Siyata Mobile Inc. (SYTA), a provider of innovative cellular communication solutions, has revealed an increase in revenue and gross margin in its fourth quarter of 2023 and full-year earnings call. The company announced Q4 revenues of $1.9 million, driven by sales of its SD7 handset and accessories, and a gross margin of 46.2%.
The full-year revenue reached $8.2 million, marking a 27% increase from the previous year. Siyata Mobile has successfully launched its flagship SD7 handset with major US carriers and is expanding its presence in international markets.
The company is also developing new products, including a 5G rugged handset portfolio and a real-time camera system for fleet management, and aims for aggressive revenue growth and breakeven status in the near future.
Key Takeaways
- Siyata Mobile's Q4 2023 revenue hit $1.9 million, with a significant sales contribution from the SD7 handset and accessories.
- The company reported a gross margin of 46.2% for Q4 2023, showing a notable improvement from the same quarter of the previous year.
- Total revenue for 2023 was $8.2 million, a 27% increase from 2022.
- Siyata Mobile has launched its flagship SD7 handset across major US carriers and is expanding into international markets.
- The company is focusing on vertical markets such as public safety and education, with a growing sales funnel and large-scale trials underway.
- Siyata Mobile is building a recurring revenue channel through partnerships with application providers like CrisisGo.
- The company aims to reach breakeven in the coming quarters and is working towards profitability.
Company Outlook
- Siyata Mobile plans to aggressively grow its revenue in 2024.
- The company is developing a 5G rugged handset portfolio and a real-time camera system for fleet management.
- Siyata Mobile is focused on reaching breakeven status in the coming quarters.
Bearish Highlights
- The recurring revenue channel is currently small but is expected to grow over time.
Bullish Highlights
- Siyata Mobile has experienced steady demand for its cellular boosters in North America.
- The company is excited about customers transitioning from legacy LMR devices to Siyata PTT handsets and accessories.
Misses
- There were no specific financial misses mentioned in the summary provided.
Q&A Highlights
- Siyata Mobile discussed the growth of their recurring revenue channel, currently small but expanding.
- The company highlighted their partnership with CrisisGo and the significant opportunity within the education sector, especially K-12 schools.
- Siyata Mobile sees the education market as their largest vertical going forward, with over 20 school districts currently using their products.
Siyata Mobile continues to make strides in the communication solutions sector, with a strong focus on vertical markets and recurring revenue channels. The company's strategic partnerships and product development are paving the way for future growth and a push towards profitability.
Siyata Mobile's ticker, SYTA, represents its ongoing commitment to innovation and market expansion. The company's full financial results are available on the SEC's website for further details.
InvestingPro Insights
Siyata Mobile Inc. (SYTA) has demonstrated a commendable revenue increase and gross margin growth in its recent earnings report. The company's strategic focus on innovative products like the SD7 handset and its expansion into new market territories are key drivers of this progress. Here are some tailored insights from InvestingPro that provide a deeper understanding of Siyata Mobile's financial health and stock performance:
InvestingPro Data:
- Market Cap: $1.78M USD, indicating Siyata Mobile's current valuation in the market.
- P/E Ratio (Adjusted) as of Q4 2023: -0.13, reflecting the company's earnings relative to its share price, and suggesting that investors are expecting future growth despite current unprofitability.
- Revenue Growth as of Q4 2023: 27.02%, showing a significant increase in sales, aligning with the company's reported revenue figures.
InvestingPro Tips:
- Siyata Mobile is trading at a low Price / Book multiple of 0.18, which may appeal to value investors looking for assets selling at prices below their intrinsic value.
- Analysts anticipate sales growth in the current year, which could signal a positive outlook for the company's revenue trajectory.
For investors interested in a more comprehensive analysis, there are additional InvestingPro Tips available on Siyata Mobile's performance and projections. These tips can provide valuable insights for making informed investment decisions. To explore these tips and access a wealth of financial data, consider subscribing to InvestingPro. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 13 more InvestingPro Tips available for Siyata Mobile, which could further guide your investment strategy.
