Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 29, 2018 
 
QUANTENNA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
001-37927
 
33-1127317
(State or other jurisdiction
of incorporation)
 
(Commission
File No.)
 
(IRS Employer
Identification Number)

1704 Automation Parkway
San Jose, California 95131
(Address of principal executive offices)
(669) 209-5500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:  
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  x
 




Item 2.02.
Results of Operations and Financial Condition.
On October 29, 2018, Quantenna Communications, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of fiscal year 2018 ended September 30, 2018. In the press release, the Company also announced that it would be holding a conference call on October 29, 2018 to discuss its financial results for the third quarter of fiscal year 2018. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a copy of the supplemental financial commentary and supplemental earnings presentation is attached hereto as Exhibits 99.2 and 99.3, respectively. The press release, supplementary financial commentary and supplemental earnings presentation are incorporated herein by reference.
This information is intended to be furnished under Item 2.02 and Item 9.01 of Form 8-K, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No.
 
Description
 
Press Release issued by Quantenna Communications, Inc., dated October 29, 2018.
 
Supplemental Financial Commentary, dated October 29, 2018.
 
Supplemental Earnings Presentation, dated October 29, 2018.







EXHIBIT INDEX
 

Exhibit
No.
 
Description
 
Press Release issued by Quantenna Communications, Inc., dated October 29, 2018.
 
Supplemental Financial Commentary, dated October 29, 2018.
 
Supplemental Earnings Presentation, dated October 29, 2018.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
QUANTENNA COMMUNICATIONS, INC.
Date:
October 29, 2018
By: /s/ Tom MacMitchell
 
 
Tom MacMitchell
 
 
General Counsel

Exhibit
Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12516948&doc=25
 

News Release
Quantenna Announces Third Quarter 2018 Financial Results
Another Record Revenue Quarter Highlights Quantenna’s Broad Product Portfolio
San Jose, CA - October 29, 2018 - Quantenna Communications, Inc. (NASDAQ:QTNA), a global leader and innovator of leading-edge performance Wi-Fi solutions, today announced preliminary unaudited financial results for the third quarter ended September 30, 2018.
"Our strong third quarter operating results highlight the success of our Wave 3 10G product. This solution is now also designed into the flagship offering of one of the largest European broadband service providers in addition to its continued deployment by cable MSOs in North America. With strong customer engagement and positive market feedback, we also expanded our 802.11ax product family with the launch of our mainstream offering, the world’s only dual-band, 9-stream 802.11ax solution,” commented Dr. Sam Heidari, Chairman and Chief Executive Officer.
“We expect record revenue in the fourth quarter driven by continued growth across our primary product segments as we are expanding our addressable market into mainstream opportunities that are seeking a superior Wi-Fi experience.”
Financial Summary
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
September 30,
2018
 
October 1,
2017
 
% Change
 
September 30,
2018
 
October 1,
2017
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
59,349

 
$
50,108

 
18.4%
 
$
157,893

 
$
135,084

 
16.9%
Gross Profit
29,490

 
24,517

 
20.3%
 
78,119

 
66,872

 
16.8%
Gross Margin
49.7
%
 
48.9
%
 
80 bps
 
49.5
%
 
49.5
%
 
—%
 
 
 
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
 
GAAP
$
3,879

 
$
2,802

 
 
 
$
1,664

 
$
2,087

 
 
Non-GAAP
6,968

 
5,571

 
 
 
12,752

 
9,534

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share - diluted:
 
 
 
 
 
 
 
 
 
 
 
GAAP
$
0.10

 
$
0.07

 
 
 
$
0.04

 
$
0.05

 
 
Non-GAAP
0.17

 
0.14

 
 
 
0.32

 
0.25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands except per share data, unaudited)
 
 
 
 
 
 
 
 
 
 






Commentary on the third quarter 2018 financial results by Company management is available at http://ir.quantenna.com/events.cfm.
Please see the note below regarding the use of non-GAAP financial measures, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.
Third Quarter Company Highlights
Record revenue of $59.3 million, representing year over year growth of 18% over the third quarter of 2017 and 11% sequential growth over the second quarter of 2018.

Third quarter GAAP diluted EPS of $0.10 compares to $0.07 in the third quarter of 2017. Third quarter non-GAAP dilutive EPS of $0.17 compares to $0.14 in the third quarter of 2017.

Third quarter GAAP operating income grew 24% compared to the third quarter of 2017. Third quarter non-GAAP operating income grew 35% compared to the third quarter of 2017.

Third quarter cash generated from operations grew 118% compared to the third quarter of 2017. Cumulative 2018 year-to-date cash from operations grew 39% compared to 2017.

Record revenue from both our Wave 3 10G and Wave 2 product segments.

Expansion of Wave 3 10G into Europe with Deutsche Telekom’s award-winning Speedport Pro gateway powered by Quantenna’s Wave 3 10G solution, using its full 12 stream capabilities for maximum Wi-Fi performance.

Released and sampled to customers the QSR5GU-AX PLUS, the world’s only dual-band, 9-stream 802.11ax solution.

The latest North American cable MSO initiated a full volume rollout using our Wave 3 QSR 10G technology in their next generation gateway bringing our total to four cable MSOs in deployment.

Enabled individual Wi-Fi clients to exceed 1Gbps throughput using Quantenna's QSR10GU-AX PLUS and QSR10G with commercially available mobile products from Intel Corp.

Orange Poland launched their new dual-band dual-concurrent Wi-Fi repeater, the Smart Wi-Fi Box, based on one of our Wave 2 chipsets.

