MRAM earnings call analysis

NASDAQ:MRAM Q4 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Call Operator: Good afternoon and welcome to Everspend Technologies' fourth quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the conclusion of management's prepared remarks, instructions will be provided for the question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Monica Gould, investor relations for Everspend. You may begin. Monica Gould | Investor Relations, Everspin Technologies: Thank you, Operator, and good afternoon, everyone. Everspin released results for the fourth quarter and full year 2025 ended December 31, 2025, this afternoon after market close. I'm Monica Gould, Investor Relations for Everspin, and with me on today's call are Sanjeev Agarwal, President and Chief Executive Officer, and Bill Cooper, Chief Financial Officer. Before we begin the call, I would like to remind you that today's discussion may contain forward-looking statements regarding future events, including, but not limited to, the company's expectations for Everspin's future business, financial performance, and goals, customer and industry adoption of MRAM technology, successfully bringing to market and manufacturing products in Everspin's design pipeline, and executing on its business plan. These forward-looking statements are based on estimates, judgments, current trends, and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We would encourage you to review the company's SEC filings, including the annual report on Form 10-K and other SEC filings made from time to time in which the company may discuss risk factors associated with investing in Everspin. All forward-looking statements are made as of the date of this call, and except as required by law, the company undertakes no obligation to update or alter any forward-looking statement made on this call, whether as a result of new information, future events, or otherwise. The financial results discussed today reflect the company's preliminary estimates, are based on information available as of the date hereof, and are subject to further review by Everspin and its external auditors. The company's actual results may differ materially from these estimates as a result of the completion of financial closing procedures, final adjustments, and other developments arising between now and the time that the financial results for this period are finalized. Additionally, the company's press release and statements made during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP net income to non-GAAP net income, which provide additional details. A copy of the press release is posted on the Investor Relations section of Everspin's website at www.everspin.com. And now, I'd like to turn the call over to Everspin's President and CEO, Sanjeev Agarwal. Sanjeev, please go ahead. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Thank you, Monica, and thanks, everyone, for joining us on the call today. We are pleased to report fourth quarter results with revenue of $14.8 million and non-GAAP EPS of $0.11 per diluted share with revenue towards the high end of our guidance range and EPS in line with our expectations. Our performance this quarter was driven by strength in data center, energy management, and industrial automation applications. Growth in data center was driven by our ongoing work with IBM on the FCM4 module as well as its recently introduced FCM5 and the redundant array of independent disks or RAID reference design at the top five hyperscale operators. Within energy management and industrial automation, we saw demand return to normal levels after a period of inventory consumption that dampened demand in the prior year. With respect to below the line items, we recognize $2 million in other income in the fourth quarter and $10.5 million to date from the $14.6 million contract we have with a DOD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. We expect this business to progress on schedule with estimated completion in the first half of 2027. On the product side, we had a total of 238 design wins in 2025, up from 178 in the prior year. Our pipeline of new design wins for our RamRam products speaks to the continuing technical innovation from the Everspin team introducing new products to meet customer demand. These design wins support new customers and existing customers with new programs in industrial automation, casino gaming, energy management, and military and aerospace applications. Turning to some of our product development efforts. We continue to expand our XPI STTM RAM portfolio in response to demand from our customers. We are pleased to announce that during the fourth quarter, we ramped our Persyst 64 megabit XPI STTM RAM high reliability product to full production and saw strong demand driven by new customer interest and design wins, specifically in the low earth orbital or LEO satellite market. These devices are AEC Q100 grade one qualified, and ideally suited for use in harsh conditions such as 125 C Celsius operating temperature with a minimum 10 years of data retention. These capabilities are demanded by our customers to secure critical data in a variety of systems from aerospace and defense to industrial applications including automotive. We are taking orders to support high volume production from our customers and began shipping in the current quarter. In addition, we are in the process of qualifying high density, high reliability parts of 128 megabit and 256 megabit that will be available in high volume in the second half of this year. We are on track to tape out a monolithic 256 megabit XPI STDM RAM device on a 16 nanometer FinFET node at TSMC in the second half of this year. This part will be our first product in the Unisys family, unifying code storage and data memory in a high density, non-volatile architecture for edge AI, industrial, and mission critical designs. It is designed to deliver high bandwidth read and write speeds in a non-volatile memory device, enabling fast boot, rapid updates, and predictable performance without the trade-offs of traditional flash-based designs. By combining high-speed access with persistent storage, this family of parts will support software design systems that require frequent reconfiguration while maintaining data integrity across power cycles. As part of our efforts to build onto our partner network, we recently qualified our persist 64 megabit XPI STTM RAM for microchips PIC64-HPSC series of 64-bit microprocessors, or MPUs, and are supporting the ecosystem for components being qualified by microchip. This ecosystem includes several industry partners that jointly offer solutions tailored for the harsh environmental conditions in space. The high-density, high-reliability X-Py STD MRAM parts I discussed earlier would be an ideal solution for this application. MRAM is achieving significant success as a leading embedded non-volatile memory in IoT, automotive, and AI edge devices. Yet, the densities and performance options of embedded MRAM macros have been limited. At the same time, the semiconductor industry is moving towards chiplets to overcome rising costs, manufacturing complexity, and yield limitations of traditional large monolithic