WATT - Earnings call transcript Q4 2019

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

Operator

Good afternoon. Welcome to Energous Corporation's Fourth Quarter 2019 Financial Results Conference Call. All participants will be in listen only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

to company's conference Investor like Bishop to now the with Relations. would turn over the Mike I Go ahead.

Mike Bishop

Thank you, Kate, and welcome, everyone.

Before remind detailed company's Securities participants to inherent company would in during the like the today's remarks and are in I Exchange statements. and the subject session whether forward-looking will we call, the make uncertainties or filings statements, prepared risks with Q&A that Commission. begin, during These to that are

any federal forward-looking those by in undertaking securities or required obligation otherwise please disclaims or as financial SEC these are the or website. that regard events, which Reconciliations posted of publicly Energous to to elsewhere as Also, circumstances. defined measures included statements G. note updates release release, to Except is and during expectations with comparable changes to the laws, call, financial herein on conditions by in to revisions will this Regulation reflect GAAP non-GAAP Energous most be the company's directly discussing press measures today's measures non-GAAP contained

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

Stephen Rizzone

Good year welcome call. XXXX and afternoon quarter fiscal conference to the Energous and fourth

Sereda, with Financial call business our is I will Brian Officer. for begin to over today me performance, then Joining update. comments Brian company's the the on Chief and turn a financial

questions. We then call the will to open

consumers flat, Energous and of in by that to the shipping united a Management our in the relatively Board Executive of will and inflection at off Directors increase Team to XXXX. company customers grow point our that we fiscal start revenues saying the me number expenses products belief are positive that is remain will Let of expect the the and

matured a past confidence when to and of The such which number into believe What elements are there answer this is years. gives have compared statement? the changed to to very going business year straightforward. We Energous us a the make

that announcement the to certified call in let technology being me sale attention was for WattUP regarding made First, the your today Japan.

for based seriously targeted a market the for Japanese for by launches. domestic such wireless integrated There Japan markets Energous a are certification projects, will this with milestone several company. industrial needed reasons top-tier now opportunities is green-lighting open Japan for has scale We anticipated WattUP domestic specifically and is who now by also is consider multiple WattUP technology. to significant XXXX several followed large Japanese dates. products this launch integrated forward believe the power with market move and to companies global consumer products why key

such or until has for been has products sell path consideration to as the an Europe, stated, As tier our three of WattUP important a X opportunities. Several Asia America, of certification often in have global certification products rolled all slow in number materialize. been enabled the development the ability and to North time markets

hampered engage creating While efforts clearly continued X global in some with a tier we path certification. our of successfully with this to them anticipation opportunities, to

Asia-Pacific be status Japan, basis. win in high there the approval is design achieve the regard Japanese in these it, with number of has difficulty region, certification can global to regulatory this likelihood on coupled certification, that obtaining WattUP the belief We technology believe potential a based the a the the high such can move the a to on in holds if done projects a

could on be global of its future in one certified remaining leader a Energous WattUP was technology not whether concerning viable X.X wireless power open and questions a or the last as Finally, basis. the the rollout

of the and Asian-Pacific WattUP approved technology in eliminates the affirmative, answers the certification overhang, this risk the in and fact Korean believe While certifications Japanese major We be question to profile a remain this establishes the be certification Chinese the completed, company. market. the can decreases that the

To grown the to and a has underlying of a significance greater understand how matured countries power as regulatory expansion of needs understanding we Energous company. business. to this, XXXX going the the to wireless have certification addition Japan, In appreciate including into of XXX one

went while market fastest executed the progress step of path We with invention, to early thought prototype, breakthroughs, engaging new to two technology effort broad all technology. by market. completely international a an we first and and with for the of trails designs, on be blazing customers company's this make years vision what we spent involved Recalling and first to decisions the pioneering early public fundamental virtually regulatory domestic innovation array a a the driven with we core new would the every

