WiSA (WISA) 11 May 222022 Q1 Earnings call transcript

…all participants are in a listen-only mode. A brief Q&A session will follow the formal presentation.

As a reminder, this conference is being recorded. With us today are Brett Moyer, CEO and President; and CFO, George Oliva.

Before turning the call over to Brett, I'd like to remind everyone that today's presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. to reliance not statements. these cautioned are place on undue forward-looking Readers associated impacting including markets, of results other detailed those described conditions updated filed competition; including on the with competition, any described XX-Q. other the SEC, Report ability our or result supply existing with as in uncertainties our to from SEC the differ COVID wins, of financial customer Annual potential the COVID-XX chain ability affecting effects company's filed design the company's retain economy year by legal timing and developments Actual inability materially the measure to statements, to XX price the XX-K employees; filings wins, and developments; consumer revised risks XX, indicated for capacity, end Factors and pandemic; drivers; the the quarterly the predict and the from reports and entering customers' adequate time and or on on secure may to growth; those pandemic in ended changes future associated with subsequently Risk material December motivate including time of and macroeconomic of predict revenue design current uncertainties rates to these our forward-looking in in Form technological, and regulatory any XXXX hire, and for markets Form risks the disruptions the with and production from business, predict to a resulting manufacturing demand future ability products for demand hereof do no to presentation law. so this update is unless date and company the undertakes to in obligations information by required as of The the will Brett. turn call With that, to over I the ahead, Go Brett.

just Summit fourth we'll today WiSA on the you, you Thank through start on slides the on to new, a synced multichannel, right? and us with strongest in When three being QX ladies developing I since Wireless will that front for slide, video WiSA on latency, new And formerly gentlemen Technologies be take the the the together, call. point have to with has as new on then synchronized on the the information technology update. we audio technical speakers thank you joining team leader known and shareholders been technology. down performance it industry going to David. comes or Technologies updating last for

as the move it chips, chips custom can and forward, we that regional cost have and which Wi-Fi Wi-Fi to believed our drops we started from we As to port more knowhow multi-channel. and dramatically take surround we powerful, have demonstrating that gets have sound have the

going have Samsung Association that speakers WiSA brands. Now high of we on with names a Harman, way all few high starting pro most through demonstrated a the performance that of the division to certified brought quite leadership which products, end the has audio

are we name, not there's because they designed. of when talk they us that our you about not we because certified about heard changed can brands the of now Now, talking that were interoperable start as would've a way series

for signal sofas wireless our when speaker, subway there, seat, sending us Lovesac it, there's So in underneath sectional when but When $XX,XXX that's sales the to that no that's are vibrates, Lexicon that right? need the interoperability.

more that as the So see have just products interoperable. been now look certified Technology you'll ones as you our website, at than website, WiSA the

into the roadmap laid several the ecosystem. out we we've call, for product impact on working how that it basically last the on fits and in the Now years been

subwoofers, we which with slides. with bar and module target beyond half high about partnership, market. the to a talk the or and Realtek high the bar a end TV currently. delivering we and do a been us the home But consistently with what the the think the to modules end, highest with of have progress is that audio, of partnership highest significant high end sound a the but the advantage cost performance audio this market directly sound the that four couple expressive we We file we're channels like lets in address we'll market rear speakers lets price doing significant And mid-market us just And it. later in have of this year, at theater

high highest performing of the the this low of year. have to lowest expect highest end -- and mid-tier So performance performance, market, product a

filings. IP of patent investments, result as release we the today and increased in all is press portfolio those our significantly mentioned our Now our have we

up bring of So of think the filings audio where these that into in market a a market, the it by new at is the audio lower to end market the market you've file gives as opportunity our the seen the into From the brands. opens technologies process. and other launch, us products we products of the this mid-tier the we'll total have market but our quarter, of go substantially we end XX the patents in segment,

