Immersion Corporation Reports Third Quarter 2021 Results

Rhea-AI Summary

Immersion Corporation (NASDAQ: IMMR) reported its third-quarter financial results for the period ending September 30, 2021. Total revenues were $7.2 million, a decrease from $7.6 million year-over-year. The company generated $7.1 million in royalty and license revenues, down from $7.5 million in the previous year. Operating expenses showed a significant decline, with GAAP expenses at $3.5 million, down 30%, and non-GAAP expenses at $2.8 million, down 22%. GAAP net income rose to $3.8 million ($0.12 per diluted share), compared to $2.9 million ($0.11 per diluted share) a year earlier.

Positive

• GAAP net income increased to $3.8 million from $2.9 million YoY.
• Non-GAAP net income improved to $4.7 million, up from $4.1 million YoY.
• GAAP operating expenses decreased by 30%, reflecting effective cost management.
• Non-GAAP operating expenses declined by 22%, indicating improved operational efficiency.

Negative

• Total revenues fell to $7.2 million from $7.6 million YoY.
• Royalty and license revenues decreased from $7.5 million to $7.1 million YoY.

SAN FRANCISCO--(BUSINESS WIRE)-- Immersion Corporation (NASDAQ: IMMR), the leading developer and provider of technologies for haptics, today reported financial results for the third quarter ended September 30, 2021.

Third Quarter Financial Summary:

• Total revenues of $7.2 million, compared to $7.6 million in the third quarter of 2020. Royalty and license revenues were $7.1 million, compared to $7.5 million in the third quarter of 2020.

• GAAP operating expenses of $3.5 million declined 30% from $5.0 million in the third quarter of 2020. Non-GAAP operating expenses of $2.8 million declined 22% from non-GAAP operating expenses of $3.5 million in the third quarter of 2020. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

• GAAP net income was $3.8 million, or $0.12 per diluted share, compared to GAAP net income of $2.9 million, or $0.11 per diluted share, in the third quarter of 2020.

• Non-GAAP net income was $4.7 million, or $0.15 per diluted share, compared to non-GAAP net income of $4.1 million, or $0.15 per diluted share in the third quarter of 2020.

About Immersion

Immersion Corporation (NASDAQ: IMMR) is the 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 (loss) and Non-GAAP net income (loss) 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, such as deferred tax assets valuation allowance, 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. The Company has not reconciled the non-GAAP financial measures guidance to the corresponding GAAP measures on a forward-looking basis due to the uncertainty and the potential variability of many of the costs and expenses that may be incurred in the future. Accordingly, reconciliations of the Company’s forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

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, and include statements regarding the anticipated impact of the expansion of our channel licensing program, and other statements regarding the future prospects and opportunities for the Company’s business.

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 effects of the COVID-19 global pandemic on the Company and its business, and on the business of its suppliers and customers; unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate (especially in light of the ongoing adverse effects of the COVID-19 global pandemic); 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 2020 and its most recent Quarterly Report on Form 10-Q which are on file with the U.S. Securities and Exchange Commission. Any forward-looking statements made by us in this press release speak only as of the date of this press release, and Immersion does not intend to update these forward-looking statements after the date of this press release, except as required by law.

Immersion, and the Immersion logo are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners. The use of the word “partner” or “partnership” in this press release does not mean a legal partner or legal partnership.

(IMMR – C)

Immersion Corporation Condensed Consolidated Balance Sheets (In thousands)
	September 30, 2021				December 31, 2020
	(Unaudited)				(1)
ASSETS
Cash, cash equivalents and short-term marketable securities	$	118,629			$	59,522
Accounts and other receivables	4,171				2,218
Prepaid expenses and other current assets	11,739				12,610
Total current assets	134,539				74,350
Property and equipment, net	220				209
Long-term deposits	11,928				12,571
Other assets	13,836				9,000
TOTAL ASSETS	$	160,523			$	96,130
LIABILITIES
Accounts payable	$	117			$	149
Accrued compensation	729				1,001
Other current liabilities	4,962				2,457
Deferred revenue	4,914				5,173
Total current liabilities	10,722				8,780
Long-term deferred revenue	17,859				21,334
Other long-term liabilities	1,153				2,035
TOTAL LIABILITIES	29,734				32,149
STOCKHOLDERS’ EQUITY	130,789				63,981
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	160,523			$	96,130
(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 September 30,									Nine Months Ended September 30,
	2021					2020				2021					2020
Revenues:
Royalty and license	$	7,068				$	7,531			$	25,017				$	19,306
Development, services, and other	105					65				325					215
Total revenues	7,173					7,596				25,342					19,521
Costs and expenses:
Cost of revenues	8					32				78					138
Sales and marketing	443					1,096				2,743					4,067
Research and development	803					920				3,442					3,932
General and administrative	2,246					2,963				7,106					14,406
Total costs and expenses	3,500					5,011				13,369					22,543
Operating income (loss)	3,673					2,585				11,973					(3,022		)
Interest and other income (loss), net	438					174				162					334
Income (loss) before benefit from (provision for) income taxes	4,111					2,759				12,135					(2,688		)
Benefit from (provision for) income taxes	(340		)			96				(987		)			3
Net income (loss)	$	3,771				$	2,855			$	11,148				$	(2,685	)
Basic net income (loss) per share	$	0.12				$	0.11			$	0.36				$	(0.09	)
Shares used in calculating basic net income (loss) per share	32,474					26,898				30,693					28,507
Diluted net income (loss) per share	$	0.12				$	0.11			$	0.36				$	(0.09	)
Shares used in calculating diluted net income (loss) per share	32,612					27,134				31,065					28,507

