Q1 2024 Vislink Technologies Inc Earnings Call

Operator: Good morning. Welcome to Vislink's first quarter 2024 earnings conference call. My name is Marlies, and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Mickey Miller, and CFO, Mike Bond, who will report results for the first quarter ended March 31. A copy of the press release is available on the company's website. Before we begin the call, I would like to provide Vislink's Safe Harbor Statement, which includes cautions regarding forward-looking statements made during this call.

Good morning, welcome to those links first score at 2024 earnings Conference call.

Mar lease: My name is Mar lease and I will be your operator for today's call.

Speaker Change: Joining us today for today's presentation are the company's CEO, making Miller and CFO, Mike born who will report the results for the first quarter ended March 31st.

Speaker Change: 'twenty 'twenty four a copy of the press release is available on the company's website.

Operator: Management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Therefore, any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, our examination of operating trends and financial expectations, are based upon the company's current estimates and various assumptions.

Speaker Change: Before we begin the call I would like to provide this link safe Harbor statement, which includes cautions regarding forward looking statements made during this call.

Speaker Change: Management will make statements during the call that include forward looking statements within the meaning of the federal Securities laws.

Speaker Change: Which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Speaker Change: Any statements contained in this call that are not statements of historical facts should be deemed to be forward looking statements.

Speaker Change: All forward looking statements, including without limitation, our examination of operating trends and financial expectations are based upon the company's current estimates and various assumptions.

Operator: The statements involve material risk and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by this forward-looking statement. Accordingly, you should not rely on this statement. For a list of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. Vislink disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by this forward looking statements.

Speaker Change: Accordingly, you should not rely on those statements.

Speaker Change: For a list of the risks and uncertainties associated with the company's business. Please see the company's filings with the Securities and Exchange Commission.

Speaker Change: This link disclaims any intention.

Speaker Change: Or obligation, except as required by law to update or revise any financial projections or forward looking statements.

Speaker Change: Whether because of new information future events or otherwise.

Operator: This conference call contains time-sensitive information that is accurate only as of the live broadcast this morning, May 15, 2024. And now, I would like to turn the call over to Vislink's CEO, Mr. Mickey Miller. Sir, please go ahead.

Speaker Change: This conference call contains time sensitive information that is accurate only as of the live broadcast. This morning may 15th 'twenty 'twenty four.

Speaker Change: And now I would like to turn the call over to this link CEO Mr. Mickey Miller.

Speaker Change: Sir Please go ahead.

Carleton M. Miller: Thank you, Operator, and thank you, everyone, for joining us today. This morning, we filed our 10-K with the SEC and issued a press release that provided our financial results for the first quarter ended March 31st, 2024, along with key business accomplishments. As a brief overview of today's call, I'll start by discussing our first quarter performance and highlighting our progress towards our three-year financial goals. I'll then pass the call to Mike to discuss our financial results.

Carleton M. Miller: Thank you operator, and thank you everyone for joining US today. This morning, we filed our 10-K with the SEC and issued a press release that provided our financial results for the first quarter ended March 31, 2024, along with key business accomplishments.

As a brief overview for today's call I'll start by discussing our first quarter performance and highlighting our progress towards our three year financial goals.

Carleton M. Miller: Has the call to Mike to discuss our financial results afterwards, I'll come back to discuss recent updates within our key target markets product developments and updates on our go to market strategies.

Carleton M. Miller: Afterward, I'll come back to discuss recent updates in our key target markets, product developments, and updates on our go-to-market strategy. With that, let me begin by expressing our enthusiasm about the strides we've made and our optimism for Vislink. The first quarter of 2024 has further solidified Vislink's foundation, demonstrating substantial financial and operational gains directly resulting from the strategic initiatives that we implemented two years ago to increase operating leverage. In Q1, we achieved a 20% year-over-year revenue increase, reaching $8.6 million.

With that let me begin by expressing our enthusiasm about the strides we've made in our optimism for <unk>.

Carleton M. Miller: The first quarter of 'twenty 'twenty four has further solidified does linked foundation, demonstrating substantial financial and operational gains.

Carleton M. Miller: Correctly, resulting from the strategic initiatives that we implemented two years ago to increase operating leverage.

Carleton M. Miller: In Q1, we achieved a 20% year over year revenue increase reaching $8 6 million.

Carleton M. Miller: This growth was primarily driven by robust sales to MilGov customers, fueled by the adoption of our Aerolink platform and opportunities opened by the BMS assets acquisition. These factors, combined with increased governmental investment given the current geopolitical landscape, have reinforced our market presence. Our continuous focus on innovation has led to recent product rollouts like Click and LiveLink. Vislink's newer products are strategically designed to serve the military, government, sports, and media sectors

Carleton M. Miller: This growth was primarily driven by robust sales to 1000 Gov customers fueled by the adoption of our Aero linked platform and opportunities opened by the BMS asset acquisition.

