indie Semiconductor Exceeds Q2 2022 Analyst Expectations

Rhea-AI Summary

indie Semiconductor, Inc. (Nasdaq: INDI) reported second quarter revenue of $25.8 million, a surge of 181% year-over-year and 17% sequentially, exceeding estimates. Non-GAAP gross margin improved to 48.6%, up 650 basis points year-over-year. Despite an operating loss of $30 million on a GAAP basis, the company anticipates Q3 revenue growth of 140-150% year-over-year, aiming for an annualized run-rate of $120 million. The firm highlights strong demand for Autotech solutions and ongoing R&D investments, targeting profitability in the latter half of next year.

Positive

• Revenue growth of 181% year-over-year and 17% sequentially.
• Non-GAAP gross margin increased to 48.6%, exceeding guidance.
• Strong demand for Autotech portfolio driving performance.
• Guidance for Q3 revenue growth of 140-150% year-over-year.

Negative

• GAAP operating loss increased to $30 million from $18.5 million year-over-year.
• Non-GAAP operating loss rose to $17 million compared to $9.6 million last year.

• Delivers 181% Year-over-Year and 17% Sequential Revenue Growth to a Record $25.8M
• Expands Non-GAAP Gross Margin to 48.6%, up 650 Basis Points Year-over-Year and 120 Basis Points Sequentially
• Guides Q3 2022 Revenue up 140-150% Year-over-Year to an Approximately $120M Annualized Run-rate at the Midpoint with Further Non-GAAP Gross Margin Expansion into the 50% Range

ALISO VIEJO, Calif.--(BUSINESS WIRE)-- indie Semiconductor, Inc. (Nasdaq: INDI), an Autotech solutions innovator, today announced second quarter results for the period ended June 30, 2022. Second quarter revenue was up 181 percent from the same period a year ago and 17 percent sequentially to a record $25.8 million, at the high end of the Company’s prior guidance range and exceeding analyst consensus estimates. Non-GAAP gross margin expanded 650 basis points year-over-year and 120 basis points sequentially to 48.6 percent, better than indie’s 48.0 percent guidance for the quarter. On a GAAP basis, second quarter 2022 operating loss was $30.0 million compared to $18.5 million in the year ago timeframe. Non-GAAP operating loss for the second quarter of 2022 was $17.0 million versus $9.6 million during the same period last year, reflecting increasing customer-driven R&D and marketing investments as well as incremental public company infrastructure costs.

“indie exceeded Q2 top and bottom line expectations driven by increasing global demand for our differentiated Autotech portfolio, underpinned by crisp operational execution,” said Donald McClymont, indie’s co-founder and chief executive officer. “At a higher level, we’re gaining design win momentum across ADAS, electrification and user experience applications. Our R&D investments coupled with successful acquisitions are yielding unprecedented levels of semiconductor and software integration spanning LiDAR, Radar, Ultrasonic and Computer Vision sensor modalities as well as key EV and advanced lighting solutions. In short, indie is laser focused on capturing a disproportionate share of what is fast becoming a close to $50 billion serviceable Autotech market opportunity.”

Q2 Business Highlights

• Commenced sampling of the automotive industry’s most integrated USB-PD programmable controller
• Secured wireless charging and advanced lighting design wins at Honda, Hyundai / Kia and XPeng
• Broadened strategic engagement with two leading electric vehicle OEMs
• Expanded global reach with opening of Dresden, Germany Engineering Center of Excellence
• Joined the Russell 2000 market index

Q3 2022 Outlook

We provide earnings guidance on a non-GAAP basis only because certain information necessary to reconcile such guidance to GAAP is difficult to estimate and dependent on future events outside of our control and, therefore, is not available without unreasonable efforts. Please refer to the attached Discussion Regarding the Use of Non-GAAP Financial Measures in this press release for a further discussion of our use of non-GAAP measures, including quantification of known expected adjustment items.

“Based on our strong order visibility from new product and customer ramps, we expect to continue to far outpace indie’s addressable markets,” said Thomas Schiller, indie’s chief financial officer and executive vice president of strategy. “Specifically, for the third quarter of 2022, we anticipate top-line growth on the order of 140 to 150 percent year-over-year to an approximately $120 million annualized revenue run-rate at the midpoint with non-GAAP gross margin expansion into the 50 percent range. Further, given the depth of our design win pipeline, demonstrated scalability and planned operating leverage, we are on track to reach profitability in the second half of next year, marking another key step toward achieving our target model of 60 percent gross and 30 percent operating margins.”

indie’s Q2 2022 Conference Call

indie Semiconductor will host a conference call with analysts to discuss its second quarter 2022 results and business outlook today at 5:00 p.m. Eastern time. To listen to the conference call via the Internet, please go to the Financials tab on the Investors page of indie’s website. To listen to the conference call via telephone, please call (877) 451-6152 (domestic) or (201) 389-0879 (international), Conference ID: 13731710.

