RESN - Earnings call transcript Q3 2020

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

Operator

Good day and welcome to Resonant's Third Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Greg Falesnik, from MZ Group, the Company's Investor Relations firm.

Greg Falesnik

Please note we'll be using a presentation during today's call, which is accessible on the events page of Resonant's IR website.

If you are with us today via phone, please go to the Events page to either view or download the presentation to follow along. released for Resonant of third afternoon XXXX. this financial the results quarter Earlier that is this Investors earnings accompanies The release call the website section company's available at www.ir.resonant.com. of the on

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

George Holmes

everyone us quarter I'd today. you joining like you for thank results financial XXXX third And call. to welcome Greg. our you, Thank to

McDermut. Joining me our Officer, today is Financial Chief Marty

a of by Let's continued to was momentum. turning get quarter Slide QX X. started

of in quickly XG. for meeting demand executive and is performance recognized applicability Our platform becoming XBAR the its

Over our from designed designed key over in a customers $X.X XXXX, Revenues million is our were than units XXX%. the million, third first million quarter XXXX. increase look at revenues shipped Before $X.X technology. in we dive quarter. into deep some the year-over-year entire of $XX.X our of our greater have ISN were ISN representing shipped with half which third technology the the with of units of let's highlights Today, XBAR,

well these to world's XBAR me our forward. of unit determined our RF our production the expert second partner, milestone. and Most filter volumes. breakthrough the performance side The our very commercialization XBAR, packaging manufacturer we prerequisite was which to we our mobile continue Let strategic technology as largest emphasize that progressing targets, a is work have milestone achieved are phase, previously achieved This importantly, initial with required filters reliability. move enables

more This the of Move filter recent report frequency we recognized teardown a revolutionizing a high in webinar of partnership manufacturer, one being our they can non-mobile particular as X. Last that along successful true the System side filter a unique believe the delivering structure, largest investors industry a XXX SAW faster that companies the RF Acoustic be On event of board, bringing manufacturers speeds attendance. industry's SAW and reference which to our did largest and power to filter, RF XG devices this The and traditional design at breakthrough breakthrough XXX Every to XG XG. involved. understand XBAR, in the XBAR of the inherent XBAR promise we significant standard In the Acoustic over industry Surface six. expected an report, total device chat, featured key for example reputable a integrated we showcased the manufacturability Wi-Fi be industry download SAW manufacturability has with of and of and a corporate included host largest approximately It's current our of which help the other XX manufactured have Slide making XBAR webinars The and of best a ongoing which been roadmap day reviewed XG the a experience number with clearly XG on Plus. applications. filters most The additional Bulk referenced or BAW our were OEM designed the media series, capabilities BAW is include manufacturers. process. the more XG. technology as in technology technologies. on live that manufacturing supports We for revolutionary. manufacturing investment or world's times the numerous two handset thought expand to RF we successfully is at solution filter XBAR publications. and than validates BAW manufactured validation based event leadership a what have very to Wave The Skyworks' Everyone or number that professionals XG of first. years we platform it month, because ISM foundries is is XBAR, foundries, from insights state a technological being the X. Slide to better idea XG are than process, Wave deployments. to expecting fireside to and of in XG it valuable designed Turn build with advisory players combined XG and

and about times download point generation high latency speeds Internet-of-Things possible to to almost will not XX only instantaneous devices, send possibilities low XX takes for revolutionary data sensors, XG. the minutes XG. the connected that the before wider data latency no movie and exception, XG, be from Wi-Fi to a new transfer another with or opportunity never mobile will more. faster is is what XG will XG to takes the seconds than scale. it XG time imaginable but the XG. be The will real a XG's vehicles smart makes with example, next the on booming. is with also mobile phones, will be take data For unlock on XX one

Wi-Fi X.X gigahertz. U.S., at bandwidth XX% was one which the the in XE over is of approved example, fractional recently bandwidth, band For gigahertz

We technology. efforts expect continued expanding at by also lower of frequencies, to can the bandwidth which be our be enabled there expert

smart device talked delivered by the points. XG, I'll mobile defined the significance your of devices, is meaning phone expected have being or Now X, the about important not to as which level, real X. Wave for this before, performance on but We we at understand expectations to today's XG it's historically the rehash some consumers' meet Slide this, of key but so

XG, using problem they the concerned not inefficient spectrum rely the XG today? of phones cut what's that techniques uncrowded is generations. high deliver used to but data the and requiring Wave X larger So of protection technology are bandwidth type wave in is filtering today. interference XG require next Because XG different future use I'm of referring were it The that won't will that with resonator Early a with rate emissions. much out-of-band what from on

and applications. the have competing the increase and like filter having another. meet tool all things who of market uniquely initial RF ready the engagement Resonant capabilities about of is that beauty additional improvements one are focused ability will to XG. download coverage, latency. or OEMs meaningful a So negatively full doping Resonant's than XG complex to technologies by doesn't of rather in been marketing which filter are business innately where world's XBAR enabling competing relationships players leverage to And single bandwidth engagements. bandwidth, knowledge, enabling still external To using bandwidth Resonant's are that of By technologies that these many model discussed today it are not them. against affect yields we affects consumers components we XG ways, meet and requirements for a on our are leveraging as Other The talk competing resonator in to RF speed technologies requirements the leading their manufacturers deliver bandwidth manufacturers, the against OEM multiple with demonstrate performance

turn So now X. to let's Slide

with filter the promise Resonant the become deliver technology XG. how exclusive upon RF of So full the to did provider solution

mean significantly As we've interns just do from our straightforward to of a from demanded of that created those and ability better filters provide engineers effectively The what design by cost into that we areas, comes cheaper. for design needed filters which filter software SAW few challenges integration simulate designs development But Synthesized by to to use comes key faster path standard that? a are Infinite a are technologies. competing A can't or leverage What's deliver to is multiphysics by through fewer needed. to to ISN ability EDA from more demanded enables than platform, process contemplated automation and great the manufactured the we requirements, filters. or example RF discussed specifically increasing here ISN rapidly variations Networks modules. are is electronic such August believe faster, before, by foundry ISN several us that our few I require mathematical better models XG. methods. our comes often as cheaper traditional be key of solve The and XBAR in The interns our announcement on non-mobile is thousands differentiators complex

