Atomera Incorporated (ATOM) Bundle
Understanding Atomera Incorporated (ATOM) Revenue Streams
Understanding Atomera Incorporated’s Revenue Streams
Atomera Incorporated has generated limited revenue primarily from customer engagements for engineering services, integration license agreements, and licensing of its MSTcad software. As of 2024, the company’s revenue sources are detailed below:
Breakdown of Primary Revenue Sources
- Engineering Services Revenue: Revenue derived from the delivery of MST wafers and related consulting services.
- MSTcad Licensing Revenue: Revenue from monthly or yearly licenses granted to customers for the use of MSTcad software.
- Integration License Agreements: Revenue from agreements allowing customers to integrate MST technology into their manufacturing processes.
Year-over-Year Revenue Growth Rate
For the three and nine months ended September 30, 2024, Atomera reported revenues of approximately $22,000 and $112,000, respectively. In comparison, no revenue was recorded during the same periods in 2023, indicating a significant year-over-year growth.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | Q3 2024 Revenue (in $) | 9M 2024 Revenue (in $) |
|---|---|---|
| Engineering Services | 22,000 | 112,000 |
| MSTcad Licensing | 22,000 | 62,000 |
| Integration Licenses | 0 | 50,000 |
Analysis of Significant Changes in Revenue Streams
The most notable change in Atomera's revenue streams is the transition from no recorded revenue in 2023 to generating revenue in 2024, primarily from the MSTcad licensing and engineering services. This shift reflects the successful completion of contractual milestones and the commencement of commercial activities, particularly the license agreement with ST Microelectronics executed in April 2023.
As of September 30, 2024, the company has approximately $8,000 in deferred revenue, expected to be recognized over the next four months, indicating ongoing engagement with clients and potential future revenue growth.
A Deep Dive into Atomera Incorporated (ATOM) Profitability
A Deep Dive into Atomera Incorporated's Profitability
Gross Profit Margin: For the three months ended September 30, 2024, Atomera reported a gross profit margin of 86.4%, with revenue of $22,000 and cost of revenue totaling $3,000. For the nine months ended September 30, 2024, the gross profit margin was 1.8%, calculated from $112,000 in revenue and $110,000 in cost of revenue.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024, was ($4,800,000), resulting in an operating profit margin of (21,818.2%). For the nine months ended September 30, 2024, the operating loss was ($14,464,000), leading to a similar operating profit margin of (12,908.9%).
Net Profit Margin: The net loss for the three months ended September 30, 2024, was ($4,595,000), yielding a net profit margin of (20,886.4%). For the nine months ended September 30, 2024, the net loss was ($13,778,000), resulting in a net profit margin of (12,292.9%).
Trends in Profitability Over Time
Comparing the financial results year-over-year:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenue | $22,000 | $0 | $112,000 | $0 |
| Cost of Revenue | $3,000 | $0 | $110,000 | $0 |
| Gross Profit | $19,000 | $0 | $2,000 | $0 |
| Operating Loss | ($4,800,000) | ($5,353,000) | ($14,464,000) | ($15,880,000) |
| Net Loss | ($4,595,000) | ($5,039,000) | ($13,778,000) | ($15,210,000) |
Comparison of Profitability Ratios with Industry Averages
As of 2024, Atomera's gross profit margin of 86.4% significantly exceeds the semiconductor industry's average gross profit margin of approximately 50%. However, the operating and net margins indicate substantial operational losses, contrasting starkly with the industry averages, which typically hover around 15-25% for operating margins and 10-20% for net margins.
Analysis of Operational Efficiency
Operational efficiency metrics reveal:
- Research and Development Expenses: $2,759,000 for Q3 2024, down from $3,305,000 in Q3 2023.
- General and Administrative Expenses: $1,812,000 for Q3 2024, up from $1,683,000 in Q3 2023.
- Selling and Marketing Expenses: $248,000 for Q3 2024, down from $365,000 in Q3 2023.
Total operating expenses for Q3 2024 were $4,819,000, compared to $5,353,000 in Q3 2023, indicating a reduction in costs despite ongoing losses.
The overall trend indicates a focus on managing costs while attempting to grow revenue streams from licensing and engineering services, although profitability remains elusive as losses continue to accrue.
Debt vs. Equity: How Atomera Incorporated (ATOM) Finances Its Growth
Debt vs. Equity: How Atomera Incorporated Finances Its Growth
As of September 30, 2024, Atomera Incorporated's total liabilities amounted to approximately $4.247 million, with a long-term financing lease liability of $781,000. The company has minimal short-term debt, primarily related to operational financing needs.
The debt-to-equity ratio for Atomera is calculated by dividing total liabilities by total stockholders' equity. As of the same date, total stockholders' equity stood at approximately $15.893 million. This results in a debt-to-equity ratio of approximately 0.27 (calculated as $4.247 million / $15.893 million), indicating a relatively low reliance on debt compared to equity.
