Welcome to the Vislink Technologies 2021 Q3 Earnings update meeting. During today's presentation, there will be an opportunity to submit online questions. You may submit online questions using the window on the webcast. Please note this event is being recorded. I would now like to turn the conference over to Belinda Marino, Corporate Secretary of the Board of Directors. Please go ahead.
Good morning, everyone. I'd like to remind everyone of the safe harbor statement referenced in the SEC filings. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements, including statements made during the course of today's call. Statements contained herein that are not based upon current or historical facts are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements reflect the company's expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. When used herein, the words anticipate, believe, estimate, upcoming, plan, target, intend, and expect, and similar expressions as they relate to Vislink Technologies, its subsidiaries or its management, are intended to identify such forward-looking statements.
These forward-looking statements are based on information currently available to the company and are subject to a number of risks, uncertainties and other factors that could cause the company's actual results, performance, prospects and opportunities to differ materially from those expressed in or implied by these forward-looking statements. For a more detailed discussion of some of the ongoing risks and some uncertainties of the company's business, please refer to the company's various filings with the Securities and Exchange Commission.
Thanks, Belinda. I'd like to welcome you to the Vislink Q3 2021 earnings webcast. I'm Carleton M. Miller, and I'll be joined on this webcast by Mike Bond, our CFO. We'd like to take this opportunity to report our financial results and the progress we made in the Q3 of 2021. We will also provide an update on our latest developments and future prospects. Participants will be able to submit questions during the webcast from the main webcast page, and we try to take as many as possible at the end. We are very pleased to report that our revenues in the Q3 grew sharply to $11.2 million, which represented a 133% increase year-over-year and over 47% sequentially.
In addition to accelerating our sales growth, we also grew our profitability substantially over prior periods, recording an EBIT of over $1 million in positive quarterly net income. This is a testament to our pursuit of realistic, sustainable growth of the business while maintaining an unyielding commitment to cost containment and operating efficiencies across the organization. I'd like to mention some notable business highlights from the Q3 . First, we finalized our acquisition of Mobile Viewpoint. I want to reiterate that we feel this represents a perfect complement to our 50 years experience developing and deploying advanced video solutions. Adding their solutions to our existing offering expands our capabilities in the areas of bonded cellular and 5G communications, AI-driven studio and sports production, remote live streaming and drone backhaul solutions.
As a result, whether a business opportunity presents itself that requires a private 5G network, a public 5G network, AI-powered production, or any hybrid combination of these, we have the market-leading options to offer. This is why we believe that we have now a truly best-of-breed set of products in our arsenal. The Mobile Viewpoint acquisition has already begun to bear fruit, namely in the launch during the Q3 of Vislink Connect. This is the first jointly developed product offering brought to market by our combined companies. Vislink Connect is designed to enable robust, reliable and economical transition of live video production. Most importantly, it provides a variety of data plan options and predictable cost, and this is what sets it apart from other solutions currently in the market. We feel this is a very strong potential for us.
We expect to launch additional solutions over the upcoming quarters that leverage the respective innovations of both Vislink and Mobile Viewpoint. We're very excited about the new product releases that are coming down the pipe. We also had a variety of our video communication solutions deployed at events held during the Summer Olympics in Tokyo. Vislink wireless cameras and related components were utilized by our broadcast service partners, and Mobile Viewpoint deployed 75 cellular encoders for outside broadcast, as well as its Trolley Live product. Trolley Live is a professional studio in-a-box solution designed to allow live streaming from home, office or any other location around the world, and we believe it has a lot of sales potential. During the quarter, we also participated in the world's first standalone 5G network introduced in MotoGP.
This took place at the British Grand Prix race, where we collaborated with Dorna, BT Sport, the University of Strathclyde to showcase the first live sports broadcast over a 5G network. This proof of concept system was considered highly successful and showed how standalone 5G networks are very suitable for broadcasting live video, even under the challenging conditions of high-speed racing. We're excited to be on the ground floor of this innovation and look forward to commercializing its future, in the future with our industry partners. We also introduced new product innovations during the quarter. These included updates to the Quantum receiver. A portable version of our IP RF transmission system and Satcom products like the DVE6100. These product families have continued to be among the company's most well-received in the market. At the same time, we continue to refine our product catalog.
We reduce our overall product SKUs available for sale, removing items that cost us more to keep in production than to realize revenues from. We've also been standardizing our solutions, making them more modular wherever possible. This has the twin benefits of making items more reusable and also allows us to react more nimbly to opportunities that may arise, which may require reconfiguration on the go. I will now turn it over to Mike Bond, who will walk you through our financials.
