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Akoustis Technologies, Inc. (AKTS) Q3 2021 Earnings Call Transcript

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Akoustis Technologies, Inc. (NASDAQ: AKTS)
Q3 2021 Earnings Call
May 03, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and welcome to the Akoustis Technologies business update conference call. As a reminder, this conference call is being recorded. At the conclusion of the company's presentation, Akoustis management will take questions. [Operator instructions] A replay of the call will be available on the investor relations section of the Akoustis website.

It is now my pleasure to introduce Tom Sepenzis, director of investor relations. Thank you. You may begin.

Tom Sepenzis -- Director of Investor Relations

Thank you, operator. And good morning to everyone on the call. Welcome to Akoustis third-quarter fiscal 2021 business update conference call. We are joined today by our founder and CEO, Jeff Shealy; interim CFO, Ken Boller; and EVP of business development, Dave Aichele.

Before we begin, please note that today's presentation includes forward-looking statements about our business outlook. All statements other than statements of historical facts included in this conference call, such as expectations regarding our strategies, operations, costs, plans and objectives, including the timing and prospect of product development and customer orders, our expectations regarding achieving design wins from current and future customers the possibility of entering into collaborative or partnering relationships, potential impacts of the COVID-19 pandemic and guidance regarding expected revenue, product orders and milestones for the current and future fiscal quarters are forward-looking statements. Such forward-looking statements are predictions based on the company's expectations as of today and are subject to numerous risks and uncertainties. The company and our management team assume no obligations to update any forward-looking statements made on today's call.

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Our SEC filings mention important factors that could cause actual results to differ materially please refer to our latest Form 10-K and Form 10-Q filed with the SEC to get a better understanding of those risks and uncertainties. In addition, our presentation today will also refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings call highlight release available on the investors section of akoustis.com. I would now like to turn the call over to Jeff Shealy, founder and CEO of Akoustis.

Jeff Shealy -- Founder and Chief Executive Officer

Thank you, Tom, and welcome, everyone, to our 2021 third-fiscal quarter business update call. The March quarter was our strongest in history as we reported record quarterly revenue of $2.5 million, which was 11% above analyst consensus of $2.25 million and at the high end of our previous guided range of 2 to 2.5 million. Quarterly revenue increased over $1 million sequentially, an increase of 92% from December. The performance was driven by strength in our WiFi and 5G mobile businesses, as well as revenue from our DARPA contract and 5G infrastructure customers.

We achieved record quarterly XBAW filter revenue and unit shipments as RF filter sales were up more than 100% over the prior quarter. Given our robust sales pipeline, we expect quarterly filter shipments to continue to increase. We currently have 15 qualified commercial XBAW filters in our product catalog and recently introduced two new WiFi 6E filters which when qualified, will bring the number of catalog products to 17. As announced last week, Akoustis has recently been awarded nine new patents already in this calendar year, significantly expanding our IP portfolio.

The patents together cover certain BAW filter methods and devices for 5G, WiFi 6, WiFi 6E and C-V2X automotive applications. The new issuances bring the total number of Akoustis patents to 47 with 78 additional patents pending, not to mention the numerous unpublished trade secrets contained within the company. In the March quarter, the entire $25 million of convertible debt was retired resulting in a largely debt-free balance sheet as we exited the quarter. We further strengthened the balance sheet in the March quarter by raising an additional 52.3 million in cash through a combination of 21.5 million non-brokered registered direct offering at $14.36 per share, as well as 30.7 million through additional equity financing at an average price of $14.99 per share.

As a result, we ended the March quarter with over $90 million in cash. The strength of our balance sheet enables us to expand wafer fab capital equipment to drive new capacity and build tool redundancy to support equipment uptime that ultimately supports the needs of our growing customer base with challenging lead times to acquire new silicon fab equipment, coupled with further constraints expected in the future, driven by current chip shortages we are focusing on ensuring that we have the fab equipment to grow with anticipated customer ramps. Leveraging our strong balance sheet. We have begun hiring to support a 24 hour, seven-day per week or 24/7 shift operation to dramatically reduce wafer fab cycle time and increase wafer capacity.

Ultimately, the number of wafers we manufacture and sell is the key to driving our company to profitability. We believe the combination of our XBAW technology, RF filter product leadership, high-volume wafer manufacturing capacity and strong balance sheet leads to greater customer confidence to use Akoustis for their commercial wireless products. In summary, we are in the best position in our history to deliver on significant opportunities across multiple BAW filter markets and to deliver substantial revenue and earnings growth for years to come. However, in the short term, we see supply chain headwinds impacting several ramp schedules from our customers due to shortage of key semiconductor components, as we will discuss later in this call.

