MRAM - Earnings call transcript Q3 2021 | Everspin Technologies, Inc.

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Operator

Good afternoon and welcome to the conference call to discuss Everspin Technologies Third Quarter 2021 Financial Results. At this time, all participants are in a listen-only mode. At conclusion of today's conference call, instructions will be given for the question-and-answer session.

As a reminder, this conference call is being recorded today, Thursday, November 11, 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 it's business plan. from based involve judgments, may risks results differ are market trends cause statements the to and in conditions and materially forward-looking on current estimates, and actual forward-looking These statements. contained those uncertainties that discuss from SEC which XX, you report factors third SEC XXXX risk XX-Q will and our Form we the with made including be our other We would filed investing review time SEC with filings, in in encourage which to may to quarter time on on associated filings November Everspin. as statements are we the forward-looking update call All this intend and not as made this law, of by date required of information. to except do our by The external are hereof based estimates and are information Everspin auditors. to the financial today on further future and date results subject reflect it's review preliminary available discussed the as of

from actual with period final closing estimates these as differ a and financial are now adjustments the may other between Our of our for procedures, this completion financial arising results and results of materially finalized. the result our developments time

turn go the to Relations definitions the GAAP call Billerbeck. additional Darin, of press press EBITDA details. and company's like Everspin's Darin conference section This during conference www.everspin.com. non-GAAP this in certain include Included ahead. provide Chairman call call financial X now, and discussions will be statements Everspin's net of terms. loss in made to available Executive the release measures the I'd GAAP of for Investor CEO, least and release, and Additionally, and which will reconciliations information days website company's adjusted audio replay over please for in Interim at And to at the

Darin Billerbeck

for and today. thanks on for Thank us call joining you, operator everyone the

brotherhood begin First sisterhood, among recognizing and of today we great the us who and those the call have military. been part U.S. foremost, all let's by

and service active Guardsman reserves. veterans, Our duty members,

And second in as kept were GAAP income the have release, press end mentioned safe nine and XXXX. guidance. we sacrifice for row and had above in in GAAP our higher quarter QX the of a results the and positive came for our our of country service net first Your months income free. net positive

higher wafer of that quarter had very inventory also revenue supply and left our The $X that lean news we revenue still growing laser higher year being positive line that Our the a while improving constraints this continue GAAP focus a with tester was we and Being Distributor demonstrates we ago. continues is XX.X% Everspin revenue to a XX% on was well company. flattish fight gross income good over for being supply by range saddled yields, customer our QX We Despite was margins as can. million every keeping net as was customer to spending, product than than our the will unfulfilled, QX drive the largest for OpEx STT since below controlling focused not toggle healthy and profitability. constraints. target is be constraint in QX impacted top culprit. for largest believe XXXX.

to production reached for other expect status do flat couple customers However, continue over the based on revenue have using suppliers, To to quarters. MRAMs. we stand-alone STT now of next X,XXX date, be

all design defense. wins robotics, and aerospace automation, applications pace continue year with adding in wins in design design XX to another many XXXX, geographies, Our new current keeping across industrial the including wins grow, our record These in quarter. transportation,

play. SRAM serve along NOR where out see it's taped ability for end our replaceable silicon other On memory applications rugged be STT can by we year. with the this market, believe next-generation and product which R&D the expect both front, will we We of to no this to out the new product mid-density revolutionary

did we to IP two the QX. respect with more IP, RAD-Hard deal close monetizing our in announced transactions strategy we Finally, our previously addition deliberate to in of

One transactions transactions be as have recognized collected cash other which revenue already recognized been Post-QX as over of CFO, turn our equivalents as while take today. will these million Aggarwal, it will in revenue and cash the XXXX puts $XX QX, I has results, cash been now quarter the guidance. you our over both and of financials Anuj our Anuj? from will those through quarter in third who to fourth QX.

