FREMONT, Calif., Feb. 13, 2017 (GLOBE NEWSWIRE) -- Quantenna Communications, Inc. (NASDAQ: QTNA ), a global leader and innovator of leading-edge performance Wi-Fi solutions, today announced preliminary unaudited financial results for the fourth quarter and fiscal year 2016 ended January 1, 2017.
“We are excited to report strong results during our first quarter as a public company. Quantenna continued its focus on delivering the best Wi-Fi solutions to existing and new customers. We believe we are well-positioned to capitalize on our deep Wi-Fi expertise and strategic customer relationships to further expand our opportunities and continue to grow our revenue in 2017 and beyond,” stated Dr. Sam Heidari, Chairman and Chief Executive Officer.
Financial Summary
| Three Months Ended | Years Ended | ||||||||||||||||||||||
| December 27, | January 1, | December 27, | January 1, | ||||||||||||||||||||
| 2015 | 2017 | % Change | 2015 | 2017 | % Change | ||||||||||||||||||
| Revenue | $ | 25,412 | $ | 37,492 | 47.5 | % | $ | 83,773 | $ | 129,069 | 54.1 | % | |||||||||||
| Gross Margin | 51.1 | % | 51.5 | % | 40 bps | 49.2 | % | 49.9 | % | 70 bps | |||||||||||||
| Net income (loss) | |||||||||||||||||||||||
| GAAP | 427 | 32 | (7,045 | ) | (1,895 | ) | |||||||||||||||||
| Non-GAAP | 672 | 898 | (5,843 | ) | 1,195 | ||||||||||||||||||
| Net income (loss) per share - diluted | |||||||||||||||||||||||
| GAAP | $ | 0.02 | $ | 0.00 | $ | (9.16 | ) | $ | (0.30 | ) | |||||||||||||
| Non-GAAP | $ | 0.02 | $ | 0.03 | $ | (7.59 | ) | $ | 0.04 | ||||||||||||||
| (in thousands except per share data, unaudited) | |||||||||||||||||||||||
Commentary on the fourth quarter and fiscal year 2016 financial results by Company management is available at at http://ir.quantenna.com/ .
Please see the note regarding the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.
Fourth Quarter Company Highlights
- Quantenna commenced shipping production quantities of its QSR10G Wave 3 products, which was formally announced in September 2015. The QSR10G is designed to be the world’s fastest Wi-Fi solution currently available in the market and leverages Quantenna’s proprietary technology architectures and advanced software and system-level algorithms.
- Quantenna announced the industry's first 802.11ax Wi-Fi chipset, the QSR10G-AX. This product is built on Quantenna's QSR10G Wave 3 802.11ac Wi-Fi platform and adds features supported in draft 1.0 of the IEEE specification 802.11ax standard.
- Quantenna successfully priced its initial public offering of 6,700,000 shares of common stock at a price to the public of $16.00 per share, raising approximately $100 million in proceeds, net of underwriting discounts, commissions and excluding the overallotment.
- Quantenna received the prestigious "Most Respected Private Semiconductor Company" award at the 2016 Global Semiconductor Alliance (GSA) Awards Dinner Celebration on December 8th. The semiconductor industry's annual event honored outstanding semiconductor companies worldwide that have demonstrated excellence through their vision, strategy, execution and future opportunity.
Business Outlook
| First Quarter 2017 | |||
| Guidance Range | |||
| Revenue | $34.5M to $36.5M | ||
| Gross Margin | 48% to 50% | ||
| Operating Expense Decline (sequential) | 5% to 10% | ||
| Net income (loss) per share - diluted | |||
| GAAP | ($0.05) - ($0.03) | ||
| Non-GAAP | $0.00 - $0.02 | ||
Webcast and Conference Call
Quantenna management will host a conference call discussing the quarterly and fiscal year results and business outlook following this press release at 2:00 p.m Pacific Time today. Individuals interested in listening to the conference call may do so by dialing (877)-239-5585 for domestic callers or (661)-378-9806 for international callers. Please reference Conference ID: 61663823. An audio webcast and replay will be available on on the “Investor Relations” section of Quantenna’s website at http://ir.quantenna.com/events.cfm .
