Earnings call transcript Q2 2023

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Operator

Good afternoon, and welcome to the conference call to discuss Everspin Technologies' Second Quarter 2023 Financial Results. [Operator Instructions].

As a reminder, this conference call is being recorded today, Wednesday, August 2, 2023.

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 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.

XXXX, to Form SEC filed time XX-Q, SEC August you quarterly including with in encourage filings investing on on SEC in discuss report which X, associated which would we review time risk filings, our our the made may We from our factors to with and will be Everspin. forward-looking as by statement otherwise. this call, to as required law, All to undertake alter of update on update forward-looking result events and our whether made date new any statements this call forward-looking or of the information, future are as obligation we made of no or except a statements,

The its the to are financial are subject reflect as external estimates review hereof preliminary based information Everspin by auditors. and results further on and discussed of today our available the date

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

adjusted reconciliation A which of and is website www.everspin.com. release income Investor company's and terms. include financial statements will Everspin's this call at to measures GAAP conference of Relations net additional certain company's the of definitions details. the in provide EBITDA, discussions copy in release posted the the release press in GAAP press and information press section Included made non-GAAP during Additionally, are and of

Sanjeev to turn Sanjeev, like I'd over ahead. Everspin's and now, call Aggarwal. And to President please go the CEO,

Sanjeev Aggarwal

end a continues the were the income company. increase for $XX.X million, for today. ninth net joining of on a focus high call of delivered to everyone, positive quarter Everspin quarterly for thanks, and strong the X% GAAP revenue which in year-over-year. guidance, a operator, row be us you, Thank We above the

A at flow million $X.X for us XXXX. QX putting $X.X from few Cash was million, operations year-to-date. highlights

products of of in new to from and sampling packages We planned operate In QX, started in we BGA family profitability. to xSPI QX XX continue megabit XXXX. increasing STT-MRAM our DFN X production debt-free while with megabit

this QX products in a we XXXX. out taped As reminder, family of of

customer to operating to a new radiation family extended deliver our hard temperature, on megabit is minus time STT-MRAM-based that have memory C. In version configuration XXX which extends instant for for multiple high-density response on X distributed is of we a XXC degrees of from exceeded XXC programs xSPI megabit We minus FPGAs products STT-MRAM industrial from to expectations and with solutions temperature, to the to our our to temperature XXC that a memory programmability. array introduced XXX requests,

For of our business to semiconductor XXXX, XXXX are for experiencing as be outlook, although June into XX, from backlog product and high, downturn. we of balance some headwinds XXXX, continues the our

chain address foundry constraints, of supply to unfulfilled demand. continue alleviate our is some us helping We Toggle our which

architecture in XXC STT-MRAM now temperature standard products from to planning our enables range XXXC. the new of operating are environmental family a megabit and Based segments industrial in and XXXX. These to to memory the XXX in feedback, Over replace QX simplify on now year, our harsher production to XXX parts the are use available STT-MRAM for products SRAM introduced with available volumes will past xSPI and all we system These to easily enable to family megabit samples these megabit. XXC. minus has densities integrated conditions. temperature megabit products XX-nanometer from will range FRAM. Everspin in X be with X This customers XXC in X ranging their legacy customer the of of xSPI like of are densities request of customers components CMOS products upon minus available on Engineering

meg. STT-MRAM for high a As Everspin than discrete XXX Flash call, earnings NOR density, is last discrete discussed designing product is the greater in replacement. which

product This store schedule on systems would engineering faster over-the-air of for first updates. tape-out XXXX simultaneously and be family products of and configuration samples. in memory XXXx for FPGA is NOR The family to and enabling density gigabit ideal X this for replacing

beam has to capability X-inch Everspin Chandler. in line etch added fine its STT-MRAM

We it when Everspin to our being MTJ and about development excited next-generation will our process. material develop to are the this stack cost as and capability etch the capability This time enables reduce production nodes. is transferred Hard programs our Radiation advanced XX-inch present, CMOS yielding etch our tool process MTJ ion results. promising At on is STT-MRAM partner's and is line beam used this to for

one, instant As on configuration solutions: a Hard deliver multiple programs FPGAs high-density you X and to Everspin Radiation a array; time with active memory STT-MRAM two, distributed know, has for memory programmability.

