Amplitech Group (NASDAQ:AMPG) Q4 2025 Earnings Call

0:00 Good day, ladies and gentlemen, and welcome to Amplitech Group's Quarterly Investor Update Call, where the company will discuss its FY twenty twenty five Financial Results. Present in this call, we have the executive team of Amplitech Group, Fawad Mahpoule, CEO, CTO and Board Chair, George Flores, COO and Luisa Sanfrantello, CFO. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session As a reminder, today's conference is being recorded. I would now like to turn the call over to Amplitech's COO, George Flores. Thank you, operator, and thank you, everyone, for joining today's call to review the progress of Amplitech's growth initiatives and to answer investors' questions.

0:50 Following initial management comments, we will open the call to investors' questions as well. An archived replay of today's call will be posted to the Investor Relationships section of Amplitech's corporate website. This call is taking place on Thursday, 04/09/2026. Remarks that follow and answers to questions may include statements that the company believes to be forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, statements that describe future plans, objectives or goals are also forward looking. These forward looking statements are subject to various risks that could cause actual results to be materially different than expected.

1:41 Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward looking statements, which are made as of today's date. With that, let me turn the call over to our CEO and CTO, Mr. Pawel Magpu. Thank you, operator and George, and thank you, everyone, for joining us today. Fiscal year 2025 was a transformative year for Amplitech Group. We delivered company record top line growth, expanded our presence in the five gs infrastructure market, and continued to build the foundation for long term growth across both our legacy RF business and our emerging O RAN five gs platform.

2:31 For the full year 2025, revenue increased to $25,200,000 compared to $9,500,000 in 2024, representing approximately 165% year over year growth. This increase was driven by higher sales of our low noise amplifier and low noise block products, expansion of our five gs product lines, recovery in Asian markets within the Spectrum division and increased demand from telecommunications and satellite communications customers. We're very encouraged by this performance because it reflects growth from multiple parts of the business, while also showing that our strategic investments in five gs are beginning to translate into commercial traction. At the same time, 2025 was also a year of deliberate investment.

3:19 As we entered the carrier grade ORAN radio market and ramped early deployments, we experienced near term margin pressure. Gross profit increased to $6,000,000 from $3,500,000 in the prior year, but gross margin declined to 23.9% from 36.7 percent. That decline reflects our strategic ramp up of five gs product deployments, initial market penetration efforts, and our focus on winning long term opportunities with larger mobile network operator customers. The company expects these margins to improve over the next few quarters. We view this as an investment phase. Our priority has been to establish market presence, support customer adoption and position the company for larger scale deployments over time.

4:09 As volume, scale and execution matures, we believe margin performance has the potential to improve. From a technology and strategy standpoint, we've made meaningful progress in 2025. We continue advancing our ORAN compliant radio systems, including our massive MIMO 64T, 64R ORAN Cat B platform while integrating proprietary RF and Mimic capabilities that we believe help differentiate our solution set in the market. We also continue to build our commercial pipeline. As previously announced, the company has a non binding letter of intent for $78,000,000 in ORAN radio systems representing a potential multi year growth opportunity subject to definitive purchase orders.

4:56 The company believes this LOI itself will surpass the $100,000,000 mark supported by production forecast that we have received. As of March 2026, we had received approximately $5,000,000 in funded purchase orders of which we had a small number of initial shipments from December to early this quarter. The bulk of the shipments will resume and culminate during our second quarter this year. Also as previously announced, we have a second LOI with the North American MNO valued at over $40,000,000 of which we already have received half of this amount in funded purchase orders. This means these LOIs are real and dynamic. From this amount, we still have to ship about 8,000,000 with shipments resuming in early Q2 of twenty twenty six.

5:45 We believe an increase in this LOI amount is also possible. In addition, during 2025, we continue expanding our Mimic Design Center, advanced our Amplitech five gs division focused on five gs system deployment and integration. These steps are part of our broader strategy to evolve from a component supplier into a more complete systems provider serving high growth and growth markets. Overall, we believe fiscal twenty twenty five marked meaningful progress in scaling the business, expanding our market reach and positioning Amplitech for the next stage of growth. With that, I'll turn the call over to our CFO, Luisa Sanfotello to review our financial results in more detail.

