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Adesto Technologies announces preliminary second-quarter results and US$40mln stock offering

Second-quarter revenue estimates fell below Wall Street expectations

Smart home app on phone
The company develops tech for Internet of Things applications, such as fitness trackers or home automation

Adesto Technologies Corporation (NASDAQ:IOTS)) announced its preliminary second-quarter results as well as a proposed stock offering.

The tech company expects revenue to be approximately US$18.1mln to US$18.3mln, which is in the shallow end of the company’s prior expectations of US$18.1mln to US$19mln.

The California-based company fell below Wall Street revenue estimates of US$18.55mln.

Despite falling below expectations, the company did see a revenue increase compared with last year’s sales, which totaled US$13.41mln.

Gross margin for the second quarter is expected to be between 42% and 44%, falling below the company’s prior forecast of 46% to 48%.

Operating expenses for the second quarter are expected to be US$8.3mln to US$8.5mln, in line with company expectations of US$8.2mln and US$8.8mln.

READ: Adesto Technologies acquires Echelon Corp in $45mln deal; Echelon shares double

The company develops application-specific semiconductors for the Internet of Things, or a network of smart devices. Its DataFlash product is designed for data-logging applications, such as health and fitness tracking and home automation sensing.

“We experienced a slower than expected ramp of DataFlash-L products targeted at smart home application markets in the quarter, which reflected the timing of ramps across the broader end-market as opposed to any customer specific issues; together with the growing Tier-1 revenue, we experienced temporarily less-favorable product mix and gross margin in the second quarter,” said CEO Narbeh Derhacobian.

Stock Offering

The tech company plans to offer US$40mln worth of shares of its common stock in an underwritten public offering.

Underwriters will be granted a 30-day option to purchase up to an additional US$6mln worth of shares of Adesto’s common stock.

The net proceeds will be used in part to finance the company’s recent acquisition of Echelon Corporation.

Adesto signed a definitive agreement to acquire the networking platform developer in a US$30mln deal.

If the acquisition falls through, the proceeds will be used for general corporate purposes.

Shares of the IoT company fell more than 20% to US$6.70 in Monday afternoon trading.

 

Contact Lenore Fedow at [email protected]

Follow her on Twitter@LenoreMariee

 

Quick facts: Adesto Technologies

Price: 12.54 USD

NASDAQ:IOTS
Market: NASDAQ
Market Cap: $391.87 m
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