XG, ISN let's materials, we attractive speed intersection. as and of The us Today create an such which stand combination XBAR Slide to in demands the allowed innovation the technology. and Now completely to strength the turn X. engineered of of of new our novel substrates,

late strategic our last uniquely high clearly the highlighted quickly XBAR applications. deal The as RF frequency earlier, of is filter meet XBAR XG I year with to partnership was of the we largest demands manufacturer. validation and recognized As the struck becoming positioned biggest world's technology

technology. As second into $X utilizing for and XBAR under multiyear investment a Resonant commercial we achieved milestone four In Resonant the a the securing a million entailed agreement. reminder, October, agreement this million of strategic bands $X

touch you Now to this key understand we're to means. few going what help on points a

performance XBAR they and We would filters said First our packaging means do. we do in foremost, XG, initial confirm for what target this reliability.

XBAR the XX% wait filters focuses XG. in it move the a we high-volume and the than these rather to in brings prepaid RF prepaid millions royalties have to next of royalties That bands. four which for first agreement, received phase Second, commercial unit manufacturing building on based the of having to of for us platform To-date, allows shipments. for

industry opportunity So market the the commitment, explain expect Seven But required the know partners to of like to our control filters is scale significant significant prior of to market the importance additional is increase our commercial than To it. give reaches a an we this time are milestones that with we yes, revolutionizing are and companies with our XX% scale. and And XBAR closer probably dominant to idea of one important both you I'd designs. the the and production in we more for ensure step partner. this how engagement. technology resources there duplexers. of as most

with which deliver players in Their also bigger ultimately at of time highlight validation and combined. good and chain the It's represent of the bandwidth. infrastructure Resonant. share XX% to clear That The largest market, we X many the OEM there engaged keenly Our focused and for initial applications that leader our market. the potential our relationships partner with are market needed market opportunities that of should XG power Wi-Fi the than the the our categories partner some XBAR's necessary the resources has really handset I established largest we for is exemplifies is over and for Tier and we're with feeling the partners both additional the name the supply duplexer in Tier wide second our annual filter market a on has strategies. penetrate $XXX XX% great of already win progress frequency highlight a said, million market. only the revenue getting dominance are customers customer OEMs. ability high third or to no of about are controlling to one We're performance filter several XBAR customers from have to non-mobile world's X today of

to Marty, designs the before MIMO the is we of used more content, the to section marketplace as many represent which This filter towards handset dominant market. to can idea as XG what market making year. a expects scale, by Chinese of Resonant an as With grow We for relevant lower Now let's delivered which which the to designs ever at than that anywhere the for simply Slide talk market and market end, smartphones supply years, XG is to you about We're X. will be number these have These moving in non-U.S. seeing The in next quarter is to filter turning very driven family targeted and several big the this for China by to-date to have XG XG It backstop still it manufactured partners our important note ability non-stand-alone five exactly has XG dominant and XX% give and higher technology up China. bringing to interesting be uses power be market, this a before. for content, enter to the will the To filter today. to of over manufacturers. our growth cost which such phones. aggressively the overall turning RF more To be continue all dominated provide. large years. and is total be Asia, increasing worth XG seven for handset XG, anchor. in $X.X large is these billion. XX can coverage. source There'll designs particularly need a XG deliver partners that by move be They estimated third in it's the as the even an market XG filters This to will generation largely will wrap

filter XX and We foundry their OEM unit fourth XXXX. expect provide another partners prepaid a XX our per in This this turnkey to with it agreements I'll over financial and services which for to on quarter Officer, Marty? are to technology these review increasing Chinese agreements issued wanted have fabless companies Today licensing licensing marketplace. in numbers designs With to of total competitiveness to all touch has significantly three allows we in the over royalty delivered McDermut, customers I portfolio our for that signed already. patents XBAR patent patent our And quarter for the filed Financial our XG. portfolio, and second Chief our pass grow. over XXX continued briefly Marty on focused results.

Marty McDermut

Thank you, George.

XX, The talked provide Turning amounts overview Slide where an I noted. our now financial our of GAAP except to I'll about results.

