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
October 13th, 2022 SAN JOSE, CA - (PR NewsWire) – (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.
2H FY 2022 OUTLOOK1
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.
NOTES:
1This 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”.
2Non-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.