Adesto Technologies Corporation (NASDAQ:IOTS), a leading provider
of application-specific, feature-rich, ultra-low power non-volatile
memory products, today announced financial results for the third
quarter ended September 30, 2015.
Third Quarter and Recent Highlights:
- Revenue increased 11.1% year-over-year and 5.1% sequentially to
$11.1 million;
- Gross margin was 45.2%, compared to 36.9% in the third quarter
of 2014 and 39.6% in the second quarter of 2015;
- Adjusted EBITDA for the third quarter of 2015 was slightly
higher than breakeven, compared to a loss of $1.2 million in the
third quarter of 2014 and a loss of $0.7 million in the second
quarter of 2015;
- Secured 115 design wins for the first nine months of 2015,
compared to 35 for the same period in 2014; and
- Completed initial public offering in October, raising
approximately $22.2 million in net proceeds.
"The increase in third quarter revenue was driven by an
increasing number of design wins ramping into production across our
end markets, in particular with our industrial and consumer
customers," said Narbeh Derhacobian, Adesto's President and CEO.
"Also in the quarter, gross margin improved 560 basis points
sequentially and 830 basis points over the prior year period,
primarily as a result of our product cost reduction
initiatives.
"Our growing design win base reflects, we believe, the
increasing demand for high-performance, low-power intelligent
memory devices that consume less energy and extend battery life.
These requirements are especially critical for connected devices
and Internet of Things applications across a growing number of end
markets. We remain focused on further expanding our differentiated
product portfolio to meet the unique power and performance needs of
our customers.
"Looking ahead, we believe that Adesto is well positioned to
drive further revenue growth as we continue to ramp design wins
with new and existing customers, benefit from the investments we
have made in sales and marketing, and release new products
specifically targeted at high-growth end markets."
Third Quarter 2015 Results
Revenue in the three months ended September 30, 2015 was $11.1
million, an increase of 11.1% from $10.0 million in the third
quarter of 2014 and an increase of 5.1% from $10.6 million in the
second quarter of 2015. The increase in revenue was due to
broad-based strength across Adesto's end markets.
Gross margin in the third quarter of 2015 was 45.2%, compared to
36.9% in the third quarter of 2014 quarter and 39.6% in the second
quarter of 2015. The increase in gross margin was primarily due to
improvements in product cost structure.
GAAP net loss in the third quarter of 2015 was $1.1 million, or
$1.90 per share, compared to GAAP net loss of $2.4 million, or
$4.40 per share in the prior year quarter and GAAP net loss of $1.8
million, or $3.14 per share, in the prior quarter.
Adjusted EBITDA for the third quarter was slightly higher than
breakeven, compared to a loss of $1.2 million in the third quarter
of 2014 and a loss of $0.7 million in the second quarter of
2015.
On a non-GAAP basis, net loss in the third quarter of 2015 was
$0.7 million, or $0.07 per share, compared to $1.9 million, or
$0.20 per share in the third quarter of 2014 and $1.4 million, or
$0.14 per share in the second quarter of 2015.
A reconciliation of our GAAP results to non-GAAP results is
provided in the financial statement tables following the text of
this press release.
Business Outlook
For the fourth quarter of 2015, the Company expects revenue to
range between $11.7 million and $12.0 million. Gross margin is
expected to be between 43% and 45%, and operating expenses are
expected to range between $6.3 million and $6.7 million.
Non-GAAP Financial Information
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), this press release
and the accompanying tables and the related earnings conference
call contain certain non-GAAP financial measures, including
adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and
non-GAAP weighted average shares outstanding. We believe these
non-GAAP financial measures are useful in evaluating our past
financial performance and future results. Our non-GAAP financial
measures should not be considered in isolation or as a substitute
for comparable GAAP measures and should be read in conjunction with
our consolidated financial statements prepared in accordance with
GAAP. Our management regularly uses our supplemental non-GAAP
financial measures internally to help us evaluate growth trends,
establish budgets, measure the effectiveness of our business
strategies and assess operational efficiencies. These non-GAAP
financial measures are not based on any standardized methodology
prescribed by GAAP and are not necessarily comparable to similar
measures presented by other companies. Our non-GAAP financial
measures include adjustments based on the following items:
- Stock-based compensation expenses: We have excluded the effect
of stock-based compensation expenses from our non-GAAP financial
measures. Although stock-based compensation is an important part of
our employees' compensation affecting their performance, we
continue to evaluate our business performance excluding stock-based
compensation expenses. Stock-based compensation expenses will recur
in future periods.
- Amortization of acquisition-related intangible assets: We have
excluded the effect of amortization of acquisition-related
intangible assets from our non-GAAP financial measures.
