AmpliTech Group, Inc. (AMPG) Earnings Call Transcript & Summary

Thanks, operator. I'd like to welcome everyone to the AmpliTech Group conference call covering financial results for the third quarter of fiscal 2026. The date today is Thursday, November 12, 2026. We released our third quarter earnings earlier today, and that release reports results for both the three and nine months ended September 30, 2026, as well as operational progress and an updated outlook for the full year. After our prepared remarks, the operator will open the lines so we can take your questions live. A replay and transcripts of today's call should be posted on our corporate website once they become available. Before we get started, I'd like to remind everyone that statements made on this call, including responses to questions, may be forward-looking statements under the meaning of applicable federal securities laws. Among these are statements about future revenue, anticipated shipments, production readiness, backlog conversion, customer deployments, margins, operating performance, liquidity, and market opportunities. Forward-looking statements reflect our current expectations and are not guarantees of future results. Actual performance could differ materially due to risks, including shifts in customer schedules and demand, order deferrals or cancellation, production and supply chain constraints, customer qualification and acceptance, geopolitical developments, export control, and other regulatory requirements, along with risks described in our filings with the Securities and Exchange Commission. All forward-looking statements speak only as of today, and we undertake no obligation to update them except as required by law. We encourage everyone to review the full safe harbor language in today's earnings release and in our SEC filings. With that, I'll hand the call over to our founder and Chief Executive Officer, Mr. Fawad Maqbool.

Thanks, Jorge. I also want to thank everyone joining us — shareholders, analysts, and all others on the call. Two key stories stand out from our third quarter. First, we continue to advance the company: revenue rose versus the prior year, our O-RAN 5G and Spectrum units saw considerable growth, and gross margin came in better than in the second quarter. Second, the timing of major 5G rollouts, together with how manufacturing has performed, has not matched the shipment timelines that originally supported our full-year revenue expectations; we intend to address both of these realities candidly today. Commercial momentum remains strong as well. Earlier we shared that during Q3 we secured over $17 million in purchase orders from customers, which included additional orders under radio programs already running for O-RAN. October brought in bookings of almost $25 million — a record-setting month for us. Once we disclosed those October orders, the backlog we had previously reported climbed past $52 million, another company record. One of the biggest highlights was the $21.7 million follow-on purchase order for 5G O-RAN radio that we announced on October 20, backing an Asian mobile network operator program. Earlier there was some uncertainty about this, yet we've now gotten close to fifty percent of the initial $78 million LOI, showing how dedicated our customer is to that program. Orders accumulated for that program total roughly $34 million. In a separate announcement, we disclosed a $1.03 million follow-on order for low-noise amplifiers placed by a Fortune 1000 satellite communications customer. Business is arriving routinely across our segments, repeat business included, and that rate keeps climbing as time goes on. During October, we previously shared that over 3,000 AmpliTech radio units were deployed to support a North American mobile network operator program. Those rollouts show real commercial traction, but when upcoming deliveries land still hinges on how each customer schedules its deployment. Once the quarter closed, we additionally completed a committed manufacturing line and reached production-ready standing, and we expect the first shipments during Q4. On October 27, we disclosed that our 5G Medium Power Radio Unit, MPRU, had proven interoperability with OCUDU, O-C-U-D-U, an open-source 5G wireless network software platform supported by the Linux Foundation. Defense and military uses are actually a big deal here. The software we provide helps control the way 5G radios talk to mobile devices and to the broader telecom network. That gives potential customers another software setting where they can assess our radio technology. We also finished, without issues, the qualification and onboarding steps required by a major telecom infrastructure provider, and we are now an approved vendor on that provider's very selective approved vendor list. For our 5G O-RAN platforms, that marks a meaningful commercial milestone, since it allows us to pursue bigger opportunities with this provider. We are just getting started. We work on O-RAN radio systems, RF microwave components, semiconductor distribution, MMIC design, and low-noise amplifier technologies. These serve telecom, satellite, defense, space, and quantum-related uses. That's a wide range. We continue investing in product readiness, engineering, and manufacturing infrastructure so we can support the larger opportunities we're pursuing. Given how broad and varied this portfolio is—with innovative products strategically aligned to some of the world's fastest and most transformative technologies—it's reasonable to ask why AmpliTech still isn't more widely recognized in the industry. That is precisely one reason we've increased spending on marketing, brand awareness, and engagement with strategic customers. Our