MRAM - Earnings call transcript Q2 2018 | Everspin Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to Everspin Technologies Second Quarter 2018 Financial Results Conference Call. At this time all participants are in a listen-only mode. At the conclusion of today's conference call instructions will be given for the question-and-answer session. [Operator Instructions].

As a reminder this conference is being recorded today August 08, 2018. turn Shelton to Group to Sievers, to like of President Investor would the over call Leanne I Relations. Leanne, please go ahead.

Leanne K. Sievers

welcome I'm of Good Earnings Relations and to Second Technologies afternoon, Quarter firm. Conference Call. Group, Leanne Shelton President Sievers, Everspin's Investor Everspin XXXX

today President CEO; Joining Winzeler, are and Conley, Officer. Financial Kevin Jeff Everspin's me and Chief

involve factors the available go Everspin's will now, Kevin Everspin. Form in intend by which made made business, but conference on SEC estimates, we may forward-looking And with forward-looking time Everspin's from please to audio required that statements review ahead. including to law, date may to future regarding at and the we call, risks March of want with performance update I in are for to its SEC contains Before section executing differ President Conley. as be for financial All like to our in to These remind plan. expectations cause events, market based do of Everspin's customer actual and call associated forward-looking for results filings, Relations adoption risk judgments, including forward-looking not manufacturing from website the goals, begin the the at and XXXX you I'd limited over on our CEO trends, statements design that you filings successfully in to as and of this call conference products time those contained XX in discuss investing the statements XX-K and encourage to this SEC XX, Kevin, and XXXX MRAM and of turn and Investor This future pipeline, current not call, replay materially statements. except uncertainties filed and other we business conditions and on bringing Everspin's are industry least this to days would information. We technology, call www.everspin.com. the market

Kevin Conley

our speak and product mainstream vision years a storage and results this during a With revenue first In to I'm Leanne reality. several products our quarter of the on grew shipments completed second by afternoon which the you everyone. significant enterprise STT-MRAM milestone calls the objective we our later MRAM from our our are becoming production the of is quarter in call. second product megabit innovative quarter. provider. for XXX XX% financial STT-MRAM technology. same we performance driving a was to regard previous of It's adoption our qualification extremely pleased to experienced see quarter key the to the revenue announce an to has storage STT-MRAM pleased full appliance our that increased XX%, good earnings a in I'll for our are compared Thank focus of more of and leading ago, the achievement new focused over as XX%, market revenue MRAM over core been our growth. this total year This on

Second quarter the the to Revenue range. guidance which demand than Toggle range targets ended guidance stronger of variances, Nevertheless our industrial discussed grade put slightly recovery this improved and behind quarter. for and increased metrics our quarter presses better per due last was the year yield operational our forecasted automotive factor products slightly also the to primary anticipated quarter on. share was us for compared behind loss below than production ago Toggle higher pursuit

on measured our the by Our early efforts have to achieved improve line. as the performance Fab backend indicators of progress

that progress yield improvements the year. second our to conjunction throughout half with of with facility gradual to in this highlight lease expect has productivity In been our extended XXXX. this into also facility realize at and We Chandler NXP want I

and we Summit. has Turning inaugural Memory week developments, industry had added Summit increased events; Day this Developer of MRAM market the from the organizers the attention this developer in MRAM significant Memory recognition received by the Developer technology Flash the Flash storage two of to Day was community.

emerging leading MRAM a progress in on to we adoption. keynote products were towards to that is opportunity we As honored our technology manufacturer MRAM have present believe that I why keynote address. mainstream reflected from made and have the lead-off moving technology of the the In the class we

in carries not to just market GLOBALFOUNDRIES promoting demonstrate great in importance STT-MRAM consumer ways; their broad first, strategic embedded progress two platform value was embedded our megabit goal for that both launched in but was This of we like a IP in new that They joint performance, customer us our towards process storage a far significance the partner MRAM partnership in significant to their IBM technology of pass for applications. solutions mass at MRAM how producing in MRAM STT-MRAM as also which reiterated assortment to leveraging in MRAM and recently of XXX all of form and at is announce focus; a enterprise tier proposition come and our XX of our the component and to and IBM. have qualified array. a customer engagements flash persistence, storage industrial FDX our also aimed shows has applications. has market discrete endurance opportunity for production Our an it second, XXXX. product our top the event on development also qualification presented nanometer This able It demonstrates the applications robust embedded been it milestone projection our