Integrated Plume’s Adaptive WiFi™ AI driven mesh solution into our QSR5GU-AX PLUS solution to deliver the next generation of whole-home mesh networking.

Announced a strategic partnership with Aerial Technologies to bring the latest in Wi-Fi motion detection technology to the market.












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Business Outlook
 
Fourth Quarter 2018
Guidance Range
Revenue
 $61M to $63M
Gross Margin
 
GAAP
49.9% +/- 100bps
Non-GAAP
50.0% +/- 100bps
Operating Expense
 
GAAP
$27.1M to $28.1M
Non-GAAP
$23.0M to $24.0M
Net income per share-diluted
 
GAAP
 $0.08 - $0.10
Non-GAAP
 $0.18 - $0.20
 
 
Gross margin, operating expense and net income GAAP to Non-GAAP reconciliation relates to stock-based compensation expense and change in deferred tax assets.
 
Webcast and Conference Call
Quantenna management will host a conference call discussing the quarterly results and business outlook following this press release at 1:30 p.m. Pacific Time today. Individuals interested in listening to the conference call may do so by dialing (877) 239-5585 for domestic callers or (661) 378-9806 for international callers. Please reference Conference ID: 1795125. An audio webcast and replay will be available on the “Investor Relations” section of Quantenna’s website at http://ir.quantenna.com/events.cfm.
Non-GAAP Financial Measures
In addition to GAAP reporting, Quantenna provides information regarding net income, gross profit, gross margin, and operating expenses on a non-GAAP basis. This non-GAAP information excludes stock-based compensation expense and changes to deferred tax balances. These non-GAAP measures are used by the Company’s management for the purposes of evaluating the underlying operating performance of the Company, establishing internal budgets, comparing performance with internal forecasts and goals, strategic planning, benchmarking against other companies, to provide a more consistent basis of comparison and to enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial tables included in this press release.
Forward-Looking Statements
This press release contains forward-looking statements based on Quantenna’s current expectations, including statements regarding Quantenna’s preliminary financial results for the third quarter ended September 30, 2018, forecasted financial results for the fourth quarter of fiscal 2018, expected future business and financial performance, growth opportunities, product technologies and customer relationships. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Quantenna are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Quantenna and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: challenges developing new and leading edge products on a timely basis that achieve market acceptance; the complexity of the products, including integration requirements with components from other third parties that are outside of Quantenna's control; quarterly fluctuations in revenues and operating results; intense

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market competition, including competition from other companies that are larger and have greater resources and broader product ecosystem offerings; ability to accurately predict future revenue and expenses; potential cancellation of customer orders; risks that Quantenna may not be able to maintain its historical growth or achieve similar levels of success with respect to new products; ability to attract and retain customers and service providers; dependence on a limited number of products and customers; intellectual property litigation risks; industry consolidation and risks associated with acquisitions, divestitures and strategic partnerships with respect to Quantenna as well as third parties; product liability risks; risks related to international operations, including the impact of increased tariffs and escalating trade tensions among countries on Quantenna and its customers, end customers, vendors and partners; dependence of Quantenna's customers on components from other third parties; risks that Quantenna may not be able to manage strains associated with its growth; dependence on key personnel; stock price volatility; the cyclical nature of the semiconductor industry; changes in tax and other laws affecting Quantenna’s business and operations; cyberattacks; adjustments to the preliminary financial results reported in this press release and related earnings call announcement and materials for the third quarter of 2018 in connection with completion of the final closing process and procedures and preparation of our Quarterly Report on Form 10-Q; and other factors that are detailed in the Securities and Exchange (“SEC”) filings of Quantenna, which you may obtain for free at the SEC’s website at http://www.sec.gov. Quantenna disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Quantenna Communications
Quantenna (Nasdaq:QTNA) is the global leader and innovator of high performance Wi-Fi solutions. Founded in 2006, Quantenna has demonstrated its leadership in Wi-Fi technologies with many industry firsts. Quantenna continues to innovate with the mission to perfect Wi-Fi by establishing benchmarks for speed, range, efficiency and reliability. Quantenna takes a multidimensional approach, from silicon and system to software, and provides total Wi-Fi solutions. For more information, visit www.quantenna.com.


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Quantenna Communications, Inc.
Condensed Consolidated Statements of Operations
(in thousands except per share data, unaudited)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
2018
 
October 1,
2017
 
September 30,
2018
 
October 1,
2017
 
 
 
 
 
 
 
 
 
 
Revenue
$
59,349

 
$
50,108

 
$
157,893

 
$
135,084

 
Cost of revenue
29,859

 
25,591

 
79,774

 
68,212

 
Gross profit
29,490

 
24,517

 
78,119

 
66,872

 
Operating expenses:
 
 
 
 
 
 
 
 
Research and development
17,783

 
15,011

 
52,468

 
43,699

 
Sales and marketing
3,833

 
3,363

 
12,307

 
9,553

 
General and administrative
4,886

 
3,735

 
13,602

 
11,231

 
Total operating expenses
26,502

 
22,109

 
78,377

 
64,483

 
Income (loss) from operations
2,988

 
2,408

 
(258
)
 
2,389

 
Interest expense

 
(103
)
 

 
(442
)
 
Other income, net
243

 
223

 
807

 
610

 
Income before income taxes
3,231

 
2,528

 
549

 
2,557

 
Benefit (provision) for income taxes
648

 
274

 
1,115

 
(470
)
 
