Spectra7 Announces Preliminary Third Quarter 2022 Revenue and Second Half 2022 Outlook
Revenue Growth of 189% Year-over-Year through First Nine Months
AR/VR Game Console Design Win in Production
Expansion of the Hyperscale Datacenter Market Expected to Drive 2023 Revenue Growth
SAN JOSE, Calif., Oct. 13, 2022 /CNW/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, today announced preliminary selected and unaudited revenue results and a business update for the three month period ended September 30, 2022. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars. Q3 revenue is expected to be approximately $2.7 million, propelling year-to-date revenue to approximately $8.3 million, a 189% increase when compared with the same period in 2021.1
- Orders have grown from the Company's AR/VR customer, a top global game console manufacturer using Spectra7's DreamWeVRTM chip sets in its next generation head mounted display interconnect
- AR/VR order volumes are expected to continue growing into 2023, providing a platform for revenue growth1
- Expanded availability of Active Copper Cables with new design-in with ACES to deliver 200 and 400Gbps interconnects for the data center, OEM and
ODM markets - Refinanced and extended terms of convertible debt to support working capital needs in anticipation of significant data center ramp
- Spectra7 expects 2023 will be another year of record revenue and improved financial performance1
"Our business continues to ramp aggressively with key customers, particularly with our global game console manufacturer, where production orders are accelerating. This part of our business gives us a foundation to build on in 2023 when we anticipate hyperscale data center operators will expand their use of our 100G Active Copper Cable technology," said Ron Pasek, Chairman of the Board.
"Our data center business remains robust. The market is now actively evolving toward 100Gbps standards, driving the need for Spectra7's unique high speed, low power solutions," said Mr. Pasek. "A recent report by the 650 Group highlighted that by 2026, they expect over two-thirds of the Cloud server market will be using active copper connections. Furthermore, the 650 Group expects the percentage of 100Gbps and above will be even higher, with almost the entire market at that speed using active copper. As the leader in the active copper cable market, and already in our third generation chip, we expect our data center revenue will accelerate in 2023 as these higher speeds begin to be deployed."1
"We expect 2023 will produce another year of record revenue and improved financial performance,"1 said Mr. Pasek.
The Company expects record revenue in 2022. The outlook for the second half of 2022 is expected to be in a range of $5.3 million to $6.0 million, which is within the range of $4.6 million to $6.0 million provided on August 29, 2022. At the mid-point of the updated range, the projected full year results represent an annual revenue of approximately $11.2 million, which would be double the revenue generated in 2021.
Total non-IFRS operating expenses in the second half of 2022 are expected to be between $4.5 million and $4.8 million, which include increased headcount growth to support customers and development expenses associated with new products and is within the range of $4.5 million to $5.0 million provided on August 29, 2022. Non-IFRS operating expenses were approximately $3.9 million in the second half of 2021.
1 This is forward-looking information and is based on a number of assumptions, which includes the current customer purchase orders received, supply outlook and anticipated operational expenses. See "Cautionary Notes".
2 Non-IFRS operating expenses is a non-GAAP measure which includes research and development, sales and marketing, general and administrative expenses and depreciation and amortization for capital equipment and right-of-use assets and excludes share-based compensation expense, non-recurring termination costs, interest and related financing costs, change in fair value of warrant liabilities, foreign exchange gain/loss and gain/loss from property and equipment disposal.
Spectra7 Microsystems Inc. is a high-performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centers and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and technical support location in Dongguan, China. For more information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services provided (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements contained in this press release constitute "forward-looking statements". All statements other than statements of historical fact contained in this press release, including, without limitation, the Company's expected Q3 revenue and non-IFRS operating expense results, expectation for 2022 revenue, revenue improvement and supply availability, the Company's expectation regarding product demand and revenue in 2023, and the Company's strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to the risk factors discussed in the Company's annual information form for the year ended December 31, 2021. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.
For more information, please contact:
Matt Kreps/Jim Fanucchi
Darrow Associates
214-597-8200
[email protected]
Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
[email protected]
Spectra7 Microsystems Inc.
John Mitchell
Public Relations
650-269-3043
[email protected]
SOURCE Spectra7 Microsystems Inc.
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