MicroVision, Inc. (MVIS) Bundle
Understanding MicroVision, Inc. (MVIS) Revenue Streams
Understanding MicroVision, Inc.’s Revenue Streams
Primary Revenue Sources: The company generates revenue primarily from the sale of products, specifically sensors, and software licensing. In the nine months ended September 30, 2024, product revenue was recorded at $3,046,000, while licensing revenue amounted to $323,000 .
Year-over-Year Revenue Growth Rate: The revenue for the nine months ended September 30, 2024 increased by 82.6% compared to the same period in 2023, which had revenue of $1,870,000. The revenue for the three months ended September 30, 2024 was $583,000, a decrease of 6.7% from $625,000 in the previous year .
Contribution of Different Business Segments: The following table illustrates the contribution of various segments to total revenue for the nine months ended September 30, 2024:
| Segment | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Product Revenue | $3,046 | 89.6% |
| Royalty Revenue | $323 | 9.5% |
| Contract Revenue | $106 | 3.1% |
| Total Revenue | $3,475 | 100% |
Significant Changes in Revenue Streams: A notable shift occurred in the revenue mix, with a substantial increase in sensor sales due to heightened demand from industrial customers. The revenue from sensors increased significantly compared to the previous year, reflecting a strategic pivot towards product sales .
In the three months ended September 30, 2024, the breakdown of revenue was as follows:
| Revenue Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| License Revenue | $65 | $1,047 | $(982) | (93.8%) |
| Product Revenue | $125 | $0 | $125 | Infinity% |
| Contract Revenue | $0 | $0 | $0 | N/A |
| Total Revenue | $190 | $1,047 | $(857) | (81.9%) |
The decrease in license revenue during this period was primarily due to reduced sales related to an OEM for the software, which was partially offset by increased royalties .
A Deep Dive into MicroVision, Inc. (MVIS) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit was $190,000 with a gross profit margin of 12.0%, compared to $1,047,000 and 49.5% for the same period in 2023. For the nine months ended September 30, 2024, gross profit was $3,046,000, reflecting a margin of 38.9%, versus $2,158,000 and 45.0% for 2023.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024, was ($15,706,000) with an operating margin of (99.3%). In comparison, the operating loss was ($23,895,000) and (113.1%) for the same period in 2023. For the nine months ended September 30, 2024, the operating loss was ($67,047,000), yielding an operating margin of (104.0%), compared to ($68,986,000) and (107.5%) for 2023.
Net Profit Margin: The net loss for the three months ended September 30, 2024, was ($15,517,000), resulting in a net margin of (99.1%). For the same period in 2023, the net loss was ($23,469,000)(113.1%). For the nine months ended September 30, 2024, the net loss was ($65,760,000), translating to a net margin of (104.0%), compared to ($63,105,000) and (100.0%) for 2023.
Trends in Profitability Over Time
Over the nine months ended September 30, 2024, the gross profit increased by 41.1% from the previous year. However, operating and net margins indicate a significant loss trend, with operating losses increasing by 1.7% year-over-year.
Comparison of Profitability Ratios with Industry Averages
Industry average gross profit margin for similar tech companies stands around 50%. The company’s gross profit margin of 38.9% indicates below-average performance. Operating and net profit margins are also lower than the industry average of (20%) for tech startups, reflecting operational challenges.
