Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to the Energous Corporation Second Quarter 2023 Financial Results Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Craig MacPhail of Investor Relations. ahead. go Please

Craig MacPhail

welcome, and Thank everyone. you

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

the obligation forward-looking required to by circumstances. contained expectations or federal or any undertaking otherwise disclaims updates in to as elsewhere Except revisions those or Energous to statements herein changes and to release publicly laws, events, reflect conditions regard with

please Also, posted to on directly press comparable by during defined SEC is will Energous Regulation included release, GAAP G. which measures the be most are these call, in measures discussing note Reconciliation today's the financial financial as that non-GAAP website. measures of company's this non-GAAP

over Please Johnston, I'd the Cesar CEO like to Cesar. Energous. call of ahead, turn to Now, go

Cesar Johnston

welcome XXXX afternoon Craig. the second call. to Thanks, quarter conference Good and Energous

me Van Susan Interim our Kim Dongen, is Officer. Financial Chief Joining today

IoT of develops our its and products technologies. on you with or through charging Advanced technology, unfamiliar PowerBridge based power Energous Semiconductor proprietary those its wireless For networks wireless

operations RF-tags, is large and industrial, smart costly replaceable electronic Our devices maintenance operate and across on depending replacement markets. related devices overhead. without and labels IoT to Energous applications strategy healthcare home, and sensor energize retail shelf office, in the smart power the IoT batteries

mobility lower wires electrical and aim to IoT removing by We installation outlet costs placement smart with and enable devices requirements. freedom,

its of enabling networks the connectivity control, tracking and IoT environment. power smart and devices, energy provide wireless Additionally, IoT device in monitoring to

environment. a equipment or or medical in label a hospital For example, a warehouse shelf

on create for then IoT Energous put RF the partnerships strategic Since has enabled customers. and and IoT to build correct end-to-end a our developing, beginning market optimized the in to ecosystem wireless power cloud networks smart XXXX, differentiated of to place products focused

and devices IoT the work labels leading in selected across these aim potential We home, sensor markets, applications smart are in markets. with namely the customers emerging and retail shift to RF-tags, focused customers highest on healthcare industrial, We electronic those office, or markets. with smart

typical a a installation conduct wireless our particular POC final technology application. for phase. evaluation a a network power power wireless then customers of network, and production In proof-of-validation or followed a then This a and phase rollout proof-of-concept their by is

am when potential increased technology On future Energous in phases this report is first note, revenue through Energous POC how implementation in POCs of quarters. that customers and the with POV POC the an of Understanding progressing our XXXX. progressing current new is, its third Energous quarter I and interest and we two in in trend indicator positive of view, a addition from that incredibly important customers continues reported pleased on to

to XXXX active grew we in to of POCs QX glad of has quarter XX. ten number This report XXXX. And and are the POCs total XX that to first in grown the POCs now

with implementation in POCs. discussions really are We early phases early or additional

wireless power IoT in the now ten have POCs, growth efforts XX our the phase. in we since achieved systems we XXXX. have We QX POC proof-of-validation started times From eight

phase. the to this awaiting into remember or So phase that's move second

the with a Fortune wireless We Thinaer. with company one also report of happy phase has production partnership that one entered to are -- network that of the power XXX installations in

power cloud IoT progress end-to-end enabled ecosystems. We wireless networks smart of are in developing proud Energous'

shelves. corridor multiple are warehouses being chain Energous technology mounted ceiling, markets. of Let in of is areas, how the are example me deployed. one an as are provide to walls energizing example, logistics of a multiple customers PowerBridges our on you technologies in installed and and this In the supply inside merchandise the give PowerBridges transportation applied live appreciation the to our

