Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - QUANTENNA COMMUNICATIONS INC | exhibit992quantennaq2fy2.htm |
| EX-99.1 - EXHIBIT 99.1 - QUANTENNA COMMUNICATIONS INC | q22017-exhibit991newsrelea.htm |
| 8-K - 8-K - QUANTENNA COMMUNICATIONS INC | qtnaq220178k.htm |
Wi-Fi Perfected™
Second Quarter 2017 Earnings Presentation
August 7, 2017
Semiconductors Cloud Analytics
Proprietary
Software
Safe Harbor and Non-GAAP Financial Measures
2
This presentation contains “forward-looking” statements that are based on our beliefs and assumptions and on information
currently available to us. Forward-looking statements include information concerning our possible or assumed future results
of operations, business strategies, product development plans, competitive position, potential growth opportunities, use of
proceeds and the effects of competition. Forward-looking statements include all statements that are not historical facts and
can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not
limited to, the risk factors listed in our 10-K dated March 2, 2017. Forward-looking statements represent our beliefs and
assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these
forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in
the forward-looking statements, even if new information becomes available in the future.
This presentation includes certain non-GAAP financial measures as defined by the SEC rules. We have provided a
reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix to this
presentation.
Quantenna at a Glance
3
Strong Revenue Growth Profile
$40
$67
$84
$129
$85
2013 2014 2015 2016 2017 YTD
$MM
100 million+
chips shipped
60+
products with
Quantenna inside
50+
service providers
40+
OEMs / ODMs
350+
employees
11+
years of history
48%
CAGR
$50
Q3 guide
midpoint
Quantenna Takes Wi-Fi to Unparalleled Performance
4
Basic Features
of Standards
Basic Functionality
and Interoperability
Optional Features of
Standards
Better Performance
Innovative Implementation
High Performance
Value-Add Proprietary Software & Algorithmic Features
• Advanced MIMO
• Advanced MU-MIMO
• Transmit
Beamforming
Technology
• 2.4GHz + 5GHz
Integrated Dual-
Band Chipset
• Complete Host
Offload
• Full Access Point in
a Single Chipset
• IQStream Traffic Management
Classify and prioritize traffic
• SuperDFS Dynamic Channel
Selection
• MAUI Analytics
Embedded cloud-based Wi-Fi
analytics platform
• SONiQ Smart Managed Wi-Fi
Solution
Manages multiple access points
and repeaters
Supports third-party silicon
4x4 MIMO
8x8 + 4x4 MIMO
Performance
Wi-Fi Perfected™
2Gbps 10 Gbps5Gbps
Wave 2 / Wave 3
8x8 MIMO
Dual-Band Predictive Software
Advanced Routing
Sizing Up the Premium Wi-Fi Market
5
Total Wi-Fi Chipset Revenue
$2.1 B $2.6 B
$1.5 B
$1.4 B
$0.2 B $1.3 B
2016 2021
Source: ABI Research Wi-Fi Market Data 3Q 2016, Table 4, Table 11 and Table 26 and Quantenna assumptions
Portable Devices include cellular phones, laptops, netbooks, Ultrabooks, Chromebooks, PC accessories, mobile devices, gaming controllers, OEM remote controls, 3D glasses, and wearables and healthcare devices
Non-Portable Devices include networking, set-top boxes, televisions, gaming consoles, DVD / Blu-ray players, desktop PCs, printers, smart home, automotive, industrial, and others
2.1 B
2.9 B
0.7 B
1.1 B
0.0 B
0.2 B
2016 2021
Total Wi-Fi Enabled Device Shipments
53%
2016-2021
CAGR
8%
7%
50%
2016-2021
CAGR
-2%
4%
Premium Wi-Fi * in
Non-Portable Devices
Mainstream Wi-Fi in
Non-Portable Devices
Wi-Fi in Portable
Devices
* Premium Wi-Fi chipsets are
defined by 4x4 MIMO or
higher performance.
Quantenna’s premium Wi-Fi
technology leads the high
performance, non-portable
device market.
Q2 2017 Financial Highlights
Record quarterly revenue of $47.1 million
• 43% Y/Y growth vs Q2 2016
• 24% Q/Q growth vs Q1 2017
Strong gross margin of 50.6%
• Above 48.5% to 50.5% guidance range
• Up 140bps Q/Q vs Q1 2017
Operating cash flow positive
• Cash from ops $7.4 million or $0.19/share
Record Earnings Performance
• $2.7 million net income
– Net income more than doubled Q/Q
• $0.07 in EPS
– Up materially Q/Q vs $0.03 in Q1 2017
0
25
50
75
100
125
150
175
Q2 2016 Q2 2017 TTM
Q2 2016
TTM
Q2 2017
50%
YoY
Strong Revenue Growth Profile
$MM
43%
YoY
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*Gross margin, income and EPS figures are fully diluted based on non-GAAP reporting which excludes stock-based compensation. TTM means trailing twelve months.
