WiSA (WISA) 10 Aug 212021 Q2 Earnings call transcript

Greetings, and welcome to the Summit Wireless Technologies Second Quarter 2021 Financial Results Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce Kirsten Chapman at LHA Investor Relations. Thank you.

begin. may You

and Good to Daryl. Financial I'd to Wireless like Call. George and Thank Oliva. Summit morning, Wireless you CEO Summit are the us XXXX Brett Technologies welcome Moyer; With CFO, you, today everyone. President, Second Results Quarter

consumer XXXX Act company's the statements, Brett, XXXX Securities expectations in forward-looking Private on forward-looking statements I the to on performance for cause statements. statements the of the and including information currently motivate the nature Act to materially are of growth company's of our the potential risks and XXA the facts with manufacturing future of a actual of performance, macroeconomic differ by the today's are entering and to of I'd ability in revenue legal -- and Litigation timing statements price our secure remind safe implied a markets the constitute to the capacity; future that employees; course certain our These customers' products forward-looking The and turn with prospects our of reflect or results, competition, end to rate; company, including current ability herein call. existing future Before demand predict the its ability based meaning within demand harbor and hire, and forward-looking SEC uncertainties in statements for to statement the subject filings. affecting like could Securities Section or forward-looking opportunities. to made XXXX. during and regulatory Statements adequate everyone forward-looking factors, XXE others the markets; associated Act the retain provides Such and number those historical our design current financial Exchange uncertainties and of results, opportunities harbor based developments safe that other associated from operating including to the pandemic; referenced economy call and predict to of in the developments; expressed technological, about Section wins our of and wins; not the are COVID-XX and and available competition, effects demand Reform conditions production customer our Securities contained are design

more SEC company's I a of business, the discussion of risks uncertainties to refer detailed ongoing and filings. For various some of the you these company's

Summit's and Now Please pleasure CEO it is my the Moyer. President, go ahead, Brett to Brett. over to call turn

ladies catch and exciting Thank few to up call. you, pretty the everybody. had second for and through Kirsten, of accomplishments. lot a investors quarter, accomplishments We'll I'm then looking model, earnings We'll the into revenue our go a you welcome the forward with good to a slides going to morning, business through with We new detail gentlemen. and like quarter initiatives on growth. go on I'd we'll highlight more to

announce that They adopted the is WiSA So X one our SoundSend the our certification. were which to fifth we Japan We using guidance brands in we Toshiba. standard Asia, have technology. have since able there call, have they and last and TV out market

with we well. download audio about several TV the The consumer which which on So Toshiba, a Hisense, up WiSA preferences able with app -- Buy Sharp, Insignia, can this the TVs, the brand, are the be and to of the any their which partnerships Best marketed their is be brands that remote Sony, program, downloaded the be Android onto -- by are entire other from WiSA's and the system app, component out big year SoundSend the marketing certification the system, WiSA of to TV SoundSend load plan like our the announced increase SoundSend Onkyo TV. it market optimize as We'll the can from this with drive -- hearing TV Also set have is like And their WiSA under the that will Certified up later A Toshiba. year. screen. awareness system and consumers. just partnerships

So million, guidance guidance and out we this to increased now we we at $X announced had $X that that year. for million

have approximately X just have websites, consumer increase awareness. under and that's WiSA We people the million visited to important the

premium WiSA This one first the store on audio, consumers products, that to what mainstream, a allow brands. the will that brands shifting us of will let to points, stores WiSA educate storefronts, them launching WiSA the a price then lot year, covers the WiSA, entry-level site, we're Amazon. all of be handful them Now and on this are bring them on to go educate of

Amazon you online, when show we'll the speaker open than so them looks traffic get like if website we specific or amazon.com/wisa. And specific a to retailer, send But in traffic directing is direct one. first these a the what and a want rather it's off I'll minute. brand WiSA stores they to up, it as you to

Russell Index Two I for metrics $XX people We to. -- the raised growth joined want and Microcap pay to big also July. million attention in

standard XX,XXX educated mentioned, I And from with we has expect, of did growth to, on the more XXX,XXX than growth. pivoting million Revenue year. the to being WiSA WiSA to gone visitors last Association a start people consumer-facing this As from year X that, technical we the organization.

