BrainChip share price up on 529% revenue surge

The ASX artificial intelligence tech company has posted its 1H FY22 results this morning.

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Key points

  • The BrainChip share price is trading higher after the release of the company's 1H FY22 results
  • The company significantly boosted its revenues but its losses stayed largely the same
  • BrainChip continues on its path toward commercialisation through new partnerships and technical scoping

The BrainChip Holdings Ltd (ASX: BRN) share price is in the green in early trading on Wednesday amid the company posting its half-year financial report for FY22.

Shares of the artificial intelligence tech company are currently trading 2.08% higher for 98 cents each, after hitting an early high of $1.01 a share.

Let's go over the highlights of the report.

What did BrainChip Report?

  • Revenue up 529% year-over-year (YoY) to US$4.83 million (AU$6.97 million)
  • Operating loss down 1% YoY to US$8.56 million (AU$12.35 million)
  • Net tangible assets per share up 74.22% YoY to US$1.69 (AU$2.44) from 97 US cents (AU$1.40)
  • Diluted loss per share down 16.36% to negative US$0.46 cents (AU$0.66)
  • No dividend declared

BrainChip revenues increased primarily due to its partnership with MegaChips and licensing revenues of Akida 1000.

One significant development BrainChip reported was its progress in producing its Akida semiconductor edge processors. The company received a report from its manufacturing partner SocioNext America that its chips qualified from being engineering samples to production chips.

The company issued 1.69 million shares in its annual report after the balance sheet date, raising AU$206,342.

What else happened in FY22?

BrainChip's total expenses grew 37% to $18.75 million during the reporting period. Sales and marketing expenses grew 64% to facilitate the company's rebranding and to engage with its current and prospective customers.

General and administrative expenses also grew 39% through a combination of a higher employee headcount and increased software and office lease fees.

Another item that grew considerably was its share-based payment expenses, swelling 128% to AU$5.27 million. The rise was attributable to equity issued to directors and to employees.

BrainChip noted that the effect of the coronavirus "continues to affect general activity levels within the community, the economy, and the operations of [BrainChip's] business". The company notes the virus has the potential to affect its "future earnings, cash flow, and financial condition".

What's next?

Although no guidance or outlook was provided in its half-year financial report, its most recent quarterly activities report states that it is working towards commercialisation by developing its Akida neuromorphic IP. The company completed technical scoping with targeted customers and established commercial partnerships.

Progress in this area by BrainChip is, therefore, expected to continue as it onboards additional partners and earns licencing fees from its technology.

BrainChip share price snapshot

The BrainChip share price is currently up 44% year to date. It's far outperformed the S&P/ASX 200 Index (ASX: XJO) which is more than 6% lower in 2022 so far.

BrainChip's market capitalisation is $1.68 billion at the time of writing.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.

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