Full transcript - Siyata Mobile Inc (SYTA) Q4 2023:
Operator: Good morning, ladies and gentlemen, and welcome to the Siyata Mobile Q4 2023 and Full Year 2023 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Tuesday, April 9, 2024. I would now like to turn the conference over to Glenn Kennedy, Vice President of International Sales. Please go ahead.
Glenn Kennedy: Thank you for joining the Siyata Mobile fourth quarter and full year 2023 earnings call. Today, I'm joined by our CEO, Marc Seelenfreund, and we will be available for questions at the end of the presentation. During this call, management will make expressed and implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. These forward-looking statements include, but are not limited to, those statements regarding future product offerings, the belief that we are on the path for strong organic growth, the goal to deliver strong year-over-year revenue growth and reach profitability in the coming quarters, and the timing and sale of our rugged handsets to North American and international carriers. Such forward-looking statements are based on the company's current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are not statements of historical fact and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The company's actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. The company cannot guarantee future results, levels of activity, performance or achievements. The forward-looking statements contained in this presentation are subject to other risks and uncertainties, including those discussed in the Risk Factors section and elsewhere in the company's annual report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission. Now, I'd like to turn the call over to Marc.
Marc Seelenfreund: Thank you, Glenn. Good morning, and thank you for joining the call. For the fourth quarter of 2023 ended December 31, revenues were $1.9 million compared to $2.1 million in Q4 2022, due mainly to increased sales of our mission-critical SD7 handset and accessories, offset by decreased booster sales for the same period. Adoption of our critical communication devices is expanding both in the U.S. and in international markets in multiple verticals, including public safety, education, healthcare, security, hospitality and more. Given our performance throughout the year and our expanding sales pipeline, we are increasingly optimistic that strong sales growth momentum will continue throughout 2024. Revenue from the U.S. was 67% of total revenue for the year compared to 59% in 2022. Rugged device sales in 2023 were $6 million versus $3.9 million in 2022, an increase of approximately $2.1 million in the year due to an increase in sales of the SD7 handset and accessories. Gross margin percentage for Q4 2023 was 46.2% versus 8.1% in Q4 2022. Gross margin dollars increased from $170,000 to $900,000, a $700,000 positive variance, which is a 410% increase in gross margin dollars. SG&A expenses were $3 million in Q4 2023 versus $4 million in Q4 2022, a positive variance of $1 million. Adjusted EBITDA for Q4 2023 was negative $2.3 million compared to negative $5 million in Q4 2022, which was a positive variance of $2.7 million. Working capital as of December 31, 2023 was just under $1.3 million versus just over $1.6 million as of December 31, 2022, a $300,000 decrease in working capital. For the full year ended December 31, 2023, total revenue was $8.2 million compared to $6.5 million in 2022, which is a positive variance of $1.7 million or a 27% increase. Gross margin dollars were $2.7 million in 2023 compared to $1.4 million in 2022, which is a positive variance of $1.3 million, a 91% increase. Finally, the gross margin percentage was 32.3% in 2023 compared to 21.4% in 2022, a significant improvement of 10.8 percentage points. Turning over to significant business highlights. We are pleased to report that in the United States, which is our largest geographic market, Siyata is now launched with our flagship SD7 handset at the fourth largest U.S. carriers, namely AT&T, including FirstNet, as well as Verizon (NYSE:VZ), T-Mobile and UScellular. With two of these carriers, we've achieved what is called stocked status, which means that the carrier supports the sell-through with subsidies and aggressive pricing options for its customers. In addition, we have recently been notified that we will be getting this stocked status with a third major U.S. wireless carrier as well in Q2. Less than a month ago, UScellular released a PR that it has launched the SD7 handset with its push-to-talk, or PTT, service, and they called out how the Siyata handset enables two-way radio customers to seamlessly transition to its new PTT over cellular service. The SD7 handset is the only direct radio replacement device offered by U.S. wireless carriers. Some wireless carriers and customers are calling the SD7 handset 'a cellular radio', because it looks, feels and functions like a traditional two-way radio but it works on a nationwide cellular network, providing much broader range than two-way radios, and is also much more cost effective than two-way radios used by first responders and large enterprise customers. Siyata is selling through the wireless carriers to a growing list of vertical markets and Siyata is selectively expanding its distribution internationally where we sell in Canada, Europe, Australia and the Middle East. Less than two weeks ago, we announced a new large scale logistics reseller for Siyata in the Middle East. Siyata is also developing an exciting and robust 5G rugged handset portfolio based on feedback from our end customers and our wireless carrier partners, which we will be announcing in the coming months. In addition, in June of 2023, we announced a new product called Siyata Real Time View together with a major order internationally. This is an innovative real-time camera system installed in first responder and enterprise vehicles to provide better fleet management and control. In Q3 of 2023, we installed our first units in ambulances at a leading international EMS customer, and the system provided outstanding results in real-time fuel cases. We continue to rollout this product to additional ambulances and EMS vehicles and expect this to be a great add-ons to our product portfolio in 2024 and beyond. Based on our strength and position with the wireless carriers, we have seen growing demand for all of our PTT products as shown by our growing sales funnel of opportunities. Our goal is to grow our revenue aggressively in 2024 and to reach breakeven status on a quarterly basis in the coming quarters. Now, I would like to pass the line back to Glenn, who will discuss our sales activities, some market dynamics that are benefiting our business, and an update on our product categories.
