CSP (CSPI) 20 Dec 242024 Q4 Earnings call transcript

Greetings, and welcome to CSP Inc.'s Fiscal Fourth Quarter and Full Year 2024 Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Mr. Michael Polyviou. Sir, you may begin.

September hello, CSPi's thank Full Fiscal Financial which and us for Year Alex, Results, review to Fourth ended you, everyone, you and joining XXXX Thank XXXX. XX, Quarter and

Officer; are historical The continue in project, Gary facts that Statements the will, forward-looking business call on are call as the identified for open estimate be on as believe, company's Financial Victor is statements similar Chief CSPi's expressions today With federal intended the regarding made and opening not management as and plan, intend, Victor remarks, today's expect, me Levine, and words to may call Gary well After statements. the Instructions] term by their identify Dellovo, laws. securities CSPi's questions. is may, forward-looking CSPi's [Operator Executive concludes Officer. then Chief we'll

a company's are and not results. beyond subject based. the and of statements should the many are upon met the The be influenced or which cautions influences, statements reflect you risks statements projections aggregated statements other company or Forward-looking uncertainties, company's of these future control and events are that as future the the which segment performance of expectations performance current several to guarantee and

affect Form report the Exchange and the company's annual quarterly on with Factors risks that report the the may are Factors filed to but on of section the XX-K the and results Commission. in not limited include, Risk uncertainties discussed XX-Q Form Securities and

to to update result entirety CSPi otherwise cautionary of statements a of future the and or and undertakes thereof. this available future the statements date as respect of as good any on after statement no management's faith, information the statements see with forward-looking by belief or information, obligation the are events. new All based events revise forward-looking at are Forward-looking call time time

please Officer. With Victor to Dellovo, Executive Chief ahead. that, I'll go turn the Victor, call over

everyone. morning, good and Michael, Thanks,

year revenue, a full as last to and less just sales ago. pretty of of Recurring Our financial area we fourth results has of increased growing, with we total committed expected the which an much quarter sales X% when than August. in couple compared to talked years been in XX% came you have

finished with in Overall, and sales in the September cash the with generated quarter $XX We million more than $XX.X plenty we fourth year momentum. XX, as cash of Solution XXXX. of Technology the of million quarter equivalents XXXX. finished fiscal approximately business in

fiscal very little quarter revenue fourth cruise came For of ship example, our customers. from our

built quarter the ship first the It the in a during year. first quarter, signing pickup company be fiscal executed the next liner order every seen that of end during and the we professional should current the for the market. quarters towards continued fiscal we've in in on However, consistent our business, was including momentum piggybacks services freight many ocean and order the cruise for large

freight recurring Our to add have ships increase revenue. which continues offering our the utilize to led retrofits, to service new managed and choose liner in following operation customer

consumption the for continue clients cloud who to group. We our increased migrate to these of see cloud demand to services want our

cloud-based projects growth. a have to also We the active dozen accommodate

pipeline We with continue clients of the our day-to-day and process in managed service environments. assist these to to to invest provide people The operations very in remains encouraging.

piece TS year. during about the we grow overall coming the fiscal optimistic recurring sales, to So the especially are opportunities our revenue

Automation July joined our and to the we OT discussed fiscal reported industry the the with of we Fischer Greg in XXXX, $X.X relationships being organization veteran of sales HPP maximize and fourth ADP in side business, us ARIA our partners. experienced call, the redirected Protect based sales of effort revenue Rockwell customers. transitioning conference who the Also, mostly led has from other XX-year were distribution for of XXXX, as the of prior in quarter million, On we process by

short the in market product, and and this market building fiscal the the primarily shorter we the the progress partners unique significant cycles entered customers, from great organizations. that serve other to for we've time, year distribution OT which of middle In Rockwell than with tend made larger potential OT sales amount the new have

the Our distributors team while extending with with OT the customers. a to will internal XX sales middle closely build to address months corporate continue large revenue the work cycles to short-term the they buyers individual from market up

a few selected critical cyber of thousand An its it will OT the producer malicious come the a announced electric endpoints we that we attacks. be order with energy example next from This X years. the was to Fortune will as over be infrastructure PROTECT Cybersecurity deal protect first was ARIA to XXX AZT many --

team to will our AZT partners as in the upturn We believe PROTECT fast as Automation these sales customer Rockwell November We leads fiscal Rockwell allow. result sales rollout XXXX. XXX. of distribution the AZT for over from the PROTECT Many were in in the late generated will assist of will leads with approach XXXX quickly unfolds. expanded this Working other has back Automation and a noted with in

