Spectra7 Announces Preliminary First Quarter 2022 Revenue and Provides Business Update
Customer Orders Above $11 million with Unconstrained Customer Demand Continuing to Exceed $20 Million for 2022
Revenue for 1H Fiscal 2022 Expected to Increase Approximately 285% from 1H Fiscal Year 2021
San Jose, CA – April 7, 2022 – (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 selected and unaudited revenue results and a business update for the three month period ended March 31, 2022. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.
• Due to Covid-related business closures in China in late March, approximately $1.2 million in product that was expected to ship in Q1 is now expected to ship in early April 2022
• Preliminary Q1 revenue is expected to be approximately $2.0 million, reflecting the aforementioned pushout of shipments
• Full Q1 demand was greater than $6 million, and total customer orders on hand for 2022 now exceed $11 million
• Added five new hyperscale data center design-ins in the first quarter, for a total of 103 to date
• Fiscal 2022 unconstrained product demand based on customer indications continues to exceed $20.0 million1
• Revenue realization expected to improve in the second half of the year due to accelerated deployment of capital to secure greater supply, as well as assembly and test capacity1
“The sudden Covid-related quarantines and temporary closures in China, coupled with the associated logistics issues, affected our ability to ship $1.2 million of product towards the end of the first quarter,” said Raouf Halim, Chief Executive Officer. “The good news is that the majority of the approximately $1.2 million of product is expected to ship in early April. We are also accelerating deployment of capital from our October 2021 raise to secure supply for the remainder of the year.”
“Order backlog remains strong going into Q2, and unconstrained product demand still exceeds $20 million for the year. 1 Deployment of our GaugeChanger™ technology is driving this robust growth as customers seek superior performance at a lower cost and lower power consumption than other technologies currently available. Momentum in our business is positive, and I remain confident in our outlook for significant growth in 2022,” added Mr. Halim.
Preliminary 1H FY 2022 Revenue Outlook1
Constraints in the semiconductor supply chain are expected to last through the second quarter, which will limit near-term revenue. The Company is deploying a significant portion of capital generated from its CDN $14.8 million private placement completed in October 2021 to secure supply, as well as assembly and test capacity, to increase production volumes and grow revenue in the second half of the year.
While long-term trends in the business are favorable, continued supply chain disruptions and constraints lead the Company to expect that revenue for the first half of fiscal 2022 will be in the range of $5.5 million to $7.0 million. At the midpoint of the outlook, this represents an increase of approximately 285% from the first half of fiscal 2021. Non-IFRS operating expenses2 are expected to be between $4.5 million and $5.0 million, which includes the costs of the annual general meeting, the annual audit and headcount growth to support Spectra7’s production ramp to meet rapidly growing demand from its data center customers in the second half of fiscal 2022. The second half of fiscal 2021 non-IFRS operating expenses were approximately $4.0 million.