Altigen Technologies Reports Full Year and Fourth Quarter Fiscal 2024 Results

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Altigen Technologies Reports Full Year and Fourth Quarter Fiscal 2024 Results

TECHNOLOGY 12.12.2024

4^th Quarter Revenues Hit a 12 Year High

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Altigen Technologies (OTCQB:ATGN), a leading Silicon Valley-based Microsoft Cloud Communications Solutions provider, announced today its financial results for the fourth quarter and year ended September 30, 2024.

"This quarter demonstrates the effectiveness of Altigen's transformation initiatives," said Jeremiah Fleming, Altigen President & CEO. "We've streamlined operations, achieved consistent performance improvements, and are making tangible progress in bringing our AI solutions to market, paving the way for sustainable growth."

Full Year Highlights (Fiscal 2024 versus Fiscal 2023)

Net revenue was $13.6 million, compared with $13.7 million;
Services revenue was $5.1 million, compared with $4.3 million;
Cloud services revenue was $7.1 million, compared with $7.6 million;
Gross margin decreased to 61.6%, compared with 63.2% in the previous year;
GAAP net income totaled $1.6 million, with diluted EPS of $0.06, primarily due to a $1.8 million non-cash tax-related benefit resulting from the release of the valuation allowance for deferred tax assets;
Non-GAAP¹ net income and non-GAAP diluted EPS of $0.5 million and $0.02, respectively.

Fourth Quarter Highlights (Fiscal 2024 versus Fiscal 2023)

Net Revenue was $3.7 million, compared with $3.5 million;
Services revenue was $1.7 million, compared with $1.1 million;
Cloud services revenue was $1.7 million, compared with $2.0 million;
Gross margin increased to 63.9%, compared with 62.4% in the prior year;
GAAP net income was $2.1 million, with diluted EPS of $0.08, driven primarily by the previously mentioned non-cash, tax-related benefit of $1.8 million;
Non-GAAP¹ net income and non-GAAP diluted EPS of $0.5 million and $0.02, respectively.

Select Financial Metrics: Fiscal 2024 versus Fiscal 2023
(in thousands, except for EPS and percentages)	Fiscal 4Q24		Fiscal 4Q23		Change		YTD FY2024		YTD FY2023		Change
Total Revenue	$	3,736	$	3,482	7.3	%	$	13,619	$	13,681	-0.5	%
Cloud Services	1,680	1,983	-15.3	%	7,097	7,656	-7.3	%
Services and Other	1,731	1,100	57.4	%	5,159	4,301	19.9	%
Legacy Products	325	399	-18.5	%	1,363	1,724	-20.9	%
Software Assurance	315	353	-10.8	%	1,293	1,551	-16.6	%
Perpetual Software License	10	46	-78.3	%	70	173	-59.5	%
GAAP Operating Income/(Loss)	$	209	$	30	596.7	%	$	(305	)	$	(436	)	nm
Operating Margin	5.6	%	0.9	%	-2.2	%	-3.2	%
Non-GAAP Operating Income/(Loss)	$	228	$	58	293.1	%	$	(245	)	$	(317	)	nm
Non-GAAP Operating Margin	6.1	%	1.7	%	-1.8	%	-2.3	%
GAAP Net Income/(Loss)	$	2,079	$	(2,813	)	nm	$	1,560	$	(3,323	)	nm
GAAP Income/(Loss) Per Share	$	0.08	$	(0.11	)	nm	$	0.06	$	(0.14	)	nm
Non-GAAP Net Income	$	493	$	145	240.0	%	$	467	$	324	44.1	%
Non-GAAP Diluted Earnings Per Share	$	0.02	$	0.01	nm	$	0.02	$	0.01	nm
Adjusted EBITDA(1)	$	507	$	109	365.1	%	$	495	$	252	96.4	%
Cash Flow from Operations	$	641	$	(236	)	nm	$	510	$	62	nm

nm = not measurable/meaningful; *may not add up due to rounding

Throughout this release, the use of non-GAAP financial measures is intended to provide useful information that supplements Altigen's results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release.

