Adesto Technologies Corporation Announces Preliminary Second Quarter 2018 Financial Results
July 09 2018 - 6:26AM
Adesto Technologies (NASDAQ:IOTS), a leading provider of innovative
application-specific semiconductors for the IoT era, today
announced preliminary results for the three months ended June 30,
2018. Adesto expects revenue for the second quarter to be
approximately $18.1 million to $18.3 million, within the company’s
prior expectations of $18.1 million to $19.0 million. The company
expects gross margin to be 42% to 44%, below the company’s prior
expectations of 46% to 48%, primarily driven by product mix during
the quarter. Additionally, the company expects GAAP operating
expenses for the second quarter to be in the range of $11.3 million
to $11.5 million, compared to the company’s prior expectations of
$9.1 million to $9.7 million. On a non-GAAP basis, Adesto expects
operating expenses for the second quarter to be approximately $8.3
million to $8.5 million, also within the company’s prior
expectations of $8.2 million and $8.8 million. Non-GAAP measures
exclude estimates for transaction related expenses, stock-based
compensation expense and amortization of acquisition-related
intangible assets. For the second quarter, non-GAAP total operating
expenses differs from GAAP total operating expenses because it
excludes stock-based compensation expense of approximately $0.6 to
$0.7 million, amortization of acquisition-related intangible assets
of approximately $0.3 million and transaction-related expenses of
approximately $2.0 million.
“During the quarter, we continued to make progress and penetrate
Tier 1 OEM customers with sales of our standard flash products. As
we gain more traction in these accounts, we believe our opportunity
pipeline is also expanding for Adesto’s value-added products,” said
Narbeh Derhacobian, Adesto’s President and CEO. ”We
experienced a slower than expected ramp of DataFlash-L products
targeted at smart home application markets in the quarter, which
reflected the timing of ramps across the broader end-market as
opposed to any customer specific issues; together with the growing
Tier-1 revenue, we experienced temporarily less-favorable product
mix and gross margin in the second quarter. Regarding our S3
Semiconductors acquisition, we are executing well on the initial
integration, and revenue from the ASIC group is expected to come in
at the high-end of our projections.”
These preliminary revenue, gross margin and total operating
expense estimates are based on management’s initial review of
operations for the three months ended June 30, 2018 and are subject
to the completion of the company's customary quarterly closing and
review procedures. Adesto will provide more information as
part of reporting the company’s full second quarter financial
results during a conference call planned for early August. For
additional discussion of Adesto’s preliminary results for the three
months ended June 30, 2018, please refer to the company’s Current
Report on Form 8-K filed with the SEC on July 9, 2018.
About Non-GAAP Financial MeasuresTo supplement
Adesto’s financial results presented in accordance with generally
accepted accounting principles (GAAP), this press release contains
non-GAAP total operating expenses. Non-GAAP total operating
expenses is defined as GAAP operating expenses as reported in
Adesto’s condensed consolidated statements of operations, excluding
the impact of stock-based compensation expense, amortization of
acquisition-related intangible assets and transaction-related
expenses. The company believes this non-GAAP financial
measure is useful in evaluating its past financial performance and
future results. Non-GAAP total operating expenses should not be
considered in isolation or as a substitute for total operating
expenses on GAAP basis and should be read in conjunction with
Adesto’s consolidated financial statements prepared in accordance
with GAAP. The company’s management regularly uses this non-GAAP
financial measure internally to help them evaluate trends,
establish budgets, measure the effectiveness of our business
strategies and assess operational efficiencies. This non-GAAP
financial measure is not based on any standardized methodology
prescribed by GAAP and is not necessarily comparable to similar
measures presented by other companies. Adesto’s non-GAAP total
operating expenses include adjustments based on the following
items:
- Stock-based compensation expenses: Adesto has excluded the
effect of stock-based compensation expenses from its non-GAAP total
operating expenses. Although stock-based compensation is an
important part of its employees’ compensation affecting their
performance, the company continues to evaluate its business
performance excluding stock-based compensation expenses.
Stock-based compensation expenses will recur in future
periods.
- Amortization of acquisition-related intangible assets: Adesto
has excluded the effect of amortization of acquisition-related
intangible assets from its non-GAAP total operating expenses.
Amortization of acquisition-related intangible assets is a non-cash
expense, and it is not part of the company’s 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.
- Transaction-related expenses: Adesto has excluded the effect of
transaction expenses such as legal, accounting and other
professional fees incurred in connection with acquisition related
activities. Such expenses typically are not recurring and are
incurred only when the company engages in acquisition related
activities. The Company evaluates its business performance
excluding such expenses and are not factored into management's
evaluation of potential acquisitions.
Forward Looking StatementsThe statements in
this press release regarding the company’s expectations for its
second quarter 2018 financial results 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 the company’s completion of the
financial closing process for the second quarter operating results
and financial condition. For a detailed discussion of other risk
factors, please refer to the risks identified in Adesto’s filings
with the Securities and Exchange Commission, including those
discussed in the section captioned “Risk Factors” contained in an
exhibit to Adesto’s Current Report on Form 8-K filed with the SEC
on July 9, 2018, 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 Monday, July 9, 2018, 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 July 9, 2018 press release, or to
reflect the occurrence of unanticipated events.
About Adesto TechnologiesAdesto Technologies
(NASDAQ:IOTS) is a leading provider of innovative
application-specific semiconductors for the IoT era. The company’s
technology is used by more than 2,000 customers worldwide who are
creating differentiated solutions across industrial, consumer,
medical and communications markets. With its growing portfolio of
high-value technologies, Adesto is helping its customers usher in
the era of the Internet of Things. See: www.adestotech.com.
Follow Adesto on Twitter.
Adesto Technologies and the Adesto logo are trademarks of Adesto
Technologies in the United States and other regions. All other
trademarks are property of their respective owners.
Adesto Technologies Media Contact:Jen
Bernier-Santarini+1 650-336-4222press@adestotech.com
Adesto Technologies Investor Relations:Leanne
K. Sievers Shelton Group949-224-3874sheltonir@sheltongroup.com
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