Anuj Aggarwal

you, afternoon, Thank good Darin and everyone.

revenue results revenue some revenue who in other recognized IP was company business in largest and ago QX quarter the revenue our quarter Licensing, the positive high-density was revenue million XX.X% MRAM product sales versus quarter applications, in financial in was came quarter of third growth for the in QX the to quarter from We include the the RAD-Hard and third a revenue of revenue revenue XXXX. supply and $X.X end in strong for to and the and million versus are QX previous million which represented deal in excellence. prior increase the to positive The in sales, million of despite $X.XX remaining $X.XX revenue at be 'XX. end customer quarter. of the million will period. compared in to royalties reflecting million recognition the million and quarter XX.X% $X.X constraints. million the Toggle income XX%, of monetization product STT-MRAM XXXX, both year into third worth the quarter XXXX. $XX.X data for exceeding of entered $X.X the IP center last improvement XXXX XX.X% with operational quarter in with and in $X.XX STT due $XX.X of million QX to results Revenue serve recognized $X.X the million. $X.XX suppliers with compared an monetization $X.X million and and million Shipments in $XX.X we guidance top and in $XX.XX is our deal. year Toggle report $XX pleased We record flow delivered quarter million operations million quarterly solid net in prior QX third of cash of for In the

to the gross third driven $X.X RAD-Hard million depreciation. revenue XX% versus margin expenses year monetization and accelerated and and the Turning by stock-based GAAP was XX.X% compensation prior prior was variable expenses last third marketing increase to XX-nanometer the is was compensation XXXX million QX $X.X quarter of year, $X.X $X.X quarter the higher year quarter recognition and operating inventory and one the quarter GAAP sales compared the product in quarter a administrative margin gross to XX.X% and quarter 'XX. The primarily IP noncash million XXXX prior in $X gross reserve operating for million gross the million in lower million quarter GAAP margin in $X.X the $X.X the and ago. The include for compared deal. development, in year of third in for quarter. XXXX prior the onetime In versus were reflected costs. million quarter million of ago margin. in $X same of

we minimally. other for We launch The expect R&D broad-based targeted XX-nanometer to industrial the product our expense applications. of and remainder prepare of XXXX, to STT-MRAM grow as

income of share XX.X in $X.XX basic net per We of to are on a average or second basic million positive weighted outstanding. per share net million $X.XX to shares gross report compares the $X.X a based or of $X.XX income loss strong pleased reflecting $X.XX This million a per third operational $X.XX quarter and XXXX. the share tight discipline our Basic GAAP of share net quarter range, XXXX or was better in and of our margins. than million of basic earnings $X.XX GAAP guidance

equivalents and increased positive QX the at the Turning Cash at million to end 'XX. million quarter in cash the positive $X.XX $XX.X compared to quarter prior from and to end the $XX.XX operations Cash the $XX.X $X.XX and was balance the million quarter third of for of at sheet. million million year-to-date.

guidance. quarter fourth our to Turning

to which growth of revenue of The in XX.X% third $XX.X at expect IP a midpoint expected $XX.XX monetization million range earlier. XXXX revenue reflects range as million expected reflects revenue quarter the product recognized the well increase the be revenue results. the discussed remaining million a $X.XX million $XX.XX of to over as million, deal for $XX.XX We

GAAP product driven a open over suppliers. back pricing commentary and primarily before STT-MRAM to We share for it turn income brief between for Darin we now $X.XX, it XX-nanometer related our I'll expenses and questions. basic expect $X.XX by per from additional increases next-generation to up of some

Darin Billerbeck

you to we extra a In effort put may Anuj. everything a the by we we our summary, towards and have questions. team year. constrained the could growth. excited rest supply opportunities grow future open the income yields both in with net accomplished of profitable network. Thanks, the line We're continue of ship the our the positive semiconductor Everspin to costs, QX's work and Operator, hard testament what in for QX, throughout improve control to to build now along very is GAAP potential

Operator

[Operator Instructions] of Your from comes the Richard Shannon from first Craig-Hallum. question line

Your line is open.

