Q4 2024 Ondas Holdings Inc Earnings Call
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Before we begin the company would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect on doses best current judgment. They are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking statements.
Speaker Change: Eric Brock, Guy Simpson, Neil Laird, Meir Kliner, Meir Kliner, Guy Simpson, Neil Laird,
These risk factors are discussed in <unk> periodic SEC filings and in the earnings press release issued today, which are both available on the company's website.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances, except as required by law.
During this call on Das will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles.
Speaker Change: Welcome to the Andas Holdings, Inc. 4th Quarter and Full Year 2024 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.
Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today.
Which is available at the Investor Relations section of our website.
This non-GAAP information is provided.
As a supplement to not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. However.
However management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. Please.
Please note this event is being recorded.
I would now like to turn the conference over to Eric Brown, Chairman and CEO. Please go ahead.
Thank you operator, and good morning, I wanted to get started by welcoming you to our quarterly conference call. We appreciate.
You are joining us today and for your continued interest in Argos.
I'm happy to be joined today by key members of our leadership team, including Neil <unk>, our interim CFO and Theyre Kleiner President of autonomous systems, and the founder and CEO of our Aero Biotic subsidiary.
Both who are whom are very familiar to you.
Speaker Change: We're also joined by two new members of our leadership team for their first investor call behind US of course, I am speaking about Oxford go Gassy, our new co CEO of Odyssey Autonomous systems and markets not open the new CEO of <unk> networks.
Speaker Change: I am excited to have markets in Austria here with us they bring exceptional leadership and industry experience that is sure to be invaluable.
Speaker Change: Further both have been known to and ask for a while now and are already making an impact in the field with customers.
Speaker Change: Paired in accordance with GAAP.
Speaker Change: However management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. Please.
Speaker Change: Hear more about these two leaders later in the call.
Speaker Change: So, let's now turn to the agenda I will begin with a review of our key highlights from 2024 and provide an outlook for 2025, we anticipate a record year of revenue growth primarily driven by OAS.
Speaker Change: Please note this event is being recorded.
Speaker Change: I would now like to turn the conference over to Eric Roth Chairman and CEO. Please go ahead.
Speaker Change: I'll also share some important details on the partnership we announced yesterday with talent here.
Speaker Change: Thank you operator, and good morning, I wanted to get started by welcoming you to our quarterly conference call. We appreciate.
Speaker Change: Neil will then walk through our financial results for the fourth quarter and full year 2024 and <unk>.
Speaker Change: Thank you joining us today and for your continued interest in <unk>.
Speaker Change: After that we will provide a business update where I will ask Markus Astrid and mayor to provide their perspective on the progress within our honest networks and OAS business units.
Speaker Change: I'm happy to be joined today by key members of our leadership team, including Neil <unk>, our interim CFO and Theyre finer president of autonomous systems, and the founder and CEO of our Arrow Barak subsidiary, both who are who are very familiar to you.
Speaker Change: Then I will wrap the call and move to take investor questions.
Speaker Change: 2024, it was a defining year for <unk> marked by pivotal milestones that sets the stage for accelerated growth in 2025 and beyond.
Speaker Change: We also joined by two new members of our leadership team for their first investor called Eidos of course, I am speaking about our single Gassy, our new co CEO of Odyssey Autonomous systems and market is not open the new CEO of on dust networks I'm.
Speaker Change: It was also marked by overcoming challenges and I am extremely proud of our teams across onto us.
Speaker Change: Recall that early in 2024, we face the challenges of extending timelines on this networks and of course, the war activities in Israel, which placed pressure on our operating capabilities.
Speaker Change: I am excited to have markets in Austria here with us they bring exceptional leadership and industry experience that is sure to be invaluable.
Speaker Change: Both have been known to Andreas for a while now and are already making an impact in the field with customers you'll hear more about these two leaders later in the call.
Speaker Change: Nonetheless, we persevere through these challenges we firmly established our presence in the global defense market securing two major programs of record with a key military customer in the middle East for both are optimists and iron Dome radar platforms. These programs validate our dual use autonomous drone technology and <unk>.
Speaker Change: So, let's now turn to the agenda I will begin with a review of our key highlights from 2024 and provide an outlook for 2025, we anticipate a record year of revenue growth primarily driven by OAS.
Speaker Change: Also dramatically increased both our Tam in the serviceable and obtainable market or som and they are expected to increase the velocity of our business at OAS.
Speaker Change: I'll also share some important details on the partnership we announced yesterday with talent here.
Speaker Change: Neil will then walk through our financial results for the fourth quarter and full year 2024.
Speaker Change: I haven't heard one later is now positioned as the market defining platform for low kinetic counter UAS and the mitigation of drone threats, leading the critical need for drone interception in contested environments.
Speaker Change: And after that we will provide a business update where I will ask Markus Astrid and mayor to provide their perspective on the progress within our honest networks and OAS business units.
Speaker Change: Then I will wrap the call and move to take investor questions.
Speaker Change: This market is seeing massive demand growth, we believe our opportunity is position iron drone as the category owner.
Speaker Change: My point was a defining year for <unk> marked by pivotal milestones that sets the stage for accelerated growth in 2025 and beyond it.
We recently announced that we have launched an iron drone demo team, which has already begun to engage customers globally and.
Speaker Change: It was also marked by overcoming challenges and I am extremely proud of our teams across Argos.
Speaker Change: And we are already seeing tangible activity with additional military and homeland security customers. We're engaging with these new defense and homeland security customers through government or government channels as well as through our own direct marketing efforts.
Speaker Change: Recall that early in 2024, we faced the challenges of extending timelines on dust networks and of course, the war activities in Israel, which placed pressure on our operating capabilities.
Mayor: As mayor will share we have similarly engaged with new customers around our optima system, which is now being deployed to secure military bases and border checkpoints demonstrating the exceptional capabilities of this market, leading system and high value security markets and both defense a critical industrial markets.
Speaker Change: Nonetheless, we persevere through these challenges we firmly established our presence in the global defense market securing two major programs of record with a key military customer in the middle East for both our optimism and iron Dome radar platforms. These programs validate our dual use autonomous drone technology and IP.
Beyond our commercial traction, we invested significant energy to enhance operational efficiencies to scale our growth ensuring we are positioned to meet demand.
Speaker Change: Also dramatically increase both our Tam in the serviceable and obtainable market or sob and they are expected to increase the velocity of our business said OAS.
Mayor: That includes furthering the development of our supply chain and field services capabilities.
Mayor: Enhancing our operational platform is a perpetual focus for us and will be critical as we drive growth across technology platforms geographies and end markets.
Speaker Change: I internal later is now positioned as the market defining platform for low kinetic counter UAS and the mitigation of threats, leaving the critical need for dwelling interception in contested environments.
Mayor: Despite the lack of revenue fractured onerous networks, we further solidified our position in technology network Roadmaps for our customers, which of course includes Amtrak, but also broadening our gateway with new industry and ecosystem partners.
Speaker Change: This market is seeing massive demand growth, we believe our opportunity is to position iron drone as the category owner.
Speaker Change: We recently announced that we have launched an iron drone demo team, which has already begun to engage customers globally.
Mayor: We closed the year with a $10 million backlog, primarily with OAS reinforcing the strength of our pipeline and the visibility we now have on future revenue.
Speaker Change: We're already seeing tangible activity with additional military and homeland security customers, we're engaging with these new defense and homeland security customers through government or government channels as well as through our own direct marketing efforts.
Mayor: That backlog is buttressed by a growing invisible order book this.
Mayor: This gives us confidence in projecting at least $20 million in revenues from OAS and supports the total revenue expectations of $25 million for <unk> holdings in 2025.
Speaker Change: As Mary will share we have similarly engaged with new customers around our optima system, which is now being deployed to secure military bases and border checkpoints demonstrating the exceptional capabilities of this market, leading system and high value security markets and both defense a critical industrial markets.
Mayor: Recall that we originally set expectations for 2025 revenue at 15% to $18 million for OIS at our Investor Day in September 2024.
Speaker Change: Beyond our commercial traction, we invested significant energy to enhance operational efficiencies to scale our growth ensuring we are positioned to meet demand that includes furthering the development of our supply chain and field services capabilities.
Mayor: And I stated that we want to set conservative expectations, which we will strive to be at that time.
Mayor: This remains the case with our updated outlook today, which I will touch on in some more detail at the end of today's call.
Mayor: We also fortified our capital position raising $35 million in Q4 alone, which met the goals, we articulated back in our last investor update.
Speaker Change: Enhancing our operational platform is a perpetual focus for us and will be critical as we drive growth across technology platforms geographies and end markets.
Mayor: This provided us with a strong liquidity position and financial runway to execute our expansion strategy with confidence.
Speaker Change: Despite the lack of revenue fractured honest networks, we further solidified our position to technology network Roadmaps for our customers, which of course includes Amtrak.
Mayor: <unk> enters 2025 stronger than ever with a clear runway for growth in defense Homeland security and critical infrastructure security markets.
Speaker Change: We're also broadening our gateway with new industry and ecosystem partners.
Speaker Change: We closed the year with a $10 million backlog, primarily with OAS.
Mayor: As we look ahead 2025 is set to be an acceleration year for Argos with momentum building from our execution. In 2024. We believe we are positioned to deliver record revenue as we scale, our existing programs and expand into new customer opportunities.
Speaker Change: Enforcing the strength of our pipeline and the visibility we now have on future revenue.
Speaker Change: That backlog is buttressed by a growing invisible order book.
Speaker Change: This gives us confidence in projecting at least $20 million in revenues from OAS and supports the total revenue expectations of $25 million for <unk> holdings in 2025.
Mayor: We have the following key objectives for 2025 firstly.
Mayor: We intend to drive growth with existing programs and customers.
Speaker Change: Recall that we originally set expectations for 2025 revenue at 15% to $18 million for OIS at our Investor Day in September 2024, and.
Mayor: We are intensely focused on executing and expanding on existing programs with optimists and iron drone, ensuring successful deployments of sustained customer adoption.
Speaker Change: And I stated that we want to set conservative expectations, which we will strive to be at that time.
Mayor: As we build on what we have we plan further expansion through new customer programs are defense and homeland security engagements in Israel in the UAE provide a strong foundation for broader adoption.
Speaker Change: This remains the case with our updated outlook today, which I will touch on in some more detail at the end of today's call.
Speaker Change: We also have fortified our capital position raising $35 million in Q4 alone, which met the goals, we articulated back in our last investor update.
Mayor: From here, we expect to secure multiple additional military customers in 2025, leveraging both <unk> channel opportunities in addition to <unk>.
This provided us with a strong liquidity position and financial runway to execute our expansion strategy with confidence.
Mayor: <unk> is direct marketing efforts.
Mayor: We believe these efforts will be enhanced with our series leadership based on his demonstrated success in securing over $20 billion 20 billion in.
Speaker Change: And that answers 2025 stronger than ever with a clear runway for growth in defense homeland security and critical infrastructure security markets.
Mayor: In defense contract sales by leading the go to market strategy at one of Israel's most important global defense companies.
Speaker Change: As we look ahead 2025 is set to be an acceleration year for Argos with momentum building from our execution into 2024. We believe we are positioned to deliver record revenue as we scale, our existing programs and expand into new customer opportunities.
Mayor: Of course, we will also look to pull through on our existing pipeline with critical infrastructure and public safety customers in the U S and Europe.
Mayor: Which also presents substantial growth opportunities.
Speaker Change: We have the following key objectives for 2025 firstly.
Mayor: We intend to continue to invest to scale our operating platform.
