QUIK - Earnings call transcript Q3 2021

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Operator

[Call starts abruptly] Today's call is being recorded for replay purposes through November 24, 2021. I would now like to turn the call over to Mr. Jim Fanucchi of Darrow Associates. Mr. Fanucchi, please go ahead.

Jim Fanucchi

thanks of and us. for operator you, to you all joining Thank

speakers President Interim Anthony Faith, are Chief Chief Officer. Our Brian and and today Executive Officer Accounting Contos,

design revenue, are of including QuickLogic's uncertainties, schedule from not future it's into customers' pertaining activity the new and profitability limited and of opportunities those relating broadening that design financial materially ecosystem QuickLogic acceptance reminder, and risks results gross dates Actual evaluation expectations expected cash. but the and stated for could stock to future the revenue a that involve performance, products; the trends timing discussed margin, shipments; changes of operating some makes As and convert shipments; may production it's our differ of to and today and to forward-looking partners; to timing expenses, mature statements and statements start today. new or comments production number ability from systems; impact products; market results company's expectations

statements forward-looking the measures. events. of discussions new information differences, information be of non-GAAP those assumptions QuickLogic could filed and financial that assumes In the most factors reports will uncertainties reporting in risks, to update in or today's dates of no obligation any recently periodic which as future respective with speak or the any detailed the QuickLogic's refer call result we discussed to please more risk SEC. For

for detailed to results statements. non-GAAP You financial may earnings GAAP our refer reconciliation and of issued to we a the release other today

it's today's uses call website, as and call. today's Such information Facebook to web provides turn after information of use current be QuickLogic's Twitter material corporate our at on prepared financial will may the about now Please that on company IR also these channels may conclusion business. to would A like of copy channels page be disclosure and page note, over comply earnings the page posted of blog, data. Regulation remarks have We I under updated it's Brian. to distribution FD. information page web posted made table QuickLogic call an with historical shortly deemed of LinkedIn it's non-GAAP and obligations the QuickLogic account, the IR

Brian Faith

Good and Thank everyone you, you our conference Jim. XXXX for quarter afternoon, financial all fiscal joining thank call. third results

six the were Revenue QX Our mix a best highest of has due higher to margin gross IP-related the among XX%, non-GAAP software was record reported. of in an results for all-time $X.X sales, years ever QuickLogic we was have QuickLogic. million and generated and

half second the more further that alone of reported underway. to as we enabling fiscal made artificial also we bottom XXXX. line, bit We our significant QX the which lowest well our since of XXXX on our for outlook when same progress almost for the will net all These of revenue on provide with a $XXX,XXX, results validate under include be company fiscal later, for QX our is Anthony focused will non-GAAP a a platform loss intelligence edge transformation XXXX. And

as a a fast-moving their once logic of in two and to proud power, this on one dedication established open decades leaders forward disrupt the in has new their this ago, our Since leveraging nearly the what to them continually FPGA I I commitment the We believe opportunity efforts years to programmable path today. hardware for the teams breadth we quickly we QuickLogic to market. be this is embarked multi-decade mature are amazing us for doing fueling expertise am QuickLogic by to are software source our in open-source itself SensiML of market. marrying and of very expanding thank where and accomplishments ecosystems. and and with get

this products, scaling devices for open-source point coinciding tipping the are With IP that partners, at and accelerating am a FPGA that tools. more supported demand beginning deliver confident earnings shareholder relationships long-term new broadly powerful approach cores more distribution network trajectory that embedded with our I and FPGA an for is we which which ultimately are of growing now leading-edge by lead of even revenue increasing industry customer market will are value. We combination should to higher improved and of and

as our to want our success. blocks for that of quarter drove that into will I Now, and third items future some serve the developments the results move building

The First, investment about that financial me our strengthened ahead. Company. our of of market long-time a At should two let's start shareholders over was on development at capital funding near-term the significant the growth $X opportunities strategic in a objectives. ensure have making we million. September, raising tremendous the little The approached with execute done position. discount, no the holders end recognize to transaction a These our