I would now like to provide a quick update on the impact of COVID-19 on our business and markets. While we continue to employ precautionary steps, including select remote work authorization and worksite isolation from outside visitors, I am pleased to report our on-site workforce attendance in office is approaching pre pandemic levels. Throughout these challenging times, the incredible flexibility afforded by our IDM manufacturing model has allowed us to continue to develop our products with minimal impact. Akoustis continues to operate with all key personnel as an essential business in both New York and North Carolina, and we continue to accelerate product development, consistent with our strategic road map.

We greatly appreciate our employees and value their flexibility and discipline staying safe during this challenging time. I would now like to address our business performance by market segment, beginning with WiFi. It is increasingly apparent that WiFi 6E is one of the most compelling near to intermediate-term market opportunities for Akoustis, as enormous momentum for the planned adoption of the new WiFi 6E spectrum continues to build both in the U.S. and worldwide, as other countries are making room for extended WiFi capabilities above 5.9 gigahertz.

We believe the WiFi 6E filter market will expand significantly in calendar 2022 and beyond, driven by the rapid release and adoption of Wi-Fi 6E CPE and strong indications that handset OEMs are planning to incorporate the new WiFi 6E standard in 5G smartphones, tablets, laptops and other devices, likely making the WiFi 6E market significantly larger than the current WiFi 6 market by both volume and revenue. As our new and growing product portfolio of 6E filters is now able to target routers, cable set-top boxes and other CPE markets, as well as the future 5G-enabled mobile device market, the demand for our WiFi 6E XBAW filters is robust, given our superior selectivity performance and smaller form factor as an early entrant in this rapidly developing market for high-frequency BAW micro filters. On the WiFi product front, we announced in January the successful design lock of our tandem 5.5 gigahertz and 6.5 gigahertz BAW micro filters for WiFi 6E, both of which are currently in the production qualification process, we've recently added two new standard WiFi 6E products, our 5.6 gigahertz and 6.6 gigahertz XBAW filters, which enable greater use of the 5 gigahertz portion of the Wi-Fi 6 specification. Furthermore, we also received our first order for these new filters solutions from an existing Tier 1 customer, both the 5.5/6.5 gigahertz and 5.6/6.6 gigahertz WiFi 6E coexistent solutions are breakthroughs, given their incredibly challenging wide bandwidth requirements, which are five times wider than our first 5.2 gigahertz product for the WiFi 6 market.

Over the past month, we announced two new WiFi 6E SoC reference design partners that are incorporating Akoustis XBAW filters in multiple current and future designs. As we have previously stated, the reference design model enables a one customer to many customer or one-to-many sales opportunity as we benefit from inclusion on the biller materials of leading baseband chipset suppliers. We now have multiple active engagements with OEMs, ODMs, SoC makers, and channel partners for both WiFi 6 and WiFi 6E. We are in the advanced stages of the sales cycle with several customers for WiFi 6E and expect additional design win announcements in the coming months.

In January, we announced a volume order for our 5.5, 6.5 gigahertz tandem WiFi 6E solutions from a new Tier 1 customer the order is for a multiple user, multiple in multiple out or mu MIMO customer-focused router using multiple 5.5 and 6.5 gigahertz XBAW filters. The customer expects to ramp this platform in the second half of calendar 2021. During the March quarter, we revised and improved our custom WiFi 6E filters for one of our two previously announced Tier 1 enterprise-class customers and delivered additional prototypes for their engineering builds. Both of our announced enterprise-class WiFi 6E customers intend to use our standard 5.5 and 6.5 gigahertz XBAW filters, which we expect to be qualified by early July.

We remain on track with both customers and expect to enter production once the respective product qualifications are complete. Our WiFi 6 XBAW filter solutions entered the commercial router market in the December quarter, as our high profiled Tier 1 retail consumer-focused customer began shipping finished product. We have successfully delivered millions of units manufactured in our New York fab to our customer for our Tri band MU-MIMO meshed router with multiple XBAW filters per device. Feedback from this customer continues to be extremely positive, and our current sales forecast supports strong unit demand throughout calendar 2021.

In addition, we have provided this customer samples and received an initial order of our standard WiFi 6E, 5.6 and 6.6 gigahertz filters for potential use in their future WiFi 6E platforms. To summarize our WiFi activity, we were awarded three new patents covering certain BAW devices for WiFi 6 and WiFi 6E during this quarter. We have six XBAW WiFi filters, four for WiFi 6E and two for WiFi 6. We have announced three design wins in WiFi 6, one of which is in a commercially available tri-band mesh router.

