Alpine 4 Holdings, Inc.

For Q2 2023, revenue was $28 million, up 11% year over year; six-month revenue was $52.4 million, up 3%. Gross margin was 28% in Q2 versus 24% in Q2 2022, and 25% year to date versus 23% last year. Net loss was $4.6 million, or $0.18 per diluted share, compared with net income of $1.5 million, or $0.07 per diluted share, in the prior-year quarter; six-month net loss was $10.3 million, or $0.41 per diluted share. Adjusted EBITDA loss improved to $247,000 in Q2 and $2 million year to date, versus losses of $1.5 million and $2.6 million, respectively, in the prior-year periods. Management said it expects top-line revenue growth to show signs of acceleration in Q4 2023, and expects RCA Commercial sales to move back toward 2022 levels in Q4 while maintaining 2023 margins. The company also said it filed an S-1 on August 4, secured $1.7 million of bridge financing in a fixed-price convertible note, and anticipates another capital raise may be needed at some point in the future.

Kent Wilson framed the quarter as the start of “a new era” and said the company’s underlying progress is “transformational and exciting,” despite share price weakness. He emphasized multiple commercialization opportunities across Vayu drones, Elecjet solid-state batteries, RCA consumer gaming/monitors, QCA manufacturing, and Global Autonomous Corporation. His tone was upbeat and aggressive, repeatedly pointing to large addressable markets, customer evaluations, and the potential for future acceleration in sales.

Christopher Meinerz focused on the financial bridge between revenue growth and operating leverage. He cited Q2 revenue of $28 million, gross margin of 28%, operating expenses of $11.5 million, and net loss of $4.6 million, then explained that higher expenses were driven by $1.6 million of professional fees tied to restated financials and filings, a $404,000 increase in R&D, and the absence of a $5.8 million property-sale gain from 2022. He also noted $2.5 million of operating cash inflow in the first six months of 2023, cash and cash equivalents of $3.8 million, $1.7 million of bridge financing, and said the company is likely to need another capital raise in the future because of its growth model.

In Q&A, management said future capital needs are likely, even after the S-1, because Alpine 4 is a growth company with uneven cash needs and new opportunities. On drone sales timing, Kent Wilson said the UAV market is highly restricted and long-cycle, so Vayu shifted focus outside the U.S., which helped lead to the $100 million supply agreement and the first $5.25 million purchase order. Management also addressed the falling share price by arguing the market is undervaluing a company with more revenue, assets, and shareholder equity than at its 2021 stock peak, and said stronger product sales should eventually be reflected in the share price.