Earnings Call Transcript - ELVA Q4 2024

Operator, Operator

Greetings. Welcome to the Electrovaya Q4 Year-End 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, John Gibson, CFO at Electrovaya. John, you may begin.

John Gibson, CFO

Thank you. Good evening, everyone, and thank you for joining today's call to discuss Electrovaya's Q4 and full year fiscal 2024 financial results. Today's call is being hosted by Dr. Raj DasGupta, CEO of Electrovaya, and myself, John Gibson, CFO. Today, Electrovaya issued a press release concerning its business highlights and financial results for the three and 12-month periods ending September 30, 2024. If you would like a copy of the release, you can access it on our website. If you want to view our financial statements, management discussion and analysis, you can access those documents on the new SEDAR+ website at www.sedarplus.ca or on the SEC EDGAR website at sec.gov/edgar. As with previous calls, our comments today are subject to the normal provisions relating to forward-looking information. We will provide information relating to our current views regarding market trends, including their size and potential for growth, and our competitive position within our target markets. Although we believe that the expectations reflected in such forward-looking statements are reasonable, they do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements. Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company's press release announcing the Q4 and full year fiscal 2024 results and the most recent Annual Information Form and Management Discussion and Analysis under Risks and Uncertainties, as well as in other public disclosure documents filed with Canadian security regulatory authorities. Also, please note that all numbers discussed on the call are in US dollars unless otherwise noted. And now, I'd like to turn the call over to Raj.

