Kestra Medical Technologies (NasdaqGS:KMTS) Q1 2026 Earnings Call September 11, 2025 04:30 PM ET Company ParticipantsVaseem Mahboob - CFONeil Bhalodkar - VP of Investor RelationsBrian Webster - President and CEOConference Call ParticipantsMike Pollock - AnalystDaniel Downes - AnalystTravis Steed - AnalystLawrence Biegelsen - AnalystMatthew O'Brien - AnalystRick Wise - AnalystOperatorAfternoon and welcome to the Kestra Medical Technologies earnings conference call. This conference call is being recorded for ...

Financial Data and Key Metrics Changes - Third quarter net sales increased by 17.5% year-over-year to $19.8 million [4][17] - Gross profit margin improved to 34%, a 450 basis point increase from the previous year [4][17] - Operating profit was $719,000 compared to a loss of $419,000 in the same period last year [4][17] - Adjusted EBITDA was $1.6 million, representing 8% of net sales, with a goal of reaching at least 10% [5][18] Business Line Data and Key Metrics Changes - Strong growth was observed across aerospace, venues, telecommunications, and broadband networks [14] - The company is diversifying its product offerings and customer base, reducing reliance on tier one carrier customers [6][10] - New partnerships and deeper relationships with existing customers are contributing to revenue growth [10][11] Market Data and Key Metrics Changes - Fast-growing markets such as aerospace, transportation, and data centers are now contributing to the sales pipeline [6][8] - Significant orders have been received for infrastructure projects in transportation, particularly at major U.S. airports [8] - The company is seeing a revival in stadium and venue buildouts, with a pipeline of over 100 venues [9] Company Strategy and Development Direction - The company is transitioning from a component supplier to a technology solutions provider [6] - Focus on profitability and operational efficiency is emphasized, with a cost structure that supports improved margins [5][12] - The strategy includes diversifying the supply chain to mitigate tariff impacts and enhance inventory availability [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining steady revenue in Q4, similar to Q3 levels [12][16] - The company is mindful of potential tariff impacts and ongoing supply chain constraints but remains optimistic about its sales pipeline [16] - The focus on execution and collaboration is seen as crucial for capitalizing on future opportunities [16] Other Important Information - The company ended the quarter with a backlog of $19.7 million, which has since decreased to $16.1 million [5][21] - Cash and cash equivalents stood at $3 million, with a current ratio of approximately 1.6 to 1 [20] Q&A Session Summary Question: How much of the gross margin improvement is driven by DAC systems and small cells versus mix? - Management indicated that the mix of higher value items, including DAC systems and aerospace projects, is contributing to the improved gross margin [23][24] Question: Should gross margins in Q4 be similar to Q3? - Management expects gross margins to remain above 30%, with potential fluctuations based on product mix and sales levels [25][26] Question: Can you characterize the competition between traditional wireless business and newer end markets? - Management noted that contributions are coming from various markets, indicating a diverse customer base and product lines [27][28] Question: When can meaningful bookings from the venue pipeline be expected? - Management anticipates contributions from the venue pipeline into fiscal 2026, with a long sales cycle for such projects [29][30] Question: What is the bridge to the 10% EBITDA target? - Management highlighted ongoing operational improvements and higher sales numbers as key factors in reaching the EBITDA target [31][32]

Financial Data and Key Metrics Changes - Third quarter net sales increased by 17.5% year over year to $19.8 million [5][18] - Gross profit margin improved to 34%, a 450 basis point increase from 29.5% in the same quarter last year [5][18] - Operating profit was $719,000 compared to a loss of $419,000 in the prior year [5][18] - Adjusted EBITDA reached $1.6 million, representing 8% of net sales, with a goal of at least 10% in the future [6][19] Business Line Data and Key Metrics Changes - The company has diversified its product offerings, with significant contributions from aerospace, transportation, and data centers [7][9] - Strong growth was noted in aerospace, with repeat orders from a leading market player [8] - The transportation market is seen as a significant opportunity, with meaningful orders for infrastructure projects [9] Market Data and Key Metrics Changes - The company is experiencing growth across various markets, including aerospace, venues, telecommunications, and broadband networks [15] - The sales pipeline includes over 100 venues, with projects related to major events like the Olympics and World Cup [10][31] Company Strategy and Development Direction - The company aims to transform from a component supplier to a technology solutions provider, focusing on product diversification and deeper customer relationships [7][8] - Partnerships with tier one carriers and new manufacturers are being leveraged to expand market opportunities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong revenue in Q4, similar to Q3 levels, despite potential tariff impacts [13][17] - The company is focused on operational efficiency and profitability, with a strong sales pipeline and disciplined operations [16][19] Other Important Information - The company ended the quarter with a backlog of $19.7 million, which has since decreased to $16.1 million [6][22] - Inventory levels were managed carefully, with a slight increase from the previous quarter [21] Q&A Session Summary Question: How much of the gross margin improvement is driven by DAC thermal cooling systems and small cells? - Management indicated that the product mix, including higher-value items, has contributed to the margin improvement, alongside increased sales volume [24][25] Question: Should gross margins in Q4 be similar to Q3? - Management expects gross margins to remain above 30%, but specific quarter-to-quarter predictions are challenging due to fluctuations in sales [26][27] Question: How is competition characterized between traditional wireless business and newer markets? - Management noted contributions from various markets, emphasizing the importance of diversification in customer base and product lines [28][29] Question: When can meaningful bookings from the venue pipeline be expected? - Management anticipates contributions from the venue pipeline into fiscal 2026, with long-term deployments expected [31][32] Question: What is the bridge to the 10% EBITDA target? - Management highlighted ongoing operational improvements and higher sales as key factors in reaching the EBITDA target [33][34]

