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CI

CLEARONE INC (CLRO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $2.96M, down 29% year over year, but up 18.1% sequentially as shipments of video and wireless microphones improved; GAAP gross margin rose to 30% (from 24% in Q3), aided by better wireless product margins and despite aged inventory write-offs year over year .
  • GAAP diluted EPS was $(0.09) versus $0.11 in Q4 2023 and flat sequentially; non-GAAP net loss was $(2.13)M versus $(1.20)M in Q4 2023 and $(2.00)M in Q3 2024 .
  • Operating expenses fell year over year (GAAP $2.91M vs $3.32M; FY OpEx down ~9.8%) reflecting cost optimization; management emphasized continued cost discipline and product innovation into 2025 .
  • No formal numeric guidance or call transcript was provided; catalysts cited by management include ramping BMA 360D and DIALOG UVHF shipments, improved interoperability, and regional expansion in the Middle East and India .

What Went Well and What Went Wrong

What Went Well

  • Sequential top-line and margin recovery: revenue +18.1% q/q; GAAP gross margin +6 pts to 30%, driven by improved wireless margins and increased video/wireless shipments .
  • Cost structure progress: FY 2024 operating expenses down 9.8% vs prior year; Q4 GAAP OpEx down year over year to $2.91M; management reiterated focus on leaner operations .
  • Strategic focus and product momentum: CEO highlighted improved interoperability, new microphone solutions integrating with third-party DSPs, and targeted investments to expand in Middle East and India to capture rising demand .

What Went Wrong

  • Year-over-year decline: Q4 revenue fell 29% vs Q4 2023, with gross margin down ~8 pts, impacted by lower microphone demand and aged inventory write-offs .
  • Profitability still negative: GAAP net loss $(2.20)M and non-GAAP net loss $(2.13)M; adjusted EBITDA $(1.94)M, reflecting still-challenged operating leverage .
  • Persisting commercial headwinds: management cited sales headwinds from lack of Microsoft Teams certification and cumulative impacts of past production shortages affecting order flow .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$4.154 $2.304 $2.504 $2.956
Gross Profit ($USD Millions)$1.578 $(0.020) $0.612 $0.886
Gross Margin %38% -1% 24% 30%
Operating Expenses ($USD Millions)$3.317 $2.904 $2.800 $2.907
Operating Income (Loss) ($USD Millions)$(1.739) $(2.924) $(2.188) $(2.021)
Net Income (Loss) ($USD Millions)$2.642 $(2.820) $(2.062) $(2.203)
Diluted EPS ($USD)$0.11 $(0.12) $(0.09) $(0.09)
Non-GAAP MetricQ4 2023Q2 2024Q3 2024Q4 2024
Non-GAAP Operating Expenses ($USD Millions)$3.162 $2.830 $2.738 $2.831
Non-GAAP Net Income (Loss) ($USD Millions)$(1.200) $(2.731) $(1.992) $(2.125)
Non-GAAP Adjusted EBITDA ($USD Millions)$(0.680) $(2.660) $(1.982) $(1.940)
Non-GAAP Diluted EPS ($USD)$(0.05) $(0.11) $(0.08) $(0.09)
KPI (Balance Sheet)Dec 31 2023Sep 30 2024Dec 31 2024
Cash & Equivalents ($USD Millions)$17.835 $1.685 $1.417
Inventories, net ($USD Millions)$10.625 $14.269 $11.224
Shareholders’ Equity ($USD Millions)$44.685 $23.501 $21.331
Total Assets ($USD Millions)$50.694 $28.379 $26.544

Results vs Consensus (Q4 2024):

MetricQ4 2024 ActualQ4 2024 Consensus
Revenue ($USD Millions)$2.956 N/A*
Diluted EPS ($USD)$(0.09) N/A*

*Values retrieved from S&P Global; consensus not available.