Raj DasGupta, CEO

Thank you, John, and good evening, everyone. It is a pleasure to address you today as we discuss one of the most transformative years in Electrovaya's history. Fiscal year 2024 was marked by several groundbreaking milestones that underline the strength of our business and our trajectory for growth. Let me highlight the key achievements. We delivered record revenue and achieved our sixth consecutive quarter of positive adjusted EBITDA, signaling sustained operational and financial strength. For the first time, we generated positive cash flow from operations and significantly improved our gross margins to over 30%, showcasing our commitment to efficiency and profitability. We secured a $51 million direct loan approval from the Export-Import Bank of the United States under the bank's Make More in America initiative, a pivotal step towards expanding our lithium-ion cell manufacturing in Jamestown, New York. This move will not only increase capacity but also improve margins and enable larger-scale projects. And most importantly, we set ourselves up for what we anticipate will be a record 2025 with revenue growth expected to exceed $60 million with profitability driven by robust customer demand and expanding opportunities in both existing and new markets. These and other accomplishments that we will discuss reflect the dedication of our team and the trust of our partners, positioning us to lead in mission-critical and heavy-duty energy storage solutions. With that, let's delve into the details of our fiscal year and our vision for the future. First of all, on November 14, we received approval from the Export-Import Bank of the United States, or EXIM, for a direct loan of nearly $51 million to fund our Jamestown, New York gigafactory. A lot of time and effort went into the process, including three levels of credit review and approval, and business, technology and customer due diligence before receiving final approval from the bank's full board. I believe EXIM's approval represents an incredible endorsement of Electrovaya and our capabilities to succeed in this strategic and highly competitive industry. We are currently in the process of finalizing the loan documents and expect to close and have access to begin drawing funds next quarter. The EXIM loan covers equipment and construction costs for the site, and when combined with incentives from the state of New York and County, provides nearly $60 million in non-dilutive financing to enable us to turn our vision into reality. We anticipate starting commercial cell manufacturing operations in the Jamestown facility in the first half of calendar 2026 and battery system manufacturing in 2025. The Jamestown facility substantially expands our capacity and will enable us to pursue an increasing number of larger opportunities that can drive higher revenues and profits. Furthermore, we believe that with domestic and vertically integrated manufacturing, we will be able to increase our gross margins, reduce lead times, and ultimately facilitate larger purchases from customers that are more sensitive to manufacturing origination, like defense. We are also experiencing increasing demand for our material handling battery products. Over the last several years, most of the orders for our products in this sector stem from newly constructed distribution centers, and we continue to have strong demand from these types of opportunities. However, one trend that is very encouraging is a ramp-up in demand for retrofit or brownfield opportunities. With far more existing warehouse sites than those under construction, there is a much larger addressable market opportunity. We recently announced one of these orders from one of our largest end customers, a leading Fortune 500 retailer, to equip two of its distribution centers. This particular customer has indicated plans to convert at least another four distribution centers in the near future with potential plans for an even larger implementation. Also significant is renewed demand from our largest end customer, a Fortune 100 e-commerce company. During fiscal year 2024, we had significantly less revenue from this end customer than previous years. Despite this and delays from other customers, we delivered revenue that was essentially flat, if not a little bit higher. While this was a disappointment and does not reflect our future growth potential, overall, it is a testament to the higher degree of customer diversification that we are starting to achieve. We are already seeing renewed demand from this customer and are anticipating a return to at least our historical rates from them for fiscal year 2025. With regards to our core material handling battery vertical, we recently introduced in partnership with one of our OEM partners, Toyota Material Handling, a high residual value leasing offering. This was achievable in part due to the strength of our position with more than five years of outstanding performance data related to battery systems in the field. Initial feedback from this offering has been terrific, with significant customer interest and anticipated orders from customers who would not normally move forward with our pricier energy storage solutions. We have a number of material handling OEM-driven development projects that are scheduled to move into production in 2025. This includes a high-profile electrified industrial forklift, which traditionally has only been powered by internal combustion engines and is used in some of the toughest applications, including ports and lumber yards. We are also working on customized battery systems for new autonomous vehicles, which are also scheduled to launch in 2025. Over the last year, Electrovaya has also successfully seeded multiple other verticals with similar mission-critical requirements. Our partnership with Sumitomo Corporation has led to the establishment of a supply contract with a global construction equipment manufacturer, for which we expect to start initial shipments in February 2025. Our high voltage battery systems have been validated in one of the toughest defense applications with a year of testing completed. That customer, a global aerospace and defense company, recently placed follow-on orders and we expect to establish a growing supply of battery systems to them. This success validates our solutions and creates strong referenceability that helps us secure other opportunities. Recently, we established a supply agreement for our high voltage battery systems to be used in electrified locomotive applications and are in discussions with other applications, including trucks and mining vehicles. We believe that the combination of these additional verticals will lead to meaningful revenue contributions in 2025, but especially 2026 and beyond, which aligns nicely with our Jamestown operations ramp-up. Electrovaya continues to develop new products based on our Infinity technology and also continues to progress with our solid-state battery development. On new products powered by Infinity technology, I expect us to launch a product for airport ground equipment in the near term. We see growing interest in that vertical with a fair bit of commonality with our material handling products. We are also launching a stationary energy storage product in 2025 to meet some of our existing end customers' demands for safe and reliable energy storage solutions. With respect to our solid-state battery development, we have made good progress over the last several months. Our ion conducting ceramic separators have improved performance, and we have started a lab scale continuous processing system, which is increasing our consistency. We were recently awarded additional grant funding to support this work and we are being considered for a larger grant as well. I would expect us to provide a more fulsome update as we make more progress.

John Gibson, CFO

Thanks, Raj. Revenue for fiscal 2024 was $44.6 million compared to $44.1 million in fiscal 2023, with Q4 coming in at $11.6 million, a slight increase year-over-year. As we previously disclosed, we had $20 million of orders pushed out of fiscal 2024 as a result of customer delays and there were almost no orders from our largest end user. While this is obviously not ideal, we were able to improve operational efficiency and position ourselves for continued growth. We continue to move closer to our breakeven point of $50 million and expect to exceed this in 2025 with revenue guidance of $60 million for the year, with the ramp-up beginning in the first quarter of 2025. Gross margin for fiscal year 2024 was 30.7%, a significant increase compared to 26.9% in the prior fiscal year. This translated into an additional $1.8 million of gross profit. Battery system margin was slightly higher at 31.3% for the year. The company has generated income from operations in back-to-back fiscal years despite the slight decline in fiscal year 2024, which included non-recurring operating costs of approximately $0.7 million. Our adjusted EBITDA grew by $0.8 million to $4.1 million for the year. Q4 adjusted EBITDA was $1.5 million. We have now recorded six consecutive quarters of positive adjusted EBITDA. This demonstrates our capability to continue our growth plans and support our operations going forward. Our net loss for fiscal year 2024 was $1.4 million, which is flat compared to the prior year. The company generated positive cash flow from operating activities, including net changes in working capital of $1 million for the fiscal year, compared to cash used of $5.2 million in the prior fiscal year, a significant improvement of $6.3 million. This demonstrates the continued improved financial and operational performance of the company, and management is committed to continuing this positive trend. As a result of this improvement, our auditors agreed that there is no doubt around the company's ability to continue as a going concern, and that note was removed from the financial statements. At September 30, 2024, total debt was $18.4 million compared to $16.3 million in the prior year. The company continues to manage cash conservatively and is in an ongoing discussion to refinance its working capital facility, which we expect will reduce our overall financing costs and provide us with additional working capital as we increase production in 2025. We believe we have adequate liquidity to support this anticipated growth for fiscal year 2025. That concludes the financial overview. I'll now turn the call over to Raj for concluding remarks.

