Core AI Holdings Q2 FY2024 earnings call

• Revenue in Q2 2024 was $1.9 million, a decrease from Q2 2023 due to working capital constraints, but demand from wireless carriers and distributors remains strong with an order backlog over $7 million.
• Expect Q3 2024 revenue to be significantly higher than Q2 2024, and goal for 2024 revenue is high double-digit growth.
• Sales of unique PTT product portfolio are rapidly adopted across various sales channels, including with North American wireless carrier partners in different stock positions.
• Sales reached beyond emergency services to include school safety, healthcare, utilities, hospitality, and enterprise use cases.
• SG&A expenses increased in Q2 2024 primarily due to marketing expenses related to investor awareness.
• Decrease in gross margin in Q2 2024 was due to a one-time heavily discounted transaction with an international reseller, same reason for decrease in six-month gross margin.

For the second quarter of 2024 ended June 30, revenue was $1.9 million, a $800,000 decrease from $2.7 million in Q2 2023. Gross margin percentage for Q2 2024 was 10.4% versus 29.7% in Q2 2023. Gross margin dollars decreased from $800,000 to $200,000. SG&A expenses are $4 million in Q2 2024 versus $2.7 million in Q2 2023, an increase of $1.3 million. Adjusted EBITDA for Q2 2024 was negative $3.8 million compared to negative $2 million in Q2 2023. For the six months ended June 30, 2024, total revenue was $4.2 million compared to $4.5 million in the same period of 2023. Gross margin dollars were $1.1 million in 2024 compared to $1.3 million in the same period of 2023. The gross margin percentage was 25% in 2024, compared to 28.8% in the same period of 2023.

• Expect revenue in Q3 2024 will be significantly higher than Q2 2024 revenue.
• Goal for 2024 revenue is high double-digit growth.
• Do not intend to disclose order backlog quarter-to-quarter due to inconsistent and lumpy purchasing behavior of customers.

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