Track Group Reports $8.67 Million Revenue, Net Loss of $2.01 Million for December 2024 Quarter

Track Group, Inc. reported a total revenue of $8.67 million for the three months ended December 31, 2024, a decrease of approximately 3.3% from $8.97 million in the same period of the previous year. The decline was primarily attributed to reduced monitoring revenues from clients in Michigan and Virginia, as well as the impact of the recently sold Chilean subsidiary. Product sales also fell, dropping to $227,021 from $292,487, reflecting decreased international sales, particularly to Brazil, although there was a partial offset from increased sales to Chile.

The company's cost of revenue decreased to $4.24 million from $4.76 million, a reduction of 11%. This decline was driven by lower device repair costs, communication costs, and monitoring center expenses. Gross profit for the quarter increased to $4.42 million, resulting in a gross margin of approximately 51%, up from 47% in the prior year. Operating expenses also saw a decrease, totaling $4.30 million compared to $4.39 million, largely due to reduced general and administrative costs following the sale of the Chile subsidiary.

Track Group's operating income improved to $128,608 from an operating loss of $183,121 in the prior year. However, the company reported a net loss attributable to common stockholders of $2.01 million, a significant decline from a net income of $461 in the same quarter of 2023. This loss was primarily driven by a substantial increase in foreign currency exchange losses, which amounted to $1.50 million, compared to a gain of $538,945 in the previous year.

In terms of strategic developments, Track Group completed the sale of its Chile subsidiary on November 1, 2024, for $1 million, which resulted in a loss of $66,483 recognized in the financial statements. The company continues to focus on its core business of providing monitoring services and tracking solutions, with an emphasis on subscription-based revenue models. As of December 31, 2024, Track Group had unrestricted cash of $3.74 million and working capital of $4.41 million, indicating a stable liquidity position.

Looking ahead, Track Group's management expressed confidence in the company's ability to meet its operational obligations and continue funding its operations through existing cash and future cash flows. The company remains committed to enhancing its service offerings and expanding its market presence, particularly in the U.S. and Latin America, while navigating the challenges posed by currency fluctuations and market conditions.