Net income
$
3,879

 
$
2,802

 
$
1,664

 
$
2,087

 
Net income per share - basic
$
0.10

 
$
0.08

 
$
0.05

 
$
0.06

 
Net income per share - diluted
$
0.10

 
$
0.07

 
$
0.04

 
$
0.05

 
 
 
 
 
 
 
 
 
 
Shares used in computing net income per share:
 
 
 
 
 
 
 
 
Basic
37,070

 
34,734

 
36,476

 
33,907

 
Diluted
40,026

 
38,525

 
39,425

 
38,419

 
 
 
 
 
 
 
 
 
 
















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Quantenna Communications, Inc.
Unaudited reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data)
Non-GAAP Income Statement Items
Three months ended September 30, 2018
Three months ended October 1, 2017
 
GAAP
Measure
Stock-based
Compensation
Expense
Income Taxes*
Non-GAAP
Measure
GAAP
Measure
Stock-based
Compensation
Expense
Non-GAAP
Measure
Revenue
$
59,349

 
 
$
59,349

$
50,108

 
$
50,108

Gross profit
29,490

50

 
29,540

24,517

38

24,555

Gross margin
49.7
%
0.1
%
 
49.8
%
48.9
%
0.1
%
49.0
%
Research and development
17,783

2,248

 
15,535

15,011

1,367

13,644

Sales and marketing
3,833

541

 
3,292

3,363

416

2,947

General and administrative
4,886

1,163

 
3,723

3,735

948

2,787

Income from operations
2,988

4,002

 
6,990

2,408

2,769

5,177

(Provision) benefit for income taxes
648


(913
)
(265
)
274


274

Net income
$
3,879

$
4,002

$
(913
)
$
6,968

$
2,802

$
2,769

$
5,571

Basic shares outstanding
37,070

 
 
37,070

34,734

 
34,734

Basic earnings per share
$
0.10

 
 
$
0.19

$
0.08

 
$
0.16

Diluted shares outstanding
40,026

 
 
40,026

38,525

 
38,525

Diluted earnings per share
$
0.10

 
 
$
0.17

$
0.07

 
$
0.14


Non-GAAP Income Statement Items
Nine months ended September 30, 2018
Nine months ended October 1, 2017
 
GAAP
Measure
Stock-based
Compensation
Expense
Income Taxes*
Non-GAAP
Measure
GAAP
Measure
Stock-based
Compensation
Expense
Non-GAAP
Measure
Revenue
$
157,893

 
 
$
157,893

$
135,084

 
$
135,084

Gross profit
78,119

146

 
78,265

66,872

123

66,995

Gross margin
49.5
%
0.1
%
 
49.6
%
49.5
%
0.1
%
49.6
%
Research and development
52,468

7,170

 
45,298

43,699

3,986

39,713

Sales and marketing
12,307

2,118

 
10,189

9,553

1,179

8,374

General and administrative
13,602

3,489

 
10,113

11,231

2,159

9,072

Income (loss) from operations
(258
)
12,923

 
12,665

2,389

7,447

9,836

(Provision) benefit for income taxes
1,115


(1,835
)
(720
)
(470
)

(470
)
Net income (loss)
$
1,664

$
12,923

$
(1,835
)
$
12,752

$
2,087

$
7,447

$
9,534

Basic shares outstanding
36,476

 
 
36,476

33,907

 
33,907

Basic earnings per share
$
0.05

 
 
$
0.35

$
0.06

 
$
0.28

Diluted shares outstanding
39,425

 
 
39,425

38,419

 
38,419

Diluted earnings per share
$
0.04

 
 
$
0.32

$
0.05

 
$
0.25


*Income tax adjustment relating to change in US Federal and State deferred tax assets.

Quantenna Communications, Inc.
Unaudited Forward-Looking Statements Regarding Business Outlook
Business Outlook
 
Three Months Ended December 30, 2018
 
 
 
 
 
 
 
Low
 
High
Estimated GAAP diluted earnings per share
 
$
0.08

 
$
0.10

Estimated stock compensation expense
 
$
(0.10
)
 
(0.10
)
Estimated Non-GAAP diluted earnings per share
 
$
0.18

 
$
0.20



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Quantenna Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
 
September 30,
2018
 
December 31, 2017
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
34,559

 
$
24,432

Marketable securities
97,471

 
94,195

Accounts receivable
20,081

 
26,786

Inventory
21,578

 
12,662

Prepaid expenses and other current assets
6,512

 
2,744

Total current assets
180,201

 
160,819

Deferred tax assets
37,443

 
35,422

Property and equipment, net
13,418

 
12,511

Intangible and other assets, net
3,571

 
3,952

Total assets
$
234,633

 
$
212,704

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
10,255

 
$
3,754

Accrued liabilities and other current liabilities
23,220

 
21,065

Long-term debt, current portion

 
3,943

Total current liabilities
33,475

 
28,762

Other long-term liabilities
2,670

 
3,339

Total liabilities
36,145

 
32,101

 
 
 
 
Stockholders’ equity
 
 
 
Common stock
3

 
3

Additional paid-in capital
324,931

 
308,023

Accumulated other comprehensive loss
(894
)
 
(207
)
Accumulated deficit
(125,552
)
 
(127,216
)
Total stockholders’ equity
198,488

 
180,603

Total liabilities and stockholders’ equity
$
234,633

 
$
212,704



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Quantenna Communications, Inc.
Condensed Consolidated Cash Flows
(in thousands, unaudited)
 
Nine Months Ended
 
September 30, 2018
 
October 1, 2017
 
 
 
