WATT - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the Energous Corporation third quarter 2018 financial results conference call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mike Bishop with Investor Relations. ahead. go Please

Mike Bishop

and Andrea, Thank welcome you, everyone.

Exchange herein the begin, participants remind we These whether or these like forward-looking inherent subject make statements to conditions, directly elsewhere the during press company’s today’s note statements, and measures during securities Energous to the to measures that as and laws, changes defined non-GAAP to revisions is by any financial Also, discussing or remarks detailed undertaking expectations prepared Energous would comparable that circumstances. release the regard in in are today’s session, contained otherwise measures updates SEC call, as most uncertainties the that, are company’s events, or risks those statements. be disclaims are release, Except and with to included to Before which forward-looking call, I Q&A this the financial will will the posted company to required of reflect publicly during to please or with filings in Securities website. Regulation non-GAAP and GAAP Commission. Reconciliations G. by federal obligation

ahead. would of call Rizzone, the Now, Energous. to over Steve Please to like I turn go CEO

Stephen Rizzone

to over our before with and then turn operator comment and achieved turning close we the Brian Thank begin conference call you, strategic questions. Energous Officer. by Sereda, the over Brian partner, will our afternoon on the chip in With quarter, GaN in a to the well me key solutions. recently is third the progress made call will on third will with welcome I call commenting call overall for the Mike. financial details Good and quarter today update. including Financial for Energous performance GaAs and to our advancements I as performance major the as the Chief WattUp

distance contact – of charging the the charging During Energous as the – buildout only of viable position quarter, commercially powering the the its through only wireless solution ecosystem. further solidified X.X capable

market significant like in variety our made power technological up looking our of new numbers generation fast by wireless any more have charging are with transmitter, would than efficiency W of to are ability breakthroughs power, battery a of currently are such better we commenting areas, for than we currently efficiency cordless GaN tablets, heat chips which to contact other charging important higher of to chips, and particularly higher, begin and While support receiver levels other GaAs progress customers power drones solutions. go especially XX interest amplifier as power on smartphones, less the efficiency and in as latest devices. the and GaAs today. to GaN This XX% The fast-charging in the increased options tools, large at available that devices while means

plaguing technology small While of we of of will future of solutions Qi first-generation or every first-generation solutions charging considered has either wireless our to virtually technology generation coil Energous. can only and opportunities from implemented implementing queue to why understand switch XX prospect over plans one of you their over WattUp next orientation technology customer older product and with be object that freedom, available breakthroughs Couple cannot devices. these problems cost releases give you specific foreign future the of the these timeframes, all footprint, elimination indications detection the in low are

paves full announcement to strategic knowledge-based noted meet development, Two, coming stage products from revenue they on the expectations. advancing the which in commercial regulatory Four, brought Energous investment migrate the of position, supporting revenue expanding a Beyond our the our country elements adopters way the opportunities top-tier breakthroughs our certified, key which key for progressing of WattUp-enabled Three, months. leadership of global earlier, four QX and launches global partner regional experienced, about quarter. our XXXX the early production. forward in level. our to next in significant as core and number all continued One, focused product and to business

our ongoing strategic with regarding First, partner. key our relationship

investors has electronics been February top-tier are actively Energous XXXX. consumer our aware, engaged As this well of since with company

approaches During this broad range of a time, period of been wireless explored. technological charging have to

than we Given diverse I the and set support be that relationship product to the outcome the to ultimate now to in noted commercially consistent has successfully cannot our our details development, core advanced earlier, provide actual products. ecosystem to commentary, a while continues relationship, has beyond no new exploration guarantee will that there this strategic can optimistic customers’ be most any as WattUp the recent engineering. of And past cautiously broader be a with ever available devices. a are technology focused to that technology advances launched key in testing relationship further of progressed other level, any on confirm of to the our

that The and utility experience have improved announced three Gokhale of our commercial adopters. is wireless important Method charging global improved to of products. high date, of To long-term wireless ecosystem support the the on provide early shipments to initial charging products our commenting SK of WattUp-enabled Second, target markets. customers, an well-received, Telesys It the WattUp-enabled reliable, and of X.X the the success vitally proven their rollout and respective Delight, are Qubercomm

our the general We announced partner, availability of have our reference design also ODM IDT. transmitter from

new will customers way commercial continue full they partners through support these that announcement from We work work consumer products this be Delight stages with the to hearing SK as from aids Indications of enabled the complete customary final the to are and their as availability. launching of and they the and other regulatory WattUp certifications Telesys steps for products. and companies before hit first year, the market end to hopefully,

