Immersion Corporation

Good day, everyone, and welcome to the Immersion's second quarter 2021 earnings call. At this time, I would like to turn the conference over to Aaron Ackerman. Please go ahead.

Good afternoon, and thank you for joining us today on Immersion's second quarter 2021 conference call. This call is also being broadcast live over the web and can be accessed from the investor relations section of our website at ir.immersion.com. With me on today's call is Jared Smith, our interim CEO. During this call, we may make forward-looking statements, which may include any expectations, projections, or other characterizations of future events or circumstances, and include statements regarding the impact of COVID-19 on our business and the business of our customers and suppliers, as well as on the economy in general, and also include projected financial results for operating metrics, business strategies, litigation or absence of litigation, anticipated future products, future expense reductions, anticipated tax expenses, anticipated market demand or opportunities, our operating model, and other forward-looking topics. These statements are subject to risks, uncertainties, and assumptions, especially in light of the ongoing adverse effects of the COVID-19 global pandemic. Many of these risks and uncertainties are beyond the control of immersion. For a more detailed discussion of these factors and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in the press release we issued today after market close, immersion's annual report on Form 10-K for 2020, and its most recent quarterly report on Form 10-Q, which are on file with the U.S. Securities and Exchange Commission. The forward-looking statements mentioned on this call reflect immersion's beliefs and predictions as of today. Immersion does not intend to update these forward-looking statements as a result of financial, business, or any other developments occurring after the date of this release or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. except as required by law. Additionally, please note that during this call, we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available in today's press release. With that said, I'll turn the call over to Jared.

Thanks, Aaron, and thanks, everyone, for joining us on the call today or listening via webcast. The results that we are reporting today reflect the continued success of our customers and partners in developing and shipping high-performance haptic products and solutions in our core markets of automotive, gaming, and mobile. Our revenue grew 94% compared to the second quarter of 2020, and our gap net income was $5.3 million compared to a gap net loss of $0.7 million in the same quarter of last year. We saw revenue growth in all of our core markets. In automotive, we remain on track for double-digit percent revenue growth in fiscal 2021 compared to fiscal 2020. In Q2, we expanded our license agreement with Stanley, a leading provider of electronic components, to cover automotive products. Stanley now has access to our innovative haptic technology for touch-based automotive products. The addition of Stanley strengthens our position in the market as it builds on our existing Tier 1 licensee base, including Farisha, Alps Alpine, Continental, and many others. We are engaged with several OEMs and Tier 1s who are evaluating our technology and haptics for new vehicles and interfaces. We continue to believe in the long-term potential of haptics in automotive and our ability to address this market. In gaming, we're excited that Sony Interactive Entertainment recently announced that PlayStation 5 surpassed 10 million units sold, making it the fastest-selling console in Sony's history. Immersion innovations are central to the PlayStation 5 experience. The DualSense controller has become the industry benchmark for performance, and gamers are purchasing them to use on a range of platforms. Sony also previously announced that many of the haptic innovations from the DualSense controller will be implemented in its forthcoming new VR controller. The success of our technology and Sony products positions us nicely with the growing use of advanced haptics in gaming and VR. We also remain on track to achieve double-digit percent revenue growth in gaming in fiscal 2021 compared to fiscal 2020. In mobile, We continue to focus on driving revenue growth from the China market through our channel licensing program. We recently announced a new channel partnership with Titan Haptics, a Canadian-based developer of advanced haptic motors, to make our haptic IP available to mobile phone and wearable OEMs that incorporate its actuators. Titan Haptics actuators are based on a new technology it developed to deliver compelling high-definition experiences. This partnership expands the footprint of component suppliers offering a channel license option servicing China and other global markets. Haptics is essential to today's smartphone experiences, including mobile gaming. We're pleased to share that ASUS, the company behind the powerful ROG gaming smartphones, executed a multi-year renewal license for its use of immersion touch-sense software and technology in its mobile products. Our mobile segment revenue remains on track to meet or exceed our 2020 segment revenue. We also see interest in haptics from companies in adjacent markets who are seeking to leverage tactile feedback to improve the user experience in their products. I'm pleased to share that Peloton, a leading interactive fitness platform provider, executed a technology license with immersion in Q2. As part of the agreement, we are also providing engineering services to support development of new products. As part of our long-term strategy to support continued adoption of advanced haptics in our target market segments, we are leading development of industry standards. Last quarter, we reported that MPEG approved a call for proposals for coding of haptic effects. Multiple companies have submitted candidate proposals, which are currently under evaluation. We look forward to keeping you updated on this initiative. These wins and developments demonstrate our continued progress driving adoption of our technology across the ecosystem. I'll now turn the call over to Aaron for a review of our Q2 results.