Vice their was why generate our was the participation. leads in-depth shows of Southwell, we our presented Manager Products and President impact. many reason hit of techniques Gary from an a view presentation financial of Performance latest and and so the General attack one High major Gary's

Petroleum in We with companies. show also began booth for relationship large and we had at a a Houston gas where several gas oil natural the Institute American

the AZT expanded the Show by Control Week awareness further We PROTECT's market Atlanta. Security System attending in Industrial in

industry received from since category are by the presented the generating at award throughout Business Intelligence XXXX the trade these PROTECT the fostering of with be its at winner application has is the convert distributors our interest trade the year. I shows X we major launch, XXXX, strongly supporting PROTECT AZT by the cybersecurity regional will we Group. AZT including the shows, leads into additional believe activities While events from awards during sales fiscal work we security generated to

also applications, and a industry July that distributors update systems. control not has new recognition have the traditional There continues and that requirements. is automation the vendors CrowdStrike OT customers and automation distribution meeting critical industrial Continuous can sign were benefited the the methodologies updates to industrial new their exposed cloud on failure from risk gain efforts including protection IT-focused channels endpoint the Our from

distributor attacks. under We've news welcome operational such the being received in proven approach control is partners. Rockwell updates We and This out believe before service code a critical alternative capability without can real-life companies having block relying down malicious industrial using the PROTECT seen circumstances. to on protection as prevent capabilities systems protect box this X-day AZT from field it taking cloud to then by of

The Rockwell mechanism From believe new bring ecosystem. show into needed there, was we expand the to the news can other markets. we into

the consider in the lines, pickup during we have to service and map AZT to when others the in U.S.-based momentum distributors, In out completed top growth allowing in and already return business accounts Rockwell agreement XXXX. the potential X market distributor Rockwell summary, have sales growth PROTECT process the the U.S. cruise of target team our teams the the of tier with managed fiscal partnership, X with approach directly to emergence to we We work together. a

a provide quarter With Gary financial that, to the I performance. will overview fiscal brief ask now of fourth

Victor. Thanks,

XXXX. for fiscal of XX, flat XXXX, ended quarter to XXXX ended the September the fourth XX, was quarter. compared and fourth compared million Revenue quarter revenue we $XX.X quarter fiscal revenue to second reported For relatively September million third $XX of

sales. $X.X service represented or XX, months X of revenue XX.X% sales September of Service sales compared million. or ago reflecting ended compared to million million the to service margins basis $X.X profit was XXXX, of increased comparable our $X.X overall Gross year of points XX.X% product revenues for the from figures. million of sales, $X.X revenue Gross percentage higher last XXX year's on a

of a per of common $X.X diluted for per $X.X September XXXX. compared the loss $X.XX to fourth net XX, XXXX ended fourth reported net company quarter loss million The $X.XX or quarter share September or XX, million share for fiscal ended share per income

$XX.X to stock cost of PROTECT a and that the growth the the fiscal of has during company the our XXXX, and to product sales at the compared end other company robust robust implement the million The at fourth quarter had $XX,XXX. repurchased balance million total $XX.X We of equivalents shares cash of resources ensures sheet of as AZT XXXX offering year. cash strategies, X,XXX

of record at Directors of the to payment close XX, business And XXXX. the has the approved a Board of December shareholders dividend quarterly XX, $X.XX on share on of January per payable XXXX,

