RESN - Earnings call transcript Q1 2020

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Operator

Greetings, and welcome to the Resonant First Quarter 2020 Corporate Update Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to Moriah Shilton, Senior Vice President of LHA Investor Relations, Resonant's Investor Relations firm. you. Thank begin. may you Moriah,

Moriah Shilton

you, operator. presentation the be a we page Please today's call note during website. on Resonant's will which of using IR Thank is Events available

the you phone page If to download follow or presentation view us with today try please to the are go events to along. the via

the X. this afternoon, quarter of Resonant Slide The earnings website call XXXX. Investors of available company's release financial the results to Turning accompanies www.ir.resonant.com. released Earlier this that is on first for at the section

statements. Additionally, the statements well predict. date as materially such the or contained subsequent in satisfaction are and with factors and not most are forward-looking differences of that are could These guarantee recent and actual believe, intend, Several in information expect, some optimism, in call Resonant's forward-looking. plan not of and described XX-K statement. those in to company's such cause Form anticipate contribute prospects to filings contain that are could absence XX-Q assumptions. that as SEC. the differ from detail forward-looking of this performance of the the this statements words update speak only forward-looking Words difficult the call. as mean no this company call obligation Their forward-looking uncertainties or not of date the statements or results forward-looking supply identify after regarding circumstances reflecting current and statements undertakes any publicly to conference Such of such statements similar expression the a and involve does as risks, with They variations new information

CEO Holmes. call turn over is it to of the to that, With and Chairman pleasure George Resonant, the my

George Holmes

you today's call. afternoon for and thank Thanks, Moriah. Good joining

Marty McDermut, is today CFO. me Joining our

of call, a website. slide we our the noted, section which IR are today's Moriah As accessed be on can for presentation using

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our discuss to Before the I like call to board. turn over advisory I'd Marty,

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we look XBAR As with technology. our strategic additional secure to

like of to a our I'd position shareholders. how financials to and the to discussion for turn Now, call capitalizing over Marty deliver is for Resonant

Marty?

Marty McDermut

Thank you, And George. everyone. afternoon, good

Turning to of noted. I cash investors our format about The metrics, except GAAP track progress. of assist our with we use a Slide amounts our and where most XX, customer are keeping talk important to two

million, quarter. $XXX,XXX of about. loss $X.X were will first last the to development million; an estimate $X.X compared the quarters. deferred revenues of to coming $XXX,XXX of $X.X XXXX compared billings end quarter. XXXX, compared be quarter, quarter quarter George quarter. Revenues revenue last last last comparable of as last fourth due to Sales, amount totaled quarter. we that and marketing $XXX,XXX administration Research quarter $X.X million to restructuring At expenses as the to For of million in up talked operating the loss as and expenses $XXX,XXX million first million from recognized $X.X compared the to $X.X the of Operating totaled of

weighted share weighted loss per of on outstanding average or million average a of loss net the per shares a a $X.XX $X.X on based shares based $X outstanding share $X.XX to for of $XX.X loss million fourth Net million compared net loss quarter. $XX.X or million of

negative or As Non-GAAP $X.XX million per shares in quarter. negative $X reminder, offering negative last or raised of did to adjusted a the $X.X which share a public February, EBITDA $X.XX compared share outstanding. negative we per million

we impact said Cash million believe we fourth million we're does not XXXX, of with at February. XXXX; XX, projections. proceeds March and negatively our quarter opportunities see, hoping the COVID-XX $XX.X included we're quarter flow to public cash of we no in that be with equivalents Last $XX.X by offering well net cash in from debt the our breakeven positioned

and burn George XX efforts employees, XXXX, the by rate expiry As XX, On of customers had and March activities, PhD XX had noted, as to extend a staff. our on our steps of our runway part total we took whom of reduce and performing as million. rate we reduce burn March in almost related $X well our focusing by of are a whom XX technical annual

accelerating Finally, revenues quarter revenues the first the third we in with to the quarter. second in believe be growth comparable will in quarter

compared operating GAAP of quarter expect to expenses for down quarter. X% second the XXXX We be about XX% the to to first

the turn call to I'd George. back like now to

George Holmes

Thank you, Marty.