Amortization of acquisition-related intangible assets is a non-cash
expense, and it is not part of our core operations. Investors
should note that the use of acquisition-related intangible assets
contributed to revenues earned during the periods presented and
will contribute to future period revenues as well.
Our non-GAAP Financial Measures are described as follows:
- Non-GAAP net loss and net loss per share. Non-GAAP net loss is
net loss as reported on our consolidated statements of operations,
excluding the impact of stock-based compensation, amortization of
acquisition-related intangible assets. Non-GAAP net loss per share
is non-GAAP net loss divided by non-GAAP diluted weighted average
shares outstanding. Non-GAAP diluted weighted average shares
outstanding was computed to give effect to the conversion of all
outstanding convertible preferred stock which occurred in
connection with our initial public offering in October 2015, as if
conversion had occurred at the beginning of the period.
- Adjusted EBITDA is net loss as reported on our consolidated
statements of operations, excluding the impact of the same items
excluded from the calculation of non-GAAP net loss as well as
interest expense, depreciation and amortization, and our provision
for income taxes.
For reconciliations of these non-GAAP financial measures to the
most directly comparable GAAP financial measures, please see the
section of the accompanying tables titled, "Reconciliation of GAAP
to Non-GAAP Financial Information."
Conference Call Information
Adesto will host a conference call today at 7:00 a.m. Pacific
Time to discuss its financial results. Investors and analysts may
join the call by dialing 1-855-715-1006 and providing confirmation
code 73137014.International callers may join the teleconference by
dialing +1-440-996-5684 using the same confirmation code. The call
will also be available as a live and archived webcast in the
Investor Relations section of the Company's website at
http://www.adestotech.com.
A telephone replay of the conference call will be available
approximately two hours after the conference call until Monday,
November 16, 2015 at midnight Pacific Time. The replay dial-in
number is 1-855-859-2056. International callers should dial
+1-404-537-3406. The pass code is 73137014.
About Adesto Technologies
Adesto is a leading provider of application-specific,
feature-rich, ultra-low power non-volatile memory products. The
company has designed and built a portfolio of innovative products,
including Fusion Serial Flash, DataFlash® and Conductive Bridging
RAM (CBRAM®). CBRAM® is a breakthrough technology platform that
enables 100 times less energy consumption than today's memory
technologies without sacrificing speed and performance. Founded in
2007 in Sunnyvale, CA, Adesto holds more than 100 patents with
dozens more in process and is working with visionary companies
across various industries to deploy its technology to the market.
For more information, please visit http://www.adestotech.com.
Forward looking Statements
The statements in this release regarding demand for our
products, as well as all statements under "Business Outlook" are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause
our actual results to differ materially, including, but not limited
to: market adoption of our CBRAM-based products; our limited
operating history; our rate of growth; our ability to predict
customer demand for our existing and future products and to secure
adequate manufacturing capacity; our ability to manage our growth;
our ability to hire, retain and motivate employees; the effects of
competition, including price competition; technological, regulatory
and legal developments; and developments in the economy and
financial markets.
For a detailed discussion of these and other risk factors,
please refer to our filings with the Securities and Exchange
Commission, including the final prospectus related to our initial
public offering, which are available on our investor relations Web
site (ir.adestotech.com) and on the SEC's Web site
(www.sec.gov).
All information provided in this release and in the attachments
is as of November 12, 2015, and stockholders of Adesto are
cautioned not to place undue reliance on our forward-looking
statements, which speak only as of the date such statements are
made. Adesto does not undertake any obligation to publicly update
any forward-looking statements to reflect events, circumstances or
new information after this November 12, 2015 press release, or to
reflect the occurrence of unanticipated events.
