Immersion Corporation Q2 FY2021 earnings call

• Revenue grew 94% compared to Q2 2020, with GAAP net income $5.3 million vs a loss of $0.7 million in Q2 2020.
• In Automotive, expanded license with Stanley and engagement with OEMs/Tier 1s.
• In Gaming, PlayStation 5 success and DualSense/VR controller haptic integrations.
• In Mobile, new partnership with TITAN Haptics, ASUS license renewal, Peloton license, and industry standards development with MPEG.
• Continued focus on driving haptic adoption across target segments.

For the Automotive segment, Immersion is on track for double-digit percent revenue growth in fiscal 2021 compared to fiscal 2020, with an expanded license agreement with Stanley and engagement with OEMs and Tier 1s. In Gaming, the PlayStation 5's success and DualSense controller's role, along with VR controller haptic implementations, position them for double-digit revenue growth in fiscal 2021. The Mobile segment saw a new channel partnership with TITAN Haptics, ASUS renewing a license, Peloton executing a technology license, and mobile revenue on track to meet or exceed 2020 levels. Revenue from per unit royalty arrangements increased ~$4.8 million (111%) y-o-y, fixed fee license revenue increased $0.5 million, and recurring revenues were 91% of Q2 2021 revenues.

• Q2 revenue was better than anticipated, but potential headwinds from COVID resurgence and supply chain issues may affect quarterly growth.
• Confident in managing cost structure, expecting profitability and positive free cash flow in coming quarters.
• Remain on track for double-digit revenue and profitability growth.

• Uncertainty from COVID-19 resurgence and supply chain issues impacting licensees' businesses.

Q: On OpEx, do you expect it to remain relatively flat, seasonality impact, and TITAN's role in Chinese smartphone space?

A: Aaron: OpEx expected to stay in $17M-$19M range, not anticipating significant increase; seasonality may not hold due to COVID/supply chain; Jared: TITAN helps grow China licensing program but adoption may take time.

Q: Automotive upside, cash balance, M&A?

A: Aaron: Upfront payments in Automotive, applications across buttons/screens; no ongoing M&A; info in public filings.

Q: New offering timeline?

A: Info in 10-Q and public filings.