Earnings Labs

Gorilla Technology Group Inc. (GRRR)

Q3 2023 Earnings Call· Wed, Feb 7, 2024

$13.04

+1.09%

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Transcript

Operator

Operator

Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Gorilla Technology Group Nine Months Ended September 30, 2023 Earnings Conference Call. Currently, all participants are in listen-only mode. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I'll turn the call over to Mr. Cody Fletcher of the Blueshirt Group. Mr. Fletcher, please go ahead.

Cody Fletcher

Management

Good morning, everyone. Thank you for joining us on today's call to discuss financial results for the first nine months of 2023. We released results pre-market yesterday and the release is available on our website, as well as from Newswire services. With me on the call are Jay Chandan, our Chief Executive Officer; and Daphne Huang, our Chief Financial Officer. Jay and Daphne will make prepared remarks and then any questions you have, you may reach out to us at gorillair@blueshirtgroup.com and we'll respond to your questions as soon as we have received them. Before we get started, I would like to note that certain statements made during this conference call that are not historical facts, including those regarding our plans, objectives, growth and expected performance, including our outlook for the fiscal year 2023 and 2024, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are our outlook only as of the date of this call. While we believe any forward-looking statements we make are reasonable, actual results could differ materially, because the statements are based on current expectations and are subject to risks and uncertainties. We do not undertake, and expressly disclaim, any obligation to update or alter our forward-looking statements whether because of added information, future events or otherwise. Further information on these and other factors that could affect the company's financial results is included in filings we make with the SEC from time to time, including the section titled Risk Factors in the Company's Form 20-F previously filed with the SEC. Additionally, unless otherwise stated, all financial measures, excluding revenue discussed on this call will be non-IFRS. The financial statements have not been audited or reviewed by our auditors. With that, let me now turn the call over to Jay Chandan. Jay?

Jay Chandan

Management

Thank you very much, Cody. Good morning everybody. As always, and with even greater enthusiasm than before, I'm delighted to be addressing you today. In the world of business, innovation isn't just an advantage. It is the lifeline that keeps us ahead of the curve, driving us beyond the competition. Since our listing in 2022, we have embraced this ethos as we have embarked on a transformative journey, navigating challenges, seizing opportunities, and steering towards unparalleled success. Over the last nine months of 2023, Gorilla did not just sustain, but it accelerated its momentum evolving our technology platform known for its broad applicability into an even more potent force. Now, we continue to leverage this robust foundation aiming to amplify Gorilla's international presence and enrich its ecosystem further. Our global footprint has expanded significantly with our teams across the globe synergizing to elevate our customers, capabilities and experience. Let me highlight some of our successes so far this year. First and foremost, we’re expodently and efficiently working with various governments on Smart City, Safe City, responsible solutions driven by artificial intelligence, computer vision, IoT, and cloud computing. We're providing a full suite of services to support our customers while also discussing even greater future collaboration. Second, we are creating a whole new suite of products covering Industry 4.0, Air Gap Networks, Lawful Interception, SOX, and Business Intelligence. Third, we have built buddying partnerships, strategic partnerships with Red Hat, MCS, InfoSec, for future endeavors, including maximizing our Smart City platform across multiple different complex pain points for a my rate of customers. Now, I could go on, but you get the point. The key takeaway here is that we will never stop innovating and create fully customized solutions for our client's needs. Now, rewind to mid 2022, Gorilla was a budding…

Daphne Huang

Management

Thanks, Jay. And hello, everyone. I'm delighted to share our first nine month results, especially highlighting some exciting milestones we achieved. First, let me draw your attention to our outstanding revenue growth. We're thrilled to report a 105% year-over-year increase from $18.5 million to close to $38 million. This remarkable achievement is due to the robust momentum generated by our capacity to deliver project progress on time. The dedication and hard work of our team have truly paid off. Our focus on operational efficiency and delivering high value services was reflected in our gross profit, which grew nearly 5x to over $29 million. This represents a gross margin of 76.5%, which is 43% higher than last year. To stay close to our clients and deliver the best and fastest response, we have established our global center for R&D and customer success in India, facilitating more cost effective labor planning. We're all pleased that our EBITDA turned positive this year. Our adjusted EBITDA margin of 35% far surpassed our initial expectations. This achievement reflects our outstanding gross margin combined with disciplined operational efficiency. It is a significant milestone marking our first earnings release with positive EBITDA since listing. Going forward, we're confident that we can sustain positive adjusted EBITDA as revenue continues to rent and we remain disciplined in our cost controls. Regarding our financial position, I am pleased that we maintain a robust cash position with nearly $19 million in cash and around $40 million restricted cash on our balance sheet. The substantial liquidity not only grants us financial flexibility, but also positions us favorably to pursue new business opportunities and act boldly on strategic initiatives. Our strong cash position equips us with increased negotiation power with vendors and clients to secure the most favorable terms possible. It also creates greater resilience to weather any unforeseen challenges. Looking ahead, our future looks promising. We have a robust new business pipeline. We have strategically positioned ourselves to capitalize on emerging opportunities, setting the stage for sustained growth in the coming quarters. With contracts in place offering high visibility, we're reiterating revenue guidance for full year 2024 of $90 million. We also expect positive adjusted EBITDA for the year. That concludes our update. We'll now turn the call over back to Cody for closing. Cody?

Cody Fletcher

Management