Speaker Change: We intend to drive growth with existing programs and customers.
Mayor: We're building a scalable infrastructure with investments in supply chain Sustainment and field services to support long term customer adoption. These activities will have the benefit of leveraging our new partnership with talented <unk> whereby they are providing their foundry AI systems for enterprise resource efficiencies, which I will expand upon in a moment.
We are intensely focused on executing and expanding on existing programs with optimists and iron dome, ensuring successful deployment is sustained customer adoption.
Speaker Change: As we build on what we have we plan further expansion through new customer programs are defense and homeland security engagements in Israel and the UAE provide a strong foundation for broader adoption.
Mayor: Lastly, we intend to build further build strategic value it honest networks despite timeline challenges.
Speaker Change: From here, we expect to secure multiple additional military customers in 2025, leveraging both <unk> channel opportunities in addition to.
Mayor: We continue to believe in both the long term opportunity on us networks and the strategic value of the business and we are intent on realizing that value.
Mayor: Recall, the private wireless platform.
Speaker Change: This is direct marketing efforts.
Platform to create value along the technology ecosystem at the edge of rail operations, the capacity and flexibility to drive new applications supporting advanced intelligence safety and operating systems is strategically valuable for both our rail customers and the large rail edge technology vendors.
Speaker Change: We believe these efforts will be enhanced with our series leadership based on his demonstrated success in securing over $20 billion $20 billion in defense contract sales by leading the go to market strategy at one of Israel's most important global defense companies.
Speaker Change: Of course, we will also look to pull through on our existing pipeline with critical infrastructure and public safety customers in the U S and Europe.
Under <unk> leadership, we expect to see broader customer and partner engagement, ensuring continuing progress in 900 megahertz rail network deployments, while exploring additional product and network opportunities.
Speaker Change: Which also presents substantial growth opportunities.
Mayor: With a strengthened leadership team validated market traction and a robust pipeline and is poised for transformative growth in 2025 as.
Speaker Change: We intend to continue to invest to scale our operating platform.
Speaker Change: We are building a scalable infrastructure with investments in supply chain Sustainment and field services to support long term customer adoption. These activities will have the benefit of leveraging our new partnership with pallet tier whereby they are providing their foundry AI systems for enterprise resource efficiencies, which I will expand upon in a moment.
Mayor: As the year progresses, I believe a deeper customer pool, a growing order book and backlog and our continuous focus on operational scale will support a growth flywheel.
Mayor: With proper execution this will be a year when our investments in technology operations and market expansion deliver tangible results for our customers and our investors.
Lastly, we intend to build further build strategic value it on dust networks, despite timeline challenges.
Speaker Change: We continue to believe in both the long term opportunity that honest networks and the strategic value of the business and we are intent on realizing that value.
Yesterday, we announced a strategic partnership with <unk> technologies, a leading provider of AI systems I'm very excited about engaging with talent here and the breadth of capabilities and solutions they bring to the markets we care about.
Recall, the private wireless platforms.
Speaker Change: Platform to create value along the technology ecosystem at the edge of rail operations, the capacity and flexibility to drive new applications supporting advanced intelligence safety and operating systems is strategically valuable for both both our rail customers and the large rail edge technology vendors.
Mayor: This is an incredibly important relationship, which we have established with significant long term benefits to Argos. Initially we will leverage <unk> foundry AI platform to scale Oas's operating platform and support of our revenue ramp.
Speaker Change: Under <unk> leadership, we expect to see broader customer and partner engagement, ensuring continued progress in 900 megahertz rail network deployment, while exploring additional product and network opportunities.
Mayor: With foundry, we aimed to unified data and streamline operations, which will help enable scalable adoption of our Optimus system and iron grown greater globally.
Mayor: This entails connecting to our supply chain production as well as our field services, a sustainment activities with customers across the world.
Speaker Change: With a strengthened leadership team validated market track traction and a robust pipeline and is poised for transformative growth in 2025 as.
Mayor: This will also ultimately extend through our product and solutions development, where we are likely to create further AI enabled advancements in our platform capabilities in support of evolving customer requirements for autonomy and data intelligence.
Speaker Change: As the year progresses, I believe a deeper customer pool, a growing order book and backlog and our continuous focus on operational scale will support a growth flywheel.
Mayor: I believe talented see similar scope for product and market development as we advance our relationship.
With proper execution this will be a year when our investments in technology operations and market expansion deliver tangible results for our customers and our investors.
This partnership to ultimately be a force multiplier across a number of important facets of our business and look forward to sharing more details as we begin to integrate foundry eventually other commentary AI capabilities into our business.
Speaker Change: Yesterday, we announced a strategic partnership with talented technologies, a leading provider of AI systems I'm very excited about engaging with talent here and the breadth of capabilities and solutions they bring to the markets we care about.
Mayor: I'll now hand, the call to Neal to provide a detailed financial update Neil.
Neal: Thank you Eric.
Speaker Change: How do I get started however, I remind our investors of our financial statements reflect the early stage of platform adoption, but both on dust networks, and OIS and the preparation for larger commercial rollouts.
Speaker Change: This is an incredibly important relationship, which we have established with significant long term benefits to Argos. Initially we will leverage <unk> foundry AI platform to scale Oas's operating platform and support of our revenue ramp.
Speaker Change: We expect significant operating leverage as revenues grow.
Speaker Change: With foundry, we aimed to unified data and streamline operations, which will help enable scalable adoption of our Optimus system and iron grown greater globally.
Speaker Change: Today's revenue levels do not yet cover our operating expenses.
Speaker Change: Or almost networks revenues will fluctuate from quarter to quarter, given the uncertainty around the timing of customer activity in front with a targeted commercial rollouts of the 900 megahertz network.
Speaker Change: This entails connecting to our supply chain production as well as our field services, a sustainment activities with customers across the world.
Speaker Change: Development programs underway with Siemens <unk> rail.
Speaker Change: This will also ultimately extend to our product and solutions development, where we are likely to create further AI enabled advancements in our platform capabilities in support of evolving customer requirements for autonomy and data intelligence.
Speaker Change: Similarly revenue that OIS are expected to vary from quarter to quarter.
Normalized into a more predictable pattern as we grow our customer base are more of those customers enter fleet programs and recurring service agreements in the United States and internationally.
Speaker Change: I believe talented see similar scope of product and market development as we advance our relationship I expect this partnership to ultimately be a force multiplier across a number of important facets of our business and look forward to sharing more details as we begin to integrate foundry eventually other voluntary AI capabilities into our business.
Speaker Change: Revenues increased 173% to $4 1 million quarter over quarter for the three months ending December 31 2024.
Speaker Change: Compared to $1 5 million for the three months ending September 32024.
Speaker Change: I'll now hand, the call to Neal to provide a detailed financial update Neil.
Speaker Change: And we're down 18% from $5 million for the three months ending December 31st 2023.
Neal: Thank you Eric.
Neil: Before I get started I want to remind our investors of our financial statements reflect the early stage of platform adoption for both on dust networks, and OIS and the preparation for larger commercial rollouts.
Speaker Change: Revenues from Rombach networks were $5 5 million relatively flat compared to the third quarter of 2024 and down $1 1 million from the fourth quarter of 2023.
Neil: We expect significant operating leverage as revenues grow.
Neil: Today's revenue levels do not yet cover our operating expenses.
Speaker Change: This was primarily a result of extended time lines related to the 900 megahertz activity.
Speaker Change: Well, Ron Das networks revenues will fluctuate from quarter to quarter, given the uncertainty around the timing of customer activity in front with a targeted commercial rollouts of the 900 megahertz network and the development programs underway with Siemens <unk> via rail.
Class one rail roads.
Speaker Change: <unk> revenues were $3 $6 million, an increase of $2 $6 million or 260% from the third quarter of 2024, and an increase of 10% from the fourth quarter of 2023.
Speaker Change: Similarly revenues with OIS are expected to vary from quarter to quarter.
Speaker Change: This increase reflects the shipment of products and services from the $14 4 million in orders primarily related to the two new programs secured with a military customer in the third quarter of 2024.
Speaker Change: Normalized into a more predictable pattern as we grow our customer base are more of those customers enter fleet programs and recurring service agreements in the United States and internationally.
Speaker Change: Revenues increased 173% to $4 1 million quarter over quarter for the three months ending December 31st 2024.
Gross profit was $0 9 million or 22% for Q4 2024, as opposed to zero point $1 million or 3% for the third quarter of 2024, and $1 7 million or 35% for the fourth quarter of 2023 the.
Speaker Change: Compared to $1 5 million for the three months ending September 30 of 2024.
Speaker Change: And we're down 18% from 5 million for the three months ending December 31st 2023.
Speaker Change: The increase in gross margins from the third quarter results from increased product revenue at OAS.
Speaker Change: For the fourth quarter of 2023, the decrease reflects the lack of higher margin product sales with on both networks at slightly lower margins with OIS because of the inclusion of third party products in the current quarter revenue.
Speaker Change: Revenues from Bombast networks were $5 5 million relatively flat compared to the third quarter of 2024 and down $1 1 million from the fourth quarter of 2023.
This was primarily a result of extended time lines related to the 900 megahertz activity.
Gross margins can be volatile on a quarter to quarter basis through the revenue levels that reflect the early stage of platform adoption and shifts in revenue mix between product development and service revenues.
Speaker Change: Class one rail roads.
Speaker Change: <unk> revenues were $3 $6 million, an increase of $2 $6 million or 260% from the third quarter of 2024, and an increase of 10% from the fourth quarter of 2023.
Speaker Change: Operating expenses decreased to $9 4 million for the fourth quarter of 2024 as opposed to $8 7 million in the third quarter 'twenty 'twenty, four and $14 4 million in the fourth quarter of 2023.
Speaker Change: This increase reflects the shipment of products and services from the $14 4 million in orders primarily related to the two new programs secured with a military customer in the third quarter of 2024.
Speaker Change: The decrease from the prior year was primarily due to a $4.
Speaker Change: Four zero million noncash impairment charge in the fourth quarter of 2023 and various cost savings implemented in 2024 of our networks. The increase from the third quarter was primarily the result of a credit loss charge in the current quarter.
Speaker Change: Gross profit was zero 9 million or 22% for Q4 2024, as opposed to zero point $1 million or 3% for the third quarter of 2024, and $1 7 million or 35% for the fourth quarter of 2023.
Speaker Change: Cash operating expenses were $7 9 million in the fourth quarter of 2024 compared to $8 7 million in the third quarter of 2020 for these exclude noncash operating expenses for depreciation and amortization of $1 $2 million in both quarters stock based compensation.
Speaker Change: The increase in gross margins from the third quarter results from increased product revenue that's L. A S <unk>.
Speaker Change: Third to the fourth quarter of 2023, the decrease reflects the lack of higher margin product sales with Ambev networks at slightly lower margins of the OIS because of the inclusion of third party products in the current quarter revenue.
Speaker Change: Zero point $3 million in the fourth quarter of 2024 compared to zero point $4 million in the fourth quarter of 2023 and impairment of long term asset charge of $4 million in the fourth quarter of 2023.
Speaker Change: Gross margins can be volatile on a quarter to quarter basis through the revenue levels that reflect the early stage of platform adoption and shifts in revenue mix between product development and service revenues.
Speaker Change: The operating loss was $8 5 million for the fourth quarter of 2024 compared to $12 6 million for the fourth quarter of 2023, adjusted EBITDA loss was $7 million for the fourth quarter about the same as the $7 million for the fourth quarter of 2023.
