MRAM - Earnings call transcript Q1 2021 | Everspin Technologies, Inc.

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Operator

Good afternoon, and welcome to the conference call to discuss Everspin Technologies' first quarter 2021 financial results. [Operator Instructions].

As a reminder, this conference call is being recorded today, Thursday, May 6, 2021.

Before we begin the call, I want to remind you that this conference call contains forward-looking statements regarding future events, including but not limited to our 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. SEC to Form SEC SEC we XX-K X, and you annual including on may encourage time XXXX, on from associated reports filed other in discuss would risk review in with filings, our our March to factors We time made investing which Everspin. filings with the forward-looking are made call. statements as this All of date of the or by And disclaim update forward-looking we required to law, alter except future. statements in as obligations any these

made be earlier until statements please information during conference Additionally, Investor now Investor Form release press website of non-GAAP A the reconciliations and company's net And conference to I'd call was certain in CEO, press financial Commission posted to press include at www.everspin.com Everspin's is call of Everspin's turn will Interim and terms. company's loss details. of Everspin's copy and adjusted in this of section Relations and discussions like ahead. are the release Darin, Relations also the of over call on for Darin in and the Chairman Exchange go in Executive the definitions today. website. the EBITDA, This XX, and the XXXX, and release available Securities GAAP Billerbeck. additional Included which measures in GAAP audio X-K section filed to will May replay provide

Darin Billerbeck

the revenue RAD-Hard joining over with call that, no QX us operator, the recognizing QX and as midpoint X% recognize the from 'XX ended of QX for majority guidance for We revenue year. line you, came licensing to over Even time. with up revenue below to our goal growth in on expect we everyone royalty over deal. XXXX double-digit in was the our Thank our of and our of the thanks do RAD-Hard results today. just licensing up

for our cash range X the row a of significantly, distributor generated while increased to third importantly, current cost, keeping healthy margin flow in weeks. we our a gross our positive XX lowered More quarter in inventory

was QX For market XXXX, XX% recovers. to approximately gain up as Toggle and the revenue traction continues

As we in and continue to that. lows XXXX, call, they the earnings to be our mentioned expected beyond recover saw QX doing to seem we in last just Toggle

our In start years. areas, little back to expected, new revenue discussing coming suggests believe our testament QX fact, off-plan. STT We current been backlog Toggle design in of all of strong industrial growing economic is the along over than backlog to solid shipping was revenue recovery a we with encouraged what growth. to the factory faster a did wins the QX in and automation seem the is past we're regions and for we to see X couple a by for industrial we've signs a customers,

exceed year. the we did they are to XXXX, QX some track inventory or of through we design as QX. in year see XXXX continue to get back adjustments, slightly on wins total match and track in all As QX small back overall grow on we expect Design for the last win did to

area. have turning more on even and sales our force real focused We refocused our compensation changed to our those opportunities in efforts into of revenue be that

adoption strong ever marketplace. the and last providing which before, customers to growing mentioned shipments As end pipeline volume of believe future than quarter, in demand Everspin MRAM is a more we production reflects

yield On to the operations on focus lowering front, and we costs. our continue improvements

sectors forward gross implementation various in mix The results with improvements we are pricing have worldwide. finally be Semiconductor biggest is is healthy gross We in efforts of our to network margins companies risk our appear keep and outpacing product a need capacity up that many created supply. the board. in struggling the margins and across to as subcon plans seeing committed getting moving the at tight the demand to demand

and the that RAD-Hard discussed a we licenses. now have won upfront finalized payments for related As contract quarter, million and last we design-in of collected the $X

As in in QX release, the press release - did $X the we not QX revenue include our in licensing press we've mentioned million anticipated. revenue

mentioned I do royalty to our get recognize reaffirms which As that we our monetize IP. to continue over deliberate strategy earlier, time, to

out Anuj will turn quarter on financials Finally, you track industrial our and the through take will our that. our guidance. now quarter call next-generation QX. CFO, Stay XX-nanometer over product in Anuj? I Aggarwal, is who to for tuned to first second XXXX tape interim

Anuj Aggarwal

focus cash discussion flow third and financial and metrics. Today, operations from some Darin, afternoon, everyone. my Thank results was key on consecutive quarter. highlight GAAP good positive the I'll include you, Highlights for

XXXX. in contributed cash higher. the licensing IP, and was and the Revenue revenue million year RAD-Hard generated have results. them. first the in XXXX period. quarter yearly to The for compared which was million, is prior lower in in to royalty a MRAM margin and in The million of million included generally STT-MRAM the quarter quarter, both compared first the in in and increase prior $X.X true-up $XX the to previously product sales quarter, from Licensing, quarter was quarter also We revenue, to we is million $X.X the $XX.X customer royalties quarter in of deal not gross the $XX.X $X.X quarter last first than first of $X.X which and and million our first Toggle using XXXX. the licensed revenue in million quarter other previous due the quarter include

XXXX of million XXXX the were The the gross royalty revenue. $X.X ago Turning driven first million a in million by is $X.X of expenses XXXX. $X.X and than quarter first quarter XX.X% last of quarter. $X.X stock-based of quarter to quarter's to $X.X GAAP but compared margin down million operating higher $X.X XX.X% for last GAAP year the from quarter the in compensation operating expenses the first included in was XXXX first lower versus of slightly million quarter. prior gross gross margin. GAAP for million, margin quarter

of quarter XX-nanometer We the product STT-MRAM negative expect of of remainder expense $X.XX reflecting and our to at Earnings broad-based of or loss bottom R&D net per margins. XXXX. XXXX the of $X.XX in industrial prepare Getting outstanding. operational or or $X.X despite launch was and targeted compares million per as million first net than the of grow we revenue $X.XX applications. our for negative better $X.XX million share share in $X.X to XXXX in quarter in other shares loss share negative on GAAP first $X.XX weighted per average for a of a XX GAAP million line. range to based was the This the strong XXXX gross - the tight quarter per in and guidance first loss GAAP discipline the just coming of share the midpoint, our negative below fourth net

and quarter $XX.X quarter. of balance million third end million at cash the and compared the cash operations flow. first Cash positive a Cash in the operations this positive consecutive equivalents of the to was flow making at first sheet. increased to flow from quarter the quarter for the best cash million of from prior $X.X $XX.X to Turning end our quarter,

second Turning to our quarter guidance.

