MRAM - Earnings call transcript Q2 2024 | Everspin Technologies, Inc.

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Operator

Good afternoon, and welcome to the conference call to discuss Everspin Technologies Second Quarter 2024 Financial Results. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Cassidy Fuller, Investor Relations for Everspin.

Cassidy Fuller

Thank you, operator, and good afternoon, everyone. Everspin released results for the second quarter 2024 ended June 30, 2024, this afternoon after the market closed. Relations Investor Fuller, Cassidy for Everspin. I'm me and Chief with Financial on Tenorio, today's President Aggarwal, Officer. Sanjeev are Executive Chief call Interim And Officer; Matt and

report estimates, with in company you actual this These like begin events, trends market future future results not company's to which remind call, review business, we risks statements. in the but made contains I'd to, XX-K the for SEC Before you statements contained Everspin's involve other and cause performance materially including forward-looking associated the filings the including, its judgments, differ time market forward-looking and current that expectations those from conditions the conference company's factors limited uncertainties from and to technology, successfully and to bringing on on in based investing goals, regarding may encourage customer are filings, financial and executing to products would statements and that design call risk the forward-looking and on to Form in time industry business Everspin. and adoption plan. discuss annual of Everspin's may MRAM SEC pipeline manufacturing We

or now materially these final this All financial are the time completion its obligation finalized. as final results information the a external -- of the the as the result further to are estimates between financial results and forward-looking as the based on time call, The on whether and this and call, developments adjustments company's of are auditors. may alter Everspin of date results a made by for actual at otherwise. this preliminary available and update other of financial reflect arising statements procedures, period by the the any required result and information, subject or company hereof date are The as and and closing from company's differ the to of except discussed no events future estimates made law, undertakes today forward-looking new statements review

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

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

Sanjeev Aggarwal

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

of team, On finance and over as behalf to independent operations. I XXXX to make Matt the moment discuss Corporate to I for as the interim in consultant the support company's and want he Board as in years, welcome an X management I results, Everspin Tenorio to rejoined we next to our endeavor. well also and a CFO. want his June wish Officer Financial previously in hard Controller thank dedication and past XXXX, Chief him work Anuj Before back Everspin Matt Interim and the as his served

our balance with We share. results. per second guidance the quarter $XX.X of our delivered revenue with ended within loss revenue range quarter to $X.XX including basic a Turning and We a net of loss million. million $XX.X cash strong net of and sheet,

our services. product showcase services of PERSYST our in here that a will had and advancements quarter, these the a design of and discuss key I corporate Everspin few capabilities. foundry number technology During areas that portfolio, development span

MRAM solution. our with Toggle Starting

markets, in currency MRAM our recovery resulted Asia for to quarter, due the As expected, slow during we Toggle the Pacific which partly weakness, products. due unfavorable exchange customers to partly experience inventory at in and continued have consumption rates a to

visibility increased inventory of signs giving us the rest demand into Looking positive ahead, the we see at for consumption year. of customers, our

a second the half expect XXXX. of in our modest in We worldwide Solutions Toggle ramp

meg Pacific STT-MRAM respectively. design our and quarter, saw with strong where to XXX traction our and megabit the Asia regions During volume, PERSYST activity experienced in we production family we highest the X the globally, European especially

a reminder, production family As to this last was year. brought

expect these wins into to year in And to few later or we XXXX. on early this with We later year begin XXXX. in design on delivering this ramping wins based a discussions, revenue customer go design expect production

solution its the data center we NOR second technology. Everspin's announced module featured Flash PERSYST X of This for our IBM's quarter, STT-MRAM IBM FCM applications. is in Earlier that in has chose that fourth STT-MRAM generation X-gigabit for use the

of like have X.X Since we seen and solution DDRX our bandwidth, continued IBM write and the from With both delivers product coupled quarters. PERSYST in orders to in the see growth over this growth announcement, second interface, read nonvolatility. gigabytes the sustained per expect coming with

our our radiation-hard now earnings On STT-MRAM call, Rad-Hard that Turning X in engaged program. our utilizing previous to we noted technology. programs were we

project related STT-MRAM program ongoing. first remains XX-megabit ad hoc an to The

The strategic second program Rad-Hard at is a FPGA. aimed building

recently a space current and will the our initiative technology, Everspin Honeywell. provide This supports future logic manufacturing services development back-end-of-line strategic we to DoD continue and contract radiation-hardened high-reliability FPGA As technology. to contract, system on QuickLogic innovative program strategic its and this announced, and Under demonstration both design of with advance and requirements. executed MRAM the collaboration AgILYST

companies where With much memory require West, faster in we technology conversations higher density use we electrification, about cannot processing meaningful STT-MRAM vehicle SEMICON increasing with automotive units that current Earlier for and attended this cases provide. central month, chiplets. engaged

amount that meaningful few automotive customers next a As we are products as We Everspin conversations further generate. the data potential increasing Automotive with starting in October. the Alliance this see for to STT-MRAM have over Chiplet our expect and to the opportunity a result, interest years see at EVs Conference vast handle in to of

our fundamental share of for we has shipped these and will IP high-quality with consistent, Everspin magnetic to our sensors their we agreement provide devices over This applications. provider sensors TMR entered leading Toggle devices. industrial that TMR generation XXX a for product sensor We of Arizona customer for million are their markets, manufactured history and allow end for pleased a to including have TMR a enable foundry To into manufacturing MRAM, from also Chandler, device. and agreement STT-MRAM to a and sensor strategic commercial services supply latest long facility. date,

