AmpliTech Group Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: Record Q2 sales of over $11 million marked the highest quarterly revenue in company history, surpassing full-year 2024 sales in just three months.
  • Neutral Sentiment: Gross profit margins dipped by 17% in Q2 due to front-loaded investments and one-time costs for 5G market entry, but management expects margins to rebound to double digits in H2 2025.
  • Positive Sentiment: As of June 30, cash, equivalents, and receivables totaled $16.4 million, working capital was $16.2 million with zero long-term debt, and current backlog stood at about $15 million from funded LOIs.
  • Positive Sentiment: Fiscal 2025 revenue guidance was raised to at least $24 million (140% year-over-year growth), with positive cash flow and profitability projected for fiscal 2026 assuming continued order momentum.
  • Neutral Sentiment: AmpleTech’s vertically integrated position across Open RAN, quantum computing, and satellite connectivity aligns with strong industry growth projections and U.S. government security initiatives.
AI Generated. May Contain Errors.
Earnings Conference Call
AmpliTech Group Q2 2025
00:00 / 00:00

There are 4 speakers on the call.

Operator

Good

Speaker 1

day, ladies and gentlemen, and welcome to AMPO Tech Group Quarterly Investor Update Call, where the company will discuss its Second Quarter twenty twenty five Financial Results. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, today's conference is being recorded. I would now like to turn the call over to Amplitech's COO, George Flores.

Operator

Good afternoon, and thank you for joining today's call to review the progress of Ampitec's growth initiatives and to answer investor questions. On the call today are Ampitec's founder and CEO, Pawar Magdal the company's CFO, Luisa San Frontero and the company's COO, Jorge Flores. Following initial management comments, we will open the call to investor questions. An archived replay of today's call will be posted on the Investor Relations section of Amplitec's corporate website. This call is taking place today on Thursday, 08/14/2025.

Operator

Remarks that follow and answers to questions may include statements that the company believes to be forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, the statements that describe future plans, objectives or goals are also forward looking. These forward looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters and the company have described in its press releases and in its filings with the Securities and Exchange Commission.

Operator

Except as described in these filings, the company disclaims any obligation to update forward looking statements, which are made as of today's date. With that, let me turn the call over to our CEO, Mr. Pawar Makul. Ladies and gentlemen, thank you for joining our Q2 twenty twenty five review call. Today, we will reflect on our performance in the 2025 and six month period ending 06/30/2025.

Operator

We will take the opportunity to discuss the company's growth outlook, market opportunities and provide additional financial guidance. I will now go over our Q2 fiscal year twenty twenty five highlights and strategic progress. Company achieved record sales in excess of $11,000,000 to the highest sales in company's quarterly history. This Q2 sales number surpasses the total sales number for the entire 2024 fiscal year. While lower than normal gross profit margins were achieved during Q2 twenty twenty five, The 17 decrease is mainly due to the front loading of our investment to open doors and get access to the lucrative five gs M and L business.

Operator

Several onetime costs were incurred by the company that contributed to the increase in costs to facilitate the shipments and activate its supply chain according to customer acquired delivery demand. Among these onetime costs are license fees, initial production line fees, molding fees, overtime, etcetera, which led to the lower gross margins achieved this quarter. However, let me emphasize that the company believes higher gross margins will be achievable over the next six months. As of 06/30/2025, we had cash and cash equivalents and accounts receivable of $16,423,000 and working capital of $16,163,000 with $0 of long term debt on our balance sheet. The company's intangible assets, including IP, increased by $8,000,000 on the balance sheet.

Operator

Our inventory position remains healthy with over $7,000,000 on hand and current backlog hovering around 15,000,000 During these initial six months of the year, the company has seen multiple purchase orders, partially funding the previously announced LOIs with prominent ORAN five gs players in the industry. Additional orders are expected to continue funding these LOIs. Now let's take a look at the industry context and the strategic outlook. We realized it would be nearly impossible for a company of our size to break into customer bases at the MNO level without a deliberate front loaded investment approach. Our strategy is to show that we can deliver and be a viable source for stringent requirements of these MNOs.

