Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - QUANTENNA COMMUNICATIONS INC | exhibit993quantennaq3201.htm |
| EX-99.1 - EXHIBIT 99.1 - QUANTENNA COMMUNICATIONS INC | q32017-exhibit991newsrelea.htm |
| 8-K - 8-K - QUANTENNA COMMUNICATIONS INC | qtnaq320178k.htm |
Financial Commentary
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
802.11n 43% 37% 19% 29% 15% 18% 17% 15%
802.11ac Wave 2 47% 61% 80% 71% 84% 79% 79% 72%
802.11ac Wave 3 (10G) 0% 0% 0% 0% 1% 3% 4% 13%
Total Semi Revenue 90% 98% 99% 100% 100% 100% 100% 100%
Other 10% 2% 1% 0% 0% 0% 0% 0%
Total Revenue 100% 100% 100% 100% 100% 100% 100% 100%
Period Ending
Quantenna Communications
Third Quarter 2017
November 6, 2017
Revenue Segmentation by WiFi Technology
(in percentage of revenue, unaudited)
Quantenna Communications, Inc.
Key Financial Metrics from the Quarter
• Revenue of $50.1 million vs:
▪ $34.1 million in Q3'FY16 grew 47% Y/Y
▪ $47.1 million in Q2'FY17 grew 6% Q/Q
• GAAP gross margin of 48.9%
• Non-GAAP gross margin of 49.0% vs:
▪ 49.5% in Q3'FY16 declined 50bps Y/Y
▪ 50.6% in Q2'FY17 declined 160bps Q/Q
• Operating margin in Q3'FY17:
▪ 4.8% GAAP
▪ 10.3% Non-GAAP
• GAAP diluted EPS $0.07 in Q3'FY17
• Non-GAAP diluted EPS $0.14 in Q3'FY17 vs:
▪ $0.04 in Q3'FY16
▪ $0.07 in Q2'FY17
• Cash from operations $7.3 million
• Cash, cash equivalents & marketable
securities $126.9 million
• DSO 41 days, up 7 days Q/Q
• Annualized inventory turns 4.3x down from
4.4x Q/Q
Fourth Quarter FY 2017 Guidance
• Revenue: $40.0 to $42.0 million
• GAAP gross margin: 51.4%, +/- 100bps
• Non-GAAP gross margin: 51.5%, +/- 100bps
• GAAP OPEX: up 13% Q/Q
• Non-GAAP OPEX: Up 15% Q/Q
• Tax Rate: 5%
• GAAP loss per share: ($0.11) - ($0.09)
• Non-GAAP loss per share: ($0.04) - ($0.02)
Key Highlights from the Quarter
• Announced a partnership with AirTies to offer
Internet Service Providers (ISPs) a complete turnkey
managed Wi-Fi mesh solution.
• Released the Spartan AP Booster which offers service
providers a cost-effective Wi-Fi performance upgrade
for their existing subscriber legacy home gateways
without replacing or upgrading the entire gateway.
• Entered the OTT set-top box market with the Zero
Memory client solution that offers unparalleled video
performance to both STB and OTT clients.
• Announced that Technicolor has adopted the QV860
chipset in its OWA0130 dual-band multi-function
extender, augmenting the coverage of Wi-Fi gateways
with a mesh network offering seamless connectivity.
• Demonstrated with Cortina Access a Dual 4x4
802.11ax 10G fiber/PON gateway reference platform,
integrating broadband and Wi-Fi capabilities into a
single platform targeting mass deployment.
• Partnered with SoftAtHome to offer its Smart Wif-Fi
software on the QV860 chipset, enabling SoftAtHome
to offer a high-performance mesh and repeater
solution to service providers and OEM partners.
Financial Results Call and Webcast
Our Q3 financial results webcast and call will commence
on November 6 , 2017 at 2:00 p.m. PT (5:00 p.m. ET).
The webcast may be accessed at
http://ir.quantenna.com/.
An archive of the webcast will be available for 90 days
from the date of this release.
