MRAM - Earnings call transcript Q2 2022 | Everspin Technologies, Inc.

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Operator

Good afternoon and welcome to the conference call to discuss Everspin Technologies Second Quarter 2022 Financial Results. [Operator Instructions] As a reminder, this conference call is being recorded today, Thursday, August 11, 2022.

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 of 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 results to differ materially from those contained in the forward-looking statements. We would encourage you to review our SEC filings, including our quarterly report on Form 10-Q which will be filed with the SEC on August 12, 2022 and other SEC filings made from time to time in which we may discuss risk factors associated with investing in Everspin. statements made as the undertake our required to any are call of no forward-looking statements call events update except this or result and, by forward-looking information, statements, forward-looking whether as or of date of this obligation to a All update on new alter further made law, we otherwise. by reflect the Everspin based on to as of date The and are further its financial information and estimates, review results external auditors. our preliminary discussed subject hereof today are available

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

release call adjusted and and GAAP this non-GAAP measures press or of certain terms. during made press ahead. the Investor details. EBITDA Everspin’s loss Officer, will definitions Sanjeev, to in reconciliations company's financial www.everspin.com. of the over discussions website Everspin's release to the company's information is GAAP conference and section And go call Sanjeev A press statements are at release Included of the Executive turn which please to in copy and income include Additionally, I’d Relations posted net in like of Chief provide now, Aggarwal. additional

Sanjeev Aggarwal

from compared be Everspin in Thank were facilities, of the you, reductions XX% inflation We company. We operator XX.X% chain GAAP operations a second a $X.X quarter and attributed GAAP quarter. constraints cost fifth in XXXX quarterly million, and from up the XX% focus was the flow thus negative in margin income Revenue $X.X We revenue delivered A our product, the improved megabits. on $X.X Expanded to today. row end few from $XX.X megabit announced the and increases a STT-MRAM million joining of continues xSPI gross for new an xSPI This to up and GAAP our efficiency high manufacturing call positive X to for broadens and was year-on-year. product guidance. which million. a and a of net meg supply healthy which was portfolio has maintaining $XX.X thanks, of was availability Cash XXX our to supports million, margins protocol. income the offset with STT-MRAM cost everyone, SPI quarter capacity range. the of year-on-year. of highlights or million, increase EMXXXLX net us above of for strong gross XXX

of an balance XX, XXXX of as remains for backlog XXXX, product at June Our all-time high.

continues team meet new navigate which demand to our and design Our successfully on existing remains Toggle supply products. wins to strong with changing customer

our partners houses for We are foundry working more more and and assembly with for capacity. test wafers

chain demand our some alleviating are have is into to carry over unfulfilled which supply of Toggle we Although expected we constraints, upcoming quarters.

guidance. this deployed to now embedded which Flash a and standard for XXX This industrial at integrity it bitstream with We financials invest I speeds who applications. demonstrated will family over in fast products was of as our in earlier Anuj Chief leadership download term to NOR opportunities to Anuj? FPGA and or low-density speeds setup. sampling to can now system writing XX-megabit and RAM available STT-MRAM you Compared quarter products xSPI persistent, in will IoT a Flash this offers and be quarter NOR serial replacement family of our product NOR our customers. Flash, half configuration turn products second STT-MRAM will faster a our display XXXX. family megabits year. xSPI is This business through Aggarwal, long of compared in take at XXXX Financial for using faster second STT-MRAM technology schedule our production on continue our World of in We products new near simulated to on the volume family are from X grow on bitstreams Embedded of our and Samples xSPI of STT-MRAM in low-density and megabits Officer, term. focus third that

Anuj Aggarwal

you, everyone. we in year, of QX The Thank we are announce to continues financial pleased positive afternoon, consecutive to Sanjeev results. highlighted and good quarters income. last team strategy execute net to resulting Today, the X

resulting and last revenue in $XX.X solid quarterly of of the and million. cost the positive cash of top of XXXX. quarter million In balance guidance, to from flow million compared beating despite increases, with $XX.X in supply second we results, quarter $XX.X $XX.X constraints We a addition, generated delivered cash healthy operations, end million

the the in in quarter compared flow We and and we XXXX. applications, STT-MRAM Licensing, in revenue, $X.X $X.X in Shipments QX $X.X and XX% who other serve our high-density data with was for million QX cash previous from of million versus our royalties, for MRAM operations in quarter product of in million quarter revenue product the in both also end of $X.X the was the income QX QX had ago. of which million represented the to million second quarter year Toggle for revenue to and XX% STT customer, in prior quarter XXXX. revenue $X.X positive suppliers second quarter center $XX.X second sales million of patents $XX.X positive a million our XX% in include largest million and and versus XXXX. net $XX.X

