Actelis Networks Reports Q3 2024 Results: 200% Quarterly Revenue Growth; 46% Year-to-Date Growth Reaching $6.7 Million
Strong revenue growth and a significant increase in gross margin from 34% to 58% for the nine months ending June 2024. Q3 2024 EBITDA loss narrowed to $0.2 million, reflecting ongoing momentum and successful cost reduction efforts
FREMONT, Calif., Nov. 14, 2024 (GLOBE NEWSWIRE) -- Actelis Networks, Inc. (NASDAQ: ASNS) ("Actelis" or the "Company"), a market leader in cyber-hardened, rapid deployment networking solutions for wide area IoT applications, today reported financial results for the fiscal third quarter ended September 30, 2024.
Financial Highlights for the Third Quarter and nine months ending September 30:
-- Robust Revenue Growth, Surpassing Full-Year 2023 in Nine Months: Revenue
reached $2.54 million in Q3 2024, a 200% year-over-year increase from
$0.85 million in Q3 2023. For the nine months ending September 30, 2024,
revenue grew to $6.7 million--up 46% from the prior-year period--driven
by accelerated execution of large contracts, including $1.1 million of
software and support revenues out of a two-year software and services
renewal with one of our largest customers.
-- Significant Improvement in Gross Margin: Gross margin soared to $1.74
million, or 69%, in Q3 2024, a substantial increase from $0.2 million, or
27%, in the same quarter last year. This boost was driven by an increase
in revenues driving lower indirect costs as a percentage of revenues, and
the significant software component of revenue. For the nine months ending
September 30, 2024, gross margin increased to $3.9 million, or 58%, up
from $1.55 million, or 34%, in the prior-year period. This substantial
improvement is driven by higher software and services revenue and other
high margin sales, along with stable, low indirect costs.
-- Continued Reduction in Operating Expenses: Operating expenses continued
their downward trend, totaling $2.0 million in Q3-2024, a 12% reduction
compared to the same quarter last year. For the nine months ending
September 30, 2024, operating expenses reached $6.0 million, down 17%, or
$1.22 million, from the prior-year period, aligning with the company's
cost reduction commitment made last year.
-- Significant Reduction in Net Loss and Non-GAAP Adjusted EBITDA: Net loss
narrowed substantially to $511,000 in Q3 2024, a 41% decrease compared to
the prior-year quarter, and by 41% to $2.57 million for the nine months
ending September 30, 2024. Non-GAAP Adjusted EBITDA improved sharply,
down 87% to $233,000 in Q3 2024, and down 56% to $2.0 million for the
nine-month period. These improvements reflect the successful impact of
increased revenue, gross margin growth, and ongoing operating cost
reductions.
-- Liquidity and Nasdaq Compliance Secured: With nearly $5 million raised in
June 2024 and a significant reduction in net loss, shareholders' equity
reached $2.8 million as of September 30, 2024. In September, the Company
also filed a shelf prospectus and now has an effective At-The-Market
$(ATM.UK)$ facility in place.
"Our third-quarter results underscore Actelis' strong financial performance and continued growth trajectory," said Tuvia Barlev, Chairman and CEO of Actelis. "With robust revenue growth, a dramatic increase in gross margins, and disciplined cost management, we are achieving the financial resilience needed to support our expanding role in critical sectors. This progress reflects the value of our cyber-hardened, rapid-deployment networking solutions and our commitment to driving sustainable long-term growth for our shareholders."
Recent Company Highlights
-- Actelis continues to gain strong traction with significant contract
renewals and new orders across strategic markets. In Q3 2024, Actelis
secured the 1.4 million renewal of a two-year software and services
contract with one of its largest North American customers out of which
recognized 1.1 million in Q3, underscoring the long-standing trust and
value Actelis provides while further enhancing our recurring revenue
base.
-- The Company also received substantial new orders across diverse sectors,
solidifying Actelis' position as a leading provider of cyber-hardened,
rapid-deployment networking solutions. Key projects include modernization
initiatives for Intelligent Transportation Systems (ITS) in major U.S.
cities and counties, deployments for U.S. military bases, and expansion
into European markets like Italy's national highway infrastructure and
German utilities.
