Founded in 2002, Audience (NASDAQ:ADNC) is a pioneer in voice technologies for mobile phones. Its services have required intensive R&D, delving into such areas as neuroscience, speech analysis, acoustics, spatial audio and CASA (a process that maps sound-separation functions in human hearing). Keep in mind that roughly two-thirds of Audience’s R&D team have advanced engineering degrees.
By the time of the IPO, Audience was a hyper-growth company. From 2009 to 2011, revenues surged from $5.7 million to $97.7 million. The company was even profitable for the past two years.
But according to the prospectus, about 80% of its revenues came from Apple (NASDAQ:AAPL). And when the company launched its iPhone 5, it nixed Audience as a supplier. On the news, the stock plunged 63%.
Back to the drawing board.