NextTrip, Inc. Q3 FY2021 earnings call

• Invested in people and infrastructure, adding 13 full-time employees, including expanding sales and engineering teams. - Gross margin improved due to sourcing components from multiple vendors, engineering enhancements, more efficient customer installations, legacy RTE program reduction, and lean manufacturing expert engagement. - Undertaken initiatives like adopting lean manufacturing, investing in software applications (product lifecycle management, CRM, etc.) to increase efficiency.

For the third quarter of 2021, revenue totaled $700,000 compared to $249,000 in the third quarter of 2020. Year-to-date revenue at September 30, 2021 was $1.3 million vs. $638,000 in 2020, an increase of 104%. Gross profit for Q3 2021 was $535,000 vs. $151,000 in 2020, resulting in a gross margin of 69% for the nine months ended September 30, 2021 vs. 37% in 2020.

• Cash burn expected to flatten as increased revenues begin to outpace increases in expenses. - Targeted gross margin in the 80% range by having OEM partners provision hardware components and moving to embedded software-only products. - Two OEM partners have committed to provisioning hardware components.

• Forward-looking statements subject to risks causing actual results to differ. - Labor market competition for retaining highly skilled employees. - 2020 expenses were lower due to COVID restrictions, so comparison to 2020 expenses needs context.

Q: Could you provide more color on the pipeline, where we are versus a quarter ago and where momentum is?

A: The pipeline continues to grow month over month, 20% bigger than going into Q3, with momentum in federal government, space exploration, DoD, and European OEMs.

Q: Should we expect stock comp to come down going forward?

A: Yes, as the one-time grant in August with 25% vesting on grant date will level off.

Q: What's the ramp up process for recent sales hires and when to expect top-line contribution?

A: Experienced hires from industry leaders will get up and running quickly, expecting contribution in early 2022.

Q: Do you find some companies can't be gotten into the door?

A: Companies early in 3D printing adoption may not be interested, but those further along in adoption are aware and accessible.

Q: Do printer manufacturers offer quality control as part of their package?

A: Yes, but their systems don't provide actionable analytics like Sigma's which identifies and predicts defects.