designs. XXXX and is with Consumers we revenue said growth. have a significant our leading working. revenue WiSA experiencing year-over-year you as And are to QX, is And is results a indicator to growth. and revenue to plan leading is membership leading that on Designs our we indicator growth. indicator QX in revenue see, sell-through to drive a So for guidance further growth can

at at chips know-how than if it which And those and the is there's For technology investing you multichannel the if brands looking ecosystem XX then has high-performing helps X wireless in there's both for more in audio, in build investment. to standard new investors, that for the to IP. side products. WiSA, Summit, really you're look pieces -- One and build the

with just a you what when one the out to the to receive. like send sophisticated and know If of receiver need another, you sending to from HDMI, look at to needs know to source what signal WiSA, you're low highly

technical WiSA transmission So into either about market, a can not production these in TVs, to that how spec so but are to process in yet, audio. and products that and has they're know in market or production. around speakers, all speakers AV to This go year, receivers understand transmit

that our technology, look than the the ecosystem. So continue forward we'll have building and be in products consumer out market total, XX to. will of to using we brands broad for a In fall to there's range the more

really about people are the the that For thinking and the deficiency that is in market deficiency we're TV the WiFi technology. in addressing, the it's the market what

helps So quality. can sub, bar. WiFi, the TV pretty And Add a a add you better. low it's -- It a couple with speakers. thin sound your audio TVs have with of

you of and actually and the can impact theater Now full still the the not bar all the of Atmos movie speakers, center So to with simplicities you're get have speakers setup, a right? with Dolby sound speakers going add speakers, speakers, WiSA, installing. rear front

paying not an You're installer.

and outlets wall into an HDMI a devices some in plug cable TV. into You

just as sound simple. like the bar, Just

solution say, which getting experience, considerably than, for Audio, Sonos Platin premium consumer sound, you're at a a or the sound $XXX. lower-priced better installation. you're simple from are Audio you these if actually bars and And from sound bars some same look getting Bose Enclave field Sony, sound better and So of running at just

moves a the in you price. subwoofer $X,XXX So

streaming get is high-resolution, next-gen to the cinema almost opportunity market full right? retailers, smart and SoundSend, three the and is to growth audio that which multichannel initiatives are brands So both for consumers, with TVs around streaming those Wave, impacting the consumer WiSA services use, our technology. sound the The all

be And SoundSend, and a X long-term certify months, the app WiSA. catalyst a this simple to guys program think a was a as ready things we well traction, important So both WiSA going for TVs been -- speaker that big All to the that good out that that's And awards support TV SoundSend-compatible. now. us to the going have that an loaded can guys right? product We're the turns AV getting investors they is the for can on you now good know right. this of they A can we're consumer into forward. for just TV lets receiver, consumer, support that it their you're new And this can now about communicate they're TV. that as product effective brand an for couple announce talk quarter

helping what marketers, better entire and ecosystem hear levels marketed surround to bar brands as reseller. Atmos everything. doing. consumers great about category. of the above them we're driving audio is So a who's driving get One, and buy versus as simulating this. the engaged $X,XXX, audio, WiSA, get with benefits actually of a identify products the market audiophile a $X,XXX consumers to and we systems, Two, for sound benefits out a benefits sound, on WiSA, of Well, who's buy as new market it the in longing in to program the consumer have looking their who's just at we that's price full Three, without Dolby Dolby, educating a the to can by talked and the

talk storefronts Amazon, like way we'll in one with up So open about WiSA is to minute. it you a saw and

that you when data look or that analytics, point, take for Certified information, pages, geography, end entry resellers. level we high is at all are price making looking time other our to The whether end site, on thing WiSA can it's we available data lower

Wave you those brands have directly that a have they the the create you We look speakers, I'm and Look, you your to your enhancement two TVs, to So so is What's team. data, these consumers WiSA like? brands website. bring also WiSA a the you and marketing proud remarket available storefront, analytics will make this if of want offerings campaign. of think to WiSA of to them if great WiSA can engaged two store

looks store WiSA the think I fabulous.