Immersion Corporation Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) (In thousands, except per share amounts) (Unaudited)
	Three Months Ended September 30,										Nine Months Ended September 30,
	2021					2020					2021					2020
GAAP net income (loss)	$	3,771				$	2,855				$	11,148				$	(2,685	)
Add: Provision for (benefit from) income taxes	340					(96		)			987					(3		)
Less: Non-GAAP provision for income taxes	(95		)			(56		)			(139		)			(47		)
Add: Stock-based compensation	415					1,339					1,997					3,433
Add: Restructuring expense	186					66					612					590
Add: Depreciation and amortization of property and equipment	25					40					75					1,003
Add: Other non-recurring charges	$	100				$	—				$	100				$	—
Non-GAAP net income	$	4,742				$	4,148				$	14,780				$	2,291
Non-GAAP net income per diluted share	$	0.15				$	0.15				$	0.48				$	0.08
Dilutive shares used in calculating Non-GAAP net income per share	32,612					27,134					31,065					28,507

Immersion Corporation Disaggregated Revenue Information (In thousands) (Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Fixed fee license revenue	$	1,247			$	1,243			$	4,346			$	3,821
Per-unit royalty revenue	5,821				6,288				20,671				15,485
Total royalty and license revenue	7,068				7,531				25,017				19,306
Development, services, and other revenue	105				65				325				215
Total revenue	$	7,173			$	7,596			$	25,342			$	19,521

Immersion Corporation Revenue by Line of Business (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Mobility	62	%		74	%		63	%		76	%
Gaming	27	%		14	%		23	%		12	%
Automotive	11	%		12	%		14	%		11	%
Other	—	%		—	%		—	%		1	%
Total	100	%		100	%		100	%		100	%

Immersion Corporation Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (In thousands) (Unaudited)
	Three Months Ended September 30,										Nine Months Ended September 30,
	2021					2020					2021				2020
GAAP operating expenses	$	3,492				$	4,979				13,291				22,405
Adjustments to non-GAAP operating expenses:
Stock-based compensation expense - S&M	(141		)			(205		)			(678	)			(593	)
Stock-based compensation expense - R&D	(118		)			(233		)			(653	)			(653	)
Stock-based compensation expense - G&A	(156		)			(901		)			(666	)			(2,187	)
Restructuring expense	(186		)			(66		)			(612	)			(590	)
Depreciation and amortization of property and equipment	(25		)			(40		)			(75	)			(1,003	)
Other non-recurring charges	(100		)			—					(100	)			—
Non-GAAP operating expenses	$	2,766				$	3,534				10,507				17,379

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006104/en/

Investor Contact:

Aaron Akerman

Immersion Corporation

514-987-9800 ext. 5110

aakerman@immersion.com

Source: Immersion Corporation

FAQ

What were Immersion Corporation's Q3 2021 revenues?

Immersion Corporation reported total revenues of $7.2 million for Q3 2021.

How did Immersion Corporation's net income change in Q3 2021?

The GAAP net income for Q3 2021 increased to $3.8 million, up from $2.9 million in Q3 2020.

What were the operating expenses for Immersion Corporation in Q3 2021?

GAAP operating expenses were $3.5 million, a 30% decrease from $5.0 million in Q3 2020.

Did Immersion Corporation experience a decline in royalty revenues in Q3 2021?

Yes, royalty and license revenues decreased from $7.5 million in Q3 2020 to $7.1 million in Q3 2021.

What is the stock symbol for Immersion Corporation?

The stock symbol for Immersion Corporation is IMMR.