WATT - Earnings call transcript Q4 2020

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Operator

Good day and welcome to Energous Corporation Fourth Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Mike Bishop with the Company's Investor Relations. Go ahead.

Mike Bishop

welcome and Rocco you, everyone. Thank

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

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

Steve Rizzone

afternoon, call. and Thanks Mike. Good Energous' conference the everyone welcome fourth quarter to

today me and is Officer. Joining Brian Financial Sereda, President our Vice Chief Senior

company. our strategies of XXXX year an growth our overview the performance. quarter of believe outlook. and and review fourth driving We momentum includes was our today agenda Our building milestones team future we towards for year A a upcoming are full

opportunity despite has challenges our for expand contact delaying distance the technology our to especially technology on had PowerHub many engagements in revenue. of achieved the WattUp customer the distance the and in The which resulting Given introduction in progress a customer of based technology. impact continues pandemic, we of the technology, validation

is PostureTracker In This received quarter terms reasons. Method Gokhale's announced we announcement FCC important fourth of for the certification. the momentum, two in

serves companies it to as continues and the expand additional increase stages or WattUp number gaining do that shipping of technology end either final validation users markets is the served. preparing to the First, to are so, acceptance as in in

marks for and charged entry the sensors large Second, and wireless distance into the to charged include market transmitters by and expanding trackers. rapidly formal Energous' Initially transmitters. announcement evolve to expected contact

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the electronics following been consumer industry. you've If

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available soon, Moving expected quarter. end early to with to onto hearing the customers segment, available or hearable be current as we have aid two as either possibly now the users product

Energous their the be will simply NewSound partner Korean onto well PSAP to to a common the we with levels in monitored charge called the The was Primo for first the SK drop providing excited special the of EarTechnic the WattUp technology. a in WattUp aids the aid then on first released on a A in our believe model user as release a needs with experience. of appropriate the charged placement announced be power Europe. place and the that, market - true devices by we're new initial market levels based Telesys, launched that from significance charging followed hearing information device charger in Tie-X begin hearing batteries. Europe, achieve. products hearing M enabled the their technology will hearing Delight selected management The is will and also charge be to of milestone internal to these has EarTechic Battery as hearing likely aids received identify by will aid aid are the the Tie-X, the Energous charger which to

models WattUp aid Further continue hearing ear to ability in WattUp the many. problems transmitter hearing technologies the with special support interest coupling full to generation options. first shapes in pose We charging product ability hearing of coil-based see devices to is support the to manufacturers aids which including for technology unique a the to one given momentum aid

of a number a charging Given ability hearing skews. engineers aid broad use transmitter across and designers the product common to platform

contact there response, military future. interest generation WPT in expand We would XXXX. the beyond interest with markets, in Xentris unique vertical companies technology continues Energous opportunity We spectrum potential to variety market second the including both working solider announcement hearing an and sector broad in [ph] like WattUp's broad, will dedicating on like in in utilizing updates capability to now are and developing business. to solutions some be charging support focus military sensors exploring and provide who federal a a of application aids. on resources the charging and are across customers is that our particularly strong to our believe pleased solutions I distance of we're of

investment federal applications percent in and military revenues. meaningful the already a our could starting future becoming to which this are result will of We benefits the of believe see we

technology China. hearing still solution integrate battery application. the of spectrum To a development the and significant in single devices medical top for effective broad based are Grepow important manufacturer and to target markets tier with market centers. into including cost charging in has easy We a implement, Grepow, aids, share stages battery and

We adding solutions we're be disruptive expect sensors. to or technology design. as need will form quarterly today lithium wirelessly with designs enable to today's earlier of face in partner battery hearables, our Thinfilm constraint their a second and devices partnership with this in future for is to working wearables some leader applications around promote a calls. solutions durable, wireless report and additional wearable a the challenges ultra-thin such market. these Designers factor complementary believe that progress in note, solid charged portless very to our for Thinfilm enable of charging types side highly small many state connected form we On to together factor, actively with waterproof, RF-based truly we technology thin micro battery applications announced

and our on, progressing. partnership Pasco, the Moving Telesys [indiscernible] with collaboration in SK with efforts still is conjunction of

have field has Cost accelerate regulatory we tracking device. formalized. opportunity is developed platform enabled WattUp recall As industrial ODM ultra-wide of been a who fortunate the successfully as consumer the believe WattUp completed will major last certification a support consideration contract a quarter, for has for We this a the introduction band new common trial transmitter as of you'll of technology. always prime to receivers. soon enabled Energous is Korean

economies scale, We they direction this have of can take advantage a number where reduce and of of to lower and cost. customers enabled direct startup prospects in risk

