Amplitech Group Inc (AMPG) 2025 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Amplitech Group's quarterly investor update call, where the company will discuss its second (sic) [third] quarter 2025 financial results. (Operator Instructions). As a reminder, today's conference is being recorded.

I would now like to turn the call over to Amplitech's COO, Jorge Flores.

Thank you for joining today's call to review the progress of Amplitech's growth initiatives and financial results and to answer investor questions.

On the call today are Amplitech's Founder and CEO, CTO, Mr. Fawad Maqbool; the company's CFO, Louisa Sanfratello; and the company's COO, Jorge Flores. Following initial management comments, we will open the call to investor questions. An archived replay of today's call will be posted to the Investors Relations section of Amplitechs' corporate website. This call is taking place on Friday, November 14, 2025.

Remarks that follow and answers to questions may include statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect or words of similar importance.

Likewise, statements that describe future plans, objectives or goals are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements, which are made as of place date.

With that, let me turn the call over to our CEO, CTO, Mr. Fawad Maqbool.

Ladies and gentlemen, good morning, and thank you for joining our Q3 2025 review call. Today, we'll reflect on our record performance in the third quarter of 2025 and the nine-month period ending September 30, 2025. We'll take the opportunity to discuss the company's growth outlook, market opportunities and provide additional financial guidance.

Let's start with the Q3 2025 highlights and strategic progress. Quarterly revenue was $6.09 million, a 115% increase compared to $2.83 million in Q3 2024. Gross profit more than doubled to $2.96 million, representing a 48.6% gross margin, up from 47.5% in the prior year period, up about 40% from Q2 2025 gross margin.

EBITDA positive of nearly $200,000, reflecting substantial improvement in operating performance and margin expansion. Net loss significantly narrowed to $188,000 compared to a net loss of $1.19 million in Q3 2024. Cash, cash equivalents and accounts receivables of nearly $12 million with zero long-term debt and working capital of $14 million as of September 30, 2025.

Now the nine months highlights year-to-date 2025. Overall, nine-month company's record revenue surged 171% year-to-date to $20.7 million compared to $7.7 million in the same period last year. Net loss reduced by nearly 50%, improving from $7.4 million in 2024 to $3.8 million in 2025. The growth driven by the successful integration of Amplitech's 5G ORAN technology and strong momentum in low-noise amplifiers, low-noise blocks and 5G infrastructure systems. This is not just 5G ORAN, its true 5G and we are 5G.

Continued investment in R&D, up 60% supporting the new product development in MIMO 64T64R ORAN Radios, private 5G network systems and cryogenic amplifier platforms for quantum applications. Now this isn't just random R&D. It's strategically focused on what the world needs, billion and trillion-dollar markets.

Now operational and financial highlights. Integration of ORAN IP portfolio positions Amplitech as a US-based vertically integrated supplier for next-generation Open RAN 5G radios and private network deployment. Our third quarter shows to be an EBITDA-positive quarter, achieved through disciplined expense control, operational efficiency and growth in high-margin segments. This is a clear signal we are turning the corner and getting close to achieving profitability.

Rights offering earlier -- it's an above market price shareholder-friendly rights offering priced at $4 per unit, providing growth capital for scaling ORAN product lines and expanding domestic production. We're going to go deeper into that a little bit later. But now I'll give some outlook and forward guidance. The company increased revenue guidance to at least $25 million for fiscal year 2025, representing a 160% year-over-year increase over fiscal year 2024, beating The Street estimates. We anticipate double-digit gross margins in Q4 2025 and 2026.

As production costs normalize, onetime costs are reduced and higher-margin follow-on business ramps up. We project positive cash flow from operations and profitability to be achieved in fiscal year 2026, assuming continuation of current order pace and margin recovery. Company expects to receive follow-on orders from both publicly announced LOIs imminently as well as orders from new customers in 2026.

Assuming continuation of the current order pace and based on forecast information received by the company, fiscal year 2026 revenue will be at least $50 million, effectively doubling that of projected record fiscal year 2025 of at least $25 million.

With this all said, I'd like to focus on our current rights offering efforts, because I'm sure many people are confused. Amplitech has an effective Form S-3 base perspective -- prospectus from which it intends to offer these securities -- registered with the Securities and Exchange Commission, for a proposed rights offering in which it plans to distribute to, a, stockholders and b, certain warrant holders two transferable unit rights to purchase up to the maximum of 8 million units at $4 per unit. Each unit will consist of one share of common stock, the common shares and two short-term rights to purchase additional common shares. These are rights -- short-term rights, not warrants.

Under the rights offering, each stockholder and certain warrant holders as of the record date will receive as a dividend at no charge, two unit rights for each common share -- each common share subject to warrant owned on the record date.

The distribution of the unit rights will occur on or around the record date. The record date for the distribution of the unit rights, the expiration dates for the units rights and related short-term rights and related pricing information will be included in the filing perspective.

Holders who fully exercise their unit rights will be entitled to oversubscribe for additional units, if available, that are not purchased by other right holders, subject to potential pro-rata allocation of those oversubscribe units, for which they subscribe in proportion to the total number of oversubscription units. Now that sounds very complicated, but you can get the SWP that has been published publicly to get all the details.

The company is aiming for a 25% to 30% annual revenue growth through 2030. This target is mainly driven and based on our ORAN 5G LOIs with two different customers. These LOIs were not binding are the results of months of technical meetings and our involvement as what is known as the industry -- in the industry as POCs or proof-of-concept.

With this said, there is a predetermined price set up with these minimum quantities and specific delivery requirements set in place already, which have been supported by receiving forecast from both customers. We're executing on a visible pipeline, early repeat orders and capacity clients to support tens of thousands of radios over time.

