"Overall, 2017 was a very successful year as we posted 37% year-over-year revenue growth. We are pleased to report that our key cable MSO customer has initiated a nationwide rollout of a gateway solution using our industry leading Wave 3 10G technology. We enter 2018 excited about the opportunities in front of us and believe we are well positioned to extend our Wave 2 market opportunities and garner incremental Wave 3 10G designs," remarked Dr.
"We expect the first quarter to bring
Financial Summary
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
2017 | 2017 | % Change | 2017 | 2017 | % Change | ||||||||||||||||||
Revenue | $ | 41,275 | $ | 37,492 | 10.1 | % | $ | 176,359 | $ | 129,069 | 36.6 | % | |||||||||||
Gross Profit | 21,279 | 19,304 | 10.2 | % | 88,151 | 64,429 | 36.8 | % | |||||||||||||||
Gross Margin | 51.6 | % | 51.5 | % | 10 | bps | 50.0 | % | 49.9 | % | 10 | bps | |||||||||||
Net income (loss): | |||||||||||||||||||||||
GAAP | $ | 32,325 | $ | 32 | $ | 34,412 | $ | (1,895 | ) | ||||||||||||||
Non-GAAP | 455 | 898 | 9,989 | 1,195 | |||||||||||||||||||
Net income (loss) per share - diluted: | |||||||||||||||||||||||
GAAP | $ | 0.84 | $ | 0.00 | $ | 0.89 | $ | (0.30 | ) | ||||||||||||||
Non-GAAP | 0.01 | 0.03 | 0.26 | 0.04 | |||||||||||||||||||
(in thousands except per share data, unaudited) | |||||||||||||||||||||||
Commentary on the fourth quarter and fiscal year 2017 financial results by Company management is available at http://ir.quantenna.com/events.cfm.
Please see the note below regarding the use of non-GAAP financial measures, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.
Fourth Quarter and Fiscal Year 2017 Company Highlights
Business Outlook
First Quarter 2018 | |
Revenue | $43M to |
Gross Margin | |
GAAP | 50% +/- 100bps |
Non-GAAP | 50% +/- 100bps |
Operating Expense Growth (sequential) | |
GAAP | -1% to 4% |
Non-GAAP | Flat to up 5% |
Net income (loss) per share-diluted | |
GAAP | ( |
Non-GAAP | $0.00 to |
Gross margin, operating expense and net income GAAP to Non-GAAP
reconciliation relates to stock based compensation expense and amortization of deferred tax asset. | |
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 fourth quarter and fiscal year 2017 ended
Condensed Consolidated Statements of Operations (in thousands except per share data, unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2017 | 2017 | 2017 | 2017 | ||||||||||||
Revenue | $ | 41,275 | $ | 37,492 | $ | 176,359 | $ | 129,069 | |||||||
Cost of revenue | 19,996 | 18,188 | 88,208 | 64,640 | |||||||||||
Gross profit | 21,279 | 19,304 | 88,151 | 64,429 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 16,048 | 13,691 | 59,747 | 46,604 | |||||||||||
Sales and marketing | 4,487 | 2,520 | 14,040 | 8,091 | |||||||||||
General and administrative | 4,069 | 2,757 | 15,299 | 10,559 | |||||||||||
Total operating expenses | 24,604 | 18,968 | 89,086 | 65,254 | |||||||||||
Income (loss) from operations | (3,325 | ) | 336 | (935 | ) | (825 | ) | ||||||||
Interest expense | (272 | ) | (252 | ) | (713 | ) | (665 | ) | |||||||
Other income (expense), net | 509 | 262 | 1,118 | (38 | ) | ||||||||||
Income (loss) before income taxes | (3,088 | ) | 346 | (530 | ) | (1,528 | ) | ||||||||
Benefit (provision) for income taxes | 35,413 | (314 | ) | 34,942 | (367 | ) | |||||||||
Net income (loss) | $ | 32,325 | $ | 32 | $ | 34,412 | $ | (1,895 | ) | ||||||
Net income (loss) per share - basic | $ | 0.92 | $ | 0.00 | $ | 1.00 | $ | (0.30 | ) | ||||||
Net income (loss) per share - diluted | $ | 0.84 | $ | 0.00 | $ | 0.89 | $ | (0.30 | ) | ||||||
Shares used in computing net income (loss) per share: | |||||||||||||||
Basic | 35,316 | 21,246 | 34,259 | 6,385 | |||||||||||
Diluted | 38,281 | 35,387 | 38,484 | 6,385 | |||||||||||