loss or fluctuations. million to to loss second on quarter. of the of $X.X of Slide compared as loss to to finally a million, to technical net XXXX $X.X shares compared million, XXX% $XXX,XXX $X.XX create the these guidance. to and For enhanced quarter. whom $X.XX top of last $X.XX compared million to second last quarter $X.X total of loss employees prepayments are $X.X related operating our the of second million compared a also Revenues to quarter, XX.X or PhD, third overall $XXX,XXX an then as Net billings for to and XXXX average net and to the $X.X part a quarter. loss recognition of from compared approximately turning $X.X XX, last share based marketing X% loss quarter million were have quarter and XXXX, And quarter. In million $X.X last million of EBITDA prepayment $XXX,XXX a on the $X.X share, per $XX.X decreased third improved XX, cash expenses position, on revenue share down and $X.X recognized expenses administration in $XX,XXX the of large to At of they over million quarter. Operating We quarter the or end the million ago last to totaled EBITDA estimate XX XX the of loss $X.X a of million, greatly XX.X the will Research outstanding the loss On shares XX, based cash amount Sales, quarter improved $X.XX third equivalents XXXX. million $X.X increase we of million of per adjusted and that debt. or Non-GAAP and totaled staff. be of of of to revenues a received compared last weighted same weighted no contracts. a September share a an per whom at $X.X future quarter. improved million as remainder development And average negative year while of adjusted in September totaled had million. revenue with we the milestone. deferred Cash to outstanding per of quarterly XX compared loss when increased

quarter the noting second look We it's expect our first but our year, progress. to fourth worth more the and of quarters' similar revenues continued to

the For basis. expect upward would intact. second for if remains we another removed three is And revenues and will call as best times and be revenues providing guidance extent in now we said, first half a steady increased quarter, greater unit COVID guidance the That trajectory in we remarks. to turn well. that uncertain the prepayment our do large for consistently the to volumes sequential continue I'd revenues a George? and volumes George quarters third first clearly back instance, in in of quarterly on volumes. on sequential than the business of increase half also XXXX the to quarter fourth like the closing possible, these the and to to will XXXX I note of our will related the

George Holmes

Thanks Marty.

quarter our to phase is our packaging almost agreement. close is determined of to Highlighted for mobile enables set by of second commercialization which This the filters Slide to the on Moving XXXX. third the initial of quarter stage the milestone our have this XBAR previously a XBAR XX, contract. a prerequisite quarter is pull-in targeted required successful this reliability performance that and milestone achieved exciting

second The are share As of noted, along market. X bigger the with the two don't unnamed Tier customers and strategy leading XBAR segments largest go-to-market and combined. named because manufacturers dominant two for third has market one market in handset over filter $XXX there. X will major critical for for in customer they strategic has the Tier our revenue key annual a the highlights of need share It's the Resonant. market the RF players partner many XX% to over partners market than coming things of representing initial she XBAR To million quarters. capture wrap are market potential up what our and in look volumes And the ramp already that to

milestones some are track. and Here to metrics

While our sample non-mobile new foundry are remain the XBAR created pandemic engagements engagements increased on customer. has to Current our focused challenges and closing and devices customers. progressing nicely to have we ability

devices in deliver quarter in foundry is our the XX delivered China devices We XXXX. fourth to at partners another expect three putting to

partners start late expect XXXX. customers in products these to We their shipping

to forward. in this together, in innings with Taken the foundry is unit suppliers key moving of begin showcase volumes success early a the the We'll majority China. the represent

companies partnered to and and In we with technology non-mobile size businesses. value the we of market, expect in mobile applications. our the both we we Given device expand on the XXXX, that our sheer have XBAR contract with add their the to

to them. and session. our that things members, Advisory hard to the it have contributed all Board not of without Turning Operator? operator for as over I that, it hand XX, I I'll work success. our And has done wrap our with want to their could employees, to begin slide up, all thank Board We current question-and-answer

Operator

[Operator Our Capital. with with proceed your from Please Loop first Instructions] question. Acree question Cody comes

Cody Acree

questions. Thanks Hi my for George. taking Hi, Marty.

back wanted from you've are go the do - customers? wireless strategy partnership then looking and or that for some here? achieve to going milestones some maybe of you looking exclude at you back you overall, parameters that with think to your to your go where just you're goes expect largest, but do got strategic now partnerships, not into where just kind we you of that that Just if to your at automotives, how put can some other of around partner, largest what - And

George Holmes

also, here asked Q&A and to join Cody. heart the I've I question, to this to great end. a at Kelly want Marty It's I Dylan highlight here And of

here tenant we've Marty's case gets in So it over in technical questions anchor for my the head. got our

to make that on call. everybody So we'll the known

ISN, when of the and contracted. kind with technology the in earlier out when of business, out of validate get, trying took of - we the Clearly had close we just the really were noted bunch we gates some we initial we that some to coming a customers. had As costs of year, designs out to we did our

them and to of able we kind next designs those through some customers got way not mile. for the production of those were and the all it take And ready

marketplace. focus designs part, plus part really and really big the So starting really those library were migration XX suppliers the the and focused foundry going to customers, in of guys on in and customers, bands into customers had get consolidating we is, particular, doing historically, been as segment to that foundry, different kind decided large one-off large effort cost that saw savings. than the products that the designs And being of and to OEMs we had on products to that the design able have from really horsepower we focus to on been the in rather we did of designs We all QX, of our pour marketplace we the in the focus to for Chinese for indigenous foundries as China. the the the custom

ship this manufacture right quarter relates they our prowess, are of to worked very their and portfolio the sub we'll quite I of really in the mobile. We end partner for as in When be that's that a highlighted product focused ability X XBAR the the space. filter seven half and we've gigahertz market to clearly, those and gigahertz designs deliver us. of our really manufacturer on have end to and are partnership capitalizing between them in our doing to those we'll moving volume. and their as in comes sub with and with it called what's fact position We're on with devices clearly, of and, high the think I qualified customers far. get happening here will that announcements, that the delivered another after the for That We what we it think them. now on is strategic said, quarter second three the frequencies X the largest our Marty to out the to, going last is and that ball so the And products we're be focusing year. higher have take well. are we're our I mean that largest, those quickly The well focus highlighted we doing year. very