and This process resulted XX distinct with from while technology, in chips IoT in Moreover, XX processes applications. over markets, GaN its MHz, XXX frequencies consumer technologies, strategy all [ph] valuable fabrication XX different multiple by broad was projects, six covered spanning Energous spectrum roadmap, proof-of-concept began GAZ engage and to company evolving of around regulatory the the XXX developing a in Energous targeting world. broad patent to go-to-market CMOS, of and spectrum this technology and and patents agencies GHz developing

faced clear of was WattUP doable, achieving [indiscernible] with would the was regulatory a of clear became challenging. in cases global were identify competitive markets power would as we but certification terms for could landscape. established the allowable that certification WattUP which and fit favorable Energous challenge be regulatory in technology good It global technology became with and to conductive the strong engaged with new safety Therefore near-term these that health initial that compliance meaningful It achieve agencies, also a certification be use standards. a and

met sensors. and to challenge WattUP technology and hearing glasses, XXXX commercial path expansion hereables, smartphones, target The been new fuel industrial [ph] roadmap XXXX clearest smart This safety, PSAPs, in are revenue. fastest, penetration the markets gaming, or products personal sound we and IoT. markets aids, believe that we include possibly military amplification public and In market represents for delineated clearly have a has medical

relaxed become the more and will beyond agencies only regulatory WattUP WPT as believe, with prevalent the benefit in capabilities products time, with what technology well can more of IoT markets. certified current become today. regulatory can These comfortable also and as be changes as Wi-Fi, over the the We go the evolve be consumer case and requirements was

As requiring the second global regional a led in near-term. global certification to regulatory noted top-tier the could Energous realities from launch third tier focus to would on reprioritize opportunities and earlier, who and opportunities, basis

that Going into basis Europe. a cycles XXXX launch opportunities our in accelerated company the regional product the will is U.S. on reprioritization on is complete and now focused and have and

their in Japanese our plans, on to the certification with both and that regional resources Given enable delayed and WattUP anticipated we a facing of XXXX. company global focus product opportunities broad positive and spectrum to response launch be from expanding XXXX a simultaneously enabled top-tier scope dates customer the opportunities, in will

revenue, into confidence. the cases able an in-depth to armed XXXX quickest going path the go-to-market that this the to executive our Therefore, knowledge and team current customer of use environment was represent year, develop operating global plan with regulatory with best the and strategy current

you The available to from new has on fully Energous approved for Amazon. this consumer. a WattUP is customers enabled that PSAP to the year fact the shipping and product shipping is Delight is Also a partner regulatory commercialized

outset commercialization associated has revenue, We that have between made not significance the crossed. with the but that product announcement to been clear fact the chasm developmental is very from full of this the it stage

next wireless full announcement Delight that transitioned successfully to that It also generation the and note the represents important product first has commercialization. is only to

China, by to shut the been has chain. expect down by products We the aid. headed impacted market additional which this possibly see NewSound's in coronavirus hearing in Unfortunately, quarter workforce NewSound the supply their and market launch

We understand they are now. online just coming back

monitor to or Chinese of based as this continue situation adopter customers dependencies. large percentage are have our early will We in a either China manufacturing

related Japan and delays customers Korea. also are our We seeing in from

after understand WattUP next but that. few we murky, resume on that is of weeks should limited product the availability basis, visibility enabled the with operations Our a limited in shortly

will path our While will the a gain other certification ramp for will larger the they and also customers. provide significant regulatory technology provide enable key WattUP these product in they early and technology. further fuel the of they are future markets They for a adopters in year, validation that to current for foothold revenue

