MRAM - Earnings call 4 2023 | Everspin Technologies, Inc.

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Operator

Good afternoon, and welcome to the conference call to discuss Everspin Technologies Fourth Quarter and Full Year 2023 Financial Results. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, February 28, 2024.

I would now like to turn the conference over to [ Kathy Fuller ], Investor Relations for Everspin.

Unknown Executive

Thank you, operator, and good afternoon, everyone. Everspin released results for the fourth quarter and full year 2023 ended December 31, 2023, this afternoon after the market closed. ], for Fuller Kathy [ Investor Everspin. Relations I'm call Aggarwal, Anuj President with Chief me Chief Sanjeev today's on and And and are Executive Officer. Financial Aggarwal, Officer;

design that trends pipeline I Before cause These risks customer the Everspin's including, executing conditions market and and on based MRAM from plan. and Everspin's but in that actual the of manufacturing statements want involve business and forward-looking future materially this statements. to, differ events, on those conference technology, limited its industry to expectations products may and to regarding to we uncertainties adoption future and call call, estimates, the and contained successful goals, remind are results forward-looking statements company's in judgments, current begin market not business, forward-looking the contains performance you bringing for financial

finalized. the materially as auditors. and developments the financial procedures, of now by the company's as review made arising statements are differ on made final for call, future are in as risk annual events company's with encourage of its and other would including filings, in factors to We from adjustments the and estimates filings reflect hereof information that financial estimates these time to SEC and you external or actual Form result are All of date subject obligation law, may other preliminary Everspin. as discuss today a closing XX-K update results company's Everspin investing this The the of period time based discussed the no the between date any and company company the as this required statements forward-looking the on this by call, and the from otherwise. and are alter or results to financial information, new report to made associated completion the undertakes review SEC which The of available on results forward-looking further except of a result may whether time

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

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

Sanjeev Aggarwal

[ call joining ], us everyone, you, the and for today. Kathy Thank on thanks,

record We no for solid gross and sheet company's are annual history. a with XXXX strong debt with pleased to report cash balance balance in profitability our highest revenue the margin, and a

the recorded company. in of This During our a margin quarter, $XX.X end range a balance in million, of of GAAP million. for of which $XX.X ended a with strong above was a the XXth year to delivered of the high guidance $XX.X up million fourth $XX.X full profitability, X% of XX.X% row our record delivered led cash gross to year-over-year. And quarter, We million, in fourth from we revenue QX We $XX.X revenue XXXX. quarter focus up year million. the we the XX.X% of

year-over-year. side, total up product design the wins XXXX, XXX X% On we in had a of

remain internal strong expectations. of and new exceeded for our our design pipeline Our wins products MRAM

customers products existing new while MRAM our our later in industrial customers this product XXXX. newer qualify MRAM Toggle will will qualify year, We our expect STT-MRAM

few continued momentum product line STT-MRAM ramping quarters. from industrial design technology in terms of has new our to showcasing the Additionally, last wins, of gain importance the

our technology, in translating Everspin's these MRAM property technologies. committed reflected and of position as leader portfolio into our to wins Looking licensing the of the in design half revenue a successful ahead, preserving remain in and intellectual we second XXXX. extensive this begin expect is to We

discussed last X first related hard agreements, call, radiation develop new to the our Toggle radiation-hard for program As entered on reliability into we applications. models earnings strategic we MRAM to

was a agreement project STT-MRAM strategic this our license FPGA. to the This quarter second to hardened build technology radiation into first year. second remains The of ongoing

the support anticipate anticipate additional progresses, this government project FPGA to As continue device. this project build funding we this progressing of help to the We year.

that want on to update XX-megabit started project provide hoc an STT-MRAM early we We our ad existing XXXX. in also

use expect our be this from to supplier, will create from silicon. expect receive product, project of and to higher-margin, revenue We throughout will XXXX. recognize we demonstration a to which additional This silicon we a working lower-volume

us we on new a DMRAM. MRAM or As previous is our mentioned for call, key distributed focus

