Immersion Corporation Reports Fourth Quarter and Full Year 2023 Results
- Immersion Corporation reported positive financial results for the fourth quarter and full year 2023.
- The company's fourth-quarter GAAP net income was $16.0 million or $0.49 per diluted share.
- Non-GAAP net income for the fourth quarter was $16.9 million or $0.52 per diluted share.
- Immersion repurchased 1% of shares outstanding during the fourth quarter.
- Total revenues for the fourth quarter were $10.4 million, with royalty and license revenues at $10.4 million.
- For the full year 2023, revenues were $33.9 million, with net income of $34.0 million.
- Cash, cash equivalents, and short-term investments increased to $160.4 million as of December 31, 2023.
- Immersion returned $15.7 million to shareholders through buybacks and dividends in 2023.
- None.
Insights
Immersion Corporation's financial results indicate a mixed performance, with total revenues and royalty and license revenues showing an increase in the fourth quarter of 2023 compared to the same period in 2022. This suggests a positive trend in the company's core business operations. However, the year-over-year increase in both GAAP and Non-GAAP operating expenses could raise concerns about cost management and its impact on profitability.
The company's strategy to repurchase shares represents a capital allocation decision that typically signals confidence in the company's value by its management. The repurchase of 1% of shares outstanding in Q4 and 3.9% over the full year at average prices below the industry average P/E ratio could be perceived as a smart move to enhance shareholder value, assuming the shares were undervalued.
Net income figures for the year show an improvement despite the decrease in revenues from 2022 to 2023, which could indicate better overall efficiency or the realization of gains from other financial activities. Investors would be interested in understanding the drivers behind the increased net income despite reduced revenues.
Immersion Corporation operates in the haptics technology sector, which is becoming increasingly relevant in various industries such as gaming, automotive and mobile devices. The company's ability to maintain and renew license deals is crucial for sustained revenue streams. The reported increase in stockholder's equity suggests a stronger financial position, which could attract investors looking for companies with solid balance sheets.
The announcement of the sixth consecutive quarterly dividend and the increase in stockholder's equity demonstrates a commitment to returning value to shareholders. However, the Board's statement regarding the potential adjustment or withdrawal of future dividends indicates a cautious approach to capital allocation, which might reflect underlying uncertainty about future financial performance or strategic investments.
The focus on enforcing intellectual property rights, as stated by the CEO, is significant for a technology company like Immersion. Intellectual property is a critical asset that can provide competitive advantage and revenue through licensing. The legal strategies to protect and leverage these assets can have direct implications on the company's financial health and market position.
Furthermore, the company's governance practices, including the Board's discretion over quarterly dividends and capital allocation, are important for investor confidence. Transparency and prudent decision-making in these areas can impact investor perception and, subsequently, stock performance.
Fourth Quarter GAAP Net Income of
Fourth Quarter Non-GAAP Net Income of
Repurchased
Fourth Quarter Financial Summary:1
-
Total revenues of
$10.4 million $9.2 million $10.4 million $9.1 million -
GAAP net income was
$16.0 million $0.49 $19.7 million $0.60 -
GAAP operating expenses of
$5.3 million $3.4 million $4.5 million $2.6 million -
Non-GAAP net income was
$16.9 million $0.52 $20.5 million $0.63 -
Repurchased 319,017 shares in the fourth quarter of 2023 (
1% of shares outstanding at December 31, 2023) at an average price of$6.52
Fiscal Year 2023 Financial Summary:
-
Revenues for 2023 were
$33.9 million $38.5 million $33.8 million $38.2 million -
Net income for 2023 was
$34.0 million $1.04 $30.7 million $0.92 -
GAAP operating expenses of
$16.0 million $14.0 million $11.5 million $10.2 million -
Non-GAAP net income for 2023 was
$38.5 million $1.18 $34.5 million $1.03 -
Cash, cash equivalents and short-term investments were
$160.4 million $10.7 million $149.7 million -
Repurchased 1,217,774 shares in 2023 (
3.9% of shares outstanding at December 31, 2023) at an average price of$6.77
| 1 Non-GAAP measures are not calculated in accordance with GAAP as described in this press release. A reconciliation of each Non-GAAP measure to the most applicable GAAP measure is included in this press release. |
Eric Singer, Chairman & CEO, stated, “2023 was a year of steady execution and accomplishment for Immersion as we maintained our efforts to enforce our intellectual property, renew license deals, and thoughtfully allocate capital. We returned
“As we enter 2024, we continue to focus on our stated objectives and are confident that our strong balance sheet positions us well,” Singer concluded.
