The following is a summary of the DZS, Inc. (DZSI) Q3 2024 Earnings Call Transcript:
Financial Performance:
Reported Q3 revenue of $38.1 million, a 23% increase quarter-over-quarter.
Non-GAAP adjusted gross margin improved to 36.7%, up by 6.5% from the previous quarter.
Operating expenses rose due to costs from the NetComm acquisition and final restatement-related costs.Adjusted EBITDA was unfavorably down by $2 million compared to Q2 2024, primarily due to challenges in converting backlog shipments and realizing cost savings initiatives.
Business Progress:
Completed the sale of the network assurance and in-home WiFi management portfolio, improving the balance sheet and reducing debt by $50 million.
Made progress across strategic initiatives including growth, profitability improvement, and balance sheet optimization.
Focused on executing sales synergies from the NetComm acquisition, enhancing broadband access, and connectivity portfolio.
Set to achieve breakeven on an adjusted EBITDA basis and anticipate positive cash flows in 2025.
Opportunities:
The global rollout of broadband equity access and deployment programs across various countries presents opportunities for increased funding in H2 2025.
Focus on monetizing $79 million of inventory aligned with a growing sales pipeline and scheduled backlog.
Risks:
Persistent challenges in the market such as an over rotation of inventory, higher cost of capital, and delays in government stimulus programs pose risks to timely revenue realization.
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