Airship AI (AISP) had a tumultuous year in 2024. The company recently released Q3 2024 performance showcased earnings that exceeded expectations, and the outlook for the full year of 2024 promises triple-digit revenue growth and positive cash flow. This growth has been powered by securing significant government contracts this year, such as the U.S. Department of Homeland Security and the Chicago Police. Shares are up roughly 190% over the past year, and a robust pipeline of $130 million suggests further upside growth.
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Investors interested in the next chapter of the AI story, beyond chip makers to its practical application, might find AISP an intriguing option.
AI-driven Surveillance Services
Airship AI offers AI-driven surveillance services through video, sensor, and data management platforms. The company’s product line includes Outpost AI, an advanced video and metadata recording device, and Airship Command, a set of visualization tools that enable customers to interact actively with their data and devices.
The company specializes in analyzing and formatting unstructured data. Its technology can interpret video feeds, picking out details like vehicle makes and models from traffic surveillance footage and transforming that data into structured formats for spreadsheets or databases.
Its clientele primarily includes government institutions, public sector organizations, law enforcement agencies, the military, and various commercial enterprises.
Projecting Triple-digit Revenue Growth
Airship AI recently reported Q3 2024 financial results. Revenue of $2.9 million fell short of analyst forecasts by $1.9 million. Gross profit was $2.2 million, representing a gross margin percentage of 75%. The margin boost was attributed to changes in the product mix, which involved fewer equipment purchases and increased sales of Outpost AI.
Operating loss for the quarter was $1.6 million, primarily due to increased stock-based compensation and overall sales levels. Other income, chiefly resulting from gains in fair value changes in earnout liability, warrant liability, and convertible debt, totaled $7.8 million. Consequently, net income for the quarter was $6.2 million, or $0.25 per basic share, with GAAP earnings per share (EPS) of $0.17 beating expectations by $0.20.
The company utilized $0.4 million in net cash for operating activities but bolstered its cash and cash equivalents to $6.5 million. During this quarter, Airship AI closed an $8 million public offering, with net proceeds approximating $7.3 million.
Looking ahead to the rest of 2024, management projects triple-digit revenue growth and positive cash flow, powered by a robust pipeline estimated at $130 million, improving gross profit margins, and a solid recurring revenue model.
Positive Price Momentum
After listing on the Nasdaq in December 2023 through a business combination with BYTE Acquisition Corp. (BYTS), a special-purpose acquisition company (SPAC), the shares have been on a rollercoaster ride, ranging from $1.34 to $14.32 over the past 52 weeks. The stock has recently found positive price momentum, gaining 115% in the past three months. Yet, it appears to be trading at a relative discount, with a P/S ratio of 2.47x compared to the Information Technology sector average of 3.15x.
Wall Street is thinly following the stock, though recent analyst coverage has been constructive. Airship AI Holdings is rated a Moderate Buy, with a price target for AISP shares over the next 12 months of $6.00, representing a potential upside of 27.93% from current levels.
Airship AI in Review
This has been a year of great strides and significant challenges for Airship AI, but the company has shown resilience in navigating the journey. The government contracts secured throughout the year and a $130 million growth pipeline hold immense potential. With shares surging by nearly 190% over the year and the company’s technology finding wide-ranging applications from government to commercial sectors, AISP merits consideration for investors seeking to tap into the evolution of AI.