RF BLE-based at and are a information energize warehouse. attached products smart customer's digitized tags sitting devices, IoT to from collect the which PowerBridge

warehouse, technologies the the as of enter the product inside outside and offer PowerBridges storage the mapping compared moving at old and to leave are corridor components customer complete provide area. or walls products visibility As the expanded or coverage doors

leave As PowerBridges into the track storage trucks area, are customer for loaded forklifts the and products unloaded. the products the also are load equipped which can as trucks, with merchandise to distribution

capability in cloud our partners cost and resulting improvements in transparency system real applications our PLCs with Finally, now and analyzed automation. and devices technical focused using identifying integration developing this visibility efforts our Energous' time continue. efficiency full with in customers example, new and collaboration predictive software, IoT for be using in and can self-optimization, markets

identify stand XXXX. at and in update integrator with we four system distribution two and we Today expected distributors, IoT we onboard to XX to of integrators system you. partners, new added and continue half the As partners, more partners be second technology will

announced Wiggle, our with partnership Force Let's DOD. phase move this the US the now Defense, we first of our discussion XXXX the sponsored at Earlier of to week half specific Research Air Lab next progress. of the update Department by

based distance our goals continue as as give presented second Energous for close would like call. an QX -- our our we provide WPT in first XXXX our networks. over also to radiofrequency earnings wireless update phase, we as half XXXX PowerBridges we to power XXXX, this Wiggles of of will close In

product signal and and XXXX, in and certification better growing markets WP IoT, new transmitter our In world's the watt technical two the the PowerBridge. than The watt development. two watt one PowerBridge market half completed leadership transmitter. extended we our and PowerBridge introduced we RF through penetration range, largest first innovative coverage power the one watt maintain of provides First,

as our evaluate kits PMIC to RF connectivity and our technologies for featuring customers also evaluation devices sensors technologies. offer as for We our well

contract assembly production and the manufacturer Asia-based as -known we of volume Second, our low-cost work we production volume partners XXXX, with enable a identify supporting the large In execution. our move , and PowerBridge first production. closely PowerBridge with gross corresponding margin to cost optimize lines and well higher to half for

technology our identify through new key to partners to expand to industry-leading customers continue markets systems and facilitate potential technologies. and access Third, our potential

partners XX partners. we partners, have and of two integrated distribution end of technology system QX, As four the

our efforts potential develop continue to to We new partners new support applications. market or find

and our full customers current and then steadily to to production. proof-of-validation from the along to commercialization path future POC Move

XXXX, half have we first one XX increase first eight third from of XX our just in installations. quarter POCs since POCs, production As phase early now the times installation proof-of-validation at XXXX, a and two customer

PowerBridge and revenue customers growth of finally, ramps support with expected XXXX. rollout And and annual achieve the our production key partners over

US, now regions. APAC across and installed part the wireless several we networks multiple power have IoT As POC of in efforts, the markets Europe

installations POCs production generation with We a XXXX. result to revenue bring in over annual revenue to target to achieve expect growth

weighted Given we or towards these year-over-year more, will year. the which XX% second the of of half anticipate currently be assumptions, growth

recognized On costs continue in the We and adding XXXX in we installations over expenses. for QX representing our prior efficiency proof-of-concept six of financial XX% QX make improvements to new quarter. the in and side, to of to XXXX, a addition non-GAAP compared $XXX,XXX a achieved reduction revenue quarter, X% growth this

the as the which future number increased potential. The of path proof-of-concept important along view an of compared customers with to revenue final indicator we prior quarter, has production moving

we're to last future. year We and and progress with production POC installations today, volumes in additional XX as secure in good the higher have working POC of installations made the

to the turn call I Susan. will now

Susan Kim Van Dongen

from in of release, increase the announcing Cesar. Earlier second QX from fiscal earnings quarter June operation was our results a mentioned prior ended quarter Cesar. and XX% press which in year QX This we by today, you, XX% reported our approximately $XXX,XXX, financial XXth. the Thank we and XXXX. as issued Revenue increase second of XXXX, was earlier of $XXX,XXX quarter

revenue decrease to XXXX. about a prior of to of of XXth, $XX,XXX XXXX. in compared a Year-to-date the of quarter compared revenue XX% and a $XXX,XXX, Cost about decrease of was was QX, $XX,XXX June $XXX,XXX as compared decrease QX to

to costs the by quarter, due decrease in and prior by and million. down expenses and chip show of $X.X of primarily For to an $XXX,XXX expenses. $XXX,XXX compared annual This trade total meeting costs expenses, of second in is a quarter, R&D the offset to increased development increase GAAP $XXX,XXX $XXX,XXX

due QX by $XXX,XXX to costs of in $XXX,XXX engineering same chip cost and in expenses and severance approximately development GAAP million total expenses, primarily pay, $XXX,XXX $X.X for in in a of supplies. last quarter and was revenue to $XXX,XXX Year-over-year, the year. recruiting This decreased compared decrease

