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Jun 19, 2021 · 22m · top-founders

$3m in Revenue and $227m Market Cap? How is Resonant thinking about Software?

George Holmes · 14m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Resonant CEO George Holmes joins Nathan Latka to discuss how the public deep-tech enterprise leverages proprietary EDA software, over 300 patents, and a high-margin royalty licensing model to resolve 5G frequency interference bottlenecks. Holmes details the company's smartphone unit economics, $227 million market valuation, and long-term strategy to reach $100 million in annual revenue through tier-one semiconductor partnerships.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 25.9% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 4.3 Guest disagreement 2.1 Nathan pushing back 5.4
05100:0010:0020:002:10–5:43 · Nathan as informed peer 4/10 Resonant's Proprietary EDA Software and IP Licensing Model Latka tries to categorize the company as a pure hardware play with no software upside. Holmes educates him on their proprietary 3D EDA software platform that designs the RF acoustic wave filters they license.5:43–9:19 · Nathan as informed peer 5/10 Mobile Device Unit Economics and Fabless Licensing Model Latka attempts to break down handset component economics and asks how many units Resonant manufactured. Holmes corrects him by clarifying that Resonant is fabless and only licenses designs without carrying cost of goods sold.9:19–12:01 · Nathan as informed peer 6/10 Evaluating Resonant's Valuation and Royalty Pricing Strategy Latka challenges Resonant's 227 million dollar market cap relative to its 3 million dollar revenue and presses on whether their royalties are priced too cheap. Holmes benchmarks their 7 to 15 percent take rate against industry giants like ARM at 1 to 2 percent.12:01–14:31 · Nathan as informed peer 7/10 R&D Expenditure, Capital Burn, and Road to $100 Million Latka highlights Resonant's steep burn rate of 32 million dollars in OpEx against 3.2 million in revenue and probes whether R&D is government-subsidized. Holmes explains their public market funding model and points to a pipeline partner with 100 million dollar annual potential.14:31–17:25 · Nathan as informed peer 7/10 Public Financing, Patent Portfolio Strength, and Defensibility Latka directly attacks the value of Resonant's 150-plus 5G patent portfolio, noting they have won zero patent court defenses. Holmes concedes the point diplomatically while emphasizing that top-tier industry players are proactively partnering rather than infringing.17:25–19:25 · Nathan as informed peer 6/10 Strategic Software Licensing Considerations and Executive Background Latka pitches a direct high-margin SaaS model for their EDA tool, prompting Holmes to explain why keeping software internal yields higher long-term value. Holmes also shares his background as a turnaround executive.19:26–22:12 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions During the Famous Five, Latka repeatedly pushes Holmes on his unhealthy four-hour sleep schedule and questions what major institutional investors like BlackRock think of it. Holmes laughs it off as founder excitement.2:10–5:43 · Guest teaching 6/10 Resonant's Proprietary EDA Software and IP Licensing Model Latka tries to categorize the company as a pure hardware play with no software upside. Holmes educates him on their proprietary 3D EDA software platform that designs the RF acoustic wave filters they license.5:43–9:19 · Guest teaching 6/10 Mobile Device Unit Economics and Fabless Licensing Model Latka attempts to break down handset component economics and asks how many units Resonant manufactured. Holmes corrects him by clarifying that Resonant is fabless and only licenses designs without carrying cost of goods sold.9:19–12:01 · Guest teaching 5/10 Evaluating Resonant's Valuation and Royalty Pricing Strategy Latka challenges Resonant's 227 million dollar market cap relative to its 3 million dollar revenue and presses on whether their royalties are priced too cheap. Holmes benchmarks their 7 to 15 percent take rate against industry giants like ARM at 1 to 2 percent.12:01–14:31 · Guest teaching 4/10 R&D Expenditure, Capital Burn, and Road to $100 Million Latka highlights Resonant's steep burn rate of 32 million dollars in OpEx against 3.2 million in revenue and probes whether R&D is government-subsidized. Holmes explains their public market funding model and points to a pipeline partner with 100 million dollar annual potential.14:31–17:25 · Guest teaching 4/10 Public Financing, Patent Portfolio Strength, and Defensibility Latka directly attacks the value of Resonant's 150-plus 5G patent portfolio, noting they have won zero patent court defenses. Holmes concedes the point diplomatically while emphasizing that top-tier industry players are proactively partnering rather than infringing.17:25–19:25 · Guest teaching 3/10 Strategic Software Licensing Considerations and Executive Background Latka pitches a direct high-margin SaaS model for their EDA tool, prompting Holmes to explain why keeping software internal yields higher long-term value. Holmes also shares his background as a turnaround executive.19:26–22:12 · Guest teaching 2/10 The Famous Five Rapid-Fire Questions During the Famous Five, Latka repeatedly pushes Holmes on his unhealthy four-hour sleep schedule and questions what