The following is a summary of the Quarterhill Inc. (QTRHF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Quarterhill reported Q2 revenue of $41.5 million, a 7.5% increase year-over-year.

• Adjusted EBITDA for Q2 was $1.7 million, down from $2.9 million from the prior year.

• Cash from operations turned positive at $802,000 compared to a $6.9 million cash used in operations in the same quarter last year.

• Substantial revenue backlog at quarter end was reported at $500 million, providing visibility into future revenues.

• Gross margin for Q2 stood at 21%, experiencing a decline from 26% the previous year.

Business Progress:

• Quarterhill has enhanced its program management and operation integration, seeing a positive impact on cash flow.

• Progress in executing tolling projects in Texas and developing technologies for automated vehicle detection and classification.

• Active in integrating and exploiting the new acquisition, Red Fox, enhancing technological capabilities and broadening service offerings.

• Strategic hires, particularly focusing on sales teams in the U.S. and Europe.

• Launched a unified branding campaign aligning the company's subsidiaries under the Quarterhill name.

Opportunities:

• Advanced technological applications in AI and machine learning to further enhance its business prospects.

• Strengthening the enforcement business with new contracts, particularly highlighting their use of AI in traffic monitoring systems.

• Expansion into the European market with a strategic focus on tolling opportunities, supported by participation in the Intertraffic show in Amsterdam.

Risks:

• A transitory period of lower-than-expected margins in some ongoing tolling projects which are anticipated to be resolved in future quarters.

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