Good morning, ladies and gentlemen, and welcome to the Baylin Technologies Second Quarter 2024 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024. I'll now turn the call over to Kelly Miles, Director of Marketing and Investor Relations of Baylin Technologies. Please go ahead.
Hello, and welcome, everyone. Thank you for joining us this morning for the Second Quarter 2024 Earnings Conference Call for Baylin Technologies. On the call with us today from Baylin are Leighton Carroll, Chief Executive Officer, and Dan Nohdomi, Chief Financial Officer. Before we begin, let me make it clear that our comments today may include forward-looking statements and information and answers to questions that could imply future expectations about the prospects and financial performance of the business for 2024, and could include the use of non-IFRS measures. These statements are subject to risks, uncertainties and assumptions. Accordingly, actual performance could differ materially from statements made or information provided today, so you should not place undue reliance on them. We also do not intend to update forward-looking statements or information except as required by law.
I ask that you read our legal disclaimers and explanation of the use of non-IFRS measures and refer you to the risks and assumptions outlined in our public disclosures, in particular, the sections entitled Forward-Looking Statements and Risk Factors in our Annual Information Form for the year ended December 31, 2023, and our other filings, which are available on SEDAR. Our Q2 2024 results were released after market close yesterday. The press release, financial statement, as well as the MD&A, are available on SEDAR and on our website at baylintech.com. I would now like to turn the call over to Leighton.
Thank you, Kelly. So I joined Baylin three years ago, and it really was a mission to turn around the company. I reflect back on this, it's the middle of COVID. I can't even get to Canada. I can't get to Korea, China, Vietnam, places I needed to get to, and we had a lot of work to do. I have to tell you, the most recent quarter results, which I'll speak about here in a moment, I am so proud of the team. I am so proud of our employees. I am thankful that people dug in and went on this journey with me.
It's been a lot of work, and I would tell you, you know, competition hasn't been sleeping, and in certain of our industries, for example, wireless infrastructure, it's been a very tough market. I know so many CEOs who are, their results are way off, just because of what has happened broadly with carrier spending, and yet we have managed to grow. And we had a strong quarter, quarter-over-quarter growth after Q1, which was growth over Q4. I'm so proud of the team and the people who work at our businesses, at Galtronics, at Advantech, and what we've done. I can't expand on that enough. With that being said, we continue to set up the company for success in the future. We're gonna talk about several wins and the momentum we have in terms of product development.
And I do continue to like the pipeline of opportunity. The backlog of purchase orders remains strong. As most of you will recall, the results of our mobile and network business line in the beginning of Q4 2023 were marked as held for sale. We felt this was the right thing to do, love the people there, but it wasn't going to be core to Baylin's success and Baylin's long-term future. This means that our financial results for continuing operations comprise of three business lines: our Embedded Antenna Business Line, our Wireless Infrastructure Business Line, and the Satcom Business Line. On July 9th of this year, we announced that we had agreed to sell the Mobile and Network Business, which is comprised of our Galtronics Korea and Galtronics Vietnam, we call them GTK and GTV, respectively, to a Korean strategic acquirer.
I'm pleased to announce that on July 30th, we completed the sale of our Korean business entity, and subject to the receipt of the regulatory approvals in Vietnam, we expect that we will be completing the sale of the Galtronics Vietnam business, which again supports the mobile business that we had sold, that that business should sell within the third quarter. It's an important step on our journey, and it, honestly, it allows us to simplify our business, focus on our North American core, and keep building on some of the momentum we've had. I do want to take the moment to thank the people, the team who I've worked with in Korea and Vietnam.
We've been through a lot together, and it is my earnest wish for their success and for the new owners to be successful, having bought the business from us. I'm also very pleased to report that our North American businesses had a very strong quarter. The embedded, you know... You know, it's a bit of a broken record, but our embedded team had a very, very good quarter. And really, they've always been good in kind of building antennas for other people's consumer end products, particularly around home automation. That continued, but we've seen really strong success in public safety as well as a complement. Very happy with it. It has certainly exceeded our expectations this year. Wireless infrastructure is really kind of a big part of the Baylin turnaround story itself.
When I got here, it had lower gross profit levels. It had struggled, and I would just say never lived up to its potential at all, and yet we had really good talent. It's one of the reasons I came. Well, we have made so much progress in so many fronts, and what I think is cool about it is the success and the team that we've had. It's not just a function of, oh, we've got one product. And, you know, people who attend this call have heard me talk about the multi-beams and how that's really working for us and why that matters. That's true. Everything I just said is 100% true, but I like the customer diversity we now have. We didn't have that before. I like the revenue diversity we have. We did not have that before.
