Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - QUANTENNA COMMUNICATIONS INC | exhibit993quantennaq2201.htm |
| EX-99.1 - EXHIBIT 99.1 - QUANTENNA COMMUNICATIONS INC | q22017-exhibit991newsrelea.htm |
| 8-K - 8-K - QUANTENNA COMMUNICATIONS INC | qtnaq220178k.htm |
Financial Commentary
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Sep 27 '15 Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
802.11n 37% 43% 37% 19% 29% 15% 18% 17%
802.11ac Wave 2 52% 47% 61% 80% 71% 84% 79% 79%
802.11ac Wave 3 (10G) 0% 0% 0% 0% 0% 1% 3% 4%
Total Semi Revenue 89% 90% 98% 99% 100% 100% 100% 100%
Other 11% 10% 2% 1% 0% 0% 0% 0%
Total Revenue 100% 100% 100% 100% 100% 100% 100% 100%
Period Ending
Quantenna Communications
Second Quarter 2017
August 7, 2017
Revenue Segmentation by WiFi Technology
(in percentage of revenue, unaudited)
Quantenna Communications, Inc.
Key Financial Metrics from the Quarter
• Revenue of $47.1 million vs:
▪ $33.0 million in Q2'FY16 grew 43% Y/Y
▪ $37.9 million in Q1'FY17 grew 24% Q/Q
• GAAP gross margin of 50.5%
• Non-GAAP gross margin of 50.6% vs:
▪ 49.5% in Q2'FY16 grew 110bps Y/Y
▪ 49.2% in Q1'FY17 grew 140bps Q/Q
• Operating margin in Q2'FY17:
▪ 0.7% GAAP
▪ 6.2% Non-GAAP
• GAAP EPS $0.00 in Q2'FY17
• Non-GAAP diluted EPS $0.07 in Q2'FY17 vs:
▪ $0.02 in Q2'FY16
▪ $0.03 in Q1'FY17
• Cash from operations $7.4 million
• Cash, cash equivalents & marketable
securities $124.4 million
• DSO 34 days, down 8 days Q/Q
• Annualized inventory turns 4.4x down from
5.8x Q/Q
Third Quarter FY 2017 Guidance
• Revenue: $49.0 to $51.0 million
• GAAP gross margin: 46.9%, +/- 100bps
• Non-GAAP gross margin: 47.0%, +/- 100bps
• GAAP OPEX: flat to down 4% Q/Q
• Non-GAAP OPEX: flat to down 5% Q/Q
• Tax Rate: 5%
• GAAP EPS: $0.00 - $0.02
• Non-GAAP EPS: $0.07 - $0.09
Key Highlights from the Quarter
• Record revenue of $47.1 million, representing year
over year growth of 43% over the second quarter of
2016 and 24% sequential growth over the first quarter
of 2017.
• GAAP operating income grew to $0.3 million, and non-
GAAP operating income grew to $2.9 million, or 6.2%
of revenue. Non-GAAP operating income was a
quarterly record and represented a three-fold
increase over the second quarter of 2016.
• Cash from operations totaled $7.4 million or $0.19 per
fully diluted share while cash, cash equivalents and
marketable securities grew $10.0 million sequentially
to $124.4 million or $3.23 per fully diluted share.
• Announced a high end GPON gateway product with
ZTE featuring Quantenna’s award-winning 4x4
802.11ac Wave 2 QSR1000 chipset. This solution
addresses the typical Wi-Fi residential bottleneck that
occurs when coupled with high speed optical
networks.
• Surpassed 50 service providers in deployment with
our solutions as we extend our technology leadership
into new market applications and geographies.
Financial Results Call and Webcast
Our Q2 financial results webcast and call will commence
on August 7, 2017 at 2:00 p.m. PT (5:00 p.m. ET). The
webcast may be accessed at http://ir.quantenna.com/.
An archive of the webcast will be available for 90 days
from the date of this release.
