Vecima Networks Inc (VNWTF) Q4 2024 Earnings Call Transcript Highlights:

• Revenue: $87.5 million for Q4, up 16% year-over-year and 9% sequentially.

• Full-Year Revenue: $291 million for fiscal 2024.

• Adjusted EBITDA: $53.8 million for fiscal 2024.

• Adjusted Earnings Per Share: $0.89 for fiscal 2024.

• Video and Broadband Solutions Segment Revenue: $236.1 million for fiscal 2024.

• Content Delivery and Storage Segment Revenue: $48.2 million for fiscal 2024.

• Telematics Segment Revenue: $1.8 million for Q4, up 22% year-over-year.

• Gross Margin: 46.5% for Q4, down from 50.5% year-over-year.

• Operating Income: $12.2 million for Q4, up 125% year-over-year.

• Net Income: $8.3 million for Q4, up from $5.1 million year-over-year.

• Cash Flow from Operations: $36.1 million for Q4, up from $4.6 million year-over-year.

• Working Capital: $84.9 million at the end of Q4.

• Dividend: $0.055 per common share, payable on November 4, 2024.

Release Date: September 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vecima Networks Inc (VNWTF) achieved record revenue of $87.5 million in Q4, up 16% year-over-year and 9% sequentially.

• The company saw strong demand for its EntraOptical 10-gig EPON products, contributing to record segment performance in both Q3 and Q4.

• Vecima Networks Inc (VNWTF) introduced and ramped up deliveries of new products like the ERM3 Remote-PHY devices and EN9000 Generic Access Platform, which are expected to drive future growth.

• The Content Delivery and Storage Segment saw a 10% increase in higher-margin services revenue, contributing to a strong segment gross margin of 56.7%.

• The Telematics segment achieved a 22% year-over-year sales increase in Q4 and maintained a strong gross margin of 67.5%.

Negative Points

• The Content Delivery and Storage Segment experienced an 8% decline in sales year-over-year.

• R&D expenses increased by $1.9 million to $11 million in Q4, reflecting higher capitalized development costs.

• Sales and marketing expenses rose by $700,000 to $8.5 million, driven by higher salaries and trade show participation costs.

• The company recorded a foreign exchange loss of $2 million in Q4, negatively impacting the bottom line.

• Gross margin percentage decreased to 46.5% in Q4 from 50.5% in the same period last year, largely due to a different product mix.

Q & A Highlights

Q: Can you give us an update on how your vCMTS trials with the Tier 1 customer are progressing? When does it move to field trials, and when is the first phase of revenues expected? A: We are making solid progress on our vCMTS lab trials with the lead Tier 1 customer, which has been ongoing through calendar ’24. While I can’t specify the exact timing for transitioning to field trials, we anticipate following the typical cadence of lab trials, friendly field trials, and market field trials through fiscal ’25. We aim for potential revenue contribution in fiscal ’25, marking a significant move in accessing the vCMTS market segment.

Q: Aside from the Tier 1 customer, how many other operators are trialing your…