Everspin to design. integrated relates stack for the the met project, solution of scheme circuit the obligations the portion its next project, is that distributed FPGA. exceeded a CMOS integration included STT-MRAM use a application case. MTJ it delivered and the the solution wafers the be in solution defined demonstration optimized memory as this of design approach this specs and This This of STT-MRAM the the the configuration on a the performance Everspin FPGA new for fabric performance. in and and the As STT-MRAM MRAM phase revolutionary extending for of will In FPGA enables a with plus

you Anuj quarter through and guidance. our turn it who CFO, second XXXX will third over our Anuj? quarter financials now will take I Aggarwal, to

Anuj Aggarwal

afternoon, everyone. Thank Sanjeev, good and you,

As Technologies quarter the quarter income. of consecutive its net part is announce of financial ninth positive XXXX pleased second Everspin to results,

million generated we $X.X In flow during of quarter. cash from the operations positive addition,

$XX.X quarter of quarter We quarterly results of second million $XX.X compared last end above the in revenue with the XXXX. delivered solid of high and to million guidance $XX.X million

and had We for million of income second of cash quarter million XXXX. positive flow $X.X the positive of $X.X from net also operations

increased $X.X STT-MRAM QX quarter to in second million the the and compared and QX sales in in in patents in million which includes product QX from MRAM compared million $XX.X million XXXX million $X.X 'XX. $XX.X an $X.X in second to 'XX. quarter both Licensing, revenue Toggle and quarter, to prior $XX.X and revenue, increase other royalties, the was million

for in XX% revenue QX represented the Shipments high-density to QX data who revenue in our versus in we suppliers serve for center end X% and 'XX. customer quarter product of with our STT XX% applications of

Turning gross and the the quarter XX.X% second quarter second XX.X% GAAP to XX.X% to that operating was low-volume in STT prior margin XXXX. is quarter quarter increased expenses QX million operating QX support product was margin. the increase family The 'XX 'XX of $X.X in in the in primarily to were $X.X of in in versus driven expenses currently the costs and by million GAAP 'XX. $X.X xSPI in prior the the compared of of versus production. quarter quarter 'XX for gross for second million

are based of $X.XX pleased net the and weighted of quarter We in of strategic range, of was macroeconomic net XX.X Basic $X.XX share profitability or to basic million drive basic quarter outstanding. and share uncertainties. of XXXX in second $X.X the $X.XX shares better income of income $X.X discipline point EPS share high of of than average This million second ability to report basic or tightening our the supplies income to reflecting face or basic million and the XXXX quarter guidance per operational per on million XXXX. first a in per $X.XX compares net a positive GAAP $X.X our

Adjusted continues remain EBITDA to positive.

equivalents a million compared quarter cash on For the and is focus $X.X million was result cash strong the Act in at at QX million in growing cash the the to of million $X while in tax Everspin's million in the CARES prior continued from from quarter-over-quarter QX quarter. retention 'XX, $XX.X receiving QX $X.X credit a to of during Cash increase cash compared the adjusted employee million EBITDA quarter and ended flow XXXX. prior and The management quarter under operations $XX.X XXXX. $X.X and million end $XX.X

Cash flow healthy was from million current at $X.X for operations the quarter.

tax during employee onetime mentioned, our Everspin The XXXX. the received quarter Treasury refund Everspin the the a tax States million. onetime the United retention XXXX, retention during of totaling within second As credit quarter $X was income credit from the recorded pursuant received CARES other Act. to refund of provisions second within employee

XXXX family third a STT our Everspin $XX.X $X.XX to income GAAP products million. increased million and expects our expects between is of Everspin $X.XX. see be range guidance. in Demand revenue Everspin total to optimistic. strong, remain cautiously net of continue quarter to $XX.X to products. demand xSPI Turning our and we per Toggle share for for basic

will I it for open back over it to for up some Sanjeev now before commentary turn brief we questions. additional

Sanjeev Aggarwal

Thanks, Everspin now reported Anuj. profitability. row, in quarter, a In summary, of ninth another

the adoption of see family covering our densities early of We XXX excited megabit. megabit X xSPI to to from STT-MRAM are product

further to from minus this xSPI the expect offering extended with to temperature family. market serve ability of to XXXC XXC the STT-MRAM our We enhance

half of for today. and may the the navigating backlog a now and visibility XXXX. good into second you successfully Thank is joining healthy slowdown Everspin for the line early with us questions. Operator, open you 'XX