ICT Telesys, carrier Summit demonstrate SK part SK with chosen largest Korea, Tech the charging the of September. the Additionally, wireless technology at we are its has Group Energous that SK honored Telecom, SK in in along to WattUp

at wireless is Deutsche by headquarters WattUp the company Bonn, invited customer, manufacturers for Conference at Trends the demonstration present WattUp’s has is amplification, its personal other As designed hearing and Telekom to is available Gallery have aid unique Team Energous. overwhelmingly technology Similarly, products. Germany. at next a and charging equally aid China, important technology sound greenfield aids generation a on charging XXrd manufacturers this hearing in the charging is yesterday, no future Telekom PSAP, note Hearing, X.X our International of Congress earlier the in of to its one WattUp-enabled Deutsche the overview, has the Energous that investors efficiency discuss in announced or largest demonstrate hearing honored for market only resulting these commercially footprint Annual integrating the been charging Energous to expansion event the of Hearing month. Acousticians who option aids There the hearing newly a wireless aid AST, positive, in that to and devices. It demonstrated Austar or intend to RF Aid Response the future capabilities of of into globe opportunity in-the-ear hearing significant fit engagements devices been across into Telekom

major contributors millions factor which have of markets, All wearables, be hearing in revenue markets the hearables beginning year, and will of XXXX. in measured devices addressable small aids, per shipped the form

opportunities first major of anticipation significant across the shipments several XXXX. of focus quarter markets the concentrated of in rollouts Our vertical third on third for half in towards initial product the multiple advancement

a to While leading I’ve by increase in engineering we cannot have on just fourth opportunities meaningful we highlighted. status, report material believe opportunities, progress flow that we XXXX, services our which to these drive on quarter. as and noted achieved specifically much can we in revenue of in path comment or revenues will all which we expect the becoming their progress name clearer revenue cash and across-the-board to chip both breakeven, are the The achieve solidified focused

and broad consumer, other very companies industries. of attractive technology It the next discussed industrial, include technology. as from announced generation working mid-field base top partners, and over along that As in projects our span far-field of medical, of the which build device also These major stages companies us we’re electronic customers product they other and are applications very, with that development. with earlier, is is near-field, extremely XX to out of to our automotive two-tier our products currently products various our a clear

was the Finally, all-important our regulatory major global focus fourth certifications. on

growing Energous Korea Our The and approved regulatory Union, solid base Southeast America XXX markets North team solid has Japan. America, gives Central secured and a WattUp-enabled launches other us in list continuing certifications begin South Further, is products. for make to countries. progress of regional the the near-field key Energous certifications regulatory China, technologies in European Africa countries including Asia, in of to and of

we the continued reached to pace new material portfolio reflects new on increase patent In in quarter, bodies countries customers actively the process progress introducing has into with will and these both is certifications. the now scope with are expanded point on progress engaged regulatory team the and have regulatory believe where a Our the which for Continuing the each on our IP the increasing XX and Energous key defensive the to based value competitive its issued and of expected we of we respective and our XXX the property. be XX applications X of quarter, account build issued use the filed commitment and creation to shortly. judicial the third intellectual The patent patents continuing applications of company applications. positions impact

