Adesto Technologies: Fiscal 4Q15 Financial Results

Adesto Technologies Corporation, provider of application-specific, feature-rich, ultra-low power non-volatile memory products, announced financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter and Recent Highlights:

• Revenue increased 14.1% year-over-year and 6.1% sequentially to $11.8 million;
• Gross margin was 45.6%, compared to 40.5% in the fourth quarter of 2014 and 45.2% in the third quarter of 2015;
• Adjusted EBITDA for the fourth quarter of 2015 was a loss of $494,000, compared to a loss of $442,000 in the fourth quarter of 2014 and a loss of $436,000 in the third quarter of 2015; and
• Launched a new line of extended voltage range Fusion XV serial flash memory products.

Full Year 2015 Highlights:

• Revenue increased 4.3% to $43.3 million;
• Gross margin increased to 42.7% from 38.4% in 2014;
• Secured 135 new design wins compared to 65 in 2014 and 32 in 2013; and
• Completed an initial public offering in October 2015, raising approximately $22.1 million in net proceeds.

“We ended the year strong with fourth quarter revenue growing 14.1% over the prior year period and gross margin above 45%,” said Narbeh Derhacobian, president and CEO. “Revenue growth was driven by an increasing number of design wins ramping into production across our industrial, consumer and communications markets. We also more than doubled design wins year-over-year to 135 in 2015, creating a strong foundation for continued growth in 2016 and beyond.

“Key to our revenue and design win success are the differentiated features of our non-volatile memory solutions, including ultra-low power, high speed, reduced energy consumption and integrated intelligence. We believe these features are also particularly critical for the next-generation memory requirements of IoT and wearable applications.

“Also throughout the year, we made significant progress on our product roadmap in order to increase our addressable market opportunities. This includes the expansion of product densities, integration of enhanced feature sets and smaller form factors for targeted applications, combined with further traction for our CBRAM devices, the first commercially available resistive RAM technology.

“In summary, I believe our strong design win momentum, expanding product offerings and increasing market penetration have positioned us well for continued growth in the coming year.”

Fourth Quarter 2015 Results

• Revenue in the quarter ended December 31, 2015 was $11.8 million, an increase of 14.1% from $10.4 million in the fourth quarter of 2014 and an increase of 6.1% from $11.1 million in the third quarter of 2015.
• Gross margin in the fourth quarter of 2015 was 45.6%, compared to 40.5% in the fourth quarter of 2014 and 45.2% in the third quarter of 2015. The year-over-year increase in gross margin was due primarily to favorable product mix and the benefits from product cost improvements.
• GAAP net loss in the fourth quarter of 2015 was $3.3 million, or $0.32 per share, compared to GAAP net loss of $1.4 million, or $2.50 per share, in the prior year quarter and GAAP net loss of $1.1 million, or $1.90 per share, in the prior quarter.
• Adjusted EBITDA for the fourth quarter was a loss of $494,000, compared to a loss of $442,000 in the fourth quarter of 2014 and a loss of $436,000 in the third quarter of 2015.
• On a non-GAAP basis, net loss in the fourth quarter of 2015 was $0.9 million, or $0.07 per share, compared to a net loss of $1.2 million, or $0.12 per share, in the fourth quarter of 2014 and a net loss of $1.1 million, or $0.12 per share, in the third quarter of 2015.
• A reconciliation of our GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.
• Cash and cash equivalents totaled $23.1 million as of December 31, 2015, compared to $6.0 million as of December 31, 2014.

Business Outlook
For the first quarter of 2016, the company expects revenue to range between $11.8 million and $12.0 million. Gross margin is expected to be between 43% and 45%, and operating expenses are expected to range between $8.0 million and $8.3 million. For the full year, the company expects revenue growth in excess of 30% based on its current design win pipeline and customer activity.