Raj DasGupta, CEO

Thank you, John. In closing, Electrovaya is starting fiscal year 2025 in an amazing position. Our products sell at some of the highest margins in the industry. We are now demonstrating consistent cash flow from our operations. Our technology is distinct and becoming recognized for mission-critical and heavy-duty segments that we are targeting. We have some of the most enviable names in the world using our products. And now, we have support from EXIM and others for our domestic manufacturing expansion. I, for one, am super excited about what is in store for us in 2025. That concludes our remarks this evening. John and I would now be pleased to hold a question-and-answer session.

Operator, Operator

Thank you. And the first question today is coming from Eric Stine from Craig-Hallum. Eric, your line is live.

Eric Stine, Analyst

Hi, Raj. Hi, John. So, I guess, first for me is you mentioned the two customers who have reordered. I'm just curious, when you look at fiscal '25, what the level of visibility is into that? And I know primarily it's material handling. And maybe how that compares to years past?

Raj DasGupta, CEO

I'll start by discussing our Fortune 100 customer. In previous years, they typically ordered over $10 million annually, but for fiscal 2024, their order was about $1 million or less, which was disappointing. However, they've begun placing orders for 2025, and we expect their purchase volume to at least match, if not exceed, what we've seen in prior years. That's encouraging and boosts our confidence. Regarding our second customer, they have been a significant partner for Electrovaya for several years, currently operating over 1,000 batteries, making them our second largest end customer. They've reported excellent results from the batteries in use, prompting them to upgrade their existing infrastructure quickly. We've already observed enhancements at two smaller sites, and we anticipate at least another four sites, as communicated to us. Furthermore, there's potential for additional implementations in 2025. They have recognized a return on their investment in this technology, which companies are selecting for its operational benefits and cost savings. It’s a safe, reliable, and long-lasting battery technology that is unique to Electrovaya.

Eric Stine, Analyst

Got it. Okay. That's helpful. And then, I know that part of fiscal '24, and you called this out early in the year, you had, I think, it was $20 million of potential projects or shipments that would ship. And it sounds like you've taken that same approach to fiscal '25. Just curious, kind of your thought process there. It would seem, given the details you just gave with the Fortune 100 customer reordering and likely returning to more historical levels, that, that $60 million is a number that you very much anticipate achieving at a minimum.

Raj DasGupta, CEO

Yeah. I would say we've been very conservative in the approach this year. In manufacturing, it's, of course, difficult to predict specific numbers. So, what we did here was we took what was our figure that we thought we would be able to achieve and we discounted it by quite a significant percentage. Some of that is detailed in our forward-looking statements. But overall, what we're anticipating to do is every quarter, we will give a further update and refine that figure. Overall, we expect to start ramping production for orders in January, so very shortly. And we expect to start hitting a good stride from then onwards. The current quarter, of course, we also anticipate being strong, but traditionally and historically Q1, our fiscal year Q1, which ends in end of December, is a weaker quarter, but we should be in a good position this year as well.

Eric Stine, Analyst

Got it. All right. And then, maybe one last question for me, and this relates to the long term. Clearly, you mentioned that 2025 will be a very good year, but you're also anticipating significant growth in 2026, 2027, and beyond. When considering non-material handling end markets, how do you foresee those evolving? How would you prioritize them among defense, aerospace, rail, construction, and others?