major institutional investors like BlackRock think of it. Holmes laughs it off as founder excitement.2:10–5:43 · Guest disagreement 2/10 Resonant's Proprietary EDA Software and IP Licensing Model Latka tries to categorize the company as a pure hardware play with no software upside. Holmes educates him on their proprietary 3D EDA software platform that designs the RF acoustic wave filters they license.5:43–9:19 · Guest disagreement 2/10 Mobile Device Unit Economics and Fabless Licensing Model Latka attempts to break down handset component economics and asks how many units Resonant manufactured. Holmes corrects him by clarifying that Resonant is fabless and only licenses designs without carrying cost of goods sold.9:19–12:01 · Guest disagreement 3/10 Evaluating Resonant's Valuation and Royalty Pricing Strategy Latka challenges Resonant's 227 million dollar market cap relative to its 3 million dollar revenue and presses on whether their royalties are priced too cheap. Holmes benchmarks their 7 to 15 percent take rate against industry giants like ARM at 1 to 2 percent.12:01–14:31 · Guest disagreement 3/10 R&D Expenditure, Capital Burn, and Road to $100 Million Latka highlights Resonant's steep burn rate of 32 million dollars in OpEx against 3.2 million in revenue and probes whether R&D is government-subsidized. Holmes explains their public market funding model and points to a pipeline partner with 100 million dollar annual potential.14:31–17:25 · Guest disagreement 2/10 Public Financing, Patent Portfolio Strength, and Defensibility Latka directly attacks the value of Resonant's 150-plus 5G patent portfolio, noting they have won zero patent court defenses. Holmes concedes the point diplomatically while emphasizing that top-tier industry players are proactively partnering rather than infringing.17:25–19:25 · Guest disagreement 1/10 Strategic Software Licensing Considerations and Executive Background Latka pitches a direct high-margin SaaS model for their EDA tool, prompting Holmes to explain why keeping software internal yields higher long-term value. Holmes also shares his background as a turnaround executive.19:26–22:12 · Guest disagreement 2/10 The Famous Five Rapid-Fire Questions During the Famous Five, Latka repeatedly pushes Holmes on his unhealthy four-hour sleep schedule and questions what major institutional investors like BlackRock think of it. Holmes laughs it off as founder excitement.2:10–5:43 · Nathan pushing back 4/10 Resonant's Proprietary EDA Software and IP Licensing Model Latka tries to categorize the company as a pure hardware play with no software upside. Holmes educates him on their proprietary 3D EDA software platform that designs the RF acoustic wave filters they license.5:43–9:19 · Nathan pushing back 4/10 Mobile Device Unit Economics and Fabless Licensing Model Latka attempts to break down handset component economics and asks how many units Resonant manufactured. Holmes corrects him by clarifying that Resonant is fabless and only licenses designs without carrying cost of goods sold.9:19–12:01 · Nathan pushing back 6/10 Evaluating Resonant's Valuation and Royalty Pricing Strategy Latka challenges Resonant's 227 million dollar market cap relative to its 3 million dollar revenue and presses on whether their royalties are priced too cheap. Holmes benchmarks their 7 to 15 percent take rate against industry giants like ARM at 1 to 2 percent.12:01–14:31 · Nathan pushing back 7/10 R&D Expenditure, Capital Burn, and Road to $100 Million Latka highlights Resonant's steep burn rate of 32 million dollars in OpEx against 3.2 million in revenue and probes whether R&D is government-subsidized. Holmes explains their public market funding model and points to a pipeline partner with 100 million dollar annual potential.14:31–17:25 · Nathan pushing back 8/10 Public Financing, Patent Portfolio Strength, and Defensibility Latka directly attacks the value of Resonant's 150-plus 5G patent portfolio, noting they have won zero patent court defenses. Holmes concedes the point diplomatically while emphasizing that top-tier industry players are proactively partnering rather than infringing.17:25–19:25 · Nathan pushing back 4/10 Strategic Software Licensing Considerations and Executive Background Latka pitches a direct high-margin SaaS model for their EDA tool, prompting Holmes to explain why keeping software internal yields higher long-term value. Holmes also shares his background as a turnaround executive.19:26–22:12 · Nathan pushing back 5/10 The Famous Five Rapid-Fire Questions During the Famous Five, Latka repeatedly pushes Holmes on his unhealthy four-hour sleep schedule and questions what major institutional investors like BlackRock think of it. Holmes laughs it off as founder excitement.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 41.6% · guest 58.4%0:00 · Nathan 41.6% · guest 58.4%3:00 · Nathan 21.9% · guest 78.1%3:00 · Nathan 21.9% · guest 78.1%6:00 · Nathan 22% · guest 78%6:00 · Nathan 22% · guest 78%9:00 · Nathan 14.4% · guest 85.6%9:00 · Nathan 14.4% · guest 85.6%12:00 · Nathan 24.1% · guest 75.9%12:00 · Nathan 24.1% · guest 75.9%15:00 · Nathan 19% · guest 81%15:00 · Nathan 19% · guest 81%18:00 · Nathan 26.2% · guest 73.8%18:00 · Nathan 26.2% · guest 73.8%21:00 · Nathan 46.7% · guest 53.3%21:00 · Nathan 46.7% · guest 53.3%
Sharpest disagreement ▶ 10:40 Stock valuation vs product pricing distinction

