- Launched OBSKUR in Epic Games Store: the first all-in-one broadcasting application for livestreams
- Began shipping the OBSKUR Mocap Box, powered by Xsens, for motion-enabled avatars
- Extended leadership in automotive workplace ergonomics with BMW and partnership with Toyota
HENDERSON, Nev., Aug. 09, 2023 (GLOBE NEWSWIRE) -- Movella Holdings Inc. ( MVLA) (“Movella”), a leading full-stack provider of sensors, software, and analytics that enable the digitization of movement, today reported its results for the second quarter and six months ended June 30, 2023.
“We're proud to have launched the OBSKUR broadcasting platform this quarter, expanding Movella’s Xsens mocap technology from professional Hollywood studios to individual streamers and VTubers. OBSKUR enables livestreamers to create engaging content, complete with motion-enabled avatars,” said Movella CEO Ben Lee. “While the writers strike impacted our top line in Q2, our results reflect the resiliency embedded in the business, and our continued expansion of movement digitization use cases into our existing markets, as well as new growth areas such as automotive workplace ergonomics. We remain well positioned for significant opportunity ahead, particularly in film and game production once all parties reach a resolution.”
Second Quarter 2023 Financial Highlights
- Revenue. Net revenue in Q2 totaled $8.4 million, a decrease of 3% year-over-year.
- Gross Profit. GAAP gross profit rose to $4.4 million as compared to $4.3 million last year. GAAP gross margin was 53%, an improvement of approximately 300 basis points year-over-year. Non-GAAP gross profit totaled $4.4 million versus $5.4 million for the comparable quarter in the previous year. Non-GAAP Q2 gross margin was 53%.
- Loss from Operations. GAAP loss from operations in Q2 was $7.7 million, versus $6.8 million in the same period last year. Non-GAAP loss from operations was $7.2 million, versus $4.9 million in the same period last year.
- GAAP Net Income. GAAP net loss attributable to common stockholders totaled $13.9 million versus $7.6 million in the comparable quarter in the previous year.
- Adjusted EBITDA. Adjusted EBITDA in Q2 totaled negative $5.2 million versus negative $4.5 million in the comparable quarter in the previous year.
- Cash and cash equivalents. Cash and cash equivalents at quarter end were $51.0 million, compared to $6.2 million as of the same period last year, and $62.1 million in Q1.
“The ongoing strikes in the entertainment industry that began in early May challenged our top line results in the quarter, and these headwinds may take time to resolve,” said Movella CFO Steve Smith. “Our strong cash position will allow Movella to continue to make measured investments in new compelling products and use cases such as OBSKUR, while continuing to manage our expenses prudently.”
Second Quarter 2023 Business Highlights
- Launched OBSKUR in the Epic Games Store: the first all-in-one broadcasting application for engaging livestreams. The move comes at a time when the global livestreaming market is booming, with experts predicting the market to reach $247 billion by 2027 (Source: Market Research Future).
- Began shipping the OBSKUR Mocap Box, powered by Xsens, for motion-enabled avatars.
- Extended leadership in automotive workplace ergonomics with BMW and partnership with Toyota.
- Hosted the Movella developer community at the Movella DOT Developers Conference 2023, with over 300 attendees and thought leader speakers in digital health present.
- Hosted VTuber live-streamers who collectively represented over 100 million monthly views at private OBSKUR pre-launch event.
Conference Call and Webcast Information
The company will hold a conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, August 9, 2023 to discuss Movella’s financial results and outlook. The call will be hosted by Ben Lee, CEO and Steve Smith, CFO. Q&A with management will follow immediately after prepared remarks.
A live webcast of the call will be accessible on the investor relations section of the Movella website at https://investors.movella.com/. To access the call by phone, please register at https://register.vevent.com/register/BI39b0377d9f524b739f18fd518634538d. Upon registration, telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.movella.com/.
About Movella Holdings Inc.
