Executive Summary

Revenue fell to $2.30M, down 36.1% sequentially vs Q1 2024 ($3.62M) and 58% year over year vs an 8‑K header assertion; the detailed financial table shows Q2 2023 revenue at $5.48M, implying a 58% YoY decline is inconsistent with the table’s 39% YoY commentary and 36.1% sequential drop, indicating a possible narrative discrepancy .
Gross margin collapsed to -1% from 32% in Q1 2024 and 34% in Q2 2023, driven by increased inventory scrap, higher inventory reserves, and purchase price variance from vendor cost increases .
Operating expenses improved to $2.90M, -10.1% sequential and -9.33% YoY, reflecting continued cost optimization; Adjusted EBITDA declined to $(2.66)M .
Liquidity materially declined: cash, cash equivalents, and investments were $4.9M at June 30 vs $22.6M at March 31 and $21.3M at year-end 2023, reflecting the $14.5M special dividend paid on April 10 and operating losses .
Near-term catalysts: resolving certification headwinds (Microsoft Teams), stabilizing distribution in Middle East/AFR, and leveraging increased product interest (InfoComm leads +60% YoY) to re-accelerate order flow .

What Went Well and What Went Wrong

What Went Well

OpEx discipline: Operating expenses fell to $2.90M (-10.1% seq, -9.33% YoY), and Non‑GAAP OpEx to $2.83M, evidencing sustained cost optimization since 2022 .
Commercial traction indicators: InfoComm USA 2024 booth visitors up 60% YoY, supporting product interest and pipeline visibility; “We continue to see strong interest in our innovative products” – CEO Derek Graham .
Portfolio momentum: Launch of Versa Lite BMA 360D (Dante-enabled BMA 360D + Versa USB22D) to simplify USB audio integration across conferencing spaces; continued ecosystem integrations (e.g., Q‑SYS plugin) .

What Went Wrong

Top-line pressure: Revenue declined to $2.30M, impacted by lagged demand effects from 2023 production shortages and lack of Microsoft Teams certification, with reduced demand across all product categories .
Margin degradation: GAAP gross margin fell to -1% (from 32% in Q1 and 34% in Q2 2023) due to inventory scrap, reserve build, and unfavorable purchase price variance amid vendor cost increases .
Channel transition headwinds: Sales were negatively impacted by the transition to a new distributor in the Middle East, with management expecting normalization over time (no assurance) .

Financial Results

Metric	Q2 2023	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$5.48	$4.15	$3.62	$2.30
GAAP Diluted EPS ($USD)	$(0.04)	$0.11	$(0.08)	$(0.12)
Gross Profit Margin (%)	34%	38%	32%	-1%
Operating Expenses ($USD Millions)	$3.20	$3.32	$3.23	$2.90
Non-GAAP Adjusted EBITDA ($USD Millions)	$(0.71)	$(0.68)	$(1.76)	$(2.66)

Segment breakdown: Not disclosed quantitatively; management cited declines primarily in audio conferencing (DSP mixer) with reduced demand across categories .

KPIs and Balance Sheet

KPI	Q4 2023	Q1 2024	Q2 2024
Cash, Cash Equivalents & Investments ($USD Millions)	$21.3	$22.6	$4.9
InfoComm USA booth visitors (YoY change)	—	—	+60%
GAAP Net Loss ($USD Millions)	$(0.56) FY; $2.64 Q4 income	$(1.90)	$(2.82)

Non‑GAAP reconciliation highlights: Non‑GAAP net loss $(2.73)M in Q2 2024 vs $(0.87)M in Q2 2023 and $(1.76)M in Q1 2024; adjustments include stock-based comp and amortization of intangibles; Adjusted EBITDA $(2.66)M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 2024	None provided	None provided	Maintained: No formal guidance
Margins	FY/Q2 2024	None provided	None provided	Maintained: No formal guidance
Operating Expenses	FY/Q2 2024	None provided	Continued optimization focus (qualitative only)	Maintained qualitative commentary
Dividend	April 10, 2024	Special dividend declared $0.50/share (March 10)	Paid April 10 (~$14.5M cash outflow)	Executed action (not guidance)

Note: Company did not issue quantitative revenue/EPS/margin guidance in Q2 materials; forward-looking statements reference ongoing initiatives but no ranges .

