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InvenSense, Inc. Message Board

invnnaire 5 posts  |  Last Activity: Jan 16, 2015 7:56 AM Member since: Mar 13, 2013
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  • - Roadmap and design wins for 7-axis, announced almost a year ago, surely you can provide meaningful guidance for this product
    - Roadmap and design wins for audio products. Nearly 1.5 years since you spent $100M on this acquisition, what do you have to show for it? Is it even covering its amortization costs on its own? Is it possible the inventory write-down was for this product line? I don't want to see this lumped in Other with OIS, show this as a separate grouping and show us what you have done.
    - Margin stabilization. I always thought they should quite promising margins in the 50-55% range, but they need to be at atleast 45% - improvements here are key.
    - Execution - the market isn't giving you a blank check to grow for the sake of growing, but you are at an interesting inflection point. You have every ability to show solid earnings growth for the next 4 qtrs (over prior year) and if you execute you will have a solid positions in major leading consumer brands, markets, and products.
    - Get costs in line with your 3rd generation 6 axis product
    - Get new products out timely with all the engineers you have hired
    - Live within your means for a while and show that you can digest all that you have taken on. They needed the diversification away from Nintendo, then Samsung, they needed the volume of Apple to help justify their growth plans, now go execute.
    - Care less about the lawsuits. If you execute there is no case.

  • Reply to

    CES

    by whygjd56 Jan 2, 2015 11:56 AM
    invnnaire invnnaire Jan 2, 2015 12:40 PM Flag

    I think we are getting some pre-CES runup here. I'm hoping we get some announcements about 7-axis and perhaps something about some new audio products. Anyone else thinking the iwatch could have 7 axis in it?

  • invnnaire invnnaire Nov 15, 2014 11:03 AM Flag

    I think your math is incorrect. I'm thinking it's closer to 10-15mm units - tops, but I do agree this is something to be concerned with. Why was this missed previously? I'm not sure I'm buying the idea that sales was told not to work these sales. Was that decision worth 47% of your market cap? Doesn't smell right. Hire an extra sales person or two - they seem to be pretty good at hiring high dollar employees.

  • invnnaire by invnnaire Nov 14, 2014 8:54 AM Flag

    Trying to look at all angles by which INVN deserves a 47% haircut in just over 2 months. Remember that the price now is basically where it was back when Nintendo made up 80% of its business (on an annual basis). Here are my list of concerns:
    - product / customer diversification - more diversiifed at this point than an at any other time...absolute $'s of non top 10 revenue was a record for them this qtr.
    - margins - clearly a concern as they not only had to write-down inventory, but had issues with current mfg processes and/or yields, which may continue. They noted pricing pressure on ASPs, but I don't see that in the 10Q. ASP's fell within their prior/standard guidance. Their investor presentation even claims their long term model is still for margins in the mid 50's. If this problem were structural they would have removed that language.
    - competition - competitors now have competing 6 axis product, so people assume loss of share and greater pricing pressure to keep share. This is why you saw INVN come out with their press release on having shipped 400mm units of 6 axis product. This is how you defend your turf. Yes so and so may have a similar product, but I'm on my 3rd generation of this product that has been proven by all top tier OEMs. Who do you trust?
    - Slowing growth of largest market - yes cell phone growth is slowing, but attach rate for gyros, OIS, and hopefully microphones (audio) are growing and if INVN keeps it share, they will see above mkt rates of growth here.
    - Inability to leverage acquisitions for growth - probably too early to tell but the ADI purchase concerns me. We haven't heard much of progress here and I have no idea if we are even covering amortization each qtr.
    - Where does future growth come from - again somewhat of a wait and see but I can't imagine growth in VR, drones, iot, indoor navigation, etc aren't huge opportunities

    Discuss...

  • invnnaire by invnnaire Nov 13, 2014 12:29 AM Flag

    Between the 10Q and their investor presentation from their website a few interesting nuggets worth discussing. Apple at 26% of Q2 revenue and 17% for 1st 6 months of this fiscal year means they did $23.45m in Q2 and $3.22m in Q1 with Apple. Apple is important because they need volume to help absorb their fixed costs (opex) and growing amortization of intangibles (from acquisitions). At some point the acquisitions need to provide revenues, which I suspect they will in the next year. Nice to see that the last two acquisitions have payments tied to actual milestones within the next 12 months. As much as has been focused on ASP decreases, the biggest issue they have is slowing growth in units. Bottom line they are growing their cost structure faster than revenues and in that environment you can't afford missteps, such as: 7.4m write-down in old inventory and 1.8m for yield issues on 3rd generation product.

    I think the premise that INVN has nowhere to go but lower is short-sited. They will continue to see gyro attach rate increases, OIS market penetration, Chinese smartphone proliferation, and hopefully a year of new market entries - be it audio, 7 axis, and greater market diversification. Look at their FY14 customer chart - Lego, Coolpad, HP, and Tyco are all customers I don't remember hearing about previously. I can't help but imagine what markets they will be leading in 5 years. One of their charts shows FY15 market opportunity of $1.5B growing to $4.5B in FY18. If they can keep gross margins in the mid 40's that will produce nice YoY earnings gains for the foreseeable future. I suspect they will focus on execution and slow the rate of growth in infrastructure until they can show margin improvements. This will bring the investment community back around in another year, perhaps.

    Discuss...

INVN
14.93-0.04(-0.27%)Jan 27 4:02 PMEST

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