Glenn Kennedy: Thank you, Marc. Marc just mentioned our sales funnel of opportunities. This is a list of over 50,000 units of SD7 handset potential sales for multiple school districts, police forces, hospitals, security companies, utilities and more who are in various stages of trials towards purchasing Siyata SD7 handsets. We know we're not going to win all of these opportunities; however, we're confident that we will win a percentage of these, plus we will continue to acquire new potential customers throughout 2024. We are also encouraged by the fact that the number of entries in our sales funnel is growing and the size of the multiple large-scale opportunities is also growing. Currently, we are conducting large-scale trials with a national airline, a global sporting event, several major school districts, leading transit companies and a statewide government opportunity. One of our key wireless carrier partners FirstNet, which is owned by AT&T, announced that as of December 31, 2023, it now supports approximately 5.5 million push-to-talk over cellular connections to 27,500 public safety agencies, a gain of about 500 agencies during the fourth quarter of 2023 from the figures they released three months earlier. During the fourth quarter of 2023, FirstNet added approximately 260,000 push-to-talk over cellular connections. Siyata works closely with FirstNet, and their growth is further evidenced that U.S. first responder customers are moving towards push-to-talk over cellular solutions. In our rugged handset product category, we are focused on growing sales of our SD7 PTT handset that supports mission-critical push-to-talk to North American and international wireless carriers. We displayed this handset at several trade shows during and after the quarter, including in March 2024 at the International Wireless Communications Expo, or IWCE for short, in Orlando, Florida and at multiple regional shows in the U.S. in partnership with FirstNet and Verizon. Today, we're active with all major North American carriers, as Marc mentioned, and also with Telstra (OTC:TLGPY) in Australia, and KPN in the Netherlands, as well as with multiple dealers and distributors in the U.S. and international markets. Our objective remains to expand our launch with additional international carriers and with additional PTT application companies in future. We're also building a recurring revenue channel by partnering with selected application providers who will share the monthly subscription revenue when we sell their application on our devices to our customers. In our in-vehicle devices category, we continue to sell-through our UV350 in-vehicle device with customers in North America and internationally. We announced an order during Q1 of 2024 of 1,000 units of UV350 for an international EMS customer. We are experiencing increasing demand for our unique VK7 vehicle kit, which is a partner product to our SD7 handset. Several customers in the U.S., including some with yellow school buses, transit vehicles and snowplows, are installing VK7 vehicle kits into their vehicles so that the SD7 handset can be easily used in the vehicle kit while their staff are in their vehicles. And also in our in-vehicle product category in 2023, we received our first order for $1.2 million for Siyata Real Time View, an integrated advanced video monitoring system for emergency management service, or EMS, providers in their fleet vehicles. Marc mentioned that we began to install the system into ambulances and first responder vehicles during the third quarter of 2023, and we look forward to more sales opportunities for this solution in 2024. Finally, in our cellular booster product category, we saw a steady demand for cellular boosters throughout North America. I will now hand the line back to Marc for closing remarks.
