revenue, up from 30% in the prior year [6][13] - For the full year, service revenue represented 36% of total revenue, compared to 33% the previous year [6] - Product revenue decreased by $1.1 million in the fourth quarter [13] Market Data and Key Metrics Changes - The company expanded its customer base across various industries, including finance, manufacturing, oil and gas, healthcare, aerospace, education, utilities, telecommunications, and maritime [6] - The managed cloud and MSP services segment experienced healthy double-digit growth during the fiscal year [7] Company Strategy and Development Direction - The company aims to build on the growth of its service business by allocating more resources and adding sales representatives [7] - There is a focus on expanding the AZT Protect cybersecurity offering, particularly in the maritime industry and industrial IoT devices [10][11] - The company is optimistic about converting its growing pipeline into significant sales in fiscal 2026 [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the strong finish to the fiscal year and the potential for increased profitability in fiscal 2026 [5][12] - The company believes it is well-positioned to leverage revenue growth going forward, supported by investments made in infrastructure [12] Other Important Information - The company reported a net loss of $191,000 for the fourth quarter, compared to a net income of $1.7 million in the prior year [14] - Cash and cash equivalents stood at $27.4 million as of September 30, 2025, down about 10% from the previous year [15] Q&A Session Summary Question: Service revenue calculation - Analyst confirmed the service revenue in the fourth quarter was approximately $6.4 million, based on 44% of total sales [19][20] Question: IIoT expansion of AZT Protect - Management acknowledged the potential for significant growth in the IIoT market and the need for OEM agreements [25][26] Question: Acronis integration - Management stated that AZT is being integrated into Acronis software, but revenue projections are still uncertain [51][52] Question: UFT relationship updates - Management provided updates on the relationship with UFT, indicating progress with case studies and future marketing events [53] Question: Revenue predictability - Management indicated that revenue projections for the upcoming year are uncertain and may vary [72]

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, revenue increased by 11% to $14.5 million compared to $13 million in the same quarter last year [13] - Gross margins improved by over 800 basis points to 37%, driven by significant growth in service revenue [5][14] - The company reported a net loss of $191,000 or $0.02 per diluted share for the fourth quarter, compared to a net income of $1.7 million or $0.18 per diluted share in the prior year [15] Business Line Data and Key Metrics Changes - Service revenue grew by 63% year-over-year, representing approximately 44% of total revenue in the fourth quarter, up from 30% in the same quarter last year [6][14] - For the full fiscal year, service revenue accounted for 36% of total revenue, compared to 33% the previous year [6] - Product revenue decreased by $1.1 million in the fourth quarter [13] Market Data and Key Metrics Changes - The company expanded its customer base across various industries, including finance, manufacturing, oil and gas, healthcare, aerospace, education, utilities, telecommunications, and maritime [6] - The managed cloud and MSP services segment experienced healthy double-digit growth during fiscal 2025 [7] Company Strategy and Development Direction - The company aims to build on the growth of its service business by allocating more resources, including adding sales representatives [7] - There is a focus on expanding the AZT Protect cybersecurity offering, particularly in the maritime industry and Industrial IoT devices [10][11] - The company is optimistic about generating consistent profitability improvements in fiscal 2026 due to infrastructure investments and growth strategies [12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the strong results from the service segment and the potential for growth in fiscal 2026 [11][12] - The company believes it has a competitive advantage in the cybersecurity space and aims to convert building momentum into significant sales [10] Other Important Information - The company maintained a strong balance sheet with cash and cash equivalents of $27.4 million, despite a 10% decrease from the previous year [16] - The company plans to pay a $0.03 per share dividend on July 15, 2026, to shareholders of record on December 26, 2025 [16] Q&A Session Summary Question: Service revenue calculation - The service revenue in the fourth quarter was approximately $6.4 million, which is 44% of total sales [20] Question: Expansion of AZT Protect - Management acknowledged that the expansion of AZT Protect is a game changer and is focusing on signing OEM agreements in the IIoT environment [25][26] Question: Integration with Acronis - AZT is being integrated into Acronis software, but revenue projections are too early to determine [53] Question: Relationship with UFT - The relationship with UFT is strong, and case studies are being developed for implementation with their customers [55] Question: Share repurchase blackout period - The company is subject to a blackout period for share repurchases until mid-February due to earnings reporting [56][59]