Turning to our outlook for the XXXX. remainder of

we As short-term we a have the X the we calls, Tenorio, wins. I we to discussed begin third expect path to I quarter as to be heavily earnings year more take XXXX. towards turn outlined half through design on it a of our the our STT-MRAM see weighted last second now new our Matt? second will and half Despite to above, XXXX will second guidance. stronger you our continue challenges over revenue recognize quarter financials CFO, Matt who from interim towards

Matthew Tenorio

you, Thank return to and afternoon, at I'm good to Everspin an such everyone. Sanjeev, exciting pleased time.

Now turning results. to our

within decreased revenue MRAM For to we Rad-Hard range both deliver quarterly million and of compared a projects. from and results $XX.X $X.X due the second which quarter, $X.X product Toggle timing product of royalty, the the decrease The decline $X.X our in with QX guidance of sales second other sales was in the demand. patent 'XX. result compared STT-MRAM are quarter due pleased to customer in in to Licensing, to million of to $XX.X our million to of compared million million quarter the a in XXXX. include $XX.X quarter, revenue in in second second million revenue QX to decline revenue was the 'XX

Turning to gross margin.

XX.X were family second xSPI these per within products. a loss $X.X quarter $X.XX a of second second This our our The of in or net increase related $X.XX Our The loss compared deals. in quarter was a QX XXXX to XXXX. quarter the in based million outstanding. gross compares on GAAP decline results decrease for to of diluted was million loss in OpEx due due million to of for the 'XX. shares share largely the $X new of product to share, basic million down second the weighted to was licensing a of slight of our average and to to related million Rad-Hard $X.X of per quarter, margin XX% revenue or factors, expenses to operating of from guidance basic $X.XX income Due $X.X XX.X% sales were range $X.XX STT-MRAM second quarter expenses XXXX. in our

a was million $X.X compared million EBITDA to negative Adjusted 'XX. $X.X in QX

in ahead, see improvement a quarter. Looking share our modest per loss expect we next to

the We end quarter. $XX.X balance of quarter equivalents are at our prior the We from sheet pleased that remains and ended strong the cash with and million $XX.X up million, debt-free. cash of

Going forward, $X.X requirements operations quarter. capital for meet our million sufficient from next flow believe to we continue Cash was second our capital generated the anticipated year. the is for to

guidance. to Turning

XXXX, lower proven which earnings X true. calls, As the we mentioned be on first of we revenue anticipated for our half to had last has

as customers. we inventory basic be Looking will consumption still half to per total the have of $X.XX range wins, net share a in in consideration, expect between we GAAP in $XX.X year, million of as into million already to factors recovery $XX.X these of and of we that revenue Taking QX the loss our begin and see $X.XX. begun positive to to to signs well and design ramp we see second the believe revenue

of wins In scaling on the remain to and business design summary, we the and revenue. second year half converting optimistic for focused our remain

products growth products focused MRAM our our and are on year. STT-MRAM growing for remainder We modest PERSYST this the Toggle and of anticipate for

in growth strong data and products with second second ability our our in Overall, expand in business to in see half of our the XXXX. we to center expect also our confident high-density remain We the STT-MRAM. half scale

line the open now questions. may you Operator, for

Operator

Company. Bolton [Operator & Quinn with Instructions] first question Our of line Needham

Quinn Bolton

questions. A few

applications Are Are Just you sort details wondering us in NOR design momentum, that you wanted industrial perhaps just these APAC. Europe if could could of to particular But color for other assume on there? of some I us designs? I some win you if these win more there momentum. replacement? applications? and type are there a of more some mentioned design lot give it start -- especially Is designs. increasing wonder give Flash embedded

Sanjeev Aggarwal

Sure, Ken.

in the are area, and in we aerospace seeing are and also, centers. them logic and think these we past, some both discussed the towards we're have industrial design defense wins Europe. as FPGA automation companies I And targeted programmable well Japan the with as in as the controllers traction the seeing

areas have basically, traction. we see So where some we're X starting different to

replacement flash backing with it's so Flash With NOR with like a as STT-MRAM low-density the well targeting both basically interfaces mentioned, NOR the SRAM. our basically up has controllers, logic you little as product programmable bit, compatible FPGA,

FPGA, the type at logic they're interface. type looking looking controllers advantage So that's taking SRAM when where we're of at our interface. they're advantage of And programmable you're taking NOR Flash

we're win those and looking at. So looking at primary we're design the areas that are that verticals

Quinn Bolton

follow-up maybe just And question. a Great.