kick this a right; Now The cost design progress, and you potential for sure what the it go is say WiSA subway So customers. we date? is our module, then what If qualification cycle. does capability. where you progress it into process it into they corporate around is has that's and to low so product a successful, four launching test vendor presentation presentation, does to DS, and channels go it plus make

way are all I the the the we sit times accounts positive. module. feedback would all is healthy sales through it's accounts a moved gigahertz say we as right? months So in process So few in the heard few of today, that cycle. that here this already design year effect that performing in The already, highest steps some the have of the extremely that of initial X.X from cycle process. three there's we the the make tested pipeline the We've and are comments pretty it. a verification They've there's to are companies several

to and technical start presentations to we quarter As valuation travel we're those and close restrictions, this quarter. relax, COVID able next expect more, to

So not right? end So necessarily but we and in targeted sound getting And bars, bar TVs low is the the bar market, where are we market, traction in dominant low to aftermarket. automotive the the ends sound the traction? this in fact to sound

pitches? competitively, or designs and And sells already, against performing range the X% that have of feedback, the performing wanted the million. right? channels course sound product goes to a worth So XXX much so getting opinion, is the rear in the more you through lower Well, customers our or we getting $XX we're working couple a how getting we're again, market from if Skyworks there bar we're of good that think the prospective and speakers, think we're wanted product feedback products or We if higher, design Now, in range in XXX a response up way with the that we we of and to, better adds the if good that sales about this cycle. we're customer

give magnitude a sales get limited only we five to order product don't -- X% It's a should worth. is X% stronger of but think to it's of We to be there. offering, what this an Now cycle is market. of you a what's the much

then, us. and it know worth you double can it's You XX% to

revenue is getting the game based IP, look for real house up tech out, and come the that's on IoT chips to that we selling, We're through we The traffic on putting us From and all a the at that product offerings, educate at But good still growth. you'll expressive in the end, to we're and looking to format a about XX% product cool year. that pipeline, chip. track, of porting at go feedback. a that in India, on this XXX,XXX more on couple still selling few end taking with our people rooms years. you licensable important this but loaded on Again, a the group products In us right. that onto people. Technologies market, in technology the looking an has growth to we're next opens is websites, or It expressive expressive it when various interoperable for hear perspective, we're end offering WiSA customer that to IP through in product stores look we're to XX% lets the as this on is theme at the is in very up the website years technology. on QX aggressively XXX,XXX we're Certainly either modules are them be the the So it, have WiSA in the and as have not retailers. but growth the the is

So George. with to to next the slide like I'd turn that, over

Brett. you, Thank

the over that So decrease of as the prior said, low XX% QX revenue $XXX,XXX, year. was Brett same quarter was of

It -- $X.X expenses. the The year, engineering such as same of stock to The of the quarter year. in accelerate. the little the to which in million prior was lower We million with at booking to same already non-cash loss QX gross in The $X depreciation non-cash for is of of the in million Cash expenses purely fixed second seeing operating is The the approximately compared quarter the that's shipments. quarter We $X.X the was $X.X expenses increase OpEx including low. XX% million starts of end $XXX,XXX expected in compared slow prior a million. the costs volume quarter and prior million comp net the and were to quarter down that's not in marketing. has $X.X the a and to bit margin compared absorbing of XX% of was starting 'XX, primarily in function year. $X were the

to on It's said, of guidance, loaded. we're to growth the still terms guiding In end back XX% still heavily year. we're as we -- XX%

adequate grow than the might prior and in recovering expecting supply year, going still to half strong. QX be we're still compared meet second we the of is the revenue substantially and lower In supply terms said, have it's to but that be I chain, to as to QX,

to continues margin gross the range is to the of and target through to in cash current XX% year. the last end sufficient Our be our XX%

the give And of XX% it back to the to So I'll, $X.X $XX to for year. that, million XX% I'll with Brett, million guidance is revenue