products on their own are helping drive us toward the top, but we require stronger market awareness. In our view, these initiatives will substantially increase how widely AmpliTech is recognized among the industry's leading companies, strengthen where we stand competitively, and create additional opportunities to convert customer interest into significant bookings and revenue during upcoming quarters. This has been taking place steadily, though it should become more evident as we progress through the remainder of this year and into the next one. Our innovation strategy has been intentional, focused, and deeply deliberate. Rather than creating technology merely for its own sake, we have concentrated our resources on sophisticated wireless and connectivity solutions that address essential market requirements today and are expected to remain in high demand well into the future. Creating a company that has a strong tech lineup, distinctive IP, scalable operations, and a steady stream of growth prospects requires a lot of time, money, and consistent execution. That is exactly what we have been pursuing for the last several years. It might not be apparent, but this is what we have been communicating through our recent press releases. Our approach has never been focused on turning a profit right away; we have never stated that at the cost of growing over the long term. Instead, we have continually put resources into developing the technical base, sector connections, certifications, strategic alliances, and operational systems required to underpin lasting revenue expansion and, in the end, generate steady profitability. Each year, we have reported significant milestones demonstrating quantifiable advancement toward those goals while further bolstering AmpliTech's standing and trustworthiness within the worldwide wireless communications sector. Our team's achievements make me proud, and I believe we are now arriving at one of the most pivotal stages of our strategic path: the shift away from prolonged technology R&D, infrastructure spending, and market positioning toward commercial implementation, revenue growth, and enhanced financial results. That is the crux—enhanced financial results. Although the schedule for customer rollouts and revenue recognition continues to depend on multiple variables, which we will detail further along, we believe the groundwork we have laid puts AmpliTech in position to deliver increasingly concrete outcomes over the upcoming quarters. We aren't just laying the groundwork for growth anymore. Our attention is shifting more and more toward turning that groundwork into financial results we can measure and lasting value for shareholders. To all our loyal shareholders, I want to say thank you for staying patient with us through this journey. I also want to address our revenue outlook head-on. We had previously forecast $50 million in revenue for 2026, and in August we withdrew that figure. As today's press release makes clear, that earlier goal won't be achieved. Based on the customer deployment schedules, production plans, and expected shipments we currently have, we now expect full-year 2026 revenue of at least $28 million. The gap between where we started and where we now expect to land comes down largely to supply chain pressures, delays in transferring technology, longer customer evaluations, geopolitical shifts around the world, and deployment changes directed by customers, including among international mobile network operators. When we put together that earlier outlook, we relied partly on shipment projections our customers gave us that subsequently changed. Beyond that, sizable backlog awards came in later in the year than we had expected. With what 2026 has taught us, the company concluded that beginning in fiscal year 2027, AmpliTech will no longer issue formal full-year revenue guidance. That choice reflects the nature of the industry we compete in, where revenue recognition can be strongly influenced by forces beyond our control. The factors involved include deployments chosen by customers, delays, worldwide supply-chain limitations, and how readily essential electronic parts can be obtained—and demand for several of those parts has risen thanks to the rapid growth of AI-driven data centers and the infrastructure that goes with them. This is occurring across every industry, not only ours. Chips and components connected to AI are steadily becoming pricier, while delivery dates continue to slip. So there was an impact on us. As we've observed this year, shipment schedules and revenue recognition can shift considerably even when customer demand is robust and purchase orders are already secured, owing to conditions outside our direct control. Rather than issuing yearly revenue forecasts, which might not line up with the timing of customer deployments, we believe shareholders benefit more from our ongoing openness about confirmed purchase orders, backlog, production milestones, shipments, and actual financial results. This choice doesn't change how confident we are in AmpliTech's long-term growth prospects or our dedication to creating lasting shareholder value. The customer orders, production capabilities, and relationships we've announced provide the groundwork for what we're doing in 2027. Getting orders out the door as shipments, finishing customer acceptance where that step is needed, running operations more efficiently, and creating performance that lasts — those are what we are focused on. We do not view backlog as a replacement for actually delivering results. With that said, I'll turn things over to Louisa, who will walk through our third quarter financial performance and our financial position in greater detail.