Raj DasGupta, CEO

I believe all of these sectors will see growth. We can expect each one to ramp up, particularly from 2026 onwards. Our team has done an excellent job over the past year in establishing many of these opportunities. On the defense side, the process of getting qualified in various programs takes a considerable amount of time due to the extensive testing and validation needed for both our product and the OEM's product. Thus, it requires patience. However, the trajectory appears very promising. I would say the defense sector looks encouraging from 2026 onwards, with 2025 expected to be significantly larger than last year. Regarding other opportunities, airport ground equipment is a relatively simple product for us to introduce and gain market acceptance. Its similarity to material handling presents great opportunities. In terms of mining vehicles, we are continuing discussions with a major mining company about potentially repowering vehicles at large mining sites and are also engaging with companies in other sectors. For example, we anticipate some projects with our rail partner and are having positive discussions with electric truck OEMs. We are very excited about these opportunities we are nurturing. While 2025 will still be largely driven by material handling in terms of revenue, we expect these other sectors to contribute more significantly in 2026, which is excellent news for us, especially as the Jamestown operations come online.

Eric Stine, Analyst

Okay. That's great. Thanks a lot.

Operator, Operator

Thank you. The next question is coming from Amit Dayal from H.C. Wainwright. Amit, your line is live.

Amit Dayal, Analyst

Thank you. Good evening, everyone. Raj, can you discuss how you are addressing the tariff-related issues? Also, how will the Jamestown facility, once operational, help mitigate the potential tariffs being discussed?

Raj DasGupta, CEO

I would say that tariffs in manufacturing can be challenging, as components come from various locations. However, Electrovaya is in a more favorable position than many others. With our Jamestown operations, we plan to start producing battery systems in 2025, and if the situation with tariffs becomes more complicated, we can accelerate those operations. We believe we are relatively insulated from tariff impacts, which aligns with our strategy moving forward. Domestic manufacturing will be increasingly important, and Electrovaya is well-positioned for that. There are very few companies in our sector producing lithium-ion cells in the US, particularly with the type of product we offer, making us stand out. In fact, tariffs could potentially work to our advantage.

Amit Dayal, Analyst

Interesting. Thank you for that. And then, you said once the Jamestown facility is up and running, you could potentially see gross margin improvements. How much more from these levels? You've done a good job on that front already, but with that facility ramping, how much more margin improvements potentially could you see?

Raj DasGupta, CEO

We expect that vertical integration will definitely enhance our margins. From a straightforward perspective, we are no longer incurring the margins of overseas contract manufacturers, paying shipping costs, or financing materials over much longer periods. These factors alone will significantly improve our margins. Additionally, there are currently production tax credits, specifically the 45X credits, that we could benefit from. We expect these credits to remain in place, which would further enhance our gross margins. While we are not relying solely on them, they would certainly help if they remain. I've had discussions with our congressional representatives in Jamestown, and the general sentiment is that these credits will continue, although it’s uncertain. In any case, we anticipate margins will improve. In the near term, we're also observing a decrease in some material costs for our products, which will positively impact margins throughout 2025. Tariffs may have an influence on this, but that's what we are currently seeing.

Amit Dayal, Analyst

Understood. Can you clarify if the retrofit opportunity you're discussing on the material handling side involves replacing the older propane-type forklifts or something else?

Raj DasGupta, CEO

We're replacing lead acid-powered vehicles.

Amit Dayal, Analyst

The $60 million for fiscal '25 mainly comes from material handling, correct?

Raj DasGupta, CEO

Correct, yeah.

John Gibson, CFO

About 95%.

Raj DasGupta, CEO

95%, yeah. Again, it's meant to be a conservative marker there.

Operator, Operator

Thank you. The next question is coming from Jeff Grampp. Jeff Grampp is calling from Alliance Global. Jeff, your line is live.

Jeff Grampp, Analyst

Good evening, guys. Thanks for the time. Raj, I'm curious. I know it's only been a month or two since you guys announced the EXIM loan, but curious, early days here, if you can touch on any change in customer conversations in terms of, I would just think, for you guys having the assurances, being able to get that production online, having a little bit more definitive financing plan and timing, does that kind of give customers, you think, a little more conviction to pursue things with you guys a little more aggressively, or is it a little early to call that definitively?

Raj DasGupta, CEO

No, it definitely helps us. We've heard from several existing and potential customers, and we're very excited about our ability to supply domestically. It's not limited to the defense sector; every sector is eager to see the ability to purchase domestically produced products. This has generated significant excitement, and we're just a couple of weeks into this.

