FiEE, Inc. Q3 FY2021 earnings call

• Gray highlighted net revenue growth of 25% YOY, outpacing the industry decline. Gross margin dipped to 29.9% due to component inflation, but actions are being taken to mitigate impacts. - Inventory optimization efforts, especially for Amazon sales, were fruitful, with DOCSIS cable product sales up 5% Q/Q and market share at 31%. - Nicole discussed top-selling products, pricing strategy with an average 6% price increase, and new product launches like the Motorola MH7603 WiFi 6 mesh system. - Sean reviewed financials: net income of $1.7M, operating profit of $1.8M, and cash and cash equivalents of $19.4M as of Q3 end.

Net revenue for Minim in Q3 2021 was $15 million, representing a 25% year-over-year growth from $12 million in Q3 2020. Software services as a percentage of revenue mix increased, with the ratio of deferred software subscription revenue to recognized revenue rising to 8% (up from 7% in the prior quarter). The top three selling products were high ASP items: 20% of revenue came from the Motorola MG8702, while the DOCSIS 3.1 high speed modems Motorola MB8600 and MB8611 were the second and third top sellers.

• Expect Q4 consumer electronics sales to be positive YOY as per NPD. - Focus on sustainable growth, monitoring component inflation's impact on FY'22 targets. - Target adjusted EBITDA profitability in FY'22. - Q4 gross margin expected to be steady around 30% due to pricing adjustments and product mix.

• Persistent component inflationary pressures could accelerate product portfolio replacement cycles, affecting FY'22 top line targets. - Supply chain shortages and component pricing issues pose challenges to product availability and financial performance.

Q: Inventory levels and 4Q outlook.

A: Gray mentioned there are two types of inventory (chipset and general product), expecting steady levels going forward but noting the dynamic inventory environment.

Q: Gross margin outlook for 4Q.

A: Sean stated Q4 gross margin is expected to be steady around 30% as pricing increases offset component price pressures.

Q: Deferred revenue and ISP opportunities.

A: Gray and Nicole discussed that deferred revenue growth in Q4 is expected to be greater than Q3, driven by new product launches, and detailed plans for ISP solutions including software and hardware packages for rural broadband deployments and international markets