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LUNA INNOVATIONS INC (LUNA)·Q4 2024 Earnings Summary

Executive Summary

  • Luna provided preliminary FY 2024 results: revenue $110–$115M, bookings $125–$130M, and year-end backlog expected to exceed $40M; H2 revenue was ~30% higher than H1 and H2 bookings ~40% higher than H1 .
  • Management accelerated delisting from Nasdaq and will deregister; Form 25 was anticipated around Feb 6, 2025 with delisting effective ~10 days after and deregistration under 12(b) ~90 days after filing; focus shifts from public-company compliance to operations and strategic alternatives (Evercore engaged) .
  • Nasdaq suspended trading Jan 7, 2025; shares moved to the OTC Expert Market, restricting quotes; management stated operations unaffected and promised a broader business update (delivered via Jan 27 press release) .
  • Due to ongoing restatements of 2022–2023 financials and delinquent filings, quarterly detail (including Q4 2024 EPS/margins) and prior quarter reported results were not available; S&P Global consensus estimates could not be retrieved (mapping unavailable) .

What Went Well and What Went Wrong

What Went Well

  • Bookings and revenue improved meaningfully in 2H24; preliminary FY 2024 bookings $125–$130M and revenue $110–$115M, with H2 bookings ~+40% vs H1 and H2 revenue ~+30% vs H1, and backlog expected to exceed $40M .
  • Tier-1 customer traction in data center, AI, and quantum markets; “secured numerous exciting Tier 1 customer wins in the rapidly expanding data center, artificial intelligence, and quantum spaces” (Will Denman, SVP & GM Optical Communications Test) .
  • EMEA wins in Oil & Gas and Power Utilities and successful Atlas Interrogation Unit launch with state-of-the-art Distributed Acoustic Sensing; early phases of Silixa integration progressed well (Thomas Oldemeyer, SVP & MD EMEA) .
  • CEO tone on resilience and improved performance: “our team demonstrated resilience… with results materializing in the second half of 2024” and “improved performance in both bookings and revenue during the second half of 2024” (Kevin Ilcisin, CEO) .

What Went Wrong

  • Filing delinquency and ongoing restatement of 2022–2023 revenue recognition led to suspension/delisting from Nasdaq and move to OTC Expert Market, reducing liquidity and visibility .
  • Formal quarterly EPS/margin disclosure unavailable for Q4 2024 due to delayed filings and planned deregistration; management suspended SEC reporting obligations with Form 15 after delisting .
  • Credit agreement amendments waived leverage/FCCR tests through FY 2025 and set minimum EBITDA thresholds that were negative for sequential quarters (e.g., ($2.3M) for 3 months ending Dec 31, 2024), signaling near-term profitability pressure .

Financial Results

MetricFY 2023FY 2024 (Prelim)Notes
Revenue ($USD Millions)Unavailable due to restatement/delinquent filings $110–$115 Preliminary unaudited ranges
Bookings ($USD Millions)Unavailable due to restatement/delinquent filings $125–$130 Preliminary unaudited ranges
Backlog ($USD Millions)Unavailable due to restatement/delinquent filings >$40 As of Dec 31, 2024
H2 vs H1 Revenue Growth (%)N/A ~+30% Preliminary commentary
H2 vs H1 Bookings Growth (%)N/A ~+40% Preliminary commentary

Segment breakdown and quarterly KPIs (EPS, margins) were not disclosed for Q4 2024 due to ongoing restatements and delinquent filings .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024None disclosed (filings delinquent) Preliminary $110–$115M n/a
BookingsFY 2024None disclosed Preliminary $125–$130M n/a
BacklogYE 2024None disclosed >$40M n/a
Listing statusEarly 2025Nasdaq listing at risk Form 25 around Feb 6, 2025; delisting ~10 days after; deregistration under 12(b) ~90 days after filing Accelerated delisting/deregistration
Covenant testingFY 2024–FY 2025Prior leverage/FCCR tests applicableLeverage/FCCR tests not tested for 9/30/24, 12/31/24, 3/31/25, 6/30/25, 9/30/25, 12/31/25; minimum quarterly EBITDA thresholds set (e.g., ($2.3M) for Q4 2024 period) Relief/forbearance and floors

