Sign in

You're signed outSign in or to get full access.

BT

BK Technologies Corp (BKTI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered revenue of $17.93M (+9.9% YoY) and gross margin of 41.2%, continuing sequential margin expansion; GAAP diluted EPS was $0.93 (including a $0.37 one-time tax benefit), and non-GAAP diluted EPS was $0.61 .
  • Versus S&P Global consensus, revenue modestly beat ($17.93M vs $16.80M*) and EPS was a significant beat ($0.93 vs $0.26*), even excluding the tax benefit normalized EPS beat ($0.93 vs $0.35*) *.
  • Management issued FY2025 guidance targeting single-digit revenue growth, gross margin ≥42%, GAAP diluted EPS >$2.40, and non-GAAP diluted EPS >$2.80, with 5–10% price increases effective April 1, 2025 and tariff mitigation plans; tax rate normalizes to 21–26% going forward .
  • Catalysts: BKR 9000 multiband adoption in state/local markets, backlog of $21.8M at year-end 2024, and margin trajectory supported by EastWest outsourcing; risks include tariff volatility and timing lag for price increases to flow through backlog .

What Went Well and What Went Wrong

What Went Well

  • Continued margin expansion: Q4 gross margin reached 41.2% (up from 35.1% YoY and 38.8% in Q3), driven by product mix shift to BKR 9000 and outsourcing to EastWest .
  • Profitability inflection: Q4 operating income of $2.21M (vs $0.40M last year) and non-GAAP adjusted EBITDA of $2.82M (vs $1.30M) as SG&A held steady and production costs fell .
  • BKR 9000 demand momentum: CEO highlighted strong adoption in state/local agencies at accessible price points; backlog at year-end was $21.8M (vs $16.0M FY2023) . “We achieved exceptional execution in the fourth quarter… order activity for the BKR 9000 saw momentum throughout the year…” — CEO John Suzuki .

What Went Wrong

  • Tariff uncertainty: Management cautioned a potential 25% tariff could compress gross margins below 42% in Q2 before price hikes offset in H2; mitigation options include shifting production lines globally with EastWest, but moves take 6–9 months .
  • Federal demand timing: Continuing resolution timing delayed Q1 federal orders; management expects funding to flow in Q2, affecting seasonality/order timing .
  • SaaS profitability: InteropONE remains a marketing tool rather than standalone profit center; BK ONE aims to broaden offerings, but contribution remains “small” near term .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$20.254 $20.179 $17.927
Gross Margin %37.3% 38.8% 41.2%
Operating Income ($USD Millions)$2.025 $2.611 $2.209
GAAP Diluted EPS ($)$0.47 $0.63 $0.93
Non-GAAP Adjusted EPS (Diluted) ($)$0.55 $0.71 $0.61
Adjusted EBITDA ($USD Millions)$2.488 $3.109 $2.818

Q4 2024 Actual vs Wall Street Consensus (S&P Global)

MetricConsensusActualSurprise (Abs)
Revenue ($USD Millions)$16.800*$17.927 $1.127*
GAAP Diluted EPS ($)$0.26*$0.93 $0.67*
Normalized EPS ($)$0.35*$0.93 $0.58*

Values marked with * retrieved from S&P Global.

KPIs

KPIQ2 2024Q3 2024Q4 2024
Order Backlog ($USD Millions)$26.9 $27.0 $21.8
Working Capital ($USD Millions)$20.3 $22.7 ~$23.0
Cash & Equivalents ($USD Millions)$2.981 $4.173 $7.075

