Tantalus Systems (GRID) Q3 2024 earnings summary

Executive summary

• Achieved 14% year-over-year revenue growth in Q3 2024, reaching $11.6 million, the second highest quarterly revenue to date.

• Generated first revenue from the TRUSense Gateway, with 21 utilities initiating field trials, pilots, and deployments, marking a major commercialization milestone.

• Converted $40.2 million in orders in the first nine months of 2024, a 46% increase year-over-year, surpassing previous annual records and expanding the user base to 314 utilities.

• Added 26 new utilities to the user community in the first nine months, a company record.

• Introduced TRUFlex Protect, a new software application to help utilities manage grid imbalances during extreme events.

Financial highlights

• Gross profit margin was 56% in Q3 2024, driven by favorable revenue mix and continuing a trend above 50%.

• Adjusted EBITDA was positive at $0.6 million for Q3 2024, up from $0.1 million in the prior year, despite $1.1 million investment in TRUSense Gateway.

• Net loss for Q3 2024 was $361,000, including $545,000 in non-cash expenses.

• Trailing 12-month revenue from software and services rose to $15.4 million, 37% of total revenue.

• Recurring revenue for the trailing 12 months increased 12% to $11.1 million, 25% of total revenue.

• Annual Recurring Revenue (ARR) as of September 30, 2024: $12.2 million, up 11% year-over-year; recurring revenue was $3.4 million (29% of Q3 revenue).

• Gross profit margin for the trailing 12 months improved to 54% from 50% year-over-year.

• Adjusted EBITDA for the trailing 12 months was $223,000.

• Ended Q3 2024 with $10.3 million in cash, up from $5.2 million at December 31, 2023.

Outlook and guidance

• Management expects recurring revenue to trend down slightly in Q4 due to timing of large renewals, but year-over-year growth is expected to continue.

• Pipeline for TRUSense Gateway remains robust, with a $500 million opportunity being pursued.

• Anticipates positive net income in the future as revenue and operational leverage increase.

• Management remains optimistic about growth prospects, citing strong demand for the Grid Modernization Platform and new product adoption driven by macroeconomic, environmental, and technological trends.

• Ongoing R&D investments and commercialization of TRUSense Gateway expected to support future growth.