Investor Presentation

Transcription

1 Investor Presentation February 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: 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 Broad Connectivity (Internet) Adesto s Semiconductor & Systems Solutions o Application Specific Non-Volatile Memory o Mixed-Signal, RF ASICs o Transceivers and Controllers o Data-Converters, Analog IP Blocks o Edge Servers, Modules o Development Platforms Bridge to Broad Connectivity Controller Local Connectivity Edge Nodes Sense, Actuate, Log Data, Control & Communicate Memory IoT Edge Node Sensor Power Management Communication 6

7 Our Solutions in IoT Verticals Industrial Communication Consumer Medical Application Specific Non-Volatile Memory Mixed Signal ASICs Data-Converters Transceivers, Controllers Comm. Modules Edge Gateways, Software Stacks and Dev. Kits 7

8 Tier-1 End Customers Across Different Verticals Industrial Consumer Communications Medical Computing 2,000+ Customers 8

9 Worldwide Presence IRELAND U.K. SWEDEN NETHERLANDS GERMANY CZECH REP. SANTA CLARA, CA TEXAS N. CAROLINA PORTUGAL FRANCE SHENZHEN S. KOREA SHANGHAI JAPAN TAIWAN HONG KONG CORPORATE HEADQUARTERS SINGAPORE SALES & MARKETING OFFICES ASIC DESIGN CENTERS 9

10 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 10

11 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 11

12 Mixed-Signal and RF ASIC Solutions 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 12

13 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% 13

14 Embedded Systems Solutions: Proven Platform for Industrial Systems Edge Devices Network Interfaces and Edge Servers Management Software and SDKs Industrial Buildings Smart Grid Transportation Lighting Connecting Devices into Networks for over 25 Years 14

15 Examples of Our Embedded Systems at Work Building Automation Transportation Entertainment Manufacturing and Retail 15

16 Embedded Systems Solutions: New Vision for IIoT Unleash Today s Data and Bridge to Future Services Embrace Embrace today s industrial operational technology (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 16

17 Connecting OT to IT and Capitalizing Data Enhance Cloud Services, Analytics January 14 th, 2019 Adesto s SmartServer IoT provides the critical connection from industrial data to our platform so that customers can perform powerful analytics on their data. We are delighted to work with Adesto to demonstrate our combined capabilities, and we look forward to making the solution available to customers in the buildings sector. - Sanjay Tripathi, VP of Strategy and Business Development, IBM IoT Extend SmartServer IoT Embrace Legacy Industrial Systems 17

18 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 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 18

19 Where You Can Find Adesto Smart Buildings Embedded Systems Memory Products HVAC and Control Elevators Fire and Security Systems Lighting Energy Monitoring Climate Control Mixed-Signal, RF ASICs Smart Home Embedded Systems Memory Products Smart Lighting Mixed-Signal, RF ASICs Security Monitors Home Entertainment Energy Control Systems Home Appliances 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 Wearable Monitors Syringe Pumps Pacemakers Portable DNA Sequencing Glucose Monitors Sleep Apnea Products Medical Technology Embedded Systems Memory Products Mixed-Signal, RF ASICs 20

21 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 Communication Embedded Systems Memory Products Mixed-Signal, RF ASICs Satellite Communication Broadband Wireless Wired / Wireless Comm. M2M Communication 21

22 2018: A Transformative Year 2018 Larger Served Addressable Market Expanded Technology Assets Higher Content Ownership Application-Specific Memory for IoT Broader Semiconductors and Systems Move Up Value Chain Stickier Solutions Broader Channel 22

23 Executing on Strategic Vision Expands Opportunity 3+ Years Roadmap Convergence Expand Industrial IoT Footprint 1 to 2 Years Synergy Benefits Accelerating Growth Leveraging proprietary assets to introduce new highly differentiated device and system-level products Immediate Market Expansion and Increased Scale Cross-selling, bundling opportunities across the aggregate channel and customers Memory -> ASIC Analog IP Connectivity Edge Servers 23

24 Financials 24

25 Financial Highlights Differentiated Semiconductors and Embedded Systems Focused on IoT Design Win Momentum Driving End Market Expansion Over 2,000 Customers with Diverse Revenue Base Over 50% of Revenue in Long Product Cycle Industrial IoT 7 Consecutive Quarters of Positive Adjusted EBITDA Long Term Model: 20% CAGR over 3-5 Years 50%+ Gross Margin 20%+ EBITDA Margin 25

26 New Products Driving Revenue Growth In millions $70.0 Revenue In millions $30.0 Quarterly Revenue $60.0 $50.0 $40.0 $30.0 $20.0 $25.0 $20.0 $15.0 $10.0 $10.0 $5.0 $ $0.0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Revenue reflects New Products only. 26

27 Income Statement and Outlook Income Statement In millions Q18 2Q18 3Q18 4Q18 Guidance 1Q19 (1) Revenue $56.1 $15.3 $18.2 $21.9 $28.1 $26-$28 Gross Margin (3) 49.0% 46.9% 43.0% 45.7% 48.6% 48-50% GAAP OpEx $32.3 $8.1 $11.7 $17.0 $19.6 Non-GAAP OpEx $27.7 $7.4 $8.3 $10.2 $13.9 $14.0-$15.0 (2) Adj. EBITDA $1.3 $0.3 $0.1 $0.5 $0.5 Seventh consecutive quarter of positive adjusted EBITDA Over 50% of $6-8 million of cost synergies realized in 4Q18, most of the remainder expected from pending sale of Echelon s Lighting Business Guiding 2H19 revenue to grow 30%+ over 2H18; also expect to generate positive adj. EBITDA each quarter of 2019, while also exiting year at a 10%+ adj. EBITDA margin (1) Represents guidance as provided on February 21, (2) Excludes approximately $1.2M in stock-based compensation expense and $1.8M in amortization of acquisitionrelated intangible assets. (3) Represents non-gaap gross margin, which excludes stock-based comp and acquisition-related adjustments. 27

28 Balance Sheet Balance Sheet In millions Cash, Restricted Cash & Short-Term Inv Q18 2Q18 3Q18 4Q18 $30.1 $29.5 $7.9 $13.3 $9.1 Assets $60.8 $66.0 $103.9 $147.6 $137.2 Debt $13.3 $13.4 $29.4 $29.4 $29.6 Liabilities $27.9 $33.4 $70.8 $79.3 $74.4 Equity $33.0 $32.5 $33.1 $68.3 $62.7 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, 2018 Expect to achieve positive free cash flow in the second half of

29 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 29

30 Appendix

31 GAAP to Non-GAAP Reconciliation 31

32 Thank you