Movella is a leading full-stack provider of sensors, software, and analytics that enable the digitization of movement. Movella serves the entertainment, health & sports, and automation & mobility markets. Our innovations enable customers to capitalize on the value of movement by transforming data into meaningful and actionable insights. Partnering with leading global brands such as Electronic Arts, EPIC Games, 20th Century Studios, Netflix, Toyota, Siemens, and over 500 sports organizations, Movella is creating extraordinary outcomes that move humanity forward. To learn more, please visit www.movella.com.
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Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of federal securities laws. The words “accelerate,” “anticipate,” “believe,” “continue,” “could,” “enable,” “estimate,” “expect,” “extend,” “fuel,” “future,” “growth,” “intend,” “may,” “might,” “opportunity,” “outlook,” “plan,” “position,” “possible,” “potential,” “predict,” “progress,” “project,” “realize,” “see,” “seem,” “should,” “will,” “would,” and similar expressions, or the negative of such expressions, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements regarding the following: our belief that our strong cash position will allow us to continue our focus on execution and on bringing new, innovative products to the market; that we expect to achieve near-term adjusted EBITDA breakeven and subsequent profitability; our ability to execute on our strategy to deliver value to shareholders, macro-environment challenges; the anticipated or potential features, benefits, and applications for Movella’s products and technology and timing thereof; the anticipated benefits and limitations of non-GAAP financial measures; the market opportunity for Movella’s products and technology; or other characterizations of future events or circumstances, including any underlying assumptions. These statements are based on the current expectations of Movella’s management and are not predictions of actual performance. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Movella’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following: (i) failure to realize the anticipated benefits of the business combination; (ii) general economic and macro-economic conditions and Movella’s financial performance and factors affecting the same; (iii) changes adversely affecting the businesses and target markets in which Movella is engaged; (iv) Movella’s ability to execute on its business strategy and plans and to manage growth; and (v) risks related to regulatory matters, as well as the factors described under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and under similar headings in the final prospectus filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(3) by Pathfinder on January 17, 2023, the Company’s annual report on Form 10-K for the year ended December 31, 2022 and current reports on Form 8-K filed on February 13, 2023 and March 31, 2023, and in Movella’s future filings with the SEC. If any of these risks materialize or the underlying assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Movella presently knows or currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect expectations, plans or forecasts of future events and views as of the date of this press release. Movella anticipates that subsequent events and developments will cause its assessments to change. However, Movella specifically disclaims any obligation to update any forward-looking statements, except to the extent required by applicable law. These forward-looking statements should not be relied upon as representing Movella’s assessments as of any date subsequent to the date of this press release and are not intended to serve as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Non-GAAP Financial Measures
Movella Holdings has provided financial information in this news release that has not been prepared in accordance with GAAP. Adjusted EBITDA, non-GAAP gross profit, and non-GAAP operating loss exclude net loss attributable to non-controlling interests, preferred stock dividends, share-based compensation expense, loss on debt extinguishments related to the consummation of the business combination agreement, debt issuance costs, change in fair value of warrant liabilities, fair value adjustments on debt instruments for which we elected the fair value option under ASC 825, and impairment of acquired intangible assets. Adjusted EBITDA also excludes interest expense and interest income, taxes, depreciation and amortization, other income (expense), certain transaction expenses related to the business combination agreement that are not expected to recur, and other infrequent costs.
Adjusted EBITDA, non-GAAP gross profit, non-GAAP gross margin, and non-GAAP operating loss are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures have limitations as an analytical tool and are not intended to be used in isolation or as a substitute for net loss, gross profit, operating loss or any other performance measure determined in accordance with GAAP. We present these non-GAAP financial measures because we consider each to be an important supplemental measure of our performance.
We use these non-GAAP financial measures to make operational decisions, evaluate our performance, prepare forecasts and determine compensation. Further, we believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods. Share-based compensation expenses are expected to vary depending on the number of new incentive award grants issued to both current and new employees, the number of such grants forfeited by former employees, and changes in our stock price, stock market volatility, expected option term and risk-free interest rates, all of which are difficult to estimate. In calculating non-GAAP financial measures, we exclude certain non-cash and one-time items in order to facilitate comparability of our operating performance on a period-to-period basis because such expenses are not, in our view, related to our ongoing operating performance. We use this view of our operating performance for purposes of comparison with our business plan and individual operating budgets and in the allocation of resources.
