Luna Innovations Inc (LUNA) Reports Modest Revenue Growth Amidst Economic Challenges
Q3 total revenue increased by 5% year-over-year to $30.7 million.
Net income declined to $0.5 million from $1.2 million in the prior year.
Adjusted EBITDA slightly decreased to $4.2 million compared to $4.5 million in the previous year.
Full-year 2023 revenue outlook updated to $120 million to $125 million, with adjusted EBITDA forecast maintained at $14 million to $18 million.
On November 14, 2023, Luna Innovations Inc (NASDAQ:LUNA) released its 8-K filing, detailing the financial results for the third quarter of 2023. Despite the ongoing macroeconomic headwinds, the company reported a 5% increase in total revenue, reaching $30.7 million compared to the same period last year. However, net income saw a decline to $0.5 million, down from $1.2 million in the prior year's third quarter.
Financial Performance Overview
Luna Innovations Inc (NASDAQ:LUNA) experienced a slight dip in gross margin, which was reported at 57% for Q3 2023, a 1% decrease from the previous year. Operating income also fell to $1.2 million, resulting in a 4% operating margin, compared to $1.5 million and a 5% margin in Q3 2022. The company's net income from continuing operations stood at $461,000, a decrease from $1.2 million year-over-year. Adjusted Earnings Per Share (EPS) was $0.07, down from $0.09 in the same quarter of the previous year.
Year-to-Date Financials
For the nine months ended September 30, 2023, Luna Innovations Inc (NASDAQ:LUNA) reported a 9% increase in revenue, totaling $84.9 million. The gross profit rose to $49.5 million, up from $47.2 million in the prior year, primarily due to higher sales. The operating loss improved to $1.2 million, which is 1% of total revenue, compared to a loss of $3.3 million, or 4% of total revenue, in the same period last year. The net loss for the nine months was $3.0 million, or $0.09 per fully diluted share, a shift from a net income of $8.4 million, or $0.26 per fully diluted share, in the prior year, primarily due to the gain on the sale of Luna Labs. Adjusted EPS for the nine-month period was $0.11, compared to $0.12 in the previous year.
Strategic Business Developments
During the quarter, Luna Innovations Inc (NASDAQ:LUNA) achieved several strategic milestones, including the appointment of George Gomez-Quintero as Chief Financial Officer and securing significant contracts and sales across its Sensing and Communications Test businesses. The company also updated its full-year 2023 revenue outlook to a range of $120 million to $125 million and maintained its adjusted EBITDA forecast at $14 million to $18 million.
Balance Sheet and Cash Flow
The balance sheet of Luna Innovations Inc (NASDAQ:LUNA) as of September 30, 2023, shows total assets of $165.1 million, with current assets accounting for $100.2 million. The company's cash and cash equivalents stood at $6.0 million. Total liabilities were reported at $70.5 million, with current liabilities making up $35.0 million. Stockholders' equity was $94.6 million.
Conference Call and Forward-Looking Statements
Luna Innovations Inc (NASDAQ:LUNA) hosted an investor conference call to discuss the Q3 and nine-month financial results. The company's forward-looking statements indicate an expectation of continued growth and the securing of additional significant business wins. However, these statements are subject to various risks and uncertainties, and actual results may differ materially.
For detailed financial tables and a reconciliation of non-GAAP financial measures, investors and analysts are encouraged to review the full 8-K filing.
Luna Innovations Inc (NASDAQ:LUNA) continues to navigate the challenging economic landscape with strategic agility, as reflected in its Q3 earnings report. The company's modest revenue growth and sustained investment in innovation position it to capitalize on future opportunities in the advanced optical technology sector.
Explore the complete 8-K earnings release (here) from Luna Innovations Inc for further details.
This article first appeared on GuruFocus.
