
Financial Data and Key Metrics Changes - The first quarter of 2023 saw revenues of $7.2 million, a 46% increase from $5 million in Q1 2022, while remaining flat sequentially [21][84] - Gross margins improved to 59.5% in Q1 2023, up from 55.5% in Q4 2022 and 46.4% in Q1 2022, attributed to favorable currency exchange rates and product mix [81][84] - Net income for Q1 2023 was $95,000 or $0.01 per share, compared to a net income of $510,000 or $0.06 per share in Q4 2022 and a net loss of $1.8 million or $0.21 per share in Q1 2022 [22] Business Line Data and Key Metrics Changes - Automotive electronics orders accounted for 63% of Q1 2023 bookings, with capital equipment making up 56% of revenue, consumables 31%, and software and services 13% [21][84] - The company reported a strong pay-per-use revenue from the SentriX platform and established significant partnerships in Japan during Q1 [7][12] Market Data and Key Metrics Changes - International sales represented approximately 87% of total revenue in Q1 2023, indicating a strong global market presence [21] - There was observed softness in the Chinese market due to COVID recovery and upcoming automotive emissions regulations, but expectations for improvement in the second half of the year were noted [12][60] Company Strategy and Development Direction - The company is focused on long-term growth in the automotive electronics market, driven by the increasing adoption of electric vehicles and advancements in active safety systems [13][14] - The SentriX platform is positioned to benefit from new government regulations demanding better security in IoT devices, which is expected to create a long-term tailwind for the business [6][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit revenue growth in 2023, supported by a strong sales funnel and expected flat operating expenses [19][22] - The management highlighted the importance of adapting to government regulations and the need for enhanced security in product designs, which is anticipated to drive demand for their offerings [36][54] Other Important Information - The company ended Q1 2023 with $11.9 million in cash, an increase from $11.5 million at the end of 2022, reflecting improved financial health [16] - The backlog decreased to $3.2 million from $4.8 million at the end of 2022, indicating a return to more normal operational levels [87] Q&A Session Summary Question: Can you discuss the gross margins for Q1? - Management attributed the strong gross margins to good revenues, a normal operating environment, favorable currency exchange rates, and a beneficial channel mix [26][27] Question: How many of the new customer wins are in automotive versus industrial? - The majority of the 10 new customer wins were in automotive, with a split of approximately 6 to 4 or 7 to 3 [31][32] Question: What are the key factors driving excitement for the rest of the year? - Management highlighted the recovery in the automotive sector, the impact of government regulations, and the increasing demand for security in product designs as key factors [33][36] Question: How will the Cybersecurity Act impact purchasing decisions? - The management indicated that the act is prompting companies to prioritize security in new product designs, which is expected to create a long-term demand for their products [36][54] Question: What is the sales model in different regions? - The company utilizes a mix of direct sales and distribution depending on the region, optimizing their approach to meet local needs [62]