Record H1 2023 Revenue and Gross Margin at
63%
SAN
JOSE, Calif., Aug. 22,
2023 /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 its financial
results for the three and six months ended June 30, 2023. A copy of the consolidated
financial statements for the three and six months ended
June 30, 2023 and the corresponding
management's discussion and analysis (the "MD&A") will be
available under the Company's profile on www.sedarplus.ca. Unless
otherwise indicated, all dollar amounts in this press release are
expressed in US dollars.
"We are excited to report second quarter revenue of $3.3 million, and record first half revenue of
$6.4 million, as we continue to build
on our exceptional growth in 2022. Gross margin also remained much
stronger year-over-year, at 63% in the second quarter.2
While these results demonstrate exciting progress, we remain
focused on the larger growth opportunities we see immediately
ahead," said Raouf Halim, Chief
Executive Officer.
"The rising demands of increasingly power and data intensive
applications such as AI and ChatGPT are mandating that our
hyperscale data center partners and customers implement new 800G
and 1.6TB standards for which our Active Copper Cable (ACC)
technologies provide the perfect balance of high speed, low cost
and low power.1 Test and qualification activities
centered around these 800G and 1.6TB data rate interconnect
upgrades are increasing quickly – with particular attention to
Spectra7's ACC solutions to meet top-of-the-rack and short-run
connectivity requirements. We expect this process will generate
orders from key data center customers in North America by late 2023.1 The
ACC connectivity market opportunity is estimated to reach
$1 billion by 2027.3
"As an early sign of our potential for success in this market,
Spectra7 is currently engaged with one of the major data center
operators to deploy our ACC solutions in their AI clusters, which
we expect will drive revenue growth in the coming quarters and
provide additional validation of the benefits for deploying ACC
solutions,"1 said Mr. Halim.
Second quarter 2023 financial highlights
- Second quarter 2023 revenue of $3.3
million, and $6.4 million
through the first six months of 2023.
- Gross margin2 as a percentage of revenue in the
second quarter increased to 63%, from 43% in the same quarter in
the prior year.
- Non-IFRS operating expenses4 were $2.4 million in the second quarter, similar to
$2.4 million in the same quarter in
the prior year as the Company continues to maintain a
cost-efficient operating approach.
- Basic and diluted loss per share for the second quarter was
$(0.03), compared to a basic and
diluted loss per share of $(0.05) in
the same period a year ago.
- EBITDA5 loss in the second quarter was
$148,000, compared with an EBITDA
loss of $600,000 in the same period a
year ago.
2H 2023 Outlook1
The Company anticipates revenue for second half of 2023 to be in
the range of $5.5 million to
$7.0 million. The Company also
anticipates maintaining its efficient operating expense structure
and non-IFRS operating expenses4 for the 2H 2023 at a
range of $4.5 million and
$4.9 million.
Notes:
1 This is forward-looking
information and is based on a number of assumptions, which include
the current and anticipated customer purchase orders received,
supply outlook and anticipated operational expenditures. See
"Cautionary Notes".
2 Gross margin is a non-GAAP measure which is
computed as revenue less cost of sales divided by revenue. Refer to
"Revenue and Gross Margin" in the MD&A, which is available on
SEDAR at www.sedarplus.ca, for a reconciliation to measures
reported in the Company's financial statements.
3 Spectra7 internally generated model based on
650Group silicon chipsets for Ethernet optical transceivers and
active cable alternatives posted July
2023.
4 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 expenses, 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. Refer to "Non-GAAP
Measures" in the MD&A, which is available on SEDAR at
www.sedarplus.ca, for a reconciliation to measures reported in the
Company's financial statements in the previous quarter.
5 EBITDA or earnings before interest, tax,
depreciation, and amortization is a non-GAAP measure. EBITDA
excludes share-based compensation, amortization, depreciation,
interest, and tax expenses. Refer to "Non-GAAP Measures" in the
MD&A for reconciliation to measures reported in the Company's
financial statements.
ABOUT SPECTRA7 MICROSYSTEMS INC.
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 a technical support location
in Dongguan, China. For more
information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY NOTES
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 revenue in the second
half of 2023, the expected datacenter upgrade cycle, the expected
size of the ACC connectivity market by 2027, the expected orders
from datacenter customers in North
America, the expected implementation of ACC technology in
response to increased power and data demands, and the Company's
ability to maintain its efficient operating expense structure and
working capital management 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 management's discussion and analysis for
the year ended December 31, 2022.
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
Darrow Associates
214-597-8200
ir@spectra7.com
Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
408-770-2915
ir@spectra7.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/spectra7-announces-second-quarter-2023-financial-results-301906375.html
SOURCE Spectra7 Microsystems Inc.