Speaker Change: Operating expenses decreased to $9 4 million for the fourth quarter of 2024 as opposed to $8 7 million in the third quarter 'twenty 'twenty, four and $14 4 million in the fourth quarter of 2023, the decrease from the prior year was primarily due to a $4.
Speaker Change: For the full year of 2024 revenues was $7 2 million as opposed to $15 $7 million for the full year of 2023.
Speaker Change: Four zero million noncash impairment charge in the fourth quarter of 2023 and various cost savings implemented in 2024 upon das networks. The increase from the third quarter was primarily the result of a credit loss charge in the current quarter.
Speaker Change: This was largely due to extended timelines around das networks and water related disruptions in Israel for OAS that impacted operations, particularly in the first half of 2024.
Speaker Change: Cash operating expenses were $7 9 million in the fourth quarter of 2024 compared to $8 7 million in the third quarter of 2020 for these exclude noncash operating expenses for depreciation and amortization of $1 2 million in both quarters stock based compensation.
Speaker Change: Gross profit was <unk> 3 million for the full year 2024, as compared to $6 4 million for the full year of 2023, reflecting lower revenue compared to fixed operations cost, particularly at OIS, we expect margins to recover in 2025 with higher revenues and improved scale from larger.
Speaker Change: Zero point $3 million in the fourth quarter of 2024 compared to 0.4 million in the fourth quarter of 2023 and impairment of long term asset charge of $4 million in the fourth quarter of 2023.
Production volumes at Hawaii gas.
Speaker Change: Operating expenses for the full year of 2024 with 35 <unk> million as compared to $46 1 million for the full year of 2023.
Speaker Change: The reduction was due to the absence of onetime noncash charges of $4 million in 2020 for achieving the full savings from the integration of American robotics, and AI robotics operations to form OAS that was implemented during 2023 and additional cost savings achieved on both networks during 2000.
Speaker Change: The operating loss was $8 5 million for the fourth quarter of 2024 compared to $12 6 million for the fourth quarter of 2023, adjusted EBITDA loss was <unk> 7 million for the fourth quarter about the same as the $7 million for the fourth quarter of 2023.
Speaker Change: For the full year of 2024 revenues was $7 2 million as opposed to $15 $7 million for the full year 2023.
Speaker Change: 24.
Speaker Change: Cash operating expenses were $28 9 million for the full year of 2024, a decline of $7 2 million from 2023. This was due to the OAS integration mentioned previously and cost savings achieved at our own best networks.
Speaker Change: This was largely due to extended timelines with Amdocs networks and weather related disruptions in Israel for OAS that impacted operations, particularly in the first half of 2024.
Speaker Change: Adjusted EBITDA loss was $28 5 million for 2024 as compared to $29 7 million for 2023.
Gross profit was zero point $3 million for the full year 2024, as compared to $6 4 million for the full year of 2023, reflecting lower revenue compared to fixed operations cost, particularly at OIS, we expect margins to recover in 2025 with higher revenues and improved scale from larger.
Speaker Change: So now, let's turn to the cash flow statement, we held cash of $30 million as of December 31, 2024, compared to $15 million as of December 31, 2023.
Speaker Change: Production volumes at Hawaii gas.
Speaker Change: The full year cash provided by financing includes additional financing totaling $50 2 million of which $35 $3 million occurred in the fourth quarter.
Speaker Change: Operating expenses for the full year of 2024 with 35 <unk> million as compared to $46 1 million for the full year of 2023.
Speaker Change: On the holdings received proceeds from convertible loans of $28 3 million OAS received $5 1 million and <unk> networks received $1 $9 million.
Speaker Change: The reduction was due to the absence of onetime noncash charges of $4 million in 2020 for achieving the full savings from the integration of American robotics, and AI robotics operations to form OAS that was implemented during 2023 and additional cost savings achieved on both networks during 2000.
Speaker Change: Cash used in operations during the full year decreased slightly to $33 5 million.
Speaker Change: Investments in working capital accounted for $4 8 million office usage compared to $3 9 million in 2023.
Speaker Change: 24.
Speaker Change: Cash operating expenses were $28 9 million for the full year of 2024, a decline of $7 2 million from 2023. This was due to the OAS integration mentioned previously and cost savings achieved at all and best networks.
Speaker Change: We expect cash utilization to improve in 2025 improved cash efficiency comes from operating expense leverage at our OIS business unit, given our expectation of a recovery in revenue and gross profit growth over the course of 'twenty five and continued cost controls across the company.
Speaker Change: Adjusted EBITDA loss was $28 5 million for 2024 as compared to $29 7 million for 2023.
Speaker Change: The company expects to fund its operations from cash on hand of $30 million as of December 31, 2024 for gross profits achieved from revenue growth potential prepayments from customers for purchase orders and potential proceeds from warrants issued and outstanding in addition.
Speaker Change: So now, let's turn to the cash flow statement, we held cash of $30 million as of December 31, 2024, compared to $15 million as of December 31, 2023.
Speaker Change: The full year cash provided by financing includes additional financing totaling $52 million of which $35 $3 million occurred in the fourth quarter.
Speaker Change: Funds are needed that the company may seek through equity or debt offerings.
Speaker Change: Borrowings under additional notes payable lines of credit or other sources.
Speaker Change: On the holdings received proceeds from convertible loans of $28 3 million OAS received $5 $1 million and on best networks received $1 $9 million.
Speaker Change: As of December the <unk>.
Speaker Change: 31, 2020 for Amdocs holdings have $52 million in debt outstanding now.
Speaker Change: $9 $6 million of this balance has can be converted into equity during the first quarter of 2025.
Speaker Change: Cash used in operations during the full year decreased slightly to $33 5 million investments in working capital accounted for $4 $8 million office usage compared to $3 9 million in 2023.
Speaker Change: $6 $2 million of Amdocs holdings compatible that matures in April of 2025, a further $12 million in July of 2025, and the balance of $24 $9 million in December of 2026, we have been focused on maintaining liquidity to fund our growth plan and raised a further $0 9 million.
Speaker Change: We expect cash utilization to improve in 2025 improved cash efficiency comes from operating expense leverage at our OIS business unit, given our expectation of a recovery in revenue and gross profit growth over the course of 'twenty five and continued cost controls across the company.
Speaker Change: And convertible notes of <unk> networks in January.
We have also established a relationship with clear our working capital provider to allow us to factor receivables has needed. We also anticipate that the maturing notes will either be converted into equity or will have that terms expanded.
Speaker Change: The company expects to fund its operations from cash on hand of $30 million as of December 31, 2024 from gross profit achieved from revenue growth potential prepayments from customers for purchase orders and potential proceeds from warrants issued and outstanding and additional.
And I will now hand, the call back to Eric.
Eric: Thank you Neal now we will transition to a review of our business units and asked Markus Haas Street in there to share updates on business development activity and operations at on dust networks and OIS.
Speaker Change: Funds if needed that the company may seek through equity or debt offerings.
Speaker Change: Borrowings under additional notes payable lines of credit or other sources.
Eric: As I hand, the call the markets to provide a business update ferrandez networks I want to reiterate how excited we are to add this level of talent to our management team.
Speaker Change: As of December 31, 2024 on the holding at $52 million in debt outstanding nine.
<unk> brings deep experience in railroad operations industrial technology and strategic finance.
Speaker Change: $9 $6 million of this balance has can be converted into equity during the first quarter of 2025.
Eric: In addition to financial and strategic roles within the private equity industry experience included senior leadership positions at Sperry Rail service and.
Speaker Change: $6 $2 million of Amdocs holdings compatible that matures in April of 2025, a further $12 million in July of 2025, and the balance of $24 9 million in December of 2026, we have been focused on maintaining liquidity to fund our growth plan and raised a further $0 9 million.
Eric: And accurate inspections subsidiaries of Rockwood holdings.
Eric: There he focused on integrating new technologies into rail road markets and was instrumental in driving improved operational efficiency and revenue velocity.
Eric: These experiences are highly relevant and complementary to the exceptional technical talent at honest networks, enabling us to drive deeper conversations with customers and business partners I am very confident that markets is the right person to help us drive the adoption of our <unk> technology across rail networks Marcus welcome to the <unk>.
Speaker Change: And convertible notes around us networks in January.
Speaker Change: We have also established a relationship with clear working capital provider to allow us to factor receivables has needed. We also anticipate that the maturing notes will either be converted into equity or will have that terms extended.
Speaker Change: <unk> the floor is yours.
Eric Roth: And I will now hand, the call back to Eric.
Eric Roth: Thank you Neal now we will transition to a review of our business units and asked Markus Astrid and mayor to share updates on business development activity and operations at on dust networks and OIS.
Marcus: Thank you Eric.
Speaker Change: I want to say simply that I'm happy to join on those networks and I'm grateful for the opportunity to work with you and the board as well as with Guy Simpson, our CFO and the extremely talented team we have at on those networks.
Eric Roth: As I hand, the call the markets to provide a business update for on dust networks I want to reiterate how excited we are to add this level of talent to our management team.
Speaker Change: I believe we have an exceptional technology platform with our <unk> system and we also have extremely valuable expertise in industrial network switch.
Eric Roth: <unk> brings deep experience in railroad operations industrial technology and strategic finance.
Speaker Change: Extends to the railroad communications.
Speaker Change: Together with together this has the promise of creating significant value for both our railroad customers and the broader rail technology ecosystem.
Eric Roth: In addition to financial and strategic roles within the private equity industry experience included senior leadership positions at Sperry Rail service in.
Of course, we have a lot of work ahead of us to drive adoption and leverage the significant efforts, we have made to create business development opportunities.
Eric Roth: And accurate inspections subsidiaries of Rockwood holdings.
Eric Roth: There he focused on integrating new technologies into rail road markets and was instrumental in driving improved operational efficiency and revenue velocity.
Speaker Change: With that introduction it is <unk>.
Speaker Change: To join you today to provide you with a review of key developments at on those networks in 2024.
Eric Roth: These experiences are highly relevant and complementary to the exceptional technical talent at honest networks, enabling us to drive deeper conversations with customers and business partners.
Speaker Change: And how we are positioning ourselves for 25.
Speaker Change: While we continue to support the railroad industry with their specific 900 megahertz network needs. We're also positioning on dust networks.
Speaker Change: I'm very confident that markets is the right person to help us drive the adoption of our <unk> 60 technology across rail networks Marcus welcome to the call the floor is yours.
Speaker Change: <unk> technology platform to address the railroads broader communication needs.
Speaker Change: I will expand on this in a moment, but first I will provide an update on our specific activities and outlook for the 900 megahertz network.
Marcus: Thank you Eric.
Marcus: Alright, I want to say simply that I'm happy to join on those networks and I'm grateful for the opportunity to work with you and the board as well as with guys Simpson, our CFO and the extremely talented team we have it on those networks.
In 2020 for one of our distribution partners Siemens mobility received and fulfilled an order for Metro the primary commuter rail system in Chicago for a system wide upgrade of their 900 megahertz network.
Marcus: I believe we have an exceptional technology platform with our <unk> system and we also have extremely valuable expertise in industrial networks rich.
Speaker Change: This project includes the migration of the network to the new abler channels and the introduction of $802 16 to support IP applications.
Marcus: Extends to the railroad communications.
Speaker Change: In addition to Metro a class one railroad has also deployed in this operating alive 900 megahertz system with the <unk> equipment in the Chicago area.
Marcus: Together with together this has the promise of creating significant value for both our railroad customers and the broader rail technology ecosystem.
Speaker Change: Both of these infrastructure upgrades highlight the seamless seamless upgrade process associated with our technology.
