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Resonant 4Q18 results -3
18:41 14-Mar-19
The Resonant conference call has just concluded. The company
burned $5.2M in cash for the quarter and has $21.3M on the balance
sheet. This quarter was expected to be weak, but this is still a
surprise. If there is a silver lining, it's that the royalty rate
improved incrementally to 9.6%. Looking further ahead, the more
exotic 5G filters should exceed 10%, which is much better than the
typical 3-7% range.
Management was of course question on an expected revenue ramp
this year, but said it's too soon to give specifics timing, though
it is cautiously optimistic about an "inevitable" ramp. It is
still targeting 40% YoY growth but most of that should begin in or
just after the 2nd quarter. Also, many current parts are
replacements for existing devices, thus the ramp will not be
steady, but should be a jump (<100K to 10+M units for a few
months) once parts are qualified. So in summary, this is not a
good report, but in light of the current smart phone market, also
not one that shatters Resonant's growth story.
Resonant has announced its results for the fourth quarter:
- a loss of 25 cents per share misses by 6 cents
- on $128K, which misses by $472K
RESN has been volatile, and I've written a lot about it recently. Shorts have been waiting for the company to use its $50M shelf, but worrying that the company will be bought or partner, as 5G is gearing up big. The net rebate rate is back down around 18% and 16% of float was shorted at the end of February. These results do not necessarily change the fundamental prospects, but there is certainly more ammo for the bear case; management will need to explain what's going on with revenue to limit the damage, otherwise this looks like another case of Chinese business not coming through. The conference is starting and I will report again later.