Boxlight Corp Q1 FY2023 earnings call

• Michael Pope thanked supporters and recognized loyal employees, noting the company's strong culture. They attracted new talent and have an employee retention rate over 90%.
• Mark Starkey discussed order intake, with Q1 order intake at $41.5 million, down 35% year-on-year. Market share grew in the US and EMEA. There were investments in Germany's sales team and showroom, and progress in Africa with a key partner.
• Greg Wiggins reviewed financial results, balance sheet details, and highlighted Boxlight's competitive advantage in data privacy, new product launches (e.g., LED video walls, Google-certified solutions), and Google partnerships for education services.

For the first quarter, Boxlight delivered $41.2 million in revenue. EMEA revenues totaled $18.3 million (45% of total revenues), Americas revenues were $21.3 million (51% of total), and other markets accounted for $1.5 million (4% of total). Hardware comprised approximately 90% of total revenues, with flat panel displays being a significant component. Gross profit for the three months ended March 31, 2023, was $15.1 million, up from $12.6 million in the same period in 2022. The gross profit margin for Q1 2023 was 36.8%, an increase of 1,190 basis points over Q1 2022.

• Full-year 2023 expected to have modest single-digit revenue growth, with the bulk of growth in the second half. Q2 2023 guided to $50 million in revenue and $4 million in adjusted EBITDA.
• Confidence in growth based on global sales pipeline, significant tenders in key markets, and substantial government funds for education technology solutions, especially in the US and Europe.
• Consideration of reverse stock split if NASDAQ listing requirements aren't met, and plan to utilize the $15 million share repurchase program when trading below intrinsic value.

• Market valuations challenging for microcap technology stocks, particularly driven by broader economic concerns, leading to stock price below NASDAQ's $1 requirement.
• Need to consider reverse stock split to maintain NASDAQ listing if organic price increase doesn't occur.

Q: Brian Kinstlinger asked if the single-digit revenue growth was constant currency or reported revenue, and about confidence in offsetting year-over-year declines given seasonality.

A: Greg Wiggins said it's modest growth, expecting activity to pick up in the second half, with tenders and pent-up demand. Mark Starkey noted increasing pipeline and expected education spend to continue.

Q: Jack Vander Aarde inquired about revenue mix, FrontRow's recovery, and OpEx related to new talent.

A: Michael Pope mentioned FrontRow expected growth with high gross margins, and Greg Wiggins discussed OpEx control, noting recent talent hires don't significantly increase OpEx.

Q: Unidentified Analyst questioned the incentive plan increase and stock buyback timing.

A: Michael Pope said the incentive plan pool is to attract talent and align with shareholders, and stock buyback will be considered when trading below intrinsic value.

Q: Brian Kinstlinger followed up on budgets and balance sheet balloon payments.

A: Michael Pope said budgets are robust and mostly used, Greg Wiggins mentioned $3 million drawn down on a delayed draw facility due in September, and debt service costs and cash covenant details.