differentiating valuation our with that now is technology benefits applications companies gaining starting with in Our the meet storage a technology STT-MRAM provides. interest

the devices. such in storage similar latency imaging We are medical seeing data persistence to interest also exist low applications enterprise where needs as of outside

markets deployments. in also latency news form segments. demonstrate U.X Fintech for new partnering accelerator. with booth the theme based with is in storage highlighted One partners a SMART product the In with storage our used earlier FPGA MRAM's with Xilinx line the in key product utilizing addition showcased the ultra storage we production applications both starting including common major in NVMe This and performance also for accelerator qualifying of opening the jointly has for Memory customers to This important our new applications success By increasingly this these quarter in become to At our mass to Summit market the the to inside also relationship up our storage in designs compliment over we FMS benefits to as market MRAM us [ph] applications. and to ecosystem. this enabled been evaluation work Modular. based decrease for storage STT-MRAM has low this time fabric cases promoted our adoption able product nvNITRO in customers in SMART started arrays we are products. factor Xilinx MRAM Flash

third addition details we will our now exciting XXX results at to this well who with quarter that Jeff for end In track to Winzeler megabit CFO target like STT-MRAM selective I the year. our continued gigabit our provide call customer this progress to our as sampling quarter have which on X product we of on the second With of our the as turn review over guidance. XXXX would

Jeff Winzeler

XX% XX.X Thank million last year the total the XXXX revenue quarter million to the or income from statement. previous X.X reviewing the I'll Revenue was to second quarter million you in quarter X.X XXXX Kevin previous X.X and agreement the by XX% good in afternoon our million start year-over-year quarter. million up quarter comparable everyone. largely the in second represented same sequentially royalty, technology and XX.X quarter of contributed with revenues. the in was Licensing, and with first the sales XXXX X.X our quarter the up revenue other royalties, Products over X.X quarter in approximately compared from $X million and to X.X was which licensing, million XXXX but which other of sensor million quarter down and the from selectors. licensing in second included of of during due million

X.X For from increase a STT-MRAM which of in second the quarter MRAM the include and the million million increase the XX% X.X quarter. was million, X% quarter a and XXXX the X.X revenue in in from Toggle previous products second

experienced we limited our which in our revenue the and quarter. products Toggle MRAM output yields quarter constrained manufacturing the During on lower

Toggle strong XXXX QX to and ago and million for was sequential quarter. for the X.X a year licensing, XX compared profit royalty, was carry in Gross quarter. XXXX. in backlog first third demand decrease X.X decline Our remains of the the million gross the quarter will to over The same and revenue in attributable other million primarily in period profit into the the in

margin terms the can from As size and second of quarter of we both as our for a in part and is materially. the QX based gross was of transaction quarter and revenue XXXX. from of from stated margins and variable XX% first affect profit quarter on quarter on XXXX and calls, XX%, XXXX previous The is each gross in the the to resulting XX% such this decrease

was half measured and expect in in in was Chandler of of XXX,XXX $X.XX GAAP the we same This million loss mentioned year XXX,XXX loss second was of quarter of was development and million our were XXXX. X.X second productivity the quarter year. XXXX. gradual ago a Kevin per backend improvement share million facility performance XXX,XXX and the to the this QX for outstanding. saw XXXX $X.XX income on realize a expense to ago in net As per XXX,XXX or our the GAAP and with a loss loss first of of throughout to directly first X million in fab down million quarter a our of million of yields XXXX first Interest XXXX of of the XX,XXX compares the positive X.X X.X quarter QX the the expenses the net from X.X shares loss quarter quarter net the X.X million the X.X and first for quarter improvements licensing $X.XX first in XX,XXX of second the second quarter the prior million Other million share the XXXX in the compared a effect XXXX in or and million versus and quarter. in compared XX.X weighted in quarter average on second and operational to second of XXXX. in quarter XXXX and XXXX have should a XX.X SG&A the of quarter capacity million X.X XX.X This for quarter million Breaking share in Operating the revenue income of during both the per last second quarter; reduction or expenses quarter quarter second to quarter. GAAP research XXXX. in million to were $X.XX quarter compared in the XX.X in XXXX. margins. change based second for loss of and in from spending a compared year XXXX the was same spending X.X the due prior at