Note: No segment revenue breakdown disclosed in filings.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY2025N/ASingle-digit growth New
Gross MarginFY2025N/A≥42% New
GAAP Diluted EPSFY2025N/A>$2.40 New
Non-GAAP Diluted Adjusted EPSFY2025N/A>$2.80 New
Tax RateOngoing (post 12/31/24)N/A21–26% expected New
Price Increase (Radios & Accessories)Effective 4/1/2025N/A+5–10% list price; accepted by federal government & reseller network Implemented
FY2024 GAAP EPS TargetFY2024>$1.50 (Q2 reaffirmed) >$1.65 (Q3 raised) Raised
FY2024 Non-GAAP EPS TargetFY2024$1.77 (Q2) $1.92 (Q3) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 2024)Trend
Manufacturing Outsourcing (EastWest)Transition progressing; lower product costs improving margins (Q2) . Completed by Q3; expected continued margin improvement .Margin tailwinds sustained; flexibility to relocate lines if tariffs persist .Improving/Strategic flexibility
Gross Margin Trajectory37.3% (Q2) ; 38.8% (Q3) .41.2% (Q4); risk of temporary dip in Q2 if 25% tariffs, with H2 recovery as price increases flow through .Upward with near-term risk
BKR 9000 DemandHighlight orders (e.g., Mississippi Forestry, CalFire) and backlog growth (Q2/Q3) .Strong state/local adoption at accessible price point; primary growth driver .Strengthening
Tariffs/MacroGeneral caution in press releases .Detailed tariff sensitivity; mitigation via pricing and supply-chain relocation; Q1 benefited from USMCA compliance (0 tariffs) .Elevated risk, mitigated
Government MixHeavy federal exposure historically .Mix shifting: 2025 expected ~35% federal vs 49% in 2023, reflecting state/local 9000 adoption .Diversifying
SaaS/BK ONE SolutionsInteropONE patent (Q2) .BK ONE rebranding; portfolio expanded (InteropONE, LocateONE, RelayONE); near-term contribution “small”, strategic driver over time .Building
Backlog/Order TimingQ2 backlog $26.9M; Q3 $27.0M with majority to ship next two quarters .Year-end backlog $21.8M; Q1 federal orders delayed by CR timing, expected to flow in Q2 .Solid, timing shift

Management Commentary

  • “We achieved exceptional execution in the fourth quarter… revenue growth, continued margin expansion, and increased profitability…” — CEO John Suzuki .
  • “We’re strategically investing in sales and marketing to further accelerate BKR 9000 adoption and building out our engineering capabilities… We believe we are positioned to achieve full year single digit revenue growth and gross margins of 42% or higher… GAAP EPS to exceed $2.40… non-GAAP adjusted EPS to exceed $2.80.” — CEO John Suzuki .
  • “Included in GAAP EPS for the fourth quarter and fiscal year of 2024 was a onetime noncash income tax benefit… $0.37 and $0.27 per share… valuation reserve allowance release on NOLs.” — CFO Scott Malmanger .
  • “We expect to be realizing a more standard tax rate range of 21% to 26%.” — CFO Scott Malmanger .
  • “Earlier this year, we announced price increases… 5% to 10%… accepted by the federal government… effective April 1, 2025… to date, we have seen no demand change or pushback.” — CEO John Suzuki .

Q&A Highlights

  • Order timing: Federal orders delayed in Q1 due to CR timing; funds released and expected to flow in Q2; seasonality implies stronger Q2/Q3 intake .
  • Guidance conservatism: Price increases will impact financials more in Q3; if tariffs hold off, guidance could be raised during the year, but uncertainty remains .
  • Tariffs compliance & mitigation: Q1 incurred 0 tariffs under USMCA; if tariffs become more permanent, options include shifting manufacturing lines with EastWest; lead times ~6–9 months .
  • Product mix/margins: BKR 9000 is the growth driver; historically targeted at ~60% gross margin pre-tariffs; tariffs could reduce margins depending on sourcing .
  • SaaS/BK ONE trajectory: InteropONE still a marketing-led driver, not a standalone profit center yet; expanded offerings (LocateONE, RelayONE) should lift revenue versus SaaS-only .

Estimates Context

  • S&P Global consensus for Q4 2024: Revenue $16.80M* vs actual $17.93M, EPS $0.26* vs actual $0.93; normalized EPS $0.35* vs actual $0.93. BK delivered a modest revenue beat and a large EPS beat; even normalized EPS beat indicates strong core profitability *.
  • Coverage depth is limited (# of estimates = 1 for both revenue and EPS), so revisions may be more sensitive to BK’s reported results.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion is durable, supported by EastWest outsourcing and BKR 9000 mix; Q4 gross margin 41.2% with management targeting ≥42% in FY2025, albeit with tariff-related variability .
  • Earnings quality: GAAP EPS benefited from a $0.37 one-time tax item in Q4; non-GAAP diluted EPS was $0.61, reflecting strong underlying profitability .
  • Demand drivers: BKR 9000 adoption in state/local governments is accelerating; management identifies BKR 9000 as the primary growth engine .
  • Backlog and cash: Year-end backlog of $21.8M and cash of $7.08M with no debt provide visibility and balance sheet flexibility to support growth investments .
  • Pricing/tariffs: 5–10% price increases effective April 1 should offset potential tariff pressures by H2; near-term gross margins may dip if tariffs are imposed rapidly .
  • 2025 guide: Single-digit revenue growth, ≥42% gross margin, GAAP EPS >$2.40, non-GAAP >$2.80; expect standardized 21–26% tax rate .
  • Trading implications: Strong EPS beat (even on normalized basis) and visible margin trajectory are positives; watch tariff headlines and confirmation of price pass-through in Q3 as stock catalysts .