 
Cash flows from operating activities
 
 
 
Net income
$
1,664

 
$
2,087

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
3,467

 
1,566

Stock-based compensation expense
12,923

 
7,447

Deferred income taxes
(1,821
)
 

Other
705

 
347

Changes in assets and liabilities:
 
 
 
Accounts receivable
6,705

 
(8,340
)
Inventory
(8,916
)
 
(7,880
)
Prepaid expenses and other current assets
(3,768
)
 
(22
)
Deferred rent and other assets
159

 
(790
)
Accounts payable
6,498

 
5,119

Accrued liabilities and other current liabilities
2,075

 
14,660

Net cash provided by operating activities
19,691

 
14,194

Cash flows from investing activities
 
 
 
Purchase of property and equipment
(3,962
)
 
(6,961
)
Purchase of long-term investment
(590
)
 

Purchase of marketable securities
(47,917
)
 
(104,044
)
Proceeds from sales of marketable securities

 
3,670

Maturities of marketable securities
44,259

 
12,239

Net cash used in investing activities
(8,210
)
 
(95,096
)
Cash flows from financing activities
 
 
 
Proceeds from issuance of common stock, net
6,091

 
5,083

Payments of taxes withheld for vested stock awards
(2,428
)
 
(626
)
Payments related to intangible asset purchase
(815
)
 

Repayments of long-term debt
(3,943
)
 
(1,756
)
Net cash (used in) provided by financing activities
(1,095
)
 
2,701

Effect of exchange rates on cash and cash equivalents
(259
)
 

Net increase (decrease) in cash and cash equivalents
10,127

 
(78,201
)
Cash and cash equivalents
 
 
 
Beginning of period
24,432

 
117,045

End of period
$
34,559

 
$
38,844

 
 
 
 

Quantenna Communications, Inc.
Vernon Essi, Jr.
669-209-5647
vessi@quantenna.com

# # #


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q318exhibit992supplement
Quantenna Communications Third Quarter Fiscal 2018 Financial Commentary October 29, 2018 Key Financial Metrics from the Quarter Key Highlights from the Quarter • Revenue of $59.3 million vs: • Record revenue from both our Wave 3 10G and Wave ▪ $50.1 million in Q3'FY17 grew 18% Y/Y 2 product segments. ▪ $53.4 million in Q2'FY18 grew 11% Q/Q • Deutsche Telekom’s award-winning Speedport Pro • GAAP gross margin of 49.7% gateway is powered by Quantenna’s Wave 3 10G • Non-GAAP gross margin of 49.8% vs: solution, using its full 12 stream capabilities for ▪ 49.0% in Q3'FY17 grew 80bps Y/Y maximum Wi-Fi performance. ▪ 48.5% in Q2'FY18 grew 130bps Q/Q • Released and sampled to customers the QSR5GU-AX • Operating margin in Q3'FY18: PLUS, the world’s only dual-band, 9-stream 802.11ax ▪ 5.0% GAAP solution. ▪ 11.8% Non-GAAP • • GAAP diluted EPS $0.10 in Q3'FY18 vs: The latest North American cable MSO initiated a full volume rollout using our Wave 3 10G technology in ▪ $0.07 in Q3'FY17 their next generation gateway bringing our total to ▪ $0.03 in Q2'FY18 four cable MSOs in deployment. • Non-GAAP diluted EPS $0.17 in Q3'FY18 vs: • ▪ $0.14 in Q3'FY17 Demonstrated over 1Gbps of Wi-Fi throughput using Quantenna's QSR10GU-AX PLUS and QSR10G, each ▪ $0.12 in Q2'FY18 • Operating cash flow of $15.8 million vs: independently communicating with commercially available mobile products from Intel Corp. ▪ $7.3 million in Q3'FY017 ▪ ($2.9) million in Q2'2018 • Orange Poland launched their new dual-band dual- • Cash, cash equivalents & marketable concurrent Wi-Fi repeater, the Smart Wi-Fi Box, based securities $132.0 million on our QV860 chipset. • DSO 30 days, down 20 days Q/Q • Integrated Plume’s Adaptive WiFi™ AI driven mesh • Annualized inventory turns 5.5x, up from solution into our QSR5GU-AX PLUS solution to deliver 5.1x Q/Q the next generation of whole-home mesh networking. Fourth Quarter FY 2018 Guidance • Announced a strategic partnership with Aerial • Revenue: $61.0 to $63.0 million technologies to bring the latest in Wi-Fi motion • GAAP gross margin: 49.9% +/- 100bps detection technology to the market. • Non-GAAP gross margin: 50.0% +/- 100bps Financial Results Call and Webcast • GAAP OPEX: $27.1 to $28.1 million Our Q3 financial results webcast and call will commence • Non-GAAP OPEX: $23.0 to $24.0 million on October 29, 2018 at 1:30 p.m. PT (4:30 p.m. ET). The • Non-GAAP Tax Exp: Approximately $300,000 webcast may be accessed at http://ir.quantenna.com/. • GAAP earnings per share: $0.08 to $0.10 An archive of the webcast will be available for 90 days • Non-GAAP earnings per share: $0.18 to $0.20 from the date of this release. Quantenna Communications, Inc. Revenue Segmentation by WiFi Technology (in percentage of revenue, unaudited) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Period Ending Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 802.11n 15% 18% 17% 15% 9% 4% 3% 2% 802.11ac Wave 2 84% 79% 79% 72% 83% 83% 71% 68% 802.11ac Wave 3 (10G) 1% 3% 4% 13% 6% 13% 26% 30% Total Semi Revenue 100% 100% 100% 100% 98% 100% 100% 100% Other 0% 0% 0% 0% 2% 0% 0% 0% Total Revenue 100% 100% 100% 100% 100% 100% 100% 100% October 29, 2018 Quantenna Q3 2018 Financial Results Page 1 of 4


