My Note: I listened to the Q2 conference call regarding Luna Innovations last week. The company continues to show impressive growth across the board, which marks the seventh consecutive quarter of double-digit year-over-year growth in it's revenues from continuing operations. Luna grew total revenue 80% in the quarter versus the comparable year-ago period, and gross profit margin grew to 49% from 43%. Revenues from it's Product and Licensing segment grew at a robust 155%, while revenues from it's Technology Development segment grew at a very strong 18%. Below are the comments on the Terametrix division relating to Terahertz at Luna. You can read a full transcript of the conference call here:
https://seekingalpha.com/article/4284322-luna-innovations-incorporated-luna-ceo-scott-graeff-q2-2019-earnings-call-transcript?part=single
Scott Graeff
Now moving on to Terahertz. Our product line is continuing the strong momentum built in previous quarters, with a robust double-digit increase in revenues for the second quarter compared to the prior year period. New sales and continuing growth into the process control and nondestructive testing markets were strong in Q2.
We continued with our strategy of enhancing market presence and sales channel expansion with the addition of a new distribution partner. This addition accelerated our sales and marketing efforts to deliver both a single-point gauge and a line scan gauge product into new market opportunities.
The main drivers for Terahertz adoption continue to be effective thickness control, lower manufacturing costs, minimization of waste and the optimization of product quality. We've maintained a good balance between ensuring efficiency in our daily operations, while still investing in growth opportunities.
...
Barry Sine
Kind of lost in the mix with all the fiber optic news is the T-Ray product line. And I know you putting a lot of marketing resources behind there. I think they've moved offices, and you've been to a lot more trade shows. Could you talk specifically about how that product line is doing the Terahertz sensing?
Scott Graeff
Yes. That continues to fit very nicely within our sensing vertical. So as I talk within the Lightwave Division, you have these two verticals and one being the sensing. And it's the third product that I talk about in that sensing vertical. So you have the OVA - I mean, the ODiSI, the HYPERION and the Terahertz product. And our team Ann Arbor - we have moved - at January 1, we moved them into a separate location. And they are really driving on all cylinders out there with the entire team led by our General Manager out there, Margaret Murdock.
So it is continuing to penetrate into the market. We sign up additional VARs and distributors, and we're seeing that momentum. Brian, you're involved with them, if you have any additional information?
Brian Soller
Yes. The team in Ann Arbor who are working on Terahertz has done a fantastic job in improving the product and in concert with adding new sales channels and distribution, and we hit on that. Scott, hit on it in his discussion of the second quarter. We did add a global reseller in Q2 that led to some new business for the nondestructive test market, which is focused on aerospace, oil and gas and automotive, primarily. Q2 was strong, again, in the aerospace market, in general; also strong, again, in process control, which is the two main areas of focus for the Terahertz team.
So again, as the product improves and as the team brings on and builds more capacity through international sales channels, we expect to continue to see progress there, and Q2 was an example of that.
Scott Graeff
Yes, Barry, I've always been careful with the Terahertz products, specifically. And I certainly just don't want to overpromise. I mean, I think, they are making - they had a lot of progress to make, and they have made that progress with getting cost down and some clean up internally, and that has gone beyond our expectations and the job that they have done out there.
So I just don't want to get out ahead of that. And I want to be cautious because the percentages are huge, but there are percentages on some smaller numbers. So I'll continue to update you guys as that makes progress, but we have very high expectations on where this product can go given the technology and where it sits.
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