November 6, 2017 Quantenna Q3 2017 Financial Results Page 1 of 4
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
Revenue 25,412$ 24,437$ 33,035$ 34,105$ 37,492$ 37,891$ 47,085$ 50,108$
COGS 12,425 12,534 16,671 17,247 18,188 19,307 23,314 25,591
Gross Margin 12,987 11,903 16,364 16,858 19,304 18,584 23,771 24,517
GM % of revenue 51.1% 48.7% 49.5% 49.4% 51.5% 49.0% 50.5% 48.9%
R&D 9,545 10,227 11,524 11,162 13,691 12,633 16,055 15,011
S&M 1,625 1,630 1,769 2,172 2,520 2,914 3,276 3,363
G&A 1,302 1,562 2,993 3,248 2,757 3,389 4,106 3,735
OPEX 12,472 13,419 16,286 16,582 18,968 18,936 23,437 22,109
OPEX % of revenue 49.1% 54.9% 49.3% 48.6% 50.6% 50.0% 49.8% 44.1%
Operating Income (loss) 515$ (1,516)$ 78$ 276$ 336$ (352)$ 334$ 2,408$
OpInc % of revenue 2.0% -6.2% 0.2% 0.8% 0.9% -0.9% 0.7% 4.8%
Interest & Other Income (loss) (50) (182) (291) (241) 10 3 45 120
Pretax Income (loss) 465 (1,698) (213) 35 346 (349) 379 2,528
Taxes 38 17 21 14 314 535 210 (274)
Tax Rate 8% -1% -10% 40% 91% -153% 55% -11%
Net Income (loss) 427$ (1,715)$ (234)$ 21$ 32$ (884)$ 169$ 2,802$
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
Revenue 25,412$ 24,437$ 33,035$ 34,105$ 37,492$ 37,891$ 47,085$ 50,108$
COGS 12,422 12,531 16,668 17,238 18,170 19,264 23,272 25,553
Gross Margin 12,990 11,906 16,367 16,867 19,322 18,627 23,813 24,555
GM % of revenue 51.1% 48.7% 49.5% 49.5% 51.5% 49.2% 50.6% 49.0%
R&D 9,468 10,126 11,402 10,931 13,234 11,428 14,641 13,644
S&M 1,599 1,600 1,739 2,112 2,392 2,561 2,866 2,947
G&A 1,163 1,392 2,262 2,514 2,494 2,886 3,398 2,787
OPEX 12,230 13,118 15,403 15,557 18,120 16,875 20,905 19,378
OPEX % of revenue 48.1% 53.7% 46.6% 45.6% 48.3% 44.5% 44.4% 38.7%
Operating Income (loss) 760$ (1,212)$ 964$ 1,310$ 1,202$ 1,752$ 2,908$ 5,177$
OpInc % of revenue 3.0% -5.0% 2.9% 3.8% 3.2% 4.6% 6.2% 10.3%
Interest & Other Income (loss) (50) (182) (291) (241) 10 3 45 120
Pretax Income (loss) 710 (1,394) 673 1,069 1,212 1,755 2,953 5,297
Taxes 38 17 21 14 314 535 210 (274)
Tax Rate 5% -1% 3% 1% 26% 30% 7% -5%
Net Income (loss) 672$ (1,411)$ 652$ 1,055$ 898$ 1,220$ 2,743$ 5,571$
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Dec 27 '15 Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
Stock Based Compensation
COGS 3$ 3$ 3$ 9$ 18$ 43$ 42$ 38$
R&D 77 101 122 231 457 1,205 1,414 1,367
S&M 26 30 30 60 128 353 410 416
G&A 139 170 731 734 263 503 708 948
Total 245$ 304$ 886$ 1,034$ 866$ 2,104$ 2,574$ 2,769$
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
November 6, 2017 Quantenna Q3 2017 Financial Results Page 2 of 4
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Period Ending Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
Assets
Current assets
Cash, cash equivalents & marketable securities 20,744$ 16,943$ 17,822$ 117,045$ 114,401$ 124,389$ 126,866$
Accounts receivable 13,569 20,813 17,306 14,480 17,812 17,696 22,820
Inventory 7,259 7,449 10,268 15,820 13,361 20,985 23,700
Restricted Cash - 1,500 1,559 - - - -
Prepaid expenses and other current assets 1,743 1,666 1,842 2,470 3,745 4,332 2,444
Total current assets 43,315 48,371 48,797 149,815 149,319 167,402 175,830
Property and equipment, net 2,828 3,548 3,842 4,742 6,025 6,380 11,215
Intangible assets, net - - - - - - 3,259
Other assets 178 1,311 2,443 232 743 769 1,037
Total assets 46,321$ 53,230$ 55,082$ 154,789$ 156,087$ 174,551$ 191,341$
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$ 12,918$
Accrued liabilities and other current liabilities 7,517 10,626 11,910 11,801 18,163 22,021 27,941
Long-term debt, current portion 3,552 2,102 2,218 2,257 2,288 2,563 2,487
Total current liabilities 16,996 16,506 20,166 21,834 22,347 35,111 43,346
Long-term debt 1,386 7,967 4,342 3,680 3,539 2,445 1,900
Other long term liabilities 578 527 0 425 3,413
Convertible preferred stock warrant liability 265 300 364 - - - -
Total liabilities 18,647 24,773 25,450 26,041 25,886 37,981 48,659
Convertible preferred stock 184,704 184,704 184,704 - - - -
Stockholders’ equity (deficit)
Common stock - - - 3 3 3 3
Additional paid-in capital 4,364 5,381 6,534 290,319 292,710 298,943 302,240
Accumulated deficit (161,394) (161,628) (161,606) (161,574) (162,512) (162,376) (159,561)
