AmpliTech Group, Inc. (AMPG)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 was materially impacted by a $3.25M loss from fraudulent digital currency transactions, driving a net loss of $4.66M and EPS of $(0.48); revenue fell 44% YoY to $2.29M with gross margin compressing to 38.5% .
• The Item 2.02 8‑K pre-announcement flagged inability to timely file the 10‑Q due to the digital asset incident and anticipated a ~$(4.7)M net loss; the filed 10‑Q reported $(4.66)M, consistent with the preliminary disclosure .
• Segment trends: Spectrum distribution revenue dropped 56.7% YoY (Asian market weakness), while manufacturing revenue declined 14.8% YoY; corporate recorded the digital asset loss, elevating consolidated losses .
• Internal control weaknesses were acknowledged with a remediation plan (dual authorization for wires, approval hierarchies, and consultant support), a key governance catalyst for investor confidence as execution progresses .
• Near-term stock narrative hinges on recovery efforts for the digital asset loss and traction in MMIC/5G ORAN and quantum products; no formal guidance was issued for Q1 2024, limiting estimate-based catalysts .

What Went Well and What Went Wrong

What Went Well

• Management reiterated strategic focus on MMIC, 5G ORAN radios, and quantum cryogenic amplifiers; Q3 2023 call indicated new product SKUs and expected monetization in 2024, supporting medium-term pipeline strength (“we expect… considerable boost to our revenue”) .
• Manufacturing gross profit remained resilient relative to Spectrum’s sharper downturn, with consolidated gross margin at 38.49%; the company actively managed COGS in line with lower volumes .
• A detailed remediation roadmap for controls was launched (approval hierarchy, dual authorization on wires, external consultants), addressing process risks highlighted by the incident .

What Went Wrong

• A cyber phishing/digital asset fraud caused a $3.25M loss, resulting in a $(4.66)M net loss for Q1 2024 and severe operating margin compression; this overshadowed core operations and delayed the 10‑Q filing .
• Spectrum (semiconductor packaging distribution) faced pronounced demand weakness—revenue down 56.7% YoY, particularly in Asian markets—pressuring consolidated revenue and margins .
• Disclosure controls were deemed “not effective” and multiple material weaknesses were identified (segregation of duties, IT general controls), raising governance concerns until remediation is demonstrably complete .

Financial Results

Year-over-Year (Q1 2023 → Q1 2024)

Notes: EBIT Margin % is calculated from disclosed Loss From Operations and Revenues in the 10‑Q .

Sequential Trend (Q3 2023 → Q1 2024)

Segment Breakdown (Q1 2023 vs Q1 2024)

Disaggregated Revenue by Geography (Q1 2023 vs Q1 2024)

KPIs and Balance Sheet Highlights (Q1 2024)

Guidance Changes

Note: No formal Q1 2024 guidance was furnished in the 8‑K or 10‑Q; the company focused disclosures on the digital asset incident and internal controls/remediation .

Earnings Call Themes & Trends

Management Commentary

• “We believe in 2024 will be a revenue transformative year for us… pipeline full of exciting new products… expected to provide a considerable boost to our revenue,” signaling confidence in MMIC/5G/quantum roadmap (Q3 2023 call, Fawad Maqbool) .
• The 8‑K disclosed the digital asset loss and inability to timely file the Q1 2024 10‑Q, with steps to seek recovery via law enforcement and private consultants, and process review underway (May 16, 2024) .
• 10‑Q elaborated on remediation, including dual authorization for ACH/bank wires, approval hierarchy, and engaging internal control and technical accounting consultants, aiming to strengthen financial reporting controls .

Q&A Highlights

• Pipeline scale and 2024 conversion: Management cited an ~$80M pipeline and targeted 2024 revenue doubling vs 2023, contingent on conversion and demos with large corporates (Q3 2023) .
• MMIC commercialization: Partnership with CDI to accelerate MMIC distribution globally; expected contributions starting Q1 2024 (context for ongoing MMIC initiatives) .
• Near-term revenue cadence: Management targeted ~$4–$5M quarterly revenue in 4Q 2023 driven by pipeline conversion, setting expectations for future quarters (historical context) .

Note: No Q1 2024 earnings call transcript was found; highlights reflect prior quarter context –.

Estimates Context

• Wall Street consensus (S&P Global) for Q1 2024 could not be retrieved; therefore, beat/miss vs consensus cannot be determined at this time. If you need estimate comparisons, we can refresh when access is available.
• Absent formal guidance and consensus, investors should focus on: revenue trajectory post-Spectrum demand weakness, margin normalization as mix shifts, and the timing/impact of MMIC/5G product monetization .

Key Takeaways for Investors

• The $3.25M digital asset loss is non-operational but materially impacted Q1 results; monitor recovery efforts and completion of control remediation for governance risk reduction .
• Core demand headwinds are concentrated in Spectrum’s semiconductor packaging distribution (not structural to manufacturing); assess mix shift toward higher-margin manufacturing/MMIC products to stabilize margins .
• Execution on MMIC/5G ORAN and quantum cryogenic products remains the medium-term growth driver; commercial traction and partner-led distribution (CDI) should be watched for revenue inflection .
• Liquidity/working capital remain adequate ($2.38M cash; $11.29M working capital) to support operations while controls are remediated and product initiatives scale .
• No formal guidance was issued; near-term result variability likely until Spectrum demand normalizes and new products ramp—position sizing should reflect event risk and execution timelines .
• Stock catalysts: tangible progress in internal control remediation, law enforcement recovery updates, MMIC/5G order wins or segment margin improvements, and resumption of normal filing cadence .

Document Trail

• Q1 2024 Item 2.02 8‑K: Results of Operations and Financial Condition (digital asset loss disclosure; delayed filing) .
• Q1 2024 10‑Q: Full financials, segment data, margin commentary, controls/material weaknesses, remediation steps .
• Prior quarter benchmark: Q3 2023 10‑Q and earnings call transcript for trend and strategic context –.