6:31 Thank you, Fawad. As Fawad mentioned, fiscal year twenty twenty five reflected substantial growth in revenue along with continued investment in the business. For the year ended 12/31/2025, revenue was $25,200,000 up from $9,500,000 in 2024. Gross profit increased to $6,000,000 compared to $3,500,000 in the prior year. Gross margin was 23.9% in 2025, compared to 36.7% in 2024. The year over year decrease in gross margin was primarily due to the strategic ramp up of five gs deployments, early stage customer acquisition efforts, and then the initial market penetration costs associated with carrier grade radio systems.

7:31 Selling, general, and administrative expenses increased to $10,700,000 from $7,900,000 in 2024. This increase was driven primarily by the higher headcount and payroll costs, increased professional and compliance expenses, and expanded commercial and marketing activities as we supported the growth of the organization. Research and development expense was $2,700,000 compared to 3,600,000 in 2024. The decline reflects the completion of certain key development initiatives, including work related to our massive MIMO 64 T, 64 R Oran Cat B radio system, and advanced beamforming and five gs infrastructure technologies.

8:24 Net loss for fiscal twenty twenty five was $7,000,000 compared to $11,200,000 in 2024. Operating loss improved to 7,300,000 compared to 8,400,000 in the prior year. This improvement was driven by the strong revenue growth as well as the absence of certain one time charges recorded in 2024. Turning to the balance sheet, as of 12/31/2025, working capital was $10,200,000 Cash and cash equivalents were $11,600,000 which included subscription proceeds held in escrow. Our accounts receivable was approximately 3,400,000.

9:10 The company also strengthened its capital position to approximately 8,100,000 in net proceeds from a rights offering and an additional 8,300,000 in net proceeds from a registered direct offering of which both were completed in January 2026. Based on our current operating plan, management believes we have existing liquidity to fund operations for at least the next twelve months. In summary, we are pleased with the top line momentum in the business, while remaining disciplined in managing investments to support long term valuation creation. I'll now turn the call back to Fouad for closing remarks. Thank you, Louisa.

9:56 To close fiscal twenty twenty five was an important year for Amplitech Group. We generated substantial revenue growth, improved operating performance, continued investing in our five gs platform and strengthened our balance sheet. While we remain in an investment phase, we believe the progress made across our commercial pipeline, technology portfolio and strategic initiatives positions us well for long term growth. We appreciate the continued support of our shareholders, customers, employees and partners. Before we open the line for callers in the call for questions, I would like to have our COO, George Flores, go over the questions previously received via email. Thank you, Pawel. I would like to immediately start with the first question received, which was, revenue growth was very strong.

10:47 What were the main drivers? Our 165% revenue growth in 2025 was driven by a combination of the stronger demand for our core LN A and LN B products, expansion of our five gs product lines, recovery in Asian markets within the spectrum division and increased demand from telecom and satellite communications customers. But out of this, without a doubt, our major revenue growth came from our Amplitech five gs division and shipments done on our 40,000,000 LOIs with our North American MMO. Question number two, why did gross margin decline despite the higher revenue? The margin decline was largely due to the strategic ramp up of our five gs deployments.

11:34 If you reflect back on our Q2 twenty twenty five results, that's the quarter in which we invested heavily to become a major player in the O RAN markets. We were in the early stages of customer acquisition and market penetration for carrier grade oral and radio systems, and that put pressure on our gross margins in the near term, driving our gross margin down into the single digits. Our focus has been on establishing long term customer relationships and scaling the business. We also provided guidance that our gross margins will recover into double digit gross margins, which we accomplished over Q3 and Q4 of twenty twenty five, going from about 7% gross margins in Q2 of twenty twenty five into the final fiscal 2025 gross margins of 23.9%.

12:30 Question number three, how should investors think about the $78,000,000 letter of intent? This letter of intent represents and it is actually more than a multi year opportunity. While it is not binding and subject to definitive purchase orders, it's the second sizable deployment we have in our hands. So investors must see not just this LOI, but both LOIs, as tremendous validations that we have the technology. In addition to this, we also have the supply chain, and on top of that, we are also able to handle the logistics of shipping our radios directly into installer warehouses, where these are kitted and sent out to deployment at cell tower sites.

