Knightscope, Inc. Q2 FY2023 earnings call

• Successfully cleared compliance efficiencies from NASDAQ and is now back in good standing with the exchange.
• Filing a formal complaint with the U.S. Securities and Exchange Commission in response to perceived unethical and potentially illegal conduct against Knightscope and its investors.
• 2022 annual revenue was $5.6 million, with 2023 H1 revenue at $6.5 million, on track for over $12 million annual run rate, potentially doubling revenue by end of 2023.
• Q1 2023 revenue was $2.9 million, Q2 2023 revenue was $3.6 million, a 20% QoQ increase.
• Gross margin improved from a loss of $0.2 million (-7%) in Q1 2023 to a gross profit of $9,000 (0.3%) in Q2 2023.
• Acquisition of Case Emergency Systems is accretive, and continued focus on cost reduction for ASRs is yielding results.
• Supply chain issues beginning to subside, aiding in reducing lead times, improving cash flow, and recognizing revenue more timely.
• Cash on hand at end of 2022 was $4.8 million, and at end of Q2 2023 was approximately $5.8 million. Convertible notes from Case acquisition fully extinguished by end of Q2 2023.

In 2022, Knightscope recorded aggregate revenue of $5.6 million for the year, reflecting over 60% growth from 2021. For the 6 months ended June 2023, the company booked approximately $6.5 million in revenue, putting it on an over $12 million annual revenue run rate. In Q1 2023, revenue was $2.9 million, and in Q2 2023, it increased to $3.6 million, a over 20% quarter-over-quarter increase. Gross margins moved dramatically from a negative 62% in the first half of 2022 to a negative 3% in the first half of 2023. A significant driver of this improvement is healthy margins from K1B product sales and continued maintenance services across its installed base of over 7,000 units nationwide. K1B products include K1 Blue light towers, E-Phones and Call Boxes, and there was $2.8 million in new orders for these, while $2.1 million was in new orders for autonomous security robots (ASRs).

• Plan to continue growing the company with a healthy sales pipeline, aiming to drive economies of scale and better leverage fixed cost base.
• Aim to reach profitability by the end of 2024.
• Potentially double the company's revenue by the end of 2023.

• Market manipulation, disclosure violations, and tortious interference are serious crimes Knightscope is addressing by conducting an investigation and filing a formal complaint with the U.S. Securities and Exchange Commission against perceived unethical and potentially illegal conduct.