Name: Presto Automation Inc. Q3 2024 Earnings Call
Start: 2024-05-22T21:01:00.000Z

Executive Summary

Q3 FY2024 revenue was $4.45M, down 32.6% year over year, while EPS was -$0.33; revenue beat by $0.38M but EPS missed by $0.20 versus consensus, driven by mix and ongoing restructuring costs .
Management exited the Touch pay-at-table business to focus exclusively on Presto Voice AI, piloting “Pure AI” (no human-in-the-loop) and Spanish-language ordering capabilities to accelerate accuracy and deployment at drive-thru customers .
Liquidity actions included $3M financing and lender forbearance extensions, but the outlook noted near-term financing needs and going-concern risks absent additional capital; Q4 FY2024 revenue guidance was set at $1.6–$1.9M .
Stock catalysts: narrative shift to end-to-end Voice AI, near-term revenue guide lower than recent run-rate, and heightened liquidity risk may drive volatility around capital raises and customer rollouts .

What Went Well and What Went Wrong

Strategic focus: Presto “took decisive action to focus exclusively on its leading Presto Voice AI solution for drive-thru operators by winding down the Touch pay-at-table solution,” clarifying the roadmap and resource allocation .
Product progress: Successful pilots of “Pure AI” for fully automated order-taking and Spanish Voice AI, with early evidence of faster ML improvement and inclusive guest experience, positioning for broader rollouts after on-site testing .
Revenue beat: Q3 revenue of $4.45M exceeded the ~$4.07M consensus by $0.38M, underscoring stability in the core despite product portfolio simplification .

Profitability/margins: Net loss of ($18.1)M and Adjusted EBITDA loss of ($12.2)M reflect heavy operating costs, impairments, and financing impacts; gross profit was $0.17M, highlighting thin gross margin amidst cost of revenue and depreciation .
Liquidity and going concern: Company disclosed lender forbearance and near‑term capital needs with risk factors indicating substantial doubt about continuing as a going concern without additional financing .
EPS miss: EPS of -$0.33 missed consensus by $0.20, reflecting higher opex and financing costs; prior decline in platform and transaction revenues tied to Touch contract terminations and lower hardware upgrades earlier in the year .

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$4.89	$4.893	$4.452
Diluted EPS ($)	-$0.27	-$0.31	-$0.33
Net Income ($USD Millions)	$5.4	N/A	($18.095)
Adjusted EBITDA ($USD Millions)	($8.8)	N/A	($12.2)

Notes:

Q3 YoY revenue change: -32.62% YoY .
Q1 net income was positive due to non-GAAP adjustments and fair value effects; management provides reconciliations in press releases .

Segment Revenue ($USD Millions)	Q1 2024	Q2 2024	Q3 2024
Platform	$2.1	N/A	$2.191
Transaction	$2.8	N/A	$2.261
Total	$4.9	$4.893	$4.452

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$4.452	$4.072	+$0.380
EPS ($)	-$0.33	-$0.13 (derived from $0.20 miss)	-$0.20

KPI	Q1 2024	Q2 2024	Q3 2024
Voice AI installed locations (units)	400+	N/A	Pure AI pilot and Spanish Voice AI pilot underway (qualitative)

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Millions)	Q4 FY2024	N/A	$1.6–$1.9	New; below recent $4.5–$4.9M quarterly run rate
Liquidity/Forbearance Conditions	Near-term	N/A	Forbearance extended with capital raise thresholds; negotiation to transfer lender position contingent on $20M consideration and ≥$12M operating capital evidence	Heightened liquidity constraints and conditional forbearance

Topic	Previous Mentions (Q1 & Q2 FY2024)	Current Period (Q3 FY2024)	Trend
AI/Technology initiatives	Emphasis on Voice AI adoption; California $20 minimum wage as a catalyst; platform and transaction revenue declines tied to Touch customer changes	Pilots of Pure AI (no human-in-the-loop) and Spanish Voice AI ordering; exit Touch to focus on Voice	Narrative consolidates around Voice AI; product acceleration and simplification
Product portfolio strategy	Dual track (Voice, Touch) with cost reduction and efficiency initiatives	Winding down Touch, exclusive focus on Voice	Portfolio rationalization completed
Liquidity/Capital	Capital raised via equity in Q1; canceled Q2 earnings call, 10-Q filed; ongoing lender amendments	$3M financing; forbearance extensions; conditional lender transfer discussions; going concern risks emphasized	Liquidity risk heightened; financing milestones critical
Revenue trajectory	Q1/Q2 revenue ~ $4.9M each	Q3 revenue $4.45M; Q4 guide $1.6–$1.9M	Guide implies sequential decline tied to portfolio changes and rollout phasing
Regulatory/legal risk	Standard forward-looking risk factors	Explicit going-concern risk and covenant compliance challenges if capital not raised	Risk disclosure intensifies

“We are encouraged by the significant progress we are making in our Voice AI solution across many operating metrics as we continue its roll-out to our drive-thru customers.” — Gee Lefevre, Interim CEO .
“Presto took decisive action to focus exclusively on its leading Presto Voice AI solution for drive-thru operators by winding down the Touch pay-at-table solution.” .
Liquidity position was updated with $3M financing and forbearance terms, including potential lender debt transfer contingent on $20M and ≥$12M operating capital, highlighting near-term capital priorities .

The public transcript confirms participants (Interim CEO and Interim CFO) and notes that reconciliations of non-GAAP to GAAP measures are in the press release; access to full Q&A details is limited behind paywalls, but management reiterated guidance for Q4 FY2024 on the call .

S&P Global consensus via tool was unavailable due to missing CIQ mapping; however, third-party aggregators indicate Q3 revenue consensus ~$4.07M (actual $4.45M, surprise +$0.38M) and EPS miss of $0.20 (actual -$0.33), implying consensus EPS ~ -$0.13. These suggest a revenue beat and EPS miss for the quarter .
Given the Q4 guide of $1.6–$1.9M, Street models likely need to adjust down near-term revenue and refine EBITDA/FCF trajectories to reflect portfolio exit and deployment timing .

Focus shift to Voice AI is strategically sound; Pure AI and Spanish features can improve accuracy and scalability, but monetization depends on pace of deployments and customer adoption in drive-thru .
Near-term revenue guide ($1.6–$1.9M) is a reset versus recent ~$4.5–$4.9M run-rate; expect model revisions and increased sensitivity to rollout milestones .
Liquidity remains the key risk; watch for additional equity/debt transactions, lender negotiations, and covenant updates as potential stock movers .
EPS miss reflects opex and financing drag; margin improvement likely requires scale in Voice deployments and COGS efficiencies (e.g., lower depreciation/impairments) .
Segment dynamics show Platform and Transaction both trending lower vs prior year; portfolio simplification (exiting Touch) should align resources to Voice but may pressure near-term revenue before replacement growth materializes .
Trading lens: headlines around financing, forbearance, and large customer pilots will likely drive volatility; upside hinges on demonstrated conversion of pilots to scaled deployments and proof points in Pure AI accuracy metrics .
Monitor quarterly results pages and SEC filings for updated guidance and liquidity disclosures (including any 8-Ks on financings or lender agreements) .