Executive Summary

Q3 revenue fell 40% YoY to $5.01M with gross margin compressing to 40.7%; diluted EPS was ($0.40). Management cited lingering supply chain issues that impeded bookings and shipments during the quarter .
The balance sheet was de‑levered via a $12M equity raise in July; convertible debentures were fully repaid by Q3 end, though a small $0.23M note payable remained outstanding .
Order momentum strengthened post‑quarter: $3M of new orders, a $13M backlog (+42% YoY), first deliveries on a $2.8M U.S. Army ISR receiver contract, and incremental public safety and international broadcast orders .
No formal financial guidance was provided. Management emphasized ongoing supply-chain realignment, operational discipline, and leveraging growth verticals (military-government, live production, satcom) as potential stock catalysts .

What Went Well and What Went Wrong

What Went Well

De‑leveraging and liquidity actions: July offering (~$12.0M gross) eliminated 2018 convertible debt; convertible notes were fully satisfied by Q3 end (debt discounts amortized to zero) .
Order intake and backlog strength post‑quarter: $3M new orders and a ~$13M backlog (+42% YoY) across live production, mil‑gov, and satcom; first U.S. Army ISR contract delivery completed .
Management quote: “We are confident that we are well‑positioned operationally to profitably build our order book, as we focus on pursuing new growth areas, as well as capturing the ongoing demand…” (CEO Roger Branton) .

What Went Wrong

Top‑line and margin pressure: Q3 revenue down 40% YoY to $5.01M; gross margin fell to 40.7% from 49.2% in Q3’18, driven by supply‑chain disruptions affecting shipments .
Losses widened: Operating loss ($4.90M) and net loss ($5.00M), with diluted EPS of ($0.40); G&A stayed elevated and FX losses were a headwind .
Nasdaq compliance risk re‑emerged: Received a minimum-bid price deficiency notice on Sep 26, 2019; 180‑day cure period granted to Mar 24, 2020 .

Financial Results

Income statement summary – 2019 progression (oldest → newest)

Metric	Q1 2019	Q2 2019	Q3 2019
Revenue ($M)	$8.206	$7.352	$5.007
Gross Margin %	49.7% (calc from Rev $8.206 , Cost $4.127 )	52.2% (calc from Rev $7.352 , Cost $3.516 )	40.7%
Operating Income ($M)	($2.666)	($3.210)	($4.898)
Net Income ($M)	($3.090)	($3.575)	($4.995)
Diluted EPS	($1.62)	($1.79)	($0.40)

Notes: Gross margin for Q1–Q2 calculated as (Revenue − Cost of components and personnel)/Revenue based on reported line items .

Q3 YoY and QoQ comparison; estimates

Metric	Q3 2018	Q3 2019	YoY %	Q2 2019	QoQ %	Street Consensus	Vs. Consensus
Revenue ($M)	$8.325	$5.007	(39.9)% (calc from 8.325 , 5.007 )	$7.352	(31.9)% (calc from 7.352 , 5.007 )	N/A (SPGI data unavailable)	N/A
Diluted EPS	($1.30)	($0.40)	n.m.	($1.79)	n.m.	N/A (SPGI data unavailable)	N/A

Estimates context: S&P Global consensus could not be retrieved via the tool at this time; as such, estimate comparisons are not available (see Estimates Context section).

Disaggregated revenue – Geography (Q3 only)

Geography	Q3 2019 ($M)	Q3 2018 ($M)
North America	$2.273	$5.761
Europe	$1.248	$0.815
Asia	$0.927	$1.331
South America	$0.097	$0.057
Rest of World	$0.462	$0.361
Total	$5.007	$8.325

Disaggregated revenue – Revenue source (Q3 only)

Revenue Source	Q3 2019 ($M)	Q3 2018 ($M)
Equipment sales	$4.702	$7.350
Installation, integration & repairs	$0.276	$0.937
Warranties	$0.036	$0.038
Other	($0.007)	$0.000
Total	$5.007	$8.325

KPIs and balance sheet items

KPI / Metric	Q3 2019	Context
Ending cash	$0.505M	Cash balance at 9/30/2019.
Convertible notes outstanding	$0.0M	Fully satisfied by Q3 end (vs. $5.8M at Q2) .
Note payable	$0.231M	Single note maturing 9/18/2020 at 8.022% .
Backlog (post‑quarter)	~$13.0M; +42% YoY	Announced Nov 6, 2019.
New orders (post‑quarter)	$3.0M cumulative (plus $0.117M police order; $0.160M North Africa)	November 2019 flow.
U.S. Army ISR contract	$2.8M; first delivery completed Nov 5	Post‑quarter execution.