Thereby see We WattUp the role support on and technology and Energous them. of more development the the customer As continues requirements expand demands internal mature. [indiscernible] and expanding we both of do as adoption ODMs to our resources. shift lessening number

update pending. certification WattUp regulatory important on efforts. There an for markets India. remains China, Now is Korea our technology of where and

these to before is have markets complete certification year. to path goal the in of this end the Our three

we continue with dealing investors caution we're However, agencies. to will our government that

certainty The US as increase will the possible by first, of So to important in may we timelines. new administration. India and number likely believe between the with and market China accelerate as of trade the expected in We China improvements in be no the this customers well the there situation continue China. as be relationships terms by of followed Korea impact can

a new zone has power the our very advancement important side, for We broadcasting implications the far-reaching very, technology major one and had strategic and PowerHub This Energous made charging announced announcement the announcement meter. in technology certification PowerHub. a both the major of On designated out to distance Energous. regulatory regarding in technical September FCC expanding

to engineering transmitter met milestone health to space. validation this pre-defined Watt investors for as team are transmitted which and back of was power This and small a that our aware, for complete long concentrates certification greater in achieve was for are to FCC XX technology three-dimensional in of industry XXXX, As standards company an an a leading certification developed represented the allows first breakthrough the over industry essentially our distance Energous than multi-antenna as power power added WPT. X distance Part December safety air a most our be

However beamforming in technology. response implementing to customers and cost concern about complexity size, of

regulatory meets completely announced. easier as health inexpensive, in safety teams a September by standards implement the combined and antenna form mandated the to factor new non-beamforming efforts FCC and a developed which their is technology Our small that engineering all and single evidenced

in used applications. While an be future technology maybe that beamforming continues to active

to Our are the process. We relationship. value have is been for earbuds, clear, Dialog accelerate To company a seeing like the will issue desktop shifted very resources environment about both Dialog in may the early may suffice the expected things commercial that sits reside. announcement isolation strong be differentiated Energous beyond and Dialog in battery to well and major it our we're At impact of decisions it interest we're interest workspace as this have ultimate Renesas both interest acquire is to as field to be asked creating in on for support our far the in be appealing believe we're far any distance accelerated keyboards, partner. revenues not a the and in and has relationship where our Renesas believe distance continues to say, our complete or an the mice, will focus the traction Though this wireless PowerHub essentially in has the aware we But especially the of Dialog. applications. help recent to anything is market the experiencing take time, of investors this expectations. light is from our desktop months which realigning I is as that powered PowerHub to address of on The creation and acquisition uniquely go-to-market charging Many to desk. moment. the a rapidly bluetooth

equity at-the-market will will set our provide is a financial balance or the the completed we Brian, fundamentals. grow will sheet I quarter, you. for and to ever now us offering ATM. It fourth But the solid our During the strongest. over foundation call to turn additional has details. Brian been

Brian Sereda

Thanks Steve.

announcing started, Along XXXX. get fiscal for close we at with I related two Before a of our announcements. financial results press customer issued release market other

I to commercialization opportunities. for We're fiscal into signs financial are believe our that Before encouraging the what XXXX. get lead from discussion engagements seeing we will

to underway their possibly products. Some distance these independently yet the projects into charging product. own been others, have want to functionality in running existing key technology these charging for at need several Where customers for of particularly wireless to the our engineering is quarters wireless unreleased products of to as and X.X pivot internal the integrate engagements now

three companies concepts. as several in consumer weeks addition of the announced In seen, may major some last charging have you RF-based and election

space. the this in believe continue We understand to We leader science we're it. behind the technology

