Exhibit 99.1

Aquantia Announces First Quarter 2019 Results

San Jose, Calif. – May 6, 2019 – Aquantia Corp., (NYSE: AQ), a leader in high-speed, Multi-Gigabit Ethernet connectivity solutions, today announced financial results for its first quarter ended March 31, 2019.

First quarter 2019 Summary:

 

   

Revenue for the three months ended March 31, 2019 of $17.0 million, a decrease of 42 percent sequentially and 40 percent year-over-year;

 

   

Gross margin of 53 percent for the three months ended March 31, 2019, compared to 57 percent for the three months ended December 31, 2018;

 

   

Operating loss of $13.2 million for the three months ended March 31, 2019, and non-GAAP operating loss of $10.8 million for the same period; and

 

   

Net loss per diluted share of $0.37 for the three months ended March 31, 2019, and non-GAAP net loss per diluted share of $0.31 for the same period.

First Quarter 2019 Results

Total revenue for the first quarter 2019 was $17.0 million, a decrease of 42 percent compared to $29.1 million in the prior quarter, and a decrease of 40 percent compared to $28.4 million in the first quarter 2018.

Gross profit for the first quarter 2019 was $9.0 million, or 53 percent of revenue, compared to $15.7 million, or 54 percent of revenue, in the prior quarter, and $16.1 million, or 57 percent of revenue, in the first quarter 2018. Operating expenses in the first quarter 2019 were $22.2 million, compared to $21.1 million in the prior quarter and $17.9 million in the first quarter 2018.

Loss from operations for the first quarter 2019 was $13.2 million, or 78 percent of revenue, compared to $5.3 million, or 18 percent of revenue, in the prior quarter, and $1.7 million, or 6 percent of revenue, in the first quarter 2018. Non-GAAP loss from operations for the first quarter 2019 was $11.0 million, or 64 percent of revenue, compared to $3.1 million, 11 percent of revenue in the prior quarter and $0.8 million, 3 percent of revenue in the first quarter 2018.

First quarter 2019 net loss was $13.1 million, or a loss of $0.37 per diluted share, compared to fourth quarter 2018 net loss of $5.5 million, or a loss of $0.16 per diluted share, and first quarter 2018 net loss of $1.4 million, or $0.04 per diluted share.


Non-GAAP net loss for the first quarter 2019 was $10.8 million, or a loss of $0.31 per diluted share. This compares to non-GAAP net loss of $3.2 million, or a loss of $0.09 per diluted share for the fourth quarter 2018 and non-GAAP net loss of $0.4 million, or $0.01 per diluted share for the first quarter 2018.

“We experienced weaker demand in the first quarter than we had anticipated as we saw several customers push out purchase orders,” said Faraj Aalaei, Chairman and CEO. “Our technical leadership remains strong and we are encouraged by our customers’ forecast as we see the deployment of 802.11ax in the Enterprise and our 10G PON design wins with Asian service providers driving our revenue growth throughout the year.”

Balance Sheet

Cash, cash equivalents and short-term investments totaled $62.4 million at March 31, 2019, compared to $67.4 million at December 31, 2018. The decrease of $5.0 million was primarily for our operating activities.

Non-GAAP Financial Measures

In addition to GAAP reporting, the Company provides non-GAAP financial measures on loss from operations and net loss. These non-GAAP financial measures exclude the income statement effects of stock-based compensation expense, amortization of acquired intangibles resulting from business combination, change in fair value of convertible preferred stock warrant liability and collaboration and development expense. The Company believes that these non-GAAP financial measures help analyze the Company’s financial results, establish budgets and operational goals for managing its business and to evaluate performance. The Company also believe that the presentation of these non-GAAP financial measures provides an additional tool for investors to use in comparing Aquantia’s core business and results of operations over multiple periods with other companies in the industry, many of which present similar non-GAAP financial measures to investors. However, the non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. The non-GAAP financial measures presented should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, comparable financial measures calculated in accordance with GAAP.

About Aquantia

Aquantia is a leader in the design, development and marketing of advanced, high-speed communications ICs for Ethernet connectivity in the Data Center, Enterprise Infrastructure, Access and Automotive markets. Aquantia products are designed to cost-effectively deliver leading-edge data speeds for use in the latest generation of communications infrastructure to alleviate network bandwidth bottlenecks caused by the growth of global IP traffic and in emerging and demanding applications such as autonomous driving. Aquantia is headquartered in Silicon Valley. For more information, visit www.aquantia.com.


Forward-Looking Statements

Statements in the press release for the first quarter 2019 regarding the Company, which are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as “outlook,” “believe,” “expect,” “may,” “will,” “provide,” “continue,” “could,” and “should,” and the negative of these terms or other similar expressions. These statements include statements relating to the deployment of the Company’s products and design wins driving revenue growth throughout the year. These statements are subject to significant risks and uncertainties and actual results could differ materially from those projected. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this release. These risks and uncertainties include, without limitation, risks and uncertainties related to: the Company’s ability to achieve or sustain profitable operations due to its history of losses and accumulated deficit; the Company’s dependence on a limited number of customers for a substantial portion of revenue and lack of long-term purchase commitments therefrom; the Company’s ability to achieve design wins in competitive selection processes; the Company’s ability to develop new or enhanced products in a timely manner; the size and growth potential of the markets that the Company targets and the Company’s ability to compete therein; market demand for the Company’s products, including by customers of its direct customers; reliance on third parties to manufacture, assemble and test our products as well as their ability to achieve cost and yield improvements; lengthy and expensive qualification processes; product defects; the Company’s ability to obtain and maintain intellectual property protection for its technology; developments in regulation and industry standards in the United States and other jurisdictions; and other risks inherent to the fabless semiconductor business. For a discussion of these and other related risks, please refer to the Company’s recent SEC filings which are available on the SEC’s website at www.sec.gov. These forward-looking statements are based on the Company’s expectations and assumptions as of the date of this press release. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events or changes in the Company’s expectations.

