AltiGen Communications, Inc. (ATGN)
Price: $0.57
Market Cap: $14.7 M
Basic/Diluted Shares Outstanding: 25.601M/25.928M. Their share structure has been quite stable as they had 22.8M shares outstanding as of 9/30/14. I picked that date because it is a date that I recorded information a long time ago.
Management ownership by CEO: 3,493,682 (14%)
AltiGen's self described mission is "to revolutionize business communications by delivering secure, scalable, and intelligent solutions that empower organizations to connect, collaborate, and grow." They currently accomplish this by delivering and supporting Voice over Internet Protocol (VoIP) phone systems and call center solutions for businesses.
Their business has bounced in an out of profitability over the years and has been profitable for the past four quarters including earning $0.011/share in the most recent quarter on revenue of $3.5M vs. a loss of $0.0099/share on revenue of $3.36M in the prior year.
Most of their increase in revenue in this quarter was from "Professional services and other" which increased from $1.183M to $1.362M. However "Hosted services" also increased from $1.817M to $1.856M. I understand this growth is due to MaxCloud V2 being available now. It has only been available for a few months. They have an objective of migrating all of their legacy cloud and on-premise customers to MaxCloud V2 in the next 18 months. They have been working on the new version of MaxCloud for years. In the Q1'25 confernce call they stated: "Now that we have the proper solution available with MaxCloud UC, we expect to be able to begin generating new incremental revenues in the UCaaS space. That, to me, suggests now is when the proverbial hockey stick starts.
They have also been reducing costs. Operating expenses were reduced from $2.302M in the March 2024 quarter (Q2’24) to $1.882M in the March 2025 quarter (Q2’25). They have further cost savings that they have identified. One such potential cost reduction is that they became a Microsoft ECIF Certified Vendor in the U.S. They have the potential to receive Financial Assistance from Microsoft among other things under this program. See the following press release for more details: otcmarkets.com
Recent Management changes:
- Joe Hamblin rejoined the company in February of 2024 as Chief Digital Officer. He was the Chief Operations Officer from Sept 2020 to January 2022. His reason for leaving in 2022 was that he received an offer "he couldn't refuse." Prior to that he spent nearly 33 years at Sprint Nextel culmination in a role as Vice President of IT Enterprise Services.
- Gary Stone joined as Acting CFO in January of this year.
About a year ago at the Planet MicroCap Conference and reiterated in the Q3'24 conference call they indicated that they expect to be within $40-60M in annual revenue with $50M at the midpoint within 5 years. That would be approximately 4 years from now. To the best of my knowledge, they haven't reiterated this guidance since Q3'24 of last year and I haven't had the opportunity to ask them. I suspect they haven’t reiterated the guidance because I understand that the delays in introduction on the next version of their UCaaS platform called MaxCloud have impacted growth. In the conference call they stated that they have “already migrated approximately 30 customers to the new platform with the objective of migrating all of our legacy cloud and on-premise customers to MaxCloud V2 in the next 18 months.” Furthermore, in the conference call they stated that: “We feel like we're positioned for growth and what you can expect from us now that we really feel like the house is in order. We will start investing in sales and marketing, focusing on our top line revenue growth going forward. Even if they only hit $35 M in revenue that would be almost tripling of revenue.
So in summary you have a company that is reducing cost and growing revenue. Given all of the above, I have to believe that earnings are going to increase and likely substantially.
Disclosure: This is a large holding of mine. |