automotive, very they got about I the top companies, got to through seven can think partnerships on, and parts And doing able been as it that's foundries we're get our announced, going be products to X leverage customers, we already key the us. we and fortunately, that we've and have north don't OEMs. else And into of of comes types that the do marketplace, mobile is the don't We that marketplace. that's well that our Clearly, kind big we into for to several that's to us. focused five what want going customer marketplace. Same I our XX% customers phase. we're their now us all be good IBM's the anything go they in being to to of there. something fortunate push Dylan, footprint, expanded partners our But and think both non-mobile technology we at their very us, big when we at have ability, very, the need has morning, take They with positioned in to there leverage then share I done to relationships this the largest over just manufacturing is segment, leverage and filter for last move somebody I think the their the for loaded. capabilities going have is on relationships be with I relationships space, into webinars those missed world's additionally, fact to with we're Wi-Fi, the as question? These to to you clearly something oldest three very the identified locked on their their lean and in here doing several think And into gigahertz. manufacturer, have their it X, We and course that there as months, look and get clearly leverage. in and be what we've going excited we're

Dylan Kelly

filter hear with aggressively technology. can probably general and of lots filters the where We us foundries, traction. where the out - can promote we through traction, say, the SAW we're positioned we're about gotten XBAR the just commercial getting they've I And go manufacturing

the technologies, We continue BAW the nitride validate traditional the aluminum differentiation to against BAW.

Cody Acree

maybe - ads. you the you what for guess a your Dylan, competition industry, just are are around Let's about of is doing? Is quarters? anybody down are at there are that's When finding looking development several in the way investors stay second. not the there in really world the might any as look you the next things as Dylan with one surprises - or we hill the that see I you newer

Dylan Kelly

between surprisingly, change. decades, the say time is so world, there no. acoustics world, breakthroughs Coming from is a where measured and the silicon I'd much innovation In in not years.

in came the XXs, of kind that's brought fore been talked got XXXXs. we've this And so technology really FBAR to in in until And SAW TC say XXs, about SAW before, technology. the XBAR it the matured originally was in the the

was be think XBAR so before messaged that to should FBAR we've And have as to continues to that I think XG XG, what legs. I

Operator

Stifel. question with proceed is question. Please Our Tore with Svanberg from your next

Tore Svanberg

you, Thank record on the and congratulations George, quarter. Yes.

the million $XXX you milestone about Can talked maybe next know down your things taking mean road? on on question But milestone contracts elaborate your that with First largest is or I the other the customer? as second opportunity. that what for that means you level? exactly partner, far potential for does what to you as

George Holmes

let kind here end. of kind then of that I'll on in and And That's chime I'll Tore. a great touch the at Dylan question,

new, filter in is XX mean, XX% went And do initial it they and and the that's with off? scale? IUS World Congress at one know, that was at technology nice a are right? demonstration as said, know, working it that disruptive we I the late having get back had to scale. July when getting sit a get that mean scale band come kind to last the of and technology it year, to clearly, handling I You relatively look that is think I market power and than at of the of it, I well, Mobile to bandwidth you really that I mean, You ability looked the companies We and we did out invented technology first came June, to right that XXXX. can quickly. people chute challenge, on greater in February this in and in We new XXXX. know,

into but initial take quality, before to and some gone their common will it be they ability to bigger year million OEMs, they Tier on is on You a not very, test get out only to product. know, really, to really do that's X a put finding mean, to hard product may the a There and reliability, just to they've up investors, doesn't this quality lot that a happen. call, the new folks that actually X a may to think until are technology, they just that to you're just of put there there technology to need know and it for company going Tier units I out they'll manufacturer, hard bet I understand sample And reliability. or and is of know sign some it really is be quantities, these these it's through willing evaluating technically, handset very a OEM companies volumes, into spent the novel OEMs, long-term do. the hard ramp is there with reliability marketplace disruptive just scale, - companies of it to with that with are

the it billions ramp packaging customers. they for billions with they the the evaluated manufacturers, parts, they with worth And And part. already have the production. And good to and of of devices into today. a news of the dollars, we requirements of for just manufactured they vis-à-vis companies be selling go filter it have us their one they've the these key think the quality devices. do that And to they would technology with our audits through thing dollars' take through manufacturer, that's filter can big is, billions know us, that's validated don't where they're units And reliability. validated is, they initial we largest have for what initial these said and completed fact I the do, it this can

of in So other seven, dollars. XX%. the represent there customers hundreds we have millions top Also, that of in

think for don't back sit at and first, planet the to sit and at, we this and now think I look validation, already back that tremendous. I is can mean, they hey, they in can second, be I third So look be us, it's actually validated. biggest guy have fourth, as guys or the know

want it. to this got their left to And And of think a opportunity think? to showing that of to for technology us. the there I out. showing real What is folks believe be that You customers. a presents kind to do you be by in mean, going of middle lot Dylan, their don't customers, they're it you're I

Dylan Kelly

was Yes, I and what really be around was capabilities technology, extended, collaboration a in phase it His agreement. so think proving it of the out initial laid on. out are the can how

to - manufacturing, filters flashing OEMs, address or in and And As we XXX our we're only this we look - phase going coming it or talking maybe a commercialization up, is for about And by different configurations going to plan. about is in as the the if out one handsets just that's is like go at we XG devices. this platform the different really put into four and customization. device, announcement, for wave going and second OEM,

the basis, an as designed. filters talking stands of So hundreds we're four annual And been on have contract. we that are today, it in

what's So contract. for opportunity huge expanding under

Tore Svanberg

opportunity, the great in Thank year, maybe not update you're timeline said maybe certainly there? hoping the that's on partnership. you've this year, know next Maybe George, a I to us on but Wi-Fi the perspective. Yes, you. announce that past And

George Holmes

the mean, very Dylan I evaluation in doing We're are well. aggressively. moving as on I'll one And, we ahead this of chime have devices. Yes.

we a we As of effort. noted continuing Today, our that supplied quarter the some a to little over samples are devices, first ago, we of partners.