Marcus: Of course, we have a lot of work ahead of us to drive adoption and leverage the significant efforts, we have made to create business development opportunities.
Speaker Change: And the benefits to be gained from the dot 16 platform.
Marcus: With that introduction it is <unk>.
Speaker Change: Rather than continue to operate there.
Marcus: Great to join you today to provide you with a review of key developments at on those networks 2024.
Speaker Change: Silo communications platforms assays multiple class ones are evaluating the possibility of having 900 220 megahertz networks access backups for the critical system running in each of these networks.
Marcus: And how we are positioning ourselves for 25.
Marcus: While we continue to support the railroad industry with their specific 900 megahertz network needs. We're also positioning on dust networks.
Speaker Change: Specifically there is an interest in extending the new 900 megahertz network from its primary use of transport and legacy centralized train control traffic to providing backup positive train control applications operating under 220 megahertz network.
Marcus: Robust technology platform to address the railroads broader communication needs.
Marcus: I'll expand on this in a moment, but first I will provide an update on our specific activities and outlook for the 900 megahertz network.
Marcus: In 2020 for one of our distribution partners Siemens mobility received and fulfilled an order for Metro the primary commuter rail system in Chicago or system wide upgrade of their 900 megahertz network.
Speaker Change: This strategy adds resiliency redundancy and diversity to critical railroad operations by eliminating single points of failure.
We're supporting various class one in their evaluations and based on results to date expected. This strategy will be adopted for network rollout by at least several classrooms.
Marcus: This project includes the migration of the network to the new abler channels and the introduction of $802 16 to support IP applications.
Speaker Change: The class one railroads through the ASR has communicated on several occasions.
Marcus: In addition to metric a class one railroad has also deployed in this operating alive 900 megahertz system with the <unk> equipment in the Chicago area.
At the end of last year and earlier this year with the class ones are firmly committed to meet the 900 megahertz transmission.
Speaker Change: As well as the related build out timeline.
Marcus: Both of these infrastructure upgrades highlight the seamless seamless upgrade process associated with our technology and the benefits to be gained from the dot 16 platform.
Speaker Change: The railroads communication needs extend far beyond the 900 megahertz network just as our customers are beginning to examine their broader communication needs.
Marcus: Rather than continue to operate there.
Marcus: Silo communications platforms assays multiple class ones are evaluating the possibility of having 900 220 megahertz networks active backups for the critical system running in each of these networks.
Speaker Change: Intend to bring our capabilities to bear and providing holistic communication solutions.
Speaker Change: And the 220 megahertz band, we continue to execute on the new PTC at our radio program for Amtrak and the northeast corridor.
Marcus: Specifically there is an interest in extending the new 900 megahertz network from its primary use transported.
Speaker Change: The first prototype radios were delivered to Amtrak and Q3 and the development activity is on track to be completed in Q1.
Marcus: Transport and legacy centralized train control traffic to providing backup projects train control applications operating on the 220 megahertz network.
Speaker Change: We expect deliveries of the new 220 megahertz radios to begin in the second quarter of 2025 with a subsequent rollout to other operators in the northeast corridor.
Marcus: This strategy adds resiliency redundancy and diversity to critical railroad operations by eliminating single points of failure.
Speaker Change: And the 450 megahertz band, we are making steady progress with next generation head of training and a train technology.
Marcus: We're supporting various class one in there.
Marcus: Patients and based on results to date expected. This strategy will be adopted for network rollout by at least several class ones.
Speaker Change: Testing of our communications technology is complete and we are working with several head of train end of training equipment manufacturers on integrating our technology.
Marcus: Yeah.
Marcus: The class one railroads through the ASR has communicated on several occasions.
We expect that this will lead to commercialization at the end of 2020 trucks.
Marcus: At the end of last year and earlier this year with the class ones are firmly committed to meet the 900 megahertz and mission.
Speaker Change: Next generation head of train end of train where <unk> is critical to the railroad industry to ensure a significant improvement in safe train operations as well as to enable preparations of longer trains.
Marcus: The related build out timeline.
Speaker Change: Both <unk> and the northeast corridor.
The railroads communication needs extends far beyond the 900 megahertz network just as our customers are beginning to examine their broader communication needs.
Speaker Change: Work highlight on those networks.
Breadth and depth and communication expertise.
Speaker Change: Our goal for 2025 is to work directly with the class ones and the other industry stakeholders to address broad industry communication needs and provide solutions for long standing industry challenges.
Marcus: Intend to bring our capabilities to bear and providing holistic communication solutions.
Marcus: And the 220 megahertz band, we continue to execute on the new PTC Ada Radio program for Amtrak and the northeast corridor.
Speaker Change: Since the beginning of the year, we have engaged with several class ones and other industry stakeholders on topics related to large volume data transmission grid Road operations.
Marcus: First prototype radios were delivered to Amtrak and Q3 and the development activity is on track to be completed in Q1.
Speaker Change: This is an industry wide topic with significant implications for safety operational continuity and capital spend.
Marcus: We expect deliveries of the new 220 megahertz radios to begin in the second quarter of 2025 with a subsequent rollout to other operators in the northeast corridor.
Speaker Change: The railroad operating environment presents some significant challenges rendering off the shelf technology irrelevant.
Marcus: And the 450 megahertz band, we are making steady progress with next generation head of training and a train technology.
Speaker Change: Class ones are looking to on those networks to provide comprehensive solutions that overcome these challenges.
Marcus: Testing of our communications technology is complete and we're working with several head of training and training equipment manufacturers on integrating our technology.
Speaker Change: We are applying our broad expertise to design develop and commercialized solutions.
These real communication needs of the class ones, we look forward to updating you on this topic throughout 2025.
Marcus: We expect that this will lead to commercialization at the end of 2020 trucks.
Marcus: Yeah.
Eric: I will now hand, the call back to Eric.
Marcus: Next generation head of train end of train where N. G. E. G is critical to the railroad industry to ensure a significant improvement in safe train operations as well as to enable preparations of longer trains.
Speaker Change: Thank you Markus I will now ask Austria lagasse to take the floor and share his thoughts on the opportunities ahead in OAS as I do I want to say once again, how thrilled we are to having joined US Astrid bring several decades of leadership experience in military operations and autonomous systems.
Marcus: Both <unk> and the northeast corridor.
Marcus: Work highlight on those networks.
Marcus: Breadth and depth and communication expertise.
Marcus: Our goal for 2025 is to work directly with the class ones and other industry stakeholders to address broad industry communication needs and provide solutions for long standing industry challenges.
Austria lagasse: Having served with great acclaim with the Israeli defense forces, where he commanded over 30000 personnel.
Austria lagasse: Prior to joining onto US actually served as vice president of marketing at Raphael Advanced Defense systems, and Raphael. He had prolific success, leading the marketing and execution of critical security capabilities totaling over $20 billion in government to government defense contract sales and helped grow Raphael is defense technology footprint.
Marcus: Since the beginning of the year, we have engaged with several class ones and other industry stakeholders on topics related to large volume data transmission grid Road operations.
Marcus: This is an industry wide topic with significant implications for safety operational continuity and capital spend.
Marcus: The railroad operating environment presents some significant challenges rendering off the shelf technology irrelevant.
Austria lagasse: Ali.
Austria lagasse: His deep industry relationships with defense ministries military forces and intelligence agencies worldwide are sure to be hugely valuable as <unk> continues to expand into defense and homeland security markets.
Marcus: Class ones are looking to <unk> networks to provide comprehensive solutions that overcome these challenges.
Marcus: We are applying our broad expertise to design develop and commercialized solutions.
Speaker Change: After <unk> comments, he will hand, the call to Mary Recliner, who will provide a detailed update on the business development progress at OAS off Street. Please proceed.
Marcus: These real communication needs of the class ones, we look forward to updating you on this topic throughout 2025.
Mary Recliner: Thank you Eric and I also want to thank you and the board.
Eric Roth: I will now hand, the call back to Eric.
Mary Recliner: The opportunity to join the team and advance the important work we are doing together.
Eric Roth: Thank you Markus I will now ask Osprey lagasse to take the floor and share his thoughts on the opportunities ahead in OAS as I do I want to say once again, how thrilled we are to have him join Argos Astrid bring several decades of leadership experience in military operations and autonomous systems.
Mary Recliner: And then also happy who joined the call and engage with our investors in this full let me begin by sharing that they've joined us thermal systems because they believe the future of defense is rooted in systems that autonomous intelligent.
Having served with great acclaim with.
Eric Roth: Really defense forces, where he commanded over 30000 personnel.
Eric Roth: Prior to joining onto US actually served as vice president of marketing at Raphael Advanced Defense systems, and Raphael. He had prolific success, leading the marketing and execution of critical security capabilities totaling over $20 billion in government to government defense contract sales and helped grow Raphael is defense technology footprint.
<unk> and built for real World operations, having spent years working on government and government defense programs.
Mary Recliner: <unk>.
Mary Recliner: First hand, how critical advanced technology is.
Mary Recliner: Protecting people defense isn't.
Mary Recliner: Just about the equipment.
Eric Roth: Ali.
Eric Roth: His deep industry relationships with defense ministries military forces and intelligence agencies worldwide are sure to be hugely valuable as <unk> continues to expand into defense and homeland security markets.
Mary Recliner: About delivering reliable field proven solutions that support those on the Frontlines.
Mary Recliner: Strengthen national security.
After <unk> comments, he will hand, the call to Mary Recliner, who will provide a detailed update on the business development progress at OAS off Street. Please proceed.
Mary Recliner: Global trends are evolving at an unprecedented pace and traditional defense systems.
Mary Recliner: Cannot keep up there is an urgent need for AI driven autonomous solutions.
Speaker Change: Thank you Eric and I also want to thank you and the board.
Speaker Change: The opportunity to join the team and advance the important work we are doing together and then also happy who joined the call and engage with our investors in this fall.
Mary Recliner: Can operate 24, seven and integrate seamlessly with Allied forces.
Speaker Change: <unk> is uniquely positioned as a leader in autonomous defense technology, bringing combat proven.
Speaker Change: We begin by sharing that they join to Linzess tunnel systems, because they believe the future of defense is rooted in systems that.
Speaker Change: Driven solutions to Allied forces with our advanced platform in the operation.
Speaker Change: <unk> PS.
Speaker Change: Don Imus intelligent and built for real World operations, having spent years working on government and government defense programs.
Speaker Change: We are poised to shape the future of modern warfare.
Speaker Change: Strengthen Michigan superiority.
Speaker Change: At the core of our success is the talent and the expertise.
Speaker Change: I've seen firsthand how critical advanced technology is protecting people defense.
Speaker Change: Our teams both in Israel, and American robotics in the U S T.
Speaker Change: Isn't just about the equipment.
Speaker Change: Teams bring decades.
It's about delivering reliable field proven solutions that support those on the Frontlines and strengthened.
Speaker Change: <unk> experience in developing and the.
Speaker Change: Employing.
Speaker Change: Almost technologies, ensuring that we deliver not just innovation the true capabilities the defense forces.
Speaker Change: Michigan.
Speaker Change: Alrighty.
Mobile trades are evolving.
Speaker Change: Yes.
Speaker Change: Precedented pace and traditional defense systems.
Speaker Change: Looking ahead my vision is clear we will become one of the leading next generation defense technology providers.
Speaker Change: Cannot keep up there is an urgent need for AI driven autonomous solutions.
Speaker Change: Delivering autonomous systems.
Speaker Change: Can operate 24 citizen integrate seamlessly with Allied forces.