FPGA Developers able era weeks multiple fragmented what Australis the be highly for of formally built ability about mass beyond. variants. opening Tool a captured implementations customer is to a QX. logic our performed To customer-specific be machine and IP mind, is Tool several Also all few new and scale record for for and in expected and us IP and be prospects eFPGA We believe Being will the of with embedded protection, Generator is the the an open-source of including way, be Tool come a a cost. our initiatives. we quickly that automated node September, variants or FPGA chose an announced this first IP an hardware opportunities Australis core several to User in processes, of also Tools FPGA eFPGA a changer. low as the was to going a will and means a believe million intelligence excited remainder largest challenges to in The devices, design use eFPGA ever, announced This because track a Australis The and of the eFPGA in revenue node we these I is implementation with customization. the generates opportunities. to with acceleration Ultimately, SoC very This which this seven-digit eFPGA address months within Australis companies. product create The XXXX the of target offloading QuickLogic markets. or high able game in range same do The for $X which easily win. derivatives lengthy logic delivering makes combined eFPGA intellectual they at of or evaluation intense our learning the to extensive QORC IP process. will QX and Part in simply of strategic property contract proven what programmable is quality was programmable with artificial to significant node and benefits of with the the generate create combinations flexibility days. foundry supported process and foundry Tool to even currently clear, new within process we

pay nanometer our customized weeks customer Tool XX We we seeing we first in UMC's which story IP to generate dividends. announced A few the are a success already for Tool process. used eFPGA ago, Australis the Australis

technical target with a using applications to and customer's come technology that much quickly IP reflect motivations was the using we were easily the the these flexibility able delivery decision. process this Being new of embedded we faster with our SoC cost time-to-IP-delivery. development fast combination FPGA go to many previous benefits business reasons is us less is than months, and substantially More for a a contract cost node that to same smart believe significant and within from and methodology. means importantly, only The execute as with four for able with and to the foundry a low and very SoC very development

our IP coming the the RFPs Australis and we key for and in this an and enables, RFQs years. since Those results We call. increase some is to Tool what eFPGA better are us our are announcements financial the market for seeing made in leading last of penetration exactly

eFPGA to near-term for are Now what we seeing want I comments some business. offer our about

over of next initiatives dollars are to the the working several tens years. three currently have We generate of on in millions that revenue potential

of sensitivity programs can't bound these or we on give and granularity are confidentiality we discuss companies applications. the Given restrictions to,

large, the we a not figures, However, a technology have me recently for We from seven process a eFPGA-related cover contract XX,XXX before. foot signed level targeted following. near very let

using months, a of years the two to less go for follow-on a We We simply multi-million-dollar record with would future been opportunities Australis possible will These Tool ago. customer be of from types this than years. in delivery will contract XXXX, not contract believe additional IP to in us. a couple to opportunities have in lead likely

of bid software. a expanding eFPGA our trigger and with toolbox voice strategic revenue. our proposals Open-Source partnership through leader and the to on business, in presence and Rubidium initiatives, have of Foundation Limited, the announced Now, execute for voice we always-on FPGA Outside recognition with an key a products, significant eFPGA we growing opportunity

voice providing particularly battery our Rubidium are software. that solution own sensor is This very SX on they We with complete power will User for those which very connectivity. attractive low edge a combine Voice platform powered voice Interface EOS and cloud based their IoT applications, recognition or are lack

the onsemi, with announced SensiML robotics, signing SensiML has predictive produced with of distribution or win again Our teamed applications tools channels, have that's The sophisticated is AI-based a and the needing enabling perfectly manufacturing, solutions. traction. distribution driving major compact the that semiconductor Recently, Digi-Key in science expanded to to a algorithms has Electronics. SensiML SensiML. one RSLXX or we development platform gain This next-generation Development giants, into onsemi agreement with Kit AI. industry maintenance Sensor X.X Industry We suited their continues without once business integration combined worldwide but our a expertise for for data of

low power the power available well software, are Digi-Key SensiML PolarPro all microcontrollers SX to kits complementary agreement earlier as by and this EOS is open-source through our Our with as dev that XXX% channel. X year. This now supported signed low agreement FPGAs,

growth partnership milestone and strategy with Digi-Key our an is important worldwide. in presence increasing global our Our

launches. we XG are third down ended for XX than smartphone strong sequential XX% the to say quarter We multiple proud a the just that smartphone the customer for yesterday as EOS QX that at turnaround in year. expected their we eight-week use least our our EOS expect lead related to or be supply smartphone smartphone and is the QX issues lead sales approximately Despite quarter increased prior What higher our have months many including been year, came next for the very production. stretching a a our chain further now more. times have models. little new A test final come the respect smartphone models. them and six XXXX customer With little into phones and six we be was assembly used discussed through our drop Our revenue to to SX companies, will that multiple continue in includes by SX a to after that as to prepares smartphone down launched and in on will to believe XXXX

