Spectra7 Announces Preliminary Third Quarter 2023 Revenue and Updates Second Half of 2023 Outlook

Rhea-AI Summary

Spectra7 Microsystems Inc. announces preliminary unaudited revenue results for Q3 2023 and updates outlook for the second half of 2023. Q3 revenues expected to be $3.1 million with operating expenses of $2.5 million. Second half revenue outlook revised to $6.0 million to $6.8 million. ACC connectivity market opportunity estimated to reach $1 billion by 2027.

Positive

• Spectra7 expects Q3 revenues of $3.1 million, operating expenses of $2.5 million, and second half revenue outlook of $6.0 million to $6.8 million. ACC connectivity market opportunity estimated to reach $1 billion by 2027.

Negative

• None.

SAN JOSE, Calif., Oct. 25, 2023 /PRNewswire/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, today announced preliminary unaudited revenue results for the three months ended September 30, 2023 and updated its outlook for the second half of 2023. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.

"We expect to report third quarter revenues of $3.1 million and operating expenses of approximately $2.5 million and are updating our second half revenue outlook to between $6.0 million and $6.8 million as we continue to build upon our technology leadership position in ultra-high-speed cabling for datacenters and hyperscalers¹," said Raouf Halim, Chief Executive Officer.

"We continue to see progress with our hyperscale customers as they move toward leading edge 800G and 1.6TB data rate interconnects deployed in the most advanced implementations, such as artificial intelligence. Hyperscalers are also increasingly sensitive to the high power requirements for other cabling options, which can exceed the power required by the switch itself. Spectra7's ACC cables provide a unique solution to this challenge and reduce both the capital cost and operating cost of a hyperscale data center. We believe the ACC connectivity market opportunity is estimated to reach $1 billion by 2027²," said Mr. Halim.

2H FY 2023 Outlook¹

The Company anticipates revenue for the second half of 2023 to be in the range of $6.0 million to $6.8 million, updated from a range of $5.5 million to $7.0 million. The Company also anticipates maintaining its efficient operating expense structure and non-IFRS operating expenses³ for 2H 2023 at a range of $4.5 million to $4.9 million (non-IFRS operating expenses for 1H 2023 were $4.6 million).

Notes:
¹ This is forward-looking information and is based on a number of assumptions, which include the current and anticipated customer purchase orders received, supply outlook and anticipated operational expenditures. See "Cautionary Notes".
² Spectra7 internally generated model based on 650Group silicon chipsets for Ethernet optical transceivers and active cable alternatives posted July 2023. This is forward looking information. See "Cautionary Notes."
³ 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 expenses, 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 Company's management's discussion and analysis for the three months ended June 30, 2023, which is available on SEDAR+ at www.sedarplus.ca, for a reconciliation to measures reported in the Company's financial statements in the previous quarter. A reconciliation to measures reported in the Company's financial statements for the three and nine months ended September 30, 2023 and for the year ended December 31, 2023 will be provided in the Company's management's discussion and analysis for those periods.

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 expected datacenter upgrade cycle, the expected size of the ACC connectivity market by 2027, the Company's expected revenue in the second half of 2023, and the Company's ability to maintain its efficient operating expense structure and non-IFRS operating expenses 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, 2022. 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
Darrow Associates
214-597-8200
ir@spectra7.com

Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
ir@spectra7.com

 

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SOURCE Spectra7 Microsystems Inc.

FAQ

What are Spectra7's Q3 revenue results?

Spectra7 expects Q3 revenues of $3.1 million.

What is Spectra7's updated outlook for the second half of 2023?

Spectra7 revised its second half revenue outlook to $6.0 million to $6.8 million.

What is the estimated market opportunity for ACC connectivity?

The ACC connectivity market opportunity is estimated to reach $1 billion by 2027.