13:20 For purchase order amounts and shipment status, what we can share is that as of March 2026, we have already received little over $5,000,000 in funded purchase orders against this LOI. Initial shipments began in December 2025. To date, we have shipped less than $05,000,000 of these orders as we most follow the initial cadence of the end users' installation crews. As they acquire speed in their deployment, we will acquire speed in our shipments. This leaves us with projections to ship the balance of the order, if not during Q2, very early Q3. As such, and based on forecasts received, we estimate receiving additional orders before the end of the current quarter.

14:10 Based on the magnitude of the project at hand and the number of sites that need to be deployed, the company believes this LOI will grow north of the $100,000,000 mark over the next two years. Question number four, what gives you confidence in liquidity? As of year end, we had $10,200,000 in working capital. Cash and cash equivalents were 11,600,000 and we also added capital through the rights offering and the January 2026 registered direct offerings. Based on our current plan, management believes this is more than sufficient to fund the operations for the next twelve months. Question number five: what are the most important strategic priorities going forward?

14:57 Our priorities include scaling our five gs and ORAM product opportunities, executing on funded orders, continuing development and commercialization of our massive MIMO and oil solutions, turning towards additional projects currently being discussed with other major players, also expanding our MIMIC and systems capabilities by continuing development on five gs front end modules. Gross margin improvement is not just a strategic goal, but a critical day to day operation goal for us. For any business, really, it goes without saying that we fully understand that we will do whatever it is within our power to maximize cost efficiency, price competitively, push our supply chains, keep on working using forecasts to optimize material order placement and receipts.

15:51 While we do have our own manufacturing capabilities in The U. S, these are largely related to our Amplitech, Inc. Core division. For large volume of oral and five gs radio manufacturing, we will continue our strategy to use CMs or contract manufacturers, either local or abroad, that are specifically in business. These are the CMs, are specifically in business to handle the type of production we require. Our strategy does not include hiring hundreds of people to support manufacturing. It is just not cost efficient for our organization. That is why CMs are there. That's why contract manufacturers are there, to scale up when we need them to scale up and scale down when delivery timeframes require us to do so.

16:41 Last question is what you can say about your 40,000,000 LOIs with the North American MNO? What is the current level of orders received, orders shipped, balance of funded POs and program visibility? We already received 50%, about 50% of funded purchase orders for this program. We have shipped about $12,000,000 worth of foreign five gs radios to the Seminal, with shipments slated to resume early in Q2 of twenty twenty six. Same as with the $78,000,000 LOI, we believe this project will exceed the initial LOI value of $40,000,000 We are certainly very excited when we hear our end customers speak about future self tower site deployments and their plans for expansions.

17:31 This concludes the questions previously received into our e mail. Operator, please open the line for other questions. Okay, thank you. We will now move on to the Q To ask a question on the phone, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, The first question will come from Jack Vander Aarde with Maxim Group. Please go ahead. Hey, great afternoon, guys.

18:17 Good results and good outlook. It's good to see things are still on track. Claude, can you maybe just touch on the nature of this agreement, this larger LOI and just the cadence of the orders you're expecting? I believe it's going to be a little bit different than the agreement you had where you've already received most of the otherwise, is it gonna be bigger chunks? Thanks. Yes, so this LOI is basically OPAP for overseas, right? It's an Asian customer. And then that one there, there are lots of, in the countries that these are deployed, the pace is very slow as far as deployment is concerned. So they have a whole crew of people working to do the entire nation.

19:07 And what happens, they have to get all the legalities and they have to have all these permits and everything in place. So it's a slow process that's initially slowing this down. Our proof of concept has been done. We have delivered already radios that have been put into the first deployments and they're working very well. So what we're working on right now is just basically the logistics of getting the radios deployed and then installed. And that's just taking a little bit of time initially. But as that ramps up, then our shipments will also continue to ramp up later this quarter and towards the end of the year. Okay, great. And then if I look at last year, like especially the second quarter in 2025, that's when you received the largest amount of orders.

20:00 It sounds like this year, with this other customer, you're expecting something similar, maybe between the second quarter and the third quarter. About other agreements that your potential opportunities with other five gs players? Can you just touch on those discussions? Do you feel like there's an opportunity to announce a new partner in the next six, twelve months on top of these? Yes, definitely there's a chance of that happening. We have been in discussions for a while and obviously the success of our previous deployments is also key. And in these various different areas, there are different bands that we have to adjust the radios for. And we've been doing that and in those adjustments, those radios, they have to go through a proof of concept phase as well.