Right? customer is company billion market. roadmap a just strong It it calls, addresses the The that's if into a up satisfactory. summarize So before we progressing we going technology TAM. the for we cycle sales unit is, open where got

that. than We're our IP better portfolio. expanding fact, In

company DS than year. open at. see like that, expect for that revenue still I'd it value David, of the a that with what up add -- this floor to second higher think questions. presents trading currently significantly is all And we're up, when in industry We you high targeting year-over-year. we're We WiSA And the to of to half impact the

Brett. Thanks, Great.

conducting Q&A be we'll a session. Now

first. looks going Okay. to I'm with the like ending instructions] XXXX questions. people [Operator It there's in unmute number two

hear guys you me? can Hi,

Yes.

Vander quarterly Hey Jack Hey Group. update I for taking and George, my Brett. appreciate this is the with Aarde Right. Maxim questions.

So color guidance to start may able some with George, revenue the too. here and I'll just you be add

second expect quarter it was maybe not sequential growth it I You will and up. be think in said be sequentially the that the up but year, might it

you're quarter you slightly clarity for or expecting is that there? I do slightly what visibility flat, any more how Just on, know second any up much it almost how could comfortability be have don't providing color more or and much it,

we or flat answering we be sequentially. don't expect that Are Yeah. to Yeah, year-over-year? sequentially

year We expect to as but last as not high we've be guided. up as

between. So in somewhere yeah, so

them depends quarter. lot there's of good get visibility lot that QX and if of visibility this as saw POs. I good if a anybody get, have we don't What have been think out, pushed a is we any on on we

only several the be think something being that's I but hundred thousand. model, specific, more I it'll reason probably not How's the in So that. we're -- would

sticking to XX% load that you're to the And just appreciate growth have maybe for definitely over the to year back confidence there. you outlook, year. going color It's to Good a still, see revenue XX% year I half to encouraging then year. guidance enough? the be that expect

coming from if Given technology YCE for disclosed these mix, that -- products I I how know of it's just you coming versus YCDS, is the back to Gen loaded? these existing don't there but have think much, better, way is new revenue [ph] understand us new don't half you terms out, what any to this, be how products in X the like very going since mu

Yeah.

talk optimism forecast. So let's revenue on just about the the

year, is we continue were still look the all at drivers over why to last the one go this we're right? seen are of year, there be you designs major think designs year, year So will still up that away. when that So haven't you the there products and

product yesterday, think announced, You're there's channel. their seeing announcements product in them several rebound over I coming out their a And, inventory new we shortly.

sales So and are staying are the cycle year last cycle. into coming new that the Right. in products there production products the were

back what Gen is, If is line. speaker think I mix the and you look the by mix largely the at still X driven half

sense, you. makes Got Okay. That

Revenue a from WiSA perspective. DS product is material to us launch from

I with sales it's the modeling perspective. think, is have material cycle from one's technology, P&L customers they perspective, the to so validation that Right? level other from know is just can majority were issue. a Right. higher in of pure and not competence. the that your a see a you So vast, market vast today. products From That's and

about I were new encouraging announced then, very And of to that Okay. caught which some partners your comments some hear. is

Did to that shipping year. you still provide think I XX, help on if me a way about or quarter? though, you expect is you more were XX be quarter XX, brands understand, good just Or think could it? this least products update last WiSA talking I think to this at about an you than that

announced is. [indiscernible] new next and after a There'll be product We right. It yesterday. that. one announced week several another

So the continue expand. brand list will to

what of revenue talk just leading then wave doing about And with WiSA that's is your sounds been the your be for in expectations, all the and WiSA view that? your you continues of I've specifically. Can performing terms program visibility, of in that's viewing to how you line indicator like Okay. that terms your that kind Is more it future and wave robust. of a traffic as do that or marketing in WiSA sales the in

Yeah.

