Financial Data and Key Metrics Changes - The company reported a strong annual revenue growth of 27% in 2021, with net sales in Q4 2021 reaching $6.4 million, up 29% from $4.9 million in Q4 2020 [8][29] - Gross margin increased to 54.4% in Q4 2021 from 47% in the prior year, and for the full year, gross margin was 57% compared to 53.2% in 2020 [35][26] - The net loss for Q4 2021 was $205,000 or $0.02 per share, significantly improved from a net loss of $1.6 million or $0.20 per share in Q4 2020 [39] Business Line Data and Key Metrics Changes - The SentriX Security Provisioning Platform saw a doubling of sales in 2021, contributing to the overall revenue growth [8] - Recurring and consumable revenues represented $2.9 million or 46% of total revenues in Q4 2021, up from $2.4 million in Q4 2020 [32] - Automotive sales accounted for 58% of total sales, consistent with strong growth in the automotive electronics market [25][21] Market Data and Key Metrics Changes - International sales represented approximately 85.3% of net sales for Q4 2021, showing a slight decrease from 89.9% in 2020 [33] - The company anticipates that 6 million electric vehicles will be shipped in 2022, up from 4 million in 2021, indicating a significant growth opportunity in the EV segment [9][10] Company Strategy and Development Direction - The company aims for double-digit bookings growth in 2022, with a target of doubling SentriX bookings [24][26] - Long-term goals include achieving 50% of consolidated revenue from recurring sales, which includes software, services, and consumables [27][70] - The company is focused on enhancing marketing and support capabilities to target new customers, both directly and through channel partners [22][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for automotive electronics, despite challenges from silicon shortages and geopolitical events [45][48] - The company plans to implement further price increases in response to inflation and rising costs [15][31] - Management highlighted the importance of environmental, social, and governance (ESG) issues, indicating a commitment to sustainable business practices [17] Other Important Information - The company appointed two new board members, enhancing governance and expertise in automotive and security sectors [18][19] - The company celebrated its 50th year in business in 2022, positioning itself to capitalize on high-growth trends in the industry [25] Q&A Session Summary Question: What are the order patterns seen in Q1 and confidence in bookings outlook for 2022? - Management noted a good start to Q1, with underlying demand in the automotive sector expected to improve as silicon shortages lessen [44][45] Question: Clarification on gross margin outlook for 2022? - The gross margin outlook is for the full year, with potential volatility on a quarterly basis due to sales mix and currency fluctuations [49][50] Question: Impact of supply chain issues and customer response to price increases? - Most customers understand the price increases due to similar pressures they face, and the company has proactively managed its supply chain to mitigate impacts [51][52] Question: Are there specific bottlenecks in the supply chain? - Management indicated that supply chain issues vary daily, but the company has a resilient supply chain strategy to manage these challenges [58][60] Question: Commentary on recurring revenue and bookings growth? - The long-term goal is for recurring revenue to reach 50% of consolidated revenue, with bookings growth expected to exceed 10% in 2022 [69][70] Question: Operating expenses outlook? - Operating expenses are expected to remain relatively flat, with potential increases tied to inflation and sales volume [81][82]
Data I/O (DAIO) - 2021 Q4 - Earnings Call Transcript