Tantalus Systems (GRID) Q2 2024 earnings summary

Executive summary

• Achieved $10.7 million in Q2 revenue, with 35% from software and services, and annual recurring revenue (ARR) reaching a record $12 million, up 14% year-over-year.

• Converted nearly $33 million in orders in the first six months, a 46% year-over-year increase, and expanded the user community to 302 utilities, adding 14 new utilities.

• Launched and shipped first commercial units of TRUSense Gateway, with 15 utilities placing initial orders and key UL certifications achieved for fiber and ethernet versions.

• Strengthened cash position via CAD 10 million equity financing in May 2024, adding new institutional investors and high insider participation.

• Q2 2024 revenue declined 4% year-over-year, attributed to timing delays, order conversion, and meter partner capacity allocations.

Financial highlights

• Gross profit margin remained strong at 55% in Q2 and 54% for the first six months, exceeding long-term goals.

• Adjusted EBITDA was near-neutral at -$174,000 in Q2, reflecting $1.5 million additional R&D investment in TRUSense Gateway.

• Net loss for Q2 was $1 million, including $400,000 in non-cash items.

• Recurring revenue was 24% of total Q2 revenue; recognized recurring revenue for the trailing 12 months was $10.2 million (25% of total).

• Ended Q2 2024 with $11.4 million in cash, up from $5.2 million at year-end 2023.

Outlook and guidance

• Anticipates revenue growth year-over-year in 2024, with TRUSense Gateway expected to contribute in H2.

• Expects reduction in R&D costs as all TRUSense Gateway versions become available, improving Adjusted EBITDA.

• Plans to allocate additional capital to accelerate sales and marketing for TRUSense Gateway.

• Cautious about ongoing capacity allocations and lead time constraints with metering partners, which may impact quarterly revenue.

• Management anticipates continued growth opportunities tied to TRUSense Gateway and grid modernization, with ongoing R&D investment and potential supply chain and inflationary impacts.