Amplitech Group Inc Stock

Good day, ladies and gentlemen, and welcome to AmpliTech Group's quarterly investor update call, where the company will discuss its second quarter 2026 financial results. Present in this call, we have the executive team of AmpliTech Group. Fawad Maqbool, CEO, CTO, and Board Chair; Jorge Flores, COO; Louisa Sanfratello, CFO. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the call over to AmpliTech's COO, Jorge Flores. Please go ahead.

Thank you, operator. Thank you for joining today's call to review AmpliTech's second quarter 2026 financial results, review of our company's outlook, and to answer investor questions. Following initial management comments, we will open the call to investors' questions. An archived replay of today's call will be posted to the Investor Relations section of the AmpliTech's corporate website. This call is taking place on Thursday, August 13, 2026. Remarks that follow and answers to questions may include the statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, statements that describe future plans, objectives, or goals are also forward-looking.

These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements, which are made as of today's date.

With that, let me turn the call over to our CEO, Mr. Fawad Maqbool.

Thank you, Jorge. Good afternoon, everyone. Thank you, everyone, for joining us today. Second quarter was an important period in AmpliTech's continued transformation and growth. We recognize that investors will focus on our total revenues, gross margins and total expenses and bottom line results. We want to address those items directly and more importantly, provide our investors with additional color behind the numbers.

Investing ahead of growth. Our second quarter results reflect both meaningful progress across our underlying businesses and a deliberate increase in investment as we position AmpliTech to pursue and support significantly larger opportunities across 5G, telecom infrastructure, satellite communications, semiconductor technologies, and other advanced communications markets. Establishing a meaningful and sustainable position in the telecom infrastructure market is neither easy nor accomplished overnight.

It requires a significant technical expertise, sustained R&D investment, product development, testing, certifications, customer qualification, and ultimately, the ability to perform at scale. We believe the investments we have made in these areas have been instrumental in the progress AmpliTech has achieved and are an important part of building a durable competitive position in this large and expanding market. While these investments impacted near-term profitability, we believe they should be viewed in the context of the larger opportunity we are building toward.

We are encouraged by our strong revenue performance and, equally important, by the continued commercial and technical progress we are making in markets that historically have presented substantial barriers to entry and were only for the industry giants. There are no shortcuts to building a lasting presence in the telecom infrastructure. Our strategy has been to invest in the technology, deliberately people, the capabilities and customer relationships necessary to compete for increasingly meaningful opportunities and to support them successfully as they scale. We remain focused on disciplined execution, converting our technology investments into commercial opportunities, expanding our customer base, scaling the revenue responsibly and improving operating leverage as the business grows. Our long-term objective is to build AmpliTech into a significantly larger and more valuable communications technology company, and in doing so, create substantial and sustainable value for our shareholders.

This doesn't happen overnight, and it takes a lot of resources to put all of this together to compete with the giants that we are in. Q2 was, in many respects, a quarter to invest in the future growth of AmpliTech Group. We invested in customer-driven R&D, customer-driven, supply chain resilience, production readiness, strategic sales, and marketing, specialized personnel and outside expertise, cybersecurity, and IT infrastructure, internal controls and the organizational capabilities required to support larger customers. Building the commercial organization, we also increased our investment in sales and marketing during the quarter.

The 10-Q reflects increased marketing and business development activity, including additional industry trade shows, expanded promotional initiatives, and hiring of 2 senior business development representatives to support the company's expanding 5G Open RAN commercial strategy and our 5G product portfolio. To establish our brand and position us for growth, we've engaged a strategic marketing and communications firm also, whose principals have deep experience in complex industries. They're building our marketing and communications foundation from the ground up. They already overhauled our website and messaging, and they'll be assisting us with sales campaigns, rebuilding the e-commerce parts to our site, strengthening our SEO and building the brand equity that positions us as a leader in the market. We recognize these as essential ingredients, especially the website to portray an image that we really need to show our investors.

Historically, AmpliTech has been a highly engineering-driven organization. As our product portfolio and addressable markets expand, we believe we must put an equally capable commercial organization around the technology we have developed. The objective is not simply greater marketing exposure. It's to improve access to strategic accounts and convert technology validation, customer engagement, and engineering activity into commercial opportunities. We believe that next stage of AmpliTech evolution requires both technology leadership and market access.

With this, I'll turn the call over to our CFO, Louisa Sanfratello to review our financial results in more detail.

Thank you, Fawad. Good afternoon, everyone. Second quarter revenue was approximately $8.1 million compared with approximately $5.35 million in the first quarter, representing sequential revenue growth of approximately 51%. Although revenue declined year-over-year when comparing second quarter results, the comparison requires important context. The prior year quarter included acquired 5G product sales associated with the Titan asset acquisition. Those sales increased reported revenue but carries significantly lower gross margin.

The difference can clearly be seen in our gross profit performance. When comparing gross margins from Q2 2025 and Q2 2026, this year's second quarter gross profit increased from approximately $863,000 to $2.25 million, an increase of approximately 161%. Gross margin increased from approximately 7.8% in Q2 2025 to 27.9% in Q2 2026. For the first 6 months of 2026, gross profit increased approximately 135% from $2.05 million to $4.82 million while gross margin increased from approximately 14% to 35.9%.

The 10-Q attributes this improvement primarily to a more favorable product mix and the absence of the lower-margin acquired 5G product sales included in the comparable prior year period. Sequentially, gross margin decreased from approximately 48% in Q1 to approximately 28% in Q2. We believe investors should consider this in the context of quarterly product mix in our current stage of commercialization.

At our present scale, individual customer programs and product mix can have a significant effect on quarterly margins. More importantly, as we prepare to support larger customers, we are incurring costs associated with production readiness, supply chain capability, product development and customer-specific requirements ahead of the full revenue contribution we are seeking from those programs.

Our longer-term objective remains to increase the contribution from our differentiated internally developed technologies and higher-margin product offerings as those programs progress towards commercialization.

In line with what our CEO just shared, our S&G expenses increased to approximately $4.08 million in Q2 2026 compared with approximately $2.13 million in Q2 2025. This increase relates primarily to higher parent company expenses, including amortization, legal fees, and stock-based compensation, together with greater investment in marketing and business development, additional trade show participation and expanded consulting resources supporting the company's 5G portfolio.

There was additional strategic context to that, we believe, is important for shareholders. As we engage with larger MNOs, the telecommunication infrastructure providers, and enterprise customers, their expectations extend well beyond the product performance. These organizations increasingly expect supplies to demonstrate strong internal controls, cybersecurity practices, IT governance, operational resilience, and the infrastructure necessary to support larger deployments. Accordingly, we have engaged specialized consulting resources to further strengthen our SOX-related controls and protocol, cybersecurity framework, and ISO-aligned IT security practices.

We are also transitioning toward a hybrid IT infrastructure model, combining appropriate internal resources with specialized external expertise. Our objective is to improve security, redundancy, scalability and technical support as the company grows. These initiatives are also relevant to enhance written documentation of internal controls and procedures, information technology general controls and personnel resources necessary for appropriate segregation of duties.

We, therefore, view these required investments as critical, both from a corporate governance standpoint and from a customer readiness standpoint. We expect operating expenses to grow more efficiently than revenue going forward. Certain elevated expenditures were associated with implementation, consulting, customer development, commercialization and infrastructure initiatives undertaken as we prepare the company for a larger scale of operations. Some ongoing investment will clearly remain necessary.

We intend to continue investing where management sees an appropriate potential return. However, our objective is to build the infrastructure now and leverage that infrastructure across a substantially larger revenue base. That is where we believe future operating leverage can ultimately come from. Second quarter R&D increased to approximately $1.37 million compared with approximately $659,000 in Q2 of 2025. Of Q2 R&D, approximately $1.08 million related to 5G development and approximately $297,000 related to MMIC design. As stated on our 10-Q, this increase is primarily due to the expanded 5G product development activity, including higher prototype and testing costs, and increased consulting expenses supporting product innovation and development.

From an operational standpoint, this quarter also required increased engineering support for new and customized requirements from existing and prospective customers. This is an important distinction as our engagement with larger customers increases, those customers may require specific configurations, prototypes, testing, validation and technical modifications before programs can progress towards commercial deployment.

That means the company can only -- can incur engineering and development expenses before the associated production revenue was recognized. We view much of this work as supporting commercialization, opportunities rather than research conducted without an identified market application. We are investing engineering resources today with the objective of creating products and configurations capable of generating future commercial revenue.

The combination of these investments resulted in a second quarter operating loss of approximately $3.2 million and a net loss of approximately $3.09 million. We recognize that these numbers are important to shareholders, and we are not minimizing them. However, we believe it is equally important to understand what contributed to the increase. During Q2, AmpliTech simultaneously invested in product development, customer-specific engineering, sales and marketing, supply chain readiness, production capability, cybersecurity, IT infrastructure, corporate control, and the broader organizational infrastructure required to support larger customers. Our focus now is on converting those investments into commercial revenue and ultimately, operating leverage.

With that said, our balance sheet provides us with significantly greater capacity to execute this strategy. At June 30, AmpliTech reported approximately $13 million in cash and cash equivalents and marketable securities, accounts receivable at approximately $6.3 million, and approximately $31.25 million in current assets, representing approximately $22.9 million of working capital.

Total liabilities decreased to approximately $11.75 million from approximately $18.62 million at December 31, while stockholders' equity increased to approximately $46.75 million. Not included in our Q2 results as this transaction occurred following our quarter end. The exercise of the company's Series A rights in July 2026, generated approximately $21.92 million in gross proceeds and $20.12 million in net proceeds. We believe the rationale for strengthening our capital position should also be used strategically. Large MNOs and telecommunications infrastructure providers need confidence that their supply has the financial resources, manufacturing capability, inventory availability, engineering support, and supply chain resilience necessary to execute significant programs.

For AmpliTech, a stronger balance sheet is therefore not simply a financial asset. It is also a commercial capability. It provides greater flexibility to support working capital requirements, secure production capacity, strengthen the supply chain, support customer qualification and testing, and pursue larger opportunities without placing undue pressure on day-to-day liquidity. We believe that is particularly important as the scale of the customers and opportunities we pursue increases. I'll now turn the call over to our COO.

Thank you, Louisa. I'd like to comment from the operational perspective. From an operating perspective, Q2 was about preparing AmpliTech for a different level of customer engagement. As our opportunities expand within 5G and telecommunications infrastructure, customer requirements became more demanding. Major telecommunication customers evaluate much more than product performance and price. They do evaluations on engineering capability, customization ability, quality, manufacturing readiness, supply chain reliability, cybersecurity IT systems, financial stability, testing capability, delivery performance, and ongoing technical support. Our investments during Q2 were designed to strengthen these capabilities.

Supply chain resilience is particularly important. At June 30, long-term deposits totaled approximately $3.08 million, including approximately $2.47 million associated with dedicated production capacity. During the first 6 months of 2026, we made an additional $1.3 million of advanced payments towards this dedicated production line. We believe these investments are important and critical as we pursue larger opportunities. The goal is to ensure that a customer demand scales, we have access to the capacity and resources required to support that demand.

For a growing technology company pursuing much larger customers, we believe preparation must occur before the volume arrives. We do not want to secure a significant commercial opportunity and then discover that our production capacity, supply chain or supporting infrastructure cannot meet the customer deployment requirements. The same principle applies to engineering.

During Q2, our team supported increased product development, prototype and testing activity. The 10-Q reflects the resulting increase in 5G R&D. In addition, existing and prospective customers are requesting custom configurations and technical requirements for their specific applications. Supporting these opportunities requires engineering investment before production revenue is necessarily recognized.