Jeff Grampp, Analyst

Great. Thanks for that. Appreciate it. And with respect to the guidance number for the upcoming fiscal year, any kind of early expectations you guys can think about in terms of kind of the shape or distribution of that growth? Should we just kind of think of a historical kind of seasonal ordering delivery schedules, or any kind of commentary that you guys can provide as we think about kind of building the distribution of that revenue in the year?

John Gibson, CFO

I mean, we'd love it to be a bit more evenly spread, but historically, we have a seasonal impact within our Q1. Pretty much everybody closes down for two weeks in December, and then, we'll build from kind of the start in Q2 onwards. So, I would expect it to be increasing revenue each quarter, maybe not as high as previous years, but, yeah, I would see us building towards Q4.

Raj DasGupta, CEO

Yeah. I think the ramp really starts in Q2, the Jan to March period. We expect to see a pretty strong quarter there, and the expectation is we hold that trend going forward. So, I would pay close attention to how things progress on our end in the winter.

Jeff Grampp, Analyst

Got it. Okay. Appreciate those details. If I can sneak one more in, just on the margin side, understanding that we expect things to have a nice move up once Jamestown is online. Any thoughts for fiscal '25? I noticed Q4 gross margins kind of took a step back sequentially, but is year-over-year margin improvement still in the cards you think for fiscal '25? Or just, I guess, looking for a little color on any dynamics that happened in Q4? And then, how to think about things prospectively? Thanks.

John Gibson, CFO

Yeah. In a battery system perspective, there was no real drop in Q4. That is just what we would explain through just our product mix. So, our non-battery system revenues, so some engineering projects that are ongoing where we don't have a very high margin came in in Q4 and that revenue was recognized. And then, there's obviously your true-ups for the rest of the quarters. There's exchange differences and all those other true-ups. So, while Q4 does look like the margin has dropped, the battery system margin itself remains strong above 30% for the whole fiscal year. So, I would expect that trend to continue. We'll always differentiate when we publish our results to see what the true battery margin is throughout the quarter and the rest of the year. So, we expect it to continue to improve. As Raj mentioned, we are seeing some cost reductions in our parts. So, we're going to work hard and try and increase our operational efficiency as much as possible to maximize this.

Raj DasGupta, CEO

I believe we have already secured lower cost materials and did so quite some time ago. Those lower cost materials may not have been integrated into battery systems in fiscal year 2024, but they are now being utilized and will be in the future. As a result, you can anticipate further improvements in gross margins. Additionally, if you consider Electrovaya, we have been EBITDA positive even with revenues around $10 million, which is relatively small for that type of metric. Once we reach quarterly revenues of around $14 million to $16 million, it will be clearly reflected in our results.

Jeff Grampp, Analyst

Yeah, definitely. A testament to the circumstances. So, I appreciate the time. I'll turn it back. Thank you, everyone.

Operator, Operator

Thank you. The next question will be from Daniel Magder from Raymond James. Daniel, your line is live.

Daniel Magder, Analyst

Thanks. Hey, guys. Congrats on the quarter.

Raj DasGupta, CEO

Thanks, Daniel.

Daniel Magder, Analyst

Specifically, regarding adjusted EBITDA margins, we understand that gross margins are expected to improve once Jamestown is live. How should we think about adjusted EBITDA margins moving forward once Jamestown is operational? Will most of the improvements come from the gross margin line or from operational expenses as well?

John Gibson, CFO

Jamestown is going to have low operating expenses. It serves as an additional operating facility with no significant research and development or sales and marketing costs. Therefore, we anticipate a high EBITDA percentage from it. As our revenue grows, we expect consolidated EBITDA to keep increasing. If we consider our breakeven point at $50 million, we can expand the business without substantial increases in operating expenses. With a 30% margin, any revenue exceeding $50 million could theoretically add 30% to the bottom line. While it doesn't work exactly that way, it gives a general idea of our growth potential as Jamestown comes online. This facility is expected to make a significant contribution to EBITDA, which we anticipate will continue to rise.

Daniel Magder, Analyst

Got it. Thanks for that.

Operator, Operator

Thank you. And the next question will be from Orin Hirschman from AIGH Investments. Orin, your line is now open.