Holmes rejects Latka's premise on pricing, differentiating between Resonant's stock price being undervalued and their product royalty take rates being significantly higher than industry averages.

 Hardest push from Nathan ▶ 16:14 Challenging patent validity without court wins

Latka bluntly confronts Holmes on whether Resonant's 158 5G patents are worth anything given they have defended and won zero courtroom patent litigations.

 Biggest teaching moment ▶ 3:53 Correcting hardware vs EDA software premise

Holmes corrects Latka's assumption that Resonant is merely a hardware business by explaining how their proprietary 3D acoustic wave EDA software powers their entire high-margin IP licensing engine.

 Nathan holds their own ▶ 12:20 Dissecting 10x OpEx burn to revenue ratio

Latka cites Resonant's exact SEC filings to reveal that they burned 32 million dollars in operating expenses, including 19 million in R&D, to produce only 3.2 million in revenue.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Resonant's Proprietary EDA Software and IP Licensing Model 4624 Latka tries to categorize the company as a pure hardware play with no software upside. Holmes educates him on their proprietary 3D EDA software platform that designs the RF acoustic wave filters they license.
Mobile Device Unit Economics and Fabless Licensing Model 5624 Latka attempts to break down handset component economics and asks how many units Resonant manufactured. Holmes corrects him by clarifying that Resonant is fabless and only licenses designs without carrying cost of goods sold.
Evaluating Resonant's Valuation and Royalty Pricing Strategy 6536 Latka challenges Resonant's 227 million dollar market cap relative to its 3 million dollar revenue and presses on whether their royalties are priced too cheap. Holmes benchmarks their 7 to 15 percent take rate against industry giants like ARM at 1 to 2 percent.
R&D Expenditure, Capital Burn, and Road to $100 Million 7437 Latka highlights Resonant's steep burn rate of 32 million dollars in OpEx against 3.2 million in revenue and probes whether R&D is government-subsidized. Holmes explains their public market funding model and points to a pipeline partner with 100 million dollar annual potential.
Public Financing, Patent Portfolio Strength, and Defensibility 7428 Latka directly attacks the value of Resonant's 150-plus 5G patent portfolio, noting they have won zero patent court defenses. Holmes concedes the point diplomatically while emphasizing that top-tier industry players are proactively partnering rather than infringing.
Strategic Software Licensing Considerations and Executive Background 6314 Latka pitches a direct high-margin SaaS model for their EDA tool, prompting Holmes to explain why keeping software internal yields higher long-term value. Holmes also shares his background as a turnaround executive.
The Famous Five Rapid-Fire Questions 4225 During the Famous Five, Latka repeatedly pushes Holmes on his unhealthy four-hour sleep schedule and questions what major institutional investors like BlackRock think of it. Holmes laughs it off as founder excitement.