At retail, we expect operating leverage, better purchasing, tighter manufacturing cycles, which will contribute to lift gross margins. Put simply, 25%, 35%, 30% isn't a moonshot. It's what happens when a valid product line meets a secular upgrade cycle with a differentiated ORAN 5G supplier.

Company's rights offering provides our loyal investors choice, fairness and alignment. In choice, a rights offering lets every existing shareholder decide if they want to maintain or increase their ownership on similar terms. No one is boxed out by a selective private deal. Everyone has access, hence it's pro-rata by design. If you participate, you can offset those.

And if you don't, you're making asset portfolio decision, not suffering because we raised capital in a small group. Please take note the right are transferable. Holders can also use to sell their rights in the market as we do expect market makers will create a market for them to be traded. So again, not just fairness, but flexibility.

Alignment, we picked this structure to strengthen the balance sheet without loading the company with expensive debt or entering into toxic financing transactions. It supports growth while expecting our valued long-term shareholders. It also sends a clear signal. We're raising capital to fund concrete opportunities, production, inventory turns, certifications and go-to-market. We are not raising capital plug hold.

Bottom line, the right deal gives us our shareholders agency and keeps us aligned as we step into larger orders and programs. We're inviting our owners to come with us on the next leg of our growth on the same terms. The company will use the proceeds as a high-return near-term growth levers. There are five levers. Number one, scale production and working capital, fund inventories for committed and forecasted orders, shorten lead times and secure long lead components. The goal is faster, order-to-cash and the capacity to fulfill multisite rollouts without bottlenecks.

Number two, certification and market assets, complete and extend -- complete these certifications and will extend certifications like CE and ISED, some are operator-specific. The field trials and interoperability testing. Each certification stamp expands our addressable market and removes friction for large buyers.

Number three, product road map. Encryption and software. Advanced next-gen radios and RF front-end at AI-RIC adjacent peers improved manageability and hardened security. We also have a proprietary encryption for our networks. It's hardware-based, not firmware-based big difference, which we want to incorporate across our entire ORAN 5G product line.

These additional products and features will lift performance and margin and create upsell paths across our installed base. These are valuable differentiators for us. We are not a me-too company. We have never been.

Growth to markets -- number four, go-to-market expansion. The strategy is to add sales, engineering, carrier enterprise channel partners and targeted international presence where trusted highly secured ORAN 5G has become a mandate. We all know how important security is, and we're going to the next step, incorporating this into our networks. This accelerates deal velocity and conversion.

And finally, number five, strategic flexibility. It keeps the balance sheet strong so we can pursue select tuck-in, joint ventures or capacity investments when they're clearly accretive. We're disciplined about ROI, dollars go where they unlock revenue, improved gross margin and reduce cycle times. That's how this rate translates into 25% to 30% growth trajectory, more importantly, durable value creation.

In concluding, valued shareholders, we are firmly looking ahead with our company having a record fiscal year 2025, in which we expect to nearly triple the sales achieved in fiscal year 2024, a major milestone for the company. We have expectations of receiving additional orders to continue funding our LOIs with a healthy balance sheet, zero long-term debt and expanding portfolio of proprietary 5G and satellite technologies.

We also have special cryogenic amplifiers to serve the growing needs of the quantum computing market, along with ORAN technology to support artificial intelligence and global 5G product certification is now in place.

Amplitech is now positioned to deliver successive quarters of growth, enhanced shareholder value and a significantly stronger IP valuation in 2026 and beyond. Thank you for your continued support.

We will now open the call for questions. Operator, please proceed.

(Operator Instructions)

Vishal Mishra, Bard Associates.

Hi, good morning, Fawad. So just want to -- I heard you right, which is that you do expect these rights to be traded when they're distributed, correct?

Correct.

That's great. Thanks. And second question, this is great momentum, congratulations. Do we -- I know I see double-digit gross margins. Or do we have any more like -- as you scale like -- and you also said that the gross -- like the margins, the quantities have been sort of solidified in the contract as you've been working on the POC. Do we know -- can you give me a more color on that? Is it like those margins, which has been agreed upon are like the gross margin like in the 20s, 30s, 40s or that's not something you can disclose?

Well, this is Jorge, COO for Amplitech Group. I'm going to be taking on that answer. We do have a mixed -- we have a mixed list of 4G and 5G products and every single one of them carries a different gross margin. All we can say right now, though, and also due to competitive natures, right, that we are not going to be able to disclose a specific gross margin information on our products due to competitive nature, of course. But that's why we are saying that at least we're going to be able to achieve double-digit gross margins on every of our products right now.

Great, thank you, Jorge. So I know historically, you've been close to 30%, 40%. Is that something historically you will be or like because these new products, they will be lower, higher or?

Well, as you could see from our results in Q2, in which we had a lot of onetime cost driver, we have recovered very handsomely in Q3 with over 40% gross margins. So we are, of course, going to keep allocating capital, right, to improve on our margins, sometimes we might elect to go into a higher configuration of molding equipment and fixturing to be able to drive the cost down on every single item used in our radios. So -- we do expect, though, that we're going to have, as I said before, though, at least like gross margins in the double digits.

Good. Thank you, Jorge. That's it for me. You're welcome.

(Operator Instructions)

Thank you. This concludes the Q&A session. I'll turn the call back to Fawad Maqbool for closing remarks.

Thank you, everyone, who enjoyed today's call to hear about progress. We made the plan. We have to further our company's mission of providing the communication systems of tomorrow today. We look forward to updating you further on our full year financial results call next year. Until then, please contact us directly if you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at the contact information listed at the bottom of our press release. Thank you and be well.

Today's conference call is now concluded. Thank you, and you may now disconnect your lines.