Carleton M. Miller: These factors combined with increased governmental.

Carleton M. Miller: Investment given the current geopolitical landscape have reinforced our market presence.

Carleton M. Miller: Our continuous focus on innovation has led to recent product rollouts like click and lively.

Carleton M. Miller: There's like newer products are strategically designed to serve the military government sports and media sectors, both click and livelihoods have been met with strong early interest in it.

Carleton M. Miller: Both Click and LiveLink have been met with strong early interest, and we expect that these higher-margin products will enhance both our top and bottom line financial results as sales ramp up. We are demonstrating continued progress in developing Link Matrix to fit the needs and preferences of customers in our target market. Our efforts to promote services and integrate our link matrix software into our hardware offerings are proving successful, as demonstrated by service and software revenue growing to represent 16 percent of total revenue in the first quarter, up from 13 percent in 2023.

Carleton M. Miller: We expect that these higher margin products will enhance both our top and bottom line financial results.

Carleton M. Miller: Sales ramp up.

Carleton M. Miller: We are demonstrating continued progress in developing linked matrix to fit the needs and preferences of customers in our target market.

Carleton M. Miller: Our efforts to promote services and integrate our linked matrix software and our hardware offerings are proving successful as demonstrated by service and software revenue growing to represent 16% of total revenue in the first quarter up from 13% in 2023.

Carleton M. Miller: Additionally, our Air to Anywhere AVDS platform and the introduction of DragonFly 5 are poised to drive further growth. We are intensifying our sales and marketing initiatives, which are showing traction, as evidenced by our newer products becoming an increasing part of our total revenue. We anticipate that the products we introduced over the last two years will approach nearly 70% of total revenue this year. This strategy not only enhances our value proposition across various use cases but also unlocks higher-margin revenue channels through our device management ecosystem link matrix.

Carleton M. Miller: Additionally, our air to anywhere ABS platform and the introduction of dragonfly five.

Carleton M. Miller: Poised to drive further growth.

Carleton M. Miller: We are intensifying, our sales and marketing initiatives, which are showing traction as evidenced by our newer products, becoming an increasing part of our total revenues.

Carleton M. Miller: We anticipate that the products we introduced over the last two years will approach nearly 70% of total revenue this year.

Carleton M. Miller: This strategy not only enhances our value proposition across various use cases.

Carleton M. Miller: It also unlocks higher margin revenue channels through our device management ecosystem linked matrix.

Carleton M. Miller: Looking ahead, we are optimistic about our trajectory, as we are working with our largest weighted sales pipeline since the pandemic, valued at $48 million entering the second quarter. Additionally, we are actively engaging in opportunities to leverage our existing solutions to expand our involvement in new markets, such as drone command and control or drone C2. We are invigorated by the momentum we've built and are continuing to ramp up our sales and marketing efforts to support our recent product launch.

Carleton M. Miller: Looking ahead, we are optimistic about our trajectory.

Carleton M. Miller: As we are working with our largest weighted sales pipeline since the pandemic.

Carleton M. Miller: And at $48 million entering the second quarter.

Carleton M. Miller: Additionally, we are actively engaging in opportunities to leverage our existing solutions to expand our involvement in new markets, such as drone command and control or drone seem too.

Carleton M. Miller: We are invigorated by the momentum we built and are continuing to ramp up our sales and marketing efforts to support our recent product launches.

Carleton M. Miller: As we proceed, we are on track to achieve cash flow neutrality by the end of 2024, and our aim is to be cash flow positive by 2025. We are continuously evolving our operations, and we are proactively identifying areas for operational enhancements and cost-saving measures. These ongoing efforts are crucial as we work to drive further revenue growth and enhance profitability. Before I go further, I'll pass the call over to our CFO, Mike Bond, to provide a detailed overview of our financial results for the

As we proceed we are on track to achieve cash flow neutrality by the end of 2024, and our aim to be cash flow positive by 2025.

Carleton M. Miller: We are continuously evolving our operation and we are proactively identifying areas for operational enhancements and cost saving measures.

Carleton M. Miller: These ongoing efforts are crucial as we work to drive further revenue growth and enhanced profitability.

Speaker Change: Before I go further I will pass the call over to our CFO, Mike <unk> to provide a detailed overview.

The results there.

Michael C. Bond: For the first quarter Mike.