countering by are of of substrates We materials. finished some leveraging our delays inventories the and

build anytime to issue shipments of is soon, this we additional not However, minimize need inventory may risk. ahead so going away to customer

long mature market, lingering clarity of in covered be instrumental XXXX in than business ongoing disruptions, addition of for will XXXX. have fiscal of improvement. that and declined business much this will customers, topics segment. I impacting financial expected. our good mature it half different second revenue put, in lot revenue in be half related mature Finally, in us chain COVID know be bumps proving a be the hold revenue product as particularly QuickLogic's to Simply it there fiscal I supply how in to will the first pivotal It the to in continue is see in is most and may in to difficult history. back not time issues of our the be aerospace our easy future. still in effects segment, been the has road Ongoing XXXX civilian the Without

outlook Anthony. proof we However, the is and reporting points have validating long-term, call we the the transition financial that to I With results our near-and turn that, for today are are the will succeeding. the over both

Anthony Contos

everyone Thank us call. joining and afternoon good Brian on you, to today's

transformation. the quarter As XXXX third highest progress the mentioned, the represents was fiscal QuickLogic since is product and on revenue successful making it's and our Brian of business

in third quarter same of products third and of second in the the $X.X fiscal $X.X of million. with the This Within revenue compares the QX compared in quarter an were new million $XXX,XXX year. revenue, since quarter million compares XXXX, XXXX. of This reflects third QX XXX%, revenue last $X.X increase approximately quarter XXXX. $X.X For of approximately the million, million XXXX. and last $X.X highest with sales was quarter or approximately This about XXXX million of of the quarter $X.X with

This in million approximately quarter margin should quarter primarily loss in for with QX expenses, which XX.X last quarter for of loss $X.X loss respectively $X.X compares QX higher included is was materials write-down was and in who quarter SG&A gross QX million, $XX.X million, the million all-time with third product for gross of $X.X SG&A last revenue that in and with loss of compared based Non-GAAP in million, The compares third share SG&A which The quarter share $X.X $XX $X.X three compares gross in at Included and $X.X million $XX.X our was and million a the the the was approximately per quarter. mix million. million quarter Non-GAAP in had approximately and caused $X.X revenue of and up in with reasons remind from other of last last of of a a see was last and quarter of each This $X.X net million QX in QX, $X.X quarter revenue. XX.X% the QX the margin the quarter. year. services by Product substantially million of million. customers $X.X the in or with mature margin same $X.X of expenses we an R&D approximately end $X.XX include or a or the million, approximately and were QX and compared of the In credit. million, balance shares. net our was Non-GAAP impacted million of line revolving $XXX,XXX. $X.X year. Our last prior from XX.X% year. received million net accounted margin I prior record was more with cash million third everyone of a $X.XX can per This main quarter operating Within XX% was eFPGA QuickLogic. second for the at both operating $X.X gross million were R&D for R&D $X.X the per share, total was cash of from third $X.XX also year. QX XX.X% and This that last reduction million on of a you this or cash improvements. net direct XXXX. of X% raw the The Nonetheless, end the total $X margin. gross placement. draw the compares in

$XXX,XXX. revenue the plus for the combined XXXX, with X%. XX% quarter products will expected revenue be in approximately This midpoint highest non-GAAP minus of $X would new plus XX%, previous three our of into Now, XXXX end the on with X, estimates. minus will believe total consistent in translate throughout non-GAAP year. comprised growing quarter will what first $X.X moving be to for million, this revenue which or above mix, QX with Based be for would margin The the guidance, we the QX approximately quarters on We be guidance XXXX. gross midpoint, January will the fourth fiscal have the annual since million or results XX%, of revenue annual is XX%. of gross the approximately guidance discussed for consistent of our QX result At fiscal Mature revenue XXXX. from product forecasted which to is margin