Operator

These are multibillion dollar companies that require precise product development. This builds foundational trust with industry giants and positions our high performance technologies to become the go to standard in some of the most rapidly expanding communications verticals in the world. We have achieved traction and revenue that can be sustained at the expense of the compression in short term gross margin for Q2 only. This is part of Amplify's intentional and calculated investment strategy by aggressively pursuing the quickest deliveries of products to tier one multinational operators to secure long term positions within their critical next generation infrastructure rollout. Amperec's four focus areas, open RAN, ORAN five g network, quantum computing, and satellite terrestrial high speed connectivity are each expected to see high growth in the coming year.

Operator

ORAN five gs infrastructure, projected growth of 33.4%, reaching over 42,000,000,000 globally by 02/1930. Quantum computing hardware, the market expected to grow at 37.3% combined AGR, exceeding $9,000,000,000 by 02/1932. Satellite and high speed connectivity equipment estimated to grow 12% CAGR through 02/1930, driven by LEO networks and the rural broadband demand. Ampletech's advanced technologies, particularly its true O RAN radio and project loan amplifiers are uniquely suited to these high performance applications. We believe the strategy of accelerated penetration combined with recurring follow on orders to establish Amplify's products as embedded solutions within the next generation infrastructure platform.

Operator

In addition, increasing demand for secure domestically manufactured communications equipment is expected to further accelerate AMPATEK growth trajectory. AMPATEK is currently the only US based company providing complete vertically integrated end to end commercial and defense grade networking and connectivity solutions. In contrast to other firms that rely heavily on third party foreign suppliers, Absa's tightly controlled supply chain offers a trusted alternative for both private and public sector clients focused on national security, data integrity and supply chain resilience. These are key advantages that AmpleTech possesses. We believe the company is also well positioned to benefit from major U.

Operator

S. Government initiatives, including rural broadband funding, USTDA led global effort to replace untrusted foreign five gs equipment with secure US based alternatives and CHIPS Act incentives to bolster American semiconductor production. These programs are expected to significantly scale operations across XFX three divisions. The AGC GFS division's five gs radios serve as the growth engine, addressing urgent needs for open, interoperable, and high performance ORAN five gs systems. Currently, Amplitech ORAN five gs radio deployment is the largest of its kind in the world, making AMG a leader in ORAN radio products delivered in this industry.

Operator

Amplitech's five g ORAN radios will integrate mimic LNA chip developed in house by the AGNDC division, ensuring superior signal fidelity and noise performance. The chips are then packaged and produced at scale by Amplify Spectrum Semiconductor division in Silicon Valley, enabling full control over quality cost and delivery time lines. There's a symbiotic relationship between each of these divisions as I have mentioned in in many of my previous calls, and each division can essentially be an independent business unit by design. Beyond internal deployment, Apple Tech's mimic LNA modules and LNBs recognized as among the best in the market U. Adoption represents a significant additional revenue stream with strong margin potential.

Operator

That's a forward looking financial guidance. As Amperetech transitions from initial deployment to scale adoption and repeat order, the company expects gross margins to improve beginning in q three and 2025 this year. Based on executed LOIs and customer feedback, management anticipates the following. Revenue growth already exceeding over 100% year over year in fiscal year twenty twenty five, driven by public and private five gs orders. The company increased its revenue guidance to at least $24,000,000 for fiscal year twenty twenty five, representing 140% year over year increase.

Operator

Gross margins getting back to double digits in the last six months of fiscal year twenty twenty five as production costs normalize, onetime costs are reduced and higher margin follow on business front. Positive cash flow from operations and projected profitability to be achieved in fiscal year twenty twenty six, assuming continuation of current order pace and margin recovery. The company maintains a strong cash management discipline and does not anticipate raising capital under unfavorable market and pricing conditions. Any capital deployment will be strategic, measured and aligned with shareholder value creation. Value of shareholders.