The sixth quarterly dividend, in the amount of
About Immersion
Immersion Corporation (Nasdaq: IMMR) is a leading innovator of touch feedback technology, also known as haptics. The company invents, accelerates, and scales haptic experiences by providing technology solutions for mobile, automotive, gaming, and consumer electronics. Haptic technology creates immersive and realistic experiences that enhance digital interactions by engaging users' sense of touch. Learn more at www.immersion.com.
Use of Non-GAAP Financial Measures
Immersion reports all financial information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Immersion discloses this non-GAAP information, such as Non-GAAP net income, Non-GAAP operating expenses and Non-GAAP net income per diluted share because it is useful in understanding the company’s performance as it excludes certain non-cash expenses like stock-based compensation expense and other special charges, depreciation and restructuring costs, that many investors feel may obscure the company’s true operating performance. Likewise, management uses these non-GAAP financial measures to manage and assess the profitability of its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release.
Forward-looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements involve risks and uncertainties. Forward-looking statements are identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “places,” “estimates,” and other similar expressions. However, these words are not the only way we identify forward-looking statements. Examples of forward-looking statements include any expectations, projections, or other characterizations of future events, or circumstances, including but not limited to statements about the Company’s focus on protecting its intellectual property, either through the execution of new or renewal license agreements or by proactive enforcement continuing to pursue thoughtful capital allocation to increase long-term shareholder value, and the timing of any dividend payments.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results could differ materially from those projected in the forward-looking statements, therefore we caution you not to place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the inability to predict the outcome of any litigation, the costs associated with any litigation and the risks related to our business, both direct and indirect, of initiating litigation, unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate; delay in or failure to achieve adoption of or commercial demand for the Company’s products or third party products incorporating the Company’s technologies; the inability of Immersion to renew existing licensing arrangements, or enter into new licensing arrangements on favorable terms; the loss of a major customer; the ability of Immersion to protect and enforce its intellectual property rights and other factors. For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in Immersion’s Annual Report on Form 10-K for 2023 as filed with the
Immersion, and the Immersion logo are trademarks of Immersion Corporation in
(IMMR – C)
Immersion Corporation Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
|||||||
|
December 31, 2023 |
|
December 31, 2022 |
||||
|
|
(1) |
|
|
|
(1) |
|
ASSETS |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
56,071 |
|
|
$ |
48,820 |
|
Investments-current |
|
104,291 |
|
|
|
100,918 |
|
Accounts and other receivables |
|
2,241 |
|
|
|
1,235 |
|
Prepaid expenses and other current assets |
|
9,847 |
|
|
|
9,347 |
|
Total current assets |
|
172,450 |
|
|
|
160,320 |
|
Property and equipment, net |
|
211 |
|
|
|
293 |
|
Investments-noncurrent |
|
33,350 |
|
|
|
17,040 |
|
Long-term deposits |
|
6,231 |
|
|
|
4,324 |
|
Deferred tax assets |
|
3,343 |
|
|
|
7,217 |
|
Other assets |
|
146 |
|
|
|
916 |
|
TOTAL ASSETS |
$ |
215,731 |
|
|
$ |
190,110 |
|
LIABILITIES |
|
|
|
|
|
|
|
Accounts payable |
$ |
47 |
|
|
$ |
86 |
|
Accrued compensation |
|
3,127 |
|
|
|
2,029 |
|
Deferred revenue-current |
|
4,239 |
|
|
|
4,766 |
|
Other current liabilities |
|
11,900 |
|
|
|
11,044 |
|
Total current liabilities |
|
19,313 |
|
|
|
17,925 |
|
Deferred revenue-noncurrent |
