Entropic Communications, Inc. (ENTR)
Q1 2009 Earnings Call
April 30, 2009 5:00 pm ET
Debra Hart - IR
Patrick Henry - President and CEO
David Lyle - CFO
Daniel Amir - Lazard Capital Markets
Sandy Harrison - Signal Hill
Tim Luke - Barclays Capital
Hamed Khorsand - BWS Financial
Ashish Rao - Credit Suisse
Previous Statements by ENTR
» Entropic Communications, Inc. Q3 2009 Earnings Call Transcript
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» Entropic Communications, Inc. Q3 2008 Earnings Call Transcript
I will repeat these instructions after management completes their prepared remarks. Today's conference is being recorded. And now, I would like to turn the call over to Debra Hart, Director of Investor Relations for Entropic Communications. Please go ahead, ma'am.
Thank you. Good afternoon, everyone and welcome to Entropic Communications first quarter 2009 conference call. Leading the call today are Patrick Henry, President and CEO, and David Lyle, our Chief Financial Officer.
Before we begin, I would like to remind you that various remarks that we make on this call concerning our expectations or beliefs about the future, including remarks about our future financial results, anticipated product deployment by service providers market trends, our goals and our prospects, all constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act.
These forward-looking statements and all other statements that may be made on this call that are not historical facts, are subject to a number of risks and uncertainties that may cause actual results to differ materially from the results indicated by such statements. We refer you to our most recently filed Form 10-K, in particular, to the section entitled “Risk Factors” and other reports that we may file from time-to-time with the SEC for additional information on factors that could cause actual results to differ materially from our expectations. Forward-looking statements we make on this call, speak only as of today's date. And we undertake no obligation to update these statements.
In addition, Entropic reports gross margin, operating expenses and net income or loss and basic and diluted net income or loss per share in accordance with GAAP and additionally on a non-GAAP basis.
Management believes the non-GAAP information is useful because it can enhance the understanding of the Company’s on going economic performance. And Entropic therefore uses non-GAAP reporting internally to evaluate and manage the Company's operation.
Entropic has chosen to provide this information to investors to enable you to perform comparisons of operating results in a manner similar to how the Company analyzes its own operating results. The full reconciliation of the GAAP to non-GAAP financial data can be found in our earnings release issued earlier today and we ask that you review it in conjunction with this call. We have posted a GAAP to non-GAAP reconciliation on our website for your convenience.
Now I'll turn the call over to Patrick Henry. Patrick?
Thank you Debbie, and thanks to everyone for joining the call today. Entropic's Q1, 2009, revenue was $24.1 million, slightly ahead of the midpoint of our guidance, our non-GAAP gross margins were strong at 52.4%, and we are diligent in our cost control efforts holding operating expenses of $16.9 million. We exited the quarter with $31.5 million in cash, cash equivalents, and marketable securities on the balance sheet.
Dave will take you to the numbers in greater detail and discus guidance for the second quarter later in the call, but first I’ll like to recap some of the key events which have occurred since our last quarterly conference call.
We recently seen strong momentum in support of the MoCA standard and our MoCA products. Time Warner Cable with second largest U.S. cable operator were held with 13 million pay-TV subscribers, recently announced plans to deploy, New MoCA-Enabled set-top Boxes to deliver Multi-room DVR and other connected Home Entertainment Services to its subscriber base later this year.
The new set top boxes utilizing in traffics MoCA 1.1 chipsets will enable subscribers to access, share and place a video recording throughout the home. Cox Communications is the third largest cable television company in United States with approximately 5 million pay-TV subscribers is adopting MoCA technology for high performance delivery of HD video and other multimedia content around the connected home. Cox Communications plan to deploy new MoCA-certified set-top boxes to deliver multi-room DVR and other connected home entertainment services to its subscriber base later this year.
These set-top boxes also use Entropic's MoCA 1.1 chipsets. The Time Warner and Cox announcements further validate MoCA as the factor of standards for connected home entertainment. These new tier 1 service provider deployments of our MoCA home networking solutions will provide new revenue streams starting in the second half of 2009, with a continued ramp in 2010.
Verizon the largest home networking deployment of our MoCA chips announced in their earnings call earlier this week another solid quarter for FiOS subscriber editions. They added 298,000 net new FiOS internet customers and 299,000 net new FiOS TV customers.
In the FiOS deployment, Entropic provides three MoCA chips for every FiOS internet installation and on average an additional three MoCa chips for every FiOS TV customers. And now we believe the channel inventory issues associated with the Verizon deployment is now behind us. The service provider deployment model is an essential part of Entropic's MoCA business about 90% of TV homes in the U.S. get their TV programming and their DVR for pay-TV service provider viewer cable, satellite or telco. According to the research firm SNL Kagan they are now with 31 million DVR homes in the U.S. and this figure is expected to nearly double the 59 million homes by the end of 2012.