MRAM - Earnings call 3 2023 | Everspin Technologies, Inc.

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Operator

Good afternoon, and welcome to the conference call to discuss Everspin Technologies Third Quarter 2023 Financial Results. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, November 1, 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 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. 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 November 2, 2023, and other SEC filings made from time to time in which we may discuss risk factors associated with investing in Everspin. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update any forward-looking statement made on this call to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. The financial results discussed today reflect our preliminary estimates are based on the information available as of the date hereof and are subject to further review by Everspin and its external auditors.

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

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

Sanjeev Aggarwal

million, revenue thanks, and an today. income everyone, for us year-to-date. million for $XX.X on quarter the positive high X us the call at quarterly We X% were in focus highlights and operator, few joining a $X.X Everspin for quarter GAAP strong the from tenth end delivered net putting for company. A you, flow XXXX. $XX.X of year-over-year. a guidance the above Cash million, row, Thank of increase was operations

We cash XX announced of for continue $X.X of centigrade while with ended was XX debt-free XX to the from Everspin QX STT-MRAM extended temperature profitability. the centigrade of density minus income to net family products balance production X increasing QX to XXX availability of operate megabits with megabit orders. $XX.X a million. range the million. We

an FPGA. license In the Toggle new contractual our density to for radiation-hardened sampling into a range entered with QX, develop in to the XXXX. In strategic DFN the production we to reliability for MRAM. first smaller agreement STT-MRAM and strategic are build into We X-megabit entered radiation-hardened agreement we planned the part models package extended temperature October, quarter technology a of

Our business outlook.

into XXXX. XXXX remainder into a of as our of We XXXX product backlog good XX, have for visibility continue September the early and to

which x the high-density XX% supply product our family, to EMxxLX alleviated chain package, offering. us industrial We X-millimeter demand. Products. the smaller X-millimeter current is have compared address We include STT-MRAM to expanded our DFN flagship by foundry helping our toggle a unfulfilled constraints,

avionics, comments enterprise, and is to delivers nonvolatile delivering few system are from endurance minus security as retention MRAM the XX area XXX meg. It of about process to In legacy the as with FRAM, of Flash memories, Radiation-Hard offer highest family C persistence savings, and access inception, automation infrastructure, today integrity, input write to This systems addition family battery-backed XXX this Since clock an highest maintaining densities we its the only C. ferroelectric ideal network evidenced frequency and available and memories, XX devices has and and megabytes of IP memories alternative performance, an Everspin BBRAM, extended configuration and its available full to architecture SRAM. A bandwidth its and of IoT, in are examples NOR control, X technologies. successful XXX with and via leadership power, megahertz. X persistent the invested technology low the FPGA STT-MRAM combination simplify latency temperature output in portfolio licensing now xSPI It read paramount. Industrial through in our programs. random its electronic per second are memory available a and performing commercial memory signals of for where data of persistent is will low are Aeronautics medical, where such solution gaming

develop excited products. Toggle X reliability agreements, entered are radiation-hardened Toggle MRAM for Radiation-Hard we on We report program strategic to new X the into that models to MRAM

programmability. The FPGAs successfully R&D memory, the teams on existing license configuration the Radiation-Hard to of is addition with to programs solution on to STT-MRAM-based strategic our our these give The STT-MRAM are the to projects. and as revolutionary believe we build hardened second agreement time have an approach approach and solutions over our a two, edge through D-MRAM discussed , coining quarter a calls. that take and array will previous and for Aggarwal milestone development our multiple efficiency Anuj further AI is delivered us memory it these now quarter fourth third One, a on deploy MRAM, high-density for design distributed and a to instance, FPGAs engines. I technologies agreements FPGA. These guidance. in will technology the radiation who earnings in STT-MRAM turn are we will energy CFO, distributed and as We and financials on you scaling inference Anuj? we XXXX

Anuj Aggarwal

good afternoon, and Thank you, everyone. Sanjeev,

XXXX tenth As quarter pleased financial part are announce to quarter of consecutive results, we net of our our positive third income.

quarter. We revenue operations of of million the delivered In from (sic) compared of $XX.X XXXX solid quarter third $X.X XXXX generated ]. above addition, of million $XX.X flow high million last results to and in million, quarter positive quarterly during the end the we cash with [ guidance $XX.X

center XX% includes $XX.X in revenue QX the We was third third positive the third third for to of to and $XX.X in net last represented revenue of quarter $X.X quarter high-density $X.X million quarter also royalties, operations product of XX% of million quarter last million for prior cash to in flow patents both suppliers and in versus application MRAM STT-MRAM in revenue increased and had million which year. other million and Toggle million STT from in income QX quarter the XXXX. Shipments QX $XX.X our $X.X QX X% $X.X 'XX. Licensing, million revenue and the product compared sales of the positive for the in in $X.X to million data compared quarter, and XXXX. The