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current PeriodTrend
Regulatory/legal (restatement)Special Committee reviewing revenue recognition; 2022 and 2022–2023 interim financials should not be relied upon; filings delayed Preliminary FY 2024 metrics disclosed; continued plan to deregister and suspend reporting with Form 15 Ongoing remediation; moving off public reporting
Listing/delisting & marketNotices of non-compliance; risk of delisting Nasdaq suspension Jan 7, 2025; move to OTC Expert Market; accelerated delisting/deregistration Liquidity/visibility reduced; administrative cost savings prioritized
Strategic alternativesIndications of sale process milestones and advisor engagement in financing docs Evercore engaged as financial advisor; exploration of strategic alternatives Active process
Product/market wins (AI/data center/quantum)Not available in Q2/Q3 2024 filings (delinquent) Tier-1 wins in data center, AI, quantum; Atlas DAS launch; multi-million EMEA wins Positive momentum
Management changesCFO transition to William Phelan (10/16/24) New CFO overseeing accounting and compliance Stabilization of finance function

Management Commentary

  • “Luna started 2024 with a series of challenges… with results materializing in the second half of 2024.” (Kevin Ilcisin, President & CEO) .
  • “Improved performance in both bookings and revenue during the second half of 2024.” (Kevin Ilcisin) .
  • “Secured numerous exciting Tier 1 customer wins in the rapidly expanding data center, artificial intelligence, and quantum spaces.” (Will Denman, SVP & GM Optical Communications Test) .
  • “We are especially proud of the strong response… Atlas Interrogation Unit… Distributed Acoustic Sensing Technology… [and] first phases of its integration of Silixa.” (Thomas Oldemeyer, SVP & MD EMEA) .
  • “Strategic decision to accelerate the delisting and terminate and suspend the Company’s reporting obligations… redirect resources from regulatory compliance to business operations… engaged Evercore.” (Kevin Ilcisin) .

Q&A Highlights

No Q4 2024 earnings call transcript was published; the company suspended/delisted and is deregistering, and quarterly SEC reporting remained delinquent and then suspended, so no Q&A content is available .

Estimates Context

  • Attempted to retrieve S&P Global consensus for Q4 2024 and FY 2024 (EPS and revenue), but ticker mapping was unavailable; therefore Wall Street consensus could not be incorporated. Values retrieved from S&P Global were unavailable due to missing CIQ mapping (SpgiEstimatesError) .
  • Given lack of consensus data and absence of reported quarterly EPS/margins, estimate comparison cannot be performed. Management-provided preliminary ranges are presented above .

Key Takeaways for Investors

  • Operational momentum improved in 2H24 with preliminary FY 2024 revenue $110–$115M, bookings $125–$130M, and backlog >$40M; near-term demand indicators look better entering 2025 .
  • The shift to OTC Expert Market and planned deregistration reduces transparency and liquidity; trading quotes are restricted, and reporting obligations suspended after Form 15, which can affect investor access and valuation multiples .
  • Credit amendments waived leverage/FCCR testing through FY 2025 and set negative minimum EBITDA floors across sequential quarters, highlighting ongoing margin pressure and the importance of execution on cost controls and backlog conversion .
  • Strategic alternatives are actively being explored with Evercore; potential corporate actions (asset sale, take-private, or strategic investment) could be a major stock catalyst once announced .
  • Finance leadership transition (new CFO) aims to strengthen accounting and compliance amid restatements; expect focus on internal controls and reporting stability even as public-company obligations wind down .
  • With consensus estimates unavailable and no quarterly EPS/margins disclosed, trading setups should emphasize headline catalysts (strategic alternatives, any transaction announcements) and operational updates rather than near-term earnings beats/misses .

Appendix: Prior Quarters and Relevant Press Releases

  • NT 10-Q (11/15/24) detailing revenue recognition review and restatements for 2022 and interim 2022–2023 periods; 2023 10-K and 2024 Q1/Q2/Q3 10-Qs were delinquent .
  • 8-K (10/16/24) announcing CFO transition to William L. Phelan, including inducement RSU and role scope .
  • 8-K (10/29/24) loan amendments waiving covenant tests through FY 2025 and setting minimum quarterly EBITDA floors; ongoing sale process requirements .
  • 8-K (01/06/25) Nasdaq suspension and OTC Expert Market move; subsequent delisting process .
  • 8-K (01/27/25) Item 2.02 furnished press release with preliminary FY 2024 bookings, revenue, backlog and strategic alternatives update; intent to accelerate delisting/deregistration .