• Total Revenue: $45.8 million, a 5% increase year over year.
• Net Bookings: $48.8 million for the fiscal 2025 first quarter.
• Ending Backlog: $126.8 million, a 2% increase year over year.
• Product Revenue: $24.4 million, a 3% increase year over year.
• Service Revenue: $21.4 million, an 8% increase year over year.
• Consolidated Gross Profit: $17.3 million, a 3% increase over last year.
• Gross Margin: 37.9%, 70 basis points lower than the previous year.
• Adjusted EBITDA: $2.9 million, compared to $4 million in the same quarter last year.
• Cash and Cash Equivalents: $21.4 million at the end of the first quarter.
• Fiscal 2025 Revenue Guidance: $188 million to $194 million.
• Fiscal 2025 Adjusted EBITDA Margin Guidance: 8% to 10% of revenue.
• Fiscal 2025 Second-Quarter Revenue Guidance: $44 million to $48 million.

• Warning! GuruFocus has detected 8 Warning Signs with ITI.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Iteris Inc (NASDAQ:ITI) reported record total revenue of $45.8 million for the fiscal 2025 first quarter, marking a 5% increase year over year.
• The company achieved record trailing six-month total net bookings of $102.1 million, surpassing their $100 million target for the first six months of 2024.
• Iteris Inc (NASDAQ:ITI) launched new products, including the Vantage PedSafe sensor and Vantage Next and Vantage Radius advanced connectivity solutions, which are expected to drive future growth.
• Record service revenue of $21.4 million was reported, representing an 8% increase year over year, driven by strong demand for their software as a service solution, ClearGuide.
• The company maintains a strong backlog of $126.8 million, a 2% increase year over year, reflecting firm customer orders.

Negative Points

• Fiscal 2025 first-quarter bookings decreased by 8% compared to the previous year's highest quarterly bookings period.
• Gross margin for the first quarter was 37.9%, which is 70 basis points lower than the same period last year, due to product mix and negative inventory adjustments.
• Operating expenses increased by 15% compared to the same period last year, with significant rises in sales and marketing, research and development, and general administrative expenses.
• Adjusted EBITDA for the first quarter was $2.9 million, down from $4 million in the same quarter last year.
• Cash and cash equivalents decreased to $21.4 million from $25.9 million at the end of the preceding quarter, primarily due to increased accounts receivable and stock repurchases.

Q & A Highlights

Q: Can you discuss the timing elements regarding the second-half revenue cadence? A: We are implying high-teens organic revenue growth in the second half, driven by product releases in September or the beginning of our third quarter. These include the Apex rackmount sensor and pedestrian detection sensor, which will generate product revenue upon shipping.

Q: How should we think about the cadence of gross margin as the year progresses? A: Gross margin should be on an upward track due to revenue leverage and new product launches. There are also product-related and marketing investments occurring in the first half in anticipation of these launches.

Q: Are there any supply chain issues currently affecting your operations? A: We are not experiencing any broad global supply chain constraints. However, there are some third-party dependencies that can cause delays, such as agencies needing new cabinets or signal controllers for projects.

Q: Can you provide an update on the pedestrian detection product with Sumitomo? A: We launched the product earlier this quarter and are actively selling it. We have demonstration products and are initiating pilots with customers, receiving favorable market response and beginning to take orders.

Q: What is the status of the Orange County Transportation order? A: The project is on schedule, with revenue being recognized against it. The SaaS revenue is recognized ratably over the three-year term, and the professional services element remains relatively constant over that period.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.