Lantronix(US:LTRX)2023-09-07 23:40Financial Data and Key Metrics Changes - For Q4 2023, the company reported revenue of $34.9 million, which is up 6% sequentially but down 3% year-over-year [27] - GAAP gross margin for Q4 2023 was 39.5%, compared to 44.4% in the prior quarter and 41.9% in the year-ago quarter, primarily due to product mix [29] - GAAP net loss was $1.7 million or $0.05 per share in Q4 2023, compared to a net income of $2.5 million or $0.07 per share in the year-ago quarter [30] Business Line Data and Key Metrics Changes - Embedded Solutions products had a strong quarter, contributing approximately $3.4 million from an embedded compute sale [27] - System Solutions revenue was relatively flat quarter-over-quarter, including $1.4 million from Gridspertise [28] - Software and Services revenues were down sequentially due to lower design services revenue, but improvement is expected going forward [29] Market Data and Key Metrics Changes - The company noted a slight increase in channel inventories, but it remains within historical norms [14] - Demand for large programs, particularly from Gridspertise and Togg, is expected to drive growth in fiscal 2024 [16] Company Strategy and Development Direction - The company anticipates over 30% growth in fiscal 2024, with revenue guidance set between $175 million and $185 million [39] - Gridspertise is identified as a lead smart grid customer, with significant revenue expected from the QED platform [33] - The company is focusing on new compute designs and has seen traction with various applications, including smart cities and electric vehicles [33][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in fiscal 2024, citing a record backlog and steady demand environment [32] - The company expects to maintain gross margins in the mid- to low-40s, with some benefits from lower supply chain costs [45] - Management acknowledged some weakness in certain parts of the business post-COVID but emphasized growth drivers from large programs [16] Other Important Information - The company is in the process of searching for a new CEO, with in-person interviews underway [40] - The company has resolved component shortages that could affect deliveries in fiscal 2024 [35] Q&A Session Summary Question: Can you provide a number for the opportunities discussed? - Management indicated that the number of opportunities has continued to grow, particularly in smart cities, smart grid, and automotive applications [2] Question: What is the expected growth from Gridspertise? - Management expects year-on-year growth with Gridspertise based on current pricing and unit forecasts [4] Question: How should gross margins be viewed for the full year? - Management anticipates gross margins for the full fiscal year to be close to those of fiscal 2023, with benefits from revenue increases and cost relief [5] Question: What is the outlook for the Embedded business? - Management indicated that the Embedded compute side may see a soft couple of quarters but expects new design wins to ramp in Q3 [7] Question: Can you confirm the production goal with Togg? - Management confirmed that the production goal with Togg remains at $50 million, with recent orders exceeding expectations [10] Question: Are there any projects expected to contribute to revenue in the next fiscal year? - Some projects may contribute to fiscal 2024, but most are expected to contribute in fiscal 2025 [11] Question: How is the competitive landscape? - Management noted no significant new entrants in the market and emphasized their competitive advantages [18]