There is, therefore, an inherent timing difference between development expenditure and potential commercialization. Our objective is to use our core technology platforms to address customer-specific requirements while developing solutions that can transition into production programs. That is why we view most of the increased engineering activity as an investment supporting potential new business. We are also making a deliberate investment in our commercial organization. As our CEO previously mentioned, to establish our brand and position us for growth, we have engaged a strategic marketing and communications firm whose principles have deep experience in complex industries. They are building our marketing and communications foundations from the ground up. They have, as Fawad mentioned, already overhauled our website and messaging, and they will be assisting us with sales campaigns rebuilding the e-commerce portion of our site, strengthening our SEO and building the brand equity that position us as a leader in our market.

Combined with our internal business development efforts, an increased presence at important industry events, the objective is to improve our ability to engage with the strategic customers across the markets we serve. Our second quarter reflects increased marketing and business development activity which includes our participation in critical trade shows and conferences like IMS, the Mobile World Congress in Barcelona, Spain, and Network X in Florida, U.S.A. during the first half and the engagement of consultant supporting the company's 5G portfolio.

We believe the technology foundation is increasingly in place. The next objective is to ensure that the market understands what AmpliTech can provide and that we have the commercial resources necessary to turn technical engagement into customer relationships and commercial programs. We have also been strengthening an area that may be less visible externally but it is increasingly important to major customers, cybersecurity and IT infrastructure. As we pursue larger MNOs, telecom infrastructure providers and other global customers, we believe robust security and IT governance become increasingly important, parts of the supplier qualification and ongoing customer support. We have, therefore, engaged a specialized consultants to strengthen our cybersecurity environment and further develop SOX-related protocols and controls and ISO-aligned IT security practices.

As Louisa mentioned, we are also transitioning towards a hybrid IT platform which is more or less intended to combine our internal oversight with specialized external IT capabilities to provide greater security, redundancy, scalability, monitoring, and support. For us, this is part of the same broad strategy of strengthening our production and supply chain capabilities. We are simply building the infrastructure behind the product. This includes the physical supply chain, engineering resources, commercial organization, cybersecurity environments, IT systems, financial control, and most importantly as well, customer support capabilities, which are ever present with larger MNOs.

We believe all of these elements become increasingly important as the size and sophistication of our customers increase, larger programs require larger preparation from our part.

With this, I would like to transfer back to our CEO, Mr. Fawad Maqbool.

Thank you, Jorge. I'd like to follow up with our strategic perspective and outlook. When we say Q2 was an investment quarter, we're not using that phrase simply to explain higher expenses. There was a deliberate strategy behind those expenditures. We invested ahead of the revenue opportunities we are pursuing. We invested in customer-driven R&D. We invested in production readiness and supply chain resilience. We invested in sales, marketing and global business development.

We invested in strategic talent and specialized outside expertise. We invested in cybersecurity, IT infrastructure and internal controls. And we strengthened our balance sheet so that we can support opportunities of a greater scale. These investments increased our near-term operating expenses, near term. But they were made with a clear objective to position AmpliTech to support larger programs, larger customers, and ultimately, a greater contribution from differentiated higher-margin products.

Every time we go to a customer, and we say, okay, where is the PO after we demonstrated something they keep adding something else. So we have to keep adding all those things that you saw that we mentioned in order to properly serve and get more business from these customers. Now looking at the margin perspective, we also want to emphasize the importance of revenue quality. Although the first half of 2026 revenue was approximately 8% below the comparable prior year period, gross profit increased approximately 135%, and gross margin improved from approximately 14% to approximately 36%. This is demonstrating the impact of product mix on the business. It's very important. We have many different products, and each 1 of them carries its own profitability.

Our objective is not simply to maximize the revenue without regard to profitability. We're focused on increasing the contribution from differentiated technologies and products where AmpliTech's engineering, intellectual property and performance provide meaningful value to the customer. All the different divisions have a different purpose for supporting the customer in every different way. As those products and customer programs move further towards commercialization, we expect the opportunity for a more favorable mix of higher-margin revenue. This is the beginning. It's like priming the engine with gas. This is what we have to do to set up the engine so we can get to speed.

We should also clear that -- be clear that quarterly margins can fluctuate based on product mix, customer mix, timing, and stage of individual programs. But strategically, the direction we are pursuing is clear. From the investment to the operating leverage, the next stage is about converting investment into results -- converting the investment into results. Much of the infrastructure we are establishing today is intended to support a significantly larger revenue base around the corner. We do not expect every dollar of the revenue growth to require a corresponding dollar increase in corporate infrastructure.

We've been investing ahead of the anticipated demand so that when larger opportunities progress, the company has the ability to support them. That's how we intend to create operating leverage over time. Our priorities remain for the remainder of 2026: one, convert customer engagement and develop programs into commercial orders and production revenue; two, increase the contribution from differentiated higher-margin products; three, leverage our expanded sales and marketing capabilities to broaden our customer base and global footprint; four, continued strengthening production and supply chain readiness for larger deployments; five, complete key customer-driven engineering and customization programs; six, strengthen cybersecurity, IT systems and internal controls appropriate for the larger customers we are pursuing. The larger customers ask for all kinds of questionnaires that we have to demonstrate that we have all the systems and protocols in place to support them. It's becoming very, very important now to cybersecurity. So we have to expand accordingly to make sure we support them; number seven, finally, maintain disciplined capital allocation as these opportunities progress.

Now my closing remarks. AmpliTech today is building a substantially broader organization than it was several years ago. That can be seen. Everything is growing. Yes, including our expenses, but it's for a greater good. We have expanded beyond our traditional RF component business into semiconductor distribution, MMIC development, advanced RF solutions and 5G infrastructure. This gives us independence from individual vendors. It gives us our own IP and technology. This makes us more of a one-stop solution for our customers, rather than them going 10 different places. So that's the attractive part, but we have to build that. We have to show them that.

That transformation requires investment but we believe we are now building not simply individual products but the technology, operational and commercial platform necessary to participate in this significantly larger markets. There are trillion-dollar markets, multibillion-dollar markets in everything that we're doing. Second quarter reflected that transition. Revenue increased approximately 51% sequentially. Our first half gross profit increased approximately 135% year-over-year. We strengthened our production and supply chain capabilities. We increased customer-driven R&D. This is something that our customers have asked. So what does that mean? They don't have any interest they wouldn't ask us to do the R&D, and then wouldn't spend it. We expanded our sales and marketing research, and reach.

We are strengthening our cybersecurity, again, IT infrastructure and corporate controls. Following the Series A rights exercise, we substantially strengthened our financial resources. This is the reason why we did that. We need to do all these things and without the capital investment, we cannot do that. We cannot compete.

Q2 was an investment quarter. It should be noted as such. Our focus now is on converting those investments into sustainable growth, higher-margin commercial revenue and over time, improved operating leverage. We believe we have strengthened the foundation necessary to support larger customers and opportunities we are pursuing, as we have mentioned in many calls before in many PRs. We appreciate the continued support of our shareholders, customers, employees, and strategic partners, and we look forward to updating you on our progress, not far away in the near future.

And now I'd like to go back to Jorge, AmpliTech Group's COO to address previously received questions into our e-mail.

Thank you, Fawad. And I would like to immediately address the questions received so far at our [email protected] e-mail address. The first question came in as, revenue increase substantially from Q1, but gross margin declined. Why?

The primary factor is product mix. At our current scale, the timing and composition of individual customer orders can materially affect quarterly margins, What we believe is important is the broader trend. For the first 6 months of 2026, gross margin was approximately 35.9% compared with approximately 14% in the first half of 2025, while gross profit increased approximately 135%.

Our objective is to increase the contribution from differentiated products and technologies as newer programs progress towards commercialization. We, therefore, will not view any individual quarter's margin as necessarily representative of the longer-term mix we are working towards.

Next question. Why the operating expenses increased so much?

Well, as we basically -- like I mentioned during this conference call, during Q2, we incurred increased amortization, legal fees, and stock-based compensation as well as greater marketing and business development activity. Additional trade shows participations and consultants supporting our 5G portfolio. R&D also increased because of higher 5G development, prototype testing and consulting activities. In addition, we have been investing in infrastructure that we believe is necessary to support larger customers, including customer-specific engineering, cybersecurity, IT systems internal control supply chain readiness and commercial capabilities.

We don't believe investors should assume that these elevated expenditures will necessarily increase proportionately with revenue. Some costs are ongoing while others are associated with implementation, customer development or building capabilities that we expect to leverage over a larger future revenue base.

In other words, the next question is, are you saying these expenses are nonrecurring?

Well, we will not characterize all of them as nonrecurring. A more accurate way to describe the quarter is that certain expenses were elevated because of a specific implementation, development, consulting and commercialization initiatives, we will continue investing where we believe there is an appropriate potential return. The objective is to increase revenues at a faster rate than expenses. That's the objective of our business. We're building capabilities today that we expect to leverage as the business scales.

Next question, why was it necessary to raise additional capital?

We believe financial strength is increasingly important when dealing with more larger customers. Large MNOs and telecommunications infrastructure providers need confidence that their suppliers can support production, can buy inventory, supply chain requirements, engineering and customer support at the scale. Following the Series A rights exercise, we received approximately $20 million in net proceeds, significantly strengthening our financial flexibility. We view the liquidity not simply as cash on the balance sheet but as part of our ability to support larger commercial opportunities.

Next question. When should investors expect this investment to translate into revenue?

Our focus is on converting the customer engagement, engineering programs and commercial activity already underway into production opportunities. The timing of large telecommunications programs can depend on customer testing, qualification, network requirements, purchasing decisions and deployment schedules, many of which are just simply outside our control. For that reason, we don't want to provide timing beyond what we have formally disclosed. What we can say is that we have intentionally strengthened our engineering, supply chain, commercial and financial capabilities so that as opportunities progress, AmpliTech is positioned to support them.

And this concludes the questions previously received up to this hour into our e-mail address. Operator, please open the lines for questions.

[Operator Instructions] The first question comes from Jack Vander Aarde with Maxim Group.

Okay. Great. So Fawad, I guess my first question is on the 2Q results, total revenue of $8 million. I was digging through the 10-Q here. And at the segment level, I was surprised to see more than half or about -- just over $4 million was actually from the Spectrum division. And it also seems that Spectrum's gross margin seem relatively stable in the mid-40%, was this expected? And it seems that the drop-off in gross margin was from the engineering services and the AmpliTech segment. So just trying to understand why that is? And if that's the case going forward.

Yes, you are correct in observation. Jorge, do you want to answer that?

Yes. That's correct. Certainly, though, we are very pleased that our Spectrum division is doing a lot better this year, we are seeing a up demand from their side. So this is a pleasant surprise. We are finally seeing that they are receiving a lot of inquiries and we are also developing new ways of revenue for our Spectrum division. And this quarter was a good testimony of what we have been doing with them while maintaining the gross margins that we are already [ accustomed ] from them.

Let me add to that, Jack. Jack, the difference -- Spectrum is a distribution company, right? They're distributing standard parts. They don't do any engineering. Our company, the rest of the divisions are engineering focused, right? So they have to basically do R&D almost all the time to keep up with all the requirements and meet all the requirements of our customers, especially in a newly developing business. So there's a significant contrast between the kind of business that Spectrum does, which is stable. That's why we acquired them many years ago, stable with the net profit margin, and it will be scaled up as our 5G business grows as well because they are going to be receiving our packages for distribution and our certain products for distribution also.

So there's a significant difference between their business model and our business model, but -- that's why it's there to give a balance and diversity.

