ClearOne reported financial results for the three- and twelve-month periods ended Dec. 31, 2023. Q4 2023 (October – December) revenue was $4.2 million, compared to $4.0 million in Q4 2022 and $4.9 million in Q3 2023. The company says the decrease was driven by lower demand for microphone products (and lack of MS Teams Rooms Certifications) and what the company says is the cumulative impact of past product shortages. The year-over-year improvement was primarily due to increased shipments of ClearOne’s video products and beamforming microphone arrays.

GAAP gross profit in Q4 2023 was $1.6 million, compared to $1.3 million in Q4 2022 and $1.6 million in Q3 2023. GAAP gross profit margin was 38% in Q4 2023, compared to 31% in Q4 2022 and 33% in Q3 2023. Gross profit margin improved by approximately 5% sequentially and approximately 7% year-over-year.

Operating expenses in Q4 2023 were $3.3 million, compared to $3.9 million in Q4 2022 and $3.1 million in Q3 2023. Non-GAAP operating expenses in Q4 2023 were $3.2 million compared to $2.9 million in Q3 2023 and $3.4 million in Q4 2022. The sequential increase was due to an increase in legal fees and audit and accounting charges, and the year-over-year decrease in non-GAAP operating expenses was mainly due to the continued benefits of the cost-cutting measures initiated in 2022.

GAAP net income in Q4 2023 was $2.6 million, or $0.11 per share, compared to a net income of $24.0 million, or $0.97 per share, in Q4 2022 and a net loss of $(1.4) million, or $(0.06) per share, in Q3 2023. The sequential improvement in net income was “primarily due to the recognition of a gain of $4 million from a legal settlement which was partially offset by a decline in net income due to higher operating expenses and lower gross margin,” according to ClearOne. The year-over-year decline was largely due to the recognition of a gain of $33.6 million related to the one-time legal settlement receivable of $55 million, net of unamortized capitalized legal expenses of $21.4 million, in Q4 2022. This decline in net income was partially offset by a decrease in the tax provision by $6.4 million, recognition of gain from legal settlements of $4.0 million, an increase in interest income by $0.6 million, and an increase in operating income by $0.9 million.

Non-GAAP net loss in Q4 2023 was $(1.2) million, or $(0.05) per share, compared to a Non-GAAP net loss of $(2.3) million, or $(0.09) per share, in Q4 2022 and a Non-GAAP net loss of $(1.2) million, or $(0.05) per share, in Q3 2023. Net loss was flat sequentially, while the year-over-year improvement in net loss was driven by an increase in interest income by $0.6 million and an increase in operating income by $0.5 million.

“Throughout the fourth quarter, we maintained efforts to expand and accelerate shipments of our award-winning communication solutions, all while driving a leaner, more efficient cost structure,” said Derek Graham, CEO of ClearOne. “In line with our expectations, we completed our outsourced manufacturing transition from China to Singapore during the fourth quarter, resulting in our manufacturing output returning to pre-transition levels. With a more normalized production cadence, we have continued to drive significant backlog reductions, as our most popular products are now in stock and ready for same-day shipping as of late in the fourth quarter. We are working with our contract manufacturers to improve output and lead times across select remaining product categories, including our wireless products.”

“While our production improvements helped drive a slight year-over-year increase in our fourth quarter revenue, our full-year top-line performance reflects slower order flow in the second half of the year, which we believe stems from the cumulative impact of past production shortages. We have also faced sales headwinds from our products’ lack of Microsoft Teams certification, despite their longtime functional compatibility with this platform. Our work through early 2024 has focused on mitigating these impacts through maintaining consistent dialogues, product demonstrations, and feedback cycles with customers and distributors, along with improving our visibility at key industry events.”

Here’s the entire financial report: https://investors.clearone.com/news-releases/news-release-details/clearone-inc-reports-fourth-quarter-and-full-year-2023-financial