that to right? indicator, used then that. Because to And we that the the the because talked design, a and right we're a last we WiSA, while, those, we and And right. say the got people, Right. WiSA into value revenue, WiSA website why substantially when our about trademarks right. right. year, of strength it, ecosystem kids, standard WiSA you, we we more as are people and that a for age. the of runs right. most me, to visions So TVs is well, technologies are in And leading are but brands that talk And at to XX, the in the are ecosystem tired like market core market us talking and right. industry are audio bringing joining tracked targeted, XX generally you go started to that members and are and you're XX that So people those looking then health revenue leading up These indicator WiSA XXX,XXX run at And people now. doing at XX, it association looking not that's equipment, did a XX about about that, of of the is seeing

Got you.

out whether of kind out for to just do untapped Do thoughts? there's consumers, a theater. they're terms, and to, deck you living consumers really terms moving out opportunity that's still -- And Or home pandemic large And the XXXX, blue -- sky they're lingered 'XX, their theatre. in ahead room, so, a in your Can you guess their XXXX comfortable what it no, there there opportunity makes that in confident stay or and that and see upgrade living like then it market update did large for on you're home or with of orders in everyone home looking an that for provide whether that, are that still the sense. still really see trying their saying in seems at do you XXXX? I room started playing all the homes,

more having the an right. America world around sound and you during TVs XX%, bars to which pandemic, company put anywhere for still I right. close Well, the without They're see rate runs talk TV that The with having XX% depending without them or TVs audio sound as bars, concentration right. good or leaves high are -- don't world I the Europe to as their attach audio industry to in likely to as think revenue of we the seasonality think around XX% you're normal in XX%

with isn't I going again low coming into part football people for and it's season, pandemic customers there our back April back because are and move of in that's, February seasonality into a still starting But a struggling think May think and are fall, to because cold into what So outside back March on about when focus winter are all right. months, to you coming the audio coming those there.

multi-channel TV that great got and big sound You content still you has it. around ton it of XX%, without these of have a XX% them in good streaming,

Great.

untapped and to question, your it $X the as maybe add of, lot you like, just Brett, The one market And if end encouraging like, okay. hear No at looks there then growing. sounds could have quarter inventory opportunity a the there's it well. So over of like still I it's that's more million.

mentioned inventory. you think that I plenty of you guys have

guidance, brands, chain supply supply just you it's but confidence suggests update, some an given of the your risk the no chain supply could they seems So your you to chain of into WiSA, but specific half your back visibility what provide reiterate maybe to it issues, kind customers? improving. electronic have have brands impact may It have may consumer like on if your the

thoughts can share you your though. if wondering Just

Parts with logistics in are what general still big is but an we an hearing issue. the is issue, Well, issue. less customers, is still a of

but XX% COVID last I They're seeing. was are what going what start a pattern to talking very impacting their again. products right with to billing is Christmas. you a customers have supplies late build They're lot of for is seeing How what for up, now rebalance and We inventory, think opening we're right of right? we're it. I ODM product an do dealing a customers, can't our people So week. similar up showed is that's outside. And

we we're watching pick any October, you if So good. markets that Right. we're orders But but optimistic it's in up can not in early something you build going QX what your do think happens reasonably to and in will because Christmas in cautiously logistically, November, QX. it's not

That's right.

Okay.

revenue year scenario? so fourth normally weighted for under then the the more And you then would expect it would your be quarter the or than heavily to towards

lines. We have product two

product the QX QX in So QX. peak in speaker And and strong the chips be equally. probably line will certainly will

Understood.

the I'll Great. Okay. color to appreciate Well, on hear track. still in and things I the glad back hop are queue.

Thanks Jack.

go Let's to Dede hand has think I on to, his Need unmute. raised. Kevin

Thank Great. you.

hope me Kevin now. Wainwright. can hear I And H.C. you Dede, Okay.

I point think your or you vis-à-vis had X X your a really product roadmap Gen delineating Gen interesting roadmap, in display new and product product.