$X.X The quarter is licensing in Turning for was million in professional in and compared by in XXXX. The to QX in million million QX expenses third the the were quarter versus third third operating driven $X.X XX.X% XXXX attributable for to of quarter $X.X gross primarily costs. revenue. increase in increase versus gross XXXX and prior an the was XXXX. prior XXXX in margin primarily quarter quarter the to the service quarter increase margin gross the in XX.X% expenses GAAP operating the margin. of increase GAAP XX.X% in

a of income $X.X third per net $X.XX per income per $X.XX positive strategic million better compares of $X.XX the remain the quarter positive. outstanding. GAAP point net report or discipline weighted We or and quarter EPS diluted of diluted $X.XX to operational XXXX and million range, income profitability average XXXX. Diluted are was continues the shares or in of share million than $X.X diluted based $X.X our in EBITDA prior high third of of pleased to fully share share drive XX.X uncertainties. Adjusted net guidance million reflecting on This to ability despite to macroeconomic quarter our

quarter of million of to for as to flow to as cash growing Cash $X in with from QX of the adjusted year. We the 'XX. The For million at Everspin's was $X.X continues from quarter cash $XX.X in the the in flow is and and quarter last of ended $XX.X million strong result $XX.X quarter-over-quarter company current EBITDA QX compared was the million million equivalents of prior cash cash a continued focus million $X.X end and operations XXXX $X.X QX the prior operate increase management, while quarter. cash operations on debt-free. million at compared healthy

our products continue is guidance. to quarter for see demand xSPI STT to of cautiously family Toggle our Turning Demand fourth strong we of products. remain optimistic. Everspin and XXXX increased our

back GAAP $X.XX and additional to turn $XX.X the we over range be per for revenue will of brief and up We open expect $X.XX. I commentary now for in million $XX.X to it between some million it questions. income net diluted total Sanjeev before to share

Sanjeev Aggarwal

Thanks, profitable reported a now Anuj. in another remains company. tenth we row, the In strong summary, for quarter, which a focus

temperature selected address are Toggle that leading-edge of XXX and excited our industrial being family and capability technologies range systems XX are MRAM C for to the minus STT-MRAM xSPI IoT advantage fast-growing extended C embedded our our of believe STT-MRAM the well of us We programs, taking markets. Radiation-Hard positions to capabilities. We

visibility our joining XXXX, us Toggle XXXX into open MRAM backlog good today. Operator, us have now may and for through the business. line We you questions. in Thank our confidence for giving early you

Operator

Instructions] first comes with [Operator Shadi question from Our Mitwalli Craig-Hallum.

Shadi Mitwalli

revenues solid on guidance. a to I on upper of got mainly on end licensing. Congrats coming the looks from It quarter. be being another question just

to licensing solely increase revenues the licensing coming So with most seeing RAD-Hard from the contributing programs? increase revenues? any royalties of are Or licenses the that, is we past meaningful from in in

Anuj Aggarwal

question. the news from some deal We licensing Anuj. for came that revenue the related and side. Sanjeev Thanks Shadi, the mentioned QuickLogic had deal. good third Yes, reliability. from Toggle RAD-hard then had And is this QX, strong the royalty a to for we

strong and continued and will And so there QX. well. so were sales we work though were able to account get some as total for revenue strong sales product say in be to also done that I

Shadi Mitwalli

there pushouts the cancellations just on Q-over-Q, a actually awesome. backlog even got any down products then Awesome, as With been product being regarding backlog? sales. And or has activity with unusual I such question

Anuj Aggarwal

there's we so mentioned constraints macroeconomic Shadi, lead industry So supply that loosening. are happening, are interesting Yes. and had with couple backlog, The thing right? are times some uncertainty The like quarters. reducing of definitely the last trends

And within outside we impact some Automation customers kind APAC, are right? example, to time, lead so but within the seeing book they're are the seeing lead waiting so the Industrial And in of we booking time. for section.

