"Our first quarter strength bolsters our Wave 3 10G growth strategy as we experienced accelerated deployment momentum with our key cable MSO customer coupled with an additional cable MSO initiating full volume rollout. Additionally, these deployments are now sourced through two separate OEM partners, which adds additional capacity to serve demand and diversifies the supply chain. We also continue to receive inbound interest for Wave 3 10G designs due to its superior performance in the Wi-Fi landscape," remarked Dr.
"We expect record revenue in the second quarter, driven by record Wave 3 10G revenue shipments, as we extend our customer opportunities into mainstream markets and new and existing high-performance markets that seek a full-featured and unparalleled connectivity experience."
Financial Summary
Three Months Ended | ||||||||||
2018 | 2017 | % Change | ||||||||
Revenue | $ | 45,117 | $ | 37,891 | 19.1 | % | ||||
Gross Profit | 22,765 | 18,584 | 22.5 | % | ||||||
Gross Margin | 50.5 | % | 49.0 | % | 150 bps | |||||
Net income (loss): | ||||||||||
GAAP | $ | (3,247 | ) | $ | (884 | ) | ||||
Non-GAAP | 1,160 | 1,220 | ||||||||
Net income (loss) per share - diluted: | ||||||||||
GAAP | $ | (0.09 | ) | $ | (0.03 | ) | ||||
Non-GAAP | 0.03 | 0.03 | ||||||||
(in thousands except per share data, unaudited) | ||||||||||
Commentary on the
first quarter 2018 financial results by Company management is available at http://ir.quantenna.com/events.cfm.
Please see the note regarding the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.
First Quarter Company Highlights
Business Outlook
Second Quarter 2018 | |
Revenue | $51M to |
Gross Margin | |
GAAP | 48% +/- 100bps |
Non-GAAP | 48% +/- 100bps |
Operating Expense Growth (sequential) | |
GAAP | Flat to up 4% |
Non-GAAP | Flat to up 5% |
Net income (loss) per share-diluted | |
GAAP | ( |
Non-GAAP | $0.07 - |
Gross margin, operating expense and net income GAAP to Non-GAAP reconciliation relates to stock based compensation expense and change in deferred tax assets. |
Webcast and Conference Call
Non-GAAP Financial Measures
In addition to GAAP reporting,
About
Forward-Looking Statements
This press release contains forward-looking statements based on Quantenna's current expectations, including statements regarding Quantenna's
preliminary financial results for the first quarter ended
Condensed Consolidated Statements of Operations (in thousands except per share data, unaudited) | |||||||
Three Months Ended | |||||||
2018 | 2017 | ||||||
Revenue | $ | 45,117 | $ | 37,891 | |||
Cost of revenue | 22,352 | 19,307 | |||||
Gross profit | 22,765 | 18,584 | |||||
Operating expenses: | |||||||
Research and development | 17,601 | 12,633 | |||||
Sales and marketing | 4,495 | 2,914 | |||||
General and administrative | 4,198 | 3,389 | |||||
Total operating expenses | 26,294 | 18,936 | |||||
Loss from operations | (3,529 | ) | (352 | ) | |||
Interest expense | — | (197 | ) | ||||
Other income (expense), net | 334 | 200 | |||||
Loss before income taxes | (3,195 | ) | (349 | ) | |||
Provision for income taxes | (52 | ) | (535 | ) | |||
Net loss | $ | (3,247 | ) | $ | (884 | ) | |
Net loss per share - basic and diluted | $ | (0.09 | ) | $ | (0.03 | ) | |
Shares used in computing net loss per share - basic and diluted | 35,848 | 33,107 | |||||
Unaudited reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) | |||||||||||||||||||||
Non-GAAP Income Statement Items | Three months ended | Three months ended | |||||||||||||||||||
GAAP Measure | Stock-based Compensation Expense | Income Taxes* | Non-GAAP Measure | GAAP Measure | Stock-based Compensation Expense | Non-GAAP Measure | |||||||||||||||
Revenue | $ | 45,117 | $ | 45,117 | $ | 37,891 | $ | 37,891 | |||||||||||||
Gross profit | 22,765 | 34 | 22,799 | 18,584 | 43 | 18,627 | |||||||||||||||
Gross margin | 50.5 | % | 0.1 | % | 50.5 | % | 49.0 | % | 0.1 | % | 49.2 | % | |||||||||
Research and development | 17,601 | 2,393 | 15,208 | 12,633 | 1,205 | 11,428 | |||||||||||||||
Sales and marketing | 4,495 | 984 | 3,511 | 2,914 | 353 | 2,561 | |||||||||||||||
General and administrative | 4,198 | 1,181 | 3,017 | 3,389 | 503 | 2,886 | |||||||||||||||
Income (loss) from operations | (3,529 | ) | 4,592 | 1,063 | (352 | ) | 2,104 | 1,752 | |||||||||||||
Benefit (provision) for income taxes | (52 | ) | — | (185 | ) | (237 | ) | (535 | ) | — | (535 | ) | |||||||||
Net income (loss) | $ | (3,247 | ) | $ | 4,592 | $ | (185 | ) | $ | 1,160 | $ | (884 | ) | $ | 2,104 | $ | 1,220 | ||||
Basic shares outstanding | 35,848 | 35,848 | 33,107 | 33,107 | |||||||||||||||||
Basic earnings per share | $ | (0.09 | ) | $ | 0.03 | $ | (0.03 | ) | $ | 0.04 | |||||||||||
Diluted shares outstanding | 35,848 | 38,703 | 33,107 | 38,371 | |||||||||||||||||
Diluted earnings per share | $ | (0.09 | ) | $ | 0.03 | $ | (0.03 | ) | $ | 0.03 | |||||||||||
*Income tax adjustment relating to change in US Federal and State deferred tax assets.