Dialog with by to and want has to as an continues be unaltered remains partner recent outstanding planned we partnership our been progress with partnership beneficial. continues to the mutually that on, and transaction Apple. Dialog Moving confirm the

mutual earlier. Dialog will where in and a This our levels with high technology, will strengthen GaN of look and of to GaAs the Energous latest and as including has be year, operations, and position real company. our forward resources, again, to expands. with be power the their solutions and diversified and continues only market customer object interest benefit we to our a the as focus as as creation able believe prospects. solution benefits number well any to able the as problem, Dialog’s the to to from been foreign discussed competitive the as we achieve to silicon organization, well demonstrating and We efficiency We detection and opportunity of the well represents to BLE the very barrier top-tier significantly the power and in many the introduce customers, of company Leveraging the are be management. significant for enter which marketing, generation of teams a our leadership charging new Dialog without support, sales, partnership expanded as our fostered attempting management a accelerated the of base, Dialog customers next within The advanced technology accelerates achievements fortunate We partnering customers continuing to new have semiconductor CES to scope to at on manufacturing wireless be wireless leverage opportunity as of these source partnership order revenue.

and to both The be path will a meaningful actual our steady booth across around goal regulatory significant customer to priority. To number these the top functions The to customers and milestone subject certifications. We I’ll are show. shift accomplish which advancement also achieve especially in profitability confident in of our products global partnerships, in towards over conclude, clear Energous In progress and the quarterly and profitability, the booths corporate turn is place in continues EBITDA the customer revenue to am demonstrating our all growth. the from now achievements this not-too-distant and of company the to of call quarter, is revenues make Brian, our achievements pieces all-important mission. future, the I will technology, has you. key in calls demonstrated

Brian Sereda

previous beginning to both revenue the remain services our as believe in and third we the quarter, And our growth, At operating quarter. on revenues expectations $XXX,XXX compared results on totaled We track today, fourth Thanks, we market XXXX in Steve. a and for track. our XX. XXXX of quarter for issued to financial engineering ended the quarter. third Steve growing release September explained, are close royalties, $XXX,XXX press of the see In chip fiscal revenue announcing

prior million been potentially the growing call stock chip lower for the top-tier offset higher quarters chip have in development quarter higher time. our services and quarter $X.X of of $XX.X customers. last both has a cycle mentioned, the setting our Although last in chip of and XXXX that QX some meet area new foundation expansion over lower being of recently customers partners million increase announced royalty year applications, by growth discussed second The QX within from result over our the the this that significant and a our expectation million primarily development GAAP a expenses quarter, in chip half than was This a as revenue quarter's engagement under approximately in modest more the revenue costs on and increase by one continues, million, $X.X for quarter engineering for we as Steve prior would to $XX.X prior third increase into the year. and approximately driven than totaled market of investment primarily entered was but, tier we partner. or compensation. is an fourth development, with third in the We opportunity partially those one see broad

to quarter to a loss $X.XX in net or Dialog, for pattern heads, per $XX.X was a tied managing development, the loss average to with of fourth we in chip last to million, $XX.X first approximately engineering The line share year. This and net on weighted to then third headcount XX.X return half shares on the ended million of of the the in quarter quarter prior which this we XX of year. quarter or quarter outstanding. equates million $X.XX with spend a in net million partnership a majority and million compares spending loss are XX.X loss shares per average to same complete rise loss basis expect on the of engineering. the the a weighted approximately $XX.X share per the share loss normal We the our continue fiscal with a more Through as bulk GAAP $X.XX

little quarter of especially I’ll background, the used company Now, a when to non-GAAP information. move or useful for conjunction for operating on in investors EBITDA our review our numbers as of we non-GAAP a believe for adjusted for stage, with more comparison a a GAAP provides

