Transphorm(US:TGAN)2023-08-15 02:40Financial Data and Key Metrics Changes - The company reported total GAAP and non-GAAP revenue of $5.9 million for Q1 2024, representing an increase of 84% from the prior quarter and 14% year-over-year [20][31][46] - Product sales accounted for $3 million, driven by various core applications, with expectations for sequential revenue growth in the current quarter [21][31] - Gross margin for the quarter was 35.5%, significantly up from 5% in the prior quarter and 14% higher than the same quarter last year [46] Business Line Data and Key Metrics Changes - Revenue was roughly evenly split between product revenue ($3 million) and government revenue ($2.9 million), with over 70% of product revenue coming from high-power applications [4][20] - The company secured over 10 new design-ins for fast chargers, bringing the total to more than 100, with over 30 now in production [11][33] - The power products pipeline has grown to over $450 million, with a total pipeline nearing $600 million, primarily driven by high-power products [31][43] Market Data and Key Metrics Changes - The company is focusing on three key high-power verticals: computing (including data centers and AI), energy and industrials, and electric vehicles [5][31] - There is significant interest in the company's 1,200-volt GaN technology, which is expected to compete with silicon carbide [13][16] Company Strategy and Development Direction - The company is undergoing a strategic review process aimed at maximizing shareholder value, including exploring financing, licensing, and potential M&A opportunities [6][18] - The focus will be on resuming sequential product revenue growth, improving margins, and accessing new markets such as 800-volt battery electric vehicle systems [18][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong design-in momentum and the ability to convert design-ins into production, anticipating a return to sequential product revenue growth [60][64] - The company is actively working on securing non-dilutive debt financing and has received $2.9 million from a government contract, contributing to a stronger balance sheet [10][48] Other Important Information - The company completed a rights offering, raising approximately $8 million from key shareholders [10] - Cash and cash equivalents were reported at $3.3 million at the end of the quarter, with operational cash burn decreasing to $6.7 million [48][65] Q&A Session Summary Question: What is the appropriate inventory level given the demand? - Management indicated that the current inventory level of $8 million is appropriate to support business growth and sequential revenue growth [67][68] Question: Can you describe the milestones for the strategic review process? - Management stated that discussions are ongoing with bankers familiar with the company, but specific milestones cannot be disclosed at this time [55][72] Question: How is the company addressing the demand in AI and data centers? - The company is seeing positive design-ins in the AI space and is focused on high-power computing applications [54][69] Question: What is the expected mix of product and government revenue in the upcoming quarters? - Management anticipates a shift towards more product revenue, with government revenue reverting to normalized levels [83][85] Question: When can customers expect sampling of the 1,200-volt products? - Limited sampling is expected in early 2024 for customers interested in system-based design and evaluation [94]