Socket Mobile Reports Second Quarter 2024 Results
Rhea-AI Summary
Socket Mobile (NASDAQ: SCKT) reported its Q2 2024 financial results, showing a slight revenue decrease of 0.7% year-over-year to $5.08 million. The company faced challenges in the specialty retail sector, its primary revenue source. Key highlights include:
- Gross margin of 50.9%, down from 51.8% in Q2 2023
- Operating expenses increased 6% year-over-year to $3.1 million
- Operating loss widened to $535,000, up 84% from Q2 2023
- Cash balance of $2.1 million as of June 30, 2024
To address challenges, Socket Mobile is investing in new products like the SocketCam C860 app and expanding into new markets beyond retail. The company aims to reduce dependence on the retail sector and drive growth through innovative solutions for various industries.
Positive
- Sequential revenue increase of 2.1% compared to Q1 2024
- Gross margin improvement from 50.3% in Q1 2024 to 50.9% in Q2 2024
- Introduction of new products like SocketCam C860 app and XtremeScan/DuraScan Wear for market expansion
Negative
- Revenue decreased 0.7% year-over-year to $5.08 million
- Operating loss increased 84% year-over-year to $535,000
- Operating expenses rose 6% compared to the prior year's period
- Cash balance declined from $2.8 million at the end of 2023 to $2.1 million
News Market Reaction – SCKT
On the day this news was published, SCKT declined 5.31%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Second Quarter 2024 Financial Highlights:
- Revenue of
$5.08 million 0.7% decrease compared to$5.12 million 2.1% sequential increase compared to$4.98 million - Gross margin of
50.9% versus51.8% in the prior year's quarter and50.3% in the preceding quarter. - Operating expenses were
$3.1 million 6% increase compared to the prior year's period and increased4% compared to$3.0 million - Operating loss amounted to
$535,000 84% from$292,000 10% from a loss of$485,000 - Cash balance on June 30, 2024 was approximately
$2.1M $2.8M
"The weakness of the specialty retail sector, our primary revenue source, presented significant challenges during Q2. This resulted in lower-than-anticipated revenue for the quarter and impacted our overall financial performance," said Kevin Mills, President, and Chief Executive Officer.
"Anticipating the continued challenges and uncertainties in the specialty retail sector, we are proactively investing in and promoting new products while also exploring opportunities beyond this market. Our advanced SocketCam C860 app exemplifies this strategy by turning any mobile device into a robust scanning solution, capable of tackling even damaged or difficult-to-read barcodes in adverse lighting conditions. Recently, we have expanded C860 functionality to integrate with Flutter-based mobile apps. This software solution, C860, is available through in-app purchases. Additionally, our ultra-rugged XtremeScan and DuraScan Wear hands free products offer versatile barcode scanning capabilities in rigorous environments like warehousing, manufacturing, and distribution. By investing in and promoting these solutions, we aim to drive company growth across new markets and reduce our dependence on the retail sector," continued Mr. Mills.
"We look forward to your participation in the upcoming conference call, where we will provide an update on the status of market traction of our new products." concluded Mr. Mills.
Conference Call
Management of Socket Mobile will hold a conference call today at 2 P.M. Pacific (5 P.M. Eastern) to discuss the quarterly results and outlook for the future. The dial-in number to access the live conference call is (800) 237-1091 toll-free from within the
About Socket Mobile, Inc.