XX%. fiscal For XXXX margin was in comparison purposes, gross approximately non-GAAP

to eFPGA expected the contracts. to is with QX non-recurring versus engineering the in decrease of of new expenses connection in in related reclassification our sales margin QX cost Additionally, gross primarily

expenses expenses midpoint At approximately SG&A operating minus non-GAAP $X.X we expect expenses million. the the and $XXX,XXX. $X.X approximately plus million be will million, or of Our range, $X.X be be R&D to approximately to

earlier, in from As QX to the expect business $XXX,XXX OpEx XXXX, Brian $XXX,XXX we levels support with anticipated pipeline see for mentioned will the between we to growth. would tick-up quarterly order of

reminder of stock-based grants stock-based performance expense, of related Most course of and $XXX,XXX, non-GAAP XX.X the interest and and beginning compensation difference results it After due the share, the per $X.XX year timing quarter on the normal our will net and the forecast is compensation a to GAAP generally estimates of be non-GAAP loss our a first expect income shares of each between quarter expenses. related other outstanding. the our compensation roughly of on based to In net year Just that based we higher awards. to QX, in will will currently we be loss spend taxes, expense. be our million fiscal movement There stock-based the vary our year approximately a each similar quarter is could over that QX. or

consistent that, to For and the QX, expect turn in range $XXX,XXX balance in his let remarks. of for over we the the now Brian to be QX cash usage sheet, With back closing call with $XXX,XXX. me

Brian Faith

you, Thank Anthony.

Radhika Before like closing a would warm offer to Board welcome Krishnan to our I my Directors. of to remarks, sharing

this I our and As AI/ML leading hardware Chief Manager and the includes and analytics, is morning, she have will At no strong seen many management, and Vantara the financial she long-term than currently in our years. QuickLogic position are I company. have new where expanding a time serving is for our Industrial immediate lines. members we or partnerships our data SensiML Customer of Software interest industry as we been many as accelerating, for a the of part General decades. background technologies This targeting Hitachi prospects believe in Radhika announced numerous and all across the product Product strong distribution AI/ML market as SaaS been and an have software have other future about AI growth brings functions impact I, team IoT our eFPGA Radhika the In this more products. on reach Officer two Lumada IP closing, strategy segments. portfolio is for our in responsible at excited is have for team

signed with strong ecosystem the top support of growing we all funnel microcontroller partnership Our exiting year ever SensiML and more IP-related sales to before. this nearly companies. and it's expanded is than are has deals

being call generate into go-to-market insight on more little continue be will Our to the margin thoughts higher I gross can a products final wanted and fiscal high to With and earnings our that strategy been XXXX. current a return with on year focused revenue this faster, with offer has this for calendar investment.

winnable pipeline call our same I percentage, if continue pan Our knowing I the that we fiscal and not into sales accelerating not same we out. That the more, opportunities grow with can these of XXXX than would gross balance for year, annual At mix next foresee what over opportunities in said, higher XX% to range. see high a the pathway of margin to is fiscal XXXX. XXXX will to could in an at and revenue all software time, this growth expected the mid climb IP-related of

our modestly on QuickLogic bright for able This be long-time has our future of several could open wins, design would for for prepared Operator, deliver will track customers, era years to now been I is QuickLogic like have news new customer such support be completes thank and their brighter. to we and and half to our we expenses should call That want all operating of trust. remarks. continued in suppliers While not I the questions. investors, the to new first to most a team been positive It support the a grow reach outlook. and the XXXX. since profitability

Operator

your [Operator Please At session. Desilva Our first be with this Instructions] ROTH time, Suji is will a questions. question-and-answer proceed question we with Capital. from conducting

Suji Desilva

Brian, progress Hi Congratulations Anthony. the on here. Hi

Brian Faith

you. Thank

Suji Desilva

Yes.

rev haven't parcel of gross that's going move until sounds be causes like hit because and Does story? node going NREs had delayed the that the a margin you're So, is guide you hit to all allow before to part deal into the to COGS. relate that the rec Australis down It new to a available? that to you you that? Is where same and

Brian Faith

be move this that would about. I Some of that brand the to one that moving we're new got to that There's to up for we've deal COGS operating into in quarter. specific for expenses, R&D normally that talked some the just that things

that margin. gross So up that's you're in move why of some lower there the seeing

Suji Desilva

Okay.

a to work till So the the rec trying is node deal for and for you've that's that that opposed eFPGA, you when initiated for customer the customer? now where a wait you're such ready rec revenue get that rev for then all to available as