Thanks, Fawad, and good afternoon to all of you. For the three months that closed on September 30, 2026, AmpliTech posted total revenues of $6.58 million, versus $6.09 million during the third quarter of 2025, which works out to 8% growth year over year. Revenue from Spectrum semiconductor materials distribution rose 36.4% year over year, reaching $2.89 million. Gross margin came in at 34.2%, up sequentially from 27.9% in the second quarter, an improvement of roughly 6.3 percentage points, and gross profit for the quarter was $2.25 million. Turning to the first nine months of the year, gross profit rose 41.1% to $7.07 million, and gross margin hit 35.3%, versus 24.2% across the first nine months of last year. From where we sit, these numbers demonstrate what our shifting product and customer mix can deliver, though margins in any single quarter may vary based on the shipments that happen in that window. The manufacturing and engineering segment generated $3.70 million in revenue, down from $3.98 million during the same quarter last year. SG&A expense reached $3.38 million, up from $2.48 million in the year-ago quarter. The rise is driven primarily by increased corporate costs — legal fees and stock-based compensation among them — as well as heavier outlays for marketing, business development, cybersecurity, and IT security programs. R&D expense came in at $860,000, versus $700,000 in the third quarter of 2025. Within that, about $440,000 came from 5G-related activity, along with approximately $420,000 from MMIC design work. For the third quarter, the net loss was $1.89 million, equal to $0.07 per basic and diluted share. That's against a net loss of about $3.09 million in Q2 of 2026, so the quarterly loss narrowed on a sequential basis; across the first nine months of 2026, revenue totaled $20 million. Gross profit rose 41.1% year over year, reaching $7.07 million versus $5.01 million, and gross margin climbed to 35.3% from 24.2% in the same period of 2025. The net loss for the nine months stands at $6.50 million. That number captures greater operating costs along with ongoing spending on technology development and commercialization, since we're getting our products and production infrastructure ready for larger-scale opportunities we expect ahead. On September 30th, 2026, our cash and cash equivalents stood at $19.48 million, and marketable securities came to $10.79 million, putting the combined figure at roughly $30.27 million. Current assets totaled $49.25 million. Working capital came in at about $42.14 million, with a current ratio of approximately 6.93. Assets overall were $76.13 million. Stockholders' equity totaled $65.72 million, versus $51.48 million in total assets and $32.86 million in stockholders' equity as of December 31st, 2025. Our stronger liquidity mostly comes from equity financing we wrapped up in 2026 — notably roughly $20.11 million in net proceeds tied to the July closing of the Series A Rights. For the first nine months of 2026, net cash used in operating activities came to $8.48 million. Based on where our cash, marketable securities, and working capital stand today, plus our current forecasts, management thinks we can meet routine operating obligations and our planned capital requirements for at least the next 12 months. We continue to keep a close eye on spending, working capital, and capital allocation as we execute our customer program. That concludes my financial review. I'll turn the call back over to Fawad now.

