MOBX

Good afternoon, everyone. I am Lisa, Investor Relations for Mobix Labs and I’d like to thank you for joining us as we report Mobix Fiscal Fourth Quarter and Full Year 2024 Financial Results for the period ending December 31st 2024. Joining me on today’s call are Fabian Battaglia, Chief Executive Officer; and Keyvan Samini, President and Chief Financial Officer. This call is also being webcast live in the Investor Relations section of our website at mobixlabs.com. Before we begin, I’d like to remind everyone of our Safe Harbor policy. This call and webcast contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 which are subject to risks and uncertainties. Any statements regarding expectations, projections or other characterizations of further events, including financial outlooks, market conditions or product development are considered forward looking statement. Actual results may differ materially from those expressed due to various factors, including those outlined in our SEC filings. Mobix Lab assumes no obligation to update any forward-looking statements except as required by law. For more detailed discussion of risks and uncertainties, please refer to our SEC filings, including on our Form 10-Q for the quarter ending February 12, 2025 and the Risk Factors section of our Form S-1 filed on August 12, 2024. Additionally, this call includes non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial metrics are available in our fourth quarter earnings release which is posted in the Investor Relations section of our website. With that, I’d like to turn the call over to Fabian Battaglia. Fabian, please go ahead.

Good afternoon, everyone. I'm excited to welcome you to Mobix Labs fiscal year 2025 first quarter earnings call for the period ending December 2024. As we now enter our second full year as a public company, I am thrilled to share our progress and the opportunities we see ahead. Mobix Labs continues executing on a bold vision, leveraging technology innovation, strategic acquisitions and operational excellence to drive sustained growth. In fiscal Q1 2025, we delivered revenue of $3.17 million exceeding our prior guidance and marking our fifth consecutive quarter of growth. This momentum reflects the strength of the successful integration of RaGE Systems and EMI Interconnect Solutions and the expanding demand for our technology and solutions across key industries. Continuing our strategic expansion, Mobix Labs has agreed to acquire two high value companies, Spacecraft Components Corp and SCP Manufacturing. These acquisitions, which are expected to close within the next few months will strengthen our position in the aerospace and defense markets. Spacecraft Components, a well-established Nevada-based leader in precision aerospace and defense technology has long been a trusted supplier to Mobix Labs' subsidiaries as well as many other customers. Integrating their expertise and longstanding customer relationships will position us for even greater success. SCP Manufacturing, which specializes in mission-critical electronic components used exclusively in spacecraft components products plays a key role in supporting vital defense systems, including the U.S. Army's Patriot missile platform and major metropolitan transit networks. These acquisitions are expected to enhance our operational efficiency, gross margins and overall profitability as we create new synergies across our expanding portfolio. Our EMI Interconnect Solutions products line remains a high growth engine for the company. The mid-2024 launch of our Filtered ARINC Connectors set a new industry standard and demands for this product continues to grow. In Q1 2025, we secured bookings for these high-performance connectors now being integrated into next-generation aircraft electronics. Additionally, our customer designed filtered connectors are now actively deployed in the U.S. Army's Apache helicopters, enhancing communication reliability in mission-critical environments. We're also delivering our high-performance USB connectors for use in the U.S. Army's Chinook helicopters ensuring seamless data transmission in even the most extreme conditions. These successes reinforce Mobix Labs as a premier provider of high reliability interconnect solutions for military and commercial aerospace applications. On the wireless technology front, the RaGE Systems product group continues to be a powerful growth driver. I am pleased to announce that RaGE Systems has been awarded a Phase 1 SBIR grant from the U.S. Department of Defense. This funding supports pioneering collaboration with the University of Massachusetts at Lowell to develop a low power, high-performance monolithic software-defined system on chip for satellite communications. This project underscores our commitment to technological leadership and our role in strengthening national defense capabilities. In addition, demand for our millimeter wave imaging and security detection products remains robust. We are producing and advancing multiple generations of our imaging modules, opening doors to new markets, including critical infrastructure protection. Our non-visual imaging and multi sensor fusion technologies are expected to generate transportation infrastructure fault detection revenue opportunities throughout 2025 and beyond. Our partnership with Talking Heads Wireless is also beginning to yield results. As we help to integrate AI-driven, power-efficient radio architectures, we are laying the foundation for revolutionary advancements in base station technology, significantly reducing power consumption and improving network efficiency. Meanwhile, our research collaboration with the University of Massachusetts at Lowell continues to generate groundbreaking innovations. Our state-of-the-art lab on campus is driving advancements in infrastructure imaging for the rail industry and exploring next-generation solutions for low power, high-performance satellite communications. As we scale operations and integrate our acquisitions, we remain focused on meeting growing customer demand by optimizing production capacity to accelerate deliveries. With our planned strategic investments in technology, talent and infrastructure, we are confident in our ability to drive sustained growth and maximize shareholder value. At Mobix Labs, we are not just building a company. We are solving real-world customer problems. Our expertise in interconnect and wireless solutions, coupled with our disciplined approach to strategic acquisitions positions us as a formidable player in rapidly growing markets. As we look ahead, we are poised to capitalize on significant opportunities, drive innovation and create long term value for our shareholders. Now Keyvan will tell you a bit more about our financial results.