Financial Data and Key Metrics Changes - Fiscal year 2025 revenue reached $558.3 million, a 10% increase from the previous year, with Q4 revenues rising 18% year-over-year to $147.1 million [7][12] - Adjusted EBITDA for FY 2025 was $72 million, up more than 10% from the prior year, with a record adjusted EPS of $2.75, reflecting a 31% increase [8][20] - Free cash flow for Q4 was $23 million, marking the strongest quarter ever, and total free cash flow for the year was $27 million [8][24] Business Line Data and Key Metrics Changes - Revenue growth was driven by retail and e-commerce (25% growth), health tech (19%), and travel, transportation, and logistics (10%) [12] - Digital and omnichannel services represented 82% of total revenue, up from 77% in the prior year, with a growth rate of 25% [12][18] - Offshore revenue grew 17% year-over-year, comprising 49% of total revenue, while onshore revenue increased 13% [12][18] Market Data and Key Metrics Changes - The fintech vertical's revenue share decreased to 10.6% from 13.7% year-over-year, while retail and e-commerce increased to 25.3% [17] - The company experienced growth in both onshore and offshore regions, with onshore revenue making up 24% of total revenue [18] Company Strategy and Development Direction - The company has transitioned to BPO 3.0, focusing on AI solutions to enhance customer experience and operational efficiency [6][10] - The strategy emphasizes a blend of culture, technology (WaveX), and analytics to outperform competitors and capture market share [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue outperforming the market, citing a strong balance sheet with zero net debt and robust free cash flow generation [9][10] - The company anticipates revenue for FY 2026 to be between $590 million and $610 million, with adjusted EBITDA expected to range from $75 million to $79 million [24] Other Important Information - The company has successfully entered the Indian market, marking a significant milestone in its expansion strategy [8] - Capital expenditures for FY 2025 were $18 million, up from $9 million in the prior year, driven by demand in high-margin regions [22] Q&A Session Summary Question: Insights on Q4 performance and any one-time impacts - Management confirmed that the growth in Q4 was sustainable and driven by market share gains and strong operational performance [30] Question: Commentary on the impact of Gen AI - Management indicated that while there are opportunities for automation, owning the entire customer journey is crucial, and the company is well-positioned to leverage AI solutions [35][36]