compared liabilities the turning at first to XX.X Total was the of in million quarter quarter. QX to XXXX. cash were the ops end compared million million sheet, compared second licensing in of XX.X were Now equivalents the XX.X payment The XXXX. collection as compared of reflected by balance million at to and Total first cash equity agreement cash first XX.X end in second quarter quarter of Stockholders quarter of at of the cash million first the the XX.X change the end of offset to at million XX.X used the in XXXX signed assets cash the of operations. XX.X XX.X in to XXXX. the million million the were quarter results from

the an in reflects decline grow up sales $XX of that expect third we sequentially the legacy sales. million revenue opens MRAM offsetting $XX.X capacity for products. X% and our quarter expectations MRAM to range approximately This revenues Note core in products ahead revenue range production this Looking decline for XXXX products between to legacy million. to anticipated our

count share shares loss share and per loss $X.XX on $X.XX XX.X average outstanding. loss based GAAP per share per resulting the range will between of expect an share million weighted We

to closing some for Now call I'd turn back like over Kevin to the remarks.

Kevin Conley

clearly pleased more continue Thanks to MRAM entire products. into This improving results. especially our We're Jeff. effort from will Toggle the for team Even on a area growth is family key of progress improvement there's products. an our and pour our with operational with our from opportunity revenue MRAM this perspective

long important a in design major wins with culmination IBM space. engagement the Our represents of enterprise a the broader We step this gaining adoption. and believe is successful in player an

speed and storage the STT-MRAM persistence into We critical will is where promotion of continue data to of focus rapidly integrated. other and our applications be on could

us focus developing investments technology and future. the that to product opportunities on range We expand this the for will continue a propel are roadmap long to technology market into

Now questions. for operator we call will open the

Operator

[Operator Instructions].

of and Our with Rajvindra comes first question Needham the Gill line from Company.

go Your line is open, ahead. please

Rajvindra Gill

could Yes, the thank you yields capacity that's constraints what kind what occurred the and further the qualification, margins, if on very and good. are you of on mentioned you experienced elaborate you job maybe Question Toggle second so great and little Jeff quarter you the now was the half? IBM and utilization product. on I utilization lower bit go your a think they can that in rates where do wondering on during

Jeff Winzeler

and industrial typical which testing last different issue our couple a utilization was quarters grade high. So is product. have lot over automotive products the a and rate of Toggle of capacity commercial shifted higher than The require mix the Rajvindra temperature has that tolerances product toward

And factory. from less so that has the output resulted in

are deliver our constrained output or in to revenue second on ability quarter. less yields which the the our has Our

all And So, yield end had the We line very so to in Toggle but XXX yields we're the constrains yield were that weren’t output we because cycle supply. ability factory. manufacturing and output mm the where the which that the way through the we demand to much is supply product that's our unfortunately gets hit that's where at seeing very of of that the demand constrained. completely able

Rajvindra Gill

got Okay, it.

meet profile? the this about the and change increase taking what in change demand to are the to the recall in a little steps of on capacity So, about and you're kind you bit talked this demand script that

Jeff Winzeler

the of in go identified those Yeah, things those. we've that programs we in we've addressed to variances there's happening; yield have factory root place a yield is caused have two are lower one active issues and so that causes fix the

depressed the although of in start but better half help of line as of a the second the yield end we to somewhat fall yields will these at will it that continue should mentioned so So lot I out see year. the getting

devoted that years, that been is other The our the those products capacity and revenue bad more sensor the by somewhat our our of about is mutes backend talked the that growth seeing in products. And news is services Toggle last other we're we able running foundry terms decline. wafers. to and core good primarily less are we're it have the are part MRAM couple for legacy issue sensor that of wafers news in The run Toggle to which products starting to

Kevin Conley

color better being to today what to doing, If have more is the of investments flow some line second of those better in on results. yield. specific part making manufacturing past I of issues that issues in that could regard their line so been lessen the will the the question and end that yield tie add and we're overall with which your And that moving those result just in we in able are just data there's the of impact a the earlier primary is taking things two processes and little really one management within to things, to

Rajvindra Gill

maybe profile is could helpful. or very X can talk Yes, should the end to little there revenue the you we bit customer what we last look see into samples the think gig about when that next the quarter we as any the and some of do And start go targeting like updates product at year since year?