Thanks, Louisa. I’ll turn now to the strategic view. AmpliTech’s priorities haven’t changed: delivering on the customer programs we’ve already funded, moving 5G O-RAN production and deployment readiness forward, broadening our 5G O-RAN business development work, stepping up distribution activity in our Spectrum division, continuing to make solid progress in RF and MMIC innovation, and keeping strict discipline on operating expenses and how we deploy capital. Across every one of those areas, we have to remain ahead of the competition, and AmpliTech has never been a me-too company. So the money we’ve raised needs to go into securing a clear edge over our competitors across the next three to four years. Right now, that edge does exist across all the technology we hold; that explains why we’ve pursued a focused development effort and invested in engineering, manufacturing readiness, and supply chain capability ahead of the revenue those programs are expected to bring in. You may see us as bullish on the company, but yes, we are bullish, and that is our job; it’s why we’re doing this, and we have strong confidence that the results will become evident. Those investments come with near-term costs. What we’re focused on now is converting that readiness and our customer commitments into deliveries and revenue flowing more efficiently during 2027 and 2028, while recognizing that customer schedules and production execution are still important variables. The scale of the customer opportunities and the order activity announced since quarter end encourages us, but as you expect, the business has to be judged on operational delivery and financial performance. With the stronger balance sheet, we have this added capacity to execute while we keep managing those risks. Before we open the phone lines, I’d like Jorge to address a number of questions we expect investors may have after today’s release, as well as questions investors have already sent us.

Thank you, Fawad. I'll jump straight into the investor questions we've received. Why didn't the company hit the 2026 revenue target it originally set? Our first outlook was put together at the close of fiscal year 2025, and it took into account the shipment forecast and production expectations our customer had given us at that point. Those forecasts covered not only orders already booked but also an expectation that follow-on orders would come in much earlier during 2026. Those schedules shifted afterward, and certain sizable purchase orders, such as the record $21.7 million PO we reported recently, came in later in the year than we had initially expected. Things like supply-chain bottlenecks, slow technology transfers, the timing of customer evaluations, geopolitical issues, and postponed deployments also shaped the way commercial demand converted into revenue we could report. Back in August we withdrew the original target, and our refreshed guidance now stands at a minimum of $28 million for the full year 2026. That number is built on present schedules and shipments we expect to make. What we ask of investors is to judge us on hitting that plan rather than on backlog by itself. Worth stressing: no orders or business were lost. The situation was simply that deliveries scheduled with our customer got pushed out. Moving to the next question — what underpins management's confidence in the revised outlook of at least $28 million? What we now expect is based on the details we have at this point from customer deployment schedules, our production plans, and anticipated shipments. It's a revised view of what we think can be booked as revenue in 2026, not a belief that every order will convert on a faster timeline. Next question: how should shareholders read the backlog that topped $52 million in October? That backlog reflects major customer order activity that has been publicly disclosed, including the $21.7 million follow-on order for the Asian mobile network operator program and the separate $1 million satellite-related LNA order. Following the published booking reports, the company booked an additional $3 million from our Spectrum and AmpliTech Inc. divisions. October bookings came in at almost $25 million, which set a record for the company. As outlined in our release, the production plans and customer schedules suggest that backlog will be worked off during the rest of 2026 and into 2027. Exact timing may shift, and right now we aren't committing to a quarter-by-quarter conversion schedule. Moving to the next question: why hasn't the pickup in order activity produced revenue growth of a proportionate size yet? The main reason is the gap in time between booking an order and having a shipment ready to deploy. Telecom systems may entail production lead times, readiness at customer sites, import or export rules, licensing and permits, logistics coordination, and acceptance terms. Shifts in those factors can also shift the period in which we book revenue. Right now we're focused on executing on business already awarded—getting suppliers lined up, ensuring production readiness, and matching customer schedules—so that purchase orders turn into shipments and revenue gets recognized as efficiently as we can manage. We also recognize this has taken longer than we initially anticipated. Next, what