Knightscope (KSCP) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenues were $3.2M, down 10% year-over-year, with services revenue up but product revenue down due to a non-repeating large sale last year.

• Gross loss was $0.6M, a significant decline from a small profit last year, driven by lower revenues, higher costs, and a $0.3M K5 v3 write-off.

• Net loss for Q2 2024 was $6.3M ($0.05/share), compared to $4.8M ($0.08/share) in Q2 2023, mainly due to increased expenses and product write-offs.

• The company is undergoing a major turnaround, consolidating manufacturing, reducing headcount, outsourcing field services, and focusing on cost reductions and operational efficiencies.

• Preferred stock was converted to common, improving capital structure and Nasdaq compliance.

Financial highlights

• Q2 2024 revenue was $3.2M, with service revenue up 7% to $2M and product revenue down 28% to $1.3M.

• Gross margin for Q2 2024 was negative 17%, with a gross loss of $0.6M; excluding one-time items, the loss would have been $0.1–$0.3M.

• Operating expenses for Q2 2024 were $6.2M, flat year-over-year when excluding restructuring charges.

• Cash and equivalents at June 30, 2024 were $2.6M, with stockholders' equity at $11.2M.

• Six-month operating cash outflow was $12.6M; financing activities provided $14.8M, mainly from equity sales and bonds.

Outlook and guidance

• 2024 is expected to remain a transition year as the company implements strategic changes, with operational fluctuations anticipated.

• Management is focused on scaling recurring revenue, improving margins, and achieving profitable growth over the coming quarters and years.

• As of July 31, 2024, backlog was $2.8M, split between ASR and ECD orders.

• No specific profitability timeline was provided, but leadership reiterated commitment to reaching profitability as soon as possible.