So I make to was transition migration you this us hoping the there. a understand that for here sure just bit look and that could little the and we at through

sales review market. right? you WiSA just So selling, completely cycle through you let's going right product now. coming So, a the DS we're been the brand the design HT, got market. of WESA and WiSA different to we've got targeted the product is in you DS E middle the that names, got WiSA And the

closed systems. rear this or around has a sound and a bar speakers is It around has So that a subwoofers subwoofer has somebody both off or it. rear

the the XX% speakers current of to If so about how talked we of XX% well, the the most you channels. subwoofer, the of to probably as ceiling rear the XX% price, able at actually to is on going get current out that five slide, And price. up remember we're

rolls but sales. is gigahertz, on out the we're And high the cycle. blocking a X.X the design way the It and that performing a strictly out blocking, it's cycle a it's and of that function tech tackling So is solution.

shake that'll QX hard degree, [ph], next a later but to to will sales this this Now, down it to stronger that and XXXX shake sample will cycle. year means, a year few beta down start sampling we probably late next YCE customers which help in year, impacts it cycle much year, which expect some

me You well. targeting seems the mentioned high the end mid-market, to there's but it as tech

in Well, there's differences latency.

look the with at are to look XX,XXX call inflation running, they're have bucks that think call but come HT&E mark bars think come a speaker, like you sound discreet speakers the speaker is midmarket, systems, audio it X,XXX down or We speakers, So five to configured roughly to a if all seven enclave. or so price however sub will the times difference that at six speaker, speakers when we you $X,XXX XX now the the between times six it file don't opportunity that down or up. a they and

going talking about MSRP is, $XXX, on dropping You're XX%, at retail, XX% depending into. by you're which products what

right. out impact. don't Now, space. powerful that's three the call chips, maybe Kevin WiSA Wi-Fi as in it see years, next five but Yeah, next or team more over in years, over get we tails any seven the four Ultimately years, the

both and incremental. So DS ER,

sort back loaded. end of And

can't I Hey Kevin, hear you.

I'm hear sorry. okay Can me you now?

Yeah.

Yeah.

Brett. apologies, A Okay.

no, No,

your I for so, X is it nomenclature that thing, because to get but Gen X? dialing a right Gen little ES E tripped a and are apologize it Gen just little shifted up bit, it that, the assume I on back and to X, fair

Yes.

my All head. Okay. it company, you right. bit… Appreciate talk Can hand. over an Fair goes holding little enough. It's a electric sometimes we my

here; difference IP a X difference fundamental the really design. fundamental Gen it's The is and is chip not Kevin,

in X, proprietary custom chip, it's is So Gen designed.

out it's the India, or expressive, of talking focused right, in whether else, or low in or about them Gen the end chips licensing what get in X, all but you're in our the IP whether of and the wireless business anybody DS mid-tier with immersive performance can wireless of IP. the interoperability You not specific from right a at real you for audio the or on a making IP. it's work or media chips, with designing We're business anymore. proprietary tech, When making have team shift highest that's E market, tech

important that's Brett. to make a think I distinction very

Yep.

Okay.

interoperability. wasn't interoperable? more product important that is or on it So One two important things. not Why just sofa

they're see product, it's or taking any think go if product, YouTube you They're design trying and your and around two audio the sofa their So to for trying you furniture. want Lovesac them sectionals. if or So or not can you around good the you discrete sectionals, has with sells with speaker right? ads about whatever them, five you all them of it videos, So rearranging sofa world. that interface sure the moving a sectionals system into a Right? about their sofa store floating to using doing and Lovesac make

to when right. sure on interoperability you that there's that So vibration. just sit They sofa, getting want there, make you're the no

they're not is their subwoofer So sectionals -- building nobody right. a else into

Okay.

