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Resonant 3Q17 report ?3

18:27 08-Nov-17


Resonant's conference call has just concluded.  With regard to the question of management's attitude to activist investors, comments that it "will not be distracted" give a pretty clear implication.  In light of that, costs and further dilution become more important.  The company used $3.1M last quarter, which is down from a $3.5-4M run rate, but OpEx will tick back up towards the average going forward.  That means there are already funds on the balance sheet (though not in the filings, as funds from the most recent raise came in after the quarter's end) to support operations through the second half of next year. 

Against that is the fact that the latest part has been sampling for over a month.  That means that design-in could occur by year end, putting management in a position to quantify some recurring revenue on the next call.  Overall, Resonant's TAM for designs already under contract is now up to 380-390M devices, for $42M of potential licensing revenue.  Looking further out, cheaper quadplexers mean the carrier aggregation market share in China can go from 15 to 50%, so we should continue to see strong growth.  In conjunction with that, management was at pains to point out that the center that it is opening in China is for sales and support, rather than design, so the company's intellectual property will supposedly not be at risk.  Initial projections are for the center to be operating in the 1st quarter of next year.

That leaves us back at the question of whether revenue will be able to prevent more dilution.  There's little risk of the latter for the remainder of this year, and the next report is typically not until the end of March.  That should give plenty of time for things to develop and, with the rebate rate at 5%, I would be open to building my RESN position on any significant dips in hopes of further progress in the interim.

On 11/08/2017 04:13 PM, Esekla wrote:

Resonant has announced results for its third quarter:

  • a loss of 28 cents per share is in-line
  • on $106K of revenue, which misses by $104K
I will prioritize the CenturyLink call over Resonant's, which occurs at the same time.