-- Recent follow-on orders with the U.S. Department of Transportation and
municipalities in Germany demonstrate Actelis' capability to serve
critical infrastructure, transportation, and government applications with
its secure, hybrid-fiber technology.
-- Actelis' expense reduction program continues to yield positive results,
with operating expenses for the nine months ending June 30, 2024, reduced
by 17% year-over-year, aligning with our strategic cost structure
optimization plan, and preparing the Company for a strong trajectory
towards 2025.
-- Actelis continues to advance its 'Cyber Aware Networking' initiative, an
AI-powered SaaS layer designed to enhance the security of IoT networks by
providing comprehensive threat monitoring and automated response
capabilities directly at the network edge. As part of this initiative,
and as reported on August 19, 2024, the Company is collaborating with an
advanced cybersecurity provider to further develop and deliver these
capabilities.
-- Following extensive due diligence, Actelis issued a termination notice on
October 12, 2024, for its agreement with Quality Industrial Corp.,
concluding that the deal did not align with our objective to maximize
shareholder value.
-- Despite ongoing tensions and conflicts in the Middle East, Actelis'
operations remain unaffected. We are closely monitoring the situation and
are prepared to make necessary adjustments as events unfold.
"Our third quarter concluded positively, meeting and exceeding key expectations," noted Tuvia Barlev, Chairman and CEO of Actelis. "Our unique ability to deliver fiber-grade hardware, software, and services across key verticals--such as Intelligent Transportation, Smart Cities, Federal and Military agencies, and Multi-Dwelling Units--positions us well to maximize revenue growth and advance towards profitability. Looking ahead, we remain focused on driving organic growth while also exploring strategic opportunities that align with our strengths and enhance the value we bring to our customers."
Fiscal Third Quarter and First nine months 2024 Financial Results:
-- Revenues: Q3 2024 revenues were $2.54 million, reflecting a 200%
year-over-year increase from $0.85 million in Q3 2023. The increase from
the corresponding period was primarily attributable to an increase of
$1.4 million of revenues generated from North America driven by volume
increase and a renewal of a service and software contract and an increase
of $0.3 million of revenues generated from Asia Pacific and Europe, the
Middle East and Africa driven by volume increase.For the nine months
ended September 30, 2024, revenues were $6.7 million, compared to $4.6
million for the nine months ended September 30, 2023. The increase from
the corresponding period was primarily attributable to an increase of
$3.4 million in revenues generated from North America associated with
volume increase and a renewal of a service and software contract offset
by decrease of $1.3 million in revenues generated from Asia Pacific and
Europe, the Middle East and Africa associated with completed projects in
the prior year period.
-- Cost of Revenues: Cost of revenues for Q3 2024 was $0.8 million, compared
to $0.6 million in Q3 2023. The increase from the corresponding period
was primarily attributable to the increase in revenues as well as change
in the product mix.For the nine months ended September 30, 2024, the cost
of revenues was $2.8 million, compared to $3.0 million for the nine
months ended September 30, 2023. The decrease from the corresponding
period was primarily attributable to the change in regional mix of
revenue of an increase in North America revenues, which are more
profitable, and a decrease in Europe, Middle East and Africa revenues
which are less profitable
-- Gross Profit: Gross profit for Q3 2024 was $1.7 million, up from $0.23 in
Q3 2023. For the nine months ended September 30, 2024, gross profit
reached $3.9 million, compared to $1.5 million in the nine months ended
September 30, 2023.
-- Research and Development Expenses: R&D expenses for Q3 2024 were $0.5,
down from $0.7 in Q3 2023. For the nine months ended September 30, 2024,
R&D expenses were $1.8 million, compared to $2.1 million in the same
period last year. The decrease is primarily attributable to cost
reduction measures taken.
-- Sales and Marketing Expenses: Sales and marketing expenses for Q3 2024
were $0.72, compared to $0.69 in Q3 2023. For the nine months ended
September 30, 2024, these expenses totaled $2.0 million, down from $2.3
million in the nine months ended September 30, 2023.The decrease was
mainly due to cost reduction measures taken.
-- General and Administrative Expenses: G&A expenses were $0.79 in Q3 2024,
down from $0.97 in Q3 2023. For the nine months ended September 30, 2024,
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