We announced two new WiFi 6E SoC reference design partners in the March quarter. We have announced three WiFi 6E customers that are planning to use our standard 5.5, 6.5 gigahertz XBAW filters and one planning to use our 5.6, 6.6 gigahertz solution. We have signed a strategic purchase agreement and are building multiple custom 6E filters for a third enterprise-class customer. And finally, we have over 15 customer engagements in WiFi 6E, 10 of which have already placed prototype purchase orders.

Next, moving on to 5G Mobile. The mobile handset BAW filter market is our largest potential intermediate to long-term market opportunity by both unit volume and revenue. We continue to see broad increased interest and activity for our XBAW filters for the 5G mobile market. In fact, our XBAW filters have already been evaluated by several leading Tier 1 and Tier 2 mobile handset OEMs in the December quarter, we added two new 5G mobile RF customers, which plan to incorporate our XBAW filters and upcoming products targeting 5G handsets.

The two new customers are in addition to the existing Tier 1 RF module maker that we have been engaged with for over a year, and we were actively engaged with all three of our mobile customers during the March quarter. As we have previously mentioned, entering the Tier 1 handset market in the near-term would require a partner, however, we believe with our previously announced capacity expansion of our New York fab which is expected to complete by this June and the plan to double that capacity once again by the end of the calendar 2021 that we will have the wherewithal to enter the mobile handset market servicing our recently announced new RF customers and/or several Tier 2 handset OEMs without a partner. With respect to our first Tier 1 mobile customer, we've remained actively engaged and delivered new 5G XBAW filters for testing and approval in the March quarter, in line with our stated objectives. Our second RF module customer, which we announced in early November, is moving quickly to develop a module for mobile applications using our XBAW filters.

The customer's product is expected to be available for sale by the end of calendar 2021 and I am happy to report today that we have successfully completed the first filter engineering prototypes for this customer in the March quarter, which was one of our stated milestones and expect to continue working with this customer to deliver a qualifiable product. Finally, in mid-December, we announced our third Tier 1 RF solutions customer. We are currently developing two 5G mobile XBAW filters for this customer with the goal of entering commercial production in calendar 2022. And I'm also pleased to share today that we have released the first XBAW filter design to the fab and plan to release the second design to the -- by the end of the June quarter.

Given early discussions with this customer, we believe our engagement may expand to include multiple filters for multiple bands in both 5G and WiFi modules. As this customer sells into multiple handset OEMs we expect that it could be a significant contributor to both filter volume and revenue in calendar 2022 and beyond. As we have previously discussed, we have dedicated engineering resources to the development of advanced chip scale packaging or CSP and wafer-level chip scale packaging or WLCSP to address the next-generation 5G mobile market. In the beginning of the March quarter, we announced that we had designed and process locked our first WLCSP product and we continue to work toward the qualification of this new packaging technology.

This morning, we announced the introduction of our second chip scale package, one which is suitable across multiple XBAW devices in the end markets and is slated for inclusion in an upcoming WiFi 6E CPE with a Tier 1 enterprise class customer. We have recently taken significant steps to strengthen our supply chain during the March quarter and once qualified and released, both new packages will be able to address the mobile device market across our entire product line, given the significantly smaller footprint of our new packaging solutions, delivering a one-to-one ratio to the size of the die. To summarize our 5G mobile activity, we have multiple customer-funded XBAW filters in design. We have announced three customer engagements, two Tier 1 RF component companies and one leading RF front-end module maker, and all three customer engagements are actively engaged with either our design or manufacturing teams.

And finally, we have just completed the development of our second chip scale package and are working toward creating a more robust supply chain for wafer-level packages in the second half of calendar 2021. Next, I would like to discuss our opportunities in 5G network infrastructure. Wide bandwidth, high-power handling, low insertion loss and high out-of-band rejection are the core filter performance requirements for 5G network infrastructure, Akoustis is ideally positioned to grow its market share in this segment, given our small Form factor solutions and our growing portfolio of RF filters above three gigahertz, where 5G is being deployed worldwide. We are currently designing and/or shipping filters in three main segments of the 5G infrastructure market, including small cell base stations, massive MIMO base stations, and Citizens broadband radio service, or CBRS equipment, the FCC C-Band auction for 3.7 to 3.98 gigahertz spectrum began in December and raised over $80 billion on a new sub 6 gigahertz 5G spectrum in the United States.