And can lots that doing get their some this the devices able of integrators, sample mean is and that this work of sample a to the to that We're we marketplace. we deliver wide largest to are good think little devices we're can did, on, SAW the us really do of XX feedback ability able could in technology ability to and demonstrate we to to part I about different guys that devices applications just deliver the we the still of in the the references than these talked it that call, that going to foundries IDMs the can I a the more against actually on we're number think these seeing remarks bandwidth gives changing. carriers, for really we space. what about in had game part the in what bit be of prepared

done that were So we am wish thing. we'll I Clearly, think I sure do COVID that I this the optimistic. over have quarter?

out the this I thereafter. customers front sitting we So think we're out in regular very a work getting and but of will Dylan? on soon we're can. be that if doing with quarter, still still that I not basis, could And there. And more Dylan getting it's it face-to-face

Dylan Kelly

bandwidth. - got six has of mentioned, front getting and just think hardware, as and the gigahertz in people prepared ultra I five demonstrating I'll we We're bands Yes, say we proved full that's have getting challenging. samples George

but We up back would. preclinical clearly, we can it's to be aluminum we filters we opened great what nitride differentiated not to do they multiple cover continued mentioned, well resonator both one. we're good incumbent to technology But George doors performance We existence, in don't work, where bands, in as enough the the BAW show do valid can progress. these just for haven't bandwidth. it's to making where the going as still as we hoped And against have quite new

Tore Svanberg

level which Sounds to of continued the one Marty, R&D good one should down, forward? this great. Is expect going is come kind Marty just we last for the

Marty McDermut

in up I it We through that think efforts, year. we the expected as set earlier then our grow I we to it went the refocused No, but stepped is year we down. thought expenses back the

would got a it's bit. out little that pushed when exactly happen Now

into So this going up early quarter to year. get next and next it's pushed

Tore Svanberg

thank and Okay you yes.

Marty McDermut

driving to to organization talking people get is job the doing we're was a some and us done. really development - real and that push say his fine Dylan I going are driving to us

the we're money. So, spending

Operator

is from Please Our next Gill Raji with question. Needham proceed with Company. & question your

Raji Gill

solid on thank you, congrats well the momentum. Yes, as and

that expect be driven to next by volume had Chinese your the XXXX, you foundries. You that these year the of in mentioned traction majority with

it clarity on your that. the you wanted of just I we of the with it the go with What mix foundries mix standard in with foundries is Chinese terms how that the business So into the do as had XXXX? of the get to business, And of five little about prepaid And a more designs in is QX? licensing, business we think agreement? is

George Holmes

during is offerings. do is asked. this question. gigahertz appreciate to I give to hey segment were the that - of Yes, our sub-X a of bit I great. when volume around some previous really These try little of of the majority questions that the Allow me specifically our clarification product

So the that products. library is

them these look Chinese So customs. unit ramp that OEMs our as at, what foundry We transition, more going that the customers China. we we had large in for full go library-based and so when XXXX seeing volumes, customers, a of becoming large historically of our into system products historical see are we after -

that I'm So talking about. that's the transition

last happen new where are months, legacy prepaid mentioned six kind up see a probably will course year signed what going I designs continue as we XX designed, starting hold. that and have volume to of designs it's the on to the early royalties. today, full of back mean that reach at and year, to and next this we we those begin off. the sit our and based So opportunities to all that We'll over tapering start that, of some start to Of late take seeing these look

process all we of on. mix as those do development, go and it's revenue things Marty a of from according so, Because recognition, XXX part revenue we're to the that And perspective reports are through get prepaid actually we that to royalties. of And is over part combination hurdle They agreements. when volume, they a royalty-based clipped mark the a that in hit offering of do convert off. they the

get to volumes. they pays the successful development customer the paid devices these ramp the upfront as in development we along our and able an as through they rewards reap back marketplace, small profit. are for And our that end we're number with the then So, of on

Raji Gill

of in Wi-Fi In the terms outside we're CPE. your of, seeing a space traction of traction mobile there lot

massive You into elaborate thoughts the about also, area? talked automotive infrastructure, of there. what then in if design you that MIMO, are explore failure side, this further specifically And could kind on of terms maybe your wondering expanding

George Holmes

Okay, two things.

relates agreement. that much can and to automotive we've got First as foremost, it as about we as talk about

marketplace. specific our the historically, As in we've customers talk about they able you get those the bands been into once of agreements, know not to

aggressively that's the XXXX. this work do working course people products, pretty, one customer for a with to tell them our touch what pretty CPE. one of about But good they versus these they're our triangulate All gigahertz for our with or relates generation And the our next tight and but what life arena, been of since actually with work by do want whether very they of Because earliest potentially can lipped to the are to the run they we with announcements our are. been to on they don't could you what those? us, the what can customers, themselves. I is of on able do are And portfolio. customers, do us customer is the devices side sub-X over to they do Dylan identify XG it as you be want software and it in us Wi-Fi that

Dylan Kelly

into think we're and the I Yes, usually massive MIMO. dig

George Holmes

Yes.