Thanks, Mickey, and good morning, everyone. Here are the main financial results for the Q3 . Revenues for the three months ended September 30, 2021 were $11.2 million. That compares to $4.8 million for the three months ended September 30, 2020, and $7.6 million for the three months ended June 30, 2021. Revenues for the nine months ended September 30, 2021 were $22.8 million. That compares to $16.1 million for the nine months ended September 30, 2020. EBITDA, which is earnings before interest, taxes, depreciation, and amortization, was $1.04 million for the three months ended September 30, 2021.
That compares to a negative $2.4 million for the three months ended September 30, 2020, and a negative $578 thousand for the three months ended June 30, 2021. We ended the Q3 of 2021 with $38 million in cash. Gross margins were 62.3% of revenue in the Q3 of 2021, which compares to 31.8% of revenue in the Q3 of 2020 and 52.8% of revenue in the Q2 of 2021. Net income attributable to common shareholders was $676 thousand, or $0.01 per share in the Q3 of 2021, compared to a net loss of $2.8 million, or $0.17 per share in the Q3 of 2020.
Net loss attributable to common shareholders was $2.8 million or $0.07 per share for the nine months ended September 30, 2021, which compares to a net loss of $8 million or $0.61 per share for the nine months ended September 30, 2020. I'll now turn it back over to Mickey to provide an update and an outlook on the business and our markets. Thank you.
Thanks, Mike. Looking forward, we see the following in store for our key market sectors. In the broadcast and live production market, demand is strong. Opportunities for growth in the U.S. are increasing as live events continue to make a comeback. International, there is areas that remain strong for our business, in particular the Middle East. Other areas have some challenges as COVID resurgences have impacted the holding of live events in some places. Although we expect to see recovery in the near to medium term, we're confident with the addition of Mobile Viewpoint to our family, we now offer a comprehensive range of technologies that can deliver more effective coverage of global sporting events with lower production costs and increased opportunities for content development. The Mil-Gov market continues to present us revenue opportunities, particularly with the additional military and law enforcement targeted solutions that Mobile Viewpoint provides.
We've been asked whether there could be opportunities related to the recently passed federal infrastructure bill, and we believe there definitely could be. You'll recall that the bill earmarks over $550 billion in new spending on resiliency upgrades in the nation's roads, bridges, pipes, ports, airports, public transports, and other public works. Vislink mobile video surveillance and security solutions can play a pivotal role in enhancing such resiliency by delivering real-time information on emergency and critical infrastructure, helping to optimize performance and monitor potential threats. Also, the $65 billion allotted towards broadband presents an opportunity for our IP link product line. The Satcom market continues to present opportunities to us, and we have seen new quoting activity since we refreshed our satellite product line earlier this year.
In summary, we believe there is no other company today that can deliver live video solutions that are immersive, immediate, and intelligent as we offer, fully engaging experiences for viewers through unrivaled video quality, reliable low latency transmissions using the latest cellular technologies, and the intelligence of AI-powered systems that allow a wider range of content to be produced profitably than ever before. In conclusion, we're more optimistic about the future than any time in the company's history. Previously, we said we would stay laser focused on operating Vislink with a mindset of financial discipline, and that is exactly what we intend to do. Our balance sheet remains strong and our operations remain lean. We also said we would make intelligent investments in product solutions and acquisitions where they made strategic sense, and this approach would allow us to achieve profitable growth.
This is also what we have done, and we will continue to do so moving forward. That means aggressively refreshing our product offerings to maintain our industry leadership and continue the trend of innovative launches we've had in the first three quarters of this year. Executing on business opportunities in the markets we operate in, where prudent and profitable. We're confident that we're well-positioned to execute on the work ahead, and we look forward to updating our shareholders on our progress. Now, we'd like to answer some questions that have been submitted during the webcast. Mike, do you wanna take the first one?
We will now begin the question and answer session. You may submit online questions at any time today using the window on the webcast. At this time, we will pause for a moment to assemble our roster.
Nick, I'll take the first one.
Okay.
Are we back on?
Yep.
Okay, thanks everyone. First question obviously is, one that's on everyone's minds these days, and that is supply chain. The first question comes from Kumar, and it asks, "How is your supply chain situation?" That's a very good question. The answer is that we watch it every day. Mickey and I have meetings with our supply chain people, almost on a daily basis. We did take steps in the last couple quarters to protect that supply chain. We did make some strategic purchases and put things on the shelves that we felt could, in fact, become scarce. We do see a tightening of the supply chain. We are cognizant of some of our more critical components, becoming in shorter supply.