Non-GAAP adjustments: Q4 2023 benefited from a $4.0M “other income” gain tied to a patent cross-license (adjusted out in non-GAAP); Q4 2024 non-GAAP reconciliations exclude stock-based comp, amortization, taxes, and other items per the provided tables .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q1 2025+Not providedNot providedMaintained (no formal guidance)
Gross MarginFY/Q1 2025+Not providedNot providedMaintained (no formal guidance)
OpExFY/Q1 2025+Not providedNot providedMaintained (no formal guidance)
EPSFY/Q1 2025+Not providedNot providedMaintained (no formal guidance)

Management did not issue quantitative guidance; commentary emphasized cost optimization, product ramps (BMA 360D, DIALOG UVHF), interoperability improvements, and regional expansion plans .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Supply chain/manufacturing transitionQ2/Q3 cited cumulative impact of past shortages; delays moving manufacturing from China to Singapore pressured audio/DSP revenue and margins Management still sees slower order flow from past shortages; sequential improvement as shipments ramp Improving sequentially; lingering YoY overhang
Microsoft Teams certificationNoted as a sales headwind despite functional compatibility in Q2/Q3 Continues to weigh on sales; mitigations via demos and customer engagement Ongoing headwind
Regional dynamicsQ3: Middle East distributor transition impacted revenue Focus to expand footprint in Middle East and India; evaluating sales/marketing investments Repositioning for growth
Product momentumQ2: Versa Lite BMA 360D bundle introduced; increased show leads Highlighted new DIALOG 20 USB, awards, and broader portfolio demos at ISE/InfoComm Building pipeline/interest
Cost optimizationSequential and YoY OpEx reductions noted in Q2/Q3 FY OpEx down 9.8%; continued focus into 2025 Sustained discipline

Note: No earnings call transcript was available in our document set; themes reflect press release commentary .

Management Commentary

  • “We delivered strong momentum in the fourth quarter of 2024 with revenue increasing 18.1% sequentially compared to Q3 2024. Gross margins also improved meaningfully, rising 44.8% from the prior quarter… For the full year 2024, we reduced operating expenses by 9.8% year-over-year…” — Derek Graham, CEO .
  • “Our newest microphone solutions can be integrated with DSPs from both our own product suite and those of separate third-party manufacturers… we are seeking to expand our footprint in… the Middle East and India…” .
  • “Moving further into 2025, we are committed to optimizing our cost structure, driving product innovation… ramp shipments for the BMA 360D and DIALOG® UVHF… With a robust balance sheet and improving product demand, we believe ClearOne is well-positioned to drive towards future growth…” .

Q&A Highlights

  • No Q4 2024 earnings call transcript was available; management’s press release commentary emphasized product ramp, interoperability, cost optimization, and regional expansion .
  • No numeric guidance clarifications were provided; non-GAAP reconciliations detail the adjustments vs GAAP, including the Q4 2023 patent cross-license gain .

Estimates Context

  • Wall Street consensus for Q4 2024 was not available via S&P Global for EPS or revenue (no estimates); actuals: revenue $2.96M and diluted EPS $(0.09) .
  • Expect sell-side models (if any) to reflect sequential improvements in revenue and margins, but continued lack of formal guidance and certification headwinds likely keep estimates conservative.
  • S&P Global disclaimer: Consensus fields were unavailable; values retrieved from S&P Global*.

*Values retrieved from S&P Global; consensus not available.

Key Takeaways for Investors

  • Sequential recovery with margin improvement: Q4 revenue +18.1% q/q and gross margin to 30% suggest early traction in ramping shipments, particularly in video and wireless microphones .
  • Year-over-year pressure persists: Revenue −29% y/y and gross margin down due to aged inventory write-offs and weaker microphone demand; profitability remains negative .
  • Cost discipline is real: FY OpEx −9.8% y/y and continued focus into 2025 should help narrow losses as revenue stabilizes .
  • Commercial overhangs: Lack of Microsoft Teams certification and lingering effects of prior shortages remain key sales headwinds; watch for progress on certification or workaround positioning .
  • Regional strategy: Increased focus and investment in Middle East and India can drive incremental demand; monitor distributor execution and pipeline conversion in these geographies .
  • Product catalysts: BMA 360D and DIALOG UVHF shipment ramps and interoperability enhancements could accelerate revenue mix toward higher-margin categories .
  • Near-term trading lens: With no formal guidance and limited consensus coverage, stock moves likely hinge on evidence of sustained sequential revenue/margin gains and tangible signs of certification/partnership traction, alongside cash preservation (cash & equivalents $1.42M at year-end) .