Condensed Consolidated Balance Sheets (in thousands, unaudited) | |||||||
2017 | 2017 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 24,432 | $ | 117,045 | |||
Marketable securities | 94,195 | — | |||||
Accounts receivable | 26,786 | 14,480 | |||||
Inventory | 12,662 | 15,820 | |||||
Prepaid expenses and other current assets | 2,744 | 2,470 | |||||
Total current assets | 160,819 | 149,815 | |||||
Deferred tax assets | 35,422 | — | |||||
Property and equipment, net | 12,511 | 4,742 | |||||
Intangible assets, net | 2,987 | — | |||||
Other long-term assets | 965 | 232 | |||||
Total assets | $ | 212,704 | $ | 154,789 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 2,077 | $ | 7,776 | |||
Accrued liabilities and other current liabilities | 22,742 | 11,801 | |||||
Long-term debt, current portion | 3,943 | 2,257 | |||||
Total current liabilities | 28,762 | 21,834 | |||||
Long-term debt | — | 3,680 | |||||
Other long-term liabilities | 3,339 | 527 | |||||
Total liabilities | 32,101 | 26,041 | |||||
Stockholders' equity | |||||||
Common stock | 3 | 3 | |||||
Additional paid-in capital | 308,023 | 290,319 | |||||
Accumulated other comprehensive loss | (207 | ) | — | ||||
Accumulated deficit | (127,216 | ) | (161,574 | ) | |||
Total stockholders' equity | 180,603 | 128,748 | |||||
Total liabilities and stockholders' equity | $ | 212,704 | $ | 154,789 | |||
Condensed Consolidated Cash Flows (in thousands, unaudited) | |||||||
Years Ended | |||||||
2017 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net income (loss) | $ | 34,412 | $ | (1,895 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Release of valuation allowances for the deferred tax assets | (35,333 | ) | — | ||||
Depreciation and amortization | 2,669 | 1,278 | |||||
Stock-based compensation expense | 10,683 | 3,065 | |||||
Accretion of discount on investments | 207 | — | |||||
Non-cash interest expense, net | 474 | 347 | |||||
Change in fair value of convertible preferred stock warrants liability | — | 87 | |||||
Non-cash foreign exchange gain | (46 | ) | — | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (12,306 | ) | 1,237 | ||||
Inventory | 3,158 | (8,413 | ) | ||||
Prepaid expenses and other current assets | (335 | ) | (901 | ) | |||
Deferred rent and other assets | (467 | ) | (50 | ) | |||
Accounts payable | (5,752 | ) | 1,804 | ||||
Accrued liabilities and other current liabilities | 9,265 | 5,757 | |||||
Net cash provided by operating activities | 6,629 | 2,316 | |||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (8,970 | ) | (2,724 | ) | |||
Purchase of marketable securities | (131,790 | ) | — | ||||
Proceeds from sales of marketable securities | 10,684 | — | |||||
Maturities of marketable securities | 26,440 | — | |||||
Restricted cash | — | (59 | ) | ||||
Net cash used in investing activities | (103,636 | ) | (2,783 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of common stock | 7,675 | 1,191 | |||||
Payment of taxes withheld for vested stock awards | (626 | ) | — | ||||
Proceeds from initial public offering, net of issuance costs | (96 | ) | 97,483 | ||||
Proceeds from revolving line of credit, net of fees paid | — | 2,950 | |||||
Repayment of revolving line of credit | — | (3,000 | ) | ||||
Proceeds from issuance of long-term debt, net of fees paid | — | 3,854 | |||||
Payments related to intangible asset purchase | (266 | ) | — | ||||
Repayments of long-term debt | (2,406 | ) | (3,816 | ) | |||
Net cash provided by financing activities | 4,281 | 98,662 | |||||
Effect of exchange rate changes on cash and cash equivalents | 113 | — | |||||
Net increase (decrease) in cash and cash equivalents | (92,613 | ) | 98,195 | ||||
Cash and cash equivalents | |||||||