So I see.

when right? their So say available option be for if buyer interoperability, what other brands, you sectionals? across you mean So to add their wanted that necessarily through would their channels that weren't

There are it no interoperable. because is them option not for

buy are options sectionals want it Your to where and do what you want you -- you and do audio? do with want

right, Right,

Interoperability.

right? So start thinking interoperability talking about TVs, brands Sound when across bars, to bars, that Right. to speakers creates directly now brands. comes into talking across sound play

the manufacturers non-exclusive my Is across that question, your the tech, help I'm or -- us Understood. just E expressive, understand is is arrangements or are just ES maybe and product understanding Last line real to those limited that. wrong there.

Right.

The is current we're there around with we'll exclusivity a chip. the really of are no So working with. availability specific between people driven who work is

to can gigahertz what to powerful chip, a transmit is us with on our we're the to tech and with has different needed but IP a now that and vendors, enough was we to IP X.X work materially any right. cost we to first real work to has their think So do chip, do use the do to ability point that six, selling what it what we chip willing at eight, than just and five with Expressive having our want to a other load XX speakers. key strictly Wi-Fi do

Okay. Thank it. you very much. I appreciate

other on supporting think we're solutions. focused you brands, right year, expressive the now, real WiFi I Kevin, to next about talking tech us see get when down you'd Yeah. heads but and

a number [Operator to have the in XXXX. instructions] ahead. We of ending Go question. unmute the I'm going line

put And times Ascendiant is speaker were the for your how to quarter I modules, put be and your chip somebody get today, product mentioned lines third order lead product they you able Brett, the two product if Ed shelves? fourth line. and had retail under question a would this the or for in for then for your a it store Woo Hi, Yeah. at different product to then about quickly Capital. it

can some have side fairly through equation have I did not somebody a on, be modules. strong we'd that Everybody, of the that coming And brand ordered. modules my time own So answer they six that times if ordered we product has depending flow through a That's support every month able of of lead their their to September. ODMs. season in the we lead much for speaker with how own

ago, POS lead plan In quarter, there our of speakers, for placed place we the this we some QX revenue actually, terms year's in last because months like long no, them of times. are

through And May the much year. lead of the to product were I through in receive you with the year. have your now pretty up the pretty all end So much times done POS of expect the end

I would we say August. through POS No, have

into confident the during get fourth enough even that you feel and the Great. orders if But out in time chain to quarter, to within the customers it'll the into fourth, stores supply product, quarter. be get you your

plans a sales. to it around this it because of apart I'm again, six for any times, break just are support we asking do customer enough it year. all Christmas month POS. anybody's modules to six building Not and month to a in massage customers have I able so be solid POS. to Well, depends. forecast think not and let's Certainly position But lead impact are customers demand we business It

industry. retail times, take for times they Other November. them we're customers, could that the something whether confident have take and transit in or. I'm shelves -- normal in not So you you do projecting can can speakers on October logistical in

then you year? markets and individual international the growth this are thanks Well, growth in Great. North for question do so last looking the providing far similar see on versus America, And the my is Europe color. in opportunities how

is very on market file just strong very and in file the are just in board. coming audio strong audio perfectly China -- were in be The Europe US to right? brands The honest,

very us, those strong right? So markets for are

Great.

do you America and So you're right in Europe saying in stronger now. growth

Harman Historically and out our that's in North to America their been -- able in because been sell Europe. have larger availability supply weighted designs has

North from successful retreated they very So America they're there. very, because

look of are those brands. If brands brands, you the European a at lot

thanks question my then. you. for you luck. Well, Great. answer guys I wish Thank good

has I'm know follow anyone just or I remarks. if if questions. to you additional have closing not Brett, want showing up any some else a don't

take You it there. could

for participating Yeah. later this I'd to or to listening investors today. like morning thank the this

we're the money been technology years. that will and And the day. offering extremely offering forward. considerable for reflected I to like I'd in get industry, has strongest in that development have the revenue go everybody -- invested think our a a in with it think have We've we good as thank it's we exciting in which and

Good bye.