Knightscope, Inc. (NASDAQ:KSCP) Q3 2023 Earnings Call Transcript

Knightscope, Inc. (NASDAQ:KSCP) Q3 2023 Earnings Call Transcript November 16, 2023

William Li: Greetings, everyone from Silicon Valley. We enjoyed the first quarter and second quarter town halls with you this year, and having interacted with hundreds and hundreds of our investors, I know having a clear and easy-to-understand quarterly video presentation followed by a Frank and direct discussion has been valuable for many. As a reminder, this town hall format is intended to provide an informal forum for our nationwide audience to ask questions from Wall Street to Main Street, from Silicon Valley to Washington DC. If we're going to achieve our long-term mission of making the U.S. the safest country in the world, we're going to need the entire country engaged, and part of that is communicating with you directly and consistently, and so we're back at it again for the third quarter 2023 town hall.

Of course, any and all figures presented today in this presentation are the financial highlights from our recently filed quarterly report on Form 10-Q should be read in full context of the company's recent regulatory filings and risk factors available to you at ir.knightscope.com. Okay, with that ever-exciting disclaimer out of the way onto the third quarter numbers. For the nine months ending September 30th, 2023, we booked approximately $9.8 million in net revenue, which compares favorably to the $3.3 million we booked in 2022 over that same period, reflecting an almost tripling of revenue year-over-year. That puts us on an approximately $13 million annual revenue run rate. Well over double last year in 2022, when we recorded $5.6 million in net revenue for the entirety of the year.

A robotic arm assembling delicate surgical tools in a clean room environment.

Additionally, as of October 29th, 2023, the company had a total backlog of approximately $4.1 million comprised of approximately $2.4 million new orders related to autonomous security robots and $1.7 million related to new orders for our portfolio of K1B products, and that includes the K1 blue light towers, ePhone, and call boxes. Compared to the backlog reported as of July 30th to 2023 of $4.9 million. Overall, we have made significant progress in reducing our backlog. Though our backlog for ASRS increased slightly by $0.3 million. Whilst we made significant reductions in the K1B backlog by approximately $1.1 million, which was primarily related to the fulfillment of a large strategic client order, we would note that the backlog will fluctuate due to new incoming orders.

While we also continue improving our production and supply chain processes to get machines out the door, we continue to work to improve our gross margins as we scale up. We reflected a gross loss during the first nine months of 2022 of $2.1 million and have significantly improved that this year for the same period to a small loss of just $154,000. We expect as we continue to execute on our roadmap to profitability, that we will see continued improvements in the future. We'll be covering the highlights of our plan later in the presentation comparing the first nine months of 2022 to the first nine months of 2023. On a per-share basis, we improved significantly from a $0.40 loss per common share to a $0.26 loss per common share. As of September 30th, 2023, and December 31st, 2022, we had $4.6 million and $4.8 million respectively of cash and cash equivalents on hand.

Also, as previously disclosed, the approximately $6 million of convertible notes secured in connection with the acquisition of case emergency systems were fully extinguished by the end of the second quarter of 2023. Speaking of cash, just a few weeks ago, we launched our public safety infrastructure bond offering. As with any Reg a plus offering, these types of financings can remain active for months. We intend to conduct rolling closes of the bonds on a monthly basis, and we recently successfully completed our initial closing, and those investors began earning interest on their closing date. Interest starts accumulating for investors on their respective closing date and not at the completion of the entire bond offering. As I like to say, it is in your interest to earn interest.

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To continue reading the Q&A session, please click here.