• Revenue (Q4 2024): $17.9 million, up 9.9% from $16.3 million in Q4 2023.
• Full Year Revenue (2024): $76.6 million, up from $74.1 million in 2023.
• Gross Margin (Q4 2024): 41.2%, up from 35.1% in Q4 2023.
• Full Year Gross Margin (2024): 37.9%, up from 30% in 2023.
• Net Income (Q4 2024): $3.7 million, compared to $290,000 in Q4 2023.
• Full Year Net Income (2024): $8.4 million, compared to a net loss of $2.2 million in 2023.
• GAAP EPS (Q4 2024): $1.03 per basic share, $0.93 per diluted share.
• Non-GAAP Adjusted EPS (Q4 2024): $0.67 per basic share, $0.61 per diluted share.
• Non-GAAP Adjusted EBITDA (Q4 2024): $2.8 million, compared to $1.3 million in Q4 2023.
• Full Year Non-GAAP Adjusted EBITDA (2024): $10.4 million, compared to $1.5 million in 2023.
• Backlog (End of 2024): $21.8 million, $5.8 million higher than at the end of 2023.
• Cash and Cash Equivalents (End of 2024): $7.1 million, with no debt.
• Working Capital (End of 2024): $23 million, up from $16.8 million at the end of 2023.
• Shareholders' Equity (End of 2024): $29.8 million, up from $21.3 million at the end of 2023.

• Warning! GuruFocus has detected 2 Warning Sign with BKTI.

Release Date: March 27, 2025

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

Positive Points

• BK Technologies Corp (BKTI) reported a strong fourth quarter with revenue increasing by 9.9% to $17.9 million.
• The company achieved a significant increase in gross margin, reaching 41.2% in the fourth quarter.
• BK Technologies Corp (BKTI) exceeded its financial and operational targets for 2024, with full-year revenue of $76.6 million and a gross margin of 37.9%.
• The BKR 9000 product line is gaining momentum, contributing to a higher backlog of $21.8 million at the end of 2024.
• BK Technologies Corp (BKTI) reported its sixth consecutive quarter of profitability, with a non-GAAP adjusted EPS of $0.61 per diluted share in Q4 2024.

Negative Points

• The company faces uncertainty due to potential tariff increases, which could impact product costs and margins.
• Despite the strong performance, the macroeconomic environment remains uncertain, which could affect future sales cycles.
• A significant portion of the backlog does not include recent price increases, potentially impacting near-term profitability.
• The federal government budget delays have affected the timing of order intake, particularly from federal customers.
• The SaaS business, while promising, is still small and not yet a significant contributor to overall profitability.

Q & A Highlights

Q: Can you discuss how order activity has been year-to-date and if you're seeing any sales cycles start to lengthen? A: John Suzuki, CEO: Our first quarter order volume is in line with expectations. Typically, our order cycles are seasonal, with Q2 and Q3 being larger. The federal government budget was delayed, affecting early orders, but funds are now available, and we expect them to start flowing in the second quarter.

Q: Where are you seeing the most interest for the BKR 9000? A: John Suzuki, CEO: The most interest is in the state and local market. Customers, especially in wildland fire, need a multiband radio that fits both their missions, and our price point is within their budget, driving sales.

Q: How should we think about the timeline before the software initiative becomes a bigger part of the P&L? A: John Suzuki, CEO: We're still learning about solutions. We see needs in the marketplace for combined solutions, and our intent is to provide a single umbrella for different solutions. We hope to provide clarity on the solutions business size as we finish 2025 and set our vision for 2030.

Q: Can you walk back from your adjusted EPS to adjusted EBITDA, particularly regarding the tax rate? A: Scott Malmanger, CFO: The significant adjustment was a non-book entry for the valuation allowance. The $2.80 figure implies a tax rate in the 21% to 26% range, which is a fully taxed EPS number.

Q: Your guidance seems conservative. Should we expect it to be revised as you get more data points? A: John Suzuki, CEO: We're in uncertain times. If tariffs hold off, we might raise guidance, but it's hard to predict. Price increases will impact financials more in the third quarter, and we'll update the market as the situation changes.

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