“During the quarter, we continued to make progress and penetrate Tier 1 OEM customers with sales of our standard flash products. As we gain more traction in these accounts, we believe our opportunity pipeline is also expanding for Adesto’s value-added products,” said Narbeh Derhacobian, Adesto’s President and CEO. ”We experienced a slower than expected ramp of DataFlash-L products targeted at smart home application markets in the quarter, which reflected the timing of ramps across the broader end-market as opposed to any customer specific issues; together with the growing Tier-1 revenue, we experienced temporarily less-favorable product mix and gross margin in the second quarter. Regarding our S3 Semiconductors acquisition, we are executing well on the initial integration, and revenue from the ASIC group is expected to come in at the high-end of our projections.”
These preliminary revenue, gross margin and total operating expense estimates are based on management’s initial review of operations for the three months ended
About Non-GAAP Financial Measures
To supplement Adesto’s financial results presented in accordance with generally accepted accounting principles (GAAP), this press release contains non-GAAP total operating expenses. Non-GAAP total operating expenses is defined as GAAP operating expenses as reported in Adesto’s condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, amortization of acquisition-related intangible assets and transaction-related expenses. The company believes this non-GAAP financial measure is useful in evaluating its past financial performance and future results. Non-GAAP total operating expenses should not be considered in isolation or as a substitute for total operating expenses on GAAP basis and should be read in conjunction with Adesto’s consolidated financial statements prepared in accordance with GAAP. The company’s management regularly uses this non-GAAP financial measure internally to help them evaluate trends, establish budgets, measure the effectiveness of our business strategies and assess operational efficiencies. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Adesto’s non-GAAP total operating expenses include adjustments based on the following items:
- Stock-based compensation expenses:
Adesto has excluded the effect of stock-based compensation expenses from its non-GAAP total operating expenses. Although stock-based compensation is an important part of its employees’ compensation affecting their performance, the company continues to evaluate its business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods. - Amortization of acquisition-related intangible assets:
Adesto has excluded the effect of amortization of acquisition-related intangible assets from its non-GAAP total operating expenses. Amortization of acquisition-related intangible assets is a non-cash expense, and it is not part of the company’s core operations. Investors should note that the use of acquisition-related intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well. - Transaction-related expenses:
Adesto has excluded the effect of transaction expenses such as legal, accounting and other professional fees incurred in connection with acquisition related activities. Such expenses typically are not recurring and are incurred only when the company engages in acquisition related activities. The Company evaluates its business performance excluding such expenses and are not factored into management's evaluation of potential acquisitions.
Forward Looking Statements
The statements in this press release regarding the company’s expectations for its second quarter 2018 financial results are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including the company’s completion of the financial closing process for the second quarter operating results and financial condition. For a detailed discussion of other risk factors, please refer to the risks identified in Adesto’s filings with the
All information provided in this release and in the attachments is as of
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Source: Adesto Technologies Corporation