Achronix Announces Record Second Quarter 2021 Financial Results and Business Highlights

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Jul 21, 2021, 16:05 ET

SANTA CLARA, Calif., July 21, 2021 /PRNewswire/ -- Achronix Semiconductor Corporation, a leader in high-performance field-programmable gate arrays (FPGAs) and embedded FPGA (eFPGA) IP, today announced financial results for the second quarter of 2021, ending June 30, 2021.

Financial Highlights:

Revenue increased to $34.7 million from $13.9 million in the second quarter of 2020.
Gross margin expanded to 82%, compared to 80% in the prior year's quarter.
GAAP operating expenses were $17.3 million, which included $4.1 million in deferred offering costs.
GAAP net income improved to $12.2 million, or $0.26 per diluted share, compared to a net loss of $0.3 million, or ($0.05) per share, in the second quarter of 2020.
Non-GAAP net income was $12.0 million, or $0.25 per diluted share, compared to a net income of $0.3 million, or $0.04 per diluted share, in the year-ago quarter.
Cash, cash equivalents and restricted cash increased to $45.8 million.

Business Highlights:

Continued customer sample shipments of latest Speedster®7t high-performance data acceleration FPGAs.
Began shipping VectorPath™ PCIe form factor acceleration cards that include new 7nm Speedster 7t1500 FPGA devices.
Announced a partnership with Napatech to create solutions that combine Speedster7t FPGAs with Napatech's software to deliver the optimal mix of price, performance, power and feature set for SmartNIC designs.
Closed new Speedcore™ eFPGA contract in the Fintech market segment and shipped Speedcore IP for first automotive application.

Robert Blake, Achronix's President and Chief Executive Officer, commented, "We continued to build on our strong first quarter results by posting 16% sequential revenue growth in the second quarter, driven by increased customer demand for our Speedster FPGAs. We are seeing strong design activity for our latest Speedster and Speedcore IP products across multiple market segments, including data center networking, high-performance cloud computing and automotive to name a few. Also during the quarter, we continue to rollout shipments of customer samples on our Speedster7t FPGAs and VectorPath acceleration cards. Testing of these new devices is going well as we work to bring multiple variants of the family to market and advance toward production shipments by year-end."

Blake concluded by stating, "With the strong momentum we have generated across our business and the significant growth opportunities that lie ahead, we believe Achronix is well positioned for a public market debut and remain focused on driving growth and profitability in the quarters and years ahead."

About Achronix Semiconductor Corporation
Achronix Semiconductor Corporation is a fabless semiconductor corporation based in Santa Clara, California, offering high-end FPGA-based data acceleration solutions, designed to address high-performance, compute-intensive and real-time processing applications. Achronix is the only supplier to have both high-performance and high-density standalone FPGAs and licensed eFPGA solutions. Achronix FPGA and eFPGA IP offerings are further enhanced by ready-to-use accelerator cards targeting AI, machine learning, networking and data center applications. All Achronix products are fully supported by a complete and optimized range of Achronix software tools called ACE, which enables customers to quickly develop their own custom applications. Achronix has a global footprint, with sales and design teams across the U.S., Europe and Asia. For more information, please visit www.achronix.com.

Non-GAAP Results
We present non-GAAP supplemental performance measures in this press release. We have presented this financial information because we believe the exclusion of non-cash charges allows for a more relevant comparison of our results of operations to other companies used by industry analysts and investors to compare our performance against that of our peer group and they provide a useful measure for period-to-period comparisons of our core operating performance.

We use non-GAAP financial measures to help us make strategic decisions, establish budgets and operational goals for managing our business, analyze our financial results, and evaluate our performance. We also believe that the presentation of non-GAAP financial measures provides an additional tool for investors to use in comparing our core business and results of operations over multiple periods with other companies in our industry, many of which present similar non-GAAP financial measures to investors. However, non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. Non-GAAP financial measures should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with GAAP.

A reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this release.

In the second quarter of 2021, non-GAAP gross profit was $28.3 million, or 82% of revenue, non-GAAP operating expenses were $16.2 million, or 47% of revenue, non-GAAP income from operations was $12.0 million, or 35% of revenue and non-GAAP net income was $12.0 million, or $0.25 per diluted share.

Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words "intend," "expect," "estimate," "project," "potential," "future," "may," "will," "would," "will be," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. All statements, other than statements of present or historical fact included in this press release, such as its strategy, future operations, estimated financial position, estimated revenue growth, prospects and pipeline expectations, estimated market growth, estimated backlog, plans and objectives of management and plans to become a public company are forward-looking statements. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to, risks related to new accounting pronouncements or changes in accounting guidance; changes in domestic and foreign business, market, financial, political, and legal conditions; the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; risks related to the rollout of Achronix's business and the timing of expected business milestones; the effects of competition on Achronix's business; the effects of the cyclical nature of the semiconductor industry on Achronix's business; risks related to Achronix's customer concentration; the risks to Achronix's business if internal processes and information technology systems are not properly maintained; risks associated with Achronix's operational dependence on independent contractors and third parties; risks associated with Achronix's reliance on certain suppliers for, among other things, silicon wafers; risks and uncertainties related to the ongoing COVID-19 pandemic; risks and uncertainties related to Achronix's international operations, including possible restrictions on cross-border investments which could harm Achronix's financial position; and risks associated with Achronix's ability to develop new products and adapt to new markets. The foregoing list of factors is not exhaustive. There may be additional risks that Achronix does not presently know, or that Achronix currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements as predictions of future events, and Achronix assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable law.

Trademarks
Achronix and Speedster are registered trademarks, and Speedcore and Speedchip are trademarks of Achronix Semiconductor Corporation. All other brands, product names and marks are the property of their respective owners.

Contacts
For Achronix:
[email protected]
[email protected]

ACHRONIX SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar in thousands, except shares and per share amounts)
(Unaudited)

			Three Months Ended		Six Months Ended
			June 30,		June 30,
			2021	2020	2021	2020

Revenue:
	Product		$ 33,812	$ 13,672	$ 59,416	$ 18,888
	Licensing		869	241	5,118	487
		Total revenue	34,681	13,913	64,534	19,375

Cost of revenue			6,367	2,736	12,994	4,159

Gross profit			28,314	11,177	51,540	15,216

Operating expenses
	Research and development		8,280	6,973	15,862	13,538
	Sales and marketing		2,890	1,980	5,479	3,925
	General and administrative		6,082	1,025	9,464	1,998
		Total operating expenses	17,252	9,978	30,805	19,461

	Income (loss) from operations		11,062	1,199	20,735	(4,245)
	Total other income (expense), net		1,061	(1,476)	250	(1,356)

	Income (loss) before income tax expenses		12,123	(277)	20,985	(5,601)
	Provision for income tax		(53)	21	46	44

Net income (loss)*			$ 12,176	$ (298)	$ 20,939	$ (5,645)

Net income (loss) per share
	Basic		$ 0.66	$ (0.05)	$ 2.23	$ (0.91)
	Diluted		$ 0.26	$ (0.05)	$ 0.53	$ (0.91)

Weighted - average shares used in computing net income per share:
	Basic		18,495	6,226	9,370	6,226
	Diluted**		47,278	6,226	39,511	6,226

* Net income does not exclude undistributed earnings attributable to participating securities.

**Diluted shares include options and warrants on an as-if-converted basis and exclude redeemable preferred stocks.

ACHRONIX SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP NET INCOME (LOSS)
TO NON-GAAP MEASURES
(Dollar in thousands, except shares and per share amounts)
(Unaudited)

			Three Months Ended		Six Months Ended
			June 30,		June 30,
			2021	2020	2021	2020
Non-GAAP gross margin
GAAP gross profit			$ 28,314	$ 11,177	$ 51,540	$ 15,216
GAAP gross margin			82%	80%	80%	79%

Stock-based compensation expense - cost of revenue			32	20	65	40

Non-GAAP gross profit			$ 28,347	$ 11,198	$ 51,606	$ 15,257
Non-GAAP gross margin			82%	80%	80%	79%

Non-GAAP Operating income (loss)
GAAP operating income (loss)			$ 11,062	$ 1,199	$ 20,735	$ (4,245)
Stock-based compensation expense
	Cost of revenues		32	20	65	40
	Research and development		306	104	557	211
	Sales and marketing		242	120	382	220
	General and administrative		318	108	602	220
		Total stock-based compensation expense	898	352	1,606	691
Non-GAAP operating income (loss)			$ 11,960	$ 1,551	$ 22,341	$ (3,554)

Non-GAAP net income
GAAP net income (loss)			$ 12,176	$ (298)	$ 20,939	$ (5,645)

Stock-based compensation expense			898	352	1,606	691
Change in fair value of warrant liability			(1,095)	222	(328)	(118)

Non-GAAP net income (loss)			$ 11,979	$ 276	$ 22,217	$ (5,072)

