Q1 2022 Energous Corp Earnings Call
Good day and welcome to the energy first quarter 2022 financial results Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.
After todays presentation, there will be an opportunity to ask questions to ask a question in the press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Matt Sullivan Investor Relations. Please.
Go ahead.
Thank you Andrew and welcome everyone before we begin I would like to remind participants that journey.
This is the conference operator, I wanted to try for a third time May I. Please have your name and company.
You are now rejoining the main conference, except as otherwise required by federal Securities laws and are just disclaims any obligation or undertaking to publicly release updates or revisions to the forward looking statements contained herein or elsewhere to reflect changes.
<unk> and expectations with regards to those events conditions and circumstances.
Also please note that during this call in or just will be discussing non-GAAP financial measures as defined by SEC regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on the company's website.
I'd like to turn the call over to Cesar Johnston CEO of vendor just please go ahead Cesar.
Yeah.
Thanks, Matt.
Good afternoon, and welcome to the <unk> 2022 first quarter conference call.
Joining me. This afternoon is bill Menino, our acting Chief Financial Officer.
As you saw on our first quarter press release that came out. This afternoon, we reported revenue of approximately 216000 in Q1 2022.
Which represents a 49% increase over the same quarter for 2020 one.
These highlights the growing interest in our wireless power networks technology.
And we are very pleased to report that for the first time in our company's history, we are sheep and measurable quantities of product.
The Ana just vision is that wireless power is crucial to unlocking significant unrealized potential.
Speedy nap and expanding the deployment of Iot devices.
Our wattup wireless charging technology is designed not only to enable mobility for devices as we charge them, while in motion and over the air at large distances, but also to enable freedom of placements like suitability for fixed Iot sensors tractors and other Iot devices without the constraints of wires.
Or they need to change batteries.
We are finding that there is particularly solid customer interest in wirelessly parent arris, Dax and electronic shelf labels.
We believe that early adoption of wireless power in these areas, we'd lead to future Iot deployments in retail industrial medical is smart home and Smart office market environments. We also believe these targeted markets hold tremendous potential for images.
In our previous Q4, 2021 and their earnings call.
We mentioned.
Three near term business goals, which we would like to give an update on today.
The first was to fulfill the commercial delivery of one what what our Bauer bridge orders as noted on our last call. Our first shipment of Wattup power bridges was deliver in Q4 2021 we.
We are happy to report that in Q1, 2022 despite continuing supply chain challenges, we fulfill and increase in number of units of our one what what our power bridges runs meters.
These transmitters are built with <unk> semiconductor and software technology and are being used today by several end customers in trials and demonstration type deployments.
Our power bridge wireless power network solution in conjunctions with low power Iot pixel bags for my work Barnard Willett are receiving early positive feedback as customers can now see firsthand the value of Williams Iot pixels wireless Lia energize at distances greater than 10 meters.
And going forward, our aim is to generate volume demand for our water power bridges from these trials.
And as we get visibility to larger order volumes, we expect to be able to significantly reduce our cost of revenue.
Yeah.
The second near term goal.
As we discussed last quarter Westwood identify a beachhead I rip tag application and related addressable markets.
Targeting our first production pilot deployment.
One potential application that we've been we have identified.
Is they need the wire does the power asset tracking devices. This application has attracted initial interest from that for multiple companies, who are evaluating our wattup power, which Iot wireless network solutions.
We will report further on this initiative as our collaboration progresses.
Our third the stated near term goal.
He used to identify a market launch customer for electronic shelf labels or E. S. LS.
Power and ESL is a major challenge for the industry due to our reliance on cumbersome cables and battery replacement.
We are actively developing our wireless power network system for ESL deployment, and we are productively engage with a global E. S. L device leader.
Now to support our Iot business focus.
We recently announced new appointments to the <unk> board of advisors.
These new advisors are highly experienced and well recognized in the industry for their past accomplishments along with their overall vision for the future of Iot. We are excited to have Bob Friday, Alessandro appeal by Carrie and Mark Tyndall as part of our team and we look forward to working with them.
They contribute to our efforts.
Yeah.
We have spent considerable effort obtaining regulatory approval to ensure that we can sell our products three front restriction in the major geographic markets.
I would like to now update you on the significant regulatory certifications Broadway is the company has recently made for Iot wireless charging at a distance.
Since our first one what what our power bricks certification in the U S. In October 'twenty 'twenty. One we have received net new certifications in the European Union, India, Canada, and most recently in China last month in April which represent a six month famous ban of sequential IRA.
Wireless charging certifications.
Delighting our.