Dylan Kelly

technologies. from just acoustic innate And as this the holding how - of physics resonator understand that on I'm think we high. so filter traditional is handling finding And quite what is work. we're Raji, do better that to I really about yes power one there. focus I the XBAR so same the we It's got because the different excited capability Basically

a MIMO station levels, filter. And it than element have And been looking two opportunity one has massive those now base be, as a come antenna, with to XX each times order used XX to four to you so closer requirements to we've macro this antennas. it down at definitely an higher have And handset. - and of needs power let's say, antenna still handset

kind market ceramics brick that's replace good traditionally. to I the industry acoustic of the sizable interesting, now. paying very a you're would commanded think to within say has always is think a margins this bring they And are filters that there if solution analysts, grail It's holy or reach. cavity been I

So it's an - of research us. exciting area for

Raji Gill

the Marty. question recognize and it's of its And talking kind how you that, about me, business We're Murata then last said from to lumpy.

them cadence yet Murata So in was revenue How revenue does the do kind start payment that calendar QX still growing back to kind the it we that back XXX,XXX go at think revenue QX, the XXXX? we hit How P&L? returns of where of to into about to of returned excluding the XXX,XXX QX, the as sequentially. recognition,

Marty McDermut

look only - only we've Well, that we give out. a quarter given

Raji Gill

Yes.

Marty McDermut

the think traditionally that's what Yes, getting we've because are I done at because - we're we comfortable - of what really good that. we that's feel

past at what of, five we've good really We've out looking a back expectations. over the job done right quarters. done setting Looking the

want out don't get far. to I too So there

growth. on steady, this just them, how guidance sort know - come at forward think hey, the as in looking I look of at of sort year, you if you might the in for past look some revenues past be that steady

Operator

Please comes Kevin Dede with question your Wainwright. with proceed H.C. question. next from Our

Kevin Dede

recognize of First, take ASP? a designed. in so XG step sort on a that us the just to then devices of next to memory refresh give that back you sort our comparison year? and I an stuff expect and XX million you'd figure don't second see of half kind the what Can that you And you said know can could you jump you that royalties approximate of the of on you

George Holmes

yet. aren't are and you always Kevin, on

gigahertz you here, seeing, down $X.XX one dramatically started $X.XX, historically $X.XX come when at sub-X just the you juncture mean what over have probably you've this But XXXX, really I quads is three at as of They've ASP that for reasons, down. As were obviously, today said, I think break come we're the don't I seen to we years. they're where at. we I know, when $X.XX mean, in an obvious four we down at today. because started, past

value So, kind the tenants of perspective. a from anchor one is of that

to going I So overall trend that think is seeing continue. we're

and dollars. nickels talking, you're in pieces dimes, So not quarters, $X.XX

are it mean, kind to sub-X devices. XG gigahertz other seeing, as the of we're backup of being applications sub-X that gigahertz volume some devices, I as except relates lower On devices used these that to

applications, seeing - pretty I silver in most you dimes sub-X uplifts of specific think part, duplexes the XG and something in and to or if would is that a it's specific we're opportunity half that see fair? can gigahertz I in Dylan ASPs space, also depending at for migrating or are out So single think you or segment on up we're if on and in that will be they CPE or looking dollars filters dependent some not infrastructure. handset in And whether see the the nickels market. mean, I dollars

Dylan Kelly

Absolutely.

Kevin Dede

command gigahertz, still of that better little is Then the stuff with to bit XG huge fair? sophisticated the yes sub-X takeaway crunch is ASP some in but enough being that a

George Holmes

to that's clearly we're only also of that the And prepayments, one to curb products not to when saw. this, custom model the that much that some timeframe, you've with reason XX aggressive part aware the device that full fair. prepayments we of for And custom part every marketplace. you're got pretty full disruptive standard we decline think ending part doing challenging, you're Kevin, on to is to one timelines migrated devices things that during we XX custom technology. is design I market think is so doing moved business Yes, seeing to reason as that the price not And mean acutely the of I customer. the I full designs and And you're thing as library into get of a months XX but is on of take we're our that

that we're library now foundry-to-foundry port So products we've working Tier these large that basically from for we got X with.

And substantially. costs are is because especially these these on shorten life big because to able kind on of back the for it's China are on the curve, shorter. cycle end, mitigate the qualification end all design very the of design the ABL back We cycle companies in there, the moreover, cycle OEMs

designs XXXX the XXXX to cost completed, ability say have the significantly So, in significantly as develop cycle to through think devices process. why well. we the way us, unit will starting we late in this ramp times is see, volume lower completed we for that shorter that all be is And to the

Kevin Dede

okay, But payment?

George Holmes

us. months very, that getting got have we just changed XBAR-based our were designs a - most in looks do our hone efficiently to where very we done. the game through us it weren't those craft, frankly, get We to as allowed being, could to do and And And clearly company it the Prepayments importantly, that things us from and able XX ISN. is it or were position the we as with ago, probably efforts to we our happy position command XX for a in develop customers. we devices do allowed we've like these

Kevin Dede

takeaway contracts cautious, that is on you here So the takeaway? outside XBAR structured with is - or prepayment of agreements that the

George Holmes

Yes.

Kevin Dede

Okay.