 
Quantenna Communications, Inc. Consolidated Statements of Operations (GAAP) (in thousands, unaudited) Period Ending Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 Revenue 37,492$ 37,891$ 47,085$ 50,108$ 41,275$ 45,117$ 53,427$ 59,349$ COGS 18,188 19,307 23,314 25,591 19,996 22,352 27,563 29,859 Gross Margin 19,304 18,584 23,771 24,517 21,279 22,765 25,864 29,490 GM % of revenue 51.5% 49.0% 50.5% 48.9% 51.6% 50.5% 48.4% 49.7% R&D 13,691 12,633 16,055 15,011 16,048 17,601 17,084 17,783 S&M 2,520 2,914 3,276 3,363 4,487 4,495 3,979 3,833 G&A 2,757 3,389 4,106 3,735 4,069 4,198 4,518 4,886 OPEX 18,968 18,936 23,437 22,109 24,604 26,294 25,581 26,502 OPEX % of revenue 50.6% 50.0% 49.8% 44.1% 59.6% 58.3% 47.9% 44.7% Operating Income (loss) 336$ (352)$ 334$ 2,408$ (3,325)$ (3,529)$ 283$ 2,988$ Op Inc % of revenue 0.9% -0.9% 0.7% 4.8% -8.1% -7.8% 0.5% 5.0% Interest & Other Income 10 3 45 120 237 334 230 243 Pretax Income (loss) 346 (349) 379 2,528 (3,088) (3,195) 513 3,231 Taxes 314 535 210 (274) (35,413) 52 (519) (648) Tax Rate 91% -153% 55% -11% 1147% -2% -101% -20% Net Income (loss) 32$ (884)$ 169$ 2,802$ 32,325$ (3,247)$ 1,032$ 3,879$ Consolidated Statements of Operations (Non-GAAP) (in thousands, unaudited) Period Ending Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 Revenue 37,492$ 37,891$ 47,085$ 50,108$ 41,275$ 45,117$ 53,427$ 59,349$ COGS 18,170 19,264 23,272 25,553 19,954 22,318 27,501 29,809 Gross Margin 19,322 18,627 23,813 24,555 21,321 22,799 25,926 29,540 GM % of revenue 51.5% 49.2% 50.6% 49.0% 51.7% 50.5% 48.5% 49.8% R&D 13,234 11,428 14,641 13,644 14,418 15,208 14,555 15,535 S&M 2,392 2,561 2,866 2,947 3,704 3,511 3,386 3,292 G&A 2,494 2,886 3,398 2,787 3,089 3,017 3,373 3,723 OPEX 18,120 16,875 20,905 19,378 21,211 21,736 21,314 22,550 OPEX % of revenue 48.3% 44.5% 44.4% 38.7% 51.4% 48.2% 39.9% 38.0% Operating Income 1,202$ 1,752$ 2,908$ 5,177$ 110$ 1,063$ 4,612$ 6,990$ Op Inc % of revenue 3.2% 4.6% 6.2% 10.3% 0.3% 2.4% 8.6% 11.8% Interest & Other Income 10 3 45 120 237 334 230 243 Pretax Income 1,212 1,755 2,953 5,297 347 1,397 4,842 7,233 Taxes 314 535 210 (274) (108) 237 218 265 Tax Rate 26% 30% 7% -5% -31% 17% 5% 4% Net Income 898$ 1,220$ 2,743$ 5,571$ 455$ 1,160$ 4,624$ 6,968$ GAAP to Non-GAAP Reconciling Items (in thousands, unaudited) Period Ending Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 Stock Based Compensation COGS 18$ 43$ 42$ 38$ 42$ 34$ 62$ 50$ R&D 457 1,205 1,414 1,367 1,630 2,393 2,529 2,248 S&M 128 353 410 416 584 984 593 541 G&A 263 503 708 948 980 1,181 1,145 1,163 Total 866$ 2,104$ 2,574$ 2,769$ 3,236$ 4,592$ 4,329$ 4,002$ Non-Recurring Items S&M 199$ Income Taxes (35,305)$ 185$ 737$ 913$ October 29, 2018 Quantenna Q3 2018 Financial Results Page 2 of 4


