Atomera (ATOM) Q4 2017 earnings summary

Executive summary

• MST is a silicon-film transistor enhancement technology aimed at improving speed, reliability and energy efficiency while using standard manufacturing equipment and requiring limited process-flow changes.

• Customer engagements doubled during 2017; the first evaluation-services revenue was recognized, but commercial adoption remained the key milestone for success.

Financial highlights

• FY2017 revenue was $110k, all from engineering services, versus $0 in FY2016; cost of revenue was $39k and gross margin was $71k.

• Operating expenses were $13.281M versus $9.999M; operating loss was $13.210M and net loss was $13.068M, compared with $12.610M net loss in FY2016.

• R&D expense rose 46% YoY to $5.8M; G&A was $5.8M and selling and marketing was $1.7M.

• Cash used in operations was $9.289M; cash and cash equivalents ended FY2017 at $17.369M, with working capital of approximately $16.8M.

Outlook and guidance

• Management expected available working capital to fund current plans and obligations for at least 12 months after the filing, while noting that additional capital may be needed before commercial-scale production.

• 2018 engineering headcount and related costs were expected to remain at or above 2017 levels; G&A was expected to increase, alongside increased R&D headcount, fabrication and testing spending.

• Near-term priorities were advancing customer integration, securing a licensee and enabling full-scale industrial production; customer qualification can take 18–36 months or longer.