Operator

We are looking ahead with our company having a good backlog in hand of about $15,000,000 with the expectations of receiving additional orders to continue funding our LOIs, a healthy balance sheet, zero long term debt and an expanding portfolio of proprietary five gs and satellite technologies, having cryogenic amplifiers serve the growing needs of the public computing market, having ORAN technology on hand to support this artificial intelligence leading pioneer, adding global five gs product certification now in place, Ethotec is positioned to deliver successive quarters of growth, enhanced shareholder value and significant stronger IP valuation in 2025 and beyond. This trajectory is anticipated because of all the previous investments and developments in unique technology that is focused and targeted for these growing technology demand. As such, I thank you for your continued support. We'll now open the call for questions. Operator, please proceed.

Speaker 1

We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your As a reminder, if you would like to ask a question, please press star then 1 to join the question queue. That's star then one.

Speaker 1

First question today comes from John Henderson with Inflections. Congratulations

Speaker 2

on your forward progress. Wanted to ask a couple questions. Number one, you know, you got the first tier one that's ordering nicely from you guys. Can you give any more granularity on what you're looking at with the second tier one and when you're expecting, you know, some feedback and additional orders from them overseas?

Operator

Well, we've already received orders on the second tier one. We've already announced those as well, and they continue to come through. George, what's the time frame on these? So right now, though, we have two main LOIs right now. One is at $17,000,000.

Operator

The other one is $40,000,000. So we actively shipped against the $40,000,000 LOI in during quarter two, and we already received the additional orders, though, which are the back the mainly the the backlog that we have is already received orders for additional production quantities for this year and the start of next year. When it comes to the $78,000,000 of our LOI, we already received about 200,000,000 worth of orders. All of those are shippable within 2025. So the bulk of the $78,000,000 LOI is going to be spreading between 2026 and 2027.

Operator

So we are definitely looking forward for really good years ahead.

Speaker 2

And do you think you're gonna have visibility on 2026, like, well ahead of time with both these guys so you can even production out Absolutely. We

Operator

we do have we do have a periodic meetings with with both organizations, and they are already working with us, and they are providing their forecast to us as as well. So we are able to energize the supply chain with these numbers. And then the way that this is working, though, is that the customers, they supply the forecast, then we start activating the supply chain, and then they start funding the orders. And that's how we are moving moving ahead with the shipments.

Speaker 2

And now what's the pipeline looking like? I mean, congrats on securing these two. You know, we're relatively new to the story, so we're just digging in here. And it would seem as though that's gonna open some other doors. You know, can you provide any, update in terms of what the pipeline might be looking like with other operators around the world in terms of the amount of engagements potentially even if it's in a broad stroke?

Operator

Well, we can't we can't give you any real numbers, but we can tell you that whatever we're doing here with these MNOs, which is the trans transitioning to the the five g ORAN technology, It is something that is imminent for many other MNOs, and there are several large MNOs. I mean, I'm not gonna name any right now, but we all know them. Those large MNOs are geared to do this transitioning. Now that they see that there's a successful way of doing that and achieving it and especially with AMPLETEC and and also the other MNOs that we're working with. Now it becomes more viable for them to pursue this opportunity.

Operator

So that's the main thing. Our whole goal was to show the world that it can be done and it can be implemented, and it doesn't have to be waiting for many years. So we have provided this technology and capability now. So we expect next year to get a very good response from other MNOs in waiting in line to do this.

Speaker 2

Great. And I noticed you guys had a press release, like, a month ago about quantum computing. How many companies in that space are you engaging with? You know, it doesn't seem as though it's really revenue producing yet. Do you think that will be, you know, revenue producing, you know, soon?

Speaker 2

And, you know, what are your expectations there, you know, over time?

Operator

So quantum computing, it's it's the whole quantum computing business right now is not at a at a productionized phase right now. The r and d companies, like, these these are teaming, valuated companies like the IONQ and other others that do not have product, and they do not have any revenues and stuff. They're just basically valued for what they may be able to produce in the next coming year. We already have a product that we have delivered to these large companies, and it's it's showing performance, but it's not at a production phase right now. And these quantum computers, they basically are not something that you have thousands of.

Operator

The quantum computers will be made to access, you know, business to business type application. Nobody has it on their desk desktop. So the businesses will access it through the cloud, and the cloud is really it's the quantum cloud, and that cloud is basically replacing the AI applications right now. Right now, the silicon applications is led by NVIDIA, but it's reached its limit. It's causing a lot of increase in power consumption in all these AI data servers, and also it's causing a lot of speed degradation because silicon cannot provide the kind of kind of speed that the the calculations and the demand is there for.