George Holmes

of those at one point. of large Asian year significant We foundry message to our partners all got that this that in continuing that customers prepayments some press And releases - the of with least pretty of out at this have. that beginning work we're we at we

Kevin Dede

business couple shift? the we that. mean know you're assume based a on there Right just same an mean of the model otherwise, on unit this is minutes right, though paid I I otherwise, royalties address you But ago, earlier for I being questioner. should those

George Holmes

to upfront, have And prepayments. as Then low unit this getting we're have five on No as we at different of XX. versions royalties, XX%, small, as juncture. high and royalty we is those per today, legacy three as average three rates were which business, seven then all

filter couple And a first of versions very up the rate, covering fully prepayment rate have a We we than with which just different engineering largest little our a has that with on getting a paid license, we have And then royalty paid a the a costs. license world's lower either, hurdle start we of paid-up bit is have device. like manufacturer. royalties

a So all billings not the for. from perspective a nice think, a from a it and a that for doing revenue in mix rev gives blend three marketplace, but out us from only rec contracting also standpoint. different versions And perspective, today, of we're the I prepayments we're in currently what

Kevin Dede

right, Give the us up the and of on All XBAR what and can start the through it I dig so we know net seeing milestones. to four and sleeves that when second in a getting you'll market? roll think timeline our market? on you've got stuff to XBAR, little a the hint in bit you

George Holmes

in I been tell But the here's would details in the what Well have shared. Those XXXX. of contract mean, exclusivity quarter first pretty - Kevin, the tightly ends I because end tell secrets, not can't you what the are you kept the obviously. I

So, it's boundary, to by we're expect and reasonable that boundary to gives to try into that that timeframe. have beat your is I them going you that that think a production

of at of latter least releases their press production If press you can schedules. look one X with ramping when signed which their the to talked we I consistent at with volume in release you agreement, in manufacturers which about releases, original Tier the point XXXX, is production the OEM XXXX part handset

Kevin Dede

Thanks Okay. George.

George Holmes

But that's XX,XXX foot, know. don't I

Kevin Dede

have no, that's of apologize? needed I track all it right. Yes, I I lost and

George Holmes

worry, Yes, don't don't worry.

Kevin Dede

else well, For it call? but I me again, think from me forcing it's well the you as through helpful as on drag everyone

George Holmes

Yes, absolutely.

Kevin Dede

Kelly's X aren't flip can rest Dylan on where, Slide the league call, so back we but imagine I All Dylan I to right, right. its the think imagine us know of Kelly's - number

call them the difference you competitors capable? technology call their a the with talking what filter we're deeper you alluded the bit the little wave for Thanks. you bringing technology per on of are So, to XG you dig involved as your next a need what se Can on market in as to XG? about to allows resonator and that address to think

Dylan Kelly

it think I was us. not Yes,

Kevin Dede

one Dylan obligated I in step George's to I lap? on mean, you I don't mean, laid this feel

George Holmes

I As you the put me like, Oh, my spot, goodness, he's think. on

Kevin Dede

No, your no, you. it's It's up George. to call

George Holmes

questions from take to good you. always Kevin, No,

I here, right, So here. two Dylan and me the I let will things backstop think

So I he when doesn't start technical. cringe talking

from these technologies mind, quickly, enough come around man you've scene to know the long if mean, you if been to do enough, to phone, minutes. depending here you're these you're to it that the LTE as a in you hybrid around better download mind. new agreed if base in lot to on up are the to in them some entirety. they that have And footprint long into that and guy the at you in due is consumer. only is network an today. some and there two mean, you think keep introduced adoption, to your a Kevin, or fully part phone going speeds, XG that a slow through ceramic you that been in the it's user to able would highest sub in you the of whether front-end of real RF timeframes, filters market. perspective, a we'll support your to the I neighborhood, of But a types - go look network. acoustic technologies, but on take taper There solutions - they you've tend to they set ramp, and the be the the our XG that, much performance are of see or compatibility XX go the better take and you consumer what's in in now right look be delivered to XG do signals. got an into matters have the we download to actually that that say nice of what that these as movie, they keep marketplace XG got have XG network, Clearly, in ramp and I combination XXX a don't square of X real people submitted get RF you've getting But different and XG setting they there I technology, X you're that's to and XX got And marketplace experience when be going backwards on stage not And going have its in get things today. that's to the old at network XX wireless don't in the than millimeter neighborhood wave minutes they're download station, you're to what the you overlap, and talked the performance lifespan think deployed some by you've you from are get work footprint getting devices that if to devices these to delivering have I the to footprint are of So the of we're then as speeds the long through in what you you be takes infrastructure in your we at get download that believe traditional to going coverage, a of is because have. getting we filters, be in as market a years, overnight. the currently have nationwide We we and trying been with have for the the is, X, XG And the that you large have probably from speeds get at on XX set am, challenge a and marketplace, today ability going seeing lots technologies, and it enterprise devices and ultimately north a like peak, then and and expectation operators start that back-end. Wave high-def people the to receive I having and deploy and able look to to time, have from Wave we your whether plus

to the and features there is at going central Xg I vehicle a think time, we're leveraging latency. applications. filters technology ultra-low going in But is your I you're that new cool you it's to end, autonomous fully think really I want going what So exciting and you're be car, front some to want want, think and

at want car go in XX of that latency into to you. an requires to you miles hour have the ploughing don't You front

very, things fast and respond, be just want have don't to capability you today. You that very to those

do over what I'm on hand my you me been to who wrong because here? gotten sitting probably screaming Dylan, the market what it Dylan, correct to Let can the me has here technology. And butchering I have overlay XG today? of

Dylan Kelly

get think I Well, right. the picture, big

I a try I to get nitride bands. just level, these to if BAW, to had it down simple. not The I to - natively think I aluminum technical it will keep bandwidth have technologies incumbent cover high-performance does

off they there the they And where trade extend can One, have interferes. tricks the make. so harms you rejection can bandwidth that to is to

what George that's And as have talking network interference. performance intensifies, within so is problems the about you'll

it the the causes the that's split force size. it issue you and And range. other approach a band path that it extra cost is is loss, sub-bands, The adds if that other with loss, and brute impacts and adds

your far as deploy either certainly which base from to infrastructure the device away station, operators won't So or work costly. more the have

covers all going And through where to wise So think it, a this XX things and WAVE solution. have timing that's that be being positioned we for XX. X that's equal, of filter we're winning all a technology if you

Kevin Dede

I not be bandwidth? needed that, it's capture is last to to is it your the still of are a understanding of going my - in just of layer what And device range. manufacturers I Dylan the the some adjusting using frequency to saying capture milling adjust - to gigahertz so part guess limited that you're adjust sufficient what guess, Okay, deposition to BAW as

Dylan Kelly

It's the Correct nicely yield. bass capability. that improving million is just trimming for

Kevin Dede

Okay.