August 7, 2017 Quantenna Q2 2017 Financial Results Page 1 of 4
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Sep 27 '15 Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
Revenue 21,806$ 25,412$ 24,437$ 33,035$ 34,105$ 37,492$ 37,891$ 47,085$
COGS 11,395 12,425 12,534 16,671 17,247 18,188 19,307 23,314
Gross Margin 10,411 12,987 11,903 16,364 16,858 19,304 18,584 23,771
GM % of revenue 47.7% 51.1% 48.7% 49.5% 49.4% 51.5% 49.0% 50.5%
R&D 7,587 9,545 10,227 11,524 11,162 13,691 12,633 16,055
S&M 1,490 1,625 1,630 1,769 2,172 2,520 2,914 3,276
G&A 1,178 1,302 1,562 2,993 3,248 2,757 3,389 4,106
OPEX 10,255 12,472 13,419 16,286 16,582 18,968 18,936 23,437
OPEX % of revenue 47.0% 49.1% 54.9% 49.3% 48.6% 50.6% 50.0% 49.8%
Operating Income (loss) 156$ 515$ (1,516)$ 78$ 276$ 336$ (352)$ 334$
OpInc % of revenue 0.7% 2.0% -6.2% 0.2% 0.8% 0.9% -0.9% 0.7%
Interest & Other Income (loss) (188) (50) (182) (291) (241) 10 3 45
Pretax Income (loss) (32) 465 (1,698) (213) 35 346 (349) 379
Taxes 40 38 17 21 14 314 535 210
Tax Rate -125% 8% -1% -10% 40% 91% -153% 55%
Net Income (loss) (72)$ 427$ (1,715)$ (234)$ 21$ 32$ (884)$ 169$
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Sep 27 '15 Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
Revenue 21,806$ 25,412$ 24,437$ 33,035$ 34,105$ 37,492$ 37,891$ 47,085$
COGS 11,393 12,422 12,531 16,668 17,238 18,170 19,264 23,272
Gross Margin 10,413 12,990 11,906 16,367 16,867 19,322 18,627 23,813
GM % of revenue 47.8% 51.1% 48.7% 49.5% 49.5% 51.5% 49.2% 50.6%
R&D 7,515 9,468 10,126 11,402 10,931 13,234 11,428 14,641
S&M 1,464 1,599 1,600 1,739 2,112 2,392 2,561 2,866
G&A 1,065 1,163 1,392 2,262 2,514 2,494 2,886 3,398
OPEX 10,044 12,230 13,118 15,403 15,557 18,120 16,875 20,905
OPEX % of revenue 46.1% 48.1% 53.7% 46.6% 45.6% 48.3% 44.5% 44.4%
Operating Income (loss) 369$ 760$ (1,212)$ 964$ 1,310$ 1,202$ 1,752$ 2,908$
OpInc % of revenue 1.7% 3.0% -5.0% 2.9% 3.8% 3.2% 4.6% 6.2%
Interest & Other Income (loss) (188) (50) (182) (291) (241) 10 3 45
Pretax Income (loss) 181 710 (1,394) 673 1,069 1,212 1,755 2,953
Taxes 40 38 17 21 14 314 535 210
Tax Rate 22% 5% -1% 3% 1% 26% 30% 7%
Net Income (loss) 141$ 672$ (1,411)$ 652$ 1,055$ 898$ 1,220$ 2,743$
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Sep 27 '15 Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
Stock Based Compensation
COGS 2$ 3$ 3$ 3$ 9$ 18$ 43$ 42$
R&D 72 77 101 122 231 457 1,205 1,414
S&M 26 26 30 30 60 128 353 410
G&A 113 139 170 731 734 263 503 708
Total 213$ 245$ 304$ 886$ 1,034$ 866$ 2,104$ 2,574$
Period Ending
(in thousands, unaudited)
Quantenna Communications, Inc.
