WISA - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the Summit Wireless Technologies’ Third Quarter Update. 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. It is now my pleasure to introduce your host, Kirsten Chapman, with LHA Investor Relations. you. Thank

begin. may You

Kirsten Chapman

Moyer; Good Summit I’d XXXX Wireless today CEO, With Curt. Oliva. you update to to us Brett Wireless' Summit the Technologies are CFO, morning you, George like everyone. welcome call. and Thank third quarter

made Securities and to the on and Act Safe performance XXXX. statements, Such referenced Exchange everyone Act forward-looking statement contained nature constitute I’d based in like Company’s the Securities of statements the forward-looking statements Litigation Harbor of of Reform a SEC reflect within the forward-looking information about available are filings. during XXXX results, Before of the call or to statements Section subject not the today’s operating Safe a the currently statements historical for the of its I certain and call. including that Brett, future are forward-looking are the herein and the our to with and could Company's demand turn Securities price consumer Act meaning markets implied wins materially XXXX based to Company number and uncertainties provides Harbor and in rate expectations from and forward expressed our current to of remind course forward-looking customer secure competition, of by or on hire, and from to These The facts adequate opportunities. Private Statements the are growth, financial opportunities including and future the effects including academy differ risks our these statements. competition prospects actual motivate legal others markets, wins, and developed capacity, the to with our design predict production looking employees uncertainties ability and predict that manufacturing and performance our the and consumers demand developments to conditions our technical, in for associated our results, cause feature logical, of factors, of regulatory, and the of retain products macroeconomic COVID-XX the current affecting entering timing other ability design ability pandemic existing of into revenue associated XXE

and the that, discussion For the to turn SEC the more risks filings. Company's you Company's Brett. upcoming to and is of ahead, various I'll the business. ongoing my pleasure refer Brett With detailed Please uncertainties over it call Moyer. to go of risks

Brett Moyer

that that to XXXX Thank the welcome the kept how P&L. impact is motivated COVID that quarter started you call terms in membership very response XXXX's Clearly, all gentlemen revenue of and consumer and growth, get you, design growth. in the and was wins, impacted work about team like us year, excited and would to what showing you, I'd start has the initially, we done Summit QX ladies Kirsten, excited and update. got When our for but to Wireless and progress we this

the do I'll for a quick investors, overview. new Now

potential or For pieces. One get but the either AV that two gone custom wireless receivers primarily designed into built modules that that is ASICs technology side investors, TVs to speakers. Summit has

product, certified a that they that they've to interfacing they're $XX from into means for If to a me means but $X product. is not WiSA ready, inserted WiSA company a if that a have they're us, purchased bought So selling module and module.

other experience, a is Now has WiSA for with more Association is sure to critical other that role, the that industry connect has It they know is because association XX the investment one, products. the can the ultimately great of WiSA And that part make run consumer We a brands. WiSA. this number the Summit right? than which product and

able in high that want their it, get living fidelity going to to to they're room, they're be that, sound know, going they phrase have when a So simple immersive for a theater you they in however they'll -- it's consumer, sound, their movie theater that see know setup to room. be to going signal or and the

XX Now And brands. Hisense. of are last to during ones two of more the the four important group out months, added WiSA. seven that more added more SKYWORTH we companies and We

these Now in either their you'll SKYWORTH be or TV big-box Chinese U.S. the in five companies. the display to close are And domestic manufacturer. production. Hisense claims And TV largest for is to the stores see five worldwide products

a all and over Europe. China brand, German see own is SKYWORTH company. Metz They the You'll which TV

expanding critical with players continue and Hisense membership like we so, SKYWORTH. And

other in is QX surround WiSASOundSend. the achievements of critical One the sound of

now project TV the and consumer, with consumer all $XXX family at isn't has so translate used to TV product, worry a the that This will there Aker with WiSA gives Now and TV, now of plug TV guy, going gotten this product the any This home et the worse, and into is and off be TV billion cetera. through down sounds to make The Amazon a this critically, and of Prime content of million to price affordable gives lot being bring to this moved with will the opportunity $X is enough the to has watching point, for Certified speaker can great back they those $XXX. they entertainment. TVs there be Arc, the list the the worth tablets the the around probably having center to right? and streamed phones. critical in devices, that price They've sell it. can bundled And video content speakers. enough For very so point handheld the family Netflix the TV to that can and TV, sound installed is for speakers without Smart guys, any of to street about deliver surround get Apple transmitters It'll in company, the got probably the speakers big center design to that them they $XXX. cinema do other what brands Hulu sound for entertainment. box for audio the night at It their love, for $XX and sound a confidence speakers a probably

customers, to screen Now they audio have the for an great around their good easy big fund. to family market way