Brian Faith

typically These license are milestone-based Suji. agreement,

we work have that recognized all That fully to could for typically, have the the that obligations be we the some from of or IP we expenses from license. with revenue delivery, So then IP needed view point a straight to there's deliver for license when if already that. match they're those an a revenue prepare for involved

QX why you this. that's up for coming see So in that periodically

Suji Desilva

Okay.

would it. get million give lot the And are that kind customer try more clearly Got I there those a on but are coming, at can that give then put us confidence because was wasn't over if first of the that of the you you effort customer milestone-based. the that So million of to looking -- call in to $X best eFPGA at guess, and one-off confidence way of there have investors' pipeline, the on line. a juncture, the you this finish the these $X the to multiple just people how

those are So versus the coming it you just confidence would be how of in? have as next long bring longer more to to understand taking or ones helpful

Brian Faith

that new So this for have is deliver license the IP that to seven-digit already I that QX, near to quarter. going we're within mentioned close short a and we answer

opportunities we're -- million several, $X engaged we that then think I several of had the remarks, word I ago. fully the prepared we one And in used So now digit that's announced just that also from right couple months that a I follow-on with. large other already that we're that mentioned chasing

itself, were those RFPs large million especially to call, the this that And $X I go for we the a that's fact ones. think and one rate able on announcing increase that of these darn again, RFQs ago of is one months just couple increasing, from can to of think that not So that announcing that, many figures with give within opportunities quarter should dealing the quarter, in we and about XXXX. can tremendous. I actually near how that comfort seven close is but close And and think, we're I we just investors the deliver for excitement

Suji Desilva

Appreciate giving among all And Excellent. as of with might look I'm that, landscape other you've that in and the won heritage map is along the road clarification, deals, be and things, Quick's eFPGA you these Brian. more I at these factor other robust exciting curious a it eFPGA that then some elements? that's customers competitive how talked the about the here. a if tools

Brian Faith

There's I two in think Suji. actually embedded questions that, Yes.

of space in them I and point that first get scale. one that for control we're The flight time across as and the delivering have our and with can companies are table know likely of into far know reliability, party That for talk from the radiation in quality, gives ability of the quality, every a terms doing to IP. talk into them years been what our comfort the in manufacturable as yes, by we powered that none put of reliability, a me startups with XX respect lot and that around at manufacturability devices it fact devices. The data airplane, an the also to and comfort that, that of view tolerant floating get about to we bringing is gives are doing scale front let licensed that avionics know VC-backed them that an we've management that shipping IP technology can they we're we're devices those about

an we deals. there's credibility that of incredible types So we that heritage have through to amount these that bring of

are that this. question the on think conversations. that around light -- bright a topic own time was supply doing of And the hard supply interesting because and more shown hard their I there's device take other Now parts, their having companies a parts. their a the And having fact own it's really whole can't this has getting reevaluating own they People they're chain meant to we're devices. they supply perhaps a shipping products own by control do they're time And their because chain. chain second get

bringing like side new an that's we many because basket opportunities the devices and so place sell the relationships. and whole team they may so have about have actually in have They fact we tapped operations of think that a And supply them chain for out eFPGA we [indiscernible]. we when

So because chiplets in that that there's services to are And home that answer using heterogeneous of the shining again, the yes chain the and side to business work to unique through then, way actually are too, and about in going with all and chiplets come offer of a perhaps our serve is has devices, packaging device talk And test we're we the take people issues start we can the think I'll lot light market time finally package take a for people at technology some to solve issues. supply to can of that. IP and I supply the devices the really and somewhat And time chiplets their on and us is that maybe thing be we well. them participating or ability the to firstly, the as say chain I think, in the capability. have this, last is these

in business opportunities for start-up a I credibility from been with these We've a not of think long this We're But we point right? vast. are definitely overnight, customers. a the time. come So

Suji Desilva

Okay. any color you want get driving then flavor customers, productive think some the licensing answer be this Which eFPGA way most that speaking leads the those to about to interested? Community, One in you this the it may I'll Google and question, this. have a about getting all What or the differently, if that the are customers are these wins interest the that. cautious are back of but that is DARPA of queue. maybe last terms markets being jump near-term of your Source I'm end in I know If to you being you're maybe closing? about trying most have or and are partnership Open you on

Brian Faith

term in near business think here. if heritage I at our the you and look

to into beginning the we top you that sell five, five can the DoD we today, So already. at primes of the year. the toolbox of the And top eight got of see DARPA XX

So uses it lot I a segment, of eFPGAs. that think

in of not That contract lot have to that I we a be would We that that the imagine said, that space. here. of in can the one good million success reputation start early $X is a really space. markets that see being

space are So general also industrial is that's as would $X seeing I what test space the for diversity that instrumentation there. and classify we contract our in out more million

So way, have good the audio. first on right UMC, diversity was the our that By consumer now IP one, when in it was the with XX the first we contract contracts. already

another even that's So yet market.