I like the product diversity we have. It's not just about multibeams. We have been selling stadium antennas. We have been selling DAS antennas. We are selling small cells, and those will continue. There's a good future for all of the products where we've chosen to focus, and we've also chosen to not focus on certain things. In hindsight, I'm glad we've taken that strategy. Stack performance has continued to be consistent and solid. The quarter was slightly lower than what we would like in terms of our expectations, as there were some pushouts at the very end of the quarter. However, you know, that's not lost revenue. That's revenue that will come in this year, and the expectation is, guys, you know, dog doesn't eat our homework. You got to make plans.
So we know we had some pushouts at the end of the second quarter in that business. I expect that we'll see that recover fully in Q3 and Q4. Backlog from continuing operations remains at a notably elevated level. I like being at CAD 33.1 million at July 29, so almost the end of the month. And new order intake across all business lines remains pretty strong. This compares to CAD 32.6 million at June 30, 2024, versus CAD 31.2 million at the end of 2023. So, you know, I like consistency, and I like numbers that grow, particularly when you're talking about a backlog that has a better margin profile than certainly when I started. Quality of the backlog is a big deal.
I'm also pleased and not satisfied with the overall improvement in our cost structures and margin attainment in the business. We have more work to do, right? No one's ever perfect, and while it's fun to celebrate and say, "Man, we had a great quarter," we're still not where I think we ultimately can be in terms of our efficiency and cost structure, but we are a lot better. We've still got a lot of work to do, but when I look from when I joined and we were running about 16% in a very hairy period in the middle of COVID to all in as a business, we did 40% in gross profit. That's a pretty remarkable improvement in the business. And by the way, it's a team effort.
It's our operations folks, it's our production folks, it's our engineers. How do we design for manufacturability? How can we improve what we do? How do we build products that have a good margin profile that customers want? And how do you ensure that you can sell enough of that? So having sales teams who are effective, and you're really solving customer issues that matter. Really, again, just proud of the team and what they've accomplished. Finally, the number of active bids for 2024 and going into, in some cases, 2025 projects, remains at a near record level, meaning the funnel of opportunities that we're chasing for our business remains substantial. Two recent developments to share. Satcom had a couple of major awards during the period. These were covered by press releases.
On May 29, we announced that Advantech received a $6 million order for its ultra-high power Summit II Solid State Power Amplifier System, placed by a major U.S. defense contractor for use in a NATO specific government application. Really cool stuff. It's, by the way, all based on relatively new technology that the teams have been engineering. Software-based capabilities, better operations and management capabilities for end customers, and importantly, in the long term, easier to manufacture than some of the legacy products that we've had.
On July third, we announced in our embedded business, we've been selected by a U.S. networking company to provide a 4G, 5G antenna solution for their mobile customer premise equipment, which will be available to consumers through multiple U.S. Tier 1 carriers, as well as Tier 1 carriers outside the U.S.. Solution will also be used in the public safety sector. In other words, you know, these are two kind of really neat press releases, two of our divisions, and by the way, there's more coming on the infrastructure side. It's actually just fun to do the press releases. I enjoy it because it's a bit of a celebration of what the people at Baylin, the people in Galtronics, the people in Advantech have accomplished, and they have a lot to be proud of.
Dan, with that, I'm gonna turn it over to you to take us through our second quarter and results.
Thank you, Leighton. Revenue from continuing operations was CAD 22 million in the second quarter of 2024, which was an increase of CAD 0.7 million or 3.4% compared to the same period last year. This also represents a quarter-over-quarter increase of CAD 1.9 million or 10%. Compared to the same period last year, the increase in revenue was primarily due to sales volume increases in the wireless infrastructure business line. Gross profit from continuing operations was CAD 9.2 million in Q2 of 2024, which was also an increase of CAD 0.7 million or 9% compared to the second quarter of last year. This also represents an increase quarter-over-quarter of CAD 1.5 million, or nearly 20% compared to Q1.
Gross margin was nearly 42% in Q2 of 2024, and that compares to 40% the same period last year, and compares to 38.5% in Q1. Compared to the same period last year, the higher margin in Q2 of 2024 was mainly due to improved product mix. Wireless infrastructure revenue as a % of total revenue was higher in Q2 of 2024, and most of its products generate higher margins than the other product lines. Adjusted EBITDA from continuing operations was CAD 2.3 million in Q2 of 2024, +ve CAD 2.3 million, which was an increase of CAD 1.2 million or 116% compared to the same period last year.