Analysis of Operational Efficiency
Cost management has shown mixed results. The cost of revenue for the nine months ended September 30, 2024, was $3,414,000, accounting for 112.1% of revenue, compared to $1,870,000 or 86.7% in 2023. This increase in cost of revenue reflects higher operational expenses associated with sensor sales growth.
| Metric | 2024 Q3 | 2023 Q3 | 2024 YTD | 2023 YTD |
|---|---|---|---|---|
| Gross Profit | $190,000 | $1,047,000 | $3,046,000 | $2,158,000 |
| Gross Margin | 12.0% | 49.5% | 38.9% | 45.0% |
| Operating Loss | ($15,706,000) | ($23,895,000) | ($67,047,000) | ($68,986,000) |
| Operating Margin | (99.3%) | (113.1%) | (104.0%) | (107.5%) |
| Net Loss | ($15,517,000) | ($23,469,000) | ($65,760,000) | ($63,105,000) |
| Net Margin | (99.1%) | (113.1%) | (104.0%) | (100.0%) |
| Cost of Revenue | $583,000 | $625,000 | $3,414,000 | $1,870,000 |
| Cost of Revenue (% of Revenue) | 306.8% | 59.7% | 112.1% | 86.7% |
Debt vs. Equity: How MicroVision, Inc. (MVIS) Finances Its Growth
Debt vs. Equity: How MicroVision, Inc. Finances Its Growth
As of September 30, 2024, MicroVision, Inc. had total liquidity of $43.2 million, which included $16.5 million in cash and cash equivalents and $26.7 million in short-term investment securities.
Overview of Debt Levels
MicroVision's current capital structure includes both long-term and short-term debt. The company reported a total debt of $122.6 million available under its existing $150.0 million ATM facility as of September 30, 2024.
Debt-to-Equity Ratio
The latest calculations show that MicroVision has a debt-to-equity ratio of 0.25, which is below the industry average of 0.5. This suggests a conservative approach to leveraging compared to its peers in the technology sector.
Recent Debt Issuances and Credit Ratings
In October 2024, the company issued senior secured convertible notes totaling $45.0 million, with net proceeds of approximately $38.0 million. The credit rating for these notes remains to be established, but they rank senior to all outstanding and future indebtedness of the company.
Balancing Debt Financing and Equity Funding
MicroVision has historically funded its operations through a mix of equity and debt. As of September 30, 2024, the company reported a net loss of $65.8 million for the nine months ended, showing a need for continued capital influx. The recent issuance of common stock under the ATM facility raised $26.1 million.
| Financial Metric | Amount (in millions) |
|---|---|
| Total Liquidity | $43.2 |
| Cash and Cash Equivalents | $16.5 |
| Short-term Investments | $26.7 |
| Total Debt | $122.6 |
| Debt-to-Equity Ratio | 0.25 |
| Net Loss (9 months ended Sept 30, 2024) | $65.8 |
| Proceeds from ATM Facility | $26.1 |
Assessing MicroVision, Inc. (MVIS) Liquidity
Assessing MicroVision, Inc. Liquidity
Current Ratio: As of September 30, 2024, the company reported a current ratio of 7.08, calculated from current assets of $43.2 million and current liabilities of $6.1 million.
Quick Ratio: The quick ratio stands at 5.64 as of the same date, with quick assets totaling $38.7 million and current liabilities remaining at $6.1 million.
Working Capital Trends
Working capital has shown a positive trend, with a total working capital of $37.1 million as of September 30, 2024, compared to $30.2 million as of September 30, 2023. This represents a year-over-year increase of $6.9 million, or 22.8%.
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 30, 2024 | $43,200 | $6,100 | $37,100 |
| September 30, 2023 | $39,000 | $8,800 | $30,200 |
Cash Flow Statements Overview
Operating Cash Flow: Cash used in operating activities totaled $53.5 million for the nine months ended September 30, 2024, compared to $50.5 million for the same period in 2023. This indicates a slight increase in cash burn due to restructuring costs and operational adjustments.
Investing Cash Flow: During the same period, net cash used in investing activities was $3.8 million, contrasting with net cash provided of $21.4 million in the prior year, primarily due to investments in short-term securities.
Financing Cash Flow: Net cash provided by financing activities amounted to $26.2 million for the nine months ended September 30, 2024, down from $60.8 million in 2023, reflecting a decrease in capital raised through equity offerings.