Michael C. Bond: Thank you, Mickey, and good morning, everyone. Looking at our financial results for the first quarter, our total revenue increased to $8.6 million, up from $7.2 million in the prior year period and a sequential increase from $8.1 million in Q4 2023. The increase in revenue was primarily driven by a jump in sales to military and government markets. Gross profit increased to $4.8 million, up from $3.7 million in the prior year period. Gross profit margin for the quarter was 59%, up from 54% in the prior year period. The year-over-year improvement in gross margin reflects greater operating efficiency and a higher mix of software and services revenue. Total expenses were $10.2 million, compared to $9.5 million in the prior year period.

Michael C. Bond: Thank you Mickey and good morning, everyone.

Michael C. Bond: This change is due to our increased focus on sales and marketing as we push to expand our reach and support our new product line. Turning now to our profitability measure, operating loss improved to 1.6 million, down from a loss of 2.3 million in the prior year period. This improvement is a direct result of increased revenue and higher margins demonstrating the effectiveness of our strategic focus on more profitable product categories. Net loss attributable to common shareholders improved to $1,000,000 or $0.39 per share from a loss of $1.8 million or $0.80 per share in the prior year period.

Michael C. Bond: Looking at our financial results for the first quarter.

Michael C. Bond: Our total revenue increased to $8 6 million up from $7 2 million in the prior year period, and a sequential increase from $8 1 million in Q4 2023.

Michael C. Bond: The increase in revenue was primarily driven by a jump in sales to military and government markets.

Michael C. Bond: Gross profit increased to $4 8 million up from $3 7 million in the prior year period.

Michael C. Bond: Profit margin for the quarter was 59% up from 54% in the.

Speaker Change: Prior year period, the year over year improvement in gross margin reflects greater operating efficiency and a higher mix of software and services revenue.

Speaker Change: Total expenses were $10 2 million compared to $9 5 million in the prior year period.

Speaker Change: This change is due to our increased focus on sales and marketing as we push to expand our reach and support our new product lines.

Speaker Change: Turning now to our profitability measures.

Speaker Change: Operating loss improved to $1 6 million down from a loss of $2 3 million in the prior year period.

Speaker Change: This improvement is a direct result of our increased revenue and higher margins demonstrating the effectiveness of our strategic focus on more profitable product categories.

Speaker Change: Net loss attributable to common shareholders improved to 1 million or <unk> 39 per share from a loss of $1 8 million or 80 cents per share in the prior year period.

Michael C. Bond: This improvement underscores our strategic cost management and ongoing efforts to enhance our operational efficiency. Moving now to our balance sheet, as of March 31, 2024, our cash and short-term investments stood at $13.8 million, compared to $14.2 million at December 31, 2023. Improving cache performance remains a top priority for us, and we have shown clear improvements in cache usage in Q1.

Speaker Change: This improvement underscores our strategic cost management and ongoing efforts to enhance our operational efficiency.

Speaker Change: Moving now to our balance sheet.

Speaker Change: As of March 31st 2024, our cash and short term investments stood at $13 8 million compared to $14 2 million at December 31, 2023 <unk>.

Speaker Change: Improving cash performance remains a top priority for us and we have shown clear improvements in cash usage in Q1.

Michael C. Bond: We maintain a robust working capital of $31.2 million at the end of the first quarter, compared to $31.8 million at December 31, 2023. We expect to see continued improvements in our working capital terms in the coming quarters. Our strong balance sheet supports our operational flexibility, enabling us to actively pursue strategic acquisitions and partnerships, especially in the defense and public safety sector. These moves aim to expand our capabilities and market reach within the MilGov market.

Speaker Change: We maintain a robust working capital of $31 2 million at the end of the first quarter compared to $31 8 million at December 31 2023.

We expect to see continued improvements in our working capital turns in the coming quarters.

Speaker Change: Our strong balance sheet supports our operational flexibility, enabling us to actively pursue strategic acquisitions and partnerships, especially in the defense and public safety sectors. These moves aim to expand our capabilities and market reach within the mill golf markets.

Michael C. Bond: In summary, our efforts over the past two years to restructure our cost base, redesign our product line, integrate two key acquisitions, and Rejuvenate our sales channels have begun to bear fruit, making a significant improvement in our profitability results. As we progress into 2024, these initiatives are expected to further solidify our positive growth trajectory. I'll now turn it back to Mickey.

Speaker Change: In summary, our efforts over the past two years to restructure our cost base redesign our product line integrate two key acquisitions and rejuvenate our sales channels have begun to bear fruit, making a significant improvement in our profitability results.

Speaker Change: As we progressed into 'twenty 'twenty four these initiatives are expected to further solidify our positive growth trajectory.

Speaker Change: This concludes my prepared remarks, I'll now turn it back to make them.

