Filter startup Resonant is making progress cracking the mobile phone market with their proprietary design service, reflected by seven active customers, at least one filter design used in an OEM handset and increasing revenue during the second quarter (Q2) — including the company’s first royalty revenue.

Resonant reported quarterly revenue of $220,000, compared to $156,000 in Q1 of 2017 and $63,000 in Q2 of 2016. The company’s revenue remains principally upfront and milestone payments from development contracts with customers, although the quarter saw initial royalty payments. The royalty revenue was not disclosed and described as modest. The quarter-to-quarter and year-over year increases reflect additional development contracts won by the company.

Resonant reported an operating loss of $4.3 million in Q2, compared to $3.0 million in Q2 of 2016. Cash on June 30, the end of Q2, was $9.1 million, compared to $13 million at the end of Q1. Resonant expects the cash flow to break even in 2018.

In June, Resonant added their seventh customer, an unnamed firm described as an established supplier of components for the Chinese RF front-end market, including several first-tier handset makers. The license agreement covers the development of two quadplexers, which Resonant will design and fabricate using a standard surface acoustic wave (SAW) process from one of Resonant’s foundry partners.

To support the increasing number of customers and design backlog, in May, Resonant named Andrew Kay as VP of engineering operations and, in August, recruited Sohrab Samadian to the position of VP of product development engineering. Previously, Kay was director of component engineering at Skyworks, and Samadian came from Microchip, where he was a senior manager of RF/analog engineering.

Resonant’s business model is designing SAW — and BAW in the future — filters for the RF front-ends used in mobile phones. The filters will be manufactured by existing suppliers, and Resonant will generate royalty income from filter shipments. The company claims their proprietary software enables complex filter designs such as quadplexers to be modeled more accurately and developed more quickly than the existing supply chain can do, which will earn Resonant premium royalties, e.g., 7 to 12 percent.