Release Date: November 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avante Corp (TSXV:XX, Financial) reported a 52% increase in quarterly revenues year-over-year, driven by the successful acquisition of NSSG and organic growth.
- The company achieved a 49% growth in adjusted EBITDA for Q2 fiscal 2025, marking positive adjusted EBITDA in nine of the past 11 quarters.
- Avante Corp is bank debt-free and has $12 million available in undrawn credit facilities, indicating a strong financial position.
- The company's proprietary Halo technology has been deployed in over 160 locations, with significant enhancements underway.
- Avante Corp maintains a high client retention rate of 98%, demonstrating strong customer satisfaction and trust in their solutions.
Negative Points
- The company faced significant challenges during the 12 years it was controlled by others, impacting its performance.
- There was a decline in the company's cash balance over the past quarter due to one-time costs and large prepayments.
- Integration of NSSG into Avante's operations has been time-consuming, posing a challenge to the company.
- The company had to settle with a former executive, which negatively impacted cash flow in the quarter.
- Avante Corp's growth trajectory was stagnant from fiscal 2020 to 2022, indicating past difficulties in maintaining growth momentum.
Q & A Highlights
Q: Can you provide some color around the pipeline for Halo specifically? Are you speaking with municipal governments to deploy Halo as a citywide threat detection solution?
A: We have mentioned and have had discussions about Halo Track. It's a very unique service and will benefit cities as we can track vehicles and individuals across our Halo Track network. β Emmanuel Manucho, CEO
Q: When do you expect the first deployments for Human in the Loop? How quickly is the pipeline building in the K-12 vertical? And what are the next verticals you'll be exploring beyond K-12? Can you also talk about the economic model here and for Halo?
A: We are presently testing Human in the Loop with an artisan public school board in New Mexico and should be going live in the next couple of weeks. We hope to monitor about 10,000 cameras by December 2025. For Halo, models range from $5200 per year for executive homes to $3500 US for Walle rental and $20 US per camera for K-12 schools. Beyond K-12, we are exploring community centers, event spaces, and retail environments. β Emmanuel Manucho, CEO
Q: Do you expect to grow operating expenses in any meaningful way to accommodate the potential growth of Halo or Human in the Loop?
A: Not in the short term, as we have staff and the software to manage all the alerts. β Emmanuel Manucho, CEO
Q: Have you scoped any new geography either in Canada or the US you would like to expand into with your traditional high-end security services?
A: We've been invited to quote a few billionaire homes specifically in Fort Lauderdale, Greenwich, Connecticut, and Princeton, New Jersey for Halo and body guarding. β Emmanuel Manucho, CEO
Q: How is the progress on Avante Black? Could you provide an example of its service?
A: Avante Black is an interesting business solving unique problems. For example, we helped a CEO discover that a headhunter was trying to take an employee away, costing $210,000. Another case involved uncovering a sex trafficker posing as a boyfriend. β Emmanuel Manucho, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