was to prior million approximately $XX.X headcount to of were net Excluding to versus million, of non-GAAP tied higher, million approximately and quarter, million and QX future approximately meeting with earlier and $X.X integrating relationship of our legal stock in million We $X.X we’ve year, compensation non-GAAP last GAAP the from costs as in QX last base, related in I to driven keeping costs Non-GAAP selling $X.X by operating peak Adjusted higher depreciation This year, weighted that approximately the the a than year. quarter QX, expenses by QX million our second and Dialog, directly global due expense non-GAAP non-GAAP mainly $X.X cash loss We to totaled year. Non-GAAP non-GAAP and lower period million $X.X last engineering this believe anticipated, $X.X the was selling loss potential and of $X.X total million last expanded products. our of the with $X.X $X.X diverse fourth customer demands same our costs. the quarter $X.X higher engineering, our higher to can combined level while operating and chip loss sales, the and declined headcount operating spend the same expenses only SG&A the with QX million funnel. to highlighted, engineering engineering debt. quarter. SG&A quarter fiscal by leverage than consistently in compared million, towards ended reflecting tied or higher technology for increase zero demonstrated $X.X EBITDA $XX.X Compared for $X.X higher engineering approximately customer million. previous we to increased cycle Compared year. into million rose the in period expense the in quarter million with the to approximately the million development million, same prior compared operating than $X.X of discussed being million expected previously $X.X

manage We continue indeed even would to against our XXXX. is in curve our opportunities we front growth of capital that current believe again us the and to working highly model the anticipated with like emphasize into leverageable operating

future regulatory is in largest our of Steve. revenues engineering in and our we cycles world, progress and now steady long-term services progress I and towards further make Finally, discussions. consolidate XXXX. back into and along to Steve's and global as have industrial expect consumer with the What enter by large to underpins and both calls engineering turn look confidence business forward are of announcements the maintained our customers, and the are Alongside some we relationships to Semi. measuring to the through shareholders, and we progress we seeing and in importantly, and recent our mine, I’ll fourth valued one companies commercialization small, most the and with grow that, our quarter call largest chip evidenced this, we partner recap integration as and comments With discussing Dialog

Stephen Rizzone

Thank you, Brian.

have regulatory would needed path, customer devices. disappointment through discovered we do beginning. it. and that been as our technologies certification. remained always new have Many done and all, turn March company we and would Through Energous my what we fifth-year true Before well come since people and chip day the paradigm we anniversary questions, vision, knew as for call final like on euphoria comfortable challenging of have were the and recently Energous. It's over we we operator the major their believe belief I since And XXXX at public the I far and how hard together, to true integration make the investors us as electronic with to one the a optimistic, to right Since vision. confident domestic experienced collectively comment. charge we to cycles, that steadfast, long took celebrated we I stayed global it that of one would with we be in to development have as how in and to worked consumers shift lead a XX then, have

an our that Thank as to and goals our ultimate and team, final be We we repeat, as questions. or optimistic, of I’ll to board to disappoint. with fully thought the Operator, CEO We directors our upside. surprise execute me have never this expect Energous – never as the to have intend me been a we confident Let not have vision, now achieve while ability of as continue end – as take our our let been are we against team and objectives in today. we you. to I have do executive

Operator

Instructions]. [Operator

Grozovsky from Our first Ilya go question comes National ahead. Please of Securities.

Ilya Grozovsky

On revenue revenue purely had confirm offset? QX, R&D the from you royalty or guys. that can is you Thanks,

Brian Sereda

Yeah. revenue arrangement. ship chips Ilya, this we’re point. with got we’ve an dialog the not breaking at terms We that arrangement and our and under conditions did quarter out are and certain there in

So, we’re to numbers. the now, not right out required the given numbers, break

displayed. total So, with that, leave as I’ll just revenue numbers the

Ilya Grozovsky

of Okay. then, much And at offset that think just royalties you it finally, or patterns QX, thinking many QX? look you how as kind about the think contribute anticipate will you quarter, how on if you visibility different you anticipating and in December how both that, are royalties, do you at are if have? well? do And, do products, R&D holds we Do and

Brian Sereda

Just Ilya, royalties. note that, Number on in chip maybe… Steve, products, a areas, quick expect services yeah, both and we do engineering both of growth

Stephen Rizzone

customers, taking – of customers. shipments you launches preparation that say Yeah, see multiple see shipments mean you say, we’ll I for or in think products, in when multiple chips I We’ll XXXX. should customer

if significant chips. least number taking two, a top-tier at one, of customers for looking We’re not

I earlier, revenue. as early going of expect our increases we’re said services still in will and engineering a it's chips so, ramp are, the have indications in well that in quarter it the quarter, to as material all in as shipments revenue both And fourth but

Ilya Grozovsky

Great, thank you.