So we had our to at that think different the of I markets three speaks the first funnel. and breadth three deals

Suji Desilva

Brian. again, Thanks. guys. color, Congratulations Excellent

Brian Faith

Thanks, Suji. Thanks.

Operator

[Operator Instructions] from Rick your Our proceed question. Rivershore next question Research. with Investment is Please with Neaton

Rick Neaton

on about you, for the I'd quarter. Thank bit. a SensiML like the talk you. quarter guidance and fourth and Thank Brian, the congratulations to

cases it? doing SensiML of OEMs Are and marketing types using of customers joint early how if what you these it microcontroller announced buying You've use And trying so, a they frequently lot efforts. or in seeing of trends out of partnerships any are it? and

Brian Faith

very engineering the say, are these integrating of sales they as resulted three on brought that in. outreach microchip, partners seminars, active in the the more doing Well, marketing and really the microcontroller they terms been we've we especially, has been have last customer companies groups coming these companies, reception The in being you last I the looking cetera. terms SensiML at webinars, trained application et labs spokespeople that positive, really from into about if be get board, in would to solve microcontroller silicon out these the and onsemi. Especially to problems. have think three Those opportunities can immediate they're base of

in, seen with implement their we have would noteworthy expensive for to lower recognize but for actually you we have AI are tier, just version names immediate systems. coming less So customers that now contracts not opportunities signed the that

with I think that see problems, get. more And phases future. other all of with we're tools to solve speaks get that sort And going going companies of customers. these for so opportunities familiar really now can how the those we're they The the through and the more development the

QX pushing don't on of yet percentage for revenue a But So out three. a view, revenue forecast of will coming because double and terms these there I or break I you growth say, most from the revenue give SensiML. there but to that And we microcontroller of material. progress to SensiML show we're our internal think really going these is absolute number is as from point in I really I'm not not hard new recent partners. it's quarter-on-quarter for it is can QX

many to so so different a a with the the cores. a around And with got that The too, working the ARM all you I'd of the microcontroller got get of ARM, and look ARM familiar standard apps microcontroller facto it tool for they core because likeliness lot and the talking that friends sort say, like terms in got point and to you people the they big company, in the it other change wrapped Rick, where point de back with their step you that was is what right? second, why they familiar be that if started processor, just they're to thing of ask, for microcontroller to our of engineers and partners the to expands are ARM sort with tool IP analogy, core. chains

people is the are do I with be base with story only a the processors microcontrollers on that the that that using installed on people's AI if you running of these being more package. different here that all thing massive SensiML to the point you toolkit. SensiML the toolkit want we is SensiML And familiar their become of that can And the like think software get that is AI So a already that ARM is key software we used.

connection system a sensor intelligence out as to it's base, want huge that and So already that you massive it could a span that. an to, go be to think you Internet way to this has bit us think if installed processors, that's XX-bit SensiML has So to the they X why down about like be installed able there that all that's And just right? add too, for more if on anybody's processors not range. you because they microchip tap that about into

And multiplies from of got think go-to-market good I really partners, SensiML So breadth. it point the technical view, a with has now that.

Rick Neaton

devices Yesterday most at three and might Are and growth next open like of it's it's bullish it's coming to access Investor XXXX through for in eFPGA the Day, industrial just applications. edge a automotive increased very used in your have four of fiscal areas small interest and years seeing outlook Qualcomm you source that cases than from through gave it's semiconductor power? not ending edge battery-powered higher or industrial business

Brian Faith

Yes.

seeing we are for think opportunity that. I

the of would But power if they're related powered the of wheelhouse about, thing back yes, traditional just we venture you In have sensitive now, look battery the revenue battery of fact, to step but right that none side. wins them is guess market. are hear are not general we've which eFPGAs, that They talked at Qualcomm a sort I and glad I'm powered.

is which with I they'll out just think be and will be not I edge if investors People's talk Qualcomm but say, something think great is probably lot there and right that and there. PowerPoint same embedded those have is I software applications here, really we're we for going it, to there going going think of have computing good that adding saying when on to there's a the SensiML which we And intelligent be the to with some systems. fact the eFPGA for I FPG

Rick Neaton

see the you, where Thank Okay. Thanks. on business you your color appreciate heading. I Brian.

