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|Third Quarter 2018 Financial Results Conference Call Nov 13, 2018
NASDAQ: RESN | 2
THIRD QUARTER 2018 FINANCIAL RESULTS CONFERENCE CALL
George HolmesCEO & Director
Jeff KillianInterim CFO
ir.resonant.com
This document contains forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements may address the following subjects among others: the status of filter designs under development, the prospects for licensing filter designs upon completion of development, plans for other filter designs not currently in development, potential customers for our designs, the timing and amount of future royalty streams, the expected duration of our capital resources, our hiring plans, the impact of our designs on the mobile device market, and our business strategy. Forward-looking statements are inherently subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: our limited operating history; our ability to complete designs that meet customer specifications; the ability of our customers (or their manufacturers) to fabricate our designs in commercial quantities; the ability of our customers to sell products incorporating our designs to OEMs; our dependence on a small number of customers; the ability of our designs to significantly lower costs as compared to other designs and solutions; the risk that the intense competition and rapid technological change in our industry renders our designs less useful or obsolete; our ability to find, recruit and retain the highly skilled personnel required for our design process in sufficient numbers to support our growth; our ability to manage growth; and general market, economic and business conditions. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report (Form 10-K) or Quarterly Report (Form 10-Q) filed with the Securities and Exchange Commission. Forward-looking statements are made as of the date of this document, and we expressly disclaim any obligation or undertaking to update forward-looking statements.
We may refer to information regarding potential markets for products and other industry data. We believe that all such information has been obtained from reliable sources that are customarily relied upon by companies in our industry. However, we have not independently verified any such information.
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SAFE HARBOR STATEMENT
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XBAR™ - Resonant’s new cutting-edge bulk acoustic wave (BAW) resonator technologyideally suited for 5G applications
RESONANT INTRODUCES XBAR™
Sources: Yole Developpement
Resonant’s roadmap is focused on the inclusion of higher frequency BAW and FBAR solutions to ensure participation in the demand created by 5G.
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TEAM - NEW BOARD MEMBER: BOB TIRVA
Background:
Extensive corporate and managerial finance experience in IT & services and semiconductor industries
Bob TirvaIndependent Director
Past Affiliations:
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Areas of Focus Contracted devices Applications and customer field support Quality and reliability
Delivery of our ISN Software Platform Expansion of our IP & trade secrets
TEAM
Total Headcount Technical Staff PhDs
6546
14Technical marketing & applications
5
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TECHNOLOGY - ISN®: EXPANDING INTO NEW TECHNOLOGIES
FBAR Film Bulk Acoustic ResonatorsAcoustic wave propagates in a vertical direction
SAW Surface Acoustic WaveAcoustic wave propagates in a lateral direction
Surface Acoustic Wave
Metal lines
Interdigital Transducer
Piezoelectric substrate (LiTaO3 , …)
Electrical Port
TC-SAW Temperature-Compensated SAWAcoustic wave propagates in a lateral direction
Si3N4 PassivationSiO2 Temperature Compensation
ElectrodesPiezoelectric Substrate
BAW Bulk Acoustic WaveAcoustic wave propagates in a vertical direction
Bottom electrode
Thin-film piezolayer
Top electrode
Stress field of acoustic wave
Si -substrate
Bottom cavity
Support layer
Best performance requires precise process control and improved design
4G 4G
More expensive Most expensive
Bottom electrode
Thin-film piezolayer
Top electrode Stress field of
acoustic wave
SubstrateAcoustic reflector
2µm thick @ 2 GHz
COST
PROCESS STEPS
PERFORMANCE
APPLICATIONS
Performance less than FBAR Currently, best performanceImproves temperature stability
4G & 5G 4G & 5G
Simple, low cost Relatively low cost process
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TECHNOLOGY - ISN®: EXPANDING INTO NEW TECHNOLOGIES
SAW Surface Acoustic WaveAcoustic wave propagates in a lateral direction
Surface Acoustic Wave
Metal lines
Interdigital Transducer
Piezoelectric substrate (LiTaO3 , …)
Electrical Port
TC-SAW Temperature-Compensated SAWAcoustic wave propagates in a lateral direction
Si3N4 PassivationSiO2 Temperature Compensation
ElectrodesPiezoelectric Substrate
BAW – XBAR™Bulk Acoustic WaveAcoustic wave propagates in a vertical direction
Best performance requires precise process control and improved design
