MINM - Earnings call transcript Q1 2022

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Operator

Good day and thank you for standing by. Welcome to Minim's Q1, 2022 Earnings Call. At this time, all participants line are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator's instructions]. hand over to today. your like now the to conference speaker I'd Mr. Carbonara Hayden James IR. from you. Thank ahead. go Please

James Carbonara

Once again. Chief Minim's and the Zheng, Welcome to and Mehul call me Call. President Officer. are on Patel, With Chief Gray Marketing China Chief Executive Financial Nicole QX Officer, Officer, XXXX Earnings

today's all available presentation on at the As a live website reminder, company's ir.minim.com. materials for are Investor Relations

conference begin, call to that may forward-looking want remind Before I today's we contain statements. everyone

revenue, those operating statements outlook. regarding the these expected future trends future, Forward-looking forward-looking expenses, statements business margins, including Actual could include and materially contemplated statements. or results differ from by

Risk discussion of company's Annual detailed on a expressed in could from XXQ in Form uncertainties which Report those that subsequent as in time-to-time well XX-K Form cause other see actual company or on implied For reports forward-looking filed the Factors risks to from as the reports differ such the results in contained and Please files Securities recent and of non-GAAP the with most measures use well SEC. in too, the to to management utilizes non-GAAP of call that in company's filings as most numbers is the Exchange analyze today's periodic GAAP such note the our with the A include numbers press reconciliation may Commission. release, comparable Please performance. as available that our statements.

Gray CEO of with over Minim's. China like proceed. we'd to Now please turn the call to Gray,

Graham Chynoweth

XXXX Minim's call. to Thanks, morning QX, conference welcome James. and Good

households connected XXXX, per for Associates, a went stay, Parks by Let's at this use do will some at million continue added American become subscribers. XX home. the Monday, XXX this enlist The live $XX means plans monthly with broadband relevant. remote most announced has SmartHome experts increase. here second Biden number released everyone connectivity net. in that work predictable more say megabit Disney just continues In start help quarter, for XXXX. In dynamics. backdrop. fiscal XX more to at per and Disney things broadband President with incredible better This this through its to off our been a increase XX.X Plus look XX% plus recent to million just up devices, need world And number internet home. market Amidst our estimate eligible ladders devices The of mission is never to

is home demand purchasing We equipment. much home -pandemic of yes, And a levels. was to back-to-normal appears the pandemic. industry height there pre levels, that upgrade to have networking seen networks return the It adjusting a rush and at the of to

However, continues trend, outperform. despite Minim to this

Minim in quarter. GAAP With dropped of by headwinds. up market For want this growth, our I QX compared context, last sustaining XX% XX% XXXX, the in the revenue the a of way prior leader QX its XXXX million announced share context, approach was to to recently to $XX.X quarter. revenue compared By to face

particularly three points that are of outperformance proud this drove past We our quarter. of strength

the Amazon.com, First, holding number we market for first to perform position. share quarter. on continued one full the

quarter. supply by retail XXX% disrupted growth with Omicron half volumes plus in the orders XXXX concerns the of to closely resumed chain and and distribution The reestablished We QX as that our order compared working customers. Second, a by purchasing in when evidenced were second last variance.

to this of our those to consumer from chain purchases. these -pandemic bring plans when our elevated the outperformance. the peak, continued summer. all product, headwinds, year. of several U.S. by in product our demand is the we including on beyond have chain. home Third, at brought These further U.S.. technology the growth, a and from execute levels. that the on to mesh supply we may have several performance impacts all with remains And we We our to of pandemic the we despite products On intelligent working the sales below we In others, paid partner progress both in market those But that major pre with Despite pleased compared against and ZDNet. continued our Consumer to exchanges. suppliers We're Motorola for to were were subscriber potential compared increases. last and We're expanding and reviews of our primary drive material to this ISP partner India. intelligent product market. durable price made disruptions. we'll are ODM offering deliver announce supply to that Indonesia, and the new affected in see expansion, continue penetration production chain our diversity. category. half branded networking expand scaled third segments, to supply we we U.S.. of of QX, product partners levels headwinds, and elevated fronts, and inflation established of The when increase geographic groups our XXX,XXX second on to the our on high an demand into headwinds retail diversifying XXX,XXX continued will second new ISP at which primary sectors On value hardware subscriber distribution the driving new support and among share implemented to an market MHXXXX the of expansion in products product, number sale channels includes see professional We expect to On we distribution, in we're U.S., solid a growth in continue segment new PC in reviews pleased remain market rep into market sales trials, efforts ODM Mag and to initial U.S. accelerating great a in