$XXX,XXX consulting and For the to fiscal The was stock quarter, development engineering outside $XXX,XXX. for compensation. expenses and increase our were compared

quarter. $X.X was year fiscal ago SG&A to fourth in the million Our million $X.X compared

was on and The audit expenses. recruiting tax and based legal, increase increased

was XX.X% in Gross $XX.X revenue the compared decline XXXX, ended was revenue profit with to of $XX.X the For or fiscal the for million to year year mix. $XX.X and the of full of XX.X% XX, sales year. product $XX.X prior million sales million compared million with largely attributed September

We reported year XXXX. XXXX, $X.XX a $X.XX September September of year income of per $X.X the compared ended net of XX, to million share ended million fiscal diluted a the per the $X.X diluted net or share loss or income for fiscal in XX,

will With turn to operator take your that, questions. I over it to the

from coming Our Investments. with Joseph [Operator question Segren first Instructions] Nerges is

comparing that Gary, retention of here. year. reporting quarter this fourth fourth credit fourth and quarter quarter, of quarter year last credit fourth fall point our this million when think our for didn't accounting had -- quick in number into that X fiscal mentioned last we're we year. unemployment I in credit Just $X.X Obviously, a year, versus of you year, last

So a that's considerable number.

Absolutely, yes.

concept. realize a that the not talked to to were bit quite we referred year, on Victor trade but question, go of I recent. call very about And a shows what we I'll you proof last

were Atlanta was I in month last Rockwell previous, week, and in believe, month the then think, I whatever. Oman. In we the fact, last the But show, was X

leads companies -- proof we How today? out any but az testing there's are any I'm prior to How have even say of are PROTECT -- come testing? of we're testing we started all assuming modeled concepts or many there? could do of these those an So where today, people enormous we out shows, have

week. yes, Rockwell that literally able actually starting just we've had or the before been in a only are Yes. then conversation, we like but X already was then it lot From shows, But and you happened days right a and one been it's that contact believe that the POC, been Thanksgiving, XX not Sunday on the for overseas, those. was business there's Thanksgiving a it of to

start of and there's the a been new of They're like conversations a So yes, year. of a But on a lot conversations will year. of things we mode. good have a activity, been to people already the lot on of there's lot up lot of vacation and new that POCs after the lot follow kind

prior ongoing Victor, even Yes. But earlier of year. that, even concepts to had proof from this we've

continue. Yes. will And those

thought I have dozen like meant but that question, in we're stages. new probably closed your than from misunderstood The energy some recently more year you finally I X on maybe But we shows. recent various other going the and we POCs that was POC, a we over got with just that yes, think I those awarded that and there's a waiting. of company

couple The lot of them either standing POCs we're X waiting decision in are that to we or done, last we're for POCs. and promising see in had are January. that waiting things don't the said true or budgets a a know for now in the us January. were just if it And if of moves, we if but not to I we that's made waiting very

through. come they hopefully, So

X referred that the the to PROTECT. the have Just this we now utilizing we company, you've pharmaceutical are companies the as that announced utilizing agency chemical intelligence that but AZT XXX government well you that company PRs to company earlier clarify, and this just Fortune as made Western are power on ACTA before,

not I we're here it have it. small So just about want clarify talking approve that. looked And at to that customers and

out something Yes. the on win. be presses you'll out week next coming eyes this keep Yes. early And your hot another just nice off there'll there,

have seriously on than Board you appreciate to I volume now more the I'm ought we we But aggressive. think under else's little program like X ago. X,XXX questions. year upping a be we and can I'll share somebody should shares more to point guys that. know slightly is, buyback, be And maybe be year can this move think of market considering maybe I shares you get conditions, but that in stock did saying repurchased I a amount on the under -- I other -- more so and all buy I'd -- the the would the that guys