in best-kept the have players million to by and secrets the handsets XX. Resonant industry RF summary, market with established tier markets believe companies, in we downs dozen technology credibility technology multiple Clearly, capital our of OEM one a tier In down major validated Turning Slide the of shipped, having with over today. I over our customers. Tier as X having devices is leading identifying XX

of we technology. our of year on enhanced cutting-edge last engagement Even the in the XBAR exciting, back more model our middle

X from of market as enable that We like customers royalties will shipped we deliver model. are products believe continue enable to disruptors prepaid to largest filter Tier XBAR-based potential. and other significantly to our revenue RF revenue level royalties the a companies, world's include the filter and just X Beyond manufacturer, adding our partners, solutions, foundry do we RF Tier predictability

Given their could in $X RF this front-end market than solution billion respective shares, greater current sales. be

times customers. technologies market for have and could values generate RF the how ability X companies, of revenues enterprise $XX value represent the enterprise our of views filter Given in for the billion times this to Resonant upwards X to

are, where and is While we this provides this a represent. guarantees Resonant, the what between clearly engagements for no technology customer mismatch

we secrets what in If lot a but market. and Resonant, else that nothing I best-kept is you, added more did be circle I on there of back to suggest tuned. new my can one stay coming nothing today hypothesis, discussed deliver may if we the the tell from we And

to operator for Now, Operator? it let the turn me over Q&A.

Operator

Acree Kelly, first Thank you. take for of with Instructions] And Capital. question from Officer we're Operating Dylan pleased to Loop us Resonant [Operator And have question-and-answer the our Chief session. join will we Cody

Cody Acree

what bit shipments? and the it taking those Dylan. comparable to unit on Thank QX just talk to things that my up to QX, you in make does the congrats what for questions changing about mean of does expecting QX? and revenue you Could to that or you progress. QX George, of are little a Marty Are in flat - be whether how terms just being

George Holmes

prepaid number on our blend noted of look we as payments. as of a a now the last Cody, revenue shipments call combination unit in Well, we and at upfront royalties

volumes see a a well sit volumes to blend. back and looking good really be of solid we'll in in that we more at going be a mind, on unit forward. keep in blend unit we QX; basis, at perspective. QX, unit-to-unit as QX progressed shape pretty it we But I going and think But how we're going QX aren't it's had as volume into to so look from a perspective as go in the And basis on quarter-to-quarter a from we

front? that on say to else anything, Marty

Marty McDermut

to source are out. those to No, impacting the I a company big George, about that being the drive the design now going of think then lot us talked forward. three are piece royalties We've you brought and things is a services,

Cody Acree

can size XE the as of numbers far any pricing just you The targeting? you - you specifics - market around thank any around some And then, put what Okay, for that. very as market that are market, quantification that Wi-Fi Wi-Fi much market?

George Holmes

because exciting a makes is I that makes stepping so I much about with that that's what OEMs. the to thing is fundamentally talk for so with Dylan, thing, I'm different the bit the segment to kind a different good start to our technology market. just think what it hand for point real And off him over of it let of little that the think going and

So real Dylan, touch that on to you quick? want

Dylan Kelly

Yes.

shifting it been on acoustic ceramic have new infrastructure addition filtering band X side was really today, market going serviced XX solutions. the in the side sure side, wave [ph], This especially and requirements of the require filters. other performing by performance a gigahertz So, the on lower of of bands this XE new one on the to

for because market whole been acoustics doubling content present that's WiFi the least at basically a And side, but similarly that handset So we're now already of the on then, this going on the it's new the represents side. after.

