MRAM - Earnings call transcript Q1 2024 | Everspin Technologies, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the conference call to discuss Everspin Technologies' first quarter 2024 financial results. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Cassidy Fuller, Investor Relations of Everspin. Please begin.

Cassidy Fuller

good and operator, you, afternoon, everyone. Thank results XX, XXXX, released for market the March ended XXXX quarter this first close. Everspin afternoon the after Investor I'm for Fuller, Cassidy Relations Everspin. Chief are me Officer. Financial Aggarwal, today's with and call And President Aggarwal, on and Executive Chief Officer; Anuj Sanjeev

results uncertainties call the but from conference and based not Everspin's the expectations to discuss business time forward-looking judgments, Before limited that XX-K statements based Everspin's reflect law, new risk we statements on estimates by a to results SEC forward-looking information, as forward-looking its future the a and the the you for future MRAM between and that are technology, subject results and other in company's this financial to market date contained of design market are those report any as to the to that company of current on products adjustments these date to for of performance the factors today review cause filings adoption associated no or estimates, the Everspin finalized. the now the materially customer except I are Everspin. of which conditions on to, company's or from company's actual of the are alter industry call, required the other as Form actual with you The by undertakes the begin statements future statements made auditors. procedures, and otherwise. Financial business, call filings, would developments may like result of and differ result its regarding encourage and would and as preliminary on including investing closing remind All and bringing this company time final We forward-looking in results and information annual discussed pipeline, contains including, made to forward-looking estimates goals, plan. time executing external risks from available manufacturing further as financial review this events, update company's completion made this financial These may call, statements. materially period are trends events successfully may whether differ hereof and in of the obligation and and and SEC arising involve on in

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

Sanjeev Aggarwal

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

compared year first We to of of to delivered margin range cash of ended quarter XX.X% the in delivered the balance end million, high with XX.X% million gross the QX at During million. $XX.X We of we guidance $XX.X $XX.X a of quarter, first in XXXX. $XX.X our the million. revenue

for and we will the progress pleased products, years increased lower-density our continue over our the We solutions. our have as up past MRAM Toggle made STT-MRAM ramp few by with are to solution, have we visibility we

markets. auto quarter flattish due expect industrial, Pacific the Asia product to revenue second in compared and continued to end we and ahead, consumer see to in Looking in QX weakness

in we and a XXXX. However, wins the of in design expect our second STT-MRAM Toggle ramp half

wins. terms continued to strength consistent gain momentum product PERSYST of design STT-MRAM industrial as Our line has in demonstrated has it

We starting into in of second the revenue XXXX. wins these design half continue to expect to begin translating

radiation hard our to now Turning that last quarter. programs outlined we

X building programs XX-megabit in strategic engaged aimed are ad at using the we second project related STT-MRAM STT-MRAM calls, technology: our hoc the previous our radiation a first an and on FPGA. hard radiation-hardened noted we to As

executed We coming expect for to successfully the hardened deliverables project strategic the continue recognizing radiation QX. FPGA revenue from the STT-MRAM in project the We XX-megabit quarters. over

with this from project continue expect the quarters. months the We to coming in in additional XXXX funding and sponsors

in extension quarter, XXXX. Toggle the quarter applications also of we During we MRAM project originally of hard signed that for an reliability a radiation third executed the

their As new announced This This reinforces high-performance center ensures in PERSYST storage that STT-MRAM data critical the IBM our FCMX. deployment use for you solution have selected seen, STT-MRAM DDRX-like persistent FlashCore power even we of recently memory may X-gigabit applications. data loss. module, integrity during in

application Act. Science recently we and our Lastly, submitted for the CHIPS

as While receive pursuing year. funding, not grant the we optimistic and STT-MRAM will XXX-millimeter use exact to the we capabilities. timing Toggle know we a which remain are and There for and that capacity through other additional additional we we share details do opportunities plan able improved to move for to are that be we decision, hope

for outlook our to Turning XXXX.

a and existing mentioned these Nuremberg with and brand expect Embedded a introduced start from distributors through be the with a year's Despite we quarter government to in potential who turn weakness show will which CFO, Asia quarter last take our revenue had economic as design our to and Anuj bring the leads weighted more to customers and lean interest of have we As challenges, will shifting to year. year STT-MRAM slower higher in a contracts. full slower came second from This expect project first our we to PERSYST we last weeks Anuj? you second distributed region. Moreover, stabilization wins, few We away rates, at over it meetings focus with more some improvement the by inventory driven Asia where customers. customer continued than We ago the encouraged significantly the guidance. schedules our now attributed and in attended towards near-term well financials event. I along continue XXXX as new Aggarwal, recognizing schedule heavily the gradual we traction. on in in a practices, quarter, be to inventories, for experience to we half and Pacific Pacific are can World recent as start