Understood. I guess my next kind of follow-up question that, though, is if I look at 2Q last year, the Engineering Services segment gross margin, I think, was actually quite high. I think it was unless this math is wrong, it was closer to 90% in the second quarter of last year, kind of 22% in Q1. So just maybe it is just product mix and then also different types of products that you've been investing in, obviously, in that segment. But does that seem accurate to you, that the gross margin difference in the AmpliTech Engineering segment?

Well, the AmpliTech Engineering segment includes the LNA business as well as the 5G -- the LNB business as well, right? And the 5G division is a little bit separate. So if you take the 5G division separately, you'll see that the gross margins, as we said before, are lower, but our revenue is getting higher. But that -- since we are a group, it impacts the profitability of the other divisions. And overall, it looks lower. But in general, the idea is the product mix. This is what differentiates everything. So that will change as we go and build more and more business, this mix will keep changing, but it will be more towards the profitability side because right now, we're just setting up a larger business that will eclipse almost all the other divisions.

Okay. Understood. And then I guess next question just on your outlook for the rest of this year. It's good to see the $6 million purchase orders come in during the month of July alone. Last quarter, I think you had reiterated revenue guidance for $50 million for the year that was assumed to be kind of low visibility back half loaded. Obviously, you have this very large LOI with another reseller here. Can you maybe just touch on that? Are you -- is there a reaffirmed guidance? Are we withdrawn from the guidance based on visibility at this point? Just trying to understand the interim change.

Jorge, do you want to handle it?

Yes, Jack, this is Jorge. Basically, when we establish our 2026 outlook, right, it was based on customer deployment schedules, we had backlog on hand as well. And also though we tied in some expected conversion of our LOI programs into funded purchase orders that we had visibility at that time, right? So over the first 6 months, we have seen or experienced a shift in the timing of certain anticipated volume shipments, right, particularly within 1 of our international 5G programs.

So this shift is affecting the timing on the follow-on purchase orders associated with that deployment overseas. So importantly, what we are seeing is primarily a timing issue rather than a change in the underlying customer opportunity. So the programs remain definitely very active. We see continued and meaningful commercial activity. And as we mentioned here before, those -- we just received $6 million in follow-on orders in July alone.

So we are still definitely expecting meaningful year-over-year revenue growth in 2026 and a stronger second half of the year. However, though, given the customer control timing associated with these larger deployments, we believe it's prudent at this point, not to reaffirm a specific full year revenue number today until we have better visibility into the timing of these value shipments and follow-on orders.

Again, our focus remains on converting these opportunities in front of us into funded orders, shipping those orders efficiently and building the business for sustainable growth beyond any individual quarter.

Okay. Understood. And that makes sense. Maybe just 1 more for me then. Fawad, can you just confirm, is that LOI that was I think it was $76 million at the time for that -- with that reseller. That LOI is still active. I believe. And then also, is there any incremental testing or certification that they are asking you for -- before we see orders start to roll in?

Yes, it's still active. It's still active. And again, since these individual countries, as Jorge just mentioned the same thing. It's basically timing related. I mean everything is still active. It's just the fact that adoption of this technology, final testing is all done. We were going through the final testing and now what happens is the adoption has to take place and the larger orders have to come through.

We were getting smaller orders, which we have delivered already and they were already deployed, and they're testing that whole thing. But these Asian countries, they have a lot of bureaucracy, if I can use that word, a lot of things that are hindrance to closing something. So that's the only thing we're facing right now. But the technology has been proven. We have good IP, and that IP can be deployed in other countries and other areas as well, which you'll be seeing in the coming months as we will be announcing.

Okay. Great. And I said that was my last question. Maybe just 1 more Fawad. Can you just touch on your kind of your business development activities recently in terms of opening up new potential LOIs or partners, just customers in general, since we've seen these 2 large LOIs, I think that you entered originally in the first half of '25. Is there anything else on the horizon here that maybe you could touch on or -- go ahead.

Yes, yes. So first of all, the LOIs were, again, because we want to show that we are in touch and engage with these customers, and they are willing to work with us. So we get LOIs from them, right? But at this stage right now, because of the development of our infrastructure, our customers are feeling more secure with us. So we've already exceeded the original LOIs for the original $40 million LOI that we had before. We've exceeded that from the same customer. We've got more orders than the LOI and the deliveries are just being rolled out now.

And the technology that we have, it took us a while to get that fully transferred. Now that IP is in our hands. And so now that will be converted into revenue streams as well in the coming months towards the end of this year. So the customers are now going to go straight towards POs, right, we're not going to go through any more LOI type of engagement because we have insisted to customers, new customers, not the same ones. In some cases, the same ones are going to renew their orders. and give us larger orders, which we'll be announcing in the next month or so. But newer customers, other customers who are also going to be interested in our technology, which is very unique. So this IP expense that we have done so much -- spent so much on, the R&D that we have spent so much on, it's for the reason that it is more common for being deployed by many in multiple MNOs rather than just 1 right now, right, so that's the whole idea.

The idea is that IP now becomes unique, and nobody else has that. No other vendor has that. So we are able to supply all these MNOs with similar technology that's been proven in the field. So we're getting very close to that time where we're just going to get the POs, and we'll be announcing that. The business development that we've put in place with the 2 new people that we hired is specific to strategic hires they have positions in the companies that they work for, and they have expertise in conveying what our technology means to them. So that will show also -- that will be shown in the coming months as well, the results of that.

The next question comes from Thomas Fortune, private investor.

I'm a small investor compared to most everybody probably on this call. Mr. Fawad, I, of course, have never spoken to you but the inability to answer the question to the previously announced $50 million yearly guidance. I didn't hear anyone on your team or an AmpliTech Group confirm that guidance, it seemed to me like you all walked around that. Did I mishear something? Or can you expand on that?

No, you didn't mishear anything. We explained that it's a timing issue and we don't have the foresight to give you any number or anything specific supporting that right now. Everything is -- the timing has changed. Timing has been -- the timing is the difference right now.

I understand. When you say everything is in place, does that mean customers are in place?

Well, we don't have any cancellations of orders or we don't have any changes in the LOIs. The forecast timing has changed, but everything else is still in place. So we can't say yes or know exactly, this is what's going to happen.

I could read into your answer of you saying that $50 million could happen before the end of the year?

It could.

Okay. All right. Well, thank you for your time. And I'm in a large AmpliTech Group investment community and everyone in our -- we've been anticipating this earnings but the lack of guidance has really been an issue in our group chat. So I just -- I really wanted to just ask you directly, and if I was rude in doing so, I apologize.

That's no problem. It's -- I don't know if it's the lack of guidance, Tom. I mean, is it specifically to this subject that you're talking about or everything else in general?

I think guidance is very important because I'm an investor in AmpliTech Group. I'm not a trader. And initial guidance in Q1 was $50 million revenue for '26. And you were asked by the Maxim reporter that direct question. If you could still confirm that AmpliTech Group's guidance for fiscal year 2026 was still on pace for $50 million. And no one answered that question directly with a yes or no, and that just drew some red flags to me as an investor in your company.

Well, but when it comes to -- Mr. Thomas, this is Jorge, right? It is that -- we cannot tell you like a 100% that we're going to hit or we're not going to hit it, right? Because we see that -- we have seen and we are seeing a shift, right, in the -- in our customers' deployment plans, right? So at this point in time, we see that we are lagging behind the projected deployment schedule. We're talking about 5G radios in which they have the schedule tower cell implementation. They have to send the staff out there to climb the towers, remove whatever technologies they are removing and then putting ours in, right? And then as they consume their inventory, right, then they place follow-on orders, right?

So while we are not reaffirming this $50 million figure today, we continue to expect significant growth for the year on ourselves. But right now, we just believe it will be premature to replace any prior outlook with another specific number until we have greater visibility into the timing of this volume deployments. So that's the case in here, though. We don't want to mislead anybody. And we just want to show in here that we are prepared. We are doing the necessary and taking the necessary steps, right? Not just to fulfill the orders that we currently have, but also to support new large opportunities that we have with new customers in which we are spending a lot of engineering resources and we are spending a lot of business development hours. So then we do have larger opportunities also that are going to start contributing to the revenue number yet.

However, though, we are not able to publish or comment on who are we dealing with right now because we are subject to NDAs, right? And we need to be very careful because we are also very, very zealous on not sharing to our competitors who are we working with because we don't want them to also impede the progress on our negotiations with our current customers. And we also can reaffirm that no orders that we have in our backlog have been canceled, absolutely not.

So it's just a timing on deployment, the speed on the deployments. So I want to make sure that everybody understands here, not just you, but everybody else that is listening to this call.

Jorge, thank you so much for your transparency. This is the first micro-cap company that I've invested in. And the 2 things that drew me to AmpliTech was, a, the technology that you'll have and b, the management. I think most everyone I'm involved with, with AmpliTech Group, those are the 2 reasons why they're investors also. And your transparency right there, I really appreciate that.

And my concern is not with the delay. I am totally fine with delays. I still believe in AmpliTech thesis. My only concern was, I wasn't asking for a firm -- guidance is just guidance. We're guiding you that we see this on the horizon. And I understand that you want to be conservative, and I appreciate that. I just think a lot of us are missing the guidance. We're not trying to stick a number on the wall to raise the stock price. But a thorough honest guidance, I think, is what has been missing, at least on my end from this call.

Now if I missed it, because I'm not as smart as you all, then that's on me. But I really, really appreciate your time taking my call, and I'll get off because I'm sure you have other people that would like to ask questions, too.

The next question comes from Lennox Brooks with Fort Washington Investment.

Congrats on the progress and on the quarter. One question for me. Can you provide any color on your inquiries or engagements from customers related to the quantum computing? Has it increased over the past year?

Lennox, quantum computing seems to be a very static business right now. If you look at the companies that are involved, the quantum computing adoption has been slow. AI is very quick, right? AI is artificial intelligence and all that. But my belief and my thinking is that the AI has to progress into quantum computing because as you get more and more AI-heavy into everything, 2 things have to change. One, the mode of wireless communications. Every piece of data has to go wirelessly somewhere at a very high speed. That's number one, and that's why we're into the 5G infrastructure and making it the fastest and most higher capacity there is. That differentiates us.

We are also in the low noise area, right? So low noise arena -- we have the lowest noise figures in the world, which leads us into quantum computing. But right now, IBM and companies like IBM, D-Wave and Rigetti and all those companies, they have not found a terrific application that will join the AI to the quantum computing. Because right now, it's not a productionized market. Let's say, 1 quantum computer would serve thousands of businesses. It's a B2B or -- it's not like you and I can get on to a quantum computer and try to start working, right? Not like a PC. So that's why the production phase has not been there. And it likely may not be until AI sees the need to now use quantum computing to do all its functionality.

Right now, we're building huge data centers and everything. So our belief is that the production phase of that has not really begun. It's really still into a smaller quantity applications because each supercomputer that these companies have. And some of these -- the companies, by the way, like D-Wave and all these other companies, they don't really have any real product IBM has a quantum computer. But again, I don't want to get into details, but they're not productionizing it. You're not going to sell thousands and thousands of quantum computers.

We have sold into the core computing systems just for R&D and development work. And we have -- we are the only U.S. company that has these LNAs capable of operating at 4 Kelvin but it has not become productionized. So it's kind of static right now. We don't see that tremendous growth in the quantum component area.

The next question comes from Richard Kreger with Moody Capital Solutions.

Congratulations on a record revenue quarter. Quick question for you. I noticed that the gross margin of the business is up significantly year-over-year. It looks like first half gross margins went from about 14% to almost 36% for the first half year-over-year and curious how you expect with revenue growth, gross margins may be impacted for the second half of the year? Should we expect a similar improvement year-over-year in both revenue and gross margins. And then also curious about Q1 versus Q2, we saw a dip quarter-over-quarter, but the big growth year-over-year. So it seems a bit choppy there.

