TIDMAWE
RNS Number : 8855S
Alphawave IP Group PLC
19 July 2022
Contains Inside Information
Q2 2022 Trading and Business Update
-- Expanding technology leadership with first 3nm design win
-- Five new end-customers including four in North America and EMEA, as well as six new design wins
-- Management remains confident in the outlook for the business and reiterates mid-term and long-term guidance,
despite difficult macro environment
-- Management reiterates confidence in closing of OpenFive transaction in 2022, pending regulatory approval
LONDON, United Kingdom and TORONTO, Ontario, Canada July 19,
2022 - Alphawave IP Group plc
(LN:AWE, "Alphawave IP", "Alphawave", the "Company"), a global
leader in high-speed connectivity for the world's technology
infrastructure, is pleased to publish its trading and business
update for the three months ended 30 June 2022.
US$m Q2 2022 Q2 2021 Change
-------- -------- -------
Licence and related 19.0 12.7 50%
------------------------------------------- -------- -------- -------
Potential future royalties 9.4 7.3 27%
------------------------------------------- -------- -------- -------
New Bookings (excluding VeriSilicon
and WiseWave multi-year subscription
licences) 28.4 20.0 42%
Additional design win activity - FSA 9.5 - n/a
drawdowns and China re-sale licences[1]
-
WiseWave multi-year subscription licences - 93.8 n/a
Number of end-customers (as at end
of period) 28 16
------------------------------------------- -------- -------- -------
Due to rounding, numbers presented in the table may not add up
to the totals provided and percentages may not precisely reflect
the absolute figures.
Tony Pialis, President and Chief Executive Officer of Alphawave
IP said: "Our increased pace in design wins and our continued
technology leadership in 3nm demonstrate the strong momentum of
Alphawave IP. Despite an uncertain macro environment, positive
secular growth trends in data infrastructure, such as data centers
and 5G, underpin a growing demand for our high-performance
connectivity solutions. This is why we continue to invest in the
business and remain confident about its long-term prospects."
John Lofton Holt, Executive Chairman of Alphawave IP said: "I am
proud of our business and technology team for their continued
execution, especially in North America and South Korea. Our focus
on connectivity technology for our blue-chip customer base, and a
strong balance sheet, provide a solid platform for continued
success."
Key highlights
Licence and related bookings in Q2 2022 were up 50%
year-on-year. Including estimates of potential future royalties[2],
new bookings excluding the WiseWave multi-year subscription licence
were up 42% year-on-year. Bookings in the second quarter were
driven by North American, South Korean and EMEA customers. Total
bookings in Q2 2022 of US$28.4 million were below the prior year
(Q2 2021: US$113.8 million) due to the multi-year subscription
licence agreement signed with WiseWave (US$93.8 million) in Q2
2021.
Cumulative bookings over the life of the Company[3] exceeded
US$400 million, of which over 50% corresponds to customers outside
of China.
Alphawave IP won five new end-customers in the quarter,
including two top-tier North American semiconductor companies,
bringing the total number of end-customers to 28.
Expanding Technology Leadership and Strong Customer Traction
Since 2017, the Company has demonstrated connectivity technology
leadership in 7nm, 6nm, 5nm, and 4nm technology. In Q2 2022,
Alphawave IP extended its leadership with a new design win in 3nm
technology. The Company expects further design wins in 3nm in the
second half of the year and is working with its foundry partners in
3nm and beyond.
During the quarter, the Company announced the availability of
two new Interconnect IP to their product portfolio. AresCORE16 is a
Die-to-Die parallel interface that further extends Alphawave's
chiplet leadership by enabling a new generation of chiplet
products. OptiCORE100 is a 112Gbps PAM4 optical
Serialiser-Deserialiser ("SerDes") that enables direct drive of
optics and includes advanced DSP techniques for receiving optical
waveforms. These two new products bring exciting new opportunities
for Alphawave IP to continue to help its customers solve the
increasingly complex connectivity challenges.
Alongside the year-on-year growth in new bookings (excluding
multi-year subscription licences) and a growing customer base, two
additional data points underline the strong level of customer
activity during the second quarter: Flexible Spending Accounts[4]
("FSA") drawdowns of US$5.6 million, and China (VeriSilicon)
reseller deals[5] of US$3.9 million. Both FSA and reseller deals
represent the conversion of customer commitments to design
wins.