Cody Acree

Thank And have just [ph]? then, lastly do you're us to how some Marty, Marty. did and steps we take you that Excuse getting to see $X me; could for you, What give around invoice Dylan. when you million? details those

Marty McDermut

Well, when filed as why was also primarily - said, we total And XX%. in and we we down about, gave million. I mean out, talked that cost that's was exact that took about, between we related go headcount should the that steps as $X.X George and took QX X% I an for expenses talked X-K the about that the March

Cody Acree

it. very you guys. Thank right. I All appreciate much,

George Holmes

Kelly. Thanks,

Operator

And take Tore with we'll Svanberg a question now Stifel. from

Tore Svanberg

thank Yes, you.

all, second when can give or fairly elaborate half the on the a program? year? new ramps you; more little you potential Dylan, this a George of bit about some update Obviously, foundry us, could any initiative First thinking this of from especially is you in

George Holmes

the catch Tore, sorry, what didn't thing; I that first So, I'm program?

Tore Svanberg

The foundry program.

George Holmes

bit a noise and background sorry, Okay. I here I little that. catch didn't I'm of I'm sorry, got

of our we've from initial established in foundry we're as our we ability ramp foundries larger to foundry predictability program a broad-based more China, are partners quarter, that noted because in broader part last in transitioning greater have going of the X a that customers large applications set, some to greater Tier to we the foundry So partners number manufacturing.

it's briefly we the Significantly, had in happened about our Dylan online come early of these today. think from are I partners Year where of here shutdowns kind New is, we touch we at something to this the that made very will as progress even Chinese Chinese year. it the let But see latter believe As half light I'll been it of part schedule. thing we've they it, in that nice of excited perspective, around see look the ahead second of to on foundry

real want to touch that on Dylan, quickly? you

Dylan Kelly

work, pretty George. kept disruption in we're It's the got during still amazing computer-based providing wafers. through but and that real facilities. sure going the Yes, been US. COVID-XX just shutdown equipment all seen is the even installed that facing that running designs in When have from we're we they've the to them the this has and them have that overseas that advantages manufacture really for and we've is And unchecked factories,

I we we right wanted So, are think where to on-track be.

Tore Svanberg

Very good.

XBAR? potentially some little a more wins to - you could there? see start a talk when we As non-mobile the could bit about follow-up, Could we opportunities for

George Holmes

Okay.

on half those little to a we thought Dylan So end and had have first further bit talk for late over that QX. we said of last we'd this about available touch the in year, hand had let to actually available year first samples of me that I'll the detail. initially We

demonstrate As performance. did in the do were that's we and noted webinar to prepared I actual why during able February the remarks, we

this multitude to largest sign samples actually been hand-curate, world's with engage last like when do manufacturer. sending contract do something evaluation; with X's technology, that's to we we different that the much the we them have the cutting-edge it's filter the prior the to we did in of lab, We with like Tier year with something to to like customers, work in reticent not

go. teed the feedback of okay of So, go, a bit little devices? ready Dylan, touch and customers and kind getting got do on to these want we now they the can are evaluate you number application to to of set these a think the I and ready poised that and waiting are to to go more that out customers directly the on so And we've start them. taking right for we're up parts performance

Dylan Kelly

George. Yes,

I a XE-band was announcement and the for address just surprised between FCC which gigantic and by the has of the bandwidth, to tremendous opening X one new the a XBAR thing of have bit these think I - and the add X pull speed moved activity interoperability to that's is certainly little creating solutions and the band. gigahertz like gigahertz with

trade-offs. right And So we we're filters at developing discussing these we emerging many specification have have engineers to the moment, engagements address architecture now new needs. and

Tore Svanberg

Great.

tuned the some obviously question, what's filter George, market; of one going on and of a announcements there you to Just year, filter pretty have tend the manufacturers. one for in beginning good from were the last the at big

that some far you've Just wondering are latest market? as heard filter in if - what the of as the things dynamics