In terms of recent debt activity, Atomera has primarily utilized equity financing through its "at-the-market" (ATM) offering. For the nine months ending September 30, 2024, the company raised approximately $8.5 million from the sale of 1.9 million shares at an average price of $4.74 per share. Additionally, since that date, Atomera sold approximately 489,000 additional shares at an average price of $3.27, generating about $1.6 million in proceeds.
Atomera's credit ratings have not been explicitly detailed in the recent financial statements. However, the company has maintained a low interest expense, approximately $104,000 for the nine months ending September 30, 2024, reflecting its limited debt obligations.
The company effectively balances its financing strategies by leveraging equity to fund its growth while keeping debt levels manageable. This approach allows Atomera to invest in research and development without incurring excessive debt-related risks. As of September 30, 2024, Atomera's working capital was reported at approximately $14.4 million.
| Financial Metrics | Amount ($) |
|---|---|
| Total Liabilities | 4,247,000 |
| Long-term Financing Lease Liability | 781,000 |
| Total Stockholders' Equity | 15,893,000 |
| Debt-to-Equity Ratio | 0.27 |
| Net Proceeds from ATM Offering (9 months) | 8,500,000 |
| Shares Sold in ATM Offering (9 months) | 1,900,000 |
| Average Price per Share (9 months) | 4.74 |
| Additional Shares Sold Post-September 2024 | 489,000 |
| Average Price per Additional Share | 3.27 |
| Interest Expense (9 months) | 104,000 |
| Working Capital | 14,400,000 |
Assessing Atomera Incorporated (ATOM) Liquidity
Assessing Atomera Incorporated's Liquidity
Current Ratio: As of September 30, 2024, the current ratio is approximately 3.04, calculated from current assets of approximately $17.3 million and current liabilities of approximately $5.7 million.
Quick Ratio: The quick ratio, which excludes inventory from current assets, is approximately 3.04, indicating strong liquidity due to cash and cash equivalents of approximately $13.8 million and short-term investments of approximately $3.6 million.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, stands at approximately $14.4 million, reflecting a healthy liquidity position. The trend shows an increase in working capital compared to $19.5 million at the end of 2023, despite ongoing operational losses.
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash used in operating activities was approximately $10.2 million, compared to $11.6 million for the same period in 2023.
Investing Cash Flow: Net cash provided by investing activities for the same period was approximately $3.5 million, primarily due to the maturity of short-term available-for-sale investments.
Financing Cash Flow: Net cash provided by financing activities was approximately $7.9 million for the nine months ended September 30, 2024, primarily from the sale of common stock under the ATM offering.
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Cash Flow | -10.2 | -11.6 |
| Investing Cash Flow | 3.5 | -7.6 |
| Financing Cash Flow | 7.9 | 10.7 |
Potential Liquidity Concerns or Strengths
The company has demonstrated a strong liquidity position with $17.3 million in cash, cash equivalents, and short-term investments as of September 30, 2024. However, ongoing operational losses resulting in a net loss of approximately $13.8 million for the nine months ended September 30, 2024, raise concerns about long-term sustainability without additional revenue generation or capital raises.
In summary, while the current liquidity indicators are favorable, future liquidity will depend heavily on the company's ability to generate revenue from its technologies and manage its operational costs effectively.
Is Atomera Incorporated (ATOM) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of Atomera Incorporated (ATOM) focuses on key financial metrics that help determine if the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
As of the latest financial reports, Atomera has a net loss per share of $0.52 for the nine months ended September 30, 2024 . This results in a P/E ratio that is currently not applicable due to negative earnings.
Price-to-Book (P/B) Ratio
Atomera's book value per share is approximately $0.56 based on total stockholders' equity of $15.893 million and total shares outstanding of 28.289 million . The current stock price as of the latest trading session is around $3.27, leading to a P/B ratio of approximately 5.8.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
With no EBITDA reported for the last fiscal period due to ongoing losses, the EV/EBITDA ratio is also currently not applicable.
Stock Price Trends
The stock price of Atomera has fluctuated significantly over the past 12 months. The stock was priced approximately $6.68 at its peak and has since dropped to about $3.27. The 52-week range has been between $2.80 and $6.96, indicating volatility in its market performance.
Dividend Yield and Payout Ratios
Atomera does not currently pay dividends, reflecting its focus on reinvesting available capital into research and development.
Analyst Consensus on Stock Valuation
Analysts have varying opinions on Atomera's stock. The consensus rating is currently a Hold, with price targets ranging from $2.50 to $5.00.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 5.8 |
| EV/EBITDA Ratio | N/A (No EBITDA) |
| Current Stock Price | $3.27 |
| 52-Week High | $6.68 |
| 52-Week Low | $2.80 |
| Analyst Consensus | Hold |
Key Risks Facing Atomera Incorporated (ATOM)
Key Risks Facing Atomera Incorporated
The financial health of Atomera Incorporated is influenced by various internal and external risk factors that potential investors should consider. Below is a breakdown of these risks.
