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DZS (DZSI) investor relations material
DZS Q3 2024 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Executive summary
Q3 2024 revenue reached $38.1M, up 22.8% sequentially and 67.8% year-over-year, driven by the NetComm acquisition and topline growth.
Adjusted gross margin improved to 36.7%, with GAAP gross margin at 29.4%; adjusted EBITDA loss narrowed to $9.3M from $17.5M in Q3 2023.
Divested network assurance, in-home WiFi management, and Asia business for $34M, reducing debt and adding cash; NetComm acquisition enhanced broadband portfolio.
Completed restatement, brought SEC filings current, and improved internal controls and governance.
Focused on strengthening balance sheet, optimizing costs, realizing acquisition synergies, and monetizing inventory.
Financial highlights
Q3 2024 net revenue: $38.1M, up from $31.1M in Q2 2024; YTD revenue: $96.9M.
Adjusted gross margin rose to 36.7% (non-GAAP), GAAP gross margin at 29.4%; adjusted operating expenses: $23.3M.
Adjusted EBITDA loss improved to $9.3M; GAAP net loss: $(25.7)M; non-GAAP net loss: $(11.7)M.
Cash and equivalents at quarter end: $5.7M, with $30M added post-quarter from divestitures; inventory: $79M.
DSO improved to 83 days; working capital at $24M; long-term debt: $30M.
Outlook and guidance
Management targets break-even adjusted EBITDA and positive cash flow in 2025, leveraging cost savings and NetComm synergies.
Q4 revenue and profitability expected to improve sequentially; strong finish to 2024 anticipated.
Inventory conversion to cash expected over 4–5 quarters, supported by $90M backlog and $79M inventory.
Margins expected to approach 40% as product mix stabilizes and cost initiatives complete.
Service provider spending and government broadband stimulus programs expected to accelerate in H2 2025.
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