From Wall Street – ClearOne – CY2017-Q3

Product transition happening, but slower than hoped for …

Summary of the Earnings Report

ClearOne reported total revenues of $10.6M in Q3, up 4% sequentially but down 18% year over year. As seen in our table below, the company’s video business is growing sharply, and represented 25% of total revenues in Q3, but couldn’t make up for the decline in the company’s pro audio business which typically represents 75-80% of the revenue pie. The company’s video business includes its VCaaS service dubbed Spontania, a set of appliance-based and PC-based video conferencing solutions, and cameras.

Total revenues in Q3 were aided by an “unusual large order” that shipped during the quarter. No details on this “bluebird” transaction were revealed other than a comment that bluebirds were not unusual for the company.

The company continues to struggle to reach the $50M annual revenue run rate which the company achieved in Y2013, Y2014, and Y2015. The challenge is acerbated by the fact that the market which ClearOne dominates is the tiny “installed audio” market.

In the company’s financial analyst earnings call, management continued to emphasize that the company is going through a major transition from its Converge Pro 1 product to the new Converge Pro 2. The transition is taking longer than first hoped. Management believes Y2018 will be the year for overall revenue growth.

The Company and its Market