Financial Data and Key Metrics Changes - Q3 2020 revenues were $607,000, representing a 45% increase compared to the same quarter in the prior year [21] - Gross margin improved to just over 17 points, compared to $7.6 million in Q3 2019, reflecting a 9.5-point improvement [21] - Cash reserves exceeded $9 million at the end of the quarter, with projections for Q4 indicating over 100% growth compared to Q4 of the previous year [21] Business Line Data and Key Metrics Changes - The company added seven more companies to the WiSA Association, expanding its membership to over 60 brands, including significant players like SKYWORTH and Hisense [11] - The introduction of the WiSA SoundSend product is expected to enhance speaker sales due to its affordability and ease of installation [12][22] - Consumer response to WiSA certified products has been positive, with many customers appreciating the value and simplicity of setup for surround sound systems [16] Market Data and Key Metrics Changes - The company anticipates a strong consumer demand for WiSA products, particularly during the holiday season, with expectations of tight inventory levels at retail due to increased demand [36] - Visitor traffic to the WiSA website is projected to reach 150,000 to 175,000 this quarter, with a 22% increase in viewing time and a rise in return visitors from 10% to 16-17% [20] Company Strategy and Development Direction - The company plans to continue adding new members, particularly in the TV and projector sectors, and expects more brands to ship WiSA certified products [22] - The focus remains on enhancing market adoption in the sound bar space, which is seen as a competitive offering with significant growth potential [44] - The company is preparing for a virtual CES event in January, where new product introductions will occur, maintaining the traditional seasonality of product announcements [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the COVID-19 pandemic has altered seasonal trends, with expectations for strong sales in the fall and into Q1 2021 due to increased consumer interest in home entertainment [29] - There is confidence in the ability to meet consumer demand despite supply chain challenges, with lead times extending due to high sales [29] - The company has not publicly disclosed cash flow positive forecasts but has indicated a strong business plan moving forward [46] Other Important Information - The company highlighted the importance of the WiSA Association in ensuring a seamless consumer experience with certified products [10] - The introduction of affordable surround sound systems is expected to drive revenue growth, appealing to a broad range of consumers [14] Q&A Session Summary Question: Update on market dynamics and supply chain - Management indicated a different seasonal trend this year, with strong consumer demand expected to continue into Q1 2021 despite earlier slowdowns [29] Question: Update on wave strategy - The multi-brand advertising strategy has shown positive results, increasing consumer engagement and return visits to the WiSA website [31] Question: Module costs and pricing guidance - Management anticipates maintaining the average module cost at $9, with no expected changes in guidance [32] Question: Retail channel inventory for the holiday season - Retailers are expected to have tight inventory levels due to COVID-19 impacts, with higher-than-normal consumer demand anticipated [36] Question: CES product introductions - CES will occur virtually, and product announcements will follow the traditional timeline despite the format change [37] Question: Progress with cell phone manufacturers - The company plans to announce its first Gen 2 product later this quarter, focusing on broader market adoption in the sound bar space [40][44] Question: Cash flow positive forecasts - Management has internal forecasts but has not publicly disclosed specific revenue targets needed for cash flow positivity [46]
WiSA Technologies(WISA) - 2020 Q3 - Earnings Call Transcript