RSSPCTEL reported its results for the third quarter ended September 30.
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Revenues increased 16% year over year to $26 million and generally accepted accounting principles (GAAP) gross profit margin was 45.9%. GAAP net income was $2 million or $0.11 per diluted share and non-GAAP net income was $2.6 million or $0.14 per diluted share.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 41% year over year to $3.3 million.
“We delivered another strong quarter, and I am very pleased by our team’s consistent execution of our growth strategy, which allowed us to deliver solid performance in the face of a challenging macro-economic backdrop,” said PCTEL CEO David Neumann. “Our results were driven by key elements of our growth strategy, including launching innovative products, expanding and leveraging our sales channels globally and increasing our market share with existing customers by providing integrated solutions. Some exciting examples of those initiatives include the FCC certification for our IoT radio modules, preparation for orders of our SeeHawk Monitor by year end, and strategic investments to pursue additional long-term growth in Europe. As we close out fiscal 2022 and prepare to enter 2023, we see potential challenges but remain committed to executing our growth strategy.”
Antennas and industrial internet of things (IIoT) devices revenue was $18.7 million, an increase of 11.8% year-over-year primarily due to an increase in revenues related to antennas for agriculture fleet applications. Test and measurement products revenue was $7.7 million, an increase of 29.8% year-over-year due to higher revenues for 5G products in the U.S.
GAAP gross margin was 45.9%, compared to 45.8% in the third quarter of 2021. Non-GAAP gross margin was 46.2% compared to 46.7% in the third quarter of 2021 due to lower gross margin for test and measurement products. GAAP operating expenses were $10.6 million compared to $9.6 million in the third quarter of 2021. Non-GAAP operating expenses were $9.4 million compared to $8.9 million in the third quarter of 2021.
GAAP net income was $2 million or diluted earnings per share of $0.11 compared to GAAP net income of $0.7 million or $0.04 per share in the third quarter of 2021. A reversal of allowances related to deferred income taxes contributed $0.02 per share during the third quarter 2022. Non-GAAP net income was $2.6 million or $0.14 diluted earnings per share compared to $1.4 million or $0.08 in the third quarter of 2021.
Adjusted EBITDA increased to $3.3 million compared to $2.3 million in the third quarter of 2021. Cash, cash equivalents and investments were $28 million, a decrease of approximately $0.3 million as compared to the second quarter of 2022. Payment of the quarterly dividend of $1 million was approximately equal to the company’s free cash in the third quarter 2022.
For the fourth quarter, PCTEL expects revenue of $25.5 million to $26.5 million, non-GAAP gross margin from 47% to 49%, and non-GAAP earnings per share (EPS) of $0.14 to $0.16.
“Following a very strong third quarter, we expect fourth quarter revenues to be consistent sequentially with a higher gross margin primarily due to the product mix,” said PCTEL Chief Financial Officer Kevin McGowan. “We continue to see growth opportunities in the industries we serve, and we have a healthy balance sheet which provides us flexibility to navigate any short-term macro-economic challenges that could emerge and to support our long-term growth initiatives.”