Finally, ramp they our opportunities the these year. startup experience early larger gained adopters to this of when the later manufacturing process in up begin will benefit

target to on focus new opportunities as our XXXX, the smart intend markets in aids, hearing stated, glasses, for sensors markets. hearables, we field Regarding medical and

significant markets. mature credible advantages, to approvals a technology, and use strong customer competitive these cases, have path of We regulatory for all funnel

be addition, In announcements markets coming stakeholders hear in major in. weeks our participating two can the regarding will Energous expect new to

technology likely expect and small factor form our charging completely This we low announcements at distance technology. differentiate the in cost, will new, a regarding can clearly stakeholders weeks in a coming desktop Energous believe radios, lamps, new First, form as application basis at the be standalone a transmitters smart distance from customers well charging speakers, the and it first will our transmitters. of of table as special clock the

at will same applications. anticipate charging Second, a industrial technology we specifically core of consumer IoT will a harvesting WattUP, opportunity major this for for be what form distance and the

our for partners the harvesting develop bar generation distance. while the technology, engaged to We actively will with which next multiple existing are receiver, and leverage captured setting power

opportunity the We value coming this for will months. a displays, devices, and and sheer this details fast-growing market be the compelling sensor, creator the associated in retail But revenue tracking on more opportunity numbers providing make with company.

the call additional Brian. A comments turning before few over to

in both we as Dialog leading the commercial continue their semiconductor industrial well applications to in with companies presence leverage as their fabless partnership and one Our strength sales strong operational significant remained of the is as world.

business to reference month increase interest strong. customer basis. design of remains month and earlier, scope on technology our noted qualified continues sent The opportunities in a kits being As to to number

with today, to defining portfolio. use with charging are as cases for regulatory Japanese technology combined focus the enabling wireless approval path such X.X on adoption. successes continue announced diversified compelling We a When we our

our in expect shipping at of a consumers, In progress the WattUP opening the ask promise We wireless and of we in our markets of have momentum the to all believe the up charging on X.X enabled stakeholders all number to our place based of deliver of of generation to components ramping track announcements, next of benefit future website a products charging quarterly new on increasing and calls. distance wireless summary, our stakeholders. generation coming and the increasing new through we revenues form necessary We quarter-to-quarter technology. to

to you. Brian, I'll turn call the over

Brian Sereda

Thanks Steve.

releases press announcing announcing reminder, one Japan Before two today started, financial ended year at approval. issued and we a a our I fiscal XX, our XXXX, market, of as results regulatory December close for second get

recognized financial for we year. XXXX approximately $XXX,XXX same the the the was prior quarter last year. in quarter $XX,XXX for our fourth Summarizing to $XX,XXX in results compared revenue to compared fiscal approximately in Revenue $XXX,XXX

to the customer Dialog commercialization knock down the last with royalties. over introductions Steve's progress and you section, and of with partnership has As ability continue in and our as company remains product havoc year, strong follow-on our played regulatory along important to to engineering have barriers ship heard timing predict we that made interest, the

have in in engagement, Given XXXX to under the progress of generate our range. seven-figure customers XXXX we and we potential highlighted revenues for expect made fiscal the

million, a $XX expense XX% million side XXXX. GAAP the total in down and On $XX.X were approximately expenses million fiscal $XX.X basis, on and from or

The associated decline fabrication engineering of stock lower cost, plus to compensation. and chip due is a including combination lower costs, headcount

we For year, $X.X due the fourth expenses quarter of additional but to the performed by million of quarter, on third approximately GAAP last that total $XX.X million our declined chip the $X.X to fourth last quarter, tape-out the to in over than increase expenses quarter investors work XX% mainly approximately GAAP in call. million the an alerted lower million $X same

driver compensation or XX.X XX% fiscal increase per and approximately XXXX compared declined quarter. year shares. to a the share the on the was prior XX.X the on of to million remainder million by million XX.X million the $X.XX $X.XX basis GAAP compared when $XX.X or primary in loss per on share to for $XX.X of Stock million Net shares

year. the $X.XX loss the quarter, This per or compared quarter million [ph] in net of fourth $X.X share $X.XX our $XX.X loss per results to was lower is or and of million fourth similar the X.X million annual share. For the to last lower XX%

accounted $X.X loss we additional as $X.XX net in mentioned, QX for the was million just the expensed approximately was per quarter this the fourth fourth but I as in fully of year tape-out work The higher and approximately than net share quarter which quarter. chip loss completed

conjunction our or of when provides now with adjusted that to to go our in as non-GAAP like over we a expenses information. view tool believe non-GAAP useful investors EBITDA would GAAP used I