Speaker Change: <unk> enhanced security operations and provide real tactical adventures.
Speaker Change: Our ability to operate across broad use.
Speaker Change: <unk> is uniquely positioned as the leader in autonomous defense technology, bringing combat proven AI driven solutions.
Yes.
Speaker Change: Defense ecosystems gives us synthetic edge as we work closely with government entities.
It forces with our advanced platform and operational.
Speaker Change: And agencies.
Speaker Change: Security forces and defense partners.
Speaker Change: Booties were.
Speaker Change: We're poised to shape, the future of modern warfare and strengthen national security.
Speaker Change: To deploy mission critical solutions.
Speaker Change: Needed most.
Speaker Change: We are not just adapting to the future we are shaping practical results driven solutions.
Speaker Change: The cool for success is the talent and expertise.
Speaker Change: Our teams both in Israel, and American robotics in the U S.
Speaker Change: That protect people and Securitizations.
Speaker Change: These teams bring decades.
Speaker Change: So.
Speaker Change: Thrilled to be here and working with the strong team. We are fully committed to both our mission and to delivering great outcomes for our investors I will now hand over the call to <unk>.
Speaker Change: <unk> experience in developing and deploying autonomous technologies, ensuring that we deliver not just innovation, but true capabilities. The defense forces can trust.
Speaker Change: We will give you a detailed update on our activities I look forward to the quarters end views ahead with all of you.
Speaker Change: Looking ahead my vision is clear we will become one of the leading next generation defense technology providers.
Speaker Change: Delivering autonomous systems.
Keith.
Speaker Change: Thank you <unk>. It is great to have you here with us today and look forward to seeing your leadership at the OAS and drive the expansion of our business in the defense and homeland security sectors.
Speaker Change: Enhanced security operations and provide real tactical adventures.
Speaker Change: Our ability to operate to cross boat.
Speaker Change: And Allied defense ecosystems gives us synthetic edge has worked closely with governments and agencies.
Speaker Change: 'twenty 'twenty four was a remarkable year for on this autonomous systems, we established a new business and our cutting edge controlled worn system I want one way to secure our first deal with estimate <unk> defense customer for our legacy system, Optimus and have already begun deploying disorders.
Speaker Change: Agencies.
Speaker Change: The forces.
Speaker Change: Defense partners to deploy mission critical solutions.
Speaker Change: Reward operational environments.
Speaker Change: Needed most.
Speaker Change: We are not just adapting to the future we are shaping.
Speaker Change: In the U S market American robotics made significant progress in expanding our footprint and strengthening relationships with strategic partners.
Speaker Change: Results driven solutions that protect people and secure nations.
Speaker Change: We launched our training and demo center in Maryland successfully conducted demonstrations and obtained designated waivers and unique technological improvements to enable fully autonomous beyond visual line of sight flights.
Speaker Change: So im trilled to be here and working with the strong team. We are fully committed to both our mission and to delivering great outcomes for our investors I will now hand over the call to me, who will give you a deeper.
Speaker Change: Outside of America, we continued scaling of our drawn networking Dubai, while expanding our business into Europe, and Asia, developing key relationships with customers and strategic partners.
Speaker Change: The update on our activities I look forward to the quarters and views ahead with all of you. Thank you. Thank.
In Europe, we secured multiple agreements with local distributors and integrators and conducted we reward demonstrations of both drawn and optimal systems. These activities have already result in significant business development progress and we look forward to sharing more details on our business.
Speaker Change: It is great to have you with us today I look forward to seeing your leadership at the OAS and drive the expansion of our business in the defense and homeland security sectors.
Speaker Change: 2024 was a remarkable year for industrial autonomous systems, we established a new business at home to our cutting edge control system I want one way to secure our first deal with estimate defense customer for our legacy system Optimus and have already begun deploying these orders in a real world operational.
Speaker Change: Progress in these countries soon.
Speaker Change: The nine general modern warfare as seen in recent global conflicts is rapidly evolving creating new demand for both defensive and offensive technologies OAS is in a unique position with both optimist and I want one radar undergoing accelerated upgrades and rigorous testing in.
Speaker Change: <unk>.
Speaker Change: In the U S market American robotics made significant progress in expanding our footprint and strengthening relationships with strategic partners.
Speaker Change: We reward competitive environments.
Speaker Change: We closed 2024 with significant deals involving key customers with strong expansion potential in 2025 and beyond to government to government agreements and multimillion dollar opportunities in the global defense market driving by the next generation warfare and cutting edge defense.
Speaker Change: We launched our training and demo center in Maryland successfully conducted demonstrations and obtained designated waivers and unique technological improvements to enable fully autonomous beyond visual line of sight flights.
Speaker Change: Outside of America, we continued scaling our dwan networking Dubai, while expanding our business into Europe, and Asia, developing key relationships with customers and strategic partners.
Speaker Change: Hologic.
Speaker Change: <unk> is currently focused on fulfilling major military and defense contracts enhancing our products with nickel generation capabilities meeting defense specific operational needs and deploying our systems. According to plan.
Speaker Change: In Europe, we secured multiple agreements with local distributors and integrators and conducted we reward demonstrations of both one and optimal systems. These activities have already result in significant business development progress and we look forward to sharing more details on our <unk>.
Speaker Change: Our initial platform Optimus stands out in the market for its maturity scalability and advanced capabilities. Unlike fifth generation wanting a bulk solutions that struggled with automated lending battery and pellets wrapping and fully automated data entering Optimus has already surpassed these challenges.
Speaker Change: <unk> progress in these countries soon.
Speaker Change: The nature of modern warfare as seen in recent global conflicts is rapidly evolving creating new demand for both defensive and offensive technologies OIS is in a unique position with both optimist and I want one radar undergoing accelerated upgrades and rigorous testing.
Speaker Change: It operates autonomously, even in disconnected environments without reliance on internet connectivity or external networks.
Speaker Change: Our defense customers recognize Optimus is scalable platform as we are actively collaborating to integrate advanced AI driven autonomy to make it truly unstoppable in a mission critical scenarios.
Speaker Change: And we reward competitive environments.
Speaker Change: We closed 2024 with significant deals involving key customers with strong expansion potential in 2025 and beyond through government to government agreements and multi million dollars opportunities in the global defense market driving by the next generation warfare and cutting edge defense.
Speaker Change: I won't run rate has been tested and refined with real world operational feedback make it in the most versatile and mature continent, one into sector on the market. Today, we are continuously integrated with other advanced defense systems and enhancing its features true and designated program with our deferred.
Speaker Change: Technology.
Speaker Change: <unk> is currently focused on from a feeling major military and defense contracts enhancing our product with next generation capabilities meeting defense specific operational needs and deploying our systems. According to plan.
Speaker Change: <unk> partners.
I am confident that we will soon witness Additionally, breakthroughs and new capabilities that will further strengthen our position as a leader in next gem Autonomous defense technology.
Our initial platform Optimus stands out in the market for its maturities capability and advanced capabilities. Unlike fifth generation wanting a bulk solutions that struggled with automated lending battery and pellets wrapping and fully automated data entering Optimus has already surpassed these challenges.
Speaker Change: During 'twenty 'twenty four we managed to fulfill most of our business development targets, creating our marketing infrastructure and targeting regions and sectors.
Speaker Change: In the U S market American robotics completed the establishment of its customer demonstration and training center.
Speaker Change: It operates autonomously, even in disconnected environments without reliance on internet connectivity or external networks.
Speaker Change: His new Maryland at quarters, supporting the introduction of Optimus and I wont run radio to the defense public safety and critical infrastructure sectors.
Speaker Change: Our defense customers recognize the Optimus is scalable platform as we are actively collaborating to integrate advanced AI driven autonomy to make it truly unstoppable in a mission critical scenarios.
Speaker Change: In addition to optimal system was showcased through multiple bibulous demonstrations, including New York, Texas, and Massachusetts, providing its ability to execute fully autonomous missions without an on site pilot or virtual observer.
Speaker Change: I won't run rate has been tested and refined with real world operational feedback make it in the most versatile and material content one into effect on the market today, we are continuously integrating it with other advanced defense systems and enhancing its features true and designated program with our <unk>.
Speaker Change: Our marketing activity at the medical robotics is gaining traction and our customer pipeline is matured.
Speaker Change: I am happy to report today that we have received the purchase order from a large U S water utility based on the East coast, where we will deploy an optimal system along with our customers aerospace awareness system. The optimal system will be used to secure important water resources in support of local community and we believe.
Speaker Change: <unk> partners.
I am confident that we will soon witness Additionally, breakthroughs and new capabilities that will further strengthen our position as a leader in next gem Autonomous defense technology.
Speaker Change: This program will expand from here.
Speaker Change: During 2024, we managed to fulfill most of our business development targets, creating our marketing infrastructure in targeting regions and sectors.
Speaker Change: Primarily kind of vertically integrated the customer system and advanced space monitoring solution, combining active and passive detection technologies with air traffic situational awareness software. This system meets regulatory detect and avoid the requirements and then building beyond visual line of sight operations and fully autonomy.
Speaker Change: In the U S market American robotics completed the establishment of its customer demonstration and training center.
Speaker Change: His new Maryland at Cortez supporting the introduction of Optimus and I wont run way down to the defense public safety and critical infrastructure sectors.
First one's missions.
Speaker Change: And we will us wherever was achieved allowing for flights over people and moving vehicles further expanding American robotics operation on our capabilities.
Speaker Change: In addition, the optimal system was showcased through multiple billion of demonstrations, including New York, Texas, and Massachusetts, providing its ability to execute fully autonomous missions without an on site pilot or virtual observer.
Speaker Change: We also executed a contract with the U S Coast Guard Maritime emission monitoring supporting EPA clean power initiatives and the port of Los Angeles, and long Beach. This milestone positions American robotics as a prime vendor for U S federal agencies.
Speaker Change: Our marketing activity at the medical robotics is gaining traction and our customer pipeline is maturing.
Speaker Change: In the Middle East, we have expanded our business footprint and continue with our project in Dubai and these wins, our Optimus metros in this region performing hundreds of flights every week completely autonomously 24, seven although populated urban areas.
I am happy to report today that we have received the purchase order from a large U S water utility based on the East coast, where we will deploy an optimal system along with our customer at aerospace awareness system. The optimal system will be used to secure important water resources in support of local community and we bill.
Speaker Change: We are very excited to see this level of operational maturity in the optimal system and we will soon have more news on scaling up our drawn network in Dubai in additional locations.
Speaker Change: This program will expand from here.
Speaker Change: I know you kind of vertically integrated the customer system and advance as space monitoring solution, combining active and passive detection technologies with air traffic situational awareness software. This system meets regulatory detect and avoid the requirements and then building beyond visual line of sight operations and fully a ton.
In Europe, we have partnered with <unk> and see how small aerospace expanding our reach into key markets, such as Germany and Slovenia.
Speaker Change: We conducted multiple demonstration of optimal sand island, one radar for key customers and partners reinforcing and robotics growing market presence in the region.
Speaker Change: Most ones missions.
Speaker Change: We recently announced the launch of our island one demo team in Europe, and we are already seeing strong engagement and positive result, which we believe will lead to important commercial activity in 2025.
Speaker Change: And we will not waiver was achieved allowing for flights over people and moving vehicles further expanding American robotics operation on our capabilities.
Speaker Change: We also executed a contract with the U S Coast Guard maritime emission monitoring <unk>.
Speaker Change: We have also announced that August and Rollouts as aerospace formed a strategic partnership to enhance motor civilians utilizing advanced <unk> technologies, reinforcing Oss all in security and defense applications.
