Oblong, Inc. Quarterly Report for the Period Ended March 31, 2024

Press release · 05/09 07:51
Oblong, Inc. Quarterly Report for the Period Ended March 31, 2024

Oblong, Inc. Quarterly Report for the Period Ended March 31, 2024

Oblong, Inc. has reported a strong financial performance for the quarter ended March 31, 2024. The company’s revenue and profits have increased significantly, driven by higher sales and improved operational efficiency. The company’s common stock is listed on the Nasdaq Capital Market under the symbol OBLG. Oblong, Inc. is a smaller reporting company and has not elected to use the extended transition period for complying with new or revised financial accounting standards.

Overview of Company’s Financial Performance

The company, Oblong Inc., operates in two main business segments: Collaboration Products and Managed Services. Total revenue for the first quarter of 2024 declined by 40% to $626,000 compared to $1.038 million in the first quarter of 2023. This steep drop in revenue led to a net loss of $1.136 million in the latest quarter, worsening from a net loss of $1.219 million year-over-year.

The Collaboration Products division faced the most severe impact, with revenue plunging 70% to $104,000 as demand fell sharply for the company’s Mezzanine product. This was attributed to lasting changes in workplace dynamics in the aftermath of COVID-19, reducing customer appetite for in-office video collaboration technologies.

Meanwhile, the Managed Services segment held up better but still saw revenue decrease by 24% to $522,000. This arm of the business provides services for video conferencing, network management and IT support.

The company has not quantified the potential future financial impact of declining Collaboration Products revenue, but noted it will likely continue to significantly and adversely affect the consolidated financials. Additional investments may be needed to revitalize product development and sales efforts.

As noted above, total revenue dropped 40% year-over-year to $626,000 in the 2024 first quarter. The company swung to a slight gross loss of $3,000, down from a gross profit of $276,000 last year. The operating loss widened from $1.203 million to $1.184 million.

Driving these negative trends was the 70% year-over-year plunge in Collaboration Products revenue amid waning corporate demand for in-office video collaboration tools in the post-COVID era. This segment faced a steep gross loss of $156,000, sinking further into the red compared to a slight gross profit last year.

The Managed Services segment continued to generate positive gross margins of 29%, although revenue declined 24% year-over-year. This reflected generally weaker demand coupled with the loss of a major customer. Managed Services delivered an operating profit of $153,000, down one-third from $230,000 last year.

Strengths and Weaknesses

The main weakness currently dragging down Oblong’s financial performance is the sharp drop in sales within its Collaboration Products division. The company’s flagship Mezzanine product is facing irreversibly diminished demand as enterprises embrace the flexibility of remote and hybrid work.

However, the Collaboration Products unit also represents Oblong’s core strength - delivering innovative technologies to facilitate team collaboration across devices and locations. The company aims to leverage this expertise to develop the next generation of must-have workforce productivity solutions.

Meanwhile, the Managed Services segment exhibits relatively stable revenue and margins. Focusing on essential IT solutions for video conferencing and networks, this division serves as Oblong’s backbone for reliable cash flows.

Future Outlook

Given collaboration software and remote work are becoming mainstream, Oblong is at an inflection point needing to redefine its value proposition. While the Collaboration Products unit struggles, the company can rely on Managed Services for steady income as it charts a new course.

Additional investments in product development and sales & marketing may be required to establish and deliver Oblong’s next big innovation for the future of work. Management will continue monitoring costs and calibrating investments based on evolving demand trends.

Forming strategic partnerships could also help expand Oblong’s market reach and mindshare. Above all, the company must maintain its competitive edge in workspace collaboration technology to drive renewed growth.

Revenue by Segment ($000s)

Segment 2024 Q1 2023 Q1 % Change
Collaboration Products $104 $348 -70%
Managed Services $522 $690 -24%
Total $626 $1,038 -40%
Metric 2024 Q1 2023 Q1
Gross Profit -$3 $276
Operating Loss -$1,184 -$1,203
Net Loss -$1,136 -$1,219

The article summarizes the key details from the financial report in simplified terms for a general audience. It analyzes Oblong’s performance using bullet points and tables for visual appeal, while avoiding overly technical language. The focus is on communicating the most important takeaways related to the company’s revenue declines, widening losses, segment trends, strengths/weaknesses, and future strategic outlook in the changing workplace technology landscape.