RYTHM, Inc. Q2 FY2021 earnings call

CEO's Opening - Raymond Chang: Started by thanking everyone for joining. Highlighted achieving all年初设定的目标, including exceeding $40M top-line revenue, securing a major MSO partnership, and launching VFU version 3.6. Mentioned the launch of the Agrify Total Turn-Key solution, signed first partner Bud & Mary's with potential $280M revenue over 10 years, and second TTK partnership with True House Cannabis with $45M revenue opportunity over 10 years. ### CSO's Update - David Kessler: Reported R&D centers in Georgia and Massachusetts, launched Agrify University for customer training, and noted customers seeing improvements in consistency and yield, with a single harvest reaching 71 grams per square foot. ### CFO's Financial Review - Niv Krikov: Total revenue for Q2 2021 was $11.8M vs $3.9M in 2020. Gross profit was $527k vs $1M in 2020, gross margin 4.5% vs 26% in 2020. SG&A was $5.2M vs $2.7M in 2020 due to hiring and stock-based comp. R&D costs $774k vs $743k in 2020. Net loss $5.6M vs $2.4M in 2020.

In the second quarter of 2021, Agrify achieved a record revenue of $11.8 million, which is a 203% year-over-year increase and a 69% sequential growth from Q1 2021. Bookings for Q2 were $30.7 million, and the backlog ended at $101 million, up 23% from the previous $82 million. Revenue consisted of facility build-out revenue and hardware revenue from VFUs. The revenue contribution was driven by the ongoing success of customer facilities, leading to growing partnerships and new business opportunities.

Management is extremely confident of hitting or even exceeding the upper range of the revised $48 million to $50 million revenue target for the second half of 2021. Actively engaging with 10-plus TTK candidates across 8 states with several hundred million dollars of potential opportunities. In advanced stages of negotiation and due diligence with potential synergistic and accretive acquisition targets to enhance offerings.

Q: Eric Des Lauriers asked about the difference between backlog and bookings.

A: Raymond Chang said backlog increased from $82M at end of Q1 to over $100M, with bookings at $30.7M in Q2.

Q: Scott Fortune asked about pipeline and construction delays.

A: Raymond Chang said they're expanding A&E and general contractor partners, projects still on schedule, hiring project managers and customer success resources.

Q: Aaron Grey asked about data collection and utilization.

A: David Kessler mentioned using data to define growth recipes for client success, and Raymond Chang talked about potential monetization of data through licensing grow recipes.

Q: Anthony Vendetti asked about M&A and TTK contracts.

A: Raymond Chang discussed looking for comprehensive solutions to increase customers' facility productivity and mentioned TTK contracts have similar terms across partners.

Q: Gerald Pascarelli asked about federal regulatory reform.

A: Raymond Chang said the business model is set up to hedge against regulatory changes, emphasizing the ability to provide consistency and quality for MSOs and smaller operators.