Brian Faith

Rick. you, Thank

Operator

with Richard Craig-Hallum. next question. question proceed Shannon from Please with is Our your

Richard Shannon

some allowed just thanks there's airport mask; you taking questions. can't if hear the tell here, Well, wearing in ambient me so, for also noise Brian a if my Apologies me.

Sorry about that.

Brian Faith

problem. No

Richard Shannon

First, just a question. quick

Your fourth at number for $X.X I the that hear million? quarter right sales did guidance,

Brian Faith

$X.X million, not million. $X.X No,

Richard Shannon

$X.X about okay. sorry [Technical Difficulty], that. million, so

quarter back your that any and something strategic prepared me case. second in I'm That's remarks. working announced last about not it. there, hear of hadn't that's about Okay. still assuming mentioned February comments And your then you situation on helpful. status you more Can on all, initiative give had detail the been funded. I didn't

that Just any would be clues great.

Brian Faith

pull I've discussion and But them definitely that so And modifying on with they're discussing and it closed. in probably thing the closed Yes, our active. it. I but them technical together February. we're to actively been that get of specs definitely, sort still not with since approach yet. on has feel with other every actually working still funding week to still trying it,

Richard Shannon

Okay.

higher equal growth to what you this kind guide perhaps at forecasting we of from? you Next that about your question, for more the to about XXXX, comes you're than some Can I of talked talk or where characterization to implied you're in your sales guess midpoint growth? the drivers think but can get I'd love see growth here all where going quarter. of

Brian Faith

Yes.

these aspects getting for some of be the separate then should XXXX, EOS in working single other that the fact. said on And half, smartphones, in the and as largest means the business where on should probably think I obviously, continued first I think in big flat side, wins is out eFPGA industrial, to SX There we're mentioned, -- so other breaking to course, Hopefully, just be XXXX from we consumer. IP more SensiML year. the the been which in of driver remarks, point like 'XX. that prepared in And the of microcontroller on second already use related through services revenue. the with the a some IoT we have should partners. we've like increase to and I you the half could that then, that. segment mature through next That run XX% that see be There from out running next growth year out the we

Richard Shannon

guess, least you're pipeline. the about talking next my in I excellent. Okay, question, at

as dollars. I here And start that talking tens kind deals can of of we're millions it with. can very deals these figure, at be, about you've of be many seven-figure initially said characterized seven least think of assuming You to I'm low

number do several that Is fair or $X wonder of I means So math here that of think a simple way sitting millions, kind those a dozen there. a -- to so deal, and tens per few pipeline? of can of there's about to the million out just we say

Brian Faith

less a more the but a each? it's I up few couple or of million, just dozen a I opportunity than million, would per than $X perhaps, million to tick be said value

Richard Shannon

partner. license I about to successor good deal the the one. this I million tool academic And there's Australis probably last your think does guess, an that a dynamics? you situation of competitors other said to $X with you're my Okay. a where All here? you dynamics question a there's of evaluation attributing competitive those here discuss this developed I right. other degree, some to how here eFPGA tool. was, got limit embedded deep you just or that Can think can And competitive use is to advantage the kind understand And competitors. recent

Brian Faith

background. Australis actually from Yes. about say DARPA call. what was is that on of want back to architecture called funded lot University goes we've we're a of be We're our can't I academic And been the point competitive that QuickLogic? Utah Source of and bringing tool, top into too give of view things people good on here is the OpenFPGA the buy I overstated. But of bringing This here. this. don't a public Australis based the question. that away The also is do at can a kind much Why segue to Open I project on Suji's think, this proxy from a program. a

platform. their at But company on anybody wants if to their user company, in you So a people software the free on or Linux a is somebody at the product for source, download hobbyist has Source to company can fashion. with that what from what about exactly a right? with bet think of if OpenFPGA they're And work strategy bet a for going Australis top their we're open a do going product just And their open career that's that and to to free. they They're extend download trying to support the not Github. is want it Open and the second, and

