Revenue Performance - Overall revenue decreased to $2.3 million in Q2 2024, a 58% decline compared to $5.5 million in Q2 2023, primarily due to a 60.5% drop in audio conferencing revenue [45]. - Revenue from the Americas declined by 64% in Q2 2024, from Europe and Africa by 41%, and from Asia Pacific by 50% compared to Q2 2023 [53]. - Approximately 61% of revenue in the first half of 2024 came from operations outside North and South America [51]. Profitability and Loss - Gross profit margin fell to (0.9)% in Q2 2024 from 33.7% in Q2 2023, and to 19.1% in the first half of 2024 from 32.7% in the first half of 2023 [46]. - Net loss increased to $2.8 million in Q2 2024 from $1.0 million in Q2 2023, and to $4.7 million in the first half of 2024 from $1.9 million in the first half of 2023 [46]. - Inventory write-offs and price mark-downs could affect profitability due to long-term inventory of approximately $1.4 million in various products [58]. Operating Expenses - Total operating expenses decreased to $2.9 million in 2024-Q2 from $3.2 million in 2023-Q2, and $6.1 million in 2024-H1 compared to $6.7 million in 2023-H1 [59]. - Sales and marketing (S&M) expenses decreased to $1.2 million in 2024-Q2 from $1.3 million in 2023-Q2, while remaining consistent at $2.5 million for 2024-H1 compared to 2023-H1 [60]. - Research and development (R&D) expenses were consistent at $0.9 million in 2024-Q2 compared to 2023-Q2, but decreased to $1.8 million in 2024-H1 from $1.9 million in 2023-H1 [60]. - General and administrative (G&A) expenses decreased to $0.8 million in 2024-Q2 from $1.0 million in 2023-Q2, and to $1.9 million in 2024-H1 from $2.3 million in 2023-H1 [61]. Cash Flow and Liquidity - Cash and cash equivalents were approximately $2.5 million as of June 30, 2024, down from $17.8 million as of December 31, 2023 [65]. - Cash used in operating activities was approximately $2.7 million in the six months ended June 30, 2024, a decrease of approximately $55.6 million from $52.9 million in the same period of 2023 [65]. - Cash provided by investing activities was $1.8 million in the six months ended June 30, 2024, compared to $7.4 million used in the same period of 2023 [66]. Inventory and Purchases - As of June 30, 2024, total inventory was $16.4 million, up from $13.8 million as of December 31, 2023 [68]. - The company had open purchase orders of approximately $3.02 million mostly for inventory purchases as of June 30, 2024 [67]. Market Challenges - The company faced sales headwinds due to the lack of Microsoft Teams certification, impacting product demand despite functional compatibility [45]. - The company expects increased costs associated with electronic raw materials to continue through 2024 and 2025 [45]. New Product Launch - The DIALOG® 20 USB wireless microphone system launched on January 23, 2024, with a 319% increase in unique visitors at ISE 2024 compared to 2023 [44]. Interest Expense - Interest expense was $0 in 2024-Q2 and 2024-H1, down from $0.1 million and $0.4 million in 2023-Q2 and 2023-H1 respectively, due to repayment of all debts [62].
ClearOne(CLRO) - 2024 Q2 - Quarterly Report