20:54 But all of these are part of expanding our traction. So we believe that these will be successful just like these first LOIs and we may be going into directly the PO phase even before an LOI phase from other leading MNOs that are going to follow suit in this ORA and deployment. Everyone is not as strongly focused into this ORAN, but as time progresses, the ORAN deployments will replace the older RAN deployments and the larger MNOs are very slow to adopt the new structure. It involves a lot of expense for them, but they will eventually have to adopt that because the technology for expanding the capacity and the speeds of various networks in larger dense populated areas, as well as rural areas is increasing, the demand is increasing for that.

21:50 So it's inevitable that this growth will happen and we are in the right spot. So we do feel that we will have some positive engagements this year. Okay, great. And then just one more for me. You guys kind of touched on the expenses and the gross margin, but the fourth quarter, I think this is kind of a trend where the fourth quarter operating expenses are higher than any other quarter. Is this just a onetime thing at the end of the year? Maybe for Melissa, if you could help understand, I think it's the SG and expense line. Thanks. Yeah, those expenses were basically, you know, we had increased, we reviewed employment contracts and so forth with our management.

22:40 We had accounting expenses that increased because of the rights offering as well as legal and things like that. Okay. Got you. And then, I guess, going forward on a normalized basis, I mean, you expect gross margins and operating expenses to be somewhat more linear and smoothed out? Is good this read through for the go forward run rate, maybe north of 40% gross margin? Can help me understand what the kind of normalized cadence is? And that's it for me. Thanks. Yes. So it will increase anywhere between 3050% is the number in telecom business, depending on what type of products we're offering.

23:28 And obviously we're offering products that are not me too products. Our products are always, they have a value added because we're putting our own remix in there that other companies cannot do to improve the performance. And we have other enhancements that we're working on to differentiate our product from So right now in ORAN, we are the leading company deploying the largest ORAN radios out there, and we are making them even better so that if there are competition that comes in, then they would not be able to compete with the performance because of our inherent legacy business that designs our own LNAs and our designs are PAs. Those are all gonna wind up going into our radios and all the other components. So we're just talking about radios right now, but there's a whole slew of products that come out of this. We're not doing just the radios.

24:24 We're also doing the private five gs enhanced CPE devices. They're like advanced router, so to speak, but those are special products that also all kinds of IoT related products that we're doing that we haven't really called out specifically, but it's an entire industry base that supports this whole radio rollout. Okay, great. I appreciate the color guys. Good luck. Thanks. Thank you so much. Thanks, Chad. The next question will come from Anthony Bates with Desballers Ventures. Please go ahead. Hi. Can you give us any updates on progress in the cryogenic tech area? Anything that you're working on there?

25:13 Yes, so we originally were introduced our cryogenic LNAs for the quantum computing applications. We have gone successful iterations and many different iterations from initial concept based on our customers' feedback. So we're working on a final version, which is basically a very standard module for four Kelvin operation for a quantum computing production environment. What we have done initially was to provide proof of concept units customized for every single different, let's say manufacturer of the quantum computers like Google and IBM and many others.

26:01 But every one of them has a different type of flavor to their quantum computers and none of them are going to very large production levels right now. So we have worked on our fourth version and we are about to deliver the fourth version of the quantum computing LNAs, which are very high performance and they're more of a standardized product to fit into many different quantum computing platforms. So we haven't introduced that yet, but we are working on that and that's going to come up. It'll become more important when the larger production starts to ramp up for all these quantum computing companies. They're not in the high production Well, mode right can you guesstimate when you might have an order?

26:53 I don't know. I mean, everything is just right now we can't say anything when they'll be in order. We have provided all these samples and it could be later this year, it could be early next quarter, but it's all based on the demand of the companies in building these quantum computers. They're not reaching production. Right, right. That's what I guess I'm asking is they're not in production yet. Do you have any idea when they may be in production? I couldn't tell you every single one of them is different. I think that's also being driven by other parts of the industry. It's not just the quantum computing and low noise amplifiers. The quantum computer demand comes from the large data, right?

27:41 Large data is five gs deployments. Every single MNO has to have a high speed infrastructure so that all that data can go into a quantum cloud and then the supercomputers will have quantum computers will have a lot more data to crunch on. So as this builds out, the other industry is going to build up. It's connected. It's all connected in the ecosphere of high speed connectivity as well as computing because you can't have the metaverse and all these other things, fully automated vehicles, all these things that require high speed capacity, and then crunching all these numbers into a quantum cloud unless everything is in place. And my last question is, can you give us any kind of updates on, is it a Texoma semiconductor tech hub, anything coming out of that?