Consolidated Statements of Operations (GAAP)
(in thousands, unaudited)
Consolidated Statements of Operations (Non-GAAP )
GAAP to Non-GAAP Reconciling Items
(in thousands, unaudited)
Period Ending
Period Ending
August 7, 2017 Quantenna Q2 2017 Financial Results Page 2 of 4
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Period Ending Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
Assets
Current assets
Cash and cash equivalents & marketable securities 20,744$ 16,943$ 17,822$ 117,045$ 114,401$ 124,389$
Accounts receivable 13,569 20,813 17,306 14,480 17,812 17,696
Inventory 7,259 7,449 10,268 15,820 13,361 20,985
Restricted Cash - 1,500 1,559 - - -
Prepaid expenses and other current assets 1,743 1,666 1,842 2,470 3,745 4,332
Total current assets 43,315 48,371 48,797 149,815 149,319 167,402
Property and equipment, net 2,828 3,548 3,842 4,742 6,025 6,380
Other assets 178 1,311 2,443 232 743 769
Total assets 46,321$ 53,230$ 55,082$ 154,789$ 156,087$ 174,551$
Liabilities, Redeemable Convertible Preferred Stock,
and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable 5,927$ 3,778$ 6,038$ 7,776$ 1,896$ 10,527$
Accrued liabilities and other current liabilities 7,517 10,626 11,910 11,801 18,163 22,021
Long-term debt, current portion 3,552 2,102 2,218 2,257 2,288 2,563
Total current liabilities 16,996 16,506 20,166 21,834 22,347 35,111
Long-term debt 1,386 7,967 4,342 3,680 3,539 2,445
Other long term liabilities 578 527 0 425
Convertible preferred stock warrant liability 265 300 364 - - -
Total liabilities 18,647 24,773 25,450 26,041 25,886 37,981
Convertible preferred stock 184,704 184,704 184,704 - - -
Stockholders’ equity (deficit)
Common stock - - - 3 3 3
Additional paid-in capital 4,364 5,381 6,534 290,319 292,710 298,943
Accumulated deficit and accumulated other comprehensive loss (161,394) (161,628) (161,606) (161,574) (162,512) (162,376)
Total stockholders’ equity (deficit) (157,030) (156,247) (155,072) 128,748 130,201 136,570
Total liabilities, conv prfrrd stock and stockholders' equity (defecit) 46,321$ 53,230$ 55,082$ 154,789$ 156,087$ 174,551$
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Period Ending Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17
Cash flows from operating activities
Net income (loss) (1,715)$ (234)$ 22$ 32$ (884)$ 169$
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 269 268 343 398 479 545
Stock-based compensation expense 304 886 1,009 866 2,104 2,574
Non-cash interest expense, net 34 (4) 110 182 135 62
Other 10 35 89 (22) - -
Remeasurement of preferred stock warrant liability
Changes in assets and liabilities
Accounts receivable 2,148 (7,244) 3,507 2,826 (3,332) 116
Inventory 148 (190) (2,819) (5,552) 2,459 (7,624)
Prepaid expenses and other current assets (315) 273 (241) (618) (1,324) (574)
Other assets 4 (59) 71 (66) (511) (27)
Accounts payable 10 (3,599) 2,453 2,940 (5,870) 8,522
Accrued liabilities 1,900 3,109 1,127 (379) 6,309 3,604
Net cash provided by (used in) operating activities 2,797 (6,759) 5,671 607 (435) 7,367
Cash flows from investing activities
Purchase of property and equipment (14) (612) (995) (1,103) (1,700) (746)
Purchase of marketable securities (71,169)
Proceeds from sale of marketable securities 4,994
Restricted cash - (1,500) (59) 1,500 - -
Net cash provided by (used in) investing activities (14) (2,112) (1,054) 397 (1,700) (66,921)
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance cost 53 35 697 406 194 3,882
Proceeds from initial public offering, net of issuance costs - - - 97,483 - -
Principal payments on debt (942) (1,769) (554) (551) (672) (433)
Other - 6,804 (3,881) 881 (31) (65)
Net cash provided by (used in) financing activities (889) 5,070 (3,738) 98,219 (509) 3,384
Net increase (decrease) in cash and cash equivalents 1,894 (3,801) 879 99,223 (2,644) (56,170)
Cash and cash equivalents
Beginning of period 18,850 20,744 16,943 17,822 117,045 114,401
End of period 20,744 16,943 17,822 117,045 114,401 58,231
Condensed Consolidated Cash Flows
(in thousands, unaudited)
Quantenna Communications, Inc.