Marc Seelenfreund: Thanks, Glenn. Overall, we are excited to see a growing number of customers choose to transition from legacy LMR devices to our Siyata PTT handsets and accessories. We are pleased that this is happening across a wide variety of vertical industries and across multiple geographic markets. We believe that the core fundamentals are in place to grow our business both in North America and in international markets. Our goal remains to ramp up sales to reach breakeven and then profitability as soon as possible, and this focus is shared by our entire Board and management team. We have filed our 2023 financial results with the SEC on a Form 20-F, and urge our listeners to access them from the SEC's website, search for Siyata Mobile. That concludes our formal remarks. With that, operator, kindly open the call to questions. Thank you.
Operator: Certainly. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Your first question for today is coming from Neil Cataldi at Blueprint Capital Management.
Neil Cataldi: Hey, guys. A question for you about the recurring revenue channel you mentioned. I was wondering if you could expand on that a little bit more. What percentage of revenue is it today? How might it scale overtime? Any notable difference in margins on that? Thank you.
Glenn Kennedy: Yeah, Neil, it's Glenn here. Thanks for the question. Our recurring revenue channel is -- it's small today. I would say it's not yet material financially. However, it's important for us and we are growing it. And the way it essentially works is, and the best way I can describe it is using an example, there's a company that offers a software application, they're called CrisisGo. And it's especially relevant for schools, the education market, K-12 schools, and specifically their solution, their application controls what happens when the SOS emergency button on our device is pressed. And they are -- through their application, they're able to have the right people notified of an emergency situation in the classroom or somewhere in the school, and they're able to follow-up through our two-way radio capabilities, our push-to-talk capabilities, and they're even able to notify local authorities. So, when we co-sell that solution, our hardware with their software application, there's a subscription fee that the customer pays to CrisisGo, and a portion of that revenue will come to Siyata. So that's one example. It's not the only example, but that's one example of application partnerships that we're doing. And so, over time, we expect that to grow to become material and will actually eventually down the road call it out in terms of its percentage. But it's very important for us to develop that channel for us.
Neil Cataldi: Great. Thanks. Appreciate the color.
Operator: [Operator Instructions] Your next question for today is from [Chris Zibert] (ph), a private investor. Chris, your line is live.
Unidentified Analyst: Good morning. You had mentioned the different vertical markets and the use cases for your products. In which vertical markets are you seeing the most current success, and which do you see the most upside potential, and why?
Marc Seelenfreund: I'll take that. This is Marc. Thanks for the question, Chris. So, as we mentioned on the call, we have a lot of different verticals that we're going after, construction, first responders, utilities. But probably the largest vertical that we're seeing right now is actually schools. We've sold into, I want to say, well over 20 school districts until now. And in our funnel, I want to say at least 20% are various school districts across the United States. It's sort of a greenfield market for us, because there were not really radios there before. And this is a very cost effective way to get teachers, security guards, and people that are working in the schools, a communication tool that they can actually use in time of emergency and also ongoing. So, we think that that's going to be a very big vertical for us. There's over 3 million teachers in the United States. There's around 0.5 million yellow school buses and we're selling both to yellow school buses and to teachers. So, we actually think that that's going to be the largest vertical for us going forward. Having said that, we have many, many other verticals that we're working on and that we're selling into. But if I have to pick out one specific vertical, I would say, will be the schools, education.
Unidentified Analyst: Sounds good. Is college campus has been something that's been looked into as well?
Marc Seelenfreund: Yes. Absolutely. We've already sold to some -- a few college campuses. That is not as big for us as specifically school districts. I can't say why, but just in general, colleges is also something very interesting for us. We sold in colleges more to security operations within colleges, whereas in schools, we're selling specifically to teachers and security and people that are working at the schools, the management of the schools. So, we just see that as a bigger, bigger opportunity. And again, we sell both to the schools and to the yellow school buses. So, it allows us to have a full opportunity to sell both our handsets and our vehicle devices. So, the answer to your question is, yes, we are going after universities for sure, but specifically K-12, we believe that that's the bigger opportunity.
Unidentified Analyst: Understandable. Thank you.
Marc Seelenfreund: Thank you.
Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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