4G 4GCOST
PROCESS STEPS
PERFORMANCE
APPLICATIONS
Best in class performanceImproves temperature stability
4G & 5G
Simple, low cost Relatively low cost process Leverages standard industry process
Thin piezolayer
Electrodes
SiO2
Si -substrate
Air Gap
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TOOLS - ISN®: NEXT GENERATION DESIGN PLATFORM
DESIGN INTEGRATION
DESIGN OPTIMIZATION SIMULATION
SYNTHESIS
CURRENT FILTER DESIGN UTILIZED BY MOST MANUFACTURERS
RESONANTFundamental | Rigorous | Scalable | Defendable
Image DesignAcoustic Wave
Ladder
Modern FilterTheory
Coupling of ModesModel | COM
Empirical Optimization& Simulation
Aggregated Physical PropertiesVelocity of Surface Waves
Reflectivity of Surface Waves
Acoustic WaveNetwork Synthesis
RF Circuit Models Optimization
Fundamental Physical Models Simulation
RF CircuitsInductance | Voltage
RF Circuit Integration
Fundamental Physical Properties
Density | DimensionsFab Integration1900s 1950s 2000s
Value• Faster development• Lower cost
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TOOLS - ISN COMPARE™
ISN COMPARE™ provides real time comparative analytics to understand how the measured performance of Resonant designs compares to Resonant simulations, Resonant specifications, and competitor designs
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TOOLS - ISN®: EXPANDING INTO NEW TECHNOLOGIES
ROADMAP OF FULLY INTEGRATED SAAS-BASED INFINITE SYNTHESIZED NETWORK
SAW
FEMSAW / PMTx™Software Enhancements
Power Durability / IsolationIP Blocks
BAW
Layers IISoftware Enhancements
XBAR™IP Blocks
2012 2017 2018 2019 2020 2021
TC-SAW Multi-Layer
Layers / PMTx™Software Enhancements
ODSR (Optimized Design Space Resonator)IP Blocks
TC-SAW Bonded Wafer
FEMSAW / LayersSoftware Enhancements
Plate Mode Engineered DeviceIP Blocks
2016
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RESONANT’SFILTER DEVELOPMENT(signed contract to design qualification)
DEVELOPMENT TIMELINE
RESN CUSTOMERS’ TEST & QUALIFICATION
THE HANDSET OEM’SQUALIFICATION & RAMP
can range from 9 months to >36 months (depending on the complexity of the design)
typically ranges from 3 to 6 months typically ranges from 3 to 6 months
RESN Customer Acceptance
OEM Qualification
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SUMMARY FINANCIAL INFORMATION
Sep 30, 2018Actual
Cash, investments & equivalents $ 26.4 M
Other current assets 0.4 M
Long-term assets 4.2 M
Total assets $ 31.0 M
Total liabilities $ 2.7 M
Stockholders’ equity 28.3 M
Total liabilities and stockholders’ equity $ 31.0 M
Shares outstanding 27.0 M
NASDAQ: RESN | 14
TEAM - NEW CFO: MARTY MCDERMUT
Background:
30+ years in financial and accounting management; CPA
Marty McDermutCFO as of 11/15/18
Past Affiliations:
NASDAQ: RESN | 15
FILTERS: THE MAIN DRIVER OF GROWTH OF THE RF FRONT END
Filter market is the fastest growing market in RFFE• 21% CAGR• >$27B in 2025
Next generation Smartphone projected to include $29.31 RF content
Sources: Yole Developpement, Navian, Barclays, Management Estimates
$22.31Advanced
4G
$16.25Premium
4G
$7.25Performance
4G
20252007 Increasing Value of RF Content | Higher RF Content Driving TAM Growth
5-8 15-20 30-35 50-70 80-90 90-100 >100Increasing number of RF filters per phone *Management estimates
2-4 TBD
$29.31Future
4G
>$38.005G
Sub 6GHz MIMO
5G
mmWave5G
2018
$ 4B
$ 9B
$ 40B
$ 28B
RFFE MARKET
$ 9B
$ 16B
$3.25Value 2G/3G
$0.80Legacy 2G/3G
FILTER MARKET
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ISN® FOUNDRY PROGRAM
Current Foundry Partners
Current Packaging / Backend Partners
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CUSTOMER CONTRACTS AND ANNUAL REVENUE POTENTIAL
$0
Dolla
rs (m
illio
ns)
>25Devices
Contracted
>50Devices
Contracted
~75 Devices
Contracted
Years
TODAY
700
600
500
400
300
200
100
0
2015 YE 2016 YE 2017 YE 2018 YE
Customers’ Annual Revenue Potential
$290M
$112M
$600M
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▪ Large, growing market, 21% CAGR, as the RF front-end industry undergoes dramatic increases in growth and complexity due to:
• Need for more bandwidth, especially due to initial 5G deployments• Band Proliferation• Carrier Aggregation
• Overall increases in RF Front-End complexity
▪ Resonant’s revolutionary ISN® platform expected to disrupt the RFFE supply chain and enable new entrants into the market that has been dominated by only a few large players
• Devices currently shipping have increased customers’ share of market 2x -10x their average market share • Greater efficiency that allows more designs per designer
▪ Resonant continues to retire risk through execution both internally and externally• New tools (ISN) and IP that enable rapid time to market
• ISN COMPARE™ - real time comparative analytics• XBAR™ - extending ISN into BAW• PMTx™ - validates software modules with customers
• Our business model is licensing designs on a per-unit royalty basis• Creation of a Fabless ecosystem through Resonant’s ISN Foundry Program
SUMMARY
Sources: Yole Developpement, Navian
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