Socket Mobile is a leading provider of data capture and delivery solutions for enhanced productivity in workforce mobilization. Socket Mobile's revenue is primarily driven by the deployment of third-party barcode-enabled mobile applications that integrate Socket Mobile's cordless barcode scanners and contactless readers/writers. Mobile Applications servicing the specialty retailer, field service, digital ID, transportation, and manufacturing markets are the primary revenue drivers. Socket Mobile has a network of thousands of developers who use its software developer tools to add sophisticated data capture to their mobile applications. Socket Mobile is headquartered in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding new mobile computer and data collection products, including details on the timing, distribution, and market acceptance of the products, and statements predicting trends, sales, market conditions, and opportunities in the markets in which we sell our products. Such statements involve risks and uncertainties, and actual results could differ materially from the results anticipated in such forward-looking statements as a result of a number of factors, including, but not limited to, the risk that our new products may be delayed or not rollout as predicted, if ever, due to technological, market, or financial factors, including the availability of necessary working capital, the risk that market acceptance and sales opportunities may not happen as anticipated, the risk that our application partners and current distribution channels may choose not to distribute the new products or may not be successful in doing so, the risk that acceptance of our new products in vertical application markets may not happen as anticipated, and other risks described in our most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission.
Socket Mobile Investor Contact:
Lynn Zhao
Chief Financial Officer
510-933-3016
lynn@socketmobile.com
Socket Mobile is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective owners.
© 2024, Socket Mobile, Inc. All rights reserved.
Socket Mobile, Inc. | ||||
Condensed Summary Statements of Operations (Unaudited) | ||||
(Amounts in thousands except per share amounts) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2024 | 2023 | 2024 | 2023 | |
Revenue | $ 5,081 | $ 5,117 | $ 10,059 | $ 9,429 |
Cost of revenue | 2,497 | 2,466 | 4,970 | 4,705 |
Gross margin | 2,584 | 2,651 | 5,089 | 4,724 |
Gross margin percent | 50.9 % | 51.8 % | 50.6 % | 50.1 % |
Research & development | 1,232 | 1,190 | 2,440 | 2,437 |
Sales & marketing | 1,154 | 1,004 | 2,185 | 2,011 |
General & administrative | 733 | 749 | 1,484 | 1,523 |
Total operating expenses | 3,119 | 2,943 | 6,109 | 5,971 |
Operating income (loss) | (535) | (292) | (1,020) | (1,247) |
Interest expense, net | (73) | (55) | (145) | (93) |
Income tax benefit (expense) | -- | (166) | -- | (166) |
Net income (loss) | $ (608) | $ (513) | (1,165) | (1,506) |
Net income (loss) per share: | ||||
Basic | $ (0.08) | $ (0.06) | $ (0.16) | $ (0.18) |
Fully diluted | $ (0.08) | $ (0.06) | $ (0.16) | $ (0.18) |
Weighted average shares outstanding: Basic Fully diluted | 7,572 7,572 | 7,164 7,164 | 7,511 7,511 | 7,135 7,135 |
Socket Mobile, Inc. | ||
Condensed Summary Balance Sheets | ||
(Amounts in Thousands) | ||
(Unaudited) June 30, 2024 | December 31, | |
Cash | $ 2,117 | $ 2,827 |
Accounts receivable | 2,550 | 1,700 |
Inventories | 5,186 | 5,409 |
Deferred costs on shipments to distributors Other current assets | 562 247 | 323 441 |
Property and equipment, net | 2,671 | 3,033 |
Deferred tax assets | 10,112 | 10,112 |
Intangible assets, net | 1,496 | 1,559 |
Operating leases right-of-use assets | 2,853 | 3,088 |
Other long-term assets | 249 | 250 |
Total assets | $ 28,043 | $ 28,742 |
Accounts payable and accrued liabilities | $ 2,537 | $ 2,185 |
Subordinated convertible notes payable, net of discount | 150 | 150 |
Subordinated convertible notes payable, net of discount-related party | 2,839 | 2,836 |
Deferred revenue on shipments to distributors | 592 | 826 |
Deferred service revenue | 34 3,065 | 33 3,292 |
Total liabilities | 9,217 | 9,322 |
Common stock | 68,962 | 68,391 |
Accumulated deficit | (49,098) | (47,933) |
Treasury stock | (1,038) | (1,038) |
Total equity | 18,826 | 19,420 |
Total liabilities and equity | $ 28,043 | $ 28,742 |
*Derived from audited financial statements. | ||
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SOURCE Socket Mobile, Inc.
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