third expense $XX XXXX. to fourth We in information. the of property to GAAP compared for than share year. in million XXXX. compared of stock commercial Revenue share in and a proprietary in approximately than a the $X.X semiconductors. in key for per compared to including net our $X.X approximately of to or in on expense was million, Total in million outstanding revenue a loss fiscal of quarter XXXX, lower Total loss like same GAAP to compensation $XX.X the fiscal in review $XX,XXX now on The per million R&D in of per $XX,XXX than a or made development $X.X $X.XX million as year. we $XX,XXX EBITDA the quarter have or on and healthy XXXX $X.XX of we year. $XXX,XXX to compared investors to total in than and last recognized and combination expense Recapping quarter QX quarter lower $X.X million third quarter loss when million quarter loss built for basis results $XXX,XXX to in weighted million loss non-GAAP This approximately provides support XX% quarter $X.XX and loss headcount million $X.X the million third adjusted million on expectations investments $X.XX basis better the regulatory average progress. last loss [ph] slightly cost would believe engineering I to portfolio was quarter of due basis We understand $X.X with intellectual have was net essentially the million expense to our shares a fourth loss a technology issues lower used Net the XXXX of formidable $X.X in GAAP below lower year. flat that and primarily non-GAAP a Net share the and in fourth GAAP for last the $XX.X of for per expense $XX.X loss lower tool XXXX. translated costs. fourth the lower chip year prior $XX.X was share total was continued

approximately compensation largely Excluding net approximately in fiscal in approximately operating due was lower and and million million expense $X.X of $XX depreciation non-GAAP to XXXX. to Total compared operating XXXX. non-GAAP and for non-cash $XX.X R&D is charges million net increasing over structure This we customer in XXXX talent XX% XX% million, COVID. cost development increase lower stock expense our $X.X by and Spending just of chip XXXX. represents our response operations of versus regulatory non-GAAP SG&A slightly from despite in fiscal to XX% XXXX R&D higher in engagements engineering sales offset as in expense in spending down

the see quarter declined quarter increased million expense million. Compared year-over-year third $X.X fourth $X.X in of $X.X employees compared reduced as year. last to XXXX We XXXX. end XX new in of fiscal and the expenses $X.X engage the we the ended prior years same to non-GAAP modest customers based For expense of in on non-GAAP of increase total WattUp million quarter other a million XX PowerHub could after by approximately we at with two from from charging by XX% $X.X distance And approximately approximately operating spending, the year non-GAAP million expense to solutions.

per or This non-GAAP than a on was million basis $XX.X million $X.XX loss. $X.XX and incurred per in $X.XX $XX.X share XXXX for loss share loss approximately lower million the non-GAAP net Our was XXXX. net XX% or

in million our or lower per the For fourth $X.XX third to $X.XX per or quarter the the than quarter in per net non-GAAP $X.XX $X.X share higher $X.X quarter net loss million or was million than million Non-GAAP share $X.X Approximately $X.X loss million fourth XX% non-GAAP approximately or $X.X quarter. loss XXXX. the of share. last the

balance with call fourth history million the Steve. at-the-market debt to of now back the We the the company. our During we XXXX. of end of strongest fiscal our I'll remain to $XX.X quarter free turn cash in sheet balance completed at XXXX, offering raising the the

Steve Rizzone

few over I Thank comments call to before operator for A you, questions. the turn the Brian.

over earlier, our PowerHub to the As a noted transmitter important in impact has based be with contact and long-term profound air accelerated I WattUp the the on an vision. regulatory continues of development technology the interest clear, approval To element company. be coupled had charging

represents require will customer are ecosystem a near-term which we revenues important both wireless to distance charging. As true adoption wireless the to believe contact contact company. both Further and the charging very of and path

supports this, contact technology of contact and that based will are always the the never a distance. is Finally, considered Having element unique both distance WattUp migration that and will significant said where be applications it be path. there

always has differentiator since the distance Energous. real company the was XXXX. case the in for been However has brought been public This first to

today's provider with that the sensors, significance. from including it major safety name benefits security be patient and harvesting and to this power displays, E-peas the solutions automations livestock ultra applications. of leading and emerging with of One retail special partnership monitors, automotive of health the harvesting of far theme, for encompass a trackers, is controllers low and for home few. announcement asset technology PowerHub is sensors extended Continuing is applications to can e-peas desktop automated, a field tracking, tracking