We further believe that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. The Company believes that the use of these non-GAAP financial measures also facilitates a comparison of our underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.
Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The limitations of relying on non-GAAP financial measures include, but are not limited to, the fact that other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool. Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.
MOVELLA HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
MOVELLA HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
2023 December 31,
2022ASSETS(unaudited)Current assets Cash and cash equivalents$51,008 $14,334 Accounts receivable, net of allowance for credit losses of $721 and $144 at June 30, 2023 and December 31, 2022 5,517 6,690 Inventories 6,348 5,164 Prepaid expenses and other current assets 5,404 3,274 Total current assets 68,277 29,462 Property and equipment, net 2,692 2,361 Goodwill 37,238 36,381 Intangible assets, net 2,216 5,807 Non-marketable equity securities 25,292 25,285 Capitalized equity issuance costs and other assets 1,668 4,265 Deferred tax assets — 86 Right-of-use assets 3,134 3,281 Total assets$140,517 $106,928 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable$2,428 $5,967 Accrued expenses and other current liabilities 6,428 7,944 Current portion of long-term debt 141 148 Current portion of deferred revenue 3,053 3,334 Payable to Kinduct sellers – current — 4,303 Total current liabilities 12,050 21,696 Long-term portion of term debt 50,458 25,649 Convertible notes, net – related party — 6,186 Warrant liabilities 1,225 — Deferred revenue, net of current portion 1,331 1,344 Deferred tax liabilities, net 68 — Operating lease liabilities and other non-current liabilities 2,934 3,088 Total liabilities 68,066 57,963 Commitments and contingencies Mezzanine equity Redeemable convertible preferred stock, $0.00001 par value. 0 shares authorized, issued, and outstanding at June 30, 2023; 3,207,472 shares authorized, issued and outstanding as of December 31, 2022; liquidation preference of $30,000 as of December 31, 2022 — 41,991 Non-redeemable convertible preferred stock, $0.00001 par value. 20,000,000 shares authorized, 0 shares issued, and outstanding at June 30, 2023; 29,524,294 shares authorized and 24,338,566 shares issued and outstanding as of December 31, 2022; liquidation preference of $146,548 as of December 31, 2022 — 143,192 Total mezzanine equity — 185,183 Stockholders’ equity (deficit) Common stock, $0.00001 par value. 900,000,000 shares authorized, 50,907,431 and 6,231,947 shares issued and outstanding at June 30, 2023 and December 31, 2022 1 1 Additional paid-in capital 211,914 692 Accumulated other comprehensive loss (561) (1,646)Accumulated deficit (140,039) (142,016)Total Movella stockholders’ equity (deficit) 71,315 (142,969)Non-controlling interest in subsidiaries 1,136 6,751 Total stockholders’ equity (deficit) 72,451 (136,218)Total liabilities, mezzanine equity and stockholders’ equity$140,517 $106,928
MOVELLA HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
MOVELLA HOLDINGS INC.
Reconciliation of GAAP Net Income Attributable to Common Stockholders to Non-GAAP Net Loss
(In thousands)
(Unaudited)
June 30, 2023 Six Months Ended
June 30, 2023 Net Income (Loss) Net Income (Loss)
Per Share Net Income (Loss) Net Income (Loss)
Per ShareGAAP net income (loss) attributable to common shareholders$(13,859) $(0.27) $1,661 $0.04 Deemed dividends from accretion of Series D-1 Preferred Stock — — 316 0.01 Stock-based compensation 493 0.01 1,157 0.03 Intangibles amortization 52 — 508 0.01 Loss on debt extinguishment — — 107 — Debt issuance costs — — 7,945 0.20 Revaluation of debt 7,292 0.15 (24,576) (0.60)Change in fair value of warrant liabilities (288) (0.01) (1,678) (0.04)Impairment of intangible assets — — 4,657 0.11 Non-GAAP net loss$(6,310) $(0.12) $(9,903) $(0.24)
MOVELLA HOLDINGS INC.