This has created yet another 5G network infrastructure opportunity for Akoustis and we expect to demonstrate XBAW filters addressing this new 3.8 gigahertz spectrum in the June quarter. We have several active engagements from OEMs that are targeting rollouts in calendar 2022 and beyond. We continue to ship XBAW filters to our Tier 1 5G small cell network infrastructure customer in support of its initial ramp we have shipped a total of four filter products to this customer and have thus far received three design wins. The production ramp with this customer is presently slower than previously expected given operator driven network deployment priorities and timing changes, but we will continue to expect to ramp production with multiple filters with this customer in the current calendar year.

The ramp timing of our second small cell 5G network infrastructure customer has similarly been affected by operator driven network deployment priorities and timing changes but we expect volume shipments to begin in the second half of calendar 2021. The Citizens Broadband Radio Service, or CBRS, has emerged as a new market for Akoustis after the spectrum auctions that occurred last summer. We continue to believe that the successful utilization of the CBRS bands within the 5G network will require a significant amount of high-frequency filters and recent customer design activity continues to support this thesis. We design locked our first 3.6 gigahertz CBRS XBAW filter in March of 2020 and announced our first order from a distributor in the September quarter to support promotion and customer engagements.

In the December quarter, we received our first volume order from a leading wide area network equipment provider for both CBRS infrastructure and customer premise equipment. We understand that this customer remains on track to begin commercial ramp in the second half of calendar 2021. During the March quarter, we announced our first design win in CBRS with a leading infrastructure maker. The customer intends to use our 3.6 gigahertz CBRS filter modules for fixed wireless infrastructure equipment and is expected to ramp in the second half of calendar 2021.

Furthermore, we are currently engaged with over 10 SOC, OEM and ODM makers for the development of CBRS networks using 5G and expect to have additional design wins in calendar 2021 and beyond. To summarize our 5G network infrastructure activity, Akoustis was awarded a new patent in the March quarter covering certain BAW devices for 5G Band N79. Further, we have five completed 5G network infrastructure filters, four for small cell base stations and one for CBRS. In addition, we have also announced three design wins in small cell with our Tier 1 customer.

We expect volume shipments to our second-tier customer in the second half of 2021. And in addition, we received our first design win for CBRS from a leading network infrastructure OEM. We also have announced the CBRS order from a leading wide area network customer for infrastructure and CPE. And finally, we have over 10 customer engagements, five of which that have already placed purchase orders.

Next, I would like to discuss our progress in our other market segments. During the March quarter, we continued to develop our technology, involving the multiyear R&D contract from the Defense Advanced Research Projects Agency, or DARPA, through the development of a Piezo MEMS process design kit, or PDK, for the company's proprietary and patented XBAW process. The direct to Phase 2, or DP2, contract is dedicated to developing a general-purpose PDK that will enable BAW and other similar MEMS structures to be designed and fabricated using the company's state of the art and patented XBAW process. We expect this will expand the opportunities for XBAW moving forward as other designers will be able to develop new products, utilizing our novel piezoelectric materials and substrates outside of the current devices, which could lead to new opportunities in adjacent vertical markets.

To summarize our other market segment activity, we have seven completed XBAW filter solutions for the civilian and defense markets. We have one design win in phased-array radars and continue to ship production filters to our customer. We continue to refine and improve our XBAW PDK, driven by the DP2 contract with DARPA. We were awarded a new patent covering certain BAW devices for 5.9 gigahertz C-V2X automotive applications during the March quarter.

And finally, we have a total of three customer engagements, two of which that have already placed purchase orders or provided NRE revenue. Now, I would like to turn the call over to Ken to go through select financial highlights.

Ken Boller -- Interim Chief Financial Officer

Thank you, Jeff. For the third quarter ended March 31, the company reported record revenue of 2.5 million, which was a sequential increase of 92% over the December quarter and at the high end of our previous guided range. This revenue growth was driven by a 125% increase in our core filter related revenue. On a GAAP basis, operating loss was 9.1 million for the March quarter mainly driven by revenue of 2.5 million, offset by labor costs of 6.8 million, depreciation of 1.2 million and other operational costs totaling 3.6 million.

As a result, GAAP net loss per share was $0.22. On a non-GAAP basis, operating loss was 7.1 million and non-GAAP net loss per share was $0.15. The reconciliation of these amounts to the corresponding GAAP measures is available in the press release issued this morning, available on the investors section of the corporate website. Capex spend for Q3 was 5.4 million compared to 2.1 million in the prior quarter, mostly related to the capacity expansion in the company's New York fab.