Financial Data and Key Metrics Changes - For the second quarter ended March 31, 2025, the company reported revenue of $13.1 million, a decrease from $13.7 million in the prior year [5][13] - Service revenue was $4.6 million compared to $5.2 million in the same period last year, reflecting a decline due to a significant multimillion-dollar deal not being repeated [5][13] - Gross profit for the quarter was $4.2 million, representing 32% of sales, down from $6.2 million or 45.3% of sales in the previous year, attributed to higher component costs [13][14] - The company reported a loss of $108,000 or $0.01 per diluted share for the quarter, while for the six months, revenue was $28.5 million compared to $29.1 million in the first half of the previous fiscal year [15][16] Business Line Data and Key Metrics Changes - The technology solutions (TS) business generated $12 million in revenue and remains profitable, with ongoing contracts in the cruise line and ocean freighter markets [10][11] - The AZT Protect product line is gaining traction, with six new customers signed during the quarter, indicating a growing pipeline and potential for future sales [6][9] Market Data and Key Metrics Changes - The company has established a new reseller partnership with Rexel USA, enhancing its market presence in the industrial equipment sector [7] - The South African market is being targeted with a new contract that could generate seven-figure sales, indicating expansion into new geographic areas [10] Company Strategy and Development Direction - The company is focused on expanding its AZT Protect product line and enhancing its sales team to build brand recognition in the operational technology (OT) market [9] - Continued investments in marketing and partnerships are aimed at increasing market awareness and driving future sales growth [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential challenges in the operating environment, including price increases and reduced customer spending, but remains optimistic about the growth prospects for AZT Protect [12] - The company is entering the second half of the fiscal year with momentum from recent contracts and an expanding customer base [11][35] Other Important Information - The company finished the quarter with over $29 million in cash and cash equivalents, allowing for continued investment and a quarterly cash dividend of $0.03 per share [11][15] - The Board of Directors has authorized a cash dividend payable on June 11, 2025, indicating a commitment to returning value to shareholders [16] Q&A Session Summary Question: Inquiry about the backlog for AZT - Management indicated that the pipeline is growing but refrained from providing specific numbers, stating that deals are at different stages of the sales process [20] Question: Status of the cruise ship business - Management confirmed that the cruise ship business remains steady, with ongoing modifications and contracts being fulfilled as ships become available [22][23] Question: Uniqueness of the cell tower contract - Management highlighted the unique advantages of their solution for cell towers, including space efficiency and compatibility with Linux, which differentiates them from competitors [28] Question: Backlog of cloud-based projects - Management confirmed that the backlog of cloud-based projects has increased and is currently in the twenties, indicating strong demand [31]

Financial Data and Key Metrics Changes - For the second quarter ended March 31, 2025, the company reported revenue of $13.1 million, a decrease from $13.7 million in the prior year [5][13] - Service revenue was $4.6 million compared to $5.2 million in the same period last year, reflecting a decline due to a single multimillion-dollar deal not being repeated [5][13] - Gross profit for the quarter was $4.2 million, representing 32% of sales, down from $6.2 million or 45.3% of sales in the prior year, attributed to higher component costs and the absence of a high-margin contract [13] - The company reported a loss of $108,000 or $0.01 per diluted share for the quarter, while for the six months, revenue was $28.5 million compared to $29.1 million in the previous year [14][15] Business Line Data and Key Metrics Changes - The technology solutions (TS) business generated $12 million in revenue and remains profitable, with ongoing contracts in the cruise line and ocean freighter markets [10][11] - The AZT Protect product line is gaining traction, with six new customers signed during the quarter, indicating a growing pipeline and potential for future sales [6][9] Market Data and Key Metrics Changes - The company is expanding its relationships with AZT Protect resellers, particularly with Rexel USA, enhancing its market presence in the industrial equipment sector [7][8] - A new contract in South Africa for AZT Protect could generate seven-figure sales over the next 18 months, indicating potential growth in the cell tower protection market [10] Company Strategy and Development Direction - The company is focused on enhancing its sales team and building brand recognition for AZT Protect in the operational technology (OT) market [9] - Continued investments in marketing and partnerships are aimed at expanding revenue relationships and increasing market share [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential challenges in the operating environment, including price increases and reduced customer spending, but remains optimistic about the growth prospects for AZT Protect [12] - The company entered the second half of the fiscal year with momentum from recent contracts and is focused on maximizing opportunities [11][34] Other Important Information - The company finished the quarter with over $29 million in cash and cash equivalents and repurchased $384,000 worth of common shares [11][15] - The Board of Directors approved a $0.03 cash dividend for shareholders, reflecting the company's robust balance sheet [15] Q&A Session Summary Question: Inquiry about the backlog for AZT - Management indicated that the pipeline is growing but refrained from providing specific numbers on backlog or contract sizes [18][19] Question: Status of the cruise ship business - Management confirmed that the cruise ship business remains steady, with ongoing modifications and contracts [20][21] Question: Uniqueness of the cell tower contract - Management highlighted the unique space and CPU requirements of cell towers as a competitive advantage, noting that they are reaching out to similar companies [25][26][28] Question: Backlog of cloud-based projects - Management confirmed that the backlog of cloud-based projects has increased and is currently in the twenties [29][30]