AmpliTech Gr Q2 2026 Earnings Call Transcript

On Thursday, AmpliTech Gr (NASDAQ: AMPG ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 1 million, a 51% increase from Q1, but a decline year-over-year due to a favorable product mix and absence of lower-margin sales from a previous acquisition.

The company is heavily investing in future growth areas such as 5G telecom infrastructure, satellite communications, and semiconductor technologies, which has impacted short-term profitability. 8% in Q2 2025, attributed to a favorable product mix. Operating expenses increased due to higher marketing and business development activities, R&D for 5G products, and necessary investments in cybersecurity and IT infrastructure. AmpliTech Gr has strengthened its balance sheet with significant cash and marketable securities, bolstering its ability to support larger customer programs.

The company withheld specific revenue guidance for the full year, citing timing uncertainties in customer deployments, though it expects significant growth and a stronger second half of the year. Strategic initiatives include expanding sales and marketing efforts, enhancing cybersecurity, and building a robust supply chain to support large-scale customer demands. Management emphasized the importance of recent investments aimed at securing future revenue growth and improving operating leverage as the company scales.

Full Transcript OPERATOR Good day, ladies and gentlemen, and welcome to AmpliTech Gr's quarterly investor update call, where the Company will discuss its second quarter 2026 financial results. In this call, we have the executive team of AmpliTech Gr: Fawad Maqbool, CEO, CTO, and Board Chair; Jorge Flores, COO; and Luisa San Fratello, CFO. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time.

As a reminder, today's conference call is being recorded. I would now like to turn the call over to AmpliTech Gr COO, Jorge Flores. Please go ahead. Jorge Flores, Chief Operating Officer Thank you, Operator.

Thank you for joining today's call to review AmpliTech Gr second quarter 2026 financial results, review our company's outlook, and to answer investor questions. Following initial management comments, we will open the call to investors' questions. An archived replay of today's call will be posted to the Investor Relations section of the AmpliTech Gr corporate website. This call is taking place on Thursday, August 13, 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.

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 its 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, Mr. Fawad Maqbool.

Fawad Maqbool, Chief Executive Officer Thank you, Jorge. Good afternoon, everyone. Thank you, everyone, for joining us today. The second quarter was an important period in AmpliTech Gr's continued transformation and growth.

We recognize that investors will focus on our total revenues, gross margins, total expenses, and bottom-line results. We want to address those items directly and, more importantly, provide our investors with additional color behind the numbers. Investing Ahead of Growth Our second quarter results reflect both meaningful progress across our underlying businesses and a deliberate increase in investment as we position AmpliTech Gr to pursue and support significantly larger opportunities across 5G telecom infrastructure, satellite communications, semiconductor technologies, and other advanced communications markets.

Establishing a meaningful and sustainable position in the telecom infrastructure market is neither easy nor accomplished overnight. It requires significant technical expertise, sustained R&D investment, product development, testing, certifications, customer qualification, and ultimately the ability to perform at scale. We believe the investments we have made in these areas have been instrumental in the progress AmpliTech Gr has achieved and are an important part of building a durable competitive position in this large and expanding market.

While these investments impacted near-term profitability, we believe they should be viewed in the context of the larger opportunity we are building toward. We are encouraged by our strong revenue performance and, equally important, by the continued commercial and technical progress we are making in markets that historically have presented substantial barriers to entry and were only for the industry giants. There are no shortcuts to building a lasting presence in telecom infrastructure.

Our strategy has been to invest in the technology, people, capabilities, and customer relationships necessary to compete for increasingly meaningful opportunities and to support them successfully as they scale. We remain focused on disciplined execution, converting our technology investments into commercial opportunities, expanding our customer base, scaling revenue responsibly, and improving operating leverage as the business grows. Our long-term objective is to build AmpliTech Gr into a significantly larger and more valuable communications technology company and, in doing so, create substantial and sustainable value for our shareholders.

This doesn't happen overnight, and it takes a lot of resources to put all of this together to compete with the giants. Q2 was, in many respects, a quarter to invest in the future growth of AmpliTech Gr. We invested in customer-driven R&D, supply chain resilience, production readiness, strategic sales and marketing, specialized personnel and outside expertise, cybersecurity and IT infrastructure, internal controls, and the organizational capabilities required to support larger customers. Building the Commercial Organization We also increased our investment in sales and marketing during the quarter.

The 10-Q reflects increased marketing and business development activity, including additional industry trade shows, expanded promotional initiatives, and hiring of two senior business development representatives to support the company's expanding 5G Open RAN commercial strategy and our 5G product portfolio. , we've engaged a strategic marketing and communications firm whose principals have deep experience in complex industries. They're building our marketing and communications foundation from the ground up.

They already overhauled our website and messaging, and they'll be assisting us with sales campaigns, rebuilding the e-commerce portion of our site, strengthening our SEO, and building the brand equity that positions us as a leader in the market. We recognize these as essential ingredients, especially the website, to portray an image that we really need to show our investors. Historically, AmpliTech Gr has been a highly engineering-driven organization. As our product portfolio and addressable markets expand, we believe we must put an equally capable commercial organization around the technology we have developed.

The objective is not simply greater marketing exposure; it's to improve access to strategic accounts and convert technology validation, customer engagement, and engineering activity into commercial opportunities. We believe the next stage of AmpliTech Gr's evolution requires both technology leadership and market access. With this, I'll turn the call over to our CFO, Luisa San Fratello, to review our financial results in more detail. UNKNOWN, Chief Financial Officer Thank you, Fawad.

