Q3 2024 CSP Inc Earnings Call Transcript
Key Points
- CSP Inc (CSPI) reported a 10% increase in service revenue, contributing to a 150 basis point improvement in gross margin percentage over the prior year.
- The AZT PROTECT product line has received significant industry recognition, winning multiple awards, including the 2024 Fortress Cybersecurity Award.
- The company has successfully expanded its partnership network, including a new integration partnership with Forescout Technologies and a reseller agreement with Worldwide Technology.
- CSP Inc (CSPI) has hired Greg Pysher, a seasoned sales veteran, to lead the AZT PROTECT business, which is expected to enhance sales team performance and drive growth.
- The Technology Solutions (TS) business continues to perform well, generating the majority of the quarter's revenue and supporting the development of AZT PROTECT.
- CSP Inc (CSPI) reported a decrease in revenue to $13.1 million from $17.7 million in the same quarter last year, attributed to the previous year's backlog conversion.
- The company reported a net loss of $185,000 for the quarter, compared to a net income of $2.5 million in the prior year.
- Integration of AZT PROTECT into the Forescout platform is expected to take four to six months, indicating a lengthy process before realizing potential benefits.
- The sales cycle for larger enterprise contracts remains long, which could delay revenue recognition from these opportunities.
- The company faces challenges in scaling its sales force and partner network, particularly in the operational technology (OT) space, due to resource constraints.
Good morning, everyone, and welcome to the CSPi's third-quarter fiscal year 2024 conference call. (Operator Instructions)
It is now my pleasure to turn the floor over to your host, Michael Polyviou. Sir, the floor is yours.
Thank you, Matt. Hello, everyone, and thank you for joining us to review CSPi's fiscal 2024 third-quarter results, which ended June 30, 2024. With me on the call today is Victor Dellovo, CSPi's Chief Executive Officer; and Gary Levine, CSPi's Chief Financial Officer. After Victor and Gary conclude their opening remarks, we'll then open the call for questions. (Event Instructions)
Statements made by CSPi's management on today's call regarding the company's business that are not historical facts may be forward-looking statements as terms identified in federal securities laws.
The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue as well as similar expressions are intended to identify forward-looking statements. Forward-looking
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