Now want is great soundbar from the great Bang These seen to audiophile chart an here whether highest $XX,XXX want the great Olufsen box. to products. And driving We've surround highlighted a on We going customer. some the product point a be examples these music to giant And or now bank. this & green you this and points chart sound is you We on value from ones certified range a system, cheap. high-fidelity or spend are to is might the of ones. ago. And year but Euro a you're experience, the have X.X got surround audio music The configurations. a systems. don't in sound want revenue. customer, this There's got updated breadth lowest break sound bars. the are got price all WiSA our from what's great

integrating We have sound to the Now is nano the they but been integrating other great progress so could on slide. our their integrated past They're their transmitter talked Xbox, TV. on products. WiSA Roku around cells surround products, X and make made about SKYWORTH, should We've into progress SculpSure systems. Enclave announced Roku in continue we've to LG that which and we products OLEDs get this and TV

shipping quarter. this TV when they directly speakers start to So can transmit the their

a development the last showing see, to business up They're of market products you model. the So occurred validate product for in year. buy, lot Summit's now great on

Platinum Now we're by that and Enclave a couple about the sub-$X,XXX these are being Axiom, SKUs little marketed going green look to sub-$X,XXX to a -- now of points. slides price and

sound surround love doing the product better spatial it, Why? to are take less. yet later, $X,XXX right? in the out response? you buyers. check these products, look well comments and price go response around But go these, So, Consumers lot certainly getting Well, not I'm line. value at that the trade a consumer enjoying the a out of but to fundamentally, were a sound. They're the of SoundSend or verified from in getting great experience. the helps or what's reviews scan system very about through but if it it's there, at consumers quick Amazon a and out great there's simple-to-set-up going

experience, gets performance. a expensive a Add bar, think have Add big bar, sound it better. step-up. about you audio even an better. audio lot TVs it of the takes But if So the sound least gets a the sublet

room. putting Now XX-plus that really rears in of the of percent audio the helps content room, a the bit, little the couple of it front so content, is in your a

is Combine sound you that jam to you're in got speakers all a consumer room. right to them separate it We you appreciating. performance the you're related traction video heavily seeing price much sub-$X,XXX that weighted the move your richer you space. think the sound in setting when equation small small and out, sub-$X,XXX. bar, you're little separate cross audio value When And all sound sound, into you for that with are tracks So you deeper gaining now get the products. left, is can a the the -- a around to this experience is

in we the the call we end at last year. indicator, critical Another of -- our QX started tracking when this did earnings QX

participants. interest reviews, see links We coming in other checks, from reviews, sites Wave box like website. product from from growth WiSA This TA referrals, to and the of consumer continue WiSA kind is open from

We continue to see consumer growth grow.

XXXX. from if visitors hit look the happen holiday quarter. this critically think we'll terms quarter-to-date and you viewing we have in is the versus XX% XXX,XXX viewers XX%, season We of XX% that at to in time in the and going viewers. expect moved up that We XXX,XXX what's of September, see of to users more probably XX% to Return --

fidelity to highlighted system, want a do to back like George? music they to are these give Now, surround over to coming what George high to research I'd you people buy? to few Association to figure turn their out it what's do system to WiSA sound comments. So

George Oliva

Thank you, Brett.

in was the quarter to a year. over strongest our quarter QX date. That's same $XXX,XXX. were Revenues in the increase prior the quarter XX% So

to cash quarter, XXXX, be in at which the prior and points, X.X-point gross which X.XX-plus, million margin XXX% will just we're QX QX projecting that was of our north over in improvement. year. Our of was about was $X over the $X.X million was QX the end compared XX growth And