Non-GAAP Financial Measures
In addition to GAAP reporting, Quantenna provides information regarding net income, gross profit 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.
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 . Follow us on Facebook , LinkedIn and Twitter .
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 fourth quarter and fiscal year 2016 ended January 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: adjustments to the preliminary financial results reported for the fourth quarter and fiscal year 2016 in connection with completion of the final closing process and procedures and preparation of our annual report of Form 10-K, risks that Quantenna may not be able to maintain its historical growth; 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 and divestitures; 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, 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; 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.
| Quantenna Communications, Inc. | |||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
| (in thousands except per share data, unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||||||||||
| December 27, | January 1, | December 27, | January 1, | ||||||||||||||||||||||
| 2015 | 2017 | 2015 | 2017 | ||||||||||||||||||||||
| Revenue | $ | 25,412 | $ | 37,492 | $ | 83,773 | $ | 129,069 | |||||||||||||||||
| Cost of revenue | 12,425 | 18,188 | 42,554 | 64,640 | |||||||||||||||||||||
| Gross profit | 12,987 | 19,304 | 41,219 | 64,429 | |||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||
| Research and development | 9,545 | 13,691 | 35,575 | 46,604 | |||||||||||||||||||||
| Sales and marketing | 1,625 | 2,520 | 6,644 | 8,091 | |||||||||||||||||||||
| General and administrative | 1,302 | 2,757 | 5,212 | 10,559 | |||||||||||||||||||||
| Total operating expenses | 12,472 | 18,968 | 47,431 | 65,254 | |||||||||||||||||||||
| Income (loss) from operations | 515 | 336 | (6,212 | ) | (825 | ) | |||||||||||||||||||
| Interest expense | (137 | ) | (252 | ) | (697 | ) | (665 | ) | |||||||||||||||||
| Other income (expense), net | 87 | 262 | (21 | ) | (38 | ) | |||||||||||||||||||
| Income (loss) before income taxes | 465 | 346 | (6,930 | ) | (1,528 | ) | |||||||||||||||||||
| Provision for income taxes | (38 | ) | (314 | ) | (115 | ) | (367 | ) | |||||||||||||||||
| Net income (loss) | $ | 427 | $ | 32 | $ | (7,045 | ) | $ | (1,895 | ) | |||||||||||||||
| Net income (loss) per share - basic | $ | 0.49 | $ | 0.00 | $ | (9.16 | ) | $ | (0.30 | ) | |||||||||||||||
| Net income (loss) per share - diluted | $ | 0.02 | $ | 0.00 | $ | (9.16 | ) | $ | (0.30 | ) | |||||||||||||||
| Shares used in computing net income (loss) per share: | |||||||||||||||||||||||||
| Basic | 872 | (1 | ) | 21,246 | 770 | (1 | ) | 6,385 | |||||||||||||||||
| Diluted | 27,067 | 35,387 | 770 | 6,385 | |||||||||||||||||||||
| (1) The number of shares reflects the number prior to conversion of preferred stock | |||||||||||||||||||||||||
| Quantenna Communications, Inc. | ||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||||
| (in thousands, unaudited) | ||||||||||||||
| December 27, | January 1, | |||||||||||||
| 2015 | 2017 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 18,850 | $ | 117,045 | ||||||||||
| Accounts receivable | 15,717 | 14,480 | ||||||||||||
| Inventory | 7,407 | 15,820 | ||||||||||||
| Prepaid expenses and other current assets | 1,428 | 2,470 | ||||||||||||
| Total current assets | 43,402 | 149,815 | ||||||||||||
| Property and equipment, net | 3,083 | 4,742 | ||||||||||||
| Other assets | 182 | 232 | ||||||||||||