We are in fact taking extreme measures to make sure we scour the entire supply chain to make sure we keep up with that and we protect ourselves as much as we can given the current situation. The compound question was, what happened to your newly hired VP of supply chain? We did announce that we had hired Joe Carson to help us rationalize our supply chain, to help us with our strategy on manufacturing. Joe came in and did a terrific job, helped us with that strategy, and has since moved on to other opportunities in a mutually agreed upon fashion. Thank you, Kumar, for the question.
Okay, next question we have, are you able to disclose how many NDAs you have in place with other public, private companies or local governments? That's a good question. You know, I'd say probably close to a hundred. Actually, Belinda. Belinda, what do you think?
Um-
I'd say close to 100, but Belinda manages that for us, so.
Yeah.
How many do we have, Belinda?
I'm gonna say it's closer to 110 that we have.
Yeah. Yeah. Obviously, some people, there's other questions of, you know, we can't wait till those expire, so we can talk about it, but many of those have a tail that once they do expire, you still can't talk about them. The other question we have is around the Mobile Viewpoint acquisition. What are the areas of potential growth you see? Mobile Viewpoint, first of all, when we made the acquisition, we talked about how live video was only 13% of the overall video on the internet, and it's growing at over 70%. That was a large opportunity that we saw by combining the product offering of Mobile Viewpoint with our offering. 'Cause with that, we now have every conceivable solution to bring video to streaming.
Whether it's through our own proprietary Quantum solutions, whether it's through public networks, whether it's through private networks or through satellite like Starlink and other satellite networks. By doing that, we have more than anyone in our industry, the ability to serve our customers. The interesting thing through the acquisition we found was the AI, the artificial intelligence that Mobile Viewpoint has been working for, our customers are super excited about, and we're talking with a lot of them. What AI will allow our customers to do, where historically, say Division II, Division III type of sports, they were too expensive to live produce because you had to send camera crews. Now you can send artificial intelligent cameras with a complete suite of production in the cloud, and you'll be able to produce a professional type of production at a much lower cost.
This is gonna allow lower value content to be produced live so everyone can enjoy whatever particular sports or activity or entertainment that they enjoy watching. We've been really enthused about the receptance of our customers and the energy and excitement around the potential that AI-driven cameras can do for their content as well as for their overall businesses or universities. We're really excited about that. We're working through here in the U.S. Mobile Viewpoint historically has been successful in Europe and Middle East with those type of solutions. Now we're bringing those to the U.S. We're really excited about that.
Good question. Someone asked, "Are you gonna continue on your strategy of acquisitions after Mobile Viewpoint?" The answer is absolutely yes. We have raised a significant amount of funds. We do still have a significant amount of cash on our balance sheet. As we've shown this quarter, our near and middle-term goals are being achieved. We've stabilized our business platform. We've minimized and mitigated the loss of money each quarter. We hope to move into profitability obviously. We think that bodes well both for the shareholders and the stock price. We think that also gives us the opportunity to go out and add and layer on additional capabilities onto our current platform. We look at that in two ways.
One, we'll do it through acquisition, and we'll do it strategically through new product development, and engineering and R&D. We will continue to be very aggressive in terms of going out in the market, looking for opportunities to add accretively to the platform that we've created to date. Thanks for the question.
Thanks, Mike. We had a question. Vislink was the first to have 5G at sporting events, particularly MotoGP. Have leagues here in the U.S. shown any interest in the same equipment? That's a great question. Let me just tell why I think what we've accomplished with MotoGP is so important. First of all, we did this in cooperation with BT Sport, which is basically the ESPN of the U.K. Dorna, who are the rights owners of MotoGP. In the U.S., a lot of people aren't familiar with MotoGP, but outside the U.S., it's a hugely successful brand. They've been able to take motorsports and make it so immersive through the technology partnership that we've had over the last 20 years to bring a super exciting co-content to the public.
By working with them, MotoGP and Dorna are innovators of really immersive, really incredible type of viewing. For instance, this past weekend, they were the first to display a shoulder cam using our technology in Valencia. What this does, what 5G does for us is basically because 5G is more spectrally efficient, meaning you can put more bits through the pipe. Because of more spectrum being available and because of MIMO antennas, multi-in/multi-out antennas, you have more pipes. More bits through a pipe is more pipes allow you to do a lot more things. Many more cameras. Everything from, like in the case of MotoGP, we're doing four cameras per bike. We'll be able to increase that, and then more cameras around the track. Think about, you know, a typical NFL football game.