 
Quantenna Communications, Inc. Condensed Consolidated Balance Sheet (in thousands, unaudited) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Period Ending Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 Assets Current assets Cash, cash equivalents & marketable securities $ 117,045 $ 114,401 $ 124,389 $ 126,866 $ 118,627 $ 120,143 $ 120,082 $ 132,030 Accounts receivable 14,480 17,812 17,696 22,820 26,786 26,310 29,700 20,081 Inventory 15,820 13,361 20,985 23,700 12,662 18,420 21,391 21,578 Prepaid expenses and other current assets 2,470 3,745 4,332 2,444 2,744 2,949 2,369 6,512 Total current assets 149,815 149,319 167,402 175,830 160,819 167,822 173,542 180,201 Deferred tax assets - - - - 35,422 35,602 36,482 37,443 Property and equipment, net 4,742 6,025 6,380 11,215 12,511 12,415 12,838 13,418 Intangible and other assets, net 232 743 769 4,296 3,952 4,215 3,901 3,571 Total assets $ 154,789 $ 156,087 $ 174,551 $ 191,341 $ 212,704 $ 220,054 $ 226,763 $ 234,633 Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit) Current liabilities Accounts payable $ 8,936 $ 4,658 $ 13,401 $ 13,805 $ 3,754 $ 11,833 $ 8,904 $ 10,255 Accrued liabilities and other current liabilities 10,641 15,401 19,147 27,054 21,065 22,394 23,155 23,220 Long-term debt, current portion 2,257 2,288 2,563 2,487 3,943 - - - Total current liabilities 21,834 22,347 35,111 43,346 28,762 34,227 32,059 33,475 Long-term debt 3,680 3,539 2,445 1,900 - - - - Other long term liabilities 527 - 425 3,413 3,339 3,222 3,214 2,670 Total liabilities 26,041 25,886 37,981 48,659 32,101 37,449 35,273 36,145 Stockholders’ equity (deficit) Common stock 3 3 3 3 3 3 3 3 Additional paid-in capital 290,319 292,710 298,943 302,240 308,023 313,503 321,669 324,931 Accumulated deficit and other accumulated loss (161,574) (162,512) (162,376) (159,561) (127,423) (130,901) (130,182) (126,446) Total stockholders’ equity 128,748 130,201 136,570 142,682 180,603 182,605 191,490 198,488 Total liabilities and stockholders' equity $ 154,789 $ 156,087 $ 174,551 $ 191,341 $ 212,704 $ 220,054 $ 226,763 $ 234,633 Condensed Consolidated Cash Flows (in thousands, unaudited) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Period Ending Jan 01 '17 Apr 02 '17 Jul 02 '17 Oct 01 '17 Dec 31 '17 Apr 01 '18 Jul 01 '18 Sep 30 '18 Cash flows from operating activities Net income (loss) 32$ $ (884) 169$ 2,802$ 32,325$ $ (3,247) 1,032$ 3,879$ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 398 479 545 542 1,103 1,125 1,138 1,204 Stock-based compensation expense 866 2,104 2,574 2,769 3,236 4,592 4,329 4,002 Deferred income taxes - - - - (35,333) (733) (908) Other 160 135 62 150 288 (50) 117 458 Changes in assets and liabilities Accounts receivable 2,826 (3,332) 116 (5,124) (3,966) 476 (3,390) 9,619 Inventory (5,552) 2,459 (7,624) (2,715) 11,038 (5,758) (2,971) (187) Prepaid expenses and other current assets (618) (1,324) (574) 1,876 (313) (205) 580 (4,143) Other assets (66) (511) (27) (252) 323 58 43 58 Accounts payable 4,100 (4,268) 10,236 2,194 (10,354) 8,185 (3,213) 1,526 Accrued liabilities (1,539) 4,707 1,890 5,020 (5,912) 1,593 150 332 Net cash provided by (used in) operating activities 607 (435) 7,367 7,262 (7,565) 6,769 (2,918) 15,840 Cash flows from investing activities Purchase of property and equipment (1,103) (1,700) (746) (4,515) (2,009) (924) (454) (2,584) Purchase of long-term investments & marketable securities - - (71,169) (32,875) (27,746) (13,801) (25,787) (8,919) Proceeds from sale and maturities of marketable securities - - 4,994 10,915 21,215 11,515 24,605 8,139 Restricted cash 1,500 - - - - - - - Net cash provided by (used in) investing activities 397 (1,700) (66,921) (26,475) (8,540) (3,210) (1,636) (3,364) Cash flows from financing activities Proceeds from issuance of common stock, net of issuance cost 406 194 3,882 477 3,122 1,438 3,874 779 Proceeds from initial public offering, net of issuance costs 97,483 - - - - - - - Principal payments on debt (551) (672) (433) (651) (650) (3,943) - - Other 881 (31) (65) - (892) (873) (360) (2,010) Net cash provided by (used in) financing activities 98,219 (509) 3,384 (174) 1,580 (3,378) 3,514 (1,231) Effect of exchange rate changes on cash & cash equivalents - - - - 113 - (152) (107) Net increase (decrease) in cash and cash equivalents 99,223 (2,644) (56,170) (19,387) (14,412) 181 (1,192) 11,138 Cash and cash equivalents Beginning of period 17,822 117,045 114,401 58,231 38,844 24,432 24,613 23,421 End of period 117,045 114,401 58,231 38,844 24,432 24,613 23,421 34,559 October 29, 2018 Quantenna Q3 2018 Financial Results Page 3 of 4