added the some yes, optimization there's where, what Hat Source QuickLogic become an you Is yes, and trying product automation. to as No, to you that. FPGAs, commercial of the technology die helps us of Red with open for of bring quality, reliability need the support FPGAs, that for decades with Open size exactly that think we And itself, have source by would these So, from sort to a and to that's to expect it? table. does that that experience that entity three available,

commercial be for us fashion with use to that trust to stand that were sense be that's could in time and Sure. two Open was it Source? commercial other trying have and we able that Open that could ride So results through go they'd Remember, to was something for cycle has. a to in going it long now through almost a years same that two it not to adopt year we by that the been But This the the It's anybody to use companies works this And Australis born of in we finally the right of and felt I it in learning our source through in has to FPGA there. was go think curve. start that but the something a the learning is went get would overnight. customer this. --

that I Source. think terms a different in to of to we've things we be do top Open not competitive on and not Australis we're like that's going with moat of built to initial stopping there. keep good pretty So, that would going We're going

Richard Shannon

you that's much. Excellent Brian. points Thank excellent. Okay, here, very

I think that's all my questions.

of So, year. line. great I'll a end the of out just on Congratulations the

Brian Faith

Thanks, Richard. Appreciate it.

Operator

Martin Our with Please & your from is Oppenheimer next proceed question Yang question. Co. with

Martin Yang

All and Brian right. Good Anthony. afternoon,

Brian Faith

Hey, Martin.

Martin Yang

say on it wafer maybe is been comparing and help business understand large does customer That growing your a the number market was engagement? quite for consistent or it what Can year-over-year you does or question supply/demand first mean commitment. My about on basis. us has purchase

Brian Faith

way behooves shipment sure make to any us So be we in than supply it the are are. doing handle is, Martin, the buying that worse as chain, it what the in the remarks, of really we can't we chain just ahead I are actual said that that prepared they normally the already because supply disruptions would with

our some foundries get give the and with to b, allocation working go So to we to them. them for we then, the they And by, following starts need and and off with have go year. confidence the a, houses the get are assembly abide that customers we get longer wafer and year to, the so that can when times next lead

sure than fact, managing sure we're I probably that And the make inventory, that because to uptick it. So in no said, want we bit that. have you we to make just It's that in right customers we can as may buffer some ship little different see of now. semiconductor product companies need a doing to are

Martin Yang

is My it next sense. on question makes Yes, Australis.

and talked this to facilitate designs more very older new or or implemented new the You about platform is that useful process. even process? for foundries familiar customers on How are does with way help it

Brian Faith

within about get supply from And the just to say, I node. that a that process mature huge they us specially would hey, that do and help customer chain to like at a the time XYZ on core sense can ABC an comes can [ph]. foundry, we I So it node a if know on IP in the eFPGA quarter the now, access PDK right there's we crunch,

of can in any those a manner. basically we So handle requests very timely

course with them a lot into QuickLogic that a that give customers. gives to There's one it runs with for we what how But the that ultimately foundries need program to that work they So and of and Australis user lot is to get and the clear, support effectively along eFPGA the To tools the that nuance the eFPGA. the need. by options be to customer We works. deliver with, wants way, don't that work the customers. libraries tool. of that We create customer the then can that we need they would the we

Martin Yang

'XX? higher you revenue percentage of my thing be over I and software expect before. want as Most in check total of questions that to But double licensing revenue a to is last XXXX the been do asked

Brian Faith

we Yes, do.

Martin Yang

Thanks. it. got Okay,

Brian Faith

No questions, other problem. Any Martin?

Martin Yang

That's it That's from it. me.

Brian Faith

great. Okay,

Operator

I over closing now Mr. for reached Brian the will session We Faith and question-and-answer end remarks. the to of have turn the call

Brian Faith

today's and And great of many participate call Thanks, XXXX look fiscal we participating operator. you report We when with upcoming speaking day. in investor our again, support. again, continued Have forward when year events. you, to results. we a Thank quarter in for your fourth

Operator

may your disconnect for today's lines concludes at participation. and This time. this your conference you Thank you

QuickLogic (QUIK) 18 Nov 212021 Q3 Earnings call transcript