Legend Power Systems (LPS) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 bookings of about CAD 3 million, surpassing Q2's record of over CAD 2.5 million, with revenue growing 122% year-over-year to $1.04 million in Q3 F2024, driven by increased SmartGATE unit deliveries.

• Net loss narrowed to $482 thousand from $1.02 million in Q3 F2023, reflecting improved gross margins and reduced operating expenses.

• Major new orders from the City of New York, US Department of Defense, GSA, and ESCOs, with a $3 million LOI from the DoD and strong multi-year order potential.

• The company is recognized as a key technology provider in its market, with a growing sales pipeline and strong customer feedback.

• Cash position at quarter-end was $806 thousand, with no debt and $1.5 million in working capital.

Financial highlights

• Q3 F2024 revenue: $1,042,412 vs. $470,310 in Q3 F2023; nine-month revenue up 23% year-over-year.

• Gross margin improved to 50% in Q3, compared to 22% in Q3 2023 and 46% in Q2 2024.

• Deferred revenue at June 30, 2024, was CAD 524,000, up from CAD 210,000 at the end of last fiscal year.

• Operating expenses decreased 11% year-over-year to $999,539 in Q3 F2024, with operating costs less than CAD 1 million per quarter, down over 45% from previous peaks.

• Adjusted EBITDA loss reduced to $392,191 from $883,821 year-over-year.

Outlook and guidance

• Strong order visibility for Q4, with 17 deals totaling over CAD 7 million in near-term bookings, including four deals each worth more than CAD 1 million.

• Expectation of continued strong margins and positive cash flow through 2024 and into 2025, supported by upfront deposits and milestone payments.

• Management anticipates sufficient funds to execute the business model with current cash, deposits, and working capital.

• Anticipate further large follow-on orders and multi-year deployments from key accounts.

• Expectation of additional orders from the City of New York and further progress with U.S. General Services Administration programs.