in extended first beyond. power standards. is power, continue is devices and within grow They capable super and market The technology into need currently health these do out by opportunities that of WattUp far to desktop collaboration actively the these and for requirements charging to the with applications the actively where ideally and to partnership be the Energous now all to and the three transmit wireless suited so point a to with they longer to represents charged. be technology functionality of meters or in beyond. can distance meters As The be actual we meters Energous being point what fields three believe distances major supported five will is step Requirements e-peas Contact, out to their markets. harvesting doing power regulatory caps. no product harvesting is engaged field five ambient

hear applications [indiscernible] this mature our distance differentiation the charging. focused wireless power provides team. seeing for you on wins of the distance expect the end, efforts the distance are surrounding core customer in inbound we're exciting R&D to PowerHub months technology The regarding Given technology in more applications. PowerHub some interest and announcements now engineering the in shifting majority engineering to our efforts the To over important can coming increase

a of WPT. introduction To technology Brian expenses chips XXXX meet noted our lead extend we increase a and vision distance year to Energous outlets. demand in to power changing the new hunting to we for development excited we As as this prototype and add in conclude, accelerate one, first morass the with by to cables, employees. daily the We extension the over few possibility early headcount two modestly shift, earlier, drive XXXX we our technology an and when fundamental expect paradigm March were launched in could of for cords of

believe But we WiFi new adoption the a to challenged. start-up, what for we our reach achieved As today. has to and be wireless expect it comparable had to approach potential

and this would disappointed. not be hard expected We were we

with our and and obstacles partners, business our approvals and We energized have growing working employees our overcoming products. will faced we're deploying how we're technical and build they're customer a many vision and our now questions. in on many a steadily take committed engagement and are our profitable is leader XXXX, by stakeholders building Together have regulatory and Operator, the achievements, hard visionary we about we global WPT. to entering by we sustainable, perseverance the today we're that enthusiastic received

Operator

[Operator Instructions] with from comes today's first ahead. Capital. Desliva Roth Please go Suji question

Suji Desliva

that out from the sort project of by whether been have Can talk projects those whether the macro, end pushed projects we're or out that continue push the environment? The COVID of and delayed COVID. macro the to about you towards back impact

Steve Rizzone

also PVT It's problem up our [ph] into broad-based moving I less in COVID ramping morality The impact. certainly confined customers problems. significant an to is [ph] pre-production. and problems we're I an we've has that, of it's issue had DBT issue. that have experienced semiconductor The that alone. the not some also But had think [ph] think Yes, becoming from a component is experiencing and automotive of issues component and

expect but in, Europe lessen fact the production the in taken first locations impact. example. we were we and problems would to are be team distance increase And also at typical in We on yields see that to resolve field has that, And not with issues a we're the members of time out steps. again could starting site the and builds. number tried associated we've an benefits With had that had these to you that. as of We've an that see China and

think I an it has had effect.

a can the downward products number and coming to I enabled of that think I WattUp again we're in continuing throughout see think side of expect to XXXX. market you

Suji Desliva

diversity order have desktop then and sense for desktop content the just the opportunity of also, if exciting the of receiver the you us an understanding great device, relative for you versus of the sounds of and side transmitter Can have those those how Steve many opportunities of the in your you what's too? kind give here magnitude would, then you for or engagements end of certainly. PowerHub That's

Steve Rizzone

One and So other is focus. there's the interest again, here. two elements is

that work I We've hardware chip. the our of work in hard The and and all of necessary said power the going really off. regulatory a configuration is interest be and opportunities can and speaker. and these complexity opportunities XXX about cost announcements. into and fits good massage and the current that With focus exciting. in form because a this so well a we're bezel - be and down distance consideration it amplifier is about to focused said work into and the which the software Easily continue understand understanding the the doing small innovation. business integrated and certainly preconfigured. and skew and Our it's regulatory over as into worked of customer XX fits as size focus adoption But that hard engineering especially commercialization. pay well. key investigations distance understand factor and a quickest antenna, easily combination are which environment very monitor focus did a filthy work done We're it's single important then continues we device contact, our simple for a integrating the number full this especially and earlier We terms mentioned end, what's major to business We to to today control to to very these of is our especially and smart and doable [ph] our I path key of of is they that, bring very, I easily we're have to that customer very opportunities. XXXX be a revenues make talking single think experiments our us team really our Having and the customer contact an in will is one, in really of single in