You know, my goal is to be able to put a camera in Tom Brady's helmet before he retires. Those kind of POV shots, really immersive type shots to get the viewers right in the middle of the game, I think are really realistic when you have the type of 5G network that we're working on. You know, can you imagine Aaron Donald chasing down Tom Brady, and you're able to see it real-time? I think that'd be phenomenal from his perspective. When you think about that, it's not just now video, but it's also biometric data. It's auto data, it's engine data. It's every bit of data now that we can move through these pipes.
There's a lot of different use cases that now can occur in a variety of sports, a variety of entertainment. We take those same technologies, and we apply them to the military and government markets that we work in. This is the beginning of what we call the connected edge, where everything's connected. You combine that with big data and compute on the edge, and you're able to do some things that, you know, heretofore we weren't able to do. We're really excited about our first step with MotoGP. We've got a lot of people interested in doing similar type of demonstrations, and we're working with those, partners to work through those. We expect this to be very positive here in the U.S. as well as around the world.
Thanks, Mickey. Here's a question from Antonio Proietti. Antonio asks kind of a two-part question. One is regarding MVP, our most recent acquisition, do they sell hardware to B2B rental companies? The answer there is they don't sell to B2B rental companies at this point, but they have looked at a leasing model, and they have leased equipment on occasion. We think that's an interesting idea and aspect of the market. We think it would be attractive to approach some of our customers from a OpEx perspective rather than a CapEx perspective, and we are looking at that. It does require us, obviously, to put a piece of our balance sheet at play and/or find a financial partner that would lease with us. We are looking at that.
We think it's a highly attractive aspect of the market that we think we'd like to look at. The other part of the question was, can you provide the financials of Mobile Viewpoint? We won't break out separate financials from Mobile Viewpoint ongoing. We did file our most recent 8-K/A that did describe that business before acquisition. I'll refer you to that 8-K/A for standalone financials. They are a profitable business. They will, we think, remain a profitable business. We will integrate them from a sales channel perspective. From an operational perspective, they are over in the Netherlands, and they do operate somewhat autonomously. We are integrating their products with ours, and we're very, very excited by the prospect of what Mobile Viewpoint brings to Vislink. Thanks for the question, Antonio.
Thanks, Mike. We have another question. It's how are sales doing internationally? I think when we look internationally, there's good and bad spots. I think Asia, you know, Asia typically was over 15% of our sales. It's down under 5%. You know, COVID still is challenging many Asian countries. So we think that will be longer to turn around. But we're encouraged 'cause we're able to hit the numbers that we've been able to hit with slowness in Asia. Europe's just coming back. The Middle East was strong, is strong for us, and the U.S. is strong. But in the U.S., our first responder sales, where we typically see higher numbers during this time, we haven't. A lot of decisions have been pushed out, so we haven't lost the opportunities.
They've just been pushed out as governments try to sort out, you know, what revenues look like and what budgets look like as well as, you know, what potential federal funding may be coming down the pike. I think we'll see 2022 to be strong in the first responder market that we haven't seen. Overall, we're pleased that we're able to achieve these revenue numbers having slowness in some of our key markets.
Thanks, Mickey. There's a lot of questions today, and it's more than just one person asking about our share price. Obviously, we don't give guidance, and we like not to comment too fully on the share price. Mickey and I came to the business a little more than a year and a half ago, and our first goals were to stabilize the company, stabilize the platform, engage the vendor base, get things moving again through the supply chain and get operations and manufacturing rolling again. We think we've achieved that. We think we've gone a long way towards rationalizing what was the old Vislink, what is today. To that end, we've rationalized the product line, we've streamlined the operations of the company, we reduced the break-even point down substantially.
We feel like we've done a lot to achieve what we considered our near-term goals. Medium-term goals are to continue to go out, evangelize our customer base, provide and introduce new products and invigorate the sales channel and invigorate the sales process. We think we've started to see that happen. I think this quarter is good evidence of that. $11 million of sales is, you know, historically high for this company. We feel like our mid-term goals are being achieved. Our long-term goals are to continue to add to the platform, to strategically go out and look for acquisitions and opportunities, to engage people in adjacent markets and to look for new ways to sell our products.
We think if we can, you know, execute on all those things, we think the share price will take care of itself, and we'll have an increase in value. That's the way we look at the share price at this point. We think hard work, step-by-step progress will eventually pay dividends. Thanks everyone for those questions.
Thanks. We have another one from Pablo Quesada. Do you think you'll achieve profitability without any further dilution? Yes, we have. We've achieved profitability. As we said from the beginning, our goal is to, with our current platform, to continue to generate cash and be profitable with our existing platform and then add to that. I think we're in a position to do that. There's some other questions on here around, you know, do we have a reverse split or dilution plan? No, we don't. You know, we believe, as you know, we have $38 million of cash. We're generating cash, and so we think we can continue to do this given the markets that we're in and the opportunities that we see with the new products that we've introduced.