Shadi Mitwalli

Industrial end be Automation the of segment with experiencing? weaker you're So markets one more the

Anuj Aggarwal

I some Industrial segment last it's had in stronger we China, quarters. in some good challenges Industrial the has so But there in No. that for there. was making Actually, are a segment. results and QX, the comment uncertainty been just few

Shadi Mitwalli

there Were then particular And in? just Yes, markets any are one a you more Okay. question seeing end strength sense. little end markets. that guys on or weakness more makes

Anuj Aggarwal

right Not now. particularly

just are uncertainty, right, overall, I there's macroeconomic some happening. think things as

to in the the to for good, And in you're what's mentioned seeing and waiting So happening except what's customers wanting what general. But just place China economy in some Industrial. risk right? happening segments just look in orders I see overall,

Shadi Mitwalli

another for makes congrats me, That's solid and Yes, sense. Awesome. on it quarter. all

Operator

for line Bolton next of moment Quinn from comes Needham. our One And the with it question.

Nicolas Doyle

really we Or for kind 'XX? if applications little is the doing in Nick also production you is claiming it's to customers then licensing touch Can on you I just a baseline a then on up deal, enter new its on the we stepping end talk to about shipping the are wins, that could the This also on onetime year that? And and -- licensing. are and licensing are track of products, we revenue? And item? of if next that of applications the still could by Doyle well, new RAD-Hard, bit Quinn. focus using wanted actually new

Sanjeev Aggarwal

Thanks, Nick. This Sanjeev. is

-- if I guess try something, questions, remember but all I to I'll please remind forget me. let I'll your So

about goodness that the Radiation-Hard FPGA I excited similar instant-on on that an one X targeted deals, I far as project Toggle and that for you're licensing we to actually towards STT-MRAM, the that mean you have about on ago. believe, to we deal X well. The announced or MRAM were of we by As talked X is or right, the quarters STT-MRAM really actually we picked talked that contractors were as the another one government

and So the they new a we'll this would we guidance, deal are Radiation-Hard very picked hopeful more technology recognized QuickLogic, building obviously is obviously, a this ago, to although type we have a project a think last we're other not deals getting I'm opportunistic. licensing we keep for different but subcontractor across. with hope is up that the provider. These a our a even for a Honeywell but more actually about vendor, talked of are different persistent I get solution array. giving any there, that not is that had and just CMOS environments. memory a We going reminder, it's as deal are And they I licensing keeps projects. And year come say lumpy through with still XX-megabit forward. where getting

that on and them. are parts this megabit our far As taped looking as production parts year. schedule. we XX and at are XX-megabit qualifying in our They brought People out and are the

anything, So them miss to and If end we remind qualified towards are early XXXX. me, hopefully production please Nick. of the on schedule getting into I

Nicolas Doyle

it got all. No,

that's For the next maybe with Lattice you weakness I have that products That Entel, declining -- reported, quarter. FPGA was say noticed accurate? an that we're your we and Would slightly seen correctly? -- seeing AMD, guys in that

Sanjeev Aggarwal

specifically is in conditions Pacific. macroeconomic like the we of So or the Anuj not, I but are cognizant don't FPGA it if know mentioned, Asia

have we As XXXX. now that that are -- chain we we constraints removed, Anuj our also also convoluted supply we that times strong movement data to in said by have for QX -- the see and been early as are dropped. some the the first is quarters, but But said, starting in are lead X actually

customers' their behavior also within our ordering has times. the lead So changed with

the together So backlog X it's over behavior combined just if times not because has conditions macroeconomic the the But our couple clear quite it's have of changed. of the or the changed in quarters. lead because last

Nicolas Doyle

even and lead kind gotten compared of kind outlook. just your last impacting So confirming to the have of that's quarter, lower that times

the asked and we were But us is to -- into reason isn't the the is quarter, quarters. times as backlog last really strong near-term related down, saying and that kind Just coming I of the lead now gives because that visibility it accurate today? are

Anuj Aggarwal

-- were down XX-something is happened Anuj. came we XX way guess it, XX, would about to weeks. times so I this further guess then describe about the what's them lead to reduce is weeks, the They I and weeks. I XX

observing so one loosened down. And to as change. So that supply did the might industry-wide saw of that come then created that, we And the be things see lead is that what addition you'll right? we're behavioral customer that times you constraints was have in a to well, what noticed up

-- then mostly they're lead as well. outside some they're booking the within booking time, mostly the they're lead and so time And

But So were nice. as they historically. much it's that's as not doing really

it's so to, of levels. kind call it, backlog now let's And back come pre-pandemic the

And normal from getting were from from looks so the not lead it enough a right? backlog declined So even people that XX-week booking just time, about year and in they was though ago, capacity, it well worried there a advance. rich capacity where relatively getting were perspective, really has

the we've seen. So that's observation that

Operator

if Quinn, question, ahead. have you Instructions] [Operator go additional

Nicolas Doyle

ask one I'll more. Yes.

that the -- give talking term? near XX staying of we how detail 'XX the to takes back -- Can on long strong that I backlog the on your half Just are based convert. months backlog, or convert to on in second growth know growth some to last versus on some expected typically much is term XX backlog any you quarter.