As is our progress edge here on over and revolutionary as energy FPGAs you deploy us will and discussed, inference an look updating believe engines. the scaling we and We coming forward solution on give our AI efficiency in to DMRAM quarters. we approach the

Turning outlook XXXX. to our for

pipeline by product driven We backlog. visibility good strong a continue solid to have and

to inventory and of in in year economic more first be part the digestion softness automotive to expect the weakness due and given and in We half sectors, rebalance. China industrial muted

Moreover, wins. a continued in the our begin expect well as Toggle discussed design from the to revenue we of for However, that our MRAM we growth in half recognize ramp design wins over additional second we STT-MRAM have our products to expect we see past X as XXXX products as years.

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

Anuj Aggarwal

and Sanjeev, you, afternoon, good everyone. Thank

fourth full quarter and of part As results. year financial XXXX our

also XXXX. that quarter consecutive million announce of annual QX to of net have $XX.X revenue XXXX record pleased million achieved positive income. with XXth profitability of are and our record $X.X We income marks we in net

positive high operations, $XX.X balance range of history, cash of million. results to flow our earnings generated million delivered with from $XX.X above the revenue and In of diluted highest $XX.X resulting company's of of quarterly share cash end addition, guidance in our we strong of We $XX.X million million $X.XX. per the

operations million. of $X from cash flow positive recorded also We

deals, Licensing, to progress success continued revenue seen our preliminarily well Our was by compared revenue RadHard increased technology $XX.X a in QX million have $X.X in the from sales in million $X.X which royalties, includes driven MRAM in product million the outperformance in STT-MRAM standpoint. XXXX. to which quarter, both quarter XXXX. we other fourth have to QX to and revenue million fourth the compared and were Toggle patents $XX.X

to X.X% suppliers Shipments product fourth QX revenue for our XXXX. versus XX.X% revenue represented STT of data in quarter in center applications high-density for the of

margin. gross to Turning

suppliers in quarter increase being to GAAP year-over-year offset the Our GAAP Toggle with offset XX.X%, of XXXX. increase from XX.X%, from XXXX. a licensing and on QX revenue is fourth margin to margin of gross up yields able for decrease increased The in gross our product in gross XX.X% XXXX result margin the products an was increased pricing increased was in from XXXX sales. XX.X% for

diluted the $X.X operating GAAP fully shares the outstanding. $X.X Fully net primarily EPS XXXX. The $X.XX million expenses Fourth XX.X increase were fourth in compared enhancement profitability reflecting macroeconomic ability on to diluted products in was $X.XX XXXX quarter driven of STT-MRAM for service to for was of Fully quarter net and diluted $X.XX diluted million This strategic to in diluted the the quarter XXXX. fourth in XXXX. family of and million professional guidance operational our operating range, to high our share by average or income of of face $X or to uncertainties. income development of the the million compared end and million $X.X based share costs. XX drive per XXXX was XXXX $X.XX increased EPS quarter compared of quarter our per was of new expenses in of weighted compares in discipline QX fourth XXXX above the $X.XX

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

operations For up million, full $X.X year, XXXX. flow in was $XX.X million from the cash from

the to anticipate revenue We half given seasonality guidance. a with ramp traditional lower the our Turning softness China first and bit to than weakness year and industrial as in move automotive sectors. through in economic the we ongoing

per $X.XX. income to half the XXXX share MRAM million of accelerate expect begin of and we wins range be revenue these breakeven million as GAAP and we and growth to revenue expect $XX.X Toggle our We QX from $XX.X consideration, to recognize factors total into STT products. design between the net Taking in in of second to diluted

another annual per report with In year summary, revenue, to we share. solid of are growth profitability earnings pleased and record

position debt-free Our a remains financial company's strong, the and balance highest cash balance history. in boasting sheet

