AmpliTech (AMPG) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics - Q2 2024 revenue was $2.5 million with gross profits of$1 million, maintaining a gross profit margin of approximately 42% despite inflationary pressures [5] - The company reported a loss of 1.57 million for Q2 2024, attributed to lower global and domestic sales, increased corporate expenses, and ongoing R&D efforts [7] - As of June 30, 2024, the company had 2.1 million in cash, cash equivalents, and accounts receivable, with working capital of nearly $10 million and inventory valued at over$7 million [8] Business Line Data and Key Metrics - The public 5G business segment is testing its Massive MIMO ORAN 5G radio at the OTIC Center, with plans for full deployment by the end of 2024 [9] - The private 5G business segment has developed a full end-to-end private 5G license product solution, targeting diverse deployment scenarios including residential homes [10] - The satellite ground station LNB business is seeing growth, with the Ku-band LNB market expected to reach $156.1 billion by 2030 [12] - The cryogenic power supplies for quantum computing have received their first order from a major US-based quantum computing company [15] - The MMIC and chip division has released over 100 new products, with a custom design project expected to require hundreds of thousands of MMIC parts over the next 2-4 years [16] Market Data and Key Metrics - The global 5G infrastructure market is projected to reach$99 billion by 2030, with significant growth opportunities in both public and private 5G networks [17] - The company is the only US-based designer and manufacturer of high-performance LNBs, used in various industries including GPS, content streaming, and airline Wi-Fi [13][14] Company Strategy and Industry Competition - The company is transitioning its revenue stream and product line to focus on 5G, quantum computing, and satellites, moving away from traditional amplifiers to MMICs and chips [26] - Strategic partnerships with industry giants and system integrators are being leveraged to gain market access and accelerate growth in the 5G sector [35] - The company is positioning itself as a leader in the quantum computing industry with its cryogenic products, which are critical for next-gen AI and quantum computing applications [15] Management Commentary on Operating Environment and Future Outlook - Management acknowledges the impact of global economic conditions, including reduced demand and recessionary pressures, but remains optimistic about a recovery in global demand [5][17] - The company expects to announce key relationships and initial 5G deployment contracts domestically and abroad in the coming months [11] - Management anticipates that 5G business will account for 75% to 80% of revenues by 2025, with significant growth expected in both private and public 5G networks [22][24] Other Important Information - The company has started seeing increased RFQ activity since the beginning of Q3 2024, indicating a potential recovery in demand [8] - The company is actively participating in global trade shows to promote its 5G suite of products and new disruptive technologies [16] Q&A Session Summary Question: Pipeline size and revenue expectations - The company has a pipeline of $130 million in opportunities, with a historical conversion rate of 25$40 million, with significant growth anticipated in the 5G and quantum computing sectors [28] Question: MMIC line of business - The MMIC division has already generated some small revenues, with a sizable order expected in Q1 2025, driving sales for 2025 and 2026 [31] Question: 4G to 5G tower upgrade opportunity - The company is targeting the upgrade of approximately 1 million towers in the US, with global opportunities also significant [35] - The company expects to start seeing revenue from private 5G networks in 2024, with larger growth expected in 2025 [35] Question: Private 5G network MoU - The company expects to commence revenue from a private 5G network project within the current fiscal year, with potential contract value exceeding $1 million [37] - The project will be deployed in phases, starting with a proof of concept and expanding to more cities and municipalities [39]