Thank you, Fabian. I'm thrilled to share the financial highlights of our first fiscal quarter ending December 31, 2025. Unless otherwise stated, all figures discussed today are on a non-GAAP basis. Now let's dive into our results for the first quarter of 2025. We delivered revenues of $3.17 million, exceeding the high end of our guidance and marking a strong 7.3% sequential increase over the prior quarter. Our revenue skyrocketed 11-fold compared to the same fiscal quarter last year, underscoring our exceptional growth trajectory. Turning to gross margin, our first fiscal quarter adjusted gross margin remained relatively stable at 54.1%, compared to 56.6% in the prior quarter, reflecting continued price discipline and cost efficiencies. We also made meaningful strides in improving profitability. Adjusted loss from operations improved by an impressive 28.9%, narrowing to $2.5 million from $3.6 million in Q4. Notably, this marks the fourth consecutive quarter of reduced operating losses, a testament to our disciplined cost management and focus on scalable revenue growth. Our balance sheet continues to strengthen with cash growing to $405,000 at the end of Q1, a significant increase from $266,000 in the prior quarter. To capitalize on strategic acquisitions and rising customer demand, we are actively pursuing additional financing that will position us to execute on growth opportunities and scale our business to meet customer demand. Looking ahead at our second fiscal quarter of 2025, we acknowledge the substantial near-term variability associated with our acquisition strategy and sales cycles. Given this, we believe it is in the best interest of our stakeholders to withhold revenue guidance at this time. However, long term financial objectives remains firmly in place. We remain committed to achieving gross margin of 60% and an adjusted operating margin of 30%. As revenue scales, we will continue exercising disciplined cost management to drive operational leverage and advance toward profitability. In summary, we are highly encouraged by our performance in the December 2024 quarter. Our acquisition strategy is fueling the revenue expansion we set out to achieve. With a growing pipeline of M&A opportunities, rising customer demand and ongoing operational enhancements, Mobix Labs is on a clear path towards scalable growth and long-term success. Operator, we are now ready to take questions.

At this time, I'm not showing any questions in the queue. I would like to thank you for joining today's conference call. You may all disconnect.

