Akoustis Technologies(US:AKTS)2024-02-13 17:38Financial Data and Key Metrics Changes - For Q2 2024, the company reported revenue of $7 million, flat compared to the previous quarter but up 20% year-over-year [19] - The GAAP operating loss was $15 million, driven by labor costs of $8 million, depreciation and amortization of $3.2 million, and other operational costs totaling $10.8 million [19] - Cash used in operating activities was $11.3 million, which included additional payroll costs and increased legal costs [20] - The company expects to achieve operating cash flow breakeven later in the year, with a projected revenue range of $11 million to $15 million per quarter to reach this goal [25][21] Business Line Data and Key Metrics Changes - XBAW-related sales accounted for the top 5 customers and 7 out of the top 10 customers, with the top 10 customers making up 58% of revenue [5] - The company secured design wins for Wi-Fi 7 solutions with tier 1 customers, indicating strong demand in the Wi-Fi segment [9][10] - In the 5G mobile market, the company recognized filter sales to a tier 1 RF component customer and shipped the first of three Wi-Fi filters to a tier 2 5G mobile RF front end module customer [11][12] Market Data and Key Metrics Changes - 40% of sales came from Asia, 47% from North America, and 13% from Europe, with the top 36 customers accounting for 80% of revenue [6] - The company expects modest growth in shipments to return in the March quarter for the 5G network infrastructure business [13] - The defense and other markets saw significant engagement, with two out of the top 10 customers in this category [14] Company Strategy and Development Direction - The company is focusing on expense reduction and cost savings to significantly reduce cash burn moving forward, estimating a reduction of 30% to 38% in the March quarter [21] - Membership in microelectronics hubs related to the CHIPS Act is expected to enhance the company's access to government research programs [8] - The company is aggressively pursuing product cost savings to lower operating expenses and improve gross margin [23] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to record quarterly revenue in Q3 2024, with expected growth of 18% to 25% sequentially [7] - The company believes it has worked through inventory issues from 2023 and anticipates a return in demand for Wi-Fi products [6] - Management highlighted the substantial market opportunity for their patented high-frequency XBAW and XP3F filters, with a strong IP portfolio [22] Other Important Information - The company completed its New York fab tool capacity expansion project, increasing capacity to 500 million filters per year [20] - The company estimates a refundable tax credit of $3.7 million to $4.7 million over the next 12 to 15 months under the CHIPS Act [8] Q&A Session Summary Question: Can you talk about the new revenue per quarter for breakeven in Q4 and expected gross margins? - The company predicts revenue needed for operating cash flow breakeven to be in the $11 million to $15 million range per quarter, assuming a margin of 20% to 25% [25] Question: What is the status of Wi-Fi inventory and design activity? - Management confirmed that Wi-Fi inventory is normalized, with ongoing design wins and expected strong momentum in Wi-Fi 7 [28][32] Question: What is the outlook for consumer versus enterprise Wi-Fi products? - The company is seeing strong activity in enterprise products, with significant dollar content, while also beginning to penetrate the consumer market [33][35] Question: What is the CapEx outlook for calendar 2024? - The company does not anticipate significant CapEx spending for the remainder of 2024, expecting it to be in the hundreds of thousands per quarter or less [38] Question: Can you provide an update on the litigation with Qorvo? - The company believes the facts do not support Qorvo's allegations and has filed motions to challenge key parts of Qorvo's claims [53][54]