Operator

So there is a push now to jump into AI. AI is going to be powered by quantum in the future, but it's not here right now. But it's inevitable and it's around the corner. When that becomes productionized, that's where we provide all the very essential core components, which is which are in these quantum applications. And the numbers come in where you look at the cubits.

Operator

So so IBM and companies that are at that level, Google AI, they have thousands of cubits in their computer. These are, like, similar to bits in a in a regular computer. So these thousand cubits, each cubic generally has an LNA that we make that's required to go into these quantum computers. So that's where the production will come in. It's not at a production stage yet, but when that goes, it'll ramp up just like everything else does.

Speaker 2

Great. And then final question, and I'll see before. Can you update on your space division? I know you're pretty upbeat there the last few quarters about what's coming next year of all these hosting new products. You know, how how is the backlog looking there in terms of building for next year?

Operator

Yes. So so the space products are coming from the LEO application. Right? So the lower orbit applications. But right now, the lower orbit applications, they're in the process of building out satellites.

Operator

And that's right now, they're not at at the stage where they would require the chips that we have. That comes some sometime next year. That's what we predict the satellite business will become. And we have already developed a bunch of chips and will state qualified hardware in our AG and DC division to support these satellite applications. But that's not this year.

Operator

It's going to start pretty much next year, the satellite application.

Speaker 2

Great. Thanks guys for your time.

Operator

You're you're welcome. Thank you.

Speaker 1

The next question comes from Jack Vander Arie with Maxim Group. Please go ahead.

Speaker 3

Okay. Great. Hey, hi, Fawad. Sorry, I joined a little late. I have quite a few earnings calls tonight.

Speaker 3

So I apologize if I'm redundant. Big uptick in the revenue this quarter as we were expecting. It's $11,000,000 I'm just wondering if you could help and just help me understand and help everyone else understand how many orders under the two LOIs have come in since reporting $11,000,000 of revenue

Operator

roughly? Well, we have right now, we have additional orders that we reported over the last month exceeding 5,000,000 so far already, and we're expecting a few more to to trickle in shortly. So we are definitely very positive that the the LOI at least on the $40,000,000 one, we know that we are on our our way to get that that LOI fully filled with purchase orders over the next over the next year or so. On the $78,000,000 LOI, we've already received 2 and a half million worth of of funded orders. So this, we are shipping this year.

Operator

So and and this is a difficult cycle in which the smaller shipments in the beginning serve as a point of concept, you know, to make sure that all of the deployments, you know, are going to be working as expected. And then, basically, the court case get open after after that.

Speaker 3

Okay. Excellent. And then that that's helpful, Dhruv. Thanks, George. Maybe just, Claude, kind of kind of bigger picture.

Speaker 3

Just can you maybe touch on all the different types of verticals for your ORAN, your five g ORAN solutions? And which ones are and and just maybe which ones you see maybe just rank them in terms of how you prioritize them, which ones take off first, and how do you actually deploy them?

Operator

Sure. So there are two different types of businesses that we are pursuing. Right? One is the private five g, which is a growing industry. The private five g is involved in, you know, applications like mining, warehouses, department stores, even homes as well, but many different businesses, railroad stations.

Operator

It could be limitless. There are many, many applications where they need a secure high speed network that basically now is AI compatible. Right? That's what everybody wants wants now because manufacturing is going to become automated. So there's a big drive to have high speed networks that can be AI based, and that's what we're providing.

Operator

So the verticals will be the sec second second part of that that the radio business is the commercial MNOs, which we've been announcing. So these two businesses are separate. They're not the same. They're different types of radios. They're they're higher configure risk convert higher configuration radios for the massive MIMO for the commercial applications and the private five g radios are lower power, and they have different parts of it.

Operator

They have a Wi Fi seven part of it. They have CPEs. They have routers. We make all those things from top to bottom, including the radio, the antennas, and everything. So what's happening now is that people need support in the private five g.