Yes, Rich, thanks for the question. Well, of course, we do -- we do -- we have explained that this gross margin and the revenue is lumpy right now quarter-to-quarter because of the product mix that we're working on. But we also want to make sure everybody understands that our focus is in building up the 5G product lines, and we're investing heavily in that, and that's the reason for all these expenses.

But as we go forward in the second half of the year, -- we expect to have orders that have higher margins that we have been looking for all these -- for the last 2 or 3 years of building the company so that we can structure a company that can support these large orders. Every time we go to these large companies, they keep asking us, do you have this? Do you have that? So this -- all the things that you're seeing now comes from the need to have all these things. Otherwise, we don't get an order, right? The company is billion dollar companies, do you think they're going to give us an order because where -- they like us. They don't do that unless they see a strong balance sheet, they see that we can support all their requirements for program management and all the other things that are tremendous requirement in this kind of business.

So yes, we do see that the second half of the year will have good bookings and good orders, higher-margin orders, and that will help us to take the lumpiness out and smooth out the curve of growth.

And if I can ask 1 more question. Obviously, we've been following the company for a long time. We're very familiar with the Open RAN story and the growth you're experiencing with Open RAN technologies but noticed that recently, you joined the AI RAN alliance. Can you talk a little bit about who's involved with AI RAN alliance? And what was the purpose or reason behind joining the AI RAN alliance?

Yes. So there are different alliances. We're also part of the ORAN, alliance by the way. I think everybody knows that. We received certification from there. Our radios were certified from them, and they're the ones making the standards for ORAN adoption, right? Similarly, the AI RAN alliance is an organization that is -- that has all the major telecoms, all the major big names you can think of, AT&T, Verizon, NVIDIA, you name it, they're in this alliance, right? The reason is that along with the adoption of the hardware interface as well software. Now they want to make sure that everything that we build is going to have some layer of AI interoperability, because AI is what speeds things up, right? It makes things more accessible and the radios will become more accessible if they have a uniform AI RAN layer.

So we have already, let's say, leapfrogged many of our competitors by being part of this alliance that allows us to share information openly as well as be able to give them hardware that they can test and put their AI RAN into the hardware and then make it work and show the world that it's doable. So that's a big step for us because it puts our technology in front of all the major players to see.

And for that reason, it kind of singles us out. We're the only ones that have radios that are AI RAN enabled. So being in addition to the fact that we are ORAN certified, we also have AI RAN accessibility to all the major players and major MNOs. And with major software providers like NVIDIA as well as the DeepSig and all these other guys. So the universities are using our radios to demonstrate this capability. So our platform becomes more and more powerful.

Do you mind if I ask 1 more question about the AI RAN alliance.

Sure.

I saw a press release that was released by Northeastern University that mentioned both AmpliTech Group as well as NVIDIA in its press release, but I didn't see any press releases from AmpliTech discussing that certification or what the relationship is with NVIDIA. Do you mind, perhaps elaborating and explaining why you did not mention NVIDIA in any of the press releases about the Northeastern certification?

Well, we work with NVIDIA as a partner in the ecosystem that Northeastern is putting together, right? They need hardware and there are so many more elements that put together an AI RAN capable radio or hardware or network to go even further. So since we don't have any direct communication or direct product placement with NVIDIA itself, we can't really mention them, right? But NVIDIA is using our radios and their aerial layer, as mentioned in the article is in our radios.

And we're the only radio they have. We cannot directly mention NVIDIA specifically because we're not doing anything contractually with them.

The next question comes from Andrew DeAngelis with Venture Capital.

I know this has been a long call. I just was hoping to get some additional context on the 8-K that you guys released yesterday night in regards to the Titan acquisition amendment, both how that's impacted the first half of the year and any continuing impact into the back half as it relates to that?

Yes. So there's going to be a press release tomorrow addressing that 8-K. But in summary, I mean, we basically have just negotiated penalties or damages for late delivery of those parts. And that really just means that we have been delayed in rolling out our IP which we have reengineered as well so that it's more feasible for all our customers, and it's in big demand right now, actually. And that is really just a delay.

So now that we are almost 99% complete in all the asset transfer that we have done, and we have embellished it with our own technology. We are now ready to rollout to the customers these productionized versions, which are going to appear to start shipping, we already have orders for these, by the way. So these are going to start shipping towards the end of the year or early next year. There'll be a press release out tomorrow detailing this.

Okay. Helpful. And then just real quickly, are you able to disclose your fully diluted share count as of the end of July post the Series A?

I don't think end of July, we can do that. Louisa?

I could, if you would like, Andrew, you could send me an e-mail, and I could disclose that information, if I'm able to -- I would have to check with legal because if I disclose it to you, I would have to disclose it to the rest of the other shareholders.

July would be outside the June 30 quarter, right? So we can only disclose certain information.

Yes. The only reason I'm asking is just to have that current number with the Series A. I understood that, that may not be disclosable. If I could just squeeze in really one more just around as you think about the costs related to the infrastructure that you're building out and the run rate of costs that are kind of ongoing versus more onetime in nature. How are you guys thinking about recurring SG&A run rate? And if you are able to kind of break out maybe the size of onetime expenditures on that line and just maybe overall?

If you look at SG&A, and gross margins, they're connected in the fact, same thing with revenues, right? So if we have higher revenues and increased revenues and we keep our expenses close to what it is right now, or a little bit higher, then you see that you basically have a lower and lower SG&A because your revenues are much higher and your gross margin is higher.

So when we reach $50 million, $100 million or so, whatever the revenues are, which is our goal, right, more than that. Then you'll see the drop in SG&A. This is only because we have a fixed expense right now and which is increasing, but the revenues have not accordingly caught up to it. But as soon as the revenues start catching up to it, you'll see that drop.

This concludes the question-and-answer session. I would like to turn the conference back over to Fawad Maqbool for any closing remarks. Please go ahead.

Thank you, operator, and thanks to everyone who joined today's call to hear about the progress we've made and the plan we have to further our company's mission of providing the communication systems of tomorrow today. We look forward to updating you further in our third quarter financial results call sometime in November. Until then, please contact us directly should you have any questions or wish to schedule a call with management, our Investor Relations team can be reached at the contact information listed at the bottom of our press releases. Thank you and be well.

The conference has now concluded. You may now disconnect.

Good day, ladies and gentlemen, and welcome to AmpliTech Group's Quarterly Investor Update Call, where the company will discuss its first quarter 2026 financial results. Present in this call, we have the executive team of AmpliTech Group, Fawad Maqbool, CEO, CTO and Board Chair; Jorge Flores, COO; Louisa Sanfratello, CFO. [Operator Instructions] As a reminder, today's conference is being recorded.

I would now like to turn the call over to AmpliTech's COO, Jorge Flores.

Thank you, Drew, and thank you for joining today's call to review AmpliTech's first quarter 2026 financial results, review of our company's outlook and to answer investor questions. Following the initial management comments, we will open the call to these questions.

An archived replay of today's call will be posted to the Investor Relations section of AmpliTech's corporate website. This call is taking place on Wednesday, May 13, 2026. Remarks that follow and answers to questions may include statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, statements that describe future plans, objectives or goals are also forward-looking.

These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements, which are made as of today's date.

With that, let me turn the call over to our CEO and CTO, Mr. Fawad Maqbool.

Thank you, Jorge and thank you, everyone, for joining us today. The first quarter of 2026 reflects meaningful progress across several areas of our business. We achieved substantial revenue growth year-over-year and expanded gross margin significantly, strengthened our balance sheet and continued transitioning key technologies from development into commercial deployment.

What is important to note here is the trend towards reducing the losses and expanding gross margins as promised. We believe our investments in 5G O-RAN radio technologies, MMIC design capabilities and advanced RF systems are beginning to contribute more meaningfully to our operational performance. We're encouraged by the increasing demand environment for next-generation wireless infrastructure and remain focused on disciplined execution, operational scalability and long-term shareholder value creation.

Before we move further into our results and outlook, I want to briefly address the broader operating environment because it is relevant to how we think about timing, delivery schedules and revenue recognition over the balance of the year.

As a technology manufacturer with global suppliers and customers, we continue to monitor several external factors that are outside of our direct control, including geopolitical tensions, volatility in fuel and logistic costs, potential disruptions in international shipping lanes and broader supply chain constraints. We are also seeing areas of heightened demand across the semiconductor ecosystem, particularly in memory and related components driven by AI, data center and high-performance computing demand. These conditions can place pressure on component availability, lead times, freight costs and production scheduling.

At this time, we are not changing our full-year revenue guidance. However, we believe it is prudent to acknowledge that the timing of certain shipments and revenue recognition may be influenced by these external conditions as well as by customer deployment schedules, supplier lead times and normal production cycle timing. As a result, we currently expect our revenue profile of the year to be more heavily weighted towards the later quarters and we have mentioned this in the last investor call as well. So we're on track in that respect.

So also very important to mention is demand for our products and solutions remains very active and our team is focused on managing supplier relationships, planning inventory requirements, qualifying alternatives where appropriate and maintaining close communication with customers to support scheduled deliveries.

While these macro factors may affect the timing of revenue recognition, they do not change our long-term confidence in the markets we serve or in the strategic opportunities ahead for AmpliTech. The company continues to believe in its full-year revenue guidance to remain achievable. We continue to receive orders related to our $40 million LOI with the North American MNO, for which shipments resumed earlier in April. Our distribution business is also experiencing an uptick in demand, contributing nicely to the over $20 million in backlog orders the company currently has.

As for our operational and strategic progress, during the quarter, the company continued to advance commercialization initiatives related to 5G O-RAN radio systems, proprietary RF and microwave technologies, 5G MMIC chip design programs, satellite and defense communications applications, next-generation wireless infrastructure solutions.

The company also reported lower research and development expenses year-over-year as several products transitioned from active deployment -- development into commercialization and deployment phases. This doesn't mean we will not invest in R&D for our products to stay ahead of the competition as always. We pride ourselves in providing unique solutions that differentiate us from other vendors in the industry. The company remains focused on expanding revenue scale, improving operational leverage, strengthening internal controls and infrastructure, increasing commercialization activity, supporting long-term sustainable growth.

With this, I'll turn the call over to CFO, Louisa Sanfratello, to review our financial results in more detail.

Thank you, Fawad. The first quarter 2026 highlights are as follows. Revenue increased 48.6% year-over-year to $5.35 million compared to $3.6 million in the first quarter of 2025. Gross profit increased 116.1% year-over-year to $2.57 million from $1.19 million in the prior year. Gross margin improved significantly to 48% compared to 33% in the prior year period. I repeat, gross margin improved significantly to 48% compared to 33% in the prior year period.

Manufacturing and engineering segment revenue increased to $3.28 million from $0.99 million in the prior year quarter. Net loss improved 17.3% year-over-year to $1.52 million. Cash, cash equivalents and marketable securities increased to approximately $18.4 million as of March 31, 2026. Working capital improved to approximately $25.4 million from $10.2 million on December 31, 2025. Current ratio, defined as current assets over current liabilities, improved to 4.25 from 1.68 on December 31, 2025.

Multiple 5G and MMIC development programs advanced further into commercialization stages. Total assets to total liabilities improved approximately 47% to $48.36 million from $32.86 million on December 31, 2025. It is important to highlight that AmpliTech Group remains debt-free.