Total stockholders’ equity (deficit) (157,030) (156,247) (155,072) 128,748 130,201 136,570 142,682
Total liabilities, conv prfrrd stock and stockholders' equity (defecit) 46,321$ 53,230$ 55,082$ 154,789$ 156,087$ 174,551$ 191,341$
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Period Ending Mar 27 '16 Jun 26 '16 Sep 25 '16 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17
Cash flows from operating activities
Net income (loss) (1,715)$ (234)$ 22$ 32$ (884)$ 169$ 2,802$
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 269 268 343 398 479 545 542
Stock-based compensation expense 304 886 1,009 866 2,104 2,574 2,769
Non-cash interest expense 34 (4) 110 182 135 77 108
Other 10 35 89 (22) - (15) 42
Remeasurement of preferred stock warrant liability
Changes in assets and liabilities
Accounts receivable 2,148 (7,244) 3,507 2,826 (3,332) 116 (5,124)
Inventory 148 (190) (2,819) (5,552) 2,459 (7,624) (2,715)
Prepaid expenses and other current assets (315) 273 (241) (618) (1,324) (574) 1,876
Other assets 4 (59) 71 (66) (511) (27) (252)
Accounts payable 10 (3,599) 2,453 2,940 (5,870) 8,522 2,467
Accrued liabilities 1,900 3,109 1,127 (379) 6,309 3,604 4,747
Net cash provided by (used in) operating activities 2,797 (6,759) 5,671 607 (435) 7,367 7,262
Cash flows from investing activities
Purchase of property and equipment (14) (612) (995) (1,103) (1,700) (746) (4,515)
Purchase of marketable securities - - - - - (71,169) (32,875)
Proceeds from sale of marketable securities - - - - - 4,994 (1,324)
Maturities of marketable securities - - - - - - 12,239
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) (26,475)
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance cost 53 35 697 406 194 3,882 477
Proceeds from initial public offering, net of issuance costs - - - 97,483 - - -
Principal payments on debt (942) (1,769) (554) (551) (672) (433) (651)
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 (174)
Net increase (decrease) in cash and cash equivalents 1,894 (3,801) 879 99,223 (2,644) (56,170) (19,387)
Cash and cash equivalents
Beginning of period 18,850 20,744 16,943 17,822 117,045 114,401 58,231
End of period 20,744 16,943 17,822 117,045 114,401 58,231 38,844
Condensed Consolidated Cash Flows
(in thousands, unaudited)
Quantenna Communications, Inc.
Consolidated Balance Sheet
(in thousands, unaudited)
November 6, 2017 Quantenna Q3 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 financial commentary.
Forward-Looking Statements
This financial commentary contains forward-looking statements based on Quantenna’s current expectations, including statements
regarding Quantenna’s preliminary financial results for the third quarter ended October 1, 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; challenges developing new and leading edge products on a timely basis that
achieve market acceptance; the complexity of the products; ability to accurately predict future revenue and expenses; 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; risks associated with acquisitions, divestitures and strategic partnerships with
respect to Quantenna as well as third parties; 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; potential changes in tax and
other laws affecting Quantenna’s business; adjustments to the preliminary financial results reported in this financial commentary and
related earnings call announcement and materials for the third 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, 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 (Nasdaq:QTNA) is the global leader and innovator of high performance Wi-Fi solutions. Founded in 2006, Quantenna has
demonstrated its leadership in Wi-Fi technologies with many industry firsts in the market. Quantenna continues to innovate with the
mission to perfect Wi-Fi by establishing benchmarks for speed, range, efficiency and reliability. Quantenna takes a multidimensional
approach, from silicon, system to software for Wi-Fi networks and provides solutions for OEMs and service providers worldwide. For
more information, visit www.quantenna.com.
November 6, 2017 Quantenna Q3 2017 Financial Results Page 4 of 4