DSPG plans to enter the automotive arena with its HDClear chip

7 August, 2016

CEO Ofer Elyakim: “We have a wide portfolio of solutions for the automotive market”. The Israeli company reported revenues of $36.2 million in Q2 2016, as well as a rosy outlook for Q3

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CEO Ofer Elyakim: “We have a wide portfolio of solutions for the automotive market”. The Israeli company reported revenues of $36.2 million in Q2 2016, as well as a rosy outlook for Q3

DSPG's HDClear
                    DSPG’s HDClear

Herzliya, Israel based DSPG strives to integrate its latest audio processing chip, HDClear, in automotive vehicles.  The company’s CEO Ofer Elyakin answered a question by Techtime during last week’s conference call following the publication of DSPG’s Q2 earning report. The CEO explained that current car systems have difficulties handling voice command systems due to the fact that a car is a noise saturated environment. “Audio is of extreme importance for the car industry, and this is one of the fields we intend to handle in the near future. In audio lies a huge potential for us, and we have a portfolio of solutions for the automotive industries”.

DSPH CEO Elyakim
DSPH CEO Elyakim

A successful entry into the automotive arena could be a major thing for DSPG – parallel to the company’s move from leaning on DECT wireless phones to new fields such as smart home, VoIP and of course, the mobile market. The earnings report published last weak shows that the company’s strategic decision to expand its horizon, as well as product portfolio is consequential, and successful: the income from these fields has grown by 55% in Q2 2016 to a record of $15.9 million, 44% of $36.2 overall revenues in Q2 2016.

The Israeli chip developer and producer expects to continue the growth trend in the next quarters. In the conference call, the company published an outlook for$37-40 million sales in Q3 2016 (a 9% increase). “We are in a growth phase” said CEO Elyakim. “In the third quarter of 2016, we expect sequential revenue growth, led by the continued success of our new product initiatives and sequential improvement in the cordless segment. Our growth and long-term value propositions are now driven by our proven new product initiatives. We are achieving market leadership in Office/VoIP, and HDClear is rapidly gaining recognition as a key technology for voice activation and voice user interface across a range of IoT, audio and mobile devices.”

Improved net profit

The demand for mobile and office VoIp products drove continued to lead in the new products category. The revenues in this field grew by 42% compared to the same quarter last year to $7.4 million. The income form mobile market products totaled $4.6 million, as much as 13% of all the revenues in Q2 2016. As for smart home and IoT – the revenues from these fields grew by 42% compared to the same quarter last year to $1.3 million, while the income from home gateways totaled $2.6 million, in line with guidance.

The increase in the sales of new products has improved DSPG’s gross margin, which amounted to 44.2% compared to non-GAAP gross margin of 41.1% in Q2 2015. The non-GAAP net income amounted to $2.6 million, compared to a net income of 2.4 million in the same quarter last year. DSPG is traded according to a market cap of 225 million.

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