George Holmes

think, created talking business you're the, created for additional in There put took that us, clearly, their pullback frankly think but are XG turmoil and just challenges of the assume occasions, the number where set historically that opportunity and I and dominated I it has I sides they highlights came on what what and actually technology. what's was out technology we have is opportunity by for of think I sale the Dylan keen further both unit happening, impending Well, I what Broadcom's as focus dominant. to on turmoil, When and it just a lots their it spoken that comes like of I some and is that mean it XG, focus, about is. about storm. that obviously market with a thing the they operate on have of companies both the quite

little is latest touch another amplifier activity segment up a Dylan, Wi-Fi that E bands, that's and to market now. want why on the announcement seeing There's right you thing of the of we're think that opening of lots another do the put new on X SEC further? I

Dylan Kelly

innovative done followed aluminum has other Hi was what suit. George, I and extremely the players at technology, think if with it the Broadcom looked all nitride we

been aluminum to high But nitride. BAW need scalability fact, is using the to beyond, XX% a In bandwidth, the doing has there what is. of the think XG going that's lot limit performance and everyone, chase and emerging I

to XBAR we're have the wider as bandwidth technology time the with so excited at right a So [indiscernible].

Tore Svanberg

Thank you. helpful. Very

George Holmes

Tore. Thanks,

Operator

Ari Needham Company. we'll our take with a Shusterman & Next, question from

Ari Shusterman

to the this off technology, Gill. color Hey, is, on question so Wi-Fi taking do for applications yes, of with yes, the - opportunity. start outside for want mobile about Ari, you Can talking X about provide bit and more a And you Raji I you so biggest XBAR see talked where that? Thank you.

George Holmes

want Dylan, first? take to do you that

Dylan Kelly

Yes.

I of is world. think it really in Wi-Fi the the side

You X people's the CPE you years scaling And have side. applications. X, slots see in acoustic on enterprise X now and those the the before. look to used from that not have enterprise a at filters up We homes are MIMO, all ago few

turns in hundreds multiply when a you box, of to that it's they or you're maybe paid millions model. of relative by the very of in significant So units become volumes

opportunity, market very that's focused good on. a will and need clear a be So we're -

by at like the been or towers operators bring side, MIMO and size cellular been now in power And weight. in door infrastructure that's play shift major like economics acoustics dropping. factor of have element opening per We've technologies has cavity space, boxes serviced looking been our that the the also Massive and But a to be for filters advantages the ceramics. on on in in to of work. And huge the may technologies with those transmitting now

putting another focus. area of lot we're where So a that's

George Holmes

to area, one our in think also lot marketing a non-mobile XBAR thing today are to CPE is obviously focus only in I we're that investigatory The to I while on want mind And locked customers, relates XXXX. we're partners. to for us which add exclusivity potential that through devices our are keep would for as to that, new technology in potential with technology applications mobile non-mobile not anything through it and to new arrangement - March particular infrastructure. is is Wi-Fi that of I we're up doing work partners for marketing our

Ari Shusterman

helpful. very a that's Yes, it. Got

can talk be a Can helpful, would your chain. the with branded That XXXX Moving that's about to this Teledyne in very the XXXX? picture you been with foundry from should we relationship paint of regards products, progressing? How supply opportunity, expect to Scientific? thanks. and And you

George Holmes

Great. first in second. Dylan, you take why jump of don't part question? I'll the that for the

Dylan Kelly

Okay. working And that's who with. we're

own our of that's samples, prepare preponderance we higher As so going work we're the why to frequency. doing

gigahertz put the just place we in and the bands. So hardware X and X

of I'd track to signed schedule the samples partner, enablement say we've is far. very term and near well up been which for So on so they've a been good

George Holmes

transition end this consistent with and foundry devices really existing transition it expect see for that devices their we year in early year, to schedule. impact continue of Clearly to this that's through partners we revenues. our partners, the Tier-X to have when the seeing that at next balance relates partners As available of year, the ramping and seeing those and our larger ramp the in as see foundry where we an starting traditional Chinese we the foundry to new

Ari Shusterman

referring That of as minimum agreements. And question. you makes more volumes, minimum the it. you're help volumes you quantify one sense. Got as - can these to to previously well the voted regard part as to, With that

George Holmes

Okay.

