Transmeta Goes Red
Staff Reporter -- EDN, August 9, 2006
Transmeta Corp. exceeded its guidance for Q2, but that wasn’t enough to pull the company out of the red for the quarter.
The Santa Clara, Calif.-based provider of processor IP said that Q2 revenue came in at $9.3 million, compared to $24.7 million for the same period a year ago.
Last year’s Q2 revenue number included $10 million of license revenue and an incremental $6.7 million of product revenue, Transmeta said, in a statement.
Transmeta reported a net loss of $8.5 million or 4 cents per share for Q2 compared to net income of $6.8 million or 4 cents per share during the same period a year ago.
Gross margin for Q2 this year was 38.6 percent compared to gross margin in Q2 of last year which was 67.1 percent. Transmeta blamed the decline on the absence of license revenue.
"In the second quarter of 2006 we exceeded our financial guidance with respect to our financial results, and we added materially to our business potential with our major announcements relating to Microsoft and AMD," said Arthur Swift, president and CEO, in a statement. "Our relationships with these industry leaders deliver on our continuing goal to drive Transmeta's technology into high volume market segments by leveraging licensing, customized processor development and synergistic engineering services."
During the quarter Transmeta announced involvement in Microsoft’s FlexGo Program with a specialized version of the Transmeta Efficeon processor and reference platform for pay-as-you-go and subscription based computing in emerging markets. In addition, the company signed an exclusive agreement with AMD to market and provide a FlexGo-enabled version of the Efficeon processor in emerging markets under the AMD brand.
"We believe that the combination of Transmeta's unique microprocessor technology, AMD's worldwide consumer brand and Microsoft's FlexGo technology for pay-as-you-go computing offers the potential to bring affordable solutions quickly to market for the hundreds of millions of prospective computing users in emerging markets," Swift said.
Looking ahead, Transmeta said it is sticking with its previous guidance for the full year of revenue in the range of $48 million to $58 million, and a net loss of $26 million to $16 million or 13 cents to 8 cents per share. The loss includes non-cash charges of $7 million in patent amortization and $6 million of stock option compensation expense.