Anuj Aggarwal

in you, and high near in solid million to Thank afternoon, includes million both was revenue our to revenue for high-density the first million quarter XX% $XX.X good $XX.X $XX.X data million XXXX. suppliers first the quarterly and center We $X.X versus royalty, product quarter product of in revenue in and the compared results million XXXX. increased quarter in quarter, $XX.X XXXX. represented $XX.X million STT to of of of applications million end revenue $X.X to guidance revenue Toggle first compared in QX million with QX patent STT-MRAM QX Sanjeev, everyone. to MRAM for the Licensing, to Shipments range XX% other our $XX.X of which compared of sales first the XXXX. in delivered

margin. gross to Turning

QX the million the weighted EBITDA gross QX flat loss in quarter million based of This loss to diluted to compares in $X.X to This $X.X at operating for first a relatively Adjusted of share or quarter first XXXX. million or shares of GAAP drove diluted diluted $X.X share outstanding. was GAAP Our per on income average million margin expenses compared XX.X million XXXX. to our quarter million fully million were first to XXXX of $X.X was per small net a the $X.XX first $X.XX XX.X%. compared results XXXX. $X.X in XXXX $X.X of quarter

ensure to prior cash balance The flow quarter-over-quarter for operating end million Our is attributed second for decrease used to strong ramp. the anticipated remains was equipment for in equivalents investments facilities with half readiness operations million, $X.X products at We million down new the quarter. in debt-free. first the $XX.X ended the of quarter. and of the Cash sheet and quarter cash and $XX.X in cash from

guidance. we remarks. between $X.XX half in loss first QX lower lower $XX anticipate range factors for to and call from on that $XX has second mentioned flattish expect last Toggle $X.XX. be and to our negative be than revenue his our Turning total and diluted first reflecting quarter the revenue This million expect in these net the quarter's seasonality. GAAP and quarter, revenue be into that share RAD-Hard proven Taking mentioned quarter, of true million typical down our first XXXX We to our the for negative revenue consideration, we we per Sanjeev to to of

of scale to revenue. we to We as design are begin products. In half second STT-MRAM and XXXX design our we revenue from ability convert our the wins remain confident summary, for wins the business optimistic recognize for our in to

with and end aerospace We our from strength have are observed industrial increased traction particular design seeing and already markets. wins

questions. STT-MRAM Toggle now industry technology. Operator, growing the MRAM near-term navigates may on focused challenges, you for recognizing line and we remain the for open revenue As our our DRAM products and some

Operator

will Needham. question the Bolton first Our Instructions] [Operator from Quinn of line with come

Nicolas Doyle

first. couple for Doyle ones on A Nick Quinn. housekeeping of

the increase quarter-over-quarter? But quarter, down that as did high-density revenue did product first For was expected. STT, the

Anuj Aggarwal

question. this Nick, Great is Anuj.

So we from in from has a center pretty been healthy. some as industrial. did STT product perspective, see that some But yes, we've an perspective, had product with challenges Toggle data softness

up as well. QX, pretty QX So it in in was was it and healthy

Nicolas Doyle

I drove remember this I expect quarter? to them and quarter. not And level? you And higher Great. then maintain do sharp mean, for if having related don't what that's OpEx, this the NREs to this increase

Just how about OpEx? are you thinking

Anuj Aggarwal

sure. Yes,

compensation couple higher an had things. stock-based from some a there's OpEx We some of services, So standpoint, professional depreciation. and

we expect be relatively OpEx giving to without forward, I think flat down. guidance, to looking

and spending reducing sure can decline. making have on working we team's the So that

Nicolas Doyle

the like Okay. goes million. the bit you for to our guide quarter. RAD-Hard's miss? by is just I going seems expected next mentioned the And about are reading drove Toggle down I that decline estimate to just guide, products the $X mean before Can then it a so you just through up. little And XQ it lines, worse what mean, missed speak

same So any in goes color as licensing Just more the should guide? probably decline that as well? vein, down on margin

Anuj Aggarwal

Yes. well. hitting I you're as it No, think

flat. guidance I revenue we back, think QX to things from a step perspective, a I perspective, relatively take product from expect be a if

pretty calls, some previous to projects. we complete mentioned, projects. from as the STT new works been going So the currently couple you we've RAD-Hard you additional of RAD-Hard flat. and might in expect perspective, and able slightly we're healthy, of on then be center, relatively out recall several is And But down. close data to as from RAD-Hard it that's flat Toggle a to a

anything signed since haven't doesn't include yet. So the guide seeing you're revenue RAD-Hard any we today

the really, is seeing QX. And you're decline so the being incorporated RAD-Hard not into there

Nicolas Doyle

last And question. in. back I'll Okay. then jump

or ramp? how is much much what maybe can second you confidence gives the half in Just percent Maybe the back from you give coming on growth the RAD-Hard. half a how the absolute range dollar -- of