- the have prepaid rates devices was higher fact up different. it in higher for cases prepaid, but bit than to the in and businesses of traditional, access filter are did that royalty it X for times the paid a we royalty to of ramping the in us we prepaid paid fully that those on Again X% royalty to agreement are to that, from rate. those those development the royalty for on That they not rate. to some from rates. there we foundry traditional expect X.X% upfront disclosed buy four what Other is higher what technology What have of them are. manufacturer. once little significantly but buydowns royalty paid X the And X X than have range. said times When converted X% we, allows X - enjoy typical early, hurdle the putting with significantly the higher deal to about disclose than the talked times They the our are down not royalty they X.X% which to your example, X get from a is upfront to them comes still us agreements, Tier in orders to a to have get volumes hit buydown not noted rate than prepayment the So that the earlier that the what also allows deal would pays we largest rates we significantly I allows the range. devices, minimum you

discussed we not major that to these hurdle ability with currently the we their that say we in that China exist. relationships what to suffice have the expect Hope are, on before, share helps. have OEMs companies significant will that disclosed as those minimum get based rates And

Ari Shusterman

Thank you.

Operator

Instructions]. our Dede next take Kevin [Operator from with question We'll HCW.

Kevin Dede

you? Marty, how Dylan, George, Hi are

Dylan Kelly

Good. How are you doing?

George Holmes

Hey, how are you doing, Kevin?

Kevin Dede

couple And things. a Good. Good. Marty, of Good.

many First you you're about talked coming that? quarters million real $X.X the looking quick, how in future, deferred for out

Marty McDermut

That will vary. three Last quarter quarters. we said

that our to Yes, are is we're off it. This what quarter we have deferred. contracts adding that happens burning

going So over three it at be will least forward. four quarters or

Kevin Dede

Okay.

George Holmes

it? second on Kevin. a Hold Isn't

that deferred Right to at Marty just Let now, over if say to it currently me little number a we've look you a want revenue million deferred add of, that books. on real ask got a question. $X.X safe revenue? quick. I Is the is

to had we come day, recognition. it also then afraid forward, go at peanut we Is that of based and new that had to think? into ultimately revenues peak butter how see valley as contracts, and we down to we revenue the that fair topline I'm As prepay end will on expect that

Marty McDermut

George. right Exactly

off. bring other we're of that the New prepaid where they the still take then, in, get deferred. income on sort we come projects it And in working

is objective to as and business. growing - Our we number build keep the build that

Kevin Dede

on the want little I about looking financial of cash color. George. a number a terms I just flow more Fourth talked Quarter you at breakeven, horizon. revenue want Thanks, our were what's there? just you using XXXX, little color in what One question, your

Marty McDermut

of cash a haven't that, number think, breakeven. given talk we Well, we flow I out when

X% XX%. higher talk just - bit little this quarter, decrease are I Let's to a said where about so it's to last that's take by going we

between around somewhere X% X% is X.X% breakeven flow something cash to that. our be to like So going

Kevin Dede

Okay. George?

George Holmes

You can do the math.

Kevin Dede

it, That's know do I I do I it I Marty. sometimes wrong, why well Yes, but can asked.

acoustics. got you've positioned scandium BAW there, see wondering that you're I'm on able side going XBAR from them? how how differentiate acoustics technology? your X, in in And bunch of to Slide to be George, them including competitors So, for a solutions And you the

George Holmes

Couple great those companies question, all of Okay. are of Kevin, competitors. would things, that's potential a there customers. what They're none but say is I

we've look are this, So companies that which have we into back and challenges the sit as are their based that market on they going has BAW described. technology, at solutions

there the sit and that's we companies, and look XX% is market. hey, no list say, the share that get and has at the like a get when to a market to opportunity company market of working so, different of at to got guys a the there is basically company these share, go is that and a real opportunity create list got bottom has And a, top company that the after we back us for is enables at there in. It's kind try to design of

that are will a we've that to on case promise currently to with, in to that in market allow vertically - the cheaper. we the that the partner We do are want in technology great look companies or what tend and at customers are think got integrated we faster, do help? their And players Does companies they better, need looking for. what them the deliver this of to