 
Quantenna Communications, Inc. Non-GAAP Financial Measures In addition to GAAP reporting, Quantenna provides information regarding net income, gross profit, gross margin, and operating expenses on a non-GAAP basis. This non-GAAP information excludes stock-based compensation expense and changes to deferred tax balances. These non-GAAP measures are used by the Company’s management for the purposes of evaluating the underlying operating performance of the Company, establishing internal budgets, comparing performance with internal forecasts and goals, strategic planning, benchmarking against other companies, to provide a more consistent basis of comparison and to enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial tables included in this financial commentary. Forward-Looking Statements This press release contains forward-looking statements based on Quantenna’s current expectations, including statements regarding Quantenna’s preliminary financial results for the third quarter ended September 30, 2018, forecasted financial results for the fourth quarter of fiscal 2018, expected future business and financial performance, growth opportunities, product technologies and customer relationships. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "project," "will" and similar phrases as they relate to Quantenna are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Quantenna and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: challenges developing new and leading edge products on a timely basis that achieve market acceptance; the complexity of the products, including integration requirements with components from other third parties that are outside of Quantenna’s control; quarterly fluctuations in revenues and operating results; intense market competition, including competition from other companies that are larger and have greater resources and broader product ecosystem offerings; ability to accurately predict future revenue and expenses; potential cancellation of customer orders; risks that Quantenna may not be able to maintain its historical growth or achieve similar levels of success with respect to new products; ability to attract and retain customers and service providers; dependence on a limited number of products and customers; intellectual property litigation risks; industry consolidation and risks associated with acquisitions, divestitures and strategic partnerships with respect to Quantenna as well as third parties; product liability risks; risks related to international operations, including the impact of increased tariffs and escalating trade tensions among countries on Quantenna and its customers, end customers, vendors and partners; dependence of Quantenna’s customers on components from other third parties; risks that Quantenna may not be able to manage strains associated with its growth; dependence on key personnel; stock price volatility; the cyclical nature of the semiconductor industry; changes in tax and other laws affecting Quantenna’s business and operations; cyberattacks; adjustments to the preliminary financial results reported in this press release and related earnings call announcement and materials for the third quarter of 2018 in connection with completion of the final closing process and procedures and preparation of our Quarterly Report on Form 10-Q; and other factors that are detailed in the Securities and Exchange (“SEC”) filings of Quantenna, which you may obtain for free at the SEC’s website at http://www.sec.gov. Quantenna disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. About Quantenna Communications Quantenna (Nasdaq:QTNA) is the global leader and innovator of high performance Wi-Fi solutions. Founded in 2006, Quantenna has demonstrated its leadership in Wi-Fi technologies with many industry firsts. Quantenna continues to innovate with the mission to perfect consumer’s Wi-Fi experience by establishing benchmarks for speed, range, efficiency and reliability. Quantenna takes a multidimensional approach, from silicon to system and software, to provide total Wi-Fi network solutions. For more information, visit www.quantenna.com. October 29, 2018 Quantenna Q3 2018 Financial Results Page 4 of 4


 
exhibit993supplementaryi
is Wi-Fi Perfected System Cloud Semiconductors Software Analytics Supplementary Earnings Presentation Q3 2018


 
Safe Harbor and Non-GAAP Financial Measures This presentation contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, product development plans, competitive position, potential growth opportunities, use of proceeds and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the risk factors listed in our 10-K filed on February 28, 2018 and subsequent 10-Q filings. Forward-looking statements represent our beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial measures as defined by the SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix to this presentation. 2


 
Company Highlights Pioneer in both 8x8 and 4x4 advanced MIMO technology High-performance Wi-Fi leader Trendsetter and influencer within IEEE 802.11 standards body Proven execution & innovation Land and expand within each product generation yields rapid across four generations of solutions revenue growth with less incremental selling expense Over 1,700 man years of R&D and IP development Sustainable advantage & multiple Demonstrated leadership in 8x8 10G Wave 3, with nationwide barriers to entry deployment underway at scale Long product lifecycles and sticky Service provider positioning in Wi-Fi is unmatched design wins Over 90% follow-on design success with existing sockets Demonstrated initial success with Service provider telco opened up satellite opportunity >> current multiple growth drivers opportunity is cable MSO >> future is retail and enterprise Drove a 45% CAGR in revenue over last five years Attractive financial model with Generated cash from operations for the last two fiscal years significant operating leverage Strong gross margin profile of ~50% 3


 
At a Glance Strong Revenue Growth Profile $MM 200 million+ 60+ chips shipped products with $176 Quantenna inside $62 Q4 guide midpoint 45% CAGR $129 50+ 40+ service providers OEMs / ODMs $84 $158 $67 $40 ~410 85+ employees Issued and pending patents worldwide 2013 2014 2015 2016 2017 2018 4


 
Premium Strategy Drives Share Gains Each Tech Cycle Launch next- generation products Premium Premium Mainstream Mainstream Low Cost Low Cost Current Wi-Fi Generation Future Wi-Fi Generation  Continue leadership in the premium  Extend the previous generation to mainstream with market with new products cost-optimized products and introduce new products 5


 
Sizing Up the Premium Wi-Fi Market Total Wi-Fi Chipset Revenue Total Wi-Fi Enabled Device Shipments Quantenna’s premium Wi-Fi 2017-2022 2017-2022 CAGR technology leads the high CAGR performance, fixed-point 0.3 B 33% device market. 28% $1.9 B 0.8 B * $0.6 B 0.1 B Premium Wi-Fi in 6% Fixed-Point Devices -2% 0.6 B Mainstream Wi-Fi in $1.2 B Fixed-Point Devices $1.3 B 2.8 B Wi-Fi in Portable 6% Devices 3% 2.1 B * Premium Wi-Fi chipsets are defined by 4x4 MIMO or higher performance. $2.1 B $2.4 B 2017 2022 2017 2022 Source: ABI Research Wi-Fi Device Report 2Q 2018 and Quantenna assumptions Portable Devices include smartphones, feature phones, mobile device accessories, portable PCs, tablets, PC accessories, portable consumer electronics, smart home nodes and wearables. Non-Portable Devices include networking, connected home devices, gateways, set-top boxes, televisions, gaming consoles, desktop PCs, automotive, industrial, IoT, and others. 6


 
New Initiatives Expanding Served Markets Spartan Products 5GHz + 2.4GHz: Cable Gateway, Emerging Markets Bridge, STB 5GHz only: Telco US, Europe 802.11ax Wave 3 Wave 2 2017 2018+ 7


