TIDMAWE
RNS Number : 0146D
Alphawave IP Group PLC
17 October 2022
Q3 2022 Trading and Business Update
-- Extending technology leadership with a second 3nm design win
-- Strong Q3 trading and design wins in the quarter reflect our
hybrid business model, combining IP and custom silicon
-- First time consolidation of OpenFive into the Group, from 1 September 2022
-- Management remains confident in the outlook for the business
and reiterates stand-alone ([1]) mid-term and long-term guidance,
despite difficult macro environment
LONDON, United Kingdom and TORONTO, Ontario, Canada 17 October
2022 - Alphawave IP Group plc (LN:AWE, "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 September 2022.
US$m Q3 2022 Q3 2021 Change
-------- -------- -------
Licence and NRE 57.8 21.5 169%
------------------------------------------- -------- -------- -------
Royalties and Silicon Orders 22.2 1.8 nm
------------------------------------------- -------- -------- -------
New Bookings (excluding VeriSilicon
and WiseWave multi-year subscription
licences) 80.0 23.3 245%
Additional design win activity - FSA
drawdowns and China re-sale licences[2] 8.5 3.9 118%
WiseWave multi-year subscription licences - - nm
Number of end-customers (as at end
of period)[3] 46 21 nm
------------------------------------------- -------- -------- -------
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: "During the third quarter, we continued to see strong
design win momentum, particularly in North America. Alongside this,
we extended our technology leadership with a second 3nm design win
and are already seeing the benefits of the greater scale of the
hybrid business model in which we can further monetise our
differentiated IP through custom silicon. With an enhanced product
portfolio of high-speed connectivity and increasingly broader
customer base, we are confident in the long-term growth potential
of our business".
John Lofton Holt, Executive Chairman of Alphawave IP said: "The
level of bookings in the quarter reflects the strength of our
technology combined with the ongoing strong execution of the team.
Our continued leadership in the most advanced technologies and our
talented team underpin the long-term growth potential of our
business. We are working hard to deliver on our plans and create
long-term value for our shareholders."
Changes to Reporting of Bookings Including OpenFive
We have consolidated the acquired OpenFive business from 1
September 2022. As a combined business we bring a broader IP
portfolio and engineering expertise in high-speed connectivity to
customers in digital infrastructure markets. This, combined with a
growing customer base and the greater scale of the hybrid business
model will help us drive sustainable long-term revenue growth and
create value for shareholders.
The following table summarises how each type of booking has been
mapped into the new bookings classifications:
Alphawave OpenFive New Alphawave
==========================================================
Type Includes Type Includes Type Notes Includes
---------- -------------------- -------- ------------------------------------------------ ---------- ----------- --------------------------------------------------
Licence IP Licence Includes
and * IP licensing, Licence * IP licensing, NRE and support and NRE IP * IP licensing NRE and support
related NRE and support licensing,
NRE and
* IP royalties support * Custom silicon NRE
of
combined
business * Other custom silicon (not volume dependent)
Not volume
dependent
-------- ------------------------------------------------
Custom
silicon * IP licensing, NRE and support
* Custom silicon NRE
* Other custom silicon
---------- -------------------- -------- ------------------------------------------------ ---------- ----------- --------------------------------------------------
Potential - IP royalties Custom Royalties Volume
future silicon * Custom silicon revenue (finished product) and dependent * IP royalties
royalties silicon
orders
* Custom silicon revenue (finished product)
---------- -------------------- -------- ------------------------------------------------ ---------- ----------- --------------------------------------------------
Key Highlights
Licence and Non-recurring Engineering ("NRE") bookings in Q3
2022 were up 169% year-on-year. Including estimates of potential
future royalties[4] and silicon orders, new bookings excluding the
WiseWave multi-year subscription licence were up 245% year-on-year.
Bookings in the third quarter were driven by North American and
Chinese customers[5].
Within the first month after closing the acquisition of OpenFive
we secured a leading storage design win that leveraged both
Alphawave's IP as well as the custom silicon capabilities acquired
with OpenFive.
Cumulative bookings over the life of the Company[6] exceeded
US$480 million.
Expanding Technology Leadership and Strong Customer Traction
Since 2017, the Company has demonstrated connectivity technology
leadership in 7nm, 6nm, 5nm, and 4nm technology. In Q3 2022,
Alphawave IP extended its leadership with a second design win in
3nm technology. The Company expects further design wins in 3nm and
is working with its foundry partners in 3nm and beyond.
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 third quarter: Flexible Spending Accounts ([7])
("FSA") drawdowns of US$3.0 million, and China (VeriSilicon)
reseller deals ([8]) of US$5.5 million. Both FSA and reseller deals
represent the conversion of customer commitments to design
wins.
Design win activity in the quarter was strong with seven new
design wins, including five from new customers and two from repeat
customers. In the quarter we built on the advantages of the hybrid
business model with four new custom silicon wins in September. Our
hybrid model enables the business to generate larger revenue
streams by capturing the full value embedded in our custom silicon
offering.
Alphawave has six of the top ten semiconductor device companies
as customers[9], 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 last quarter of the year.
Alphawave IP reiterates its stand-alone mid-term and long-term
outlook communicated on 21 September 2022 in its interim results
for H1 2022[10]. 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.
Further details on the pro forma 2023 outlook and long-term
financial model, including the acquisition of Banias Labs and the
multi-year agreement with a leading North American hyperscaler[11],
will be communicated at our Capital Markets Day on 13 January
2023.
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 and custom silicon
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
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 +1 415 420 8420
===================== =============================== ===========================
[1] Stand-alone outlook excludes the acquisition of Banias Labs
and the multi-year agreement with a leading North American
hyperscaler announced on 13 October 2022.
[2] 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.
[3] Includes customers from OpenFive who were not already
customers of Alphawave and who signed contracts from 1 September
2022.
[4] 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.
[5] These Chinese customers are out of scope from the WiseWave
and VeriSilicon agreements.
[6] Since its inception in 2017.
[7] 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.
[8] 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.
[9] Semiconductor device companies ranked on market
capitalisation.
[10] 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%.
[11] Communicated on 13 October 2022
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFFFFLIDLSLIF
(END) Dow Jones Newswires
October 17, 2022 02:00 ET (06:00 GMT)
Alphawave Ip (LSE:AWE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alphawave Ip (LSE:AWE)
Historical Stock Chart
From Apr 2023 to Apr 2024