Speaker Change: Courting EPA clean power initiatives and the port of Los Angeles, and long Beach. This milestone positions American robotics as a prime vendor for U S federal agencies.
Speaker Change: I would like to thank all of our teams and mineral Baltics and American Robotics I believe we are making very significant progress in the last year and as 2025 started we have witnessed a big changes in the world in the market and within our company every day with CLS systems getting better and conversations.
Speaker Change: In the Middle East, we have expanded our business footprint and continuing to our project in Dubai and these wins, our Optimus metros in this region performing hundreds of flights every week completely autonomously 24, seven although populated urban areas.
Speaker Change: We are very excited to see this level of operational maturity in the optimal system and we will soon have more news on scaling up our <unk> network in Dubai and additional locations.
Speaker Change: With more top customers I am looking forward to sharing some more news with you soon.
Speaker Change: I would now and over the call to Eric So he can provide the outlook for 2025.
Speaker Change: In Europe, we have partnered with <unk> and see how small aerospace expanding our reach into key markets, such as Germany and Slovenia.
Eric: Thank you Matt.
Eric: Now turn to our outlook I am excited for US I believe 2025, we will see accelerated growth leveraging the momentum from our successes in 2024.
Speaker Change: We conducted multiple demonstrations of optimal send I want one window for key customers and partners reinforcing our robotics growing market presence in the region.
Eric: So let me set that stage for you all.
Eric: Our key objectives of OAS include driving growth through the expansion of our ongoing optimists and iron drone programs with our current military and public safety customers, ensuring successful deployments and further customer adoption.
Speaker Change: We recently announced the launch of our island one demo team in Europe, and we are already seeing strong engagement and positive result, which we believe will lead to important commercial activity in 2025.
Eric: We also plan to expand new customer programs, particularly in the defense and homeland security sectors and aim to secure additional military customers through both governance and government channels indirect marketing.
Speaker Change: We also announced that honors and rollout this aerospace formed a strategic partnership to enhance motor civilians utilizing advanced <unk> technologies, reinforcing OAS as long in security and defense applications.
Eric: Similarly, we are focused on leveraging our dual use capabilities across critical infrastructure and public safety sectors to capture new customers in the U S and in Europe.
Speaker Change: I would like to thank all of our teams in <unk> and American Robotics I believe we are making very significant progress in the last year and is 2025 started we have witnessed a big changes in the world in the market and within our company every day, we see our systems getting better in conversations with.
To support this growth we will continue to invest in scaling our operating platform with a focus on supply chain and <unk> services and leveraging our new partnership with talented to enhance efficiencies through AI.
Speaker Change: And as networks, we are committed to building strategic value by advancing private wireless networks for critical rail operating and safety systems as Mark has highlighted that entails driving the 900 megahertz buildout as well as broadening the use cases at the edge, which will include additional applications on 900 megahertz as well as the other private rail bands.
More top customers I am looking forward to sharing some more news with you soon.
Speaker Change: I would now and over the call to Eric So he can provide the outlook for 2025.
Speaker Change: Thank you mayor.
Speaker Change: Let's now turn to our outlook I am excited for onto US I believe 2025, we will see accelerated growth leveraging the momentum from our successes in 2024 so.
The new systems, such as <unk> at $4 50 megahertz.
Speaker Change: Given the building momentum at Argos, we expect to generate record revenues for 2025. This is supported by a significant backlog backlog, we bring into the year and visibility we have on the order intention of customers. Indeed, our business development pipeline is expanding and we also expect a record year for bookings and backlog growth.
Speaker Change: So let me set that stage for you all.
Speaker Change: Our key objectives of OAS include driving growth through the expansion of our ongoing optimists and iron drone programs with our current military and public safety customers, ensuring successful deployments and further customer adoption.
Speaker Change: We also plan to expand new customer programs, particularly the defense and homeland security sectors and aim to secure additional military customers through both governance and government channels indirect marketing.
Speaker Change: For the full year, we expect to generate $25 million in revenue across all business units. We believe this is a conservative forecast for OIS, we are raising our revenue outlook to at least $20 million as compared to our initial 2000 $15 million to $18 million given at our hour OAS Investor Day in September 2024.
Speaker Change: Similarly, we are focused on leveraging our dual use capabilities across critical infrastructure and public safety sectors to capture new customers in the U S and in Europe.
Speaker Change: To support this growth we will continue to invest in scaling our operating platform with a focus on supply chain efficiency keel services and leveraging our new partnership with talent here to enhance efficiencies through AI.
Speaker Change: Sure.
Speaker Change: We want to carefully manage expectations on dust networks due to the lack of tangible orders in hand today.
Speaker Change: Now we have a conservative outlook expecting just $5 million of revenue for 2025 of course these numbers would change dramatically to the upside with the network build out which I believe is inevitable.
Speaker Change: And on our networks, we are committed to building strategic value by advancing private wireless networks for critical rail operating and safety systems as Mark has highlighted that entails driving the 900 megahertz buildout as well as broadening the use cases at the edge, which will include additional applications on 900 megahertz as well as the other private rail bands.
Speaker Change: For some more context on the outlook when sharing targets. Our objective is to provide as much transparency as we can when setting expectations on financial performance, there's always risk in providing revenue targets, but it is important to help our investors evaluate both our potential and performance simply put we believe these rapidly targets.
Speaker Change: According to new systems, such as N G E F 150 megahertz.
Speaker Change: Given the building momentum at Argos, we expect to generate record revenues for 2025. This is supported by a significant bagwash backlog, we break into the year and visibility we have on the order intention of customers. Indeed, our business development pipeline is expanding and we also expect a record year for bookings and backlog growth.
Speaker Change: Our conservative we are targeting huge markets with proprietary invaluable platform technologies.
Speaker Change: We're engaging with various customers at both OAS and on dust networks, who could enter into and expand programs around our platforms that could substantially increase this outlook of course that is our goal and I hope we will be able to do that in 2025.
Speaker Change: Yeah.
Speaker Change: For the full year, we expect to generate $25 million in revenue across all business units. We believe this is a conservative forecast.
Speaker Change: With a strengthened leadership team invalidated market traction I believe we are poised for significant growth supported by a robust pipeline and our focus on operational scale we.
Speaker Change: Yes, we are raising our revenue outlook to at least $20 million as compared to our initial 2000 $15 million to $18 million given at our hour OAS Investor Day in September 2024.
Speaker Change: We are focused on delivering for our customers and for you our investors.
Speaker Change: We want to carefully manage expectations on dust networks due to the lack of tangible orders in hand today.
Speaker Change: Summing up we are executing our vision to scale on us and I believe 2025 will be a breakout year.
Speaker Change: Now we have a conservative outlook expecting just $5 million of revenue for 2025 of course these numbers would change dramatically to the upside with the network build out which I believe is inevitable.
Speaker Change: That said, let's see if there are any questions.
Speaker Change: Operator.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to.
Speaker Change: For some more context on the outlook when sharing targets. Our objective is to provide as much transparency as we can when sidney expectations on financial performance. There is always risk and providing revenue targets, but it is important to help our investors evaluate both our potential and performance simply put we believe these revenue targets.
Withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Our conservative we are targeting huge markets with proprietary invaluable platform technologies, we're engaging with various customers at both OAS and on dust networks, who could enter into and expand programs around our platforms that could substantially increase this outlook of course that is our goal and I hope, we will be able to do that.
Speaker Change: The first question comes from Glenn Mattson with Ladenburg Thalmann. Please go ahead.
Glenn Mattson: Yeah, Hey, guys. Thanks for taking the question and congrats on the progress at OAS nice to see the $10 million of backlog coming into the year could you just give us some more color on.
Speaker Change: In 2025.
Speaker Change: Your visibility into the number you provided at least $20 million.
Speaker Change: With a strengthened leadership team invalidated market traction I believe we are poised for significant growth supported by a robust pipeline and our focus on operational scale.
Speaker Change: Things like just.
The timing of how you see that kind of when you expect orders to come in in order to get them shipped it out this year and then also generally the mix that you envision between optimists and iron drone.
Speaker Change: We are focused on delivering for our customers and for you our investors.
Speaker Change: Summing up we are executing our vision to scale on to us and I believe 2025 will be a breakout year.
Glenn Mattson: Sure Glenn Thanks for the question.
Glenn Mattson: So, bringing the $10 million into this year, we expect that to be realized and recognized in revenue.
Speaker Change: With that said, let's see if there are any questions.
Speaker Change: Operator.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like.
Speaker Change: In the first.
Second quarter.
Speaker Change: And we are actively engaged with various customers both on.
Speaker Change: The military side.
Speaker Change: New customers that is.
Speaker Change: Four new programs with iron drone.
Speaker Change: As well as customers, who were on iron drone and.
Speaker Change: Withdraw your question. Please press Star then two.
Speaker Change: And optimists, who are looking to expand programs and that specifically is with our major military customer in the middle East.
At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from Glenn Mattson with Ladenburg Thalmann. Please go ahead.
Speaker Change: And of course.
Speaker Change: Our public safety customer.
Speaker Change: In Dubai.
Glenn Mattson: Yeah, Hey, guys. Thanks for taking the question and congrats on the progress that OAS nice to see the 10 million of backlog coming into the year could you just give us some more color on.
Speaker Change: On the Dubai customer can you give us an update on how did you shipped any.
Speaker Change: Units in Q4, and maybe just a general sense of how many you expect in.
Speaker Change: 25 or <unk>.
Glenn Mattson: Your visibility into the number you provided at least $20 million a couple of things like just.
Speaker Change: Yes.
Speaker Change: I'm not able to share specific details on that but there is active in advanced dialogue specifically on that.
Glenn Mattson: The timing of how you see that kind of when you expect orders to come in in order to get them shipped it out this year and then also generally the mix that you would envision between optimists and iron drunk.
We didn't ship units in Q4.
Speaker Change: I guess I won't.
Speaker Change: I won't forecast for Q1, specifically for that just yet.
unknown: Sure Glenn Thanks for the question.
Speaker Change: Okay, great I'll jump in the queue and let someone else go alright. Thanks Glenn.
unknown: So, bringing the $10 million into this year, we expect that to be realized and recognized in revenue.
Speaker Change: The next question comes from Matthew <unk> with Maxim Group. Please go ahead.
unknown: In the first.
Second quarter.
unknown: And we are actively engaged with various customers both on.
Matthew: Hey, good morning, Thanks for taking my questions.
Matthew: I wanted to maybe check in on the first responder opportunity in the U S market.
unknown: On the military side.
unknown: New customers that is.
unknown: Four new programs with iron drone.
Matthew: Would that developing and our any.
unknown: As well as customers, who were on iron drone and.
Matthew: I guess changes to access to drone.
unknown: And optimists, who are looking to expand programs and that specifically is with our major military customer in the middle East and of course our own.
Matthew: <unk>.
Matthew: How is that impacting first responder interest in the Optimus platform.
unknown: Our public safety customer.
unknown: And Dubai.
Matthew: Thank you Matt So there is quite a bit of interest in optimists, specifically, but of course as we've shared on recent calls and I know youre observing in the market.
unknown: On the DIY customer can you give us an update on how did you ship any.
unknown: Units in Q4, and and and and maybe just a general sense of how many you expect in.
Matthew: Demand for <unk> programs generally across the U S is growing very rapidly.
unknown: 25.
unknown: Yes.
Matthew: And we do expect to participate.
unknown: I'm not able to share specific details on that but there is active in advanced dialogue specifically on that.
