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Akoustis 3Q22 results ?3

10:00 02-May-22

Also note the correction to non-GAAP EPS in the original note below, which is in line rather than a miss.

The Akoustis conference call has just concluded.  First of all this is its third fiscal quarter; sorry about that.  The call did contain lots of helpful color about supply chains.  Akoustis is only seeing 1-2 week delays shipping in and out of the country, though I speculate that lack of direct impact may be because manufacturing is still ramping.  Some of its customers are being impacted by the semiconductor shortage, though.  Internally, Akoustis plans to be installing equipment to get to 500M units around mid-year, and labor looks the main constraint.

Akoustis has too many major new projects to list, but the summary is that 8 WiFi customers and 2 mobile (infrastructure) customers shipping.  Integration of Wafer Level Packaging into manufacturing should enable first handset design wins expected in the second half of the year, with revenue ramping in 2023 and 2024.  Two project level highlights that I want to detail are that WiFi 7product characterization for the PC customer should take around 15 months.  Perhaps more importantly, there is no news on new materials yet, but management expects (presumably positive) impact on its 2-7GHz filters and to sign a new multi-million dollar contract with DARPA scaling filers up to 18 GHz.  That is quite impressive but I suspect it could lead to changes in long term plans.

Perhaps on a related note, management thinks semiconductor stimulus could be reconciled between House and Senate and signed into law by June.  I am never willing to count on Congress sticking to any time line, but I think that this happening could be a major gating factor for eventual M&A.  Speaking of which, I probably also should have mentioned that Akoustis did complete its acquisition of the remainder of RFMi during the quarter.

In summary, despite the misses and even though plenty of uncertainty remains, I continue to think that AKTS should be priced above the $7.50 strike price rather than merely being up an uncertain 4% pre-market.  CapEx should decline and operating margins improve in second half of the year as manufacturing facilities are finalized and usage increases.  Slow deployment of 5G in China is understandable and even if the same happens in the west, the customer activity and revenue ramp warrants a higher multiple in my opinion.  It remains to be seen when the market will come around to this point of view but the technology looks compelling.

On 5/2/22 08:10, Esekla wrote:

Akoustis has announced its results for its fiscal third quarter:

• a loss of 22 cents per share is in line
• from $4.6M of revenue, which misses by $0.1M
• projects 2Q22 revenue of at least $6.0M, which misses by $0.2M

In addition the company has begun shipping the second of two BAW filters to a multi-billion dollar tier 1 customer.  More design wins are expected over the course of the year, including a second iteration of a WiFi 7 diplexer design for a major PC maker.  AKTS is up slightly among shaky equity futures, affirming by view that it is undervalued and the revenue ramp is all that matters.  The conference call is beginning now, but there may not be many more to write.

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