Public Relations Contact:

Diane Vanasse

408-242-0027

diane.vanasse@aquantia.com

Investor Relations Contact:

Deborah Stapleton

650-815-1239

deb@stapleton.com


AQUANTIA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2019     2018  

Revenue

   $ 17,022     $ 28,358  

Cost of revenue

     8,056       12,241  
  

 

 

   

 

 

 

Gross profit

     8,966       16,117  
  

 

 

   

 

 

 

Gross Profit Margin

     52.7     56.8

Operating expenses

    

Research and development

     16,070       12,574  

Sales and marketing

     2,719       2,287  

General and administrative

     3,422       2,997  
  

 

 

   

 

 

 

Total operating expenses

     22,211       17,858  
  

 

 

   

 

 

 

Loss from operations

     (13,245     (1,741

Other income (expense)

     368       248  
  

 

 

   

 

 

 

Loss before income tax expenses

     (12,877     (1,493

Provision for (benefit from) income taxes

     190       (125
  

 

 

   

 

 

 

Net loss

   $ (13,067   $ (1,368
  

 

 

   

 

 

 

Net loss per share

    

Basic

   $ (0.37   $ (0.04
  

 

 

   

 

 

 

Diluted

   $ (0.37   $ (0.04
  

 

 

   

 

 

 

Weighted—average shares used in computing net income per share:

 

Basic

     35,158       33,495  
  

 

 

   

 

 

 

Diluted

     35,158       33,495  
  

 

 

   

 

 

 

 

- more -


AQUANTIA CORP.

RECONCILIATION OF GAAP NET LOSS

TO NON-GAAP NET LOSS

(in thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2019     2018  

GAAP net loss

   $ (13,067   $ (1,368

Stock-based compensation expense:

    

Cost of revenue

     66       25  

Research and development

     1,232       573  

Sales and marketing

     350       111  

General and administrative

     642       269  
  

 

 

   

 

 

 

Total stock-based compensation expense

     2,290       978  

Amortization of acquired intangibles resulting from business combination

     8       8  
  

 

 

   

 

 

 

Non-GAAP net loss

   $ (10,769   $ (382
  

 

 

   

 

 

 

GAAP basic earnings per share

   $ (0.37   $ (0.04

Effect of non-GAAP adjustments on basic earnings per share

     0.06       0.03  
  

 

 

   

 

 

 

Non-GAAP basic earnings per share

   $ (0.31   $ (0.01
  

 

 

   

 

 

 

GAAP diluted earnings per share

   $ (0.37   $ (0.04

Effect of non-GAAP adjustments on diluted earnings per share

     0.06       0.03  
  

 

 

   

 

 

 

Non-GAAP diluted earnings per share

   $ (0.31   $ (0.01
  

 

 

   

 

 

 

Weighted—average shares used in computing net income per share:

 

Basic

     35,158       33,495  
  

 

 

   

 

 

 

Diluted

     35,158       33,495  
  

 

 

   

 

 

 

GAAP loss from operations

   $ (13,050   $ (1,741

Stock-based compensation expense

     2,290       978  

Amortization of acquired intangibles resulting from business combination

     8       8  
  

 

 

   

 

 

 

Non-GAAP loss from operations

   $ (10,752   $ (755
  

 

 

   

 

 

 

 

- more -


AQUANTIA CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     March 31,     December 31,  
     2019     2018  
     (unaudited)     (audited)  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 8,480     $ 6,684  

Short-term investments

     53,895       60,730  

Accounts receivable, net

     10,350       16,927  

Inventories

     17,015       14,474  

Prepaid expenses and other current assets

     1,801       2,018  
  

 

 

   

 

 

 

Total current assets

     91,541       100,833  

Property and equipment, net

     11,211       9,225  

Operating lease assets, net

     5,644       —    

Intangible assets, net

     3,546       3,748  

Other assets

     616       617  
  

 

 

   

 

 

 

Total assets

   $ 112,558     $ 114,423  
  

 

 

   

 

 

 

Liabilities and shareholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 6,349     $ 5,495  

Accrued liabilities

     15,750       13,907  

Operating lease liabilities, short-term

     839       —    
  

 

 

   

 

 

 

Total current liabilities

     22,938       19,402  

Operating lease liabilities, long-term

     6,251       —    

Other long-term liabilities

     413       1,799  
  

 

 

   

 

 

 

Total liabilities

     29,602       21,201  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     —         —    

Additional paid-in capital

     303,473       300,791  

Accumulated comprehensive loss

     (4     (123

Accumulated deficit

     (220,513     (207,446
  

 

 

   

 

 

 

Total stockholders’ equity

     82,956       93,222  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 112,558     $ 114,423  
  

 

 

   

 

 

 

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