Brainchip (ASX:BRN) share price sinks 7% as ‘Most successful year in history’ comes at a cost

Investors were not won over by Brainchip’s annual report…

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Key points

  • The Brainchip share price is reeling after releasing its full-year results last night
  • Losses continued in FY21 as the company commences production at volume
  • The company plans to significantly add to its patent portfolio throughout this year

The Brainchip Holdings Ltd (ASX: BRN) share price is suffering a headache on Thursday following the release of the company’s annual report last night.

In afternoon trade, the artificial intelligence (AI) technology company’s shares are down 7.2% to $1.16. In light of the fall, ASX-listed Brainchip is now down 50% from its 52-week high.

Brainchip share price weakens on another year of losses

  • Revenue from operations up 1,215% on prior corresponding period to $1.59 million
  • Operating losses deepen to $19.52 million from $11.17 million
  • Losses from continuing operations after tax improve 22% to $20.98 million
  • Diluted loss per share of 1.22 cents per share, improving from 1.76 cents per share

What else happened during the year?

The Brainchip share price underwent an eventful year during the 12 months ended 31 December 2021. As pointed out in the annual report, it was a year of evolution for the chip developer. Crossing the barrier between research and development company, over to a supplier of AI technology.

Notably, Brainchip forged forth with its Akida neuromorphic AI architecture throughout 2021. In the process, shipping its first production chips in partnership with Socionext America and Taiwan Semiconductor Manufacturing Company (NYSE: TSM). Since then, preparations to manufacture at volume have commenced.

Importantly, the company has continued to work on protecting its intellectual property surrounding the Akida technology. In 2021, ten new international patents were filed and four previously filed patents were granted.

Additionally, Brainchip highlighted that it expects to significantly increase its patent portfolio throughout 2022. However, it seems the Brainchip share price is not benefitting from the ambitions.

What did management say?

Commenting on management changes in the year that has passed, Brainchip chair Emmanuel Hernandez wrote:

Mr Louis DiNardo stepped down as CEO in March, and Mr Sean Hehir was appointed as CEO in November, allowing interim CEO Peter van der Made to focus his attention on the ongoing technical development of Akida. Mr van der Made deserves our deepest gratitude for stepping up to manage the business while the Company secured the right candidate to guide BrainChip to full commercialisation of the Akida device IP.

Brainchip share price snapshot

The performance of the Brainchip share price has been nothing short of astonishing over the last year. Rising by more than 125%, the chip developer has far exceeded the returns of most companies on the ASX — making Brainchip a winner for shareholders.

A flurry of patents at the beginning of this year has also helped the Brainchip share price continue its streak in 2022. On a year-to-date basis, shares are up 48.7%, while the S&P/ASX 200 Index (ASX: XJO) is down 7.6%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Taiwan Semiconductor Manufacturing. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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