and and truth, and far as we're is keep ideally they defining and meters those desktop to opportunity. what to company is in this become just commercial But seeing for is a The I there's contact, other we're viable we're way there. mature as is in PowerHub. really just speak has it which lot that do field earlier, your And what thing in that is again migration the of productivity low harvesting was come This functionality to in that kind the really and power sensors of there arena. far to harvesting In very, going use movement same and the as mentioned or requirements very, starting their active suited so you caps that is up three were the can to kinds and that seeing the and that, of WPT that, we're functionality a seeing fact of five in devices we're mind, so there's looking limited. desktop super due the today were very, quite even we also to or very ramp market tracking power and have close to field very or excited functionality market. on a up ramp because very requirements beyond And ambient to about early-stage was lot offerings other that that was largely market, but technology their no

Suji Desliva

overseas ratio relative type device, understand a end device there. versus the Steve transmitter for just the content And to

Steve Rizzone

controller down receiver, by and content been I able the it very mill and together. as three so is the our goes inexpensive in that chip, transmitter and putting mill and for this X - is a standard technology the three So into receiver PowerHub hardware materials PA, we've single said software shrink antenna size to building X to for a a

Suji Desliva

and distance, over the and distance great multi-meter last be we power opportunities helpful? there any just if then about I energy so, on there harvesting amount should of to limited other you're the talking think can further color opportunity, that you would Okay, question the, distances. because that transmit Is or is my the guess

Steve Rizzone

Certainly.

it's years talking the that demonstrated think at XX conclusively of we regulatory environment feet. the now charge between is always again ago delta technology I we're We will capable could the about what what and several been a support. smartphone what

We independently is have UL, of capable more. that fully technology today documented and doing and the

today what I will efficiency; is frequencies difference material. impacts the longer and tell frequency, just not and that's very, regulatory there in is was it's in why that customer it environment delays not that regulatory frankly, technology yet of of and that's why important what in quite that and very and been then environment us to different terms understand the really opportunities. and the inflection the point. the it in you're of to had and of you regulatory lot We very differences then in reaching and impacts doable distance, higher kind The understand had a first was us a really noticing white technology to the the - match doable to very, But and we some significant understand this frequency the way. had to nose in However, the frequencies we

business I have that As fact that feel as all year enthusiastic of said going achieved I our to three I we confident really is into And that come think said, about this a to accelerate. and linkage. think end, the starting and those I really vectors have

So it's an answer. again, I elongated know

regulatory are milliwatts relaxed period where talking safety as I the you've seen where a over just restrictions we're the environments WiFi power at become as time initially think distances a in and think better I health and of understood.

restrictions. easing You'll regulatory environment of see power the same things will happen and with that

the demand, the also consumer more that. think The attention industry with The has more going to issue. do it. the and bigger to I pay a agencies regulatory lot this are more more becomes a to the requirements, more

technology far will that from increase that the milliwatts to capability power very relatively it's more has much think low higher we overtime now. opportunities So Certainly support and power. certainly they

Suji Desliva

color. helpful Thank you. Okay, Steve.

Operator

any and turn to like remarks. following team would back conference concludes over And our for the question-and-answer session. the this I to gentlemen, ladies management

Steve Rizzone

update. Partners Roth to additional Well XXth. listening on our thank on WPT. Good virtually Annual in Energous Conference for monitor the XX plan afternoon. to on continue fourth XXXX you. Thank Energous.com the to Please future XXrd participate quarter being through updates the of and for held and announcements company exciting Capital you We March the

Operator

conference sir. today's you presentation. call. you, This attending We concludes Thank all today's thank for

day. disconnect You may have your lines and a wonderful now

Energous (WATT) 26 Feb 212020 Q4 Earnings call transcript