A replay of the conference call will be available beginning at 8:00 p.m. Eastern time on August 11, 2022 until 11:59 p.m. Eastern time on August 25, 2022 under the Financials tab on the Investors page of indie’s website, or by calling (844) 512-2921 (domestic) or (412) 317-6671 (international), Conference ID: 13731710.

About indie

indie is empowering the Autotech revolution with next-generation automotive semiconductors and software platforms. We focus on edge sensors spanning multiple modalities, including LiDAR, radar, ultrasound and computer vision for Advanced Driver Assistance Systems (ADAS), user experience and electrification applications. These technologies represent the core underpinnings of both electric and autonomous vehicles while our advanced user interfaces enabled by our mixed-signal SoCs transform the in-cabin experience to mirror and seamlessly connect to the mobile platforms we rely on every day. We are an approved vendor to Tier 1 partners and our solutions can be found in marquee automotive OEMs around the world. Headquartered in Aliso Viejo, CA, indie has design centers and sales offices in Austin, TX; Boston, MA; Detroit, MI; San Francisco and San Jose, CA; Córdoba, Argentina; Budapest, Hungary; Dresden and Munich, Germany; Cambridge, England; Edinburgh, Scotland; Haifa, Israel; Quebec City, Canada; Tokyo, Japan and several locations throughout China.

Please visit us at www.indiesemi.com to learn more.

Safe Harbor Statement

This communication contains “forward-looking statements” (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended). Such statements include, but are not limited to, statements regarding our future business and financial performance and prospects, other statements identified by words such as “will likely result,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “plan,” “project,” “outlook,” “should,” “could,” “may” or words of similar meaning, our ability to substantially outpace our addressable markets and drive further gross margin expansion, our guidance regarding top line growth and non-GAAP gross margin, our belief that our deeper investments and targeted acquisitions are setting the stage for accelerating growth in 2022 and positioning indie to become the leading provider of edge sensors spanning LiDAR, radar, ultrasound and computer vision applications and our belief we are well positioned to capitalize on several powerful automotive megatrends, including ADAS, enhanced user experience and electrification. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. The preliminary unaudited financial results for our second quarter and year to date June 30, 2022 included in this press release represent the most current information available to management. Our actual results when disclosed in the Form 10-Q may differ from these preliminary results as a result of the completion of our financial closing procedures; final adjustments; completion of the review by our independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. In addition to the factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 11, 2022 and in our other public reports filed with the SEC (including those identified under “Risk Factors” therein), the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: the impact of the COVID-19 pandemic; the impact of Russia’s invasion of Ukraine; macroeconomic conditions, including inflation, rising interest rates and volatility in the credit and financial markets; our reliance on contract manufacturing and outsourced supply chain and the availability of semiconductors and manufacturing capacity; competitive products and pricing pressures; our ability to win competitive bid selection processes and achieve additional design wins; the impact of any acquisitions we may make, including our ability to successfully integrate acquired businesses and risks that the anticipated benefits of any acquisitions may not be fully realized or take longer to realize than expected; our ability to develop, market and gain acceptance for new and enhanced products and expand into new technologies and markets; trade restrictions and trade tensions; and political or economic instability in our target markets. All forward-looking statements in this press release are expressly qualified in their entirety by the foregoing cautionary statements.

Investors are cautioned not to place undue reliance on the forward-looking statements in this press release, which information set forth herein speaks only as of the date hereof. We do not undertake, and we expressly disclaim, any intention or obligation to update any forward-looking statements made in this announcement or in our other public filings, whether as a result of new information, future events or otherwise, except as required by law.