Carleton M. Miller: Thanks Mike. Returning to operational updates, in our MilGov markets, we continue to show impressive growth driven largely by the sales momentum of our Aerolink platform solution. This growth is further propelled by the successful integration of the BMS asset. This quarter, our focus on developing long-term relationships with OEMs is helping to build more predictable revenue streams for the future. Notably, we successfully achieved approved supplier status with three new OEM partners.

Speaker Change: Thanks, Mike turning to operational updates.

Speaker Change: And our 1000 Gov markets, we continue to show impressive growth driven largely by the sales momentum of our Airlink platform solutions. This growth is further propelled by the successful integration of the BMS assets. This quarter, our focus on developing long term relationships with Oems is helping to build more predictable revenue streams for the future.

Speaker Change: Notably we successfully achieved approved supplier status with three new OEM partners. In addition to our airlink platform, our air to anywhere offering and labeling introduction are driving new revenue with 1000 Gov customers.

Carleton M. Miller: In addition to our Aerolink platform, our Air to Anywhere offering and LiveLink introduction are driving new revenue with MilGov customers. These include a prominent European police department deploying LiveLink to bring live video from the field to help drive more proactive decisions and allocate resources more efficiently. In the live production markets, we've maintained a solid performance with revenue contributions consistent with the prior year period. This stability reflects continued demand for our product. With events like the Olympics on the horizon, we expect this trend to continue.

Speaker Change: These included a prominent European police department deploying lively to bring live video from the field to help drive more proactive decisions and allocate resources more efficiently.

Speaker Change: In the live production markets, we maintained a solid performance with revenue contributions consistent with the prior year period.

Speaker Change: This stability reflects the continued demand for our products with events like the Olympics on the Horizon. We expect this trend to continue.

Carleton M. Miller: Our involvement in significant industry events like the A2RL race series, which attracted 30,000 fans, underscores the potential for future enhancements and broader applications in VR and AR experiences. Now, turning to product updates. We anticipate that our new product will contribute almost all of our sales in 2026. The key driver of this growth is our AVDS Air to Anywhere platform. This platform will significantly accelerate our software and service sales in the coming years by incorporating advanced analytics capabilities that augment our existing visual solutions. This strategic focus is not just about increasing sales volume.

Speaker Change: Our involvement in significant industry events like the AQR L race series, which attracted 30000 fans underscores the potential for future enhancements and broader applications and D. R. N E R experiences.

Speaker Change: Turning to product updates.

Speaker Change: We anticipate that our new products will contribute almost all of our sales in 2026.

Speaker Change: A key driver of this growth is our a b D. S air to anywhere platform. This platform will significantly accelerate our software and service sales in the coming years by incorporating advanced analytic capabilities that augment our existing digital solutions.

Speaker Change: This strategic focus is not just about increasing sales volumes, it's about enriching the quality and functionality of our solutions, ensuring that our technology anticipates market demands.

Carleton M. Miller: It's about enriching the quality and functionality of our solutions, ensuring that our technology anticipates market demand. The introduction of DragonFly 5 and NAB 2024 represents a key strategic advancement in our product lineup. As Vislink's smallest ever transmitter, it's specifically designed for dynamic environments where mobility and compact size are critical.

Introduction of Dragonfly, five and N. B 2024 represents a key strategic advancement in our product lineup.

Speaker Change: As the visit smallest ever transmitter, it's specifically designed for dynamic environments, where mobility and compact size are critical.

Carleton M. Miller: Dragonfly 5 excels in live video capture from POV cameras, UAVs, and body-worn devices, delivering high-quality real-time video transmission in a miniature package. Moving forward, our strategy is to harness this technology to enhance sports and media broadcast experiences and integrate it into broader applications such as emergency response, surveillance, and more. In line with our strategic expansion, we are enhancing our solutions through AI video processing. This advancement aims to improve the detection and analysis of activities such as crowd control, drug trafficking, and border surveillance.

Speaker Change: Ragen fly five excels in live video capture from Pov cameras, Uavs and body worn devices.

Speaker Change: <unk> high quality real time video transmission and a miniature package.

Speaker Change: Moving forward our strategy is to harness this technology to enhance sports and media broadcast experiences and integrate into broader applications, such as emergency response surveillance and more.

Speaker Change: In line with our strategic expansion, we are enhancing our solutions through AI video processing. This advancement aims to improve the detection and analysis of activities such as crowd control drug trafficking and border surveillance. Additionally.

Carleton M. Miller: Additionally, in 2023, we secured cloud distribution and storage of footage for our ABDS services, ensuring data accessibility and protection. We continue to prioritize the protection of our customers' data. We are also improving our systems' remote management capabilities, including integrated eSIM provisioning services. These developments leverage our common circuit architecture and component base to enhance system scalability and quality while reducing costs, simplifying the management of our technologies, and boosting their efficiency and effectiveness in our operations. As for our go-to-market strategies, we continue to see growth potential across our four focus areas. Live video connectivity, video data transport, AVDS, and drone control and communication.

