Spectra7 Announces Third Quarter 2022 Financial Results

Record Revenue Up 190% through First Nine Months, Gross Margin Improves over First Half

AR/VR Tier 1 Game Console Orders Ramping, Enters High-Growth Automotive Infotainment Market

SAN JOSE, Calif., Nov. 29, 2022 /PRNewswire/ — (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. (“Spectra7” or the “Company“), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, today announced its financial results for the third quarter of 2022. A copy of the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2022, prepared in accordance with International Financial Reporting Standards, and the corresponding management’s discussion and analysis (the “MD&A”) will be available under the Company’s profile on www.sedar.com. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.

“I am pleased with our continued volume growth at key customers, enabling us to nearly double revenue, even in a year of challenging market conditions. With the increased orders we are now seeing, we have raised the midpoint of our second half 2022 revenue expectations from our previous range as customer visibility improves,” said Raouf Halim, CEO.

“With growing backlog for the year ahead, we expect to maintain similar growth plus return to more typical gross margins in 2023 as we march steadily toward EBITDA positive operations in the coming year,” 1 said Mr. Halim.

“Ramping DreamWeVR™ orders with our Tier 1 game console customer and entry into the robust automotive infotainment market with JVCKENWOOD continue to drive scale for our key business lines,” said Mr. Halim. “We expect to further expand on this foundation in 2023 and receive significant orders from hyperscale data center customers shifting to the 112G PAM4 standard. Spectra7’s high speed, low power 112G PAM4 Active Copper Cable solutions are expected to provide critical speed, power and cost advantages as our customers seek to scale in an economic manner. We are working closely with multiple customers to implement on site demonstrations for the high speed, low power, carbon responsible data center of the future that Spectra7 uniquely enables.” 1 

Q3 2022 Financial Highlights

  • Revenue for the third quarter was approximately $2.7 million, up from $1.6 million in the same quarter a year ago, an increase of approximately 71%.
  • Revenue for the first nine months of 2022 was $8.3 million, a Company record, increasing by over 190% from the first nine months of 2021.
  • Gross margin2 as a percentage of revenue for the third quarter was 55%, compared with 57% in the third quarter of 2021. Gross margin increased sequentially from 43% in the second quarter as the Company began to see lesser supply constraints that were negatively affecting gross margin year-to-date.   
  • Non-IFRS operating expenses3 in the third quarter were $1.9 million, down from $2.0 million in the same period a year ago. In addition, the third quarter of 2022 included costs to support the continued production ramp for the Company’s DreamWeVR™ products, R&D supplies.
  • Basic and diluted loss per share for the third quarter was $(0.04), compared with a basic and diluted loss per share of $(0.12) in the same period a year ago.
  • EBITDA4 loss in the third quarter was $(0.2) million, compared with an EBITDA loss of $(0.9) million in the same period a year ago.
  • The Company refinanced and extended terms of convertible debt to support working capital needs in anticipation of significant data center ramp.

2H FY 2022 Outlook 5

The Company expects to generate record revenue for the full 2022 year. The current outlook for revenue in the second half of 2022 is in the range of $5.3 million to $6.1 million. At the mid-point of the updated range, the projected full year results represent an annual revenue of approximately $11.2 million, which would be double the revenue generated in 2021.

Total non-IFRS operating expenses3 in the second half of 2022 are expected to be between $4.2 million and $4.5 million, which include increased headcount growth to support customers and development expenses associated with new products, and is within the range of $4.5 million to $4.8 million provided on October 19, 2022. Non-IFRS operating expenses were approximately $3.9 million in the second half of 2021.

Key Business Highlights

  • Increasing production volume with a top global gaming manufacturer that is using Spectra7’s DreamWeVR™ chip sets in its next generation head mounted display interconnect.
  • Entered the large and growing automotive market with Elka International for an in-vehicle entertainment system active cable harness that includes an embedded HDMI IC from Spectra7 for customer JVCKENWOOD, a Tier 1 Japan based automotive supplier.
  • Expanded availability of active copper cables with ACES, a cable partner, to deliver 200 and 400Gbps interconnects for data center markets


1 This is forward-looking information and is based on a number of assumptions which include the current customer purchase orders received, market and supply outlook and anticipated operational expenses.  See “Cautionary Notes”.
2  Gross margin is a non-GAAP measure. Refer to “Revenue and Gross Margin” in the MD&A for reconciliation to measures reported in the Company’s financial statements.
3 Non-IFRS operating expenses is a non-GAAP measure which includes research and development, sales and marketing, general and administrative expenses and depreciation and amortization for capital equipment and right-of-use assets and excludes share-based compensation expense, non-recurring termination costs, interest and related financing costs, change in fair value of warrant liabilities, foreign exchange gain/loss and gain/loss from property and equipment disposal. Refer to “Non-IFRS Operating Expenses” in the MD&A for reconciliation to measures reported in the Company’s financial statements.
4 EBITDA or earnings before interest, tax, depreciation, and amortization is a non-GAAP measure. EBITDA excludes share-based compensation, amortization, depreciation, interest, and tax expenses. Refer to “EBITDA” in the MD&A for reconciliation to measures reported in the Company’s financial statements.
5 This section includes forward-looking information and forward-looking financial information, which is based on a number of assumptions including current customer purchase orders received, market and supply outlook and anticipated operational expenses. See “Cautionary Notes”.


Spectra7 Microsystems Inc. is a high-performance analog semiconductor company delivering unprecedented bandwidth, speed, and resolution to enable disruptive industrial design for leading electronics manufacturers in data centers, 5G infrastructure, virtual and augmented reality, and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and technical support location in Dongguan, China.

For more information, please visit www.spectra7.com. 

Neither the TSX Venture Exchange nor its regulation services provided (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical fact contained in this press release, including, without limitation, the Company’s expectation for revenue and supply availability in the second half of 2022 and into 2023, the Company’s ability to obtain additional financing, the Company’s expected operating expenses, and the Company’s strategy, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to the risk factors discussed in the Company’s annual information form for the year ended December 31, 2021. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

For more information, please contact:

Matt Kreps
Darrow Associates

Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer

Spectra7 Microsystems Inc.
John Mitchell
Public Relations


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SOURCE Spectra7 Microsystems Inc.

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