chips. especially when combining leading-edge logic with volatile or non-volatile memory. Chiplets enable mix and match process nodes, greater customization, and reuse of building blocks, providing new freedom of degrees in the form of heterogeneous packaging solutions. With organizations such as the Open Compute Project embracing chiplets from the hyperscale data center to the edge, it is foreseeable that chiplets will be ubiquitous. This trend increasingly favors Everspin given our focus on marketing chip solutions, including chiplets, and licensing our technology to embedded MRAM partners. In 2025, we further advance our efforts in this area through several initiatives. We engage with the Fraunhofer Chiplet Center of Excellence to analyze next-generation automotive compute platforms and corresponding MRAM use cases. We subsequently progress to engage on system level simulations into which we plan to provide MRAM simulation models to allow an assessment as well as quantification of the benefits that MRAM can provide in various use cases. Everspin is also participating in an effort to bring MRAM chiplets to the IMEC ecosystem that is aligned with the framework of the Open Compute Project chiplet work streams. IMEC launched the Automotive Chiplet Forum in 2024 to bring together members from the automotive industry to enable an open chiplet ecosystem essential for accelerating innovation, reducing costs, and reinforcing the supply chain. More recently, we joined the newly formed Physical AI Chiplet Ecosystem, or PACE, to help enable MRAM-based solutions for physical AI. As part of this effort to co-develop interoperable and reusable chiplets to reduce development costs and speed time to market for system and ASIC companies, Everspin will provide a robust, high-performance, non-volatile memory to assist securing PACE chiplets for boot, wait and code storage, as well as lifecycle management solutions. We expect to see chiplets addressing various applications over the next few years. As a reminder, the chiplet is part of our Unisys unified code and data memory solutions, which are currently in the design phase. To further enhance the position in the auto industry, we are working with Quinteros, a joint venture of leading semiconductor companies on a next generation RISC-V based automotive reference design platform. RISC-V is an open standard instruction set architecture, or ISA, based on reduced instruction set computer, or RISC, principles allowing anyone to design, manufacture, and sell chips without paying a license fee for the ISA. Its modular architecture allows designers to create purpose-built accelerators using RISC-V core technology as well as extensions. This also includes new instructions that uniquely integrate and leverage MRAM as a persistent working memory. Given its rapid adoption, it offers a greenfield opportunity to create new MRAM-based architectures that fully utilize all the features and benefits that MRAM has to offer. Before I close, I would like to discuss our long-term strategy, which entails reaching $100 million in annual revenue over the next three to five years. We believe this growth will be driven by the ramp of new products, most notably our new X5 parts in our persist product portfolio, such as the 64 megabit part I described earlier, and continued solid growth in our toggle MRAM and licensing business. Our new Persyst XPY parts are getting solid traction. They're offered in densities from 4 megabit to 256 megabit and include the power optimized SC families and the high reliability or HR families with quad and octal SPY interfaces. For example, in industrial automation, energy management, electric vehicle, and casino gaming markets, reliable high density memory is required for next generation systems. In aerospace and defense markets, such as LEO satellites, flight control systems require reliable, fast, and read and write speeds, and fast boot for configuration. And in the FPGA and the MPU markets for AGI, low standby power, instant on, and high density memory is needed for larger bit streams. We expect our first enhanced serial norm, like Unisys product family, to be in production in 2027 and anticipate these products to contribute to our 100 million revenue target. Before I turn the call over to Bill to walk through our financials and guidance, I would like to briefly touch on the industry environment. As has been widely publicized, the industry is expecting experiencing memory shortages. Memory suppliers, who have for decades been pushed into commoditization, have seen a shift based on unprecedented memory shortages driven by the demands of AI. As a result, they have gone into allocation mode and are moving their capacity up the food chain. Companies that can make Norflash, NAND, and DRAM are shifting those capacities to where they can get more margin out of their fixed capacity. NOR suppliers, for example, are converting their lines to support DRAM to maximize their margins and generate more revenue. This has created a gap in the supply for NOR flash and driving customers to look for alternatives. We are in conversations with customers to evaluate our X5 STDM RAM to replace NOR flash. We have the capacity to support such demand, and our parts are compatible with NOR flash. While these market dynamics are speeding up such conversations, revenue is contingent upon the qualification cycles of our potential customers. I will now turn it over to our CFO, Bill Cooper, who will walk you through our fourth quarter financials and first quarter 2026 guidance. Bill? Bill Cooper | Chief Financial Officer, Everspin Technologies: Thank you, Sanjeev. Our results reflect the consistency of our execution. During the fourth quarter, we delivered revenue of $14.8 million up 12% year over year, and toward the high end of our guidance range of 14 to 15 million, driven by higher product sales. MRAM product sales in the fourth quarter, which include both toggle and STT MRAM revenue, were 13.5 million, up 22% over the fourth quarter of the prior year. Licensing, royalty, patent, and other revenue in the fourth quarter decreased to 1.3 million, from $2.2 million in Q4-24 due to the completion of projects which were active in Q4-24. Turning to gross margin, our GAAP gross margin decreased to 50.8% for the fourth quarter, down slightly from the 51.3% in the fourth quarter of 2024 due to lower licensing and other revenue. GAAP operating expenses for the fourth quarter of 2025 were $8.6 million, down sequentially and up slightly from $8.4 million in the fourth quarter of 2024. Other income of $2 million was related to the strategic award we won in mid-2024 to upgrade manufacturing equipment in our existing facility located in Chandler, Arizona. We recorded fourth quarter non-GAAP net income of $2.6 million or 11 cents per diluted share based on 23.8 million weighted average diluted shares outstanding. This was in line with our guidance range of non-GAAP net income of 8 cents to 13 cents per share and compares to non-GAAP net income of 2.8 million or 13 cents per share in the fourth quarter of 2024. As a reminder, reported non-GAAP results exclude the impact of stock-based compensation. We are pleased that our balance sheet remains strong and debt-free. We ended the quarter with cash and cash equivalents of $44.5 million down $0.8 million from $45.3 million at the end of the prior quarter. Cash flow generated from operations increased to $2.8 million for the fourth quarter from $0.9 million in the third quarter. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements. Our capital requirements depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support our current and future manufacturing requirements, research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products. We did not experience any material tariff-related impact on our results in the fourth quarter and do not expect any material tariff-related impact in the coming quarters. Turning to guidance, we expect Q1 total revenue to be consistent with Q4-25 and in the range of $14 to $15 million, and GAAP net loss per fully diluted share to be between 3 cents and net income of 2 cents. On a non-GAAP basis, we anticipate net income per fully diluted share to be between 7 cents and 12 cents. Going forward, we expect to exclude the impact of patent defense costs in addition to stock-based compensation from non-GAAP results. We expect a sequential decline in non-product revenue due to a project completion in Q4-25, which will result in a gross margin headwind. However, we are still targeting gross margin to be in the 50 percent range. In summary, we are pleased with our solid performance this quarter and remain committed to maintaining financial discipline while focusing on scaling our business and converting additional design wins to revenue. Operator, you may now open the line for questions. Operator | Conference Call Operator: Thank you. Ladies and gentlemen, to ask the question, please press star 11 on your telephone. Then wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Neil Young with Needham & Company. Your line is open. Neil Young | Analyst, Needham & Company: Hey, thanks for letting me ask a question. Great to hear about the Norflash opportunity. I'm curious, you know, sort of, you know, you're talking about that you're in conversations. I guess sort of how fast or how quickly do you think you could see upside from that? And sort of, you know, if you could in any way size the upside, that would be really helpful of possible upside in revenue. Thanks. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Thank you for the question. So like I said in the prepared remarks, I think it really depends on the qualification cycle for our potential customers. I can say that we are now getting listed as an alternate for Norflash at various distributors worldwide because of the tight supply chain issues that we are seeing with Norflash. So we do expect some upside, but it's very difficult to quantify today as to what that upside can be. But we obviously, you know, available to meet the demand if the requests come in. And it just depends on the call cycle of the customers. Neil Young | Analyst, Needham & Company: Great. Thanks. That's helpful. Just one more question for me. You talked about the inventory levels and energy management and industrial automation. You know, they're starting to look pretty healthy or, you know, they think that you think they do look healthy at this point. I guess what gives you confidence that that shouldn't be, you know, it shouldn't be an issue next quarter and going forward? Thanks. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Yeah, so based on the backlog that we are seeing at our distributors and the forecast that we are seeing at our customers, we do feel that they have burned through the inventory that they had overbuilt over the last year or so. So we are pretty confident that going forward, we would not run into that same issue at least in 2026. Neil Young | Analyst, Needham & Company: Thank you. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Sure. Operator | Conference Call Operator: Please stand by for our next question. Our next question comes from the line of Richard Shannon with Craig Hallam. Your line is open. Richard Shannon | Analyst, Craig Hallam & Co.: Well, hey, guys. Thanks for taking my question. The last one kind of in the context of this year here. I want to ask about two different contributors here. First of all, on the strategic Rad Hard project you've been working with, your partner in this has talked about a much better year and wondering if that's something similar that you're expecting as well. And then also this quarter and a couple of past ones, you've been talking about some increasing contributions from the LEO satellite market. Great to get a sense of what's kind of the sense of scale of that today, and you see that increasing over this year and over the next couple of years. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Thanks for the question, Richard, and thanks for joining. Clearly, you seem to be a little bit under the weather, but thank you for joining. Yeah. As far as the LEO satellite market is concerned, I'll let Bill address it. On the QuickLogic project, I think the award that QuickLogic talked about does not relate to the project that we've been working on jointly. And, in fact, I think that's the project that Bill was talking about in his prepared remarks that it's not going to renew in the near future, and we're going to see some decline in that non-product revenue in Q1 of 2020. Q1 of this year. That is still waiting for, you know, some milestones to be met by the other partners in the program, and we expect that to be, you know, kicking in again towards the second half of this year, but not in the first half. Bill, on the LEO satellites. Bill Cooper | Chief Financial Officer, Everspin Technologies: Yeah, thanks, Sanjeev. Thanks, Richard, for the question. Yeah, I would say that, you know, the LEO satellite market is still that burgeoning market, and, you know, that's what we see, both in terms of you know, our orders and our backlog, and, you know, we feel confident about our products and our position there, and, you know, we expect to, again, kind of move up with that increased demand, especially as we've introduced our high-rel, high-reliability products as well. That sort of fits perfectly in that particular marketplace as well. Richard Shannon | Analyst, Craig Hallam & Co.: Okay, great. Thanks for that. Second question, just on your... giving you Norflash replacement products and maybe taking a different angle than one of the last questions here and also your very interesting comments. But obviously you've been targeting Norflash replacement in certain markets. And if I caught your comments right, Sanjeev, you're talking about, I think, a win with, I think it was Microchip on an MCU. Love to get a sense of when you see that becoming a material contributor here. And then also maybe I think in the past you talked about some other engagements, particularly in the FPGA space, where you were excited about some progress there. Maybe give us an update there as well, please. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Yeah, good question, Richard. I think there are two partner programs that we're really excited about in particular. One is the one with Lattice, and the other one is this Microchip. And I think we are seeing steady progress with both those partners trying to get our product qualified and integrated into their standard offering. And I think that's where this PIC64 at Microchip comes into play. The markets that they're targeting align very well with Everspan in the aerospace and defense market. And then I think we can then expect to take it into the commercial market as well. But right now, the PIC64 is targeted towards the aerospace and defense as well. Richard Shannon | Analyst, Craig Hallam & Co.: Okay, thanks for that. My last question, I'll jump out of line here. Sanjeev, you talked about a goal of driving towards or driving to $100 million of revenues within, I think you said, three to five years. Let me get a sense anyway you quantify or at least rank order of the contributors of that revenue. I think of the big picture here that I think of is the toggle, the, excuse me, the STT products, and licensing, I guess, if there's any other way you'd categorize the contributors, that that'd be very helpful. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Thank you. So the way I look at it is, you know, the major contributor is going to be the Persyst products, followed by perhaps equal contributions from our licensing and Unisys in, you know, three to five years down the road to hit the $100 million. In the Persyst, I'm including the toggle and RAM markets. products, as well as the XPI STD products that we are shipping today, as well as the STDDR products that we're shipping to IBM. So I think those three would form the portion of the HR, form the portion of the process products that are going to contribute. And this high reliability product family that we have just introduced is going to actually give us a nice boost over there. And then in 2027, we expect Unisys to kick in some volume, and so I think between that, Unisys, and our licensing is what's going to get us to the $100 million mark down the road. Richard Shannon | Analyst, Craig Hallam & Co.: Okay. I will jump out of line. Thank you for that, Sanjeev. Sanjeev Agarwal | President and Chief Executive Officer, Everspin Technologies: Thank you, Richard. Hope you feel better soon. Richard Shannon | Analyst, Craig Hallam & Co.: Thank you. Operator | Conference Call Operator: Thank you. Ladies and gentlemen, I'm sure no further questions in the queue. That concludes today's conference call. Thank you for your participation. You may now disconnect. jsPDF 3.0.3 D:20260606090248-00'00'

NASDAQ:MRAM Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good afternoon and welcome to Everspin Technologies' third quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. At the conclusion of management's prepared remarks, instructions will be provided for the question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Monica Gould, Investor Relations of Everspin. Monica Gould | Investor Relations: Thank you, Operator, and good afternoon, everyone. Everspen released results for the third quarter 2025, ended September 30, 2025, this afternoon after market closed. I'm Monica Gould, Investor Relations for Everspen, and with me on today's call are Sanjeev Agarwal, President and Chief Executive Officer, and Bill Cooper, Chief Financial Officer. Before we begin the call, I would like to remind you that today's discussion may contain forward-looking statements. regarding future events including, but not limited to, the company's expectations for Everspin's future business, financial performance and goals, customer and industry adoption of MRAM technology, successfully bringing to market manufacturing products in Everspin's design pipeline, and executing on its business plan. These forward-looking statements are based on estimates, judgments, current trends, and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We would encourage you to review the company's SEC filings, including the annual report on Form 10-K and other SEC filings made from time to time in which the company may discuss risk factors associated with investing in Everspen. All forward-looking statements are made as of the date of this call and, except as required by law, the company undertakes no obligation to update or alter any forward-looking statement made on this call, whether as a result of new information, future events, or otherwise. The financial results discussed today reflect the company's preliminary estimates, are based on information available as of the date hereof, and are subject to further review by Everspin and its external auditors. The company's actual results may differ materially from these estimates, as a result of the completion of financial closing procedures, final adjustments, and other developments arising between now and the time that the financial results for this period are finalized. Additionally, the company's press release and statements made during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP net income to non-GAAP net income. which provide additional details. A copy of the press release is posted on the investor relations section of Everspins website at www.everspins.com. And now I'd like to turn the call over to Everspins president and CEO Sanjeev Agarwal. Sanjeev, please go ahead. Sanjeev Agarwal | President and Chief Executive Officer: Thank you, Monica. And thanks everyone for joining us on the call today. We are pleased to report third quarter results with revenue of $14.1 million and non-GAAP EPS of $0.06 per diluted share with revenue in line with our guidance range and EPS towards the high end of our expectations. Our performance this quarter was driven by strength across all products, specifically in Low Earth Orbital, or LEO, applications, casino gaming, and energy management. In addition, our data center business remains strong with continued demand for our toggle MRAM products for redundant array of independent disks or RAID from a broad selection of data center customers, including Dell, Supermicro, and others. The LEO satellite market is expected to grow rapidly in the coming years. Everspin MRAM, with its reliability at extreme temperatures and harsh ambient, is ideally suited for these deployments. As mentioned in our last call, we are seeing good traction in this market with announced design wins with AstroDigital and Blue Origin. It is our understanding that LEO satellites have a short lifespan of three to five years, primarily due to atmospheric drag impacting the orbit. Design wins in this market with multiple Everspin MRAM parts per satellite is expected to translate into meaningful revenue for Everspin as this market grows. As anticipated, revenue from the sale of our persist 1-gigabit SCTM RAM into IBM's Flash Core Module 4, or SCM4, for data center applications remained consistent with the prior quarter, and we continue to anticipate revenue from this project to remain at this level for the remainder of the year. We continue to ship and recognize revenue for our Persyst MRAM solution from Lucid Motors for their Gravity SUV and expect volumes to increase as the automaker ramps production. In Q3, we continue to ship engineering samples of the Persyst EM064LXHR and EM128LXHR to several LEO satellite customers and remain on