million for the the loss Net a $X.XX XX.X This GAAP $X of amount per in basis value fair or -- change loss million share in quarter on approximately approximately includes million was from our our second shares a quarter on outstanding. other income warrants. $X.X average weighted

of last a in weighted per net shares $X.X share outstanding, on a weighted million average XX.X loss net share a million or prior XX.X outstanding. and loss $X.X a quarter a compared QX loss net QX average million shares per in to loss $X.XX $X.XX on loss million year or

the trending loss vertical strategy our is go-to-market downwards efforts strategy. due operations in Our legacy trimming primarily aligning for to IoT net our access from year-over-year expenses and our

Well, for let a non-GAAP view second of give numbers me the our you now quarter.

our believe with GAAP a we company used As especially a for stage, non-GAAP investors, useful comparison our provides when our for at information numbers.

less expenses approximately Non-GAAP approximately the approximately in and of excludes compared total our costs $XX,XXX than which expenses $X.X and totaled compensation, $X.X amortization million. of expenses depreciation million severance expenses GAAP $XX,XXX QX $XXX,XXX Okay. and of and of less for $XXX,XXX costs and of to Non-GAAP QX $X.X total from million, expenses costs $XXX,XXX QX XXXX. was approximately and costs and non-GAAP stock QX of

compared loss loss loss Our prior is of our other QX. net and adjustment in $XXX,XXX or approximately warrants QX for includes $X.X a million compared adjustment the QX non-GAAP to the $X.XX for value per of million $X.X the fair was a $XXX,XXX XXXX. of non-GAAP which a income decrease to for non-GAAP quarter net share, of in This

million, approximately and expectations. decrease the across to minor line development expenses non-GAAP compared decrease was $XXX,XXX a XXXX. to saw of of compared our all expense research was approximately prior in quarter fluctuation which Notably, QX in $X.X areas and We $XXX,XXX

equivalents, On debt-free. the still we and with $XX approximately we balance cash sheet, in cash and the quarter million stay ended

million in accounted for this our QX as which earlier, in of realized other we mentioned $X.X liability, As value of change year. fair was income warrant

To for downwards. GAAP expect full year conclude, the we expenses cash non-GAAP trend operating our and to

As we our our savings strategy. market operations expenses with and continue align costs find financial to to in

you. And I'll operator give for a Thank back call question-and-answer the the session. to

Operator

you. Thank

comes question Please [Operator MKM. We first from session. ahead. The Suji will Instructions] now the go ROTH with Desilva begin question-and-answer

Suji Desilva

Hi, the Cesar. taking for question. Hi, Susan. Thanks

of versus like all, you maybe near to or remaining think on is the them earlier? first are production it? the XX know or them segregate So order could validation XX might maybe portion of What production. are I of close of which of into one of If POCs, Susan, Cesar relatively XX you from said the nearest and the to rank those kind stage kind be them. you

Cesar Johnston

Suji. you? Hi, are How Yes.

Suji Desilva

Good. Thanks.

Cesar Johnston

POCs. so XX Yeah, to XX. from we reported XX We went

kind proof-of-validation. are during of you early. X the if there's mentioned them now So of presentation, them are X in But I recall that the of conversation,

So already is dependent production. some second me I would them, takes say, would months. six least and those, on applications. expect how perspective of And to the we it the to have fast industry if time production, that in become production not and going went if went to at it you're a nine production eventually one stage. I all we the the into ask we're from of Certainly, pretty within,

Suji Desilva

was and helps helps. realize XX and That of Okay. the inclusive production, didn't more. validation the the absolutely that I

-- be is sites the one we And that? Is ramp there initial the market maybe what emerged by think for in? should timing? it how about period? kind in the phase opportunity that's production, of end what ramp-up Or What's it Cesar, an or is the by to in of kind here? what's it going here? What So