| Total assets | $ | 46,667 | $ | 154,789 | ||||||||||
| Liabilities, Redeemable Convertible Preferred Stock, and | ||||||||||||||
| Stockholders’ Equity (Deficit) | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 5,917 | $ | 7,776 | ||||||||||
| Accrued liabilities and other current liabilities | 5,617 | 11,801 | ||||||||||||
| Long-term debt, current portion | 3,581 | 2,257 | ||||||||||||
| Total current liabilities | 15,115 | 21,834 | ||||||||||||
| Long-term debt and other long term liabilities | 2,265 | 4,207 | ||||||||||||
| Convertible preferred stock warrant liability | 255 | - | ||||||||||||
| Total liabilities | 17,635 | 26,041 | ||||||||||||
| Convertible preferred stock | 184,704 | - | ||||||||||||
| Stockholders’ equity (deficit) | ||||||||||||||
| Common stock | - | 3 | ||||||||||||
| Additional paid-in capital | 4,007 | 290,319 | ||||||||||||
| Accumulated deficit | (159,679 | ) | (161,574 | ) | ||||||||||
| Total stockholders’ equity (deficit) | (155,672 | ) | 128,748 | |||||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 46,667 | $ | 154,789 | ||||||||||
| Quantenna Communications, Inc. | ||||||||||||||
| Condensed Consolidated Cash Flows | ||||||||||||||
| (in thousands, unaudited) | ||||||||||||||
| Years Ended | ||||||||||||||
| December 27, | January 1, | |||||||||||||
| 2015 | 2017 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | $ | (7,045 | ) | $ | (1,895 | ) | ||||||||
| Adjustments to reconcile net loss to net cash provided by | ||||||||||||||
| (used in) operating activities | ||||||||||||||
| Depreciation and amortization | 987 | 1,278 | ||||||||||||
| Stock-based compensation expense | 1,202 | 3,090 | ||||||||||||
| Non-cash interest expense | 271 | 322 | ||||||||||||
| Change in fair value of convertible preferred stock warrants liability | 61 | 87 | ||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Accounts receivable | (5,877 | ) | 1,237 | |||||||||||
| Inventory | 3,387 | (8,413 | ) | |||||||||||
| Prepaid expenses and other current assets | 541 | (901 | ) | |||||||||||
| Other assets | 60 | (50 | ) | |||||||||||
| Accounts payable | (4,401 | ) | 1,804 | |||||||||||
| Accrued liabilities and other current liabilities | 934 | 5,757 | ||||||||||||
| Deferred revenue | (2,197 | ) | - | |||||||||||
| Net cash provided by (used in) operating activities | (12,077 | ) | 2,316 | |||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchase of property and equipment | (1,761 | ) | (2,724 | ) | ||||||||||
| Restricted cash | 59 | (59 | ) | |||||||||||
| Net cash used in investing activities | (1,702 | ) | (2,783 | ) | ||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issuance of convertible preferred stock, net of issuance costs | 14,256 | - | ||||||||||||
| Proceeds from issuance of common stock | 164 | 1,191 | ||||||||||||
| Proceeds from initial public offering, net of issuance costs | - | 97,483 | ||||||||||||
| Proceeds from revolving line of credit, net of fees paid | - | 2,950 | ||||||||||||
| Repayment of revolving line of credit | - | (3,000 | ) | |||||||||||
| Proceeds from issuance of long-term debt, net of fees paid | 3,000 | 3,854 | ||||||||||||
| Repayment of long-term debt | (3,111 | ) | (3,816 | ) | ||||||||||
| Net cash provided by financing activities | 14,309 | 98,662 | ||||||||||||
| Net increase in cash and cash equivalents | 530 | 98,195 | ||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Beginning of year | 18,320 | 18,850 | ||||||||||||
| End of year | $ | 18,850 | $ | 117,045 | ||||||||||
| Quantenna Communications, Inc. | ||||||||||||||||||||||||||
| Unaudited reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||||