Richard Shannon

guys, excuse taking for questions my here. thanks Hi me, --

questions Sorry of on supply degree reasons I end quarter. quick gross beyond? here. here, there's a toward in expect expand to Can on fourth and happen your unusual. the margins to one, assuming the are And for you Anuj, quarter -- costs for on product just slide, to remarks or Maybe lower repeat some the which developing the something you going getting the of kind constraints just model my didn't the that here your I'm prepared that? expedite and in that or catch the

Anuj Aggarwal

Richard. Sure, Yes.

you gross I on model. last quarters, So of as relative in strong terms gross But over margin know, typically, that to will give we QX. don't seen our we've a couple internal margin the of -- guidance say

So we of deal, last they IP gross over the quarters. of IP with to as uplift in RAD-Hard have new the an to seen typically monetization this mid-XXs. and margin the XXs deal the communicate Because couple internal we deals relate model, low

Richard Shannon

that the margin. quarter my I doing asking gross bit a than around If XX% on quarters. few right product Right. I'm But was for was it the third and last higher here, specifically calculations

just I if dynamics understanding make I'm the going continue. and to So to want there they're sure

Anuj Aggarwal

Yes.

perspective, seen the operational improvements team. work So a from think Toggle great I good yield we've some from and

so in that space. seen And we've improvements

would to hold think these And... I going levels forward? they

Darin Billerbeck

bunch on in Yes, of There's the network. stuff the compression on on we're so raising going cost due Everybody prices. And the increases. this stuff that. supply Richard, of some is overcoming to a is obviously margins

we notified running We've try prices. or strong had In -- is biggest do because the expect and to some for that model increases hot we about XX price lot of think model, XX% quarter, I XX% back move a is mix thing and ran strong the the our future But on IP everything to the margins so will last But it because your But offset overall up customers. XX%. margin due closer We've product-specific everybody strategies as monetization last side us that got and very should and model be on range. fact, the between we be forward that that come that. before. to the and first pretty to our quarter else we increases we to base of slide as XX% talked we quarter peace to parts move price that on going It's in us of of the to to had. we've for back been And in many

Richard Shannon

there, helpful That's Darin. Okay.

question, I guess was sales, said STT, product roughly with margins Toggle product and me, flattish the quarter-on-quarter. on specifically I'm Next you excuse if the it at think here side I looking gross --

design third implying that growth are now your Is if and to right a about the a strong quarter. some decline are Toggle couple not numbers design into your evidence see predecessor think, nice the larger because that talked of it here flatten we a I are the seems those out finally didn't here and and some in running Darin or Or pretty fairly fairly wins really good to coming you're growth wins strong wins still maybe substantial there at starting as actually, ramping Both growth, largest same like fourth are the customer you, had but we're quarter. for growing here, in well, years of here increase much. You time, least that of -- my production? seeing at see kind

wins So here. you're of getting Toggle good a lot

in And next growth you the get of so they're how coming coming quarters? love and how and understanding where I'd sustainable see to the few from

Darin Billerbeck

probably things the is so the is, think were I abnormally growth because were was mean news things. constrained than QX pretty I so And that's then customers, the One And big itself. we high digits by much able probably of good look us Toggle some a was it. Toggle that XX%. ability double seeing forward, in those when by caused we so Yes. growth gave that low fact through on moving kind caused unhinge that as more was in going you a QX When probably what QX the to And to at also. it that's there's many It's two were that customer. of but the strategy areas. we big less ship you growth happened. It you're one what look no at

albeit, multiple In largest kind they're the those but design now of of perspective. coming it's fact, years We've people. wins growth a And customers, added which smaller caused XXX Toggle diversified. of see a what member most to are to starting like couple more walked we're customers to kind is of retreat XXX and to away from fruition ago

And grow a Toggle again, us. pretty could growth. ship just to if STT with -- higher our bit put expect for QX main We strong But thing could to. go we point good a it inventory. through this that's you're we wanted in quite to in. at We So going

what do sure they that inventory. with is much so, to and don't trying make And have our customers large too we're work

taken It call let's just it higher. flat and QX QX have much for the "Hey, been say, ability on STT." So we've to could

quarters. going in even But we mean results down that doing we're that then other slow future I little as have the the things take and some to of should regrow we're bit better advantage happened. So and company of had could a just it a had

Richard Shannon

last Okay, One and that's for perspective. I'll of here. line me jump out helpful

if XX-nanometer wonder Your going could they're repeat you Darin, about what here, STT your I device comments after.