Cesar Johnston

Suji. good Very question,

our XXX it First with what been of deploy more very we that in has a where extremely we in in expensive And coverage. to is is want point glad area. area. that in inside in are many constraints, is all, the of had company to and deployment that warehouses. to need with be okay? wireless we ceiling, our of the stress XXX we're on I fact provide networks can And more be on been, walls to company. the to logistics who cannot, time. known the installations given we partner is and what tracked they we at very Fortune and transmitters, It's at to production to hundreds are deployed that's the NDA the the need due when looking this and is that particular Fortune deploy in report Reality done that, time, say And a companies, Thinaer and networks, the power happy in we're discuss warehousing that one number and the which that But about this, already it's stored they those that the be components shelves, cases, into need

maybe So the you idea one, Typically, mean. of far, having in life XX That see to of meters have, before let's say, technology towards, times WiFi in in or background is joining of that AP case be an very in But we one of kind we to this the up we've able where system. my cover strong right? to cases, one particular, many applications so. gearing a transmitters previous WiFi so in on actually certain XX I number every seen we WiFi, gives this that provide Energous.

Suji Desilva

on calendar color. my I outlook appreciate Cesar. 'XX last is the question helpful, that's No, that very guidance. Maybe

think you're in out half. up the visibility achieving XX% sort perhaps? revenue, I think understand implies that of last at to that ramp? a saying Any ramp just second XQ, of half year-over-year plays what's into at your XQ the obviously, versus from qualitatively, second And I least how sense year,

Cesar Johnston

in guide direction. still that we So

loaded towards of the year. the We are half second

those system. validation – We have proof-of-validation

really moving of really, are well. Some those

we we be on updating will next where in you the with those. So quarter are

Suji Desilva

Okay. ask Is contributing production to one guidance? Can into there. last Will than there my XQ? be I in system that revenue built question expectation the your more just

Cesar Johnston

decision-making. the That in we function now. right And customer's what the on at a expectation it's this point is of based time, have

related way, And some with. the we've by Fortune the company XXX are, working to been those of

Suji Desilva

Cesar. Very Thank helpful, Thank Okay. Susan. you, you, Cesar.

Cesar Johnston

Suji. you, Thank you. Thank

Operator

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

Jon Hickman

easier fact have XX my are now than of along because these asked, of previous validation Most getting but Is do that. questions you that -- I to were customers the programs could speak the in already of it do you to proof-of-concept work? farther maybe for their summer

Cesar Johnston

definitely. Yes,

of We are We've installations. done way much now. number experience on the the a on more requirements and by them

cases, many than set go in faster to much we and are up usually. able So way them we

within by technologies, where when old our compared the it hours, other we We XX the set technology, hours, up situations feasibility the them and superior and is comes show it have way, coverage. of XX can to and capability to actually visibility which, far

Jon Hickman

end Could of for handle that? by you the do a manpower the And have year like to XX. proof-of-concept double to you the

Cesar Johnston

we can. Yes. Yes,

done We to as move focus have In technical we clear have if fact, that. as you limited They're saved And includes yes, we prepared of are are. pointed part Yes. the the pretty those much our double, where and out, of we that a try best all ourselves step just strategy And that. allow the to guidelines very we've have we pretty industry time. forward, something into same. have to very unique one-watt, tools install is mean, what products, much. internal They're that as two-watt is number what to that systems. developed technology the places of our we repeat I changed best deploy what how how and not know locations very, are working with and and amounts for the tremendous us customers, we And actually and we

Jon Hickman

you. Thank Okay.

Cesar Johnston

Thank Appreciate you, Jon. it.

Operator

concludes to question-and-answer Cesar remarks. session. our to conference Johnston closing would This any the for I over back turn like

Cesar Johnston

towards and batteries emergence power as progressing continues Energous you. lead the networks removing IoT wireless of cables. and for need we in Thank the

on IoT progress installations, progress XX. company a updating quarters quarter solutions I advanced positions developing leader to potential in the and XX% robust as revenue pleased indicator and team to to totaling technologies over in forward and continue power as which two-watt network power past of you believe over the quarter property, resulting stakeholders the future charging We has XX% in key transmitter for in revenue a solutions.Finally, that our wireless enhancements, by number Thank intellectual was to look see proof-of-concept which in and our members, prior increase PowerBridge company's a shareholders, the all novel in innovate grown used this in you the Energous' we now again. the quarter,

Operator

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

You may disconnect. now

Cesar Johnston

Yes. Thank you.

Susan Kim Van Dongen

Thank you.

Energous (WATT) 10 Aug 232023 Q2 Earnings call transcript