Anuj Aggarwal

Yes.

see from to want challenges macroeconomic before, everyone seeing same some the we else distis ordering the there But will I depreciated. a times. as working seeing give the so And capital, we So the bit be necessarily continue little about we're they're right, to then we're is year. versus don't seeing careful more is, guidance there's things the reducing are a full kind the for because I China talking impact Japan, yen pressure say perspective, products From lead dollar because and inventory. to back that going of costly, yen

So still from I perspective, a that's true. macro think

we in the second I things a think say would of I business, us dive as that half. our there's couple confidence deep give what into some

at So XXXX look and STT if look design see also continuing new the that's we for to our the STT example, XXXX. so ramping to see exceed data low-density in bookings product, center, we're wins. we And far that

yet, worked. They perspective, being that, are the that there's haven't a multiple but In there things licensing from to several addition signed in are been hopper. projects

in to second So a expect half of those the few year. the of we sign

that's full as confidence we to year. the what us gives So look

Operator

Shannon question Richard of from line Craig-Hallum next comes from Our Capital. the

Richard Shannon

RAD-Hard. X as for seems there Maybe a a here? pause of on mostly about Is follow-up the up whether project the it in project decline question that years, to your here the of go. be options left your there picked program, reason sequentially. years of products think to partners lasts order to particular the and sequential be Is the seems a flat we've here a here It seem like least to continue? on topic as I kind like at the to something are Because X got a will talked assuming all

project that between I So bigger is within visibility whether a kind just to lull want picture? get sub sense this the programs in just some of the the of and

Sanjeev Aggarwal

for is this Thanks Richard, the Yes, question. right. you're Sanjeev.

that we expect on, FPGA strategic project partner. I think the with the are hardened we radiation project working our

going the sometime in project point funding for get the comes reason changes that Toggle we schedule deliverables like to well. get government on renewed next guidance from because or to talk coming soon We fully that for The project the our the months Richard, is would has as so some in of new been we We we haven't met just agency all so said, I delay that project expect sometime quarter. the our that is as like QX, funding to a some -- continuing in there QX we all in through. their expect QX. the and in we the delay U.S. project signed as in about in that MRAM yet, that reliability we details Also, did out included don't have have QX side. The

Richard Shannon

another reliability U.S. follow about that very comments, the government this what's the in your of And on interesting. there? one? other up other of of part what's Well, we source I project? think Sanjeev, last source that agency? guess do Or or sounds the the scale it Toggle I'll Is How

Sanjeev Aggarwal

basically that's reliability agency some the with XXXX. in had the same them from project that we we follow-up a that on They follow-up a So questions shared. did models

collecting we them bring more So data are to that actually speed up some one. to on

have So financial -- big as figures it disclose. it yet of we 'XX, don't in the the terms was as won't be in but to scale,

Richard Shannon

enough. Fair Okay.

couple questions Let those. me for hit of a financial

see. Let's

getting there there product X dynamic And prior Toggle XXs think, amount there on bit during up the in and of little range good it that seems here to here, significant any margins I XX high still pretty percent any to some have fairly levels? yield. wondering Last being about -- mix is I'm that's quarters? numbers if Last your continuing. of also, year. been as in then to a gross be after related in particularly shift hit Is quarter, Let's the here. visibility between back talked last something mix few you STT last lower, quarters

Anuj Aggarwal

guidance, from been Yes, the our question. margin within margin, has model. again, great gross giving Richard, gross internal Yes. perspective, a without

as is. So to where we we gross the hold believe continue with margin to low mid-XXs

If you have pretty did about to, that which alluding QX. look we saw revenue million you're was the RAD-Hard margin think of at I kind We QX QX gross in versus $X.X guidance, healthy. in

no into that's XX% on reduction the at there's And so product a like But operationally we efficient. has somewhere higher margin. In margin projects, mentioned, XX% RAD-Hard margins, QX, incorporated great from job range gross is that's guide, purely based so between perspective, done really, team to the there cost margin. revenue being normally looking the being product a operationally

So of we've able been a see healthy margin gross to last couple quarters.

Richard Shannon

the guess the follow-up years model, should here. curious a product margins Maybe where numbers density that that half, very Or degree Okay. I'm we've on quarters that this little past topic. second the a these to And last in we we seems -- a in is or mid-XXs high still -- of one X at a aspire to number be over the we both what more we up viewing over high I abnormally here, bit and specifically the that do deemed that then ramping to? that looking as of difficult? the be you've the range to seen low-density Are level gross be new seen can And be to? is is kind -- to STT going range, on levels ramps the aspire one you

Anuj Aggarwal

bit little end. as on yields been, efficiencies improving in probably up looked standpoint. an I think, teams the performance There's some great I and operational the is think Richard, a bringing from seen we've at past, what high the

is little It's that of So terms of not steady to be going So you'll a right? tapers flex of there's like yields off. There get where some steady see can to in state bit that the I think kind state mix. there's you there. XXX%, some

margins look that, we low-density the product, as introduced. there that there. so at to challenges if And are at just expecting now, improve Right STT product. some But it's from new look been you we're

get a product that new product. them from And through need you gross the to you levels the it in ramp improvement working speed should to so you the see to But challenges there and margin to. up get and get as we're yields margin

Sanjeev Aggarwal

is mid-XXs, aspiration the the Richard, in right?

