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 5 speakers on the call.

Speaker 4

Ladies and gentlemen, welcome to AmpliTech Group Inc.'s quarterly investor update call, where the company will discuss its second quarter 2025 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 CEO, Fawad A. Maqbool.

Speaker 1

Good afternoon, and thank you for joining today's call to review the progress of AmpliTech Group Inc.'s growth initiatives and to answer investor questions. On the call today are AmpliTech Group Inc.'s Founder and CEO, Fawad A. Maqbool, the company's CFO, Louisa Sanfratello, 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 AmpliTech Group Inc.'s corporate website. This call is taking place today on Thursday, August 14, 2025. 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, a statement that describes future plans, objectives, or goals is also forward-looking.

Speaker 1

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 that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company excludes 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. Fawad A. Maqbool.

Operator

Ladies and gentlemen, thank you for joining our QC 2025 review call. Today, we will reflect on our performance in the second quarter of 2025 and the six-month period ending June 30, 2025. 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 QC fiscal year 2025 highlights and strategic progress. The company achieved record sales in excess of $11 million, the highest sales in the company's quarterly history. This QC sales number surpasses the total sales number for the entire 2024 fiscal year. While lower than normal gross profit margins were achieved during QC 2025, the sudden decrease is mainly due to the front-loading of our investment to open doors and get access to the lucrative 5G MNO business.

Operator

Several one-time costs were incurred by the company that contributed to the increase in cost to facilitate the shipment and activate its supply chain according to customer-required delivery demands. Among these one-time costs are license fees, initial production line fees, molding fees, overtime, etc., 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 June 30, 2025, we had cash and cash equivalents and accounts receivables of $16,423,000 and working capital of $15,163,000, with $0 of long-term debt on our balance sheet. The company's intangible assets, including IT, increased by $8 million on the balance sheet. Our inventory position remains healthy, with over $30 million on hand and current backlog hovering around $15 million.

Operator

During these initial six months of the year, the company has seen multiple purchase orders partially funding the previously announced LOIs with prominent O-RAN 5G 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. These are multi-billion 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 spending communications verticals in the world.

Operator

We have achieved traction and revenues that can be sustained at the expense of the compression in short-term growth margins for Q2 only. This is part of AmpliTech Group Inc.'s intentional and calculated investment strategy. By aggressively pursuing the quickest deliveries of products to Tier 1 MNOs to secure long-term positions within their critical next-generation infrastructure rollout, AmpliTech Group Inc.'s four focus areas—O-RAN, O-RAN 5G network, quantum computing, and satellite terrestrial high-speed connectivity—are each expected to see high growth in the coming year. O-RAN 5G infrastructure projected growth of 33.4%, reaching over $43 billion globally by 2030. Quantum computing hardware sees market expected to grow at 37.3% CAGR, exceeding $9 billion by 2032. Satellite and high-speed connectivity equipment is estimated to grow 12% CAGR through 2030, driven by LEO networks and the rural broadband demand.

Operator

AmpliTech Group Inc.'s advanced technologies, particularly its two O-RAN 5G radios and cryogenic low-noise amplifiers, are uniquely suited to these high-performance applications. We believe the strategy of accelerated penetration combined with recurring follow-on order will establish AmpliTech Group Inc.'s products as embedded solutions within the next-generation infrastructure platform. In addition, increasing demand for secure domestically manufactured communications equipment is expected to further accelerate AmpliTech Group Inc.'s growth trajectory. AmpliTech Group Inc. is currently the only U.S.-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, AmpliTech Group Inc.'s tightly controlled supply chain offers a substantive alternative for both private and public sector clients focused on national security, data integrity, and supply chain resilience. These are key advantages that AmpliTech Group Inc. possesses. We believe the company is also well-positioned to benefit from major U.S.