drove the sequential gross margin improvement, and is 34.2% sustainable? Gross margin in the third quarter did climb to 34.2%, compared with 27.9% in the second quarter—an improvement of about 6.3 percentage points. Product sales mix plays a significant role in shaping our margin profile; across the first nine months of 2026, gross margin came in at 35.3%, versus 24.2% during the same stretch a year ago; we keep a sharp focus on product mix, pricing discipline, cost control, and better manufacturing efficiency; even so, margins may swing considerably depending on the volume and mix of radio systems, components, and distribution sales in any given period. As a result, we are not stating that third quarter margins represent a guaranteed quarterly floor, nor are we giving a specific future margin target during this call. Moving on, which operational milestones underpin the company's readiness to carry out larger 5G programs? We reported that over 3,000 AmpliTech radios have been deployed under our North American operator program with TELUS. We also finished a dedicated production line after quarter end, achieving production-ready status, with first shipments anticipated in the fourth quarter. Beyond that, as Fawad noted, our MPRU showed interoperability with OCUDU, an open, centralized, and distributed unit, an open-source software-defined radio access network platform built to support 5G, Open RAN, AI-RAN, and future 6G networks, and that is what is fueling demand for 5G ORAN products. We also completed, and this matters a great deal, we also completed the onboarding and qualification steps needed to become an approved vendor to a major telecommunication infrastructure provider. Those moves expand what we can sell commercially and help customers with their evaluations. Turning to the next point: why are costs and losses still high while the company is building backlog? We've been putting money in ahead of the bigger revenue opportunities we expect. In Q3, SG&A expenses came to $3.38 million, up from $2.48 million in the same period last year. R&D costs also increased, hitting $860,000 compared with $700,000. Clearly, these costs reflect corporate activities, technology work, commercialization, and getting infrastructure ready. We must be ready to take on large programs and to execute them. We understand that investors want this spending to translate into results. Our main focus is on boosting operating efficiency, keeping expenses under control, and turning funded orders into shipments and revenue. In the third quarter, the net loss shrank on a sequential basis, coming in at $1.89 million compared with about $3.09 million during the second quarter. Next, is AmpliTech's liquidity sufficient to cover operations and production requirements? Absolutely, no doubt about it. At September 30, we had roughly $30 million in cash equivalents and marketable securities, along with about $42 million in working capital, and our current ratio is approximately 6.93. Total stockholders' equity came to around $65.72 million, and most important, the company continues to have no long-term debt. Across the first nine months of 2026, the company consumed $8.48 million in operating cash. Management believes that, using the resources currently on hand and the present forecast, the company can meet its routine operating obligations and finance the capital needs it has planned over the next 18 months. That assessment remains subject to real business conditions and real capital requirements. The last question we got concerned management's priorities for 2027. Our leading priority is converting the order base we already hold into production shipments and recognized revenue, while handling supplier lead times, manufacturer execution, deployment timing, and customer acceptance. We'll additionally pursue chances created by broader O-RAN software interoperability plus our status as an approved vendor, while continuing to back our RF MMIC Spectrum distribution operation and the businesses tied to satellites. Management holds the view that customer work, the present backlog, readiness on the manufacturing side, and a stronger balance sheet together provide a remarkable base for expansion in fiscal 2027. That wraps up the key items we intended to cover in today's prepared remarks. Operator, go ahead and open the lines for questions.

Thanks, operator. And thanks to each of you who joined today's call. We're grateful for the ongoing interest in AmpliTech Group. We think the increase in customer order activity, the advances we've made in product capabilities and interoperability, and our stronger financial position together give us a solid base for the business's next phase. We're eager to share our progress in upcoming updates. Until then, investors can get in touch with our team using the contact details in today's earnings release, or by sending an email to investors@amplitechgroup.com. There's also a detailed presentation on our investors page covering today's call and the quarter's results. So please take a look at that if you'd like any specifics. Thanks once more for being with us, and have a good evening.

That wraps up today's conference call. You're free to disconnect your lines now. Thanks for joining us, and enjoy the rest of your day.