Investor Presentation

Transcription

1 Investor Presentation November Peterson Way Santa Clara, California

2 Safe Harbor Statement Forward-Looking Statements: This presentation and the accompanying oral presentation contain forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward looking statements, including, but not limited to: any projections of addressable market size, market trends and market opportunities, customer growth, design win growth, product availability, technology developments, or other future events; any statements about historical results that may suggest future trends for our business; any statements regarding our plans, strategies or objectives with respect to future operations; any statements regarding future economic conditions; and any statements of assumptions underlying any of the foregoing. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including, but not limited to: market adoption of our CBRAM-based products; our limited operating history; our rate of growth; our ability to predict customer demand for our existing and future products and to secure adequate manufacturing capacity; our ability to manage our growth; our ability to hire, retain and motivate employees; the effects of competition, including price competition; technological, regulatory and legal developments; and developments in the economy and financial markets. These factors, together with those incorporated by reference into the registration statement (including a base prospectus) that we filed, and the preliminary prospectus supplement that we intend to file, with the Securities and Exchange Commission ( SEC ) for the offering to which this presentation relates, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although our management believes that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations, except as required by law. In addition to the U.S. GAAP financials, this presentation includes certain non-gaap financial measures. The non-gaap measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP. There are a number of limitations related to the use of these non-gaap financial measures versus their nearest GAAP equivalent. First, non-gaap gross margin, operating expenses, operating loss and net loss are not substitutes for GAAP gross margin, operating expenses, operating loss and net loss, respectively. These non-gaap financial measures exclude certain recurring, non-cash charges such as stock-based compensation and amortization of acquisition-related intangible assets. Stockbased compensation has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and is an important part of our employees compensation affecting their performance. Furthermore, while depreciation and amortization and amortization of acquisition-related intangible assets expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. Finally, other companies may calculate non-gaap financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-gaap financial measures as tools for comparison. See Appendix for a reconciliation between each non-gaap financial measure and its nearest U.S. GAAP equivalent. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. Any offer, if at all, will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. 2

3 Company Overview Leading Provider of Application-Specific Semiconductors and Embedded Systems for the IoT Era Our customers embed our innovative technologies into their solutions to enable seamless access to data and control of things in the connected world. Founded: 2006, Silicon Valley, CA Publicly Traded: IOTS Over 100 Products and Over 300 Million Units Shipped Over 2,000 Diversified Customers Long-term Supplier to Tier 1 OEMs 3

4 Relevance in World of Connected Things 4

5 Company Timeline Company Founded To Commercialize an Ultra Low-Power Memory Technology (Resistive RAM) Brings First RRAM Products to the Market Acquires Atmel s Serial Flash Business Introduces Fusion Family for BLE Applications Initial Public Offering (Q4 15) Introduces EcoXiP for High Performance MCUs DataFlash-L for Smart Home MavriqCM for Camera Modules Acquisitions Enhances Product Offerings Expands SAM Expands Vertically in Value Chain Strengthens Position in Industrial IoT

6 Sense, Control, Store, Communicate. Hierarchy of the Internet of Things Cloud Storage Analytics; AI Internet or Broad Internet Bridge to Internet or Broad Connectivity Adesto s Semiconductor & Systems Solutions o Application Specific Non-Volatile Memory o Mixed-Signal, RF ASICs o Analog IP Blocks o Edge Servers, Modules o Development Platforms controller Local Connectivity Edge Nodes Sense, Actuate, Log Data, Control & Communicate memory analog IoT Edge Node communication sensor 6

7 Tier-1 End Customers Across Different Verticals Industrial Consumer Communications Medical Computing 2,000+ Customers 7

8 Adesto s Worldwide Presence IRELAND U.K. SWEDEN NETHERLANDS GERMANY CZECH REP. SANTA CLARA, CA TEXAS N. CAROLINA PORTUGAL FRANCE SHENZHEN S. KOREA JAPAN SHANGHAI TAIWAN HONG KONG CORPORATE HEADQUARTERS SINGAPORE SALES & MARKETING OFFICES ASIC DESIGN CENTERS 8

9 Non-Volatile Memory Matters System knowledge Application specific design Technology Best CPU/Memory Performance Best Process Fit Floating Gate, RRAM, CBRAM Adesto s NVM Longer Battery Life Greater Reliability Higher Performance Security Better System Cost Smaller Footprint 9