| Non-GAAP Income Statement Items | Three months ended December 27, 2015 | Three months ended January 1, 2017 | ||||||||||||||||||||||||
| Stock-based | Stock-based | |||||||||||||||||||||||||
| GAAP | Compensation | Non-GAAP | GAAP | Compensation | Non-GAAP | |||||||||||||||||||||
| Measure | Expense | Measure | Measure | Expense | Measure | |||||||||||||||||||||
| Revenue | $ | 25,412 | $ | 25,412 | $ | 37,492 | $ | 37,492 | ||||||||||||||||||
| Gross profit | 12,987 | 3 | 12,990 | 19,304 | 18 | 19,322 | ||||||||||||||||||||
| Gross margin | 51.1 | % | 0 | % | 51.1 | % | 51.5 | % | 0 | % | 51.5 | % | ||||||||||||||
| Research and development | 9,545 | 77 | 9,468 | 13,691 | 457 | 13,234 | ||||||||||||||||||||
| Sales and marketing | 1,625 | 26 | 1,599 | 2,520 | 128 | 2,392 | ||||||||||||||||||||
| General and administrative | 1,302 | 139 | 1,163 | 2,757 | 263 | 2,494 | ||||||||||||||||||||
| Income from operations | 515 | 245 | 760 | 336 | 866 | 1,202 | ||||||||||||||||||||
| Net income | $ | 427 | $ | 245 | $ | 672 | $ | 32 | $ | 866 | $ | 898 | ||||||||||||||
| Basic shares outstanding | 872 | 872 | 21,246 | 21,246 | ||||||||||||||||||||||
| Basic earnings per share | $ | 0.49 | $ | 0.77 | $ | 0.00 | $ | 0.04 | ||||||||||||||||||
| Diluted shares outstanding | 27,067 | 27,067 | 35,387 | 35,387 | ||||||||||||||||||||||
| Diluted earnings per share | $ | 0.02 | $ | 0.02 | $ | 0.00 | $ | 0.03 | ||||||||||||||||||
| Quantenna Communications, Inc. | ||||||||||||||||||||||||||
| Unaudited reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||||||
| Non-GAAP Income Statement Items | Year ended December 27, 2015 | Year ended January 1, 2017 | ||||||||||||||||||||||||
| Stock-based | Stock-based | |||||||||||||||||||||||||
| GAAP | Compensation | Non-GAAP | GAAP | Compensation | Non-GAAP | |||||||||||||||||||||
| Measure | Expense | Measure | Measure | Expense | Measure | |||||||||||||||||||||
| Revenue | $ | 83,773 | $ | 83,773 | $ | 129,069 | $ | 129,069 | ||||||||||||||||||
| Gross profit | 41,219 | 9 | 41,228 | 64,429 | 33 | 64,462 | ||||||||||||||||||||
| Gross margin | 49.2 | % | 0 | % | 49.2 | % | 49.9 | % | 0 | % | 49.9 | % | ||||||||||||||
| Research and development | 35,575 | 302 | 35,273 | 46,604 | 911 | 45,693 | ||||||||||||||||||||
| Sales and marketing | 6,644 | 445 | 6,199 | 8,091 | 248 | 7,843 | ||||||||||||||||||||
| General and administrative | 5,212 | 446 | 4,766 | 10,559 | 1,898 | 8,661 | ||||||||||||||||||||
| Income from operations | (6,212 | ) | 1,202 | (5,010 | ) | (825 | ) | 3,090 | 2,265 | |||||||||||||||||
| Net income | $ | (7,045 | ) | $ | 1,202 | $ | (5,843 | ) | $ | (1,895 | ) | $ | 3,090 | $ | 1,195 | |||||||||||
| Basic shares outstanding | 770 | 770 | 6,385 | 6,385 | ||||||||||||||||||||||
| Basic earnings per share | $ | (9.16 | ) | $ | (7.59 | ) | $ | (0.30 | ) | $ | 0.19 | |||||||||||||||
| Diluted shares outstanding | 770 | 770 | 6,385 | 31,113 | ||||||||||||||||||||||
| Diluted earnings per share | $ | (9.16 | ) | $ | (7.59 | ) | $ | (0.30 | ) | $ | 0.04 | |||||||||||||||
| Quantenna Communications, Inc. | |||||||||||
| Unaudited Forward-Looking Statements Regarding Business Outlook | |||||||||||
| Business Outlook | Three months ended April 2, 2017 | ||||||||||
| High | Low | ||||||||||
| Estimated GAAP diluted earnings (loss) per share | $ | (0.03 | ) | $ | (0.05 | ) | |||||
| Estimated stock compensation expense | 0.05 | 0.05 | |||||||||
| Estimated impact from dilutive shares deemed anti-dilutive due to GAAP loss | 0.00 | 0.00 | |||||||||
| Estimated Non-GAAP diluted earnings per share | $ | 0.02 | $ | 0.00 | |||||||
Quantenna Communications, Inc. Vernon Essi, Jr. 510-897-2684