Explosive IP Traffic Growth Stresses Wi-Fi Bottleneck
Cloud data rapidly evolving
towards 100G switch fabric
Infrastructure upgrades
such as fiber, G.fast and
DOCSIS 3.1 are
distributing up to 10G
to the home
Current
Wi-Fi
speed up
to 1G is
gating
factor
7 EB
48 EB49 EB
103 EB
40 EB
127 EB
2016 2021
Worldwide IP Traffic in Exabytes per Month
26%
2016-2021
CAGR
16%
46%
Wi-Fi
(fixed & mob)
Wireline
(incl. VoD)
Mobile
(carrier)
Source: Cisco Visual Networking Index: Forecast and Methodology, 2016-2021; updated June 6, 2017
Wi-Fi will deliver 48% of WW IP traffic growth from 2016-2021
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Wi-Fi Offload a Requirement for MVNO Profitability
-$10
$0
$10
$20
$30
$40
$50
60% 70% 80% 90%
Revenue MVNO Costs EBITDA
Wi-Fi data offload penetration rate
Cable MSOs are building out new
mobile phone service
• MVNO strategy leases expensive mobile
airtime with other carriers in a “virtual”
arrangement to complete network
• Creates a “sticky” bundling strategy to
retain subs over long-term, further
expanding EBITDA
Wi-Fi offload is critical to success
• Without Wi-Fi data offload, the MSO
would lose money
• The last portion of offload unleashes
incremental leverage to subscriber
EBITDA
• In this example, every 1% of Wi-Fi data
offload translates to 2.7% of EBITDA
expansion per subscriber
Wi-Fi Integral to Cable MSO Mobile Strategy
Source: New Street Research, LLP, “Xfinity Mobile is More Disruptive Than You Think”, April 17, 2017
8
Monthly per Subscriber Metrics
3%
29%
56%
EBITA%
Technology Cycles Drive Growth
$MM
0
5
10
15
20
25
30
35
40
45
50
Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Other 802.11n 802.11ac Wave2 802.11ac Wave3 (10G)
Q2 Wi-Fi Technology Highlights
• 802.11ac Wave 3 (10G) revenue
– Grew 66% Q/Q to $1.9 million
– Expect to be no less than 10% of Q3
revenue
• 802.11ac Wave 2 revenue
– Grew $7.3 million or 24% Q/Q
– Grew 41% Y/Y to $37.2 million
– Q3 revenue expected be flat to
slightly down Q/Q in Q3
• 802.11n revenue
– Grew 17% Q/Q to $8.0 million
– Expect modest decline Q/Q in Q3
– Revenue expected to slowly decline
longer-term
Wi-Fi Technology: Wave 3 (10G) Ramp Begins
9
Operating Results & Guidance
2015 2016 Q1 2017 Q2 2017 Q3 2017 Guidance
Revenue $83.8 $129.1 $37.9 $47.1 $49 - $51
Gross Margin 49% 50% 49% 51%
GAAP: 46.9% +/-100bps
non-GAAP: 47.0% +/-100bps
OPEX 55% 48% 45% 44%
GAAP: flat to -4% Q/Q
non-GAAP: flat to -5% Q/Q
EPS $(7.59) $0.04 $0.03 $0.07
GAAP: $0.00 - $0.02
non-GAAP: $0.07 - $0.09
10
*Gross margin, OPEX and EPS figures are based on non-GAAP reporting which excludes stock-based compensation.
Balance Sheet Summary
2015 2016 Q1 2017 Q2 2017
Cash, Cash Equivalents &
Marketable Securities $18.9 $117.0 $114.4 $124.4
Total Assets $46.7 $154.8 $156.1 $174.6
Total Debt $5.8 $5.9 $5.4 $5.0
Total Liabilities $17.6 $26.0 $25.9 $38.0
Total Stockholders’ Equity ($155.7) $128.7 $130.2 $136.6
11
Appendix
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Non-GAAP to GAAP Operating Margin Reconciliation
13
SBC means stock-based compensation, percentages may not total due to rounding
2015 2016 Q1 2017 Q2 2017
Non-GAAP Gross Margin 49% 50% 49% 51%
SBC: Gross Margin 0% 0% 0% 0%
GAAP Gross Margin 49% 50% 49% 51%
Non-GAAP Operating Margin (6%) 2% 6% 6%
SBC: R&D 0% 1% 3% 3%
SBC: S&M 1% 0% 1% 1%
SBC: G&A 1% 1% 1% 2%
GAAP Operating Margin (7%) (1%) (1%) 1%
Non-GAAP to GAAP Net Margin Reconciliation
14
SBC means stock-based compensation, percentages may not total due to rounding
2015 2016 Q1 2017 Q2 2017
Non-GAAP Net Margin (7%) 1% 6% 6%
SBC: Gross Margin 0% 0% 0% 0%
SBC: R&D 0% 1% 3% 3%
SBC: S&M 1% 0% 1% 1%
SBC: G&A 1% 1% 1% 2%
GAAP Net Margin (8%) (1%) (2%) 0%
Wi-Fi Perfected™
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Semiconductors Cloud Analytics
Proprietary
Software