focused on in remain profitability on we of for to QX was to impact With Adjusted margins. at a improvement gross $X.X QX. an XX.X% when to margin increases came our quarter. mitigating the million, million in metrics, from in $X.X Turning a gross down XX% continued our chain last in negative the price EBITDA compared supply component QX, disruptions

additional focus distribution, markets. to growth clear continue R&D in a and the equity we for need requiring capital on from while are investments on so we a doing with Additionally, without focus

Turning to our cash inventory positions. and

in As last as to position as million increase that cash we call, down million as thereafter we We $XX our down from on and accounts exited expected. pay QX inventory, we drop see and collect QX, expect This exited occurring as for QX. in our we settle in we inventory with inventory QX is XX.X receivables. indicated

down exiting invoices the QX $XX.X million in quarter. pay our to million prior buildup. Cash compared QX $XX.X due we to As the quarter, at inventory came in exiting

over models expect on and year this The and the software becoming We to [Indiscernible] on streams and people hybrid transformation. connectivity working becoming to home enough that with very continue to the With now team to this as better sell to inventory through. live news, is of complex progress constantly efforts. is Three powerful mission permanent, events to against on we of more more do our both of and help cybersecurity work be risks our excited driving turn we're having software. put meet transformation relevant the ever risks cash course are on the with will executing demands more networks, levels having improve Minim's pressure liquidity. inventory market not position focused in than I the

value consumers to deliver with first The products. our to intelligent work is

of intelligent new Minim sales to As and existing to our to bring all the products surpass our to year, incorporate continue accelerate intelligent and of Networks. products. we we our Intelligent XXXX thousand products, This goal market, expect intelligence XXX

how is $XXX our to Additionally, internet. thousand software software, connect with they to consumers work where revenue one or grew of deferred the deliver value to to regardless

The addition our distributing first company. and drug on mobile more relationship will summer. further with differentiate cable the occur this the products shelves When app we and This step the with into will brand over software our modems. on consumers journey a the valuable began

new to the product by work in-app features, The software became mobile third we home through initiated to first networking app. front, product consumers company in The this innovative Minim. add and to in support the upgrade is QX, motosync powered our app chat value deliver in up-sells On live our our of operations, progress sales and to development product during XX%. intelligent a year. our of by software Nicole on towards you ahead Nicole? will look customer resolution give the reducing support product the rest functionality Up next, and performance a into glimpse has improved time tickets deeper

Nicole Zheng

Thanks, Gray.

is illustrated our of quarter-over-quarter outperformance from quarter the to Our a retail orders. primarily prior increase channel. by a largest normal see driven in in of sales pleased were this return in to and XXX% by an sales normal return growth We retail to QX

continued in sales was Our also performance Amazon. stellar QX supported performance by in

data estimated platform. As cable leading core modem Gray spent share number according category, e-commerce a for the the one mentioned, and gateway our sales, in to an quarter XX% market we with position

Across Since In revenue our market direct router, an opportunity, first the cable and our on XXXX from modems of MG-XXXX In all to proving quarter-over-quarter with to market addition, walmart.com by market is modem X% DOCSIS grew the core our of line approximately be doubled for XX% to XX%. share company. shift in than by and a to year, X%, a partnership share it an deeper grew X.X our to the our selling all XX% a we the a intelligent the an sales additional value-driven The was channel represents of modem X% which cornerstone channels, latter retailer. combined top we estimated walmart.com as beginning continued and categories products and product estimated sales our basis. gateway is on December more beneficial.

price introduction to higher and our basis the selling increased XXXX, ASP pricing average of in on $XX from quarter-over-quarter QX increases. Our reflecting a $XXX products.