certified do, quickly exactly transmitters, TVs and sees in. can TVs bundled does think this right? the that it I one and want category, right, category. together, is So can what certified you'd a on it audios click page landing consumer They consumer to full see speaker

et are see those of into malls. in category. But lot is Europe, open in not pages, brands Amazon. There's able up the on Now Certified China, There's will brands a and in is you WiSA whole all cetera. these we that store to shipped premium will consumer premium whatever the stores, when brands see only come at

design, Enclave If you high for We think simply think all great right? of we create a about really consumers, a it, We that brand, the performance. launched Audio to why the mainstream Platin was is bigger part category cost-effective product, with course, $X,XXX, a of great out think about $X,XXX, we a you great really for you $XX,XXX, audiophiles, go when can market system do the can sounding But $XXX, think the and $XXX. products. what with

with so create X. WiSA Gen right. wanted All we that to point entry the Platin And Audio. ecosystem for

sound than market. here more wireless has the to And software headphones, So loaded bring an market first is of is the device. gen -- bars is connected I which product questions X. to I device, plan lots But IP product. out side. smart speakers our That and tablets, get and whole get smartphones, to smart that questions specifically we is of and on X on have our smart WiFi targeted subwoofers. It speakers, launched TVs, This onto channels. applicable X the IoT gigahertz, lots

defined have as strategy. we this Now our

there's we as But designs sound We is to continue it it's will gigahertz marketing. about we're get to the that when X.X talk, now, revenue closer recognize. bars when to applicable talk that right to there's to

market get. be of applicable market we question to industry. and the size, popular think we're terms to million that's can that would market top what for really combined, headphones We and X. gen on In is shipping, of to. market. the that the ultimately This the gen George? update the X I'd X current not -- third million, product a right. is you With the guidance. $XX smart million XX% gen like applicable to for another then you that when XXX,XXX cost-effective really George devices look When being the TAM and X All look or TV that, lower and share other the than $XXX you a whole SoundSend, revenue for TVs to TAM, transmitter, IP is either the shipped, loaded turn we onto considering at call available on at be see over substantially and a a very $XXX But smart can gen

Thank you.

to approximately quarter continued prior and growth revenue in $XXX,XXX stock of stock the million, which XX% quarter sequentially. So in margin of compared compensation about June same QX compensation million up grow noncash several That's primarily the $X.X was year. points sequentially million to $X.X expense. in gross expense, The to approximately was XXXX was which was the prior The compared over over included expenses, revenue. year, XXX% OpEx from quarter. $XXX,XXX prior $X X.X%

around If you bit while -- spending height of recall, were COVID. and in the QX We the cut cut uncertainty of uncertainty. XXXX was markets a we salaries were

in QX million loss QX, bridge expense the prior of quarter after $X.X low was exercise about loss was related $X.X to the in terms And did other that our noncash of that year that which was That The for compared point relating was net was the that $XXX,XXX So warrant million. million to of of which expense, to was prior a expense inducement. spending. $X.X year. we funding in about interest

guidance, feel going of in guidance will to full for That increase will million XXX% year-over-year. OpEx and We think for we're million, in million the revenue about $X.X giving noncash far along the around around where between which compensation our the come year. $X be looking comfortable all. million year will trend year to The stock represent XX%. of we we're target, terms -- year. $X.X full expenses. That's $XX.X We gross a of continue at to XX% of margin In

to I'll that, it hand Brett. back with So

George, let's sheet. recap the balance

million. Okay. between in we $XX.X million. June year-end in raised July. cash come net was million to $X.X cash and million $XX expect $XX And We a

in we mind, we we're could have that pretty still near capitalized XXXX. be good feel feel outstanding So are warrants but money that we well in with for or the financing, Keep now. is company that shape the exercised, that in

All right. Thanks, George.

a really both revenue got out building Adoption consumers. working questions, with questions. -- to and standard -- being to And and take operator, around will so is model to large we're a is summarize, beyond. With for year in think IP. with good with market HDMI tighter with drive a increasing I'd actively model We've the help And that, we We've think open smart for bars. is us a before We sound WiSA. trademarks got like this headphones wireless there it both this devices, and up we the that, retailers brands fashion and emulate. growth