Let us turn to the balance sheet and the company's liquidity. As of March 31, 2026, AmpliTech reported cash, cash equivalents and marketable securities of $18.4 million, total current assets of approximately $33.2 million and total stockholders' equity of approximately $48.4 million. During the first quarter, the company completed both a rights offering and a registered direct offering, generating aggregate net proceeds exceeding $16 million to support growth initiatives, working capital requirements and operational expansion.

I'll now turn the call back to Fawad for closing remarks.

Thank you, Louisa. To close, this first quarter is nicely setting the tone for the balance of the year for the company. We increased our year-over-year revenue while also decreasing our gross margins. Business development-wise, our participation at MWC Barcelona, one of the world's largest and most influential connectivity events, was strategically important for AmpliTech because it placed us directly in front of global mobile operators, OEMs, infrastructure providers, technology partners and potential customers at a time when the industry is rapidly advancing toward Open RAN, private 5G, AI-enabled networks and future 6G architectures.

We achieved additional certifications with our flagship radio, our O-RAN 64T64R Massive MIMO radio unit. Our O-RAN certification achievements continue to strengthen the market position of our radio portfolio.

For mobile network operators, certifications help to reduce perceived deployment risk by demonstrating that our radios are being validated for open standards-based multi-vendor network environments. We believe this gives operators greater confidence in evaluating and adopting AmpliTech radios and positions the company to benefit from increasing demand for Open RAN solutions that support vendor diversification, network flexibility and lower total cost of ownership. These are key factors in the MNOs adopting our strategy and our products.

Before we open the line for callers in the call for questions, I would like to have our COO, Jorge Flores, go over the questions previously received via e-mail.

Thank you, Fawad. I'd like to immediately start with the first question, which is, does the company still believe its full-year revenue guidance as achievable?

Absolutely, yes. Based on the visibility we have today, including funded purchase orders, customer forecasts, active deployment schedules and ongoing discussions across our commercial pipeline, we continue to believe our full-year revenue outlook remains achievable. That said, investors should understand that revenue recognition in our business can be influenced by the timing of customer deployments, supply chain availability, production and scheduling, shipment timing and customer acceptance. As a result, we currently expect a greater portion of 2026 revenue to be weighted towards the later quarters of the year. Importantly, this is primarily a matter of timing, not a change in our long-term view of the opportunity.

We continue to see active demand for our 5G and O-RAN radio solutions and our focus remains on converting funded orders and customer forecasts into shipments and be able to recognize the revenue.

Next question. Are geopolitical tensions, fuel prices, logistic costs, or supply chain pressures affecting your outlook?

Of course, we continue to monitor broader macroeconomic and geopolitical conditions, including tensions in key global regions, volatility in fuel and freight costs, potential disruptions in international shipping routes and supply chain constraints affecting the electronics and semiconductor industries.

At this time, as previously stated, we are not changing our full year revenue guidance. However, these external factors may influence component availability, lead times, freight cost and production scheduling. We just believe it's prudent to acknowledge these factors because they could affect the timing of shipments and revenue recognition.

But rest assured that our team is actively managing supply relationships, the inventory planning and logistic options and customer communications to reduce risk wherever possible.

Next question. How do your O-RAN certifications and validations position AmpliTech with mobile network operators?

This is a good question, though. Our O-RAN certification and validation work is very important because it helps reduce perceived adoption risks for mobile network operators. These certifications are not just technical milestones. They provide third-party validation that our radios are being tested against recognized Open RAN conformance, interoperability and performance expectations. And for MNO customers, that matters because it gives them greater confidence that AmpliTech radios can operate in open, standard-based multi-vendor network environments. We believe this strengthens the commercial positioning of our radio portfolio and effectively reduces evaluation cycles, support vendor diversification and increase confidence in broader deployment opportunities.

In short, certification helps move the conversation from, can this technology work to how do we evaluate and deploy it at a scale.

Next question. What did the MWC Barcelona mean for AmpliTech from a business development perspective?

The Mobile World Congress show in Barcelona was an important strategic platform for AmpliTech. It placed us directly in front of global mobile network operators, OEMs, providers, technology partners, industry decision-makers at a time when the market is actively evaluating Open RAN, private 5G, AI-enabled network architectures and future 6G planning. All of these are at our strength right now.

For us, MWC was not only about visibility. It was about strengthening awareness of AmpliTech's capability, brand name, advancing business development conversations and reinforcing our position as a U.S.-based provider of advanced wireless and 5G infrastructure solutions.

We believe this event supported our long-term commercial strategy and helped expand the number and quality of conversations we are having across the global telecom ecosystem, creating multiple opportunities for us to participate in further interoperability testing efforts with different customers.

Next question. What gives management confidence that demand for AmpliTech's radios can continue to grow?

This confidence is based on several factors. First, we have already received meaningful funded purchase orders on the previously announced customer opportunities. Second, we are seeing continued customer interest in O-RAN, private 5G and vendor-diversified network architectures. Third, our certification and validation efforts help reduce technical risk for customers evaluating our radios.

We also believe the market is moving in a direction that favors open, flexible standard-based network solution. While O-RAN is increasing -- O-RAN adoption is increasing, the regular RAN is decreasing. And we are already there with designs that are ready to be manufactured and sold to all of these MNOs and satisfy their demands for O-RAN-related products.

AmpliTech's portfolio is designed to address that market need and our strategy is to continue building credibility through execution, certification, customer deployments and supply chain readiness. We want to be clear that timing can vary based on customer deployment schedules and purchase orders, but the level of engagements we are seeing supports our confidence in the long-term opportunities.

Last question. How should investors think about gross margins as 5G revenue scales?

Gross margin remains a major focus for management. As we discussed, the initial ramp-up of carrier-grade O-RAN radio deployments placed pressure on margins last year as we invested in customer acquisition, production readiness and early market penetration.

Looking forward and actively doing it right now, we believe margins can improve as volumes increase, production processes mature, supplier trends improve and we gain efficiencies with our contract manufacturing partners. We are also focused on forecasting, material planning, cost control, pricing discipline and supply chain optimization.

We do not expect margin improvement to be perfectly linear quarter-to-quarter, especially during a ramp-up phase, but improving gross margin remains one of our key operating priorities.

With that said, this concludes the questions previously received into our e-mail. Operator, please open the line for callers' questions.

[Operator Instructions] The first question comes from Jack Vander Aarde with Maxim Group.

Fawad, so good to see the strong year-over-year revenue growth and definitely strong gross margin expansion. It looks like Spectrum or the international sales definitely rebounded back to normalized levels. I'm wondering how much revenue from this quarter roughly was from the LOI orders.

Jorge, can you answer that?

Right now, from our 5G division, we will say that the revenues, the revenue mix from our AmpliTech 5G, it was a very high percentage of sales were attributed to the $40 million LOI. Mostly from the $40 million LOI.

So somewhere maybe between $2 million and $3 million, does that feel about right?

Yes, a little bit more than that.

Okay. And then SG&A, maybe this is a question for Louisa. SG&A expenses -- so the gross margin expanded nicely. SG&A expenses did tick up, but I did see quite a bit more of noncash stock comp. Just wondering kind of what the reason is there and if that's a normalized level going forward.

Well, we did -- normally speaking, our first quarter, our SG&A expenses are a lot higher as we incur the audit expense, we incur D&O insurance expense, we get hit with our NASDAQ fees and so forth. So typically speaking, SG&A is higher in the first quarter and we did have the stock compensation expense. We did have the trade show that ran us about $180,000 in addition to hiring a new marketing company to help us expand sales and our outreach. We can probably see an uptick with the SG&A.

Excuse me. Just one moment. This is the operator. It seems like there has been an interruption. Just a moment, please.

Excuse me. This is the conference operator. There seem to have been an interruption. Ms. Sanfratello, were you still answering the question?

Well, I was just reiterating that for the first quarter, we always see an uptick in SG&A because of those expenses in the audit fees that was completed for the first quarter. The D&O insurance is always, we activate it. We reactivate it in the first quarter as well as the NASDAQ fees and so forth. So we may see a little uptick in SG&A as we expand and we -- with our revenue guidance, but it all -- it really all depends.

Does that answer your question?

Yes. No, Louisa, that's great. That's great. And then maybe separately, looking at the full year outlook, so -- and maybe just for Fawad, it sounds like maybe you have limited visibility just given the geopolitical tensions in the world and a few other -- maybe some shortages in the memory market, but it sounds like the guidance is still achievable for that $50 million of revenue, just more back half loaded.

But I'm wondering now that we're almost halfway through the second quarter, how is the second quarter kind of shaping up? Is there any color you can provide, maybe orders received? You just did $5.3 million of revenue in the first quarter. Any guidance or I guess, commentary you could provide would be helpful.

Well, this is Jorge. So far, we started the month of April very nicely. As I mentioned previously, we resumed the shipments on our $40 million LOI to our MNO in North America. So right now, things are looking very nicely for Q2. We continue to receive orders against that LOI as well. The supply chain is prime and ready to go.

So that's as far as I can share right now due to the ongoing -- we cannot disclose stuff that is not publicly released as of yet.

Okay. Got it. I guess, could you maybe just make it more clear how many -- how much orders you've received in the second quarter or expect to receive? I mean, is there a chance that the second quarter is maybe flat or down from the first quarter, but then the back half is very strong? Just trying to get a sense of what to expect.

No, definitely not. We are projecting Q2 to be definitely much higher than Q1.

Okay. Fantastic. I appreciate that color. And then maybe just one more. This one's definitely for Fawad. Fawad, it sounds like you've had success at the trade shows. Sounds like you had a lot more discussions going on.

Yes.

Outside the 2 vendors that you've disclosed, right, we have the North American MNO that we all know who that is and then there's the other value-add reseller, I believe. Is there any other discussions that are kind of warm enough where you feel like maybe you will be able to announce another LOI in the future? Anything you could provide there, I'd be interested to hear.

Yes. So we have had very productive discussions and conversations with major MNOs and we will probably -- it's more likely that they'll go straight to POs, no LOIs. We'll be announcing those in the next quarter or so in a relatively short period of time actually because these discussions are ongoing and we're just finalizing all these. There's a demand -- increased demand and it could -- I don't know whether it's a sudden demand or not, but it is increasing in the 64Ts and Massive MIMO. There's all sorts of applications that are commercial as well as military that are now becoming more and more evident for all larger MNOs.

And our success as being the largest O-RAN deployment in North America or in America, that's helping us to reach out and reach further in Europe and in other areas of the world.

Okay. Got it. And then just one last question. I'm not sure if you can provide any color on this, but the larger LOI of -- in excess of $70 million, it was my understanding that this one might be chunkier in terms of the size of the orders once you do receive them. Do you have any -- just -- is there any sign or color or just expectations of when you'll receive a substantial order under that larger LOI?

Yes. We expect that to happen later this year. And again, that's all dependent on the customer being able to deploy their original quantities in the field and that has slowed down somewhat. It slowed down due to many different factors and some of them what we mentioned already.

Things are happening all over the world. So it also -- it's like a ripple effect. Fortunately, we haven't felt any tremendous impact, but the supply chain for these guys overseas, because of the locations, it slows things down. But we don't expect that to go away. It's just going to be a little bit later, as we said, later towards the year.

Okay. Great. So it sounds like you still feel very good and confident about that LOI being recognized. It's just a matter of when, just given the world environment we're in.

Right.

I appreciate the questions and the answers and look forward to watching you execute.

[Operator Instructions] The next question comes from Richard Kreger with Moody Capital.

Congratulations on the fantastic quarter. So I've got 2 questions. Given AmpliTech's gross margin has expanded dramatically from approximately 33% to 48% quarter-over-quarter, which looks like about a 1,500 basis point improvement, how sustainable is that and? And is there the possibility of that margin expanding as revenue scales?