 
Q3 2018 Income Statement Highlights* Record quarterly revenue of $59.3 million Strong Revenue Growth Profile $MM $MM • 18% Y/Y growth vs Q3 2017 80 15% 200 • 11% Q/Q growth vs Q2 2018 YoY 70 18% 175 • 15% Y/Y growth TTM 2018 YoY Gross margin of 49.8% 60 150 • Exceeded guidance range of 48.25% to 50 125 49.25% Strong earnings performance 40 100 • $7.0 million net income 30 75 • $0.17 in EPS 20 50 – Exceeded $0.14 to $0.16 guidance range 10 25 0 0 Q3 2017 Q3 2018 TTM Q3 TTM Q3 2017 2018 *Gross margin, income and EPS figures are fully diluted based on non-GAAP reporting which excludes stock-based compensation and other specified one-time items. See reconciliation table. TTM means trailing twelve months. 8


 
Q3 2018 Cash Flow and Balance Sheet Highlights* Generated record $16M in cash from Strong Operating Cash Flow Performance $MM $MM operations in Q3 2018 25 25 • 118% Y/Y growth vs Q3 2017 • 39% Y/Y growth YTD 2018 20 20 • $0.40 per share 39% Cumulatively generated $27M in cash YoY from operations over the last two years 15 15 118% • $0.67 per share YoY Generated $13M in free cash flow in Q3 10 10 2018 • $0.33 per share 5 5 Cash, cash equivalents and investments of $132M and no debt 0 0 Q3 2017 Q3 2018 YTD Q3 YTD Q3 • $3.30 per share 2017 2018 *Gross margin, income and EPS figures are fully diluted based on non-GAAP reporting which excludes stock-based compensation and other specified one-time items. See reconciliation table. YTD means year-to-date. 9


 
Wi-Fi Technology Segmentation Highlights • 802.11ac Wave 3 (10G) revenue Technology Cycles Drive Growth Q3 was a record at $17.8 million $MM – Q/Q growth of 28% or $3.9 million 60 – Y/Y growth of 173% or $11.3 million – Q4 revenue expected to grow 5% to 50 10% Q/Q 40 • 802.11ac Wave 2 revenue Q3 was a record at $40.4 million 30 – Q/Q growth of 6% or $2.4 million – Y/Y growth of 12% or $4.3 million 20 – Q4 revenue is expected to be slightly up Q/Q 10 • 802.11n revenue 0 – Q3 declined 26% Q/Q to $1.2 million Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 – Q4 revenue expected to be slightly Other 802.11n 802.11ac Wave2 802.11ac Wave3 (10G) up Q/Q 10


 
Operating Results & Guidance* 2016 2017 Q2 2018 Q3 2018 Q4 2018 Guidance Revenue (M) $129.1 $176.4 $53.4 $59.3 $61 - $63 GAAP: 49.9% +/- 100bps Gross Margin 49% 50% 50% 50% Non-GAAP: 50.0% +/- 100bps GAAP: $27M to $28M OPEX 40% 38% 48% 44% Non-GAAP: $23M to $24M GAAP: $0.08 – $0.10 EPS $0.12 $0.17 $0.04 $0.26 Non-GAAP: $0.18 – $0.20 *Gross margin, OPEX and EPS figures are based on non-GAAP reporting which excludes stock-based compensation and other one-time items. 11


 
Balance Sheet Summary (in millions) 2016 2017 Q2 2018 Q3 2018 Cash, Cash Equivalents $117.0 $118.6 $120.1 $132.0 & Marketable Securities Total Assets $154.8 $212.7 $226.8 $234.6 Total Debt $5.9 $3.9 $0.0 $0.0 Total Liabilities $26.0 $32.1 $35.3 $36.1 Total Stockholders’ $128.7 $180.6 $191.5 $198.5 Equity 12


 
Appendix 13


 
Non-GAAP to GAAP Operating Margin Reconciliation* 2015 2016 2017 Q2 2018 Q3 2018 Non-GAAP Gross Margin 49% 50% 50% 49% 50% SBC: Gross Margin 0% 0% 0% 0% 0% GAAP Gross Margin 49% 50% 50% 48% 50% Non-GAAP Operating Margin (6%) 2% 6% 9% 12% SBC: R&D 0% 1% 3% 5% 4% SBC: S&M 1% 0% 1% 1% 1% SBC: G&A 1% 1% 2% 2% 2% Non-recurring items 0% 0% 0% 0% 0% GAAP Operating Margin (7%) (1%) (1%) 1% 5% *SBC means stock-based compensation, non-recurring items comprised of executive severance, percentages may not total due to rounding 14


 
Non-GAAP to GAAP Net Margin Reconciliation* 2015 2016 2017 Q2 2018 Q3 2018 Non-GAAP Net Margin (7%) 1% 6% 9% 12% SBC: Gross Margin 0% 0% 0% 0% 0% SBC: R&D 0% 1% 3% 5% 4% SBC: S&M 1% 0% 1% 1% 1% SBC: G&A 1% 1% 2% 2% 2% Non-recurring items 0% 0% (20%) (1%) (1%) GAAP Net Margin (8%) (1%) 20% 2% 6% *SBC means stock-based compensation, non-recurring items comprised of executive severance and income tax adjustment relating to recognition of US Federal deferred tax asset pursuant to release of valuation allowance. Percentages may not total due to rounding 15


 
Wi-Fi Perfected™ System Cloud Semiconductors Software Analytics 16