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MOBIX LABS, INC (CLAY)·Q3 2024 Earnings Summary

Executive Summary

  • Revenue of $2.06M, up 80% q/q, with GAAP gross margin at 35.5% and adjusted gross margin at 40.3%; GAAP operating loss was $9.35M and adjusted operating loss was $4.14M .
  • Q4 2024 revenue guidance maintained at $2.6–$3.2M; Q3 revenue exceeded the guidance midpoint set last quarter (Q3 guide $1.8–$2.2M) .
  • Closed RaGE Systems in May with meaningful June-quarter contribution; announced intent to acquire J‑Mark Connectors to enhance defense and aerospace margin profile .
  • Liquidity actions included a $4M private placement of pre-funded warrants (with additional warrant capacity) and pursuit of further financing to support acquisitions and working capital .

What Went Well and What Went Wrong

What Went Well

  • Sequential revenue growth of 80% to $2.06M, with adjusted gross margin expanding 660 bps q/q to 40.3%, driven by favorable mix, pricing, and operational efficiencies .
  • Strategic execution: closed RaGE Systems and announced intent to acquire J‑Mark Connectors to strengthen defense/aerospace positioning and gross margins .
  • Business development momentum: THW partnership on AI‑optimized 5G base stations; supplier progress with U.S. Navy SM‑6 connectors; BAE ‘Partner 2 Win’ Gold award .

Management quotes:

  • “Quickly increasing customer demand and exciting requests for proposals are expanding the pipeline...” — CEO Fabian Battaglia .
  • “We were pleased with our sequential revenue growth of 80%, gross margin expansion... pursuing additional financing to fuel our acquisition strategy...” — President & CFO Keyvan Samini .
  • “Adjusted Gross Margin was up 660 basis points… due to favorable product mix and pricing, as well as operational efficiencies.” — Prepared remarks .

What Went Wrong

  • GAAP operating loss widened q/q to $9.35M (from $8.56M), reflecting higher SG&A and M&A-related costs despite improved gross margin .
  • Cash declined to $0.205M from $2.993M at prior quarter-end, highlighting near-term liquidity constraints before late-July financing .
  • Continued GAAP net losses and reliance on external capital; management explicitly noted intent to pursue additional financing for acquisitions and working capital .

Financial Results

Consolidated performance vs prior periods and estimates

MetricQ3 2023Q1 2024Q2 2024Q3 2024Consensus (S&P Global)
Revenue ($USD Millions)$0.08 $0.29 $1.145 $2.058 N/A (unavailable via S&P Global)
GAAP Gross Margin %-256.3% 10.4% 16.9% 35.5% N/A
Adjusted Gross Margin %-156.3% 28.7% 33.7% 40.3% N/A
GAAP Loss from Operations ($USD Millions)$(9.739) $(17.27) $(8.562) $(9.348) N/A
Adjusted Loss from Operations ($USD Millions)$(4.638) $(4.21) $(4.082) $(4.142) N/A
GAAP Net Loss ($USD Millions)$(10.004) $(1.479) $(1.753) $(7.679) N/A
EPS Basic ($USD)$(0.65) $(0.06) $(0.09) $(0.25) N/A
EPS Diluted ($USD)$(0.65) $(0.10) $(0.21) $(0.25) N/A

Note: Wall Street consensus from S&P Global was unavailable for this ticker mapping at the time of query; comparisons to estimates are noted as N/A [SpgiEstimatesError].

Balance Sheet and working capital KPIs

KPI ($USD Thousands)Sep 30, 2023Mar 31, 2024Jun 30, 2024
Cash$89 $2,993 $205
Accounts Receivable (net)$53 $461 $1,478
Inventory$319 $361 $1,906
Total Current Assets$830 $4,448 $4,070
Accounts Payable$8,995 $6,693 $10,572
Accrued & Other Current Liabilities$4,519 $7,036 $8,839
Total Current Liabilities$20,423 $18,027 $25,501