Yes. So there's a very good chance it's expanding even more because we have been investing. As mentioned before, we have been investing in initial deployments to get our foot in the door with the larger MNOs. And I believe we have done that already and proven that we can do that. So that kind of investment is behind us.

We are now acknowledged by our MNOs as being a very valid provider of these sophisticated radios and especially the higher configuration radios. So we believe that the margins will expand further. And that's the way we are planning it now. I mean, we don't have to do any more of the types of investment that we did earlier.

The second question I have is AmpliTech has been doing a lot of testing and verifications with universities such as Northeastern University. Number one, can you talk a little bit more about where you stand with all the university verifications and testing, the competitive environment for those O-RAN testing accreditation?

And then secondly, do you see any orders coming from any of the universities in terms of them ordering any equipment or testing equipment further beyond what we've read in the recent press releases?

Good question. Good question. Yes, we do see -- with the universities testing our radios, we have gotten exposure to not only the Massive MIMO radios in which, by the way, we are the world's only 64T O-RAN 5G Massive MIMO radio company. So we are certified by the OTIC center. So Northeastern University through its wireless Internet of Things has certified us as an OTIC vendor for the largest configuration radio that exists today and we're the only ones in the world.

So that's a unique position for us and that gives us leverage to push our other products, the lower configuration, [ 32T, 32R ] and then also the 4T4R, which are used in private 5G type applications as well as commercial MNO deployment.

So we got exposure in these lower configuration radios and they're also targeting private 5G deployment in these universities, specifically in both Northeastern, we've been putting our radios in there under test. Now they are going to deploy them full across their campus as well as other universities that are looking to put our enterprise private 5G system in place in the university.

So as these roll out, other universities will also take advantage of the unique position that we have for these private 5Gs. So all these sectors, like the commercial MNO, the military applications as well, we have several military applications for this as well, Department of War. They have shown large interest in these configurations. And the private 5G enterprise is growing as well.

So we'll get more exposure on these private 5G systems because that is the key in Industry 4.0, where all the industries are targeting automation and monitoring using AI-based tools. And so in addition to that, we're also showcasing our fixed wireless access capabilities. Fixed wireless access means that there's no cable or no fiber, it's all wireless at very high speeds provided to the homes or businesses. So we are the only U.S.-based company that can provide everything from the tower to the home and all the IoT devices in between. That's a very unique position for us to be in to service this growing industry.

Was there a follow-up, Mr. Kreger?

No, I'm good.

That concludes the Q&A session. I will now turn the call back to Fawad Maqbool for closing remarks.

Thank you, operator and thanks to everyone who joined today's call to hear about the progress we've made and the plan we have to further our company's mission of providing the communication systems of tomorrow today. We look forward to updating you further on our second quarter financial results call sometime in August. Until then, please contact us directly should you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at the contact information listed at the bottom of our press releases. Thank you and be well.

Today's conference call has now concluded. Thank you. You may now disconnect your lines.

Good day, ladies and gentlemen, and welcome to AmpliTech Group's Quarterly Investor Update Call, where the company will discuss its FY 2025 Financial Results. Present in this call, we have the executive team of AmpliTech Group, Fawad Maqbool, CEO, CTO and Board Chair; Jorge Flores, COO; and Louisa Sanfratello, CFO. [Operator Instructions]

As a reminder, today's conference is being recorded. I would now like to turn the call over to AmpliTech's COO, Jorge Flores.

Thank you, operator, and thank you, everyone, for joining today's call to review the progress of AmpliTech's growth initiatives and to answer investors' questions. Following initial management comments, we will open the call to investors' questions as well. An archived replay of today's call will be posted to the Investor Relationship section of AmpliTech's corporate website. This call is taking place on Thursday, April 9, 2026.

Remarks that follow and answers to questions may include statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, statements that describe future plans, objectives or goals are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements, which are made as of today's date.

With that, let me turn the call over to our CEO and CTO, Mr. Fawad Maqbool.

Thank you, operator and Jorge, and thank you, everyone, for joining us today. Fiscal year 2025 was a transformative year for AmpliTech Group. We delivered company record top line growth, expanded our presence in the 5G infrastructure market and continue to build the foundation for long-term growth across both our legacy RF business and our emerging ORAN 5G platform.

For the full year 2025, revenue increased to $25.2 million compared to $9.5 million in 2024, representing approximately 165% year-over-year growth. This increase was driven by higher sales of our low noise amplifier and low noise block products, expansion of our 5G product lines, recovery in Asian markets within the Spectrum division and increased demand from telecommunications and satellite communications customers. We're very encouraged by this performance because it reflects growth from multiple parts of the business, while also showing that our strategic investments in 5G are beginning to translate into commercial traction.

At the same time, 2025 was also a year of deliberate investment. As we entered the carrier-grade ORAN radio market and ramped early deployments, we experienced near-term margin pressure. Gross profit increased to $6 million from $3.5 million in the prior year, but gross margin declined to 23.9% from 36.7%. That decline reflects our strategic ramp-up of 5G product deployments, initial market penetration efforts and our focus on winning long-term opportunities with larger mobile network operator customers. The company expects these margins to improve over the next few quarters. We view this as an investment phase. Our priority has been to establish market presence, support customer adoption and position the company for larger scale deployments over time. As volume, scale and execution matures, we believe margin performance has the potential to improve.

From a technology and strategy standpoint, we've made meaningful progress in 2025. We continued advancing our ORAN compliant radio systems, including our Massive MIMO 64T64R ORAN CAT B platform while integrating proprietary RF and MMIC capabilities that we believe help differentiate our solution set in the market. We also continue to build our commercial pipeline. As previously announced, the company has a nonbinding letter of intent for $78 million in ORAN radio systems, representing a potential multiyear growth opportunity, subject to definitive purchase orders. The company believes this LOI itself will surpass the $100 million mark supported by production forecast that we have received. As of March 2026, we had received approximately $5 million in funded purchase orders, of which we had a small number of initial shipments from December to early this quarter. The bulk of the shipments will resume and culminate during our second quarter this year.

Also, as previously announced, we have a second LOI with the North American MNO valued at over $40 million, of which we already have received half of this amount in funded purchase orders. This means these LOIs are real and dynamic. From this amount, we still have to ship about $8 million with shipments resuming in early Q2 of 2026. We believe an increase in this LOI amount is also possible. In addition, during 2025, we continue expanding our MMIC Design Center, advanced our AmpliTech 5G division focused on 5G system deployment and integration. These steps are part of our broader strategy to evolve from a component supplier into a more complete systems provider, serving high-growth and growth markets.

Overall, we believe fiscal 2025 marked meaningful progress in scaling the business, expanding our market reach and positioning AmpliTech for the next stage of growth.

With that, I'll turn the call over to our CFO, Louisa Sanfratello, to review our financial results in more detail.

Thank you, Fawad. As Fawad mentioned, fiscal year 2025 reflected substantial growth in revenue along with continued investment in the business. For the year ended December 31, 2025, revenue was $25.2 million, up from $9.5 million in 2024. Gross profit increased to $6 million compared to $3.5 million in the prior year. Gross margin was 23.9% in 2025 compared to 36.7% in 2024. The year-over-year decrease in gross margin was primarily due to the strategic ramp-up of 5G deployments, early-stage customer acquisition efforts and in the initial market penetration costs associated with carrier-grade ORAN radio systems.

Selling, general and administrative expenses increased to $10.7 million from $7.9 million in 2024. This increase was driven primarily by the higher headcount and payroll costs, increased professional and compliance expenses and expanded commercial and marketing activities as we supported the growth of the organization. Research and development expense was $2.7 million compared to $3.6 million in 2024. The decline reflects the completion of certain key development initiatives, including work related to our Massive MIMO 64T64R ORAN CAT B Radio System and advanced beam-forming and 5G infrastructure technologies. Net loss for fiscal 2025 was $7 million compared to $11.2 million in 2024. Operating loss improved to $7.3 million compared to $8.4 million in the prior year. This improvement was driven by the strong revenue growth as well as the absence of certain onetime charges recorded in 2024.

Turning to the balance sheet. As of December 31, 2025, working capital was $10.2 million. Cash and cash equivalents were $11.6 million, which included subscription proceeds held in escrow. Our accounts receivable was approximately $3.4 million. The company also strengthened its capital position through approximately $8.1 million in net proceeds from a rights offering and an additional $8.3 million in net proceeds from a registered direct offering, of which both were completed in January of 2026. Based on our current operating plan, management believes we have existing liquidity to fund operations for at least the next 12 months.

In summary, we are pleased with the top line momentum in the business while remaining disciplined in managing investments to support long-term valuation creation.

I'll now turn the call back to Fawad for closing remarks.

Thank you, Louisa. To close, fiscal 2025 was an important year for AmpliTech Group. We generated substantial revenue growth, improved operating performance, continued investing in our 5G platform and strengthened our balance sheet. While we remain in an investment phase, we believe the progress made across our commercial pipeline, technology portfolio and strategic initiatives positions us well for long-term growth. We appreciate the continued support of our shareholders, customers, employees and partners.

Before we open the line for callers in the call for questions, I would like to have our COO, Jorge Flores, go over the questions previously received via e-mail.

Thank you, Fawad. I would like to immediately start with the first question received, which was revenue growth was very strong. What were the main drivers? Our 165% revenue growth in 2025 was driven by a combination of a stronger demand for our core LNA and LNB products, expansion of our 5G product lines, recovering Asian markets within the Spectrum division and increased demand from telecom and satellite communications customers. But out of this, without a doubt, our major revenue growth came from our AmpliTech 5G division and shipment done on our $40 million LOI with a North American MNO.

Question number two, why did gross margin decline despite the higher revenue? The margin decline was largely due to the strategic ramp-up of our 5G deployments. If you reflect back on our Q2 2025 results, that's the quarter in which we invested heavily to become a major player in the ORAN markets. We were in the early stages of customer acquisition and market penetration for carrier-grade ORAN radio systems, and that put pressure on our gross margins in the near term, driving our gross margin down into the single digits. Our focus has been on establishing long-term customer relationships and scaling the business. We also provided guidance that our gross margins will recover into double-digit gross margins, which we accomplished over Q3 and Q4 of 2025, going from about 7% gross margins in Q2 of 2025 into the final fiscal year 2025 gross margins of 23.9%.

Question number three, how should investors think about the $78 million letter of intent? This letter of intent represents and it is actually more than a multiyear opportunity. While it is not binding and subject to definitive purchase orders, it's the second sizable deployment we have in our hands. So investors must see not just this LOI, but both LOIs as tremendous validations that we have the technology. In addition to this, we also have the supply chain. And on top of that, we are also able to handle the logistics of shipping our radios directly into installer warehouses where these are kitted and sent out to deployment at cell tower sites.

As for purchase order amounts and shipment status, what we can share is that as of March 2026, we have already received a little over $5 million in funded purchase orders against this LOI. Initial shipments began in December 2025. To date, we have shipped less than $0.5 million of these orders as we must follow the initial cadence of the end users' installation crews. As they acquire speed in their deployment, we will acquire speed in our shipments. This leaves us with projections to ship the balance of the order, if not during Q2, very early Q3. As such and based on forecast received, we estimate receiving additional orders before the end of the current quarter. Based on the magnitude of the project at hand and the number of sites that need to be deployed, the company believes this LOI will grow north of the $100 million mark over the next 2 years.