Sanjeev Aggarwal

talking Or XX you mean? qualification are months you did time? about Nick, to XX of

Nicolas Doyle

Yes. Right.

Sanjeev Aggarwal

Yes.

expect -- for XXXX. XX time be that early still the we to product to production in that XXXX, the months So and XX that early out new STT is brought late qualification we

in "changed So that nothing is or process. delayed"

Anuj Aggarwal

Yes.

you I going. they're the think they right? would part way continue the look wins, I at gain traction, pipeline, you're and to explain if healthy that's think where design the I still of

a is we strong of as there the backlog just and time, before. So not lead much outside pipeline as are seeing

Operator

from have line. we another And do a question

with have Orin a from question Hirschman We AIG.

Orin Hirschman

more question clarification that one just see, Let's on last topic.

want guidance the product does be. to much that what out put assume In for terms of you more too sequentially? increases QX, Being that specific than you

Anuj Aggarwal

a would I to flat Orin, for looking this Yes. similar we're relatively mix. at Anuj. guidance is say QX QX with

Orin Hirschman

the the you Okay. actual, scheme that mentioning product And if never and mentioned IP have a are bit more? piece of because the you the FPGA, AI Where it fit in that are AI? overall little does And before. in only go within a Is customers the it -- you they becomes of interest? through

Sanjeev Aggarwal

Yes.

is So Sanjeev. this the Orin, --

for to instant-on need image, be to the the example, engines it edge to -- that instant-on that want you fast, processed FPGAs, for developed standby and want for for extremely it an the So namely, very nonvolatile the for low it to FPGA something current, you're requirements solution and the so the be the FPGA, AI we GPU market that brought inference that be the similar requirements are comparison. you and for standby for comparing X to or with then you the

compatibility. this solution to And and focus there the So to Again, are a something year, some as hoping R&D at company. it's some in X.X focus the be and folks AI good but applies the we only with over had some next seems basically of for stages, new discussions years early to looking early solutions, on the we've that both. it's

Orin Hirschman

on And anything would to how Do be the to enough to it there they side? AI together? Is these parts density chained able work? practical have be do in

Sanjeev Aggarwal

targeted require the Orin, for It's applications. Edge AI, not and meet it's they mean, But density, AI, for Edge much the of gigabits density. high AI require but towards So mostly where requirements for very would the density don't servers have we plenty we they Edge I the densities. higher

Orin Hirschman

Okay. And follow-up. just more one

the timing of one? the -- second both the with what instant-on first lag the on What's And is timing You development. on these? going mentioned is FPGA

Sanjeev Aggarwal

as the programs XXXX. are active So so are QX both of of we --

So one and that the with just original is progressing QuickLogic SkyWater, fine.

the making vendor that where forth U.S. program a that. as CMOS uses the progress a And -- actually are awarded concerned. government, as and are concerned is but on has the from deliverables the different solutions continuing new solutions with QuickLogic has We this from are it been a requirement similar then far FPGA as

the parallel least are couple in programs X these for of So run quarters. at going to next

Orin Hirschman

use? Which Is second or one? governmental the for use though one commercial for

Sanjeev Aggarwal

Orin. They are use, both for government

Orin Hirschman

commercial on the you'd FPGA know with on products. before application? I And commercial you're there working Any of some instant-on vendors progress the mentioned

Sanjeev Aggarwal

solutions basically that memory traditional NOR that looking at we So to we're XX out, and work brought ongoing. megs there's Flash replace but is STT-MRAM was other that meg FPGA for the and the XX the

Operator

any Anuj will I [Operator back queue. Instructions] I see further the Aggarwal final his don't for comments. questions pass in it to

Anuj Aggarwal

that call. to for look progress you quarter. forward on updating and all joining next we us, we you Thank you. conclude With said, today's our Thank

Operator

you, you Thank and for may participating, disconnect. now everyone,

Everspin (MRAM) 1 Nov 232023 Q3 Earnings call transcript