Operator

They need these to fill, let's say, the last mile access. And the networks are not covering the last mile, and we're calling it fixed wireless access. Since we have capabilities for both the commercial applications as well as the private five g, we're in a very good position to fill all these holes that other providers cannot do because we are basically vertically integrated and we're able to provide all of these solutions, including in the home AI based devices like routers, like CPEs, like WiFi seven devices, cameras, all of these supporting equipment we can provide. And that supports not only businesses, but it also supports these commercial applications and homeowners as well. So it's a large market because our products cover all of these verticals.

Operator

And this is a very, very lucrative market now because the large MNOs are not going after this last mile business. We are. And the more subscribers we build with our network, the more value we get.

Speaker 3

Excellent. Okay. So and then maybe just to follow-up on that. It's it's very very complex. There's a lot of moving parts in the ecosystem.

Speaker 3

And I just wanna know, like, for the autonomous piece of this business, all the different drone providers, all the different you know, you have you have robo taxis on on the way maybe. Everything is kind of competing for these last mile deliveries. Are you do you see Amplitech as a fundamental absolute requirement to enable all of these? And do you play will you be able to play well with everyone? Or do you think one or two of these providers is gonna kinda win win share?

Speaker 3

How does Amplitech think about that?

Operator

So for Amplitech's strategy is not to compete with these providers. Right? I mean, we're providing a unique solution. Right now, there there there are other companies that basically take third parties and put or assemble and integrate the entire system. They buy the c u d from someone.

Operator

They buy the radios from someone, and then they have the support for installation from someone. So we're we're not doing that. We're basically the only company in The US that is providing all of it from top to bottom, including the planning and optimization and the design of all this equipment and the software that goes along with it. So we are in a position to help these MNOs achieve what they want, not compete with them. So we become valuable to them as their as their assisted provider.

Operator

Right? And also to help them improve their whole network by adding our subscriber base to theirs or also just adding our equipment and and transitioning them to the next level. So it's a very, very positive thing. We're not competing with them. We're basically helping all of them and creating a business niche where there's not too many US players in the private five g market that can do all of it that we can do.

Operator

And we've we've also built up a lot of IT.

Speaker 3

Just to just to clarify, sorry, Claude. I I was talking about what how does Amplitech view the competitor competitive environment in terms of the the end drone providers and the end autonomous vehicle players? Are you you're enabling all of them. So it's not like you you are the solution for everyone in regardless of who who wins out or if it's if it is a fragmented market. Excellent.

Speaker 1

And then can I

Speaker 3

just one more thing? I would just like to get an update from your whatever you can provide perspective wise. Two months ago, three months ago, and then maybe six months ago when you initially announced these LOIs, how have your feelings and and opportunities in terms of, like, people knocking on your doors, new opportunities knocking on your doors? Like, I know what AmpleTech is now, and I I think I need that. But there's MNO discussions or other, you other big MNO players domestically, internationally, and then also some of these other special channel service providers as well.

Speaker 3

What what has changed in your view? How are things progressing? Thanks.

Operator

Well, I I most definitely, their view has changed in the that we we they've we have shown that we have an ability to be able to produce what they need. Right? It's very hard for qualification in this business for any provider or small company, especially, to have all the certifications and all the the attestations that we need to provide all the regulatory things that that company needs to provide service and a qualified product to these MNOs and large companies. We have shown that. And that's orders and repeat orders are showing that we are a viable one.

Operator

So other companies, as I mentioned before, and I think I don't you may admit that, is that by seeing that we are able to provide this, there are several other MNOs that are in the same position as TELUS or or Canadian manufacturer that is transitioning them to a five g o r n to save billions of dollars in the future. So now they have seen that this is working, and we are a partner to them. So they're advertising our services to them. And then so they see when they see that we can do it and it's really possible to achieve this five g transition and that we're a viable player, they're now easily set up for us to tap into, and they will now see that we can provide provide that. So it opens a lot of doors for us, this investment.