Kevin Conley

plan of will our operational So, and means sample performance product within the and takes the reliability. and course that meeting We're new customer's which requirements its adoption reiterating specs be design parameters meeting any will that of be time. of our to

month as plan still this are to track indicating we're track our on meet week on that to month week, in our December. to milestone So that we indicators

eventually of at that customers. volume their of main Looking through in customer ending those qualifications would typical to sampling the production the and technology of go that be ramps from would adoption middle ramping up our mean the course then point production around we'll with XXXX cycles

Rajvindra Gill

to Any the had on is last question sensor is, MRAM the for sequentially year that from, of a kind business going the significant impact quantify I legacy, foundry. bucks that so the I year what it pretty backend what was which it on remember it last -- from million offsetting me, of decline you X grow as couple million was to if Y? sensor that around And revenue like X to mentioned I was think off Because recall last way X% range. the going dropped

was I million think me am...? X and if correct foundry I

Jeff Winzeler

dollars have to You was million year. about it last a $X million memory, $X.X good

away. So that go anticipated that business would something is we've

licensing to to longer a And the volume just regard you than it's lasted know that business go definitely XXXX a sensor we're start has moving in seeing to business would. away. we're specifically. royalty with it thought we and As It's model the that lot

at it We're that that lot devoting time factory line to Toggle getting that will a expect to We closer point. so and directly some we're production point MRAM in reach zero.

Kevin Conley

up Rajvindra completing more I focus business by will to that terms technology be And taken sensor sensor. back and a probably the in and our second strategy in that approach our highlighting that we've would our licensing of successfully continued license of of this

Rajvindra Gill

much. very Thank you

Operator

our you with Richard the Craig-Hallum. question comes of Thank from line Shannon and next

is ahead. Please go Your open. line

Richard Shannon

and design can taking announcement win been probably got this reaction from have us? looking add any kind we've questions. initial Kevin you over as Jeff of maybe I the congratulations any hours other this the my at reaction that XX my for announced technology Thanks you with IBM seen have share and ago but engagements you the and well. I'll on just IBM early, is know Kevin,

Kevin Conley

what even Xilinx Flash IBM has a having at to lighthouse lot Summit. the attention. been strong the Memory with think attract from manufacturers like the expected other we was going customer from based and designers In reaction did line very of a we say I'd storage other

how a compact a their of So into benefits say and Everspin what MRAM that with for performance a density of customer's mean is variety great product sales. we deal itself of it application. in could saw lot excitement and and the very discussion footprint level what of about and now delivers bring will published will the also specs actually product interest the and MRAM a that about there's I

Richard Shannon

event a correctly IBM thank hear perfect, at the tactically be end if you. Monday available would on I announced them with and IBM I heard by Thinking August, Okay, products I bit Kevin. in they said the when did was of the little more product the that correctly near-term

Kevin Conley

I what he that's think yes. said,

Richard Shannon

so is your IBM of revenues presumably inventory will Okay, third for kind that say? include initial the quarter fair to from build some

Kevin Conley

fair that's Yes, to say.