Operator

government initiatives, including rural broadband funding, U.S. CDA-led global efforts to replace untrusted foreign 5G equipment with secure U.S.-based alternatives, and CHIPS Act incentives to bolster American semiconductor production. These programs are expected to significantly scale operations across AmpliTech Group Inc.'s three divisions. The AGCGFS division's 5G radios serve as the growth engine, addressing urgent needs for open, interoperable, and high-performance O-RAN 5G systems. Currently, AmpliTech Group Inc.'s O-RAN 5G radio deployment is the largest of its kind in the world, making AmpliTech Group Inc. a leader in O-RAN radio products delivered in this industry. AmpliTech Group Inc.'s 5G O-RAN radios will integrate MMIC LNA chips, developed in-house by the NGNDC division, ensuring superior signal fidelity and large performance. The chips are then packaged and produced at scale by AmpliTech Group Inc.'s Spectrum Semiconductor division in Silicon Valley, enabling full control over quality, cost, and delivery timelines.

Operator

There is a symbiotic relationship between each of these divisions, as I have mentioned in many of my previous calls, and each division can essentially be an independent business unit by design. Beyond internal deployment, AmpliTech Group Inc.'s MMIC LNA modules and LNBs, recognized as among the best in the industry, are expected to see growing demands from other radio and telecom manufacturers in the United States and allied nations transitioning away from foreign component suppliers. The power of ample market adoption represents a significant additional revenue stream with strong margin potential. Now, some forward-looking financial guidance. As AmpliTech Group Inc. transitions from initial deployments to scaled adoption and repeat orders, the company expects gross margins to improve beginning in Q3 and Q4 of 2025.

Operator

This year, based on executed LOIs and customer feedback, management anticipates the following: revenue growth already exceeding 100% year-over-year in fiscal year 2025, driven by public and private 5G orders. The company increases revenue guidance to at least $24 million for fiscal year 2025, representing a 140% year-over-year increase. Gross margins getting back to double digits in the last six months of fiscal year 2025, as production costs normalize, one-time costs are reduced, and higher margin follow-on business runs. Positive cash flow from operations and projected profitability should be achieved in fiscal year 2026, 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.

Operator

Valued shareholders, we are looking ahead with our company having a good backlog in hand of about $15 million, with the expectations of receiving additional orders to continue funding our LOIs, a healthy balance sheet, zero long-term debts, and an expanding portfolio of proprietary 5G and satellite technologies, adding cryogenic low-noise amplifiers to serve the growing needs of quantum computing markets. Having O-RAN technology on hand to support this artificial intelligence leading pioneer, having global 5G product certifications now in place, AmpliTech Group Inc. is positioned to deliver successive quarters of growth, enhanced shareholder value, and significantly 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 demands. As such, I thank you for your continued support. We will now open the call for questions. Operator, please proceed.

Speaker 4

We will now begin the question and answer session. To ask a question, you may press star and one on your touch-tone phone. If you are using a speakerphone, 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 question, please press star and two. At this time, we will pause momentarily to assemble our roster. As a reminder, if you would like to ask a question, please press star and one to join the question queue. Star and one. The first question today comes from John Brien Henderson with Inflection Point Investing LLC. Please go ahead.

Speaker 3

Hi, good afternoon, guys. Congratulations on your forward progress. I wanted to ask a couple of questions. Number one, you know, you got the first Tier 1 MNO that's ordering nicely from you guys. Can you give any more granularity on what you're looking at with the second Tier 1 MNO and when you're expecting some feedback and additional orders from them, overseas?

Operator

We've already received orders on the second Tier 1 MNO. We've already announced those as well, and they continue to come through. Jorge, what's the timeframe on these?

Speaker 1

For right now, we have two main LOIs right now. One is a $17 million, the other one is $40 million. We actively shipped against this $40 million LOI during quarter two, and we already received the additional orders, which are the backlog that we have, already received orders for additional production quantities for this year and the start of next year. When it comes to the $17 million LOI, we already received about $2.5 million worth of orders. All of those are shippable within 2025. The bulk of the $17 million LOI is going to be spreading between 2026 and 2027. We are definitely looking forward for really good years ahead.