Operator

I mean, we invested heavily in doing this. But the the the the game winning thing is that we are now a viable supplier to all of these people, and and it's a unique industry. There's not too many already five g providers to size up. Excellent. That that was exactly the answer I was

Speaker 3

I was looking for. And then maybe just one one more follow-up. Guess, how you how's your inventory kind of looking? And how do you how are you prioritizing just sheer demand that you're gonna have to satisfy where things stand in terms of your manufacturing and and inventory kind of strategy and needs?

Operator

Well, right now, the let let me answer the question. This is this is George. We have we are entering right now a very good period for us because now we have a great relationship with our customer to the point that, as I mentioned previously, though, now we are free to be able to see their forecast. Right? So the that has been a tremendous help because, obviously, though, for us to be able to to do the shipments in in q two, we really have to expedite material and pay premiums and stuff like that.

Operator

So if there was a lot of onetime cost that we had to endure in q two to be able to to deliver this rapidly. Right? But on the same token, but that's why we are able to predict that our gross margins are going to be improved greatly over the next six months. Why? Because, you know, we we already have all of the test jigs, all of the molding, all of the onetime costing that is that affected our our gross margins in in q two.

Operator

That's already behind us. So for q three and q four, we we already captured those costs. Right? Now when it comes to material, we don't need to airship material or pay the expedite fees to get to get the suppliers to ship the materials because we already based on forecast, we were able to start ordering against forecast. So now that material, the supply chain is is already active.

Operator

Right? So we don't need to be expediting or paying premiums to to be able to get the material to the assembly line on time for the the strict delivery requirements that we have from our customer. One and that's one of the things that I wanted to point out, though, that we have a great relationship with the customer. The customer is very, very when it comes to deliveries, you know, that we must make deliveries based on their schedules because there is a lot of system integrators, right, that they use, that they will have products on hand, and we committed to that. And we and we achieved a a great response, a a great supply chain activation for q two, and we're already set to continue doing that over the next quarters.

Operator

And that's why we firmly firmly believe that our gross margins are going to return to a very normal levels over the next six months, and and we are definitely looking forward into that. Inventory. How much is it? The inventory right now, yes. The inventory is is that we are hungry right now.

Operator

As you can see and as you will see in the in the balance sheet, we are very selective, right, that with the we basically build build to order. We're building to forecast. So we are very careful, you know, in in bringing inventories and keeping the inventory levels to very manageable levels without affecting the cash flows of of the company. So we we definitely are in a good position inventory wise to to satisfy the the next set of funded purchase orders throughout the company, not just for five g, but also for the core business in the amphitheking division and the Spectrum division. Yeah.

Operator

7,000,000. Mhmm.

Speaker 3

Alright. Excellent. Well, it sounds like things have really progressed. Everything's on track. Look forward to watching you guys execute.

Speaker 3

Thanks.

Operator

Thank you. Thank you, Jeff.

Speaker 1

The next question comes from Gerard Patel, a private investor. Please please go ahead.

Operator

Hello? Gerard,

Speaker 1

your line is open. You may ask yourself.

Operator

Yeah. Hi. I'm sorry. I was just on the mute. No.

Operator

I have a question about I'm holding I'm one of your investors from very beginning of the time. I have seen too many ups and downs, and sometimes those moral breakdowns. But I have a question on the AmpleTech warrants. I also own warrant. I wanted to know if I want to execute to execute those warrants, how can I do it?

Operator

And is there any plan you guys are extending the expiry of those warrants?

Speaker 1

If you would like to exercise your warrant, please this is Louisa Sanfordello, CFO. If you need to exercise those warrants, please contact me at the office or send me an email at louisa@aquatecgroup.com. As far as extending those warrants, at this time, we do not have any plans on doing so.

Operator

Okay. Alright. So, basically, I have to reach out to you in order for the okay. Got it. Yes.

Operator

That's all. Those are the two questions. Okay. Thank you, sir. Thank you for being an investor.

Speaker 1

This concludes our question and answer session. Would like to turn the call back over for any closing remarks.

Operator

Thank you, operator, and thanks to everyone who joined today's call to hear about the progress we've made and the plans we have to further our company's mission of providing the communication system of tomorrow to date. We look forward to updating you further on our Q3 financial results call in mid November. Until then, please contact us directly should you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at contact information listed at the bottom of our press release. Thank you and be well.

Speaker 1

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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