Cash used in operating activities in Q3 was 5.9 million, down from 8.3 million in the prior quarter. The company exited the March quarter with 90.4 million of cash and cash equivalents versus 47.8 million at the end of the previous quarter. As Jeff previously stated, during the March quarter, the company raised 52.3 million in cash through a combination of a 21.5 million non-brokered registered direct offering at $14.36 per share, as well as 30.7 million through additional equity financing at an average price of $14.99 per share. The company also took action to bolster our balance sheet by calling for the redemption of the entire 25 million principal amount of our May and November 2018, 6.5% convertible notes, which were converted into shares of common stock.

As of today, our company has zero debt on the balance sheet. Given the current challenges in the semiconductor supply chain and how that may impact our customers, as well as small timing shifts involving 5G small cell network infrastructure, we expect revenue for the June quarter to be in the range of 2.25 to 2.75 million or flat at the midpoint as we align to the ramp of new customer production programs. However, XBAW filter unit shipments during the June quarter are expected to increase over 75% sequentially as the mix shifts away from nonrecurring engineering or NRE revenue. It is important to note that whereas we believe the revenue opportunity for the company is both quite substantial and sustainable over an intermediate to long-term horizon our near-term quarter-to-quarter revenue is being negatively impacted by the timing of customer design schedules and production ramps.

These timing shifts are largely driven by semiconductor shortages, which are impacting the global electronics industry, as well as carrier deployment priority shifts, primarily in Asia, that have impacted customer ramp timing. We expect sequential growth returning later in calendar 2021 and as the shortages and timing shifts are expected to impact us in the short term. Finally, I would like to add that with over 90 million in cash on the balance sheet and no debt, we should have ample cash on hand to advance our business plan to cash flow breakeven, which we expect to be achieved in the next 12 to 24 months. I would now like to turn the call back over to Jeff to discuss our future milestones.

Jeff Shealy -- Founder and Chief Executive Officer

Thank you, Ken. Our filter backlog and sales funnel continued to grow as we enter commercial production across multiple markets and layer in new customers across each of our major segments. As we are still in the early phase of filter commercialization and revenue ramp and still have a relatively small number of customers. Our quarterly performance can at times be lumpy, largely driven by factors outside of our control.

In the June quarter, we expect to generate revenue from each of our business segments, including 5G mobile, WiFi, 5G network infrastructure in other markets, including defense. While we are experiencing unanticipated weakness in our 5G small cell business, driven by changing carrier ramp priorities, as well as an expected reduction in NRE payments in the June quarter, we are targeting significant sequential filter unit shipment growth, driven primarily by WiFi and 5G infrastructure products. More specifically, we expect filter unit shipments to increase over 75% sequentially in the June quarter, a key indicator of the momentum in our commercial XBAW RF filter business. We continue to strive toward executing on our target milestones, and we'll continue to keep you informed of our progress.

Our anticipated June 2021 milestones include, first, we expect to receive at least one new WiFi 6E design win. In addition, we plan to announce a third WiFi 6E SoC partner. We expect to ship a wafer-level packaging design to our second 5G mobile RF front end customer. Next, we plan to demonstrate our first C-Band 5G XBAW filter in the 3.7 to 3.98 gigahertz spectrum to small cell network infrastructure customers.

Further, we expect a second design win in CBRS. And finally, we expect to receive an order for the development of a new S Band defense filter. Looking further out, our anticipated calendar 2021 milestones include the design lock and commencement of production with our second RF mobile module maker, plus the delivery of XBAW filters meeting our customers' specs to our third Tier 1 RF mobile customer. In addition, we plan to ramp production with multiple WiFi 6 and WiFi 6E customers, including three announced Tier 1 WiFi 6E customers.

We also expect to design lock our massive MIMO for our Tier 1 network infrastructure by the end of the calendar year, further, we expect the product qualification of CSP XBAW package filter for 5G mobile, 5G infrastructure and Wi-Fi. And finally, we expect to ramp production with multiple 5G and CBRS infrastructure customers. In conclusion, we believe the market opportunity for our patented high-frequency XBAW filters is substantial, and we are well positioned to capitalize on that opportunity. We continue to work diligently to achieve each of our stated objectives, and we'll continue to update you on our execution against these objectives going forward.

