Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avante Corp (ALXXF, Financial) reported a 21% increase in quarterly revenues year-over-year, reaching $8.4 million in Q3 2025.
- The company achieved a 74% increase in adjusted EBITDA, reflecting improved profitability.
- Avante Corp (ALXXF) is bank debt-free and has $12 million available in undrawn credit facilities, indicating a strong financial position.
- The introduction of innovative products like Avante Verified and WALL-E is gaining strong market traction.
- Recurring monthly revenues increased by 25%, driven by the core business and new service offerings.
Negative Points
- Gross margin percentage slightly decreased from 42.5% in Q3 2024 to 40.9% in Q3 2025.
- Despite growth, the company faces challenges in managing the balance between selling and leasing WALL-E units.
- The company is still in the process of ramping up production and sales efforts for new products like WALL-E.
- Avante Corp (ALXXF) is experiencing a slow ramp-up in the WALL-E division, with full potential expected in about four months.
- The company is navigating the complexities of expanding its geographical reach while maintaining service quality.
Q & A Highlights
Q: Can you explain the drivers behind the strong MRR growth this quarter, particularly the balance between NSSG and other business lines?
A: Our recurring revenue growth is primarily driven by Halo, which is expanding in both residential and commercial markets. NSSG contributes through long-term contracts with embedded employees, while Avante Black, although not recurring, has shown significant growth this quarter. - Emmanuel Mounouchos, CEO
Q: What are your EBITDA margin targets, and how do you plan to achieve them?
A: We aim for EBITDA margins of 15% to 20%. Our strategy involves cutting overhead while managing growth and recurring revenue across different vertical markets. - Raj Kapoor, CFO
Q: Which parts of the business do you expect to grow the fastest?
A: While all areas are growing, our focus is on expanding Halo and its vertical markets due to its high recurring revenue potential. Avante Black and our core business are also seeing significant demand. - Emmanuel Mounouchos, CEO
Q: How does Avante differentiate itself in the market with its alarm response system?
A: Our smart box technology allows for immediate dispatch to client homes, bypassing traditional monitoring stations and reducing response times to an average of six minutes or less. - Emmanuel Mounouchos, CEO
Q: What are your plans for expanding the core monitoring business geographically?
A: We are expanding Halo-based services globally, using local security companies for installations while we handle remote monitoring. This model is being applied in various locations, including Italy, California, and Florida. - Emmanuel Mounouchos, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