The to expenses million million ‘XX. primarily prior second second $X.X gross versus was $X.X Turning margin GAAP were operating expenses and the the in costs the in of product. quarter the XXXX STT for quarter the quarter to second XXXX. in highest XX% XXXX GAAP margin. quarter by in in and quarter the driven increased $X.X versus new for prior the of XX.X% industrial was of operating gross quarter million support XX.X% QX

applications. product STT-MRAM and at support broad-based XX-nanometer expense expect to the industrial as XXXX continue targeted R&D other we We grow in to

the $X.X basic income share per million a $X.XX $X.XX We are XX.X million or based income pleased million or to positive $X.X $X our to of on face This outstanding. equivalents strategic shares compared to at weighted end operations first to per operational year. the of $X.X the Cash quarter end and gross $XX.X in quarter average the net in at $XX.X in report second basic in and Basic and GAAP our XXXX. of top was net million Cash quarter XXXX. second compares per of and the discipline basic $XX.X the million $X.X margins income current of EPS quarter better a or $X.XX for prior $X.XX of net in the million negative tightening than quarter million range, cash for and strong the QX reflecting end QX negative of from share of flow million XXXX the of quarter the increased second a to guidance $X.X quarter share of prior basic was supply. million compared of last million

Turning now to our strong. guidance. our for product third XXXX Demand Toggle quarter remains

in quarters. We $XX.X to limit expects range a million. million future to unfulfilled Everspin push demand of expect industry to supply some customer $XX.X total revenue and supply constraints

and Sanjeev to I’ll some for up increases we to per commentary income next-generation share, We GAAP $X.XX development turn price suppliers. be basic brief it related before for influenced from additional that’s and breakeven – share expenses by open XX-nanometer primarily questions. per our over expect STT-MRAM to it now product net between the back

Sanjeev Aggarwal

and we unchartered Anuj. future work net towards and hard Thanks, sustainable income, profitability to a tough and summary, chain In QX's operational growth. dedication flow are these are in GAAP environments. profitable, building employees' testaments of cash positive GAAP our supply

tempered XXXX, questions. the you continue you customer growth for macro continued all We and challenges. demand now open us see to materialized in supply strong joining today. by Operator, revenue crosscurrents for line and Thank may

Operator

coming First [ph]. of Shannon Richard from question is Hallum Instructions] [Operator

Richard Shannon

can you Hello, hear me?

Anuj Aggarwal

Richard. Yes,

Sanjeev Aggarwal

can. we Yes,

Richard Shannon

And prices, line head high know the off top raised the few about there’s little quite second some a although there. year. spotty product level the quarter Sorry, we I've I past in here to in these you’ve sale quarter as in the as again than specifically beatable the A once as at you’ve or even level of expecting good a some off while. sustainable inventory. seen are margins if range coming this the in gross third here. of here, were It's back But my Gross was mentioned wonder be last of the think costs extent of Should future. some written or you which down looking the well? to other in comment them margins in I there. some written can the

Anuj Aggarwal

Anuj. the the was is it above margin, the Yes, gross Richard. communicated absolutely, in that model yes, we've This internal XX.X%, past. Yes, definitely

are seeing product -- floatings. tell From even operational I yields. give you we had on mix. right? We guidance So don't excellence, some just quarter standpoint, better what though margin, We manufacturing we a was had gross excellent can we saw this increased higher really

I so from And things, But gross contributed in combination, perspective, of think around margin. the those all be the long still margin gross the mid-XXs. expect would term, a I to to sustainable higher

Richard Shannon

Okay, that's helpful.

here, look second that's here. record either verify the out quarter. had Let's my correctly STT-MRAM is you you've revenues model and/or run at in a product correct? Toggle If Can

Anuj Aggarwal

Yes, absolutely, Richard.

can that's we had in as that's perspective, also, perspective, So a well, Toggle trying acquire supply wins to with the right? yes, terms years, doing helping then to that revenue from couple revenue very supply And growing meet in that. past we as product the we're So and a of seeing much design of from the demand. we're

that so And slightly STT, from doing great. then before. down is Toggle standpoint, from And that's

Richard Shannon

Slightly down.