$XX.X million million $XX.X Excluding non-cash XXXX. lower stock total compared prior the when and approximately of incurred $X.X depreciation net expense in was $XX.X million, of to million approximately in $X.X million, than compensation year, or non-GAAP expense less XXXX expense net XX% the non-GAAP

areas associated markets with our The future we R&D it lower certain engaged largest chip believe actively we revenues drop in tape-out a the signals where and expense comes of in customers. third-party we generate expect of technology and maturing that development with costs a including number will from are engineering vertical

XX% Spending in represents just engineering of structure. regulatory and our non-GAAP over R&D and cost

historical increased non-GAAP fourth year. year-over-year quarter. again and $X.X down the On XX% expense declined that to approximately quarter However, from I these of mentioned in this million $X.X our the three almost $X.X non-GAAP from Compared prior non-GAAP incurred same third million, costs incurred by of XX% due in quarter expense last spend approximately is fourth the the areas. chip million basis to by $X.X were a million to quarter, tape-out quarterly expense in or non-GAAP rate

areas to commercialization in regulatory support capital ongoing engineering of and majority Dialog's the our sales operations, we as efforts. and global invest marketing, related continue such in With

In addition, at company costs protection the We and legal end significant of costs year the compared for intellectual are ended our XXXX. employees of including property size. company to with XX public XX a

expect our structure, support on core fiscal to We charging to on market of bringing RF this based this focused examples range is additional headcount maintain year. to which

non-GAAP XXXX for the was Our or XX% $XX.X lower net the approximately loss million, net $XX.X million prior non-GAAP million on a than year. in incurred loss basis $X.X

earlier non-GAAP loss of X.X reasons our non-GAAP the and $X.X loss non-GAAP For $X.X in than discussed in or net than the net quarter million $X the approximately $X.X quarter fourth million, XX% the for higher approximately million quarter, the I prior lower fourth operating was million net loss XXXX.

current designs the past diverting our years. commercialization XXXX XXXX year cash remain in investments regulatory levels, and chip fiscal as versus new For expect we spending other to developing to efforts below fiscal multiple

adding to structure partnership operation areas traditional as sales cost rates Dialog. compared associated years with global and growth. leverageable our will to without thanks those lower remains part allow costs significantly us in prior That Our run to in scale revenue with such

In fiscal the million year an reduced QX debt-free to of aftermarket B. stakeholders we volatility cash in cash. ended Riley. we on all of October by agreement We mind, fiscal of million in with shares commonly resources XX/XX fears expense known expected $X.X navigate XXXX, initial view run balance against recent with sales election through reflects market or issuance as an sufficient ATM XXXX interest cycle. fees at the The million this rate, Keeping a sold, $X.X along $XX.X believe net our have associated while raised entered costs. with legal and continue driven the into last upcoming approximately balancing we to net of the pandemic including

to Let me now turn Steve. the back call

Stephen Rizzone

Operator, Brian. take will you, Thank we now questions.

Operator

ahead. Desilva first [Operator Suji from Instructions] Our is Roth Go Capital. question from

Suji Desilva

Steve Hi hi and the on Brain, you made congratulations progress here.

push are if of can just much kind is coronavirus guys to of disruption just of seeing get a possible? on impact many you maybe weeks launches average you the sense question this about So how on in quantifying back here, talk maybe how ground orders, the

Stephen Rizzone

murky, measured in Again, our of is this but weeks. is view it

work to back I that morning. I was as office XX% think There they that starting now. noted, in come are the about yesterday to

as that, we So problem adopters. completely see majority have as dependence that our like a that. unless four I with to don’t as six in chain for see the mentioned Chinese manufacturing of something will of eight it this supply gets this is impact infrastructure a and on the significant we we We that out control infrastructure early caveat earlier, weeks, it think numbers to something us of now long-term the

talking And but right how about out, we'll we weeks. now are this plays to see have so,