Trended Financial Information
(in thousands, except for EPS and percentages)	Fiscal 1Q23		Fiscal 2Q23		Fiscal 3Q23		Fiscal 4Q23		Fiscal 1Q24		Fiscal 2Q24		Fiscal 3Q24		Fiscal 4Q24		FY2023		FY2024
Total Revenue	$	3,460	$	3,373	$	3,366	$	3,482	$	3,240	$	3,360	$	3,283	$	3,736	$	13,681	$	13,619
Cloud Services	1,822	1,894	1,957	1,983	1,890	1,817	1,710	1,680	7,656	7,097
Services and Other	1,174	1,028	999	1,100	996	1,183	1,249	1,731	4,301	5,159
Legacy Products	464	451	410	399	354	360	324	325	1,724	1,363
Software Assurance	424	390	384	353	342	340	296	315	1,551	1,293
Perpetual Software License	40	61	26	46	12	20	28	10	173	70
GAAP Operating Income/(Loss)	$	(188	)	$	(131	)	$	(147	)	$	30	$	(342	)	$	(240	)	$	68	$	209	$	(436	)	$	(305	)
Operating Margin	-5.4	%	-3.9	%	-4.4	%	0.9	%	-10.6	%	-7.1	%	2.1	%	5.6	%	-3.2	%	-2.2	%
Non-GAAP Operating Income/(Loss)	$	(156	)	$	(101	)	$	(118	)	$	58	$	(330	)	$	(225	)	$	82	$	228	$	(317	)	$	(245	)
Non-GAAP Operating Margin	-4.5	%	-3.0	%	-3.5	%	1.7	%	-10.2	%	-6.7	%	2.5	%	6.1	%	-2.3	%	-1.8	%
GAAP Net Income/(Loss)	$	(188	)	$	(140	)	$	(183	)	$	(2,813	)	$	(345	)	$	(236	)	$	62	$	2,079	$	(3,324	)	$	1,560
Non-GAAP Net Income/(Loss)	$	44	$	95	$	40	$	145	$	(156	)	$	(72	)	$	202	$	493	$	324	$	467
Non-GAAP Diluted Earnings/ Loss Per Share	$	0.00	$	0.00	$	0.00	$	0.01	$	(0.01	)	$	(0.00	)	$	0.01	$	0.02	$	0.01	$	0.02
Adjusted EBITDA(1)	$	44	$	95	$	4	$	109	$	(159	)	$	(67	)	$	214	$	507	$	252	$	495

Throughout this release, the use of non-GAAP financial measures is intended to provide useful information that supplements Altigen's results in accordance with GAAP. Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release.

Conference Call

Altigen will be discussing its financial results and outlook on a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. ET). The conference call can be accessed by dialing (888) 506-0062 (domestic) or (973) 528-0011 (international), conference ID #182309. A live webcast will also be made available at www.altigen.com. To access the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international), conference ID #51729. A web archive will be made available at www.altigen.com for 90 days following the call's conclusion.

About Altigen Technologies

Altigen Technologies (OTCQB: ATGN) is focused on driving digital transformation in today's modern workplace.  Our Cloud Communications solutions and Technology Consulting services empower companies of all sizes to elevate customer engagement, increase employee productivity and improve operational efficiency. We're headquartered in Silicon Valley with operations strategically located in five countries spanning three continents. For more information, call 1-888-ALTIGEN or visit our website at www.altigen.com.

Safe Harbor Statement

This press release contains forward‐looking information. The statements are based on reasonable assumptions, beliefs and expectations of management and the Company provides no assurance that actual events will meet management's expectations. Furthermore, the forward-looking statements contained in this press release are based on the Company's views of future events and financial performances which are subject to known and unknown risks and uncertainties including, but not limited to, statements regarding the Company's operational improvements, performance enhancements, AI solution development, and expectations for sustainable growth. There can be no assurances that the Company will achieve the expected results, and actual results may be materially different than expectations and from those stated or implied in forward-looking statements.

Please refer to the Company's most recent Annual Report filed with the OTCQB over-the-counter market for a further discussion of risks and uncertainties. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company does not undertake any obligation to update any forward-looking statements.

Contact:
Carolyn David
Vice President of Finance
Altigen Communications, Inc.
(408) 597-9033
www.altigen.com

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED BALANCE SHEETS (In thousands)



	September 30, 2024		September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	2,575	$	2,641
Accounts receivable, net	1,770	1,495
Other current assets	185	236
Total current assets	4,530	4,372

Property and equipment, net	-	3
Operating lease right-of-use assets	149	301
Goodwill	2,725	2,725
Intangible assets, net	1,242	1,568
Capitalized software development cost, net	1,363	1,215
Deferred tax asset	5,638	3,737
Other long-term assets	2	-
Total assets	$	15,649	$	13,921

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	98	$	58
Accrued compensation and benefits	593	417
Accrued expenses	446	455
Deferred consideration - current	744	510
Operating lease liabilities - current	104	324
Deferred revenue - current	481	477
Total current liabilities	2,466	2,241
Deferred consideration - long-term	-	208
Operating lease liabilities - long-term	49	-
Deferred revenue - long-term	176	134
Total liabilities	2,691	2,583

Stockholders' equity:
Common stock	24	24
Treasury stock	(1,565	)	(1,565	)
Additional paid-in capital	73,193	73,133
Accumulated deficit	(58,694	)	(60,254	)
Total stockholders' equity	12,958	11,338
Total liabilities and stockholders' equity	$	15,649	$	13,921

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
	Twelve Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net income (loss)	$	1,560	$	(3,324	)