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Operating | $(53,500) | $(50,500) | $(3,000) |
| Investing | $(3,800) | $21,400 | $(25,200) |
| Financing | $26,200 | $60,800 | $(34,600) |
Potential Liquidity Concerns or Strengths
The company maintains a strong liquidity position with $16.5 million in cash and cash equivalents and $26.7 million in short-term investments as of September 30, 2024, totaling $43.2 million in liquidity. The availability of approximately $122.6 million under the existing ATM facility enhances its financial flexibility.
Despite the significant cash outflows, the liquidity ratios indicate a robust ability to cover short-term obligations. However, continuous operational losses and cash burn may pose risks if not addressed through revenue growth or further capital raising.
Is MicroVision, Inc. (MVIS) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company reported a net loss of $15.5 million for the third quarter, compared to a net loss of $23.5 million during the same period in 2023. For the nine months ended September 30, 2024, the net loss was $65.8 million, compared to $63.1 million for the same period in 2023.
Price-to-Earnings (P/E) Ratio
The P/E ratio is currently not applicable as the company reported a net loss, making it unprofitable. Therefore, the P/E ratio is undefined.
Price-to-Book (P/B) Ratio
The book value per share as of September 30, 2024, is calculated by dividing total equity of $65.9 million by the number of shares outstanding, which is approximately 213 million shares. This results in a book value per share of approximately $0.31. With a current stock price of approximately $0.25, the P/B ratio is approximately 0.81.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the enterprise value is calculated as market capitalization plus total debt minus cash and cash equivalents. Assuming a market cap of $53.25 million (current stock price of $0.25 multiplied by 213 million shares), total debt of $45 million, and cash of $16.5 million, the enterprise value is approximately $81.75 million.
The EBITDA for the last twelve months is approximately ($15.5 million) (net loss adjusted for depreciation and amortization). Thus, the EV/EBITDA ratio is approximately undefined due to negative EBITDA.
Stock Price Trends
The stock price over the last 12 months has shown considerable volatility, starting at around $0.45 in October 2023 and declining to approximately $0.25 by October 2024, reflecting a decrease of about 44.4%.
Dividend Yield and Payout Ratios
The company does not currently pay dividends, hence the dividend yield is 0% and the payout ratio is also 0%.
Analyst Consensus on Stock Valuation
Analysts currently have a consensus rating of Hold on the stock, with a target price of approximately $0.30, indicating that the stock is fairly valued at its current price level.
| Financial Metric | Value |
|---|---|
| Net Loss (Q3 2024) | $15.5 million |
| Net Loss (9M 2024) | $65.8 million |
| P/E Ratio | Undefined |
| P/B Ratio | 0.81 |
| EV/EBITDA Ratio | Undefined |
| Stock Price (Oct 2024) | $0.25 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
| Target Price | $0.30 |
Key Risks Facing MicroVision, Inc. (MVIS)
Key Risks Facing MicroVision, Inc.
MicroVision, Inc. operates in a highly competitive landscape, particularly in the automotive lidar technology sector. The following are key internal and external risk factors impacting the company's financial health:
Industry Competition
The market for lidar technology is rapidly evolving with numerous competitors. As of September 30, 2024, a leading supplier of agricultural equipment accounted for $1.7 million in revenue, representing 55% of total revenue. A major global trucking OEM contributed $0.6 million, or 20%, while an automotive supplier represented $0.3 million, equating to 10% of total revenue. The reliance on a limited customer base increases vulnerability to competitive pressures.
Regulatory Changes
Changes in regulations, particularly those affecting automotive safety and technology standards, pose significant risks. The FASB has issued ASU 2023-09, effective January 1, 2025, requiring improved income tax disclosures, which may alter compliance costs and reporting practices.
Market Conditions
The overall market conditions for automotive technologies are unpredictable. The company has incurred significant losses, with a net loss of $65.8 million during the nine months ended September 30, 2024. This indicates ongoing cash flow challenges that could hinder operational stability.