This also represents an increase of CAD 1.8 million or 394% compared to Q1 of 2024. Compared to the same period last year, the increase in Q2 of 2024 was mainly due to a combination of higher revenue, higher margin, and lower OpEx. The second quarter of 2023 had the benefit of specific one-time government incentives, which were recorded as an offset to operating expenses in that quarter as well. Net loss from continuing operations was CAD 0.1 million in Q2 of 2024, so nearly breakeven from that measure, and that compares to a net income of CAD 0.2 million in Q2 of 2023. This also represents an increase of CAD 1.9 million compared to a net loss of CAD 2 million in Q1 of 2024.
The net loss in the current quarter was primarily the result of operating income of CAD 0.8 million, offset by interest in other finance expenses as well as income tax expenses. The net income in Q2 of last year was due in part to a gain on lease termination and sale of non-current assets in Vietnam, as well as a favorable adjustment based on the fair value of our convertible debentures. On a per share basis, a net loss of was nil per share in this Q2 of 2024, compared to a similar measure in Q2 of last year.
Net debt from continuing operations was CAD 16.6 million at the end of June 2024, which was an increase of CAD 3.9 million from December 31, 2023, and that was primarily due to an increase in working capital investment as a result of increasing sales and order backlog during the six months ended June 30, 2024. I'll now talk about discontinuing operations, which represents the mobile and network business line. Adjusted EBITDA from discontinuing operations was -ve CAD 0.6 million in Q2 of 2024, compared to -ve CAD 1 million in the same period last year.
The reduced loss in Adjusted EBITDA from discontinued operations in the current quarter was primarily due to an increase in gross profit, as a result of result of higher revenue, as well as a decrease in OpEx in the M&N business line compared to the prior year period. Net loss from discontinued operations was CAD 1.5 million in Q2 of 2024, which was largely consistent with the prior year period. Then this net loss was mainly due to an operating loss of CAD 1 million in the M&N business line, and on a per share basis, a net loss of CAD 0.01 per share in Q2 of 2024 compares to a net loss of CAD 0.02 per share in Q2 of 2023. I'll now turn the call back over to Leighton.
Thank you, Dan. As we mentioned earlier, the company's financial performance from continuing operations in the second quarter was good on a relative basis, and certainly, I'm pleased with the progress we've made. Revenue increased by 10% quarter-over-quarter, and gross profit increased by nearly 20% quarter-over-quarter. And obviously, quarter-over-quarter, our gross margin improved by 3.4 percentage points up to nearly 42%. Positive Adjusted EBITDA of CAD 2.3 million compared to CAD 0.5 million in the first quarter. That's an almost 400% increase. And the thing that is not lost on me is how challenging the market environment is. I actually, when this came out, I shared-...
Some of these results with a few friends of mine, who are CEOs of various companies in, for example, wireless infrastructure. And a couple of the responses I got were: H-how? How did that happen? Everyone is in a super challenged environment, and honestly, it's to have these results in that context makes me very proud of the work that the team has done. Okay, as we continue to prioritize our product mix, emphasizing products that solve customer needs while generating better margin and better gross profit, our life is really about continuing to improve Baylin, right? As good as the results are, you know, what do they say? Some is good, more is better. We need to continue to drive profitability. We need to continue to grow our business. You know, while mobile and network in...
You know, if you could roll back many years ago in our past, it was a very important part of our business. The right thing for us was to sell that business and move and focus on our core. And by focusing on this core, the mission is we need this core to continue to perform and continue to grow. So, happy with the results, but not satisfied is perhaps the message. Now, I'd like to speak about each of our businesses, and some of the things that we've been up to. The embedded line continues to have a strong quarter. One of the nice bolt-ons that I mentioned earlier is the demand for a new public safety product that we launched in fourth quarter of 2023.
You know, good, good, good, good thing to have happen. The customer has an extremely successful product, and it has driven volume for us, and which obviously is a great thing and drives profitability. We do expect the embedded business line will continue to perform strongly for the remainder of 2024, but it will have some, and this is part of Baylin. If you look at it over many years, some of our businesses, not all, but certainly embedded and also infrastructure, there's seasonality involved. Some of these businesses have a very definitive cycle to them, and what you typically see is our Q3s tend to not be as strong as our Q2s. We do anticipate these businesses will remain healthy, profitable.