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found in company documents; themes below synthesize press releases across Q4 2023, Q1 2024, and Q2 2024.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Manufacturing transition & supply normalization	Transition from China→Singapore completed in Q4; products in stock, backlog reduction	Lingering order flow lag from 2023 shortages impacting Q2 sales	Improving production cadence, but demand lag persists
Certifications (Microsoft Teams)	Headwinds due to lack of Teams certification	Continued sales headwinds due to lack of certification	Unchanged challenge
Regional trends (Middle East/India/Asia)	Asia incl. India/Middle East up 18% YoY in Q1; plans to invest regionally	Middle East distributor transition impacted sales; appointment of FVC for MEA	Transition period; long-term potential
Product launches/portfolio	DIALOG 20 USB launch; UVHF delays to Q2; BMA 360D momentum	Versa Lite BMA 360D introduced; InfoComm showcase across solutions	Continued innovation rollouts
Cost optimization	OpEx -14% YoY in Q4; ongoing reductions	OpEx -10.1% seq, -9.33% YoY	Sustained improvement
Gross margin drivers	Q4 GM 38%, improvement YoY	GM -1% due to scrap, reserves, PPV/vendor costs	Deteriorated sharply

Management Commentary

“We believe this revenue decline was primarily due to the cumulative impact of past production shortages... We have also faced sales headwinds from our products’ lack of Microsoft Teams certification... Our sales in Q2 2024 were also impacted by our transition to a new distributor in the Middle East.” – Derek Graham, CEO .
“During the first half of 2024, our team has been diligently working to win back customers who have defected to competing brands... We continue to see strong interest in our innovative products as demonstrated by the 60% increase in visitors at our Infocomm USA booth...” – Derek Graham, CEO .
On operations: “The Company reduced operating expenses by 10.1% sequentially and 9.33% year‑over‑year.” .

Q&A Highlights

No Q2 2024 earnings call transcript was available in the company’s document set; Q&A highlights cannot be assessed. Analysis relies on press releases and 8‑K exhibits .

Estimates Context

Wall Street consensus estimates from S&P Global (EPS and Revenue) for Q2 2024 were unavailable due to SPGI access limits at time of request; as a result, estimate comparison cannot be provided at this time. Values retrieved from S&P Global.*
Actuals: Revenue $2.30M; GAAP diluted EPS $(0.12). Given the magnitude of revenue decline and negative gross margin, sell-side models may require downward revisions to near-term revenue/margin assumptions .

Financial Results vs Estimates

Metric	Actual (Q2 2024)	Consensus (Q2 2024)	Surprise
Revenue ($USD Millions)	$2.30	N/A – S&P Global data unavailable*	N/A
GAAP Diluted EPS ($USD)	$(0.12)	N/A – S&P Global data unavailable*	N/A

Guidance Changes Detail

No quantitative guidance ranges provided; forward-looking statements emphasize demand recovery efforts, certification remediation, distributor transition outcomes, and continued cost controls .
Special dividend paid ($0.50/share on April 10, ~$14.5M cash outflow) materially impacted liquidity levels entering Q2 .

Key Takeaways for Investors

Near-term headwinds are acute: order flow lag from 2023 shortages, lack of Teams certification, and Middle East distributor transition weighed on revenue and margins in Q2; monitor certification progress and channel normalization timelines .
Cost controls are working, but not offsetting revenue/margin pressure: OpEx down to $2.90M yet Adjusted EBITDA deteriorated to $(2.66)M on negative gross margin .
Liquidity reset post-dividend: cash/investments at $4.9M vs $22.6M in Q1; runway depends on stabilizing demand and margin repair; watch inventory reserves and PPV trends .
Commercial signals improving: InfoComm leads +60% YoY and new product introductions (Versa Lite BMA 360D) point to potential pipeline recovery, but conversion is critical over Q3–Q4 .
Trading implications: Absent guidance and with negative gross margin, stock likely trades on evidence of demand re-acceleration (orders, certifications, regional distribution traction) and margin repair; any update on Teams certification could be a material catalyst .
Medium-term thesis: If supply chain normalization and certifications close, ClearOne’s beamforming microphone array and integrated AV solutions portfolio could re-gain share, leveraged by improved OpEx structure; execution on regional expansion (MEA distributor) is a key test .
Model watch items: gross margin drivers (scrap/reserves/PPV), OpEx cadence, inventory levels, and other income line normalization (vs prior legal settlement effects in 2023) .

CLEARONE INC (CLRO)·Q2 2024 Earnings Summary