Summit Wireless Technologies (WISA) Stock Sees Dramatic Q3 Growth

Summit Wireless Technologies Inc (NASDAQ: WISA) is flying in the market this morning, and for good reason. The company reported its financial results for the third quarter of 2020, with a compelling performance, even in the face of COVID-19.

The company said that revenue grew 45% year over year, with more than 100% year over year growth expected in Q4. Moreover, the company’s first branded consumer product, the SoundSend Wireless Transmitter is expected to see tremendous expansion. Here’s what’s going on with WISA stock today:

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WISA Stock Is A Buy On Financial Results

In the press release, Summit Wireless Technologies provided both financial results, and a business update surrounding its performance in the third quarter and expectations for the fourt quarter.

The Business Update

In the press release, Summit Wireless Technologies said that it added 7 new WiSA members who represent 11 brands. Two of these brands are big names in the television space, including SKYWORTH and Hisense. In fact, this member growth means that the company now has 9 WisA display members, or members that offer television and projector offerings.

The company said that it continues to work to expand the amount of television brands that are engaged with WiSA. In fact, it expects to bring between five and seven new TV brands into the Association in 2021.

Aside from WiSA member growth, Summit Wireless Technologies said that consumer awareness is doing overwhelmingly well as well. In the third quarter, the company had 99,000 visits to its website, WisaAssociation.org. That figure is up 112% over the second quarter of 2020. Moreover, in the fourth quarter of 2020, WISA said that it expects to serve its website to between 150,000 and 175,000 visitors.

Moreover, the company reminded investors that it’s making waves in the entertainment space with the launch of its first WiSA branded product, SoundSend. SoundSend is a wireless HDMI transmitter that connects smart TVs to WiSA Certified speakers. Importantly, the product expands the company’s total available market to 800 million smart televisions, allowing smart surround systems to compete with mid-tier and premium soundbars.

The Financial Update

In the press release, Summit Wireless Technologies announced that the third quarter was the best financial quarter in the company’s history. Here are the financial highlights:

Revenue. Revenues increased 45% year over year in the third quarter.
Gross Margin. Gross margins were up dramatically as well. In fact, gross margin came in at 17.1% in the third quarter of 2020, compared to just 7.6% in the third quarter of last year.
Cash. As of September 30, 2020, WISA had about $9.1 million in cash and cash equivalents on hand.
Revenue Guidance. In the fourth quarter, Summit Wireless Technologies’ management said that it expects to generate more than 100% year over year revenue growth in the fourth quarter.

WiSA Association Highlights

The WiSA Association, or Wireless Speaker and Audio Association, founded by Summit Wireless Technologies, had some impressive updates of its own:

First and foremost, the Association unveiled SoundSend, it’s first branded product which is expected to be commercially available in November. This, combined with expanded TV brands will ultimately increase awareness of WiSA and what it offers to both consumers, and television and speaker manufacturers.

The Association also saw several partner product launches or planned product launches. Most notably, the company was involved in the Metz Skulptur 1 TV and Speaker combo by SKYWORTH launch. Moreover, it is preparing for a fourth quarter launch of the Certified LG Electronics WiSA Ready 4K UHD Smart Projector, the world’s first laser projector.

The company has also initiated WiSA Wave, a direct-to-consumer marketing campaign that enables members to participate in tailored campaigns with the Association’s social media database.

Coming Conference Call

Summit Wireless Technologies announced that it will host a conference call at 10:30 a.m. ET today, November 10, 2020. If you would like to take part, dial (877) 423-9813 or (201) 689-8673. The access code is 13711981. WISA suggests that you call in at least 10 minutes prior to the start time of the call.

Moreover, participants can view accompanying slides by clicking here.

Management Commentary

In a statement, Brett Moyer, CEO at WISA, had the following to offer:

All of WiSA’s performance metrics – membership, shipments, and website visitors – are gaining momentum. As leading indicators of Summit Wireless revenue, they give us confidence in our continued revenue growth in Q4 2020 especially as we enter the promising holiday season. Looking forward into 2021, we believe these trends will accelerates.

The Bottom Line

The bottom line here is that the third quarter of 2020 was a pivotal time for Summit Wireless Technologies and its WiSA Association. The company generated record-setting revenues, margins, and brand awareness metrics. At the same time, the WiSA association saw strong growth in WiSA members, took part in multiple product launches, one of which was its first branded product, and plans to do more of the same in the fourth quarter. With a compelling performance and impressive guidance for an even stronger Q4 performance, WISA stock is one to watch closely.