INDIE SEMICONDUCTOR, INC. PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share amounts) (Unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Revenue:
Product revenue	$	20,452			$	8,888			$	38,538			$	16,371
Contract revenue		5,303				292				9,216				923
Total revenue		25,755				9,180				47,754				17,294
Operating expenses:
Cost of goods sold		15,178				5,319				29,370				10,167
Research and development		28,467				13,486				57,966				22,163
Selling, general, and administrative		12,085				8,878				24,727				11,573
Total operating expenses		55,730				27,683				112,063				43,903
Loss from operations		(29,975	)			(18,503	)			(64,309	)			(26,609	)
Other income (expense), net:
Interest income		175				13				208				20
Interest expense		(267	)			(530	)			(325	)			(1,150	)
Gain (loss) from change in fair value of SAFEs		—				2,500				—				21,600
Gain (loss) from change in fair value of warrants		20,301				11,316				67,654				11,316
Gain (loss) from change in fair value of earn-out liabilities		—				17,939				—				17,939
Gain (loss) from change in fair value of contingent considerations		3,584				(100	)			3,667				(100	)
Gain (loss) from extinguishment of debt		—				304				—				304
Other income (expense)		9				106				(21	)			99
Total other income, net		23,802				31,548				71,183				50,028
Net income (loss) before income taxes		(6,173	)			13,045				6,874				23,419
Income tax benefit (expense)		869				(57	)			1,528				(70	)
Net income (loss)		(5,304	)			12,988				8,402				23,349
Less: Net income (loss) attributable to noncontrolling interest		(1,070	)			6,839				1,803				6,385
Net income (loss) attributable to indie Semiconductor, Inc.	$	(4,234	)		$	6,149			$	6,599			$	16,964
Net income (loss) attributable to common shares — basic	$	(4,234	)		$	6,149			$	6,599			$	16,964
Net income (loss) attributable to common shares — diluted	$	(4,234	)		$	3,649			$	6,599			$	(4,636	)
Net income (loss) per share attributable to common shares — basic	$	(0.04	)		$	0.13			$	0.06			$	0.43
Net income (loss) per share attributable to common shares — diluted	$	(0.04	)		$	0.06			$	0.04			$	(0.10	)
Weighted average common shares outstanding — basic		116,983,265				47,058,489				114,102,308				39,712,251
Weighted average common shares outstanding — diluted		116,983,265				63,647,057				150,740,655				46,236,226

INDIE SEMICONDUCTOR, INC. PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited)
	June 30, 2022				December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	163,749			$	219,081
Restricted cash		383				383
Accounts receivable, net		15,835				13,842
Inventory, net		12,566				9,080
Prepaid expenses and other current assets		6,910				5,648
Total current assets		199,443				248,034
Property and equipment, net		11,900				11,090
Intangible assets, net		97,318				96,285
Goodwill		125,738				115,206
Operating lease right-of-use assets		10,345				—
Other assets and deposits		1,623				270
Total assets	$	446,367			$	470,885
Liabilities and stockholders' equity
Accounts payable	$	7,608			$	5,441
Accrued payroll liabilities		7,267				4,021
Accrued expenses and other current liabilities		14,325				14,622
Intangible asset contract liability		6,368				5,516
Deferred revenue		1,768				1,840
Current debt obligations		13,204				2,275
Total current liabilities		50,540				33,715
Long-term debt, net of current portion		4,795				5,618
Warrant liability		32,813				100,467
Intangible asset contract liability, net of current portion		9,419				12,452
Deferred tax liabilities, non-current		23,320				21,164
Operating lease liability, non-current		8,725				—
Other long-term liabilities		5,458				5,612
Total liabilities	$	135,070			$	179,028
Stockholders' equity
Preferred stock	$	—			$	—
Class A common stock		12				11
Class V common stock		3				3
Additional paid-in capital		527,807				514,891
Accumulated deficit		(193,818	)			(200,416	)
Accumulated other comprehensive loss		(8,452	)			(1,443	)
indie's stockholders' equity		325,552				313,046
Noncontrolling interest		(14,255	)			(21,189	)
Total stockholders' equity		311,297				291,857
Total liabilities and stockholders' equity	$	446,367			$	470,885

INDIE SEMICONDUCTOR, INC.
RECONCILIATION OF PRELIMINARY NON-GAAP MEASURES TO GAAP
(Unaudited)

GAAP refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This announcement includes historical non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. We believe that our presentation of historical non-GAAP financial measures provides useful supplementary information to investors. The presentation of historical non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP.

The reconciliations of our preliminary GAAP basis financial data to non-GAAP measures are as follows (in thousands, except share and per share amounts):

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Computation of non-GAAP gross margin:
GAAP revenue	$	25,755			$	9,180			$	47,754			$	17,294
GAAP cost of goods sold		15,178				5,319				29,370				10,167
Acquisition-related expenses		(1,920	)			—				(4,542	)			—
Share-based compensation		(13	)			—				(13	)			—
Non-GAAP gross profit	$	12,510			$	3,861			$	22,939			$	7,127
Non-GAAP gross margin		48.6	%			42.1	%			48.0	%			41.2	%

