Brainchip share price higher despite US$22m loss

This billion-dollar meme stock is finding it hard to generate revenue…

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A man is shocked about the explosion happening out of his brain.

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Key points

  • Brainchip has released its full year results and it was a shocker
  • The almost billion dollar meme stock generated revenue of approximately US$250k during the second half
  • This led to Brainchip reporting a US$22 million loss for the year

The Brainchip Holdings Ltd (ASX: BRN) share price edged higher on Friday.

The semiconductor company's shares rose almost 1% to 54.5 cents.

This is despite the company sneaking out a full-year results release this afternoon and reporting another large loss and barely any second-half revenue.

Brainchip share price higher despite loss and cash burn

  • Revenue up 219% to US$5.07 million
  • Total operating expenses up 27% to US$27 million
  • Operating loss of US$22.4 million
  • Loss after tax of US$22.1 million
  • Cash and equivalents of US$23.2 million

What happened during the year?

For the 12 months ended 31 December, Brainchip reported a 219% increase in revenue to US$5.07 million. This comprises product revenue of US$446k, licence revenue of US$4.049 million, and development service revenue of US$575k.

It is very important to note that Brainchip recorded revenue of US$4.8 million during the first half. This means that for the second half of FY 2022, this almost billon-dollar company generated a whopping US$250k of revenue to bring its total for the year to US$5.07 million!

One thing that did continue to grow in the second half was its costs. With Brainchip's costs increasing 27% over the 12 months to US$27 million, the company continues to burn through cash like it's going out of style. This led to Brainchip's loss after tax increasing to US$23.2 million.

It is also worth noting that the company only collected US$2.7 million in cash receipts during the full year, which led to a cash outflow from operating activities of US$13.65 million. But thanks to US$16.15 million received from the issue of shares, the company finished the period with US$23.165 million in cash and equivalents.

Unless there's a significant improvement in its financial performance in 2023, it looks like this meme stock will be rattling the can again for funds from LDA Capital later this year.

Management commentary

Brainchip's CEO, Sean Hehir, didn't provide an explanation for why its revenue almost evaporated during the second half. Though, he acknowledged that there's still a lot of work to be done. Hehir commented:

While I'm pleased with the progress we have made in 2022 and believe we have set the foundation for BrainChip's market adoption and revenue scaling, there is still much more to do. As Chief Executive Officer, I am committed to continuing to build a world class team, extending our technology leadership, and aggressively pursuing all engagements to achieve market leadership.

Motley Fool contributor James Mickleboro 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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