28:39 Yeah, that's our mimic division and our mimic division is basically expanding its product line. They're also building LNBs now, low noise block converters are used in satellite communication technologies. So the LEO satellites will need ground station terminals to communicate with and the LNBs that are in these ground station terminals we rebuilt because we have the lowest noise figures in the world. So those are increasing in number every day, every year actually. And so our LNBs product line is increasing as well. That's why you saw some increase in the revenues from our LNB division. But this is part of our Texoma division in Texas, in Allen, Texas. But they're also ramping up production of our ICs that are going into these radios.

29:28 So that's growing and that division will be growing more as our production increases. Okay, and that'll be growing this year? Yes. Great. All right, thanks for answering my questions. You're welcome. Thank you. The next question will come from Andrew DeAngeles with Venture Visionary Partners. Please go ahead. Good afternoon. Hi, everyone. Just a lot of helpful detail on this call, but just wanted to make an explicit question of it. The $50,000,000 revenue guidance that you have out there for this year, what gives you confidence in your ability to achieve that? Right now it's a combination of two factors. One is the current backlog that we already have in funded orders on both of the LOIs.

30:22 And the second, though, is that we are actively seeing forecasts provided by the end users directly into OAuth, and that's how we're managing supply chain as well. So that's a big definitely on why we are predicting that projecting that. That's helpful. And then just relative to the funds that you guys received and the recent rights offerings, where will you be utilizing those funds? And can you talk maybe through the cadence of, how those funds will be deployed? So most of those funds are used for our growth, the growth of this five gs business, right? So as I mentioned before, we're building new mimics and new chips to go into these radios and we're building different types of radios. So most of our expense is going to be working capital for building out the infrastructure for our five gs groups, but as well, we're building the other groups as well. So it's a scaling effect, every single group.

31:29 The idea is to drive growth from our five gs division, which will require increased amount of Mimics, custom Mimics and PAs and low noise amplifiers, which will go down to the Mimic Group and increase their revenue cause they will be supplying the five gs radio requirements. And then the other packaging group, which is Spectrum division, which is in California, that's a stocking and distribution group. They'll be providing the packages for all these mimics that go into these radios. So each of these divisions are structured such that there's a synergy in growth. As we scale up the five gs, we will scale all the other divisions as well, but our sales force is increasing as well. So we're putting in key personnel this year to grow these specific telecom business. So we recognize the need for having specific sales force for this particular application because connectivity to these large MNOs is very, very important in growing the business.

32:34 And we found that these are giants, right? Telecom giants and we're a smaller company penetrating these giants, but what will help is a good technical force as well as Salesforce that is connected to all of these companies. So we're gonna be focusing on increasing sales personnel as well as technical personnel in these areas. Very helpful. And I guess this just kind of layers, this question layers onto what you just mentioned, but I just, again, wanna make it explicit. In terms of your execution priorities, the one or two things that you're focused on here in the first half of the year, what would those be? Well, I mean, R and D, we're basically growing the company, right? So the R and D phase mostly is done. What we're trying to do now is to take our production line and our assembly lines and make them such that we can make repeatable products. So many of our products are standardized now.

33:35 It took about a year or two so that we can actually make our assembly lines standardized and have our supply chain standardized as well. And this increases our five gs exposure. So the idea is to build consistent and cost effective assembly lines and product lines and procure all the materials at good prices so that we can have a higher gross margin as we grow the business. You think that inflection point is gonna really, I guess, happen here in the first half? Yes, it's more likely in the second half. It will start in late Q2, but in the second half of the year. Yes.

34:20 Okay. Thank you very much. You're welcome. That concludes the question and answer session. I will now turn the call back to Fouad Lapoule for closing remarks. Thank you, operator, and thanks to everyone who joined today's call to hear the progress we've made and the plan we have to further our company's mission of providing the communication systems of tomorrow today. We look forward to updating you further on our first quarter financial results call next month. Until then, please contact us directly should you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at the contact information listed at the bottom of our press releases. Thank you and be well.

35:07 Today's conference call is now concluded. Thank you. You may now disconnect your lines.