To support our current engagements and emerging sales opportunities, we have been working diligently to expand our manufacturing capacity by 500%, to be able to produce hundreds of millions of XBAW filters per year by the end of the June quarter. As we announced earlier in the March quarter, given our rapidly growing sales funnel activity, as well as our ongoing interaction with our customers regarding expected ramps in both 5G mobile and WiFi 6E in calendar 2022. We plan to double this output once again by the end of calendar 2021 to approximately half a billion filters per year. We continue to add key hires across sales, design and manufacturing, beyond our previously announced expansion plan, the company is positioned to further scale as our New York fab can ultimately be equipped to produce up to 5 billion XBAW filters per year.

I would like to thank those who have joined us today on this call. We continue to build our company around our core belief in strong management and technical staff, strong intellectual property, which currently includes 47 issued and licensed patents and 78 patents pending, large and growing markets with limited historical competition in the high-band and ultra-high band spectrum and our qualified wafer manufacturing operation, which is now proven to deliver volume quantities of XBAW filters and is expanding to address high-growth opportunities in our target end markets. Finally, I would like to congratulate our employees for their hard work, passion and dedication throughout 2020 and early 2021, particularly during this ongoing pandemic as our team has kept the momentum going on our R&D, which has led to multiple design wins across the Wi-Fi, 5G network infrastructure and defense markets. We have also experienced exceptional momentum in the 5G mobile market-driven by our leadership in filters that operate above three gigahertz and our new and expanding wafer-level packaging capabilities.

I also wish to thank our shareholders who continue to support the company. And with that, I would like to open the call for questions from the investment community. Operator, please go ahead with the first question.

Questions & Answers:


Operator

[Operator instructions] First question has come from the line of Rick Schafer with Oppenheimer. Please proceed with your question.

Rick Schafer -- Oppenheimer & Co. Inc. -- Analyst

Yeah. Thanks. Thanks, guys. Good morning.

I guess, maybe just a quick question, if I could, Jeff, on balance sheet. I mean, it's in great shape now. I was just curious if you could comment on what cash burn is going to look like this year. And you've got a quality problem with all these orders stacking up, obviously, trying to add capacity as fast as you can.

But I just was curious if you could give us a sense of what that cash burn might look like this year for the rest of the year, what you're kind of planning? And also, maybe if you could give some more color on how much capacity additions are tied to labor, and I know you're hiring people pretty quickly here, but adding more shifts and things like that versus equipment. And I'm curious on equipment lead times, I guess, maybe if you could give a sense of your level of confidence that you're going to be able to get the tools you need by the end of this year to add all that incremental capacity?

Jeff Shealy -- Founder and Chief Executive Officer

Thanks for the comment. We'll start with the balance sheet question with Ken. And then when it comes back to capacity -- he can jump in on the capacity, but I'll also follow-up with some comments.

Ken Boller -- Interim Chief Financial Officer

So I expect our operating cash burn to be better than what our year-to-date average is per quarter in the next quarter. And obviously, as we bring on our 24/7 heads, that will arose a little bit into that until we see the revenue match those. But I do not expect it to be less than what we experienced year-to-date so far on a per average quarter. And with the strength of our balance sheet, have 90 million of cash and no debt.

I do believe we have a very strong balance sheet. I do believe we can reach operating cash flow breakeven in the next 12 to 24 months. As previously we stated, revenue that we'll take to get there is about 12 to $15 million in revenue per quarter. So I do feel we're in a good place, and we'll be able to get that with our existing balance sheet.

Jeff Shealy -- Founder and Chief Executive Officer

So Rick, I'll add to that on the capacity front. We have taken the steps, as we said in the prepared comments on adding -- the shift labor for 24/7. That also comes in and play with also the equipment, the lead time on that equipment. It takes us one to two quarters to bring on the required labor to support the 24/7 with regards to the equipment, getting equipment and qualified is a -- depending on the piece of equipment, is nine to 12 months.

And so we previously took steps to bring that equipment in to support the capacity targets that we shared we are -- equipment, since you mentioned it, in terms of lead times, we have seen those lead times creeping up. It's something that we monitor very closely. We're watching that for any additional bottlenecks that we have to address. But with the anticipated infusion by the U.S.

government and other countries into silicon capacity. We expect challenges to continue in terms of lead times for silicon manufacturing equipment to increase. So that's something we're watching very closely. And then one final comment from me is regarding balance sheet.

It is important for us as we engage with our customer base that we have a strong balance sheet, one that has -- we're engaging with Tier 1 customers, which -- these are large customers that have a lot of unit shipments. And so they need a partner that has the wherewithal to grow with them. And so the balance sheet as we also touched on this in the prepared comments, but the balance sheet is one of those elements that's important in addition to the ownership of the technology, the product leadership and the manufacturing capacity that we have to have in place and maintain their confidence. So I think that's a key facet of the strength of that balance sheet.

