Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KULR Technology Group Inc (KULR, Financial) achieved record revenue of approximately $3.19 million in Q3 2024.
- The company increased its total paying customers by 83% and engineering service revenue by 22%.
- Operating expenses were reduced by 38% year over year, demonstrating improved efficiency.
- Gross margin for the third quarter was 71%, a significant increase from 44% in the same period last year.
- KULR Technology Group Inc (KULR) signed its first revenue-generating license agreement, contributing over $1 million in revenue.
Negative Points
- Product revenue was approximately $765,000, down 60% from the same period last year.
- The decline in product revenue is partly due to delayed orders from a significant customer, expected to resume in 2025.
- Despite improvements, the company still reported a one penny loss per share for the third quarter.
- The company faces challenges in diversifying its customer base to mitigate risks associated with customer concentration.
- Global supply chain disruptions remain a concern, although KULR is working to diversify its vendor base.
Q & A Highlights
Q: Cooler's business is focused on high-performance thermal management for batteries and electronics. Can you provide updates on any upcoming product launches or significant innovations we should expect in 2025?
A: Yes, we have several exciting developments for 2025, including the Cooler One Space, Q1 Guardian, Cool One Air, and our Cooler Zero Vibe platform for servers and potentially wind farm turbines. These innovations are expected to drive growth, and we are exploring new business models, such as licensing deals and subscription models, particularly for our Safe X products.
Q: Operating expenses, particularly research and development and general administrative expenses, remain high. What steps are you taking to optimize these costs without compromising product development?
A: We have reduced operating expenses by 38% compared to last year, with R&D costs down 32% and SG&A costs down 42%. We are continuously looking for ways to streamline processes and find cost savings, both large and small, to improve our financial efficiency.
Q: Given the global supply chain disruptions, how is KULR ensuring the continued supply of key materials and managing vendor relationships to avoid future shortages or delays?
A: We have reduced vendor concentration significantly, with no vendor representing 10% or more of inventory this quarter. Our supply chain team is focused on diversifying sources and qualifying multiple suppliers to mitigate risks. So far, we have not encountered any material issues.
Q: With a few customers accounting for a large portion of revenue, how is KULR planning to diversify its customer base to mitigate risks associated with customer concentration?
A: We are actively working to diversify our customer base. Our customer concentration is down 38% for the third quarter compared to last year, and down 46% for the nine months ending this quarter. As we continue to grow our customer base, we expect this trend to improve further.
Q: With lithium battery transportation and storage likely to be more regulated by governments in the future, how is KULR positioning itself to quickly meet a large demand for their products if it arises?
A: We are prepared to scale up production quickly through our contract manufacturing partners, who have existing factories and operations in North America and Asia. This allows us to meet increased demand without significant capital expenditure.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