Leadership position for war, while worldwide regulatory certifications for wireless power networks.
As we have noted in the past the Iot ecosystem continues to expand rapidly.
And is expected to grow from 12 billion devices today to nearly 40 billion by 'twenty twenty-five according to IDC and their report entitled worldwide Global data sphere, Iot device and data forecast 2021 to 2020 five.
Beyond the successful regulatory approvals received over the past six months.
We are excited to see the major movement in the U S for greater than one watt conducted powered delivery are in limited distance our long term collaboration with the FCC since the early days when we first opened part 18 of less than one metre has now involved evolve into a draft FCC knowledge database or <unk>.
DB that allows barley theme for a limited distance powered transmission.
This progress mirrors or their world wide efforts and solidifies the future of wireless power networks as a recognized emerging technology and solution with a path to becoming available in the world markets. We believe that these regulatory achievements combined with the rise of the Iot markets provide the perfect combination for.
Our rapid growth of connected devices as the next generation of industrial retail health and a smart office or smart home infrastructure are deployed.
On the operational side, we have completed the transfer of the <unk> 40, 132, 10, and <unk> 32, 22, 10 device supply chain to energize from our previous partner dialog semiconductor and we continue working on the transfer of the of the end 'twenty two 'twenty three device supply chain.
We have seen no major impacts in manufacturing as we continue to work with and sorts from our original foundry partner.
These partners the same firm that we have been using since day one.
Back when we fabricate our own designs and is indeed, the same firm that was used when we moved to our operations to dialogue.
Now that the supply chain is back under <unk> management, we're working directly with this foundry as we have done it in the past.
On this on the business partnerships.
We.
We see business partnerships, playing an important role in the deployment of <unk> Iot wireless power networks, we continue to develop relationships with partners that complement our vision to expand our business reach.
As noted on our last call. We are engaged in a partnership with Williams and emerging RF Tech leader and maker, a groundbreaking battery less Iot pixels. William includes our one one what what our power bridge as the wireless power source in their starter kits.
How would you what's announced in January and as part of our continued partnership we will be participating in the William training session at RFID Journal.
Life next week in Las Vegas, where we will be supporting their training event.
We are excited to see the strong interest in this offering as our water power Bridge wireless power network solution provides guarantee levels of power, we'd have to have 100% Iot device visibility at greater than 10 meters.
During Q1 2022 in partnerships with at mosaic, an emerging leader in low power BLE devices, we announced that Iot wirelessly charged sensory evaluation kit, which includes a one watt power Bridgewater, most ex ATM three receivers, which is expected to become available in Q2 2020.
You too.
Mosley receivers will be power over the air with our Wattup our bridge, while establishing a BLE connection to trasimene censored data after the power of bridge with his capabilities for further censored data transfer into a wireless network infrastructure for cloud data management processing.
Also announced this quarter seem to it as a new partner, who is low low powered neuro decision processors, Brett did visually intelligence represents the addition of next generation high performance yet low power.
Consumer Iot devices at the network edge with no data processing capabilities. Our aim is to become a critical provider in delivering the power and connectivity that will be required by artificial intelligence devices to process on low data for cloud processing and in certain applications to improve the network.
Latency response by using initiatives Wattup, our breach technology, Cynthia and sound processing at our new generation <unk>.
The smart Iot devices, which kind of react and control Iot devices deployed in retail industrial home and office environments.
In summary.
And rigorous execution of its Iot wireless power networks is underway.
And showing solid progress in multiple technical regulatory and partnership areas.
Our water power of Rich brothers have now reached a number of potential end customers that are evaluating our solutions.
The ramp up of our semiconductor devices production is also in place we expect that as we as with any new product demand and interest may fluctuate as we ramp up and we will plan accordingly.
Finally, we reiterate our long term goals as we outlined last quarter are our.
Our goals were supportive of the air fuel alliance efforts to make the wireless power transmission a standard.
Lead the ICU recommendation to align 900 megahertz wireless power transmission. The spectrum is the first designated wireless power spectrum worldwide.
35 high power that is greater than one watt conducted power Iot power bridges transmitters in the U S and EU without distance limitations.
Fourth identify potential market applications for ESL vertical markets and target first pilot deployments.
Also identify third vertical market and build end to end system for customer technology demonstration.
Finally deliver a year over year revenue growth driven by expanding Iot W. P M deployments.
We are focused on these long term tasks and continued to make progress we will update the audience.
As important accomplishments are made on these targets.
I will now turn the call to Bill money now, we're acting CFO Bill Thanks Cesar.