I just wanted to follow-up on that.

Rick Schafer -- Oppenheimer & Co. Inc. -- Analyst

And maybe for a quick follow-up. What have you seen change since the C-Band auction a couple of months ago? I mean what impact, I guess, have you seen on design or design order velocity, customer engagement, things like that that it's a little harder for us maybe to see -- I'm just curious of your perspective there.

Jeff Shealy -- Founder and Chief Executive Officer

Rick, I'll let Dave to comment on C-Band and what we're seeing.

Dave Aichele -- Vice President of Business Development

Yes, Rick. The auction with the C-Band is something that I think with the investment that the U.S. government is putting into it and the FCC auction off that spectrum that's put the U.S. in a good position from enabling the ratabilities to service the 5G market I think the providers would struggle if they did not have the spectrum.

So there's already a lot of activity, both at the system-level from a design, architecture wise as well with the service providers, the operators. That -- utilizing that 3.7 to 3.98. And we have a unique position here, and that we've been developing the technology to service the spectrum in that 3 to 6 gigahertz and some of the work that we've done for the China market is in a very similar spectrum range and also the fractional bandwidth so we're working to develop some unique filters that we're going to demonstrate this quarter and look to obviously see that start deploying and really see mass production in 2022.

Rick Schafer -- Oppenheimer & Co. Inc. -- Analyst

Thank you, guys. Congrats.

Jeff Shealy -- Founder and Chief Executive Officer

Thanks Rick.

Operator

Thank you. Our next questions come from the line of Anthony Stoss with Craig-Hallum. Please proceed with your question.

Anthony Stoss -- Craig-Hallum Capital Group -- Analyst

Morning guys. My congrats as well on quarterly strong design momentum here. I wanted to focus on, first off, Jeff, on the WiFi side. You talked about 15 customer engagements, 10 have already placed sample orders.

With one current WiFi customer in volume production, maybe you can lay out how many more you expect to come online in Q3 and Q4? I know things can change a little and wiggle a little bit. I'm just curious if you can kind of lay out how many more in Q3, how many more in Q4. And then on the mobile side and the chip scale production being locked down, how vital is that? And have you seen kind of an uptick? And are you sampling yet to the mobile customers for this?

Jeff Shealy -- Founder and Chief Executive Officer

OK. Rick -- I'm sorry, Tony, I apologize. With regard to just the WiFi commentary, Tony, I'm going to pull Dave in here. He can touch on the mobile customer as well, but I'll bring my comments in after him.

Dave Aichele -- Vice President of Business Development

So Tony, on the WiFi 6, we had as we've talked about, a key customer that we're in production with and ramping, we have a couple of smaller customers that we've announced that are scaling as well. The activity in next-gen WiFi 6 is still robust. A lot of it has shifted over to the Asian market, which is deploying that spectrum in the 5 gigahertz. So then we've got two new products that we've been sampling with -- our extension of the existing family there.

The activity on WiFi 6E, there is very robust. And as we've talked about that we're going to announce -- plan to announce a design win this quarter, but there is activity that's very deep in the funnel. And it has a significant amount of market pool primarily, that we're one of the few technologies out there that can enable the full use of the spectrum. So the activity is going to continue to pick up and obviously as we get closer to securing the design wins, we'll announce those.

So what I can say is that we're also seeing demand from the consumers that they will start placing orders based on concerns of security supply, Jeff commented, earlier that we have to really show robust balance sheet and also capacity to services market because we are getting engagements with these Tier 1s and becoming a preprimary source. They really want to look under the hood and make sure that we're in a good position, but they're also aware of what's going on in the semiconductor industry. So I expect that this will start picking up into Q3 and Q4, and we'll make announcements porting regarding mobile. Just touching on that, the activity that we have with three mobile customers is good.

We'll continue to push a strategy of supporting the foundry, which is enabling access to the XBAW technology. And again these are customers that do not have access to BAW technology that they're concerned about the 5G co-exist requirements and also with the new WiFi spectrum. But also, we're engaging on the module at a discrete filter side as well. And there's activity that we're seeing particularly with WiFi 6E that utilization of the high-Q technology is very important.

So both these areas stay tuned, more information to come.

Jeff Shealy -- Founder and Chief Executive Officer

And Tony, Jeff here again. Just wanted to kind of describe it. Just reiterate, our sales funnel is just -- we start with samples of these filter chips for the WiFi. What we have ongoing now is product qualification.