track to ramp to full production in the fourth quarter 2025. Turning to our licensing, royalty, patent, and other revenue. We continue to successfully execute on our deliverables for our contract with Purdue University to provide our state-of-the-art STTM RAM technology for energy-efficient AI solutions. During the first half of the year, we characterized a process to establish a baseline for percent MR, magneto resistance, and switching reliability. More recently, we developed materials with higher percent MR and characterized devices using these new materials and processes. These advancements position us favorably for the next phase of the project. Lastly, we continue to recognize revenue from our ongoing project with the leading provider of sensor devices to provide services for their latest generation DMR sensor device on our MRAM line in our Chandler facility. With respect to below the line items, we recognize 1.2 million in other income in the third quarter and 8.5 million to date from the 14.6 million contract we have with the DOD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. We continue to expect this business to pick up meaningfully in the fourth quarter. As we announced last month, we entered into a strategic collaboration with Quinteros to strengthen the reliability and safety of RISC-V-based platforms with our MRAM offerings. This partnership is focused on automotive, industrial, and edge applications where data persistence, integrity, low latency, and security are critical. The goal is to jointly build reference design that would lay the foundation for scalable, reliable platforms for these applications. I will now turn it over to our CFO, Bill Cooper, who will walk you through our third quarter financials and fourth quarter 2025 guidance. Bill Cooper | Chief Financial Officer: Bill? Thank you, Sanjeev. Our results reflect the consistency of our execution. During the third quarter, we delivered revenue of $14.1 million up 16% year over year, and in line with our guidance range of 13.5 million to 14.5 million, driven by higher product sales. MRAM product sales in the third quarter, which include both toggle and STT MRAM revenue, was 12.7 million, up 22% over the third quarter of last year. Licensing, royalty, patent, and other revenue in the third quarter decreased to $1.4 million from $1.7 million in Q3-24 due to the completion of projects in Q4-24 and Q1-25, which were active in Q3-24. Turning to gross margin, our GAF gross margin improved 51.3% for the third quarter, up just over 200 basis points from 49.2% in the third quarter of 2024. Despite the slight decrease in licensing and other revenue year over year, we were able to maintain gross margins consistent with Q2 levels due to improving yields on our STT products, driven by process improvements developed in collaboration with our foundry partner. GAAP operating expenses for the third quarter of 2025 were $8.8 million, up slightly sequentially, an increase from $8.1 million in the third quarter of 2024. Other income of 1.2 million was related to the strategic award we won in August of last year to develop a long-term plan to provide manufacturing services for aerospace and defense segments. We recorded third quarter non-GAAP net income of 1.5 million, or six cents per diluted share, based on 23.1 million weighted average diluted shares outstanding. This was toward the high end of our guidance range of non-GAAP net income of 2 cents to 7 cents per share and compares to non-GAAP net income of 3.8 million or 17 cents per share in the third quarter of 2024. The decrease versus the year-ago period was driven by lower other income stemming from lumpiness inherent in our DoD MRAM contract services as Q3 24 required higher levels of activity upon initiation of the contract in that quarter. As a reminder, non-GAAP results exclude the impact of stock-based compensation. We are pleased that our balance sheet remains strong and debt-free. We ended the quarter with cash and cash equivalents of 45.3 million, up 0.3 million from 45 million at the end of the prior quarter. Cash flow generated from operations decreased to 0.9 million for the third quarter, from 5 million in the second quarter which was driven by higher collections on receivables on a change in distributors. We did not experience any tariff-related impact on our results in the third quarter and do not expect any tariff-related impact in the coming quarter. We expect Q4 total revenue in the range of $14 million to $15 million and GAAP net income per fully diluted share to be between 2 cents and 7 cents. On a non-GAAP basis, we anticipate net income per fully diluted share to be between 8 cents and 13 cents. In summary, we're pleased with our solid results this quarter and remain committed to maintaining financial discipline while focusing on scaling our business and converting additional design wins to revenue. Operator, you may now open the line for questions. Operator | Conference Operator: Thank you. To ask a question at this time, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for our first question. Our first question comes from the line of Neil Young with Needham and Company. Your line is open. Please go ahead. Neil Young | Analyst at Needham & Company: Hey, everyone. Thanks for letting me ask a question. First question, so three-quarters in a row now of non-GAAP gross margin over 52%. Just curious, I guess, how sustainable you think this is going forward? Bill Cooper | Chief Financial Officer: Yeah, I think we saw some improvement this quarter, Neil, on the product gross margin, specifically, as well, based on some of our yield improvement initiatives and our factory utilization. But to answer your question directly, I think we'll see, you know, that's a good, strong result for us. We do expect to kind of continue to be in that range overall. Neil Young | Analyst at Needham & Company: Okay, great. Thanks. And then, so the sequential decline in licensing, royalty, patent, and other, I know you talked about it a little bit, but I was just hoping you could maybe provide some more detail just on the sequential decline and then sort of, if possible, where you think that is going in 4Q. Bill Cooper | Chief Financial Officer: Yeah, there was, you know, these projects, right, and that kind of bucket of non-product revenue encompasses a lot of different things. including any license revenue, any engineering service revenue, you know, different foundry services that we provide as well. And so really on that particular piece of our revenue, that can be, I'll call it somewhat lumpy as we go forward in time, and even some of the initiatives that we have where we do work for other groups that we've mentioned in the past, you know, those projects tend to be, you know, anywhere between, you know, one year to 18 months type, two years type projects typically. So they do wrap up, right? And then on the second part of your question, you know, I think as we see sort of this level of product, non-product revenue, we'll probably expect that to kind of continue to be around that range, right? Kind of in the, again, we've been in that 10 to 15% range, probably more in the 10% range. Operator | Conference Operator: we go forward okay perfect thank you thank you and as a reminder to ask a question please press star one one i'm showing no further questions at this time so oh hold on we have a follow-up question okay we do have a follow-up question from mill young with needham and company please go ahead Neil Young | Analyst at Needham & Company: Hey, thanks. Sorry, again. Just a question on OpEx. So it was flat again in the quarter on a non-GAAP basis. Sorry, it was flat again in the quarter. So similar, should we sort of assume that it stays in that $7.5 million range going forward? And that's all I have. Thanks. Bill Cooper | Chief Financial Officer: Yeah, Neil, that's a safe assumption. We continue to sort of manage through on OpEx, and we've been pretty consistent throughout this year. Now, again, we've sort of indicated that we are going to continue to sort of move toward product development type costs, but for Q4, you're going to see a lot of consistency. Neil Young | Analyst at Needham & Company: Thank you. Operator | Conference Operator: Thank you. And now I'm showing no further questions at this time. Ladies and gentlemen, this will conclude today's question and answer session. This will also conclude today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day. jsPDF 3.0.3 D:20260606090249-00'00'

NASDAQ:MRAM Q2 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good afternoon and welcome to Everspin Technologies second quarter 2025 financial results conference call. At this time, all participants are in a listen only mode. At the conclusion of management's prepared remarks, instructions will be provided for the question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Monica Gold, investor relations for Everspin. Monica Gould | Investor Relations: Thank you, Operator, and good afternoon, everyone. Everspin released results for the second quarter 2025 ended June 30, 2025, this afternoon after market close. I'm Monica Gould, Investor Relations for Everspin. And with me on today's call are Sanjeev Agarwal, President and Chief Executive Officer, and Bill Cooper, Chief Financial Officer. Before we begin, I would like to remind you that today's discussion may contain forward-looking statements regarding future events, including, but not limited to, the company's expectations for Everspin's future business, financial performance, and goals, customer and industry adoption of MRAM technology, successfully bringing to market and manufacturing products in Everspin's design pipeline, and executing on its business plan. These forward-looking statements are based on estimates, judgments, current trends, and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We would encourage you to review the company's SEC filings, including the annual report on Form 10-K and other SEC filings made from time to time in which the company may discuss risk factors associated with investing in Everspence. All forward-looking statements are made as of the date of this call, and except as required by law, the company undertakes no obligation to update or alter any forward-looking statement made on this call, whether as a result of new information, future events, or otherwise. The financial results discussed today reflect the company's preliminary estimates and are based on the information available as of the date hereof and are subject to further review by Everspin and its external auditors. The company's actual results may differ materially from these estimates as a result of the completion of financial closing procedures, final adjustments, and other developments arising between now and the time that the financial results for this period are finalized. Additionally, the company's press release and statements made during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP net income to non-GAAP net income, which provide additional details. A copy of the press release is posted on the Investor Relations section of Everspin's website at www.everspin.com. And now I'd like to turn the call over to Everspin's President and CEO, Sanjeev Agarwal. Sanjeev, please go ahead. Sanjeev Agarwal | President and Chief Executive Officer: Thank you, Monica. And thanks everyone for joining us on the call today. Turning to our second quarter results. We are pleased to report our second quarter results with revenue of 13.2 million and non-GAAP earnings per share of 3 cents with revenue toward the high end of our guidance range. Our performance this quarter was driven by strength across all products, specifically in data center, industrial automation, and low earth orbital or LEO applications. We saw high single digit sequential growth in the data center business. This growth was driven by strong demand on redundant array of independent disks or RAID from a broad selection of data center customers, including Dell, Supermicro and others. We saw good momentum from our customers who build industrial automation equipment like programmable logic controllers or PLCs with sequential growth in excess of 20% from the first quarter. Aversman has a significant historical business here, and we are seeing momentum from current customers and recent design wins with our industrial X byproduct. We saw good traction in the space and aerospace segments that continue to value the benefits of MRAM as a reliable, persistent, non-volatile memory for LEO deployments. During the second quarter, we reached a steady state of revenue from the sale of a persist 1 gigabit STTM RAM into IBM's Flash Core Module 4, or FCM4, for data center applications and continue to anticipate product revenue from this ongoing project to remain consistent for the remainder of the year. We continue to ship and recognize revenue for our Persyst MRAM solution from Lucid Motors for their Gravity SUV and expect volumes to increase as the automaker ramps production. We shipped engineering samples for the two new products we announced last quarter as part of our X-Pi family, the Persyst EM064LX-HR and EM064LX-HR. 128 LXHR. These parts feature an expanded temperature range to address the growing demand for persistent high-speed memory in aerospace, defense, and extreme industrial environments, and provide designers with a robust, fast, and scalable alternative to static RAM or NORFLASH. We remain on track to ramp to full production in late 2025. turning to our licensing, royalty, patent, and other revenue. We completed the first phase of the front-grade project successfully, meeting all our deliverables in Q2. During this phase, we recognized revenue related to delivering the process design kit, or PDK. This contract allows for the award of future optional phases based upon successful performance of all parties contributing to this phase, and at the discretion of the US government. As a reminder, the goal of the project is to enable production of embedded radiation hard STT MRAM macros for use in aerospace applications. We saw a sequential uptake in revenue from our contract with QuickLogic for our innovative Agilis MRAM technology in the second quarter. As a team, we continue to advance the development and demonstration of strategic, radiation-hardened, high-reliability FPGA technology. At the end of this phase, we will have