I And you if NOR some can want replacement you SRAM mid-density, sure maybe or but said I that. said then this And of get on -- think years? even and the I'm kind just not applications of a something the and to kind you're if you how big opportunity see going over understand that here? of next us an few add how help the value after you repeat

Darin Billerbeck

Yes.

So what The market our a that's driven what do Toggle data serve itself let's forever. capability do. like SRAM we've right? product replacement which start stuff, of done to right? that what of does. with lot kind product, we the That's the has is more logging the products And traditional That's

drop is was can reason performance we a out there also addition, and devices because act market lower NOR itself In retention put for get all a to. there fast highly And we [indiscernible], that that counts. the and be it NOR and rights a can't believe socket. but interfaces on reliable higher higher we the it with that today because higher Extreme into temperatures, cycling exterior device it's did

Richard Shannon

great. Okay,

jump for I Thanks. me. think all I'll that's the in line.

Operator

comes question the from next from & line Rajvindra Company. of Your Gill Needham

open. is line Your

Denis Pyatchanin

for evening, Denis on good This Hey guys. is Raji.

Darin Billerbeck

evening. Good

Denis Pyatchanin

either How up have for kind new So my of some of you first customers? Any about markets is new question buying is these Toggle. the do drivers And backlog around -- that for anybody knew looking? is product? the opening

Darin Billerbeck

it's upsides good you in competitive I and have front when of in past. And you for in to lots supply. Same haven't markets, of you right? of have had helped product things yes, the able all there the a customers. lots with that good you it's constraints aligning have those supply that mean new us new We've And we have customers that's the been good QX It's dealt a leverage that out when some lot, QX. old

handle QX. in We some also can upsides

now Our than ever it's backlog is been. stronger right

were we In two quarters, fact, XXX% the last booked.

Denis Pyatchanin

each of skew kind Toggle split which end could for that, markets? STT, versus between to split terms of follow-up for of remind at one a as end in of rate us the kind you And of market the Great.

Darin Billerbeck

of Yes. electric it's industrial vehicle. automation drives, So in Lucid STT announced the enterprise, aerospace. Toggle the enterprise cashing be mostly So big is play. a right? Think big is an high-speed as robotics, which of everything the could just right? it's We've design factory more

nonelectric you're of have even And cars really also. can there see failures. to And a uptick high products of count they they those So get of many, are years, applications the a car we're many, especially any finding of are becoming computers. realizing electric probably automotive can't out lot manufacturers the that where types on it's that when some starting retention in for and that lot many difficult to

Denis Pyatchanin

going? And my out, helpful. there the the progress really for how were then last anything I that's Great, because think regards question, second they there to with partnership, taping is is new Phison there? the year

Darin Billerbeck

STT research it's like We out. we rolling it can and without difference it's big production but can and message, taped And they'll eventually, wins on the that making We And time help every we at get control going maybe is they're not because to the memory be other that looked of ramp the us big as they Phison to did But for product we're for. quarter been get the right? as QX same that it's line, those QX, XXXX. are albeit ones the a some design makes think take looking us. standard even if progress We Phison. it

Denis Pyatchanin

mentioned sometime date 'XX, mentioned you quarter is roll You in So a in out? this to there... expected

Darin Billerbeck

supposedly, QX their -- the didn't heard, it's sorry, what say have QX, mean it, XXXX. and they to because silicon. to it's that then but will of we XXXX call silicon our us I -- 'XX supposed it's be and I help QX-ish in next they six from have production months Yes, don't

what hear. can today they sample, once from So I sampling they're

momentum hopefully, can get some going So we on that.

Denis Pyatchanin

Thanks. it for it. That's Got me.