Speaker 3

Do you think you're going to have visibility on 2026 well ahead of time with both these guys so you can even production out without any cost?

Speaker 1

Absolutely. We do have periodic meetings with both organizations, and they are already working with us, and they are providing the forecast to us as well. We are able to energize the supply chain with these numbers. The way that it's been working is that the customers supply the forecast, then we start activating the supply chain, and then they start funding the orders. That's how we are moving ahead with the shipments.

Speaker 3

What's the pipeline looking like? Congrats on securing these two. We're relatively new to the story, so we're just digging in here. It would seem as though that's going to open some other doors. 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 engagement, potentially even if it's in a broad stroke?

Speaker 1

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 transitioning to the 5G O-RAN technology, it is something that is imminent for many other MNOs. There are several large MNOs. I'm not going to name any right now, but we all know them. Those large MNOs are geared to do this transitioning. Now that they see that there is a successful way of doing that and achieving it, and especially with AmpliTech and also the other MNOs that we're working with, it becomes more viable for them to pursue this opportunity. 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. We have provided this technology and capability now.

Speaker 1

We expect next year to get a very good response from other MNOs waiting in line to do this.

Speaker 3

Great. 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? It doesn't seem as though it's really revenue-producing yet. Do you think that will be revenue-producing soon? What are your expectations there over time?

Speaker 1

Quantum computing, the whole quantum computing business right now is not at a productionized phase. The R&D companies, like these obscene valuated companies like IonQ and others, do not have products, 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 showing performance, but it's not at a production phase right now. These quantum computers basically are not something that you have thousands of. The quantum computers will be made to access business-to-business type applications. Nobody has it on their desktop. The businesses will access it through the cloud, and the cloud is really the quantum cloud, and that cloud is basically replacing the AI applications right now.

Speaker 1

Right now, the silicon applications are 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 it also is causing a lot of speed degradation because silicon cannot provide the kind of speed that you said the calculations and the demand is there for. 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. 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 are in these quantum applications. The numbers come in where you look at the qubits. IBM and companies that are at that level, Google AI, they have thousands of qubits in their computers. These are similar to bits in a regular computer.

Speaker 1

These thousand qubits, each qubit generally has an LNA that we make that's required to go into these quantum computers. 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 has.

Speaker 3

Great. Final question I don't 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 with all these hosting new products. How is the backlog looking there in terms of building for next year?

Speaker 1

Yeah, the space products are coming from the LEO applications, right? The low Earth orbit applications are in the process of building out satellites right now. Right now, they're not at the stage where they would require these chips that we have. That comes sometime next year. That's what we predict the satellite business will become. We have already developed a bunch of chips and space qualifying hardware in our AGCGFS division to support these satellite applications. That's not this year. It's going to start pretty much next year about the satellite application.

Speaker 3

Great. Thank you guys for your time.

Speaker 1

You're welcome. Thank you.

Speaker 4

As a reminder, if you would like to ask a question, please press star and one to enter the question queue. The next question comes from Jack Vander Aarde with Maxim Group LLC. Please go ahead.

Speaker 2

Okay, great. Hi, Fawad. Sorry, I joined a little late. I have quite a few earnings calls tonight, so I apologize if I'm redundant. Big uptick in the revenue this quarter, as we were expecting. It's $11 million. I'm just wondering if you could help, just help me understand and help everyone else understand how many orders under the two Letters of Intent have come in since reporting $11 million of revenue, roughly?

Speaker 1

Right now, we have additional orders that were reported over the last month, exceeding $5 million so far, and we're expecting a few more to trickle in shortly. We are definitely very positive that the LOI, at least on the $40 million one, we know that we are on our way to get that LOI fully filled with purchase orders over the next year or so. On the $78 million LOI, we already received $2.5 million worth of funded orders. These we are shipping this year. This is a typical cycle in which these smaller shipments in the beginning serve as a point of concept to make sure that all of the deployments are going to be working as expected. Basically, the core cases get open after that.