Speaker Change: Additionally, in 2023 we secured cloud distribution and storage of footage or a b D. S services, ensuring data accessibility and protection.

Speaker Change: We continue to prioritize the protection of our customers' data.

Speaker Change: We're also improving our systems remote management capabilities, including integrated E. Sim provisioning services. These developments leverage our common circuit architecture and component base to enhance system scalability and quality, while reducing costs and simplifying the management of our technologies.

Speaker Change: And boosting their efficiency and effectiveness in our operations.

Speaker Change: As for our go to market strategy, we continue to see growth potential across our four focus areas live video connectivity video data transport.

Speaker Change: S and drone control and communications and.

Carleton M. Miller: In Q1, our efforts have gained considerable traction with new product introductions driving increased market interest and trial usage. We're heavily focused on demonstrations and trials in Q2 to convert this interest into firm orders. We gain revenue traction through live connectivity and video data transport. Our bonded cellular technology plays a key role in a growing market where connected cameras from various venues and vehicles are essential.

Speaker Change: In Q1, our efforts have gained considerable traction with new product introductions driving increased market interest and trial usage, we're heavily focused on demonstrations and trials in Q2 can to convert this interest into firm orders.

Speaker Change: We gained revenue traction in live connectivity and video data transport or.

Speaker Change: Our bonded cellular technology plays a key role in a growing market where connected cameras from various venues and vehicles are essential.

Carleton M. Miller: We are advancing discussions with key OEM participants to understand their future requirements and align with Vislink's technology roadmap, ensuring that our innovations meet the evolving needs of our market. As I mentioned, we are seeing traction with Drone C2. While this is an emerging market, we expect it to be fast growing in the years ahead. We're having meaningful conversations with key industry leaders, and the feedback from the market and our OEM partners has been overwhelmingly positive, confirming the strong demand and expanding the reach of our technology suite.

We are advancing discussions with.

Speaker Change: With key OEM participants to understand their future requirements and align with those links technology roadmap.

Ensuring that our innovation to meet the evolving needs of our market.

Speaker Change: As I mentioned, we are seeing traction in drone see too well. This is an emerging market, we expect it to be fast growing in the years ahead.

Speaker Change: Having meaningful conversations with key industry leaders in the field.

Speaker Change: Feedback from the market and our OEM partners has been overwhelmingly positive confirming the strong demand and expanding the reach of our technology suite.

Carleton M. Miller: As we move forward in 2024, our strategy is finely tuned to support the recent advancements and launches in our product line. The significant role of our AVDS Air-to-Anywhere platform will accelerate the growth of our software and service-based revenue streams. This transition aims to improve the functionality and quality of our visual solutions and align with our goal to increase sales volumes across targeted markets. We remain focused on extending our reach and influence in the MilGov market.

Speaker Change: As we move forward in 2024, our strategy is finely tuned to support the recent advancements and launches and our product lines.

Speaker Change: The significant role of our Avs air to anywhere platform will accelerate the growth of our software and service based revenue streams. This transition aims to improve the functionality and quality of our visual solutions and align with our goal to increase sales volumes across targeted markets.

Speaker Change: We remain focused on extending our reach and influence in the 1000 Gov markets.

Carleton M. Miller: Our strategic efforts are bolstered by a strong sales pipeline, the largest post-pandemic backlog we've experienced, and continuous improvements in operational efficiency. These elements are key as we work to achieve cash flow neutrality by the end of 2024 and aim for positive cash flow in 2025. Looking ahead, we are energized by the positive start to the year and are dedicated to maintaining this momentum. Our solid foundation from Q1 and the ongoing strategic initiatives are poised to drive us toward meeting our ambitious targets for this year and beyond.

Speaker Change: Our strategic efforts are bolstered by a strong sales pipeline.

Speaker Change: The largest post pandemic backlog, we've experience and continuous improvements in operational efficiency.

Speaker Change: These elements are key as we work to achieve cash flow neutrality by the end of 'twenty 'twenty four and aim for positive cash flow in 2025.

Speaker Change: Looking ahead, we are energized by the positive start to the year are dedicated to maintaining this momentum.

Speaker Change: Our solid foundation from Q1, and the ongoing strategic initiatives are poised to drive us toward meeting our ambitious targets for this year and beyond.

Carleton M. Miller: As we progress, we are consistently refining our business model and are confident we will continue to reduce our costs. With a clear focus on operational excellence and market expansion, we are well positioned to capitalize on the opportunities ahead and continue driving innovation and value for our stakeholders. Operator, please provide the appropriate instruction.