Darin Billerbeck

Denis. right. All Thanks,

Denis Pyatchanin

you. Thank

Operator

of question the Dialectic line John next Fichthorn from from Capital. comes Your

line open. is Your

John Fichthorn

the you What talk IP could selling you does great a then know, got hey monetization. validate? couple a One I don't you taking little thanks and just what bit of guys, And are for a And it work others. question; up? little are off? about that? about bit What a I've is, IP couple. Yes, giving my

Darin Billerbeck

Yes.

strategies. So after have this our one. strategy Actually, now different three -- we have we two

first we cases. that have The was RAD-Hard it." we strategy people We've like, continue multiple And play is things we custom that's for give So it's we're business for where in done do that. case markets our to go to us. technology don't "Hey, away because Really we want the that, to license let's utilize exact multiple of specific that they're great. And that. even that going nothing so building good do. in, We that continue products

where The we second have because There's thing have we this area or either that. a protecting And of a is may our a essentially, go the lot with that we another of we're people it, necessarily and to IP license of use we and don't do our out. know piece it -- anymore element technology on that's they violating not patents one our So right? pieces they're technology protection IP we where and we there's have heading. direction also of lot that lot using

we're as find we discussions have some in they result so cases, about seeing. that IP people is we And with monetization those in you're what assets, discussions. having which And valuable

John Fichthorn

anything. really away not you're giving So

extra You're is kind value. -- this of

selling your portfolio to patent is? or it not You're capture million whatever $X

Darin Billerbeck

That's correct.

what's no simple. that. direction, saying don't And basically you're you And than of pick Do this? yes, is once we yes. a patents. is You're I any different it all Is really It's long-term your -- that? like, strategic map because we that what's road That's right? this have my maintenance company, almost fee, other need the need ton

John Fichthorn

Great.

product the a of that customers. period. lot you've got yet It -- a new right sounds product been the there's -- whole this I more And a same of you bit validation time, and a think is could of some at acceptance, little released COVID word. a into There's buildup there's over was like here, So

kind the for you question or we're demand can't tell what know going have better future pent-up term long that's or visibility the release term on or a relative to whether into very seeing so worse? And near don't forward? of I thoughts term visibility I'd but of And I medium here of love whether the your the better

Darin Billerbeck

I me have to enough Yes. in questions one think there couple years try I didn't base let our answer. ago business. mean On two-three that side we design there's but of a on it, of wins

we so that. deliberate And put a focus on

new We're expect. throttle in, reason. products. momentum kept to we So And win just you that. normal you're during just successful. of products for are the like see coming demand getting where just a the COVID, for we Those size that on customers off -- That's they're would releasing the design starting Toggle what

the -- for And QX, On of started have there me, demand there's we as can different push everyone meet for it the demand all overcome all supply. because people table. QX, QX, difficult the excuse other We're on in lot time. within is remember, we back because stuff some supply results, enough us. order it. of do where to at this than which was like chain, helped higher supply be was we one a able probably today, when constraints us serviced QX, supply. million hand, could leaving in supply In with the QX had to we to constraints. of then, QX be when issues and million and the we freeing -- to got $X -- up, I you And able it's than QX, a it happened to QX, $X our supply giant think still we had Even started us the still just seeing from demand. higher QX, the have these is our year

John Fichthorn

That's great.

see I this want good market additional the just of but forward you've lot a other that say have longer-term growth don't finally at unlimited extend point And this base this in is can to a growth basis? on through going where you So for got execution? kind are is inflection that product, does Like visibility. you and of, a now words, we

Darin Billerbeck

lost revenue what if just a CEO before. get what customer different is And you It's remember, X,XXX see at, you're bigger probably lot I'm by forward, a because you looking like look strong at like like, a hurt of really because backlog we it us that big or customers, all than names like that bunch had did as right, through that may last? a two does in which first this okay, it's quarters. divisible the case, also And the these we're How that other in ago, looks backlog, base we we're that's to things. people a we're your the like and big XXX% Well, people -- risky. almost one the these base. today, -- prices, artifact three you less looking raise The two of a in that product stuff. is you're just you you -- can it's challenge have an or not is customers not years if expensive And shipping product long be constraints, are most three because our

-- to So does we mouth. hold, we inventory so at always care And I hand concern levels that this there low are need you because this is to are a that point can don't anyway. that really we're so our tell we replenish

got get anyway, a we correct build this and blood through there's pretty buffer distribution, today, inventory have you've of just little to in -- are all don't everyone So just like correct. low. you're And because else, them product that our levels just bit they're down to

So...

