I.D. Systems Reports Second Quarter 2018 Results

I.D.Systems (NASDAQ:IDSY), a leading provider of wireless M2M solutions for securing, controlling and managing high-value enterprise assets announced results for the second quarter ended June 30, 2018.

The company’s revenue increased 38 percent to US$14.8 million from US$10.7 million in same period in 2017. I.D.Systems said that the revenue increase was due to higher connected vehicle solutions revenue.

As quoted in the press release:

“The second quarter was yet another strong period for I.D. Systems, building off the momentum we established at the outset of the year,” said I.D. Systems CEO Chris Wolfe. “Our performance in the second quarter was highlighted by solid topline growth of 11% sequentially and 38% year-over-year to $14.8 million. This achievement was driven by meaningful growth in our Connected Vehicle Solutions business from the delivery of 28,000 Unified Telematics Platform units to Avis Budget Group, along with steady contributions from our Industrial Truck Management and Logistics Visibility Solutions businesses. In addition to our strong topline results, we also delivered a solid improvement in non-GAAP net income, demonstrating our optimized cost structure and the leverage of our financial model.

“Looking ahead, the remainder of the year looks as promising as the first half of 2018 as we continue to launch innovative new products as well as prove our ability to consistently market, sell, execute and deliver our technology platforms. Our operational momentum, expanding product and solution offerings and growing customer demand have established solid foundation for us to leverage in the years ahead.”

Second Quarter 2018 Financial Results

Recurring revenue increased 6% to $5.0 million from $4.7 million in the same period a year ago.

Gross margin was 43.3% compared to 51.8% in the same period a year ago. The decrease in gross margin was primarily due to deliveries of Connected Vehicle Solutions hardware, which have lower upfront margins, but grow over time making for high lifecycle profitability over the contract term.

Selling, general and administrative expenses were $6.0 million, compared to $5.0 million in the same year-ago period. The increase was primarily due to the inclusion of expenses from Keytroller, which were absent in the same period a year ago.

Research and development expenses were $1.5 million, compared to $997,000 in the same year-ago quarter. The increase in research and development expenses was primarily due to reallocation of internal product development resources to cost of services in 2017 for the development program for Avis Budget Group.

Excluding stock-based compensation, depreciation and amortization, foreign currency translation losses, and acquisition-related expenses, non-GAAP net income totaled $294,000 or $0.02 per basic and diluted share (based on 17.1 million weighted average shares outstanding), compared to non-GAAP net income of $83,000 or $0.01 per basic and diluted share (based on 13.5 million weighted average shares outstanding) in the same year-ago quarter.

Net loss totaled $1.1 million or $(0.07) per basic and diluted share (based on 17.1 million weighted average shares outstanding), compared to net loss of $524,000 or $(0.04) per basic and diluted share in the same year-ago quarter (based on 13.5 million weighted average shares outstanding).

At quarter-end, the company had $13.1 million in cash, cash equivalents and marketable securities.

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