Industry Competition
The semiconductor industry is highly competitive, with numerous established players and emerging startups. Atomera faces significant competition from companies that offer alternative technologies. The rapid pace of innovation in this sector means that failure to keep up with technological advancements could adversely affect market share and revenue potential.
Regulatory Changes
Changes in regulations regarding semiconductor manufacturing processes and environmental standards can impact operational costs. Compliance with new regulations may require additional investment in technology or processes, which could affect profitability.
Market Conditions
Fluctuations in market demand for semiconductor products can pose risks. Economic downturns or shifts in consumer preferences can lead to decreased demand for Atomera's technologies, affecting revenue streams.
Operational Risks
Operational risks include potential disruptions in the supply chain or manufacturing processes. As an early-stage company, Atomera relies on third-party suppliers for certain components, making it vulnerable to supply chain disruptions. Additionally, any operational inefficiencies could increase costs and impact financial performance.
Financial Risks
Atomera has a history of recurring operating losses, with a net loss of approximately $13.8 million for the nine months ended September 30, 2024. The company will need to secure additional capital to fund ongoing operations and development efforts. As of September 30, 2024, it had cash and cash equivalents of approximately $13.8 million. Future capital requirements depend on various factors, including the ability to commercialize technology and generate revenue.
Strategic Risks
Strategic risks involve the company’s ability to execute its business plan successfully. Atomera's reliance on licensing agreements and collaborations for revenue generation means that any failure to secure such agreements could significantly impact financial stability. As of September 30, 2024, Atomera had deferred revenue of approximately $8,000, indicating reliance on future contracts for income.
Mitigation Strategies
To address these risks, Atomera has implemented various strategies. These include:
- Investment in R&D: The company has incurred approximately $8.2 million in research and development expenses for the nine months ended September 30, 2024, to enhance its product offerings.
- Equity Distribution Agreements: Atomera has an ATM offering with a remaining capacity of approximately $20.9 million as of September 30, 2024, to raise capital as needed.
- Cost Control Measures: The company is actively looking to manage operational costs, evidenced by a decrease in selling and marketing expenses by approximately 32% for the three months ended September 30, 2024.
Summary of Financial Performance
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Loss | $4.6 million | $5.0 million | $13.8 million | $15.2 million |
| Cash and Cash Equivalents | $13.8 million | $12.6 million | $13.8 million | $21.2 million |
| R&D Expenses | $2.8 million | $3.3 million | $8.2 million | $9.5 million |
| Deferred Revenue | $8,000 | N/A | N/A | N/A |
Investors should consider these risk factors when evaluating the financial health and future prospects of Atomera Incorporated.
Future Growth Prospects for Atomera Incorporated (ATOM)
Future Growth Prospects for Atomera Incorporated
Analysis of Key Growth Drivers
The company is poised for growth through several key drivers:
- Product Innovations: The introduction of MST technology is a significant innovation that enhances semiconductor manufacturing processes.
- Market Expansions: Strategic partnerships, such as the licensing agreement with STMicroelectronics, are expected to open new markets and increase revenue streams.
- Acquisitions: The company may explore acquisitions to enhance its technological capabilities and market reach.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth projections indicate a gradual increase as the company expands its product offerings and market presence. For the nine months ended September 30, 2024, revenue was approximately $112,000, compared to $0 for the same period in 2023. Analysts project a compound annual growth rate (CAGR) of around 15% to 20% over the next five years as the company successfully commercializes its technology and secures additional licensing agreements.
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic initiatives include:
- Partnership with STMicroelectronics: This partnership is expected to generate royalties on MST-enabled products, significantly contributing to future revenue.
- Expansion of MSTcad Licenses: The company plans to increase the number of licenses granted for its MSTcad software, which simulates the effects of MST technology, further driving revenue growth.
Competitive Advantages That Position the Company for Growth
The company possesses several competitive advantages:
- Proprietary Technology: The MST technology provides a unique selling proposition that differentiates it from competitors in the semiconductor industry.
- Strong Intellectual Property Portfolio: The extensive patent portfolio supports the company's innovations and protects its competitive edge.
- Experienced Management Team: The leadership team has significant expertise in semiconductor technology, enhancing strategic decision-making capabilities.
Financial Overview
As of September 30, 2024, the company reported:
- Cash and Cash Equivalents: Approximately $13.8 million
- Short-term Investments: Approximately $3.6 million
- Working Capital: Approximately $14.4 million
- Net Loss: Approximately $13.8 million for the nine months ended September 30, 2024.
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Revenue | $112,000 | $0 |
| Net Loss | $13.8 million | $15.2 million |
| Cash and Cash Equivalents | $13.8 million | $12.6 million |
| Working Capital | $14.4 million | $18.2 million |
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Article updated on 8 Nov 2024
Resources:
- Atomera Incorporated (ATOM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Atomera Incorporated (ATOM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Atomera Incorporated (ATOM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.