SAN
JOSE, Calif., July 18,
2023 /CNW/ -- (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 June 30, 2023 and its
outlook for second half of 2023. Unless otherwise indicated, all
dollar amounts in this press release are expressed in US
dollars.
"We expect to report second quarter revenues of $3.3 million, resulting in record revenue for the
first half 2023 of $6.4 million,
further building upon our exceptional growth in 2022. Additionally,
we expect to report a strong gross margin for the quarter of 63%,
which is consistent with a gross margin of 63% in first quarter of
2023.2 While these results demonstrate exciting
progress, we believe even more important opportunities lie ahead as
our hyperscale data center partners and customers ready for the
necessary upgrade to 800G and 1.6TB products needed to support
increasingly advanced data intensive applications such as AI and
ChatGPT. These technologies are expected to drive a new upgrade
cycle in data centers," 1 said Raouf Halim, Chief Executive Officer.
"Our customers are intensifying their test and qualification
activities centered around new switches that require 800G and 1.6TB
data rate interconnects – a perfect environment for Spectra7's
power and cost-efficient Active Copper Cable solutions (ACC)
designed specifically to meet top-of-the-rack and short-run
connectivity requirements. This build out is expected to result in
an estimated $1 billion ACC
connectivity market by 2027.3 We continue to expect this
process will generate orders from key data center customers in
North America and outside the U.S.
in late 2023."1
"Spectra7 is currently engaged with one of the major data center
operators to deploy Active Copper Cable solutions for their AI
clusters. While the data center operator is charting its plan, we
are preparing for the upcoming supply needs. We expect that this
will drive revenue growth in the coming quarters."1
2H FY 2023 Outlook1
The Company anticipates revenue for second half of 2023 to be in
the range of $5.5 million to
$7.0 million. The Company also
anticipates maintaining its efficient operating expense structure
and non-IFRS operating expenses4 for the 2H 2023 at a
range of $4.5 million and
$4.9 million (non-IFRS operating
expenses for 2H 2022 were $3.9
million).
RSU Grants
The Company announced the grant of such number of RSUs to
certain directors of the Company as is equal to C$43,474 divided by the closing price of the
common shares on the TSX Venture Exchange on the trading day after
publication of the Company's financial statements for the three and
six months ended June 30,
2023.
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 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 Company's management's discussion
and analysis for the three months ended March 31, 2023, which is available on SEDAR at
www.sedar.com, 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 six months ended June 30, 2023 will be provided in the Company's
management's discussion and analysis for that period.
3 Spectra7 internally generated model based on
650Group silicon chipsets for Ethernet optical transceivers and
active cable alternatives posted July
2023.
4 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 March 31,
2023, which is available on SEDAR at www.sedar.com, 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 Company's expected revenue and gross margin
in the second quarter of 2023, the expected datacenter upgrade
cycle, the expected size of the ACC connectivity market by 2027,
the expected orders from datacenter customers in North America, the expected acceleration in
the data center market, the Company's expected revenue in the
second half of 2023, and the Company's ability to maintain its
efficient operating expense structure and working capital
management 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.