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Computation of non-GAAP operating loss:
GAAP loss from operations	$	(29,975	)		$	(18,503	)		$	(64,309	)		$	(26,609	)
Acquisition-related expenses		4,222				964				9,673				1,490
Share-based compensation		8,767				7,968				21,182				7,968
Non-GAAP operating loss	$	(16,986	)		$	(9,571	)		$	(33,454	)		$	(17,151	)

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Computation of non-GAAP net loss:
GAAP Net income (loss)	$	(5,304	)		$	12,988			$	8,402			$	23,349
Acquisition-related expenses		4,222				964				9,673				1,490
Share-based compensation		8,767				7,968				21,182				7,968
(Gain) loss from change in fair value of SAFEs		—				(2,500	)			—				(21,600	)
(Gain) loss from change in fair value of warrants		(20,301	)			(11,316	)			(67,654	)			(11,316	)
(Gain) loss from change in fair value of earn-out liabilities		—				(17,939	)			—				(17,939	)
(Gain) loss from change in fair value of contingent considerations		(3,584	)			100				(3,667	)			100
(Gain) loss from extinguishment of debt		—				(304	)			—				(304	)
Non-cash interest expense		150				97				150				198
Income taxes (benefit) expense		(869	)			57				(1,528	)			70
Non-GAAP net loss	$	(16,919	)		$	(9,885	)		$	(33,442	)		$	(17,984	)

	Three Months Ended June 30, 2022
Computation of non-GAAP share count:
Issued and outstanding Class A common stock		119,323,612
Escrow Shares		1,725,000
TeraXion Unexercised Options		1,287,212
ADK Minority Holders interests		26,382,703
Non-GAAP share count		148,718,527
Non-GAAP net loss	$	(16,919	)
Non-GAAP net loss per share	$	(0.11	)

Discussion Regarding the Use of Non-GAAP Financial Measures

Our earnings release contains some or all of the following financial measures that have not been calculated in accordance with United States Generally Accepted Accounting Principles (“GAAP”): (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating loss, (iii) non-GAAP net income (loss), (iv) non-GAAP share count and (v) non-GAAP net loss per share. As set forth in the “Unaudited Reconciliations of Non-GAAP Financial Measures” table, we derive such non-GAAP financial measures by excluding certain expenses and other items from the respective GAAP financial measure that is most directly comparable to each non-GAAP financial measure. Management may use these non-GAAP financial measures to, amongst other things, evaluate operating performance and compare it against past periods or against peer companies, make operating decisions, forecast for future periods and to determine payments under compensation programs. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods and competitors more difficult, obscure trends in ongoing operations or improve management’s ability to forecast future periods.

We provide investors with non-GAAP gross profit and gross margin, non-GAAP operating loss, non-GAAP net income (loss) and non-GAAP net income (loss) per share because we believe it is important for investors to be able to closely monitor and understand changes in our ability to generate income from ongoing business operations. We believe these non-GAAP financial measures give investors an additional method to evaluate historical operating performance and identify trends, an additional means of evaluating period-over-period operating performance and a method to facilitate certain comparisons of our operating results to those of our peer companies. We further believe these non-GAAP financial measures allow investors to assess the overall financial performance of our ongoing operations by eliminating the impact of (i) acquisition-related expenses (including acquisition-related professional fees and legal expenses, deemed compensation expense, amortization of acquisition-related intangibles and certain license rights, and expenses recognized in relation to changes in contingent consideration obligations), (ii) gains or losses recognized in relation to changes in the fair value of the simple agreements for future equity (“SAFEs”), warrants and contingent considerations issued by indie, and unrealized gains or losses from currency hedging contracts (iii) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (iv) share-based compensation, (v) gains and losses from extinguishment of debt, and (vi) income tax benefit (expenses). We believe that disclosing these non-GAAP financial measures contributes to enhanced financial reporting transparency and provides investors with added clarity about complex financial performance measures.

We do not report a GAAP measure of gross profit or gross margin because certain costs related to contract revenues are expensed as incurred and included in research and development expenses, and not in cost of sales, as it is not practicable for us to bifurcate these expenses. We derive and reconcile non-GAAP gross profit from the most relevant GAAP financial measures by subtracting cost of sales, adjusted for acquisition-related expenses, from revenue. We calculate non-GAAP operating loss by excluding from GAAP operating loss, any (i) acquisition-related expenses (including acquisition-related professional fees and legal expenses, deemed compensation expense, amortization of acquisition-related intangibles and expenses recognized in relation to changes in contingent consideration obligations) and share-based compensation. We calculate non-GAAP net income (loss) by excluding from GAAP net income (loss), any (i) acquisition-related expenses (including acquisition-related professional fees and legal expenses, deemed compensation expense, and amortization of acquisition-related intangibles and certain license rights, and expenses recognized in relation to changes in contingent consideration obligations), (ii) gains or losses recognized in relation to change in the fair value of the simple agreements for future equity (“SAFEs”), warrants and contingent considerations issued by indie, (iii) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (iv) share-based compensation, (v) gains and losses from the extinguishment of debt, and (vi) income tax benefit (expense). We calculate non-GAAP share count by adding to GAAP weighted average common shares outstanding: (i) Escrow Shares and (ii) ADK Minority Holders interest, which represents all shares issuable to vested minority equity interests held in Ay Dee Kay LLC upon exchange for indie Class A shares as described in the Form 10-Q. Non-GAAP net income (loss) per share is calculated by non-GAAP income (loss) divided by non-GAAP share count.