Adjustments to reconcile net income to net cash from operating activities:
Impairment of capitalized software	53	-
Impairment of intangible assets	142	131
Depreciation and amortization	3	4
Deferred income tax expense	(1,901	)	2,756
Change in operating lease liabilities	(19	)	-
Amortization of intangible assets	184	183
Amortization of capitalized software	375	587
Stock-based compensation	60	119
Changes in operating assets and liabilities:
Accounts receivable and unbilled accounts receivable	(275	)	(275	)
Prepaid expenses and other current assets	51	(30	)
Other long-term assets	(2	)	37
Accounts payable	40	5
Accrued expenses	193	30
Deferred revenue	46	(161	)
Net cash provided by operating activities	510	62

Cash flows from investing activities:
Capitalized software development costs	(576	)	(471	)
Net cash used in investing activities	(576	)	(471	)

Cash flows from financing activities:
Payment related to business acquisition	-	(225	)
Proceeds from issuances of common stock	-	43
Net cash used in financing activities	-	(182	)
Net decrease in cash and cash equivalents	(66	)	(591	)
Cash and cash equivalents, beginning of year	2,641	3,232
Cash and cash equivalents, end of year	$	2,575	$	2,641

ALTIGEN COMMUNICATIONS, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data)



	Three Months Ended						Twelve Months Ended
	September 30,						September 30,
	2024		2023		2024		2023
Net revenue	$	3,736	$	3,482	$	13,619	$	13,681
Gross profit	2,386	2,172	8,395	8,648
Operating expenses:
Research and development	885	1,187	4,268	5,066
Selling, general & administrative	1,292	955	4,432	4,018
Operating income (loss)	209	30	(305	)	(436	)
Interest expense	(3	)	(37	)	(26	)	(74	)
Interest and other income	16	1	52	2
Net income (loss) before provision for income taxes	222	(6	)	(279	)	(508	)
Income tax benefit (expense)⁽¹⁾	1,857	(2,807	)	1,839	(2,816	)
Net income (loss)	$	2,079	$	(2,813	)	$	1,560	$	(3,324	)

Per share data:
Basic	$	0.08	$	(0.11	)	$	0.06	$	(0.14	)
Diluted	$	0.08	$	(0.11	)	$	0.06	$	(0.14	)
Weighted average shares outstanding:
Basic	24,919	24,917	24,919	24,550
Diluted	25,903	24,917	25,959	24,550

(1) The Company's fourth quarter fiscal year 2024 results include a non-cash tax benefit of $1.8 million, resulting from the release of the valuation allowance for deferred tax assets, while the Company's fourth quarter fiscal year 2023 results include a non-cash tax expense of approximately $2.7 million, primarily due to differences between the Company's income tax rate and the statutory rate.

ALTIGEN COMMUNICATIONS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share data)

Three Months Ended			Twelve Months Ended
September 30,			September 30,
2024	2023	2024	2023
Reconciliation of GAAP to Non-GAAP Gross Profit:
GAAP gross profit	$	2,386	$	2,172	$	8,395	$	8,648
Amortization of capitalized software	56	124	335	531
Amortization of acquired customer relationships	40	40	160	160
Non-GAAP gross profit	$	2,482	$	2,336	$	8,890	$	9,339
Reconciliation of GAAP to Non-GAAP Expenses:
GAAP operating expenses	$	2,177	$	2,142	$	8,700	$	9,084
Asset impairment	142	-	142	-
Depreciation and amortization	-	1	3	4
Amortization of capitalized software	9	13	40	56
Amortization of intangible assets	6	6	24	24
Stock-based compensation	18	29	60	119
Non-GAAP operating expenses	$	2,002	$	2,093	$	8,431	$	8,881
Reconciliation of GAAP to Non-GAAP Net Income:
GAAP net loss	$	2,079	$	(2,813)	$	1,560	$	(3,324)
Asset impairment	142	-	142	-
Depreciation and amortization	-	1	3	4
Amortization of capitalized software	65	137	375	587
Amortization of intangible assets	46	46	184	184
Stock-based compensation		18	29	60	119
Deferred tax asset valuation allowance		(1,857)	2,745	(1,857)	2,754
Non-GAAP net income	$	493	$	145	$	467	$	324
Per share data:
Basic	$	0.02	$	0.01	$	0.02	$	0.01
Diluted	$	0.02	$	0.01	$	0.02	$	0.01
Weighted average shares outstanding:
Basic	24,919	24,917	24,919	24,550
Diluted	25,903	26,122	25,959	25,663

Non-GAAP Financial Measures

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our core operating performance on a period-to-period basis. These non-GAAP financial measures exclude stock-based compensation expense, amortization of acquired intangible assets, depreciation and amortization expenses, acquisition-related costs, change in deferred tax asset valuation allowance, litigation costs and other non-recurring or unusual charges or benefits that may arise from time to time that we do not consider to be directly related to core operating performance. We use non-GAAP measures to evaluate the core operating performance of our business and to perform financial planning. Since we find these measures to be useful, we believe that investors benefit from seeing results reviewed by management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating: (i) the comparability of our on-going operating results over the periods presented and (ii) the ability to identify trends in our underlying business.

SOURCE: Altigen Technologies

O.M.Souza--AMWN