Orin Hirschman, Analyst

Hi, how are you? I have a few random questions. You mentioned that you'll start producing cells in Jamestown in '26. Clearly, this will put you in competition with your current cell providers. Is there enough supply for a smooth transition, or will you still need to mix in cells from outside sources? How should we approach this situation?

Raj DasGupta, CEO

Great question, Orin. First of all, the cells we currently produce and assemble in China are Electrovaya cells. While I expect our Jamestown operations to meet our North American needs, we are witnessing significant interest from outside North America, particularly in the Asia Pacific region. In Japan, for instance, we already have a contract with a major OEM for construction vehicles. Partnering with Sumitomo Corporation, we are actively exploring several other opportunities in Japan. Additionally, we've recently been shipping battery systems to various locations, including Australia and even Singapore, where we see substantial opportunities. I anticipate continued production in Asia to cater to these markets, which can be quite significant on their own. The Asia Pacific region is a large market. We will also start looking into the European market in more detail when we have the capacity. There are certainly opportunities for Electrovaya beyond North America, and our supply chain is prepared to accommodate that. Our product is not a commodity; Electrovaya's lithium-ion battery technology is unique, which allows us to see global demand for it.

Orin Hirschman, Analyst

You mentioned autonomous vehicle. Is that a military vehicle or a commercial vehicle?

Raj DasGupta, CEO

We are focusing on material handling, where we have developed several autonomous vehicles. We are already working with one and have plans to launch a second and third by 2025 with our main OEM partner. In the defense sector, we are also providing batteries for another autonomous vehicle.

Orin Hirschman, Analyst

Okay. And last question, just any update on the solid R&D project?

Raj DasGupta, CEO

The solid-state batteries project is very exciting, and we will provide the market with more comprehensive updates soon. Over the past year, we have received grant funding to support this initiative, including a recent grant. The progress is promising, particularly regarding the separator, which is our core intellectual property. We are producing the ceramic material in-house, and it shows excellent performance, surpassing the performance metrics of available data sheets. Our current focus is on making the separators more consistent and thinner. We are also working on pouch cells, which are modest in size, and we are refining and optimizing the cells to a point where we feel confident to market them. While it's difficult to predict the exact timeline for readiness, we are seeing significant progress.

Orin Hirschman, Analyst

Progress measure, let's say, in terms of performance, in terms of number of charges and discharges, the life of the battery?

Raj DasGupta, CEO

Exactly. So, what we're looking for is, first is cycle life. We want to target getting to about 500 cycles, which is quite different from our Infinity battery systems that achieve over 10,000 cycles. However, 500 is a solid number for a commercially viable product, and we're already making good progress towards that goal. The second aspect is ensuring we have the right rate capability, which refers to the charge and discharge rates for the cells, and we're seeing positive improvements there as well. Thirdly, we’re focusing on consistency to ensure we can produce the same product reliably. Those are the key areas we're concentrating on. In terms of energy density, we are definitely already meeting our targets, as these cells have very high energy density.

Orin Hirschman, Analyst

One question on the charge and discharge metrics. That would represent a significant increase compared to a year or two ago when you were at around 200 or 150, if I recall correctly. Please feel free to correct me. Did this improvement stem from your own separator or your own ceramic material, or a combination of both? What were the key factors that contributed to this change? If possible, can you quantify or qualitatively describe it?

Raj DasGupta, CEO

About two years ago, we were taking a different approach. We didn't have this specific ceramic material design; instead, we were working with a different kind of ceramic composite material. Although it produced acceptable results, we faced limitations on the cycle life, unable to exceed around 250 or 300. We also encountered challenges with rate capability. Therefore, about 18 months ago, we shifted to this new direction. It takes time to see results, but we are now observing promising outcomes from this new approach.

Orin Hirschman, Analyst

Okay, great. I have one final question. Do you have any insight on this? Typically, your first quarter performance is lower, and you're coming off an unusually low fourth quarter. Are you expecting the first quarter to mirror the fourth quarter or to be slightly better? I know this isn’t crucial since the ramp starts more in January, but what do you think we should expect right now?

Raj DasGupta, CEO

Our expectation is Q1 is going to be similar to Q4.

Operator, Operator

Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Raj DasGupta for closing remarks.

Raj DasGupta, CEO

That concludes our call, and thank you for listening. We look forward to speaking with you again after we report our first quarter results for fiscal 2025. Have a wonderful evening.

Operator, Operator

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.