Consolidated Balance Sheet
(in thousands, unaudited)
August 7, 2017 Quantenna Q2 2017 Financial Results Page 3 of 4
Quantenna Communications, Inc.
Non-GAAP Financial Measures
In addition to GAAP reporting, Quantenna provides information regarding net income, gross profit, gross margin, and operating
expenses on a non-GAAP basis. This non-GAAP information excludes stock-based compensation expense. These non-GAAP measures
are used by the Company’s management for the purposes of evaluating the underlying operating performance of the Company,
establishing internal budgets, comparing performance with internal forecasts and goals, strategic planning, benchmarking against
other companies, to provide a more consistent basis of comparison and to enable more meaningful period to period comparisons.
These non-GAAP measures are provided in addition to, and not as a substitute for, measures of financial performance prepared in
accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial tables
included in this press release.
Forward-Looking Statements
This press release contains forward-looking statements based on Quantenna’s current expectations, including statements regarding
Quantenna’s financial results for the second quarter ended July 2, 2017, expected future business and financial performance, growth
opportunities, product technologies and customer relationships. The words "believe," "estimate," "expect," "intend," "anticipate,"
"plan," "project," "will" and similar phrases as they relate to Quantenna are intended to identify such forward-looking statements.
These forward-looking statements reflect the current views and assumptions of Quantenna and are subject to various risks and
uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results
to differ materially from those in the forward-looking statements are the following: risks that Quantenna may not be able to maintain
its historical growth or achieve similar levels of success with respect to new products; quarterly fluctuations in revenues and
operating results; ability to accurately predict future revenue and expenses; challenges developing new and leading edge products on
a timely basis that achieve market acceptance; ability to attract and retain customers and service providers; dependence on a limited
number of products and customers; intense market competition; intellectual property litigation risks; political uncertainty; potential
changes in tax and other laws affecting Quantenna’s business; risks associated with acquisitions, divestitures and strategic
partnerships; product liability risks; potential cancellation of customer orders; difficulties managing international operations; risks
that Quantenna may not be able to manage strains associated with its growth; dependence on key personnel; stock price volatility;
dependence on, and geographic concentration of, contract manufacturers, customers and end customers, assembly and test
providers, and other vendors that subject Quantenna's business and results of operations to risks of natural disasters, epidemics, war
and political unrest; the cyclical nature of the semiconductor industry, adjustments to the preliminary financial results reported in this
press release and related earnings call announcement and materials for the second quarter of 2017 in connection with completion of
the final closing process and procedures and preparation of our Quarterly Report on Form 10-Q, and other factors that are detailed in
the Securities and Exchange (“SEC”) filings of Quantenna Communications, Inc., which you may obtain for free at the SEC’s website at
http://www.sec.gov. Quantenna disclaims any intention or obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
About Quantenna Communications
Quantenna is a global leader and innovator of leading-edge performance Wi-Fi solutions. Quantenna introduced the world's first 10G
Wi-Fi technology for a new generation of access points in home, enterprise and public spaces and continues to innovate. Quantenna's
Wi-Fi solutions offer superior performance, and establish benchmarks for speed, range, efficiency and reliability. With MAUI,
Quantenna's cloud-based Wi-Fi analytics platform that complement its chipset solutions, service providers can deliver real-time,
automated Wi-Fi monitoring, optimization, and self-healing to their customers around the clock to help achieve the best Wi-Fi
experience. Quantenna is Wi-Fi perfected. For more information, visit www.quantenna.com.
August 7, 2017 Quantenna Q2 2017 Financial Results Page 4 of 4