Financial Data and Key Metrics Changes - For the three months ending July 31, 2025, consolidated revenue was $13.8 million, down from $15.1 million for the same period in the prior fiscal year, indicating a decrease of approximately 8.6% [12] - Consolidated net income for the same period was approximately $634,000, or $0.07 per share, compared to approximately $2.4 million, or $0.25 per share for the same period of the prior fiscal year, reflecting a significant decline in profitability [17] - The company's fully funded backlog at the end of July 2025 was approximately $71 million, slightly up from approximately $70 million for the previous fiscal year ended April 30, 2025 [17] Business Line Data and Key Metrics Changes - Revenue from commercial and U.S. government satellite programs was approximately $6.5 million, or 47% of total revenue, down from $8.3 million, or 55%, in the same period of the prior fiscal year [12] - Revenues from non-space U.S. government and DOD customers were $6.9 million, up from $6.3 million in the same period of the prior fiscal year, accounting for approximately 50% of consolidated revenues compared to 42% for the prior fiscal year [13] - Other commercial and industrial revenues decreased to approximately $439,000 from approximately $544,000 in the prior fiscal year [13] Market Data and Key Metrics Changes - The company noted that customer-driven delays on key programs pushed revenue recognition out of the fiscal first quarter, but these delays are not expected to result in overall program revenue reductions [4] - The company is actively bidding on new programs, with expectations of meaningful new business in the near term, particularly in space and defense markets [5][6] Company Strategy and Development Direction - The company has transformed into a larger, more profitable, and cash-generative entity that invests in future growth while rewarding shareholders [5] - The recent opening of an engineering facility in Boulder, Colorado, aims to support ongoing programs and new technology efforts, particularly in quantum sensing [6] - The company is pursuing external government funding for research and development, especially in quantum sensing, which is identified as a large emerging market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the issues faced in the first quarter related to customer-led delays are now resolved, with significant progress being made towards a larger book of business [4] - The company maintains a debt-free balance sheet and a strong working capital position, indicating confidence in its liquidity to meet operational needs [9][17] - Management highlighted the increasing global focus on resilient timing technologies, validating the company's strategic importance in the defense sector [11] Other Important Information - The company announced a $20 million authorization for share repurchase, demonstrating its commitment to returning cash to shareholders while investing in future growth [10] - The company plans to host its second annual Quantum Sensing Summit in New York City, aimed at exploring emerging technologies and reinforcing its strategic role in advancing quantum technology [7] Q&A Session Summary Question: Update on various clock technologies and timelines for productization - Management confirmed that atomic clocks are available off the shelf, with prototypes of the Mercury Ion atomic clock being produced in collaboration with the Jet Propulsion Laboratory, expected for low-rate production in about a year [20][21] Question: Interest in applying quantum sensing technology outside of space applications - Management stated that while they are not directly investing in quantum computing, they are aware of its developments and are focusing on quantum sensing technologies that can contribute quickly [23][25]

Kestra Medical Technologies (NasdaqGS:KMTS) Q1 2026 Earnings Call September 11, 2025 04:30 PM ET Speaker2Afternoon and welcome to the Kestra Medical Technologies earnings conference call. This conference call is being recorded for replay purposes. We will be facilitating a question and answer session following prepared remarks from management. At this time, all participants are in listen-only mode. I would now like to turn the call over to Neil Bhalodkar, Vice President of Investor Relations, for introducto ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $80.9 million, an increase of $2 million or 2.5% year-over-year, and up $11.3 million or 16.2% quarter-over-quarter [17] - Adjusted EBITDA for Q2 2025 was $3.6 million, or 4.4% of revenue, compared to $13.7 million, or 17.4% of revenue in Q2 2024 [19] - Free cash flow for Q2 2025 was negative $26.5 million, compared to negative $4.5 million in Q2 2024 [20] Business Line Data and Key Metrics Changes - Subscriber growth ended Q2 with 146,400 active subscribers, a 13.4% year-over-year increase, accelerating from -4.9% in Q4 2024 and 0.9% in Q1 2025 [8][15] - Subscription and Reserve rental revenue increased by $0.7 million, or 1% year-over-year in Q2 2025, primarily due to higher average subscribers [18] - Revenue share units from existing partners were up 40% year-over-year, and total revenue share units increased by 119% year-over-year [10] Market Data and Key Metrics Changes - Engagement with new inventory in Q2 overperformed last year across every key metric, including share of views up 84% year-over-year and hearts per style up 15% year-over-year [10] - Organic channel acquisitions had the best performing quarter in years, with engagement on social media channels up 796% and views up 175% year-over-year [12] Company Strategy and Development Direction - The company announced a recapitalization plan aimed at reducing total debt from over $340 million to approximately $120 million, which is expected to strengthen the balance sheet and provide financial flexibility [4][5] - The strategy focuses on capturing subscribers through a new inventory strategy, increased product innovation, and improved customer connection [6][8] - The company plans to continue adding inventory and enhancing customer experience, with a focus on organic growth through community engagement [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the company is on the right track to generate strong medium and long-term performance, with improved momentum evidenced by subscriber growth [21] - The company expects revenue for Q3 2025 to be between $82 million and $84 million, with adjusted EBITDA margins projected to be between negative 2% and 2% of revenue [20] - Management believes the recapitalization transaction is a key step forward for continued investment in customer experience [16] Other Important Information - The company implemented a price increase for subscription plans on August 1, with an average increase of $2 per item, and the most popular plan increasing from $144 to $164 per month, a 14% increase [13][14] - The company is excited about the future and views the recapitalization as a new chapter, akin to an "IPO 2.0" [5][6] Q&A Session Summary Question: What are the expectations for subscriber growth moving forward? - Management indicated that they expect double-digit growth in ending active subscribers for fiscal year 2025 [20] Question: How will the recapitalization impact the company's operations? - The recapitalization is expected to significantly reduce debt, lower interest expenses, and provide cash infusion for continued investment in inventory and customer experience [16] Question: What are the anticipated challenges in the upcoming quarters? - Management acknowledged that free cash flow is expected to be lower than negative $40 million due to costs associated with the recapitalization transaction [20]