Good afternoon. Thank you for standing by. And welcome to Mobix Labs Inc. Fiscal Fourth Quarter and 2024 Financial Results Conference Call. Please be advised today's conference is being recorded and a replay will be available on Mobix's Investor Relations website. I would now like to turn the conference over to Lori Barker, Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. I'm Lori Barker, Investor Relations for Mobix Labs. And I'd like to thank you for joining us today as we report Mobix fiscal fourth quarter and 2024 financial results for the period ending September 30th. With me on the call today are Fabian Battaglia, Mobix's Chief Executive Officer; and Keyvan Samini, President and Chief Financial Officer. This call is simultaneously being webcast on the Investor Relations section of our Web site at mobiclabs.com. Before we get started, I would like to remind everyone of our Safe Harbor policy. Comments made during this conference call and webcast contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. Any statement that refers to expectations, projections or other characterizations of future events, including financial projections, future market conditions or future product enhancements or development is forward looking statement. Mobix's actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in our SEC filings. Mobix assumes no obligation to update any such forward-looking statements except as required by law. For greater detail about risks and uncertainties, please see our SEC filings, including on our Form 10-Q for the quarter ended June 30, 2024 and the section entitled Risk Factors in the Form S-1 filed on August 12, 2024. In addition, this call includes non-GAAP financial measures. Reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our fourth quarter earnings release posted on the Investor Relations section of our Web site. With that, I will turn the call over to Fabian Battaglia. Fabian, please go ahead.

Thank you, Lori. I am pleased to announce a successful fourth quarter that caps off Mobix Labs' results as we approach our first fiscal year as a public company. It is an exciting time as we unleash the performance of next generation wireless sensing and connectivity solutions. I'm proud of our team's execution as we quickly grow the breadth of our offerings through organic growth and synergistic accretive acquisitions. Integrating employees and technologies is part of our core DNA and shaping tomorrow's connectivity is front and center for all Mobix employees. In the fourth quarter, we executed on our plan and we grew revenues sequentially by 44% for a full year fiscal growth rate of 426%. Also, gross margins increased as we integrated RaGE Systems and continued working on synergies in a more favorable mix of products and engineering services. We closed out the fiscal year with strong bookings, which position us well for our next fiscal year and mergers, and acquisitions at Mobix Labs will continue to be in the news as we diversify our technology portfolio. Our recent announced letter of intent to acquire Spacecraft Components is an excellent example of our accretive funnel of M&A opportunities. Spacecraft is a leader in high precision mission critical components for aerospace, defense and commercial applications. Also, they are recognized for their cutting edge engineering and manufacturing capabilities. These electrical connector components and accessories are vital to critical missile technology, submarines, naval ships, oil rigs, railcars, military and commercial jet aircraft and many other applications. Notably, these components are utilized in the Patriot missile, the US Army's primary missile defense system and in tactical manned and autonomous vehicles. Additionally, Spacecraft supplies key components for railcar systems in major metropolitan areas, such as Chicago and New York. As a long-standing supplier to Mobix Labs, we were aware of Spacecraft's excellent reputation and we see them as a natural fit as we expand our offerings into aerospace, military and defense sectors and in more near term the transportation market. We expect that the acquisition will be accretive to Mobix Labs' earnings and will increase our workforce by approximately 150 employees. We are really excited about this acquisition and expanding our reach. Each quarter since becoming a publicly traded company, you've heard me talk about our acquisition strategy. Our mission remains consistent as we target and attract synergistic accretive opportunities that will expand our customer base and footprint and make life easier for our customers as they look to reduce their number of suppliers. Mobix Labs is a nimble supplier that can deliver demanding next generation solutions at best-in-class lead times. Today, I'd like to highlight two solutions groups. EMI interconnect solutions and our wireless system solutions from the RaGE Systems acquisition. Let me start with the EMI interconnect solutions, which are used by many leading companies in aerospace, military and medical applications. In June, we announced our new filtered ARINC connectors, which are setting a new standard in price, performance and customization. I'm pleased to say in the fourth quarter, we saw increased bookings for these high performance connectors used in advanced aircraft electronic systems. In the fourth quarter, we landed significant new customers in aerospace and defense sectors and we are now scheduled to produce custom filtered next generation high performance connectors for the customers' flight guidance and cockpit display systems. We are excited about our overall growth in EMI solutions and the planned growth in our interconnect product line, and we believe that we are well positioned in this core part of Mobix for further developments of these solutions as we expand our strong relationships and deliver what we believe is the fastest delivery of EMI filtered parts in the world. Customers value our engineering support and our nimble hands-on approach. The second area I'd like to highlight this quarter, wireless systems, achieved strong revenue and increased margins during the RaGE Systems' first full quarter with Mobicx. RaGE Systems has a strong customer base and exciting funnel of opportunities. We are quickly identifying synergies between Mobix Labs and RaGE Systems so we can expand on our customer base and products, and to deliver IP and technology across the entire product line portfolio. Within wireless systems, our security imaging and detection services and products continue to grow and expand. While we continue building and shipping present generation modules, we are also developing multiple generations of products with our customers to help them offer new products in new markets. This is all about helping our customers to envision different futures for imaging and detection in their established markets and in areas they are targeting for expansion. Also, our multi-spectral imaging and detection or MSID programs continue to expand. We added new MSID capabilities to our customer supported test facility and demonstrated new capabilities and functionality beyond security imaging detection. We believe the new capabilities that we are demonstrating in non-visual imaging and multi-sensor fusion should begin generating incremental revenues in 2025 and beyond in areas like infrastructure imaging and fault detection. Partnerships are an important part of developing our business and a good example is our expanding relationship with UMASS Lowell in Massachusetts. Together, we're working on several technologies and projects for infrastructure imaging and satellite communications. The pop-up laboratory created on the grounds of UMASS is focused on gaining a better understanding of infrastructure degradation and safety for the rail industry. Another joint program is working on identifying and investigating the feasibility of low power, low cost and high performance monolithic software defined system on a chip for SATCOM applications. Both technology development projects could lead to new product introduction in 2025 and 2026. In summary, customers come to Mobix Labs because we are a nimble supplier that can deliver demanding next generation solutions at best-in-class lead times. Also, execution of our acquisition strategy is diversifying our offerings and expanding on our end markets while growing revenue and margins. Now Keyvan will tell you a bit more about those financial results.