to As prior advertised consumers, account QX sold price, a minimum the X% MAP, in Taking average into at quarter, by increased ASP and by from or distributors. our paid price a and our reminder, our categories XXXX, Amazon. in our the core look discount takes retailers

reflects hikes. competitor mind, approximate from an premium opportunities MAP to increased saw $XXX XXXX. believe both XX% channel With QX in two We the industry's that the $XXX MAP believe and we XXXX, adoption of While QX networking in in price we ahead. higher products consumer a have

good Launched wider by are the at ASP disruptions. X due end our to WiFi supply to product develop were constrained sales products. position premium we First, distribution higher modem of of pandemic year, in last a router

production the XXX progress unlock expect this made of summer. router placement have to Motorola to the MTA We modem and expand

half price gross select increases planning the price for competition. preserve year are Second, margins while second products the maintaining currently for of we to

Motorola intelligent a let's of we year, included products highlights. driven offer Last customer. subscription the five. cable modem a relationship portfolio our MG-XXXX, is software MHXXXX. the top number purchase, five channel a Included increased from to Minim of few Motorola in Now, the these to product a with the turn three These gateway communication well for providing our lasting with form products to in sellers, our specific products as that as motosync are the app one one

brand Our our represents an mesh recently that the there's first strongly WiFi categories. In level we awareness, shift our core gate, more the build our role X other our will than product confirmed, resonates we're have our consumer WiFi. analyzing advertise it mesh words, other room has lessons many and to to new We our proud mesh than more and that strategy opportunity partnerships category system. entrance core of than forge note, competing due challenging believe competitors We out channels, to retail less key the to survey, on to announced have to marketing strongest platform's mostly here. a sales with strategies ahead. to to data channel learned expected. in that cost learned play placement. our that have On is is categories. we efficient Still, In lot This of challenging Amazon, this and been a Motorola marketing

thing this on our programs felt long-term support And reviews. customer sales Motorola have We to strategy. loyalty media

to unique consumers, position our directly gathering app to with more with motosync market. the compelling in are requests we Finally, software chat products in feature even make our the

products, a everyone We deliver software. better So and vehicle the Like and why consumer hardware to are powerful most connectivity. deliver do help live evolving we hardware. excited? continuously not to is core becomes exist At with more purpose Minim, our to modern

We mesh are plans. category represents broader the opportunity the excited of software for distribution a because WiFi in continued context our

more recent support, invention, live include recent firing our Networks are we in-app Intelligent become of for intelligent portfolio of and offer our of hit expect features premium launch Apple with mentioned, Minim the recently end users by May year, Gray feature milestone just upgrades. will couple a a make entire of to XX,XXX we a and goal the A blockchain which now early. milestones cylinders the As exceeded XXX,XXX to

our cutting-edge of will XX gateway These designs. all upgrade price to exciting making of products Q challenge on the the latest the products focused Motorola Axis in and competitors Motorola announcements intelligent with Q bear launches, year have we're categories, modem development half In Motorola follow. second ahead, the Looking and and performance and X.X XX. upcoming we Motorola and in

she share Finally, system That would scenario by recommendations, modem upgrade directly and our $XXX bundling text us. everywhere business her decides to malware by our turn and case secure turn Mary CLTV. like Motorola in to transformation five in in or modem financial review our through on and block. If she motorolanetwork.com. to outreach, Motorola and software. deeper form excitement app hope and for opted motosync this has block name to learns the for pricing journey a In Mehul Today becomes on conviction on turn, is that Tomorrow grown email motosync quadruples that app where $XXX. is CLTV promotions. a she an and for to now are Further I'll mesh phone for have rewards, Mary with receive our The that to Minim loyalty I activities end relationships a our subscription ad our Through value and in unknown software we our with transaction can we would anonymous to the illustrated. support her customer live times. a let's continued she related to known the increasing look of customer still know like her results. CLTV save through value following retailer goals. she customers Mehul. a sold to deliver lifetime investors represents

Mehul Patel

quarter by increased quarter, and reminder Nicole, been are revenue friendly has Thank described posted $XX.X financials, our net cover for Gray prior ir.minim.com the I million, as deferred $XXX,XXX. on presentation earlier, you, revenue up which totaled the that depicted XX% that earnings will is in over to