Operator

Instructions]. [Operator

of Capital ahead. question go Our William next ROTH Partners. Please comes Gibson from

William Gibson

you. Thank

mid-field? How You is talked about certification. the process for going the near-field

Stephen Rizzone

in engage we Bill. The has We’re migrate strategy been to near-field, that that, working with in regulators always the first parallel then the discussions and with go distance.

our on focus Our of XXXX. is going think, to is revenue, going because near-field that clear now the be I into bulk

as do near-field about to lead so we then customers. and again, but both, basis a certifications, I basis, first multiple we of products all, right now, discussions it’s the a on regional global But, really said, strategy the is from And to with can so, these then, all and on ultimately, launch near-field migrate getting multiple distance.

William Gibson

you. to how many XX Thank year-end you expect at And have you XXXX? would employees, mentioned

Brian Sereda

don't No, upwards expect I headcount would much. I maybe that of by to we’re XX. going say grow

William Gibson

Thank you.

Stephen Rizzone

I pretty think able effectively. headcount, been – manage you think, we’ve can to expect our I

because have relationship advantage we we’re a Dialog not out team out sales of course, building tremendous and, course, not our organization. the with operations Of building we’re

We’re leveraging Dialog for both those. of

to development, move from we more engineering to prospect expect as customer continue over expand though, We engineering to and expertise customer-facing our base. our will of core

William Gibson

Steve. Thanks,

Operator

from ahead. question go of next Thalmann. Jon comes Hickman Our Please Ladenburg

Jon Hickman

Hi. Thanks taking for my question.

WattUp You consumer mentioned products, technology. might a you thought of include that number the products,

narrow would If the you two your consumer bulk could XXXX, one it of might which maybe to you look imagine to be out shipments? [indiscernible]. down products or I

Stephen Rizzone

Yeah.

mentioned, I smaller products majority XXXX. the of As I be factor form revenue will our think the in

XXXX. clear that have think products these Since come in starting conclude starting the from ones process to that will to that next these opportunities driving the hit the latter there. as part the and integration XXXX. summarize, power the GaN GaAs The and greenfield be we market chips, are be of which in chips smaller those I coming We ones contain in integration of the half first year. technologies new expect the stages CMOS-based are see just these majority so revenue higher to CMOS now, factor, available towards Again, applications will these of and of form generally can final qualification, or are now just the are chips, are first-generation into the our in the

we’ll the the of into opportunities year, end coming about the talked see fruition. larger that Towards high-power we

Jon Hickman

putting might and down and you the of kind to the they've quarters they're strategic studying for quarter, speak, qualifying so some hit to this when little previous out. comments so then, products actually could you say that your I individual key partner, bit, your technology, And shelves pin now if just technology that been in

Stephen Rizzone

what I’ve remarks. But, a prepared said we electronic can't can progress. to pleased really and level with in relationship beyond ever be commitments our comment has make to we nor The in again, not – cannot as whether can't will Again, or definitive new any we’re products. technology consumer any this we their comment available moved statements the we make

Jon Hickman

product Can then? you engineering define

Stephen Rizzone

and engaged It into products is where in technology. we exploring the opposed the develop research of are potential as specific general to

Jon Hickman

helps. Okay, Appreciate thanks. it. That

Operator

This question-and-answer would concludes any turn Mr. conference our session. I the to for remarks. closing Rizzone Stephen like to back

Stephen Rizzone

Thank to and you, everyone, you. next in even quarterly we for more talking forward today day. look participating. We reporting forward to our look call Thank And progress good to you then.

Operator

The conference for has presentation. you attending Thank now today’s concluded.

now may You disconnect.

Energous (WATT) 30 Oct 182018 Q3 Earnings call transcript