GAAP basic earnings per share			$ 0.66	$ (0.05)	$ 2.23	$ (0.91)
Effect of non-GAAP adjustments on basic earnings per share			(0.01)	0.09	0.14	0.09
Non-GAAP basic earnings per share			$ 0.65	$ 0.04	$ 2.37	$ (0.81)

GAAP diluted earnings per share			$ 0.26	$ (0.05)	$ 0.53	$ (0.91)
Effect of non-GAAP adjustments on diluted earnings per share			(0.00)	0.09	0.03	0.09
Non-GAAP diluted earnings per share			$ 0.25	$ 0.04	$ 0.56	$ (0.81)

Weighted - average shares used in computing net income (loss) per share:
	Basic		18,495	6,226	9,370	6,226
	Diluted*		47,278	6,226	39,511	6,226

*Diluted shares include options and warrants on an as-if-converted basis and exclude redeemable preferred stocks

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2021	2020	2021	2020
Adjusted EBIT
GAAP net income (loss)	$ 12,176	$ (298)	$ 20,939	$ (5,645)

Stock-based compensation expense	898	352	1,606	691
Total other income (expense), net	(1,061)	1,476	(250)	1,356
Provision for income tax	(53)	21	46	44
Adjusted EBIT	$ 11,960	$ 1,551	$ 22,341	$ (3,554)

In addition to disclosing financial results calculated in accordance with U. S. generally accepted accounting principles (GAAP), the operating
results presented contain non-GAAP financial measures that exclude the income statement effects of stock-based compensation expense
and expenses related to the change in fair value of our redeemable preferred stock warrants.

Management believes it is useful to provide these non-GAAP financial measures and a reconciliation to comparable GAAP financial measures
as we believe non-GAAP measures provide useful supplemental information for investors to evaluate our operating results in the same manner
as used by industry research analysts, all of whom present non-GAAP projections in their published reports. As such, non-GAAP measures
provided by Achronix facilitate a more direct comparison of its performance with the financial reports published by the industry analysts.
The items reconciling GAAP financial measures to non-GAAP financial measures and additional comments and the usefulness of each item are
set forth below:

(1)	Stock-based compensation is excluded by management when evaluating operating activities and for strategic decision making, forecasting
	future results and evaluating current performance. Management believes that utilizing non-GAAP financial measures that exclude this
	non-cash item is useful in providing an alternate measure that excludes the variability caused by different methodologies and subjective
	assumptions used in the valuation of equity awards across different companies.

(2)	Redeemable preferred stock warrant is excluded from the internal analysis of Achronix's operations and management does not view this
	non-cash expense as reflective of the business' current performance. Management believes that utilizing non-GAAP financial measures
	that exclude this non-cash item is useful in providing an alternate measure that excludes the variability caused by such item.

Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other
companies' financial information and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP.

ACHRONIX SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar in thousands)

			June 30,	December 31,
			2021	2020
			(unaudited)	(audited)
Assets
Current assets:
	Cash and cash equivalents		$ 40,613	$ 38,546
	Restricted Cash		5,145	5,011
	Accounts receivable, net		15,886	16,900
	Inventories		14,174	2,116
	Prepaid expenses and other current assets		1,944	2,251
		Total current assets	77,762	64,824

Property and equipment, net			10,039	3,723
Operating lease assets, net			5,722	-
Intangible assets, net			21,477	16,432
Other current assets			600	1,247
		Total assets	$ 115,600	$ 86,226


Liabilities, redeemable convertible preferred shares and stockholders' equity (deficit)
Current liabilities:
	Accounts payable		$ 3,442	$ 5,938
	Accrued liabilities		13,942	13,414
	Operating lease liabilities		1,236	-
	Deferred revenue		2,540	4,176
		Total current liabilities	21,160	23,528

	Preferred stock warrant liability		3,983	4,311
	Deferred revenue - noncurrent		4,942	2,800
	Operating lease liabilities - noncurrent		2,317	-
	Other noncurrent liabilities		9,619	6,125

		Total liabilities	$ 42,021	$ 36,764

Redeemable convertible preferred stock			$ 320,916	$ 320,916

Stockholders' equity (deficit):
	Common stock		18	9
	Additional paid-in capital		9,151	5,983
	Currency translation adjustment		(86)	(87)
	Accumulated deficit		(256,420)	(277,359)
	Total stockholders' equity (deficit)		(247,337)	(271,454)
		Total liabilities, redeemable convertible preferred shares and stockholders' equity (deficit)	$ 115,600	$ 86,226