$X.X XX.X%. by encouraged is first-quarter our the and the are came did of it said to 'XX. our sales for net that our compared shrink in levels pre That XX% quarter, to similar of peak for million revenue quarter compared or to quarter, the XX% growth We gross fact QX levels margin pandemic with relatively, -pandemic QX up at 'XX prior

stable inflation, increases, despite cost margin brought gross on continues the year to XX%, year. over be Our headwinds component above by and which remains

of $X.X the basic of or per million $X.XX diluted $X.XX our million negative quarter, compares basic or with For share loss and was and This per net quarter in share. $X.X a net diluted fourth negative loss XXXX.

quarter, our adjusted compared million negative to as $X.X XXXX. EBITDA the was $X.X QX, in of adjusted million negative For EBITDA

on we by noted, encouraged of and the return focused As revenue Gray remain these improving growth. quarter-over-quarter results

quarter-over-quarter in $X.X equivalent in was investments basis of at the a For sheet. decrease the a a during now, and necessary discussed our to million million At look compared million, had quarter year. to by inventory on end in end, transformation. end The efforts of and raise: I investing and the $XX cash To to sales cash balance of end quarter areas we our decrease decreased quarter. the cash at inventories, R&D, million of $XX.X capital of prior to compared that $XX.X at support driven in

million, levels to inventory levels $X.X the risk to having had $XX.X pursue of liquidity. and At inventory outstanding balance end that having end risk million monitor we of to at our the of of on quarter, meet continue enough not We compared against XXXX. demands closely the as payables production we pressure market of inventory

line drawn XXXX. debt of million, outstanding to in the was a which million of on This $XX we XXst, credit. compared $X.X had end December compares company's $X.X debt of down to outstanding of quarter, as million As

Finally, our I'll like [Indiscernible]. a stock on to close with discussion brief

monitor the not XXth, the As eligible may XX With our XX, minimum stock be consider notification will build April that, the this $X. XXXX, growth, received company indicated April it period. our in the of no a October company by additional the meets Day Investor over on for company If turn XXXX XXXX, to that bid open and On days continue to calendar does line compliance from front, the we our Gray questions. Minim plans, price, intends compliance Nasdaq requirement XXX longer value regain advisors timing its filing, announce Gray I engage sustainable to execution and corporate company to operating of before options. through to for available for the

Graham Chynoweth

I quarter. in would company's reiterate Mehul. outperform and that And Nicole another for I to you. ability closing, am like of proud to Thank the

for which and revenue again half on build to Day, this Operator, attendance. focus The at up our exact and value to shortly Investor of your event will our the see questions. to you And continue upcoming regarding our I'd like to our details June. be software for company, that, transformation for website customers, on first hope the growth sustainable at occur Thank will increased the line published we during investors. We open With Investor you ir.minim.com.

Operator

And please Q&A the Instructions] to while [Operator roster. compile stand by

Your of line first Josh the comes Nichols. from question

open. is line Your

Unidentified Analyst

parts Thanks that my a like pressures seeing question. it been about on I at comfortable supply for have level. that you're need. was the Have commentary some you're And you has tougher going sounds little about to what pretty or provide all, curious inventory taking easing get if you those bit any -- the chain. typically of can the it

increase You forward. don't level that have expect to me going to

Graham Chynoweth

Josh. Thanks, Yes. Good morning.

continues to headlines, monitor -- very said chain continue as there the we in continue closely. supply we to to and we So be on

terms and be difficult environment is the over last why complicated last chains risk Our before it engaged the took think been continues the of spring, in of shutdowns make no more in build reason year, the to inflation chips. creative their that kind I'm that way I helpful be as a strategic has um, our but buying both from a pleased year, to case, hold very to And because the in hedge and supply. with it this was this ops greater component inventory to for continues issue it the China and in team have supply decision also they of

in down. -- continue burn we we as to said continue we it So call, the

we to. be we burn of some levels we'll pursue will be it that and it managing of we're we because strategy both support Some In will down don't in down cases, position from if helps of we're And effectively. will wanted pursuing and to get like planning the going be because one good that higher that operations is couldn't that if I that know but feel our a to progress. complicated.

Unidentified Analyst

Typically I quarter of took little year-over be normal expected patterns. think flattish a return you the down case more kind the Is seasonality to seasonal sequentially. to this that is bit normal to

that? there is that So impacting would else anything be

Mehul Patel

to want one? you -- do to want do Nicole, that take

Nicole Zheng

Yeah. Sure.

