Victor Dellovo reported that fourth quarter and full year financial results met expectations, with recurring revenue growing to 17% of total sales. The Technology Solutions business generated $12.7 million in sales in Q4. A large cruise ship order was signed for Professional Services, reflecting momentum in the Ocean Freightliner market.
The company saw increased demand for cloud services, with a dozen active projects. Revenue from HPP in Q4 was $0.4 million, mainly from ARIA customers. The sales effort for AZT PROTECT was transitioned to focus on Rockwell Automation and distribution partners, with significant progress made in building the market.
A Fortune 500 Electric Energy Producer selected ARIA Cybersecurity, AZT PROTECT to protect critical OT infrastructure, leading to potential future orders. The sales team expanded leads for AZT PROTECT to over 100 through various industry events and trade shows. The company aims for increased sales in fiscal 2025 by working closely with distributors.
The interest in AZT PROTECT at trade shows is supported by nine industry awards received. The product’s ability to prevent zero-day attacks without relying on cloud updates has been well-received by industrial automation vendors. The company is working with Rockwell Distributor Partners to bring this alternative approach to industrial control system protection to the market.
The company has completed one agreement and is in the process of three others with top-tier US-based Rockwell distributors. The team is mapping out accounts to approach together for future sales. AZT PROTECT shows potential for growth in fiscal 2025 with partnerships and market momentum. Fourth-quarter financial performance reveals revenue of $13 million, a decrease from $15.3 million in 2023. Gross profit was $3.7 million, with a net loss of $1.7 million. Cash and cash equivalents are at $30.6 million. A $0.03 per share quarterly dividend was approved. Engineering and development expenses increased to $793,000. Service revenue represented $4.0 million. Gross profit for the fiscal year was $18.9 million. Net loss for the fiscal year was $0.3 million. Over a dozen proof-of-concept tests are ongoing, with new POCs starting in the new year. The company has three Fortune 500 clients utilizing AZT PROTECT and a pharmaceutical company and government agency using ACT PROTECT. A new win is expected next week. The TS division is profitable, funding AZT R&D. Myricom sales declined due to product discontinuation. Recurring revenue growth is impressive, aiming for 10-15% yearly growth. The earnings per share estimate is $0.56. Investors need patience with partnerships in Australia, the Middle East, and the US. Proof-of-concepts are ongoing, with progress varying by partner. Government deals may yield more opportunities, with potential deals expected in the next 90 days. Contracts with Fortune 500 companies are in the millions, with rollout timelines dependent on customers. Conversations with NVIDIA for AZT are ongoing, focusing on robotics. Happy Holidays from investors to the team. Victor Dellovo stated there will be E2D next year, possibly in Q1, with one more in 2025. UCaaS contracts are growing, with new clients and three-year contracts. The pipeline for UCaaS looks good, with consistent customer growth and a focus on recurring revenue. Professional service contracts are high margin and multiyear deals. Microsoft contracts are different. Happy Holidays were exchanged at the end of the call. The Motley Fool has no position in any stocks mentioned. 1. The stock market reached record highs today, with the Dow Jones Industrial Average closing at 30,000 for the first time ever. This milestone comes amid positive news regarding potential COVID-19 vaccines and hopes for economic recovery in 2021.
2. The United States reported a record-breaking 200,000 new COVID-19 cases in a single day, bringing the total number of cases in the country to over 12 million. Hospitals are becoming overwhelmed, and health officials are urging the public to take precautions to slow the spread of the virus.
3. In a surprising move, President-elect Joe Biden has selected Janet Yellen to be the next Treasury Secretary. Yellen, the former chair of the Federal Reserve, would be the first woman to hold this position if confirmed by the Senate. This decision has been met with widespread praise from both Democrats and Republicans.
4. Retail giant Walmart announced that it will be launching a new subscription service called Walmart+, which will compete with Amazon Prime. For $98 per year, customers will have access to free delivery, discounts on fuel, and other perks. The service is set to launch on September 15th.
5. The European Union has reached a historic agreement on a €750 billion coronavirus recovery fund, aimed at helping member countries recover from the economic impact of the pandemic. The fund will be financed through joint borrowing and will be distributed as grants and loans to member states.
Read more at Yahoo Finance: CSP (CSPI) Q4 2024 Earnings Call Transcript