10 Application Specific Flash Memory Products DataFlash Fusion EcoXiP Mavriq, Moneta Phoenix Ideal for data-logging Ideal for Battery Operated Systems Ideal for High Performance Edge Computing Ideal for Ultra-Low Power Applications Industry Standard Serial NOR for Code Storage Smart Meters Remote Controls Sensors Remote Sensor Computing Remote Sensors BLE Personal Device Autonomous Systems Medical Patches Servers Health Monitors Asset Trackers Multi-Protocol Comm. Camera Modules Game Consoles Patented Proprietary Solutions Std. Flash 10

11 Mixed-Signal and RF ASIC Products Mixed-Signal ASIC Full Custom Embedded Mixed-Signal & RF SoCs Satellite Communication Industrial Control & Automation Health Monitors Analog IP Mixed-Signal & RF IP High-Speed Data Convertors Ultra-Efficient Sensing ADC s RF & Power Management ASIC Group Background Offices: Ireland, Czech Republic, Portugal, US Competency: Mixed-Signal, Analog, RF & Systems Engineering Partners: Arm Global Design Partner Focus and Business Model Applications: Sensing, Controlling & Communication Nodes End Markets: Industrial IoT, Satellite Communication Engagement Model: ASIC Supplier, ASIC Design, IP Licensing Proven Track Record: Delivered Over 200 ASIC Designs Leveraging a Rich IP Portfolio 11

12 ASIC Solutions: Providing Unique Value to the IIoT Market Improved performance and reduced system cost for Industrial IoT systems Industrial OEM systems Bill of Materials (BoM) containing multiple components Designed single mixed-signal RF chip Reduced BoM up to 80% 12

13 Embedded Systems Solutions: Proven Platform for Industrial Systems Edge Devices Network Interfaces and Edge Servers Management Software and SDKs Industrial Buildings Transportation Lighting Connecting Devices into Networks for over 25 Years 13

14 Embedded Systems Solutions: New Vision for IIoT Unleash Today s Data and Bridge to Future Services Embrace Embrace today s industrial OT systems which are often in silos or closed loop systems Extend Extend OT to IP and IOT technologies to unleash data trapped in physical systems Enhance Enhance operations, customer experience and ROI from Analytics and AI based on data from physical world With 30 years of experience in open and interoperable systems and 140M+ nodes installed, we are in a unique position to bridge the IT/OT/cloud gap 14

15 Where you can find Adesto Industrial Control Embedded Systems Memory Products Mixed-Signal, RF ASICs Industrial Control & Automation Lighting Control Environmental Monitoring Sensors and Actuators Gas and Leak Detectors Instrumentation 15

16 Where you can find Adesto Smart City Embedded Systems Memory Products Mixed-Signal, RF ASICs Smart Grid and Metering Street Lighting Gas Station Pump Monitoring Waste Disposal Systems Drones Security Lighting 16

17 Where you can find Adesto Smart Buildings Embedded Systems Memory Products HVAC and Control Mixed-Signal, RF ASICs Elevators Fire and Security Systems Lighting Energy Monitoring Climate Control 17

18 Highlight: Smart Grid 18

19 Where you can find Adesto Smart Home Embedded Systems Memory Products Smart Lighting Mixed-Signal, RF ASICs Security Monitors Home Entertainment Energy Control Systems Home Appliances Connected Door Locks 19

20 Where you can find Adesto Transportation Embedded Systems Memory Products Mixed-Signal, RF ASICs Fleet Management and Asset Tracking Station Monitoring Vehicle Telematics Vehicle Breaking Systems Auto Infotainment GNSS Devices 20

21 Where you can find Adesto Medical Technology Embedded Systems Memory Products Mixed-Signal, RF ASICs Wearable Monitors Syringe Pumps Pacemakers Portable DNA Sequencing 21 Glucose Monitors Sleep Apnea Products

22 Where you can find Adesto Key Finders and Trackers Robotics and Educational Tools Fitness Trackers AR Glasses Consumer Embedded Systems Memory Products Mixed-Signal, RF ASICs Smartphones and Accessories Fingerprint Recognition 22

23 Where you can find Adesto Communication Embedded Systems Memory Products Mixed-Signal, RF ASICs Satellite Communication Broadband Wireless DSL / G.FAST Wired and Wireless Communication M2M Communication 23

24 Executing on Strategic Vision Expands Opportunity 3+ Years Roadmap Convergence Expand Industrial IoT Footprint Immediate 1 to 2 Years Market Expansion and Increased Scale Synergy Benefits Accelerating Growth Cross-selling across the aggregate channel and customers Bundling opportunities Geographic expansion Leveraging proprietary assets to introduce new highly differentiated device and system-level products Memory -> ASIC Analog IP Connectivity Edge Servers 24

