Executive Summary

Revenue increased 20% year over year to $8.723M, driven by balanced growth across Precision Electronic Solutions (+21%), Power Electronics & Displays (+21%), and RF Solutions (+19%), but gross margin fell to 25% and operating expenses doubled on financing-related issuance costs, resulting in a wider net loss of $(2.464)M and diluted EPS of $(0.42) .
New orders (bookings) fell 43% to $5.279M and backlog declined 4% to $26.828M, signaling near‑term demand softness versus the prior year .
Management implemented a ~$1.7M reduction in force, reported “substantial doubt” about going concern, and disclosed a need to raise ~$5.0M of near‑term liquidity with $3.3M notes maturing October 6, 2023, making funding the key catalyst/risk .
The company announced a 2023 revenue target of $40M, broadening relationships across defense and medical markets; delivery and financing execution will determine valuation trajectory .

What Went Well and What Went Wrong

What Went Well

Segment growth and mix: Precision (+21%), Power (+21%), and RF (+19%) all grew year over year, reflecting execution across defense and medical programs .
Non‑cash fair value gains helped offset interest: gains on notes and warrants boosted other income to $1.334M in Q1, partially mitigating the operating loss .
Strategic positioning: Management highlighted strengthened RF filter solutions and expanded medical technology offerings, with opportunities from global defense budgets and a $40M 2023 revenue target. “We expect the increase in orders for precision electronics solutions to enable defense and medical applications…to carry over throughout 2023” (CEO Jonathan Read) .

What Went Wrong

Bookings and backlog softness: Q1 bookings dropped 43% to $5.279M, and backlog dipped 4% to $26.828M; Q1 2022 included a $1.5M prime contractor order that did not repeat .
Margin compression and cost pressure: Gross margin fell to 25% (from 34%), with inventory obsolescence in RF and fixed‑price contract overruns affecting Power Electronics; operating expenses rose on $1.2M issuance costs and higher legal/audit .
Liquidity and going concern: Management disclosed substantial doubt over the next 12 months, noted Ault funding cessation, and the need to raise ~$5.0M of working capital, while $3.3M senior notes come due October 6, 2023 .

Financial Results

Metric	Q3 2022 (older)	Q1 2022 (older)	Q1 2023 (newer)
Revenue ($USD Millions)	$7.783	$7.244	$8.723
Gross Profit ($USD Millions)	$2.334	$2.493	$2.163
Gross Margin %	30%	34%	25%
Operating Expenses ($USD Millions)	$3.196	$2.984	$5.954
Net Loss to Common ($USD Millions)	$(0.737)	$(0.497)	$(2.464)
Diluted EPS ($)	$(0.20)	$(0.17)	$(0.42)
Adjusted EBITDA ($USD Millions)	$(0.274)	$(0.076)	$(1.537)

Segment revenue (year-over-year comparison):

Segment Revenue ($USD Millions)	Q1 2022 (older)	Q1 2023 (newer)
Precision Electronic Solutions	$3.254	$3.941
Power Electronics & Displays	$2.479	$2.991
RF Solutions	$1.511	$1.791
Total	$7.244	$8.723

KPIs:

KPI ($USD Millions)	Q1 2022 (older)	Q1 2023 (newer)
Bookings – Precision	$3.886	$2.632
Bookings – Power	$3.409	$1.815
Bookings – RF	$1.940	$0.832
Bookings – Total	$9.235	$5.279
Backlog – Precision	$10.297	$9.746
Backlog – Power	$7.646	$7.916
Backlog – RF	$10.015	$9.166
Backlog – Total	$27.958	$26.828

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	N/A	$40M target	Initiated

Earnings Call Themes & Trends

No Q1 2023 earnings call transcript was filed. Narrative trends from recent quarters:

Topic	Previous Mentions (Q3 2022)	Current Period (Q1 2023)	Trend
Supply chain	Higher freight/inflation and extended lead times compressed margins; RF margin pressure; Power contract overruns	RF saw obsolescence charge; Power margin at 5% on a completed fixed-price contract; supply chain improvement cited	Easing but still a headwind
Bookings/Backlog	Bookings +21% YTD and backlog +47% vs prior year; strong Defense & Power	Bookings −43%; backlog −4% vs prior year; Q1 2022 large order did not repeat	Softening demand
Liquidity/Going Concern	Negative working capital; reliance on parent funding	“Substantial doubt” going concern; ~$5.0M funding need; $3.3M notes due Oct 6, 2023	Deteriorated
R&D/Execution	Ongoing product development; EW platform niche strategy	Adjusted EBITDA more negative; cost actions (RIF ~$1.7M over 12 months)	Cost focus
Macro/Defense	Backlog strength across defense; customer concentration	Press release cites demand from defense and medical due to global tensions and inflation	Mixed: opportunity vs execution risk

Management Commentary

“Conflict and tensions have spurred investment in defense…We expect the increase in orders for precision electronics solutions to enable defense and medical applications that fueled growth in bookings and backlog in Q4 2022 to carry over throughout 2023” — Jonathan Read, CEO .
The company set a 2023 revenue target of $40M and emphasized expanding relationships with U.S. DoD, global defense ministries, Tier‑1 contractors, and medical customers .

Q&A Highlights

No Q1 2023 earnings call transcript was filed; therefore, analyst Q&A highlights are unavailable.

Estimates Context

Wall Street consensus via S&P Global was unavailable for GIGA (ticker mapping missing). As a result, comparisons to consensus for Q1 2023 EPS and revenue cannot be provided.

Key Takeaways for Investors

Q1 revenue growth of 20% year over year was broad‑based across segments, but margin compression (25% gross margin) and issuance‑related costs drove a wider loss; monitor margin recovery and cost discipline through 2023 .
Demand signals weakened: bookings fell 43% and backlog dipped 4%; near‑term pipeline conversion is the key determinant of revenue trajectory versus the $40M 2023 target .
Liquidity is the central risk/catalyst: management disclosed “substantial doubt” and the need to raise ~$5.0M; $3.3M senior notes mature October 6, 2023, with restrictive covenants across recent financings .
Segment execution remains intact: Precision, Power, and RF grew year over year; resolving fixed‑price overruns and RF obsolescence, plus supply chain stabilization, should aid margins .
Non‑cash fair value gains on notes/warrants bolstered other income; these are not recurring cash drivers—investors should focus on core operating cash flow trends .
Strategic breadth across defense and medical end‑markets is positive, but customer concentration and fixed‑price exposure amplify execution risk in inflationary periods .
Trading implications: near‑term stock moves likely hinge on financing announcements, order conversion/backlog updates, and margin stabilization progress against guidance .

GRESHAM WORLDWIDE, INC. (GIGA)·Q1 2023 Earnings Summary