validated the design on silicon. Our contract with Purdue University to provide our state-of-the-art STTM&M technology to support energy-efficient AI solutions has reached a steady state. We are making good progress to develop low-power magnetic channel junction, or MTJ, devices and continue to share these results with Purdue University. Lastly, we continue to recognize revenue from our ongoing project with the leading provider of sensor devices to provide foundry services for their latest generation TMR sensor device on our MRAM line in our Chandler facility. With respect to below the line items, we recognize 0.8 million in other income in the second quarter and 7.4 million to date from the 14.6 million contract we have with the DOD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. We expect this business to pick up meaningfully in the fourth quarter. In order to ensure that we meet the future demand for our products, we are expanding our executive team with the addition of a dedicated VP of sales, Sean Dougherty, who joined us recently from Intel. With Sean's addition, David Schrenk, who has been our VP of sales and business development for the last three years, will be able to focus his efforts exclusively on business development. Our outlook for 2025 remains consistent. We continue to expect the year to be waited more heavily towards the second half of 2025 due to our typical seasonality and do not expect a direct material impact from our tariffs on our results. I will now turn it over to our CFO, Bill Cooper, who will walk you through our second quarter financials and third quarter 2025 guidance. Bill? Bill Cooper | Chief Financial Officer: Thank you, Sanjeev. Our results reflect the consistency of our execution. During the second quarter, we delivered revenue of $13.2 million at the high end of our guidance range of $12.5 million to $13.5 million, driven by strength across all of our products. MRAM product sales in the second quarter, which included both toggle and SCT MRAM revenue, was $11.1 million compared to $9.9 million in Q2-24, up slightly from product sales of $11.0 million in the first quarter. Licensing, royalty, patent, and other revenue in the second quarter increased to 2.1 million compared to 0.7 million in Q2 of 24. This increase was driven by the ramp in our contract with Purdue. Turning to gross margin, our GAAP gross margin was 51.3% for the second quarter, down slightly from 51.4% in the first quarter, and up from 49% in Q2 of 24. The increase relative to the same period last year was due to a larger mix of high margin licensing and other revenue. GAAP operating expenses for the second quarter of 2025 were 8.7 million, flat as compared to 8.7 million in the first quarter, and up from 8.0 million in the second quarter of 2024. In the second quarter of 2025, the company recorded 0.8 million of other income related to the strategic award we won in August of last year to develop a long-term plan, provide manufacturing services for aerospace and defense segments. We recorded second quarter non-GAAP net income of 0.7 million or 3 cents per diluted chair based on 22.6 million weighted average diluted chairs outstanding. This was in line with our guidance range of non-GAAP net income of breakeven to $0.05 per share and a significant improvement from a non-GAAP net loss of $0.6 million or a loss of $0.03 per share in the second quarter of 2024. As a reminder, non-GAAP results are calculated by removing the impact of stock-based compensation. We are pleased that our balance sheet remains strong and debt-free. We ended the quarter with cash and cash equivalents of $45.0 million up 2.8 million from 42.2 million at the end of the prior quarter. Cash flow generated from operations increased to 5.0 million for the second quarter, up from 1.4 million in the first quarter, driven by improved accounts receivable collections. We will continue to utilize our cash in developing new products, enhancing our sales and marketing efforts, and as an effective hedge against macroeconomic uncertainty. We did not experience any tariff-related impact on our results in the second quarter and do not expect any material tariff-related impact in the coming quarters pending further guidance from the Trump administration. As Sanjeev mentioned, we continue to expect 2025 to be more heavily weighted towards the second half of the year, reflecting our typical seasonality. Taking these factors into consideration, we expect Q3 total revenue in the range of $13.5 million to $14.5 million and GAAP net loss per fully diluted share to be between $0.05 and break-even. On a non-GAAP basis, we anticipate net income per fully diluted share to be between $0.02 and $0.07. In summary, we are pleased with our solid results this quarter and remain committed to maintaining financial discipline while focusing on scaling our business and converting additional design ones to revenue. Operator, you may now open the line for questions. Operator | Conference Operator: Thank you. At this time, we will conduct our question and answer session. Please remember, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Richard Shannon . Your line is now open. Richard Shannon | Analyst, Craig-Hallum: Well, great that you guys are letting me ask a few questions here. I apologize I jumped in a little bit late in the call, so I may have missed some topics here. But as I typically do, I'd love to ask about product gross margins in the quarter. If I did my numbers right, it seems like they're in line or a little bit lower than last quarter and kind of a bit lower than maybe what the trend we've seen in the last several quarters here. So I want to get a sense of whether there's any yield or mixed dynamics going on in here. Bill Cooper | Chief Financial Officer: They're earlier in the lifecycle, so we're always looking for ways to improve those gross margins and working with the foundries and the folks in manufacturing to improve continuous improvement on the yields. Richard Shannon | Analyst, Craig-Hallum: I guess, is there a path or a view to getting those product gross margins up above 50% any time soon? Bill Cooper | Chief Financial Officer: Yeah, that is our target. We expect to be north of 50% in total for product gross margins. But, you know, as always, those things take a little bit of time. But we do expect to be solidly in that 45% to 50-ish percent margin range for products. Richard Shannon | Analyst, Craig-Hallum: Okay. Fair enough. Thanks for that update. I would love to ask about kind of progress in the new product area here. I think you mentioned a couple of brief comments in this area, but – It doesn't sound like we should expect a notable increase here as we exit the year. I think the phrase I heard used was going to full-volume production with these products late this year. So if I caught that right, maybe it can help us understand what kind of contributions we should look for as we get into next year. Bill Cooper | Chief Financial Officer: Yeah, I think on those newer products, right, they are ramping and they are kind of in the burgeoning, Aerospace segment, that's one of the key segments, key industries for that area. And we definitely are starting to see