Suji Desilva

to that's the customer look four fair. can then, today, have Understood, magnitude that what I with quarters? or that you products in think you I end XXXX, come by three think correct and product me the one of is can if market do pipeline And what am the but throughout very like of the that of kind next market wrong,

Stephen Rizzone

our to the markets impact of Brian have pipeline range. seven-figure guidance that we factors products the in and of additional we view are Well, I'm to that a several give we quarter. a as anticipate we to out market. to as to products we begin have this quarter number as is multiple early certainly will conservative as we in they about, will hit to a not market. quickly sure because medical there ramping that in significant a come and be sensors have markets clear other And in a particular fact us and aids, view revenues I'm do prepared to said, talked coming this which will the that hearing clear want begin to the We number give how market not how But least these PSAPs, the that next potentially that roll than

number I revenues as our quarter-over-quarter see products market. ramping the are We as of customer to and said in shipments expected the

for that particular point significant than what lining time is coming view we as of this year we very can said, rollout how a a kind together clearer I things is last at expect this regulatory so in much approval, this queue as where and see. that getting very, have to of customers And up all year We are department to will were busy.

Suji Desilva

on then of a here. Japan Okay, great. And couple questions

in behind are a with China of them, did of how might First and place? those of that's I'm if far into fall being spirit to and how really when Japan along all, Korea asking those about, think long taken? metric this the kind process good

Stephen Rizzone

did problems, a to Asian year markets, of but and would at is represent been this to that that a do Well, each environment. aggressively the we year in same we probably that made believe Korea is we and it certainly path time. They Japan year and a over we've in much measure pretty global full it certification Korea, and China different a regulatory for already possible the today major three there the We China now close path all half. we complete certification engage engaged we've believe statement the that will

Suji Desilva

design the segments lastly here, the there term, and near of regional Okay, particular for strategy or Japan with to markets then any the to cycle think the is most you how opportunity and launches? two sub on that term And XXXX. just approval you that specifically gets length the can here, said in you have those of cycles, you products What approval with sort about transition kind that talk near launch Thanks. design Japan end inter product launch are relate? the

Stephen Rizzone

now dependent hearing glasses, hearables customer. strongest upon are right smart aid, sensors with think are product The medical Our cycles markets and PSAPs, ramping. I the

this an a from XX-month see is products expect cycle. of expect X be going would those a of to end of year, will consumer there we the third would you until possibly, to as launched into meet towards number of of the to beginning this opportunity start the period, green-lighted see that why, we think we result hands hit or really again For year quarter certification the is those to expect tier year. to and in That's it probably it consumer next green-lighted the mid-next the can domestic market requirements sales a chip see ramping

Suji Desilva

the Brian thanks Steve time. the progress, again, congratulation on Okay, for and

Stephen Rizzone

Suji. Thanks

Operator

Ladenburg. question from from is Our next Hickman ahead. Instructions] Jon Go [Operator

Jon Hickman

you Can hear okay? me

Stephen Rizzone

hi Jon. Yes,

Jon Hickman

intend next I charging So make you ask like to to I, what then distance to away or markets desktop us understand announce in applications? take did I going IoT exactly markets, the next that here? actually mean What partners the product so a and you new announce exactly couple want to few there months? can to be these these Can a of in two you from at by sure the wanted two months in the you is

Stephen Rizzone

this. I elements think there's to two important

can review of the based possible, give a requirements. be through perspective understand I a realistically call move in we certified, basis regulatory gone that some you we how global can on have me mentioned to and the First product all, what and portfolio on and here. what historical is regulatory let very detailed a those elongated earlier

and It first our regulatory power became launch as global distance work order regulatory requirements, clear done from technology as to products, for meet needed both distance. as it from our be a the customer available to well requirements desktop as for perspective the at well to that products necessary significant a the to customers cost a perspective in footprint

completely begin coming and have really that just is market as very will transmitters, we the the be the what based the in the We anticipate technology very first early form completed until the do that of the we a likely believe product hit this the cycle cycle. but new transmitters will This next announcing will be will weeks. in beginning basis of year, the to the announcement cycle. not We at year on these late desktop very,