Question number four, what gives you confidence in liquidity? As of year-end, we had $10.2 million in working capital. Cash and cash equivalents were $11.6 million, and we also added capital through the rights offering and the January 2026 registered direct offerings. Based on our current plan, management believes this is more than sufficient to fund the operations for the next 12 months.

Question number five, what are the most important strategic priorities going forward? Our priorities include scaling our 5G and ORAN product opportunities, executing on funded orders, continuing development and commercialization of our Massive MIMO and ORAN solutions, turning to orders additional projects currently being discussed with other major players, also expanding our MMIC and systems capabilities by continuing development on 5G front-end modules. Gross margin improvement is not just a strategic goal, but a critical day-to-day operation goal for us.

For any business really, it goes without saying that we fully understand that we must do whatever is within our power to maximize cost efficiency, price competitively, push our supply chains, keep on working using forecast to optimize material order placements and receipts. While we do have our own manufacturing capabilities in the U.S., these are largely related to our AmpliTech Inc. core division. For large volume of ORAN 5G radio manufacturing, we will continue our strategy to use CMs or contract manufacturers, either local or abroad that are specifically in business. These are the CMs are specifically in business to handle the type of production we require. Our strategy does not include hiring hundreds of people to support manufacturing. It is just not cost efficient for our organization. That is why CMs are there. That's why contract manufacturers are there to scale up when we need them to scale up and scale down when delivery time frames require us to do so.

Last question is, what you can say about your $40 million LOI with the North American MNO? What is the current level of orders received, orders shipped, balance of funded POs and program visibility? We already received 50%, about 50% of funded purchase orders for this program. We have shipped about $12 million worth of ORAN 5G radios to this MNO, with shipments slated to resume early in Q2 of 2026. Same as with the $78 million LOI, we believe this project will exceed the initial LOI value of $40 million. We are certainly very excited when we hear our end customers speak about future cell tower site deployments and their plans for expansions.

This concludes the questions previously received to our e-mail. Operator, please open the line for other questions.

[Operator Instructions] The first question will come from Jack Vander Aarde with Maxim Group.

Good results and good outlook. It's good to see things are still on track. Fawad, can you maybe just touch on the nature of this agreement, this larger LOI and just the cadence of the orders you're expecting? I believe it's going to be a little bit different than the agreement you had where you've already received most of the LOIs. Is it going to be bigger chunks?

Yes. Yes. So this LOI is basically for overseas, right? It's an Asian customer. And in that one there, there are lots of -- in the countries that these are deployed, the pace is very slow as far as deployment is concerned. So they have a whole crew of people working to do the entire nation. And what happens, they have to get all the legalities and they have to have all these permits and everything in place. So it's a slow process that's initially slowing this down.

Our proof-of-concept has been done. We have delivered already radios that have been put into the first deployments, and they're working very well. So what we're working on right now is just basically the logistics of getting the radios deployed and then installed. And that's just taking a little bit of time initially. But as that ramps up, then our shipments will also continue to ramp up later this quarter and towards the end of the year.

Okay. Great. And then because if I look at last year, like especially the second quarter in 2025, that's when you received the largest amount of orders. It sounds like this year with this other customer, you're expecting something similar maybe between the second quarter and the third quarter. How about other agreements that you -- potential opportunities with other 5G players? Can you just touch on those discussions? Are you -- do you feel like there's an opportunity to announce a new partner in the next 6, 12 months on top of these?

Yes. Definitely, there's a chance of that happening. We have been in discussions for a while. And obviously, the success of our previous deployments is also key. And in these various different areas, there are different bands that we have to adjust the radios for, and we've been doing that. And in those adjustments, those radios, they have to go through a proof-of-concept phase as well. But all of these are part of expanding our traction. So we believe that these will be successful just like these first LOIs, and we may be going into directly the PO phase even before an LOI phase from other leading MNOs that are going to follow suit in this ORAN deployment.

Everyone is not as strongly focused into this ORAN but as time progresses, the ORAN deployments will replace the older RAN deployments. And the larger MNOs are very slow to adopt the new structure. It involves a lot of expense for them, but they will eventually have to adopt that because the technology for expanding the capacity and the speeds of various networks in larger dense populated areas as well as rural areas is increasing. The demand is increasing for that. So it's inevitable that this growth will happen, and we are in the right spot. So we do feel that we will have some positive engagements this year.

Okay. Great. And then just one more for me. You guys kind of touched on the expenses and the gross margin. But the fourth quarter, I think it's just kind of a trend where the fourth quarter operating expenses are higher than any other quarter. Is this just a onetime thing at the end of the year? Maybe for Louisa, if you could help understand, I think it's the SG&A expense line.

Yes. Those expenses were basically -- we had -- we reviewed employment contracts and so forth with our management. We had accounting expenses that increased because of the rights offering as well as legal and things like that.

Okay. Got you. And then I guess, going forward, on a normalized basis, I mean, do you expect gross margins and operating expenses to be somewhat more linear and smooth out? Is this a good read-through for the go-forward run rate, maybe north of 40% gross margin? Just help me understand what the kind of normalized cadence is? And that's it for me.

Yes. So it will increase. It's anywhere between 30% and 50% is the number in this telecom business, depending on what type of products we're offering. And obviously, we're offering products that are not me-too products. Our products are always -- they have value added because we're putting our own MMICS in there that other companies cannot do to improve the performance. And we have other enhancements that we're working on to differentiate our product from the rest of the competitors.

So right now, in ORAN, we are the leading company deploying the largest ORAN radios out there. And we are making them even better so that if there are competition that comes in, then they would not be able to compete with the performance because of our inherent legacy business that designs our own LNAs and our designs our PAs. Those are all going to wind up going into our radios and all the other components. So we're just talking about radios right now, but there's a whole slew of products that come out of this. We're not doing just the radios. We're also doing the private 5G enhanced CPE devices. There -- if they're like advanced routers, so to speak. But those are special products that are also all kinds of IoT-related products that we're doing that we haven't really called out specifically, but it's an entire industry base that supports this whole radio rollout.

The next question will come from Anthony Bates with [ Despoer Ventures ].

Can you give us any updates on progress in the cryogenic tech area? Anything that you're working on there?

Yes. So we originally were introduced our cryogenic LNAs for the quantum computing applications. We have gone through successful iterations and many different iterations from initial concept based on our customers' feedback. So we're working on a final version, which is basically a very standard module for [ 4 Kelvin ] operation for a quantum computing production environment.

What we have done initially was to provide proof-of-concept units customized for every single different, let's say, manufacturer of the quantum computers like Google and IBM and many others. But every one of them has a different type of flavor to their quantum computers, and none of them are going to very large production levels right now. So we have worked on our fourth version, and we are about to deliver the fourth version of the quantum computing LNAs, which are very high performance. And they're more of a standardized product to fit into many different quantum computing platforms. So we haven't introduced that yet, but we are working on that, and that's going to come up. It will become more important when the larger production starts to ramp up for all these quantum computing companies. They're not in high production mode right now.

Well, can you guesstimate when you might have an order?

I don't know. I mean everything is just right now, we can't say anything when they would be in order. We have provided all these samples, and it could be later this year, it could be early next quarter. But it's all based on the demand of the companies in building these quantum computers. They're not reaching production.

Right, right. Actually, I guess I'm asking is they're not in production yet. Do you have any idea when they may be in production?

I couldn't tell you every single one of them is different. I think that's also being driven by other parts of the industry. It's not just the quantum computing is one example for us. The quantum computer demand comes from the large data, right? So large data is part of the large data is the 5G deployments. Every single MNO has to have a high-speed infrastructure so that all that data can go into a quantum cloud and then the supercomputers will have -- quantum computers will have a lot more data to crunch on, right?

So as this builds out, the other industry is going to build up. It's connected. It's all connected in the ecosphere of high-speed connectivity as well as computing because you can't have the metaverse and all these other things, fully automated vehicles, all these things that require high-speed capacity and then crunching all these numbers into a quantum cloud unless everything is in place.

And my last question is, can you give us any kind of updates on -- is it the Texoma Semiconductor Tech Hub? Anything coming out of that?

Yes. That's our MMIC Division. And our MMIC Division is basically expanding its product line. They're also building LNBs now, low noise block converters are used in satellite communication technologies. So the LEO satellites will need ground station terminals to communicate with and the LNBs that are in these ground station terminals, rebuild because we have the lowest noise figures in the world.

So those are increasing in number every day, every year, actually. And so our LNBs product line is increasing as well. That's why you saw some increase in the revenues from our LNB division. But this is part of our Texoma Division in Texas in Allen, Texas. But they're also ramping up production of our ICs that are going into these radios. So that's growing, and that division will be growing more as our production increases.

Okay. And that will be growing this year?

Yes.

The next question will come from Andrew DeAngelis with Venture Visionary Partners.

Just a lot of helpful detail on this call, but just wanted to make an explicit question of it. The $50 million revenue guidance that you have out there for this year, what gives you confidence in your ability to achieve that?

Right now, it's a combination of 2 factors. One is the current backlog that we already have in funded orders on both of the LOIs. And the second though is that we are actively seeing forecasts provided by the end users directly into us, and that's how we're managing the supply chain as well. So that's a big definitely on why we are projecting that.

That's helpful. And then just relative to the funds that you guys received in the recent rights offering, where will you be utilizing those funds? And can you talk maybe through the cadence of how those funds will be deployed?

So most of those funds are used for our -- the growth of this 5G business, right? So as I mentioned before, we're building new MMICS and new chips to go into these radios, and we're building different types of radios. So most of our expense is going to be working capital for building out the infrastructure for our 5G groups. But as well, we're building the other groups as well. So it's a scaling effect. Every single group, the idea is to drive growth from our 5G division, which will require increased amount of MMICS, custom MMICS and PAs and low noise amplifiers, which will go down to the MMIC group and increase their revenue because they will be supplying the 5G radio requirements.

And then the other packaging group, which is Spectrum division, which is in California, that's a stocking and distribution group. They'll be providing the packages for all these MMICS that go into these radios. So each of these divisions are structured such that there's a synergetic synergy and growth. As we scale up the 5G, we will scale all the other divisions as well. But our sales force is increasing as well. So we're putting in key personnel this year to grow the specific telecom business. So we recognize the need for having specific sales force for this particular application because connectivity to these large MNOs is very, very important in growing the business. And we found that these are giants, right, telecom giants, and we're a smaller company, penetrating these giants. But what will help is a good technical force as well as sales force that is connected to all of these companies. So we're going to be focusing on increasing sales personnel as well as technical personnel in these areas.

Very helpful. And I guess this just kind of layers -- this question layers on to what you just mentioned. But I just, again, want to make it explicit. In terms of your execution priorities, the 1 or 2 things that you're focused on here in the first half of the year, what would those be?

Well, I mean, R&D, we're still -- we're basically growing the company, right? So the R&D phase mostly is done. What we're trying to do now is to take our production line and our assembly lines and make them such that we can make repeatable products. So many of our products are standardized now. It took about a year or 2 so that we can actually make our assembly line standardized and have our supply chain standardized as well. And this increases our 5G exposure. So the idea is to build consistent and cost-effective assembly lines and product lines and procure all the materials at good prices so that we can have a higher gross margin as we grow the business.

And you think that inflection point is going to really, I guess, happen here in the first half?

Yes. It's more likely in the second half. It will start in late Q2, but in the second half of the year.

That concludes the question-and-answer session. I will now turn the call back to Fawad Maqbool for closing remarks.

Thank you, operator, and thanks to everyone who joined today's call to hear the progress we've made and the plan we have to further our company's mission of providing the communication systems of tomorrow today.

We look forward to updating you further on our first quarter financial results call next month. Until then, please contact us directly should you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at the contact information listed at the bottom of our press releases. Thank you, and be well.