Matthew: We highlight at the end of last year that we had a demonstration with a public safety customer a major one.
unknown: We didn't ship units in Q.
Matthew: That was.
unknown: Q4.
Matthew: And then in first the first quarter of this year.
unknown: I guess I won't I.
unknown: I won't forecast for Q1, specifically for that just yet.
Matthew: We have.
Matthew: Performed a pilot program for that and there was a major pilot program, which was successful.
Speaker Change: Okay, great I'll jump in the queue and let someone else go alright. Thanks Glenn.
Matthew: And I guess I need to leave it at that.
Speaker Change: The next question comes from Matthew <unk> with Maxim Group. Please go ahead.
Matthew: We're going to see from here, how things progressed with our customer.
Matthew: Commercial orders and things.
Matthew: Hey, good morning, Thanks for taking my questions.
Matthew: Like that.
Matthew: Okay.
Matthew: Got it alright, just as my follow up.
Speaker Change: I wanted to maybe.
Speaker Change: Maybe check in on the first responder opportunity in the U S market, how is that developing and how or any.
Matthew: They wouldn't be.
Matthew: The conference call, if we didn't ask about.
Matthew: U S is tariff posture and how that might have influenced.
Matthew: Your ability to deliver.
Speaker Change: I guess changes to access to drone.
Matthew: Product and how it might affect costs. So just curious how how are you.
Speaker Change: How is that impacting first responder interest in the Optimus platform.
Matthew: You are positioned against.
Matthew: Some of the tariff issues and how nimble you can be into kind of offset some of them.
Speaker Change: Yeah.
Speaker Change: Thank you Matt So there is quite a bit of interest in optimists, specifically, but of course as we've shared on recent calls and I know youre observing in the market.
Matthew: Well I don't see it having a major impact.
Matthew: For us we are not sourcing.
Speaker Change: <unk> four <unk> programs generally across the U S is growing very rapidly.
Matthew: Much.
Matthew: If anything really from China directly.
Speaker Change: And we do expect to participate.
Matthew: And so I think that's a simple answer Matt.
Speaker Change: We highlight at the end of last year that we had a demonstration with a public safety customer a major one that was.
Matthew: At the same time, I do say policy looks like.
Matthew: Blow it up a little bit more I think policy, particularly the Trump administration is going to be proved to be extremely supportive.
Speaker Change: And then in the first quarter this year we have.
Speaker Change: A formed a pilot program for that and there was a major pilot program, which was successful.
Matthew: For for Western and U S producers like us.
Speaker Change: And I guess I need to leave it at that we're going to see from here.
Matthew: So I do think that's going to be a nice tailwind for us really in the near term.
Speaker Change: Things are progressing with that customer.
Matthew: Alright, thank you.
Speaker Change: Commercial orders and things like that.
Mhm.
Speaker Change: Got it alright, and just as my follow up.
Speaker Change: The next question comes from Mike Latimore with Northland Capital. Please go ahead.
Speaker Change: I guess it wouldn't be.
Speaker Change: The conference call, if we didn't ask about <unk>.
Speaker Change: You have some tariff posture and how that might influence.
Speaker Change: Hey, Hi, this is <unk> on behalf of Mike Latimore could you give some color on the gross margins for this year.
Speaker Change: Your ability to deliver.
Speaker Change: <unk> product and how it might affect costs. So just curious how how you are positioned against.
Speaker Change: Yes, sure. So we are expecting gross margins to recover this year, specifically driven by OIS and improved volumes.
Speaker Change: Some of the tariff issues and how.
Speaker Change: How nimble you can be to kind of offset some of them.
Speaker Change: So if.
Speaker Change: If im looking at the first couple of quarters, you should probably look at them to be in the 40% range and I think they can get to 50% or better as we're moving through the second half.
Speaker Change: Well I don't see it having a major impact.
Speaker Change: For us we are not sourcing.
Speaker Change: Sure.
Speaker Change: If anything really from China directly.
Speaker Change: Got it.
Speaker Change: And so I think that's this is for Matt.
Speaker Change: Could you also give some color on how many drones do you have in the inventory.
Speaker Change: At the same time I do say policy.
How much do we expect to manufacture this year.
Blow it up a little bit more I think policy, particularly the Trump administration is going to be proved to be extremely supportive.
Speaker Change: I don't want to.
Speaker Change: Sure those details.
Speaker Change: Alright got it.
Speaker Change: For for Western and U S producers like us.
Speaker Change: Thank you.
Speaker Change: The next question comes from Carter <unk> with <unk> Capital Group. Please go ahead.
Speaker Change: So I do think thats going to be a nice tailwind for us really in the near term.
Speaker Change: Alright, thank you.
Speaker Change: Wow that was slow.
Speaker Change: Okay.
Speaker Change: And gentlemen, congrats on all that you've achieved and look forward to.
Speaker Change: The next question comes from Mike Latimore with Northland Capital. Please go ahead.
Speaker Change: 25.
Speaker Change: I need some clarity on Collins here. So it seems that you put out a press release yesterday with a partnership with double and triple down on that during this call and it seems there's confusion as to the meaning of partnership. So clearly volunteer gave you permission to put out that press release.
Speaker Change: Hi, This is <unk> be helpful. Mike Latimore could you give some color on the gross margins for this year.
Speaker Change: Yes, sure. So we're expecting gross margins to recover this year, specifically driven by OIS and improved volumes.
Speaker Change: Reads as if youre.
Speaker Change: They're utilizing their product not partnering with them. So please explain to me and I guess shareholders why it's considered a partnership and how are they actually a partner. Thank you.
Speaker Change: So.
Speaker Change: If I'm looking at the first couple of quarters. So you should probably look at them to be in the 40%.
Speaker Change: Sure. So first of all as you're well aware pelletier has vast capabilities.
Speaker Change: Range and I think they can get to 50% or better as we're moving through the second half.
Speaker Change: At range those capabilities range from entry point for enterprise resource planning systems.
Speaker Change: Got it.
Speaker Change: Could you also give some color on how many drones do you have into inventory.
And of course, our foundry AI is one of the key.
Speaker Change: Well, how much do we expect to manufacture this year.
Speaker Change: Pieces or services they provide there.
Speaker Change: I don't want to.
Speaker Change: But that also includes tools around making autonomy more robust.
Speaker Change: Sure those details.
Speaker Change: Alright got it.
Speaker Change: And they have tools data analytics for example that can be combined with the data we collect from IR sensors.
Speaker Change: Thank you.
Speaker Change: The next question comes from Carter <unk> with <unk> Capital Group. Please go ahead.
Speaker Change: That provide actionable intelligence so in that sense talents here also serves as an integrator of capabilities.
Speaker Change: Wow that was slow.
Speaker Change: Where they can take complete advanced.
Speaker Change: Gentlemen, congrats on all that you've achieved and look forward.
Speaker Change: AI enabled solutions directly to customers. So so today for us. The first step is really to integrate foundry AI, but I do believe longer term that we will see this evolve with talented AI again embedded in the product solutions, we develop on behalf of customers in terms of the technology roadmap.
Speaker Change: 25.
Speaker Change: I need some clarity on Collins here. So it seems that you put out a press release yesterday with a partnership doubled and tripled down on that during this call and it seems there's confusion as to the meaning of partnership so clearly volunteer.
Speaker Change: And this partnership does call for some elements of that that we're likely to be able to share.
Speaker Change: Volunteer gave you permission to put out that press release it reads as if.
Speaker Change: They're utilizing their product not partnering with them. So please explain to me and I guess shareholders why it's considered a partnership and how are they actually a partner. Thank you.
Speaker Change: In the future.
Speaker Change: Okay, great. Thanks, guys best of luck.
Thank you.
Speaker Change: And we have a follow up from Glenn Mattson with Ladenburg Thalmann. Please go ahead.
Sure. So first of all as you're well aware pelletier has vast capabilities.
Glenn Mattson: Hi, Yes, just on the on the network side.
Speaker Change: That range those capabilities range from entry point for enterprise resource planning systems.
Speaker Change: Can you just get someone can just comment about.
Glenn Mattson: The level of.
Glenn Mattson: Of significance that the new administration is putting on.
Speaker Change: And of course, our foundry AI is one of the key.
Speaker Change: Pieces or services they provide there.
Whatever timelines that were previously in place obviously it seems like I believe it was April 2026.
Speaker Change: But it also includes tools around making autonomy and more robust.
Speaker Change: And they have tools data analytics for example that can be combined with the data we collect we are sensors.
Glenn Mattson: Line to meet some sort of.
FCC requirements.
Glenn Mattson:
Glenn Mattson: Just what's the status of that is what the general thought of it.
Speaker Change: That provide actionable intelligence so in that sense talents here also serves as an integrator of capabilities.
Administration's going to enforce that or extend that or just thoughts around that would be great. Thanks.
Speaker Change: Where they can take complete advanced.
Glenn Mattson: Yes, let me take a crack at it and I'll see if market says anything to add so firstly, we let the railroad speak to the deadlines and as Mark has highlighted the AAR has publicly said they expect to meet or.
Speaker Change: AI enabled solutions directly to customers. So so today for us. The first step is really to integrate foundry AI, but I do believe longer term that we will see this evolve with talented AI being embedded in the product solutions, we develop on behalf of customers in terms of the technology roadmap.
Lipa deadlines.
Speaker Change: And I would highlight there is theres a couple of.
Glenn Mattson: Deadlines that.
Speaker Change: And this partnership does call for some elements of that that we're likely to be able to share.
Glenn Mattson: Matter, Firstly, Theres September 2025, where they have to.
Glenn Mattson: They've agreed to.
Speaker Change: In the future.
To retire the legacy network.
Speaker Change: Okay, great. Thanks, guys best of luck.
Speaker Change: Thank you.
Glenn Mattson: And that spectrum is being returned back to the FCC for.
Glenn Mattson: And we have a follow up from Glenn Mattson with Ladenburg Thalmann. Please go ahead.
Glenn Mattson: To be reused elsewhere.
Glenn Mattson: And then there is also what is known as utilization.
Speaker Change: Hi, Yeah, just on the on the network side.
Glenn Mattson: Requirements, so they're required to utilize the spectrum or.
Speaker Change: Can you just get someone can just comment about.
Speaker Change: The level of.
Glenn Mattson: In that instance, if they don't.
Speaker Change: Significance that the new administration is putting on.
Glenn Mattson: The rules typically.
Glenn Mattson: Would require the spectrum to be the new spectrum I'm talking about the Greenfield that you'll also known as the a block to be to be returned to the FCC.
Speaker Change: Whatever timelines that were previously in place obviously it seems like I believe it was April 2026.
So that's that's simply it I do believe that.
Speaker Change: Deadlines to meet some sort of a F.
Speaker Change: FCC requirements.
Glenn Mattson: Well let.
Speaker Change:
Glenn Mattson: Let me leave it at that I don't want to speculate on what the administration.
Speaker Change: You know what the status of that is what the general thought of it is about how the administration's going to enforce that or extend that or just just thoughts around that would be great. Thanks.
Marcus: For the FCC thinks about this but Marcus would you add anything I mean, perhaps you can.
Speaker Change: Yeah, let me take a crack at it and I'll see if market says anything to add so firstly, we let the railroad speak to the deadlines and as Mark has highlighted the AAR has publicly said they expect to meet or.
Marcus: Share a bit more on the $2 20 in the 900 megahertz, the redundant network strategies and things like that as well as the other use cases in addition to.
Marcus: CTC and PTC backup on 900.
Speaker Change: Meet the deadlines.
And I would highlight there is theres a couple of a.