Our Will with next Visionary Advisors. Wealth question Lauber is coming from

the for a line. AZT so year. What payoff effort and us that guys just can hopefully Guys, much people this into money earnings how realize help are have putting handle huge get for would a down been you on this division the

a it loss. But was

mean... I So

took you just -- You out would... said taking TS, out it it if was AZT, if

it definitely Yes. Yes, profitable. will be

be a They chain Like TS cash want will only a for that's profitable, It grow for cash They they really, have and the for AZT the have doing very are position have a to growth, but want understand that the earnings. something want to loss year. is small they cash have I for a build dividend, people distribution. the cow R&D That's all said, -- to Yes. this yes. I to startup startup paying with AZT true building whole really well. and whole food we want is truly have to and

there's now. it. over sales then building going a longer old, going There's the no right year. last distributor on the or building big unfortunately, getting Myricom boat. that had was because that a that side of But product And sales years the XX will in partners we actually was on on, the manufacturer And build Boards, lot now lot team,

went sell, they're but all some minimal So now. business pieces year away. from that are we and that There parts still last

it because that I the testing, happy. that using -- of took are X time we now more of things think like So lot And is through the Fortune try our the have just which of over chain building if more now you we is, to on multibillion-dollar the a like where customers. people, we at a it, it name our point, that big to POCs, space. that it on of just building in lot name, that's with that look some get and companies -- out we're this to in the effort front size all were prior just Joe's fence to a where competing because are call, we get said are recognition, we're and sale said, customers but takes XXX our really and one food in I a I lot closed have are where customers of is

a guys you I it? on have mean, put earned Could an we share? could approximation $X

Yes. that, . More yes. than

$X than a share. More

percentage a the question could percentage impressive. you do my And X And pretty out think increase look recurring down was of what your Okay. X, your is line, next say, that what's When be? in maybe as revenue years goals? you the kind internal

something next piece double very that's and the could continue that months, that be the along we the focused support on proud in business engineers, If XX it, would cloud, we'd would be revenue recurring to be with again -- we -- the that especially in of and we're the staff staff of very, why grow the it. that Microsoft sales we're

the And into then after the -- MSP, get we once play, comes could cloud the MSP that. if usually

usually get each So definitely -- one, we to adjacent we they're get the other. can If other.

we'll do, growth but limits year-over-year, what XX% least possible. on minimum what at goal more. least to yes, that So not want no we at our as to as XX% fast a is if grow There's to

To be per share. answer would about to question, it $X.XX a your

private next Crotty, from Our coming is who question a John investor. is

of just us, on especially want need a the FXXX have for and long patients. company, understand to been to involved having is congratulations the person. energy patience with I XX Wanted months investors, job And a a I've POC. good few we the say dead

you we're it. right So along with with

about about great to the partnerships you and seems the with Rockwell, that have. want of lots lot Anyway, really But you've I talked lot a leads. other a like read partnership I and a talk

Australia. have You in the X large

in had the the And with in Coast there we X that East then was I mentioned U.S., of the large was believe, smaller a a East. a clients. in Middle You lot out X

on running large Could give they that a concepts? proof us you of of Do terms any that? type any info any feedback or in of like have are pipeline they

They on are The not partner in not but sector. with in they're partner, opportunities in they're -- the them. commercial Australia, POCs do going some have largest the good their sized we

So but there, they progressing. things do time are take

on we're has the from focused manufacturers that's on because certified partner, OT right really kind the a partners Rockwell we have other that space Rockwell our because of the some been getting because is now And yes, the time. where as focus that into with takes approval we're focused of and

a Rockwell took approved X as partner. us get almost inside certified years to

working we're So with of of other manufacturers. some big different stack. getting that the a inside their We're approval stages as in work partner can certified

in depending how just organizations, these moving fired. just is paces, larger fast everything of yes, unfortunately, or on leave, So at people move some get different

forward in then the large sometimes and we've reeducate happen companies. And seen new steps you and take manufacturing of to someone person, got leaves these and you X some that

waiting fruit some Yes, had couple government the they agree. they're divisions ago, increasing that I that other existing of want departments opportunities of with low-hanging mentioned budgets to agree. what Intelligence. Is with customers, the talk calls any along the many a had add you I especially through. I it of because or the moving Go . about you mentioned in. also anything areas Westin you or for pushing for to you were that win like had, with

another opportunity. There's Yes.