Statements from this episode (13)

Prediction Held up
Resonant CEO: 30-second 5G movie downloads are years away
“You know, we're looking for that 32nd download of a high-def movie as we're jumping on an airplane. Just doesn't happen today. It won't happen for a couple of years.”
George Holmes Jun 19, 2021 ▶ 1:55
Disclosure
Resonant generated $3M in 2020 royalty revenue on 10% rates
“We did a three million dollars in revenue last year, rough numbers. And that is royalty revenue. So we get paid on the shipment of products on a per unit royalty basis, and we get about a 10% royalty. So we enable about thirty million dollars for the revenue l…”
George Holmes Jun 19, 2021 ▶ 2:35
Assertion Supported
Holmes: 5G iPhones require 100 RF filters versus 6 in 2007
“Back in 2007 when the first iPhone came out, it had about Half a dozen filters in it. Today, the current five G iPhone has about a hundred filters in it.”
George Holmes Jun 19, 2021 ▶ 3:31
Assertion Contradicted
Resonant claims monopoly on 3D acoustic wave filter modeling software
“We are the only ones that have a tool like this that allows us to do three-dimensional modeling of acoustic wave filters.”
George Holmes Jun 19, 2021 ▶ 4:11
Assertion Supported
Seven semiconductor manufacturers control 98% of RF front-end market
“There are seven companies that represent. 98% of the market starting at the top with Murata. Corvo, Skyworks, Broadcom, Qualcomm, Wysol, and Tyoyuden.”
George Holmes Jun 19, 2021 ▶ 4:51
Assertion Contradicted
RF front-end components represent 20% to 25% of smartphone BOM cost
“About 20 to 25% of the total material cost of the phone is the RF front end, and it's that RF front end that has all of those components in it.”
George Holmes Jun 19, 2021 ▶ 7:14
Disclosure
Resonant customers have sold over 60M devices to phone manufacturers
“So we've sold right now over sixty million devices into the marketplace. So customers, our customers have sold those to phone manufacturers today.”
George Holmes Jun 19, 2021 ▶ 8:29
Prediction Not checkable as stated
Holmes: Resonant 5G Deal Will Enable Billions in Customer Revenue
“With our most recent deal for five G filters, we are going to enable several billion dollars worth of revenue for our customer.”
George Holmes Jun 19, 2021 ▶ 10:04
Assertion Not checkable as stated
Holmes: Resonant Earns 7% to 15% Royalty Rates, Beating Peers
“If you look at the largest licenses, Licensors of technology, companies like Arm, Tesra, Siva, and whatnot, they're very happy to get one to two percent royalty. We're getting on average seven to 15% royalty”
George Holmes Jun 19, 2021 ▶ 10:57
Prediction Not checkable as stated
Holmes: Largest customer could generate over $100M annually for Resonant
“We believe that customer has the potential to generate over a hundred million dollars annually for Resonant you know, as they get to full volume on delivering filters into the five G space.”
George Holmes Jun 19, 2021 ▶ 13:42
Prediction Didn’t hold up
Holmes: Resonant could reach $100M revenue by 2025 to 2026
“We're thinking that the opportunity set is in the 20, 25, 20, 26 range is where those opportunities will present themselves as the unit volumes continue to expand and the number of devices continue to expand over the course of the next several years.”
George Holmes Jun 19, 2021 ▶ 14:14
Disclosure
Holmes: Resonant burns $6.5M to $7M quarterly, mostly on R&D
“We're burning right now about Rough numbers six and a half, seven million a quarter. And that is all in R&D for the most part.”
George Holmes Jun 19, 2021 ▶ 14:44
Assertion Supported
Resonant has over 300 patents, ranking top six in BAW filters
“Well over 300 patents filed and issued, over a 150 are in the five G space. We are arguably in the top six from an IP generator perspective in the BAW filter space.”
George Holmes Jun 19, 2021 ▶ 15:12
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