Beginning of year | 117,045 | 18,850 | |||||
End of year | $ | 24,432 | $ | 117,045 | |||
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 | Non- Recurring Items* | Income Taxes** | Non-GAAP Measure | GAAP Measure | Stock-based Compensation Expense | Non-GAAP Measure | |||||||||||||||||
Revenue | $ | 41,275 | $ | 41,275 | $ | 37,492 | $ | 37,492 | ||||||||||||||||
Gross profit | 21,279 | 42 | 21,321 | 19,304 | 18 | 19,322 | ||||||||||||||||||
Gross margin | 51.6 | % | 0.1 | % | 51.7 | % | 51.5 | % | 0.0 | % | 51.5 | % | ||||||||||||
Research and development | 16,048 | 1,630 | 14,418 | 13,691 | 457 | 13,234 | ||||||||||||||||||
Sales and marketing | 4,487 | 584 | 199 | 3,704 | 2,520 | 128 | 2,392 | |||||||||||||||||
General and administrative | 4,069 | 980 | 3,089 | 2,757 | 263 | 2,494 | ||||||||||||||||||
Income (loss) from operations | (3,325 | ) | 3,236 | 199 | — | 110 | 336 | 866 | 1,202 | |||||||||||||||
Benefit (provision) for income taxes | 35,413 | — | — | (35,305 | ) | 108 | (314 | ) | — | (314 | ) | |||||||||||||
Net income (loss) | $ | 32,325 | $ | 3,236 | $ | 199 | $ | (35,305 | ) | $ | 455 | $ | 32 | $ | 866 | $ | 898 | |||||||
Basic shares outstanding | 35,316 | 35,316 | 21,246 | 21,246 | ||||||||||||||||||||
Basic earnings per share | $ | 0.92 | $ | 0.01 | $ | 0.00 | $ | 0.04 | ||||||||||||||||
Diluted shares outstanding | 38,281 | 38,281 | 35,387 | 35,387 | ||||||||||||||||||||
Diluted earnings per share | $ | 0.84 | $ | 0.01 | $ | 0.00 | $ | 0.03 | ||||||||||||||||
Non-GAAP Income Statement Items | Twelve months ended | Twelve months ended | ||||||||||||||||||||||
GAAP Measure | Stock-based Compensation Expense | Non- Recurring Items* | Income Taxes** | Non-GAAP Measure | GAAP Measure | Stock-based Compensation Expense |
Non-GAAP Measure | |||||||||||||||||
Revenue | $ | 176,359 | $ | 176,359 | $ | 129,069 | $ | 129,069 | ||||||||||||||||
Gross profit | 88,151 | 165 | 88,316 | 64,429 | 33 | 64,462 | ||||||||||||||||||
Gross margin | 50.0 | % | 0.1 | % | 50.1 | % | 49.9 | % | 0.0 | % | 49.9 | % | ||||||||||||
Research and development | 59,747 | 5,616 | 54,131 | 46,604 | 911 | 45,693 | ||||||||||||||||||
Sales and marketing | 14,040 | 1,763 | 199 | 12,078 | 8,091 | 248 | 7,843 | |||||||||||||||||
General and administrative | 15,299 | 3,139 | 12,160 | 10,559 | 1,898 | 8,661 | ||||||||||||||||||
Income (loss) from operations | (935 | ) | 10,683 | 199 | — | 9,947 | (825 | ) | 3,090 | 2,265 | ||||||||||||||
Benefit (provision) for income taxes | 34,942 | — | — | (35,305 | ) | (363 | ) | (367 | ) | — | (367 | ) | ||||||||||||
Net income (loss) | $ | 34,412 | $ | 10,683 | $ | 199 | $ | (35,305 | ) | $ | 9,989 | $ | (1,895 | ) | $ | 3,090 | $ | 1,195 | ||||||
Basic shares outstanding | 34,259 | 34,259 | 6,385 | 6,385 | ||||||||||||||||||||
Basic earnings per share | $ | 1.00 | $ | 0.29 | $ | (0.30 | ) | $ | 0.19 | |||||||||||||||
Diluted shares outstanding | 38,484 | 38,484 | 6,385 | 31,113 | ||||||||||||||||||||
Diluted earnings per share | $ | 0.89 | $ | 0.26 | $ | (0.30 | ) | $ | 0.04 | |||||||||||||||
*Non-recurring items comprised of executive severance.
**Income tax adjustment relating to recognition of US Federal deferred tax asset pursuant to release of valuation allowance.
Unaudited Forward-Looking Statements Regarding Business Outlook |
|||||||
Business Outlook | Three Months Ended | ||||||
High | Low | ||||||
Estimated GAAP diluted earnings (loss) per share | $ | (0.06 | ) | $ | (0.08 | ) | |
Estimated stock compensation expense | (0.08 | ) | (0.08 | ) | |||
Estimated Non-GAAP diluted earnings (loss) per share | $ | 0.02 | $ | 0.00 | |||
Source:Quantenna Communications, Inc. Vernon Essi , Jr. 669-209-5647 [email protected]
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