We exclude the items identified above from the respective non-GAAP financial measure referenced above for the reasons set forth with respect to each such excluded item below:

Acquisition-related expenses - including such items as, when applicable, amortization of acquired intangible assets and certain license rights, fair value adjustments to contingent consideration, fair value charges incurred upon the sale of acquired inventory, and acquisition-related professional fees and legal expenses because they are not considered by management in making operating decisions and we believe that such expenses do not have a direct correlation to our future business operations and thereby including such charges do not necessarily reflect the performance of our ongoing operations for the period in which such charges or reversals are incurred.

Share-based compensation - related to the non-cash compensation expense associated with equity awards granted to our employees. These expenses are not considered by management in making operating decisions and such expenses do not have a direct correlation to our future business operations.

Gain (loss) from change in fair values - because these adjustments (1) are not considered by management in making operating decisions, (2) are not directly controlled by management, (3) do not necessarily reflect the performance of our ongoing operations for the period in which such charges are recognized and (4) can make comparisons between peer company performance less reliable.

Non-cash interest expense - related to the amortization of debt discounts, warrants, and issuance costs because (1) these expenses are not considered by management in making decision with respect to financing decisions, and (2) these generally reflect non-cash costs.

Gain from extinguishment of debt - related to the gain from the PPP loan forgiveness and partially offset by the one-time debt termination fees and the acceleration of unamortized debt discounts and issuance costs as a result of the payoff of debt obligations. This net gain is not reflective of management’s operation decisions and are not expected to recur.

Income tax benefit (expense) - because such benefit (charge) does not result in a current period tax refunds (payments).

The non-GAAP financial measures presented should not be considered in isolation and are not an alternative for the respective GAAP financial measure that is most directly comparable to each such non-GAAP financial measure. Investors are cautioned against placing undue reliance on these non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures to arrive at these non-GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures are likely to have limited value for purposes of drawing comparisons between companies as a result of different companies potentially calculating similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles.

To the extent our disclosures contain forward-looking estimates of non-GAAP financial measures, these measures are provided to investors on a prospective basis for the same reasons (set forth above) we provide them to investors on a historical basis. We are generally unable to provide a reconciliation of our forward-looking non-GAAP measures because certain information needed to make a reasonable forward-looking estimate of such non-GAAP measures are difficult to predict and estimate and is often dependent on future events that may be uncertain or outside of our control and, therefore, is not available without unreasonable efforts. Such events may include unanticipated changes in our GAAP effective tax rate, unanticipated one-time charges related to asset impairments (fixed assets, inventory, intangibles, or goodwill), unanticipated acquisition-related expenses, unanticipated settlements, gains, losses and impairments and other unanticipated items not reflective of ongoing operations. Our forward-looking estimates of both GAAP and non-GAAP measures of our financial performance may differ materially from our actual results and should not be relied upon as statements of fact.

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Source: indie Semiconductor, Inc.

FAQ

What were indie Semiconductor's Q2 2022 revenue results?

indie Semiconductor reported Q2 2022 revenue of $25.8 million, representing a 181% increase year-over-year and a 17% increase sequentially.

How did indie Semiconductor's gross margin perform in Q2 2022?

The non-GAAP gross margin for Q2 2022 expanded to 48.6%, up 650 basis points year-over-year.

What is indie Semiconductor's outlook for Q3 2022?

indie Semiconductor anticipates Q3 2022 revenue growth of 140-150% year-over-year, aiming for an annualized run-rate of approximately $120 million.

What was indie Semiconductor's operating loss in Q2 2022?

The GAAP operating loss for Q2 2022 was $30 million, compared to $18.5 million for the same period last year.

What market opportunities is indie Semiconductor targeting?

indie Semiconductor is focused on capturing a significant share of the growing Autotech market, projected to be close to $50 billion.