you do think sort signs you in think get inventory year? think you are customers base to of importantly, of starting terms more with in customer Just you of back potentially the that we burn perhaps, mentioned Where And for Do consumption, to the this do into in inventory inventory the process. in see momentum XXXX? line digestion you early last various the say, of end by digestion. shipping

Sanjeev Aggarwal

inventory signals seeing of are consumption. we So

our lead We are with also seeing customers orders times. short placing very

be within timeframe. a weak So want order even times lead they our get fill to will us kind we'll of an where order XX to though XX, the

trying So we're suggesting last because being their and all our minute. cash, of is inventory orders is their the getting this customers hand to in to they're consumed that that mouth have basically just conserve

to in they're and to come think as their I see side well. inventory behavior they the build where to over change time, is really So want orders going will starting on

So year, should times we end normal and see over of a returning lead think by to there. I the the inventories

Quinn Bolton

revenue? I that margin some Great. big from Gross mix Matt. gross the on And gross product in guess product it of was product couple margin mix the the the at issues income affected just that a on the going -- the shift of lower purely the there down for I for margin. is even have probably I if margin looks a just sense what's XXs on that give understand gross XX%. get a just might have But away in Is absorption certainly side? margin to that the XX%. of you to gross Were royalty impact then to mid- upper account quarter? other going us blended Can in

Matthew Tenorio

are we're over also That's the costs lower a seeing products. lower-margin you've great absorb got And But our that we that but we it. having think is also really because are some as then volume, to And what improve question. a progresses. the of to running volume, expect year do we mix to I fixed

Operator

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

Richard Shannon

As couple of questions. a

the to on second fit products here a third at the bucket? grow guess, all of the half I coming I want -- guidance, one, into license over I improving quarter all trying the to guess a from to just is of royalty this sense trying is First Or is whether first half. to and theme get expected get this sequentially?

Matthew Tenorio

Yes, to we sequentially. go are up expecting product revenue our

Richard Shannon

And STT. there's it any, can in assume high-density stuff? Is you very I pickup Okay. high-density characterize all Toggle? little, there's the how in Or PERSYST there, whether -- versus revenues about any is Toggle but there if

Matthew Tenorio

I as do up ramp think we STT to half. well Well, in mentioned, high-density expect we as the products next

Richard Shannon

about forward contracts? year, think or you How are I you long the maybe. maybe X here of on kind how projects how long what years major so? of your basically you're then at it Rad-Hard question of revenue contract license last we kind announced, Sanjeev, bucket with And here going in comparing your seen multipart in we've these of royalty do do enough. -- X.X do talked week for? a over Fair Okay. to think, them, that the think the looking go the some projects stream they recognized past about the I

Sanjeev Aggarwal

would past, X you. Yes. bit talked our talked Rad-Hard little one, -- now. have doing, about revenue, have right the where individual to Rad-Hard we I ad be XX-megabit is we we where a Honeywell. ongoing a but STT-MRAM qualify Honeywell once hoc projects -- as With basically Richard. How we ready project reaching complete the would is are One Thank those lumpy where the always And is in you fabs. are there in building think they devices out point for processing that

and is building it as project ahead has project What strategic just million. and go As press release to Basically, far phases, Everspin that this it phase is we then we the expect so $X.X this the this announced to still $X.X million We a is is So project continue it's in Rad-Hard it bring far QuickLogic FPGA, this part. renewed. to design the QuickLogic in concerned, right? the covers out production. been going as share build characterize announced, next several is forward. a and device that and need

So those phase the I think forward. funding is simply get But to keep complete on this funded as for moving design. will we phases now, the

Richard Shannon

end the that contract? lasts Okay. And beyond the Rad-Hard it that? that of extend to is Or something the through year, strategic specifically does

Sanjeev Aggarwal

extends well, It QX into Richard. as

Richard Shannon

Okay.

level space in how PERSYST nicely Okay. the of Maybe potential the to just revenues sense built Fair those quarters way can try building to that you for say, enough. wanted lines, touching on revenue on Or of I in, the about a models the far. hopefully, I today, doing of design that's how get next we have the relative do have several the to to over soon? product some new couple in of had Toggle product the this we is on quantify years think close half we nice commentary today? mean product what so think obviously, potential what build a for any you're scale characterize How family? Toggle here. of do our can to you you we you and get wins the to revenue expecting a

Sanjeev Aggarwal

desire, our like of right? in XX% reach here any revenues of guidance, that Toggle type couple to type a or the Richard, We giving using Yes, next years. is without over [indiscernible]. So would Toggle

the towards or will 'XX second XXXX. some the towards end the year, converting half start the probably early wins more of of We design of

see as meaningful well. some be 'XX, revenue recognition only there in XXXX but you So in will would I think

Operator

as you the will no may And queue, Instructions] further for today. now conclude and you I you. in and all I questions the Q&A [Operator conference participated, Thank see Thank to who disconnect.

Everspin (MRAM) 31 Jul 242024 Q2 Earnings call transcript