Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - QUANTENNA COMMUNICATIONS INC | exhibit992quantennaq4fy2.htm |
| 8-K - 8-K - QUANTENNA COMMUNICATIONS INC | qtna-21218x8k.htm |
| EX-99.1 - EXHIBIT 99.1 - QUANTENNA COMMUNICATIONS INC | exhibit991newsrelease-21218.htm |
Fourth Quarter 2017 Earnings Presentation
February 12, 2018
Semiconductors Cloud Analytics
System
Software
Wi-Fi Perfected
is
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 and subsequent 10Q filings. 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.
$40
$67
$84
$129
$176
2013 2014 2015 2016 2017
At a Glance
3
Strong Revenue Growth Profile
$MM
150 million+
chips shipped
60+
products with
Quantenna inside
50+
service providers
40+
OEMs / ODMs
~400
employees
45%
CAGR
85+
patents
Company Highlights
High-performance Wi-Fi leader
Pioneer in both 8x8 and 4x4 advanced MIMO technology
Trendsetter and influencer within IEEE 802.11 standards body
Proven execution & innovation
across four generations of solutions
Land and expand within each product generation yields rapid
revenue growth with less incremental selling expense
Sustainable advantage & multiple
barriers to entry
Over 1,400 man years of R&D and IP development
Long product lifecycles and sticky
design wins
Service provider positioning in Wi-Fi is unmatched
Over 90% follow-on design success with existing sockets
Demonstrated initial success with
multiple growth drivers
Service provider telco opened up satellite opportunity >> current
opportunity is cable MSO >> future is retail and enterprise
Attractive financial model with
significant operating leverage
Drove a 45% CAGR in revenue over last five years
Generated cash from operations for the last two fiscal years
Strong gross margin profile of ~50%
4
Premium Strategy Drives Share Gains Each Tech Cycle
5
Current Wi-Fi Generation Future Wi-Fi Generation
Mainstream
Low Cost
Premium
Mainstream
Low Cost
Premium
Launch next-
generation products
Continue leadership in the premium
market with new products
Extend the previous generation to mainstream with
cost-optimized products and introduce new products
Diverse Applications
Retail Access Point
Video Bridge
Broadband Gateway
Wi-Fi Booster Repeater & Mesh Node
Video Client
Enterprise / Outdoor
6
Sizing Up the Premium Wi-Fi Market
7
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.
Q4 2017 Financial Highlights
Quarterly revenue of $41.3 million
• 10% Y/Y growth vs Q4 2016
Gross margin of 51.7%
• Within the 50.5% to 52.5% guidance range
• Up 270bps Q/Q vs Q3 2017
Earnings of $0.5 million
• $0.01 in EPS exceeded ($0.02) to ($0.04)
guidance range
0
30
60
90
120
150
180
Q4 2016 Q4 2017 2016 2017
37%
YoY
Strong Revenue Growth Profile
$MM
10%
YoY
8
*Gross margin, income and EPS figures are fully diluted based on non-GAAP reporting which excludes stock-based compensation and other specified one-time items. See reconciliation table.
TTM means trailing twelve months.
Technology Cycles Drive Growth
$MM
0
10
20
30
40
50
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17
Other 802.11n 802.11ac Wave2 802.11ac Wave3 (10G)
• 802.11ac Wave 3 (10G) revenue
– Declined 62% Q/Q to $2.5 million
– Q1 revenue expected to grow
Q/Q but not exceed Q3 levels
• 802.11ac Wave 2 revenue
– Declined $1.8 million or -5% Q/Q
– Grew 9% Y/Y to $34.3 million
– Q1 revenue expected grow Q/Q
• 802.11n revenue
– As expected, declined 51% Q/Q
to $3.7 million
– Q1 revenue is expected to
decline Q/Q
Q4 Wi-Fi Technology Segmentation Highlights
9
Operating Results & Guidance
2016 2017 Q3 2017 Q4 2017 Q1 2018 Guidance
Revenue $129.1 $176.4 $50.1 $41.3 $43 - $45
Gross Margin 50% 50% 49% 52%
GAAP: 50% +/-100bps
non-GAAP: 50% +/-100bps
OPEX 48% 44% 39% 51%
GAAP: down 1% to up 4% Q/Q
non-GAAP: flat to up 5% Q/Q
EPS $0.04 $0.26 $0.14 $0.01
GAAP: ($0.08) – ($0.06)
non-GAAP: $0.00 – $0.02
10
*Gross margin, OPEX and EPS figures are based on non-GAAP reporting which excludes stock-based compensation and other one-time items.
Balance Sheet Summary
2015 2016 Q2 2017 Q3 2017 2017
Cash, Cash Equivalents
& Marketable Securities $18.9 $117.0 $124.4 $126.9 $118.6
Total Assets $46.7 $154.8 $174.6 $191.3 $212.7
Total Debt $5.8 $5.9 $5.0 $4.4 $3.9
Total Liabilities $17.6 $26.0 $38.0 $48.7 $32.1
Total Stockholders’
Equity (Deficit) ($155.7) $128.7 $136.6 $142.7 $180.6
11
Appendix
12
Non-GAAP to GAAP Operating Margin Reconciliation
13
SBC means stock-based compensation, non-recurring items comprised of executive severance, percentages may not total due to rounding
2015 2016 Q3 2017 Q4 2017 2017
Non-GAAP Gross Margin 49% 50% 49% 52% 50%
SBC: Gross Margin 0% 0% 0% 0% 0%
GAAP Gross Margin 49% 50% 49% 52% 50%
Non-GAAP Operating Margin (6%) 2% 10% 0% 6%
SBC: R&D 0% 1% 3% 4% 3%
SBC: S&M 1% 0% 1% 1% 1%
SBC: G&A 1% 1% 2% 2% 2%
Non-recurring items 0% 0% 0% 0% 0%
GAAP Operating Margin (7%) (1%) 5% (8%) (1%)
Non-GAAP to GAAP Net Margin Reconciliation
14
SBC means stock-based compensation, non-recurring items comprised of executive severance and income tax adjustment relating to recognition of US Federal
deferred tax asset pursuant to release of valuation allowance. Percentages may not total due to rounding
2015 2016 Q3 2017 Q4 2017 2017
Non-GAAP Net Margin (7%) 1% 11% 1% 6%
SBC: Gross Margin 0% 0% 0% 0% 0%
SBC: R&D 0% 1% 3% 4% 3%
SBC: S&M 1% 0% 1% 1% 1%
SBC: G&A 1% 1% 2% 2% 2%
Non-recurring items 0% 0% 0% (85%) (20%)
GAAP Net Margin (8%) (1%) 6% 78% 20%
Wi-Fi Perfected™
15
Semiconductors Cloud Analytics
System
Software