John Fichthorn

is love thoughts How your that how which mentioned is off it? that another is kind opportunity, then around How and NOR. question drop I'd immediate big is of I'll it? in Just to be question, NOR opportunity response it? you science would great. your Last the on thoughts any additional around Great.

Darin Billerbeck

haven't division four or over shut for in because past, And there So used years. five my was to run you the technology it for time down was Intel. back one no I NOR that that advancement I and seen the

And real can retention so SRAMs infinite endurance with devices is designing but the also remember, really we have rugged we that put were because not high these only for an theory that with can we SRAM. we displace

devices of that not You on built as a the and don't need different as look NOR it's people all on block the you and retention air is lot And on good if XX-nanometer, say data NOR. correction, back things. for management

the a don't software, there's need of So software. design. lot it They simplifies

today, want So rugged choose can people there this. that out for what's they'll devices outperform that

Now, but have the big a and opportunity product, I don't is find this it. traditional the thing SRAM the we're as SRAM to know going other do this it big today not Same move to NOR. through market both is. we market go test NOR to have how and only market And how out but it we we're putting has it's Remember, market. interfaces; has product this out. has it it's

John Fichthorn

Thank so much. great. That's you

Denis Pyatchanin

You bet [ph].

Operator

Shannon the have from Instructions] [Operator question Craig-Hallum. line another You Richard of from

line Your is open.

Richard Shannon

Great, thanks the taking questions for last of couple here, Darin.

MRAM-based and on partners into and potential up about there's How you've mentioned, guys SSD the partners as whether topic of Phison. SSD you any other doing talked control, Following controllers? about any or progress end visibility getting other

Darin Billerbeck

doing it but is biggest Phison mean also other from supplier. the know. biggest lot Yes. one what of I they're people a not the I

that's So good.

and it. yes, because wait because which out what that life in better helpful different kind get gotten our largest it it more the design But time. standardizes is until will customer, right right, with we've for using the things mode think through we're that our thing of quite is interface hopefully, the doing FPGAs of grow we're are because we a then now, I controller kind few of product. extends wins to can of a people it's it that lot at And and hard us,

Richard Shannon

Right.

hearing you, of ball do both your going you're the but here out issues know constraints. for this customers? question hand a long for to supply and what I specifically here Any Last how sort are crystal here, of is is you think Okay. stuff sense there? on be at

Darin Billerbeck

if XXXX. supply just law it the I -- Moore's law nature haven't in of should up I be to sometime and not heard go cyclical anything. demand Moore's But but back

say at now of X.X I the constraints look can But people been that's for what have that maybe you'll going you on if longer. something think I tell, nature. almost years from

the like ran I when a because day it that for flashes a of Intel, factory. on everyone one those to the things. I could in else put new it's remember factory, I put new yes, So we predict

was it then waited constrained all more And you then and Here's of then up supply got volume a and you all up caught the and then went and it demand. added all and sudden factories. bigger than prices

flipped. that every logical COVID follows so sometime. but it will has changed it X.X XXXX it about thing, don't end And a I know if if in years

Richard Shannon

Okay. then? think that that you be year it's and Most than to time for you're calling next going think some people longer do

Darin Billerbeck

sorry, I'm XXXX.

XXXX, yes. I mean XXXX, XXXX, sorry. Sorry, say to didn't sorry. XXXX, -- sorry

Richard Shannon

loud all I clear. right. for for clarifying and me, Yes, Thanks Darin. and Thank heard all you. that that's

Darin Billerbeck

Thanks, Richard.

Operator

turn There at I Instructions] Aggarwal. further conference questions this [Operator now to time. Mr. Anuj over back to the like would are no

Anuj Aggarwal

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

Operator

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

disconnect. may You all for please conference. online a post Presenters, stay

Everspin (MRAM) 12 Nov 212021 Q3 Earnings call transcript