Good afternoon, everyone. 35 million in the first quarter, representing sequential revenue growth of approximately 51%. Although revenue declined year over year when comparing second quarter results, the comparison requires important context. The prior-year quarter included acquired 5G product sales associated with the Titan Asset acquisition.

Those sales increased reported revenue but carried significantly lower gross margin. The difference can clearly be seen in our gross profit performance when comparing gross margins from Q2 2025 and Q2 2026. 25 million, an increase of approximately 161%. 9% in Q2 2026.

9%. The 10-Q attributes this improvement primarily to a more favorable product mix and the absence of the lower-margin acquired 5G product sales included in the comparable prior-year period. Sequentially, gross margin decreased from approximately 48% in Q1 to approximately 28% in Q2. We believe investors should consider this in the context of quarterly product mix in our current stage of commercialization.

At our present scale, individual customer programs and product mix can have a significant effect on quarterly margins. More importantly, as we prepare to support larger customers, we are incurring costs associated with production readiness, supply chain capability, product development, and customer-specific requirements ahead of the full revenue contribution we are seeking from those programs. Our longer-term objective remains to increase the contribution from our differentiated internally developed technologies and higher-margin product offerings as those programs progress toward commercialization. 13 million in Q2 2025.

This increase relates primarily to higher parent company expenses including amortization, legal fees, and stock-based compensation, together with greater investment in marketing and business development, additional trade show participation, and expanded consulting resources supporting the company's 5G portfolio. There is additional strategic context to that, which we believe is important for shareholders. As we engage with larger MNOs, telecommunications infrastructure providers, and enterprise customers, their expectations extend well beyond product performance.

These organizations increasingly expect suppliers to demonstrate strong internal controls, cybersecurity practices, IT governance, operational resilience, and the infrastructure necessary to support larger deployments. Accordingly, we have engaged specialized consulting resources to further strengthen our SOPs-related controls and protocols, cybersecurity framework, and ISO-aligned IT security practices. We are also transitioning toward a hybrid IT infrastructure model, combining appropriate internal resources with specialized external expertise. Our objective is to improve security, redundancy, scalability, and technical support as the company grows.

These initiatives are also relevant to enhance written documentation of internal controls and procedures, information technology general controls, and personnel resources necessary for appropriate segregation of duties. We therefore view these required investments as critical both from a corporate governance standpoint and from a customer readiness standpoint. We expect operating expenses to grow more efficiently than revenue going forward. Certain elevated expenditures were associated with implementation, consulting, customer development, commercialization, and infrastructure initiatives undertaken.

As we prepare the company for a larger scale of operations, some ongoing investment will clearly remain necessary. We intend to continue investing where management sees an appropriate potential return. However, our objective is to build the infrastructure now and leverage that infrastructure across a substantially larger revenue base. That is where we believe future operating leverage can ultimately come from.

37 million, compared with approximately 659,000 in Q2 of 2025. 08 million related to 5G development and approximately 297,000 related to MMIC design. As stated in our 10-Q, this increase is primarily due to the expanded 5G product development activity, including higher prototype and testing costs and increased consulting expenses supporting product innovation and development. From an operational standpoint, this quarter also required increased engineering support for new and customized requirements from existing and prospective customers.

This is an important distinction as our engagement with larger customers increases. Those customers may require specific configurations, prototypes, testing, validation, and technical modifications before programs can progress toward commercial deployment. That means the company can incur engineering and development expenses before the associated production revenue is recognized. We view much of this work as supporting commercialization opportunities rather than research conducted without an identified market application.

We are investing engineering resources today with the objective of creating products and configurations capable of generating future commercial revenue. 09 million. We recognize that these numbers are important to shareholders and we are not minimizing them. However, we believe it is equally important to understand what contributed to the increase during Q2.

AmpliTech Gr simultaneously invested in product development, customer-specific engineering, sales and marketing, supply chain readiness, production capability, cybersecurity, IT infrastructure, corporate controls, and the broader organizational infrastructure required to support larger customers. Our focus now is on converting those investments into commercial revenue and ultimately operating leverage. With that said, our balance sheet provides us with significantly greater capacity to execute this strategy. 9 million of working capital.

7 million. 12 million in net proceeds. We believe the rationale for strengthening our capital position should also be viewed strategically. Large MNOs and telecommunications infrastructure providers need confidence that their suppliers have the financial resources, manufacturing capability, inventory availability, engineering support, and supply chain resilience necessary to execute significant programs for AmpliTech Gr.

A stronger balance sheet is therefore not simply a financial asset; it is also a commercial capability. It provides greater flexibility to support working capital requirements, secure production capacity, strengthen the supply chain, support customer qualification and testing, and pursue larger opportunities without placing undue pressure on day-to-day liquidity. We believe that is particularly important as the scale of the customers and opportunities we pursue increases. I'll now turn the call over to our COO.

Jorge Flores, Chief Operating Officer Thank you, Luisa. I'd like to comment from the operational perspective. From an operating perspective, Q2 was about preparing AmpliTech Gr for a different level of customer engagement. As our opportunities expand within 5G and telecommunications infrastructure, customer requirements became more demanding.

Major telecommunication customers evaluate much more than product performance and price. They do evaluations on engineering capability, customization ability, quality, manufacturing readiness, supply chain reliability, cybersecurity, IT systems, financial stability, testing capability, delivery performance, and ongoing technical support. Our investments during Q2 were designed to strengthen these capabilities. Supply chain resilience is particularly important.

47 million associated with dedicated production capacity. 3 million of advanced payments toward this dedicated production line. We believe these investments are important and critical as we pursue larger opportunities.