Release Date: May 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WiSA Technologies Inc (WISA, Financial) has signed five licensing agreements for its WiSA E technology within the first six months of its launch, indicating strong initial market acceptance.
- The company has a robust portfolio of patents in the wireless multi-channel, high-resolution audio space, which provides a competitive edge.
- WiSA E technology is versatile and can be implemented across various devices such as TVs, set-top boxes, phones, and tablets, making it highly adaptable.
- The company has a well-established customer base from its 11 years of selling high-performance wireless multi-channel audio, which supports the launch of WiSA E.
- WiSA Technologies Inc (WISA) has secured $8 million in financing, which will ensure the proper launch and rollout of WiSA E and strengthen its Nasdaq listing compliance.
Negative Points
- Revenue from the new WiSA E licenses is expected to start in the second half of 2024, which means there is a delay before the financial benefits are realized.
- The company has faced challenges in maintaining its Nasdaq listing, requiring strategic financial maneuvers to comply with listing requirements.
- There is uncertainty around the exact timing of mass production and revenue generation from the new licenses, as production dates can shift by a month or two.
- The company has a high monthly operating expense of around $900,000, which could strain financial resources if revenue targets are not met.
- The need for shareholder approval on various proposals, including reducing the quorum threshold, indicates potential governance and operational challenges.
Q & A Highlights
Q: Can you help us understand the expected revenue ramp based on the existing WiSA E agreements in 2024?
A: We haven't put out specific guidance yet, but we expect to see initial shipments from a couple of agreements in Q3 and more in Q4. The engineering team is heavily involved with three of the five agreements, and production dates can move around by a month or two.
Q: Which licensing revenue streams do you expect to commence in the back half of 2024 from your existing agreements?
A: Each agreement is different. Engineering services have already started in Q1 and will increase in Q2 and Q3. Royalties from the fifth contract should kick in late Q3 or early Q4. Other agreements will generate revenue based on module pricing.
Q: Are the three additional WiSA E agreements similar in scale to the existing five agreements?
A: We are still working out the terms, but they are expected to be similar to the existing agreements, primarily in the TV and set-top box market segments.
Q: Can you talk about your expected quarterly OpEx and burn rate for the next couple of quarters?
A: We expect to be in the $900,000 a month range for OpEx. Revenue from WiSA HT sales, which is mostly cash, will help offset some of the burn rate.
Q: Is the WiSA E launch focused internationally or mainly on the US market?
A: WiSA E is an international launch. Most TV brands and set-top box manufacturers are international, though we expect some US licenses as well.
Q: Is your marketing strategy in Europe different from the US?
A: Yes, it is different. US consumers are more familiar with WiSA certified products due to Platin Audio brands, while European consumers are more familiar with high-end audio brands that use WiSA HT.
Q: What does the signing of five licenses mean for investors?
A: It indicates that five multinationals have tested and approved WiSA E's performance. The licenses include various revenue streams such as royalties, activation pricing, engineering services, and speaker module pricing.
Q: What is the significance of the shareholder vote on May 31?
A: The vote is crucial for executing the company's business. Proposal Number Two aims to lower the quorum threshold to make it easier to conduct business. Proposals Three and Four are related to investor agreements during a tough financial period.
Q: How does WiSA E's universality benefit technology vendors?
A: WiSA E can be implemented across all major SOCs and different operating systems, making it versatile. It allows vendors to design one set of audio products that work with various TVs and Wi-Fi chips, reducing costs.
Q: What are the financial highlights for Q1 2024?
A: WiSA Technologies reported under $500,000 in revenue for Q1 2024. The company expects revenue from WiSA E agreements to start in the second half of the year, with significant contributions from engineering services and royalties.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