Unaudited Forward-Looking Statements Regarding Business Outlook | ||||||||
Business Outlook | Three Months Ended | |||||||
Low | High | |||||||
Estimated GAAP diluted loss per share | $ | (0.04 | ) | $ | (0.02 | ) | ||
Estimated stock compensation expense | (0.11 | ) | (0.11 | ) | ||||
Estimated Non-GAAP diluted earnings per share | $ | 0.07 | $ | 0.09 |
Condensed Consolidated Balance Sheets (in thousands, unaudited) | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 24,613 | $ | 24,432 | |||
Marketable securities | 95,530 | 94,195 | |||||
Accounts receivable | 26,310 | 26,786 | |||||
Inventory | 18,420 | 12,662 | |||||
Prepaid expenses and other current assets | 2,949 | 2,744 | |||||
Total current assets | 167,822 | 160,819 | |||||
Deferred tax assets | 35,602 | 35,422 | |||||
Property and equipment, net | 12,415 | 12,511 | |||||
Intangible and other assets, net | 4,215 | 3,952 | |||||
Total assets | $ | 220,054 | $ | 212,704 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 10,696 | $ | 2,077 | |||
Accrued liabilities and other current liabilities | 23,531 | 22,742 | |||||
Long-term debt, current portion | — | 3,943 | |||||
Total current liabilities | 34,227 | 28,762 | |||||
Other long-term liabilities | 3,222 | 3,339 | |||||
Total liabilities | 37,449 | 32,101 | |||||
Stockholders' equity | |||||||
Common stock | 3 | 3 | |||||
Additional paid-in capital | 313,503 | 308,023 | |||||
Accumulated other comprehensive loss | (438 | ) | (207 | ) | |||
Accumulated deficit | (130,463 | ) | (127,216 | ) | |||
Total stockholders' equity | 182,605 | 180,603 | |||||
Total liabilities and stockholders' equity | $ | 220,054 | $ | 212,704 |
Condensed Consolidated Cash Flows (in thousands, unaudited) | |||||||
Three Months Ended | |||||||
Cash flows from operating activities | |||||||
Net loss | $ | (3,247 | ) | $ | (884 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 1,125 | 479 | |||||
Stock-based compensation expense | 4,592 | 2,104 | |||||
Other | (50 | ) | 135 | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 476 | (3,332 | ) | ||||
Inventory | (5,758 | ) | 2,459 | ||||
Prepaid expenses and other current assets | (205 | ) | (1,324 | ) | |||
Deferred rent and other assets | 58 | (511 | ) | ||||
Accounts payable | 8,725 | (5,870 | ) | ||||
Accrued liabilities and other current liabilities | 1,053 | 6,309 | |||||
Net cash provided by (used in) operating activities | 6,769 | (435 | ) | ||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (924 | ) | (1,700 | ) | |||
Purchase of long-term investment | (590 | ) | — | ||||
Purchase of marketable securities | (13,211 | ) | — | ||||
Maturities of marketable securities | 11,515 | — | |||||
Net cash used in investing activities | (3,210 | ) | (1,700 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of common stock, net | 1,438 | 163 | |||||
Payments of taxes withheld for vested stock awards | (601 | ) | — | ||||
Payments related to intangible asset purchase | (272 | ) | — | ||||
Repayments of long-term debt | (3,943 | ) | (672 | ) | |||
Net cash used in financing activities | (3,378 | ) | (509 | ) | |||
Net increase (decrease) in cash and cash equivalents | 181 | (2,644 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 24,432 | 117,045 | |||||
End of period | $ | 24,613 | $ | 114,401 | |||
Source:Quantenna Communications, Inc. Vernon Essi , Jr. 669-209-5647 vessi@quantenna.com
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