Lantronix (LTRX) 5 Sep 24 2024 Q4 Earnings call transcript

Lantronix, a leading provider of Edge intelligence solutions, recently announced its fourth quarter 2024 financial results, highlighting a record revenue of $49.1 million, representing a 41% increase from the previous year. This impressive growth was attributed to the company's strategic focus on key vertical markets, including smart cities, automotive, and enterprise, which are experiencing double-digit growth rates and favorable secular trends.

Strong Performance in Enterprise Vertical

The company's out-of-band management solutions business, a crucial component of its enterprise vertical strategy, experienced a remarkable 70% growth from fiscal year 2023 to fiscal year 2024. This growth is attributed to the increasing demand for secure and efficient network management solutions in the enterprise sector. Lantronix's out-of-band management products have been particularly successful in minimizing mean time to recovery during network disruptions, enabling businesses to quickly restore affected devices and resume operations.

Automotive and Smart Cities Verticals

In the automotive vertical, Lantronix's relationship with Togg, a Turkish automotive OEM, is progressing well, with plans for higher performance compute modules and software features. Additionally, the company secured a design services purchase order from a large German OEM, marking a significant step towards expanding its footprint in the automotive infotainment business.

In the smart cities vertical, Lantronix's collaboration with a leading smart grid customer is yielding positive results, with over $21 million in product shipments in the June quarter. The company is also partnering with this customer to expand into the North American market, presenting a significant opportunity for growth in this sector.

Edge AI Computing and Strategic Partnerships

Another area of focus for Lantronix is Edge AI computing, where it is collaborating with Qualcomm to provide integrated solutions using Lantronix's compute modules and Edge AI gateways. This partnership is expected to leverage the operational efficiency and real-time decision-making capabilities of Lantronix's Edge intelligence solutions in various vertical markets.

Financial Health and Outlook

Lantronix's financial health is robust, with a record revenue of $160.3 million in fiscal year 2024, representing a 22% increase from the previous year. The company's strong balance sheet, improved liquidity, and strategic partnerships position it well for future growth.

Looking ahead, Lantronix expects revenue to be in the range of $34 million to $38 million for the first quarter of fiscal year 2025, with non-GAAP EPS in a range of $0.07 to $0.11 per share. The company remains focused on enhancing operational leverage, pursuing inorganic growth opportunities, and driving shareholder value.

In conclusion, Lantronix's fiscal year 2024 results underscore its strategic focus on key vertical markets and innovative technologies, positioning the company for sustainable growth in the future.