Before we begin I'd like to remind everyone again that we issued a press release today at the close of market announcing our financial results for our first quarter of fiscal 2022 ended March 31.
As we mentioned in the release, we delivered our first shipment of one watt Wattup power beads transmitters in the 2021 and fourth quarter and we are very pleased to report that in the 2022 first quarter, we fulfilled additional orders of Wattup power bridges.
Revenue in the first quarter was $216000 or 49% increase over the 145000, we reported in Q1 2021 <unk>.
Sequentially. This compares to 225000 in Q4 2021 as discussed.
We do anticipate quarter over quarter revenue fluctuations as we ramp up sales.
As a result of our product revenue in Q1, we reported the related cost of revenue for our product sales cost of revenue was 203000 in Q1, we did not report cost of revenue in the prior quarter or in Q1 last year.
Going forward, our aim is to generate volume demand for our products and we expect to be to be able to significantly reduce our cost of revenue once we achieve larger order volumes.
For the quarter total non-GAAP total GAAP I'm, sorry, GAAP spending decreased by $2 3 million down to $7 4 million compared to the prior quarter, primarily due to a decrease of $2 5 million and stock compensation expense.
Year over year total GAAP spending for Q1 decreased by $1 3 million compared to the same quarter last year, which is due to a $1 $3 million decrease in stock based compensation.
Research and development expense accounted for 48% of total costs and expenses in Q1.
Management continues to evaluate targeted cost savings opportunities, while still supporting business growth.
Net loss for the first quarter on a GAAP basis was approximately $7 2 million or a nine loss per share on approximately 77 million weighted average shares outstanding.
This compares to a $9 4 million net loss in the prior quarter or 13 cent.
Loss per share on $72 9 million weighted average shares outstanding.
And an $8 $5 million net loss or a 14 loss per share in Q1 of last year on 61 6 million weighted average shares outstanding the increase in share count year over year is primarily due to our at the market or ATM financing completed in Q.
Four of the last fiscal year.
Which raised approximately $27 million.
Let me now give you a non-GAAP view of our numbers for the first quarter as we believe non-GAAP information provides a useful comparison for investors, especially for a company at our stage when used with GAAP information.
Excluding <unk> 8 million of stock compensation expense and <unk> 1 million of depreciation expense from our total Q1, GAAP costs and expenses of $7 4 million net.
Net not non-GAAP costs and expenses totaled approximately $6 5 million.
Approximately <unk> 3 million less than the $6 2 million total non-GAAP costs and expenses in the prior quarter and approximately even compared to the same quarter last year.
Our non-GAAP net loss for Q1 was $6 $3 million or an 8% loss per share.
This is an increase of approximately <unk> 3 million compared to the prior quarter and essentially flat to Q1 of last year.
Okay.
We saw minor expense fluctuations across all areas in line with our expectations.
non-GAAP research and development expenses decreased by approximately <unk> 3 million from the prior quarter to $3 1 million and we had the same decrease of <unk> 3 million compared to the prior year.
non-GAAP SG&A increased over the prior quarter by approximately <unk> 3 million.
Due primarily to public company year end reporting costs.
Paired to the same period last year Q1, non-GAAP SG&A costs increased by approximately 100000.
We ended the quarter with approximately $42 8 million in cash and remain debt free.
To close.
We expect our GAAP and non-GAAP cash operating expenses for the full year to trend in the current range with our normal quarterly fluctuations.
We continue to forecast year over year revenue growth.
I will now return the call back to Cesar.
Thank you Bill.
We would like to thank our shareholders and stakeholders for their support.
We would also like to thank our partners, who share our vision and support the growing Iot wireless charging market.
And the goal is to make.
Make wattup wireless power at worldwide standard for over the air of wireless charging at 900 megahertz.
We believe <unk> is poised for success due to our strong innovation capabilities and the technology regulatory and business development areas. We have made a tremendous amount of progress towards our goals and I am in Iot wireless power networks.
Thank you for your support as we work to unleash the full potential of Iot through Wattup wireless charging by removing cables and batteries.
At this time, we would like to open the call for questions operator.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you'd like to withdraw. Your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Sujit de Silva with Roth Capital. Please go ahead.
Hi, Cesar Hi, Bill congratulations on the shipments.
Continuing its great.
So.
Yeah. So let me ask what's the it.
It seems like the shipments initially or through.
Through Willy I, if I heard it kind of.
And if I read between the lines. There are there is that correct or are there. Other partners that are also shipping trial products I just wonder how many partners are helping seed the market already.
Yes, so we're not giving the customer detail at this time.