That includes what we do there is we build multiple lots with our chips and then we make those with the packages, and those go through a fairly rigorous qualification. So for the new product set -- for 6E, that's the phase that we're in. And then aligning that to the customer ramps. We have base catalog chips, as well as some custom designs that are going through that process.

So we're managing that and ensure that we get the data behind that to support it. We do compete in that market on performance and size. I think Dave touched on that but we have a much smaller solution, as well as enabling the channels that Dave talked about. My final comment on the mobile is we did ship in the March quarter, the RF filter designs to customers.

And then what's next on tap is shipping those solutions with our WLP package solutions. So we've been working very hard on that. We made commentary strengthening that supply chain. And I think putting a lot of extra emphasis on being able to do rapid prototyping, that's feedback we've gotten from a couple of key customers is that we need to move faster with WLP being able to supply the filter designs in WLP in a very quick turnaround fashion.

And so we've taken some steps to improve that, and that's just going to make us a better partner going forward.

Anthony Stoss -- Craig-Hallum Capital Group -- Analyst

And then just as a follow-up for either for you, Jeff or Dave. You talked about a lot of additional bands and multiple filters going into devices. Can you characterize maybe what you're seeing on the amount of content? Is it jumping faster than you were expecting? And where do you think it ends up? I know your customers are getting used to you being able to ship in volume now, but I'm just curious what you're seeing on the content side or the number of filters per device from Akoustis?

Jeff Shealy -- Founder and Chief Executive Officer

Yes. So I think -- let me let Dave jump in here on kind of the MIMO type complexity factor, which is a big driver of that.

Dave Aichele -- Vice President of Business Development

So the MIMO factor has increased in MIMO is multiple-in-multiple-out, so multiuser MIMO. And the number of filters per system has increased. So if we take a traditional Wi-Fi 6, it's typically a 2X2 MIMO. And when you look at a WiFi 6E, it's now scaling to more 4X4, at least in the higher end systems.

When you get to mid-tier and low tier, it usually is a low-cost system that they may only go to 2X2 MIMO, so we having seen an increase in the number of filters in that kind of architecture. The interesting thing that we're also seeing, though, is utilization of the Wi-Fi 6E spectrum. So traditionally, it's a dual-band system or a tri-band system and a tri-band and the WiFi 6E would be 2.4 gigahertz, the 5.5 gigahertz and the 6.5 gigahertz. We're now seeing quad-band architectures, where they're dividing up to 5 gigahertz, and we're actually seeing interest in a penta, which is utilizing 5 where they split the 6 gigahertz.

So -- and then you multiply the number of filters and the number of radios and all these are architectures so they can be simultaneous operations. So the codes that are filtering is critical and enabling that full spectrum is also critical, particularly being driven from the service providers, we are talking to the carriers and to the operators and working the funnel down into the OEMs and ODMs and understanding how important it is to them.

Jeff Shealy -- Founder and Chief Executive Officer

And, Tony, let me comment just on -- Dave, I think, hit all the key points on the content. I just want to talk about kind of how we're managing the manufacturing of those. So we start out in the early stages of this, as we start ramping, we've been producing these on a first shift and from a manufacturing standpoint, that all of our products use the same XBAW manufacturing flow process. Obviously, there's customization based upon the different bands.

But our end goal is to get these designs on a 24/7 rotation to where they can all be manufactured with the shortest possible cycle time to where we can service a wide spectrum. Dave talked about kind of what was going on, tri-band, quad-band and penta but we also think about it in terms of how we manufacture, making sure we have the -- that we have the inventory to make sure we address the demand from the customer.

Anthony Stoss -- Craig-Hallum Capital Group -- Analyst

Thanks to detail. Best of luck guys.

Jeff Shealy -- Founder and Chief Executive Officer

Thank you, Tony.

Operator

Thank you. We have reached the end of our question-and-answer session. I would like to turn the call back over to management for any closing remarks.

Jeff Shealy -- Founder and Chief Executive Officer

OK. I wanted to reiterate and add my thanks for all the time today from everyone. We look forward to speaking with you during our next update call to discuss our quarterly -- the current quarter's execution, as well as the milestones and future expectations that we laid out. And I wish everybody a pleasant, happy day and goodbye.

Operator

[Operator signoff]

Duration: 54 minutes

Call participants:

Tom Sepenzis -- Director of Investor Relations

Jeff Shealy -- Founder and Chief Executive Officer

Ken Boller -- Interim Chief Financial Officer

Rick Schafer -- Oppenheimer & Co. Inc. -- Analyst

Dave Aichele -- Vice President of Business Development

Anthony Stoss -- Craig-Hallum Capital Group -- Analyst

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