ADESTO TECHNOLOGIES
CORPORATION |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 5,337 |
$ 5,972 |
Accounts receivable, net |
4,510 |
1,994 |
Inventories |
6,981 |
7,453 |
Prepaid expenses |
520 |
239 |
Deferred tax asset, current |
291 |
291 |
Other current assets |
2,268 |
1,095 |
Total current assets |
19,907 |
17,044 |
Property and equipment, net |
987 |
1,725 |
Deferred tax assets, non-current |
1,862 |
1,861 |
Intangible assets, net |
9,868 |
10,795 |
Goodwill |
22 |
22 |
Total assets |
$ 32,646 |
$ 31,447 |
Liabilities, Convertible
Preferred Stock and Stockholders' Equity (Deficit) |
Current liabilities: |
|
|
Revolving line of credit |
$ -- |
$ 4,273 |
Accounts payable |
9,458 |
7,814 |
Income taxes payable |
194 |
134 |
Accrued compensation and benefits |
979 |
877 |
Accrued expenses and other current
liabilities |
1,932 |
1,334 |
Deferred tax liability, current |
736 |
726 |
Term loan |
5,042 |
6,476 |
Total current liabilities |
18,341 |
21,634 |
Preferred stock warrant liability |
463 |
122 |
Term loan |
9,229 |
-- |
Deferred tax liability, non-current |
1,453 |
1,453 |
Other liabilities, non-current |
-- |
23 |
Total liabilities |
29,486 |
23,232 |
|
|
|
Convertible preferred stock |
78,467 |
78,467 |
Stockholders' equity (deficit): |
|
|
Common stock |
-- |
-- |
Additional paid-in capital |
4,119 |
3,912 |
Accumulated other comprehensive
income |
(146) |
(3) |
Accumulated deficit |
(79,280) |
(74,161) |
Total stockholders' equity (deficit) |
(75,307) |
(70,252) |
Total liabilities, convertible preferred
stock and stockholders' equity (deficit) |
$ 32,646 |
$ 31,447 |
|
|
ADESTO TECHNOLOGIES
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands, except for share
and per share amounts) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended September 30, |
Nine Months
Ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Revenue |
$ 11,143 |
$ 10,034 |
$ 31,433 |
$ 31,096 |
Cost of revenue |
6,110 |
6,333 |
18,346 |
19,367 |
Gross profit |
5,033 |
3,701 |
13,087 |
11,729 |
Operating
expenses: |
|
|
|
Research and development |
3,217 |
3,456 |
9,313 |
11,375 |
Sales and marketing |
2,126 |
1,735 |
6,189 |
5,368 |
General and
administrative |
919 |
639 |
2,589 |
1,809 |
Total operating expenses |
6,262 |
5,830 |
18,091 |
18,552 |
Loss from operations |
(1,229) |
(2,129) |
(5,004) |
(6,823) |
Other income
(expense): |
|
|
|
Interest expense, net |
(336) |
(189) |
(822) |
(611) |
Other income (expense),
net |
494 |
(38) |
783 |
5 |
Total other income (expense),
net |
158 |
(227) |
(39) |
(606) |
Loss before provision for income
taxes |
(1,071) |
(2,356) |
(5,043) |
(7,429) |
Provision for income taxes |
5 |
15 |
76 |
125 |
Net loss attributable to common
stockholders |
$ (1,076) |
$ (2,371) |
$ (5,119) |
$ (7,554) |
|
|
|
|
|
Net loss per share
attributable to common stockholders |
|
|
Basic and diluted |
$ (1.90) |
$ (4.40) |
$ (9.11) |
$ (14.01) |
Weighted average number of shares used
in computing net loss per share attributable to common
stockholders |
Basic and diluted |
564,896 |
539,397 |
562,110 |
539,285 |
|
|
ADESTO TECHNOLOGIES
CORPORATION |
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION |
(in thousands, except for share
and per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
Nine Months Ended
September 30, |
|
|
|
2015 |
2014 |
2015 |
2014 |
Reconciliation from GAAP net loss
to adjusted EBITDA: |
|
|
GAAP net loss: |
|
$ (1,076) |
$ (2,371) |
$ (5,119) |
$ (7,554) |
Stock-based compensation
expense |
85 |
127 |
197 |
204 |
Amortization of
acquisition-related intangible assets |
309 |
309 |
927 |
927 |
Non-GAAP net loss |
(682) |
(1,935) |
(3,995) |
(6,423) |
Interest expense, net |
336 |
189 |
822 |
611 |
Provision for income
taxes |
5 |
15 |
76 |
125 |
Depreciation and
amortization |
346 |
491 |
1,173 |
1,364 |
Adjusted EBITDA |
|
$ 5 |
$ (1,240) |
$ (1,924) |
$ (4,323) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net loss per
share |
($0.07) |
($0.20) |
($0.41) |
($0.67) |
|
|
|
|
|
|
|
Reconciliation of shares
used in computing non-GAAP net loss per share: |
|
Diluted shares: |
|
|
|
|
|
Weighted-average shares used
in calculating GAAP diluted net loss per share |
564,896 |
539,397 |
562,110 |
539,285 |
Conversion of convertible
preferred stock upon IPO |
9,114,739 |
9,114,739 |
9,114,739 |
9,114,739 |
Weighted-average shares used in
calculating non-GAAP diluted net loss per share |
9,679,635 |
9,654,136 |
9,676,849 |
9,654,024 |
CONTACT: Company Contact:
David Viera
Director, Corporate Communications
P: 408-419-4844
E: david.viera@adestotech.com
Adesto Technologies Investor Relations:
Shelton Group
Matt Kreps, Managing Director
P: 214-272-0073
Leanne K. Sievers, Executive Vice President
P: 949-836-4276
E: sheltonir@sheltongroup.com
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