We have good backlog in each, and we are comfortable that we're gonna stay ahead of plan, where we started the year, where we expected, but I do expect that the embedded line will be seasonally adjusted, slightly lower. Separately, we do continue to have a very active bid book for the embedded division. Wireless infrastructure had, honestly, at least since I've been here, I think probably its best quarter in Q2. And it's really been nice because it's been a good mix. Yes, the multi-beams, they are great. It's a great technology. Customers love them. We have been getting more carrier approvals. We have more work going on with carriers. We actually have new models with additional capabilities coming out.
An example of that is we have our antennas, these multi-beams, they were fairly fixed, which is a very standard antenna type. We have now added something called a remote electrical tilt, or RET capability to them. The first unit has come out. It is in a carrier's hands. They have deployed it and love the performance. That bodes well for us because that opens up additional use cases, kind of a neat place to be, and you can kinda see where we're going. And then you layer in, we have small cells that are starting to sell again, and we were struggling with small cells last year. We have DAS deployments that are going on. We are seeing DAS deployments in Europe. That wasn't That was not the case when I joined the company.
and these airport deployments have been just tremendous. and we're in a lot of really cool marquee properties, and that success is building on itself. The competitive advantages our products open up help us drive sales and help us drive sales in places we haven't been. That revenue and product diversity is gonna help make our business resilient, and I'm really pleased with the work that they've done. Now, with that being said, seasonality is real, and it's always real in infrastructure. Do 100% expect Q3 will not be as strong as Q2, but again, it's gonna be ahead of plan, and the business is continuing to have a nice order book with a lot of opportunity in front of it. On the Satcom side, it's been a really interesting story to watch. We've had certain product areas where the market changed.
You know, customers no longer needed 5G filters, and if you go back to when I joined the business, that was not an inconsequential part of revenue. Well, guess what? We've all set that. That business continues to perform and has continued to grow, and if I can talk about the Satcom context for a second, a lot of the places in, for example, the maritime and in some aviation markets, kind of more the end consumer side of things, that market, a lot of the people who were the guys who our customers who were active in that market, their revenues are way off. And that's because there are new entrants and new technology in what I would say on the low end and the lower end of commercial technology.
We chose purposely to focus on high power, high end, very unique capabilities, and it's paid off. We have a strong backlog. We're doing a lot of work with NATO-specific governments, and that's not just defense, it's also scientific. And scientific can go everything from weather agencies to space exploration. We've obviously had some really cool announcements in that space.... The new technology that we've come up with, the Genesis and the Summit Lines, are well received. And then finally, broadcast. You know, it's one of those things that I don't know that we talk enough about, but when I can go and explain to customers, okay, look, our Satcom Business is real easy to... I mean, or excuse me, just third parties or even investors. Our Satcom Business is really easy to understand. We don't put things in space. We don't make dishes.
We make technology that makes the dishes work. Easy examples: NASA Artemis space mission, the lunar modules go out, the communication to them is powered by us. If you like golf or you like American football, the Super Bowl broadcast, the Masters Golf Tournament, and many more, many more events, those, when you're watching on TV, you're watching technology powered by Advantech gear. It's a, it's a great, great business, neat, and I would tell you, the positioning and investment in technology that we've done has helped us, where others, particularly if they were on the low end of the market, have not fared as well. So overall, for 2024, we expect 2024 will continue to be a good year. It will have stronger revenue and gross profit than we did in 2023.
I feel good about the work that we've done, and I feel good about our longer-term journey and where we're going. Mobile and network, as mentioned earlier, has been sold to a Korean strategic acquirer. The factory in Vietnam, which produces for this line, has yet to be transitioned, but we expect to complete this by the end of the third quarter. When we started 2024, there were significant challenges. Q4 of 2023 was super challenging for a lot of us who work in the technology segments we work in. I felt like we fared better, and I felt like at that time I could kind of see that we were starting to set up to have a nice, nice 2024, and I... honestly, that has started to happen.
The go-to-market strategies that we have in each of our business, I like how we positioned ourselves, I like our customer relationship, I like how we focus, I like how we're hyper-focused on supporting our customers, and I like the technology that we've developed. As I mentioned in my opening remarks three years ago, this was about turning around Baylin. And I tell people, you know, I don't do the work. My job is to help people be great at what they do, so they can do what they love, solve customers issue, issues, and let us try to build a business. We've been doing that. I feel like the employees of Baylin deserve all the credit for this.
Baylin, to see us grow in this context of a very challenging environment and deliver a strong quarter, it's something I'm very proud of, and I can't thank our employees enough for this. Folks, that concludes our formal remarks. I appreciate everyone joining the call, and keep rooting for us while we go back to work and try to deliver another positive quarter. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.