Brett Moyer

Thank you, George. right. All

and add look XXXX, gone QX and So and TV XXXX that's forward XXXX more activity the projector into look at including all anticipate in under companies. radar the new we when screen, to and members, still we on we

see TV. products in well existing as and expect more the volume WiSA increased We broad brands and expect easy sales brand shipping. from and distribution more because we more brands ship projects We TV WiSA-enabled as installation to SoundSend the increasing speaker Certified to add of

it wrap go great box. and highlight, is to in All we want the the out I just have wait up is before season. is -- a there surprise. the for sound to to Now you questions, it surround do

here's three kickass great links So will there. you, audio to systems $X,XXX, and sound, ship one give a you that three under click for box in

LG to got to WiSA build your you has ready great out OLED plating speakers. are and If want cells home clip that really and theater, will connect nano that some

just hang with to that, operator, for the let This click slide opportunity So, is questions. and to this this for during promotions I'm on home. I'd going these like great up Q&A look a to to open And drive on point websites.

Operator

Thank with and first a your with Ruben this conducting Instructions] from Roy at of proceed question-and-answer session. the will comes line Please time [Operator question you. we be question. Ladies gentlemen, Benchmark. Our

Ruben Roy

QX understand we kind traction just start. give Obviously, terms you think on obviously, of and build supply high-end think to we little have Brett, the you -- you trend but of of are update? as into some maybe here, are about brands things of had great year-end. part head out down get guidance, market see It's slowed tough year? some them we've us a year, I point. things as about seeing earlier and out overall we these you're that as guess to first all the up How of bit But be in this numbers door? of you're the helpful beginning dynamics, around would the Can to given looking going some an traction excitement congrats your getting with That the got a we a there. how a this kind move thinking to bit the at year. things And that chain? seasonal Can about different next

Brett Moyer

got audio TV a Well, year stuff traditionally or improvements, outside. that consumer have I think all be The said couple home fall of expect say in to the most of in season than that so of seasonality COVID. good because going to year the people be we went space reasons. done this home the And gyms, there's I home for a the spring, a selling the I the different space. that

the we're do in stuck Now wave house in you're now right. what you X, and

that are validation there's seen times that lead think selling extending I our out. customers are we've from because products

We our since times inside seen in coming late have lead orders August.

believe because be or to QX strong continue So, consumer demand customers right? -- all there's to it's our able a demand, fulfill I though into pretty not customers, it season should going and the Christmas are even

Ruben Roy

Right.

very with helpful. I'd agree And yes, That's Okay. that.

new of seeing were You consumer give the update things but are anything with dialed to report just an you late, around well. a at electronics your in us that wave follow-up, bit this going how in that Brett, areas Maybe did some other quick as of point? And a little I strategy? on

Brett Moyer

Yes.

lot consumers and graph, to consumer back growing. we a of had go if So interest you the

multi-brand run Cliffs a Enclave or and Platin, They Enclave whether Platin it's cetera. Cliffs, of have whether are Axom, Platin, that performed LG, very well. We and ads it's et series

think consumer for I is integration XXXX. an a perspective, from from this -- critical

I think consumers it's WiSA huge leverage partner. as reach cost-effectively to Association a those help for brands the

best, an Enclave say, our refer a add good, better, Cliffs ad. on So Platin, to so test, that for and what lands multi-brand a example, we as,

one If you brands clicks. When you'll Amazon just you get put in, those actually X.X run you website get one three Page. brands, of brand, to click one or

that September see certified clicks the return almost to the has mentioned in November. So you I in almost early it increases XX% the -- and the XX% that from October, to with impact, earlier, And visitors number to gone Ruben, it our I doubles think of which site WiSA can consumer. engagement brands

Ruben Roy

Right. Got it.

Okay.

Just up, to Brett. finish

the you we $X. momentum it as are the of some module average see here said costs? obviously, exciting start about changes cetera. 'XX? hold So way thinking think you could You've How you to see traction, the engagements, past the in et into Any on to that

Brett Moyer

When do anticipated that not we changing anticipate expected I we we us set have. of that we'd the $X. changes guidance, guidance whatever

as So think number I in you forward, solid a that's look XXXX.

Operator

of with the line Our Ascendiant from comes with Ed next proceed question. Please question Woo your Capital.

Ed Woo

to of on we is you're on Or the it Congratulations them as more question to kind retail is like selling in more channel Christmas willing take channel right retailers. you into see head season the the Do My quarter. when the talking what up of or terms you're the back? inventory holding retail now?

