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SGE NYSE AM· Strong Global Entertainment Inc
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SGE NYSE AM· Strong Global Entertainment Inc
Earnings report Q3 2023

Strong Global Entertainment Reports 10.3% Increase in Revenue in Q3 2023

Segments of revenue

Strong Global Entertainment (SGE) reported total net revenues of $10.92 million in the third quarter of 2023, representing a 10.3% increase compared to the same period in 2022. This growth was driven by higher revenue from product sales, which increased by $0.3 million, and a $0.7 million increase in service revenue.

Strengths

SGE's revenue growth in the third quarter of 2023 can be attributed to multiple factors. Firstly, the company experienced a 16% increase in sales of screen systems, driven by the industry-wide transition to laser projection. Additionally, SGE saw higher revenue from its Eclipse product line due to new projects. Moreover, the company benefited from improved gross margin on its installation services as it shifted from third-party screen installation costs to internal labor.

Challenges

Despite the overall revenue growth, SGE faced some challenges in the third quarter of 2023. The company reported a net loss of $5,000, which was a decline compared to a net income of $976,000 in the same period last year. This decrease in profitability can be attributed to higher selling and administrative expenses, including marketing, travel, and entertainment expenses, as well as higher general and administrative expenses following the company's separation as an independent public company.

Noteworthy

It is worth noting that SGE's gross profit from product sales in the third quarter of 2023 was $2.2 million, representing 27.3% of revenues, compared to $2.1 million or 27.9% of revenues in the third quarter of 2022. Additionally, gross profit from service revenue increased significantly, reaching $0.6 million or 21.8% of revenues, compared to $0.2 million or 10.0% of revenues in the same period last year.

Summary

Strong Global Entertainment reported a 10.3% increase in revenue in the third quarter of 2023, driven by higher product sales and service revenue. The company experienced growth in sales of screen systems and revenue from its Eclipse product line. However, SGE faced challenges in terms of profitability, reporting a net loss in the quarter due to higher expenses. Despite this, the company's gross profit margins improved, particularly in service revenue, as a result of internal labor for installation services. Overall, SGE's revenue performance reflects positive growth in its core business segments.

Source documents

Form 10-Q  filed on Nov 09, 2023
3 pages scanned

Reference data

Company financials Q3 revenue 10.9M
Analyst estimates Q3 EPS missed by NaN%
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