Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CSP Inc (CSPI, Financial) met its internal budget and expectations with a fiscal second quarter revenue of $13.1 million.
- The company signed six new customers for its AZT PROTECT product, indicating growing traction in the OT marketplace.
- A new reseller partnership with Rexel USA was established, enhancing distribution capabilities for AZT PROTECT.
- CSP Inc (CSPI) maintains a robust balance sheet with over $29 million in cash and cash equivalents.
- The Technology Solution business generated $12 million in revenue and continues to be profitable, with ongoing contracts in the cruise line and ocean freighter liner markets.
Negative Points
- Service revenue declined compared to the previous year due to the absence of a single multimillion-dollar deal.
- Gross profit decreased to $4.2 million or 32% of sales, down from $6.2 million or 45.3% of sales in the prior year, due to higher component costs.
- The company reported a loss of $108,000 or $0.01 per diluted share for the fiscal second quarter.
- Price increases on products purchased for resale and potential customer spending reductions pose challenges for future operations.
- Some potential customers in the cell tower market have not responded to outreach efforts, indicating potential hurdles in market expansion.
Q & A Highlights
Q: Can you provide more details on the backlog for AZT and the potential size of these contracts?
A: Victor Dellovo, President and CEO, stated that the pipeline is growing with new customers, and it is segmented into four different stages. However, he preferred not to comment further on specific numbers or potential contract sizes.
Q: Is the cruise ship and freighter business continuing to grow, or is it steady?
A: Victor Dellovo, President and CEO, mentioned that the business is steady. The schedule depends on when ships are available for modifications, which is unpredictable as it aligns with their drydock schedules.
Q: Regarding the cell tower contract, is there something unique about CSPi's solution that can be applied to other cell tower companies?
A: Victor Dellovo, President and CEO, explained that CSPi's solution is unique due to its minimal space and CPU power requirements, which are crucial for cell towers with limited resources. The solution's compatibility with Linux and its updated software also make it attractive.
Q: Are there other cell tower companies with similar needs that CSPi can target?
A: Victor Dellovo, President and CEO, confirmed that CSPi is reaching out to other companies with similar needs, although not all are responding immediately. They continue to pursue these opportunities.
Q: Is there still a sizable backlog of cloud-based projects?
A: Victor Dellovo, President and CEO, confirmed that the backlog has grown from 14 projects at the end of last year to over 20 projects currently.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