Speaker Change: As we progress we are consistently refining our business model and are confident we will continue to reduce our cost base with a clear focus on operational excellence and market expansion, we are well positioned to capitalize on the opportunities ahead and continue driving the innovation and value for our stakeholders.

Speaker Change: Operator, please provide the appropriate instructions.

Operator: Thank you very much. We will now begin the question and answer session. To ask a question, you may press star and then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the key. And if at any time your question has been answered and you would like to withdraw your question, please press star then 2. Again, it's star 1 to enter the question at this time. We'll take the first question from Brian Kinstlinger from Alliance Global Partners. Brian, please go ahead.

Speaker Change: Thank you very much we will now begin the question and answer session.

Brian David Kinstlinger: Good morning. Nice results.

Speaker Change: Ask a question you May press Star then one on your Touchtone phone.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: And if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: Again, its star one to enter the question queue.

Speaker Change: At this time.

Brian David Kinstlinger: I have lots of questions. First, a finance-related question. As you look at the makeup of your pipeline and backlog, do you think the gross margin is sustainable? Or, depending on the mix of products and customer set, what is the range of gross margin investors should come to expect over the next year, year and a half? Hey Brian, good morning. I'll hit on that and then turn it over to Mike for the numbers, but you know, I think when we look at our pipeline, there are two key things or, you know, tailwinds that we see. One is the insatiable demand for live events.

Well take our first question from Bryan Kipp from Alliance Global Partners, Brian. Please go ahead.

Good morning, Nice results and I have a lots of question first financial related question.

Bryan Kipp: Look at the makeup of your pipeline and backlog do you think the gross margin is sustainable or I guess, depending on the mix of products and customer set.

Speaker Change: What is the range of gross margin.

Speaker Change: Investors should come to expect over the next year year and a half.

Brian David Kinstlinger: I think in the US, 93 of the top 100 age shows were live sporting or entertainment events, so that's strong, but then the MilGov piece is an area given, you know, the political landscape and the geopolitical landscape in which we all live, the need for safety and security. So we see a large driver there. So as we see more opportunities in that area, which typically is a little bit higher margin area for us, Mike, maybe you can give them some color on that.

Brian: Yeah, Hey, Brian Good morning, all.

Speaker Change: Oh I'll hit on that and then turn it over to Mike for the numbers, but you know I.

Speaker Change: I think when we look at our pipeline, there's two key themes, one or tailwind that we see one is the.

The insatiable demand for for live events I think in the U S 93 of the top 100 rated shows were alive sporting or.

Speaker Change: Detainment events.

Speaker Change: So that's strong but then the 1000 Gov piece is an area given you know.

The.

Speaker Change: Political landscape geopolitical landscape.

Speaker Change: That we all live in the need for safety and security So we see.

Speaker Change: A large driver there so as we see more opportunities in that area that typically is is a little bit higher margin area for us.

Speaker Change: So Mike maybe you can give him some color to that.

Speaker Change: Brian.

Carleton M. Miller: [inaudible] As we kind of move forward, we're seeing a higher mix of our newer products, as Mickey had mentioned, and as we kind of exit some of the older products, we're seeing some pretty drastic increases in our margin. So, you know, whereas in the old days, some of our older things had a high 40s, low 50s margin. Now we're seeing more in the upper 50s to low 60s. So as we can continue to put more of the new products into the mix, we're gonna start seeing high 50s, low 60s margin. Great.

Speaker Change: As we kind of move forward, we're sitting a higher mix of our newer products as Micky mentioned and as we kind of exit some of the older products.

Speaker Change: We're seeing some pretty drastic increases in our margins. So we you know, whereas in the old days some of our older things had.

Speaker Change: Yeah, Hi, forties low Fifty's margin now we're seeing more in the upper fifties low sixties. Those we can continue to put more of the more of the new products into the mix, we're going to start seeing high fifties low sixteens margin.

Carleton M. Miller: Great, that's super helpful, and then Can you talk about the upgrade cycle for the BMS customer base, which I think you talked about last quarter has some older technology. Can you size the opportunity just for that customer set?

Speaker Change: Great that's super helpful and then.

Can you talk about the upgrade cycle for the Vms customer base, which I think you talked about last quarter had some older technology can you size the opportunity just for that customer set.

Carleton M. Miller: Yeah, when we look at that customer base, given the challenges that BMS was going through, they were in a position to help those customers with that upgrade. So, what we did with a lot of the customers is work with them during a transition period. Many of these are designed into platforms, so we are working with customers to make sure they have the BMS product line to support their needs for the next 12 to 18-month period and then work with them on a transition to a newer product, which will be higher compression, higher throughputs, better video quality, and therefore, they're able to maintain their needs now and then migrate to newer technology along their product lifecycle.