Speaker 2

Okay, excellent. That's a helpful overview. Thanks, Jorge. Maybe just, Fawad, kind of bigger picture, can you really touch on all the different types of verticals for your O-RAN, your 5G O-RAN solutions? Which ones are, and 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?

Speaker 1

Sure. There are two different types of businesses that we are pursuing. One is the private 5G, which is a growing industry. The private 5G is involved in applications like mining, warehouses, department stores, even homes as well, but many different businesses, railroad stations. It could be luminous, many, many applications where they need a secure, high-speed network that basically now is AI compatible, right? That's what everybody wants now because manufacturing is going to become automated. There's a big drive to have high-speed networks that can be AI-based, and that's what we're providing. The verticals would be the second part of that, the radio business is the commercial MNOs, which we've been announcing. These two businesses are separate. They're not the same. They're different types of radios.

Speaker 1

They're higher configuration radios for the massive MIMO for the commercial applications, and the private 5G radios are lower power, and they have different parts of it. They have a Wi-Fi 7 part of it. They have CPE. They have routers. We mix all of those things from top to bottom, including the radio, the antennas, and everything. What's happening now is that people need support in the private 5G. 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.

Speaker 1

Since we have capabilities for both the commercial application as well as the private 5G, 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 PPE, like Wi-Fi 7 devices, cameras, all of these supporting equipment we can provide. That supports not only businesses, but it also supports these commercial applications and homeowners as well. It's a large market because our products cover all of these verticals, and it's a very, very lucrative market now because the large MNOs are not going after the last mile business. We are. The more subscribers we build with our network, the more value we get.

Speaker 2

Excellent. Okay. Maybe just to follow up on that, it's very complex because there's a lot of moving parts in the ecosystem. I just want to know, for the autonomous piece of this business, all the different drone providers, all the different, you know, you have robotaxis on the way maybe. Everybody's not competing for these last mile deliveries. Do you see AmpliTech Group Inc. as a fundamental absolute requirement to enable all of these? Do you play, will you be able to play well with everyone? Or do you think one or two of these providers is going to kind of win, win, share? How does AmpliTech Group Inc. think about that?

Speaker 1

AmpliTech's strategy is not to compete with these providers, right? I mean, we're providing a unique solution. Right now, there are other companies that basically take third parties and assemble and integrate the entire system. They buy the CFU from someone, they buy the radios from someone, and then they have the support for installation from someone. We're not doing that. We're basically the only company in the U.S. that is providing all of it from top to bottom, including the planning and optimization and the design of all of this equipment and the software that goes along with it. We are in a position to help these MNOs achieve what they want, not compete with them. We become valuable to them as their assistance provider, right?

Speaker 1

Also, we help them improve their whole network by adding our subscriber base to theirs or just adding our equipment and transitioning them to the next level. 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 are not too many U.S. players in the private 5G market that can do all of it that we can do.

Speaker 2

All right.

Speaker 1

We have also built up a lot of IP.

Speaker 2

Just to clarify, sorry, Fawad, I was talking about how does AmpliTech view the competitive environment in terms of the end drone providers and the end autonomous vehicles? You're enabling all of them. It's almost like you are the solution for everyone regardless of who wins out or if it is a fragmented market. Excellent. Provide us 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.

Speaker 2

How have your feelings and opportunities in terms of like people knocking on your doors, new opportunities knocking on your doors, like I know what AmpliTech is now, and I think I need that, whether it's MNO discussions or other things, MNO players domestically or nationally, and also some of these other special channel service providers as well. What has changed in your view? How are things progressing? Thanks.

Speaker 1

Their view has changed in that 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 attestations that we need to provide all the regulatory things that a company needs to provide service and a qualified product to these MNOs and large companies. We have shown that. These orders and repeat orders are showing that we are a viable one. Other companies, as I mentioned before, and I don't think you may have missed 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 our Canadian manufacturer that is transitioning them to a 5G O-RAN to save billions of dollars in the future.