25 Smart Semiconductors and Solutions for the IoT Era A leading provider of Innovative Application Specific Semiconductors and Embedded Systems for the IoT Era Industrial IoT Leadership and Differentiation Expanded Ownership of Building Blocks of IoT Value Chain Comm. Modules Industrial Edge-Servers Open-System Network Platforms Mixed-Signal ASICs RF ASICs System-on-Chip Analog IP Application Specific Non-Volatile Memory 25

26 Financials 26

27 Financial Highlights Differentiated Semiconductors and Embedded Systems Focused on IoTç 6 Consecutive Quarters of 30% YoY Growth Over 2000 Customers with Diverse Revenue Base Over 50% of Revenue in Long Product Cycle Industrial IoT Design-win Momentum Driving End-market Expansion Long Term Model 20% Growth 55% Gross Margin 20%+ EBITDA Margin 27

28 New Products Driving Revenue Growth In millions $60.0 $50.0 $40.0 $30.0 $20.0 Revenue In millions $25.0 $20.0 $ % $ % Quarterly Revenue YoY Growth Rate 31% 36% 35% 36% 32% $10.0 $5.0 $ 'YTD $0.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Revenue reflects New Products only includes partial contributions from acquisitions. 28

29 2018: A Transformative Year Application- Specific Memory for IoT Larger Served Addressable Market Broader Semiconductors and Systems Expanded Technology Assets Higher Content Ownership Move Up Value Chain 2018 Stickier Solutions Broader Channel 29

30 Income Statement and Outlook Income Statement In millions Q18 2Q18 3Q18 Outlook 4Q18 (1) Revenue $56.1 $15.3 $18.2 $21.9 $27-$30 YoY Growth 28% 35% 36% 32% Gross Margin (3) 49.0% 46.9% 43.0% 45.7% 47-50% GAAP OpEx $32.3 $8.1 $11.7 $17.0 $15.8-$17.8 Non-GAAP OpEx $27.7 $7.4 $8.3 $10.2 $13.0-$15.0 (2) Adj. EBITDA $1.3 $0.3 $0.1 $ Sixth consecutive quarter of 30%+ year-over-year revenue growth Sixth consecutive quarter of positive adjusted EBITDA 50% of $6-8 million of cost synergies realized in 4Q18, remainder 1Q-3Q 2019 Expanding gross margins toward corporate target of 55% (1) Represents guidance as provided on November 7, (2) Excludes approximately $1.0M in stock-based compensation expense and $1.8M in amortization of acquisition-related intangible assets. (3) Represents non-gaap gross margin for 2Q18, 3Q18 and 4Q18, which excludes stock-based comp and acquisition related adjustments

31 Balance Sheet Balance Sheet In millions Q18 2Q18 3Q18 Cash & Equivalents $30.1 $29.5 $7.9 $13.3 Assets $60.8 $66.0 $103.9 $147.6 Debt $13.3 $13.4 $29.4 $29.4 Liabilities $27.9 $33.4 $70.8 $79.3 Equity $33.0 $32.5 $33.1 $68.3 2Q18 reflects closed acquisition of S3 Semiconductors on May 9, Q18 reflects secondary offering of $43.1 million, net and closed acquisition of Echelon on September 14,

32 Appendix

33 GAAP to Non-GAAP Reconciliation 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 GAAP gross profit Stock-based compensation expense $5,514 (21) $6,723 (30) $7,466 (35) $7,732 (26) $7,180 (25) $7,764 (48) $9,583 (56) Inventory step-up related to acq. accounting (371) Non-GAAP gross profit $5,575 $6,753 $7,501 $7,758 $7,205 $7,812 $10,010 GAAP Operating Expenses $8,107 $8,259 $8,264 $7,676 $8,130 $11,677 $17,006 Stock-based compensation expenses (803) (952) (1,032) (603) (418) (672) (884) Amortization of acq.-related intangible assets (309) (309) (309) (295) (294) (2,704) (5914) Non-GAAP Operating Expenses $6,995 $6,998 $6,923 $6,778 $7,418 $8,301 $10,208 Reconciliation from GAAP net loss to Adjusted EBITDA GAAP net income (loss): ($2,775) ($1,751) ($997) ($165) ($1,102) ($5,058) ($8,397) Stock-based compensation expense , Amortization of acq.-related intangible assets ,704 5,914 Inventory step-up related to acq. accounting Non-GAAP net income (loss) ($1,642) ($460) $379 $759 ($365) ($1,634) ($1,172) 33 Interest expenses , Provision for (Benefit from) income taxes (37) (64) Depreciation and amortization Adjusted EBITDA ($1,088) $99 $938 $1,353 $298 $102 $472

34 Thank you