Segment breakdown

  • Segment reporting was not disclosed; portfolio priorities include EMI Interconnect Solutions, Active Optical Cables, 5G IC Solutions, and Wireless Systems .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2024$1.8–$2.2M (set in May) N/A (actual delivered $2.06M) Met midpoint; delivered $2.06M
RevenueQ4 2024$2.6–$3.2M (set in May) $2.6–$3.2M (reaffirmed) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2024)Trend
M&A-driven portfolio buildDefinitive agreement to acquire RaGE Systems; Arrow distribution; multiple defense awards (Tomahawk, Javelin, Abrams) Closed RaGE; intent to acquire J‑Mark to elevate defense/aerospace margins Strengthening; accretive scope expanding
Gross margin trajectoryNon‑GAAP GM 28.7% (Q1) → 33.7% (Q2) Adjusted GM 40.3%, +660 bps q/q, mix/pricing/efficiencies Improving sequentially
Defense/aerospace winsMultiple awards/sole-source wins; Arrow to target defense/aerospace Navy SM‑6 connectors delivered; BAE Gold Tier award Building credibility and orders
AI/5G systemsProduct launches (MBX3110); mmWave focus THW 5G partnership leveraging AI to optimize base station energy; SMART Edge device showcased Broadening to AI‑enabled 5G
Liquidity & financing$100M equity line set with B. Riley (availability conditional) $4M private placement closed; warrants could add up to $8M; pursuing further financing Active capital raising
Guidance & executionQ3 revenue guide $1.8–$2.2M; Q4 $2.6–$3.2M Q3 actual $2.06M; Q4 guide reaffirmed On plan; maintained outlook

Management Commentary

  • “We are pleased with the June quarter’s results, closing the acquisition of RaGE Systems and our growing pipeline of synergistic M&A opportunities…” — CEO Fabian Battaglia .
  • “We were pleased with our sequential revenue growth of 80%, gross margin expansion and closing an additional private placement… pursuing additional financing…” — President & CFO Keyvan Samini .
  • “Adjusted Gross Margin was up 660 basis points sequentially to 40.3%… favorable product mix and pricing, as well as operational efficiencies.” — Prepared remarks .
  • “For the fourth fiscal quarter of 2024, we are reaffirming our prior guidance and forecast consolidated revenues between $2.6 million and $3.2 million.” — Prepared remarks .

Q&A Highlights

  • Guidance reaffirmation and execution: Management emphasized Q3 revenue exceeding guidance midpoint and reiterated Q4 guidance range, signaling confidence in near-term demand .
  • Margin drivers: Mix/pricing and operational efficiencies cited as key levers behind adjusted gross margin expansion; implication that continued portfolio actions (e.g., J‑Mark) aim to structurally lift margins .
  • Liquidity path: Detailed the July financing and warrants with potential additional cash proceeds over five years, alongside pursuit of further financing, clarifying near‑term funding plans for growth and working capital .
    Note: The company posted prepared remarks and archived webcast; a full third-party transcript was not available in SEC document listings for CLAY; prepared remarks are used for call content .

Estimates Context

  • S&P Global consensus mapping was unavailable for the CLAY ticker at time of query; therefore, comparisons to Wall Street consensus (Revenue, EPS) are N/A and the quarter is benchmarked against company guidance instead [SpgiEstimatesError].
  • Given the maintained Q4 revenue guidance and Q3 delivery above guidance midpoint, near‑term sell‑side models may need to reflect improving gross margin trajectory but persistent operating losses and external capital needs .

Key Takeaways for Investors

  • Sequential revenue scale-up with margin improvement is a positive trajectory; execution against guidance and mix/pricing supports near‑term gross margin gains .
  • Liquidity remains tight (Q3 cash $205K), but July financing and warrant structure plus ongoing capital plans mitigate funding risk for acquisitions and working capital; monitor dilution and covenant terms .
  • M&A strategy (RaGE closed; J‑Mark intent) targets defense/aerospace growth and higher margin profile; diligence should assess integration pace and incremental backlog visibility .
  • Partnership with THW introduces AI‑optimized 5G base station angle and could expand system-level opportunities; commercialization timelines and unit economics bear watching .
  • Q4 guide maintained ($2.6–$3.2M) sets expectations for continued sequential growth; watch conversion of AR/inventory and SG&A run-rate vs. revenue scale to narrow operating losses .
  • Defense/aerospace validation (Navy SM‑6, BAE award) strengthens credibility; track follow-on orders and program share .
  • Absent Street consensus, trade the narrative on guidance execution, margin momentum, and financing updates; catalysts include closing J‑Mark, additional financing disclosures, and Q4 delivery .