Design win activity in the quarter was strong with six new
design wins, including five from new customers and one from a
repeat customer.
Alphawave now has six of the top ten semiconductor device
companies as customers[6], a reflection of its continued strength
in the data infrastructure markets that require the world's most
advanced connectivity technology.
Outlook
Based on current visibility, the Company expects continued
customer traction during the second half of the year. The
acquisition of OpenFive is proceeding as planned and is expected to
close in H2 2022, pending customary regulatory approvals.
Alphawave IP reiterates its mid-term and long-term outlook
communicated on 29 April 2022 in its 2021 full year results[7].
Despite the uncertain macroeconomic environment, our growing
pipeline reflects positive secular growth trends in data
infrastructure markets and the continued investment in next
generation connectivity solutions. This combined with our talented
team and strong balance sheet give us confidence in our future.
About Alphawave IP Group plc (LN:AWE)
Faced with the exponential growth of data, Alphawave IP's
technology services a critical need: enabling data to travel
faster, more reliably and with higher performance at lower power.
Alphawave IP is a global leader in high-speed connectivity for the
world's technology infrastructure. Our IP solutions meet the needs
of global tier-one customers in data centers, compute, networking,
AI, 5G, autonomous vehicles, and storage. Founded in Toronto,
Canada in 2017, by an expert technical team with a proven track
record in licensing semiconductor IP, our mission is to focus on
the hardest-to-solve connectivity challenges. To find out more
about Alphawave IP, visit: awaveip.com
Related Party Disclosures
There are no new related parties disclosed in this press
release.
###
Trademarks
All registered trademarks and other trademarks belong to their
respective owners.
Contact Information:
Alphawave IP Group John Lofton Holt, Executive ir@awaveip.com
plc Chairman +44 (0) 20 7717 5877
Daniel Aharoni, CFO
Jose Cano, Head of IR
--------------------- ------------------------------ -----------------------------
Brunswick Group Simone Selzer alphawave@brunswickgroup.com
Sarah West +44 (0) 20 7404 5959
------------------- ------------------------------ -------------------------------
Gravitate PR Lisette Paras alphawave@gravitatepr.com
Wynton Yu +1 415 528 0468
===================== ============================== =============================
[1] Both FSA (Flexible Spending Account) drawdowns and China
re-sale licences convert previously announced contractual
commitments included within bookings reported in prior periods to
new product design wins which will be recognised as revenue over
time.
[2] Our bookings comprise in some instances, our estimate of
potential future royalties. Our royalties are estimated based on
contractually committed royalty prepayments or, in limited
instances, on sensitised volume estimates provided by
customers.
[3] Since its inception in 2017.
[4] FSAs or Flexible Spending Accounts represent contracts with
customers who have committed to regular periodic payments. These
payments are not in respect of specific licences but can be used as
credit against future deliverables. FSA drawdowns represent the
design win value of transactions signed during the period, against
which FSA payments will be credited and will convert to revenue
over time.
[5] In February 2021, Alphawave IP signed a three-year exclusive
subscription reseller agreement with VeriSilicon with a minimum
value of US$54 million. Reseller deals represent the subsequent
licensing of IP by VeriSilicon to third parties in China and do not
constitute additional bookings for the Company as they are part of
the US$54 million minimum commitment.
[6] Semiconductor device companies ranked on market
capitalisation.
[7] Including the financial contribution from OpenFive, the
Company expects to reach revenues of between US$325m and US$360m in
2023. Longer-term, we expect to achieve annual revenue run rates in
excess of US$500m in 2024 and in excess of US$1bn by 2027.
Near-term margins will be impacted by OpenFive as we integrate and
scale that business, and we anticipate a 2023 adjusted EBITDA
margin of 32% to 36% with a steady increase thereafter as we focus
and integrate the business and realise the anticipated synergies.
Excluding OpenFive, standalone revenues are expected to be in line
with the guidance provided at IPO, namely $210m to $240m by 2023,
with an adjusted EBITDA margin of 50% to 60%.
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