That's right. all Okay, helpful.

of I new in seems touch FPGA year you've if that be the possible? you wouldn’t how should production offer I revenues well. fast here. you correctly ramp next a and the think next can of there year year? on then you typically STT, any any that of mentioned reiterated are just we pretty target remember ramp get as second is to that half year. first call that resonating a see Is I guess it, application people the expect one application way what markets that sense on your thought of I fast this Let's kind the volume ramp-up to you and the in would revenues think but the XX, want you And to next about have I

Sanjeev Aggarwal

Sanjeev. this Richard, is

yes, the it actually decade that or extending is So is our product, last low-density about think the so. for Toggle new the way we've serving been STT-MRAM, I the think market to

win People design-in be would Toggle design the our and have are adoption faster application new higher or the been density. at there, just for rate, accustomed think It's this we're much looking believe, I compared parts. that before. They I to to a designing So FPGAs.

So or easier to ramp compared that the FPGA path market. success is I the think to

just technology our compared the of As stages, to far we're where think benefits standard is I demonstrating Flash. the in early are the the concerned, FPGA we as NOR actually

seeing real markets. start a from So we be longer the it months, might FPGA revenue closer to cycle, XX design before

Richard Shannon

Okay, that's for helpful perspective. the One out I'll me, of jump question line. more

You Phison X a announced I that. or couple X me, with SSD years think, didn't new like a And relationship -- announced excuse ago. X, controllers, controller for that. weeks they something ago, X a I SDD that relationship whether see controllers any going mention you could is still or MRAM. they're whether MRAM of if making that that on support in future I will support to or comment be wonder active,

Sanjeev Aggarwal

Yes.

at Flash with the we So controller or product. will X-gigabit actually actually Summit high-density Phison the XX we is confirmed released that support that and our compatible Memory STT-MRAM they met

still mentioned was testing not reason not is basically why complete. the that on was it So schedule. final The is

start in happen hopefully some wins ins that front going then to about expect and this And the talking after quarter. from capabilities we to and get start we that, of design there. customers So can

Richard Shannon

big follow and do Is can be gig this in think obviously, we to manifest before end the something ultimate revenues, think ASPs there. about year? very cycle a design market Or out? it could further on nice in of X next how And that, is itself revenues up you the

Sanjeev Aggarwal

design out, XX you further I typical months, again, in are would it's would to expect XX side, I to is mean, cycles, so XX. although think Richard. this the think commercial closer I

XXXX in win revenue end towards seeing a would of than expect next I some early the year So you you if get rather could mostly but XXXX. revenue start

Operator

question is of Next Instructions] Richard coming Craig-Hallum. [Operator from Shannon

Richard Shannon

possibly or questions. one more two Maybe

you increasing, the the Can next was you tell X? as or us all, going to or said do changed quarter? view of ever First over the strong And whether as you that's how over be backlog have quarter the it's lead flat going down last been. have on any times

Anuj Aggarwal

I guess, and making growing. all for demand Richard. requests backlog the and sure, over diligently And couple looking the of that backlog. Yes, working of is meet good we've problem requests to been first are Yes, into requests, get have the is going of at half XXXX supply we've customers backlog, fill quarters, so the to of customer now, are But Their XXXX. some right? the right new got to actually last so

exciting. that's So

looks the increases And so to now a as backlog And the second meet matter see We're it's it. seeing to of the we continuing supply half get that, of good. yes, XXXX. out try to to

Richard Shannon

Okay, On get there's enter you're a suppliers that's of me. kind competition, been see helpful. to your them, to for any of sense trying win? of mostly couple market small to that clear in your you want whether inroads I are market. I question Last of know other sailing seeing from it as or any this

Sanjeev Aggarwal

that to STT, So Richard, reference is just right? to with clarify,

Richard Shannon

yes. but Both

Sanjeev Aggarwal

Yes. Okay.

with competing of are STT-MRAM come there the product a So actually have densities. a couple out at low companies that

presence big customers. However, we with see our continue a to not

with that visiting. or not So we volumes competition high customers our are really are we seeing

like a sailing -- seems smooth us. still So for it it's

Operator

The Nicolas next question is Doyle. coming from

Nicolas Doyle

Raji Doyle Nick hear okay? for Gill. is me Can you on This

Sanjeev Aggarwal

Yes, Nick. We hear can you.

Nicolas Doyle

question. just one So

mentioned shipment You pushouts.

you quantify pushed Is bulk out Just next of further how year? maybe are the next even was Or much wondering into for into if pushed they XQ? push could outs quarter? the

Anuj Aggarwal

that’s perspective, unfulfilled to So seeing the XX% quarter. into XX% the demand next about out we’re pushing yes, from an same

Operator

again, are queue. the no the more no queue. questions in And are questions There in Instructions] [Operator more

Anuj Aggarwal

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

Operator

conference today's concludes This you. Thank call.

You a day. have great all

Everspin (MRAM) 12 Aug 222022 Q2 Earnings call transcript