Speaker Change: Yeah, when we look at that that the customer base given the challenges of BMS was going through they weren't in a position to help those customers that upgrade so what we've done with a lot of our customers is work with them on a transition period many of these.

Speaker Change: Are designed into new platforms.

Speaker Change: So we are working with our customers to make sure. They have the BMS product line to support their needs you know in the 12 to 18 month period, and then work with them on a transition to a newer product, which will be higher compression higher throughput.

Speaker Change: Better video quality and therefore, they are able to maintain their needs now and then migrate to newer technology.

Speaker Change: Along their product lifecycle, so in the context of that opportunity for us. It's basically you know that customer base, which which pre COVID-19 we've.

Carleton M. Miller: So, in the context of that opportunity for us, it's basically, you know, that customer base, which pre-COVID, you know, we've mentioned within the $20 million range, every single one of those customers will be needing upgrades at some point in time.

Speaker Change: Mentioned was in the $20 million range every single one of those customers.

Speaker Change: We will be needing upgrades at some point in time.

Speaker Change: Yeah.

Brian David Kinstlinger: Great. And you've highlighted three new products. Obviously, you announced the Dragon Planet Fresh Fleece recently.

Speaker Change: Great and you'd probably like the three new products, obviously, you announced the Dragon point a press release recently can.

Brian David Kinstlinger: Can you quantify the addressable market for these? Who are the initial target customers? Are they existing customers? Are they a brand new customer? And then lastly, I know it's a three-part question, how do we think about average selling price or are they recurring pieces? Maybe take us through the model then.

Speaker Change: Can you quantify the addressable market for these.

Speaker Change: The initial.

Speaker Change: Target customers I beg your existing customers I think a brand new customer.

Speaker Change: Then lastly, I know it's a three part question how do we think about average selling price or are they recurring piece is maybe take us through the model there.

Carleton M. Miller: Yeah, so in terms of the new products, which would include Qlik, LiveLink, and DragonFly 5, those have been all introductions that we've had in the last nine months, those are for both existing customers and new customers. So from an existing customer base, what that basically does is that it gives our customers the options to have either a proprietary custom solution or a public or private 5G solution, all connected through Link Matrix.

Speaker Change: Yeah. So.

Speaker Change: In terms of the the.

Speaker Change: The new products and that would include click lively Inc. And dragonfly five those are all introductions that we've had in the last nine months those are for both existing customers and new customers. So from an existing customer base, what that basically is that it gives our customers the option to have either proprietary.

Speaker Change: <unk> solution or a public or private five G solution all connected through linked matrix. So we the way we look at those products are basically a Trojan horse to drive software and services recurring sales so that number one exist with our card customers, but it opens up a.

Carleton M. Miller: So the way we look at those products, they are basically a Trojan horse to drive software and services recurring sales. So number one exists with our current customers, but it opens up a lot of new markets and opportunities for us. In fact, on the Live Link, our first opportunity that we delivered on was around bringing live video from belt-attached Live Links to the cloud for a large police group in Europe. And so it now opens up that type of market for us with a very sleek, slim, high-density package size that allows it to be very mobile.

Speaker Change: A lot of new markets and opportunities for us in fact on the lively our first.

Speaker Change: Opportunity that we.

Speaker Change: We delivered on was around bringing.

Speaker Change: Live video from belt.

Speaker Change: Belt attached live links to the cloud for a large police group in Europe, and so it now opens up that type of market for us with a very sleek slim high density pack.

Speaker Change: Package size that allows it to be very mobile similarly, with with slick and lively and well see the same type of thing. So it not only supports our existing customers, but also broadens the opportunity for our overall plan to drive more software to service sales through.

Carleton M. Miller: Similarly, with Flick and Live Link, we'll see the same type of thing. So it not only supports our existing customers but also broadens the opportunity for our overall plan to drive more software service sales through UIs.

Speaker Change: He lives.

Speaker Change: Is there a way to think about either average selling price for total contract value for some of these products are they relatively small of a well.

Speaker Change: Relatively large how do I think about that yeah, I think the best way to think about it typically our order size, which will include one or multiple types of those products as they need that they have different demands.

Speaker Change: For their use case, so in the case of our live broadcast they may have a lively they may have a quicker than they may have.

Speaker Change:

Speaker Change: A dragonfly are several sets it is highly dependent upon what the use cases and what they're trying to achieve and then in public safety.

Speaker Change: Safety typically you'll see some uniformity around what they want to deploy because they're there.

Speaker Change: Basically integrating into their current workflows and operations. So we'll try to standardize around a certain package size.

Speaker Change: Okay, and then you talked about increased investment in sales and marketing you got people that advertising maybe breakdown.