Thank you, Fabian. I'm excited to walk you through the financial highlights of our fourth fiscal quarter ending September 30th as well as our full fiscal year ending September 30, 2024 and to share our outlook for the first fiscal quarter of 2025. Unless otherwise stated, the figures I'll discuss today are on a non-GAAP basis. Before discussing the numbers, I want to underscore the significant milestone Fabian mentioned earlier. Our letter of intent to acquire Spacecraft Components. If completed, this strategic acquisition is expected to be transformative for Mobix Labs, expanding our reach into high demand sectors, including military, defense, aerospace and rail. Spacecraft is a well-established business and its acquisition is expected to be immediately accretive. In addition to delivering immediate financial benefits, we believe this acquisition will enhance our sales strategy, strengthen our position in critical markets and significantly accelerate revenue growth for fiscal year 2025. Upon closing, we expect the transaction to materially increase Mobix Labs' revenue compared to fiscal 2024 while driving synergies that boost operational efficiency and long term scalability. Now let's look at our financial results for the fourth quarter and full fiscal year 2024. We delivered revenues of $2.95 million, surpassing the midpoint of our guidance range and representing a robust 44% sequential increase over the prior quarter. For the full fiscal year 2024, annual revenue grew by $6.44 million, marking an exceptional 426% increase over fiscal 2023. Turning to gross margin. Our fourth quarter adjusted gross margin improved 16.3 percentage points sequentially to 56.6%. This impressive growth was driven by a favorable product mix, pricing strength and operational efficiencies. On a full year basis, our fiscal 2024 adjusted gross margin reached 45%, a dramatic turnaround from fiscal 2023. We also made substantial progress reducing our adjusted loss from operations. For the fourth quarter, adjusted loss from operations declined by more than 12% to $3.6 million, down from $4.1 million in the last quarter. For the full fiscal year, adjusted loss from operations improved by 14.6%, narrowing to $15.96 million compared to $18.7 million in fiscal 2023. Our balance sheet remains stable and improving with cash growing to $266,000 at the end of Q4, up from $205,000 in the prior quarter. To support our acquisition strategy and meet rising customer demand, we are actively pursuing additional financing that will enable us to execute on our growth opportunities and scale further. Looking ahead to our first fiscal quarter of 2025, we are forecasting consolidated revenues of between $3.05 million and $3.15 million, a strong continuation of our growth momentum. As we look to the future, our long term financial goals remain clear. We are committed to achieving an adjusted gross margin of 60% and an adjusted operating margin of 30%. While revenue scale we will maintain discipline by ramping R&D and SG&A expenses at a slower pace driving profitability and operating leverage over time. In summary, we are incredibly pleased with the results from the September quarter and the full fiscal year 2024. Our acquisition strategy has delivered the transformational revenue growth we set out to achieve. With an expanding pipeline of M&A opportunities, increasing customer demand and operational improvements, Mobix Labs is positioned for long term success and scalable growth. Operator, we're now ready to take questions.

