Immersion Corporation Q4 FY2020 earnings call

• Jared Smith noted 2021 is poised to be an inflection year for haptic technology adoption, with examples like Sony PlayStation 5 DualSense controller, Samsung and Apple in smartphones, VR, and automotive adoption accelerating.
• Aaron Akerman referred to the Q4 2020 financial performance as discussed in the press release.
• Jared Smith discussed auto win cadence, stating revenue can come as soon as the following year depending on licensees' design cycles, and Samsung is licensed across its smartphone product line.
• Jared Smith also talked about new markets like household appliances, where haptic feedback on touchscreens is emerging, and ASPs in such markets follow trends similar to mobile and automotive depending on volume and screen size.
• Jared Smith expressed excitement about the Sony PlayStation 5 deal, noting strong potential and scope, and discussed ASPs in the gaming controller market varying based on peripheral and volume.

Total Revenue for Q4 2020 was $10.9 million, down 5% from the same quarter last year but up over 40% sequentially. Revenue from per unit royalty arrangements increased approximately $0.4 million or 4% compared to the prior year quarter. Revenue from fixed license fee arrangements was down 34% primarily due to a $1.1 million fixed license fee from a mobility customer recognized in Q4 2019. Recurring revenues represented 91% of Q4 2020 revenues versus 60% in Q4 last year. By line of business as a percentage of total revenues in Q4 2020: 57% for mobility, 19% from gaming, 24% from automotive.

• Aaron Akerman stated they feel they can sustain non-GAAP OpEx between 17 and 19 million, currently below that level, and believe this provides ample room to run the business and support initiatives.
• Jared Smith mentioned continued growth in automotive with new licensees, potential revenue in the following year depending on design cycles, and haptic adoption in various markets including consumer, automotive, gaming, etc.

• The ongoing adverse effects of the COVID-19 global pandemic, which are beyond the control of Immersion.

Q: Anthony Stoss asked about the cadence of auto wins coming into play and Samsung's penetration across product lines.

A: Jared Smith said auto revenue can come as soon as the following year depending on licensees' design cycles, and Samsung is licensed across its entire smartphone product line.

Q: Anthony Stoss followed up with a question about household appliances use cases.

A: Jared Smith discussed touchscreens on devices like refrigerators, washing machines, printers, etc., where haptic feedback is emerging to confirm successful touch experiences, and ASPs follow trends based on screen size and volume.

Q: Derek Soderberg asked about the PlayStation 5 deal royalty rate and gaming controller ASPs.

A: Jared Smith was happy with the Sony license, scope, and economics, and mentioned ASPs vary in the gaming controller market depending on peripheral and volume.

Q: Derek Soderberg asked about OpEx levels and support for initiatives.

A: Aaron Akerman said they feel they can sustain non-GAAP OpEx between 17 and 19 million, currently below that level, providing ample room to run the business and support initiatives.