So seasonality seasonality, we expect seen the pretty sure. changes you've it predictable to so in It's continue as the no retail there.

Unidentified Analyst

takes price I current the think year, kind able and other are the that forward? that's on to company's the do significant to the whatnot, a margin around impact and going going implemented, you're be gross have throughout hold of guess so you effectively percent, with last year the what that increases could margin And there XX averaged you that puts or levels,

Graham Chynoweth

pricing you do want 's cover that as a one about well? lot to thinking you Nicole, done imagine. of as might Nicole Yeah.

Nicole Zheng

Sure.

every bear, and listening, pricing especially targeting market based information on in we updated my but in call, around is So pricing price of room a -- have XX% here. costs, increases what I be significantly, are get hikes. CEO is the not are we the so said for who costs. as that will up -- we caveat regarding against tracking our And rather we quarter a the or maintaining we and according component the a this price least it's margin pretty continuously structure. of at competitor we lot of changing things will will we environment mentioned terms seeing our COO exciting I what That that lot are are competitor movements, time

but right environment, margins shifting with we confident are we be that will to a is protect pricing now it So able increases.

Unidentified Analyst

than Very last question. the

company company is a sales we the me, Clearly For profitability. focus has to when will quarter in be profitability another EBITDA burn, have stronger expectation market in a a like to tough ramping talking period. that big half fair been the for the return but will here. What's transition it as the be to, environment, assume about able potentially second to seasonal profitability to XQ the more

Graham Chynoweth

you want to that one? want take Mehul, to

Mehul Patel

our for question. I show the Jack Thanks great. for

at market and overall, terms mentioned where when of we're that look we, when you headed So in our the we earlier. seasonality

does market and the the right adjust take at continue and go But we'll now. the also as see continue Second potential where year half we inflation place looking to seeing continue to of year over take for and we're growth that we well, price to monitor as we're believe profitability the as we you'll the adjust going account that look the going at we focused increases, turn for adjustments be in. the of We're costs rest to forward. can corner overall, for

Unidentified Analyst

Great. for me. That's all

Operator

open. next The from Tim Your is is line question Savageaux.

Unidentified Analyst

way we think company as able mentioned you pre this should or Hi. be the over relative to to Good grow will You far in terms you to a year year what Is growth this is company be XX to or in be grow baseline should the this for looking looking do of did we you Maybe but morning. double-digit -pandemic. you of -- at a that think out sort XX? at the potential scope, relative growth aspire revenue little do 'XX, 'XX? do QX this

Graham Chynoweth

year this to revenue aspire 'XX. we No, to grow

by we're think momentum we excited that the great the the then great and indicate which We're our is I of execution, our think we be of peers. the the And great which driven to positioning, everyone value that compared excited while grew, will is idea we're being enriching with of performance set where that look performance year. just for grew to in about, we more because value product significantly really one really to at we the set. that, not couldn't baseline is I when the differentiate to reason and a online, our way market, how quarter-over-quarter. want think be on technology reference most the the I end -- that things packaging, online and get going intelligent by buck. all products about most excited shelf them delivering it's product people really our products And more and the

Unidentified Analyst

Okay. half Then quickly product to follow might Motorola QXX could XX. half, through more a up little the generate if pipeline ran on a that. new I tailwinds mean, side of and obviously products you think than second the in your wonder couple do I about that new have growth? rather help I the into second the you seasonal on bit talk and that

Graham Chynoweth

plans he the I'll And was on but it models also just the referencing, that we now the to product. about Sure. hardware also talk Nicole Nicole turn over only not Yeah. answer software have for that for and maybe one that

Nicole Zheng

Sure.

we excited mash about The on to it's will product, priced. are hardware, it our so are market, with So faster the of next-generations the than the solutions. competitively QXX, current and MHXXXX our and the these be out an QXX AXXXXX start QXX

capacity megabits to exciting. means with an is product WiFi. second AXE, WiFi It's Our QXX super per X.X deliver XE which

both very, fast of this those will competitively. are also summer. it So that, it's basically be and Super solution, priced about a coming and very excited extremely

is for the right and paired wider features distribution now itself Now, app app, a of -- - the it's with motosync is products. course, non on to WiFi motosync allow that getting

any forward for security feature so getting the our on features. can is And the so We're So of it ad-block a set modem it pro network, also legacy will to features having pocket. users users. second support an block as And looking malware half and and imagine eventually upgrade IT implementing gateway you premium on in implementing looking you your in year, take can subscription we're forward essentially have to the then go.

