IMMR Q2 2021 Earnings Call Summary | Stock Taper
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IMMR

IMMR — Immersion Corporation

NASDAQ

Q2 2021 Earnings Call Summary

August 16, 2021

Immersion Corp (IMMR) Q2 2021 Earnings Call Summary

1. Key Financial Results and Metrics

  • Revenue: $11 million, up 94% from $5.7 million in Q2 2020.
  • GAAP Net Income: $5.3 million ($0.17 per diluted share), compared to a net loss of $0.7 million in Q2 2020.
  • Non-GAAP Net Income: $7.2 million ($0.23 per diluted share), up from $0.8 million in the same period last year.
  • Recurring Revenue: Represented 91% of total revenue, down from 98% in Q2 2020.
  • Cash and Cash Equivalents: $107.3 million as of June 30, 2021, an increase of $47.8 million from December 31, 2020.
  • Operating Expenses: Decreased by 23% to $5.2 million compared to Q2 2020.

2. Strategic Updates and Business Highlights

  • Market Growth: Revenue growth observed across all core markets: Automotive, Gaming, and Mobile.
  • Automotive Segment: Anticipated double-digit revenue growth for fiscal 2021; expanded licensing agreement with Stanley for automotive products.
  • Gaming Segment: Benefiting from Sony's PlayStation 5 success, which has sold over 10 million units; innovations from Immersion are integral to the DualSense controller.
  • Mobile Segment: New partnership with TITAN Haptics to enhance presence in the Chinese market; ASUS renewed its multi-year license for Immersion's TouchSense technology.
  • New Licenses: Peloton signed a technology license, indicating potential for haptic technology in fitness devices.

3. Forward Guidance and Outlook

  • Revenue Growth: Expected to maintain double-digit percentage growth in revenue and profitability for FY 2021.
  • Cautious Outlook: Acknowledgment of potential headwinds due to the resurgence of COVID-19 and supply chain issues, which may impact future revenue growth.
  • Operating Expenses: Projected to remain flat, with a long-term target of $17 million to $19 million in non-GAAP operating expenses.

4. Challenges and Points of Concern

  • COVID-19 Impact: The resurgence of the Delta variant poses risks to licensees' businesses and overall market conditions.
  • Supply Chain Issues: Potential disruptions could affect revenue growth and operational performance in upcoming quarters.
  • Revenue Mix Fluctuations: Changes in revenue contributions from different segments may affect overall performance.

5. Notable Q&A Insights

  • Operating Expenses: Management indicated that while they expect expenses to remain flat in the short term, they could increase in the long term as marketing activities resume.
  • Automotive Growth: The automotive segment is expected to grow steadily, though it has a longer production timeline.
  • M&A Activity: No current engagements in M&A, but the company remains open to opportunities.
  • Channel Partnerships: The partnership with TITAN Haptics is seen as a potential growth driver in the Chinese smartphone market, although the impact may take time to materialize.

Overall, Immersion reported strong financial performance in Q2 2021, with significant revenue growth and profitability, while also navigating potential challenges related to the pandemic and supply chain disruptions.