Brett Moyer

So we're a component.

channel should WiSA retail talked right? as there's the or look to actual the wave recognize business they other get it their one that about they to multi-brand there's websites. category brand, to can whether that them We effort around brands their how at talk we to bringing So to that Get a should in them drive multi-SKU the in. them storefronts to recognize and

-- do beyond had of on to orders So say, I had more access the the of on have from they but to don't components some us product we're season. front our wish for I the they retail, -- line that we customers build think more actual know

by I the have have retailers for because higher-than-normal And hurt they tight I prior would demand in consumer hard the were I mentioned expect to COVID. inventory expect questioning. category, this So as to

So I be be the the year think will retail. inventory supplies end tight tight, will by at of

Ed Woo

get right. you a in new hear. your we new as or Will you is, of some All CES introductions big similar my January a And of products, your by to obviously. That's typically then question showcase type either for partners? great use by

Brett Moyer

Yes.

out. QX. announced production or in going how -- it's early tell by done, CES The seasonality. on has be I production to virtually. to to CES Everybody the very have happen QX. those right? late will delivered markets So how They happen. going formats in defined U.S. will can't you electronics Products get a to consumer still is And is to get curious in have It European, exactly have They October. in be very their QX, plays

Well, seasonality four CES it. wait product aren't spread terms remain there or to because Individual So the might people I buying. events the It's around The to seasonality its by certainly, holiday all season is don't driven to think over the weeks closer. in have brands the six changes. same. until announcements going opportunity that see of

Operator

from [Operator your Schuster investor. the Jay with line proceed Instructions] Our [ph], question. next question a of Please comes private

Unidentified Analyst

with phone progress LG, any particular? in the Samsung manufacturers, or of any Brett, or cell Apple

Brett Moyer

Jay.

really about you're handheld the what's talking from X whether transmit So in with and it's even going a TV. on Gen ability to devices, tablet,

this talking more first say the our year-end quarter. later that's which -- will have We that start X to we'll we said, Well, what product in call. be about that continue we anticipate. announce will Gen And a we'll

Unidentified Analyst

say perfected their than of Gen like you phones? your this to be rather in that introduction put when LG X, So an has will agreed product all

Brett Moyer

we meets is there's starting sell-in enough, roll of meats we of be product Agreed. broader and That the out market, next different performance, is will will that series are process. have to -- the year, the over and course target good the a that that a of products

Unidentified Analyst

like is seems the put seems it the don't to be you to that in of there what be. it phone. enormous. do of seems those on know one It margin get to driven you if it will going But the three, if I it volume Because others to are get done, those any their copy. And just

Brett Moyer

the our around $XXX audio service gives market a in that and We TV now bar true, market, that's at and adoption space. that the foothold good competitive of TV on and sound team in theory. have us it's us highly and I near-term the am focus. mostly think a a both That's Clearly, We this available in we gives offering. think market going market attention the though, the investor from and -- opportunity presentation focusing the million, -- year, the

in stuff we'll our But drive launch year what's detail. X, is we that more the talking start this year this about we're when about and next today. talking going P&L Gen to dominantly Now

Unidentified Analyst

there cash when is flow as positive? Or unpredictable? is And you turn too just to forecast any that

Brett Moyer

we Well, have those yes, internally. forecasts

We us. a business of have not front see publicly. plan issued pretty strong in them We

themselves, continue So we'll to we as let for the speak quarter grow.

Unidentified Analyst

And so what achieve to kind cash you have you a flow publicly in need revenue positive? said of quarter

Brett Moyer

off not. People model historically. have that can We

as OpEx our X.X. said, have We around runs

some we on we stock -- X.X issues, in excluding think QX. X.X were around charges a QX guided I X.X, for non-cash at

can So, anybody I model think out. it

Operator

Instructions] [Operator

Brett Moyer

to give to a operator. to it have right, system or and the We're box joining go Hanukkah all other And season. with audio Go in and like Christmas a plug. just wrap that, I'd holiday surround in and that you. great to today. us Enclave one for the gift-giving Axiim get everybody to thank more going opportunities Thank All audio, you Platin, for

Operator

Ladies teleconference. today's and for participation. your does conclude this gentlemen, you Thank

disconnect wonderful time, day. at may have your and You a lines this

WiSA (WISA) 10 Nov 202020 Q3 Earnings call transcript