Okay.
That's fair enough.
Maybe perhaps you could talk about the.
The end markets that those initial.
Power bridges are shipping into to understand where you're seeing initial traction and marketwatch vertical.
Sure as we have previously discussed we are focused on two particular applications. One of them is our attacks and a second application is that a drunk ship label.
On the Irish tax side with really up in conjunction with their Iot what our pixels.
We are looking at US a couple of markets that seem to be pretty interesting right now one of them I actually mentioned on the on the call today and deals with asset tracking.
There's a lot of interest from being able to track devices in markets, such as industrial retail as well as smart home and.
Smart offices, where pretty much customers are interested in being able to file.
Find different components that they have deployed.
Their premises.
And being able to actually find those components in a timely manner is kind of interesting.
To see especially in medical applications were from what we hear it takes sometimes over a couple of hours to find equipment and with this type of technology, you can find that equipment, especially in emergency situations.
Quite quite fast.
There are some obligation social and REIT in retail where as you have merchandise in the front of the store and that merchandise is consumed by.
The buyers that merchandise.
<unk> highlighted and it's actually communicated to the warehouse and the warehouse can actually bring that into the front door.
Those are two so two examples I think.
Where we've seen ASIC dragging us that potential.
Business right now.
Okay.
Great and then just got it I'm sorry.
On ESL, just just to add to your question because I said there were two.
Potential applications on E. S. L. We've seen also very complimentary usage off of ESL tax.
To basically complement our attacks where the Irish tax can be in the front of the store or the premises or the warehouse and where you can have actually dose Irish tax indicating verbatim.
Surveyed them, what the status of let's say <unk>.
Inventories or warning people that things are going low or in certain cases in retail actually updating.
Upon prices in and merchandise pricing as people move through stores and things like that okay.
Great Yeah, no it sounds like really some good areas for opportunity for you guys. In these pilots are you shipping both the transmit base.
Gateway as well as the end device kind of receives is at is at both ends of these pilots are taking products.
It's a combination of both in the case of let's say Willis evaluation.
<unk> those are extreme low.
Vertically integrated devices from a technology point of view, okay. So they are optimized to to be extremely cheap and dedicated to retail and asset tracking as well as other <unk> applications. So in those potential.
Our scenarios what Youre seeing is just a.
A combination of power bridges with those labels and potentially in certain cases ESL displays.
There are other applications would that also you could potentially share that environment with.
Higher power devices that require the technology that we have or also potentially could use.
Devices that we have also put together as part of our reference designs with because it's not just a semiconductor than we have what we have referenced the science also.
They tend to use our EPS partner solution. So there's a combination there.
Not a one off per se.
Okay, great very helpful.
Switching over to the financials, perhaps.
The revenue in the quarter insurance 60000 is that.
100% product revenue are there still non product elements in terms of pilot products.
There is a mix Fuji.
Thanks.
Okay and then.
I know the cards are high here, because you were at low volumes and.
Initial shipments what what are the target.
Gross margins you would foresee as you get to a.
More volume ramp just to understand where this can go.
Definitely definitely were looking to ramp that number down I mean, we're not targeting exact numbers at this time.
On the call but.
And they definitely with volume we can bring the number down.
Okay. That's very helpful. And then lastly on the quarter I know you completed the ATM here.
Can you talk about what the cash burn was in the first quarter and if you'll be looking to.
I guess to set up another ATM or kind of other funding vehicles or where do you feel like you have good coverage for the near term.
Okay, well actually.
We mentioned, we raised $27 million last quarter. So we haven't actually finished the ATM.
Approximately $7 million left on the ATM.
Okay.
And Thats still just.
Up to our own timing.
Okay. No I'd heard you said you completed I guess you haven't completed the ATM you just execute against 7 million left 7 million left got it and then most of the cash burn in the quarter.
First quarter.
Overall about $6 3 million.
Okay. Okay, Thanks, guys and again congrats on the progress.
Okay. Thank you Susie thanks Angie.
This concludes our question and answer session I would like to turn the conference back over to Cesar Johnston for any closing remarks.
As previously stated we would like to thank our shareholders and stakeholders for their support and most important our partners that allow us to extend our reach and make our products well known.
We.
We're working hard here to make introduce the solution for Iot wireless power networks.
And we will be updating it.
All of you as we move forward and make progress. This has been a very important quarter for us we announced our first.
Product in history.
And we.
We are seeing today as we move forward the growth of <unk>.
Wireless power networks.
And this is a very important year. So thank you very much.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.
[music].
Okay.
[music].
Yeah.
[music].