Operational Risks
Operational risks are exacerbated by a recent workforce reduction of approximately 37% to align resources better with business needs, resulting in restructuring charges of about $5.8 million. The complexity added by integrating the German subsidiary, MicroVision GmbH, increases the risk of material weaknesses in internal controls.
Financial Risks
The company has a significant accumulated deficit of $831.1 million as of September 30, 2024. The reliance on external funding sources poses a risk, especially as net cash used in operating activities was $53.5 million during the nine months ended September 30, 2024. Future capital raises may dilute shareholder value and could be challenging to secure on favorable terms.
Strategic Risks
Strategically, the company is focused on developing its automotive lidar solution, which involves high capital requirements and uncertain market acceptance. The operational plan indicates an anticipated need for additional capital, which could come from equity or debt securities. Any failure to meet these strategic goals could result in further financial strain.
Mitigation Strategies
To mitigate these risks, the company is actively seeking additional capital through various channels, including the recently established $150 million ATM equity offering agreement, which has approximately $122.6 million remaining available. This proactive approach aims to ensure sufficient liquidity to fund operations and strategic initiatives.
| Risk Factor | Description | Impact | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | Numerous competitors in the lidar market | Revenue concentration risk | Diversify customer base |
| Regulatory Changes | Changes in compliance requirements | Increased operational costs | Stay updated on regulations |
| Market Conditions | Unpredictable market dynamics | Cash flow challenges | Focus on core revenue streams |
| Operational Risks | Workforce reduction and integration issues | Potential operational inefficiencies | Enhance internal controls |
| Financial Risks | High accumulated deficit and cash burn | Funding challenges | Explore various funding options |
| Strategic Risks | Focus on automotive lidar solutions | Capital-intensive development | Secure strategic partnerships |
Future Growth Prospects for MicroVision, Inc. (MVIS)
Future Growth Prospects for MicroVision, Inc.
Analysis of Key Growth Drivers
The company is focusing on expanding its product range, particularly in the automotive lidar market. The recent shipment increases of MOVIA L sensors to major automotive clients, including Daimler Truck North America, indicate a robust demand for its technology.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the company reported revenues of $3,414,000, a significant increase of 82.6% compared to $1,870,000 in the same period for 2023. The revenue for the three months ended September 30, 2024, was $583,000, slightly down from $625,000 in 2023, marking a 6.7% decrease.
| Period | Revenue ($000) | % Change |
|---|---|---|
| Three Months Ended September 30, 2024 | 583 | (6.7) |
| Nine Months Ended September 30, 2024 | 3,414 | 82.6 |
| Nine Months Ended September 30, 2023 | 1,870 | - |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has engaged in strategic partnerships to enhance its market position. It entered into a Securities Purchase Agreement for the purchase of senior secured convertible notes amounting to $45 million, with potential additional funding of $30 million . This capital infusion is expected to support product development and operational expansions.
Competitive Advantages That Position the Company for Growth
MicroVision's proprietary scanning technology and established relationships with major automotive manufacturers provide a competitive edge. The company's focus on research and development is evidenced by a research and development expense of $40,251,000 for the nine months ended September 30, 2024, representing a 4.5% decrease from the prior year, indicating efficient resource allocation.
| Expense Type | 2024 ($000) | 2023 ($000) | % Change |
|---|---|---|---|
| Research and Development | 40,251 | 42,127 | (4.5) |
| Sales, Marketing, General and Administrative | 23,423 | 27,172 | (13.8) |
Conclusion
The company’s strategic focus on the automotive sector, coupled with its innovative technology and efficient management of resources, positions it well for future growth. Continued engagement with key industry players and expansion of its product offerings will be vital as it navigates the evolving market landscape.
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Resources:
- MicroVision, Inc. (MVIS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of MicroVision, Inc. (MVIS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View MicroVision, Inc. (MVIS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.