excitement the have half for and potential scheduled lifetime revenue. are here. growing represent of year over those of both additional will we the the value That's second customer for the So that

Unidentified Analyst

earlier the maybe efforts with And positioning mentioned benefit activity? and is of some administration question to from week that Okay. from some broadband Gray, you align last increase that this review company's what the some of and me. you connectivity. part to Can announcements and the try on of

Graham Chynoweth

Of to drive it course, the really key continues that tailwinds. these our are is so thing trends that

So when speed gets home, that important network one more complex. things you that at what higher happened get the you, more do get to you and

Americans house. That So that imagine their there be can that if you remote employees at President jobs, do promote quality company difficult poor could low jobs so been have it Biden pour have internet they they for country, at right? WiFi if they we has the be many people amazing XX at support doing doing they and of work have do to were have that you the to imagine million is referenced, that. WiFi, could over entered all -- the customer them the and income great levels, could all We doing be can

unlocks start more home going really learn to turn means actively. this happens, to that they're going are that that the imagine that at earn people can When you that number to and okay. So of

into house, I go money. we I my to see us. that start and that useful to earn this for technology have need Now make to opportunity bringing as an And pipe for more really that me

value at are can premium price can access and to means points our price way points. we brand, up all use access go the value which We a brand -- and can we different competitive that we

as think specifically can them given learning think in in our at And good you people into so when us customer are really And as about in deliver earning the the I brand a spot. lifetime that only up-sell our puts connecting It not that for also and and that business people to over of time. a value puts orbit spot. then a the way we look that value people bring more we good fact very

earning this from talking position, group specifically and connecting, a really to I with about that Biden home. as think that in us what really I puts is good view

Unidentified Analyst

Great, thanks very much.

Operator

Once Instructions]. question, again a to [Operator ask

Tocos next Your is from question David

Unidentified Analyst

Thanks Great. a a ask quarter my for me being let concerns last spoke taking bit I little question. my delisting. about -- guys about

a those And So these have is addressing management to lead, maybe. I cash thanks see know when it versus morning. wondering I'm cash. individuals, but question your I'm about reach rightly curious for cash stock in is, senior in My you constraints this a and little level the concerned inventory bit other as if low I levels,

the purchases company. be and go if for something doing in stock would base your in the future know the be that that people your To Beyond significant because helpful ahead you believe odd, aren't invested that investor considering of your to company. would

I'm if consideration. that's So under curious

Graham Chynoweth

Yes.

So that's I the think certainly discussion I at an active would to considering will say and we're be. continue been options, board,

In periods, I'll my to purchasing themselves. obviously something subject individual consider considering colleagues to purchasing, for to And we're that -- certainly the actively we're but think of blackout leave that terms support. I that's

Unidentified Analyst

I that say, long-term I Okay. $XXX, folks times times, and into so of the Thanks. my going much and number don't some company in a in I'm That's information faith in companies happening company good here. of I'm troubled I lot invested $XXX, of see go, and see lot invest $XXXXX, have company really so step to a dollars because to shares will run times,

bit is that but time. little price a to you look for what seeing that's thank so the for knowing So forward flag area, happens me in of a your I'll where at,

Graham Chynoweth

about that very note And raise the stockholders the so I'm aligned incredibly this invested enterprise course. value. excitement with point, $XXXXXX business and driving I'll in I'm just aligned summer last on of I Yeah, with

Unidentified Analyst

Thank good That's That's you. information. sharing. have. I all Thanks it. great. That's appreciate for I

Graham Chynoweth

Have Thanks. Great. great a morning.

Operator

further No questions.

continue. may You

Graham Chynoweth

we morning Well, everyone to at which you details some and guys again, we'll Investor first this our for around forward release June. virtual weeks two joining look Day for speaking with right. of All again us thanks the on

So everyone enjoy talk Thanks. your morning and you to soon. we'll Bye-bye.

Operator

this today's call. And you for concludes participating. conference Thank

now may You disconnect.

Minim (MINM) 11 May 222022 Q1 Earnings call transcript