[Operator Instructions] Our first question will come from the line of Kevin Cassidy of Rosenblatt Securities.

You had mentioned that EMI interconnect solutions having increased bookings. Can you go into a little more details on that? Is it the market getting better or are there things you're doing that are increasing the bookings?

As you likely know the geopolitical [stripe] that exists today unfortunately is not calming down. So we're getting increased opportunities or increased request for, uh, products in that area. And as you know, EMI fits in that space. So aerospace and defense is a key driver for EMI and that's why we're seeing the increases that we see.

Can you say what the visibility is? Is it out one quarter, two quarters?

Typically, it's out to two quarters is what we see.

And then just one other question with the Spacecraft Components, 150 employees is impressive. But will you be able to get some leverage with those employees, like you'll be able to take over more of the say SG&A portion of the spending?

Yes, like all acquisitions, we look at the synergies and that's something that we're very experienced in doing. So we would take a company like Spacecraft who's got great technology, great capability, especially manufacturing capability and you match that with our go-to-market strategy and our experience in that space. We feel that that will be a great benefit when we combine forces.

And maybe could you say what percentage of those employees are engineers?

I would say it's less than 5%.

And our next question will be coming from the line of [Martyn Lucas].

Thank you very much for allowing me on your call today. I represent the investor family known as the [Lucas Ades] who watch my YouTube TV show and follow Mobix with great enthusiasm. I have two questions for you. The first one is, what specific strategies or initiatives is Mobix Labs prioritizing to drive shareholder value and ensure consistent stock price growth in both the short and long term?

Our strategy has been consistent from day one. So it's in two parts, the organic growth and then an M&A strategy to accelerate that growth. On the organic side, we focus on connectivity, wireless communications, security imaging and detection. Those are our primary focuses. And then on the M&A side, we have a well defined process and we're looking at areas in aerospace and defense, transportation, medical, wireless communications. So it's a combination, both short term what we have in front of us will drive the organic growth and then over the longer term, our M&A strategy will accelerate that growth.

My follow-up question. As we all know, investors around the world are extremely passionate and excited about where NVIDIA is going. So my viewers have asked me to ask this question. As NVIDIA is so popular now with retail investors and there are -- are there any ways that you could introduce your technology to them for a strategic partnership, this would surely be a great move?

Yes, we agree with that. Well, first, we applaud NVIDIA in their great success. We are a believer of GPU accelerated solutions and of course AI is driving that. And I think, we're seeing more AI end use cases, right? So we expect that that will continue to grow. Now we believe that Mobix IP is applicable in the same ecosystem. So we're excited to be attached to applications that live alongside where NVIDIA lives. Now what we expect, as of course with their success, we're going to see use cases, which we think are going to require increased expectations for things like higher demand rate and higher bandwidth type applications and we feel that that fits really well in the areas that we're developing.

Well, thank you very much for that, and giving us the chance to ask a question a few questions. And congratulations today on your call from all of the [Lucas Ades], thank you very much.

Thank you so much for participating in today's conference call. This now concludes today's meeting. You may all disconnect.