$XX.X represents $XX this of million of million in to the over $XX.X midpoint first quarter increase $XX at XX% year. expect revenue a from We million, million, the which, range of

product. by over of next-generation $X.XX brief primarily it turn will STT-MRAM expenses per open it related loss GAAP $X.XX a for expect before Darin for up additional and to the XX-nanometer between driven some now commentary to I share We back questions. we

Darin Billerbeck

market believe growth. summary, build our to the high-density we customer of We In as Toggle - other We as profitable recovers. our future of our towards continue as both increasing top for well few we demand the center, the the years. will market STT-MRAM customers continue next traction as move products anticipate to Anuj. through data the Toggle Thanks, penetration at gain

industrial the out are product track And up continue mentioned open questions. license and with with middle replacement low-density our the a for to the our year. We in still come. now we at you of being to may STT-MRAM big to on Operator, this lines will NOR IP customers step, we STT-MRAM RAD-Hard more tape monetize targeted

Operator

[Operator Instructions].

Your line Peterman comes from first Capital. the Sam of of question Craig-Hallum

Sam Peterman

guess for on numbers a kind being Richard obviously, going in of maybe just impact. recognized, In quarter that's revenue sounds was about too, thinking strength bigger onetime parts. that some for forward, lot moving lot I of this and first, here. quarter this the just licensing Toggle like and a first Sam of growing a

give So That I'm had And constraint, recovery that curious, color what's going if on would STT-MRAM on more in or burns inventory kind area? of great. just there. little we what a expect - Curious of whether that customer kind should you that's can supply that's be a there. drop-off

Darin Billerbeck

Yes.

I'll but a start start. on - me more of one let question There comments. So one there, than probably couple was with

our better lot of true-up So of we what in And than royalty do were through serve but that would a that rates that customers uptick we rate. we than would royalty run the get. from that's anticipating on we higher did a some have we much see We did a don't one markets they normally be obviously, time. the to slightly they project visibility,

STT specific slightly. the deal, was On down it

they data. the end their of were was end looking soft. And last And believed actually market. some think of they at were think I would better I the than that year, at the in they we business do

expect recovery. that And we then going be back to quarter, QX, to this we by QX However, from QX QX, some normal. and to expect

to you're So from bit of ramp-up little a see going a that.

it's I demand. inventory any catastrophic leveling way, but nothing normal think the end versus So just in their their of

enough And happened. fact QX negative that So is very was numbers and well, QX, already years believed we last now to wasn't where can nice demand? as where sure that new far grew that from from the continue you come that that backlog. is you feeling game We about changed very the It a are. get we're in for that. which focused QX it's you comfortable it's of it to at hear about we've news ahead would believed were fruition, concerned look were And the the the we're But we before, if I'm grow. we we been again, Toggle as And X really Now to the focused QX everybody. it those design excited can Toggle like, - would enough by we wins on, get and were on really supply?

Sam Peterman

I to there could Toggle is demand which where you going a constraints supply either think you we just your in or from continue point outstrip call, bit. forward to to going on point could really mitigate at a pressure quite to though. Have from you'd you That's been said point that supply in that the hearing been supply, well. I And helpful on know yes, margin color, pretty impacts guess Yes, that? able constraints like see able margin a last you do Is last said, products? supply

Darin Billerbeck

Yes.

I answer So have one we going yes, our was that want to even aren't get do capacity there's that, last because happened our that margins But stay to capacity. a think it. going there in artifact out think some at that are of call, great in to mentioned of we're That things we by their lot order XX%. earnings an And this constraints for margins at the be I the price opportunistically clearly, impacted to of to front of in that X raised that people - you time.

that we we're It's that's it But year. strategy suck seeing that the within today we anything that our we to we're that pass And our above have through strategy we're going to Our as that and I start on we think in that, rightsized not we forward, And believe companies plan up as customers. marketplace. this moving with for our recovery walk X. actually to as all that. a right will the the as that is margins through submitted go still is

be I assembly feel that a lead test long But you It's and today. you're think from us, today. for don't quarters. times us to wouldn't But for there's we more for So going many that constraint so are about fab see right, a perspective, comfortable impact. an fab

Operator

turn to showing no time. this Mr. like would am questions to I conference I Anuj back the Aggarwal. at further now

You may proceed.

Anuj Aggarwal

Okay.

you call. joining, that, disconnect look for Thank may progress all with now reporting to today's we and you results Operator, forward the call. conclude our on next the call. we So and quarter's

Darin Billerbeck

you. Thank

Anuj Aggarwal

Thank you.

Operator

and concludes wonderful call. your a Thank participation, you. for Thank This today's day. conference you have

disconnect. now may You

Everspin (MRAM) 9 May 212021 Q1 Earnings call transcript