Reconciliation of GAAP Cost of Revenues and Operating Costs and Expenses to Non-GAAP Cost of Revenues and Operating Costs and Expenses
Three Months Ended June 30, 2023
(In thousands)
(Unaudited)
Financials Stock-Based
Compensation Amortization
of Intangibles Non-
GAAP
FinancialsRevenues Product$6,550 — — $6,550 Service 1,809 — — 1,809 Total revenues 8,359 — — 8,359 Cost of revenues Product 2,971 — — 2,971 Service 944 — — 944 Total cost of revenues 3,915 — — 3,915 Gross profit Product 3,579 3,579 Service 865 865 Total gross profit 4,444 4,444 Gross margin Product 54.6% 54.6%Service 47.8% 47.8%Total gross margin 53.2% 53.2%Operating expenses Research and development 2,203 80 — 2,123 Sales and marketing 3,785 148 — 3,637 General and administrative 6,192 265 52 5,875 Total operating expenses$12,180 $493 $52 $11,635 Total $493 $52 Loss from operations$(7,736) $(7,191)
MOVELLA HOLDINGS INC.
Reconciliation of GAAP Cost of Revenues and Operating Costs and Expenses to Non-GAAP Cost of Revenues and Operating Costs and Expenses
Six Months Ended June 30, 2023
(In thousands)
(Unaudited)
Financials Stock-Based
Compensation Amortization
of Intangibles Impairment of Intangibles Non-
GAAP
FinancialsRevenues Product$14,209 — — — $14,209 Service 3,317 — — — 3,317 Total revenues 17,526 — — — 17,526 Cost of revenues Product 5,332 — — — 5,332 Service 2,154 — 264 — 1,890 Total cost of revenues 7,486 — 264 — 7,222 Gross profit Product 8,877 8,877 Service 1,163 1,427 Total gross profit 10,040 10,304 Gross margin Product 62.5% 62.5%Service 35.1% 43.0%Total gross margin 57.3% 58.8%Operating expenses Research and development 5,107 299 — — 4,808 Sales and marketing 7,265 288 139 — 6,838 General and administrative 10,149 570 105 — 9,474 Impairment of intangible assets 4,657 — — 4,657 — Total operating expenses$27,178 $1,157 $244 $4,657 $21,120 Total $1,157 $508 $4,657 Loss from operations$(17,138) $(10,816)
MOVELLA HOLDINGS INC.
Reconciliation of GAAP Net Income Attributable to Common Stockholders to Non-GAAP Net Loss and Adjusted EBITDA
(In thousands)
(Unaudited)
June 30, 2023 Six Months Ended
June 30, 2023Net income (loss) attributable to common stockholders$(13,859) $1,661 Deemed dividend from accretion of Series D-1 preferred stock — 316 Stock-based compensation 493 1,157 Amortization of acquired intangibles 52 508 Loss on debt extinguishment — 107 Change in fair value of warrant liabilities (288) (1,678)Debt issuance costs — 7,945 Revaluation of debt, net 7,292 (24,576)Impairment of intangible assets — 4,657 Non-GAAP net loss$(6,310) $(9,903)Interest expense 8 180 Interest income (623) (879)Income tax expense 71 129 Depreciation and amortization, excluding acquired intangibles 229 445 Other income, net (149) (34)Costs incurred related to the transaction 78 394 Other infrequent costs 1,499 1,499 Adjusted EBITDA$(5,197) $(8,169)
MOVELLA HOLDINGS INC.
Quarterly Net Revenues by Product Grouping
(In thousands)
(Unaudited)
2023 March 31,
2023 December 31,
2022 September 30,
2022 June 30,
2022Product$6,550 $7,659 $10,068 $9,051 $7,064Service 1,809 1,508 2,049 1,213 1,513Total revenues$8,359 $9,167 $12,117 $10,264 $8,577