|
8,390 |
|
|
|
12,629 |
|
Other long-term liabilities |
|
4,926 |
|
|
|
1,856 |
|
Total liabilities |
|
32,629 |
|
|
|
32,410 |
|
STOCKHOLDERS’ EQUITY |
|
183,102 |
|
|
|
157,700 |
|
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY |
$ |
215,731 |
|
|
$ |
190,110 |
|
(1) Derived from Immersion’s annual audited consolidated financial statements. |
|||||||
Immersion Corporation Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty and license |
$ |
10,380 |
|
|
$ |
9,099 |
|
|
$ |
33,781 |
|
|
$ |
38,178 |
|
Development, services, and other |
|
— |
|
|
|
65 |
|
|
|
138 |
|
|
|
283 |
|
Total revenues |
|
10,380 |
|
|
|
9,164 |
|
|
|
33,919 |
|
|
|
38,461 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
890 |
|
|
|
229 |
|
|
|
1,751 |
|
|
|
1,219 |
|
Research and development |
|
22 |
|
|
|
262 |
|
|
|
281 |
|
|
|
1,380 |
|
General and administrative |
|
4,432 |
|
|
|
2,892 |
|
|
|
13,960 |
|
|
|
11,442 |
|
Total operating expenses |
|
5,344 |
|
|
|
3,383 |
|
|
|
15,992 |
|
|
|
14,041 |
|
Operating income |
|
5,036 |
|
|
|
5,781 |
|
|
|
17,927 |
|
|
|
24,420 |
|
Interest and other income (loss), net |
|
14,257 |
|
|
8,958 |
|
|
24,988 |
|
|
|
2,545 |
|||
Income before benefit from (provision for) income taxes |
|
19,293 |
|
|
|
14,739 |
|
|
42,915 |
|
|
|
26,965 |
|
|
Benefit from (provision for) income taxes |
|
(3,303 |
) |
|
|
4,963 |
|
|
(8,939 |
) |
|
|
3,699 |
||
Net income |
$ |
15,990 |
|
|
$ |
19,702 |
|
$ |
33,976 |
|
|
$ |
30,664 |
|
|
Basic net income per share |
$ |
0.49 |
|
|
$ |
0.61 |
|
$ |
1.05 |
|
|
$ |
0.92 |
|
|
Shares used in calculating basic net income per share |
|
32,465 |
|
|
|
32,327 |
|
|
|
32,214 |
|
|
|
33,280 |
|
Diluted net income per share |
$ |
0.49 |
|
|
$ |
0.60 |
|
$ |
1.04 |
|
|
$ |
0.92 |
|
|
Shares used in calculating diluted net income per share |
|
32,707 |
|
|
|
32,584 |
|
|
|
32,536 |
|
|
|
33,508 |
|
Immersion Corporation Reconciliation of GAAP Net Income to Non-GAAP Net Income (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP net income |
$ |
15,990 |
|
|
$ |
19,702 |
|
$ |
33,976 |
|
|
$ |
30,664 |
|
|
Add: Stock-based compensation |
|
869 |
|
|
|
756 |
|
|
|
3,395 |
|
|
|
3,417 |
|
Add: Restructuring expense |
|
7 |
|
|
|
— |
|
|
|
420 |
|
|
|
— |
|
Add: Depreciation and amortization of property and equipment |
|
12 |
|
|
|
45 |
|
|
|
68 |
|
|
|
140 |
|
Other nonrecurring charges |
|
6 |
|
|
|
27 |
|
|
|
627 |
|
|
|
322 |
|
Non-GAAP net income |
$ |
16,884 |
|
|
$ |
20,530 |
|
$ |
38,486 |
|
|
$ |
34,543 |
|
|
Non-GAAP net income per diluted share |
$ |
0.52 |
|
|
$ |
0.63 |
|
$ |
1.18 |
|
|
$ |
1.03 |
|
|
Shares used in calculating Non-GAAP net income per diluted share |
|
32,707 |
|
|
|
32,584 |
|
|
|
32,536 |
|
|
|
33,508 |
|
Immersion Corporation Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (In thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP operating expenses |
$ |
5,344 |
|
|
$ |
3,383 |
|
|
$ |
15,992 |
|
|
$ |
14,041 |
|
Adjustments to GAAP operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense - S&M |
|
(302 |
) |
|
|
(41 |
) |
|
|
(412 |
) |
|
|
(61 |
) |
Stock-based compensation expense - R&D |
|
(2 |
) |
|
|
(21 |
) |
|
|
69 |
|
|
|
(117 |
) |
Stock-based compensation expense - G&A |
|
(565 |
) |
|
|
(694 |
) |
|
|
(3,052 |
) |
|
|
(3,239 |
) |
Restructuring expense |
|
(7 |
) |
|
|
— |
|
|
|
(420 |
) |
|
|
— |
|
Depreciation and amortization expense of property and equipment |
|
(12 |
) |
|
|
(45 |
) |
|
|
(68 |
) |
|
|
(140 |
) |
Other nonrecurring charges |
|
(6 |
) |
|
|
(27 |
) |
|
|
(627 |
) |
|
|
(322 |
) |
Non-GAAP operating expenses |
$ |
4,450 |
|
|
$ |
2,555 |
|
|
$ |
11,482 |
|
|
$ |
10,162 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240307428413/en/
Investor Contact:
J. Michael Dodson
Immersion Corporation
mdodson@immersion.com
Source: Immersion Corporation
FAQ
What was Immersion Corporation's (IMMR) GAAP net income for the fourth quarter?
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What were Immersion Corporation's total revenues for the fourth quarter?
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How much did Immersion return to shareholders through buybacks and dividends in 2023?