Instructions]. [Operator

Group. questions first the from Our Aarde Maxim come line Jack of with

both start George. question solid with for Congrats on guidance. results, strong I'll the and a maybe Brett

for to fact XXXX encouraging I be introduced environment guys the you So at parameters in my to expectations. given time. relative you first guidance The full But appears the is we're guidance year is industry itself positive guidance provided full the what semiconductor perhaps, year that more don't in. view all know,

directionally can And you that confidence for fourth at two maybe or third of that the just you about are quarter visibility expect about maybe incremental how then two, trend? factors questions. and provide that quarter, play to whatever expectations So Can revenue give XXXX guidance? you you kind to your talk talk the

right. All

is world semiconductor in The right. challenging supply. absolutely you're So terms of

have for orders secured our back provide QX of QX. our arrive. production, modules to other move push our to we customers have customers, but We for waiting out seen saw supply components We into

Now upside orders, But pushed any products to the and always why where a or this in year, our clear on we're be. think there's properly Certainly, changes plant. in time get in revenue. pretty our to given the of really the under minor of thinking the of this sight we're because is hedge we'll part guided to bulk orders on And going we year, shortages. the downside there that of terms point sitting we book for at that August, the the lead have are we

just And then maybe Brett. Okay. follow-up. a helpful, I Great. the appreciate color. That's

similar maybe X to your plans? general, how it in impacts As of or kind impact, the is there of the there terms nuanced opportunity a any relates impact in gen gen of a there anything Is impact X note? industry semiconductor

easily developed chips. loaded -- software IP can the we've WiFi that be the So we we've the developed and on most believe

for are solution. expensive We not looking more a

potential cost say, at we're statement, partnerships lower for significantly offer of that. semiconductor audio use leave until let's ongoing a it we'll would, what the with a than that are broad conversations to today. have that's But finalized, partners shipping selection just those and directional We a channels and

That's material could catalyst, of imagine that And kind another time it. maybe your growth growth I drivers Got Amazon helpful. into new ramp over just something then up is storefronts.

Are go Just So any momentum what that quarter? from the you be initial fourth revenue or getting you expectations from so -- already could interesting. for than kind without of a it? to provide means like inbound sales your interest anything more there you as would your XQ

ones a wireless impact impact impact how will the believer building if that as of have I QX standard sales, you'll WiSA recognizes think a impact a how In of, the go customers, and long-term see Amazon I it significantly consumer store terms and one, does two, on does are come number in multichannel, So LG for QX QX that the -- right? to fundamental it trademark our the there, am you right? TV. that sales it universal

Hisense see TVs. You'll

Enclave. see You'll

You'll see Klipsch.

You'll see Platin.

transmitters And has from I the believe. Axiim, significant consumer see You'll traffic already. been

close Amazon think directed having I XX,XXX putting into we're -- already. to consumers

Lavigne from with Our of next come Trickle questions Research. line the David

maybe close not things? Brett, that are products number Can current a quarter market bit give us of number the us something or of So color -- to maybe little give that give the you in there yet, the you of brands coming now, just on me or quite the and can that? but then those third

be not appreciative customer in what comment job, not bringing that are be That the their That's brands going of third quarter. fourth okay? and would on base. out So we're -- to would our

and Primare, Olufsen, Klipsch, Harman, Savant, run is think the in is I market Axiim, the Buchardt, of market, that the pull System I Audio terms is is Bang the TV who's Platin, market, Onkyo, slide the guys. in through in the Living Almando, in market, can Enclave, up. quick well as PIEGA in X EC real In market, Ecler as &

us on aren't quarter that just expect what there Can number third number you a give you -- the in a today?

It's saying I brand shipping We're technology. on this be slide. list -- our will slide know, brands XX-plus the don't

Okay.