Marcus: Yes, certainly.
Speaker Change: Deadlines that.
Marcus: So.
Speaker Change: Matter Firstly, there's September 2025, where they have to.
Marcus: Really the administration.
And you still although it probably seems like it's been a long time already to some people.
Speaker Change: They've agreed to.
Speaker Change: To retire the legacy network.
Speaker Change: And that spectrum is being returned back to the FCC for.
Marcus: I think we're still shaking out at the FRE.
Marcus: At the FCC and I think.
Speaker Change: To be used elsewhere.
And then there is also what is known as utilization.
As Erik said speaking for them in terms of.
What actions they will take and when they will enforce decisions.
Speaker Change: Requirements, so they're required to utilize the spectrum or not.
Marcus: It's probably premature.
Speaker Change: The agencies have to speak for themselves now I.
Speaker Change: In that instance, if they don't.
Speaker Change: The rules typically.
Marcus: I do think the railroads are alright.
Speaker Change: It would require the spectrum to be the new spectrum I'm talking about the Greenfield that you'll also known as the a block.
Speaker Change: Becoming more sophisticated in terms of how they look at their overall.
Speaker Change: To be to be returned to the FCC.
Marcus: Patient strategy.
Speaker Change: So that's that's simply it I do believe that.
Speaker Change:
Speaker Change: The idea of creating redundancy between the two 'twenty than before.
Speaker Change: Well.
Speaker Change: Let me leave it at that I don't want to speculate on what the administration.
Speaker Change: Sorry go to training in the Manhattan market.
Speaker Change: Everyone's networks I think that's a very.
Speaker Change: Real.
Speaker Change: Or the FCC thinks about this but markets would you add anything I mean, perhaps you can.
Speaker Change: Consideration for many of the class ones.
Speaker Change: Are they do realize they have to.
Speaker Change: Sure a bit more on the $2 20 in the 900 megahertz, the redundant network strategies and things like that as well as the other use cases in addition to.
Our upgrade their communications capabilities, they want to move away from single points of failure.
And we're supporting them in both methods.
Speaker Change: As stated earlier in the presentation.
Speaker Change: <unk> PTC backup on 900.
Speaker Change: Again, those efforts are very real.
Speaker Change: Yes, certainly.
Speaker Change: A number of trials.
Speaker Change: So.
Speaker Change: <unk>, our private projects out on some of the class ones.
Speaker Change: Really the administration are in you still are.
Speaker Change: And hasbro's programs closeout.
Speaker Change: Probably seems like it's been a long time already to some people.
Speaker Change: We expect to see network wide rollouts of.
Speaker Change: So I think we're still shaking out at the FRE.
Speaker Change: All of those capabilities.
Speaker Change: At the FCC and I think.
Speaker Change: Okay, great. Thanks for the color and I guess, we'll see how the again, we look forward to further updates as the year progresses. Thank you.
Speaker Change: <unk>.
Speaker Change: As Erik said speaking for them in terms of.
Speaker Change: What actions they will take and when they will enforce decisions.
Yes, thanks Glenn.
Speaker Change: And we have a follow up from Matthew <unk> with Maxim Group. Please go ahead.
It's probably premature and they'll have the agencies have to speak for themselves.
Hey, Thanks can you maybe give us a refresher on the competitive environment for thrown in a box maybe domestically and international.
Speaker Change: I do think the railroads are alright.
Speaker Change: They are becoming more sophisticated in terms of how they look at their overall.
Speaker Change: Patient strategy.
Speaker Change: More on the optimist side.
Speaker Change: Uh huh.
Speaker Change: The idea of creating redundancy between the 220 in before.
Speaker Change: The question was on the competitive environment.
Speaker Change: Alright, good to training in the 900.
Speaker Change: Yes.
Speaker Change: Sure so ill.
Speaker Change: Everyone's networks, I think thats, a very real.
Speaker Change: I'll start by just.
Speaker Change: Consideration for many of the class ones.
Speaker Change: Discovery capabilities and I think we.
Speaker Change: Hi, they do realize they have to.
Speaker Change: We would highlight that optimists has unique capabilities around persistent availability.
Speaker Change: Our upgrade their communications capabilities, they want to move away from single points of failure.
Speaker Change: And functionality with.
Speaker Change: And we're supporting them and progresses.
Speaker Change: With the persistent availability being particularly important for <unk> applications, where critical.
Speaker Change: <unk> stated earlier in the presentation.
Speaker Change: Those efforts are very real we have a number of trials on our pilot projects out on some of the class ones.
Speaker Change: Security is obviously critical.
Speaker Change: And Thats of course is enabled by <unk>.
Speaker Change: And hasbro's programs closeout.
Speaker Change: The.
Speaker Change: Our ability to swap batteries I saw the journal.
Speaker Change: We expect to see network wide rollouts of.
Speaker Change: Michigan comes back it's available immediately for the next mission. It's also.
Speaker Change: All of those capabilities.
Speaker Change: Okay, great. Thanks for the color and I guess, we'll see how the we look forward to further updates as the year progresses. Thank you.
Critically important.
Speaker Change: The.
Speaker Change: Doc itself.
Glenn Mattson: Yeah. Thanks, Glenn.
Speaker Change: Industrial grade and I think Thats, where we are able to walk work in very difficult conditions, particularly from a weather standpoint, either hot or cold.
Speaker Change: And we have a follow up from Matthew Glinka with Maxim Group. Please go ahead.
Matthew Glinka: Hey, Thanks can you maybe give us a refresher on the competitive environment for thrown in a box maybe domestically and international.
Speaker Change: Invite.
Speaker Change: Environments and that is a key differentiator otherwise I think you'll see in the U S. The Sky deal, obviously has a very competitive drawing a box.
Speaker Change: More on the optimist side.
Speaker Change: Capability, you'll see dji as well with <unk>.
Speaker Change: The question was on the competitive environment.
Speaker Change: Yes.
Speaker Change: The design capabilities, and our <unk> system and TGI are fairly comparable.
Sure so.
I'll start by just a disc.
Speaker Change: Discovery capabilities and I think we we've.
Speaker Change: And I think thats.
Speaker Change: The two.
Speaker Change: Two that we see the most.
Speaker Change: We would highlight that Optimus has unique capabilities around persistent availability.
Speaker Change: Got it thank you and just as a follow up.
Speaker Change: On the rail side.
Speaker Change: And.
Speaker Change: <unk> functionality with the persistent availability being particularly important for <unk> applications were critical.
Speaker Change: You brought up the scenario.
I guess the railroad looking to eliminate.
Speaker Change: Single points of failure in their communications.
Speaker Change: Security is obviously critical.
Speaker Change: Does that open up any avenue for our competitors too.
Speaker Change: And that's of course is enabled by <unk>.
Speaker Change: The.
Speaker Change: Our ability to swap batteries.
Speaker Change: 802 <unk> two.
Speaker Change: Aw, Michigan comes back it's available immediately for the next mission.
Speaker Change: To sort of work their way into the network now or do you still feel.
Speaker Change: It's also critically important.
Speaker Change: Confident as you were.
Speaker Change: The <unk>.
Speaker Change: On our last update.
Speaker Change: <unk> itself.
Speaker Change: Sort of in a prime position.
Speaker Change: Is industrial grade and I think Thats, where we are able to walk work in.
Speaker Change: Oh, no I don't we don't see any new competition to AWS <unk> four the private wireless networks.
Speaker Change: In very difficult conditions, particularly from a weather standpoint, either hot or cold.
Speaker Change: Environments and that is a key differentiator otherwise I think you'll see in the U S. The Sky deal, obviously has a very competitive drawing a box.
Matthew: Was there a follow up Matthew.
Speaker Change: No that was it thank you.
Speaker Change: Capability, you'll see dji as well with <unk>.
Speaker Change: Our next question comes from Craig Scott with CSR consulting. Please go ahead.
Speaker Change: The design capabilities of the <unk> system in T. G. I R are fairly comparable.
Craig Scott: Hey, Eric Good nice call I'm glad to see the progress being made.
Speaker Change: And I think that's a that's the.
Could you just take us through a little bit the cash position and I know you have about $30 million on the books at the end of the year and what you foresee as a.
Speaker Change: Two that we see the most.
Speaker Change: Okay.
Speaker Change: Got it thank you and just as a follow up again on the rail side.
Speaker Change: And you brought up the scenario I guess.
Craig Scott: A slowdown in cash burn or any.
The railroad looking to eliminate.
Any possible need for more capital in 2025. Thank you.
Speaker Change: Single points of failure in their communications.
Craig Scott: Sure. So thank you Craig and we feel very good about our cash position for 2025.
Speaker Change: Does that open up any avenue for competitors to <unk>.
Speaker Change: <unk> two.
And of course, as we're moving through the year.
Craig Scott: The revenue ramp.
Speaker Change: To.
Speaker Change: To sort of work their way into the network now or do you still feel.
Craig Scott: Realize some operating leverage that will bring the current down progressively.
Confident as you were.
Craig Scott: So we would expect sequential growth in revenues.
Speaker Change: On our last update.
Craig Scott: Each quarter of this year and.
Speaker Change: And a prime position.
Craig Scott: And for gross profit as well so cash card will be will be declining.
Speaker Change: Oh, no I don't we don't see any new competition to AWS <unk> four the private wireless networks.
Craig Scott: Okay.
Craig Scott: Okay. Thank you.
Craig Scott: I'm good.
Craig Scott: Thank you.
Matthew Glinka: Was there a follow up Matthew.
Craig Scott: This concludes our question and answer session I would like to turn the conference back over to Eric Brock for any closing remarks.
Speaker Change: No that was it thank you.
Speaker Change: Our next question comes from Craig Scott with CSR consulting. Please go ahead.
Craig Scott: Well thank you.
Eric Brock: As we wrap up I do want to give you just a.
Craig Scott: Hey, Eric Good nice call I'm glad to see the progress being made.
Craig Scott: A preview.
Craig Scott: We do expect to see an article run tomorrow breaking defense. This article is going to provide an update on our activity with iron throne in optimists Ishares context on the progress we are making in military and homeland security markets. So please keep your eyes open for that.
Craig Scott: Could you just take us through a little bit of the cash position and I know you have about $30 million on the books at the end of the year and what you foresee as.
Craig Scott: A slowdown in cash burn or any.
Craig Scott: That said, we appreciate you spending time with US today I will reiterate that we expect a great year in 2025, and I do look forward to keeping you informed of our progress. So we hope you have a great day. Thanks again.
Craig Scott: Any possible need for more capital in 2025. Thank you.
Craig Scott: Sure. So thank you Craig and we feel very good about our cash position for 2025.
Craig Scott: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Craig Scott: And of course, as we're moving through the year and seeing the.
Speaker Change: We ramp.
Speaker Change: Realize some operating leverage that will bring the birnbaum progressively.
Speaker Change: So we would expect sequential growth in revenues.
Speaker Change: Each quarter of this year and.
Speaker Change: Gross profit as well so cash card will be will be declining.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: Okay. Thank you and I'm good.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Eric Brock for any closing remarks.
Eric Brock: Well thank you.
Speaker Change: And as we wrap up I do want to give you just a preview.
Speaker Change: We do expect to see an article run tomorrow breaking defense. This article is going to provide an update on our activity with iron throne in optimists Ishares context on the progress we are making in military and homeland security markets. So please keep your eyes open for that.
That said, we appreciate you spending time with us today.
Speaker Change: We reiterate that we expect a great year in 2025, and I do look forward to keeping you informed of our progress. So I hope you have a great day. Thanks again.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].