some uptick and, again, some good traction on some of the newer parts and products. So I think we're, you know, we're moving along helpfully with those products. Sanjeev Agarwal | President and Chief Executive Officer: I'm going to add some thought after that, Richard. Hi, this is Sanjeev. Like we said in our prepared comments, we did see significant sequential growth, almost 20% compared to Q1. And a good portion of that is actually attributed to this new product of the X5 family that we brought to market over the last couple of years. So we are seeing good traction and we are seeing some volume pick up. As to how much it will be, it's a little bit difficult for us to break that out. But I do think that you'll see some contribution of that in the projection for the revenue that we have for Q3 and going up into Q4. Richard Shannon | Analyst, Craig-Hallum: Okay, fair enough then. Maybe let's ask on the product side here from an end market perspective. You mentioned some nice dynamics here in data center, and you pulled out some stuff in automotive here. Maybe just talk about the dynamics you're seeing in the broader industrial markets and even by geographies, as I think you've talked about from time to time in the past here, what the trends are looking like. I think we're seeing you know, a lot of moving parts both up and down as we see other companies reporting so far and love to get your sense of what you're seeing. Sanjeev Agarwal | President and Chief Executive Officer: Yeah, so the good news for Iverspen from Iverspen's point of view is that we are actually seeing depletion of inventories at our customers almost all across the world, specifically in the Asian region where we were concerned about inventory overbuilds. I think we are actually seeing some good a number of orders come in from that region, so that's good. And again, most of these are either in the automation or in the data center. And by data center, I mean the RAID memory or general memory applications. So, you know, the Dells, the Super Micros, the Broadcoms. And then as far as automation, you know, those are our traditional customers from across the world that use them for programmable logic controllers. So we're starting to see some uptick in that activity as well. Richard Shannon | Analyst, Craig-Hallum: Okay. Great to see. And my last question, I'm just hunting through my notes here from the call. I believe Billy had mentioned something about a pickup in some specific contract. I apologize. My handwriting here is pretty bad. But something in a pickup in the fourth quarter. Maybe you could repeat that and then describe a little bit more about what's going on there, please. Thank you. Bill Cooper | Chief Financial Officer: Yes, yes. So that is the other income that we have from the momentum contract that we were awarded late last year. And you would expect to see some activity in that contract in the back half of the year. Richard Shannon | Analyst, Craig-Hallum: Okay. So when you talk about a pickup there, any way you can quantify what we're talking about relative to the Third quarter to, you know, I think you had a fairly sizable quarter in this contract sometime last year. Maybe you can just kind of size that for us somehow, please. Bill Cooper | Chief Financial Officer: Yeah, we had a strong back half last year. We'll expect to see a strong second half and particularly more toward Q4 as well. Richard Shannon | Analyst, Craig-Hallum: Okay. I think that is all the questions for me. Thank you, guys. Anytime, Richard. Thank you. Operator | Conference Operator: Thank you so much. And please, as a reminder, to ask a question, please press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. One moment while we compile our Q&A roster. All right. Our next question, again, comes from the line of Richard Shannon with Craig Holland. Your line is now open. Richard Shannon | Analyst, Craig-Hallum: All right. Well, I guess I could have just stayed in here. Let's hear, I guess, two questions from me. First one is, in terms of the quick logic relationship there, Maybe I caught the language wrong here, but is this something that you're finished the current contract, you're waiting for the new one, or just want to get a sense of the timing and dynamics of where we are with the last announcement? Please. Sanjeev Agarwal | President and Chief Executive Officer: Yeah, so as far as the completion of the phase, I was referring to the front grid project, Richard. We did complete the first phase of that project in Q2, and now we are dependent on renewal of the project phase. And that is actually funded, I think FrontGrid is actually funded through the AFRL. So that's what we're waiting on next. On the QuickLogic, we continue to deliver on the deliverables that we had signed up for in Q2. There's nothing significant to report over there except that we have met our deliverables and continue to work on future deliverables. Richard Shannon | Analyst, Craig-Hallum: Okay. When do you expect that contract to complete? Sanjeev Agarwal | President and Chief Executive Officer: The quick logic one, I think the total value of the project and the time is almost another two years, if I'm not mistaken. Richard Shannon | Analyst, Craig-Hallum: Got it. Okay. My last topic to touch on here is, you know, following up on the press release that you did with Lattice Semi-Ukter as a companion to the FBJ chips they sell there, wanted to get kind of an update there on the progress. I know this is something that was going to take a number of quarters to Come to fruition, but let me get your update on that one. That's all for me. Thanks. Sanjeev Agarwal | President and Chief Executive Officer: Yeah, so, I mean, as we talked about last time, we do have some activity going on with LARIS where they're actually doing a co-package solution using our X-Py part of, I believe it's either 32 or 64 megabit density. And I think that evaluation is ongoing, and I think those parts are now available for our customers to evaluate through different distributors. For example, DigiKey, you can get the boards from there for evaluation. And then also on GitHub, we have the drivers available to actually download the drivers to evaluate those parts. So I think the collaboration is going well. It's just, like you said, it's going to take a couple of quarters before you see any significant traction. Richard Shannon | Analyst, Craig-Hallum: Okay. I'm sure I'll ask – In a couple quarters on that, we look forward to hearing more about that. That's all from me, guys. Thank you. Sanjeev Agarwal | President and Chief Executive Officer: Thank you, Richard. Richard Shannon | Analyst, Craig-Hallum: Thank you. Operator | Conference Operator: Thank you so much. I am showing no further questions. I would now like to turn the call over to Sanjeev for closing remarks. Sanjeev Agarwal | President and Chief Executive Officer: Thank you, operator. I just wanted to thank everyone for joining the call today and look forward to giving you guys an update for next quarter. Operator | Conference Operator: Thank you. This does conclude today's conference. Thank you for your participation. You may now disconnect. jsPDF 3.0.3 D:20260606090250-00'00'