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Spectra7 Announces Financial Results for Second Quarter 2024

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Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF) announced its Q2 2024 financial results. Key highlights include:

  • Revenue of $0.9 million, up from $0.8 million in Q1 2024 but down from $3.3 million in Q2 2023
  • Gross margin of 64%, improved from 41% in Q1 2024
  • Completed a private placement raising C$12.5 million
  • Eliminated C$11.7 million in long-term debt by converting debentures to equity

The company is focusing on advancing to commercial orders for its 100Gbps active copper cable products, with ongoing testing at data center customers. Despite lower revenue, Spectra7 has strengthened its balance sheet and is progressing on key product development initiatives.

Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF) ha annunciato i risultati finanziari del secondo trimestre del 2024. I punti salienti includono:

  • Ricavi di 0,9 milioni di dollari, in aumento rispetto a 0,8 milioni di dollari nel primo trimestre del 2024, ma in calo rispetto a 3,3 milioni di dollari nel secondo trimestre del 2023
  • Margine lordo del 64%, migliorato dal 41% nel primo trimestre del 2024
  • Completato un collocamento privato che ha raccolto 12,5 milioni di dollari canadesi
  • Eliminato 11,7 milioni di dollari canadesi di debito a lungo termine convertendo obbligazioni in azioni

L'azienda si sta concentrando sull'avanzamento verso ordini commerciali per i suoi prodotti di cavo in rame attivo da 100Gbps, con test in corso presso clienti di data center. Nonostante i ricavi più bassi, Spectra7 ha rafforzato il suo bilancio ed è in fase di avanzamento su importanti iniziative di sviluppo prodotto.

Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF) anunció los resultados financieros del segundo trimestre de 2024. Los aspectos destacados incluyen:

  • Ingresos de 0,9 millones de dólares, un aumento desde 0,8 millones en el primer trimestre de 2024, pero una disminución desde 3,3 millones en el segundo trimestre de 2023
  • Margen bruto del 64%, mejorado desde el 41% en el primer trimestre de 2024
  • Se completó un colocación privada que recaudó 12,5 millones de dólares canadienses
  • Eliminación de 11,7 millones de dólares canadienses en deuda a largo plazo convirtiendo obligaciones en acciones

La compañía se está enfocando en avanzar hacia pedidos comerciales para sus productos de cable de cobre activo de 100Gbps, con pruebas en curso en clientes de centros de datos. A pesar de los ingresos más bajos, Spectra7 ha fortalecido su balance y está avanzando en iniciativas clave de desarrollo de productos.

Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF)는 2024년 2분기 재무 결과를 발표했습니다. 주요 사항은 다음과 같습니다:

  • 수익 90만 달러로, 2024년 1분기 80만 달러에서 증가했으나, 2023년 2분기 330만 달러에서 감소했습니다
  • 총 마진 64%로, 2024년 1분기 41%에서 개선되었습니다
  • 1250만 캐나다 달러를 유치한 사모 펀드 완료
  • 장기 부채 1170만 캐나다 달러를 제거하고 전환사채를 주식으로 전환했습니다

회사는 100Gbps 능동 구리 케이블 제품에 대한 상업 주문 추진에 집중하고 있으며, 데이터 센터 고객을 대상으로 진행 중인 테스트가 있습니다. 수익이 감소했지만 Spectra7는 재무 상태를 강화하고 주요 제품 개발 이니셔티브를 진행 중입니다.

Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF) a annoncé ses résultats financiers pour le deuxième trimestre 2024. Les points forts comprennent :

  • Chiffre d'affaires de 0,9 million de dollars, en hausse par rapport à 0,8 million de dollars au premier trimestre 2024, mais en baisse par rapport à 3,3 millions de dollars au deuxième trimestre 2023
  • Marge brute de 64%, améliorée par rapport à 41% au premier trimestre 2024
  • Finalisation d'un placement privé ayant levé 12,5 millions de dollars canadiens
  • Élimination de 11,7 millions de dollars canadiens de dettes à long terme en convertissant des obligations en actions

L'entreprise se concentre sur l'avancement vers des commandes commerciales pour ses produits de câbles en cuivre actifs de 100Gbps, avec des tests en cours chez des clients de centres de données. Malgré une baisse des revenus, Spectra7 a renforcé son bilan et progresse dans des initiatives clés de développement de produits.

