CSP (US:CSPI)2025-12-16 16:02Financial 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 [14] - Gross margins improved by over 800 basis points to 37% in the fourth quarter, driven by significant service revenue growth [5][14] - For the full fiscal year, revenue grew by 6%, with gross profit at $18.5 million, representing 32% of sales [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][14] - For the full year, service revenue represented 36% of total revenue, compared to 33% a year ago [6] - Product revenue decreased by $1.1 million in the fourth quarter [14] 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 grew at a healthy double-digit rate 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 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 confidence in generating consistent profitability improvements for fiscal 2026, supported by infrastructure investments [13] - The company is excited about the potential for growth in the service segment and the product business as it enters fiscal 2026 [12][13] 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 [15] - Cash and cash equivalents stood at $27.4 million as of September 30, 2025, down about 10% from the previous year [16] Q&A Session Summary Question: Service revenue calculation - Analyst confirmed the service revenue in the fourth quarter was approximately $6.4 million, which was well received by management [21][22] Question: IIoT expansion and potential customers - Management acknowledged the potential for significant deployments in the IIoT market and the need for OEM agreements [27][28] Question: Leads from Rockwell show - Management reported a 50% increase in leads from the Rockwell show compared to the previous year, with improved quality of leads due to established relationships [42][45] Question: Integration with Acronis - Management confirmed that AZT is being integrated into Acronis software, but revenue projections are still uncertain [54][68] Question: UFT relationship and case studies - Management provided updates on the relationship with UFT, indicating progress with case studies and future marketing efforts [56][57] Question: Share repurchase blackout period - Management clarified the blackout period for share repurchases due to earnings reporting schedules [58][60]