Having clearly versatile has terms for to will IoT has on major the available contact this the on its very markets have be applications. harvesting in provider we technology core in that, that And ability company. specifically commercial us based the differentiate zeroed to designed major, very, as largest we power time, this opportunity distance wireless the will said technology. be a and same only This and do industrial at of to and been the company as both

that as - implemented The retail and mentioned is on a both really I are displays basis industrial on of and very and significant. number being global basis, commercially sheer sensors industrial an

be in be in will be very well aggressive we and these that leapfrog we we very active so, what technology markets. and position market releasing will And this will participants will believe us

year. contribution this to degree for XXXX, be but top the more see our was very this activity. next in revenue of and kind will that the it year, of will very significant more POSCO we think kind these example first element I significant relates a of can sensors and earlier bottom to to us expect both sensors and the line company you we as and a this announcements believe talked impact and a that The will to not about of have

Jon Hickman

when that current goods lower talked significantly think So, this I of generation, new that… was at CSU [ph], you Is cost here versions? we mentioned than the

Stephen Rizzone

that's correct, was it much expensive. been have that's we key been with released we transmitter working When XXXX the much and technology. factor the customer rollout considerably So our more in complicated on larger And and that transmitter distance in perspective first XXXX, and the with of the more size, a since customers. engaged distance certainly

It technology decreasing to became as small, desktop utilizations very attractive to to actually clear really very, incorporate itself that technology this had as and that speakers, said, are conductive very first the smart a I which the and increase most markets low-cost to while simultaneously into way this become had to radios the become table also lamps, out the cost. we WattUP footprint figure clock power of had

well And conjunction will being I it significant of because an in will program very three this impact appropriate is that's we objects, be time. pending, have why all and at announcing it is a this on out think announcement very with early received which the those company accomplishes adopter the roll

Jon Hickman

that? does so you seven I then one Okay, $XX more mean somewhere that and from how should say question million, million me, just figures, is when $X that understand

Stephen Rizzone

Yes.

Brian Sereda

Yes.

Jon Hickman

as just Okay, I make to nice the Thanks page was you. wanted here. I and same on progress sure

Stephen Rizzone

Jon. you, Thank

Operator

conference the would closing remarks. like this back for Rizzone Mr. turn time, to to I At

you, closing said to comments what's reiterate few Thank A today. operator. been

on that themselves inflection indeed to and at not an the based compelling product but way a is rather a breakthrough, fact hope First, provide the such a in the regulatory for expressed vectors future the point. today, clear picture customer confidence or have event technological some aligned and that a have is that company we

positive move the and final approval the global come quarter-by-quarter the as from customer for We here upward push stage anticipate sets Japanese WattUP said technology regulatory shipments certification we that Further, this now the to I year. will on expect basis. a revenue of towards

as propel very new a new desktop and launch company both certainly create IoT for at for industrial while the as second harvesting successfully generation and charging applications of the into as markets performance both current And value size, well has that well and applications company, significant the the positive finally, cost leapfrogging a a release of on will technology a solutions commercial distance line top the completely fast-growing impact to bottom stakeholders. our power as have

We of do you take conference expectations. expect you faith. Roth progress We in additional that not We track can mid-March we and attending hope your this to expect the to coming the number will Energous Niguel at we conference. our as these as Conference you well on on be attention. in Please performance, see I the and for thank to and announcements where will ask to that look as a Laguna announce you call I progress deliver weeks. next forward can to in see

your Thank you for attention and good afternoon.

Operator

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

disconnect. now may You

Energous (WATT) 26 Feb 202019 Q4 Earnings call transcript