Spectra7 Microsystems Inc. (TSXV:SEV) (OTCQB:SPVNF) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht. Die wichtigsten Highlights sind:

  • Einnahmen von 0,9 Millionen US-Dollar, ein Anstieg von 0,8 Millionen US-Dollar im ersten Quartal 2024, aber ein Rückgang von 3,3 Millionen US-Dollar im zweiten Quartal 2023
  • Bruttomarge von 64%, verbessert von 41% im ersten Quartal 2024
  • Abschluss einer Privatplatzierung mit einem Erlös von 12,5 Millionen kanadischen Dollar
  • Eliminierung von 11,7 Millionen kanadischen Dollar an langfristigen Schulden durch Umwandlung von Anleihen in Eigenkapital

Das Unternehmen konzentriert sich darauf, kommerzielle Aufträge für seine 100Gbps aktiven Kupferkabelprodukte voranzutreiben, mit laufenden Tests bei Datacenter-Kunden. Trotz sinkender Einnahmen hat Spectra7 seine Bilanz gestärkt und arbeitet an wichtigen Produktentwicklungsinitiativen.

Positive
  • Completed private placement raising C$12.5 million, strengthening balance sheet
  • Eliminated C$11.7 million in long-term debt by converting debentures to equity
  • Gross margin improved to 64% from 41% in the previous quarter
  • Revenue increased to $0.9 million from $0.8 million in Q1 2024
Negative
  • Revenue decreased 74% year-over-year from $3.3 million in Q2 2023 to $0.9 million in Q2 2024
  • EBITDA loss widened to $1.7 million from $148,000 in Q2 2023
  • Basic and diluted loss per share increased to $(0.17) from $(0.03) in Q2 2023
  • Non-IFRS operating expenses increased to $2.5 million from $2.4 million in Q2 2023

Strengthened Balance Sheet with C$12.5 Million in New Capital in the Second Quarter, C$11.7 Million in Debt Eliminated

Advancing Key Data Center Testing Activity

SAN JOSE, Calif., Aug. 29, 2024 /PRNewswire/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leader in high-performance analog semiconductors for broadband connectivity markets, such as AI networks, hyperscale data centers, and AR/VR, today announced its financial results for the three and six months ended June 30, 2024. A copy of the unaudited interim consolidated financial statements for the three and six months ended June 30, 2024, and the corresponding management's discussion and analysis (the "MD&A") will be available under the Company's profile on www.sedarplus.ca. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.

Second quarter 2024 financial highlights

  • Second quarter 2024 revenue was $0.9 million, increased from $0.8 million in the first quarter 2024 and decreased from $3.3 million in the second quarter 2023.
  • Gross margin1 was 64%, compared to 41% in the preceding quarter and 63% in the prior year second quarter.
  • Non-IFRS operating expenses2 were $2.5 million, increased from $2.1 million in the first quarter 2024 and $2.4 million in the second quarter 2023.
  • Basic and diluted loss per share for the second quarter 2024 was $(0.17), compared with a basic and diluted loss per share of $(0.06) in the first quarter 2024 and $(0.03) in the second quarter 2023.
  • EBITDA3 loss for the second quarter was $1.7 million, compared with an EBITDA loss of $1.4 million for the first quarter 2024 and an EBITDA loss of $148,000 in the second quarter 2023.

The Company completed a private placement of units for gross proceeds of approximately C$12.5 million. Additionally, the Company eliminated C$11.7 million in long-term debt by converting its outstanding debentures into equity securities on May 15, 2024.

 "Spectra7 remains focused on advancing to commercial orders from top global datacenter customers for its new 100Gbps active copper cable products4. The Company is actively engaged in testing with data center and other customers, supported by our newly strengthened balance sheet," said Ron Pasek, Interim Chief Executive Officer.

NOTES:

1 Gross margin is a non-GAAP measure which is computed as revenue less cost of sales divided by revenue. Refer to "Revenue and Gross Margin" in the MD&A and the table below for reconciliation to measures reported in the Company's financial statements.


Three Months Ended June 30,


Six Months Ended June 30,



(In thousands)


(In thousands)


2024


2023


Change



2024


2023


Change



$


$


$

%


$


$


$

%

Revenue

862


3,266


(2,404)

(74 %)


1,678


6,401


(4,723)

(74 %)

Cost of sales

314


1,211


(897)

(74 %)


797


2,383


(1,585)

(67 %)

Gross profit

548


2,056


(1,507)

(73 %)


881


4,018


(3,137)

(78 %)

Gross margin %

64 %


63 %


1 %



53 %


63 %


(10 %)


2 Non-IFRS operating expenses is a non-GAAP measure which includes research and development, sales and marketing, general and administrative expenses and depreciation and amortization for capital equipment and right-of-use assets and excludes share-based compensation expense, non-recurring termination costs, interest and related financing costs, change in fair value of warrant liabilities, foreign exchange gain/loss and gain/loss from property and equipment disposal. Refer to "Non-GAAP Measures" in the MD&A and the table below for reconciliation to measures reported in the Company's financial statements.