While we XXXX. we year, to a the solid of half to experience second expect a slower start expect

in begin We revenue DRAM products, expect MRAM we Toggle see growth recognizing MRAM additional STT our and to also our expect to and for products.

questions. you you open Operator, Thank for the joining line today. may for us now

Operator

of Instructions] the from comes Needham Bolton Our line Company. question Quinn first of [Operator &

Unknown Analyst

] to about fourth This wanted the number Bolton. for in gross is Neil on Quinn first Young the [ quarter. margin I ask

considering But drove could I the decline some all gave you year-over-year gross you margin royalties, revenue So sequential what strong. that the to be licensing the change. appear in color and patents the on was share hoping

Anuj Aggarwal

Aggarwal. It's Yes. Yes. Anuj

margin. well margin saying gross in gross we'd over last we've be performed So right? really mid-XXs the been So has year,

we our the think quarter, and tapered a licensing to decline above revenue I see the margin, internal it's but gross of kind off had seeing and the as in what model you're still you expectations. slightly is prior yields compared lower

Unknown Analyst

the given my quarter-over-quarter some China. weakness And that like of product in revenues. quarter follow-up automation the decline talked you industrial Okay. then continued last about fourth in It in in quarter, sounds is, the

share then that across see the was maybe for regarding STT-MRAM. Toggle or products, hoping and geographical the thinking across And quarter spread X markets? you're segments, and thinking other you're products I could did areas outlook, licensing. separately first what So you you weakness within then what And end

Anuj Aggarwal

Sure. Absolutely.

So questions. couple it's a of

Let one by me try to one. go

perspective, think shown in at And from backlog a to weakness. question right? industrial terms within and geographies, of I seeing automotive space. the So some APAC challenges you look backlog, has general the As in your you're

challenges been there's China, some and Japan there. So

So And second what we we the for in starting guidance? well. part and -- perspective QX, then see in QX question of guidance that from the saw a that was sorry, as

Unknown Analyst

Yes.

you the between then within product the for if and the across wondering buckets. share segment, X separately was thinking licensing I what thinking products So what you're and maybe you're could X segments

Anuj Aggarwal

absolutely. Yes,

million revenue, million. for we're $XX.X to $XX.X So expecting

We expect decline We revenue. do see a licensing perspective. QX to royalty and from product be strong some again in

APAC the of and inventory. why guiding and in And we're at seeing challenges their looking with It's number. inventory that's again because customers that also down bleeding so We're the to challenges mainly China. concern

because so guidance of numbers. that, And those setting we're at conservatively

Sanjeev Aggarwal

So optimistic that we out [ just focusing the years. I to Neil that, product on couple second low-density the to One really on half year. we are things. ], STT-MRAM are still of think few of this is a brought a add

industry, We traction in are seeing in the Pac. even good Asia

to the as some And that, XXXX. earned we with supply be some So customers. Everspin And able have we supply very before, of the the of that traction because goodwill get year and some with well. actually expect in had the issues our managed last -- all you that we'll year everybody know, chain chain second half

are we those to we're actually some our And on the actually expect of FPGA so Toggle to back actually basically, deals, Rad discussions from working going So talking win And color project customers some to are the sockets wins, the continue for customers, can you precipitate throughout we see customers. and our year. going do with that design the giving we on Hard well. our

Rad revenue to licensing this And will our revenue then along there. And year, Hard also from we way. and some STT_MRAM continue initial will project, so will recognize the expect see we -- XX-megabit see our through the we some

Operator

Aggarwal for no to the questions back showing closing over time. this remarks. to further I'm any Instructions] Anuj call like I'd at [Operator turn

Anuj Aggarwal

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

Operator

and conclude today's Ladies you Thank for this does you. conference. all participating. Thank gentlemen,

You disconnect. a may great day. now Have

Everspin (MRAM) 28 Feb 242023 Q4 Earnings call transcript