Optical Cable (NasdaqGM:OCC) Q3 2025 Earnings Call September 11, 2025 04:15 PM ET Company ParticipantsNeil Wilkin - President and CEOTracy Smith - Senior VP and CFOConference Call ParticipantsNone - AnalystOperatorHello, my name is David, and I'll be your conference operator today. At this time, I'd like to welcome you to Optical Cable Corporation's third quarter of fiscal year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, the ...

Optical Cable (NasdaqGM:OCC) Q3 2025 Earnings Call September 11, 2025 04:15 PM ET Company ParticipantsNeil Wilkin - President and CEOTracy Smith - Senior VP and CFOConference Call ParticipantsNone - AnalystOperatorHello, my name is David, and I'll be your conference operator today. At this time, I'd like to welcome you to Optical Cable Corporation's Third Quarter of Fiscal Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, the ...

Financial Data and Key Metrics Changes - Net sales increased by 22.8% in Q3 2025 to $19.9 million compared to $16.2 million in Q3 2024, and increased by 12.8% to $53.2 million for the first nine months of fiscal 2025 compared to $47.2 million in the same period last year [6][9] - Gross profit rose by 61.2% to $6.3 million in Q3 2025 from $3.9 million in Q3 2024, with gross profit margin increasing to 31.7% from 24.2% [10][11] - The company recorded net income of $302,000 or $0.04 per share in Q3 2025, compared to a net loss of $1.6 million or $0.20 per share in Q3 2024 [12][13] Business Line Data and Key Metrics Changes - Sales increases were noted in both enterprise and specialty markets, contributing to the overall growth in net sales [9][40] - SG&A expenses increased to $5.7 million in Q3 2025, but as a percentage of net sales, it decreased to 28.8% from 32.3% in the prior year [11][12] Market Data and Key Metrics Changes - The sales order backlog at the end of Q3 2025 was $7.1 million, slightly down from $7.2 million in Q2 2025, but higher than previous quarters [10][21] - The company is experiencing broad growth across both U.S. and international markets [40] Company Strategy and Development Direction - The company entered a strategic collaboration with Laterra to expand product offerings in the enterprise and data center sectors, with Laterra holding a 7.24% stake in OCC [7][28] - The focus remains on disciplined execution and capitalizing on growth opportunities to drive shareholder value [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the industry and the strength in targeted markets, despite not being directly involved in hyperscale data centers [42][44] - The company is not currently planning significant investments in additional capacity but is filling open positions to meet anticipated demand [25][56] Other Important Information - The gross profit margin is heavily influenced by product mix and operating leverage, which has improved due to higher sales volumes [11][52] - The company is in the process of improving its website to better showcase its data center products [61] Q&A Session Summary Question: Can you comment on what you're seeing in your traditional markets? - Management noted strength in targeted markets, benefiting from a strong market position reflected in top-line results [15] Question: Can you comment on the impact of AI? - AI is positively impacting the industry, particularly in the growth of hyperscale data centers, although OCC's products are more suited for tier two and tier three data centers [16][18] Question: Does the decline in backlog indicate weaker demand? - Management described the decrease in backlog as minimal and not indicative of weaker demand, attributing it to timing of shipments [20][22] Question: Why was the gross margin lower despite higher sales? - The gross profit margin varies based on product mix, which impacted the comparison between quarters [23] Question: Will you need to increase capacity? - The company believes it has sufficient capacity to meet anticipated demand without significant new investments [25] Question: Is the current OpEx level sustainable? - Management indicated that operating expenses should be sustainable at current and higher sales levels due to operating leverage [26] Question: How will Laterra add value to OCC? - The collaboration is expected to expand product offerings and solutions, benefiting both companies [29] Question: What is the typical ticket size for tier two or tier three data centers? - Management did not provide specific forecasts but noted that opportunities vary widely [33] Question: Will Laterra invest in sales and marketing for the partnership? - Laterra has begun marketing efforts, including participation in trade shows, but specific strategies were not disclosed [30][31] Question: How is the collaboration with Laterra expected to drive production volume? - The collaboration is anticipated to create more production volume, leveraging OCC's existing capacity [55]