in, not sure, timing days, that that forward. we're I'm about in . feel not that's XX I that like exactly but hoping think a there deal the has can next is say moved I that on is all that. we'll -- I come

side. I a read just I that's through $X.XX else know cautious share the No, that's up. have with. a TS like lot fair just wanted that Everything I I Okay. be and why response. No, you was to nondisclosures -- of And on the you enough. like got follow to

Keep guys. the good up good. that's So work

coming is private investor. is a Douglas next who Johnson, Our question from

X AZT with . you have Yes. these contracts How Fortune XXX are companies? these large

roll the and budget, current as of -- It systems the big of the ones, other in the X infrastructure we'll mentioned could but were adopted is take these I energy, millions get exactly, disclose looking to in I their them roll then can't mentioned was them that up and the years left out we're script, I out. have Well, what to to in X thousands told they and they us. inside

to kind roll customer. with us but is fast it's or are up they the of and endpoints doing installation, how speed thousands hoping assisting the that to how out up and We're of there by

Long Jeffrey Pond Our next question is with coming Stevens Capital. from

a couple had And back you when looked years area. relationship I with of a guys ago,

a announcement a them Is hardware with guys software. their you them were did to AZT? guys possible little -- conversations you for that it with You with and your had have

Yes.

So we the one of was talking of with we conversations examples them. definitely have powers that some of the had to moved be with where on. That were kind

we had kind kind we of there's on to on like, we bit as some talking but there of have focus that contracts they're the fast But more their in definitely some area, in would little scratch AZT of to conversations want moving So do we a area. stop where as robotic we're and relationships not there. from that's

I from comes with our focus of and goal kind that's but those What guys. can't our it? say,

Our next question is is coming from Brett private investor. Davidson, a who

just to announced color at that in a on you any going Is give limit It's UCaaS stuff can it earnings contracts Victor, the there question. all on to last just got going And be quarterly a little those going Gary, I'll multipart. I'm release. program? to legacy link -- of E-XD out couple the were a X with

XD year. a moved this next It quarter, supposed be to be to was it. little going is There they in

towards we its it's -- thinking you next the We to more end there'll that's could the at we're of X be XXXX. -- move be but believe year coming, in is as believe out, it note, career. So It QX. going

in took sure we on on billing we're pieces and and a implement, clients. we're that And deal just parts, over that then to There's -- then new few the some this will bringing we be UCaaS, guessing some been the time exactly. there on turned quarter, continue last to quarter. grow we And but not business, it a sold

So over contracts. these it will time, usually to and grow continue are X-year

it. Got

headway any then? so this quarter and that's since And

constantly Yes. customers good pipeline every X on looks a quarter Yes. we're sizes. -- recurring. of X or we're it's pretty on And UCaaS, The bringing all and consistently monthly

So like it get a you pop. big sounds

it's number whether it's or or You monthly may XX,XXX a get the on whatever -- basis. X,XXX be,

recurring We'll mentioned of we game. services Like at we're on do. the stage out either finally do roll pretty to I million revenue I like our in lines $X said, or we're Yes, professional do. the we to one multiyear the still we because a margin nice much this revenue, -- any as services cruise of the will on professional focused And close focused gave sell us high of and deals service it's over recurring try contract that XXXX. everything we on product

a Microsoft different. is little

it's a they a either You or that's that program get year X but monthly offer. because

for this further [Operator Instructions] As comments. back the I'd like we have Mr. in to closing questions hand at to queue no any over time, Dellovo call

you. Thank

and always, CSPi As things gaining continued in PROTECT at I for more is in the happening look their on want to we to updating our are increased our February. generating forward we more shareholders The Good you support. in momentum and and and market. and experienced exciting, activity interest progress interest more thank AZT

then, best Until Thank holiday a you. happy healthy, wishes season. I for

at thank call, you you for your may your gentlemen. Thank we This and this lines and concludes disconnect and you, time, ladies today's participation.