Dylan Kelly

in it This science niobate have broadly is is we're capability, how to a is it says, lithium use material out coupling figured in a to capability, chosen published way which old before. use material, there that which better results bandwidth. using certain just material a no to has And that one we've certain

Kevin Dede

they that to ISM it the foundry to need modeling? your the specifications they to incorporate is they need make to the difficult out partners adjustments How on need for the Okay. line spat the that adjustments to or that from

George Holmes

structure approach and beauty real the utilize take of the we that, mean, I existing did trying Yes, really size, to is processes.

So, success as through off did already we back they first shelf no process, in we commercial pass change. with announced the both had two SAW on two different foundries, runs the August,

Kevin Dede

change. no Oh,

as you it. Okay. on Well, me pleasure. appreciate Congrats George gentlemen, Thank entertaining always. for the I thank you. progress. It's

George Holmes

much. thank very you Great,

Operator

Our next question. Please question National is Bill Securities. with from proceed with your Morrison

Bill Morrison

any And expect with there ended run they Or they're any basically hit XBAR now, sockets of that? may Since Thanks. you X per China, your XG for do rate is into design cycle many two, you partner like WAVE visibility number unit devices, when in the visibility Or the into like there won? then to one. is royalty pitching? Number have there? number the how

George Holmes

landed great two questions. Bill,

answer. one our First to not for us question, that's to answer and for one partner

prepaid for Sorry a for the devices if we're have contracted is And on are you about paid that The devices. recall, news frankly that. good royalty basis up. those fully we four them with us

of on noted, So thought flows. there are they matter developed. not and to those And when four paid. the whether already customer those get highlight devices, cash this contract customers, was we have team, are for us made to under for be went period, because that What been hundreds no with as we we've devices, going Dylan choice it best or this to XX a us devices XX it And that customers devices. contract doesn't or into I'd business also like is that to new concurrent for us, we we

in business. model you So little back good that nifty piece look we at couple you a devices and it's pretty little a which think get a and us XXX it, pretty for becomes is sit a that million one you know, dollars

kind for answer the front. on you have of I that's So that

traditional a prepaid customers hurdle our Now, down if of the the we XG devices, royalty prepaid most look a again XX% with Chinese which to hurdle rate range. their are pulls also with those from that X% rate rate, to a is that in X%

a unit to a a Hope answers standpoint, on rate hurdle So your that we royalty small where pre-pay on rate. to X% the all and XX%, that our to volume been our where we upfront question. when with from back-end, a payments tend get do of get we have X% we historically X% do

Bill Morrison

expect royal design comfortable front's becoming XBAR whole, Yes, more market filters… so as customer, but XG, up there and like then understand a per versus be is fronts, the with on to you on the I was be do I when going just the revenues wins asking in the some for unit average, like rate your to with

George Holmes

fact plus And this technology wanted contracted the viewed technology they evaluating Bill, in they there, us they go already worth after percent share. that as single market technology contract. and one they're on. believe is of millions out XX let's to they indicating And with the the every our bet per XBAR hundreds that with own dollars of

$XXX million these So $XX million the devices. for of said, somewhere for four devices, life these between and it's they

confidence. So perspective, they share. lose can their that, you I that they I I to public because tell to that's any domain. any from speak have than if can't in more what's intent doubt haven't the

there annually I as execute So in lots new that for going get are we good be developed considering to those. we as of to very continue to long is devices, they're think position, XG,

try answer let to relates on and come that. your to XG, back As question the me it

those in the to initial half additional year we're For it'll we we have be rate. these get And the following the them seeing through they're second Keep their to - customers, will or these makes XXXX. mind, year said until expectation on My That hurdle second start that take in is going with - assuming they're of ramping half though, they year. sense, we those won't devices start successful. devices going companies. to doing the additional

we're right miss I we've now just anything Dylan, the this did revenues the that. seeing contracted. early devices represents so And on

Operator

George closing the the Holmes, to back reached end of question-and-answer call for I'd have to this over We the time, session. comment. At turn like

George Holmes

the infrastructure of expanded foundries. operator. Wi-Fi filter with BAW Hopefully, validation engagements beating XBAR structures standard to performance customers. and manufacturing the the the footprint In products IDM's you and to applications. milestone of all solutions particular, our great for to based RF able supplier. poised Tier thank our moving meeting of development world's the XBAR our deliver largest for the mobile the company. third highlight another we've fronts SAW built Today the expand on Chinese other We're able contract, or phase, on our our just X with partnership our The quarter and of with library we've Great, been guidance significance our to on for being marks with

milestone an all for and this the to I'd marks things exciting and company's marks think thank are great I high to really come. us in the a it's note day. today like history, exciting everybody joining that have and

Operator

This concludes today's conference.

at lines thank And for time. disconnect You may you this we your your participation.

Resonant (RESN) 11 Nov 202020 Q3 Earnings call transcript