Kevin Dede

device maybe a A and I structure guess was talk component. little I could bit. about you hoping little

give Now, BAW. haven't aluminum, into on a gone Avago's the me really George, but come side on in you on scandium Dylan dug break.

understand, I'd different. able is of to those so, each from [indiscernible] just And technology perspective, to a like help

George Holmes

well. Yes,

you it problem, an filter fundamental easier cases let's LTCC both start doing of we and filter. that these cases uses So, acoustic does deliver can natively to be you And back first. a for know solve performance. a do. can in talk doping, up in we FBAR that's you wider to of in some scandium BAW and come try then structures to about all to to try the and a companies inductors, imagine, of single which it get have exotic it's try once the just those And the would package actually I cases, filter things those bandwidth, what to a and together and things combination of in But some think it's filter creating hybrid to what do some

go when do not with do so great marketplace bandwidth a to these the entire filter talking what get we're you rejection can talking we We're That's exotic. have that process it And cover companies. a into about. actually required, Hey, in talk go to leveraging cost-effectively, very and them and about. we that's can the help

little do you for to further bit that to want a here. little on Dylan, more color add Kevin a bit touch

Dylan Kelly

HP away doing five film I'd work. Yes, to to thin chipped acoustic I really they do XX else revolution same are ago Labs, and And every players at at technologist, at doing at that my and of nitride the to make say, they to resonance performance, years the it, that thing a that's this bulk more off trying the aluminum nitride. got least the guys hat’s back to as and aluminum get look got

I'd shifted things do ISM were recognized. pursuit that to or was like recently enable we thin-film of say able piezoelectric-on-silicon to And the ultraSAW our using Qualcomm's was what announced. HP,

us capable X X all of. a combined larger offer With insights they film nitride. in BAR thin it can the lithium use is position And nitride in this that such aluminum within, lithium a we bandwidth, assume and Okay, can aluminum to there's fit a we SAW lay out, is niobate a I than and that of to of advantage niobate more would line. to the make got bandwidth radically times bandwidth these

Kevin Dede

little Thank difference what ingredients guess the Dylan. a all Oh. you go awesome, just to Yes, component the recipe. - kind was in was the Yes, you. looking yes. of obviously very Yes, I to the difference. that's - That I'm privy I - substance much. Thank not for, just and

entertaining always. much, you very So as thank gentlemen. you my Appreciate questions,

George Holmes

good Kevin. one, was That a

Operator

over signaled additional or back there turn at will time. things any questions And I this remarks. further no are to George Holmes closing for

George Holmes

Great, operator. thank you

with couple year. how Let asked me of great if looking you was a define recently we'd leaving of the end by at back a I thoughts. XXXX, close

think pretty there answer. a simple is I

led already an we've strengthen institutionally done, equity what raise. sheet with balance First, our

position to manufacturer, filter world's second execution allows continue market. we our them the largest us reach execute agreement to Second, major dominate the to against a That in contract the with XG putting milestone.

Third, for XG if two Tier with we enable doing expanding our our in the suppliers. X more well, to to one Chinese China. a path executing to market or non-mobile space, agreement on partners in the we're really footprint foundry, XBAR deliver Tier multiple customers begin IDM on across XBAR dominate And X

XG the groundwork XG's laid We've recognize the mobile in XBAR potential, being our of full for both non-mobile markets. to capable the and technology delivering capabilities

to like joining safe thank today, healthy. everybody for Be I'd stay call. Thank that, today's With you. and again

Operator

conclude does that conference. everyone joining again today's And Thanks for us.

now disconnect. You may

Resonant (RESN) 6 May 202020 Q1 Earnings call transcript