in thousands



2022


2023


2024



Sep 30

Dec 31


 Mar 31

Jun 30

Sep 30

Dec 31


Mar 31

Jun 30



$

$


$

$

$

$


$

$













Total expenses - IFRS


2,936

3,210


3,053

3,330

3,086

4,479


2,575

9,866

Share‑based compensation


567

469


541

486

288

334


182

270

Interest on lease obligation of right-of-use assets


4

3


1

4

4

3


1

3

Accretion expense


463

425


370

389

411

493


538

142

Other income


-

-


-

(12)

(30)

(9)


-

10

Foreign exchange gain


(9)

354


(72)

57

(110)

143


(211)

27

Extingushment of convertible debt


-

-


-

-

-

-


-

6,922

Termination cost



-





-


-

-

Non-IFRS operating expenses


1,911

1,959


2,212

2,407

2,523

3,515


2,065

2,491



























in thousands



2022


2023


2024



Sep 30

Dec 31


 Mar 31

Jun 30

Sep 30

Dec 31


Mar 31

Jun 30



$

$


$

$

$

$


$

$













Research and development, net of investment
tax credits and including amortization of licenses


985

928


995

1,195

1,409

1,154


1,040

1,123

Sales and marketing


224

280


269

252

271

325


279

270

General and administrative


635

684


881

891

762

1,947


657

1,014

Depreciation of right-of-use assets


60

60


60

60

60

60


60

57

Depreciation of property and equipment


7

8


8

8

21

28


28

28

Non-IFRS operating expenses


1,911

1,959


2,212

2,407

2,523

3,515


2,065

2,491

3 EBITDA or earnings before interest, tax, depreciation, and amortization is a non-GAAP measure. EBITDA excludes share-based compensation, amortization, depreciation, interest, and tax expenses. Refer to "Non-GAAP Measures" in the MD&A and the table below for reconciliation to measures reported in the Company's annual financial statements.















in thousands



2022


2023


2024



Sep 30

Dec 31


 Mar 31

Jun 30

Sep 30

Dec 31


Mar 31

Jun 30



$

$


$

$

$

$


$

$













Net loss


(1,461)

(1,231)


(1,090)

(1,275)

(1,500)

(4,315)


(2,242)

(9,318)

Depreciation of right-of-use assets


60

60


60

60

60

60


60

57

Depreciation of property and equipment


7

8


8

8

21

28


28

28

Depreciation expense - COGS


31

35


35

30

31

31


32

32

Amortization - intangible assets


137

55


76

105

90

179


167

167

Share-based compensation


567

469


541

486

288

334


182

270

Interest on lease obligation of right-of-use assets


4

3


1

4

4

3


1

3

Accretion expense


463

425


370

389

411

493


538

142

Other income


-

-


-

(12)

(30)

(9)


-

10

Foreign Tax


-

(216)


-

-

-

(119)


-

-

Foreign exchange gain


(9)

354


(72)

57

(110)

143


(211)

27

Extingushment of convertible debt


-

-


-

-

-

-


-

6,922

Other income


-

-


-

-

-

-


-

-

EBITDA


(201)

(38)


(70)

(148)

(734)

(3,172)


(1,445)

(1,659)

4 This is forward-looking information and is based on a number of assumptions. See "Cautionary Notes" below.

ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high-performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centers and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and a technical support location in Dongguan, China. For more information, please visit www.spectra7.com. 

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY NOTES

Certain statements contained in this press release constitute "forward-looking statements". All statements other than statements of historical fact contained in this press release, including, without limitation, the Company's expectation that it will advance to commercial orders from top global datacenter customers for its new 100Gbps active copper cable products, and the Company's strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, the risk factors discussed in the Company's management's discussion and analysis for the year ended December 31, 2023.. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

For more information, please contact:

Matt Kreps, Managing Director
Darrow Associates Investor Relations
mkreps@darrowir.com  
214-597-8200

Spectra7 Microsystems Inc.
Dave Mier
Interim Chief Financial Officer
925-858-7011
ir@spectra7.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/spectra7-announces-financial-results-for-second-quarter-2024-302234559.html

SOURCE Spectra7 Microsystems Inc.

FAQ

What was Spectra7's revenue for Q2 2024?

Spectra7's revenue for Q2 2024 was $0.9 million, an increase from $0.8 million in Q1 2024 but a decrease from $3.3 million in Q2 2023.

How much capital did Spectra7 (SPVNF) raise in Q2 2024?

Spectra7 completed a private placement for gross proceeds of approximately C$12.5 million in Q2 2024.

What was Spectra7's (SPVNF) gross margin in Q2 2024?

Spectra7's gross margin in Q2 2024 was 64%, compared to 41% in the preceding quarter and 63% in the prior year second quarter.

How much debt did Spectra7 (SPVNF) eliminate in Q2 2024?

Spectra7 eliminated C$11.7 million in long-term debt by converting its outstanding debentures into equity securities on May 15, 2024.

SPECTRA7 MICROSYSTEMS INC

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