Financial Data and Key Metrics Changes - Fourth quarter revenue was $5.2 million, down 25% from the prior period, and full year sales were $21.8 million, down 22% from $28.1 million in 2023 [28][35] - Gross margin for the fourth quarter was 52% and for the full year was 53%, down from 58% in 2023, primarily due to lower sales volume [31] - The company incurred a net loss of $1.2 million for the fourth quarter and $3.1 million for the full year, compared to a net profit of $144,000 in the fourth quarter and $486,000 for the full year 2023 [35] Business Line Data and Key Metrics Changes - Automotive electronics represented 59% of 2024 bookings, down from 63% in 2023, with significant declines in the Americas and European markets [29] - Asia revenue grew by 14% for the year, contrasting with the declines in other regions [30] Market Data and Key Metrics Changes - Order backlog remained strong at $3.5 million as of December 31, up $700,000 from the start of the year [30] - The company reported a decrease in operating expenses for the full year, down $1.1 million or 7% from the prior year [34] Company Strategy and Development Direction - The company is focusing on building out its algorithm library, which is crucial for customer support and market share growth [19] - A consultative sales approach has been implemented, reducing the sales cycle from over 140 days to 70 days in early 2024 [13][14] - The company aims to return to profitability and accelerate top-line growth by expanding into new markets and enhancing operational efficiencies [25][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of automotive market headwinds and political changes on growth perspectives, emphasizing the need to diversify beyond the automotive sector [53][54] - There is optimism regarding Q1 performance, with bookings expected to improve compared to Q4 [60][106] Other Important Information - The company maintains a healthy cash position with no debt, ending the year with $10.3 million in cash [38][40] - The company is actively managing tariff impacts and exploring ways to mitigate costs associated with international trade [71][72] Q&A Session Summary Question: Clarification on nonrecurring expenses - Gerald Ng confirmed that the one-time expenses in Q4 should not recur in 2025, and the company will continue to drive efficiencies [48] Question: Sales funnel and expectations for the year - Bill Wentworth discussed the impact of the political environment and the automotive industry slowdown, but noted that Q1 bookings are strengthening [53][60] Question: Tariff impact on manufacturing - Gerald Ng explained the company's international footprint helps mitigate tariff impacts, and they are actively managing material costs [70][72] Question: Success of electric vehicles in Asia - Bill Wentworth indicated that while electrification contributes to demand, traditional combustion engine vehicles still drive significant technology content [82] Question: Future revenue expectations - Gerald Ng stated that while they do not provide forward-looking guidance, the goal is to improve revenue and leverage a strong backlog [92][93] Question: Adapter sales and customer engagement - Bill Wentworth highlighted a 20% increase in adapter activity early in the year, indicating positive engagement with service providers [113] Question: End markets for service providers - Bill Wentworth noted that service providers support a diverse range of vertical markets beyond automotive, including consumer electronics and IoT [135]
Data I/O (DAIO) - 2024 Q4 - Earnings Call Transcript