Anuj Aggarwal

Yes.

Sanjeev Aggarwal

is aspiration be the still mid-XXs. Our to

Richard Shannon

Okay.

talked that's product not the number your in of gross correct? total So terms you've about margins, margins, gross

Sanjeev Aggarwal

That's correct.

Anuj Aggarwal

right. That's

Richard Shannon

X X Fair enough. here. or maybe Then others Okay.

I in agreement a you not about think in anything that something and release around I your is? here prepared sure Can foundry press that. I'm your said caught here, if remarks what elaborate you

Sanjeev Aggarwal

Yes.

in well embedded as the an So actually program been the we've for you past know, programs and XX radiation also as or years hard foundry over last to a several so.

are acting a actively foundry. we So as

that are is we this new So bringing online. customer a

this in process hope volume setting lower year, more we we So low sometime our half improve to wafers their lower the utilization second into fab, distribute the of year. up our And production is QX likely right our more here, of now, over Richard, in our of in it's basically product. the going and -- that go going idea our fab to to this costs are fixed whole then and --

Richard Shannon

Can elaborate a And custom sense or can other customers your Is Okay. application? big customer any product big of company total the how on this Any relative be you to product scale? this here? in way? in your

Sanjeev Aggarwal

next talk call, disclose this about much more Hopefully, at is but can earnings as we we point. at this as Richard, can the this

Richard Shannon

product business then. enough of fair here. looking big at Maybe That's Okay. kind just picture your

through come? and largely be Your that? bit that -- burn you for burn, to more going what a in sign imagine, market industrial through think few Are at there's automotive. is to the you worry as last seen of what do little you being Or We've issues? quarters To of I are we difficult guidance sort in inventory it. context here of look do revenues roughly product the are we like fairly a seems degree good any flat we a for

Anuj Aggarwal

to really is be. on it's the where Richard, hard Yes, going year speculate to

if to X usually think X just And second for should them think to semiconductor long that, and you a I we be time, see about quarters. uptick the I downturns, in in half. semiconductor some being see typical from

Richard Shannon

to The on Fair and last sorry, mean I'll interrupt. question Okay. didn't jump enough. --

Anuj Aggarwal

ahead, go Richard. no, no, No,

Richard Shannon

quick lead Last quick question -- times. on me just for a is just

you STT now were is before we the coming think ordering inside to on Toggle at times times. mentioned your COVID that that still levels? lead and I down Or you lead company's products? Are both those at

Anuj Aggarwal

to looking the lead on XX products So back weeks at. Richard, times you're roughly They're we've kept pre-pandemic levels. to which depending the XX

Operator

our Instructions] -- the please moment from -- of next one comes with Bolton question [Operator And line Needham. Quinn

Nicolas Doyle

-- asking assuming decline product just the quarter, would I quarter. both next there And next ASP for Just if flat any decline there? the and it's assume that quarter entirely is unit-based? flat product -- was any this just is -- ASP the Or are then changes the

Sanjeev Aggarwal

Nick, Yes, is Sanjeev. this

the seen the Japan not have It's market Pacific the mostly which or softness volumes. ASP We is market, demand in and any decline. the the Asia causing lower

Nicolas Doyle

I size give in Okay. with Makes us opportunity early. for you any or that of PERSYST IBM, terms But it's And -- the could then sense. hints timing? could know you I mean,

Sanjeev Aggarwal

as the us might marketplace release as IBM. FCMX seen you have did already, available well the press in So their from They launch it's so actually today.

it's up of reflective In backlog market, healthy data center backlog, increase to the in I Anuj our like of what right with the into to compared we our XXXX. which And see. that. think like for actually XXXX, is terms the basically consistent It's is pretty mentioned,

Operator

hand I'd I further remarks. the conference to Sanjeev to back for like questions closing am this Aggarwal time. currently at showing no

Sanjeev Aggarwal

at you everyone, next to I forward our the say we and you, today, for joining thank joining. earnings would call look Thank quarter you again report. to like speaking to for

Operator

Thank for And this call. you your concludes participation. today's conference

day. now have may Everyone, disconnect. wonderful You a

Everspin (MRAM) 1 May 242024 Q1 Earnings call transcript