You know what those investments are.

Speaker Change: Yeah.

Speaker Change: One is people we've added we've had additional sales capability, we are kicking off a.

Speaker Change: And S E O effort.

Speaker Change: Which will be incremental.

Speaker Change: And we'll go with that slow, but largely its people and we've integrated the overall Salesforce instance, that BMS has had into the overall Salesforce instance of vigilant so that increase as well.

Speaker Change: Great last question Ive got is you mentioned three Oems.

Speaker Change: If I heard you right approved you as a supplier.

Speaker Change: People identify who those Oems are.

Speaker Change: No we can't but we.

Speaker Change: We've got.

Speaker Change: I can say that two of them are man.

Aircraft and the others are in one is unmanned but I think that's the area that we see.

Speaker Change: Huge potential for us and is drone command and control, it's an emerging market for us.

Speaker Change: We see tremendous potential there globally and it's really taken the technologies that we have around beam forming.

Speaker Change: Bonding.

Speaker Change: Channel bonding and resilient radios software defined radios that allow us to address that particular lean at a very efficient way. So really excited about that it's still early in.

Speaker Change: In that market, we do have revenues in that market currently today.

Speaker Change: But we think that could be really a huge upside for us in the future.

Speaker Change: Great.

Speaker Change: Thank you so much.

Brian: Thanks, Brian.

Thanks, Brian.

Speaker Change: And this concludes our question and answer session.

I'd like to turn the call back over to Keith for some closing remarks. Please go ahead.

Keith: Thank you for joining us today, everyone. This quarter marks a significant strides forward in our journey a testament to the hard work of our team and the strong support from our investors.

Carleton M. Miller: Is there a way to think about either average selling price or total contract value for some of these products? Are they relatively cheap?

Keith: Our mission to revolutionize video capture and delivery in advance no Gov markets through innovative technology continues to drive our strategic direction as we reflect on a successful start to the year. We are energized by the opportunities that lie ahead with a solid financial foundation and a clear.

Keith: Strategic direction, we are confident that we can maintain this momentum and reach new heights.

Keith: Thank you for your continued trust and support operator.

Carleton M. Miller: Yeah, I think the best way to think about it is that typically, our order size will include one or multiple types of those products as they meet different demands for their use cases. So in the case of a live broadcast, they may have a live link, they may have clicks, and they may have a dragonfly or several sets. It's highly dependent upon what the use case is and what they're trying to achieve. And then, in public safety, typically, you'll see some uniformity around what they want to deploy because they're basically integrating it into their current workflows and operations. So we'll try to standardize around a certain packet size.

Thank you very much for joining us today for this links first quarter 'twenty 'twenty four conference call. You may now disconnect and have a great day.

Brian David Kinstlinger: and then you talked about increased investment in sales and marketing. Is that people? Is that advertising? Maybe a breakdown? You know what those investments are.

Carleton M. Miller: The number one thing is people. We've added additional sales capability. We are kicking off an SEO effort, which will be incremental, and we'll go at that slow, but largely it's people, and we've integrated the overall Salesforce instance that VMS had into the overall Salesforce instance of Vislink, so that increased as well.

Brian David Kinstlinger: Great. Last question I've got is you mentioned three OEMs. I think if I heard you right, they approved you as a supplier. Are you able to identify who those OEMs are?

Carleton M. Miller: We can't, but...

Carleton M. Miller: We can't, but we've got, I can say that two of them are manned aircraft and the others are, and one is unmanned. I think, you know, that's the area that we see a huge potential for us, and it is drone command and control. It's an emerging market for us. We see tremendous potential there globally. And it's really taking the technologies that we have around beam forming, bonding, channel bonding, and resilient radios, software-defined radios, that allow us to address that particular need in a very efficient way. So, we're really excited about that. It's still early in that market. We do have revenues in that market currently today, but we think that could be really a huge upside for us in the future. Great.

Operator: Thanks, Brian. Thank you, Brian.

Carleton M. Miller: And this concludes our question and answer session. I'd like to turn the call back over to Mickey for some closing remarks. Please go ahead. Thank you for joining us.

Carleton M. Miller: Thank you for joining us today, everyone. This quarter marks a significant stride forward in our journey, a testament to the hard work of our team and the strong support from our investors. Our mission to revolutionize video capture and delivery and advance no-gov markets through innovative technology continues to drive our strategic direction. As we reflect on a successful start to the year, we are energized by the opportunities that lie ahead. With a solid financial foundation and a clear strategic direction, we are confident that we can maintain this momentum and reach new heights. Thank you for your continued trust and support, operator.

Operator: Thank you very much for joining us today for Vislink's first Quarrier 2024 conference call. You may now disconnect, and have a great day.