Non‑GAAP: Company disclosed adjusted net loss of $3.8M and adjusted EBITDA loss of $2.9M for Q3 (reconciliations referenced in Corporate Update) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 2019	None	None	No formal guidance provided .
Margins	FY/Q4 2019	None	None	No formal guidance provided .
Liquidity actions	2H 2019	N/A	Planning another equity raise in Nov 2019; expect $2.8M Army cash collection by year‑end	Operational/liquidity update, not numeric guidance .

Earnings Call Themes & Trends

Note: The company suspended traditional earnings calls in 2019, opting for written Corporate Updates; Q&A was not held in Q3 2019 .

Topic	Q1 2019 (prior)	Q2 2019 (prior)	Q3 2019 (current)	Trend
Supply chain	Not highlighted	Not highlighted	Lingering disruptions impeded bookings/shipments, pressured results	Deteriorated in Q3, remediation underway
De‑leveraging	Convertible notes outstanding ($6.26M gross)	$5.81M outstanding; plan to repay with July raise	Convertible notes fully satisfied by Q3 end	Material improvement
Orders/backlog	Not disclosed	Not disclosed	Post‑Q: $3M orders; ~$13M backlog (+42% YoY)	Improving demand indicators
R&D and cost discipline	R&D cut to $0.93M vs $2.44M YoY	R&D $0.87M vs $2.93M YoY	R&D $0.80M vs $1.29M YoY; continued cost actions	Sustained spend reduction
Nasdaq compliance	Working to regain; reverse split authorized 5/7/2019	Regained compliance May 29, 2019	New deficiency letter Sep 26, 2019; 180‑day cure	Re‑emerged risk
Internal controls	Material weaknesses persisted	Persisting; ERP consolidation planned	Persisting; ERP go‑live testing Oct 2019	Remediation in progress
Mil/Gov and satcom	Not highlighted	Not highlighted	Army ISR deliveries; NATO BOA; satcom orders $1.6M	Strategic traction

Management Commentary

Strategic focus and supply chain remediation: “This allowed the Company to de‑lever its balance sheet and be free of all funded debt for the first time. However, our performance was impeded… by lingering negative effects to our supply chain… investments we started making to realign the supply chain began to bear fruit.” — Roger Branton, CEO .
Demand outlook: “We are gratified to see organic growth in our key verticals and a strong increase in our order backlog…” — John Payne, President & COO (Nov 6 orders update) .

Q&A Highlights

No Q&A: The company did not hold an earnings call; it communicated via press release and corporate update, consistent with its August decision to forgo calls for cost and disclosure‑efficiency reasons .

Estimates Context

Wall Street consensus (S&P Global) was not available via the tool at this time; therefore, we cannot provide beat/miss vs. consensus for revenue or EPS. Given VISL’s microcap profile and 2019 communication shift to written updates, formal sell‑side estimates appear limited; we default to reported GAAP and disclosed non‑GAAP metrics in this recap [Tool error on S&P Global estimates retrieval].

Key Takeaways for Investors

Near‑term: Expect choppy reported results as supply‑chain realignment completes; watch for conversion of ~$13M backlog to revenue and margin stabilization back toward ~50% gross levels seen in 1H19 once shipment cadence normalizes .
Balance sheet inflection: July capital raise removed high‑cost convertible overhang; focus shifts to working capital and execution (note a $0.23M note payable remains) .
Demand signals: Post‑quarter orders across mil‑gov, public safety, and international broadcast, plus NATO BOA and Army ISR deliveries, corroborate pipeline health; order momentum is a potential upside catalyst if conversion is timely .
Cost discipline sustained: R&D and opex reductions from 2018 restructuring persist; monitor for operating leverage as revenue recovers .
Compliance/controls watch‑items: Renewed Nasdaq bid‑price deficiency and ongoing internal control weaknesses remain overhangs; ERP adoption and any corporate actions (e.g., split) to regain listing are key milestones .
Trading setup: With estimate comparisons unavailable and limited coverage/liquidity, stock may be event‑driven around order announcements, large contract deliveries, and any capital markets actions or listing updates .

Vislink Technologies, Inc. (VISL)·Q3 2019 Earnings Summary