Operator

we coming question have from [Operator Raji line Instructions]. a I'm the with Gill Needham. showing of

Nicolas Doyle

This next assume, moving down you're big what Great I quarter would about that be, My come quarter. you down. Congrats is drove would bump the numbers. come assume licensing in good Nick just Maybe on what just first would margin I I'd Doyle. question like and could the forward. licensing talk and thinking gross quarter. this that the said,

coming So uptick. really a are or that Toggle that nice we're products STT? from the Is seeing that getting

Anuj Aggarwal

is this Nick, Anuj. Yes.

everyone. to in It gross are model was our quarter, gross gross compared we've healthy that richer deals with give licensing but So XX.X% We the don't margin. say that typically gross I'll this a on guidance pretty margin. margin, shared internal margin

quarter. as project it future a so completed there will what has lumpiness, activities if quarters forward. that And the have future will, and margin some get do being to look gross into on are quarters. hard to going the gross us enabled you we in get But expect margin licensing predict this because how we progress high higher things is will that's It's when

Nicolas Doyle

sequentially talked in you expect the to over And think time. I Toggle past, grow about you've that

maybe do that? constraints. And And what's to still supply expect driving that? it's So we related the

think still XXX nanometer? in better. a mentioned that constraints seeing getting little I you you Are that they're

Anuj Aggarwal

Yes.

and strong So to Toggle revenue continues the be growing. fairly and consistent

continue at very over in we time, So design Toggle years. design last the our strong if last you The of X wins. We've this we've look strong space. wins wins year, that see had quarters to experienced couple design

projects expect so. nicely we translating into the in those so year start next or And revenue to

Toggle So standpoint. in that from we continued expect growth

shared everyone sluggish relatively we've center, data the challenging. with within standpoint, that STT and been that's an From

I us. then soft you if family xSPI the at think a continues of look that STT, within to products be be our part exciting. market, of you will, if that continues to But for also

version as have space. that in the we're mentioned, that's customers So out cut seeing relative requested. another they've design need and to product wins Sanjeev what And of what down nice we come some

future, as start to so into we translating we wins look into design And those revenue. the expect

Operator

Shadi of Mitwalli Craig-Hallum. line And the question from our next coming from

Shadi Mitwalli

in a is filling just question This if the Craig-Hallum. little supply bit you on in on constraints unfilled looks guys what had I you're Shannon Shadi a Mitwalli at for that chain experiencing the depth and more go Richard demand like? can

Anuj Aggarwal

Shadi, is again. an this Anuj

kind So me about yes, the constraints. of a let little talk bit

to So products. on constrained XXX-nanometer be we continue our

wafers buy And very know, that to need in we you we closely as our so And we working have. CMOS them the product with to from that fulfill order TSMC. get we're demand the

And get ongoing continues try the an and discussion more to product be wafers with so out. as to get partnership them that to we

challenge. So to a think I continuing be that's

half going From so standpoint, we've now we're bookings the very kind past. the some to into said times. 'XX. healthy, increased in the continuing within of to just lead be And orders reiterate seeing things of backlog We're the see the lead second backlog times. There's bookings new outside a continues of the I'll

looking to but historical do perspective, that's and that We continue very are I good. you pushouts, see some from and normal at the So if would cancellations say limited look probably trends. things

are promising backlog things perspective. a from So looking

Shadi Mitwalli

and with customer quick out And the sales just bottomed have to question follow-up a then if future visibility at revenues them. on your largest

Anuj Aggarwal

for total the now data yes, our So customer, they're of X.X% center revenue.

of couple a of things, right? mix. is it's think different it I So part

grow business. Hard particular see concentration have develop. becoming and smaller as the this that's from our to to part become customer we continued. might It have a family softness our is But their projects, a new revenue And good increased them xSPI continues total We in thing, products continues some or of the revenue. revenue, a seen to right? which limits of larger Toggle Rad of So as increasing we impact

Sanjeev Aggarwal

is Which of the rest with data Yes. market. center consistent the

Everspin something So it's not to unique surprise. a or

Operator

further turn any questions at this showing the now queue time. any closing. I'm back not in will conference Anuj to the for I

Anuj Aggarwal

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

Operator

your gentlemen, conference participation. and you today. Thank for Ladies conclude for our does that

may disconnect. You now

Everspin (MRAM) 2 Aug 232023 Q2 Earnings call transcript