Speaker 1

Now they have seen that this is working, and we are a partner to them. They're advertising our services to them. When they see that we can do it and it's really possible to achieve this 5G 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 that. It opens a lot of doors for us, this investment. I mean, we invested heavily in doing this, but the game-winning thing is that we are now a viable supplier to all of these people. It's a unique industry. There's not too many O-RAN 5G providers besides us.

Speaker 2

Excellent. That was exactly the answer I was looking for. Maybe just one more follow-up. I guess, how do you, how's your inventory kind of looking? How are you prioritizing just the sheer demand that we're going to have to satisfy where things stand in terms of your manufacturing and inventory strategy and needs?

Speaker 1

Right now, let me answer this question. This is Jorge. We are entering a very good period for us because now we have a great relationship with our customers to the point that, as I mentioned previously, now we are privy to be able to see their forecast, right? That has been a tremendous help because, obviously, for us to be able to do the shipments in Q2, we really had to expedite material and pay premiums and stuff like that. There was a lot of one-time costs that we had to endure in Q2 to be able to deliver this rapidly, right? On the same token, that's why we are able to predict that our gross margins are going to be improved greatly over the next six months. Why?

Speaker 1

Because we already have all of the test units, all of the molding, all of the one-time costing that affected our gross margins in Q2. That's already behind us. For Q3 and Q4, we already captured those costs, right? When it comes to material, we don't need to airship material or pay the expedite fees to get the suppliers to ship the materials because we already, based on forecast, were able to start ordering against forecast. Now that material, that supply chain is already active, right? We don't need to be expediting or paying premiums to be able to get the material to the assembly line on time for the strict delivery requirements that we have from our customers. That's one of the things that I wanted to point out on that. We have a great relationship with the customer.

Speaker 1

The customer is very, very, when it comes to deliveries, you know, can we make deliveries based on their schedules because there is a lot of system integrators, right, that they use that they must have products on hand. We committed to that. We achieved a great response, a great supply chain activation for Q2. We're really set to continue doing that over the next quarters. That's why we firmly believe that our gross margins are going to return to a very normal level over the next six months. We are definitely looking forward to that. The inventory right now, yes, the inventory is that we're handling right now. As you can see, as you can see in the balance sheets, we are very selective, right? We basically build to order. We're building to forecast.

Speaker 1

We are very careful, you know, like in bringing inventories and keeping the inventory levels to very manageable levels without affecting the cash flows of the company. We definitely are in a good position inventory-wise to satisfy the next set of purchase orders throughout the company, not just for 5G, but also for the core business in the AmpliTech King division and the Spectrum Semiconductor division.

Operator

We're still moving.

Speaker 1

Yeah.

Speaker 2

All right. Excellent. It sounds like things have really progressed. Everything's on track. Look forward to watching you guys execute. Thanks.

Speaker 1

Thank you.

Operator

Thank you, Jorge.

Speaker 4

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

Speaker 1

Hello?

Speaker 4

Thank you, Mayor.

Speaker 1

Yeah, hi. I'm sorry. I was just on mute. I have a question about, I'm holding, I'm one of your investors from the very beginning of the time. I have seen too many ups and downs, and sometimes those, more breakdowns. I have a question on the AmpliTech warrants. I also own warrants. I wanted to know, if I want to execute those warrants, how can I do it? Is there any plan you guys are extending the expiry of those warrants?

Speaker 4

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

Speaker 1

Okay. All right. I have to reach out to you in order for an execution. Okay, you got it. Thanks, those are the two questions.

Operator

Okay. Thank you, Jorge. Thank you for being an investor.

Speaker 4

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

Speaker 1

Thank you, operator. Thank you to everyone who joined today's call to hear about the progress we've made and the plan we have to further our company's mission of providing the communication systems of tomorrow, today. 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 the contact information listed at the bottom of our press release. Thank you and be well.

Speaker 4

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

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