We're encouraged by what our customers are saying to us around our products and how excited they are. You know, for instance, our Quantum receiver that we introduced earlier this year has been a massive success. We see, as a native IP receiver for our proprietary networks, we've seen that deployed, as we said, in the Olympics, in major sporting events around the world, and a lot of our partners are gearing up with that today. We're really excited about the products that we've had and the new products. We'll have a new introduction, similar platform introduction in our Q1 of next year that we're very excited about, will be for our first responder market.
I think, you know, as Mike says, we continue to focus on innovation and generating new products to work closely with our customers. We think there's tremendous opportunity to grow this business, continue to generate cash. Then on the M&A side, we'll do both complementary and also areas that we see growing. You know, as investors, you need to understand that we are super focused on costs and cost containment. The ideas of the past Vislink not being as focused on that are gone. We're very focused on that. We'll continue to maintain our discipline in that area.
Thanks, Mickey. Good question from Hassan. Hassan has asked us, you know, why are some of your operating costs going up? For two reasons. One, obviously, we've shown a lot of discipline in our operational cost structure, but we have experienced some public company costs like D&O insurance and other things that just go up unavoidably, and we can't help that. Some of those costs are rather large. We've also invested to some extent in more additional R&D and engineering. We feel that we were a little bit underserved, a little bit undermanned there. We have increased our spending in places where we really feel it'll provide the maximum amount of benefit. Then we also, going forward, you'll see, we'll combine the results and the expense streams of Mobile Viewpoint into our own.
That will obviously entail an increase that will be obviously more than offset by the revenue that we'll add to the top line. Thanks for that question.
Okay. We'll have one more question then. Maybe we'll do two more questions. One on how are our subscriptions going with bonded cellular. We introduced the Vislink Connect a few weeks ago. You know, we get interest there. We've had some demos that have been acquired, but still early on for that product. We continue to build on that and have a complete suite of products to support that. We're encouraged by the reception that we're seeing. I would say that the AI cameras.
Is the area that a lot of customers are focused on. It's new, it's different, it's super innovative, and they think they can do a lot of things for their content creation.
Let's go. We'll go with one more.
One more.
First of all, thank you, everybody, for the questions. You see one, Mike?
Yeah. Just another kind of Pablo asked a question that I think has been recurrent in the questions, is do you think you can achieve and sustain profitability? There, the answer is absolutely. You know, Mickey and I have, I think, put a lot of hard work into trying to stabilize the company, rationalizing again the supply chain, the operations, the headcount, our operating expenses. We've endeavored to kinda reinvigorate our channels, and we think that that bodes well for the company. We think this quarter is indicative of, you know, all the hard work that the team here at Vislink has put in. You know, Mickey and I couldn't have done it without an incredible amount of effort from our team, you know, worldwide. We think we've turned the corner.
We think we're on a path to, you know, increased profitability, which obviously increases shareholder value. We think we have a great opportunity to go add to the company strategically as well. We think that, you know, we're well on our way to creating a very profitable company.
Yep. First of all, thanks everyone for the questions, and thank you to our long-term investors. You know, we've been talking about our plan and our discipline for the last 5, 6, 7 quarters, and we appreciate. You know, we talk to quite a bit of our investors, and we appreciate the support that we get for those that are in here for the long-term opportunity. We'll continue with our turnaround plan that we started when we joined in early last year, and we're starting to see the fruits of our labors of the team throughout the world and the focus that we've had since both Mike and I joined the company. One thing I can say is we're just getting started.
We see tremendous opportunity for this company in the markets that we serve, as well as additional markets to leverage the technologies that we now have and other technologies and capabilities that we might acquire. We're very encouraged by what we see, and we think we have a tremendous opportunity both in the near term as well as to make this company. Like when I started, we said we didn't come here to have a small company. We wanna create a company that makes a major difference in this world, and we continue to be focused on making that happen. We've done a lot of the blocking and tackling to get us where we now can be profitable with our current platform, and we see opportunities to grow that platform as well to add to that through M&A.
We will continue to be diligent in how we maintain our costs and how we deploy our capital. You own this company as investors. We deploy this capital with you in mind to make sure we're gonna get the best returns for that capital. We continue to focus on that, and you have our commitment to do that on your behalf. Thanks, everyone. Appreciate your questions and appreciate your support. Thank you.
Yes, thank you, everybody.
Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.