Today's conference call is now concluded. Thank you. You may now disconnect your lines.

Good day, ladies and gentlemen, and welcome to AmpliTech Group's quarterly investor update call, where the company will discuss its second (sic) [third] quarter 2025 financial results. [Operator Instructions]. As a reminder, today's conference is being recorded.

I would now like to turn the call over to AmpliTech's COO, Jorge Flores.

Thank you for joining today's call to review the progress of AmpliTech's growth initiatives and financial results and to answer investor questions.

On the call today are AmpliTech's founder and CEO, CTO, Mr. Fawad Maqbool; the company's CFO, Louisa Sanfratello; and the company's COO, Jorge Flores. Following initial management comments, we will open the call to investor questions.

An archived replay of today's call will be posted to the Investors Relations section of AmpliTechs' corporate website. This call is taking place on Friday, November 14, 2025.

Remarks that follow and answers to questions may include statements that the company believes to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally include words such as anticipate, believe, expect or words of similar importance. Likewise, statements that describe future plans, objectives or goals are also forward-looking. These forward-looking statements are subject to various risks that could cause actual results to be materially different than expected. Such risks include, among others, matters that the company has described in its press releases and in its filings with the Securities and Exchange Commission. Except as described in these filings, the company disclaims any obligation to update forward-looking statements, which are made as of place date.

With that, let me turn the call over to our CEO, CTO, Mr. Fawad Maqbool.

Ladies and gentlemen, good morning, and thank you for joining our Q3 2025 review call. Today, we'll reflect on our record performance in the third quarter of 2025 and the 9-month period ending September 30, 2025. We'll take the opportunity to discuss the company's growth outlook, market opportunities and provide additional financial guidance.

Let's start with the Q3 2025 highlights and strategic progress. Quarterly revenue was $6.09 million, a 115% increase compared to $2.83 million in Q3 2024. Gross profit more than doubled to $2.96 million, representing a 48.6% gross margin, up from 47.5% in the prior year period, up about 40% from Q2 2025 gross margin. EBITDA positive of nearly $200,000, reflecting substantial improvement in operating performance and margin expansion. Net loss significantly narrowed to $188,000 compared to a net loss of $1.19 million in Q3 2024. Cash, cash equivalents and accounts receivables of nearly $12 million with zero long-term debt and working capital of $14 million as of September 30, 2025.

Now the 9 months highlights year-to-date 2025. Overall, 9-month company's record revenue surged 171% year-to-date to $20.7 million compared to $7.7 million in the same period last year. Net loss reduced by nearly 50%, improving from $7.4 million in 2024 to $3.8 million in 2025. The growth driven by the successful integration of AmpliTech's 5G ORAN technology and strong momentum in low-noise amplifiers, low-noise blocks and 5G infrastructure systems. This is not just 5G ORAN, its true 5G and we are 5G. Continued investment in R&D, up 60% supporting the new product development in MIMO 64T64R ORAN Radios, private 5G network systems and cryogenic amplifier platforms for quantum applications. Now this isn't just random R&D. It's strategically focused on what the world needs, billion and trillion-dollar markets.

Now operational and financial highlights. Integration of ORAN IP portfolio positions AmpliTech as a U.S.-based vertically integrated supplier for next-generation Open RAN 5G radios and private network deployment. Our third quarter shows to be an EBITDA-positive quarter, achieved through disciplined expense control, operational efficiency and growth in high-margin segments. This is a clear signal we are turning the corner and getting close to achieving profitability.

Rights offering earlier -- it's an above market price shareholder-friendly rights offering priced at $4 per unit, providing growth capital for scaling ORAN product lines and expanding domestic production. We're going to go deeper into that a little bit later. But now I'll give some outlook and forward guidance. The company increased revenue guidance to at least $25 million for fiscal year 2025, representing a 160% year-over-year increase over fiscal year 2024, beating The Street estimates. We anticipate double-digit gross margins in Q4 2025 and 2026.

As production costs normalize, onetime costs are reduced and higher-margin follow-on business ramps up. We project positive cash flow from operations and profitability to be achieved in fiscal year 2026, assuming continuation of current order pace and margin recovery. Company expects to receive follow-on orders from both publicly announced LOIs imminently as well as orders from new customers in 2026. Assuming continuation of the current order pace and based on forecast information received by the company, fiscal year 2026 revenue will be at least $50 million, effectively doubling that of projected record fiscal year 2025 of at least $25 million.

With this all said, I'd like to focus on our current rights offering efforts, because I'm sure many people are confused. AmpliTech has an effective Form S-3 base perspective -- prospectus from which it intends to offer these securities -- registered with the Securities and Exchange Commission, for a proposed rights offering in which it plans to distribute to, a, stockholders and b, certain warrant holders 2 transferable unit rights to purchase up to the maximum of 8 million units at $4 per unit. Each unit will consist of 1 share of common stock, the common shares and 2 short-term rights to purchase additional common shares. These are rights -- short-term rights, not warrants.

Under the rights offering, each stockholder and certain warrant holders as of the record date will receive as a dividend at no charge, 2 unit rights for each common share -- each common share subject to warrant owned on the record date. The distribution of the unit rights will occur on or around the record date. The record date for the distribution of the unit rights, the expiration dates for the units rights and related short-term rights and related pricing information will be included in the filing perspective.

Holders who fully exercise their unit rights will be entitled to oversubscribe for additional units, if available, that are not purchased by other right holders, subject to potential pro-rata allocation of those oversubscribe units, for which they subscribe in proportion to the total number of oversubscription units. Now that sounds very complicated, but you can get the SWP that has been published publicly to get all the details.

The company is aiming for a 25% to 30% annual revenue growth through 2030. This target is mainly driven and based on our ORAN 5G LOIs with two different customers. These LOIs were not binding are the results of months of technical meetings and our involvement as what is known as the industry -- in the industry as POCs or proof-of-concept. With this said, there is a predetermined price set up with these minimum quantities and specific delivery requirements set in place already, which have been supported by receiving forecast from both customers. We're executing on a visible pipeline, early repeat orders and capacity clients to support tens of thousands of radios over time.

At retail, we expect operating leverage, better purchasing, tighter manufacturing cycles, which will contribute to lift gross margins. Put simply, 25%, 35%, 30% isn't a moonshot. It's what happens when a valid product line meets a secular upgrade cycle with a differentiated ORAN 5G supplier.

Company's rights offering provides our loyal investors choice, fairness and alignment. In choice, a rights offering lets every existing shareholder decide if they want to maintain or increase their ownership on similar terms. No one is boxed out by a selective private deal. Everyone has access, hence it's pro-rata by design. If you participate, you can offset those. And if you don't, you're making asset portfolio decision, not suffering because we raised capital in a small group. Please take note the right are transferable. Holders can also use to sell their rights in the market as we do expect market makers will create a market for them to be traded. So again, not just fairness, but flexibility.

Alignment, we picked this structure to strengthen the balance sheet without loading the company with expensive debt or entering into toxic financing transactions. It supports growth while expecting our valued long-term shareholders. It also sends a clear signal. We're raising capital to fund concrete opportunities, production, inventory turns, certifications and go-to-market. We are not raising capital plug hold.

Bottom line, the right deal gives us our shareholders agency and keeps us aligned as we step into larger orders and programs. We're inviting our owners to come with us on the next leg of our growth on the same terms. The company will use the proceeds as a high-return near-term growth levers. There are 5 levers. Number one, scale production and working capital, fund inventories for committed and forecasted orders, shorten lead times and secure long lead components. The goal is faster, order-to-cash and the capacity to fulfill multisite rollouts without bottlenecks.

Number two, certification and market assets, complete and extend -- complete these certifications and will extend certifications like CE and ISED, some are operator-specific. The field trials and interoperability testing. Each certification stamp expands our addressable market and removes friction for large buyers.

Number three, product road map. Encryption and software. Advanced next-gen radios and RF front-end at AI-RIC adjacent peers improved manageability and hardened security. We also have a proprietary encryption for our networks. It's hardware-based, not firmware-based big difference, which we want to incorporate across our entire ORAN 5G product line. These additional products and features will lift performance and margin and create upsell paths across our installed base. These are valuable differentiators for us. We are not a me-too company. We have never been.

Growth to markets -- number four, go-to-market expansion. The strategy is to add sales, engineering, carrier enterprise channel partners and targeted international presence where trusted highly secured ORAN 5G has become a mandate. We all know how important security is, and we're going to the next step, incorporating this into our networks. This accelerates deal velocity and conversion.

And finally, number five, strategic flexibility. It keeps the balance sheet strong so we can pursue select tuck-in, joint ventures or capacity investments when they're clearly accretive. We're disciplined about ROI, dollars go where they unlock revenue, improved gross margin and reduce cycle times. That's how this rate translates into 25% to 30% growth trajectory, more importantly, durable value creation.

In concluding, valued shareholders, we are firmly looking ahead with our company having a record fiscal year 2025, in which we expect to nearly triple the sales achieved in fiscal year 2024, a major milestone for the company. We have expectations of receiving additional orders to continue funding our LOIs with a healthy balance sheet, zero long-term debt and expanding portfolio of proprietary 5G and satellite technologies. We also have special cryogenic amplifiers to serve the growing needs of the quantum computing market, along with ORAN technology to support artificial intelligence and global 5G product certification is now in place.

AmpliTech is now positioned to deliver successive quarters of growth, enhanced shareholder value and a significantly stronger IP valuation in 2026 and beyond. Thank you for your continued support. We will now open the call for questions. Operator, please proceed.

[Operator Instructions] Our first question comes from the line of Vishal Mishra with Bard Associates.

So just want to -- I heard you right, which is that you do expect these rights to be traded when they're distributed, correct?

Correct.

That's great. And second question, this is great momentum, congratulations. Do we -- I know I see double-digit gross margins. Or do we have any more like -- as you scale like -- and you also said that the gross -- like the margins, the quantities have been sort of solidified in the contract as you've been working on the POC. Do we know -- can you give me a more color on that? Is it like those margins, which has been agreed upon are like the gross margin like in the 20s, 30s, 40s or that's not something you can disclose?

Well, this is Jorge, COO for AmpliTech Group. I'm going to be taking on that answer. We do have a mixed -- we have a mixed list of 4G and 5G products and every single one of them carries a different gross margin. All we can say right now, though, and also due to competitive natures, right, that we are not going to be able to disclose a specific gross margin information on our products due to competitive nature, of course. But that's why we are saying that at least we're going to be able to achieve double-digit gross margins on every of our products right now.

So I know historically, you've been close to 30%, 40%. Is that something historically you will be or like because these new products, they will be lower, higher or...

Well, as you could see from our results in Q2, in which we had a lot of onetime cost driver, we have recovered very handsomely in Q3 with over 40% gross margins. So we are, of course, going to keep allocating capital, right, to improve on our margins, sometimes we might elect to go into a higher configuration of molding equipment and fixturing to be able to drive the cost down on every single item used in our radios. So -- we do expect, though, that we're going to have, as I said before, though, at least like gross margins in the double digits.

[Operator Instructions] This concludes the Q&A session. I'll turn the call back to Fawad Maqbool for closing remarks.

Thank you, everyone, who enjoyed today's call to hear about progress. We made the plan. We have to further our company's mission of providing the communication systems of tomorrow today. We look forward to updating you further on our full year financial results call next year. Until then, please contact us directly if you have any questions or wish to schedule a call with management. Our Investor Relations team can be reached at the contact information listed at the bottom of our press release. Thank you and be well.

Today's conference call is now concluded. Thank you, and you may now disconnect your lines.