As of with said revenues by variety production full going quarter our and of QX a shipments preproduction production and meant we into I included builds we're a that customers.

be So, that into is them product revenue in today the will units to shipments. shipping we're that going

Richard Shannon

characterize and helpful? that this product, Anyway IBM Okay. way anything share you about early stage help that in inner new and/or is can the think but I giving would it's us forecast visibility be you know very any to this can regarding

Kevin Conley

I'm in liberty not forecast Yeah, to share am afraid. projected I their

Richard Shannon

I'd gross second characterize half the get could of any just are issue about on expecting can should it so to the you the Toggle faster talked products sounds do question line roughly margins, there? I a this timing more about Last improved for If we specific that from margin give or be let comments the of talking like you the me, year, Okay, products overall be for exiting way thought year over normal or your me backend expectations gross and with to thanks try, cut Toggle. slower, be the a I that Kevin. problem you kind

Jeff Winzeler

getting second to prepared remarks we Yeah, and expect the this the as in I of really half better said year. this in start

with think the But frame. the the QX fixes the time yields time that's by year. to think that really lag and we I place line in will healthy the gross exit we we frame the the margins impact more would time QX the uptrend material than we and definitely see that put probably we of already in the to in expect be on

Richard Shannon

to Okay, for need that's know. all my guys. questions Thanks I taking

Operator

our And Kevin of you. line comes question Thank from with next the Cassidy Stifel.

Your ahead. is go open, please line

Kevin Cassidy

congratulations I'll and Thanks my for taking IBM add also win. the for question

for With the yields to now is material yields still STT improve or there room is product XXX? on that

Kevin Conley

technologies in the in technologies we yields are -- production where ramping go that we takes continual No, to top. pretty information public. time appreciate that's competitive memory you I technologies sense still improvement through make specifics and we the hit until hope Kevin are. don't amount there's good these as a the And most can that of of

Kevin Cassidy

idea IBM the also the with a being we I qualified engagements just time Sure, time would STT but like customer to there is made on Monday Everspin was with win? know in good what if they GLOBALFOUNDRIES a so that get engagement it years of long had clear into directionally cycle maybe ahead. design the next getting improvement presentation expect their production then to do an the still it product two able your And to you product ago, cycle, from announce be engaged

Kevin Conley

we from will months. back bring said enterprise customers with on X that XX what we've calls anywhere qualification to storage could previous take maybe So

on pretty on we've pre to actually record you'll so changing production strategy closely working able at with customers terms how customer. think it build XXX get We're into qualified with time. and commentary in well recall very I of my the early this our In megabit are point and reengaging with and done we XXX

level. be customer of So at equally high team it hopefully engagements pace a to will focus and at those our perform of high the stay driving a

Kevin Cassidy

is or as Okay, the the R&D just R&D on X R&D, X expect to great we should gig? move are expenses you on introducing completed mostly gigabit and the up device,

Kevin Conley

early activities continue as production we work and yields. begin we on ramp and even R&D until hit will So to

with our focused said we've team Jeff on and historical less calls on more expenses and in are the line keeping as averages. So I previous with operating or

Kevin Cassidy

GLOBALFOUNDRIES. Okay, I other see. the about one And question just

XX FDX would is [ph] year process the had in or E a on MRAM would significant be their volume? revenue they in that think be that for that some wins something announced have and higher be we still I the to next having much

Kevin Conley

terms What of year mean hard on. me their in to is for next comment statements revenue

think those have of to design did and to risk dependent. pointing to much than the starts wins visibility talk next be of are those other this they I timing don't to portion and that about The MRAM a end reiteration of mass going year significant I good of production year. at

Kevin Cassidy

great. Congratulations Okay, again.

Kevin Conley

Thank you Kevin.

Operator

and line question you Thank Orin Hirschman with of next from comes AIGH. the our

Your line is open, please go ahead.

Kevin Conley

Hi Orin.

Operator

Orin if your the at time. and remarks. line I'm back questions Mr. time this any would is to Conley it over muted please Alright at I for unmute like further conference further no this showing turn Kevin to

Kevin Conley

next I'd progress upcoming attending In that disconnect your Shelton be like reporting I you want would a may work representative highlight the Jeffries our sales for Operator, look you to to your thank you. Thank events forward Jeffries including Please Chicago. conference these progress. now and like again Everspin for that the contact across Thank August strong the will or to results in Everspin participation Group today's on to look investor if the XXth future board you closing We multiple forward call. quarter. schedule to the meeting. the call. on the team delivered

Operator

you participating have the gentlemen may thank conference. does and Ladies program conclude This day. a all in great Everyone and you disconnect. for today's

Everspin (MRAM) 8 Aug 182018 Q2 Earnings call transcript