business? starting point our know if, your traffic at that you to sense get any of Are Are to those going sort job, So level curious of any how comfort develop anyway. I that. leading might is can translate with the look to -- we we I'm this the think you starting sort traffic I big ask actual website might between but just sort mean to you correlations you and a know but indicators. about see talked a of or of develop I about that's that you how sort where I and mean sales? into website view and

shopping, showing albeit me at products Day, I Well, week and right? team I'm category a and license fundamentally of virtual, return We the not quantitative. in running a I'm my the that then were retailer them low showing see weekend that Thanksgiving mid-December, think traffic should I the of to side Christmas right? category, absolute of week before, in absolutely the tell program that -- before think was I'm came were laughs actually months being last my was sales Father's saw season back that and in doing not you see to traffic week for a multiple to visitors. before, until does and we health, month up visitors. went from X on before tells just and I'm them started -- the right? educational. of I consumers That coming return moving it point getting you curve. it you? were we -- the changes for that year, XX% an the consumers What That's or be, XX% the educating believer that the a highly

people I the out that leads you can you worthless, like, for directed see only lead being was they of some lot Amazon to come there's that back type we to of ecosystem. to a metrics only have the site thought coming extent of can people that valuable consumer So see people think initial store, WiSA right? sales time. can -- to So a that don't behavior, higher good the

But -- is you. Yes. I don't it to how WiSA of this to to seems. becoming quite put that constructive seems Wave into mean to certainly it point, me necessarily know That's sort at how I all it numbers. how

I'll it So at leave that.

Woo questions with Our come Ascendiant next from the of Ed Capital. line

providing the Congratulations and on year full for you quarter, Yes. guidance. thank us

What You be no able semiconductor industry that the have mentioned year? visibility year? next will think up yet you year. you for visibility challenges have into next this that about Do in to issues to for the ease

year. for to I point So guide we're lot got it think will will what But definitively thought executives, that just semiconductor I right? truly common ease. is can't what say do space, among ready We guiding a that can not a next I say of year. happen, the to of this And pretty

because may it's part But or We over be next like of number where I regional a that think a there I it Two, towel a supply be we components that. may you know QX sky our the say markets almost buying all customers because of know be to toilet QX there that. see know And ago think entering it'll move time. not paper saw new There and expanding. don't easing. yes, of buying that I inventory their dissipates and paper of year, the was with that But factors. are those protective component because our several what whether itself can falling. some consumer not One, customers out year shortages. are work

have year? building what people have the on I the of holidays? consumer electronics for stay-at-home, that there's up confident Do lot and season year. a question I will partners consumer do retail last good then as see is, All a the demand this right. obviously, And mean, we'll holiday house for your feel the increase other spending

trend the continues Yes. the And capped in strongly. supply. I trend [indiscernible] the believe is believe I

questions from Wainright. line Kirschman the H.C. next of with Our Spencer come

a just I quarter. question. the on Congrats had quick

that web store you up on mix able provide as that as If on Amazon well talked percentage any makes color earlier. about were the you sales your to those some the future of storefronts color

of first. Well, part I'll question that take the last

X the holidays So X we're or targeting for this for storefronts year.

one is First up Amazon. at

working other handful create and other of of however those e-presence question? was it storefronts your the done. a retailers with We to their to allows part be actively are What

The the up store the sales percentage that Amazon made web of mix.

you brands Amazon if Well, type in are brands. very in there, only that They're at a Harman it's from are And small the just those the Klipsch the look only up the to brands. U.S. mainstream presence has entry-level inventory-constrained. U.S.

most to So Europe. China of volume their and goes

think I license especially on I how at impacts think store the that already how responds handful lines, and gone we a don't to each in We critical, China. or -- like how in already it that some resellers yet. up, to about But have that that -- know individual probably bundles to it in the said don't XX,XXX do the are that XX,XXX brand X,XXX consumers and that ultimately Europe So we look with impacts of store is replicate TV I getting we'll to store -- in shopping. it's know, have store,

of back season? manufacturing the place, orders that been Do might helpful. quarter. had take in half for that terms second revenue, pushed the And That's third very mentioned the some impact the quarter any to second holiday you preparation you think that from might of

No.

capacity. fighting line, their that parts shortages. I there's Everybody's manufacturing a from think

this [Operator would to for are closing call time. Instructions]. to back over further There hand no like any the Moyer at comments. Brett questions I

a products. I'd to quarter. WiSA, time time job you doing and throughout great updating of team look been we to Look, for It's Thank pretty for you. rest like a to the our thank exciting hear has forward taking you executing. The the the

you. This for today's teleconference. Thank participation. you your does conclude Thank

You at a may time. Have this great lines disconnect your day.